ANNUAL REPORT
AND
STATEMENT OF ACCOUNTS
TO
31
s t
JULY 2024
1
1
DIRECTORS
DaviD W Smart, Chairman and Joint Managing Director
John r Smart, Joint Managing Director
alaSDair h roSS
Patricia Sweeney
COMPANY SECRETARY
Patricia Sweeney
REGISTERED OFFICE
SUBSIDIARY COMPANIES
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REGISTRARS AND TRANSFER OFFICE
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AUDITOR
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J. Smart & Co. (Contractors) PLC
2 3
J. Smart & Co. (Contractors) PLC
NOTICE IS HEREBY GIVEN that the ANNUAL GENERAL MEETING of the Company will be held at the Registered
Office, 28 Cramond Road South, Edinburgh on 16th January 2025 at 12 noon, for the following purposes:
1. To receive and consider the Statement of Accounts for the year ended 31st July 2024 and the Report of the Directors
and the Independent Auditor’s Report.
2. To approve the Directors’ Remuneration Policy as set out on pages 54 to 56 in the Annual Report.
3. To approve the Directors’ Remuneration Report for the financial year ended 31st July 2024 as set out on pages 54 to
59 in the Annual Report.
4. To declare a Final Dividend of 2.27p per share.
5. To re-elect John R Smart as a Director, who retires in accordance with provision 18 of the UK Corporate Governance
Code.
6. To re-elect Alasdair H Ross as a Director, who retires in accordance with provision 18 of the UK Corporate Governance
Code.
7. To re-elect Patricia Sweeney as a Director, who retires in accordance with provision 18 of the UK Corporate Governance
Code.
8. To re-appoint BDO LLP as the Company’s auditor.
9. To authorise the Directors to determine the remuneration of the Auditor.
10. To authorise the Company, via a special resolution, for the purposes of section 701 of the Companies Act 2006 to make
market purchases (as defined in section 693(4) of the Companies Act 2006) of its ordinary shares of 2p each (ordinary
shares) provided that:
(a) the Company does not purchase under this authority more than 10% of the nominal value of the Company’s issued
share capital at the date of this notice;
(b) the minimum price which the Company may pay for each ordinary share is 2p (exclusive of expenses); and
(c) the maximum price which the Company may pay for each ordinary share is the higher of:
(i) 105% (exclusive of expenses) of the average market value of the Company’s equity shares for the five
business days prior to the day the purchase is made according to the Daily Official List of the London
Stock Exchange; and
(ii) the higher of the price of the last independent trade and the highest current independent bid for an ordinary
share on the trading venue where the purchase is carried out.
This authority will expire at the earlier of 15 months from the date of passing of this resolution and the conclusion of the
next Annual General Meeting, except that the Company may enter into a contract to purchase ordinary shares which will
or may be completed or executed wholly or partly after this authority ends, the Company may purchase these ordinary
shares pursuant to any contract as if the authority had not ended. Under this authority any shares purchased by the
Company will be cancelled.
11. To transact any other business of an Annual General Meeting.
Explanatory notes providing information in relation to each of the proposed resolutions in this Notice of Meeting can be
found on the Company’s website www.jsmart.co.uk.
A member entitled to attend and vote at this Meeting is entitled to appoint one or more proxies to attend
and vote on a poll instead of him/her. A proxy need not be a member. Forms of proxy, if used, must be
lodged with the Registrars of the Company at least 48 hours before the time fixed for the Meeting. Forms of
proxy may also be lodged electronically by submitting a duly completed scanned copy of the proxy card to
[email protected]. You may not use the electronic address provided either in this Notice of Meeting or any
related documents (including the Form of Proxy) to communicate with the Company for any purpose other than that
expressly stated.
2 3
J. Smart & Co. (Contractors) PLC
In accordance with section 311A of the Companies Act 2006, the contents of this Notice of Meeting, details of the total
number of shares in respect of which members are entitled to exercise voting rights at the Annual General Meeting
and, if applicable, any members’ statements, members’ resolutions or members’ matters of business received by the
Company after the date of this Notice will be available on the Company’s website.
Pursuant to section 319A of the Companies Act 2006, the Company must cause to be answered at the Annual General
Meeting any question relating to the business being dealt with at the Annual General Meeting which is put by a member
attending the meeting, except in certain circumstances, including if it is undesirable in the interests of the Company or
the good order of the Meeting that the question be answered or if to do so would involve the disclosure of confidential
information.
BY ORDER OF THE BOARD OF DIRECTORS
Patricia Sweeney
Company Secretary
28 Cramond Road South,
Edinburgh
EH4 6AB
19th November 2024
4 5
J. Smart & Co. (Contractors) PLC
CHAIRMAN’S REVIEW
ACCOUNTS
Headline Group profit for the year before tax, including an unrealised surplus in revalued property and a surplus in
revalued financial assets was £2,365,000 compared with £105,000 last year.
As in previous years, our view is that disregarding the movement in the revaluation of the commercial property
provides a truer reflection of the Group’s performance, which we refer to as underlying profit. The underlying profit
before tax for the year was £1,248,000, compared with last year’s figure of £2,288,000, as detailed in note 10 of the
financial statements.
The Board is recommending a Final Dividend of 2.27p, making a total of 3.23p, the same as the previous year. The
Final Dividend will cost the company no more than £890,000.
TRADING ACTIVITIES
Group construction activities, including residential sales, increased by 141%. Headline Group profit on continuing
operations increased this financial year, due to the rise in the value of the commercial property portfolio, the profit from
the investment sale in a joint venture company and an improved financial performance from some of our subsidiary
companies. Underlying profit before tax decreased substantially this year, mainly due to increased loss provisions in
our private housing developments, which are detailed below.
Our construction sites continue to suffer from longer than anticipated programmes due to delays in statutory approvals
and infrastructure/utility approvals.
Trading margins have been negatively affected by these delays and also by the continuing rise in the price of construction
materials.
The lack of contract work in the housing association sector continues due to these factors, but also by a reluctance by
central government to increase funding from their current unviable levels.
The residential development at Clovenstone Gardens has been badly affected by the above issues, with first completions
now not being until March/April 2025. Marketing has just commenced on the private housing and interest is not
promising. At present it is unlikely that the rise in construction costs will be counter-balanced by positive house sales.
The sales at our private housing development at Winchburgh, Canal Quarter, continue to suffer due to the lack of interest
from home buyers. Whilst there was a spate of reservations at the beginning of 2024, these have become sporadic.
Half of the properties remain to be sold, which is more than anticipated. There has been a downward pressure on sales
prices due to competitors drastically reducing their figures. The prolonged sales period, with associated holding costs
and negative pressure on sales prices, has led to a significant deterioration in the profitability of this development.
The construction contract with a manufacturing company for a new office facility and an industrial unit extension just
outside Stirling has progressed well and is now complete, albeit after the financial year end. Whilst inexplicable delays
in local authority approvals have hampered administrative progress, we do not anticipate any significant profit erosion
in this contract.
Commercial property values have recovered, albeit mainly due to rental growth rather than any significant improvement
in investment yields. Lettings of both our industrial stock and office stock continue to progress well. Rental levels in
both sectors have held with rental growth still being experienced.
As previously reported, the three let units at Gartcosh Industrial Park, developed through our joint venture company,
Gartcosh Estates LLP, were sold as an investment property disposal, with an acceptable profit achieved.
As mentioned in the interim report, the second phase at Belgrave Point, Bellshill, a large single user industrial unit,
was finished in March 2024 and let to an occupier on completion. Both phases of this development, now being let,
were marketed as an investment sale and sold after the financial year end. As predicted, profit margins on the second
phase were impacted negatively due to a longer than anticipated programme caused by delays in utility infrastructure
and increased construction costs.
4 5
J. Smart & Co. (Contractors) PLC
CHAIRMAN’S REVIEW (continued)
TRADING ACTIVITIES (continued)
As predicted in the interim report, the slow nature of the pre-contract process has delayed the start of private housing
and commercial property developments, with none being commenced prior to the end of the reporting year.
Contract work continues to be scarce, mainly due to the financial viability issues noted above.
FUTURE PROSPECTS
We have less work in hand in our own private housing than we did last year.
There are no real prospects of further contract work at present. We continue to explore other avenues to obtain contract
work, but many of these sectors have major obstacles. For example, investment in the new build private rented sector
has stalled due to the Scottish Government’s rent control legislation. The Housing (Scotland) Bill will hopefully
reverse this lack of investment and kick start this sector, but when remains to be seen.
The new Government in Westminster has adopted a pessimistic approach to business in their start in power, but they
have relaxed matters in the planning system. Unfortunately, this does not apply in Scotland, and we continue to suffer
from a lack of urgency in local authorities in processing statutory approvals.
A start at Inchmuir Park, Bathgate, a speculative industrial development, will be made in the near future. This
development should have commenced well before the financial year end, but delays in statutory approvals and utility
approvals prevented this.
Planning consent has been granted at our site at Inglis Green Road, Edinburgh, for a substantial flatted housing
development.
Interest rates have recently decreased but consumer confidence in private housing remains low. Whilst there will be
some private housing sales this year, it is probable these will be less than originally anticipated.
Letting and rental levels in our commercial property portfolio will be maintained. We do not anticipate that yields will
drastically change, and therefore, expect property values to remain steady in this current financial year.
At this stage it is difficult to assess what the headline profit will be for the year to 31st July 2025. Profits will be eroded
by the factors already reported.
DaviD W Smart
19th November 2024 Chairman
6 7
The Directors present their Annual Report and Statement of Accounts of the Group for the year ended 31st July 2024.
CORPORATE GOVERNANCE
The Company is required, as a premium listed company on the London Stock Exchange, to prepare a report on Corporate
Governance in accordance with the Financial Reporting Council’s UK Corporate Governance Code (the Code). A copy of
the Code can be reviewed on the Financial Reporting Council’s website at www.frc.org.uk. The information required by
the Code and also the Disclosure and Transparency Rules and the Listing Rules can be found on pages 47 to 53.
RESULTS AND DIVIDENDS
The profit of the Group after tax for the year ended 31st July 2024 amounted to £1,673,000 (2023, £200,000).
During the year the Company paid on 29th January 2024 a final dividend for the year to 31st July 2023 of 2.27p per share
(2023, 2.27p) and paid on 3rd June 2024 an interim dividend for the year to 31st July 2024 of 0.96p per share (2023,
0.96p).
The Directors recommend a proposed final dividend for the year of 2.27p per share, making a total for the year of 3.23p.
This final dividend is subject to approval by the shareholders at the Annual General Meeting in January 2025 and has
not been included as a liability in these financial statements. If this dividend is approved it will be paid to the members
on the share register of the Company at the close of business on 20th December 2024. Dividend warrants will be posted
on 24th January 2025.
DIRECTORS
The following were Directors of the Company during the financial year ended 31st July 2024:
− David W Smart
− John R Smart
− Alasdair H Ross
− Patricia Sweeney
Details of the Directors are given on page 46 of the financial statements.
APPOINTMENT AND REPLACEMENT OF DIRECTORS
The Company’s Articles of Association (the Company’s Articles) give the Directors the power to appoint or remove any
Director. Initial appointments must be approved by the Board of Directors but anyone so appointed must be re-elected by
ordinary resolution at the next Annual General Meeting of the Company. In accordance with the Company’s Articles, all
Directors, but excluding the Chairman, must retire annually and offer themselves for re-election at the Annual General
Meeting. Annual retirement of the Directors is also in accordance with provision 18 of the UK Corporate Governance
Code which is followed for all the Company’s Directors except for the Chairman.
DIRECTORS’ INTERESTS
Details of Directors’ interests in the ordinary share capital of the Company are given in the Directors’ Remuneration
Report. Details of changes in Directors’ interests between 31st July 2024 and 14th November 2024 are given on page 57
of the financial statements.
Other than the original employment contract received on joining the company, no Director has been issued with a
Director’s Service Contract on appointment as a director.
No Director has a material interest in any contract to which the Company or any Subsidiary Company was a party to during
the year. The Group is constructing a commercial and industrial property of a company in which David W Smart and John
R Smart have a material beneficial interest. Refer to note 34(c) for details, all transactions are at normal commercial rates.
J. Smart & Co. (Contractors) PLC
REPORT OF THE DIRECTORS 31st JULY 2024
6 7
J. Smart & Co. (Contractors) PLC
REPORT OF THE DIRECTORS (continued) 31st JULY 2024
DIRECTORS’ POWERS
The Company’s Articles state that the Directors may exercise all of the powers of the Company which also includes the
right of the Directors to buy back the Company’s shares based on the authority given by the shareholders following the
passing of a special resolution at the Company’s 2023 Annual General Meeting.
INDEMNIFICATION OF DIRECTORS
In accordance with the Company’s Articles and to the extent permitted by law, Directors are granted an indemnity by the
Company in respect of liabilities incurred as a result of their office. The Directors are also indemnified against the cost
of defending any proceedings whether criminal or civil in which judgement is given in favour of the Director or in which
the Director is acquitted or the charge is found not proven. The Company has maintained Directors’ and Officers’ liability
insurance cover throughout the financial year.
CAPITAL MANAGEMENT AND SHAREHOLDER INFORMATION
The capital structure of the Company consists of issued share capital, reserves and retained earnings represented
predominantly by investment properties, working capital and cash.
The Company’s issued ordinary share capital as at 31st July 2024 comprises a single class of ordinary shares of 2p each.
Details of the issued share capital are shown in note 27 of the financial statements.
At the 2023 Annual General Meeting the Company was authorised by the shareholders to purchase, in the market, up to
10% of the Company’s issued share capital, as permitted under the Company’s Articles. This authority will expire at the
earlier of 15 months from the date of passing of the resolution granting the authority and the conclusion of the next Annual
General Meeting. The purpose of the market purchase is to enhance the earnings per share and/or the equity shareholders’
funds per share. The Directors are seeking renewal of this authority at the 2024 Annual General Meeting.
During the year the Company made market purchases of 632,750 ordinary shares of 2p under the existing authority, for
a total consideration of £902,000. The shares purchased were subsequently cancelled, and represented 1.58% of the
Company’s issued share capital at the start of the financial year. There were no purchases of shares in the year made
otherwise than through market purchases.
All members who hold ordinary shares are entitled to attend and vote at a General Meeting. On a show of hands at a
General Meeting every member present in person and every duly appointed proxy shall have one vote and on a poll, every
member present in person or by proxy shall have one vote for every ordinary share held or represented. The Company is
not aware of any agreements between shareholders that may result in restrictions on voting rights of shareholders. Rights
attached to ordinary shares may only be varied by special resolution at a General Meeting.
There are no specific restrictions on the transfer of securities in the Company, other than those imposed by prevailing
legislation and the requirements of the Listing Rules in respect of Company Directors. The Company is not aware of any
agreements between shareholders that may result in restrictions on the transfer of securities.
Details of substantial shareholders can be found in the Company’s Corporate Governance Report.
FINANCIAL INSTRUMENTS
The Group’s financial instruments consist of bank balances and cash, financial assets, trade receivables and trade payables.
The main purpose of the financial instruments are to provide working capital for the Group’s continuing activities and
provide funding for future activities whether in construction or property investment.
Given the nature of the Group’s financial instruments the main risk associated with these is credit risk, it is not exposed
to liquidity or interest rate risk as it does not have any net debt but it does suffer from low interest rates on the amount we
can earn on monies on deposit.
8 9
J. Smart & Co. (Contractors) PLC
REPORT OF THE DIRECTORS (continued) 31st JULY 2024
FINANCIAL INSTRUMENTS (continued)
Credit risk
The Group’s credit risk is mainly mitigated due to the fact the majority of the Group’s revenue relates to private house
sales which are made on completion of a legal contract for the transfer of title and are to numerous customers. Other
construction contract sales are mainly to social housing providers and government local authorities who undertake projects
knowing funds are available to fulfil payment of contracts. With regards to rental income there is no concentration of
credit risk as exposure is spread over a number of tenants.
Regarding trade and other receivables, these amounts are accounted for at cost less a loss allowance for expected credit
losses which are assessed based on past default experience and debtors’ current financial position, as detailed in note 21
of the financial statements.
Liquidity risk
As the Group finances its operations through equity and reinvested profits and does not have any bank borrowings it has
no exposure to liquidity risk.
Interest rate risk
As the Group has no debt it has no exposure to interest rate risk other than in relation to interest earned on short term
deposits of surplus funds when interest rates remain low..
ARTICLES OF ASSOCIATION
The Company’s Articles can only be amended by a special resolution at a General Meeting. No amendments are proposed
to be made to the existing Company Articles at the 2024 Annual General Meeting.
LISTING RULES
Disclosures required in accordance with Listing Rules 6.6.1 and 6.6.6 are:
LR6.6.1(1) Capitalised interest There was no interest capitalised in the year to 31st July 2024.
LR6.6.1(3) Long term incentives The Group does not have any schemes for long term incentives.
LR6.6.1(4)(5) Director emolument waivers No current or future emoluments have been waived .
LR6.6.1(6)(7) Allotment of cash for equity None in the year.
securities
LR6.6.1(9) Contracts of significance No contracts in the year requiring disclosure.
LR6.6.1(10) Contracts by controlling No contracts in the year requiring disclosure.
shareholders
LR6.6.1(11)(12) Dividend waivers No current or future dividends have been waived.
LR6.6.6(1) Directors’ interests Details of directors interests in the ordinary shares of the Company
LR6.6.7 are detailed in the Directors’ Remuneration Report on page 57.
LR6.6.6(2) Major shareholders’ interests Details of substantial shareholders are given in the Corporate
Governance Report on page 48.
LR6.6.6(3) Going concern and viability Disclosures are included in the Report of the Directors on page 12
statements and in the Strategic Report on page 20.
LR6.6.6(4) Buyback of share capital Disclosures are included in the Report of the Directors on page 7
and in note 27 of the financial statements.
LR6.6.6(5)(6) UK Corporate Governance Disclosures are given in the Corporate Governance Report on
Code Compliance pages 47 to 53.
8 9
J. Smart & Co. (Contractors) PLC
REPORT OF THE DIRECTORS (continued) 31st JULY 2024
LISTING RULES (continued)
LR6.6.6(7) Director’s service contract Disclosures are included in the Directors’ Remuneration Report
on page 55.
LR6.6.6(8) TCFD disclosures The TCFD report is included in the Strategic Report on pages
LR6.6.8-6.6.12 21 to 43.
LR6.6.6(9) Board of Directors diversity Details in the format required by LR6 Annex 1 are given in the
Strategic Report on page 45.
CHANGE OF CONTROL
The Company is not party to any significant agreements which take effect, alter or terminate upon change of control of
the Company following a takeover bid. The Company does not have any agreements with any Director or employee that
would provide compensation for loss of office or employment, whether through resignation, purported redundancy or
otherwise resulting from a takeover bid.
POLITICAL DONATIONS AND POLITICAL EXPENDITURE
It is the policy of the Group not to make donations for political purposes to UK or EU Political Parties or incur UK or
EU Political Expenditure and accordingly neither the Company nor its Subsidiaries made donations or incurred such
expenditure in the year.
GREENHOUSE GAS EMISSIONS
This Energy and Carbon Report, prepared in accordance with The Companies (Directors’ Report) and Limited Liability
Partnerships (Energy and Carbon Report) Regulations 2018, is commonly known as Streamlining Energy and Carbon
Reporting (SECR); it provides one lens to help us understand our carbon impacts and guide our actions to reduce our
emissions.
This report outlines our scope under SECR, the total energy used, and associated carbon emissions for the year ending
31st July 2024, a summary of actions taken in the year to reduce our emissions and further detail on the methodology used
to comply with SECR. We do not have responsibility for any emission sources that are not related to activities included in
our Annual Report and Statement of Accounts.
Our Scope for SECR
The SECR sets out the UK’s new mandatory reporting requirements for energy and carbon impacts of large UK
organisations, as defined by the Companies Act 2006. The Group is classed as large under the regulations. SECR requires
us to report the total annual energy consumption, and associated carbon emissions for our financial year.
Energy relates to all energy of any fuel type where we have direct or indirect control, known as Scope 1 and 2 emissions
under Greenhouse Gas Protocol (see methodology for further details). For the Group, relevant energy sources are
electricity and gas consumption to run our head office in Edinburgh and our office in Kirkcaldy, diesel and petrol used in
the delivery of our construction projects and property services and any business travel by personal car starting or ending
in the UK. All energy and emissions relate to our activities within the UK.
Our Impacts and Intensity Ratios
Based on the scope outlined above, our energy and carbon impacts for the current and prior year are summarised below.
These impacts show us our environmental performance and can form a baseline for us to compare ourselves to in the
future.
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J. Smart & Co. (Contractors) PLC
REPORT OF THE DIRECTORS (continued) 31st JULY 2024
GREENHOUSE GAS EMISSIONS (continued)
Consumption Greenhouse Gas Emissions
(MWh) (tCO2e)
Energy Source 2024 2023 2024 2023
Natural Gas 1,986 1,642 357 300
Petrol 17 28 4 6
Diesel 2,665 2,703 631 652
Company Vehicles 13 – 3 –
Total Scope 1 4,681 4,373 995 958
Grid Electricity 498 530 103 103
Total Scope 2 498 530 103 103
Business Travel 32 46 11 13
Total 5,211 4,949 1,109 1,074
Intensity ratios
To understand our progress in improving our environmental performance, and to meet SECR requirements, we have
identified intensity ratios that help put our energy consumption and emissions into the context of our business. We have
chosen to use revenue and headcount - full time equivalent (FTE) employee numbers. Therefore, our intensity ratios for
energy are kWh/£m and kWh/FTE and emissions tCO
2e/£m and tCO2e/FTE. This allows us to compare our impact with
that of similar organisations in size and/or activities. For future years, we are currently streamlining data management to
enable us to report intensity ratios for each segment of our business.
Revenue £m MWh/£m tCO
2e/£m FTE MWH/FTE tCO2e/FTE
2024 22.0 237 50.4 140 37.2 7.9
2023 13.0 460 98.8 152 39.3 8.4
In 2024, the reporting year covered six months of the head office being in temporary accomodation whilst the refurbishment
of the office was undertaken. Reflecting the operational changes between the reporting periods, total energy increased
by 5.3% and carbon emissions rose by 3.3%. The increase in intensity ratio for both energy and emissions in relation
to revenue is primarily driven by a full year of progress on major contracts during the year. Given the nature of the
development and construction business it is not unexpected to have fluctuating intensity metrics between reporting years.
Our Energy Efficiency Actions
Throughout the year we have taken action to reduce energy consumption and improve energy efficiency across our
construction activities, investment properties and office operations. A summary of energy saving actions and programmes
are detailed below:
Refurbishment of Head Office
In May 2023 we commenced the refurbishment of our head office which was completed in December 2023. As part
of the refurbishment, we implemented improvements to the thermal properties of the building fabric, installed a
14kWp solar PV array, upgraded all lighting to LED with use of motion sensors, installed two EV charging points
and upgraded our heating system to an efficient gas fired system.
Plant and Vehicle Fleet
We began the process of changing company car vehicles, that required replacing, with hybrid models. The Group
will focus on implementing a policy of replacing vehicles with hybrid and EV options going forward. The Group
have also investigated the use of Hydrotreated Vegetable Oil (HVO) fuel for certain plant vehicles; this option will
be further developed and implemented where applicable.
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J. Smart & Co. (Contractors) PLC
REPORT OF THE DIRECTORS (continued) 31st JULY 2024
GREENHOUSE GAS EMISSIONS (continued)
Our Energy Efficiency Actions (continued)
Investment Properties
Across our investment property portfolio we are investing in energy efficiency measures that will benefit our tenants
as well as our energy consumption for common areas included in Scope 1 and 2 above. We are continuing to roll out
LED lighting upgrades when properties become vacant and have a programme to upgrade to smart meters where
possible, install solar PV, reduce heat loss from the building fabric and install heating controls for common areas.
Further details of the energy efficiency and renewable energy measures implemented for investment properties
are outlined in our Task Force on Climate-related Financial Disclosures (TCFD) on pages 21 to 43 of the financial
statements.
The Group has conducted a comprehensive calculation of its carbon impact under the TCFD requirements and has
developed its net zero strategy and carbon reduction roadmap for coming year. Refer to our TCFD report on pages 21 to
43 of the financial statements.
Methodology
Overall, our methodology for preparing the energy and carbon report follows the principles set out in Environmental
Reporting Guidelines
1
, namely, relevance, completeness, consistency, and transparency. We have used the GHG Protocol
Corporate Accounting and Reporting Standard (revised edition) to data gathered to fulfil our requirement under these
regulations and emission factors from the UK Government GHG Conversion Factors for Company Reporting 2023
and 2024 as provided by the carbon reporting accounting software platform, Our Impacts and using location-based
methodology. In the reporting year, we did not have any certified renewable energy purchase contracts in place, and thus
market-based methodology has not been applied.
Our energy and carbon emissions are based on our UK operations for the year to 31st July 2024. Electricity and mains
gas data is taken from invoices and relates to our offices (individually metered) and vacant investment properties (based
on annual apportionment). Where gas consumption is recorded from volumetric meter readings the consumption has been
converted into kWh using an assumed average gross calorific value, and the standard volume correction factor of 1.0224.
Fuels for construction plant and company vehicles are based on supplier invoices and converted into kWh based on fuel
conversion factors published within UK Government Conversion Factors for Company Reporting 2023
2
.
For business travel, the Group’s financial records were reviewed for any expenses related to car hire, personal car mileage
claims and any other fuel consumption which we have direct or indirect control. The related kWh for mileage has been
calculated using the conversion factors provided in the GHG Conversion Factors for Company Reporting 2023 for the
average vehicle and unknown fuel type.
Limitations
There were no significant matters impacting the 2024 impacts or intensity ratios.
WASTE MANAGEMENT
We manage waste in accordance with the waste hierarchy and ensure compliance with all applicable environmental
legislation across all our operations. Construction waste is managed through site waste management plans which ensure
waste arising is minimised, reused or recycled. Waste reduction is considered at the building design stage and any waste
arising in construction is segregated into either on site or off site. Where possible, waste is reused on site and waste
to landfill is minimised with preference given to recycling or energy recovery. Training is provided to all staff and
subcontractors and waste champions are assigned to each site to ensure compliance with our waste policies and procedures.
1. Environmental Reporting Guidelines: Including streamlined energy and carbon reporting guidance March 2019, published by HM Government
2. https://www.gov.uk/government/collection/government-conversion-factors-for-company-reporting
12 13
J. Smart & Co. (Contractors) PLC
REPORT OF THE DIRECTORS (continued) 31st JULY 2024
GOING CONCERN
The Group’s business activities, performance and principal risks and uncertainties are set out in the Strategic Report on
pages 14 to 45.
The Directors having assessed the business risks of the Company and Group as detailed in the Strategic Report on pages
18 to 20 confirm that they have a reasonable expectation that the Company and Group has adequate financial resources
without reliance on external funding to allow the Company and Group to continue in operational existence for a period of
at least twelve months from the date of approval of the financial statements. The Directors therefore consider the adoption
of the going concern basis as appropriate for the preparation of the Annual Report and Statement of Accounts.
The Directors have made this confirmation after reviewing the expected cash position of the Group under various
scenarios taking into account future trading activities around construction projects in hand and anticipated projects, land
acquisitions, rental income, investment property acquisitions and disposals and other capital expenditure. The Directors
prepare a number of cash flows to predict the cash position of the Group under these various scenarios. The aim of these
various cash flows is to ensure at all times regardless of the scenario the Group remains cash positive thus ensuring the
Group does not have to rely on external funding. The Group ensures that all companies within the Group are financially
supported by each other and where necessary dividends from cash and reserve positive subsidiaries are paid to the Parent
Company to allow that company to provide financial support to all subsidiary companies.
There continues to be issues around the increased cost of construction materials and labour costs resulting from the
current economic climate within the United Kingdom with the cost of living crisis, inflation rates and the impact of global
conflicts. Delays in obtaining planning approval and confirmation of utility infrastructure continue to negatively impact
the progress on construction sites resulting in programme delays and increased costs.
Our investment property portfolio however, remains resilient in both the industrial and commercial sectors despite the
current economic climate. Rental income has remained consistent with no significant loss of income due to reduced
occupancy or default in tenants paying rents and the Directors do not believe that this situation will significantly change
due to the types of investment properties held.
The impact of climate risks on the Company and Group’s business activities are also considered when looking at going
concern to ensure that the Company and Group are taking account of new construction materials and techniques which
are less carbon intensive and to make improvements to our existing investment property portfolio to lower their carbon
impact. We are undertaking scenario analysis using a specially designed software package to fully analyse the impact of
climate changes in both our construction and investment property activities to enable us to take informed decisions for the
future. Full details of the Company and Group’s carbon strategic objectives and our Net Zero Roadmap as detailed in our
TCFD report on pages 21 to 43 will assist the Directors in making informed decisions about the Company and Group’s
future activities.
Although there are issues which have an impact on the finances and operations of the Company and Group the Directors
believe that as they can determine the construction work programmes to be undertaken and the management of the
investment property portfolio to ensure that the Company and Group are well placed to manage these financial and
operational risks.
FUTURE DEVELOPMENTS
It is not anticipated that the activities of the Company and its Subsidiaries, as described in the Strategic Report, will
substantially change in the foreseeable future.
12 13
J. Smart & Co. (Contractors) PLC
REPORT OF THE DIRECTORS (continued) 31st JULY 2024
EVENTS AFTER THE REPORTING PERIOD
In August 2024 the Group concluded the sale of two of its investment properties for £14,150,000. These properties had
been transferred in the year to 31st July 2024 to Assets Held for Sale details of which are given in note 18 of the financial
statements.
There have been no other events occurring after the Statement of Financial Position date that the Directors consider
should be brought to the attention of the shareholders..
AUDITOR
The Company’s auditor, BDO LLP, has expressed willingness to continue in office. Resolutions to re-appoint them as
the Company’s auditor and to authorise the Directors to determine their remuneration will be proposed at the Company’s
forthcoming Annual General Meeting.
CAUTIONARY STATEMENT
The Chairman’s Review on pages 4 and 5 and the Strategic Report on pages 14 to 45 have been prepared to provide
additional information to members of the Company to assess the Group’s strategy and the potential for the strategy to
succeed. It should not be relied on by any other party or for any other purpose.
This Annual Report and Statement of Accounts contain certain forward-looking statements relating to operations,
performance and financial status. By their nature, such statements involve risk and uncertainty because they relate to events
and depend upon circumstances that will occur in the future. There are a number of factors, including both economic and
business risk factors that could cause actual results or developments to differ materially from those expressed or implied
by these forward-looking statements. These statements are made by the Directors in good faith based on the information
available to them up to the time of their approval of this Report.
STATEMENT OF DISCLOSURE TO AUDITOR
The Directors who held office at the date of approval of the Report of the Directors, confirm that, so far as they are each
aware, there is no relevant audit information of which the Company’s Auditor is unaware; and each of the Directors has
taken all steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and
to establish that the Company’s Auditor is aware of that information.
BY ORDER OF THE BOARD OF DIRECTORS
Patricia Sweeney
19th November 2024 Company Secretary
14 15
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT 31st JULY 2024
The Directors present their Strategic Report of the Group for the year ended 31st July 2024.
The purpose of the Strategic Report is to provide the members of the Company with information to allow them to assess
how the Directors have performed their duty to promote the success of the Company and Group.
OUR BUSINESS MODEL, STRATEGY AND OBJECTIVES
The Company was established in 1947 and was listed on the Scottish Stock Exchange in 1965 and was admitted to the
London Stock Exchange on 25th March 1973.
The Group has a portfolio of self-financed industrial and commercial properties which are owned and managed by
subsidiary company, C. & W. Assets Limited. The investment properties are located throughout the central belt of
Scotland but primarily in the Edinburgh area, this being the area of the country with which we are most familiar. Our
portfolio as at 31st July 2024 extends to almost 825,000 square feet.
The Group has six other subsidiaries, four of which are trading companies. Thomas Menzies (Builders) Limited carries out
small to medium sized building and civil engineering work for a variety of clients. McGowan and Company (Contractors)
Limited provides plumbing support to the main construction companies. Cramond Real Estate Company Limited, is the
investment holding company of the Group and holds the Group’s equity investments and monies on bank deposits. Smart
Serviced Offices Limited, which trades as Foxglove Offices, provides serviced office and co-working spaces in Leith.
Concrete Products (Kirkcaldy) Limited ceased to trade in the year to 31st July 2019. Northrigg Limited is a property holding
company.
The Group also has an interest in a Joint Venture Company which was established for the purpose of property development.
The Group operates out of premises in Edinburgh and Kirkcaldy, with the centralised administration and finance function
being at the head office in Edinburgh. Full support is given by the company Directors and the finance staff to all Group
companies based at the two locations.
We maintain a core employee base which is beneficial to the growth and success of the Group due to the fact that they have
the expertise to ensure the construction activities of the Group are efficiently run, achieve a high level of quality of work
and retain control over operations. Employees who manage the Group’s investment property portfolio are fully aware of
current market conditions and ensure that there is appropriate marketing of the Group’s investment property portfolio. We
employ our own maintenance team thereby ensuring that our investment property portfolio is always in good condition
and ready for let.
Our objectives are to identify and exploit promising business opportunities as they arise to the benefit of the Group, its
shareholders and employees without over extending Group resources. While endeavouring to complete all our operations as
efficiently and to as high a standard as possible we do not set ourselves general performance yardsticks or volumetric targets.
To achieve these objectives our strategy is to continue to maintain and develop the relationships we have with social housing
providers and develop relationships with new and existing partners to establish new areas of construction opportunities,
retain our core workforce and only use specialist subcontractors with proven track records with the Group to ensure work
quality. We will continue to build both our residential properties and investment property portfolio within the central belt of
Scotland, being the area of the country with which we are most familiar. We will build up our resources to ensure the Group
has sufficient current working capital facilities and financing for future commercial and private residential developments.
In achieving our objectives we aim to generate value by creating long term and sustainable returns for our shareholders
by growing our income and profits and increasing the value of our investment portfolio and the net assets of the Group.
14 15
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
PERFORMANCE REVIEW
Construction activities
2024) 2023)
£000) £000)
Revenue . . . . . . . . . . . 14,350) 5,961)
Operating loss . . . . . . . . . . . (3,968) (2,720)
Construction revenue in the year has significantly increased over all activities due to the progress of contracts in the year.
Work has continued on the social housing contract at our Clovenstone development, being the 24 flats for Prospect
Community Housing. The work on the private housing at this development has also progressed throughout the year,
however sales from these are not expected until the year to 31st July 2026. Post year end we have established our sales
office at this site and the showhouse will follow in due course. For both the social housing and private housing elements at
this site the Directors considered the carrying value of the contract asset and inventory balances in the financial statements
and made required provisions against both amounts.
The work for a third party for a commercial and industrial property have progressed well in the year. Both of these
properties have been completed and handed over to the customer post year end.
Sales continue to be made at our private housing development at Canal View, Winchburgh but not at the levels we had
anticipated this being due to continuing uncertainties in the housing market. In the year to 31st July 2024 we sold 16
properties, giving a total sold of 25 as at 31st July 2024 out of a total of 64 dwellings in the development. Due to the levels
of sales at this development, reduced sales prices and other incentives were introduced to simulate sales. Post year end we
have sold a further 2 dwellings with a further 5 reserved. Due to the reduced sales prices and incentives introduced and
the duration of time since the completion of the housing development, the Directors considered the carrying value of the
inventory balance at the year end and made a required provision against the balance.
Our civil engineering subsidiary, Thomas Menzies (Builders) Limited, has seen an increase in revenue of £1,423,000
being an increase of 44% this is due to the nature and timing of contracts undertaken in the year.
Full details of construction revenue is given in note 3 of the financial statements.
Construction material costs continue to remain high for various reasons, being the continuing impact of Brexit, global
unrest, inflation rate increases and the overall demand for goods and services causing increases in material and labour
costs. The Group continues to monitor costs on construction contracts, with the finance and surveyor teams liaising to
ensure accurate recording of cost to contracts and monitoring of actual costs against anticipated costs and anticipated
revenue to ensure projects remain on course and reviewing the impact on future costs to complete contracts. The Directors
continue to fully appraise contracts, at various stages, prior to acceptance to ascertain the likely outcome of the contract.
These appraisals are conducted prior to land bank acquisitions, commencement of construction and then during the
lifetime of the contract to its completion.
Overheads continue to remain relatively constant in nature over time, however they have increased in monetary terms due
to inflationary increases. The Directors do continue to monitor these with a view to achieving any savings on costs where
possible. With our revenue levels the recoverability of overhead is difficult.
The increased material construction costs together with increased labour costs has resulted in margins being reduced and
the impact on the recoverability of overheads incurred by the Group has resulted in the increased operating loss incurred
in the year.
16 17
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
PERFORMANCE REVIEW (continued)
Investment activities
2024) 2023)
£000) £000)
Revenue from investment properties . . . . . . . . 7,670) 7,011)
Net surplus/(deficit) on valuation of investment properties . . . . . 994 (2,164)
Operating profit from investment properties . . . . . . . 4,634) 2,063)
Income from financial assets . . . . . . . . . 49) 58)
Loss on sale of financial assets . . . . . . . . . (123) (15)
Net surplus/(deficit) on valuation of financial assets . . . . . . 123 (19)
Share of profit/(loss) in Joint Ventures . . . . . . . 320 (36)
Overall revenue for investment properties has increased in the year by 9%. There has been a small increase overall in the
rental income and a significant increase of 58% in the amount of service charges and insurance premiums we have recovered
from tenants. Throughout the year, as expected there have been movements of tenants in and out of properties, overall, both
occupancy levels and rental growth have remained fairly static. Recoverability of revenue for investment properties continues
to remain high and the Group has suffered little in the way of defaulting tenants.
We completed work on phase 2 at our industrial site at Bellshill for the construction of one 53,735 square foot unit and the fit
out of an office within the unit. A tenant moved into the unit in the year. This unit and the existing unit at the estate were sold
post year end. Refer to notes 18 and 35 of the financial statements for further details on this sale.
There were no disposals of properties in the year but, as stated above, the Group sold the estate at Bellshill and also the one
at Cardonald, post year end.
This year the Group has earned a surplus on the revaluation of investment property portfolio of £994,000, due mainly to
improving yields and increased rental.
Income from our financial assets has decreased from that of the previous year. There were a number of acquisitions in the
year to our portfolio of financial assets along with a number of disposals on which the Group suffered a loss of £123,000.
Improvements in the world financial markets resulted in a surplus of £123,000 on the fair value of our financial assets being
recorded this year.
The share of the results in our Joint Ventures is a profit of £320,000 this is due to the accounting for the sale of the investment
properties held by Gartcosh Estates LLP in the year and the resulting profit earned on the sale.
16 17
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
PERFORMANCE REVIEW (continued)
Group results and financial position
2024 2023
£000 £000
Profit before tax . . . . . . . . . . . 2,365 105
Net bank position . . . . . . . . . . . 7,552 8,214
Total assets . . . . . . . . . . . 146,498 147,925
Net assets . . . . . . . . . . . 126,313 125,467
Overall the Group has earned a profit before tax in the year which has significantly increased due to the impact of the
surplus on revaluation of the investment properties earned this year as opposed to the deficit suffered in the previous
year. Construction activities continue to suffer operating losses but these are covered by the operating profit earned on
investment activities. If the movements in investment properties fair value and the movement in fair value of financial
assets are excluded then in the current year the Group generated a profit of £1,248,000 compared to £2,288,000 in the
previous year, as detailed in note 10 of the financial statements. The decrease in profits of £1,040,000 is mainly from
the increased operating loss suffered on the Group’s construction activities plus the loss suffered on the sale of financial
assets less the profit earned from Joint Ventures and overall increase earned in finance income.
Our net bank position, which comprises monies held on deposit, cash and cash equivalents and the netting of our bank
overdraft has decreased in the year. This is due to the cash outflows on our current private housing and own industrial
developments undertaken in the year. In the year, however, the Group received significant amounts from the Joint
Venture, Gartosh Estates LLP following the sale of its investment properties. These sums were for the repayment
of the loan provided by J. Smart & Co (Contractors) PLC plus interest earned thereon, the repayment of the capital
contribution initially paid to the Joint Venture and a dividend payment from profits previously earned and earned in
the financial year following the sale for the investment properties. Overall, the Group continues to be net debt-free.
The Group’s net assets have increased by £846,000, the main impact being the profits earned in the year, the movement
in the Group’s pension scheme surplus of £3,042,000 and the increase in our inventories of private housing for sale net
of the decrease in cash and cash equivalents. The profit generated in the year as discussed above and the accounting for
share buy backs and dividends paid to shareholders in the year also impact on the net assets.
TOTAL DIVIDEND
The Directors are recommending a final dividend of 2.27p per share which taken with the interim dividend of 0.96p
already paid in the year gives a total dividend for the year of 3.23p (2023, 3.23p), which is the same as the dividend rate
for 2023.
GREENHOUSE GAS EMISSIONS
The Group is required to report the greenhouse gas emissions for which it is responsible and on any environmental matters
which are material to the Group’s operations. Details of our emissions for the year to 31st July 2024 are set out in the
Report of the Directors on pages 9 to 11.
18 19
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties faced by the Group and the mitigating factors taken by the Group against these risks
are detailed below. The principal risks noted below are not all of the risks faced by the Group but are those risks which
the Group perceives as those which could have a significant impact on the Group’s performance and future prospects.
Area of principal risk or uncertainty
and impact
By focusing external construction
activities in the social housing sector,
which is a competitive market,
failure to win new contracts would
impact on our volume of work and
therefore the workforce required by
the Group.
Mitigating actions and controls
• Maintain long term relationships with social housing providers, resulting
from high standards of service, quality and post construction care thus
giving the Group an advantage over other builders when contracts are
awarded on criteria other than cost only.
• Identify potential build sites or include the provider within private housing
developments in relation to the element of affordable housing required.
• When workload is reduced workforce can be diverted to the Group’s own
commercial and private residential developments.
• Continue to acquire land for development for either private housing
developments or for resale to social housing providers as part of a construction
contract.
• Develop new areas of construction activities.
• Develop new joint venture opportunities.
Decline in home buyer confidence,
due to bank interest rates, availability
of affordable mortgages and cost of
living crisis resulting in stalling of
private house sales.
• Building developments in popular residential areas.
• Building high quality specification homes with attention to detail which
sets them apart from other new build homes and therefore make them more
attractive to buyers.
• Building a range of homes within a development thus providing choice to
buyers.
• Programming commencement of new build housing projects to market
conditions.
• Providing sales incentives.
• Considering the letting of built homes at market rates.
Social housing sector and the
housing market in general is highly
competitive with tight margins.
• We are an ‘all trades’ contractor who employs our own personnel in all
basic building trades who are supervised by site agents who are long serving
employees of the Group, and who have been promoted through their trades,
thus ensuring control of labour costs on contracts.
• We have invested heavily in plant and the maintenance thereof and therefore
limit our costs on contracts by utilising own plant as opposed to incurring
higher costs of hiring plant.
• Subcontractors employed by the Group are specialists in their fields and in the
main subcontractors have previously been used by the Group therefore quality
of work and reliability is known. No labour only subcontractors are employed.
• In house architectural technicians and surveyors provide pre-contract design
advice to resolve potential technical problems with the build and therefore
potential costs.
• Detailed appraisals of contract pre-land acquisiton and pre-construction.
18 19
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
Area of principal risk or uncertainty
and impact
Reduction in rental demand for
investment properties may result in a
fall in property valuations.
Mitigating actions and controls
• Only commence speculative developments after careful assessment of the
market.
• Continue to invest in property sectors which are robust.
• Restricting our operations to the central belt of Scotland being the area of
the country with which we are most familiar.
• Continually maintain and refurbish existing properties to retain existing
tenants and attract new tenants and improvements to our properties for
improved economic and climate efficiencies.
• Provide necessary financial incentives to retain existing tenants at end of
current leases and attract new tenants.
Reduction in demand for UK real
estate from investors may result in a
fall in valuations within our investment
property portfolio, this could result in
delays in investment decisions which
could impact on our activities.
• The Directors regularly review the property market to ascertain if changes
in the overall market present specific risks or opportunities to the Group.
• Restricting our operations to the central belt of Scotland being the area of
the country with which we are most familiar.
Reduction of financial resources. • Ensure resources are not over committed and only undertake commercial
and private housing developments after due consideration of the financial
impact on the Group’s financial resources.
• Build up resources to ensure the Group has sufficient finance for working capital
requirements and financing of commercial and private housing developments.
• Spread cash reserves over several banks taking account of the strength of
the bank and interest rates attainable.
• Invest resources in equities also taking account of the security of the
investment and the yields attainable.
Political events and policies result in
uncertainty until final decisions have
been made and the impact of decisions
are known, this could result in delays
in investment decisions which could
impact on our activities. Including
Local Government processes slowing
down our ability to commence new
building projects.
• Before any decisions are taken by the Directors in any area of the Group’s
activities the level of uncertainty and range of potential outcomes arising
from political events and policies are considered.
• Monitor Government guidelines and new legislations announcements to
ensure the Group remains up to date with legislation.
• Continue to pursue contacts at Local Government to obtain necessary
consents and planning approval.
Failure to evolve business practices
and operations in response to climate
change.
• Continue to monitor all requirements relating to the construction industry
in relation to improvements in buildings to ensure they comply with current
and emerging requirements.
• Review of designs for new buildings to ensure they are as energy efficient
as possible.
• Procurement of building materials from sustainable sources.
• Investment in energy saving measures within our investment property
portfolio.
• Establishment of Sustainability Committee to develop the Group’s
sustainability strategy with the commitment to reduce the Group’s carbon
emissions in line with science-based carbon reduction targets.
• Employ the services of external specialists and consultants for their expertise.
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
20 21
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
Area of principal risk or uncertainty
and impact
Unforeseen national and global
events including world conflicts and
natural disasters.
Impact of cost of living crisis,
increased inflation and bank interest
rates.
Mitigating actions and controls
• Establish strong relationships with suppliers and subcontractors to ascertain
impact on their potential supply chains.
• Build up financial resources to ensure the Group has sufficient funds for
future working capital requirements.
• Establish continuity plans for all areas of operations.
• Retain strong control over costs on construction contracts.
• Remunerate onsite and office based employees with competitive rates of
pay and benefits.
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
Emerging risk
The Group faces a number of emerging risks which could have a significant impact on the Group’s performance and future
prospects. These risks are discussed by the Directors and appropriate actions taken to mitigate these risks as soon as they
are considered to be a principal risk of the Group.
VIABILITY STATEMENT
The Directors have assessed the viability of the Group over a three year period to July 2027, taking account of the Group’s
current financial strength, business model and strategy. The Directors have also taken account of the principal risks and
uncertainties facing the Group and the actions being taken to mitigate these risks as described above.
The assessment period of three years has been chosen as the Directors consider this period to be appropriate as it fits well
with the Group’s development and investment property cycles.
The Group’s financial planning process consists of cash flow projections based on the current financial position together
with current commitments and then assumptions on future developments and investment property acquisitions and
disposals.
As the Group is net debt-free the Directors are assessing the cash impact of their assumptions of future activity to ensure
that this position is maintained. The Directors vary their assumptions in terms of economic, investment and other factors
to different scenarios to assess the impact on the Group’s cash position. Even with these sensitivities applied the Group
remains net debt-free.
Based on this assessment the Directors have a reasonable expectation that the Group will continue in operation and meet
its liabilities as they fall due over the period to July 2027.
20 21
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
As a Group, J. Smart & Co. (Contractors) PLC already follow prudent principles in relation to our business activities. We
will continue to refine and re-focus our objectives to ensure compliance with the Task Force Climate-related Financial
Disclosures (TCFD) requirements and embed TCFD into our governance, strategy and risk mitigation going forward. We
support the essence of TCFD, and recognise the importance and impact of climate change, which is reflected within our
Sustainability Strategy.
Following the reporting of 2022/23 emissions data, we debriefed the process and from learnings we have reviewed our data
collection and preparation process and applied more specific emission factors to our carbon accounting methodology. To
provide the most accurate information possible, we have invested in two software platforms; Our Impacts by Eco Online
and Earth Scan by Mitigia. These along with improvements in data collection of our 2024 Greenhouse Gas Emissions and
TCFD metrics, provide a more robust and reliable basis for ongoing data analysis and monitoring performance. As a result
of the outcomes of data work in 2023/24, we have taken the decision to set the current year data as our baseline, against
which all future carbon impacts and metrics will be compared. The prior year was the Group’s initial disclosure under
TCFD Metrics and Targets pillar, and with the learnings we have decided it is not beneficial to allocate time, resources
and costs to restate 2022/23 data.
The Board confirms that it has complied, where applicable, with the Listing Rule requirements as per UKLR 6.6.6(R)(8)
for the disclosures for TCFD. As identified last year, the Board recognised that some TCFD recommended disclosures
required further development. To develop and improve the disclosures within the relevant pillar, we have progressed our
data management practices through the introduction of comprehensive software, developed our Net Zero roadmap and
enhanced our scenario analysis capabilities.
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
As a Group, J. Smart & Co. (Contractors) PLC already follow prudent principles in relation to our business activities. We
will continue to refine and re-focus our objectives to ensure compliance with the Task Force Climate-related Financial
Disclosures (TCFD) requirements and embed TCFD into our governance, strategy and risk mitigation going forward. We
support the essence of TCFD, and recognise the importance and impact of climate change, which is reflected within our
Sustainability Strategy.
Following the reporting of 2022/23 emissions data, we debriefed the process and from learnings we have reviewed our data
collection and preparation process and applied more specific emission factors to our carbon accounting methodology. To
provide the most accurate information possible, we have invested in two software platforms; Our Impacts by Eco Online and
Earth Scan by Mitigia. These along with improvements in data collection of our 2024 Greenhouse Gas Emissions and TCFD
metrics, provide a more robust and reliable basis for ongoing data analysis and monitoring performance. As a result of the
outcomes of data work in 2023/24, we have taken the decision to set the current year data as our baseline, against which all
future carbon impacts and metrics will be compared. The prior year was the Group’s initial disclosure under TCFD Metrics
and Targets pillar, and with the learnings we have decided it is not beneficial to allocate time, resources and costs to rest ate
2022/23 data.
The Board confirms that it has complied, where applicable, with the Listing Rule requirements as per UKLR 6.6.6(R)(8) for
the disclosures for TCFD. As identified last year, the Board recognised that some TCFD recommended disclosures required
further development. To develop and improve the disclosures within the relevant pillar, we have progressed our data
management practices through the introduction of comprehensive software, developed our Net Zero roadmap and enhanced
our scenario analysis capabilities.
Disclosure Alignment with
Compliance
Requirements
Actions Year
Recommendation
Disclosure: Disclose the organisation’s governance
around climate related risks and opportunities.
(a) Describe the board’s oversight of climate related
risks and o
pp
ortunities.
Full
(b) Describe the management’s role in assessing and
managing climate- related risks and opportunities.
Full
Disclosure: Disclose the actual and potential impacts
of climate-related risks and opportunities on the
organisation’s businesses, strategy, and financial
planning where such information is material.
Recommendation
(a) Describe the climate-related risks & opportunities
the organisation has identified over the short, medium,
and lon
g
term.
Full
(b) Describe the impact of climate-related risks &
opportunities on the organisation’s business strategy, &
financial planning
Partial Continue to progress our carbon reduction
target of 30% by 2030 to align to Science
Based targets initiative and reflect the
financial impacts of our Net Zero roadmap
into the Group's financial planning process.
A more detailed climate-related risk
assessment for material aspects of the business
will be conducted in 2025 The potential
impacts on financial performance will be
estimated where possible.
2025
22 23
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
Disclosure Alignment with
Compliance
Requirements
Actions Year
(c) Describe the resilience of the Organisation’s
strategy, taking into consideration different climate-
related scenarios, including a 2°C or lower scenario.
Partial Use climate and emissions analysis software
(Our Impact and Earthscan) to update scenario
analysis for physical risks and review the
potential of government policy developments
around transitioning to low carbon-built
environment.
A more detailed climate-related risk
assessment for material aspects of the business
will be conducted in 2025 The potential
impacts on financial performance will be
estimated where possible.
We will evaluate the resilience of our strategy
to the impact of climate-related risks, and the
adaption measures required.
2025
2026
Recommendation
Disclosure: Disclose how the organisation identifies,
assesses, and manages climate-related risks.
(a) Describe the organisation’s processes for
identifying and assessing climate-related risks.
Partial Continuing to refine and enhance our
processes for assessing and managing
climate-related risk, particularly the impacts
of financial planning and data processing.
2025
(b) Describe the organisation’s processes for managing
climate-related risks.
Partial Through our quarterly reporting process, the
sustainability committee will continue to
identify climate-related risk and consider
approaches to risk management (e.g.
mitigation, control, etc) and report to the
Board for decisions.
2025
(c) Describe how processes for identifying, assessing,
and managing climate-related risks are integrated into
the organisation’s overall risk management.
Full
Recommendation
Disclosure: Disclose the metrics and targets used to
assess and manage relevant climate-related risks
and opportunities where such information is
material.
(a) Disclose the metrics used by the organisation to
assess climate-related risks and opportunities in line
with its strate
gy
and risk mana
g
ement
p
rocess.
Full
(b) Disclose Scope 1, Scope 2, and if appropriate,
Scope 3 greenhouse gas (GHG) emissions, and the
related risks.
Full
(c) Describe the targets used by the organisation to
manage climate-related risks and opportunities and
p
erformance a
g
ainst tar
g
ets.
Full
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
22 23
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Our Sustainability History & Roadmap
The Group has a long history of sustainable practices. We aim to refurbish where possible, reuse materials, utilise
local suppliers and redevelop brownfield sites, for both residential and commercial projects, a recent example being
our development at Clovenstone, Edinburgh. This development, consisting of 69 apartments arranged over 3 blocks,
broke ground in 2023/24. The City of Edinburgh Council has declared a housing emergency so we are confident this
development will provide some much-needed high quality, energy efficient and safe housing to an area which has a dearth
of such accommodation. The development benefits from a timber frame, high levels of insulation, double glazed energy
efficient windows along with communal EV charging points. The power to the lifts, communal stair lighting and door
entry systems will be augmented by electricity generated by PV panels on each block. Of the 69 apartments, 24 will be
affordable homes delivered by us in partnership with Prospect Community Housing. The rest of the apartments will be
available for sale, and we are positive that these will attract a high level of interest when they become available in 2025.
For projects, including Inchmuir Park, we will be using lower carbon recycled steel, along with other emission reducing
practices. This new speculative development of 4 industrial units each of 14,660 square feet will provide our most
sustainable project to date. We are utilising recycled steel in the frame of the building to reduce our embodied carbon.
There will be 8 EV chargers and PV panels to each unit. They are subdivisible into 4 smaller units, and each will be
equipped with LED lighting. We have made the decision not to install gas to any of our new, speculative developments
and this will also reduce our embedded carbon footprint as well as operational carbon for the buildings in the future. We
are continually striving to reduce embodied carbon, in this and all future projects, working collaboratively with our supply
chain partners.
The Group has continued its programme of energy awareness to improve on-site energy efficiency, such as providing
electricity grid connections to our developments as soon as possible to reduce the use of diesel generated power. We are
also restricting machine idling time and using appropriate travel speeds when manoeuvring around the development.
We have also introduced a Waste Management Policy to ensure a consistent approach to waste across all our sites and
locations, with a focus on driving site efficiency actions.
As part of our exploration of renewable energy for leased assets, we commissioned Syzygy Renewables Ltd, a renewable
energy consultancy firm, to prepare a feasibility study on our existing leased asset portfolio to determine the suitability
and the viability of our properties for the installation of PV on the roofs. We have received the report, with the financial
impacts quantified. The next steps will be to investigate various funding options and how to progress the PV roll out
programme.
Reducing the carbon emissions from our construction fleet is a key priority. As well as ensuring efficient practices
employed, we are investigating medium-term alternative fuels to power our plant and fleet. Further information is detailed
in our Net Zero Roadmap.
As part of our Strategic Objective; Digital Transformation: to build upon & improve our data management, data analysis,
digital working practices, the Group has significantly invested in two software platforms. To improve data collection and
analysis we have invested in software platform, Our Impacts by Eco Online to enable us to measure, report and monitor
our climate impact.
This investment in our digital working practices will improve our risk and data management, ensuring our information and
results are refined and robust. The software platforms will also support the Board when assessing risks and opportunities,
in terms of TCFD.
In addition to the above, our data management practices for 2023/24 have included members of our team who are closer
to the processes and data as part of their roles. This has enabled a more comprehensive identification, collection and
accuracy of the data required.
Looking forward, Climate Action will be a continual key strategic priority for the business, embedding processes and
practices into our business operations and providing key education and training to our employees to support our goals.
24 25
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Our Sustainability History & Roadmap (continued)
Governance
Recommendation Recommended Disclosures
Disclosure: Disclose the
organisation’s governance
around climate related risks
and opportunities.
2023/24 Progress: Continued focus on targets and objectives and creation of Net Zero Road
Map.
(a) Describe the Board’s
oversight of climate-related
risks and opportunities.
(b) Describe the
management’s role in
assessing and managing
climate- related risks and
opportunities.
The Group understands that climate change can present risks and opportunities to our
business activities, our employees and our other stakeholders. The Board of the Company
oversees the Sustainability Strategy, which details risks, opportunities, and identified
objectives. The Strategy also addresses the carbon impact of our waste, assets, operations
and investments. It provides details of our objectives going forward, including our efforts
to reduce our carbon impact and operate more sustainably in all aspects of our business.
The Board met 4 times throughout the year when climate-related risks and opportunities
were placed on the agenda. The design, implementation, and execution of the organisation’s
response is discussed. The Board Director responsible for climate related issues is our
Chairman and Joint Managing Director, David Smart, and the Senior Manager who leads the
delivery of the sustainability strategy is Jane Oliver. Our Chairman oversees the internal
management of J. Smart & Co.’s climate-related risks, opportunities and strategy-setting
process, and receives updates on climate-related activities and developments throughout the
business. These updates are reported by the Sustainability Committee.
The Sustainability Committee is formed of representatives from across the business
including the Joint Managing Directors, members of the Real Estate, Construction, HR and
Design Teams. Meeting monthly, the Committee collaborates to identify, assess, and
manage our response to climate related risks and opportunities. The Committee works
closely with employees throughout our company to implement and enhance programmes and
policies addressing climate-related risks and opportunities for J. Smart & Co. The
Committee reports to the Board quarterly with its recommendations, and provides progress
updates on targets and objectives.
Our Board, oversees the integration of climate related opportunities and risks, including
environmental and climate-related impacts, into corporate risk assessment activities and
audit functions.
2024/25 focus: Set up of Climate Disclosures Working Group, to identify further
climate-related risks and opportunities
1947
•Establishment of J.
Smart & Co.
•Creation of prudent
principles in all
business activities.
1947 onwards
•Introduction of
sustainable design
into projects &
developments.
2023
•Baseline targets
identified for TCFD
requirements.
•Continuation of our
sustainability
journey.
2024
•Creation and
publication of J.
Smart & Co. Net
Zero Road Map.
•Baseline targets
recalibrated for
2023/24.
•Continuation of our
sustainability
journey.
2030
•To reduce our
carbon emissions by
at least 30%, in line
with Science Based
Targets.
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
Governance
24 25
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
Strategy
Recommendation
Recommended Disclosures
Disclosure: Disclose the actual
and potential impacts of climate-
related risks and opportunities
on the organisation’s businesses,
strategy, and financial planning
where such information is
material.
2023/24 focus: Re-evaluation of our carbon reduction targets to align to Science
Based targets initiative and; reassess our objectives based on more detailed
scenario analysis in order to further develop our financial planning.
(a) Describe the climate-related
risks & opportunities the
organisation has identified over
the short, medium, and long term.
We have identified climate-related risks, opportunities and objectives through our
business activities and processes, namely: Stakeholders, Supply Chain, Materials,
Assets groups, unconsolidated Equity Investments and GHG emissions. We have
progressed the analysis and impact of our risks and opportunities, through quarterly
reviews with the Board.
Our main risks, related to climate change are changes in regulation, technology,
stakeholder expectations and physical risks, including heat and unpredictable weather.
Our opportunities are focused on the products we can offer to adapt to the effects of
climate change, including the use of green steel, low-carbon materials, low-carbon fuels
for construction activities, and generating income from solar PV from our property
portfolio.
The time horizons, as summarised below, can differ by business segment and reflect the
development timescales and cyclical nature of the business. We define time horizons as
follows:
• Short term relates to the standard development cycle from planning consent
being granted to completion;
• medium relates to site identification through purchase to the submission of
planning application; and
• long term relates to expected period that investment properties are held
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Governance (continued)
Strategy
Recommendation
Recommended Disclosures
Disclosure: Disclose the actual
and potential impacts of climate-
related risks and opportunities
on the organisation’s businesses,
strategy, and financial planning
where such information is
material.
2023/24 focus: Re-evaluation of our carbon reduction targets to align to Science
Based targets initiative and; reassess our objectives based on more detailed
scenario analysis in order to further develop our financial planning.
(a) Describe the climate-related
risks & opportunities the
organisation has identified over
the short, medium, and long term.
We have identified climate-related risks, opportunities and objectives through our
business activities and processes, namely: Stakeholders, Supply Chain, Materials,
Assets groups, unconsolidated Equity Investments and GHG emissions.
We have
progressed the analysis and impact of our risks and opportunities, through quarterly
reviews with the Board.
Our main risks, related to climate change are changes in regulation, technology,
stakeholder expectations and physical risks, including heat and unpredictable weather.
Our opportunities are focused on the products we can offer to adapt to the effects of
climate change, including the use of green steel, low-carbon materials, low-carbon fuels
for construction activities, and generating income from solar PV from our property
portfolio.
The time horizons, as summarised below, can differ by business segment and reflect the
development timescales and cyclical nature of the business. We define time horizons as
follows:
• Short term relates to the standard development cycle from planning consent
being granted to completion;
• medium relates to site identification through purchase to the submission of
planning application; and
• long term relates to expected period that investment properties are held
Strategy
26 27
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
Recommendation Recommended Disclosures
(a) Describe the climate-related
risks & opportunities the
organisation has identified over
the short, medium, and long term.
Time
Horizon
Period Physical Risk Transition Risks
Short Within 3
years
Unpredictable
weather events
Government Policy & Market
demands for low carbon commercial
properties
Regulations relating to
decarbonisation of transport & the
expansion of low emission zones.
Availability of low carbon materials
& technologies that are financially
viable to meet market re
q
uirements.
Medium 3-10 years Increase demand for
cooling
Continuation of market expectations
to use low carbon buildings
Planning regulations for
decarbonisation of the built
environment.
Availability of low carbon materials
& technologies that are financially
viable to meet market re
q
uirements.
Long term 10 -50
years
Increase in extreme
weather events (100
return rate) more
likely by surpassing
2
o
C
To be assessed more fully in the
coming year and relate to the market
valuation of investment properties
traditionally held for 50 years. The
investment strategy will be reviewed
in the coming year.
(b) Describe the impact of
climate-related risks &
opportunities on the organisation’s
businesses, strategy, & financial
planning.
Although we have assessed the impact on our business and strategy, we intend to analyse
our processes and impacts further in order to better quantify the impact on financial
planning. Through the commencement of our Net Zero journey, we have identified
financial quantification of some of our principal risks and opportunities.
Financial Quantification
• Materials: The financial impact has been quantified, and the impact is cost neutral.
• HVO: Cost impacts from transitioning to HVO have been identified and are not
considered to be prohibitive and will be reflected in the coming year’s financial
planning process.
• Property Portfolio PV: The financial impact of each batch has been quantified and
over the next 12 months we shall investigate various funding options to progress
the PV roll out programme.
• Property Portfolio LED Lighting: This is funded by dilapidations settlements or
via service charge and therefore has minimum financial impact on the Group.
Our financial planning processes for our identified climate-related risks and
opportunities are in their infancy as outlined in the points noted above, however, going
forward, they will form part of the cash flow process and Board risk analysis
discussions, outlining how these are prioritised within an appropriate timeframe.
Our identified targets and objectives support the overall direction of travel to reduce our
emissions, and where possible, are shaped by scenario analysis.
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Strategy (continued)
26 27
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
Recommendation Recommended Disclosures
(c) Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-
related scenarios, including a 2°C
or lower scenario.
Our current scenario analysis has focused on the potentially most significant financial
impact of climate-related risks upon the Group. We now use Earthscan, a geospatial
mapping tool to assess the physical risks for each property asset (i.e. office buildings or
Estates) and operational properties across three climate scenarios: business as usual,
emissions peak 2040 and Paris aligned scenarios for short (2025), medium (2030) and
long term (2050).
For other strategic objectives, our scenario analysis is based the outcomes of our
engagement with our supply chain for materials, subcontractors and fuel providers to
assess impacts for two scenarios: <2
o
C and >2
o
C upon the current business activities and
processes outlined in disclosure (a) above.
Further scenario analysis will be a focus for future years, we have been able to gather
limited information this financial year. The targets and objectives are subject to our
transition to Net Zero and will be adjusted accordingly.
Resilience Strategies
As this is our second year of TCFD reporting, and we are yet to fully evaluate the
resilience of our strategy to the impact climate related risks, and the adaptation measures
required.
2024/25 focus:
i) Continue to progress our carbon reduction target of 30% by 2030 to align to
Science Based targets initiative and; ii) Use climate and emissions analysis software
(Our Impact and Earthscan) to assess the financial impacts of the scenario analysis
for physical risks and the potential government policy developments around
transitioning to low carbon-built environment.
As part of our ambitions to acquire better data to allow us to assess the risks and opportunities of our physical assets, we have
moved to a more sophisticated climate risk analysis tool from EarthScan. Currently, this platform does not measure surface
water flood risk, however, will be included in the future.
Under Paris-aligned criteria this has identified that our assets are “C” rated for combined physical risk. However, the
combined C rating results from the principal risk factor is “heat stress”. For the 5 assets most at risk, based on the expected
maximum temperature under a 100-year return period for Paris aligned scenario, means an average increase in temperature
of between 1.38
o
C and 1.43
o
C at 2030. In conclusion, management have considered the location and risk profiles provided
by Earthscan and do not believe there to be a material impact on the financial performance and value of these assets at present.
Management will continually monitor its investment and operational assets to assess financial impacts
Please see matrix below which indicated our portfolios average EarthScan rating for each climate hazard. The matrix
indicates how average climate exposure may change over the short, medium and long term under business as usual, emissions
peak in 2040 and Paris aligned scenarios.
The matrix below indicates our portfolios average EarthScan rating for each climate hazard. The matrix indicates how
average climate exposure may change over the short, medium and long term under business as usual, emissions peak in 2040
and Paris aligned scenarios.
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Strategy (continued)
As part of our ambitions to acquire better data to allow us to assess the risks and opportunities of our physical assets, we
have moved to a more sophisticated climate risk analysis tool from EarthScan. Currently, this platform does not measure
surface water flood risk, however, will be included in the future.
Under Paris-aligned criteria this has identified that our assets are “C” rated for combined physical risk. However, the
combined “C” rating results from the principal risk factor is “heat stress”. For the 5 assets most at risk, based on the
expected maximum temperature under a 100-year return period for Paris aligned scenario, means an average increase in
temperature of between 1.38°C and 1.43°C at 2030. In conclusion, management have considered the location and risk
profiles provided by Earthscan and do not believe there to be a material impact on the financial performance and value
of these assets at present. Management will continually monitor its investment and operational assets to assess financial
impacts
The matrix below indicates our portfolios average EarthScan rating for each climate hazard. The matrix indicates how
average climate exposure may change over the short, medium and long term under business as usual, emissions peak in
2040 and Paris aligned scenarios.
28 29
A = Excellent
Minimal risk of climate hazard events that have the potential to cause physical damage and/or disruption to built assets.
B = Good
Low risk of climate hazard events that have the potential to cause physical damage and/or disruption to built assets.
C = Moderate
Medium risk of climate hazard events that have the potential to cause physical damage and/or disruption to built assets.
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Strategy (continued)
A = Excellent
Minimal risk of climate hazard events that have the potential to cause physical damage and/or disruption to built assets.
B = Good
Low risk of climate hazard events that have the potential to cause physical damage and/or disruption to built assets.
C = Moderate
Medium risk of climate hazard events that have the potential to cause physical damage and/or disruption to built assets..
28 29
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Strategic Objectives
Strategic Objectives
Strategic
Objective
Physical/
Transition
Risk*
Managing the
risk or
opportunity
Risk/
Opportunity
Scenario
Analysis
< 2c
Scenario
Analysis
> 2c
Target
2023/2024
Update
1. Reduce the
carbon intensity
of raw materials
Transition
Focus on steel
and investigate
low carbon
concrete.
10% of total
steel
purchase is
green by
2025.
125tonnes of
recycled steel
was used in
2023/24
reducing
emissions by
76% compared
to conventional
steel. This
represents 44%
of total steel
used on Plean
Precast
contracts.
For Inchmuir
Park 40% of
required steel
will be
recycled, with
specification to
be used for
future projects.
2. Monitor
exposure to flood
risk for vacant
land sites
Physical –
flooding,
wind, heat
stress,
precipitation,
drought and
wildfires
Physical
Monitor risks
using Earth
Scan software
and explore any
necessary
adaptation and
mitigation
measures where
appropriate.
For assets
rated E or F
consider the
financial and
commercial
viability.
We have
reviewed all
our property
holdings,
including
leased assets,
operational
property and
vacant land
throughout the
Group on the
EarthScan
platform.
125 tonnes of
30 31
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Strategic Objectives (continued)
Strategic
Objective
Physical/
Transition
Risk*
Managing the
risk or
opportunity
Risk/
Opportunity
Scenario
Analysis
< 2c
Scenario
Analysis
> 2c
Target
2023/2024
Update
3. Decarbonise
investment
portfolio
Transition
Focus on divesting
high carbon
investments, when
stock market
conditions,
financial yield and
portfolio balance
permit.
10%
reduction by
2025.
Proposed new
investments,
will work
towards the
reduction
target.
From invest
decisions in the
year the carbon
intensity of
equity
investments has
fallen by 14.5%
with a view to
continuing our
decarbonisation
strategy.
4. Explore
renewable energy
strategy to
property portfolio
Physical &
Transition
Review
recommendations
of feasibility study
and develop plan
on how to
progress. Look at a
case study
property to work
on.
Increase the
renewable
energy
generation
capabilities
across the
property
portfolio.
From a
feasibility study
for PV to
suitable
properties, we
have identified
1023kWp of
potential
generation
capacity.
5. Transition to
low carbon
alternatives for
plant and
machinery
Physical &
Transition
To look at the
short, medium and
long-term
opportunities to
upgrade plant to
more green
alternatives; and
the suitability of
HVO for plant,
and the suitability
of local supply
chain.
Transition to
HVO and
battery
storage for
plant and
welfare
facilities to
reduce diesel
consumption
by 40% by
2026.
Investigating
medium
-term
alternative fuels
to power our
plant and fleet
.
6. Digital
Transformation:
to build upon &
improve data
management, data
analysis, digital
working practices
and procure the
relevant skill sets
required to
implement
Transition
To investigate
available options
to improve our
data collection and
IT systems to
collect quality
data, to provide
more detailed and
robust
information.
Implement
digital IT
systems and
provide
training to
our
employees
by 2025.
Completed
migration to
Microsoft 365.
Training to be
rolled out to
employees on
full remit of
365.
Implement use
of
software;
Our Impacts
&
Earth Scan.
Microsoft 365
30 31
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Strategic Objectives (continued)
Strategic
Objective
Physical/
Transition
Risk*
Managing the
risk or
opportunity
Risk/
Opportunity
Scenario
Analysis
< 2c
Scenario
Analysis
> 2c
Target
2023/2024
Update
7. Continually
strive towards
Zero Waste to
landfill
Transition
Review our waste
management
process to improve
diversion from
landfill by
focusing on each
stage of the
development
process from
design to final
treatment,
We will engage
with regulators,
other contractors,
and landowners to
improve our
processes and
options to increase
on and off-site
reuse.
Increase
diversion
from landfill
to 95% by
2025.
Implementation
of Waste
Management
Policy.
Focus on
education
–
review &
communicate
procedures e.g.
correct
recycling bins
to use.
Engage with
our Waste
Contractors to
improve data
granularity and
explore
alternative
recycling
methods.
* Physical Risk: Heat, Flood, Unpredictable weather.
Transition Risk: Policy, Economic, Technology, Regulation, Stakeholders.
KEY:
Risk/Opportunity
Low Risk
Medium Risk
High Risk
Low
Opportunity
Medium
Opportunity
High
Opportunity
Risk Assessment Matrix
Risk Rating
Scale of Impact Likelihood
Stakeholder
Interest
Materiality
(Financial & GHG)
Low Risk
Limited and short term time
horizon
Remote
Rarely reported as
focus area
Insignificant <0.5%
Medium Risk
High in short term time horizon,
and recoverable
Possible
Commonly reported
as focus area
Potentially significant.
High risk
High in medium to long term
horizon, and widespread impact if
no corrective action taken
Probable
Reported as a high
priority
GHG emissions >15% of total
baseline emissions, OR significant
impacts on financial planning
Scenario Analysis
No Change
Minor Change
Major Change
32 33
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Risk Management & Corporate Risk
Risk Management & Corporate Risk
Recommendation Recommended Disclosures
Disclosure: Disclose how the
organisation identifies, assess,
and manages climate-related
risks.
2023/24 focus: Continuing to develop our processes for assessing and managing
climate-related risk, in particular the impacts of financial planning.
(a) Describe the organisation’s
processes for identifying and
assessing climate-related risks.
Climate change is a principal risk. We have formal ongoing processes to identify, assess
and analyse risks and these form part of our Group Risk Register.
We are continuing to refine our processes for assessing the potential size and scope of
identified climate-related risks as well as determining the relative significance of climate
related risk in relation to other risks. We understand that we still have more work to do
in this area and are partially compliant.
These risks are fully explained in our risk section in our Principal Risks and Uncertainties
section of the Strategic Report on pages 18 to 20 of the financial statements.
(b) Describe the organisation’s
processes for managing climate-
related risks.
For 2023/24, we have implemented work processes and initiatives to further progress the
learnings from 2022/23 work packages, i.e. Key stakeholders (Tenants, Housing
Associations, Employees), Supply Chain, Construction Materials, Key Assets Groups
(Plant & Machinery, Vehicles and investments properties and unconsolidated Equity
Investment). This work has been underpinned by a series of sprints with key members
of the team.
The assessment work has been led by members of the Sustainability Committee and with
input from specialists and team members from across the organisation. Our holistic
approach ensures that the assessment has captured expertise and knowledge in both depth
and breadth. The outcomes from the work packages and sprints have enabled a more
systematic evaluation of risks and opportunities which the Board has reviewed as part of
their decision-making process in risk mitigation and setting strategic objectives. Risk
and opportunity assessment considers scale of the impact, likelihood, stakeholder interest
and materiality in terms of financial and GHG emissions.
These risks and opportunities are detailed in our Strategic Objective table on pages 29 to
31.
We are developing our processes to control, mitigate, accept or transfer our significant
climate-related risk which could have a material impact.
As part of our ongoing drive to enhance the quality of our data and analysis of our
climate-related risks, this year we have invested in the EarthScan platform. Earthscan is
an effective tool to control our risk through incredibly detailed information on our
operational properties as well as our leased assets portfolio’s exposure to climate risk. It
provides customised asset-level insight into acute and chronic risks such as flooding,
droughts and extreme temperatures. It brings together world-leading climate science,
data modelling and machine learning to help us comply with disclosure requirements as
we as informing investment decisions across time horizons and future climate scenarios.
32 33
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Risk Management & Corporate Risk (continued)
Recommendation Recommended Disclosures
Furthermore, our focus on data quality for the preparation of carbon emission is essential
to improving our climate risk management to ensure key metrics are reliable for decision
making. Data quality also underpins our performance against our Net Zero targets for
material emissions. In 2023/24, departments across the Group focused on improving data
gathering and processing to streamline data management, particularly for construction
materials, subcontractors and property investments. The Group investment in data
management during the reporting year is evident in our 2024 Greenhouse Gas Emissions
Statement, and the reason behind setting our Net Zero carbon baseline to 2024.
To mitigate transition risks, our construction team are strengthening our supply chain
engagement process to identify suppliers that can provide low carbon materials, such as
recycled steel, at the scale and cost required. In addition, we are regularly assessing our
fixed investments with our brokers to reduce the carbon intensity of our equity
investments to mitigate the risk of potential devaluation.
With regards to our plant and equipment, the Group has typically preferred to own
rather than lease as heavy plant and equipment is often held for 10-15 years. However,
the speed of technological developments in battery powered construction equipment
and low carbon energy generation for sites, questions the suitability of our traditional
approach. The Board will be reviewing the Group’s plant and equipment acquisition
strategy in the coming year to assess options, and the implications on operational
processes and financial planning.
(c) Describe how processes for
identifying, assessing, and
managing climate-related risks
are integrated into the
organisation’s overall risk
management.
For 2023/24, the Sustainability Committee have prepared a quarterly report on
Sustainability, to present to the Board at their meetings. The report contains an update
on the Sustainability Risk Register & Opportunities, our Strategic Objectives and our
Key Metrics and Targets; identifying progress, any blocks to achievement, and Board
assistance required. The Board report and the attendance by the Sustainability
Committee at the Board meetings enable a consistent assessment of the climate related
risks, objectives and targets. This ensures actions and issues are identified timeously,
and the Company’s overall risk management is continuously reviewed and discussed.
2024/25 focus: Continuing to refine and enhance our processes for assessing and
managing climate-related risk, particularly the impacts of financial planning and
data processing.
34 35
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Metrics & Targets
35
Recommendations Recommended Disclosures
Disclosure: Disclose the metrics
and targets used to assess and
manage relevant climate-related
risks and opportunities where such
information is material.
2023/24 focus: Monitor our key metrics and targets and improve data gathering
to achieve this.
(a) Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management
process.
(b) Disclose Scope 1, Scope 2, and if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related
risks.
(c) Describe the targets used by the
organisation to manage climate-
related risks and opportunities and
performance against targets.
We have detailed our climate-related risks and opportunities according to TCFD
guidelines in our Sustainability Strategy. Our overarching target is to reduce our total
carbon emissions for Scope 1, 2 and 3 by at least 30% by 2030, in line with Science
Based Targets initiative (SBTi) for 1.5
o
C limit to global warming by 2100.
With the creation of our Net Zero Roadmap, during this financial year, we will be able
to refine this target, along with improvements in our business processes, practices, and
actions.
The key metrics and targets we have set relate to reductions in our carbon emissions for
the most significant areas of our GHG emissions, as set out below, and to a focus on
our investment portfolio for properties and unconsolidated equity investments. Our key
metrics are detailed below under Metrics & Targets.
Following the review of our data for year ending 31st July 2023, the data for year
ending 31st July 2024, will form of our baseline year. The GHG emissions for year
ending 31st July 2024 can be found under the Greenhouse Emissions Statement on
pages 36 to 43 of the financial statements, which details Scope 1, 2 and 3 emissions, in
addition to the SECR report provided on pages 9 to 11.
We plan to achieve these targets through key areas:
• Continually engage with our supply chain to reduce the carbon intensity of
materials and subcontracted services.
• Investment in energy efficiency and renewable energy generation across our
investment portfolio.
• Move towards a balanced portfolio of our investments.
• Remuneration, we will consider linking climate related targets, as per our
Sustainability Strategy in the Group remuneration process.
• Internal carbon pricing has not been considered as a method to support our
carbon reduction targets, though this could be considered in the future.
More details on our Net Zero Roadmap are outlined on pages 35 and 36.
2024/25 focus: Monitor our key metrics and targets. To continue to improve data
gathering and analysis, through our processes, and software packages Our Impacts
and Earthscan.
Our metrics and targets have been established in line with mandatory requirements. We have approved targets for Scope 1
and 2. For Scope 3, our baseline year is 2023/2024.
Metric Title Units
2024
Baseline
year
2023
Fixed Asset Investments (Carbon
Intensity) tCO
2
e/$m invested 49.7 56.0
Waste Management % diversion from landfill 21% 94%
Energy (Property) kgCO
2
e/sqft 1.7 1.8
Materials (Construction) tCO
2
e/£m 91.1 624.9
Plant (Fuel Carbon Intensity)
tCO
2
e/£m of Construction
Work 21.6 23.0
Our metrics and targets have been established in line with mandatory requirements. We have approved targets for Scope
1 and 2. For Scope 3, our baseline year is 2023/2024.
Metric Title Units 2024 Baseline year 2023
Fixed Asset Investments (Carbon Intensity) tCO
2e/$m invested 49.7 56
Waste Management % diversion from landfill 21% 94%
Energy (Property) kgCO
2e/sqft 1.7 1.8
Materials (Construction) tCO
2e/£m 91.1 624.9
Plant (Fuel Carbon Intensity) tCO
2e/£m of Construction Work 21.6 23.0
34 35
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Net Zero Roadmap
We are in the process of developing our Net Zero Roadmap for the key programmes of work needed for our business to
achieve our interim target and reduce our total carbon emissions by at least 30% by 2030. This interim target is in line with
Science Based Targets Initiative (SBTi)1.5oC reduction pathway. Although the Group’s Net Zero target and roadmap has
not be validated by SBTi, it is best practice to adopt its reduction trajectory to support the long-term UK 2050 Net Zero
Commitment and Scotland 2045 Net Zero target.
Our Net Zero commitment covers all emissions across the Group. Where applicable our Net Zero objectives have been
quantified, for those that have not been, they remain equally important. From emission reductions currently quantified, as
detailed below, the GHG emissions could fall by 1363.50tCO2e by 2030. This represents over half the reduction required
to achieve our interim target from the 2024 baseline. We recognise with the cyclical nature of property development and
the type of development there will be annual fluctuations in our emissions.
The following actions and emission estimates will be reassessed annually, and they currently exclude upstream emissions
for fuel and energy-related emissions and the effect of decarbonisation of UK grid electricity.
Recycled steel
The steel that we purchase directly predominately comes in by tonnage, all reinforcement used in foundations. This is
wholly manufactured from recycled steel. We will be using recycled steel at our Inchmuir Park development, with a view
to using the specification for future projects. The current projected emissions reduction for recycled steel by 2030 is
estimated at 495tCO2e for subcontractor packages and 524tCO2e for direct steel purchases.
Hydrogenated vegetable oil (HVO)
We have analysed our diesel fuel consumed in 2023/24, taken advice on the ability of existing and future pieces of plant
and commercial vehicles to be operated with hydrogenated vegetable (HVO) in lieu of diesel, made assumptions on
future plant purchases, verified fuel consumption rates of various pieces of existing plant and commercial vehicles, and
discussed cost and availability of HVO in East Central Scotland.
We conclude by July 2026 it is possible that 40% of the diesel consumed by the company can be replaced with HVO.
Based on the 2023/24 diesel consumption figures and current fuel rates this would result in 54,950 litres of HVO being
consumed in lieu of diesel at an additional fuel cost of £10,600 (there will also be additional monthly costs for provision
of an additional fuel storage tank on each site, initial additional costs for cleaning out existing fuel storage tanks and likely
initial additional costs for adjustments to engines to operate on HVO). The projected emission reduction for switching to
HVO is 136tCO2e by 2026.
Installing PV – Investment Property Portfolio
We have identified properties from our portfolio which have the potential for 1,023 kwp of solar power generation and
assumed 50% consumed onsite. The projected emission reduction from installing solar PV system on our portfolio is
estimated to be 88tCO2e by 2026.
Complete roll out of upgrade to LED Lighting – Investment Property Portfolio
Our LED lighting upgrade programme will continue to 2030, as installation is largely planned when a tenant vacates the
property. The projected emission reduction from installing additional LED across portfolio is estimated to be 98.5tCO2e
by 2030.
Transitioning motor fleet to hybrid models
Reducing the carbon emissions from our construction fleet is a key priority. For 2023/24, we began the process of changing
Company car vehicles that required replacing, with hybrid models. The Group will focus on implementing a policy of
replacing Company vehicles with hybrid and EV options going forward.
35
36 37
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Net Zero Roadmap (continued)
Waste management
Emissions are largely dependent on the management and final disposal of construction waste, especially excavation
material when preparing the ground and foundations for development. The nature of the Group’s construction activities
means that tonnage can vary widely year on year depending on the topography of the site, location, type of development
and opportunities for reuse; this makes setting targets difficult. With consideration the target to reduce landfill of
excavation material is 10% for reporting year 2025. This will be achieved by designing out waste at each development
stage, collaborating with other contractors to optimise reuse opportunities and to engage with waste treatment facilities to
maximise recycling of current landfilled material. The estimated carbon reduction from achieving this target is 22tCO2e.
Business travel
Through our data and Net Zero sprints for employee business travel, we identified and researched the possibility of
introducing Salary Sacrifice schemes for EVs and cycle to work. This option could reduce mileage by 5% in diesel/petrol
cars. In addition, the introduction of an EV pool car for employees to utilise for business travel journeys. The introduction
of this would aid in the reduction of business travel mileage undertaken in petrol/diesel vehicles.
Greenhouse Gas Emissions Statement
The 2024 Annual Report and Statement of Accounts includes our comprehensive Greenhouse Gas Emissions Statement
for the year ending 31st July 2024. The statement includes the emission categories
1
which the Board considers to be
relevant to climate related risks, importance to stakeholders and material to the Group’s activities during the year; and
where reliable data is available to calculate emissions. Where relevant, Scope 3 emissions also include upstream emissions
as calculated by the carbon accounting platform.
This statement outlines the carbon emission for the three business segments: Company, Construction and Property
Investment, along with an appropriate carbon intensity metric for each segment. This segmentation and analysis will
enable the Board to compare our performance year on year, assess the effectiveness of carbon reduction actions taken,
and revise the Net Zero Roadmap.
Common with most carbon accounting and reporting the methodologies and the accuracy of reported emissions will
mature overtime, and the Board will ensure key reporting principles of transparency, comparability, comprehensiveness,
and materiality are adhered to. Throughout the year the Group has invested in improving its data capture, processing and
carbon accounting methodologies, including the use of a carbon accounting software platform – Our Impacts- provided by
Eco online. These improvements have impacted our significant Scope 3 emissions categories, in particular, subcontractor
and material purchases, waste generation, and downstream leased assets (further details are provided in the notes below).
The emissions included in this statement represent the Group’s base year and will form the baseline for the Group to
develop its Net Zero Roadmap towards an interim carbon reduction target of 30% by 2030.
The statement includes a summarised methodology, supplementary notes on each emissions category and any limitations
in the methodology.
36
36 3736
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Greenhouse Gas Emissions Statement (continued)
Emissions Impact 2024
This is the Group’s second GHG Emissions Statement and there are some notable changes compared to 2023. The reasons
are numerous and include the following: i) improved data collection and processing, ii) more granular, relevant and
latest emission factors provided by the carbon accounting platform, iii) the variation due to cyclical nature of multi-year
construction projects, and iv) the type of structural framework. These reasons have contributed largely to changes in
emissions for construction materials, subcontractor services, leased properties, and waste. Further explanation is provided
after the emissions table below.
The chart below shows the profile of our total emissions for the 11 emissions categories
1and 2
within our defined operational
boundary, covering Scopes 1, 2 and 3 and notably the three largest categories. The total emissions for the reporting period
are 8,160tCO2e (2023: 18,174tCO2e) (tonnes of carbon dioxide equivalent).
1. As defined by the GHG Protocol: A Corporate Accounting and Reporting Standard (revised edition) for Scope 1, 2 and 3 emissions.
2. The category for purchased goods and services has been subdivided into central overheads, construction materials and subcontractors, which all fall within the formal emissions category of
Purchased goods and services.
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TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Greenhouse Gas Emissions Statement (continued)
Segmental Analysis of the Group’s Greenhouse Gas Emissions
The table below outlines the emissions for each emission category included in the operational boundary for each business
segment and the total for the Group.
Investment Group Group
Emissions Category Notes Company Construction Property Total Total
2024 2023
tCO2 e tCO2 e tCO2 e tCO2 e tCO2 e
1.01 Direct combustion 1 328 310 - 638 658
1.02 Natural gas 2 15
2 340 357 300
2.01 Electricity 3 22
10 71 103 102
3.01 Purchased goods and services 4 479
472 572 1,523 2,611
3.01 Construction materials 5 -
1,308 - 1,308 2,343
3.01 Subcontractor services 6 -
1,895 - 1,895 10,812
3.02 Capital goods 7 227
31 - 258 476
3.03 Fuel and energy-related activities 8 90
79 80 249 254
3.05 Waste generated in operations 9 217
4 - 221 20
3.06 Business travel 10 6
- 4 10 13
3.07 Employee commuting 11 203
- - 203 205
3.13 Downstream leased assets 12 -
- 1,331 1,331 300
3.15 Investments 13 65
- - 65 80
Total Emissions 1,652
4,111 2,398 8,161 18,174
Breakdown by Scope (in tCO
2 e)
Scope 1 343
312 340 995 958
Scope 2 22
10 71 103 102
Scope 3 1,287
3,789 1,987 7,063 17,114
Total Emissions 1,652
4,111 2,398 8,161 18,174
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
38 39
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Greenhouse Gas Emissions Statement (continued)
Segmental Analysis of the Group’s Greenhouse Gas Emissions (continued)
Explanation of Emission Variations compared to prior year
The table below aims to outline the key root causes for the variation in emissions between reporting periods ending 31st
July 2023 and 2024. Although we have identified the key root causes, it is not practically possible to assign an emissions
value to each cause.
Emissions Category Key Root Causes for variation tCO2e Variance
Purchased goods
and services
Materials
Subcontracted Services
Waste
Leased Assets
• Improved granularity of activities and updated emissions
factors from EPA database within Our Impacts platform
• Methodology improvements by increasing the proportion of
materials based on quantity rather than spend which improves
accuracy of emissions data.(see note 5).
• Improved granularity of activities and updated emissions
factors from EPA database within Our Impacts platform
• Differences in stage of construction/development compared to
prior year due to cyclical nature of the business.
• Development Type – shift to recycled structural steel (estimated
emission reduction 234tCO2e) and prefabricated timber kits.
• In 2023, structural steel represented 56% of total spend, and
only 35% in 2024.
• Prefabricated timber kits represented 12% of spend in 2024,
and nil in 2023.
• Data processing error in 2023
• Data processing error in 2023
• Methodology changes to estimating energy consumption
• Changes to asset portfolio during the year
1,088
1,035
8,917
200
1,031
From the reasons outlined above, management have concluded that restating any emissions impacts reported in the
year would not be possible because underlying data would require significant resource time to reprocess based on 2024
methods and data quality checks.
Whilst some restatements could easily be identified for data processing errors in the 2023 reported emissions, management
considers there would still be uncertainties in the overall emissions data. Consequently, we believe 2023 emissions data
is unreliable as a baseline for net zero and other metrics. Without the ability to apply all the significant improvements in
our methodologies to the prior year, artificial reductions could be reported in future years requiring explanation that would
distract from the actual performance. Nevertheless, the overall net zero reduction target remains at 30% by 2030.
Management recognises that a clear restatement policy is required to help guide the preparation of emissions data. By its
very nature carbon accounting methods, emission conversion factors, and the quality of raw data evolves as the Group’s
carbon accounting process mature, and therefore a caution is necessary as to if and how restatements are required.
Relevant and Excluded Emission Categories
The Greenhouse Gas Emissions Statement excludes relevant and potentially material emissions categories where data
availability and reliability were not adequate to include. The exclusions are primarily relating to the logistics from Tier 1
suppliers to our sites or central depot (upstream transportation and distribution), and the treatment of waste from the future
demolition of properties (end of life treatment of sold products).
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TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Greenhouse Gas Emissions Statement (continued)
Segmental Analysis of the Group’s Greenhouse Gas Emissions (continued)
Upstream Emissions Distribution and Transportation
For upstream logistics, the limitation is due to availability of reliable data from suppliers and practical data collection
methods that are not unnecessarily time consuming.
Downstream Emissions for Sold Properties
For end-of-life treatment of properties the calculation of emissions arising from the future demolition of property sales
in the year is problematic because the properties have a useful life of around 50 years, most materials would be recycled,
and there is a specific uncertainty around the final release of atmospheric emissions for recycled timber. In accordance
with Corporate Accounting and Reporting Standard (revised edition), sub-sets of downstream emissions relating to sold
products (categories: 9,10,11 and 12) should not be selectively excluded/included (section 6.4). Although categories 9
and 10 are not relevant to the Group’s activities, end of life emissions are and therefore, the estimated the lifetime energy-
related emissions from the sale of residential properties in the year has been excluded from the emissions statement.
Carbon Intensity Metrics
The statement includes four intensity metrics, one for each segment and an overall Group metric. The Group metric
is based on total Revenue in £million, and for each business segment they are based on the underlying activity that
influences emissions for a given segment, as follows:
• Company is based on the number of full-time equivalent employees (FTE).
• Construction is based on the £millions of work carried out, including the capitalisation of own work. The capitalisation
of our own work is included as this fairly captures the underlying activities which influence carbon emissions.
• Investment property is the current floor area (square feet) under lease, excluding common areas.
The Board considers these metrics to be appropriate and comparable for the sectors in which the Group operates. The
carbon intensity metrics are provided in the table below.
Investment *Group
Carbon Intensity Company Construction Property Total
Metric UoM FTE £m sqft £m
2024 140 14.4 781,744 22.0
2023 152 11.7 851,159 6.0
2024 Carbon Intensity tCO
2e/UoM 12 286 0.0031 371
2023 Carbon Intensity tCO
2e/UoM 17 1,207 0.0018 3,049
* Group intensity measure for 2023 has been updated to include property revenue
The increase in revenue is largely the reason for the improvements in the intensity ratios for the construction segment and
the Group overall, and the changes in the underlying emissions as noted above. Investment Property, although it shows
an increase compared to 2023, is the result of significant improvements in data processing and refining methodologies
adopted in 2024. With the second year of reporting carbon intensity ratios and the cyclical nature of the construction
projects, we will monitor trends more closely in future years, as well as transitioning towards quarterly review as per
outline in our Governance section of TCFD.
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
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TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued)
Greenhouse Gas Emissions Statement (continued)
Climate-Related Risks
From our strategic analysis and risk assessment as outlined on pages 29 to 31 of the financial statements, the most
significant emissions categories (% of total emissions) with associated climate-related risks are summarised as follows:
• Construction Activities - in relation to materials and subcontractors 39% (2023, 72.4%).
Risks are primarily associated with transition risks relating to regulatory risks in the Scottish building sector,
the adoption of new technologies, such as green steel and low carbon alternatives for concrete, insulation, and
stakeholder expectations for low carbon buildings. Physical risk is more long-term, with regards to supply of timber.
Consequently, mitigating these risks requires us to work closely with the supply chain and to develop skills to work
with new materials and methods.
• General purchases of Goods and Services 19% (2023, 12.9%).
At present, the transition risks are not considered to be significantly different to the general economy’s progress
towards a net zero future.
• Energy - in relation to fossil fuels for heating, power and transport across the company 13% (2023, 7.4%).
• Leased Assets (16%), climate risks relate to increasing extreme heat in the context of Scotland, and properties may
need to adapt (increased demand for cooling) to periods of high summer temperatures by 2030.
Risks are primarily associated with transition risks relating to movement away from fossil fuels including the adoption
of hybrid/electric vehicles, and expectations from clients for energy efficient buildings with renewable energy options
for the common areas we control. Physical risks in the medium-term relate to the increase in air temperatures during
summer periods which may lead to an increase in energy demand for air conditioning for offices and site activities,
operating plant and welfare units.
The progress to mitigating these risks is outlined in the risk management section of the Group’s TCFD disclosures.
Methodology
The overall methodology for preparing this Greenhouse Gas Emissions Statement follows the requirements outlined in
the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (revised edition) with supplementary
guidance provided by Greenhouse Gas Protocol: Corporate Value Chain (Scope 3) Accounting and Reporting Standard.
The Group’s boundary is based on the equity method of consolidation.
For the current reporting period, the raw data from the Group records was entered into Our Impacts Platform, which
then calculated the GHG Emissions for the year. The carbon accounting methodologies used in the platform are audited
annually by PWC LLP, which we place assurance upon. The emissions factors used are generally based on the UK
Governments published: UK Government GHG Conversion Factors for Company Reporting for 2023 for non-spend based
data, such as tonnes of materials, and where suitable supplier specific emissions factors based on verified Environmental
Product Declaration (EPD) for cradle to gate, for example recycled steel. For spend based data, emissions factors within
the platform are predominantly sourced from US Environmental Protection Agency Office of Research and Development
(US EPA ORD), 2024 publication, and converted into GBP sterling (kgCO2e/£) in accordance with the platform verified
methodology.
Data sources are predominantly from the Group’s accounting records, supplier and contractor records, and other Group
information as required. Specific assumptions and methods for each emissions category are outlined in the supporting
notes below.
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
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Greenhouse Gas Emissions Statement (continued)
Limitations
Notable limitations with the methodology and emissions data are as follows:
• Emissions factors for spend are based emissions are sourced from the platform and therefore does not reflect or adjust
for any inflationary impacts in recent years. Spend-based emission factors are generic and do not represent the actual
emissions of the Group’s supply chain and are based on sector averages and may have a +/- 60% uncertainty.
• For leased assets there has been significant improvement on the data gathering and processing of the raw data from
underlying systems during the year, however, given the complexity of data processing there is a degree of uncertainty
as to the data accuracy.
• The statement has been prepared on information and data available during the year, and its accuracy is dependent on
the underlying systems and process for record keeping and data management.
With the continual improvement in carbon accounting methodologies and availability of more specific data and recent
carbon factors the impact of these limitations will diminish over time. We are unable to practically estimate the material
impact of these limitations.
The notes below outline more specific areas of uncertainty for each emission category in the segmental analysis table above.
1. Represents the consumption of liquid fuels predominately by construction plant and company vehicles based on
supplier invoices.
2. The consumption of mains supplied natural gas for Group offices and heating for common areas of Investment
Properties where the Group has direct control over its use are based on supplier invoices.
3. Represents the consumption of grid electricity for Group offices and for common areas of Investment Properties
where the Group has direct control over its use are based on supplier invoices.
4. The category for purchased goods and services represents general overheads for the running of the Company and
its Subsidiaries and is based on the financial data used to prepare the financial statements. Emissions relating to
the purchases of direct materials and subcontractor services in relation to the Group’s construction activities are
calculated and disclosed separately (see notes 5 and 6 below).
5. Emissions for directly purchased materials are calculated based on a mixed method of quantity of raw material (i.e.,
tonnage of concrete, m3 of timber), and spend £ for the cradle to gate emissions. For the current reporting year, 70%
(2023: 20%) of material spend is based on quantity method, and the remainder based on spend. Some emissions
factors within carbon accounting platform are sourced from Circular Ecology (2019) ICE V3.0. Material emissions
include emissions of smaller sub-contractor work.
6. Subcontractor emissions relate to significant packages of work; and associated activities are matched to the most
suitable industry activity per US EPA ORD (2024).
7. Emissions relate to capitalised spend on IT equipment, motor vehicles, plant & equipment, and the refurbishment
of the head office. Capital goods exclude any capitalisation of own work relating to Investment Property, though
the carbon impact is included within other Scope 3 categories, namely purchased goods and services, materials and
subcontractor related emissions, as it is not currently practical to disaggregate this data and reclassify the £1,765,291
of capital expenditure.
8. This category is based on the consumption of grid electricity (kWh) for transmission losses and distribution and
upstream emissions for both natural gas and grid electricity consumption (kWh) for Scope 1 and 2 emissions
respectively, as calculated by the carbon accounting platform.
9. Emissions relate to the waste management of construction waste and waste from arising from the head office; as
waste from Investment Properties is generated and managed by the leasee. Emissions are based on the tonnage for
each waste stream and final waste treatment.
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
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Greenhouse Gas Emissions Statement (continued)
Limitations (continued)
10. For business travel, emissions are calculated from monthly mileage claims and the vehicle type (market segment
emissions per the Our Impacts platform).
11. In June 2024, the Group conducted a survey of all employees to ascertain the commuting travel patterns by mode (car,
bus, train, cycle and walk). The survey results were extrapolated to estimate the emissions for the FTE employees
who commute using their own vehicles based on the average car with unknown fuel.
12. Corporate Value Chain (Scope 3) Accounting and Reporting Standard (p124), states that ‘proper categorisation of
emissions from leased assets by lessors and lessees ensures that emissions in Scopes 1 and 2 are not double counted.
For example, if a lessee categories emissions from the use of purchased electricity as Scope 2, the lessor categories
the same emissions as Scope 3, and vice versa.’ In this regard, we reasonably expect that some leasees could consider
their direct energy consumption as their Scope 1 and 2 emissions based on their operational use. In addition, to
ascertain the appropriate classification of emissions related to Investment Properties between Scopes 1, 2 and 3
requires a more thorough examination of the ownership and operational control of underlying assets and activities
which generate emissions. For example, a leasee may own a heating system installed at an industrial unit and thus
could be treated as Scope 3, or in another scenario the leasee controls the purchases of certified renewable electricity.
For this reporting period, the emissions related to electricity and gas have been included in Scope 3 emissions.
In the reporting year improvements have been made in the data gathering, processing and review of benchmarks
assigned to each property, and the calculations of ‘in-use’ floor area of properties with an energy demand. The in-
use basis has resulted in pro-rating floor area for the live lease period in the reporting year, and thus excludes vacant
properties. Any energy relating to vacant properties is recorded in Scope 1 and Scope 2 emissions as the Group has
direct control over consumption for the vacant period. Energy benchmarks by kWh/m2 as provided in the platform or
obtained from UK Government Non-domestic National Energy Efficiency Data-Framework 2023.
We recognise there are limitations, unquantifiable, in the benchmark methodology, and will look to improve this with
more specific benchmarks in future years.
13. Investments reflect Scope 1 and 2 emissions for equities investments managed by third-party fund managers, and
not recorded the Group’s Scope 1 and 2 emissions. The emissions are allocated based on the investee emission ratio
of tCO2e/$million invested as of 31st July 2024 to the Group equity holding ($millions) in the investee. Carbon
data provided by fund managers is of 31st July 2024. The reported emissions for investments exclude any emissions
related to collective investments and debt investments where currently emission data is not available from fund
managers.
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
44 45
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
EMPLOYEES
The Group recognises the contribution of the staff to the success of the Group. The Group operates with a core employee
base who in the main have been with the Group for a considerable length of time and have gained a significant knowledge
of the sectors the Group operates in and of the companies within the Group. Where appropriate the Group promotes from
within whether that be the Directors, staff or site employees. The Group recognises the importance of retaining its core
staff to ensure its future success.
The Group does not have a specific Human Rights policy but it does have policies on recruitment and retention of
employees and communication with employees which are aimed at ensuring employees are fairly treated during their
employment with the Group.
The Group is committed to providing equal opportunities in recruitment and employment, full and fair consideration is given
to all applicants for employment and to all existing employees for promotion. Where employees become disabled during their
employment and are unable to fulfil current duties they are offered suitable alternative employment within the Group, if feasible.
It is the Group’s policy that there should be effective communication with employees at all levels, on matters which affect
their current jobs or future prospects and all Directors and senior staff members make themselves available to all staff
to discuss any matters of concern. In achieving this policy, the Directors are aware of the need to take account of the
practical and commercial considerations of the Group, and the needs of the employees.
A breakdown by gender of Directors, senior managers and all employees is given below:
Male Female
Directors 3 1
Senior Managers 4 1
Total Employees 124 16
44 45
J. Smart & Co. (Contractors) PLC
STRATEGIC REPORT (continued) 31st JULY 2024
EMPLOYEES (continued)
Numerical Diversity Data of Board of Directors at 31st July 2024
In accordance with Listing Rule UKLR6.6.6R our gender identity and ethnicity data as per the format set out in UKLR6
Annex 1R is detailed below. At the year end, the Board of Directors were asked to complete of diversity disclosure
questionnaire to confirm which categories in the tables below they identify with.
Number of senior
Number of positions on the Number in Percentage of
Board Percentage Board (CEO, CFO, executive executive
Gender Identity Members of the Board SID and Chair) management management
Men 3 75% 2 3 75%
Women 1 25% 1 1 25%
Not specified/
prefer not to say - - - - -
Number of senior
Number of positions on the Number in Percentage of
Board Percentage Board (CEO, CFO, executive executive
Ethnic background Members of the Board SID and Chair) management management
White British
or other White
(including minority
- white groups) 4 100% 3 4 100%
Mixed/Multiple
Ethnic Groups - - - - -
Asian/Asian British - - - - -
Black/African/
Caribbean/
Black British - - - - -
Other ethnic group,
including Arab - - -
- -
Not specified/
prefer not to say
- - - - -
As at 31st July 2024, our chosen reference date under UKLR6.6.6R(9), the Company states it has not met the target on
Board diversity relating to 40% of the individuals on the Board being women and also in relation to at least one individual
on the Board being from a minority ethnic background. The Company has met the target relating to at least one women
on the Board holding a senior position on the Board. The Board of the Company comprises a relatively small number of
individuals and therefore it is difficult for the Company to comply with the requirements of the Listing Rules in relation
to board diversity.
BY ORDER OF THE BOARD OF DIRECTORS
Patricia Sweeney
19th November 2024 Company Secretary
46 47
David W Smart, Chairman and Joint Managing Director Aged 51
Joined the Company in 1998
Appointed Director in 2010
Appointed Chairman and Joint Managing Director in 2017
John R Smart, Joint Managing Director Aged 54
Joined the Company in 2002
Appointed Director in 2013
Appointed Joint Managing Director in 2017
Alasdair H Ross Aged 62
Joined the Company in 1989
Appointed Director in 2012
Patricia Sweeney Aged 55
Joined the Company in 2011
Appointed Director in 2017
J. Smart & Co. (Contractors) PLC
DIRECTORS
46 47
J. Smart & Co. (Contractors) PLC
CORPORATE GOVERNANCE 31st JULY 2024
COMPLIANCE STATEMENT
This statement details how the Company has applied the principles and provisions as set out in the Financial Reporting
Council’s UK Corporate Governance Code issued July 2018 (the Code). A copy of the Code can be review on the
Financial Reporting Council’s website at www.frc.org.uk.
The Board recognises that it has not complied fully with the Code in the areas of appointment of Non-Executive Directors
and the establishment of Nomination, Audit and Remuneration Committees and the re-election of executive Directors. It
also has not complied with the principles relating to division of responsibilities, evaluation of the Board and individual
Directors. The Board considers that due to the nature of the Company including its size, lack of complexity and the
ownership of the Company that to follow all the principles of the Code would be onerous and would provide no discernible
benefit to the Company or shareholders. Full details and explanations of principles and provisions not complied with are
detailed below.
BOARD LEADERSHIP AND COMPANY PURPOSE
The Board of Directors (the Board) is committed to ensuring that it maintains good corporate governance of the Company
so as to achieve the long-term sustainable success of the Company. The Board remains committed to the principles
of openness, integrity and accountability in dealing with the Company’s affairs and believes it has always acted with
probity in the best interests of the Company, its employees, shareholders and stakeholders without recourse to guidance
or instruction from others and fully intends to continue to do so in the future.
The Board which is the executive management of the Company consists of the Chairman who is also one of the two Joint
Managing Directors and two other Executive Directors. The size of the Board results in efficient management of the
Company leading to the long-term sustainability and success of the Company and that the Directors fulfil their statutory
duties under S172 Companies Act 2006. The objectives of the Company as stated in the Strategic Report have been set by
the Board and are reviewed regularly to ensure that they are being met and that adequate financial and human resources
are available to meet these objectives.
The Directors are involved in the day to day management of the Company supported by senior management. The Directors
were all employees of the Company prior to their appointment as a director and therefore have the appropriate skills,
experience in their particular fields and knowledge of the Company and its culture to ensure that the Board discharges
its responsibilities effectively to ensure the continued success of the Company. The detailed involvement in the day to
day management ensures that the Directors interact daily with Company employees and encourage an open approach
to management allowing employees to raise any concerns they have directly with the Directors and ensures that actual
workplace policies and practices align to the Company’s values.
The Directors have ascertained the risks and uncertainties which could impact on the continuing success of the Company
and these are set out in the Strategic Report. The Directors have also established controls with the aim to mitigate these
risks as best as possible. The risks and the controls in place are regularly reviewed and steps are taken as necessary to
adapt the controls as it becomes apparent that changes are needed.
The Chairman always makes himself available to shareholders to answer any queries they may have throughout the year
on matters relating to the governance and performance of the Company and ensures that the views and concerns of the
shareholders are brought to the attention of the Board as a whole.
Decisions are taken by the Board quickly and effectively following ad hoc consultation among the Directors concerned
as matters arise. The Board takes the view that this direct and flexible approach is preferable to the more cumbersome
procedures prevalent in larger organisations and has made a considerable contribution to the Company’s continuing success
and ensures that this approach best serves the interests of the Company, its employees, shareholders and stakeholders.
The Board confirms that it will consider and authorise any conflicts of interest between the Directors and the Company
where there is no detrimental impact to the Company.
48 49
J. Smart & Co. (Contractors) PLC
CORPORATE GOVERNANCE (continued) 31st JULY 2024
BOARD LEADERSHIP AND COMPANY PURPOSE (continued)
S172 COMPANIES ACT 2006
The Directors are aware of their responsibilities and duties under S172 Companies Act 2006 to promote the long-term
success of the Company for the benefit of its members whilst having regard to the matters as set out in section 172 (1)
(a)-(f) of the Companies Act 2006. The Directors consider the other stakeholders which are impacted by their decisions
are employees, suppliers, customers, tenants and local communities in which we operate. Whenever decisions are being
made by the Board they take into account the implications these will have on all of these stakeholders.
EMPLOYEES
As stated in the Strategic Report the employees of the Company are an important part of the success of the Company
and the Group overall. The Directors operate an open-door policy whereby any employee can discuss any matters arising
from their employment with any of the Directors. The Managing Directors visit all sites on a weekly basis which allows
all site-based staff to also communicate directly with the Directors on matters they wish to raise. The employees can also
raise any matters with Human Resources.
Health checks for all employees wishing to utilise the service continued in the year and through our private medical
insurance a Health & Wellbeing app is available to employees and regular updates are issued to all employees on
Wellbeing topics. A number of employees have undertaken training in mental first aid and these employees are known to
all employees who can contact them if required.
Employees are sent on relevant training courses to ensure their skills knowledge and training is up to date and particularly
on the sites that all health and safety issues remain a main focus.
We are committed to employing apprentices in the construction trades and currently we have 6 apprentices.
RELATIONS WITH SHAREHOLDERS
The Board has in the past and will continue to enter into dialogue with the shareholders wherever possible. The Chairman
is responsible for ensuring that the views and concerns of the shareholders are communicated to the Board. The Chairman
is also responsible for discussing governance and strategy matters with the shareholders.
We report our performance to the shareholders via our interim 6 monthly accounts, our preliminary announcement of the
year end results and the provision of the statutory financial statements.
All shareholders have the opportunity to attend the Annual General Meeting and to participate in questions and answers
with the Board on matters relating to the Company at the conclusion of the Meeting.
At the Annual General Meeting separate resolutions will be proposed on each substantially separate issue and the number
of proxy votes received for, against and withheld for each resolution will be announced.
SUBSTANTIAL SHAREHOLDERS
As at 31st July 2024 and 14th November 2024, the Company has been notified of the following holdings of substantial
voting rights in respect of the issued share capital of the Company:
As at 31st July 2024 Number %
Davd W Smart . . . . . . . 12,782,750 32.43
John R Smart . . . . . . . 12,782,750 32.43
Octet Investments Limited . . . . . . 1,872,400 4.75
Estate of A J Whitehead . . . . . . . 2,311,495 5.87
As at 14th November 2024
Davd W Smart . . . . . . . 12,782,750 32.61
John R Smart . . . . . . . 12,782,750 32.61
Octet Investments Limited . . . . . . 1,872,400 4.78
Estate of A J Whitehead . . . . . . . 2,311,495 5.90
48 49
J. Smart & Co. (Contractors) PLC
CORPORATE GOVERNANCE (continued) 31st JULY 2024
BOARD LEADERSHIP AND COMPANY PURPOSE (continued)
S172 COMPANIES ACT 2006 (continued)
SUPPLIERS AND SUBCONTRACTORS
The Company and Group prefers to use key suppliers and subcontractors which it has existing working relationships with
and therefore is aware of the quality of products and services provided. We are committed to ensuring that all suppliers
and subcontractors are paid within the terms of their supply and are paid by electronic payments directly into their bank
accounts thus ensuring prompt payment.
Supplies of some materials have proven difficult to obtain and costs continue to increase, however, were possible we have
continued to place orders with the suppliers we would normally use and aim to use local suppliers and subcontractors as
much as possible.
CUSTOMERS AND TENANTS
Customers of construction activities tend to those which the Group has worked with in the past and we have built up
strong working relationships with them which has resulted in repeat work being awarded to the Group. We maintain
dialogue throughout contracts with our customers to ensure that they are aware of the progress of all contracts and any
issues which may arise can be resolved in a timely manner.
For our private housing customers we have a dedicated sales team based at the development sites who assist the customers
from their initial viewing of properties through to the handing over of the keys to their new home.
Our investment properties are maintained to a high standard with dedicated managers who regularly inspect them and
communicate with tenants regarding any issues they have.
With regards to rental payments from tenants we have continued to allow tenants who are having cash flow issues
resulting from the coronavirus pandemic and the cost of living crisis to make monthly payments as opposed to the normal
quarterly payments in advance. A number of our tenants have and continue to make use of this arrangement.
COMMUNITIES AND THE ENVIRONMENT
The Group supports the local community by financially supporting local and national charities and providing financial
support to local communities for gala days held for the benefit of the people living in the local area.
The Group complies with all local authority guidance and planning conditions to ensure that all building sites are safe for
employees, subcontractors and suppliers and do not interfere with surrounding neighbours.
As a private house builder we are committed to fulfilling our requirements to provide social housing and financially
contribute to local authorities under Section 75 Agreements for amenities and facilities required to support new housing
developments.
A Sustainability Committee has been established comprising of some executive Board members and senior members of
staff from various departments within the Group with the aim to ensure that the Company and Group review the impact of
climate change on all aspects of the Group’s operations and take appropriate actions to ensure that the impact of climate
change is minimised as much as possible.
The impact of our activities on Greenhouse Gas Emissions is disclosed in the Report of the Directors on pages 9 to 11 and
our Report on Task Force on Climate-Related Financial Disclosures is contained in the Strategic Report on pages 21 to 43.
50 51
J. Smart & Co. (Contractors) PLC
CORPORATE GOVERNANCE (continued) 31st JULY 2024
DIVISION OF RESPONSIBILITY
As mentioned above the Chairman of the Board is also one of the Joint Managing Directors who collectively act as the
Chief Executive of the Company. Bearing in mind the size of the Company, the Board sees no value in splitting the role
of Chairman and Managing Director, a policy which has served the Company well over many years. The Chairman is
responsible for the leadership of the Board, ensuring that all the Directors receive accurate, timely and clear information
on issues arising at formal and ad hoc Board meetings, setting Board agendas and ensuring adequate time is given to
discussion of the agenda points.
The Board considers that appointing Non-Executive Directors would increase costs and impose an additional administrative
burden on the Company for no discernible benefit and therefore would serve no useful purpose. As no Non-Executive
Directors have been appointed the Company has not established Nomination, Remuneration or Audit Committees. The
functions of these Committees are undertaken directly by the Board.
As the Company has no Non-Executive Directors then no director has been identified as an Independent Director.
During the year the Board held 6 formal board meetings all of which were attended by all the Directors.
Also, during the year the Directors met regularly on an ad hoc basis to undertake the executive management of the
Company and take decisions on all material matters quickly and effectively but with due care and diligence and therefore
exercising full direction and control of the Company. All Directors openly express their views and make a valuable
contribution to the running of the Company.
Due to the makeup and operation of the Board there is no requirement to formally set out in writing the responsibilities of
the Chairman, Chief Executive or the Board.
All members of the Board have the ability to seek independent professional advice, at the Company’s expense, should they
consider it necessary to enable them to fulfil their duties as a director. All Directors have access to the advice and services
of the Company Secretary, who is responsible for ensuring that Board procedures are followed and that applicable rules
and regulations are complied with.
The Statement of Directors’ Responsibilities is set out on pages 60 and 61.
COMPOSITION, SUCCESSION AND EVALUATION
As the Company has no Non-Executive Directors it has not established a Nomination Committee for the appointment
of Directors. Nominations of new directors are submitted by the Chairman for approval by the Board. All Directors of
the Company are long-serving employees of the Company at the date of nomination and appointment which ensures
that their skills, experience and knowledge are retained within the Company and onto the Board. Although the Group
does not have a specific policy on diversity, due regard is taken of the benefits of all types of diversity onto the Board
when nominations are proposed and also takes into account the skills, experience and professional background of
nominees.
No formal tailored induction upon joining the Board is required given all members of the Board are long-term
employees. As all Board members are full-time employees of the Company they are fully committed to the Company
and are able to allocate sufficient time to the Company in discharging their duties and responsibilities effectively.
There is no formal system of performance evaluation of the Board or the Directors individually. Directors are encouraged
to receive any training they consider necessary to ensure they remain up-to-date with their skills and knowledge of the
Company’s business and that they remain aware of the risks associated with the Company and also are aware of the
regulatory, legal, financial and other developments to enable them to fulfil their roles effectively.
All Directors, with the exception of the Chairman, offer themselves annually for re-election.
As the Chairman is one of the Joint Managing Directors, then the Chair will not retire after the nine years recommended
in the Code.
50 51
AUDIT, RISK AND INTERNAL CONTROL
As the Company has no Non-Executive Directors it has not established an Audit Committee, it is therefore the responsibility
of the Board to ensure the independence and effectiveness of the external audit function.
The Company does not have an internal audit function. The Board reviews the need for this function regularly and has
concluded for the time being that no internal audit function is required.
RISK MANAGEMENT AND INTERNAL CONTROLS
The Directors have sole responsibility for the preparation of the Annual Report and Statement of Accounts which taken
as a whole is fair, balanced and understandable and provides the information necessary for the shareholders to assess the
Company’s performance, business model and strategy. The Directors are also responsible for the preparation of the Interim
Report and other price-sensitive public reports and to ensure that these reports are also fair, balanced and understandable.
The Board is responsible for and annually reviews the Group’s system of internal controls in relation to financial,
operational, compliance and risk management to ensure their continued effectiveness. The systems adopted by the Board
are designed to manage the risks of failure to achieve the Company’s business objectives as opposed to eliminate them,
as any system of control can only provide reasonable but not absolute assurance against material misstatement or loss.
The Strategic Report includes a description of the principal risks and uncertainties faced by the Group and the actions
undertaken by the Group to mitigate these risks.
The Board, in accordance with the Code, has reviewed the effectiveness of the internal controls from the commencement
of the accounting period to the date of approval of the Annual Report and Statement of Accounts. No significant failings or
weaknesses have been identified in that period. There has also been a continual process of identification by the Directors
of key areas of principal and emerging risks within the Group and appropriate action taken to mitigate and monitor such
risks. The Directors confirm that they have carried out a robust assessment of the principal and emerging risks facing
the Group, as detailed in the Strategic Report, including those which threaten the business model, future performance,
solvency and liquidity of the Group.
The main features of the Group’s internal control and risk management systems in relation to the financial reporting process are:
– contracts, development projects, land purchases and acquisition of property, plant and equipment are only
proceeded with after due consideration by the Directors;
− monthly reports for each contract and development project are prepared and reviewed by the Directors;
− subsidiary Company reports are prepared for consideration by the Directors; and
− treasury and cash management are undertaken by the Directors to ensure the Group remains net debt free.
The Board has identified that the interest in its Joint Venture company is a material investment. Both parties to the joint
venture have equal interest in the joint venture and jointly manage it with the regular board meeting being held attended
by both joint venture parties to discuss construction progress and financial position. All decisions are taken relating to
the joint venture between both parties. J. Smart & Co. (Contractors) PLC deals with the day to day administration and
accounting function of the joint venture.
GOING CONCERN AND VIABILITY
In order to ensure the Company and Group have adequate resources to ensure the continuing operations of the Company
and Group for the foreseeable future the Directors consider current and future trading including investment property
acquisitions and disposals and cash requirements. The Directors take account of prevailing market conditions in all areas
of the Group’s activities and use their knowledge and experience relating to the Group’s investment property portfolio.
Currently our construction activities are continuing in line with current programmes and recoverability of rents from our
tenants remains high. The Directors’ opinion is that the Company and Group have adequate financial resources to allow
the Company and Group to continue in operational existence for a period of at least twelve months from the date of
approval of these financial statements and therefore consider the adoption of the going concern basis as appropriate for
the preparation of these financial statements.
The Directors also consider the viability of the Group over a longer period than twelve months from the date of approval
of these financial statements, being a three-year period from the Statement of Financial Position date. The Directors’
statement on this review can be found in the Strategic Report.
J. Smart & Co. (Contractors) PLC
CORPORATE GOVERNANCE (continued) 31st JULY 2024
52 53
J. Smart & Co. (Contractors) PLC
CORPORATE GOVERNANCE (continued) 31st JULY 2024
AUDIT, RISK AND INTERNAL CONTROL (continued)
SIGNIFICANT JUDGEMENTS, KEY ASSUMPTIONS AND ESTIMATES
As there is no Audit Committee, it is the responsibility of the Board to consider areas of the financial statements where
there are significant areas of judgement regarding estimates and assumptions, which in turn have a significant effect on the
amounts recognised in the financial statements. In respect of the 2024 financial statements these areas were:
− Investment Property Valuations – the valuation of the investment property portfolio is completed by the Directors. The
valuation of the property portfolio is inherently subjective and requires significant judgements and assumptions to
be made especially around capitalisation yields and future rental streams. Details of impact on the value of the
investment property portfolio incorporated into the financial statements is given in note 15 of the financial statements.
The Directors appoint external valuers to value the portfolio to provide a sense check on their valuation. The valuations
are discussed with the Auditor.
− Long-term Contract Valuations and Provisions – the Directors consider contract performance to ensure appropriate
revenue recognition. Future revenue, contract performance and stage of completion of contracts are considered and loss
provisions determined and recognised where necessary. Both costs and revenues may require to be revised as future
events unfold and uncertainties are resolved, which would have a direct impact on overall performance of these
contracts.
− Retirement Benefit Surplus – the valuation of the retirement benefit obligation is dependent upon a series of assumptions
which are determined after the Directors take expert advice from the Group’s Actuary. Changes in these assumptions
could have a material affect on the surplus disclosed in the financial statements, details of the impact of changes in these
assumptions are given in note 31 of the financial statements.
The Board discusses fully all issues relevant to the above areas and obtains where possible information and advice from
external experts for consideration by the external Auditor and only when fully satisfied with the amounts associated with
each area are they incorporated into the financial statements.
RELATIONSHIP WITH EXTERNAL AUDITOR
As the Company does not have an Audit Committee, it is the responsibility of the Chairman and the Company Secretary
to maintain an appropriate relationship with the Group’s external Auditor and to review the scope and results of the audit
and its cost effectiveness. The Board is responsible for monitoring and ensuring that the Auditor’s independence and
objectivity is not compromised. The Board takes account of the external Auditor’s own policies and procedures regarding
their integrity and independence and the professional standards they have to adhere to. The Board monitors non-audit
services. The Board is responsible for setting the remuneration of the Auditor.
REMUNERATION
As the Company has no Non-Executive Directors it has not established a Remuneration Committee, it is therefore the
responsibility of the Chairman to fix the remuneration packages of the Directors which are based on the scope of their
duties and responsibilities.
The main components of Directors’ remuneration are detailed in the Directors’ Remuneration Report and consist of
basic salary, benefits and pension contributions based on basic salary only. There are no performance or incentive-based
elements to the Directors’ remuneration and there are no share award schemes in place.
The Chairman takes account of the remuneration packages of the workforce when determining the level of remuneration
of the Directors, benefits given are in line with those given to employees and all contributions for pension contributions
are at the same rates as those for employees.
No Director has a service contract other than their initial employment contract and therefore periods of notice and
termination payments are structured in accordance with current employment law.
52 53
J. Smart & Co. (Contractors) PLC
CORPORATE GOVERNANCE (continued) 31st JULY 2024
REMUNERATION (continued)
The remuneration policy, as approved by the shareholders at the 2021 Annual General Meeting, is regarded by the
Chairman as fulfilling the provisions of the Code for:
− Clarity – the policy is clear and understood by all Directors and by our shareholders who approved the policy.
− Simplicity – the remuneration package does not include any complex structures.
− Risk – as there are no performance-based elements to the remuneration it does not promote excessive risk taking by
the Directors.
− Predictability – as there are no performance-based elements to the remuneration the level of remuneration for the
Directors can be predicted with reasonable accuracy.
– Proportionality – remuneration levels are based on duties and responsibilities of the Directors and are not considered
to be excessive.
– Alignment to culture – as there are no incentive schemes the remuneration package is considered to be in line with
the Company’s values and strategy.
BY ORDER OF THE BOARD OF DIRECTORS
Patricia Sweeney
19th November 2024 Company Secretary
54 55
ANNUAL STATEMENT
On behalf of the Board of Directors, I present the Directors’ Remuneration Report for the year ended 31st July 2024.
In addition to this statement the Report includes two other parts being the Policy Report and the Annual Report on
Remuneration, which have been prepared in accordance with the provisions of the Companies Act 2006 and Schedule 8 of
The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013. The Report
also meets the requirements of the UK Listing Authority’s Listing Rules and the Disclosure Guidance and Transparency
Rules.
The Policy Report has been developed taking account of the principles of the UK Corporate Governance Code 2018.
The shareholders approved the Policy at the 2021 Annual General Meeting and the policy was effective for three years
from that date.
The shareholders will be asked to approve the Policy at the 2024 Annual General Meeting and if approved will become
effective from that date and will be effective for three years.
The Annual Report on Remuneration will be subject to a vote at the 2024 Annual General Meeting. Our Auditor is
required to report to the shareholders on certain information contained in the Annual Report on Remuneration and that it
has been prepared in accordance with the Act and the Regulations. The information to be audited is appropriately marked.
There have been no substantial changes to Executive Directors’ remuneration in the year. Our policy continues to be to provide
remuneration packages that will retain and motivate the Directors to sustain the long term growth and value of the Company.
DaviD w Smart
19th November 2024 Chairman
THE POLICY REPORT
As stated in the Corporate Governance Statement the Company does not appoint Non-Executive Directors and therefore
the Company does not have a Remuneration Committee to set the Executive Directors’ Remuneration Policy. The
Chairman fulfils the function of the Remuneration Committee.
The Company’s remuneration policy is to provide remuneration packages that will retain and motivate the Directors to sustain
the long term growth and value of the Company and is based on the scope of their duties and responsibilities. The Directors
are not entitled to any performance related remuneration, long term incentive schemes or share options. The remuneration
of the Directors is not performance related therefore no element of their remuneration is based on performance measures.
The policy table below summarises the main components of Directors’ Remuneration:
ELEMENT PURPOSE AND STRATEGY OPERATION
BASE SALARY
J. Smart & Co. (Contractors) PLC
DIRECTORS’ REMUNERATION REPORT 31st JULY 2024
To pay a fair salary commensurate with the individual’s
role, responsibilities and experience.
Reviewed annually in July taking account of the
individual’s role and experience and the salary increases
of employees throughout the Group as a whole. No
maximum level is set.
54 55
J. Smart & Co. (Contractors) PLC
DIRECTORS’ REMUNERATION REPORT (continued) 31st JULY 2024
THE POLICY REPORT (continued)
ELEMENT PURPOSE AND STRATEGY OPERATION
BENEFITS
PENSION
The Chairman retains the right to make minor amendments to the above policy, to take account of regulatory, tax,
legislative or administrative changes without obtaining shareholder approval for these amendments.
No share options or long term incentive schemes are operated by the Company.
Directors are entitled to claim relevant expenses incurred by them in respect of their duties.
There are no provisions for the recovery of sums paid to Directors or the withholding of the payment of any sums to
Directors.
As all remuneration of Directors is fixed remuneration there is no need to illustrate, via a bar chart, the expected values
of proposed remuneration as it does not contain any elements based on performance and therefore is not subject to
change based on either the Company’s or Director’s performance.
APPROACH TO RECRUITMENT OF DIRECTORS
The Company’s approach to appointing new Executive Directors is to appoint from within the Company. As such
the remuneration of the Director has already been set by the Company and the package held by the employee prior to
appointment as a Director will remain in place. Consideration will be made of the increased duties and responsibilities
that will apply post appointment as a Director and revision to their base salary may be made to reflect this.
SERVICE CONTRACTS AND POLICY ON CESSATION
No Director has a service contract with the Company, other than their initial employment contract and therefore periods
of notice and termination payments are structured in accordance with current employment law. As a result of there
being no service contracts no report under Listing Rules 6.6.6(6)R is required.
CONSIDERATION OF EMPLOYMENT CONDITIONS ELSEWHERE IN COMPANY
The Chairman when considering the remuneration of the Executive Directors takes into account the remuneration
of employees across the Group as a whole. However, the Chairman does not consult directly with employees on the
remuneration of the Executive Directors but is mindful of salary increases which are applied across the Group as a
whole.
To provide appropriate levels of retirement benefits. Depending on when a Director first became an
employee of the Company will determine whether they
are members of the Company’s Defined Benefit Pension
Scheme or Defined Contribution Scheme.
Company contributions to the Defined Benefit Scheme
are currently 35.4% of base salary. Contribution levels
are set in agreement between the scheme trustees and
the Company and can therefore vary from time to time.
Company contributions to the Defined Contribution
Scheme are currently a minimum of 10% of base salary.
To provide support to enable the Directors to carry out
their duties effectively.
Benefits include cash in lieu of a company car and
private medical insurance. No maximum level is set
as the costs of providing benefits fluctuate over time;
however the costs are monitored to ensure they remain
reasonable.
56 57
J. Smart & Co. (Contractors) PLC
DIRECTORS’ REMUNERATION REPORT (continued) 31st JULY 2024
THE POLICY REPORT (continued)
CONSIDERATION OF SHAREHOLDER VIEWS
The Chairman considers all views and concerns he receives from shareholders especially at the Annual General Meeting
when shareholders have the opportunity to ask questions of the Board on all matters relating to the Company including
Directors’ Remuneration, or at any other time throughout the year.
Although no direct communication was held by the Chairman with major shareholders prior to shaping the Remuneration
Policy he believes that it is a responsible approach to remuneration and its policies in the past and for the future as
evidenced by the level of approval of the 2023 Directors’ Remuneration Report at the 2023 Annual General Meeting,
details of which are given in the Annual Report on Remuneration below.
ANNUAL REPORT ON REMUNERATION
The following provides details of how the remuneration policy was implemented in the year to 31st July 2024.
Single Total Figure of Remuneration for Executive Directors (Audited Information)
The following table presents the single figure for the total remuneration of each Executive Director for the year ended
31st July 2024 and the prior year:
Taxable
Salary Benefits
1
Pension Total
£000 £000 £000 £000
David W Smart 90 6 96 88
2024 . . . . . . . 132 11 51
2
194
2023 . . . . . . . 124 10 (13)
2
121
John R Smart
2024 . . . . . . . 132 11 16 159
2023 . . . . . . . 124 10 16 150
Alasdair H Ross
2024 . . . . . . . 132 11 58
2
201
2023 . . . . . . . 124 10 (24)
2
110
Patricia Sweeney
2024 . . . . . . . 132 11 16 159
2023 . . . . . . . 124 10 16 150
1. Taxable benefits consist of cash in lieu of company car and private medical insurance.
2. Pension value represents the cash value of pension accrued over one year multiplied by 20 in line with new regulations with allowance for inflation and employee contributions.
56 57
J. Smart & Co. (Contractors) PLC
DIRECTORS’ REMUNERATION REPORT (continued) 31st JULY 2024
ANNUAL REPORT ON REMUNERATION (continued)
DIRECTORS’ PENSION ENTITLEMENTS
David W Smart and Alasdair H Ross are members of the Company’s Defined Benefit Pension Scheme whilst
John R Smart and Patricia Sweeney are members of the Company’s Group Personal Pension Plan.
The Company’s Defined Benefit Pension Scheme was closed to new members in 2003. The normal date of retirement
based on the scheme rules is 65 and there is no automatic entitlement to early retirement. Contributions by the employer
under the scheme are 35.4% of pensionable salary.
Accrued pension Accrued pension
as at 31 July 2024 as at 31 July 2023
£000 £000
David W Smart . . . . . . . 54 50
Alasdair H Ross . . . . . . . 67 62
SCHEME INTEREST AWARDS (AUDITED INFORMATION)
There were no scheme interests awarded in the year.
PAYMENTS TO PAST DIRECTORS (AUDITED INFORMATION)
No payments were made to past Directors in the year.
PAYMENTS FOR LOSS OF OFFICE (AUDITED INFORMATION)
No payments for loss of office were made to Directors in the year.
STATEMENT OF DIRECTORS’ SHAREHOLDING AND SHARE INTERESTS (AUDITED INFORMATION)
The Company has no policy that Directors are required to own shares in the Company, although all Directors are currently
shareholders of the Company.
The interests of the Directors in the ordinary shares of the Company, including beneficial interests, are shown in the table
below:
Beneficial holdings
(including interests of the Director’s connected persons)
4 Dec er 2020 31 July 2024 31July 2023
David W Smart . . . . . 782,750 12,782,750 12,782,750
John R Smart . . . . . 782,750 12,782,750 12,782,750
Alasdair H Ross . . . . . 150,000 150,000 150,000
Patricia Sweeney . . . . . 150,000 150,000 150,000
There have been no changes in any Directors’ beneficial holdings between 31st July 2024 and 14th November 2024.
58 59
J. Smart & Co. (Contractors) PLC
DIRECTORS’ REMUNERATION REPORT (continued) 31st JULY 2024
ANNUAL REPORT ON REMUNERATION (continued)
PERFORMANCE GRAPH
The graph below shows a comparison of the total shareholder return for the Company’s shares for each of the last ten
financial years against the total shareholder return for the companies comprised in the FTSE EPRA/NAREIT UK index
which the Company deems to be the most relevant to the Company as it includes companies in the same sector as the
Company.
The graph compares the value of £100 invested in J. Smart & Co. (Contractors) PLC, including re-invested dividends.
Total Shareholder Return over the last ten financial years
GROUP MANAGING DIRECTORS TOTAL REMUNERATION
The following table details each of the Managing Directors their single figure of remuneration over the last ten financial
years:
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
David W Smart 179 194 121 100 144 179 177 154 148 166 165
John R Smart 140 159 150 144 140 140 136 133 130 126 122
John M Smart 86 115 115 119 133
GROUP MANAGING DIRECTORS CHANGE IN REMUNERATION
The following table compares the change in remuneration of the Group Managing Directors and that of the remuneration
of the Group’s salaried employees. This group of employees was chosen as it represents the most comparable group.
Managing Directors Other employees
% change 2023-2024 % change 2023-2024
Base salary . . . . . 5.84 % 6.23 %
Taxable benefits . . . . 3 % 2 %
J Smart & Co (Contractors) PLC
FTSE EPRA / NAREIT UK Index
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
£
180
160
140
120
100
80
60
40
20
0
58 59
J. Smart & Co. (Contractors) PLC
DIRECTORS’ REMUNERATION REPORT (continued) 31st JULY 2024
ANNUAL REPORT ON REMUNERATION (continued)
RELATIVE IMPORTANCE OF SPEND ON PAY
The following table compares the total spend on remuneration of all employees of the Group, including Executive
Directors, and the total amounts paid in distributions to shareholders for the years to 31st July 2024 and 31st July 2023:
Difference in Difference as a
2024 2023 spend percentage
£000 £000 £000 %
Remuneration of employees . . . 7,848 8,085 (237) (2.9
Total distributions paid . . . 2,179 2,656 (477) 18.0
(being dividends and share buy backs)
IMPLEMENTATION OF EXECUTIVE DIRECTOR REMUNERATION POLICY FOR 2025
After taking into consideration Group employees’ salary increases for the year to 31st July 2024, an increase of 6% of
base salary was awarded to all Directors.
Base salary from 1st July 2024 Base salary from 1st July 2023
£ £
David W Smart . . . . . . . 136,500 131,250
John R Smart . . . . . . . 136,500 131,250
Alasdair H Ross . . . . . . . 136,500 131,250
Patricia Sweeney . . . . . . . 136,500 131,250
CONSIDERATIONS BY THE DIRECTORS OF MATTERS RELATING TO DIRECTORS’ REMUNERATION
The Chairman is responsible for determining Directors’ Remuneration. No advice was sought in the year in considering
Directors’ Remuneration.
SUMMARY OF SHAREHOLDER VOTING AT THE 2023 ANNUAL GENERAL MEETING
The 2023 Directors’ Remuneration Report was put to the shareholders for their approval at the 2023 Annual General
Meeting. The resolution was passed on a show of hands.
Details of the proxy votes lodged, including those at the discretion of the Chairman, are as follows:
Total number % of votes cast
of votes
For . . . . . . . . . 26,534,440 100
Against . . . . . . . . . 9,427 –
Total votes cast (excluding votes withheld) . . . . . 26,543,867 100
Votes withheld . . . . . . . . . 21,600
Total votes cast (including votes withheld) . . . . . 26,565,467
Votes withheld are not included in the proxy figures as they are not recognised as a vote in law.
BY ORDER OF THE BOARD OF DIRECTORS
Patricia Sweeney
19th November 2024 Company Secretary
60 61
J. Smart & Co. (Contractors) PLC
STATEMENT OF DIRECTORS’ RESPONSIBILITIES 31st JULY 2024
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND STATEMENT OF ACCOUNTS
The Directors are responsible for preparing the Annual Report and Statement of Accounts in accordance with
international accounting standards in conformity with the requirements of the Companies Act 2006 and applicable law
and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors
are required to prepare the Group financial statements and have elected to prepare the company financial statements
in accordance with international accounting standards in conformity with the requirements of the Companies Act
2006. Under company law the Directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group and Company and of the profit or loss for the Group and
Company for that period. The Directors are also required to prepare financial statements in accordance with UK
adopted international accounting standards.
In preparing these financial statements, the Directors are required to:
− select suitable accounting policies and then apply them consistently;
– make judgements and accounting estimates that are reasonable and prudent;
– state whether they have been prepared in accordance with international accounting standards in conformity with
the requirements of the Companies Act 2006, subject to any material departures disclosed and explained in the
financial statements;
– state whether they have been prepared in accordance with UK adopted international accounting standards,
subject to any material departures disclosed and explained in the financial statements;
– prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company
will continue in business; and
– prepare a Report of the Directors, a Strategic Report and Directors’ Remuneration Report which comply with the
requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring that the Annual
Report and Statement of Accounts, taken as a whole, are fair, balanced, and understandable and provides the information
necessary for shareholders to assess the Group’s performance, business model and strategy.
WEBSITE PUBLICATION
The Directors are responsible for ensuring the Annual Report and Statement of Accounts are made available on a
website. Financial statements are published on the Company’s website in accordance with legislation in the United
Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in
other jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. The
Directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein.
60 61
J. Smart & Co. (Contractors) PLC
STATEMENT OF DIRECTORS’ RESPONSIBILITIES (continued) 31st JULY 2024
DIRECTORS’ RESPONSIBILITES PURSANT TO DTR4
The Directors confirm to the best of their knowledge:
− The financial statements have been prepared in accordance with UK adopted international accounting standards
and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group and
Company.
– The Annual Report and Statement of Accounts includes a fair review of the development and performance of
the business and the financial position of the Group and Company, together with a description of the principal
risks and uncertainties that they face.
BY ORDER OF THE BOARD OF DIRECTORS
Patricia Sweeney
19th November 2024 Company Secretary
62 63
J. Smart & Co. (Contractors) PLC
INDEPENDENT AUDITOR’S REPORT 31st JULY 2024
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF J. SMART & CO. (CONTRACTORS) PLC
OPINION ON THE FINANCIAL STATEMENTS
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at
31st July 2024 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted international accounting
standards;
• the Parent Company financial statements have been properly prepared in accordance with UK adopted international
accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of J. Smart & Co. (Contractors) PLC (the ‘Parent Company’) and its subsidiaries
(the ‘Group’) for the year ended 31st July 2024 which comprise the Consolidated Income Statement, Consolidated
Statement of Comprehensive Income, Consolidated and Company Statement of Changes in Equity, Consolidated and
Company Statement of Financial Position, Consolidated and Company Statement of Cash Flows and notes to the financial
statements, including a summary of significant accounting policies. The financial reporting framework that has been
applied in their preparation is applicable law and UK adopted international accounting standards and as regards the Parent
Company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion. Our audit opinion is consistent with the additional report to the Board. .
INDEPENDENCE
We were appointed by the Board on 28th January 2021 to audit the financial statements for the year ending 31st July 2021
and subsequent financial periods. The period of total uninterrupted engagement including retenders and reappointments
is four years covering the years ending 31st July 2021, 31st July 2022, 31st July 2023 and 31st July 2024. We remain
independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit
of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and
we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited
by that standard were not provided to the Group or the Parent Company.
62 63
J. Smart & Co. (Contractors) PLC
INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2024
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and
the Parent Company’s ability to continue to adopt the going concern basis of accounting included:
• Evaluation of the Directors’ assessment in respect to their ability to continue as a going concern for at least twelve
months from the date of this Annual Report. This included checking the mathematical accuracy of the models used;
• Evaluation and challenge of the Directors’ key assumptions, cash flow projections and judgements made in respect to
their going concern assumption. We did this by considering the appropriateness of the assumptions and judgements
made by the Directors, based on our understanding of the business and challenging the Directors as to the accuracy
of these assumptions and judgements relative to the equivalent metrics actually achieved in the recent history of the
Group’s performance. We challenged these based on our understanding of the business in respect to construction
contracts won, ability to deliver these within agreed timeframes and the probability of the cash flows materialising.
We evaluated the Directors’ sensitivity analysis for appropriateness and performed our own sensitivity analysis based
on our own assumptions and judgements comparing results to the Directors’ outcomes;
• We performed stress tests to identify key areas that would cause the Group to fail and assessed the likelihood of these.
We performed these sensitivities by identifying what key indicators such as revenue, cash and profit would need to
reduce by before the Group would no longer have the ability to repay it’s debts as they became due. We considered
new construction contracts and private housing sales to be some of the main assumptions made by management and
duly sensitised these by assuming much reduced trading profit to determine whether the Group had sufficient cash
and reserves to absorb any such reasonable downside scenarios;
• We performed ratio analysis to identify key risk areas in relation to going concern;
• We performed procedures to identify unrecorded liabilities that may exist in the Group. These procedures included
inspection of Director meeting minutes, post year end payments and invoice sampling, inspection of correspondence
with management’s legal advisors including obtaining confirmation of no material claims or litigations of which
we were not aware, as well as challenging new contracts taken out in the year to identify any unrecorded liabilities
or conditions not otherwise met by the Group. This included testing the Directors’ ability to forecast by comparing
previous forecasts to actual outturns and current year forecasts to post year end positions achieved and corroborating
evidence such as quoted costs, especially in relation to construction contracts to identify any potentially material
forecasting errors.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group and the Parent Company’s ability to continue as
a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the
Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
64 65
J. Smart & Co. (Contractors) PLC
INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2024
OVERVIEW
Coverage 94% (2023: 100%) of Group profit before tax
99% (2023: 100%) of Group revenue
92% (2023: 94%) of Group total assets
2024 2023
Key audit matters Revenue recognition ✓ ✓
Valuation of defined benefit pension
scheme obligations (including assumptions used) ✓ ✓
Valuation of investment properties ✓ ✓
Materiality Group financial statements as a whole
£1,300,000 (2023: £1,300,000) based on 0.89% (2023:0.88%) of total assets
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s
system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed
the risk of management override of internal controls, including assessing whether there was evidence of bias by the
Directors that may have represented a risk of material misstatement.
The Group manages its operations from a central location in the UK and has common financial systems, processes and
controls covering all significant components.
In assessing the risk of material misstatement in the Group financial statements, and to ensure we obtained adequate
quantitative coverage of significant categories of balances in the Annual Report and Statement of Accounts, we determined
that two significant components, J. Smart & Co. (Contractors) PLC and Thomas Menzies (Builders) Limited, represented the
principal business units within the Group. A full scope audit was undertaken on these components by the Group audit team.
In addition, we performed specific procedures on the investment property balance and revenue of C. & W. Assets Limited.
We did not scope in the entire C. & W. Assets Limited subsidiary on the basis that only these two balances form the
significant risk and value areas of the subsidiary with all other balances not being significant from a Group perspective.
The Group audit team performed analytical procedures in respect of the financial information of the non-significant
components and obtained further reasoning for movements exceeding a pre-determined threshold. In addition, we
performed specific procedures over risk areas such as revenue, journals and construction costs in respect to these
insignificant components by testing a statistical sample of these balances to corroborating evidence, focussing on the cut-
off of transactions and manual journals.
64 65
J. Smart & Co. (Contractors) PLC
INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2024
CLIMATE CHANGE
Our work on the assessment of potential impacts on climate-related risks on the Group’s operations and financial
statements included:
• Enquiries and challenge of management to understand the actions they have taken to identify climate-related risks
and their potential impacts on the financial statements and adequately disclose climate-related risks within the annual
report;
• Our own qualitative risk assessment taking into consideration the sector in which the Group operates and how climate
change affects this particular sector; and
• Review of the minutes of Board meetings and other papers related to climate change and performed a risk assessment
as to how the impact of the Group’s commitment as set out in the Strategic Report may affect the financial statements
and our audit.
We challenged the extent to which climate-related considerations, including the expected cash flows from the initiatives
and commitments have been reflected, where appropriate, in the Directors going concern assessment and viability
assessment.
We also assessed the consistency of managements disclosures included as ‘Statutory Other Information’ in the Strategic
Report with the financial statements and with our knowledge obtained from the audit.
Based on our risk assessment procedures, we did not identify there to be any Key Audit Matters materially impacted by
climate-related risks and related commitments.
66 67
J. Smart & Co. (Contractors) PLC
INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2024
KEY AUDIT MATTER
How the scope of our audit addressed the key audit matter
REVENUE
RECOGNITION
(Note 1 and 3)
The Group’s revenue is
generated from construction and
investment property activities.
These activities result in revenue
that is derived from construction
contracts, the sale of private
housing and investment property
rental revenue.
Revenue from construction
contracts (disaggregated
into Social Housing, Civil
Engineering, Industrial and
General Construction in note 3)
is recognised based on different,
individual, commercial contract
terms. This includes areas of
judgement such as when to
recognise the right to revenue
arising from the value of work
performed based on valuations
and the identification and
recognition of losses in respect to
loss making contracts.
Given the nature and complexity
of construction revenue and its
importance to the activities of the
business, we considered there to
be a significant risk of material
misstatement arising in respect of
the completeness, accuracy, cut-
off and existence of incomplete
construction revenue contracts.
As a result, we considered
the revenue recognition from
incomplete construction revenue
contracts to be a key audit
matter.
We reviewed the revenue accounting policies and practices
as well as the basis of material recognition estimates for
consistency of application and whether they were in accordance
with the requirements of the applicable accounting standards.
We tested the Group’s material revenue streams individually
according to their characteristics, performing detailed testing,
as articulated in the following paragraphs below, of a sample
of contracts during the year based on pre-determined metrics
(related to contribution to revenue and profit) designed to
address higher risk contracts and areas of judgement, as well as
an additional unpredictable sample of contracts.
We engaged in detailed discussions with the relevant
commercial directors and other key individuals in ascertaining
and verifying the judgements made for each contract. This
included testing the recoverability of contract balances and
trade debtors, certification of works and billing by matching
the year end balance to post year end receipts, where material
to test. As part of this process, we critically assessed and
challenged the recognition of revenue and profit by reference
to costs incurred to total costs as well as valuations performed
at year end in comparison to our site attendance and other
corroborating evidence such as the revenue contract agreement,
testing of material variations and claims, as well as year-end
payment certificates and cash received.
Through our audit work we obtained an understanding of the
key estimates taken by management around these contracts
and sought detailed explanations and support for judgements
taken, in particular where material claims for variations
had been recognised. We then obtained evidence to support
recoverability of these variations or claims by reference to
customer agreement as well as cash payment of these variations
and, where appropriate, consulted with management’s experts
(in the form of Quantity Surveyors and Commercial Directors)
to gain an understanding of the basis for the judgements made.
We reviewed legal correspondence relating to significant
claims and variations to identify evidence contrary to our
understanding and management’s judgements. Our revenue and
contract profit recognition testing focused on the timing of and
amounts recognised in respect of any variable income to check
that it is improbable that a significant reversal of amounts
recognised will occur.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
66 67
J. Smart & Co. (Contractors) PLC
INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2024
KEY AUDIT MATTER
How the scope of our audit addressed the key audit matter
REVENUE
RECOGNITION
(Note 1 and 3)
(continued)
We agreed the calculations underlying the estimate of costs
to complete in relation to ongoing contracts to supporting
agreements and documentation.
For a sample of projects, we carried out site visits to improve
our understanding of the projects and their risk and attended
contract review meetings to understand the process and
challenges identified.
As part of testing of construction contracts, we also
agreed a sample of applications for payment to customer
correspondence and agreed a sample to cash receipt.
We checked that costs had been appropriately allocated to
a particular contract, including the application of payroll,
subcontractor and purchasing costs by sampling all costs in
the year over all contracts and checking that the corroborative
evidence obtained in relation to these samples supported the
allocation of the cost to the particular contract being tested.
As part of our detailed testing, we reviewed post year end
performance of contracts to corroborate estimates taken at
the year-end in respect of costs expected to be incurred and
challenged assumptions which appeared inconsistent with
actual post year end performance. This included assessing the
reliability of management estimates considering the positions
adopted in previous years compared to actual outturn.
Key observations
Based on our procedures we found management’s judgements
in respect of revenue recognition to be appropriate.
KEY AUDIT MATTERS (continued)
68 69
J. Smart & Co. (Contractors) PLC
INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2024
KEY AUDIT MATTER
How the scope of our audit addressed the key audit matter
VALUATION OF
DEFINED BENEFIT
PENSION
SCHEME
OBLIGATIONS
(including
assumptions
used)
(Note 1 and 31)
The Group has a defined
benefit pension scheme.
The pension valuation
is dependent on market
conditions and key
assumptions made by
management, relating to
investment markets, discount
rate, inflation expectations and
life expectancy assumptions.
The Group has recognised the
full scheme surplus of assets
over the scheme obligations
which represents another area
of significant judgement.
The valuation of the defined
benefit pension scheme
obligation, which reduces the
surplus, represented a key
audit matter given that the
setting of the assumptions
is complex and requires
the exercise of significant
management judgement
with the support of third
party actuaries. The related
sensitivities of any changes in
assumptions are disclosed in
note 31.
In testing the valuation of the pension obligation, we
utilised pension actuarial experts to review the key actuarial
assumptions used, both financial and demographic and, in
conjunction with our experts, considered the appropriateness
of the methodology utilised to derive these assumptions.
We benchmarked the scheme assumptions against publicly
available published data. Specifically, we challenged the
discount rate, inflation and mortality assumptions applied in
the calculation with the assistance of our pension experts in
benchmarking the assumptions applied against comparable
third party data and assessing the appropriateness of the
assumptions in the context of the Group’s own position. We
performed sensitivity analysis on the assumptions determined
by the Directors.
We considered the recoverability of the surplus to gain
assurance that the Group has an unconditional right to recover
the net asset. We have seen legal correspondence obtained by
the Directors that confirmed that the Group has unconditional
right to the scheme surplus and challenged this by reference to
the Trust Deed, to determine whether this is appropriate.
We considered the competence, independence and ability
to perform the work of the third-party actuaries used by
management by obtaining independence confirmations as well
as checking that they are qualified actuaries.
We assessed the disclosure of the net pension asset and the
related assumptions and sensitivities in the financial statements
against the relevant accounting framework and the findings of
our work.
Key observations
We have not identified any evidence to suggest that the
methodology and assumptions applied in relation to
determining the pension valuation are not within an acceptable
range.
KEY AUDIT MATTERS (continued)
68 69
J. Smart & Co. (Contractors) PLC
INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2024
KEY AUDIT MATTER
How the scope of our audit addressed the key audit matter
VALUATION OF
INVESTMENT
PROPERTIES
(Note 1 and 15)
The Group has a significant
portfolio of investment property.
Judgement is required by
management in terms of the
assessment of the effect on the
valuation of the individual nature
of each property, its location,
expected future rental income,
tenure and tenancy profiles,
prevailing market yields and
comparable market conditions.
Input inaccuracies or
unreasonable bases used in these
assumptions could result in a
material misstatement in the
financial statements.
This area represented a key audit
matter given that the setting of
these assumptions is complex
and requires the exercise
of significant management
judgement with the support of
third party valuation experts.
We audited the investment property portfolio, with the
assistance of our experts, who are independent 3rd party
RICS valuers. Our independent experts reviewed a sample of
the investment property portfolio valuations in order to assess
the key assumptions used, considered the appropriateness of
the methodology utilised to derive these assumptions and the
appropriateness of the valuation technique used.
We performed detailed testing on a sample of properties,
agreeing the key aspects such as the nature of each property,
its location, expected future rental income, tenure and
tenancy profiles and prevailing market yields to corroborating
documentation, to check that the valuations are based
on accurate and reliable information in relation to those
properties.
A sample of additions to investment properties were agreed
to legal documentation and all properties at year end were
agreed to the prior year listing to confirm the completeness of
the portfolio. We performed further tests such as inspection
of Director meeting minutes and post year end receipts to
identify any unrecorded disposals. A sample of properties was
physically inspected by our audit experts.
We considered the competence, independence and ability to
perform the work of the third party valuation experts used
by management by obtaining independence confirmations as
well as checking that they are qualified valuers.
Assumptions made by management in their valuation, such
as rental amounts and yields, were challenged by agreeing a
sample of these assumptions to corroborating evidence in the
form of rental contracts and engagement of our own experts
to assist in reviewing these, to consider whether they are
appropriate.
The completeness and accuracy of disclosure in the financial
statements were checked with reference to our knowledge
obtained during the audit and the requirements of the relevant
accounting standards.
Key observations
We have not identified any evidence to suggest that the
methodology and assumptions applied in relation to
determining the investment properties valuation are not
within a tolerable range. Based on our procedures we found
management’s valuation in respect of investment properties to
be appropriate.
KEY AUDIT MATTERS (continued)
70 71
OUR APPLICATION OF MATERIALITY
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and
the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
J. Smart & Co. (Contractors) PLC
INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2024
Group financial
statements
Group financial
statements
Parent company
financial statements
Parent company
financial statements
2024
£
2023
£
2024
£
2023
£
Materiality £1,300,000 £1,300,000 £197,000 £173,000
Basis for determining
materiality
0.89% of total assets at
the year end
0.88% of total assets at
the year end
0.42% of total assets at
the year end.
0.33% of total assets at
the year end.
Rationale for the
benchmark applied
We consider this
to be the principal
consideration in
assessing the financial
performance of the
Group as the Group
considers total assets to
be its key performance
indicator, which
demonstrates less
volatility than other
performance measures.
We consider this
to be the principal
consideration in
assessing the financial
performance of the
Group as the Group
considers total assets to
be its key performance
indicator, which
demonstrates less
volatility than other
performance measures.
We consider this
to be the principal
consideration in
assessing the financial
performance of the
Parent Company as
the Parent Company
considers total assets to
be its key performance
indicator, which
demonstrates less
volatility than other
performance measures.
We consider this
to be the principal
consideration in
assessing the financial
performance of the
Parent Company as
the Parent Company
considers total assets to
be its key performance
indicator, which
demonstrates less
volatility than other
performance measures.
Performance
materiality
£910,000 £910,000 £138,000 £121,000
Basis for determining
performance
materiality
70% of the above
materiality thresholds
to address the
expected total value
of known and likely
misstatements, our
knowledge of the
Group’s internal
controls and
management’s attitude
towards proposed
adjustments.
70% of the above
materiality thresholds
to address the
expected total value
of known and likely
misstatements, our
knowledge of the
Group’s internal
controls and
management’s attitude
towards proposed
adjustments.
70% of the above
materiality thresholds
to address the
expected total value
of known and likely
misstatements, our
knowledge of the
Parent Company’s
internal controls and
management’s attitude
towards proposed
adjustments.
70% of the above
materiality thresholds
to address the
expected total value
of known and likely
misstatements, our
knowledge of the
Parent Company’s
internal controls and
management’s attitude
towards proposed
adjustments.
70 71
J. Smart & Co. (Contractors) PLC
INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2024
OUR APPLICATION OF MATERIALITY (continued)
Component materiality
We set materiality for the remaining significant component of the Group, apart from the Parent Company whose
materiality is set out above, based on a percentage of 6.2% (2023: 4.6%) of Group materiality dependent on the size and
our assessment of the risk of material misstatement of this component. Component materiality for this component was
£80,000 (2023: £60,000). In the audit of this component, we further applied performance materiality levels of 70% (2023:
70%) of the component materiality to our testing to ensure that the risk of errors exceeding component materiality was
appropriately mitigated.
Reporting threshold
We agreed with the Board that we would report to them all individual audit differences in excess of £39,000, (2023:
£39,000). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative
grounds.
OTHER INFORMATION
The Directors are responsible for the other information. The other information comprises the information included in the
Annual Report and Statement of Accounts other than the financial statements and our auditor’s report thereon. Our opinion
on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is
a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
CORPORATE GOVERNANCE STATEMENT
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to the Parent Company’s compliance with the provisions of the UK
Corporate Governance Statement specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit.
GOING CONCERN
AND LONGER-TERM
VIABILITY
• The Directors’ statement with regards to the appropriateness of adopting the going concern
basis of accounting and any material uncertainties identified set out on page 51; and
• The Directors’ explanation as to its assessment of the Group’s prospects, the period this
assessment covers and why the period is appropriate set out on page 51.
OTHER CODE
PROVISIONS
• Directors’ statement on fair, balanced and understandable set out on page 51;
• Board’s confirmation that it has carried out a robust assessment of the emerging and
principal risks set out on pages 51 and 52;
• The section of the Annual Report that describes the review of effectiveness of risk
management and internal control systems set out on page 51; and
• The section describing the work of the Audit Committee set out on page 50. As set out on
page 50 to 52 the Directors consider it impracticable to have an Audit Committee for the
Group.
72 73
J. Smart & Co. (Contractors) PLC
INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2024
OTHER COMPANIES ACT 2006 REPORTING
Based on the responsibilities described below and our work performed during the course of the audit, we are required by
the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
STRATEGIC REPORT
AND REPORT OF
THE DIRECTORS
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report and the Report of the Directors for the
financial year for which the financial statements are prepared is consistent with the
financial statements; and
• the Strategic Report and the Report of the Directors have been prepared in accordance
with applicable legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its
environment obtained in the course of the audit, we have not identified material misstatements
in the Strategic Report or the Report of the Directors.
DIRECTORS’
REMUNERATIONS
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly
prepared in accordance with the Companies Act 2006.
CORPORATE
GOVERNANCE
STATEMENT
In our opinion, based on the work undertaken in the course of the audit the information about
internal control and risk management systems in relation to financial reporting processes and
about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure
Guidance and Transparency Rules sourcebook made by the Financial Conduct Authority (the
FCA Rules), is consistent with the financial statements and has been prepared in accordance
with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company and its
environment obtained in the course of the audit, we have not identified material misstatements
in this information.
In our opinion, based on the work undertaken in the course of the audit information about
the Parent Company’s corporate governance code and practices and about its administrative,
management and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and
7.2.7 of the FCA Rules.
We have nothing to report arising from our responsibility to report if a corporate governance
statement has not been prepared by the Parent Company.
MATTERS ON
WHICH WE ARE
REQUIRED TO
REPORT BY
EXCEPTION
We have nothing to report in respect of the following matters in relation to which the
Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns
adequate for our audit have not been received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ Remuneration
Report to be audited are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
72 73
J. Smart & Co. (Contractors) PLC
INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2024
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent
to which our procedures are capable of detecting irregularities, including fraud is detailed below.
Non-compliance with laws and regulations
Based on:
• Our understanding and accumulated knowledge of the Group and its subsidiaries and the sector in which it operates;
• Discussion with management and those charged with governance as well as the Board; and
• Obtaining and understanding of the Group’s policies and procedures regarding compliance with laws and regulations,
we considered the significant laws and regulations to be the applicable accounting framework, UK corporate tax, VAT
and employment tax legislation.
The Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on
the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified
such laws and regulations to be the Health and Safety legislation, UK Companies Act 2006, industry related regulations
impacting the construction industry, and the Listing Rules.
Our procedures in respect of the above included:
• Review of minutes of meeting of those charged with governance for any instances of non-compliance with laws and
regulations;
• Review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws and
regulations;
• Review of financial statement disclosures and agreeing to supporting documentation;
• Involvement of tax specialists in the audit; and
• Review of legal expenditure accounts to understand the nature of expenditure incurred.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment
procedures included:
• Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;
• Obtaining an understanding of the Group’s policies and procedures relating to:
o Detecting and responding to the risks of fraud; and
o Internal controls established to mitigate risks related to fraud.
• Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud;
• Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted
by these; and
• Involvement of our forensics specialists in identifying key risk areas susceptible to fraud.
Based on our risk assessment, we considered the areas most susceptible to fraud to be management override of controls,
revenue recognition (cut-off) relating to construction contract revenue and construction related activities such as supplier
changes, petty cash misappropriation, manipulation of expense accounts and related collusion.
74 75
J. Smart & Co. (Contractors) PLC
INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2024
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS (continued)
Fraud (continued)
Our procedures in respect of the above included:
• Challenging assumptions and judgements made by management in their significant accounting estimates, in particular
in relation to the recognition of revenue, the assumptions and estimates used in the valuation of investment property
and private housing inventory, and the defined pension benefit scheme net asset (for more information on how we
audited these areas, refer to the “Key audit matters” section above). We sought to identify any areas of management
bias by corroborating these estimates and judgements and challenging management as to their appropriateness based
on third party empirical evidence, recalculating management’s estimate, following up on information in relation to
estimates to the date of issue as well as in some cases developing our own estimate range and comparing this to
management’s estimate;
• Designed targeted audit tests to address the areas identified at the planning stage with our forensic specialists which
included:
o testing a sample of capitalised assets in order to identify those that should not have been capitalised based on
recognition criteria of the applicable accounting standards;
o maintaining awareness of the possibility of money laundering in construction contracts;
o testing of unusual cash payments identified through use of our data analytics software to corroborating evidence;
o comparison of bank accounts between suppliers and payroll in order to identify any duplicates;
o reviewing supplier transactions to identify unusual items and testing those items that meet a pre-determined
threshold to corroborating evidence;
o testing supplier changes to corroborating evidence to identify unauthorised or potentially fraudulent changes;
o reviewing petty cash movements in order to identify any large or unusual items which could be indicative of
potentially fraudulent payments and testing these to corroborating evidence where identified.
• In response to the risk of fraud in revenue recognition relation to cut-off, we performed the procedures set out in the
key audit matters section of the report;
• Identifying and testing journal entries to corroborating evidence, in particular journal entries posted with specific
keywords, journals to revenue and cash, journals posted by individuals with certain system access levels and an
unpredictable sample of journals; and
• Testing payroll calculations and payments to identify potential fraud and in order to incorporate unpredictability into
our testing by checking those processors of payroll only received what is contractually due to them with reference to
their employment contracts.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members
who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-
compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that
the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error,
as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are
inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is
from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditor’s report.
USE OF OUR REPORT
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
aliStair rae (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Edinburgh, UK
19th November 2024
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127)
74 75
Notes | 2024 | 2023 | ||||||||||
£000 | £000 | |||||||||||
| REVENUE | . | . | . | . | . | . | . | . | 3 | |||
Cost of sales | . | . | . | . | . | . | . | . | ( | ( | ||
GROSS PROFIT | . | . | . | . | . | . | . | . | ||||
Other operating income | . | . | . | . | . | . | 4 | |||||
Administrative expenses | . | . | . | . | . | . | ( | ( | ||||
| OPERATING (LOSS)/PROFIT BEFORE NET SURPLUS/(DEFICIT) | ||||||||||||
ON VALUATION OF INVESTMENT PROPERTIES | . | . | . | . | ( | |||||||
Net surplus/(deficit) on valuation of investment properties | . | . | 15 | ( | ||||||||
OPERATING PROFIT/(LOSS) | . | . | . | . | . | . | 6 | ( | ||||
Share of profit/(loss) in Joint Ventures . | . | . | . | . | 16(a) | ( | ||||||
Income from financial assets | . | . | . | . | . | . | 7 | |||||
Loss on sale of financial assets . | . | . | . | . | . | ( | ( | |||||
Net surplus/(deficit) on valuation of financial assets | . | . | . | 17 | ( | |||||||
Finance income | . | . | . | . | . | . | . | 8 | ||||
Finance costs | . | . | . | . | . | . | . | 8 | ( | ( | ||
PROFIT BEFORE TAX | . | . | . | . | . | . | . | 10 | ||||
Taxation | . | . | . | . | . | . | . | . | . | 9 | ( | |
PROFIT FOR YEAR ATTRIBUTABLE TO EQUITY SHAREHOLDERS | . | |||||||||||
| EARNINGS PER SHARE | ||||||||||||
Basic and diluted | . | . | . | . | . | . | . | 12 |
J. Smart & Co. (Contractors) PLC
CONSOLIDATED INCOME STATEMENT
for the year ended 31st July 2024
76 77
J. Smart & Co. (Contractors) PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31st July 2024
Notes | 2024 | 2023 | ||||||||||
£000 | £000 | |||||||||||
PROFIT FOR THE YEAR | . | . | . | . | . | . | . | |||||
| OTHER COMPREHENSIVE INCOME | ||||||||||||
| Items that will not be subsequently reclassified to Income Statement: | ||||||||||||
Remeasurement gains on defined benefit pension scheme | . | . | 31 | |||||||||
| Deferred taxation on remeasurement gains | ||||||||||||
on defined benefit pension scheme | . | . | . | . | . | 25 | ( | ( | ||||
| TOTAL ITEMS THAT WILL NOT BE SUBSEQUENTLY | ||||||||||||
RECLASSIFIED TO INCOME STATEMENT . | . | . | . | . | ||||||||
TOTAL OTHER COMPREHENSIVE INCOME | . | . | . | . | ||||||||
TOTAL COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX | . | |||||||||||
ATTRIBUTABLE TO EQUITY SHAREHOLDERS | . | . | . | . |
76 77
J. Smart & Co. (Contractors) PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
as at 31st July 2024
Capital
Share | Redemption | Retained | ||||||||||
Capital | Reserve | Earnings | Total | |||||||||
£000 | £000 | £000 | £000 | |||||||||
At 1st August 2022 | . | . | . | . | . | . | . | |||||
Profit for the year | . | . | . | . | . | . | . | |||||
Other comprehensive income | . | . | . | . | . | . | ||||||
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | . | . | . | |||||||||
| TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY | ||||||||||||
Shares purchased and cancelled | . | . | . | . | . | ( | ( | ( | ||||
Transfer to Capital Redemption Reserve | . | . | . | . | ( | |||||||
Dividends | . | . | . | . | . | . | . | . | ( | ( | ||
TOTAL TRANSACTIONS WITH OWNERS . | . | . | . | . | ( | ( | ( | |||||
At 31st July 2023 | . | . | . | . | . | . | . | |||||
Profit for the year | . | . | . | . | . | . | . | |||||
Other comprehensive income | . | . | . | . | . | . | ||||||
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | . | . | . | |||||||||
| TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY | ||||||||||||
Shares purchased and cancelled | . | . | . | . | . | ( | ( | ( | ||||
Transfer to Capital Redemption Reserve | . | . | . | . | ( | |||||||
Dividends | . | . | . | . | . | . | . | . | ( | ( | ||
TOTAL TRANSACTIONS WITH OWNERS . | . | . | . | . | ( | ( | ( | |||||
At 31st July 2024 | . | . | . | . | . | . | . | . |
78 79
J. Smart & Co. (Contractors) PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
as at 31st July 2024
Capital
Share Redemption Retained
Capital Reserve Earnings Total
£000 £000 £000 £000
At 1st August 2022 . . . . 818 190 19,936 20,944
Profit for the year . . . . – – 12,709) (12,709)
Other comprehensive income . . . – – 3,247) 3,247)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR – – 15,956) 15,956)
TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled . . (16) – (1,329) (1,345)
Transfer to Capital Redemption Reserve . – 16 (16) –
Dividends . . . . . – – (1,311) (1,311)
TOTAL TRANSACTIONS WITH OWNERS . . (16) 16 (2,656) (2,656)
At 31st July 2023 . . . . . 802 206 33,236 34,244
Loss for the year . . . . . – – (49) (49)
Other comprehensive income . . . – – 1,352)
1,352)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR – – 1,303) 1,303)
TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled . . (13) – (889) (902)
Transfer to Capital Redemption Reserve . – 13 (13) –
Dividends . . . . . – – (1,277) (1,277)
TOTAL TRANSACTIONS WITH OWNERS . . (13) 13 (2,179) (2,179)
At 31st July 2024 . . . . . 789 219 32,360 33,368
78 79
J. Smart & Co. (Contractors) PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31st July 2024
Notes | 2024 | 2023 | |||||||||||
£000 | £000 | ||||||||||||
| NON-CURRENT ASSETS | |||||||||||||
Property, plant and equipment | . | . | . | . | . | . | 13 | ||||||
Investment properties | . | . | . | . | . | . | . | 15 | |||||
Investments in Joint Ventures | . | . | . | . | . | . | 16 | ||||||
Financial assets | . | . | . | . | . | . | . | . | 17 | ||||
Trade and other receivables | . | . | . | . | . | . | 21 | ||||||
Retirement benefit surplus | . | . | . | . | . | . | 31 | ||||||
Deferred tax assets | . | . | . | . | . | . | . | 25 | |||||
| CURRENT ASSETS | |||||||||||||
Assets held for sale | . | . | . | . | . | . | . | 18 | |||||
Inventories | . | . | . | . | . | . | . | . | 19 | ||||
Contract assets | . | . | . | . | . | . | . | . | 20 | ||||
Corporation tax asset | . | . | . | . | . | . | . | 92 | |||||
Trade and other receivables | . | . | . | . | . | . | 21 | ||||||
Monies held on deposit | . | . | . | . | . | . | 22 | ||||||
Cash and cash equivalents | . | . | . | . | . | . | 22 | ||||||
TOTAL ASSETS | . | . | . | . | . | . | . | . | |||||
| NON-CURRENT LIABILITIES | |||||||||||||
Deferred tax liabilities | . | . | . | . | . | . | . | 25 | |||||
Lease liabilities | . | . | . | . | . | . | . | 26 | |||||
| CURRENT LIABILITIES | |||||||||||||
Trade and other payables | . | . | . | . | . | . | 23 | ||||||
Lease liabilities | . | . | . | . | . | . | . | 26 | |||||
Bank overdraft | . | . | . | . | . | . | . | 22 | |||||
TOTAL LIABILITIES | . | . | . | . | . | . | . | ||||||
NET ASSETS | . | . | . | . | . | . | . | . | |||||
| EQUITY | |||||||||||||
Called up share capital | . | . | . | . | . | . | . | 27 | |||||
Capital redemption reserve | . | . | . | . | . | . | 27 | ||||||
Retained earnings | . | . | . | . | . | . | . | 27 | |||||
TOTAL EQUITY | . | . | . | . | . | . | . | . |
The financial statements on pages 75 to 119 were approved by the Board of Directors and authorised for issue
on 19th November 2024 and were signed on its behalf by:
DaviD w Smart John r Smart
Director Director
Company Number SC025130
80 81
J. Smart & Co. (Contractors) PLC
COMPANY STATEMENT OF FINANCIAL POSITION
as at 31st July 2024
Notes 2024 2023
£000 £000
NON-CURRENT ASSETS
Property, plant and equipment . . . . . . 14 2,267 1,088
Investments in Subsidiaries and Joint Ventures . . . 16 615 1,748
Trade and other receivables . . . . . . 21 364 3,374
Retirement benefit surplus . . . . . . 31 23,040 19,998
26,286 26,208
CURRENT ASSETS
Inventories . . . . . . . . 19 18,330 17,380
Contract assets . . . . . . . . 20 427 –
Trade and other receivables . . . . . . 21 808 6,585
Corporation tax asset . . . . . . . 1,256 1,053
Cash and cash equivalents . . . . . . 22 – 1
20,821 25,019
TOTAL ASSETS . . . . . . . . 47,107 51,227
NON-CURRENT LIABILITIES
Deferred tax liabilities . . . . . . . 25 5,837 5,067
CURRENT LIABILITIES
Trade and other payables . . . . . . 23 3,667 2,593
Bank overdraft . . . . . . . 22 4,235 9,323
7,902 11,916
TOTAL LIABILITIES . . . . . . . 13,739 16,983
NET ASSETS . . . . . . . . 33,368 34,244
EQUITY
Called up share capital . . . . . . . 27 789 802
Capital redemption reserve . . . . . . 27 219 206
Retained earnings . . . . . . . 27 32,360 33,236
TOTAL EQUITY . . . . . . . . 33,368 34,244
A separate Statement of Comprehensive Income for the Company has not been presented as permitted by
Section 408 of the Companies Act 2006. The loss for the Company is £49,000 (2023, profit £12,709,000).
The financial statements on pages 75 to 119 were approved by the Board of Directors and authorised for issue
on 19th November 2024 and were signed on its behalf by:
DaviD w Smart John r Smart
Director Director
Company Number SC025130
80 81
J. Smart & Co. (Contractors) PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31st July 2024
Notes | 2024 | 2023 | |||||||||||
£000 | £000 | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ) | ||||||||||||
Profit after tax | . | . | . | . | . | . | . | . | |||||
Tax charge/(credit) for year | . | . | . | . | . | . | ( | ||||||
Profit before tax | . | . | . | . | . | . | . | . | |||||
| Adjustments for: | |||||||||||||
Share of (profits)/losses from Joint Ventures | . | . | . | . | ( | ||||||||
Depreciation | . | . | . | . | . | . | . | . | |||||
Unrealised (surplus)/deficit on valuation of investment properties | . | ( | |||||||||||
Unrealised (surplus)/deficit on valuation of financial assets | . | . | ( | ||||||||||
Profit on sale of property, plant and equipment | . | . | . | ( | ( | ||||||||
Loss on derecognition of asset | . | . | . | . | . | . | |||||||
Loss on sale of financial assets . | . | . | . | . | . | ||||||||
Change in retirement benefits | . | . | . | . | . | . | ( | ( | |||||
Interest received | . | . | . | . | . | . | . | ( | ( | ||||
Interest paid | . | . | . | . | . | . | . | . | |||||
Change in inventories | . | . | . | . | . | . | . | ( | ( | ||||
Change in contract assets | . | . | . | . | . | . | ( | ( | |||||
Change in receivables | . | . | . | . | . | . | . | ( | |||||
Change in payables | . | . | . | . | . | . | . | ||||||
CASH OUTFLOW FROM OPERATING ACTIVITIES | . | . | . | ( | ( | ||||||||
Tax paid | . | . | . | . | . | . | . | . | ( | ( | |||
NET CASH OUTFLOW FROM OPERATING ACTIVITIES | . | . | . | ( | ( | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||
Additions to property, plant and equipment | . | . | . | . | ( | ( | |||||||
Additions to investment properties | . | . | . | . | . | ( | ( | ||||||
Expenditure on own work capitalised - investment properties | . | ( | ( | ||||||||||
Proceeds of sale of property, plant and equipment | . | . | . | ||||||||||
Purchase of financial assets | . | . | . | . | . | . | ( | ( | |||||
Proceeds of sale of financial assets | . | . | . | . | . | ||||||||
Monies held on deposit | . | . | . | . | . | . | ( | ( | |||||
Interest received | . | . | . | . | . | . | . | ||||||
Interest paid | . | . | . | . | . | . | . | ( | |||||
Loan to Joint Ventures repaid | . | . | . | . | . | . | |||||||
Return of capital contribution to Joint Ventures | . | . | . | ||||||||||
Dividend received from Joint Venture | . | . | . | . | . | ||||||||
NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES | . | ( |
82 83
Notes | 2024 | 2023 | |||||||||||
£000 | £000 | ||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||
Interest costs on leases | . | . | . | . | . | . | . | ( | ( | ||||
Purchase of own shares | . | . | . | . | . | . | . | ( | ( | ||||
Dividends paid | . | . | . | . | . | . | . | . | ( | ( | |||
NET CASH OUTFLOW FROM FINANCING ACTIVITIES | . | . | . | ( | ( | ||||||||
DECREASE IN CASH AND CASH EQUIVALENTS | . | . | . | . | ( | ( | |||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | . | . | 28 (a) | ||||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | . | . | . | 28 (a) |
J. Smart & Co. (Contractors) PLC
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
for the year ended 31st July 2024
82 83
J. Smart & Co. (Contractors) PLC
COMPANY STATEMENT OF CASH FLOWS
for the year ended 31st July 2024
Notes 2024) 2023)
£000) £000)
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss)/profit after tax . . . . . . . (49) 12,709
Tax credit . . . . . . . . (482) (295)
(Loss)/profit before tax . . . . . . . (531) 12,414
Adjustments for:
Depreciation . . . . . . . . 255 217
Profit on sale of property, plant and equipment . . . (79) (38)
Loss on derecognition of asset . . . . . . – 42
Write off investment in subsidiary . . . . . 668 –
Dividend received from Subsidiaries and Joint Ventures . . (2,311) (14,100)
Change in retirement benefits . . . . . (154) (41)
Interest received . . . . . . . (1,134) (628)
Change in inventories . . . . . . . (950) (5,313)
Change in contract assets . . . . . . (427) 16
Change in receivables . . . . . . . 5,680 (4,040)
Change in payables . . . . . . . 1,074) 596
CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES . . 2,091 (10,875)
Tax received . . . . . . . . 599) 791
NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES . 2,690 (10,084)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment . . . . (1,453) (690)
Proceeds of sale of property, plant and equipment . . . 98 51)
Interest received . . . . . . . 145 –)
Investment in subsidiary . . . . . . (575) –
Loan to Joint Venture repaid . . . . . . 3,010 –
Return of capital contribution to Joint Ventures . . . 1,040 –
Dividend received from subsidiaries and Joint Ventures . . 2,311) 14,100
NET CASH INFLOW FROM INVESTING ACTIVITIES . . . 4,576) 13,461
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of own shares . . . . . . . (902) (1,345)
Dividends paid . . . . . . . . (1,277) (1,311)
NET CASH OUTFLOW FROM FINANCING ACTIVITIES . . . (2,179) (2,656)
INCREASE IN CASH AND CASH EQUIVALENTS . . . . 5,087 721
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR . . 29 (a) (9,322) (10,043)
CASH AND CASH EQUIVALENTS AT END OF YEAR . . . 29 (a) (4,235) (9,322)
84 85
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS 31st JULY 2024
84 85
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
86 87
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
86 87
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
88 89
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
88 89
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
90 91
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
90 91
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
92 93
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
92 93
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
Revenue
2024 2023
. . . . .
. . . .
94 95
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
94 95
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
96 97
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
96 97
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
98 99
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
98 99
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
100 101
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
100 101
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
102 103
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
102 103
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
104 105
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
104 105
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
20. CONTRACT BALANCES
The timing of revenue recognition results in amounts due from customers for construction contracts, those
which have not yet been invoiced are disclosed as Contract Assets and once invoiced they are disclosed as
Trade Receivables (note 21). The Group does not receive deposits or payments in advance for contracts and
therefore has no Contract Liabilities to disclose. The Group did not incur costs to obtain contracts.
Group Company
2 0 2 4 ) 2023) 2024) 2023)
£ 0 0 0 ) £000) £000) £000)
Contract Assets . . . . . . 944) 33) 427) –)
As at 1st August 2023 . . . . . 33) 16) –) 16)
Transfers from contract assets recognised at the
beginning of the year to trade receivables . . (33) (16) – (16)
Increase related to services provided in the year . 944) 33) 427 –)
As at 31st July 2024 . . . . . 944) 33) 427 –)
106 107
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
106 107
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
108 109
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
108 109
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
110 111
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
110 111
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
112 113
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
112 113
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
114 115
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
114 115
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
116 117
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
116 117
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
118 119
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
118 119
J. Smart & Co. (Contractors) PLC
NOTES TO THE ACCOUNTS (continued) 31st JULY 2024
35. POST BALANCE SHEET EVENTS
In August 2024 the Group concluded the sale of two of its investment properties for £14,150,000. These properties
had been transferred in the year to 31st July 2024 to Assets Held for Sale details of which are given in note 18 of
the financial statements.
There have been no other events occurring after the Statement of Financial Position date that the Directors consider
should be brought to the attention of the shareholders.
120
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