CLS Holdings plc
16 Tinworth Street
London
SE11 5AL
Tel: +44 (0)20 7582 7766
Fax: +44 (0)20 7735 2779
www.clsholdings.com
enquiries@clsholdings.com
CLS Holdings plc Annual Report and Accounts 2025

CLS Holdings plc Annual Report and Accounts 2025

CLS Holdings plc Annual Report and Accounts 2025
CLS Holdings plc
Annual Report and Accounts 2025

Strategic report
1 Group highlights
2 Our investment case
4 Group at a glance
6 Chief Executive’s review
10 Strategy in action
14 Country reviews
20 Our Strategy and business model
21 Our Key Performance Indicators
22 Chief Financial Officer’s review
26 Stakeholder engagement
28 Section 172 statement
30 ESG overview
49 People
52 Health and safety
53 Risk management
61 Going concern statement
63 Viability statement
Corporate governance
64 Chairman’s introduction
66 Board of Directors
68 Key Board Activities
70 Relationship with shareholders
71 Workforce engagement
72 Culture dashboard
73 Division of responsibilities
74 Nomination Committee Report
81 Audit Committee Report
87 Remuneration Committee Report
100 Remuneration Policy
115 Directors’ Report
119 Directors’ responsibility statement
Financial statements
120 Independent Auditor’s report
130 Group accounts
169 Company accounts
Other information
176 Five-year financial summary
177 Supplementary disclosures
182 Glossary
IBC Directors, officers and advisors
See also
At CLS we aim to deliver long-term value and
steady shareholder growth by investing in
modern spaces in central and urban locations.
Our success is based on a deep understanding
ofour customers’ business ambitions; a quick-
thinking, fast-responding culture; and a long-term,
progressive attitude.
In a difficult property market our ability to
respondto change sets us apart. We adopt an
agileapproach across all our property activities
continually assessing how to optimise rent, drive up
the value of our properties and build partnerships
with clients that help secure our shared success.
Please visit our website
to read our Sustainability
Strategy and 2025
Sustainability Report
www.clsholdings.com/sustainability/
reports/
Group highlights

Directors
Lennart Sten
*◊
(Non-Executive Chairman)
Anna Seeley
◊
(Non-Executive Vice Chair)
Fredrik Widlund (Chief Executive Officer)
Harry Stokes (Chief Financial Officer)
Johannes Conradi
†
(Non-Executive Director)
Bill Holland
*†
(Non-Executive Director)
Eva Lindqvist
*†‡◊
(Non-Executive Director)
‡ Senior Independent Director
* Member of Remuneration Committee
† Member of Audit Committee
◊ Member of Nomination Committee
Chief Operating Officer & Company Secretary
David Fuller BA, FCG
Registered Office
16 Tinworth Street, London, SE11 5AL
Registered Number
02714781
Website
www.clsholdings.com
Email
enquiries@clsholdings.com
Telephone
+44 (0)20 7582 7766
Registrars and Transfer Office
Computershare Investor Services Plc
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Shareholder Helpline: 0870 889 3286
Germany
CLS Germany GmbH
Hamburg Office:
Nagelsweg 37
20097 Hamburg
Düsseldorf Office:
Roßstraße 96
40476 Düsseldorf
Tel: +49 (0)40 29 81 39 0
France
CLS France Sarl
36 Rue Jules Verne
92300 Levallois-Perret
Paris
Tel: +33 (0)1 86 26 48 50
Luxembourg
CLS Luxembourg Sarl
33 Avenue de la Liberte
1931 Luxembourg
Tel: +352 (0)27 861 217
Clearing Bank
Royal Bank of Scotland Plc
24 Grosvenor Place
London
SW1X 7HP
Joint Corporate Brokers
Panmure Liberum Limited
Ropemaker Place, Level 12
25 Ropemaker Street
London
EC2Y 9LY
Joh. Berenberg, Gossler & Co. KG
London Branch
60 Threadneedle Street
London
EC2R 8HP
Registered Auditor
BDO LLP
Chartered Accountants
55 Baker Street
London
W1U 7EU
Financial and Corporate Public Relations
Daniel J. Edelman Limited
Southside
105 Victoria Street
London
SW1E 6QT
Consultancy, design and production
www.luminous.co.uk
Printed by Park Communications – A carbon
neutral printing company
The material used on this card is from sustainable
sources. The paper mill and printer are both
registered with the Forestry Stewardship Council
(FSC)® and additionally have the Environmental
Management System ISO 14001. The paper is
recyclable and biodegradable
It has been printed using 100% offshore wind
electricity sourced from UK wind.
Consultancy, design and production
www.luminous.co.uk
Directors, officers and advisors

Group highlights
Financial highlights
EPRA EPS
7.6p
(2024: 9.2p)
Statutory EPS
(12.6)p
(2024: (23.6)p)
EPRA NTA (per share)
200.7p
(2024: 215.0p)
Statutory NAV (per share)
186.4p
(2 024 : 1 97. 3 p)
Cost of debt
3.8%
(2024: 3.8%)
Balance sheet LTV
50.0%
(2024: 50.7%)
Total Accounting Return
(4.8)%
(2024: (11.9)%)
Dividend
4.0p
(2024: 5.28p)
Strategic highlights
Contracted rent
(secured in the year)
£17.0m
(2024: £16.6m)
Contracted rent
above ERV
6.3%
(2024: 6.8%)
Contracted rent
which is index-linked
58.7%
(2024: 54.4%)
EPRA
Vacancy Rate
14.5%
(2024: 12.7%)
ESG highlights
GRESB rating
4 Stars
(2024: 4 Stars)
Like-for-like decrease in
landlord energy usage
5.8%
(2024: 4.9%)
% UK portfolio
EPC A-C
84%
(2024: 82%)
Assets Excellent or Very
Good (BREEAM In-Use)
55%
(2024: 53%)
Hansaallee 299, Düsseldorf
CLS Holdings plc Annual Report and Accounts 2025 1
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1.
A clear
strategy
Diversified approach
This approach is across countries (weinvest in major
citiesin Europe’s three largest economies), customers
(over 650 customers spread across most sectors of the
economy), and financing (loans with 23 different lenders).
Focus on multi-let offices
Long-term investment in high yielding, multi-let offices in
London and the South East of the UK, and the larger cities
in Germany and France.
Selected development schemes
Opportunities arise in the portfolio to carry out development
projects to capture rental and capital growth; the amount
ofdevelopment is kept below 10% of the portfolio value at
any one time. Opportunities to secure alternative uses are
pursued usually until planning permission is obtained
andthen the property is sold to a specialist developer.
2.
Active
management
Experienced in-house capabilities
In-house asset, property and facilities management teams
result in better cost control, closer asset knowledge and
synergies across the property portfolio.
Secure rents and high occupancy
Targeted occupancy levels above 95% with affordable
rents and flexible lease terms to meet customer demand
and so create opportunities to capture above market rental
growth. On average over 115 lettings executed each year
over the past five years.
Interest rate management
Financing facilities, which are arranged in-house, seek
tobalance flexibility, diversity and maturity of funding
withalow cost of debt.
Delivered outcomes
Size by contracted rent (%)
Delivered outcomes
Contracted rent secured in the year (£m)
Spring Gardens/Citadel Place, London – proposed development
2021 2022 2023 2024 2025
12.9
8.2
15.5
16.6
17.0
Government
Large
1
Medium
1
Other
30.2%
24.2%
32.2%
13.4%
1 Based on Companies House definitions.
CLS Holdings plc Annual Report and Accounts 20252
Our investment case

3.
Strong track
record
Disciplined approach to investment
Acquisitions are assessed against return and strategic fit
criteria and are pursued on an opportunistic and property
by property basis with no set capital allocation across
countries. Low yielding assets with limited potential are
sold.
Cash-backed progressive dividend
CLS is a total return business using cash flow generated
topay a progressive dividend and also to reinvest in the
business to generate further net asset growth. We aim to
grow the dividend in line with the growth of the business,
targeting the dividend to be covered 1.5 to 3.0 times by
EPRA earnings.
4.
A focus on
sustainability
Responsible business
Corporate responsibility is integrated in our business
model, taking account of all of our stakeholders, including
our own people, our local communities, our shareholders
and the environment, in the decisions we make.
Strong ESG performance
We measure and monitor our progress against our
owntargets as well as performance against both
mandatoryandvoluntary ESG frameworks in our industry.
This gives our stakeholders confidence in our delivery
against commitments.
Climate risk mitigation
Our in-house sustainability programme is focused on
mitigating the impact of climate risks and energy security
issues whilst maximising opportunities for sustainable
growth and the benefits we deliver tothe communities
inwhich we are involved.
Delivered outcomes
Dividend per share (pence)
Total Returns to Shareholders (see page 21 for more recent performance)
CLS FTSE All Share FTSE 350 RE SS
Delivered outcomes
UK portfolio EPC A–C coverage (%)
2021 2022 2023 2024 2025
7.70
7.95 7.95
5.28
4.00
2022 2023 2024 2025
72
80
82
84
1995 2000 2005 2010 2015 2020 2025
CLS Holdings plc Annual Report and Accounts 2025 3
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We are a London-based office and commercial
property specialist with a property portfolio in the
UK,Germany and France. Listed on the London
StockExchange main market since 1994, we have
over650 tenants, including blue-chip organisations
and government departments.
At CLS, our purpose is clear
We transform properties into sustainable, future-
focused spaces that help businesses to grow and
communities to thrive.
What we do
We continuously innovate, modernise and invest in
ourportfolio, creating viable, sustainability-driven
buildings, inspiring workspaces and thriving
cityscapes. We go beyond mere ownership of
ourproperties, partnering with our customers to
understand their own business ambitions, and actively
shaping the future success stories across our cities.
Total Portfolio Value
UK
Germany
France
Property Use by Revenue
Office Space 81.7%
Hospitality 6.1%
Education 4.1%
Light Industrial 3.6%
Retail 2.1%
Laboratory 1.2%
Health Care 0.7%
Residential 0.5%
CLS in numbers
3 countries
77 properties
669 tenants
£1.7bn property portfolio value
£106.2m contracted rent
14.5% vacancy rate
99% rent collection
Top 10 Tenants by Contracted Rent (30.5%) Tenant Sector by Contracted Rent
1 Government 30.2%
2 Commercial & Professional Services 12.3%
3 Information Technology 9.1%
4 Communication Services 8.6%
5 Consumer Discretionary 7.7%
6 Health Care 6.3%
7 Industrials 6.3%
8 Other 6.0%
9 Financials 5.3%
10 Consumer Staples 4.6%
11 Real Estate 3.6%
40%
13%
47%
Secretary of State
CLS Holdings plc Annual Report and Accounts 20254
Group at a glance

Supported by our values
Our tenants,
our focus
Agility unlocks
opportunity
We pride ourselves on the way we build relationships
with our tenants. We get to know them and understand
their business needs, so they feel listened to and
valued. We are responsive and flexible, ensuring they
stay with us for the long term.
Our agile approach allows usto see potential and
opportunities in ways others cannot. It means we
canrespond to changing market conditions and make
decisions quickly. We act with flexibility and speed
tomake the most of opportunities which arise.
Openness
creates closeness
Collaboration
gets the job done
We treasure our inclusive, close-knit and open culture.
Everyone has visibility and a voice. Our open-door
policy encourages everyone to share opinions, creating
greater transparency, honesty and trust.
We confidently take ownership of projects from
beginning toend, making the critical decisions that
getthe job done. We get involved and collaborate
across departments and markets, contributing ideas
and creating new initiatives to drive us forward.
Our office portfolio at a glance (at 31 December 2025)
EPRA net
initial yield
(%)
EPRA
‘topped-up’
net initial
yield (%)
Equivalent
yield (%)
Reversion
(%)
Over-
rented (%)Valuation data
1
Market value
of property
£m
Underlying
valuation
movement
(%)
United Kingdom 641.7 (4.6) 5.5 6.6 7. 5 4.9 9.8
Germany 800.4 (2.7) 4.2 4.9 5.3 3.7 14.0
France 223.6 (4.5) 4.7 5.3 6.2 2.6 6.2
Total office portfolio 1,665.7 (3.8) 4.8 5.6 6.1 4.1 11.2
Lease data
1
Average lease length Contracted rent of leases expiring in: ERV of leases expiring in:
To break
years
To expiry
years
Year 1
£m
Year 2
£m
3 to 5 years
£m
After 5 years
£m
Year 1
£m
Year 2
£m
3 to 5 years
£m
After 5 years
£m
United Kingdom 2.6 3.8 16.2 4.0 15.7 11.5 14.0 3.7 16.2 11.2
Germany 7. 4 7. 4 4.8 9.2 13.1 18.6 4.9 8.4 12.1 15.6
France 2.5 5.3 0.8 0.7 3.9 7. 7 0.8 0.7 3.7 7. 4
Total office portfolio 4.7 5.5 21.8 13.9 32.7 37.8 19.7 12.8 32.0 34.2
Rental data
1
Lettable
space
sqm
(’000)
Contracted
rent
£m
ERV of
lettable
space
£m
Contracted
rent subject
to indexation
%
EPRA
vacancy rate
%
United Kingdom 146.9 47.4 55.0 30.7 18.0
Germany 323.1 45.7 46.1 76.0 11.1
France 63.6 13.1 14.3 100.0 12.1
Total office portfolio 533.6 106.2 115.4 58.7 14.5
1 The above tables comprise data for our offices in investment properties and held for sale (see note 12 and 14).
They exclude owner-occupied space, student accommodation andhotel.
CLS Holdings plc Annual Report and Accounts 2025 5
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Introduction
The economic backdrop of our three chosen geographies of
the UK, Germany and France during 2025 was stable but with
slow economic growth. When combined with varying levels of
political uncertainty both domestically and internationally, the
environment was not conducive to improved investment and
employment levels which are so important for office occupier
demand. Post-pandemic hybrid and flexible working practices
are stabilising and, in areas, reversing. Businesses and their
employees recognise that offices have an important role to
playin efficient, productive and collaborative working. Equally,
occupiers now expect more from their offices in terms of
amenities, collaborative space, higher sustainability standards
(not least to reduce occupancy costs) and a greater focus
onemployee wellbeing.
The office sub-markets in which we operate have varying
degrees of strength at the moment. Core city markets tend
tobe characterised by limited supply and rental growth;
suburban and regional markets have more availability with
softerlease terms while supply stabilises through a combination
of lettings and the removal of older offices through change of
use, mainly to residential space. All of ourproperties are located
in or close to major European cities and they are characterised
by being in strong local business centres with good transport
links. We remain confident in the long-term success of these
markets, particularly as companies look for space convenient
for their employees, with shorter commutes and lower-cost,
high qualityspace.
Recent structural changes have reshaped the office market
andCLS is responding to these changes. We constantly
reviewour portfolio, selling properties no longer core to
ourstrategy and those for which wehave maximised value,
butalso focusing on multi-let offices where we can benefit
fromtenant diversification. This reduces concentration risk
andthe impact of structural changes to any one sector of the
economy. Forexample, the revolutionary impact of Artificial
Intelligence (AI) presents both challenges and opportunities.
“In 2025, CLS has focused on achievingits strategic
priorities, concentrating onwhat is within our control
and continuing to navigate a prolonged downturn
inthe property cycle amidsignificant domestic
andinternational economic and political uncertainty.
Weare clear on what we need to dotorefocus the
business and drive operational efficiency, strengthen
our balance sheet andposition our assets for
long-term growth: wemadegood progress in
2025and expect thattocontinue in 2026.”
WeuseAI to make our own business more productive, and we
are mindful that our diversified tenant base will be impacted in
different ways and atdifferent times. By having in-house asset
management, we keep close to our tenants and ensure that
wecan react quickly to their evolving needs, as well as directing
our capital expenditure to ensure that we are well positioned to
benefit from new businesses and technologies that will emerge
as part of theAI revolution.
Internally, we have undertaken some difficult but necessary
measures to reduce our cost base to reflect the size of our
portfolio. The actions we are taking to improve our operational
performance will result in aleaner CLS and one that is fit for
thefuture.
Delivering on our strategic priorities
We continue to make progress in reshaping the business to
ensure long-term success based on our four strategic priorities.
Reduce vacancy and improve earnings growth
As expected, vacancy increased during the first half of the year
from 12.7% at the end of 2024 to 15.1% at June 2025 as newly
refurbished space was completed. Since the half-year, we have
made good progress in letting this new space at Artesian (now
35% full), The Coade (now 41% full) and at Gotic Haus in
Dortmund with an eight year, 14,700 sqm lease taking the
building to 85% occupied.
As a result of this increased second half letting activity, vacancy
fell to 14.5% at the end of 2025 and would have fallen further
to13.7% had it not been for two larger tenants unexpectedly
entering into insolvency in Germany. During the year, leases
signed were on average 6.3% ahead of valuers’ estimated rental
values (ERV) and 2026 has started well with a good level of
enquiries, and wecontinue to work hard to reduce the vacancy
rate towards our long-term target of 5%.
Reduce debt through targeted asset sales
In 2025, we made further progress with our sales programme
but in a consciously disciplined manner. In 2024 we completed
£66.1 million of sales and the progress accelerated in 2025 with
£144.2 million of properties sold. A particular highlight was the
£101.1 million sale of Spring Mews Student, which was well-timed
given the more recent downturn in the purpose-built student
accommodation market.
Fredrik Widlund
Chief Executive Officer
CLS Holdings plc Annual Report and Accounts 20256
Chief Executive’s review

In 2026, we are aiming to dispose of between £100-£150 million
of assets, excluding Spring Gardens where we have exchanged
contracts to sell the property to a residential developer,
conditional on achieving satisfactory planning permission.
Wehave initiated sales programmes on more than thetargeted
level and are under offer on around £140 million, including
Spring Gardens.
CLS remains committed to bringing its LTV to within the
targeted range of between 35% and 45%. At the end of
2025,our LTV was 50.0% (2024: 50.7%), reflecting a balance
ofasset disposals and property value declines during the year.
Successful completion of £100-£150 million of disposals,
absent further property value declines, will reduce LTV to
between 45% and 47%. However, we may consider more
salesifLTV does not reduce sufficiently quickly, particularly
ifwe receive favourable unsolicited offers.
Successful refinancing or repayment of debt due in 2025
Due to lease expiries and short-term debt extensions, CLS
hada disproportionately higher amount of debt maturing
in2025. As a result of refinancings and the restructuring of
some portfolio loans, all £373.7 million across 11 loans with
ninelenders was successfully refinanced, extended or repaid.
The profile of debt maturities is now more evenly spread in
future years such that no more than £200 million is expiring
inany year going forward. As at 31 December 2025, we had
£199.3 million of debt maturing in 2026. This comprised
£145.5 million across seven loans, £42.0 million of committed
facilities and £11.8 million of amortisation. We are confident
thatdebt expiring in 2026 will be refinanced or repaid
alongsidesales.
Investing in our properties to unlock additional value
The pandemic accelerated occupier demands for higher
qualitybuildings in terms of amenities, flexibility, wellbeing,
digital infrastructure and sustainability. During the year,
weinvested £14.3 million in our portfolio, although capital
expenditure requirements vary year to year depending on
occupier demand and timing of projects. We are also more
consciously linking expenditure to pre-lets, as well as regulatory
requirements, toensure faster and more certain returns on
thisinvestment.
Financial results
In 2025, EPRA earnings per share (EPS) fell by 17.4% to
7.6pence (2024: 9.2 pence), reflecting primarily reduced
netrental income largely as a result of disposals, particularly
ofSpring Mews Student, offset in part by lowerfinancing costs
as a result of lower levels of net debt andlower operating and
administrative costs. 2024 EPS also benefited by 0.7 pence
from the receipt of a forfeited deposit which was not repeated
in 2025.
IFRS EPS improved to a loss of 12.6 pence (2024: loss of
23.6pence) reflecting the lower overall decline of our portfolio
value and lower net finance costs compared to 2024. These
contributed to a 6.7% reduction in EPRA NTA to 200.7 pence
per share (2024: 215.0 pence) and a 5.5% reduction in statutory
NAV per share to 186.4 pence (2024: 197.3 pence).
Dividends
We are recommending a final dividend of 2.70 pence per
share,in line with the 2.68 pence final dividend declared in
2024. The total dividend for the year is therefore 4.0 pence,
24% lower than the 2024 dividend (5.28 pence), reflecting
thedividend policy established in 2024 that dividends should
be 1.5to 3.0 times covered by EPRA earnings. The 2025 full
dividend is 1.9 times covered by EPRA EPS of 7.6 pence.
Subject to shareholder approval, we are proposing to
offeranenhanced scrip dividend schemefor the 2025final
dividend.Under the UK REIT rules, we are obliged todistribute
substantially all of our UK earnings, leaving us withlimited
abilityto retain capital in the business forfuture investment.
Byoffering an enhanced scrip scheme, shareholders are able
toopt to take new shares at a 5% discount to the Reference
Share Price instead of acash dividend, increasing their
investment in the company andenhancing our ability
toinvestinour portfolio.
Property portfolio
At 31 December 2025, the value of our investment
portfolio,including assets held for sale, was £1.70 billion
(2024: £1.85 billion), reflecting disposals during the year as
wellas a 3.8% decline in value on a constant currency basis
(2024: 5.8% decline). Within this, the UK portfolio fell by
4.6%,or by 1.6% excluding Spring Gardens (2024: 8.3% decline),
Germany by 2.7% (2024: 3.5% decline) and France by 4.5%
(2024: 5.1% decline).
The lower valuation reflected a slight softening of property
yields, by 16 basis points to an equivalent yield of 6.1%
(2024: 5.9%) and ERVs which fell by0.1% (2024: 0.8% fall).
The Coade, London
CLS Holdings plc Annual Report and Accounts 2025 7
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The overall decline was lower than last year, reflecting our belief
that values are stabilising in a lower interest rate environment.
One of the largest individual moves was Spring Gardens where
the valuers have adjusted the basis of valuation to reflect
theconditional agreement to sell the property for residential
development. Thiscomprises a payment on satisfaction of
theconditions (primarily planning permission) and potential
overage paymentswhich will not be known until the new
ownercompletes the development.
Asset and property management
At 31 December 2025, our lettable portfolio totalled 533,597
sqm and generated £91.1 million of annualised (passing) rent.
Most of ourbuildings are multi-let, housing 669 tenants of which
30.2% are government agencies, 32.2% are large corporations
and 13.4% are medium-sized companies. The strength of our
occupier base is reflected in a billed rent collection rate of 99%
(2024: 99%). In addition to rent currently being paid, a further
£15.1 million of rent will bepaid once rent-free periods expire.
Over the course of the year, we signed £17.0 million of new
annualised rent (2024: £16.6 million) across 99 lettings and
renewals at an average 6.3% above ERV.
Our vacancy rate at the end of 2025 was 14.5% (2024: 12.7%),
the increase due in part to planned expiries at New Printing
House Square and other buildings as we work towards vacant
possession in advance of redevelopment, and two tenant
insolvencies in Germany towards the end of the year. We also
have a number of properties which are subject to planned
futuredevelopment, conversion to alternative use, or actively
undergoing significant refurbishment or development.
Thesebuildings form our future pipeline of opportunities
toaddvalue to our portfolio.
During the year, we invested £14.3 million of capital in our
existing portfolio, and delivered 9,532 sqm of newly refurbished
ordeveloped space of which 6,194 sqm has been let.
In 2026, there are a number of known and potential upcoming
expiries, not least at Spring Gardens where the National Crime
Agency lease expires in September, shortly before we expect
tosell the site for residential development, and at Harman
House and New Printing House Square, both earmarked
formedium-term redevelopment. While we are working hard
toretain tenants, these may cause short-term volatility in
earnings and vacancy while we work to realise the attractive
medium-term opportunities they present.
Balance sheet and financing
At 31 December 2025, net debt fell by 9.2% to £852.5 million
(2024: £938.7 million), reflecting disposals during the year.
Theweighted average cost of debt remained stable despite
therefinancing activity, while the weighted maturity of the
debtbook increased to 3.6 years (2024: 3.2 years) as a
resultoftherefinancing activity carried out during the year,
lengthening and smoothing the future maturity profile.
Our primary leverage indicator is balance sheet loan to value
(LTV) ratio and this improved slightly to 50.0% (2024: 50.7%)
reflecting the lower debt levels, offset by the reduction in
thevalue of the property portfolio. An alternative leverage
measure, net debt to EBITDA (earnings before interest,
tax,depreciation and amortisation) increased to 12.4 times
(2024: 11.9 times) reflecting the interplay between the lower
level ofearnings during the year and lower net debt at the
endof the year. As we make progress on our strategic priorities
(reducing net debt and improving earnings), we expect this
measure to fall. Interest cover (defined as EBITDA divided
bynet finance costs), was 1.8 times (2024: 1.9 times) reflecting
lower net finance costs, following the debt repayments in 2025,
offset bylower EBITDA than in 2024.
During the year, we refinanced or repaid £373.7 million of
debtacross 11 loans from nine lenders. In 2026, the refinancing
requirements are substantially lower, with £199.3 million of
maturing secured loans and credit facilities. Discussions are
underway with new and existing lenders, with most of the debt
maturing in the second half ofthe year.
At 31 December 2025, the Group had cash and cash
equivalents (including restricted cash – see note 16) of
£49.4 million (2024: £60.5 million), £28.0 million ofundrawn
committed facilities (2024: £50.0 million) and a£10.0million
overdraft facility (2024: £10.0 million).
ERV potential of the portfolio
£m
Contracted rent as at
31 December 2025
106.2
115.4
130.9
16.8
15.5
(7.6)
Portfolio vacancy Over-rented Lettable ERV Development stock Potential portfolio ERV
CLS Holdings plc Annual Report and Accounts 20258
Chief Executive’s review continued

Sustainability
CLS is half-way into the delivery of its 2030 Sustainability
Strategy and Net Zero Carbon (NZC) Pathway. Since the
launchdate in 2020, both the Group’s near and medium-term
business strategy and the sustainability landscape have evolved.
To ensure the ongoing and future strategic alignment of the
Group’s approach to building and value chain decarbonisation
and its overall business strategy, CLS is undertaking a review
ofits current NZC Pathway. The Group remains committed to
becoming a net zero carbon business and any amendments
tothe current Pathway will be validated by the Science Based
Targets initiative (SBTi), ensuring alignment with the latest
climate science.
In 2025, as part of the Group’s current NZC Pathway, CLS has
continued to deliver energy efficiency and carbon reduction
projects across the portfolio and the annual, like-for-like,
landlord energy consumption decreased by 5.8% whilst our
Scope 1 and 2 greenhouse gas emissions reduced by 9.3%,
meaning we remain on track to deliver our current NZC Pathway
targets. We also expect to meet near-term regulatory
requirements in our geographies including minimum Energy
Performance Certificate (EPC) ratings in the UK and Décret
Tertiaire in France: 84% of our UK buildings by space have an
EPC rated C or better. Our investment in this important
areacontinues in 2026 with a number of projects involving
thereplacement of gas supply with renewable and cleaner
sources of energy.
In 2025, the Group maintained its EPRA sBPR Gold award for
sustainability disclosure and its GRESB four-stars rating for the
sustainability of its portfolio. In 2026, CLS has chosen not to
participate in GRESB to reduce the burden of reporting allowing
us to focus our time and resources on direct decarbonisation
ofour portfolio. We will continue to assess our buildings using
certification schemes including BREEAM In-Use which we
believe are more meaningful for both occupiers and investors.
As part of our continued commitment to being a responsible
company and a long-term investor in our local communities,
wemaintained our support for local and industry-related
charities and community organisations as well as our Living
Wage Employer accreditation, covering both UK employees
andregular contractors.
Our staff and our culture
It has not escaped the attention of most market observers
thatthe property sector has experienced one of its longer
downturns which has naturally impacted not just our financial
results but also our employees. We hold regular town halls
andall staff meetings to ensure there are plenty of
opportunities to provide feedback on how we can maintain
andimprove our well-established, positive culture throughout
the organisation. Iam pleased that our excellent teams have
delivered, and continue to deliver, a resolute focus on executing
our strategic priorities. On behalf of the Board, I want to
reiterate our ongoing thanks for their tremendous dedication
to,and achievements for, CLS.
Outlook
We remain confident that the core of the CLS strategy, which
has delivered resilient performance through multiple market
cycles, is the right approach for the Company over the long
term. The strategy continues to focus on the ownership and
active management of high-quality, well-located, multi-let
office assets across Europe’s three largest economies.
Economic conditions remain subdued across Europe but the
outlook was becoming more supportive before the war in the
Middle East. It is early days and therefore difficult to judge
theshort- and longer-term impact of the war on Europe’s
economies and its property markets. However, local factors
remain important. Germany should be well positioned to
benefitfrom stimulative fiscal policy with investment in defence
and infrastructure expected to support economic growth and,
in turn, office occupier and investor demand over the medium-
term. Additionally, in a number of our markets, supply constraints
are beginning to emerge for high-quality office space following
a prolonged period of limited new construction.
Notwithstanding the wider geopolitical and economic
uncertainties, we are making good progress in delivering
operational improvements and executing initiatives within our
control to advance our strategic priorities. These actions are
concentrated on: letting available space to reduce vacancy
anddrive earnings growth; executing sales, at appropriate
values, to reduce balance sheet gearing; exploiting opportunities
to capture value uplifts as well as fund ongoing investment
toimprove the quality of the portfolio; and refinancing debt
maturities and improving Group liquidity.
In the short term, 2026 has started well with a noticeable uptick
in enquiries for our space. However, the combined effects of
our disposal programme, refinancing activity and the
preparation of certain larger assets for redevelopment are likely
to impact earnings in 2026.
In the medium-term, we expect these actions to bear fruit,
improving occupancy and creating workplaces in structurally
resilient locations where businesses want to be, driving
improved values for our properties, reducing our gearing
andstrengthening our balance sheet.
CLS has successfully navigated several market cycles
throughout its history, and we are confident that the Company
is well positioned to emerge from the current period as a
stronger, more focused business, delivering sustainable
long-term value for shareholders.
Fredrik Widlund
Chief Executive Officer
CLS Holdings plc Annual Report and Accounts 2025 9
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2025 Objective
• We are focused on increasing letting activity, particularly
in the UK, reducing vacancy levels to below 12% and, over
time, to our target level of 5%.
• Maintain rent collection levels and actively manage
baddebts as well as continue cost control measures.
2025 Performance
• Our vacancy remains higher than our target at 14.5%, partly
due to two customer insolvencies in Germany in late 2025.
• Rent collection remains strong and bad debts remain low,
helped by the fact that we manage our properties directly,
allowing us to keep close to our customers.
1. Increasing letting activity
to reduce vacancy and
improve earnings
Our short-term strategic priorities
1. Increasing letting activity to reduce vacancy and improve earnings;
2. Executing sales to reduce LTV to our target range of 35%-45%;
3. Completing refinancings due in 2025; and
4. Investing in our properties to unlock the value within the portfolio.
2026 Objective
Our objective to reduce our vacancy rate remains key to
future earnings growth. At a time when property yields are
stable, active asset management iscritical to improving the
value of our assets and this isthefocus of everyone at CLS.
Gotic Haus, Dortmund
8 year lease at Gotic Haus
toGermangovernment
• In October 2025, we secured an eight year, index-linked
leasefor14,700 sqm, or two-thirds, of Gotic Haus in
Dortmund toaGerman government department.
Theleaseisdue to commence in November 2026.
• The letting reflects our active approach to asset
management, close partnerships with occupiers, and
theability to configure space to our tenant’s precise
operational needs.
• The property holds a BREEAM In-Use certification rating
of“Very Good” and offers flexible office space, bright
atriums, roof terraces and an underground car park.
CLS Holdings plc Annual Report and Accounts 202510
Strategy in action

2025 Objective
• To complete the disposal ofassets, identified in 2024,
nolonger coretoour strategy.
• In addition, we are exploring further disposals to reduce LTV
to be comfortably within ourtargeted range of 35% to 45%,
and help fund opportunities within our property portfolio.
2025 Performance
• We completed £144.2 million of disposals during
theyear,reducing net debt by £86.2 million.
• Our LTV remains above our target range at 50.0%, partly
due to the fall in the value of our portfolio which offset
thereduction in net debt. Excluding valuation movements
our LTV would have been 46.7%.
Earnings and value-enhancing
saleofSpring Mews Student
• Spring Mews Student was sold for £101.1 million during the
year,which reduced Group LTV, our cost of debt and 2025
refinancing risk, and is marginally earnings-accretive as the
proceeds were used to pay off expensive debt.
• Having fully executed our business plan for the property and
achieved record occupancy and profits, it was the right time
to sell to crystallise value and reduce debt levels to make
progress on achieving our financing strategic priority.
2. Executing sales to reduce
LTV to our target range of
35%-45%
Our short-term strategic priorities
1. Increasing letting activity to reduce vacancy and improve earnings;
2. Executing sales to reduce LTV to our target range of 35%-45%;
3. Completing refinancings due in 2025; and
4. Investing in our properties to unlock the value within the portfolio.
2026 Objective
We will continue to pursue disposals of assets where we
believe that we have maximised value or which are no longer
core to our strategy. We expect 2026 disposals of between
£100 million and £150 million. Our agreed sale of Spring
Gardens to a residential developer is subject to achieving
planning permission and is expected to complete in
early2027.
Spring Mews, London
CLS Holdings plc Annual Report and Accounts 2025 11
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Strategy in action

3. Completing refinancings
due in 2025
Our short-term strategic priorities
1. Increasing letting activity to reduce vacancy and improve earnings;
2. Executing sales to reduce LTV to our target range of 35%-45%;
3. Completing refinancings due in 2025; and
4. Investing in our properties to unlock the value within the portfolio.
2026 Objective
As a result of the higher amounts of refinancing carried
outin2023, 2024 and 2025, CLS now has a much
moreevenlyspread debt profile with most debt refinanced
to current rates.
In 2026, £199.3 million of loans and credit facilities are due
tobe refinanced or repaid.
2025 Objective
• Due to lease expiries and short-term debt extensions,
CLShad a disproportionately higher amount of debt
maturingin 2025 of £373.7 million, which needed resolving.
2025 Performance
• All £373.7 million across 11 loans with 9 banks was
successfully refinanced, extended orrepaid as expected.
Restructure of Aviva debt and
refinancing ofDukes Road portfolio
• In order to sell Spring Mews Student, retain the existing
£146.1million portfolio loan at 2.54% with Aviva (expiring in
2030 and 2032), and refinance the portfolio loan with Safra
known as Dukes Road, a number of property substitutions were
successfully executed.
• At completion, Spring Mews Student was withdrawn from the
Aviva portfolio and two properties were substituted in from
the Dukes Road portfolio.
• To maintain the Dukes Road portfolio loan at c.£90 million,
another property with debt maturing in 2025 was added to
that portfolio which was then refinanced until 2030.
• In summary:
– The entire existing low-interest long-dated loan with
Avivawasmaintained virtually unchanged; and
– The Dukes Road portfolio was successfully refinanced
until2030.
Artesian, London
CLS Holdings plc Annual Report and Accounts 202512
Strategy in action

2026 Objective
We will continue to review options for buildings which are
older or in sub-markets with less attractive supply-demand
dynamics, seeking to reposition or repurpose them to reduce
risk and improve long-term value and earnings growth.
2025 Objective
• Our focus will be on the many opportunities within the
portfolio to upgrade or reposition existing properties
tocapture higher rents and values.
• We will continue to improve the quality of our property
portfolio including sustainability enhancements which
improve energy efficiency for our customers and help
tofuture-proof the buildings.
2025 Performance
• We invested £14.3 million of capex in improving our
buildings, and have progressed plans to transform Spring
Gardens to a residential scheme, working with a residential
developer to whom we will sell the scheme once planning
permission is obtained.
• We have improved the energy efficiency of our portfolio,
reducing Scope 1 and 2 GHG emissions by 9.3% compared
to 2024.
4. Investing in our properties
to unlock the value within
the portfolio
Our short-term strategic priorities
1. Increasing letting activity to reduce vacancy and improve earnings;
2. Executing sales to reduce LTV to our target range of 35%-45%;
3. Completing refinancings due in 2025; and
4. Investing in our properties to unlock the value within the portfolio.
The Brix, Essen
Radius House, Watford
Completion of the upgrade
worksatThe Brix to deliver
the30‑year lease
• We completed our €20 million refurbishment of The Brix
inEssen in October 2025 and our customer, the City of
Essen, has now occupied the space on a 30-year lease.
• Following the lease signing, there are limited asset
management opportunities, and we consider this the right
time to crystallise the value of our investment through a
disposal, improving the geographical focus of our
Germanportfolio and reducing debt.
Investing in sustainability
atRadiusHouse
• At Radius House in Watford, we replaced the gas-powered
heating system with an Air Source Heat Pump. The project,
which was undertaken whilst our tenants remained in
occupation, resulted in the full electrification of the building.
• The EPC rating of the property improved from a D to aB.
• The CLS Sustainability and Property teams are working
closely to deliver more building decarbonisation projects
inthe coming years.
CLS Holdings plc Annual Report and Accounts 2025 13
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Strategy in action

Value of property
portfolio
£677.4m
Percentage of Group’s
property interests
40%
Number of
properties
33
Number of tenants
203
EPRA vacancy rate
18.0%
Lettable space (sqm)
146.9k
Government and
large companies
70.4%
Weighted average
lease length to expiry (years)
3.8
Leases subject
to indexation
30.7%
2
2
2
2
2
10
2
Sutton
Staines
Leatherhead
Reigate
Bromley
Chelmsford
Uxbridge
Crawley
Teddington
Richmond
Hammersmith
Bracknell
Reading
Watford
Harrow
Central London
Acton
New Malden
London & South East
CLS Holdings plc Annual Report and Accounts 202514
United Kingdom

UK market review
The UK economy experienced another volatile year, initially
driven by global economic uncertainty following the imposition
of US trade tariffs, and subsequently by business and consumer
caution ahead of the November Budget.
The commercial property investment market improved,
withinvestment volumes reaching c.£53 billion, up over 20%
compared with 2024. The strongest improvement occurred
inthe fourth quarter of the year.
Office leasing take-up in London totalled c.10.0 million sq. ft,
while the wider South East market recorded c.3.5 million sq. ft,
both broadly in line with the previous year. Year-end vacancy in
London fell from 9.2% to 8.4%, driven bylimited availability of
prime properties. Vacancy in the SouthEast decreased from
12.3% to 11.6%.
Portfolio movement and valuation summary
In 2025, the value of the UK portfolio decreased by £129.6 million
as a result of a revaluation decline of £32.6 million or 4.6%,
disposals of £101.7 million, including Spring Mews Student,
Vauxhall, and depreciation of £0.1 million, partly offset by capital
expenditure of £4.8 million. The overall valuation decline of
4.6% was largely shaped by movement at Spring Gardens,
Vauxhall reflecting achange in valuation approach for this asset
to reflect its conditional sale as a residential development.
Excluding Spring Gardens, the portfolio experienced a
moremodest decline of 1.6%, influenced by a 13 basis point
expansion in equivalent yields on a like-for-like basis and higher
vacancy following lease expiries. Encouragingly, ERVs edged
upwards by 0.2% on a like-for-like basis.
Asset management
EPRA vacancy reduced from 18.5% at 31 December 2024
to18.0% due to leasing progress at Artesian, Aldgate and
TheCoade, Vauxhall offset by the scheduled expiry of all
leasesat New Printing House Square, London in June 2025.
In 2025, 52 lease extensions and new leases secured £8.1 million
of rent at an average of 7.9% below 31 December 2024 ERVs,
reflecting some short-term, flexible leases at properties due
formedium-term development.
The most significant new leasing transaction in 2025 was the
letting of 1,217 sqm at Artesian to a serviced office operator
whilst a further 578 sqm was let to a social media tech company.
There was also meaningful progress at The Coade in Vauxhall
where further lettings were secured to a mixture of financial,
media and professional services companies.
In terms of existing tenants, despite the expiry of all leases
atNew Printing House Square, renewals were signed with
asignificant number of existing tenants which secured a total
rent of c.£4 million per annum as part of the strategy to
reposition the building in 2029.
Developments and refurbishments
Total capital expenditure in 2025 was £4.8 million, which
wasreduced from the £9.4 million spent in 2024 as our focus
switched to smaller fit-outs to meet tenant requirements.
At Spring Gardens, let to the National Crime Agency,
weexchanged a contract for sale with London Square
Developments Limited conditional on achieving planning
consent for a major residential scheme. The planning
application was submitted in February 2026. To support
thisstrategy weextended the leases with the National Crime
Agency to September 2026, securing additional income
of£7.0 million.
The application for Permitted Development Rights at Columbia
House, Bracknell was recently approved and we will commence
the design process shortly for our repositioning ofNew Printing
House Square.
Disposals
During 2025 we completed the sale of the student
accommodation at Spring Mews for £101.1 million, in line
withbook value.
We continue to look at opportunities to exit some of our
smallerassets, or assets which have a higher value as alternative
use, as market conditions allow.
Outlook
Economic growth in 2026 is expected to remain muted.
Recentreductions in interest rates have been supportive for
theproperty sector but it remains sensitive to the continuing
international political and economic uncertainty. The November
2025 budget avoided several business tax measures expected
by commentators which helped build optimism for greater
occupier and investment activity. The degree to which this will
translate into sustainable momentum will depend significantly
on how the war in the Middle East develops.
United Kingdom vacancy rate
Key: CLS London South East
Kings Court, Leatherhead
2022 2023 2024 2025
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
CLS Holdings plc Annual Report and Accounts 2025 15
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Value of property
portfolio
£802.1m
Percentage of Group’s
property interests
47%
Number of
properties
29
Number of tenants
320
EPRA vacancy rate
11.1%
Lettable space (sqm)
323.1k
Government and
large companies
55.9%
Weighted average
lease length to expiry (years)
7.4
Leases subject
to indexation
76.0%
Munich Hamburg
Berlin Düsseldorf
Rudesheimer
Strasse
Martinsried
Neuperlach
Altstadt
Unterföhring
Ismaning
Flughafen
München
3
Harburg
Hafencity
Barmbek
Wandsbek
City Sud
St Pauli
Herzberg
Adlershof
Charlottenburg
Düsseldorf
CLS Holdings plc Annual Report and Accounts 202516
Germany

Germany market review
Germany experienced another year of weak growth, characterised
by low business confidence and political uncertainty. Concerns
regarding the long-term impact of trade tariffs and energy
supply continued to place pressure on the export sector and
overall economic growth.
Commercial property investment remained subdued, declining
to c.€24 billion, down 4% compared with 2024.
Office leasing activity across the seven largest cities totalled
c.2.7 million sqm, representing a slight increase on the previous
year. Average vacancy rose to 8.0%, with Berlin recording the
largest increase in availability. Vacancy rates vary significantly
between cities, with Cologne among the lowest at 5.0%, while
Düsseldorf remains elevated at 11.3%.
Portfolio movement and valuation summary
In 2025, the value of the German portfolio decreased by
£13.6 million, reflecting a revaluation decline of £21.9 million
or2.7% in local currency, disposals totalling £38.8 million and
depreciation of £0.1 million. These impacts were partly offset by
a £41.8 million foreign exchange gain and £5.4 million of capital
expenditure. In Sterling, the property valuation growth was 2.6%
when incorporating foreign exchange effects and disposals.
The 2.7% valuation decline in local currency reflected a 4 basis
point expansion in equivalent yields on a like-for-like basis and
higher vacancy. ERVs also reduced by 60 basis points on a
like-for-like basis.
Asset management
The vacancy rate increased to 11.1% as at 31 December 2025
(2024: 6.7%) as a result of the expected departure of some
large tenants. We were also impacted by two tenants
unexpectedly filing for insolvency: one has terminated their
lease and the other has downsized after being acquired.
Wearefocused on reconfiguring this space to offer a high-
quality product to the market.
In 2025, we completed 27 lease extensions and new lettings,
securing £7.5 million of rent at an average of 31.5% above ERV.
This was primarily due to a large eight year lease with a government
department of the Federal State of North Rhine-Westphalia
for14,700 sqm at Gotic Haus, Dortmund. The lease resulted
ina valuation uplift of more than 40% at the property. Excluding
this transaction, the remaining deals were achieved at 17.6%
above ERV.
Further details are provided in the Strategy in Action case study
on page 10. This lease follows earlier successful government
lettings at The Brix, Essen and The Yellow, Dortmund in 2023
and 2024 respectively, demonstrating our continued ability
tocompete effectively in this market.
Rent from leases subject to indexation increased by an average
of 2.5%.
Developments and refurbishments
Development projects across our German portfolio are
expected to deliver meaningful ERV growth and are already
contributing to valuation uplifts. Works associated with our
30-year lease with the City of Essen at The Brix completed
ontime, and the tenant is in occupation. Construction relating
to the 20-year lease with the City of Dortmund at The Yellow
and the eight-year lease with the Federal State of North
Rhine-Westphalia at Gotic Haus has commenced and
isprogressing well.
We invested £5.4 million in smaller refurbishment projects
across the portfolio to improve sustainability performance,
meet regulatory requirements and address evolving occupier
needs. The largest project was at Technisches Rathaus in
Bochum, where we are upgrading the façade and modernising
the lifts to support our tenant’s 30-year lease. We are also
expanding marketing suites in several properties to aid the
re-letting of recently vacated space.
Disposals
In 2025, we disposed of Jarrestrasse, Hamburg, and Grafelfing
Munich, for a total of £35.6 million at a combined discount to
pre-sale values of 8.9%.
Outlook
The €500 billion infrastructure spending package introduced
by the government is expected to support growth, encouraging
higher office take up and strengthening investor confidence.
The German commercial real estate market is set for a selective
recovery in 2026, underpinned by stabilising, lower interest
rates and an ongoing shift towards high quality, sustainable
assets. The Energy Performance of Buildings Directive
provisions become legally binding in 2026, increasing the
impetus for renovation as new efficiency standards for non
residential buildings come into force.
We are optimistic that vacancy rates in major cities will peak
during the year, reflecting a marked slowdown in new construction.
At the same time, demand is likely to remain focused on core,
modern and energy efficient space in prime locations,
reinforcing the relative resilience of higher quality assets.
Germany vacancy rate
Key: CLS Hamburg Munich Berlin Düsseldorf
Cologne Stuttgart Frankfurt
Flexion, Berlin
2022 2023 2024 2025
12.0%
8.0%
4.0%
0.0%
CLS Holdings plc Annual Report and Accounts 2025 17
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Value of property
portfolio
£225.3m
Percentage of Group’s
property interests
13%
Number of
properties
15
Number of tenants
146
EPRA vacancy rate
12.1%
Lettable space (sqm)
63.6k
Government and
large companies
56.1%
Weighted average
lease length to expiry (years)
5.3
Leases subject
to indexation
100.0%
Lyon
Paris
Villeurbanne
La Part-Dieu
Brotteaux
Gare de Lyon
Part-Dieu
6th Arr.
3rd Arr.
Boulogne-Billancourt
Malakoff
Courbevoie
10th Arr.
La Garenne-Colombes
Rueil-Malmaison
La Défense
2
2
2
Paris
CLS Holdings plc Annual Report and Accounts 202518
France

France market review
Political uncertainty and a softer macroeconomic backdrop
dominated the French economy in 2025, with significant debate
surrounding rising government debt and its impact on sovereign
bond yields.
The commercial property investment market improved, with
volumes reaching c.€14 billion, up 10% compared with 2024,
andonce again dominated by domestic investors.
Office leasing activity remained challenging, although
performance varied significantly between submarkets.
Conditions softened inthe CBD, while several outer
arrondissements recorded some improvement. Take-up
declined by 9% to c.1.6 million sqm in Paris, while Lyon fell by
20% to c.0.2 million sqm. Year-end vacancy in Paris increased
from 10.2% to 10.7%, and in Lyon from 7.0% to 7.8%
Portfolio movement and valuation summary
In 2025, the value of the French portfolio decreased by
£2.2 million as a result of a revaluation decline of £10.4 million
or4.5% in local currency and disposals of £7.9 million, partly
offset by capital expenditure of £4.1 million and a foreign
exchange gain of £12.0 million. The 4.5% valuation decline
reflected a 8 basis point expansion in equivalent yields on
alike-for-like basis and higher vacancy following the departure
ofa major tenant at Inside, Paris. ERVs were flat on a like-for-
likebasis, and all leases remain fully indexed.
Asset management
As at 31 December 2025, the EPRA vacancy rate in our French
portfolio rose to 12.1% (2024: 8.3%), largely due to the expected
lease expiry at Inside, Paris and the completion of refurbishment
works at Bellevue, Paris. We intend to use this opportunity at
Inside to refurbish the space and reconfigure it to
accommodate a broader range of floor plates.
In 2025, excluding contractual indexation uplifts, 20 lease
extensions and new leases secured £1.4 million in rent, averaging
7.1% below ERV. Notably, we experienced an uptick in leasing
activity in Q4, with several new leases in Paris completed
despite a difficult leasing market, removing some of the
vacancy during the year.
Rent from leases subject to indexation increased by an average
of 1.5% in 2025.
The most significant transaction in Paris was a lease extension
for 675 sqm at Sigma, located east of La Défense. This renewal
was with a long-standing tenant that has occupied space
atSigma for over ten years, highlighting the benefits of
ourcustomer-focused asset management approach in a
competitive leasing market. In Lyon, the largest transaction
wasat Park Avenue for 855 sqm with an IT services company.
Developments and refurbishments
A major milestone in the first quarter was the completion of the
£1.5 million redevelopment of Petits Hôtels, a centrally located
2,081 sqm asset in Paris. The project involved a full refurbishment
of one of the buildings, which has since been let at ERV to a
specialist tour operator company.
At Bellevue, Paris, we completed our £1.1 million refurbishment
programme in the third quarter of 2025. The scheme upgraded
five floors totalling 1,301 sqm, delivering best-in-class space
with enhanced sustainability features. The improved specification
has already generated strong interest, with two new leases
signed in December, and we expect this momentum to
continueinto 2026.
Disposals
In August, we completed the sale of Les Reflets in Lille which
weacquired in 2019. This sale marked our exit from Lille.
OurFrench portfolio is now focused on France’s two largest
property markets, Paris and Lyon.
Outlook
France’s economy is expected to grow modestly in 2026
butitis sensitive to the continuing domestic and international
political uncertainty.
Investment volumes ended 2025 with a more balanced
distribution across offices, retail and logistics. Conditions in
2026 are expected to remain broadly stable, with stronger
momentum anticipated from 2027 onwards.
Leasing activity is likely to remain relatively muted, although
weexpect a gradual improvement in the second half of 2026,
led by the Paris Île de France market and followed by regional
markets, particularly with small-to-medium size businesses
targeted by CLS.
France vacancy rate
Key: CLS Paris Lyon
Debussy, Paris
2022 2023 2024 2025
12.0%
8.0%
4.0%
0.0%
CLS Holdings plc Annual Report and Accounts 2025 19
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Our strategy and business model Performance in 2025
Link to KPIs/OPIs and
principal risks
We acquire the right properties
We invest in high-yielding, modern office properties
in major cities across the UK, Germany and France,
focusing on cash returns and long-term value
creation. Our approach combines active asset
management with diversification across geographies,
tenants, sectors and currencies to reduce risk and
enhance sustainable income growth.
We did not make any
acquisitions during the year,
but invested £14.3 million
toimprove our existing
property portfolio.
KPIs/OPIs
• TSR – Relative
• Total Accounting Return
Link to principal risks
• Property risk
• Sustainability risk
We secure the right finance
Most of our properties are held in their own legal
entityand are financed with bank loans borrowed
onan asset-specific, ring-fenced basis to the rest
ofthe Group. We also have some portfolio loans.
Wehave the flexibility to borrow at fixed or floating
rates of interest and, by borrowing against each asset,
we are able to use a level of gearing suitable to the
specific property.
Refinanced, repaid or
extended 11 loans to a value
of£373.7 million.
KPIs/OPIs
• Cost of debt
• EPRA earnings per share
Link to principal risks
• Financing risk
• Property risk
We deliver value through active
management and cost control
The key to active management is to perform it
in-house. By using our own employees, we harness
greater motivation, response times and attention
todetail than if tasks were to be outsourced.
Byperforming in-house, not only do we have
ahands-on relationship with our occupiers, but
weare able to control costs.
Completed 99 lease
eventssecuring £17.0 million
of annual rent at 6.3%
aboveERV.
Carried out a cost reduction
programme that is expected
to result in savings of over
£2 million per annum.
KPIs/OPIs
• Vacancy rate
• Administration cost ratios
Link to principal risks
• Sustainability risk
• Business interruption risk
We continually assess whether to hold
orsell properties
Our active management approach is applied at a
portfolio level, continually assessing whether properties
meet return criteria and/or we can continue to add
value. Each property in our portfolio has its own asset
management plan, which we flex depending upon our
occupiers’ requirements and leasing activity.
Disposed of four properties
across all of our geographies
for £144.2 million, in-line with
the pre-sale valuations.
Signed a conditional sale
agreement for another
property, valued at
£70.0 million.
KPIs/OPIs
• TSR – Relative
• Total Accounting Return
Link to principal risks
• Property risk
• Financing risk
We reward shareholders, customers
andemployees
We pay dividends to our shareholders, with the
balance reinvested in the business. Our occupiers
areour customers. We pride ourselves in how we
build relationships and align our strategic vision to
their own business ambitions. We reward employees
for their work and their loyalty, through salaries
andbonus schemes which reflect the success
ofthebusiness.
Final dividend maintained
at2.7 pence. Full year
dividend covered 1.9times
byEPRA earnings.
Despite some targeted
redundancies, voluntary
staffturnover remained
belowour five year
averagerate.
KPIs/OPIs
• Dividend cover
• Staff turnover
Link to principal risks
• People risk
• Business interruption risk
CLS Holdings plc Annual Report and Accounts 202520
Our Strategy and business model

Total Accounting Return
(%)
Topped-up net initial yield vs cost of
debt (%)
Topped-up net initial yield
Cost of debt
EPRA vacancy rate
(%)
EPRA earnings per share
(pence)
UK portfolio EPC A–C coverage
(%)
Total Shareholder Return – relative
(against a peer group from FTSE 350)
Learn more here:
CFO review on pages22 to 25
Learn more here:
CFO review on pages22 to 25
Learn more here:
Country reviews on pages22 to 25
Learn more here:
CFO review on pages22 to 25
Why this is important to CLS
This KPI measures the change in EPRA NTA
per share of the Company before the payment
of dividends and so represents the value
added to the Company inthe year.
Our target
Our target Total Accounting Return is over 8%.
Why this is important to CLS
This KPI compares the return from our
properties with reference to the cost of
debtfinancing them.
Our target
We seek to maintain a cost of debt at least
200 bps below the Group’s topped-up net
initial yield.
Why this is important to CLS
This KPI is one of our key sustainability
indicators. Our UK portfolio is fully compliant
with the Minimum Energy Efficiency Standards
(MEES), critical in ensuring our properties
meet mandatory energy efficiency and
carbon performance requirements.
Our target
We will ensure 100% of our UK portfolio
israted EPC A-C by 2027.
Why this is important to CLS
This KPI measures the potential rental income
of unlet space and, therefore, the cash flow
which the Company would seek to capture.
Our target
We are targeting a vacancy rate of 12% in
thenear term, and 5% in the medium and
longterm.
Why this is important to CLS
This KPI gives relevant information to investors
on theincome generation of the Group’s
underlying property investment business and
an indication of the extent to which current
dividend payments are supported by earnings.
Our target
We will seek to grow the earnings of the
business alongside net asset value.
Why this is important to CLS
This KPI measures the change in the wealth
ofa CLS shareholder over the year, against
the change in the wealth of the shareholders
of a peer group of 24companies (2024:
20companies) in the FTSE 350.
Our target
Our target Total Shareholder Return (relative)
is between the median and upper quartile.
2021 2022 2023 2024 2025
5.8
7.4
11.0
12.7
14.5
2021 2022 2023 2024 2025
11.3
11.6
10.3
9.2
7.6
2022 2023 2024
72
80
82
84
2025
2021 2022 2023 2024 2025
3.7
-3.7
-20.8
-11.9
-4.8
2021 2022 2023 2024 2025
5.6
3.8
2021 2022 2023 2024
2025
23rd
Lower
quartile
Upper
quartile
Median
11th
23rd
15th
23rd
CLS Holdings plc Annual Report and Accounts 2025 21
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Our Key Performance Indicators

Summary
EPRA net tangible assets (NTA) per share fell by 6.7% to
200.7pence (2024: 215.0 pence) and basic net assets per
share by 5.5% to 186.4 pence (2024: 197.3 pence), primarily
reflecting the 3.8% like-for-like decline in the valuation of
ourportfolio.
EPRA earnings per share (EPS) were 7.6 pence (2024: 9.2 pence)
whilst the IFRS loss after tax of £50.3 million (2024: £93.6 million
loss) generated basic earnings per share of -12.6 pence (2024:
-23.6 pence). We are proposing a final dividend of 2.7 pence
(2024: 2.68 pence), equating to a full dividend for 2025 of 4.0
pence (2024: 5.28 pence).
The Total Accounting Return per share (the reduction in
EPRANTA plus the dividends paid in the year) was -4.8%
(2024:-11.9%).
CLS uses a number of Alternative Performance Measures
(APMs) alongside statutory figures. We believe that these assist
in providing stakeholders with additional useful information on
the underlying trends, performance and position of the Group.
Note 5 and our Supplementary disclosures gives a full
description and reconciliation of our APMs.
Graph A: Net rental income
(£m)
Harry Stokes
Chief Financial Officer
Rental
income
31 Dec 2024
Lease
renewal/
new leases
Lease
expiries
Indexation Developments Other income Like-for-like
rental income
Other sales FX and other
Rental
income
31 Dec 2025
114.0
(4.0)
2.6
(9.2)
106.8
(1.9)
0.4
0.8
(0.4)
(1.0)
101.3
Student sale
“The hard work undertaken by the whole CLS team
to make progress on our strategic priorities is having
its desired effect, with lower net debt, a more
streamlined cost base and occupancy starting
toimprove. These actions have had short-term
negative impacts on our earnings and NTA,
buttheyare vital to creating the foundations
formedium- and long-term growth, delivering a
portfolio and business that are fit for the future.”
Income statement
EPRA profit after tax was lower than last year at £30.2 million
(2024: £36.4 million), reflecting the impact of disposals
andhigher vacancy costs, offset by lower net finance and
administration expenses. 2024 EPRA earnings also benefited
from adeposit forfeited by a potential buyer of one of our
properties which equated to £2.9 million (0.7 pence per share).
Net rental income in 2025 of £101.3 million, as set out in
graphA, fell by 11.1% (2024: £114.0 million), mainly reflecting
thelost income from disposals early in the year, and higher
vacant space. Like-for-like net rental incomefell 6.3%
to£106.8 million due to lease expiries and movement of
properties todevelopment stock, which reduced rental income
by £9.2 million and £0.4 million respectively, and lower other
income of £1.0 million. New leases,renewals and indexation
added £2.6 million and £0.8 million respectively. Income from
student operations fell £4.0 million reflecting the disposal
ofSpring Mews Student in early 2025, and a further £1.9 million
of rent was lost from other property disposals.
CLS’ tenant relationships remain strong and the quality and
diversity of our tenant base has continued to be reflected in our
rent collection. As in previous years, we collected over 99% of
rent and this trend has continued into the first quarter of 2026.
Overall administration and property expenses, excluding
amortisation of intangibles, decreased by £2.0 million to
£33.4 million (2024: £35.4 million). Administration costs were
£1.2 million lower compared with 2024 reflecting action taken
CLS Holdings plc Annual Report and Accounts 202522
Chief Financial Officer’s review

toreduce our cost base during the year. Property expenses
were £0.8 million lower as a result of the disposal of the student
property early in the year, offset by increased vacancy costs.
The proportion of index-linked rent was 58.7% (2024: 54.4%)
oftotal contracted rent.
Although administration and property expenses were lower,
CLS’ administration cost ratio increased to 16.1% (2024: 15.4%)
and the EPRA cost ratio increased to 36.2% (2024: 33.6%) as a
result of lower gross rental income and higher costs associated
with vacant space.
The valuation of CLS’ properties declined by 3.8%
(2024:5.8%decline) on a like-for-like basis, although much
ofthis was concentrated on twoproperties: Spring Gardens,
where the valuers adjusted their valuation approach to reflect
the conditional agreement tosell; and the Spring Mews hotel
which will be subject to higher businessrates than previously
assumed. The reduction in thevalue of investment properties
was £79.2 million (2024: £127.7 million reduction) with falls in the
UK of 4.6%, Germany 2.7% and France 4.5% inlocal currencies.
Four properties were sold in 2025 for an aggregate
consideration of £144.2 million. This consideration was in-line
with the pre-sale book values but, after costs, resulted in a loss
on sale of investment properties before tax of £10.9 million
(2024: £2.3 million loss). At year-end, we have classified
£94.9 million (2024: £133.0 million) of assets as being held
forsale, recognising that we expect to dispose of these
assetsin the first half of the year. This does not include Spring
Gardens, the current headquarters of the National Crime
Agency inVauxhall, London as the sale is conditional on
planning permission being obtained from the local council
toredevelop the property from offices into residential space.
We are working in partnership with the acquiror on this deal
andsubmitted planning permission in February 2026.
Thetransaction is expected to release equity in stages over
thenext two years, following the repayment of associated debt.
Graph C: EPRA NTA movement
(pence per share)
Graph B: EPRA EPS movement
(pence per share)
At 31 Dec
2024
Rent
and SC
Student
and hotel
Other income
Expenses
Fin inc/exp
Tax/Other
At 31 Dec
2025
9.2
(1.8)
(0.6)
(0.4)
0.1
1.0
0.1
7.6
At 31 Dec
2024
EPRA EPS
Dividends
Revaluation
Loss on sale
of properties
FX
Other
Exceptional
At 31 Dec
2025
215.0
200.7
7.6
(4.0)
(20.4)
(3.5)
(0.8)
(0.4)
7.2
Net finance costs, excluding movement in derivatives, fell by
10.3% to £36.7 million (2024: £40.9 million) reflecting primarily
lower debt during theyear, and the impact of disposals in late
2024 and the sale ofSpring Mews Student in early 2025.
Approximately 52% of the Group’s sales are conducted in the
reporting currency of Sterling and 48% in Euros. The year-end
Sterling rate against the Euro weakened by 5.1% and the
averageSterling rate weakened by 1.2%, resulting in a foreign
exchange gain of £0.2 million in the income statement
(2024: £0.6 million loss).
The low tax expense primarily reflects our statusas a UK REIT
which means that we do not pay corporation tax on our
property-related profits in our UK business.
The components of the EPRA earnings are as shown below:
2025
£m
2024
£m
Revenue 139.7 151.9
Service charges and similar expenses (38.4) (37.9)
Net rental income 101.3 114.0
Administration expenses
1
(16.1) (17.3)
Other property expenses (17.3) (18.1)
Net finance costs
1
(36.7) (40.9)
Foreign exchange gain/(loss) 0.2 (0.6)
Taxation expense
1
(1.2) (0.7)
EPRA earnings 30.2 36.4
EPRA earnings per share 7.6 p 9.2p
1 Balances include EPRA adjustments; the reconciliation to the IFRS figures can
be found in note 5(i).
CLS Holdings plc Annual Report and Accounts 2025 23
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EPRA net tangible assets and gearing
At 31 December 2025, EPRA net tangible assets (NTA) per
share were 200.7 pence (2024: 215.0 pence), a fall of 6.7%.
Asset out in graph C, the main reasons for the decrease
wereproperty valuation decreases of 3.8% in local currency
(20.4pence per share), dividends paid in the year of 4.0 pence
per share, and a loss on disposal of investment properties of
3.5pence per share. These were partly offset by EPRA earnings
per share of 7.6 pence per share and foreign exchange uplifts
on our European business of 7.2 pence per share.
The impact of reduced level of debt in the business was partly
offset by a decline in the value of our property portfolio,
resulting in a slight improvement in balance sheet loan-to-value
ratio at 31 December 2025 to 50.0% (2024: 50.7%). We retain
our intention to reduce LTV to between 35% and 45% in the
medium-term through disposals and value-enhancing
investment. We believe that this LTV range is more appropriate
for the business.
Cash flow and net debt
2025 2024
Borrowings (£m) 901.9 999.2
Cash and cash equivalents (£m) (49.4) (60.5)
Net debt (£m) 852.5 938.7
EBITDA (£m) 68.5 79.2
Net debt:EBITDA ratio (times) 12.4 11.9
Balance sheet loan-to-value ratio (%) 50.0 50.7
Weighted average cost of debt (%) 3.8 3.8
Interest cover (times) 1.8 1.9
Weighted average unexpired debt (years) 3.6 3.2
Graph D: Movement in cash and cash equivalents
(£m)
At 31 Dec
2024
Cash from
operations
Interest/tax Dividends
paid
Sales of
properties
Net loan
repayments
Capex Other At 31 Dec
2025
60.5
52.6
(126.8)
2.6
(38.0)
(15.9)
131.8
(17.4)
49.4
As at 31 December 2025, the Group’s cash and cash
equivalents balance (including restricted cash – see note 16)
was £49.4 million (2024: £60.5 million) asset out in graph D
andnote 16 to the Group financial statements. Available
undrawn facilities totalled £28.0 million (2024: £50.0 million),
with a further £10 million uncommitted facility (2024: £10 million)
which was undrawn at year-end. Net cash flow from operating
activities, after payment of £38.0million for financing costs
andtax, generated £14.6 million (2024: £29.5 million) mainly
reflecting the impact of disposals and higher vacancy, as well
as£1.7 million of non-recurring costs related to the staffing
review and financial structuring carried out during the year.
Excluding the non-recurring costs, operating cash flows cover
the £15.9 million cash cost of the interim and final dividend
for2025.
Borrowings decreased by £97.3 million to £901.9 million
(2024: £999.2 million) due primarily to the net repayment
ofloans of £126.8 million, partially offset by the impact of the
weakening Sterling exchange rate on the Sterling value of
ourEuro-denominated debt. During the year, CLS increased
the size of its two committed revolving credit facilities from
£50 million to £70 million. It also has a £10 million overdraft
facility. As at 31 December 2025, CLS had drawn down
£42 million on the revolving credit facilities. No overdraft
wasutilised as at 31 December 2025.
The weighted average cost of debt at 31 December 2025
wasstable at 3.8% (2024: 3.8%), translating to group interest
cover of 1.8 times (2024: 1.9 times).
Financing strategy and covenants
The Group’s financing strategy is based substantially on
raisingsecured debt against its properties, whether individually
or inmulti-property facilities. At Group level, we have a
targetbalance sheet LTV ratio of between 35% and 45%.
At31 December 2025, LTV was 50.0%, a level which we are
working to reduce through disposals and investment to
enhancethe value of our properties.
CLS Holdings plc Annual Report and Accounts 202524
Chief Financial Officer’s review continued

Most of our properties have debt secured against them.
Properties not subject to secured debt at 31 December 2025
totalled £64.4 million (2024: £41.3 million).
At the start of 2025, the Group had £373.7 million of debt
(including £9.6 million of amortisation) across 11 loan facilities
expiring in 2025, all of which have been refinanced, extended
orrepaid. We took the opportunity to spread the maturities
overa longer period to smooth out future refinancing peaks:
the £222.8 million of new loans taken out during the year had
aweighted average all-in rate of 5.5%, within which £51.6 million
were fixed at a weighted average all-in rate of 4.1%.
Consequently, the Group’s debt maturity risk profile is more
evenly spread (graph E), and the weighted average maturity
hasincreased to 3.6 years (2024: 3.2 years).
In 2026, the Group has £145.5 million of long-term debt maturing
and comprising of seven loans; loan amortisation of £11.8 million
and a further £42.0 million of expiring short-term credit facilities
which we are currently in discussions to extend or refinance with
existing and new lenders.
CLS’ objective remains to keep a high proportion of fixed rate
debt but to retain some floating rate debt to provide flexibility
to allow early repayments expected from planned disposals
without incurring break costs typically associated withfixed
rateloans.
At 31 December 2025, 69% of the Group’s borrowings were
atfixed rates or subject to interest rate swaps, 7% were subject
to caps which had been hit and 24% of loans were unhedged.
At 31 December 2025, the Group had 36 loans (26 through
SPVs, eight portfolios and two credit facilities) from 23 different
lenders. The loans vary in terms of the number and nature of
their covenants, although the three most common relate to
LTVratio, interest cover and debt service cover.
Graph E: Debt maturity
(£m)
400
300
200
100
0
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
-2039
Repaid/refinanced GBP EUR New debt maturity
On average, across the 36 loans, CLS has between 23% and
28% headroom against these three most common covenants.
In the event of an actual or forecast covenant breach, all of the
loans have equity cure mechanisms to repair the breach, which
allow CLS to either repay part of the loan, substitute property
ordeposit cash, for the period the loan is in breach after which
the cash can be released.
Distributions to shareholders
The final dividend for 2024 of 2.68 pence per share (£10.7 million)
was paid in May 2025. In October 2025, CLSpaid an interim
dividend for 2025 of 1.30 pence per share (£5.2 million).
We are proposing to maintain the final dividend at 2.7 pence
pershare (2024: 2.68 pence), in line with the dividend policy
established a year ago, equating to a cash amount of
£10.7million (2024: £10.7 million). This equates to a full year
distribution of 4.0 pence per share (£15.9 million), covered
1.9times by EPRA earnings per share, within our policy of the
dividend being covered 1.5 to 3.0 times by EPRA earnings.
Under the terms of being a UK REIT, CLS is obliged to distribute
a minimum of 90% of its UK property income as a Property
Income Distribution (PID). The final dividend will be paid entirely
as a PID. As a result of this high distribution requirement, the
ability of a UK REIT to retain capital in the business for
investment is limited. Therefore, we are proposing to offer
shareholders the option of receiving the dividend in new shares
rather than cash, in the form of an enhanced scrip dividend,
allowing those who take the scrip alternative to increase their
investment in CLS and to receive a benefit by doing so in the
form of a 5% discount to the reference share price.
Harry Stokes
Chief Financial Officer
CLS Holdings plc Annual Report and Accounts 2025 25
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statements
Corporate
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Strategic
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Engaging with our key stakeholders is fundamental to our
ability to make well-informed decisions which ultimately
haveapositive impact on the business, in thecommunities
inwhich we invest and on the people with whom we do
business. Positive engagement and collaboration with our
stakeholders supports the implementation of our long-term
strategy for growth.
We engage with our stakeholders through a variety of
channels throughout the year. We have seen a positive impact
on the decisions we have taken during the year as a result
ofthe input from this stakeholder engagement.
Priorities in 2025 How we engaged Outcomes and opportunities
Link to strategy and
business model
Tenants
• Improvements to communal areas to meet
tenants’ needs
• Input into tenants’ refurbishments
• Implementation of sustainability initiatives
includingautomatic energy meter readings
• Regular feedback through
tenantmeetings
• Tenant surveys
• Continued programme of refurbishments and modern,
sustainable fit out as per Net Zero Carbon plan
• Active asset, property and facilities management to deal
withissues quickly
• Enhanced tenant communications on activities taking
placeonsite through tenant meetings
Suppliers
• Support fair tendering processes with feedback
from suppliers
• Investigate updating our supplier portal
• Obtain commitments from relevant suppliers in
line withLiving Wage Foundation requirements
• Quarterly review meetings
withprincipal suppliers
• Fair tendering process to ensure
wework in partnership with suppliers
• Communicated Group policies on modern slavery and
anti-bribery to ensure expectations of business conduct
iswellunderstood
• Continued commitment to the Group’s policy of prompt
payment ofinvoices
Communities
• Improvements in public realms
• Financial and in-kind support for local charities
and other organisations
• Implementing CSR programme
• Supporting local organisations
intheareas in which we invest
• Working closely with communities
and councils on refurbishment and
development projects
• Provided local charities and organisations with employee
assistance and essential funding
• Adapted refurbishments/redevelopments in light of feedback
Employees
• Monitor staff engagement
• Enhance CLS culture through wellbeing measures
• Action outcomes from employee town halls
• Embed clear understanding of Group strategy
and medium-term priorities
• All-employee town hall meetings
• CSR initiatives including group
volunteering days andsocialevents
• More all staff meetings hosted by
the CEO
• Greater understanding of Group strategy and future
priorities,leading to higher morale
• CSR initiatives including group volunteering days
andsocialevents have created better cross-departmental
relationships aiding co-operation and collaboration
Investors
• Increasing letting activity to reduce vacancy
andimprove earnings
• Executing sales to reduce LTV to our target range
• Complete refinancings due in 2025
• Invest in our properties to unlock value
• Q&A session at analyst
presentations
• Regular meetings with investors
• Feedback through our key advisors
• Completed significant leasing activity
• On track to meet sales and LTV targets
• Sale of Spring Gardens highlighting significant opportunities
within the portfolio
Financial
institutions
• Ongoing compliance with loan covenants
• Economic and market research and trends
• Sustainability initiatives
• Frequent meetings with existing
andnew and potential lenders
andshareholders
• Communication of Group strategy at individual meetings
• Regular updates on portfolio changes
• Ensuring best practice in compliance reporting
CLS Holdings plc Annual Report and Accounts 202526
Stakeholder engagement

16 Tinworth Street, London
Priorities in 2025 How we engaged Outcomes and opportunities
Link to strategy and
business model
Tenants
• Improvements to communal areas to meet
tenants’ needs
• Input into tenants’ refurbishments
• Implementation of sustainability initiatives
includingautomatic energy meter readings
• Regular feedback through
tenantmeetings
• Tenant surveys
• Continued programme of refurbishments and modern,
sustainable fit out as per Net Zero Carbon plan
• Active asset, property and facilities management to deal
withissues quickly
• Enhanced tenant communications on activities taking
placeonsite through tenant meetings
Suppliers
• Support fair tendering processes with feedback
from suppliers
• Investigate updating our supplier portal
• Obtain commitments from relevant suppliers in
line withLiving Wage Foundation requirements
• Quarterly review meetings
withprincipal suppliers
• Fair tendering process to ensure
wework in partnership with suppliers
• Communicated Group policies on modern slavery and
anti-bribery to ensure expectations of business conduct
iswellunderstood
• Continued commitment to the Group’s policy of prompt
payment ofinvoices
Communities
• Improvements in public realms
• Financial and in-kind support for local charities
and other organisations
• Implementing CSR programme
• Supporting local organisations
intheareas in which we invest
• Working closely with communities
and councils on refurbishment and
development projects
• Provided local charities and organisations with employee
assistance and essential funding
• Adapted refurbishments/redevelopments in light of feedback
Employees
• Monitor staff engagement
• Enhance CLS culture through wellbeing measures
• Action outcomes from employee town halls
• Embed clear understanding of Group strategy
and medium-term priorities
• All-employee town hall meetings
• CSR initiatives including group
volunteering days andsocialevents
• More all staff meetings hosted by
the CEO
• Greater understanding of Group strategy and future
priorities,leading to higher morale
• CSR initiatives including group volunteering days
andsocialevents have created better cross-departmental
relationships aiding co-operation and collaboration
Investors
• Increasing letting activity to reduce vacancy
andimprove earnings
• Executing sales to reduce LTV to our target range
• Complete refinancings due in 2025
• Invest in our properties to unlock value
• Q&A session at analyst
presentations
• Regular meetings with investors
• Feedback through our key advisors
• Completed significant leasing activity
• On track to meet sales and LTV targets
• Sale of Spring Gardens highlighting significant opportunities
within the portfolio
Financial
institutions
• Ongoing compliance with loan covenants
• Economic and market research and trends
• Sustainability initiatives
• Frequent meetings with existing
andnew and potential lenders
andshareholders
• Communication of Group strategy at individual meetings
• Regular updates on portfolio changes
• Ensuring best practice in compliance reporting
Key to strategy and
business model
We acquire the
right properties
We secure the
right finance
We deliver value
through active
management
andcost control
We continually assess
whether to hold or
sellproperties
We reward
shareholders,
customers and
employees
CLS Holdings plc Annual Report and Accounts 2025 27
Additional
information
Financial
statements
Corporate
governance
Strategic
report

Overview
The Board recognises the importance of the views of key
stakeholders in its decision-making process and the execution
of its strategy. It believes these to be crucial in maintaining a
reputation for high standards of business conduct, and a
Company that people want to work for and to do business with.
Our key stakeholders are set out on pages 26 to 27 and
illustrate how the Group has engaged and consulted with them.
This approach is reflected in the Board’s decision-making process
and examples of key decisions are set out in this section.
To support the recording and reporting of our section 172
obligations, Board papers are written so that they include a
specific section detailing how the decision the Board is being
asked to make would affect key stakeholders.
In some circumstances it has led to decisions being amended
toimprove the impact on certain stakeholder groups.
Meeting tenants and employees across the business through
our property tours and Board presentations together with
individual meetings with members of staff and external advisors
on specific topics, provide an excellent platform to understand
the views of our key stakeholder groups.
The Board also receives regular reports and feedback from
meetings with investors and analysts, which provide further
insight and discussion on their views.
The Board undertook a property tour in Lyon in May 2025,
where Board members were able to hear from local employees
and external advisors. They were able to see the locations of
our buildings and understand the local market and the changing
needs of tenants through different styles of fit out and design.
They also received first-hand feedback through meetings with
anumber of tenants.
Relevant disclosures
Page
The likely consequences
of any decision in the
long term
Purpose and values
Dividend Policy
Our Business Model
Performance Review
Sustainability
4-5
3
20
1-25
30-52
The interests of the
Company’s employees
Company Culture
Diversity and Inclusion
Employee Engagement
Our People
Performance Review
Whistleblowing
49-51, 72
49-51
50, 71
49-51
1-25
51
The need to foster
business relationships
with suppliers,
customers and others
Modern Slavery
Our Business Model
Performance Review
Responsible Payment Practices
Sustainability
Whistleblowing
116
20
1-25
48
30-52
51
The impact of the
Company’s operations
on the community and
the environment
Purpose and values
Sustainability
Climate-related financial
disclosure
4-5
30-52
39-47
The desirability of the
Company maintaining
areputation for high
standards of business
conduct
Internal Controls
Purpose and values
Sustainability
Whistleblowing
82
4-5
30-55
51
The need to act fairly
asbetween members
ofthe Company
Annual General Meeting
Dividend Policy
Stakeholder Engagement
Sustainability
70
3
26-27
30-52
Purpose-led considerations
Our purpose is to transform office properties into
sustainable, modern spaces that help businesses to grow.
Our investments are based on long-term vision, continually
modernising our portfolio into viable, future-focused and
sustainable properties.
Our vision is to be a leading office space specialist and a
supportive, progressive and sustainably focused landlord.
We achieve this by aligning our strategic vision to our tenants’
ambitions, reinforcing diversification in and across our key
markets and elevating the importance of sustainability across
all aspects of our business.
Our four key values define our culture: collaboration gets the
job done; our tenants our focus; agility unlocks opportunity;
and openness creates closeness.
Together, these underpin the decisions made at every level
across the Group.
Stakeholders
See pages 26-27
Purpose
2030 Goals See page 36
and Sustainability Report
Vision
Risks
See pages 53-60
Strategy
Culture
See pages 49-51 and 72
Decision-making
See pages 28-29 & 68-69
CLS Holdings plc Annual Report and Accounts 202528
Section 172 statement

Consideration of key S172 impacts by the Board in its decision-making
Refinancing
Securing the right finance remains one of the key tenets of
CLS’ business model and strategy and has delivered significant
value to our stakeholders.
The property and financing markets remain challenging,
butas a result of our excellent relationships with our current
lenders, we were able to refinance or repay all of our loans
maturing in 2025, totalling £373.7 million, which was a
significant achievement in the current economic climate,
giving us greater flexibility and resilience.
Investors 1, 2
The execution of our financing strategy materially reduced the
Group’s liquidity and refinancing risks, enhancing our resilience in
the current economic climate and giving our investors confidence
that the Company will continue to deliver on its strategy.
Financial institutions 1
The financing agreements we entered into this year have
strengthened our relationship with our lenders and ensured
thatthe terms remain favourable and beneficial to all parties.
Our agreements have also allowed us to build relationships
withnew lenders and expand our financing options in the future.
Property sales
A strategic objective during the year was to undertake
adisciplined sales programme. In 2025, despite the
challenging investment market conditions, the Board
agreedto sell £144.2 million of properties, which included
the£101.1 million sale of Spring Mews Student, at or close
tobook value. These sales helped reduce LTV to 50%
andfurther sales in the pipeline should ensure it is reduced
further to within our target range of 35%–45%.
Investors 1, 3, 6
The Board’s focus was to meet the key strategic priority, to
reduce our Group Loan To Value ratio (LTV) through property
sales, which ultimately enhances the financial stability of the
Group and positioning for future growth.
Financial Institutions/Suppliers 1, 2
The Board concluded that the repayment of debt would have
apositive impact on how financial institutions and suppliers
assessed the Group, and broaden the ability for CLS to seek
alternative funding options.
Dividend Considerations
During the year, the Company reviewed its dividend policy
with the aim of retaining cash to invest in the portfolio for
long-term growth.
The revised dividend policy supports the long-term strategic
plan whilst still providing an attractive return toshareholders
whilst being covered 1.5x to 3.0x by EPRA earnings.
Through the annual strategic plan, the Board monitors the
Group’s cash flow position to ensure sufficient resources to
invest in our portfolio, and support our vision to be a leading
office space specialist and a supportive, progressive and
sustainability-focused commercial landlord.
Investors 1, 5
In April the Board concluded that a revised dividend policy
beadopted, given the financial and operational performance
ofthe Group against a continued challenging macro-economic
background. The 2024 Final dividend (2.68 pence per share)
and 2025 Interim dividend (1.3 pence per share) were reduced
by 50% compared to the previous year.
Employees 4
The Board considered how this would impact employees.
Ourremuneration structure and annual outcomes reflect
bothGroup and individual performance, which would therefore
be lower. Additionally, those employees who own shares in
CLSthrough our Share Incentive Plan (SIP) would be impacted.
It concluded that there remained significant benefits through
the SIP Matching Shares to reward employees.
Review of Net Zero Carbon Pathway (NZC)
The Board considered it prudent to review our NZC
inlightofchanges to the sustainability landscape and
operational requirements.
Community/Environment 1, 5, 6
The Board concluded that a review was warranted in order to
ensure alignment with our strategy and that capital expenditure
matched with end-of-life replacement programmes and tenant
expiries, underlining our continued commitment to sustainability,
minimising wastage and the impact on the environment.
Theresults of that review are expected to be published in 2026.
Key: Section 172 criteria
1. The likely consequences of any decision
in the long term
2. The need to foster the Company’s
business relationships with suppliers,
customers and others
3. The desirability of the Company
maintaining a reputation for high
standards of business conduct
4. The interests of the Company’s employees 5. The need to act fairly between stakeholders 6. The impact of the Company’s operations
on the community and the environment
CLS Holdings plc Annual Report and Accounts 2025 29
Additional
information
Financial
statements
Corporate
governance
Strategic
report

Our Sustainability Strategy maps the journey CLS will take up to 2030, with key targets and milestones
setto ensure we robustly track and maximise our environmental and social impact, in line with the needs
ofour stakeholders.
Our strategy is summarised below
Environmental Social Governance
A positive environmental impact
We will invest in our properties
andcollaborate with occupiers to
sustainablymanage natural resources,
support local environments and build
resilience to climate risks; delivering
future-ready assets.
Creating shared value
We will create and share value with our
stakeholders by engaging collaboratively
with our occupiers, supporting local
communities and partnering with our
supply chain.
Being a responsible business
Strong governance and transparency
willprovide the basis for demonstrating
our values, supporting people and
working with our stakeholders to
upholdhigh standards.
Net Zero Carbon Pathway
See pages 36-37 for details
Social Value Framework
See the Social section of the 2025
Sustainability Report for details
Monitoring and regulatory reporting
See the Governance section of the
2025 Sustainability Report for details
We believe that sustainable outcomes and shareholder returns
are not a zero-sum game. Properly valuing and integrating
sustainability risks and opportunities into our business strategy
provides resilience to future disruption and unlocks potential
future growth.
Our strategy takes steps to prepare and adapt our business
before regulation requires it, or the environment and our
customers demand it. A more sustainable operating model
reduces material risks to our reputation and balance sheet.
Crucial to this is our commitment to being a net zero
carbonbusiness.
The fundamentals remain the same. Weare working in line
withglobally recognised sustainability frameworks and targets
to have a positive environmental impact, create shared value
with our stakeholders and be a responsible business with strong
governance andtransparency.
Explore deeper with our Sustainability Report
Our separate Sustainability Report, which will be published
shortly after the release of our Annual Report, provides a
deeper dive on the data and work behind making CLS a more
sustainable business and driving ourESGagenda.
This separate report is designed to matchnumerous relevant
ESG and sustainability reporting frameworks. It provides a
greater level of transparency, with substantial amounts of
thespecialist data and information these frameworks require
and is useful for many of our varied stakeholders.
Metrics and Framework Alignment
We align to EPRA sBPR (Sustainability Best Practices Reporting),
SASB (Sustainability Accounting Standards Board) and GRESB
(Global Real Estate Sustainability Benchmark) frameworks and
report in accordance with the SBTi(Science Based Targets
initiative) andCRREM (Carbon Risk Real EstateMonitor).
Whilst not currently obligated, we remainwell placed to align
reporting to the ISSB (International Sustainability Standards
Board) standards as well as the upcoming UK-equivalent
UKSRS (UK Sustainability Reporting Standards).
The table overleaf shows a summary of key metrics for 2025.
The full tables, with splits by country, can be found in the rear
ofthe separate Sustainability Report. These include all the
disclosures for updated EPRA sBPR guidelines, geographical
splits of the data and the table of SASB indicators. We provide
ourannual sustainability data as a downloadable file from our
website (inCSV format for easy use).

For more detail, please visit ourwebsite
to read our Sustainability Strategy and 2025
Sustainability Report www.clsholdings.com/
sustainability/reports/
CLS Holdings plc Annual Report and Accounts 202530
ESG overview
Sustainability Strategy to 2030

2025 ESG highlights
Proportion of buildings with BREEAM In-use ratings
ofVery Good or above
55%
Proportion of total Group electricity from renewable
orcarbon-free sources
98.9%
Equivalent social value generated (excluding supply chain)
£388,657
Employee volunteering hours given tocommunity
andcharitable organisations
567 hours
Net Zero Carbon Pathway projects completed
30
Reduction in like-for-like Scope 1 and 2 GHG emissions
from 2024
9.3%
2025 in review
We continue to demonstrate improvements with energy and
GHG savings on a like-for-like basis, as well as measures to
make ourbuildings more efficient and future-ready, highlighted
byimproved EPCs and BREEAM ratings.
Notably, we completed the full heating decarbonisation
ofoneofour UK properties, replacing the existing gas boiler
withan Air Source Heat Pump (ASHP) solution, all whilst tenants
were in situ. For more information about this project, please refer
to our separate Sustainability Report.
We maintained our commitment to delivering social value in
thecommunities in which we operate, with a continued focus
onskills for young people. Using the Social Value Portal National
TOMs framework, our total value generation reached over
£388,000 representing a 6% increase from 2024.
Performance and Progress in 2025 Focus Areas
We achieved the energy and carbon reduction targets
wesetourselves for the year.
The impact of our energy efficiency work manifested in
reduced electricity and gas consumption. Like-for-like landlord
electricity consumption decreased by 5.2% across the portfolio
whilst like-for-like gas consumption fell by 10.3%. Thecontinued
decarbonisation of European electricity grids saw GHG
(Greenhouse Gas) emissions factors improve, which, combined
with our energy savings and carbon reduction projects, meant
ourtotal Scope 1 and 2 GHG emissions, using location-based
carbon factors, reduced by 9.3% like-for-like and 11.6% on an
absolute basis.
Scope 3 GHG emissions were lower than last year, largely due
to reduced spending on construction and refurbishment projects
as well as reduced occupier emissions and business travel.
Changes to spend-based GHG emissions factors, used to
calculate certain Scope 3 categories, also contributed to the
reduction in overall emissions.
In total, we completed 30 energy efficiency and carbon
reduction projects in 2025, saving anestimated 590 tonnes
CO
2
e (tCO
2
e) per annum. Our UK portfolio is fully aligned with
the Minimum Energy Efficiency Standards (MEES) and this
project will help ensure our alignment with the anticipated
changes to the regulation. Theproportion ofour UK properties
rated EPC A-C is 84% (by number).
Furthermore, we completed more feasibility studies on
ourfossil fuel heated buildings toallow heating system
electrification projects to commence in operational buildings
in2026 and beyond. Whilst no more Photovoltaic capacity was
installed this year, planning has advanced for installations in
2026 in Germany.
Water consumption decreased by 3.3% like-for-like,
supportedby our smart water meters and leak detection
systems in Germany and the UK, whilst waste generation,
across our managed portfolio, remained consistent with
2024.Our recycling rate for 2025 was 55% (excluding energy
from waste). We plan to introduce new occupier engagement
measures in 2026 to improve this recycling rate.
We have maintained the social metrics which we report
onandagain achieved the EPRA sBPR gold award. Board
andemployee gender balance remained steady as well
asemployee turnover. See the People section (pages 49-51)
for more commentary.
CSR and social value remain important. We held various
volunteering events this year, with 567 employee volunteering
hours and just over £160,000 of donations (cash and in-kind)
were made to charities in our focus areas. Weupdated 13
BREEAM In-Use ratings this year across our UK, French and
German portfolios. 55%of buildings arenow rated Excellent or
Very Good, demonstrating the operational sustainability
credentials of our office spaces.
CLS Holdings plc Annual Report and Accounts 2025 31
Additional
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statements
Corporate
governance
Strategic
report

GHG emissions metrics
(GHG-Dir-Abs, GHG Indir-Abs, GHG-Dir-LfL, GHG-Indir-LfL)
Absolute Like-for-like
2025
tCO
2
e
2024
tCO
2
e Difference %
2025
tCO
2
e
2024
tCO
2
e Difference %
Scope 1 GHG emissions (Direct) 3,871
1
4,527
7
-14.5% 3,861 4,234
7
-8.8%
Gas 3,268 3,929
7
-16.8% 3,268 3,699
7
-11.6%
Gas oil 2 2
7
4.5% 2 2
7
4.5%
Diesel 13 9
7
49.9% 13 9
7
49.9%
Fugitive emissions 588 588 0.0% 578 524 10.3%
Scope 2 GHG emissions
(Energy Indirect – Location-based) 6,648
1
7, 3 7 5
7
-9.9% 6,617 7, 3 2 2
7
-9.6%
Electricity (location-based) 3,404 4,146
7
-17.9% 3,373 4,092
6
-17.6%
Purchased Heat (location-based) 3,244 3,230
7
0.4% 3,244 3,230
6
0.4%
Scope 2 GHG Emissions
(Energy Indirect – Market-based) 704
1
799
7
-12.0% 704 799
7
-12.0%
Electricity (market-based) 0 0
7
0.0% 0 0
7
0.0%
Purchased heat (market-based) 704 799
7
-12.0% 704 799
7
-12.0%
Total Scope 1 and 2 GHG emissions
(Location-based) 10,519
1
11,903
5
-11.6% 10,478 11,556
7
-9.3%
Progress against NZC Pathway target
NZC Pathway target
10,519
9,687
8.6%
1,3
– – –
Total Scope 3 GHG Emissions (Other Indirect)
2
–selected categories 21,918 25,941 -15.5% – – –
Upstream emissions
2
10,856 13,750 -21.0% – – –
Downstream emissions
2
11,062 12,191 -9.3% – – –
Total Scope 1, 2 and 3 GHG emissions
(Location-based) 32,437 37,843
7
-14.3% – – –
Energy consumption metrics
(Elec-Abs, Elec-LfL, DH&C-Abs, DH&C-LfL, Fuels-Abs, Fuels-LfL, IF-RE-130a.2, IF-RE-130a.3)
Absolute Like-for-like
2025
MWh
2024
MWh Difference %
2025
MWh
2024
MWh Difference %
Electricity
Total purchased electricity for landlord spaces 17,698 18,735
7
-5.5% 17,573 18,540
7
-5.2%
Total purchased electricity sub-metered to occupiers 9,381 9,413
7
-0.3% 9,381 9,413
7
-0.3%
Total electricity generated through on-site PV 956 883 8.2% 956 883 8.3%
Total electricity generated through on-site CHP 78 269 -71.1% 78 269 -71.1%
Proportion of electricity obtained from renewable
sources 98.9% 98.5%
7
0.5% 99.0% 98.5%
7
0.5%
Grid electricity consumed within head offices 149 152
5
-1.8% 149 152
5
-1.8%
District Heating and Cooling
Total landlord purchased district heating and cooling 10,652 10,485 1.6% 10,652 10,485 1.6%
Proportion of district heating and cooling obtained
fromrenewablesources 26% 25%
7
0.4% 26% 25%
7
0.4%
Fuels
Total direct fuel consumption for landlord spaces 17,922 21,525
5
-16.7% 17,922 19,984
5
-10.3%
Total direct fuel consumption sub-metered to occupiers 43 25
5
75.9% 43 25
5
75.9%
Total Group energy consumption in landlord spaces
(net of onsite energy generation) – - - 46,146 49,009
5
-5.8%
Total Group energy consumption in landlord spaces 47,305
1
51,897
5
-8.8% 47,1 8 0 50,161
5
-5.9%
CLS Holdings plc Annual Report and Accounts 202532
ESG overview continued
EPRA sBPR and SASB Summary data

Intensity metrics
(Energy-Int, GHG-Int, Water-Int)
Absolute Like-for-like
2025 2024 Difference % 2025 2024 Difference %
Total building energy intensity per floor area
(kWh/m
2
/yr)
72.9 79.8
5
-8.8% 83.5 88.8
5
-5.9%
Total building energy intensity per £ revenue
(kWh/£ revenue/yr)
0.56 0.54
5
– – – –
Total Scope 1 and 2 GHG emissions intensity
perfloorarea (kgCO
2
e/m
2
/yr)
16.2
1
18.3
5
-11.6% 18.5 20.4
5
-9.3%
Total Scope 3 GHG emissions intensity per floor area
2
(kgCO
2
e/m
2
/yr)
33.8 40.0
5
-15.5% – – –
Total Scope 1, 2 and 3 GHG emissions intensity
perfloorarea
2
(kgCO
2
e/m
2
/yr)
50.0 58.3
5
-14.3% – – –
Total Scope 1, 2 and 3 GHG emissions intensity
per£revenue
2
(kgCO
2
e/£ revenue/yr)
0.32 0.33 – – – –
Total building water intensity per floor area (m
3
/m
2
/yr) 0.38 0.38
5
-1.4% 0.36 0.37
5
-3.3%
Total building water intensity per £ revenue
(litres/£ revenue/yr)
2.40 2.17
5
– – – –
Water, waste and certificates metrics
(Water-Abs, Water-Lfl, Waste-Abs, Waste-LfL, IF-RE-140a.2)
Absolute Like-for-like
2025 2024 Difference % 2025 2024 Difference %
Water
Total landlord-obtained water (m
3
) 243,344 246,848
5
-1.4% 203,429 210,282
5
-3.3%
% Total water withdrawn in regions with high
orextremely high baseline water stress 48% 52% -7.1% – – –
Waste
3
tonnes tonnes tonnes tonnes
Total waste collected 1,389 1,383 0.4% 1,224 1,249 -2.1%
Total non-hazardous waste 1,389 1,383 0.4% 1,224 1,249 -2.1%
Total hazardous waste 0 0 0.0% 0 0 0.0%
Total waste recycled 745 802 -7.1% 665 698 -4.7%
Total waste incinerated with energy recovery 644 581 10.8% 558 552 1.2%
Proportion of waste recycled 54% 58% - 7. 5 % 54% 56% -2.6%
Proportion of waste incinerated with energy recovery 46% 42% 10.4% 46% 44% 3.3%
For data on mandatory and voluntary certifications across our portfolio (Cert-Tot) including measuring levels of certification attained
in EPCs and BREEAM In-Use and percentage coverage by both portfolio value and floor area, see the Sustainability Report.
1 2025 figure independently assured by DNV.
2 CLS currently only reports absolute Scope 3 emissions, therefore no like-for-like breakdown has been provided.
3 Percentage difference between NZC Pathway target and actual Scope 1 and 2 GHG emissions.
4 Excluding employees on maternity leave and fixed-term contractors who are not subject to annual appraisals.
5 Figure restated due to replacement of estimated data or availability of new data.
6 Figure restated with revised set of buildings aligned with EPRA sBPR guidelines.
7 Figure restated due to use of revised calculation method or data.
CLS Holdings plc Annual Report and Accounts 2025 33
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Corporate
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Strategic
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Social metrics
(Diversity-Emp, Emp-Training, Emp-Dev, Emp-Turnover, H&S-Emp, H&S-Asset, H&S-Comp, Comty-Eng)
2025 2024
Gender Diversity
All employees – number/%offemaleemployees 45/52% 53/49%
All employees – number/%ofmaleemployees 41/48% 56/51%
Board of Directors – number/%offemaleemployees 3/38% 3/38%
Board of Directors – number/%ofmaleemployees 5/62% 5/62%
Training
Average hours of training per employee – allemployees 18 19
Performance Appraisals
Percentage of all employees who received performance appraisals
4
100% 100%
Turnover
Total number of new employee hires 16 21
Total rate of employee turnover 32% 25%
Health and Safety
Employee health and safety – Injury rate (UK only)/absentee rate (days/employee) 38/2.6 36/5.2
Percentage of assets with health and safety assessments 100% 100%
Incidents of non-compliance with asset health and safety regulations and standards 0 0
Community
Percentage of assets with community engagement, impact assessments & development programmes 83% 83%
Governance metrics
(Gov-Board, Gov-Selec & Gov-COI measures)
Refer to Corporate Governance Section for data and information covering the composition of the Board and the process
fornomination and selection as well as the process for managing conflicts of interest.
Regulated Reporting and Methodology
The disclosures included in this ESG section cover the following reporting
requirements that we are subject to as a UK publicly listed company:
• Greenhouse gas (‘GHG’) reporting requirements defined within the
Companies Act 2006 (Strategic Report and Directors’ Report)
Regulations 2013.
• Energy reporting requirements under the Streamlined Energy and
Carbon Reporting (‘SECR’) requirements in the Companies (Directors’
Report) and Limited Liability Partnerships (Energy and Carbon Report)
Regulations 2018.
• Climate-related financial disclosures consistent with recommendations
from theFinancial Stability Board’s Task Force for Climate-Related
Financial Disclosures (TCFD), as required under current UK Listing Rules.
The scope, boundary and methodology adopted for the calculation of the
Scopes1, 2 and 3 GHG emissions, SECR metrics, and other environmental
andsocial indicators are set out in the Sustainability Metrics: Scope,
Boundaries &Methodology section in the back of our detailed
Sustainability Report.
Independent Assurance
We have engaged DNV Business Assurance
Services UK Ltd (DNV), anindependent
expert in assurance andrisk management,
toundertake limited independent assurance.
Theassurance scope covers energy and
Scope 1, 2 and selected Scope 3 GHG
emissions, EPRA sBPR metrics aswell
asourNZC Pathway progress.
The specific metrics that have been subject
toassurance are identified in therelevant
datatables.
CLS Holdings plc Annual Report and Accounts 202534
ESG overview continued
EPRA sBPR and SASB Summary data continued

In the year ahead, our key priority is to continue
delivering key decarbonisation and energy
efficiency projects to progress our NZC Pathway.
This includes a focus on decarbonising heating
systems, further operational and building controls
optimisation and increasing on-site renewable
energy generation.
We will continue to support our occupiers, with the enhanced
use of our Sustainability data platform, and advance our
supplychain engagement, key to reducing our Scope 3
GHGemissions (our largest emissions segment), as well
asmaximising our social value impact.
We will progress work in other environmental areas with
aparticular focus on biodiversity, ensuring our properties
support the health and wellbeing of our tenants whilst
adheringto specific net-gain targets.
Finally, we will review our progress against our 2030 NZC
Pathway. Given we are half-way through the delivery of the
Pathway, 2026 serves as an opportunity to evaluate our
strategy and ensure it continues to align with the latest
climatescience as well as our overarching business strategy.
Focus Areas
• Deliver key planned heating electrification and energy
efficiency projects.
• Reduce like-for-like GHG emissions by 2%.
• Increase engagement with our tenants and supply chain,
including data collection and reporting, to improve
sustainability metrics (e.g. Scope 3 GHG emissions,
energy,waste, water and social value).
• Improve smart meter data coverage of mains utilities
acrossthe regional portfolio.
• Include our supply chain in social value measurement
andreview measurement methods.
• Establish biodiversity net-gain plans for each property
(whererelevant) and begin roll out of measures.
• Introduce mitigation and adaptation measures at properties
most at risk of flooding.
• Ensure relevant sustainability performance awards are
maintained (e.g. EPRA sBPR gold award) and continue
workto ensure alignment with current and future regulation
(e.g. MEES, Décret Tertiaire and the UK SRS).

For more detail, please visit ourwebsite
toreadour Sustainability Strategy and 2025
Sustainability Report www.clsholdings.com/
sustainability/reports/
Additional
information
Financial
statements
Corporate
governance
Strategic
report
ESG priorities for 2026
35CLS Holdings plc Annual Report and Accounts 2025

Spotlight on Net Zero Carbon Progress
Our Net Zero Carbon Pathway is built from asset-level energy
audits creating a robust technical evidence base of the energy
and carbon saving opportunities and costs for each property.
These have been aggregated into a Group-wide model to
calibrate our targets, strategy and capital expenditure plans.
Inaddition, they have been incorporated into individual asset
management plans to enable strategic decisions about the
refurbishment, sale or full redevelopment of assets to be made.
Where refurbishment is viable, the projects highlighted in the
energy audit are incorporated into Net Zero Carbon Asset
Management Plans for each building to ensure the optimal
timing and allocation of capital over the course of the pathway,
to achieve our carbon reduction targets. These plans have
resulted in a timeline of carbon reduction through to 2030,
which will be constantly updated as expenditure is incurred
ateach asset. These plans are reviewed each year to
incorporate technology improvements as well as any
acquisitions or disposals.
We have included the full portfolio of buildings in our
NZCPathway and report on progress against our targets,
projects completed and delivery costs. The pathway includes
a65% reduction (giving a buffer on our 42% commitment) in
Scope 1 and 2 GHG emissions and a 27% reduction in Scope 3
emissions by 2030 against a 2020 baseline. The plans are
aligned to meet or exceed our SBTi target (42% reduction
required) as well as the CRREM pathways for 2030.
Residual GHG emissions in 2030 will be addressed with
appropriate and robust carbon offsets. We are continuing
tomonitor options for offsets and will provide more details
oncethe regulatory environment is more certain.
We have verified that our NZC plans for each building align with
anticipated regulatory changes (e.g. MEES in the UK and Décret
Tertiaire in France) and include appropriate costs to meet these.
Our focus for this year was completing a number of
decarbonisation and efficiency projects as well as advancing
feasibility studies, where fossil fuel heating needs to be
replaced. This ensures NZC plan risks are well managed.
Energy Efficiency and Carbon Reduction Projects
During 2025, we delivered a variety of projects to improve
energy efficiency and reduce energy costs in our buildings
inthe UK, Germany and France.
We completed 30 carbon reduction projects from the
NZCPathway at a cost of £3.4 million. The projects save
anestimated 590 tCO
2
e annually. Key projects included:
• Replacement of ventilation, cooling and heating
plantandequipment with higher efficiency units;
• Facade refurbishments including upgrading to
highperformance glazing;
• Improving ventilation fan controls in car parks and
toilets(e.g.carbon monoxide and time controls);
• Replacing old light fittings in common areas and tenant
areas,including emergency lighting and external and carpark
lighting with LED lighting and automatic lighting controls;
• Upgrades to controls including introducing Building
Management Systems (BMS) and smart (AI-powered)
thermostats.
In addition, there were also simple operational changes to BMS
and control systems adjustments where they were inefficiently
deviating from optimum settings.
Net Zero Carbon Pathway to 2030 Summary chart
Adjusted
baseline
Business
as usual
Electricity
decarbonisation
Upstream and
downstream
measures
Energy efficiency
and F-Gas
phasedown
Maximise onsite
solar energy
Carbon
offsets
CLS Holdings plc Annual Report and Accounts 202536
ESG overview continued
Spotlight on Net Zero Carbon Progress

12%
21%
34%
19%
11%
3%
One of our most significant projects in 2025 involved the
decarbonisation of the existing gas boiler plant at Radius
Housein Watford, with an innovative ASHP solution. Full BMS
integration allows for intelligent modulation, monitoring and
control in response to occupier demand. The project improved
the EPC rating of the building to a B (from a D). For more
information, please see the Sustainability Report.
We continued to expand our coverage ofAutomatic Meter
Reading (‘AMR’) technology across our utility supplies in 2025.
80% of our main utility meters in managed assets now have
AMR and include the expansion of smart water leak detection
inthe UK.
Streamlined Energy and Carbon Reporting (SECR)
As a listed company, we are required toreport in accordance
with SECR regulations. The table below provides a summary
ofthe required measurables (aligned to the EPRA sBPR
performance measures on pages 32-33). This, along with
theprevious section on Energy Efficiency Projects, forms
ourdisclosure. More detailed figures are provided in the
Sustainability Report in the Extended Sustainability Metrics
section along withcalculation details in the Scope, Boundaries
&Methodology section.
CLS progress vs Net Zero Carbon Pathway
Key: Actual Projections
Projected CLS GHG intensity vs CRREM v2 pathway
Key: CLS GHG intensity projected CRREM 1.5°C (Carbon)
Scope 1
Scope 2
Scope 3 – Downstream leased assets
Scope 3 – New construction and other capitalgoods
Scope 3 – Purchased goods and services
Scope 3 – Waste generated in operations, Water, Employee
commuting, Business travel, Fuel and energy
related activities
SECR Measurables 2025 2024 % Change
Total Scope 1 and 2 GHG emissions (GHG-Indir-Abs-Scope 1 & Scope 2) tCO
2
e 10,519
1
11,903
2
-11.6%
GHG Emissions intensity ratio (GHGInt) – Scope 1 and 2 emissions per net lettable floor area
(kg CO
2
e/m
2
) 16.2
1
18.3
2
-11.6%
Total Group energy consumption in landlord spaces (MWh) Total Energy-Abs 47,305
1
51,897
2
-8.8%
Total UK energy consumption in landlord spaces (MWh) Total Energy-Abs 20,570 23,195
2
-11.3%
Total offshore energy consumption in landlord spaces (MWh) Total Energy-Abs 26,735 28,702
2
-6.9%
Scope 3 GHG Emissions Selected Categories 2025 (tCO
2
e) 2024 (tCO
2
e) % Difference
Category 1: Purchased goods and services 3,525
1
3,790 - 7. 0 %
Category 2: New construction and other capital goods 6,216
1
8,611 - 2 7. 8 %
Category 3: T&D and WTT losses 926
1
1,085 -14.7%
Category 5: Water and waste treatment 48 44 9.3%
Category 6: Business travel 100 162 -38.3%
Category 7: Employee commuting, including homeworking 41 58 -28.5%
Category 13: Sub-metered utilities, & occupier-controlled utilities 11,062
1
12,191 -9.3%
Total Scope 3 GHG Emissions Selected Categories 21,918 25,941 -16.0%
1 2025 figure independently assured by DNV.
2 Figure restated due to use of revised calculation method or data.
20 21 22 23 24 25 26 27 28 29 30
16,000
tCO
2
e
12,000
8,000
4,000
0
2025 2026 2027 2028 2029 2030
35
GHG Intensity
kgCO
2
/m
2
25
30
20
5
10
15
0
Total Group Scope 1, 2 and
3 GHG emissions 2025
(tonnes CO
2
e)
32,437
CLS Holdings plc Annual Report and Accounts 2025 37
Additional
information
Financial
statements
Corporate
governance
Strategic
report

2025 Focus Areas and Performance
Target Performance
Energy & Carbon
Reduce carbon emissions and energy use in line with our
NZC Pathway
Achieved • Scope 1 and 2 GHG emissions reduced
by9.3% like-for-like
• Landlord energy use reduced by 5.8%
like-for-like, led by an electricity use
reduction of 5.2% and a gas use reduction
of 10.3%
Energy & Carbon
Ensure completion of relevant planned energy efficiency
and decarbonisation projects for 2025 and set capex plans
forkey large NZC projects due prior to 2030
Achieved • 30 NZC Pathway projects completed
costing £3.4 million and saving an
estimated 590 Tonnes of CO
2
e per year
• Full heating decarbonisation project
completed at one of our UK properties
• Feasibility studies completed on nearly
allgas heated buildings
Data
Review utilities metering and monitoring systems in each
region and action any changes required to ensure they are
providing accurate and timely data
Achieved • Sustainability data platform fully
operational and used for internal reporting
for all main utility data
• Utilities metering continued to improve
with 80% smart metering
• Further work planned with regional
property teams in 2026 to improve
smartmeter coverage
Landlord energy use reduced
by 5.8% like-for-like, led by
an electricity use reduction
of5.2% and a gas use
reduction of 10.3%
Key Environmental
Highlights
Percentage of smart metering
onmain utilities
80%
Percentage of UK properties
ratedEPC A-C
84%
CLS Holdings plc Annual Report and Accounts 202538
ESG overview continued
Environmental Summary

We recognise that the impacts of climatechange, such as
higher average temperatures, alongside changes to technology,
markets, policy, regulation and consumer sentiment, on the
pathway to a net zero carbon economy, create risks and
opportunities that could have material impacts on the value
ofthe Company and our assets.
CLS has made climate-related financial disclosures as
requiredunder UK Listing Rules. These are consistent with
therecommendations from the Financial Stability Board’s
TaskForce on Climate-Related Financial Disclosures (TCFD),
now merged into the ISSB, established and monitored by the
International Financial Reporting Standards (IFRS) Foundation.
Going forwards, we will ensure ourdisclosures remain aligned
with the ISSB as well as any adaptations required by future
standards including the UK SRS.
We are fully compliant with all 11 recommendations. This includes
showing: how climate change considerations areintegrated
intoour governance processes; the potential impacts on our
strategy and financial planning; how they are incorporated in
riskmanagement; and the relevant climate-related metrics and
targets that CLS uses to drive action. All material elements of
the TCFD “Guidance for All Sectors” as well as the sector-
specific guidance are considered.
The tables and sections below summarise our responses to the
recommended disclosures of the TCFD framework and signpost
the location of additional detail within our separate comprehensive
2025 Sustainability Report, which will be published shortly after
the release of our Annual Report.
We have documented the details of somedisclosures elsewhere
(e.g. the Sustainability Report) to meet the needs of our
stakeholders to minimise the length of this Annual Report.
Governance
Reporting Requirements (as per regulations) CLS Disclosure
Additional Information/
References
Description of
thegovernance
arrangements
inrelation to
assessing and
managing
climate-related
risks and
opportunities
A)
The Board’s
oversight of
climate-related
risks and
opportunities
The Board has clear oversight of climate-related matters
andis responsible for overseeing our approach to all material
climate-related risks and opportunities. The Board receives
briefings on such issues from the Group ESG Manager at
leasttwice per year, and through CLS’ governance framework,
caneffectively delegate to the appropriate sub-committees
and individuals. Given the risks and opportunities arising from
climate change impact various aspects of our operations,
theBoard’s sub-committee includes representation from
department heads. This ensures company-wide management
of climate-related risks and opportunities using a ‘top down,
bottom up’ approach.
Division of
Responsibilities
page 73
Our Risk
Management
Structure page 53
B)
Management’s
role in assessing
and managing
climate-related
risks and
opportunities
The CEO maintains the overall responsibility for the
management ofclimate-related risks and opportunities,
supported by the COO andGroup ESG Manager. The CLS
Sustainability Committee, whichcomprises key department
leads (including the COO, Group ESG Manager and regional
property heads), forms a key part of the management
structure. As part of the Committee’s quarterly meetings,
theimpacts of climate change on the business are reviewed.
Performance against climate-related metrics (outlined
intheKPIsand Targets section below) are assessed to
determine what actions are required to manage risks
andopportunities. Actions are assigned to the relevant
department heads, ensuring robust management across
allbusiness operations. For further details on the division
ofresponsibilities across the organisation andthe process
bywhich climate-related issues are communicated, including
upwards to the Board, please see ourGovernance Framework.
To embed a further level of accountability, we link climate-
related performance measures into our Remuneration Policy
for the Executive Directors’ bonuses.
Division of
Responsibilities
page 73
Remuneration
Committee Report
page 87-93
CLS Holdings plc Annual Report and Accounts 2025 39
Additional
information
Financial
statements
Corporate
governance
Strategic
report
ESG overview continued
Climate-related Financial Disclosure

Risk Management
Reporting Requirements (as per regulations) CLS Disclosure
Additional Information/
References
Description
ofhow CLS
identifies,
assesses,
andmanages
climate-related
risks and
opportunities
A)
Description of
CLS’processes
foridentifying
andassessing
climate-related
risks
Climate-related transition risks and opportunities are identified
and assessed by the CLS Sustainability team and documented
inthe Sustainability Risk Register. The Register is reviewed
bythe Sustainability Committee on at least an annual basis
and, where necessary, updated to reflect the ever-changing
regulatory landscape, global socio-economic conditions
andstakeholder demands, amongst other issues.
Physical risks are identified and assessed on both an asset
andportfolio level using the Jupiter Intelligence ClimateScore
Global platform. Using the latest climate science, we identify
risks and assess the level of exposure of our buildings to a
rangeof acute and chronic climate hazards, over different
time horizons, against different climate scenarios. Using the
platform, wealso quantify the level of risk from a financial
perspective, providing oversight of the cost of action versus
inaction. Like transitional risks/opportunities, all material
physical risks are summarised, as applicable, in the
Sustainability Risk Register which is reviewed and updated
annually. Both physical and transition risks and opportunities
are reviewed bytheSustainability Committee in accordance
with TCFD guidance and Companies (Strategic Report)
(Climate-related Financial Disclosure) Regulations 2022.
To align our assessment of CLS’ key areas of risk and
opportunity associated with climate change to future
reporting frameworks (e.g. ISSB standards), we will look at
updating our previous materiality assessment in our strategy
review, and update the Sustainability Risk Register, if required.
Sustainability
Report –
Sustainability Risk
Register Summary
2025 section
Sustainability
Report – Climate-
related Risks &
Opportunities
section
B)
Description of
CLS’ processes
formanaging
climate-related
risks
Fundamentally, climate-related risks and opportunities are
managed in accordance with CLS’ Group-wide approach to
riskmanagement. Once identified, physical and transitional
risksand opportunities are managed using the mitigations
andcontrols outlined within our Sustainability Report and
Climate Resilience Plan. Day-to-day management is owned
bythe Sustainability team in conjunction with the Group’s
Sustainability Committee, which meets on a quarterly basis.
Theteam has significant knowledge and experience of
climate-related and sustainability matters. In addition, we
utilise the services of expert third-party consultants where
necessary. Training and presentations are provided to the
Board and management to maintain up-to-date industry
knowledge. TheBoard has experience in advising both
listedand non-listed organisations on their approach to
ESGmatters in the built environment and across
corporatedisciplines.
Sustainability
Report – Climate-
related Risks &
Opportunities
section
Climate Resilience
Plan
Risk Management
section pages
53-60
CLS Holdings plc Annual Report and Accounts 202540
ESG overview continued
Climate-related Financial Disclosure continued

Reporting Requirements (as per regulations) CLS Disclosure
Additional Information/
References
Description
ofhow CLS
identifies,
assesses,
andmanages
climate-related
risks and
opportunities
C)
Description
ofhow CLS’
processes
foridentifying,
assessing and
managing
climate-related
risks are
integrated into
CLS’overall risk
management
The Group risk management strategy involves the ongoing
assessment and management of six principal risks, considered
those that have the greatest impact on our business strategy.
The principal risks act as a centralised risk repository involving
an annual evaluation of risk profiles and an analysis of the
impacts on the Group’s business model. It also provides the
structure to assign the appropriate controls. Sustainability is
represented within the six principal risks as climate-related
transition and physical risks are considered ‘key risks’ to the
business. All transition and physical risks are included in
theSustainability Risk Register which is maintained by the
Sustainability team and reviewed by the Sustainability
Committee on at least an annual basis or when a material
change in the risk landscape occurs. Climate-related risk
profiles are reviewed and relevant controls are assigned based
on the ongoing evaluation of the Sustainability Risk Register.
Furthermore, climate risks, opportunities and any necessary
responses are managed across the same time horizons used
by the Group to establish any emerging risks (page 60)
ensuring their inclusion in short-, medium- and long-term
business planning.
Sustainability
Report –
Sustainability Risk
Register Summary
2025 section
Risk Management
section pages
53-60
Strategy: Principal Risks & Opportunities
This section sets out the principal physical and transitional climate-related risks and opportunities arising in connection with our
operations and the scenarios, including timeframes, over which these risks and opportunities develop.
Only the material risks and opportunities to the business are outlined below. Further details and risk analysis are presented inthe
Sustainability Report including commentary on the updates to the ClimateScore Global platform data analysis methodology.
We have assessed the risks and opportunities presented to the business using two possible climate change scenarios: a 1.8ºC
global warming trajectory (aligned with Shared Socioeconomic Pathway (SSP) 1 and Representative Concentration Pathway (RCP)
2.6); and a 4.4ºC trajectory (aligned with SSP 5 and RCP 8.5). Risks and opportunities are also considered against three different
timeframes: short- (< 1 year); medium- (until 2030); and long-term (beyond 2030). The two climate change scenarios ensure we
identify, assess and manage risks and opportunities across a full spectrum of global warming scenarios. The time frames against
which we assess risks and opportunities have been selected to align with the Group’s overall approach to risk management (please
see page 60) which establishes the time horizons the Group uses. The timeframes used mean we are able to capture climate-
related risks and opportunities in an optimal way given the nature of the business and how it operates.
Time Horizon Our Approach
Short term
(< 1 year)
Our annual strategic budgeting process combined with the individual NZC Asset Management Plans
(seepage 36), ensures that the necessary resource and capital required to mitigate the impacts of climate
change and maximise any opportunities, isidentified and allocated to each property on a yearly basis.
Medium term
(until 2030)
We are acting now, until 2030, to meet the targets set out within our NZC Pathway. Our NZC Asset
Management Plans ensure we respond to both transitional and physical climate-related risks whilst
decarbonising our operations in line with our science-based target timeframe.
Long term
(beyond 2030)
Our assets typically have a lifespan of over 50 years. The identification of long-term risks (i.e.beyond
2030) is thus critical for our business model, especially investment allocation and development decisions.
Consideration of long-term risks and opportunities is fundamental in ensuring our portfolio remains resilient
in the decades to come.
CLS Holdings plc Annual Report and Accounts 2025 41
Additional
information
Financial
statements
Corporate
governance
Strategic
report

Strategy: Climate-related Physical Risks Summary Table
We have used the Jupiter Intelligence ClimateScore Global platform to perform analysis and prioritisation of climate-related
physical risks associated with well-known hazards. These are summarised in the table below. More details of the analysis from
theClimateScore Global platform is provided in the risk tables in the Sustainability Report including hazard likelihood and impact
ratings. Inthe review of risks and opportunities by the Sustainability Committee, it was agreed there are currently no material
opportunities associated with physical climate change related to our current business model over and above providing high
qualitybuildings with strong sustainability credentials which meet regulatory standards.
Scenario Short term (< 1 year)
Medium term
(until2030) Long term (beyond 2030)
SSP 1/RCP 2.6
Approximately
1.8°C warming by
2100. A scenario in
line with the United
Nations Climate
Change Agreement
of 2015. According
to the IPCC,
itrequires
thatgreenhouse
gasemissions
startdeclining
immediately and
reach zero by 2100.
This relies on global
implementation
ofstringent
climatepolicies.
Low risks
Across the
portfolio, hazard
levels are highest
for Flooding and
Drought.
A 1 in 100-year
flood event, with
water depth
exceeding 2m,
would impact 8%
ofthe portfolio.
48% of the
portfolio could
beexposed to
drought which
could impact
building operations
without appropriate
mitigations
andcontrols.
Impacts
Disruption at
buildings leading
toreactive
maintenance adding
to operating costs
and possible tenant
dissatisfaction.
No material
change from
the short term
Marginal increases
inrisks
No significant
change to overall
portfolio exposure.
Forexample, slightly
warmer summers
areexpected
butthese do not
pose significant risk
of heat stress.
Impacts
Slightly increased
disruption at
buildings leading to
increased reactive
maintenance costs
and possible tenant
dissatisfaction.
SSP 5/RCP 8.5
Approximately
4.4°C warming by
2100. A ‘business
as usual’ high-
emissions scenario.
This scenario is
consistent with
nomajor policy
changes or
industry moves
toreduce
emissions globally
leading to high
atmospheric GHG
concentrations.
Low risks
Flooding and
Drought remain the
most significant
hazards in a
high-emissions
scenario.
The change to the
risk profile
compared with SSP1
is immaterial (given
thetimeframe).
Impacts
Impacts as per
theSSP1 warming
scenario.
No material
change from
the short term
Material increases
in risks
Portfolio impacted
by hotter, drier
summers; warmer,
wetter winters and
more frequent
severe weather
events. Sea level
riseand increases
inriver peak flows
put additional strain
on the flood
defences which
maycause flood
defence failures
across the regions.
Impacts
Increased disruption
at buildings leading
tosignificantly
increased reactive
maintenance
costsand tenant
dissatisfaction.
Significantly
increased insurance
premiums.
Increased capital
allocation for
buildingretrofit/
refurbishment
projects to meet
potentially higher
insurance
requirements/
buildings standards.
CLS Holdings plc Annual Report and Accounts 202542
ESG overview continued
Climate-related Financial Disclosure continued

Strategy: Climate-related Transitional Risk & Opportunities Summary Table
Climate-related transitional risks were considered during the development of the NZC Pathway. These are reviewed at least
annually by the Sustainability Committee to ensure that any material changes are captured. More detail is provided in the risk tables
in the Sustainability Report including hazard likelihood and impact ratings. Note that we have blended the material opportunity of
increased occupier demand forlow-carbon buildings with the risk of failing to provide net zero aligned buildings, asit can be seen
both ways and the resulting actions/mitigation is the same.
Scenario Short term (< 1 year)
Medium term
(until2030) Long term (beyond 2030)
SSP 1/RCP 2.6
SSP 1/RCP 2.6
Approximately
1.8°C warming by
2100. A scenario in
line with the United
Nations Climate
Change Agreement
of 2015. According
to the IPCC,
itrequires
thatgreenhouse
gasemissions
startdeclining
immediately and
reach zero by 2100.
This relies on global
implementation
ofstringent
climatepolicies.
Medium risks
Associated with
existing regulations,
for example,
MEESand Décret
Tertiaire as well
aslocal planning
requirements
favouring low
embodied carbon
development
schemes. In
addition, there is
increasing occupier
and investor
demand for
assetswith high
sustainability
credentials.
Impacts
Capital allocation
forbuilding retrofit/
refurbishment
projects as per
ourNZC Pathway
and Sustainability
Strategy.
No material
change from
the short term
High risks
Impact of
regulations including
MEES and Décret
Tertiaire.
Carbon tax –
potential for the
builtenvironment
tobe included in
UKEmissions
Trading Scheme.
Operational and
embodied carbon
obligations for
development
schemes.
Continued increase
in occupier and
investor demand
forESG.
Impacts
Capital allocation
forbuilding retrofit/
refurbishment
projects as per
ourNZC Pathway
and Sustainability
Strategy.
Increased operating
costs e.g. cost
ofenergy.
SSP 5/RCP 8.5
Approximately
4.4°C warming by
2100. A‘business
as usual’ high-
emissions scenario.
This scenario is
consistent with
nomajor policy
changes or
industry moves
toreduce
emissions globally
leading to high
atmospheric GHG
concentrations.
Medium risks
Risks remain
consistent with
theSSP 1 scenario.
Impacts
Impacts remain
consistent with
theSSP 1 scenario.
No material
change from
the short term
Material increases
in risks
Like all other
commercial
landlords operating
in Europe, as
adaptation measures
are adopted to
copewith changes
inclimate and
theassociated
physical risks.
Impacts
Increased capital
allocation for
buildingretrofit /
refurbishment
projects outside
ofthat captured
inNZC Pathway
andSustainability
Strategy.
Increased operating
costs e.g. cost
ofenergy.
CLS Holdings plc Annual Report and Accounts 2025 43
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Strategy: Business Model & Strategy Resilience
The tables below outline the financial and strategic impacts of transitional and physical climate-related risks on CLS’ operations
and explain how our business strategy is designed to mitigate and respond to these impacts, ensuring our portfolio and business
model remain resilient in the long-term. We only outline the impact of transitional risk under SSP 1/RCP 2.6 as this climate scenario
requires the greatest level of transition and aligns with our financial and strategic planning. We explain the impact of physical risk
inboth climate scenarios.
Scenario 1 – SSP 1/RCP 2.6
Summary risk potential Financial impact Strategy impact potential Financial plan impact potential
Physical The capital allocated to deliver
the targets set out in our NZC
Pathway, Sustainability Strategy
and Climate Resilience Plan,
amounts to an estimated
£65 million between 2021
and2030. This investment will
ensure the necessary adaptation
measures and mitigating controls
are implemented across our
portfolio. Furthermore, our
properties are insured against
allweather hazards and critical
incidents (e.g. flooding) and
following discussions with our
insurance brokers, there will be
nomaterial change to our
insurance premiums in the
medium term, including for
buildings considered at higher
riskof flooding, for example.
Our active asset management
approach, in line with our
Sustainability Strategy, NZC
Pathway, Climate Resilience
Planand overall Group strategy,
means our properties undergo
aprogramme of upgrades and
future proofing to address
physicalclimate risks. This process
is manageable within current
planned capital allocations.
Assuch, we are confident our
business model will remain resilient
in the long term.
As above, annual budgets factor
ininvestment aligned with the
NZCPathway, Sustainability
Strategy and Climate Resilience
Plan meaning we expect no
material impact on our future
financial planning.
Transitional The Group’s NZC Pathway is
underpinned by individual
property energy audits which
identify energy and carbon
savingopportunities. As per the
above, the investment allocated
to deliverthe NZC Pathway and
auditfindings (as well as our
Sustainability Strategy and
Climate Resilience Plan)
amountsto an estimated
£65 million. We have integrated
the energy audits into individual
Asset Management Plans to
enable strategic decisions about
the refurbishment, sale or full
redevelopment of our assets to
be made. In addition, we report
against all relevant mandatory
GHG, energy and ESG reporting
frameworks as well as several
voluntary disclosures (see page
30), ensuring we meet all current
and future regulation.
Our Sustainability Strategy, NZC
Pathway and Climate Resilience
Plan align with our business model
and overall strategy. Notably,
ouractive asset management
approach continuously upgrades
our portfolio of buildings to meet
energy and carbon targets and
ismanageable within current
planned capital allocations.
Giventhis, our analysis suggests
our business model and strategy
remain resilient in the short to
medium term to climate-related
transition risks in all scenarios by
following the actions and targets
inour Sustainability Strategy,
NZCPathway and Climate
Resilience Plan.
In the short term, annual budgets
already factor in investment
alignedwith the NZC Pathway
andSustainability Strategy. In the
longer term, our strategic budgets
and investment programme
includes the estimated £65 million
from 2021 to 2030 to prevent
obsolescence (i.e. not meeting
future climate standards) and
creates a resilient portfolio.
Relative to our peer group
ofcommercial landlords with
properties in UK, German
&French cities, we see no
majordifferences.
CLS Holdings plc Annual Report and Accounts 202544
ESG overview continued
Climate-related Financial Disclosure continued

Scenario 2 – SSP5/RCP 8.5
Summary risk potential Financial impact Strategy impact potential Financial plan impact potential
Physical The £65 million investment
allocated to deliver our NZC
Pathway, Sustainability Strategy
and Climate Resilience Plan,
between 2021 and 2030, will
ensure comprehensive and
robust mitigation measures and
controls are implemented across
our portfolio. Our analysis of the
short-, medium- and long-term
hazard levels associated with
climate change across the
UK,Germany and France
(seeClimate-related Risks &
Opportunities section of the
Sustainability Report), highlight
some adaptation measures will be
necessary but this will be covered
by the capex we have already
identified and allocated in the
medium-term. Furthermore,
anyphysical modification costs
(i.e. potential costs associated
with introducing additional
flooddefences or overheating
protection to properties)
areconsidered non-material
asproject costs are likely
toberelatively insignificant
andonly affect a small minority
ofour buildings.
Our analysis gives us confidence
inthe resilience of our strategy,
aswe are supporting the transition
toa low-carbon economy and
society whilst managing the
impact of climate-related risks
toour portfolio. Although it does
not undermine our overall model
as a commercial landlord, we
recognise our strategy and
adaptation measures may need
toevolve in the long term under
a>4ºC warming (i.e. SSP 5)
scenario. This may involve
measures including divestment
ofassets which are less resilient
toextreme heat and rainfall
(aspart of a holistic approach
toasset assessment), or
investment into additional building
infrastructure to limit the impact
of flooding, coastal surge and
extreme heat. This scenario
couldalso result in changes to
ourcustomers’ and supply chain
partners’ businesses, including
business failures, or supply chain
disruption. Increased due
diligence in supply chain selection
may be required, particularly
considering the sourcing of
construction materials which may
be processed or manufactured in
countries wherethe effects of
climate change are more extreme.
We do not expect this to impact
tenant demand for workspace.
In the medium- to long-term,
whilst our Sustainability Strategy,
NZC Pathway and Climate
Resilience Plan still apply, we
notethat capital allocations and
operating costs (e.g. insurance
premiums) may exceed current
planning to meet future standards.
However, we fully expect this
willbe in line with our peer group
of commercial landlords with
properties in UK, German and
French cities.
CLS Holdings plc Annual Report and Accounts 2025 45
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Metrics & Targets
Metrics for tracking climate-related transition and physical risks are shown in the tables below. More details on the targets
andcalculations are in the referenced documents. Some metrics are independently assured as indicated in the tables.
Note that most targets and metrics used to manage climate-related transitional risk are drawn from our Sustainability Strategy
andNZC Pathway whilst targets for managing physical risks are taken from our Climate Resilience Plan. Interim focus areas and
targets are established and reviewed year-on-year by the Sustainability Committee.
As per the Scope, Boundaries & Methodology 2025 section of the Sustainability Report, GHG emissions are calculated in line
withthe GHG Protocol guidance. Further detail on the interlinkage between our metrics and targets and risks and opportunities
canbe found in the Sustainability Report.
Climate-related Transition Risk & Opportunities – Metrics & Targets
Metric EPRA/SASB Reference 2025 2024 2023 Targets & References
Scope 1 and 2
emissions (tCO
2
e)
GHG-Dir-Abs,
GHG-Indir-Abs
Elec-Abs
10,519 11,903
2
12,001 42% reduction in
absolute Group
Scope 1 and 2
emissions by 2030
(see NZC Pathway/
SBTi aligned target)
Total Group energy
consumption (MWh)
Total-Energy-Abs 47, 305 51,897
2
52,630 N/A
Proportion of
electricity sourced
from renewable
sources (%)
Elec-Abs 98.9% 98.5%
2
98.0%
2
100%
Total fuel consumed
on site (MWh)
Fuels-Abs 17,922 21,525
2
21,339 N/A
Building emissions
intensity by floor
area (kWh/m
2
/year)
Energy-Int 72.9 79.8
2
104.4 85 kWh/m
2
/year
(aligned with 1.5ºC
CRREM pathway)
Scope 3 emissions
(tCO
2
e) and
selected Scope 3
categories split
GHG-Indir-Abs 21,918
Selected Scope 3
categories as per
page 37
25,941
2
37, 47 2 Physical intensity
reduction by
20%per m
2
NLA
(See NZC Pathway/
SBTi aligned target/
CRREM aligned
target)
EPC (Energy
Performance
Certificate) split
ofUK portfolio and
Décret Tertiaire
compliance
proportion
Cer t-Tot 84% EPC A, B or C
16% EPC D
85% of portfolio in
France is already
compliant with
the2030 Décret
Tertiaire energy
requirements
82% EPC A, B or C
18% EPC D or below
80% EPC A, B or C
20% EPC D or below
Fully MEES
compliant in
UK– regulation
under review
Fully Décret
Tertiaire compliant
in France
1 Metric performance is independently assured in 2025.
2 Figure restated due to use of revised calculation method or data.
CLS Holdings plc Annual Report and Accounts 202546
ESG overview continued
Climate-related Financial Disclosure continued

Climate-related Physical Risk & Opportunities – Metrics & Targets
Metric EPRA/SASB Reference 2025 2024 2023 Targets & References
Number and %
byvalue of assets
located in areas
exposed to high
orhighest risk of
inland, coastal and
flash flooding –
current & 2030
(SSP 5 Scenario)
1,2
N/A 7 assets
8% by value
2030 (SSP 5
Scenario): 7
7 assets
8% by value
2030 (SSP 5
Scenario): 7
7 assets
8% by value
2030 (SSP 5
Scenario): 7
Less than 5% assets
(by value) by 2035
% Assets with
measures installed
to mitigate flooding
(highest risk areas)
1
N/A 0% 0% 0% 100% by 2035
% Total water
withdrawn in
regionswith high
orextremely high
baseline water
stress
SASB IF-RE-140a.2 48% 52% 42% 35% by 2035
% Assets with
adaptation
measures to
mitigate
overheating
N/A Not yet measured Not yet measured – 100% by 2035
1 As per ClimateScore Global definitions.
2 Methodology for calculation included in the Sustainability Report.
CLS Holdings plc Annual Report and Accounts 2025 47
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2025 Focus Areas and Performance
Target Performance
Stakeholder Engagement
Increase engagement with our tenants and supply chain,
including data collection and reporting, to improve
sustainability KPIs (e.g. Scope 3 GHG emissions, energy,
waste, water and social value)
Partially
Achieved
• Waste management engagement
continuedin the UK
• Continued work on providing data
fortenants sustainability reporting
• Supplier specific Scope 3 GHG data
collection to commence in 2026
Supply Chain
Ensure compliance with prompt payment code and maintain
supplier payment rates
Achieved • 98% of UK SMEs paid within 30 days
and99% of all suppliers paid within
60days
Social Value
Maintain social value generation focusing on measures
under ‘Improved employability of young people’ outcome
Achieved • Reached £388,657 social value
generated by our own work
• Continued youth work with National
Literacy Trust and Black Prince Trust
Regulation & Risk
Ensure the business is working towards compliance with key
future regulations (i.e. MEES, Décret Tertiaire, Décret BACS
and ISSB standards/TCFD)
Achieved • MEES (UK) and Décret Tertiaire (FR)
compliance is on track. 84% of UK
buildings now EPC A, B or C
• Pilot Décret BACS projects underway
attwo properties in France
• Sustainability data platform in place
forfuture reporting requirements
Reporting
Improve the efficiency and effectiveness of sustainability
data reporting and collection internally and externally
Partially
Achieved
• Sustainability data platform analytics
usedfor internal reporting
• Further internal data platform upskilling
ofthe wider teams to take place in 2026
• Tenant reporting using data platform
delayed until 2026
Reputation & Ratings
Build CLS’ reputation externally on sustainability and ensure
EPRA sBPR award and GRESB rating are maintained
Partially
Achieved
• EPRA sBPR Gold Award
• GRESB 4 stars
• Greater occupier communication on
sustainability matters planned in 2026
Key Social & Governance Highlights
Equivalent social value generated
(excluding supply chain)
£388,657
Employee volunteering
hours given
567
Maintained Living Wage
Employeraccreditation
EPRA sBPR
Gold award achieved
CLS Holdings plc Annual Report and Accounts 202548
ESG overview continued
Social & Governance Summary

As at 31 December 2025,
CLS had 86 employees
looking after ourproperty
portfolio across three
countries.
Attracting, motivating and retaining a diverse and high-
performing team is key to the long-term success of our
business. This includes offering attractive remuneration
andbenefits packages, providing learning and development
opportunities, maintaining a continuous dialogue with our
employees to increase engagement, as well as creating a
supportive working environment that encourages diversity,
promotes equity and fosters inclusion and teamwork.
Key aspects of our approach are summarised below with more
detail and data also included in our Sustainability Report.
A breakdown of our employee numbers and gender diversity
statistics, as required by the Companies Act 2006, can be
found on page 34 and for the Board and senior management
on page 78.
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49CLS Holdings plc Annual Report and Accounts 2025
People

Recruitment
We continue to focus on attracting, motivating and retaining
thebest people to support the achievement of our goals.
Policies and procedures are in place to support objective and
inclusive recruitment processes and to encourage a diverse
range of candidates, including those with non-traditional routes
into our sector.
We aim to treat all employees and applicants consistently
regardless of gender, gender reassignment, marital or civil
partnership status, age, race (including: colour, ethnic or
national origin), religion or belief, disability or sexual orientation.
Conditions or requirements, including age limits, which cannot
be justified objectively are not applied within our processes.
Entry and progression within the business is solely determined
by the role requirements for skills, knowledge and experience
aswell as aptitude.
Training and Development
We run a comprehensive onboarding programme for new
starters to ensure that they quickly understand our purpose,
vision and our values, and can access the resources and people
required to be successful in their roles.
All employees are actively encouraged to undertake learning
and development activities to develop both personally and
professionally as well as ensure their knowledge remains current.
This includes seminar or webinar attendance, e-learning, internal
’lunch & learns’ or workshops to share knowledge and external
networking events as well as more traditional classroom based
courses on subjects such as interpersonal or software skills.
Each employee is allocated a personal training budget to
useforprofessional development and annual training hours
arerecorded. In addition, we support employees to attain
professional qualifications in their specialist areas through
sponsorship of their studies and time off for revision
andexaminations.
We also ensure that our people managers have the support
thatthey need to manage their teams effectively and promote
the value of continuous development.
Remuneration
Our overall remuneration and benefits package is designed
toattract, motivate and retain employees. Our remuneration
structure combines salary and benefits with an annual bonus
and a long-term retention bonus, based on the Group’s
medium-term performance. Packages are reviewed and
benchmarked as needed to ensure we remain competitive
ineach of our regional markets.
In addition we continue to ensure that all UK employees are
paidat least the London Living Wage and we adjust this annually
as part of our salary review process, four months ahead of the
May implementation date.
We support equal pay for work of equal value and consider this
during the annual salary review and discretionary bonus process,
although we do not disclose gender pay gap data due to the low
employee sample size.
We also encourage employee share ownership which aligns
both performance and reward. The Group has a share incentive
plan, which is open to all employees in the UK, Germany and
Luxembourg. The scheme matches employee contributions
inthe ratio of 1:1.
Engagement
Our transparent and non-hierarchical approach to management
aims to encourage everyone to share opinions and ideas and
tocreate greater trust from and engagement of our employees
We have a very clear vision and values which are
communicatedto employees during recruitment and induction
processes and are used to assess performance during the
annual appraisal process. This supports the maintenance of
apositive culture, ensures clarity of direction and encourages
constructive behaviours which support the achievement of
ourbusiness objectives.
Our Senior Independent Director, Elizabeth Edwards, hosted
‘townhalls’ twice during 2025 for each office and all employees
were invited to attend to enable the Board to engage directly
with employees, share information and hear their views. The
summary output of these discussions was shared with the
Board. A new approach, which aims to increase the level of
interaction between all members of the Board and employees
will be taken in 2026. More details are included in the Workforce
Engagement section on page 71.
CLS Holdings plc Annual Report and Accounts 202550
People continued

With a predominantly flat management structure, all employees
can be quickly and effectively informed of matters concerning
their interests and the financial and economic factors affecting
the business. This includes quarterly strategic updates to all
employees from the CEO and senior leadership as well as
dedicated intranet and an internal social media channel. These
are used to promote new policies, procedures and benefits,
Group activities, employee social and volunteering events,
andto recognise individual or team achievements.
On an individual basis, employees have two appraisals/
performance review conversations each year. All employees
agree annual objectives with their manager which are tracked
and adjusted during the year as needed to ensure their
continued motivation as well as alignment to, and achievement
of, business goals.
Welfare
The health, safety, and wellbeing of our employees remains our
top priority. We continually strive to maintain our low workplace
incident record and have implemented comprehensive health
and safety protocols.
Employees have the opportunity to participate in schemes
oractivities designed to promote general health and wellbeing
such as private healthcare, an employee assistance programme,
sports club or gym contributions, health checks, financial
wellbeing support, social events and volunteering, which
arelocally determined by region.
We also offer all employees flexible start and finish times, whilst
maintaining core hours, in order to maintain a healthy balance
between home and work commitments.
As part of our commitment to having an open and transparent
culture, we ensure there is a process for employees to raise
concerns via our dedicated whistleblowing process, incorporating
a hotline, available in different languages, together with a web
portal. An update is provided to the Audit Committee annually
and there were no incidents reported during the year.
CLS Holdings plc Annual Report and Accounts 2025 51
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It is a core focus of the Board that CLS manages
its activities so that the health and safety of its
employees, customers, advisors and contractors,
and the general public is not compromised.
The Group sets health and safety objectives
covering our workforce and portfolio which are
monitored by the Health and Safety Committee.
All countries we operate in maintain and follow their own
localhealth and safety policies in line with local regulations.
Theyreport issues, if they arise, to the Chief Executive Officer
and Health and Safety Committee. We also employ accredited
advisors in each country to advise on health and safety matters.
Separately, we engage specialists for management and
reporting of health andsafety for major refurbishment
anddevelopment projects in line with best practice.
Our Health and Safety Committee coversissues related to
CLS’assets andemployees. Chaired by the Chief Operating
Officer, the Committee comprises Facilities Managers,
Property Managers, employees and advisors. TheChief
Executive Officer also attends Health and Safety Committee
meetings to remain informed. The Committee reports
quarterlyto the Board and updates are provided at each
scheduled board meeting.
This reporting process has worked effectively throughout
theyear and has ensured ongoing compliance with health
andsafety legislation in all operating countries.
UK
Each managed or occupied UK property undergoes an annual
risk assessment against which our targets can be measured.
Our targets address risk management and control; document
compliance; and incidents.
Our retained external health and safety consultant attends the
quarterly Health and Safety Committee meetings and presents
a report on their findings from the UK portfolio and measures
our performance against these targets. Asummary of the
report is provided totheBoard.
This year, accident frequency remained well below the national
rate and our external health and safety consultant considered
our risks remain well managed and to a high standard.
Germany
CLS’ buildings in Germany comply with building permits and are
regularly reviewed by local authorities to ensure legal compliance.
Facilities governed by special regulations (e.g. laboratories)
arereviewed more frequently by a certified specialist.
Services (such as fire safety, electricity supply, ventilation,
liftsand heating) are reviewed as required by law or business
standards and at least once a year by authorised personnel.
Reports and protocols are reviewed by the CLS operational
team. They also ensure that all scheduled reviews are
conducted in accordance with local laws. Facilities management
contractors provide comprehensive reports on a monthly basis
to the CLS operational team.
The CLS operational team reports on health and safety matters
to the Health and Safety Committee, where it was noted that
risks remain well managed and in compliance with local regulations.
France
All buildings must comply with the Code du travail (Labour Code),
which defines our responsibilities.
Each tenant oversees their own security on their premises
inaccordance with theCode and security obligations of
thebuilding.
The building facilities (such as the electricity supply and building
and mechanical safety checks) are reviewed at least once a year
by a statutory controller. These reports are reviewed and acted
upon by our operational team. This process is audited externally
twice a year and the results of those audits are discussed at
theHealth and Safety Committee. As at the date ofthis report,
100% of regulatory audit reports have been processed and
theexternal audit confirmed that risk management was at
ahighlevel.
Facilities management contractors in France
provide comprehensive reports on a monthly
basis to the operational team.
As at the date of this report,
100%
of all identified risks were under control
99%
document compliance
Zero
accident rate
CLS Holdings plc Annual Report and Accounts 202552
Health and safety

Our Risk Management Structure
Risk management is a critical component of the operation of our business, allowing us to take advantage of opportunities
whilstensuring that we do not expose the business to excessive risk, thereby generating shareholder value over the long
terminasustainable and compliant manner.
The Board
• Sets our overarching risk appetite and ensures that we manage risks appropriately across the Group within arobust internal control framework.
TheBoarddelegates oversight of risk management activities to the AuditCommittee.
• Annual assessment of principal and emerging risks.
The Audit Committee
• Key oversight function for risk management, internal controls and viability.
• Receives updates on risks and the control environment including the results of any internal control review procedures and other assessments
undertakenin the period at each Audit Committee meeting.
• Reports to the Board on the effectiveness of the external auditors, risk management and internal controls.
Management Committees
• Several management committees have the responsibility for overseeing
andmitigating risks associated with safety, sustainability, treasury and
energyprocurement amongst other things.
• Responsible for the day-to-day operational oversight of risk management.
• Major business-wide decisions such as property acquisitions, disposals,
significant strategy changes and the wider changing geopolitical landscape
are discussed. These decisions are assessed with reference to risk appetite.
The Senior Leadership Team
• Comprised of the CEO, the CFO, the COO and senior
members ofthe property operations, finance and human
resources teams.
• Reviews and monitors the Group’s principal and emerging
risks takinginto account the appetite for, and impact of,
riskin all areas ofthe business. These are presented to the
Audit Committee everysix months for further discussion.
Group Finance
• Responsible for the management of the Group’s risk and internal controls.
• Conducts regular testing and monitoring of material controls.
• Responsible for following up and tracking any process or control improvements.
• The Group has policies set by the Board that govern key risks across the business. These are regularly reviewed to ensure they are up to date
and comply with laws and regulations
Business units
• Risk management embedded in day-to-day operations including identifying, evaluating and reviewing within these units.
• Execute strategic actions in compliance with the Group’s objectives and policies.
What we did in 2025
• Implemented a Failure To Prevent Fraud (‘FTPF’) Policy
andstaff training in advance of the FTPF provisions of the
Economic Crime and Corporate Transparency Act 2023
which became enforceable from September 2025.
• Upgraded the IT firewall at our London head office to ensure
our defences against potential cyber attacks remain robust.
• Addressed internal control recommendations from our
external auditor.
• Progressed towards providing a declaration of effectiveness
of material controls by 31 December 2026 by performing
testing on a selection of our material controls.
• Implemented minor process improvements based
onobservations from control testing.
• Refinanced, extended or repaid £373.7 million of debt
fallingduein2025.
Our priorities for 2026
• Increasing letting activity to reduce vacancy
andimproveearnings.
• Executing sales to reduce LTV to our target range
of35%-45%.
• Completing refinancings due in 2026.
• Investing in our properties to unlock the value within
theportfolio.
• Continuing to deliver on our roadmap activities for the
UKGovernment’s corporate reforms. This includes:
– agreeing the cadence for and performing cycles
ofmaterialcontrols testing; and
– preparing a draft of the material controls declaration
including any ineffectiveness explanations.
CLS Holdings plc Annual Report and Accounts 2025 53
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Risk management

Management of risk throughout the Group
2. Prioritisation
3. Controls and responses
4. Governance and reporting
5. Monitoring
1. Identification
1. Identification
We proactively identify potential risks across all processes
andthe wider environment that could impact our organisation.
2. Prioritisation
We evaluate and rank risks based on their potential impact
andlikelihood of occurrence. Using risk matrices and scoring
systems, we focus our resources on the most critical risks.
Thisprioritisation process allows us to address the most
significant threats first, ensuring that our risk management
efforts are both effective and efficient.
3. Controls and responses
We develop and implement strategies to mitigate or manage
risks. We design controls to prevent or reduce theimpact of
risks and plan responses for when risks materialise. Our controls
include preventive, detective, andcorrective measures.
4. Governance and reporting
We have established a robust governance framework to
oversee our risk management. Roles and responsibilities are
clearly defined, and policies and procedures are set toensure
accountability. Regular reporting to senior management and
theBoard keeps them informed of therisk landscape and the
effectiveness of our risk management activities, ensuring
transparency andoversight.
5. Monitoring
Continuous monitoring is a key part of our risk management
process. We track identified risks, assess the performance
ofcontrols, and detect new risks. Regular reviews and updates
to our risk management plan help us adapt to changes in the
internal and external environment, ensuring that our risk
management practices remain effective andrelevant.
6. Audit and assurance
We conduct independent reviews and audits to provide
assurance that our risk management process is functioning as
intended. Reviews both internally and by our external auditors
help evaluate the effectiveness of our controls and compliance
with policies. These assurance activities help us identify gaps
and areas for improvement, ensuring that we maintain a robust
risk management framework.
Based on the size of its balance sheet and market capitalisation,
CLS is a large business, but it is relatively small based on the
number of people working directly in the business. The small
number of employees and our internal control structures allow
the Group to safeguard its assets, prevent and detect material
fraud and errors and ensure accuracy and completeness
oftheaccounting records used to produce reliable financial
information, while still allowing the flexibility to take advantage
of opportunities tofurther the business strategies of the Group.
6. Audit and assurance
CLS Holdings plc Annual Report and Accounts 202554
Risk management continued

Our Assessment and Appetite for Risk
Impact
Very highHigh
MediumLowVery low
Very unlikely Unlikely Possible Likely Very likely
Likelihood
Key: 1. Property
2. Sustainability
3. Business Interruption
4. Financing
5. Political & Economic
6. People
Risk assessment
As part of annual business planning, the Board undertakes
anassessment of the risks that could threaten the Group’s
strategic objectives, future performance, solvency or liquidity.
We use a risk scoring matrix to consider the likelihood and
impact of each risk at regular points throughout the year.
Weevaluate risks on an inherent (before mitigating actions)
andresidual (after mitigating actions and controls) basis.
Todoso, we identify principal risks (current risks with relatively
high impact and certainty) and emerging risks (risks where
theextentand implications are not yet fully understood).
The chart above illustrates the relative positioning of the
potential impact and likelihood of the principal risks on the
Group’s strategic objectives, financial position or reputation
after mitigation. Internal or external forces, or a combination
ofboth, will continue to have the potential to alter this
positioning and therefore these risks are closely monitored
onacontinual basis.
Throughout the year, the Board monitored the changing
economic and market situation and considered its effect
onthebusiness, as it will continue to do going forward.
Theimpact of the macro-economic factors is discussed
intheCEO review and the country reviews.
Our principal risks are set out on the following pages 56 to59.
Inevaluating these risks, any potential impact asaresultof
market uncertainties has been considered. Changesin the risk
profile between 2024 and 2025 are identified on these pages.
Risk appetite
The Board reviews our risk appetite at least annually. The risk
appetite of the Group is assessed with reference to changes
that have occurred, or trends that are beginning to emerge
inthe external environment, and changes in the principal risks
and their mitigation. These will guide the actionswe take in
executing our strategy. Whilst our appetite forrisk will vary
overtime, in general we maintain a balanced approach to risk.
Risk appetite vs risk assessment
The Board’s risk appetite in relation to the Group’s principal
riskassessment is broadly aligned. As shown in the detailed
description of our principal risks on pages 56 to 59 there
isdivergence of risk appetite and risk status in relation to
thefinancing and sustainability risks. The Board accepts
thatthere are factors in relation to these risks that are outside
the Group’s control and are likely to change over time.
Mitigating actions have been put in place to ensure financing
risk is adequately managed and monitored to reduce the
potential impact on theGroup. We expect the sustainability
riskappetite and assessment to align in the medium-term.
TheBoard recognises that notallrisks can be fully mitigated
andthat they need to bebalancedalongside commercial,
andpolitical and economicconsiderations.
The Group uses five risk categories to allocateits risk appetite:
Very low: Avoid risk and uncertainty
Low: Keep risk as low as reasonably practical
with very limited, if any, reward
Medium: Consider options and accept a mix of low and
medium risk options with moderate rewards
High: Accept a mix of medium and high-risk
options withbetter rewards
Very high: Choose high risk options with potential
for highreturns
On reviewing our risk appetite, the Board recognised that
thereare factors outside of the Group’s control, for example
the property market environment, that influences risk appetite
in any one year.
1
4
5
2
3
6
CLS Holdings plc Annual Report and Accounts 2025 55
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Our principal risks
Our principal risks and risk assessments are discussed over
thefollowing pages along with: any change in their risk profile
since the last year end; the current direction of travel; and our
risk mitigation actions and plans. Whilst we do not consider
thatthere has been any material change to the nature of the
Group’s principal risks over the last 12 months, several risks
remain elevated as a result of the challenging external
environment and significant ongoing uncertainty.
The following pages are only focused on our principal risks
being those that have the greatest impact on our strategy
and/or business model. In addition, there are many lower
leveloperational and financial risks which are managed
onaday-to-day basis through the effective operation
ofacomprehensive system of internal controls.
Key to strategy:
We acquire the right properties
We secure the right finance
We deliver value through active
management and cost control
We continually assess whether
to hold or sell properties
We reward shareholders,
customers and employees
Key to change in risk profile in year/direction of travel:
Increasing Decreasing No Change
1
Property
Market fundamentals and/or internal behaviours lead to adverse changes to capital
values of theproperty portfolio or ability to sustain and improve income generation
from theseassets.
Link to strategy:
Key risks:
• Cyclical downturn in the
property market which
maybe indicated by
anincrease in yields
• Changes in supply of
spaceand/or demand
(vacancy rate)
• Poor property/facilities
management
• Inadequate due diligence
and/or poor commercial
assessment of acquisitions
• Higher tenant expectations
with respect to fit outs
andamenities
• Failure of tenants
• Rising business rates
• Insufficient health and
safetyrisk protection
• Building obsolescence
Mitigation:
2025
• Maintained strong relationships with our occupiers, agents and
directinvestors active in the market and actively monitored trends
inour sectors
• Asset management committees meet once amonth to discuss
eachproperty
• Targeted capital expenditure with a focus on sustainability
tomeettenantdemands
• Rigorous and established governance approval processes
forcapitaland leasing decisions
• Engagement with tenants to understand their needs and
spacerequirements
• Disposal of properties with low yield, limited assetmanagement
potential or unfavourablybalanced risk/reward ratio
• Continued monitoring of covenant strength of tenants
• High quality provision of property and facilities management
services with our in-house team
• Health and Safety Committee met throughout the year
andprovidedregular updates to the Board
• Monitored changes in the regulatory environment, particularly
inrelation to the Building Safety Act 2022 which may impact
thepermitted uses and viability of future schemes
Appetite:
Low to High
Risk assessment:
Low to High
Change in risk
profile in year:
Direction
of travel:
KPIs:
• TSR(R)
• TAR
• EPS
CLS Holdings plc Annual Report and Accounts 202556
Risk management continued

2
Sustainability
As a result of a failure to plan properly for, and act upon, the potential environmental
and social impact of our activities, changing societal attitudes, and/or a breach of any
legislation, this could lead to damage to our reputation and customer relationships, loss
of income and/or property value, and erosion of shareholder confidence in the Group.
Link to strategy:
Key risks:
Transition risks
• These include regulatory
changes, economic shifts,
obsolescence, and the
changing availability
andpriceof resources.
Physical risks
• These are climate-related
events that affect our
supplychain as well as
thebuildings’ physical form
and operation; they include
extreme weather events,
pollution and changing
weather patterns.
Mitigation:
2025
• Monitoring and oversight by the Sustainability Committee
overkeyprojects and regulatory requirements
• Detailed sustainability risk registers maintained, reviewed,
andupdated
• Evaluation of the physical climate risk profiles of all properties
• Continued implementation and active monitoring of NZC
Pathwayprojects
• Completion of planned energy efficiency and carbon
reductionprojects
• Continuation of EPC upgrade programme
• Recertification of relevant properties across all three regions
toBREEAM In-Use
• Integration of sustainability data platform for group-wide
datamanagement
• Independent assurance on EPRA sBPR KPI data
• Completion of biodiversity appraisals in the UK
• Maintained living wage accreditation
Appetite:
Low to High
Risk assessment:
Low to High
Change in risk
profile in year:
Direction
of travel:
KPIs:
• TSR(R)
• TAR
• VR
3
Business interruption
Data loss; or disruption to corporate or building management systems; or catastrophic
external attack; or disaster; may limit the ability of the business to operate resulting
innegative reputational, financial and regulatory implications for long-term
shareholdervalue.
Link to strategy:
Key risks:
• Cyber threat
• Large scale terrorist attack
• Environmental disaster,
power shortage orpandemic
Mitigation:
2025
• Completed the migration of files from on-premise servers to cloud
service to reduce ransomware risk
• Maintained a Centre of Internet Security ‘A’ rating (internet-facing
systems)
• Continued implementation of shared property and finance system
across the Group
• Engaged external partners for specialist cyber security activities
andindependent reviews
• Continued use of continuous, automated patching across systems
• Continued to test and train employees on cyber security
Appetite:
Low to High
Risk assessment:
Low to High
Change in risk
profile in year:
Direction
of travel:
KPIs:
• TSR(R)
• TAR
CLS Holdings plc Annual Report and Accounts 2025 57
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4
Financing
The risk of not being able to source funding in cost-effective forms will negatively
impact the ability of the Groupto meet its business plans or satisfy its financial
obligations.
Link to strategy:
Key risks:
• Inability to refinance debt
atmaturity due to lack of
funding sources, market
liquidity, etc.
• Unavailability of financing
atacceptable terms
• Risk of rising interest rates
onfloating rate debt
• Risk of breach of loan
covenants
• Foreign currency risk
• Financial counterparty risk
• Risk of not having sufficient
liquid resources to meet
payment obligations when
they fall due
Mitigation:
2025
• Financed, refinanced, repaid or extended all loans maturing in 2025
• Weekly treasury meetings took place with the CEO and CFO
including discussion of financing, rolling 12-month cash flow
forecasts, FX requirements and hedging, amongst other items
• Mitigated risk of interest rate fluctuations, ensuring the majority of
theGroup’s borrowings are fixed rate or subject to interest rate caps
• Regularly monitored loan covenants
• CLS borrows in local markets and in local currencies via individual
SPVs to provide a ‘natural’ hedge
• All loans have equity cure mechanisms to repair breaches
• Maintained banking relationships with a wide number of lenders
across the Group to diversify funding sources
• Maintained low weighted average cost of debt
• Increased average debt maturity
• Significant headroom across three main loan covenants
Appetite:
Low to High
Risk assessment:
Low to High
Change in risk
profile in year:
Direction
of travel:
KPIs:
• Cost of debt
• EPS
5
Political & economic
Significant events or changes in the Global and/or European political and/or economic
landscape may increase the reluctance of investors and customers to make timely
decisions and thereby impact the ability of the Group to plan and deliver its strategic
priorities in accordance with its core business model.
Link to strategy:
Key risks:
• Global geopolitical and trade
environments
• Potential impact of UStariffs
on inflation andinterest rates
Mitigation:
2025
• Monitored events and trends closely, making business responses
ifneeded
• Maintained membership of key industry bodies
• Monitored tenants for sanction issues
Appetite:
Low to High
Risk assessment:
Low to High
Change in risk
profile in year:
Direction
of travel:
KPIs:
• EPS
CLS Holdings plc Annual Report and Accounts 202558
Risk management continued

6
People
The failure to attract, develop and retain the right people with the required skills,
andinan environment where employees can thrive, will inhibit the ability of the Group
todeliver its business plans in order to create long-term sustainable value.
Link to strategy:
Key risks:
• Failure to recruit senior
management and key
executives with the
right skills
• Excessive staff
turnoverlevels
• Lack of succession
planningand development
opportunities
• Poor employee
engagementlevels
Mitigation:
2025
• Bi-annual townhall meetings held by Senior Independent Director
tolisten to employee concerns and suggestions and discusswith
theBoard
• Employee compensation packages reviewed at least annually
toensure they remain competitive
• Continuation of wellbeing, social and diversity, equity, and
inclusionactivities
Appetite:
Low to High
Risk assessment:
Low to High
Change in risk
profile in year:
Direction
of travel:
KPIs:
• TSR(R)
• TAR
CLS Holdings plc Annual Report and Accounts 2025 59
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Emerging risks
We define emerging risks to be those that may either materialise
or impact over a longer timeframe. They may be a new risk,
achanging risk or a combination of risks for which the broad
impacts, likelihoods and costs are not yet well understood, and
which could have a material effect on CLS’ business strategy.
Emerging risks may also be superseded by other risks or cease
to be relevant as the internal and external environment in which
we operate evolves. The Senior Leadership Team, which has
representatives from each area of the business, is tasked with
identifying emerging risks for the business and discussing what
impact these risks may have on the business and what steps
weshould be taking to mitigate these risks. The Board reviews
these assessments on an annual basis.
Emerging risk Potential impact Mitigation
Short
<2yrs
Medium
2-5yrs
Long
>5yrs
Artificial
intelligence
The automation of certain tasks through AI may
lead to job displacement for those whose roles
are automated but it will also create jobs. The
adoption of these technologies by our customers
may impact their officespace requirements.
Active monitoring of the changing landscape
through attendance at AI industry talks and
regular discussion/awareness at the senior
leadership team level of opportunities, risks
andregulatory frameworks.
Adoption of
technology
Failure to embrace technology could result in
theGroup falling behind its competitors in
efficiency, thereby risking a loss of competitive
edge. As buildings evolve to incorporate smart
features, tenants may prefer such technologically
advanced spaces over those lacking similar
amenities. Neglecting occupant preferences
fortechnology could diminish the attractiveness
of the Group’s office properties, potentially
leading to vacancies and declines in property
values and rental revenue.
We thoroughly examine emerging technologies
to ensure that we extract the utmost value
fromany new system or service we opt to
incorporate into our comprehensive digital
andtechnological framework.
We consider applicable regulatory
frameworksto ensure adoption of
newtechnologies are compliant.
Regulation/
compliance
Increased capital cost of maintaining our
propertyportfolio.
Increased administration costs to ensure
resources sufficient to deliver corporate
compliance.
Continued ongoing assessment of all
properties against emerging regulatory
changes and benchmarking of fit-out
andrefurbishment projects against
third-partyschemes.
Increasing
energy and
construction
costs
Increased cost of operating properties will
reduceattractiveness of tenancies toexisting
andpotential customers.
Increased costs of refurbishments
anddevelopments leading to reduced
investmentreturns.
Ongoing consideration of, and investmentin,
energy efficient plant andbuilding-mounted
renewable energysystems.
Continued monitoring of materials, investment
in key skills for staff and viabilityassessments
ofbuildings.
Changes in
office
occupation
trends
Changes in societal attitudes to agile and
flexibleworking practices may reduce demand
for space compared to historical trends.
In-house asset management model provides
the means for the property teamto: proactively
manage customers; and gain real-time insight
and transparency onchanges in needs and
trends allowing us toadapt our properties
tomeet these.
Regular review of our assets to assess viability
of change of use, leading to greater diversity
ofproperties in our portfolio.
Climate
change, natural
resources and
biodiversity
risks
Increased risk of weather-related damage
toproperty portfolio and reputational impact
ofnot evolving sustainability goals in line with
global benchmarks and/or public expectations.
Inability to obtain sufficient carbon credits
atsuitable price to offset residual carbon
emissions in order to achieve net zero carbon.
Our sustainability strategy continues toevolve
and has been developed in alignment with
Global Real Estate Sustainability Benchmarks
(GRESB), consideration of the UN Sustainable
Development Goals (SDGs) and climate
riskmodelling.
We are investigating various solutions
toachieve sufficient offsets by 2030.
CLS Holdings plc Annual Report and Accounts 202560
Risk management continued

Background
CLS’ strategy and business model include regular secured
loanrefinancings, and capital deployment and recycling
throughacquisitions, capital expenditure and disposals.
Overthe last thirty years, the Group has successfully navigated
several periods of economic uncertainty, including the recent
macroeconomic stresses resulting from global conflict, the
resulting inflationary pressures and transition to a higher
interestrate environment.
The Group continues to have very high levels of rent collection
and lowbad debts, and has a long-term track record in financing
andrefinancing debt including £373.7 million completed in the
twelve months to 31 December 2025 and a further £38.7million
has been completed or well advanced subsequent to year-end,
whereby terms sheets have been obtained or they have reached
a first stage credit review.
The Directors note that the group financial statements for
theyear ended 31 December 2024 contained disclosure of a
Material Uncertainty related to going concern due to the timing
and amounts of the planned refinancing of debt and disposals
of property being outside of Management’s control. In this
context the Directors set out their considerations and
conclusions in respect of going concern for these financial
statements below.
Going concern period and basis
The Group’s going concern assessment covers the period to
31 July 2027 (“the going concern period”). The period chosen
takes into consideration the maturity date of loans totalling
£254.2 million that expire by July 2027. The going concern
assessment uses the forecast approved by the Board at its
November 2025 meeting as the Base case. The assessment
also considers a Severe but plausible case. The Directors have
also considered the period between the date of Board approval
and the date of signing the accounts. Based on a review of
events since Board approval in November 2025, the Directors
conclude that there have been no significant changes since
theforecast was approved.
Forecast cash flows – Base case
The forecast cash flows prepared for the Base case take account
of the Group’s principal risks and uncertainties and reflect the
challenging economic backdrop. The forecast cashflows have
been updated using assumptions regarding forecast forward
interest curves, inflation and foreign exchange, and include
revenue growth, principally from contractual increases in rent,
and increasing cost levels in line with forecast inflation.
The Base case is focused on the cash and working capital
position of the Group throughout the going concern period.
Inthis regard, the Base case assumes continued access to
lending facilities in the UK, Germany and France, and specifically
that debt facilities of £254.2 million with 13 lenders expiring
within the going concern period will be refinanced or extended
as expected (£164.4 million) or will be repaid (£89.8 million),
some of which are linked to forecast property disposals.
TheBoard acknowledges that these refinancings are not
fullywithin its control; however, they remain confident that
refinancings or extensions of these loans will be executed
withinthe required timeframe, having taken into account:
• existing banking relationships and ongoing discussions
withthe lenders in relation to these refinancings;
• CLS’ track record of prior refinancings, particularly in
the12 months to 31 December 2025 when £373.7 million
wassuccessfully repaid, refinanced or extended;
• recent refinancings subsequent to 31 December 2025 that
have reached an initial credit committee review stage by
lenders, or where term sheets have been obtained, totalling
£38.7 million of the £164.4 million noted above; and
• other ongoing discussions with lenders.
The Base case includes property disposals in the going concern
period in line with the Group’s business model and the forecast
cash flows approved by the Board in November 2025. The
Board acknowledges that property disposals are not fully within
its control; however, they are confident these transactions will
be completed within the going concern period, based on their
history of achieving disposals (with disposals of £144.2 million
achieved in the 12 months to 31 December 2025). The value
ofthe properties available for disposal is in excess of the
valueof the debt maturing during the going concern period.
The Group’s financing arrangements, which utilise ring-fenced
property loans, contain Loan to Value (‘LTV’), Interest Cover
Ratio (‘ICR’) and Debt Service Coverage Ratio (‘DSCR’)
covenants. In the Base case, minimal cure payments have
beenforecast given that the Group expects to maintain its
compliance with the covenant requirements.
The near-term impacts of climate change risks within the
goingconcern period are expected to be immaterial following
an assessment of potential significant inflation resulting
fromclimate change, in the context of increased property
andadministrative costs, as part of the reverse stress testing
performed by CLS. Furthermore, the forecast cash flows
prepared for the Base case include all necessary capital
expenditure to meet the minimum energy efficiency
standardsrequired in the countries where CLS operates.
Forecast cash flows – Severe but plausible case
A Severe but plausible case has been assessed which has
beenproduced by flexing key assumptions further including:
lower rents, increased service charges, higher property and
administration expenses, falling property values and higher
interest rates.
These flexed assumptions are more severe than CLS
experienced during the 2007-2009 global financial crisis and
other downturns such as that experienced in 2020-2022 during
the Covid-19 pandemic. A key assumption in this scenario is
afurther reduction to the Base case in property values of 10%
until July 2027, impacting forecast refinancings, sales and cash
cures. This is in addition to the reduction experienced of 3.8%
in2025 and cumulative c.25.4% decline from 30 June 2022
to31 December 2025.
CLS Holdings plc Annual Report and Accounts 2025 61
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Going concern statement

Assumptions around refinancing and investment property
disposals are adjusted to incorporate the higher interest rates
and lower property values noted above. A reduction in property
values of 10% results in additional cure payments of £1.1 million
being necessary for the Group to remain in compliance with
itscovenant requirements. Similarly, the assumptions of lower
rents and increased expenses results in additional cure
payments of £1.6 million.
Due to the severity of the assumptions used in this scenario,
which is Severe but plausible and therefore not remote, the
liquidity of the Group is exhausted even after putting in place
controllable mitigating actions as set out below.
Mitigating actions
In the Severe but plausible case, CLS is assumed to take
mitigating actions including depositing cash to cure covenant
shortfalls under the facilities’ equity-cure provisions, scaling
back uncommitted capital expenditure (specifically where
reductions do not affect tenant revenue streams over the going
concern period) and reducing the dividend to the Property
Income Distribution required under the UK REIT rules as well
asdrawing the currently available £30.8 million of its existing
£80.0 million revolving credit and overdraft facilities. If needed,
further disposals could be considered as there are no sale
restrictions on CLS’ £1.7 billion of properties, albeit the timing
and the amount of these potential disposals are not in the
Group’s control.
Additionally, the Directors note that the loans that require
refinancing in the going concern period are all through ring-
fenced SPV borrower structures. Accordingly, in extremis, the
lender could enforce their security on an individual property
with no claim on the rest of the Group’s assets apart from
certain limited guarantees and limited recourse security
grantedby the Company and certain Group companies.
Material uncertainty related to going concern
As described above, the Group is reliant in the Base case
andSevere but plausible case upon its ability to both refinance
the debt maturing and to complete a number of investment
property disposals in the going concern period in challenging
market conditions.
Whilst the Directors remain confident that a combination of
sufficient refinancings and property disposals will be achieved,
the timing and value of both the planned refinancing of facilities
falling due within the going concern period, and planned
property disposals, are outside of Management’s control
andconsequently a material uncertainty exists that may cast
significant doubt on the Group’s and the Company’s ability
tocontinue as a goingconcern.
Notwithstanding this material uncertainty on the going
concernassumption, given our track-record and reputation,
theDirectors are confident that the debt falling due for
repayment in the going concern period will be refinanced
orsettled in line with their plans for the reasons set out
above,rather than requiring repayment on maturity, or will
beextinguished as part of property disposals in the period.
Inextremis, the loans requiring refinancing are all through
ring-fenced SPV structures, save for certain limited guarantees
and limited recourse security granted by the Company and
certain other Group companies. Therefore, the Directors
continue to adopt the going concern basis in preparing these
Group financial statements.
The financial statements do not include any adjustments that
would be necessary if the Group and the Company were unable
to continue as going concerns.
CLS Holdings plc Annual Report and Accounts 202562
Going concern statement continued

The Group’s viability assessment follows a similar methodology
to the going concern assessment in terms of analysing the
Basecase financial forecasts and a Severe but plausible case
but makes the assessment of the viability of the Company to
continue in operation and meet its liabilities as they fall due
overa longer period.
The viability assessment covers the period to 31 December 2029
(“the viability period”), as it coincides with the forecasts approved
by the Board at its November 2025 meeting. These forecasts
comprise the Base case, reviewed against the actual results for
2025 and incorporating updated assumptions. Theperiod of four
years is a balance between the Group’s weighted lease term and
weighted average debt maturity, andso aligns with the period
over which the Group has good operational visibility.
In performing this assessment, the Board notes that the
financial information for the year ended 31 December 2025
contained disclosure of a Material Uncertainty related to going
concern because the timing and amounts of the planned
refinancing of debt and disposals of property at the time were
outside of Management’s control. In this context the Directors
set out their considerations and conclusions in respect of their
viability statement for these financial statements below.
Viability assessment
As with the Going Concern assessment, the financial forecast
prepared for the Base case takes account of the Group’s
principal risks and uncertainties, and reflects the current
challenging economic backdrop. The forecast uses forward
interest rate curves, inflation and foreign exchange.
The Base case forecast is focused on the cash, liquid resources
and working capital position of the Group including covenant
compliance. It also assumes continued access to lending
facilities. Within the viability period, it is assumed that expiring
debt facilities of £508.3 million will be refinanced as expected
or repaid from the proceeds of disposals. The Board
acknowledges that these refinancings are not fully within
management’s control but remains confident that refinancings
or extensions of these loans will be executed within the required
timeframe, having taken into account:
• existing banking relationships;
• CLS’ track record of prior refinancings, particularly in
the12 months to 31 December 2025 when £373.7 million
wassuccessfully repaid, refinanced or extended;
• recent refinancings subsequent to 31 December 2025 that
have reached an initial credit committee review stage by
lenders, or where term sheets have been obtained, totalling
£38.7 million of the £508.3 million noted above; and
• other ongoing discussions with lenders.
A Severe but plausible case was also produced by flexing key
assumptions including: lower rents, increased service charges,
higher property and administration expenses, falling property
values (mainly a further 10% reduction in 2026 and no recovery
during the viability period), higher interest rates and reduced
achievements of refinancings and disposals. These flexed
assumptions are derived by considering the negative market
and economic impacts experienced during the 2007-2009
global financial crisis and other downturns such as the
Covid-19pandemic.
Assumptions around refinancing and property disposals
areadjusted to include only those agreed or considered
significantly advanced by management. In addition, a reduction
in property values of 10% results in additional equity cure
payments of £1.1 million to remain in compliance with covenant
requirements. Similarly, the assumptions of lower rents and
increased expenses result in additional equity cure payments
of£1.6 million.
The impacts of climate change risks within the viability period
have been considered in the Severe but plausible case and are
expected to be immaterial.
Due to the severity of the assumptions used in this scenario,
theliquidity of the Group is exhausted even after putting in
place mitigating actions wholly within management’s control
asset out below.
Mitigating actions
In the Severe but plausible case, CLS would need to take
mitigating actions in terms of depositing cash to equity cure
covenants under the facilities, scaling back uncommitted capital
expenditure and reducing the dividend as well as drawing the
currently available £30.8 million of its revolving credit and
overdraft facilities. If needed, further disposals could be
considered as there are no sale restrictions on CLS’ £1.7 billion
of properties, albeit the timing and the amount of these
potential disposals are not wholly within management’s control.
Additionally, the Board notes that the properties that require
refinancing in the going concern period are on a non-recourse
basis to the Group. Accordingly, in extremis, the lender could
enforce their security on an individual property with no claim
onthe rest of the Group’s assets.
Material uncertainty
The Directors highlighted in their going concern assessment
(see note 2.1) that whilst they remain confident in the future
prospects for the Group and its ability to continue as a going
concern, the Group is reliant upon its ability both to refinance
the debt maturing and to complete property disposals in the
going concern period in what are assumed to be continued
challenging market conditions. The same material uncertainty
applies to the future viability of the Group.
Our 2025 strategic report, from the Inside Front
Cover–page63, has been reviewed and approved
bytheBoard of Directors on 12 March 2026.
Approved and authorised on behalf of the Board
David Fuller
Company Secretary
12 March 2026
CLS Holdings plc Annual Report and Accounts 2025 63
Additional
information
Financial
statements
Corporate
governance
Strategic
report
Viability statement

Dear Shareholder
On behalf of the Board, I am pleased to present the Corporate
Governance Report for the year ended 31 December 2025.
This is the first year reporting under the new 2024 UK
Corporate Governance Code (the ‘Code’) and this report
demonstrates how we have complied with, or explained
wherewe have deviated from, those principles and provisions.
Our Code compliance statement can be found on page 65.
Board changes and succession planning
During the year we reduced the size of the Board reflecting
acorresponding change to the size of the business and our
group-wide cost saving initiatives.
Bengt Mortstedt, one of our founding shareholders, stepped
down from the Board in February and Elizabeth Edwards
stepped down at the end of 2025, having served over nine
years in post.
We welcomed Johannes Conradi in September, who provides
significant experience of the German Real Estate market.
Following the 2025 AGM, the Board confirmed it would initiate
asuccession plan for the Chairman, which we will progress over
the coming months. Once a successor has been found, and
withthe support of the Board, it is my intention to step down
following the conclusion of the 2027 AGM.
Board and Committee performance review
We undertook our annual Board performance review in
November, the results for which can be found on pages 79
and80. Itconcluded that the Board and Committees remain
effective, and continue to deliver strong oversight and
strategicchallenge.
Given that the Group is no longer a constituent of the
FTSE350 index, we will consider whether to continue
withexternally facilitated reviews every three years.
Embedding our culture
With investment markets and occupier demand remaining
subdued, we have focused on our four key strategic objectives:
to reduce vacancy and costs to drive earnings, reduce debt
through asset sales, refinance or pay off debt to lower LTV and
invest in our portfolio. This means our teams have had to come
together more than ever, whilst recognising that the Group is
ina transition phase as we arguably enter thestart of another
property cycle.
As a result, our culture, underpinned by our four key values,
hasbeen as important as ever. Through our various channels,
asexplained on page 71, the Board has monitored how our
well-established culture has been embedded into the
organisation and is satisfied that it is.
Board focus areas in 2025
• Reviewed and approved financial statementsfollowing
recommendations fromthe Audit Committee
• Considered our sales strategy across the portfolio
andmonitored the sales pipeline
• Considered our financing strategy in light ofthe
changingeconomic landscape
• Reviewed our workforce engagement mechanisms
Priorities for 2026
• Focus on major trends within the commercial property
market
• Oversee culture to provide assurance that the agreed
values and culture are being embedded
• Continuous review of risk and uncertainties facing the
Company and their implications forthe business model
• Oversee implementation of Provision 29 of the 2024
UKCorporate Governance Code
• Initiate and progress Chairman’s succession planning
• Review our Sustainability policy and Net Zero Carbon
Pathway
Lennart Sten
Non-Executive Chairman
CLS Holdings plc Annual Report and Accounts 202564
Chairman’s introduction

“Our purpose driven culture, supported by our
corevalues and robust governance framework
hasproven to drive our performance.”
Code Provision 29 readiness
A key component of the new Code is that relating to internal
controls. Our teams have been working hard to identify and
testour material controls and an overview of our work to date
can be found on page 83. We have more work to do but we are
well advanced to be able to provide the necessary attestation
for our next report.
Looking forward
Ensuring we have the right culture and values enables us to
create and build strong and successful relationships with our key
stakeholders, which is vitally important in the current economic
landscape. This in turn creates an environment where we are
able to remain resilient and seize opportunities when they arise,
supporting the delivery of our long-term strategy for the
benefit ofall stakeholders.
Lennart Sten
Non-Executive Chairman
Principles and how the Company addresses them
The principal corporate governance rules which applied
tothe Company in the year were those set out in the UK
Corporate Governance Code published by the Financial
Reporting Council (‘FRC’) in January 2024 (the ‘Code’),
theUK Financial Conduct Authority (‘FCA’) Listing Rules
andthe FCA’s Disclosure Guidance and Transparency Rules.
The Board fully supports the principles ofgood
governance as set out in theCode, which is available on
theFRC’s website (www.frc.org.uk), and itsapplication
ofthemain principles are set out onpages64 to 111.
Compliance with the Code
Save as identified below and explained in this report, the
Board considers that throughout 2025 it complied with the
provisions of the 2024 UK Corporate Governance Code.
During the year the Board recognises that it did not comply
with the following Code provision:
19 Tenure of Chairman, explanation on page 75
Board leadership and Company purpose
Our Board of Directors is responsible for setting the Group’s
strategy and ultimately ensuring the success of the Group.
Weaim to hold five Board meetings per year, including
astrategy day. Our purpose is to transform office properties
into sustainable, modern spaces, that help businesses
togrow. This year we held eight Board meetings.
Board of Directors 66-67
Board activities 68-69
Approach to s.172(1) 28-29
Strategy, Purpose, Vision and Values 4-5 and 10-20
Division of responsibilities
This year we reviewed our division of responsibilities to
ensure that they reflect our Board structure.
Governance framework 73
Composition, succession and evaluation
Our Board consists of an Independent Non-Executive
Chairman, twoExecutive Directors, three Independent
Non-Executive Directors andone non-Independent
Non-Executive Director. Succession planning is reviewed
periodically by the Nomination Committee. The evaluation
ofthe Board and Committees’ performance is overseen
bythe Chairman.
Nomination Committee Report/
Chairman’s introduction 74-77/64
External Board effectiveness review 79-80
Audit, risk and internal control
The Audit Committee has oversight of the financial accounts
production process and audit, and reviews the effectiveness
of our risk management and internal controls system and
theneed for an internal audit function.
Audit Committee report 81-86
Going concern basis 61-62
Viability statement 63
Assessment of the principal risks facing the Group 53-60
Annual review of systems of risk management
andinternalcontrol 82, 84
Fair, balanced and understandable review 84
Remuneration
The Remuneration Committee is responsible for the design,
implementationand oversight of the Group’s Remuneration
Policy, which was last approved by shareholders on 27 April
2023. A new Remuneration Policy is contained in this report and
will be put to shareholders at the 2026Annual General Meeting.
Remuneration Committee Report 87-99
2026-2029 Remuneration Policy 100-114
CLS Holdings plc Annual Report and Accounts 2025 65
Additional
information
Financial
statements
Corporate
governance
Strategic
report

Board independence as at 31 December 2025*
57%
Female representation as at 31 December 2025
38%
Board members’ range of experience
7
Property: Wide ranging experience of the property sector
including our European markets
6
International markets: Experience and in-depth
knowledge of dealing in, and the operation of, international
markets
7
Financial management: Substantial background of financial
experience from wide ranging industries andmarkets
7
Governance: Significant listed company governance
experience and understanding of investor requirements
6
Risk management: In-depth insight and experience of risk
management within the property sector
6
ESG: Knowledge of environmental, social and governance
issues facing listed and non-listed organisations in the
property sector and wider UK businesses and charities
Directors’ tenure (years)
1. 0 – 5 2
2. 6 – 10 2
3. 10+ 4
Board independence
1. Executive 2
2. Independent 4*
3. Non-Independent 1

Visit our website to view the full
biographicalinformation for the Directors:
www.clsholdings.com/about-us/our-leadership
* Excluding the Chairman, in
accordance with Code Provision 11.
1.
3.
2.
1.
3.
2.
CLS Holdings plc Annual Report and Accounts 202566
Board of Directors
The right team to deliver our strategy

Key to Board image
1. Lennart Sten
Independent Non-Executive
Chairman
Joined: 1 August 2014
Former roles: CEO, GE Capital Real Estate
Europe. President, GE Real Estate Nordic.
CEO Fabege AB. General Counsel, GE Capital
Equipment Finances AB. Partner, Baker &
McKenzie, Stockholm. Founder and CEO,
Svenska Handelsfastigheter
Qualifications: Degree in Law,
StockholmUniversity
Experience: International property industry.
Chairman, KlaraBo Sverige AB. Chairman,
Samhällsbyggnadsbolaget i Norden AB. Board
member, Interogo Holding AG.
Attendance: Board 6/6, Remuneration
Committee 5/5, Nomination Committee
2/2,AGM 1/1
2. Fredrik Widlund
Chief Executive Officer
Joined: 3 November 2014
Former roles: Global Commercial Leader
andMD, GE trade finance business. Regional
CEO, GE’s European Leasing businesses.
Managing Director, GE Capital Real Estate.
CFO, GE Capital Equipment Finance.
Variouspositions with Royal Dutch Shell
Qualifications: Degree in Business
Administration, Stockholm University
Experience: Business leadership, property
and finance experience in global organisations.
Trustee of Morden College, a social and
housing charity, Chair of Property Committee
Attendance: Board 6/6, AGM 1/1
Andrew Kirkman (not pictured)
Chief Financial Officer
Joined: 1 July 2019
Resigned: 5 January 2026
Former roles: Finance Director, Harworth
Group plc. Finance Director, Viridor.
ChiefFinance Officer, Balfour Beatty
Capital.Global Head of Corporate Finance,
Bovis Lend Lease
Qualifications: Masters in Politics, Philosophy
and Economics, Oxford University. Fellow,
Institute of Chartered Accountants
Experience: Extensive plc, property, finance
and operational experience. NED,
A2Dominion Housing Limited, a housing
association. Oxford University Audit and
Scrutiny Committee member
Attendance: Board 6/6, AGM 1/1
4. Harry Stokes
Chief Financial Officer
Joined: 5 January 2026
Former roles: Commercial Finance Director,
SEGRO plc. Head of European Real Estate
Equity Research, UBS. Head of European Real
Estate Equity Research, Citi Investment Bank.
Qualifications: Degree in Geography,
Cambridge University. ACA, Institute of
Chartered Accountants. Postgraduate
Certificate in Sustainable Business,
CambridgeUniversity
Experience: 25+ years in the financial
services and real estate sectors. Sustainability
reporting and strategy.
Attendance: Board n/a, AGM n/a
5. Anna Seeley
Non-Executive Director and Vice Chair
Joined: 11 May 2015
Former roles: European Property Surveyor,
General Electric Corporation and BT Group.
Group Property Director, CLS Holdings plc.
Chartered Surveyor, Chestertons
Qualifications: Degree in Property
Valuationand Finance, City University
andChartered Surveyor
Experience: 20+ years of property
industryand business experience
Attendance: Board 6/6, Nomination
Committee 2/2, AGM 0/1
6. Eva Lindqvist
Independent Non-Executive Director
Joined: 22 September 2023
Former roles: Senior roles, Ericsson. Senior
Vice President, Telia Sonera telecoms division.
Chief Executive, Telia Sonera international
carrier. CEO, Xelerated Holdings AB, NED,
Keller Group plc. NED, Tele2AB.
Qualifications: MSc, engineering degree
inApplied Physics. Marketing Diploma.
Masterof Business Administration.
MelbourneGraduate School of Management.
Helen Schytt Fellowship
Experience: NED, Greencoat Renewables
plc, member Audit, Management
Engagement, Nomination and Remuneration
Committees. NED, Vesuvius plc, Chair,
Remuneration Committee, member Audit,
Nomination Committees. Videndum plc,
member Audit, Remuneration & Nomination
Committees. Member, Royal Swedish
Academy of Engineering Sciences
Attendance: Board 6/6, Remuneration
Committee 5/5, Audit Committee 4/4,
Nomination Committee 1/1, AGM 1/1
7. Bill Holland
Independent Non-Executive Director
Joined: 20 November 2019
Former roles: Senior Partner, KPMG real estate
auditpractice. Governor, WinchesterCollege
Qualifications: Fellow, Institute of Chartered
Accountants. Degree in Economics from
DurhamUniversity
Experience: Real estate, finance and audit
experience. NED, Urban&Civic plc, Chair
AuditCommittee. NED, Ground Rents
IncomeFund plc, Chair Audit Committee.
Non-Executive Chairman, St Anselm
PropertyCompany Limited
Attendance: Board 6/6, Remuneration
Committee 5/5, Audit Committee 4/4,
AGM1/1
8. Johannes Conradi
Independent Non-Executive Director
Joined: 15 September 2025
Former roles: Global Head of Real Estate,
Freshfields. Chairman, Supervisory Board,
Alstria Office REIT-AG
Qualifications: Doctor of Law, Fellow,
RoyalInstitute of Chartered Surveyors
Experience: 30+ years of real estate
experience. Managing Director, BLACKLAKE
Management Partner. Chairman, Supervisory
Board, EUROPA-CENTER AG. Deputy
Chairman, ICG Institute for Corporate
Governance in the German Real Estate
Industry. Chairman, Restructuring Committee,
Germany Property Federation (ZIA). Deputy
Chairman, Centre for Corporate Governance
in the Real Estate Industry, Frankfurt School
Real Estate Institute
Attendance: Board 2/2, AGM n/a
Elizabeth Edwards (not pictured)
Senior Independent Director
Joined: 13 May 2014
Resigned: 31 December 2025
Former roles: Managing Director,
Landesbank Berlin London. Head, BerlinHyp
London office. Senior positions with National
Australia Bank, Westdeutsche Immobilien.
Management Consultant, PwC. Trustee
Refuge. Past Master, Worshipful Company
ofChartered Surveyors, member Charity
Committee. Past Warden, The StOlave’s
andSt Saviour’s Schools Foundation.
Qualifications: Fellow, Royal Institution of
Chartered Surveyors. Honours Degree in
Estate Management, South Bank University
Experience: Extensive commercial property
investment and finance expertise in the
UKand Europe (primarily Germany). Senior
NED, Schroders European REIT plc, member
of Audit, Valuation & Risk, Nomination,
Remuneration and Management Engagement
Committees. Trustee, Central School of Ballet,
Chair of Audit Committee. The St Olave’s
andSt Saviour’s Schools Foundation Court
trustee, member Finance & General
PurposesCommittee.
Attendance: Board 6/6, Audit Committee
4/4, Nomination Committee 2/2, AGM 1/1
Bengt Mortstedt (not pictured)
Non-Executive Director
Joined: 7 March 2017
Resigned: 28 February 2025
Former roles: Director, CLS Holdings plc
(1992–2010). Former Junior District Court
Judge inSweden
Qualifications: Degree in Law, Stockholm
University
Experience: European property market
andCLS Holdings plc business. Developed
and runs hotels in St Vincent & Grenadines,
West Indies
Attendance: Board n/a, AGM n/a
8
1
6
7
5
2
4
CLS Holdings plc Annual Report and Accounts 2025 67
Additional
information
Financial
statements
Corporate
governance
Strategic
report

The Board Governance role What we considered for 2025 Relevant stakeholders Find out more
We acquire the
right properties
The Board considers the Group’s investment criteria and
marketconditions in the regions to ensure it supports its
long-term strategy.
• Received detailed updates on the markets in which we operate together
withinvestments at each Board meeting
• Received presentations from the UK, German and French valuers on market
conditions and key portfolio risks and opportunities
• In light of market conditions and strategic objectives, no acquisitions were
considered by the Board during the year.
• Investors
• Employees
Read more:
Pages6-9 and 14-19
We secure the
right finance
The Board considers the Group’s financing strategy to
ensureitremains appropriate, dynamic and diverse.
• Received updates on the Group’s debt position including covenant reports,
cash flow and budgets
• Received detailed updates on the Group’s financing strategy
• Considered various alternative financing options that may provide the Group
with extra flexibility
• Approved refinancings in line with recommendations from our Treasury Team.
• Financial
Institutions
Read more:
Pages11-12 and 22-25
We deliver value
through active
management
and cost control
The Board considers the Group’s operational strategy to
deliveron the Group’s vision to be a supportive, progressive
and sustainably focused commercial landlord.
• Received updates on asset, property and facilities management operations
• Ensured appropriate resourcing levels to provide quality active in-house
assetmanagement
• Monitored performance against budget and organisational structure as part
ofcost control measures
• Reviewed and approved 2026 budget and forecasts, which include key capital
expenditure on refurbishments and developments
• Tenants
• Suppliers
Read more:
Pages10, 13 and 14-19
We continually
assess whether
to hold or sell
properties
The Board oversees management’s assessments of the entire
portfolio to ensure the Company focuses on holding properties
with the potential to add value in line with the Group’s investment
strategy and sustainability goals. It also reviews and approves
the active sales programme for capital recycling.
• Received updates on vacancy rates and rent collections
• Received updates on the sustainability strategy including the Net Zero
CarbonPathway
• Reviewed the Group’s strategy for the property portfolio at the Strategy
Board meeting held in September
• Approved further portfolio sales to meet strategic objectives
• Tenants
• Communities
• Suppliers
Read more:
Pages10 and 14-19
We reward
shareholders,
customers and
employees
The Board aims to pay a dividend consistent with its Dividend
Policy and grow the dividend in line with the growth in the
business. It also ensures the reward structures for its employees
underpin our values andsupport the success of the business.
Our tenants are our customers, and we provide sustainable
office space that helps businesses grow.
• Approved new dividend policy reflective of the Group’s long-term strategy
• Considered and approved interim and final dividend proposals, based
onthefinancial performance of the Group
• Considered appropriate reward structures for employees that reflect
Groupperformance
• Approved capital expenditure budgets, supported by our sustainability
strategy, to deliver sustainable office space
• Investors
• Employees
Read more:
Pages7, 49-52 and
22-25
How governance
supports our business
model and strategy
Our governance structure enables
the Board to provide the necessary
oversight of the Company’s
long-term strategic plan and
businessmodel.
The Board and Executive
Committees facilitatethe
implementation of the Group’s
strategy and business model
withtwo way dialogue ensuring
thatthe Group’s Vision, Purpose
and strategic goals are aligned.
Clear reporting lines and
divisionofresponsibilities ensure
efficient and effective strategic
decision-making.
Read more:
Page73
Key announcements, decisions and Board approvals
January
• Approval of significant
letting at Fetter Lane
February
• Agreed lease extension
with the National Crime
Agency
• Trading Update
March
• Approval of the 2024
annual report and accounts
• Approval of new Dividend
Policy and the 2024 final
dividend
• Launch of sale of additional
£190 million properties
• Approval of sale of
SpringMews Student
Accommodation
May
• All shareholder resolutions
passed at the AGM
• Property tour in Lyon
June
• Appointment of executive
search firm to replace
Andrew Kirkman as CFO
CLS Holdings plc Annual Report and Accounts 202568
Key Board activities

The Board Governance role What we considered for 2025 Relevant stakeholders Find out more
We acquire the
right properties
The Board considers the Group’s investment criteria and
marketconditions in the regions to ensure it supports its
long-term strategy.
• Received detailed updates on the markets in which we operate together
withinvestments at each Board meeting
• Received presentations from the UK, German and French valuers on market
conditions and key portfolio risks and opportunities
• In light of market conditions and strategic objectives, no acquisitions were
considered by the Board during the year.
• Investors
• Employees
Read more:
Pages6-9 and 14-19
We secure the
right finance
The Board considers the Group’s financing strategy to
ensureitremains appropriate, dynamic and diverse.
• Received updates on the Group’s debt position including covenant reports,
cash flow and budgets
• Received detailed updates on the Group’s financing strategy
• Considered various alternative financing options that may provide the Group
with extra flexibility
• Approved refinancings in line with recommendations from our Treasury Team.
• Financial
Institutions
Read more:
Pages11-12 and 22-25
We deliver value
through active
management
and cost control
The Board considers the Group’s operational strategy to
deliveron the Group’s vision to be a supportive, progressive
and sustainably focused commercial landlord.
• Received updates on asset, property and facilities management operations
• Ensured appropriate resourcing levels to provide quality active in-house
assetmanagement
• Monitored performance against budget and organisational structure as part
ofcost control measures
• Reviewed and approved 2026 budget and forecasts, which include key capital
expenditure on refurbishments and developments
• Tenants
• Suppliers
Read more:
Pages10, 13 and 14-19
We continually
assess whether
to hold or sell
properties
The Board oversees management’s assessments of the entire
portfolio to ensure the Company focuses on holding properties
with the potential to add value in line with the Group’s investment
strategy and sustainability goals. It also reviews and approves
the active sales programme for capital recycling.
• Received updates on vacancy rates and rent collections
• Received updates on the sustainability strategy including the Net Zero
CarbonPathway
• Reviewed the Group’s strategy for the property portfolio at the Strategy
Board meeting held in September
• Approved further portfolio sales to meet strategic objectives
• Tenants
• Communities
• Suppliers
Read more:
Pages10 and 14-19
We reward
shareholders,
customers and
employees
The Board aims to pay a dividend consistent with its Dividend
Policy and grow the dividend in line with the growth in the
business. It also ensures the reward structures for its employees
underpin our values andsupport the success of the business.
Our tenants are our customers, and we provide sustainable
office space that helps businesses grow.
• Approved new dividend policy reflective of the Group’s long-term strategy
• Considered and approved interim and final dividend proposals, based
onthefinancial performance of the Group
• Considered appropriate reward structures for employees that reflect
Groupperformance
• Approved capital expenditure budgets, supported by our sustainability
strategy, to deliver sustainable office space
• Investors
• Employees
Read more:
Pages7, 49-52 and
22-25
July
• Sale of Techno Centre, Gräfelfing
Business Park, Munich and
Jarrestrasse8-10 in Hamburg
August
• Approval of the 2025 half-year
reportand interim dividend
• Review of principal risks and
uncertainties including emerging risks
• Approval of significant lettings
atOffice Connect in Cologne
andTheCoade in London
September
• Consideration of the Group strategy
• Financing strategy discussion
• Appointment of Johannes Conradi
October/November
• Approval of appointment of new CFO
• Approval of significant letting atGotic
Haus, Dortmund
• Approval of 2026 budget and forecasts
December
• Trading update
• Approval of conditional sale
ofSpringGardens
CLS Holdings plc Annual Report and Accounts 2025 69
Additional
information
Financial
statements
Corporate
governance
Strategic
report

The Board’s primary contact with existing and prospective
institutional shareholders is through the Chief Executive
Officerand the Chief Financial Officer, who have regular
meetings withinstitutional shareholders. They also undertake
analyst presentations following the Company’s half-year
andannual financial results. They are supported by a financial
relations advisor and two corporate brokers, all of whom are
inregular contact with institutional and retail shareholders,
andwithanalysts.
A report of feedback from each institutional investor meeting
isprepared by the broker who organised it and a report of
unattributed feedback from analysts on analyst presentations
isprepared by the financial relations advisor. All such reports
and coverage of the Company by analysts are circulated to the
Board. Consequently, all Directors develop an understanding
ofthe views of institutional shareholders and commentators.
Analyst presentations, following the announcement of half-year
and annual financial results, are webcast and available onthe
Company’s website.
The Committee and Panel Chairs seek regular engagement
with shareholders on significant matters as they arise. Further
detail can be found in each Committee report.
The Group issues its annual financial report to each of its
shareholders. In accordance with the UK company disclosure
regulations the Group does not distribute its half-year financial
report to shareholders but makes it available on its website.
We aim to provide all shareholders at least 20 working days’
notice of the Annual General Meeting at which all Directors
whoare available to attend are introduced and are available
forquestions. All shareholders are welcome to attend the
Company’s Annual General Meeting and to arrange individual
meetings by appointment. The views received at such
meetingsare fed back to the Board.
Proxy voting
The proxy forms for the Annual General Meeting which was
heldin 2025 included a ‘vote withheld’ box.
Details of the proxies lodged for this meeting were announced
to the London Stock Exchange and are on the Company’s
website at www.clsholdings.com. Shareholders may also
chooseto register their vote by electronic proxy on the
Company’s website.
At the 2026 Annual General Meeting, the Company will
complywith the Listing Rules in respect of the voting
requirements for the re-election of independent Directors
where a Company has a controlling shareholder.
Key shareholder events
January
• One institutional investor meeting
April
• 14 institutional investor meetings
• Two sales force presentations
May
• One institutional investor meeting
• One sales presentation
June
• One institutional investor meeting
August
• Analyst presentation
• Seven institutional investor
meetings
• Two sales force presentations
September
• 12 institutional investor meetings
• One sales force presentation
October
• 10 institutional investor meetings
2025 AGM
At the 2025 AGM, all the resolutions as set out inthe
Notice of Meeting were passed on a poll.

All financial reports and press releases are
alsoincluded on the Group’s website at
www.clsholdings.com/
CLS Holdings plc Annual Report and Accounts 202570
Relationship with shareholders
The Company values its dialogue with both institutional andprivate investors

Dear Shareholder
As the director responsible for workforce engagement, I am
pleased to report on the way in which we have engaged with
ouremployees across the Group and acted upon the feedback
we received.
Main activities during the year
This year we have had bi-annual meetings in each country,
withone meeting in-person and the other via videoconference.
We held meetings in April and October via a series of ‘town hall’
meetings in the UK, Germany, France and Luxembourg.
Smaller group meetings meant that all employees were able
tobe invited in each region. It also ensured that we were able
tospeak about themes that were directly relevant to each
culture and working norms, which I felt allowed for better
andmore fulsome discussion overall.
Following the town hall meetings, I fed back our discussions to
the Board, which they felt were extremely valuable especially
when making key decisions affecting the workforce.
Areas discussed
We covered three main topics: Economic environment and
business strategy, culture and working environment. With
thenew provisions of the UK Corporate Governance Code
focusing on how the desired culture has been embedded
intheorganisation, listening to this key part of the feedback
wasparticularly valuable.
Economic environment and business strategy: It has not
beenan easy year in the commercial real estate industry due
toa difficult macro-economic environment. This has been
reflected operationally, where we implemented an internal
costreduction programme and completed a number of asset
sales across each region. Naturally, this led to some concern
within the workforce, especially amongst those who had not
experienced a downturn before, and to a desire to better
understand the long-term strategy of the Company.
Outcomes: We discussed these concerns and as a result
Ibelieve the workforce now has a better understanding of
oursituation within the context of a cyclical market. We also
ensured that the next ‘all staff’ CEO presentation encompassed
more detail around our medium- and long-term strategy.
Culture: With a difficult economic backdrop, it is our culture that
brings us together. I was pleased to hear that our values, which
reflect our culture, remain evident through our organisation.
From listening to how we engage with and support our tenants
and how we are working through our challenges to adopt a
group-wide property and finance system, it speaks to a culture
of collaboration, openness and agility.
Outcomes: We noted the feedback that despite having a
smaller company and fewer people, we must continue to
celebrate the successes of our employees, with more emphasis
on all achievements, big or small.
Working environment: I was pleased to hear the feedback that,
overall, we have an excellent working environment. We did note
some perennial IT hardware issues, and some questions and
challenges were raised around the implementation of new
operating systems, which we were able to feed back to the
relevant teams.
Outcomes: Our IT team was able to reach out to offer suitable
training or replacement of IT equipment as needed.
Overall, the opportunity to meet our teams and understand
their challenges was very welcome. What I most admired was
that, despite the industry wide headwinds, we have an
extremely dedicated, motivated and forward-thinking team
whoaspire to deliver the best for the business.
Looking forward
Given that I stepped down as a director on 31 December 2025,
and with the expectation from our employees that workforce
engagement is embedded across the Group, the Board has
agreed to adopt an alternative approach that brings together
anumber of existing and new practices. We believe this will
continue to provide the Board with the ability to assess, monitor
and review culture and include the views of our workforce in
decision-making. These practices will include:
• Involve multiple NEDs in activities rather than a single
appointed NED Workforce Engagement representative.
• Hold informal events after each Board meeting to allow
NEDsto engage with employees on key topics discussed
atmeetings.
• Host Chairman’s round table sessions with a mix of employees.
• Continue Board property tours.
• Implement a new employee survey tool to provide regular
engagement data that can be shared with the Board.
• Enhance HR reporting to the Board: addition of additional
engagement data and statistics.
Elizabeth Edwards*
Chair, Workforce Advisory Panel
* retired 31 December 2025
Elizabeth Edwards
*
Director responsible for workforce engagement
CLS Holdings plc Annual Report and Accounts 2025 71
Additional
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Corporate
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Strategic
report
Workforce engagement
Helping to enhance our workingenvironment

Maintaining our culture
The Board recognises the need to establish a constructive
culture, including the right values and ethics to ensure high
standards of behaviour are maintained throughout the Group.
Italso understands the need to ensure that this culture is
embedded into the organisation.
Our culture is defined by our purpose, vision and values. More
information on these can be found on pages 4-5. Together,
they promote an open and collaborative environment that
enables our workforce to operate at its best through efficient
decision-making that facilitates ownership and enables a
hands-on approach to operating.
How the Board assesses and monitors culture
To ensure that our culture is embedded within the organisation,
we engage with the business in a number of ways. We have
regular updates from the Chief Executive Officer, we meet with
employees of all seniorities across the business through Board
presentations, formal and informal meetings, and property
tours. During the year we also received feedback through
Elizabeth Edwards, our designated non-executive director
forworkforce engagement, who chaired our ‘townhalls’
meetings that took place across all regions. These ‘townhalls’
are designed to ensure the voice of the workforce is
consideredin our decision-making process and our values
arebeing upheld.
At each of our Board meetings, we also receive information on
human resourcing matters such as employee turnover, diversity
statistics, feedback (and action plans) from employee surveys
and a summary of reasons for leaving.
Through these feedback mechanisms the Board considers
thatthe organisation has the strong culture embedded into the
organisation that supports its purpose and ability to deliver on
its strategy. We do, however, acknowledge that there are areas
where we can improve and we are taking steps in 2026 to adjust
our approach to ensure that we have a deeper understanding
ofemployee views to then inform our future plans.
Below is a summary of how the Board assessed that the Group culture is embedded in the organisation during 2025:
Cultural priority 2025 action Indicator
Promoting
integrity
andopenness
NED Workforce engagement
representativechaired bi-annual
employee‘townhall’ meetings
95% attendance
Board property tours with employees 1 property tour in Lyon with members of the French team
Review of HR updates as well as key
employee metrics in Board papers
includingvoluntary attrition, diversity
andsickness absence
4 HR Updates provided, one at each meeting.
16% voluntary attrition
50:50 gender diversity
Review of any non-compliance with key
policies: Whistleblowing, Anti-Bribery &
Anti-Corruption, Anti-Fraud, Prevention
ofTax Evasion, Modern Slavery
Report provided to the Board in May and Audit Committee
inNovember
Valuing diversity
Flexible Working Policy 100% adoption for applicable roles
Individual training budget/learning
&development undertaken
£1,000 allowance per employee
Encouragement of internal promotions 5 internal promotions
Enhanced family leave policies UK shared parental leave policy
with enhanced company payments
Being responsive
tothe views of
stakeholders
Customer surveys 1 undertaken in each country
Shareholders 45 meetings with shareholders (see page 70 for further details)
Culture aligned
to strategy,
purpose
andvalues
Individual training budget/learning
&development undertaken
17.6 training hours per employee
Attrition data reported to Board 16% voluntary attrition
Community volunteering 5.2 volunteering hours per employee
CLS Holdings plc Annual Report and Accounts 202572
Culture dashboard
Promoting an open, collaborative culture

The Board’s role
The Board has ultimate responsibility for setting the Group’s
strategic direction, leading and overseeing culture, delivering
value sustainably, understanding the risks the Group faces
andensuring that we uphold the highest standards of
corporategovernance.
Board and Committee structure
The Board is supported by the Audit, Remuneration,
Nomination and Disclosure Committees which update Board
members at each meeting. The Board discusses issues arising
from Committee meetings which allows them to gain a wider
understanding of the operation of the Group.
Chair leadership and effectiveness
The Group’s Independent Non-Executive Chair, Lennart Sten,
leads the Board in promoting a culture of openness and debate
to ensure that the Board operates effectively. It is the Board’s
culture and accepted practice to give regular feedback, but
once a year a more formal feedback session is undertaken with
the Non-Executive Directors, led by the Senior Independent
Director without the Chair present. This session reviews
theChair’s overall performance, considering areas such
ascommunication, effective leadership and oversight of
theBoard and company culture. The right ‘tone from the top’
iskey to supporting our purpose, vision and values. This year’s
review confirmed that the Board members consider that the
Chair leads by example, effectively chairing meetings and
facilitating open discussion and debate that ensures all Board
members have a voice around the table.
Roles and responsibilities of theDirectors
The Board’s composition and responsibilities are set out in
aformal schedule of matters specifically reserved to it for
decisions, which is reviewed and approved annually and a
copycan be found on our website. Matters reserved for Board
decisions include identifying strategic long-term objectives,
approving the annualGroupbudget, and approving substantial
property transactions and investment decisions over £10 million.
The implementation of Board decisions and the day-to-day
operations of the Group are delegated totheExecutive Directors.
All Board members are required to notify the Company as
soonas they become aware of a situation that could give rise
toa conflict or potential conflict of interest. Atthe beginning of
each Board meeting the Chair requires all Directors (including
the representative of the majority shareholder) toconfirm that
they do not have a potential personal conflict regarding any
itemon the agenda. If a conflict arises, the Director is excluded
from discussions and voting, unless theBoard unanimously
decides otherwise.
Division of responsibilities
The responsibilities of the Independent Non-Executive Chairman,
who is responsible for the overall strategy of theGroup, the
Non-Executive Vice Chair who supports theChair, and the
Chief Executive Officer, who is responsible for implementing
the strategy and for the day-to-day running of the Group, are
clearly divided. Awrittenstatement of thedivision of these
responsibilities isreviewed and approved by the Board each
year and copy can be found on our website.
Board and committee structure
(as at 31 December 2025)
The Board
• Non-Executive Chairman (Independent upon appointment)
• Two Executive Directors
• Four independent Non-Executive Directors
• One non-independent Non-Executive Director
Defining the Company’s purpose and setting the strategy to deliver it.
Audit
Committee
Three independent
Non-Executive
Directors
Monitors the
arrangements for
risk management,
corporate reporting
and internal controls.
Maintains the
relationship with
theAuditor
Remuneration
Committee
Three independent
Non-Executive
Directors
Develops the
Company’s policies
on executive and
senior management
remuneration and
sets the remuneration
packages of
individual Executive
Directors and other
senior management
Nomination
Committee
One non-
independent
Non-Executive
Director
Three independent
Non-Executive
Directors
Monitors and
evaluates the
Board’s skills and
experience to ensure
full Board discussion
Operational Oversight Disclosure Committee
Monitors inside information
andclose periods
Senior
Leadership
Team
Chaired by the CEO,
this group reports
onthe day-to-day
operation of the
Group and
implementation of
strategy across each
region and function
Financial
Investment
Committee
Chaired by the CEO,
this group analyses
financial investment
opportunities and
reviews investment
portfolios
Sustainability
Committee
Chaired by the COO,
this group monitors
and reviews
performance against
the sustainability
strategy, and reports
on best practice and
legislative changes
Health
andSafety
Committee
Chaired by the COO,
this group reviews
and moderates the
Group’s policy and
best practices for
Health and Safety
Asset
Management
Committee
Chaired by each
country head, this
group reviews the
Group’sproperty
investments in
eachcountry
CSR
Committee
Chaired by a senior
employee, this
groupassists in
implementing the
Group’s ESG strategy
in relation tocreating
shared value within
the community
Group
Restructuring
Committee
Chaired by the CEO,
this group reviews
and approves
proposalsfor all
subsidiary company
corporate projects
Treasury
Committee
Chaired by the CFO,
this group reviews all
financings, debt
maturity, cashflow
and other key
treasury matters
CLS Holdings plc Annual Report and Accounts 2025 73
Additional
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statements
Corporate
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Strategic
report
Division of responsibilities

Dear shareholder
On behalf of the Nomination Committee, I am pleased to
present my report as Chair of the Committee for the year
ended 31 December 2025. This report is intended to give
aninsight into the work of the Committee during the year.
TheNomination Committee is responsible for ensuring that
theBoard consists of members who have the relevant skills,
experience and knowledge in order to set and enable the
executive directors to deliver the Company’s strategy.
Role of the Committee
The Committee makes recommendations to the Board with
regard to the nomination, selection and succession of directors
and senior executives. The Committee also focuses on ensuring
that there is appropriate succession planning in place, having
regard to the provisions of the UK Corporate Governance Code.
The Committee regularly evaluates the Board’s performance
and effectiveness both as a group and as individual directors,
and reviews the annual Board effectiveness process to ensure
itcontinues to operate in the best possible way.
Membership and attendance
Because of our shareholder structure, membership also
consists of a representative of the controlling shareholder,
whoacts as its Chair, to ensure appointments are discussed
withtheir input.
The Committee met formally twice during 2025 and held
frequent discussions outside formal meetings. Throughout
2025, the Committee comprised four Non-Executive
Directors, three of whom are deemed independent. From
1 January 2026, following Elizabeth Edwards’ retirement the
Committee will consist of two independent Non-Executive
Directors, which supports the need for independent oversight
whilst recognising that we have a controlling shareholder.
The Company Secretary acts as Secretary to the
Committeeand its Terms of Reference are available
ontheCompany’s website.
Main activities throughout the year
The Committee continued to fulfil its core responsibility,
principally to:
• Review the structure of the Board and its Committees
andensure it has the right skills and experience
• Lead the process for Board appointments
• Ensure plans are in place for orderly succession
ofBoardandsenior management positions
• Oversee the development of a diverse pipeline forsuccession
• Report on how the annual Board effectiveness review
hasbeen conducted
Committee members’ attendance
during the year ended 31 December 2025
Anna Seeley
Lennart Sten
Elizabeth Edwards
Eva Lindqvist
Anna Seeley
Chair, Nomination Committee
CLS Holdings plc Annual Report and Accounts 202574
Nomination Committee Report
Successfully implementing our succession planning

Set out below are the key areas of our work this year.
Board structure, composition and skills
Following last year’s review of composition and skills,
2025sawa number of changes to the Board.
Our aims were to:
• Reduce the size of the Board
• Enhance our German real estate experience
• Review independence for the directors who have
servedovernine years
• Plan for the Chair’s succession given he has served
morethannine years
Board size
At the year end, the Board consisted of a Non-Executive
Chair(who was independent on appointment), two Executive
Directors, four independent Non-Executive Directors and
onenon-independent Non-Executive Director.
Following the retirement of Bengt Mortstedt on 28 February
2025, we decided not to fill the position in order to reduce
thesize of the Board and help in rebalancing its independence.
Enhancing of experience
Elizabeth Edwards, who had significant German real estate
experience, retired from the Board on 31 December 2025.
Aspart of our review of Board composition, we recognised
thatthere was a need to replace these specific skills given
thesize of the German portfolio.
Following an external search process undertaken by Sapphire
Partners, we welcomed Johannes Conradi to the Board on
15 September 2025. He has more than 30 years’ experience
inthe real estate industry, principally as Global Head of Real
Estate at Freshfields and as Chairman of the Supervisory Board,
Audit, Remuneration and Nomination Committees, of Alstria
Office REIT-AG, a German real estate company formerly listed
on the Frankfurt Stock Exchange.
Board independence
We note that both Lennart Sten and Elizabeth Edwards served
for more than nine years during 2025, which the Code states
isacircumstance that might impede their independence.
InNovember the Board considered their ongoing
independence. We took into account their other roles outside
ofthe Group, their time commitment and leadership and
contribution to discussions at Board meetings and concluded
that they both remained independent.
With a majority of independent Non-Executive Directors at
theyear end, the Board complied with Provision 11 of the Code.
Following the retirement of Elizabeth Edwards, as at the date
ofthis report there are equal numbers of non-independent
andindependent Non-Executive Directors.
Succession planning
Chair’s succession plans
It is noted that Lennart Sten, our Chairman, has served for
morethan nine years. In response to the voting at the 2025
AGM, the Board explained the rationale for serving more than
nine years but that a succession plan for the Chair would be
initiated, noting that there will need to be an orderly transition.
We are currently finalising that succession plan in order to
appoint an executive search firm in the first quarter of 2026
witha view tomaking an appointment in the second half of
2026. It is important that we make the right appointment and
soit is envisaged that, after a period of handover, Lennart will
step down following the conclusion of the AGM in 2027.
Board and Senior Management succession planning
annualreview
We undertook our annual review of our succession plans
fortheBoard and senior management. As set out above, our
succession plans worked effectively for the Board, which also
included the appointment of our new Chief Financial Officer,
Harry Stokes, where we employed external search firm, Odgers.
Following our review, we recognise that we have a key challenge
to retaining talent in a relatively small and flat organisation.
Weare confident however that in having a positive culture
andproviding mentoring and career development opportunities
we do as much as we can to retain our best talent and support
adiverse pipeline.
Our process to succession planning and Board appointments
isset out on pages 76 and 77.
Board effectiveness annual review
Following an external review in 2023, our 2025 board
effectiveness review took place through an internal review
undertaken by questionnaire and followed up by an in-depth
Board discussion at our November meeting. Further details
onthe outcome and actions from the review can be found
onpages 79 and 80 of this report.
It is noted that the Company was not a constituent of the
FTSE350 index for the year immediately prior to the reporting
year and, therefore, we will consider whether to continue with
externally facilitated reviews every three years.
Performance of the Committee
The Committee undertakes a review of its performance
eachyear. During 2025, this review was undertaken internally
byway of a questionnaire and concluded that the Committee
continued to perform effectively and had unfettered access
tothe information and advice it needed to make informed
decisions on all matters related to remuneration.
Anna Seeley
Chair, Nomination Committee
CLS Holdings plc Annual Report and Accounts 2025 75
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Corporate
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Board appointments
Our process follows the provisions of the UK Corporate
Governance Code. The Committee leads the process for
Boardappointments and makes its recommendations to
theBoard for final approval.
Our process starts with the Committee’s review of Board
composition, taking into account the skills, experience and
background that it needs to fulfil its objectives. If an
appointment is recommended, it is the Committee’s policy
touse an open advert and/or an external search consultancy
forthe appointment of the Chair and Non-Executive Directors.
In line with our diversity, equity and inclusion policy, we expect
our external search consultancy to provide us with a diverse
selection of candidates to review.
A detailed role specification is reviewed with the Chairman
andthe Committee following which a final role specification
isapproved. The appointment of an external search firm
isconfirmed.
The Committee then initiates a minimum of a three-stage
interview process having received and reviewed a long list
ofcandidates. A short list is then confirmed.
Interview 1: Candidates first meet members of the Committee
and the Company Secretary.
Interview 2: Candidates will meet other members of the senior
leadership team and other members of the Board where there
isa specialist appointment. For example, if the appointment
isto join the Audit Committee, then the Chair of the Audit
Committee will also attend.
Interview 3: Following these interviews, two final candidates
willmeet with the CEO and the Chair.
The Nomination Committee will review feedback from all
interviewers and, together with candidates’ level of experience,
commercial focus and broad skill sets, a recommendation to
theBoard will be made.
As part of the Committee decision-making process, it also
considers the time commitment expected of the proposed
director in line with any other commitments they may
alreadyhave.
Directors are also required to seek approval from the Chairman
and the Chief Executive Officer prior to accepting additional
commitments to ensure that they will be able to continue to
devote a suitable amount of time to the Company and to ensure
no conflict arises.
The Committee is satisfied with the time each director devotes
to the Company notwithstanding other commitments.
Induction and ongoing development
It is important for all Directors, both Executive and Non-Executive,
when joining the Company, to be provided with, andgiven an
insight into, the Company’s operations, culture andvalues.
Our induction programme has been designed to involve a full
overview of the Group and how it operates:
• Individual meetings with the Non-Executive Chairman,
ChiefExecutive Officer and the Chief Financial Officer.
• A programme of meetings with country leaders and
seniormanagers across the Group to understand key
operational matters.
• Bespoke tours of the Group’s portfolio and offices in
theUK,Germany and France.
• Meetings with other Non-Executive Directors.
As part of ongoing development, the Board aims to hold one
Board meeting a year either in France or Germany, preceded by
a property tour, so that it can gain first hand knowledge of the
activities, challenges and opportunities across the portfolio.
Our individual portfolio tours and Board meetings allow Directors
to engage directly with a range of employees below Board level,
which we believe is important in relationship building and
understanding our talent pipeline, people and culture. It also
raises the profile and understanding of the role of the Board
andits governance responsibilities. Meetings are also arranged
with key advisors such as the external auditor, valuers and
brokers on an ongoing basis both at Board level and individually.
Ongoing training and development beyond the induction
process is encouraged. This year, the Board visited ourportfolio
in Lyon where they met with members of our property team,
allowing them to gain a greater understanding of our properties.
We also provide for ‘deep dives’ on different subjects at each
Board meeting so that Directors can keep up to date with the
latest developments in a wide range of topics. The Company
Secretary also provides regular governance updates to
theBoard.
Professional development at a glance
Site visits, Board dinners and breakfast meetings
Briefing material on Board portal
Deep dives on key topics
Management and one-to-one meetings
Training and information sessions
CLS Holdings plc Annual Report and Accounts 202576
Nomination Committee Report continued
Composition, Succession and evaluation

Succession planning
In considering succession planning for the Board, the
Committee assesses its optimal composition in terms of skills
and experience, and aligns it to medium and long-term time
horizons primarily based on individual tenure and the need
torefresh Board membership.
While identifying and developing talent across the Group
remains primarily the responsibility of management, the
Committee also reviews wider succession plans for senior
managers below Board level.
This review is undertaken annually. The Committee receives
updates from the Chief Executive Officer in relation to senior
management succession planning to ensure there is a good
quality pipeline in place.
The Committee challenges those plans in order to understand
the actions taken to enhance the pipeline, ensuring there is
representation from a diverse range of employees.
The Committee is able to monitor the Group succession
plans,noting where we have potential internal successors
orwhere we have to undertake an independent external
appointments process.
Diversity
The Board’s policy is that the selection of new Board members
should be based on the best individual for the role and that the
Board’s composition should have an appropriate balance of
skills and diversity to meet the requirements of the business.
At the end of 2025, female Board representation stood at
38%,however this fell to 29% in 2026 following Elizabeth
Edwards’ retirement. We continue to have one senior board
position, the Senior Independent Director, held by a woman.
On recruitment, our policy is that we expect our independent
search firms to ensure, where possible, that there is a diverse
selection of candidates. We ensure that this is not just for
gender but also all diversity characteristics, a policy that
weencourage throughout the Group when recruiting. To this
end, we ask our search firms for all recruitment levels across
theGroup to aim for a long list of at least 50% women and
appropriate diversity representation. We recognise that
thereare significant benefits of diversity, including age,
gender,ethnicity, core skills, experience, and educational
andprofessional background, which we continue to evaluate
whenever changes to the Board’s composition are considered.
Following a review of the senior leadership team by Fredrik
Widlund to ensure better representation from our property
management functions across our regions, we were at the
sametime also able to achieve greater gender diversity
(55%male: 45% female).
Our Diversity, Equity and Inclusion Policy underlines our
commitment to attracting, promoting and developing talent
nomatter who they are.
Succession planning review process
2.
Assessment of teams
and high performers
3.
Identification of individuals’
development needs and timeline
4.
Group-wide report compiled
5.
CEO presents to the
Nomination Committee
6.
Nomination Committee presents
key findings to the Board
1.
Individual CEO meetings with
HeadsofFunctions
Our focus for the year ahead
• Oversee the succession plan for the Chair
• Annual review of our succession plans for the Board
• Annual review of succession plans and talent
pipelinebelow Board level
• Ongoing induction of new Board members
• Implement findings from internal Board
effectivenessprocess
CLS Holdings plc Annual Report and Accounts 2025 77
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statements
Corporate
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Strategic
report

Objectives
Policy objectives Implementation
Ensure the Board comprises
anappropriate balance of skills,
experience and knowledge
required to oversee and
supportthe management
oftheCompany effectively.
The Committee continues to monitor the composition of the Board and meets at least
annually to review and discuss it. As explained above, during the year an executive search
firm, Sapphire Partners, was appointed to search for a Non-Executive Director toreplace
the German real estate experience following Elizabeth Edwards’ retirement on 31 December
2025 and Johannes Conradi was appointed in September 2025.
Ensure consideration is given to
candidates for Non-Executive
Director Board appointments
froma wide pool, including
thosewith no listed company
Board experience.
The brief that is given to our independent executive search firms is designed to ensure that
this Policy objective is met. Whenconsidering appointments to the Board, the Committee
endeavours to consider candidates with a broad range of experience. We were satisfied
thatSapphire Partners provided candidates with a range of working experiences during
ourrecruitment process.
Ensure Board appointment ‘long
lists’ contain diverse candidates,
including diversity of social
andethnic backgrounds, and
cognitive and personal strengths.
The brief that is given to our independent executive search firms is designed to ensure that
this Policy objective is met. Whenconsidering appointments to the Board, the Committee
endeavours to consider candidates with a broad range of experience. We were satisfied that
Sapphire Partners provided candidates who had a diverse range of backgrounds during the
recruitment process.
Targets
Policy targets Progress against target
40% women representation
ontheBoard.
38% female representation on our Board at 31 December 2025 (2024: 38%).
Minimum of one Board
Directorfrom an ethnic
minoritybackground.
When the Board seeks to appoint a Non-Executive Director, it will expect its independent
consultants to ensure candidates come from a diverse range ofbackgrounds. Currently
notmet.
One senior Board position
heldbyawoman.
Elizabeth Edwards stepped down as our Senior Independent Director on 31 December 2025
and Eva Lindqvist was appointed to this position, therefore this target has been met.
Data on diversity of the board and executive management (at 31 December 2025)
A) Table for reporting on gender identity or sex
No of board
members
Percentage of
theboard
Number of senior
positions on
theboard
(CEO,CFO, SID
andChair)
Number in
executive
management
Percentage of
executive
management
Men 5 62 3 6 54
Women 3 38 1 5 46
Other – – – – –
Not specified/prefer not to say – – – – –
B) Table for reporting on ethnic background
White British or other White
(including minority-white groups) 8 100 4 10 91
Mixed/Multiple Ethnic Groups – – – 1 9
Asian/Asian British – – – – –
Black/African/Caribbean/
BlackBritish – – – – –
Other ethnic group, including Arab – – – – –
Not specified/prefer not to say – – – – –
CLS Holdings plc Annual Report and Accounts 202578
Nomination Committee Report continued
Composition, Succession and evaluation
Board Diversity Policy

Review process
Appointment of consultants
The last external Board effectiveness review was undertaken
in2023, by Independent Audit Limited using their online
governance assessment service Thinking Board. They have
noconnection with CLS or any individual director.
Each year, the results of the review, together with those of the
previous year, are discussed in detail and enable the Board to
understand better whether there have been improvements in
the operation of the Board and also where it can be enhanced.
Based on the results of the 2025 review, this approach met
theBoard’s objective.
It is noted that the Company was not a constituent of the
FTSE350 index for the year immediately prior to the reporting
year. Consideration will be given as to whether to continue with
externally facilitated reviews every three years.
Board Effectiveness Framework
The process covered the key areas of: Leadership, responsibility
and accountability; performance and risk management; and
Board operation.
The primary purpose of the review was to direct the Board’s
attention to areas where there might be opportunities to
improve its performance.
The report was broken down into themes, which corresponded
to the groupings of questions covering the key topics
highlighted in the chart.
After an introductory overview, each section provided a chart of
the responses, with commentary that summarised the findings,
drew out key points, and contextualised the results based on
the experiences of other review processes.
The review was presented to the Board for discussion at its
November 2025 meeting.
Leadership
Composition
Succession
Skills & Experience
Accessibility
Accountability & Risk
Strategy
Risk
Engagement
Development
Board & Committee operation
Roles
Culture
Communication
Efficiency
Board dynamics
Relationships
Transparency
Openness
Challenge
Year 2
Internal questionnaire and
follow up on results of previous
performance reviews
Year 3
Internal questionnaire and
follow up on results of previous
performance reviews.
Year 1
Externally facilitated questionnaire
using Independent Audit’s Thinking
Board Software.
The process was divided
intofourstages:
1st Stage
Design and scope of
questionnaire to address core
areas and key themes, and
facilitate the ability to provide
confidential written responses
towhere improvements could
be made.
2nd Stage
External questionnaire including
follow up on results of previous
performance reviews.
3rd Stage
Review of the results of the
questionnaire and benchmark
findings against the 2024
externally facilitated review
outcomes.
4th Stage
Presentation of report to the
Board for discussion and to
prepare a plan for achieving
desired outcomes.
CLS Holdings plc Annual Report and Accounts 2025 79
Additional
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Financial
statements
Corporate
governance
Strategic
report
Review of Board effectiveness

2025 Internal Board effectiveness results and objectives for the forthcoming year
Key focus areas within the internal Board Effectiveness Framework
2026 objective
1
Leadership
There was unanimous agreement that members
work together on a basis of trust and openness,
thatthe right skills are around the table and that
Directors have a good understanding of their
duties. There was a consistent view that the
Chairman led and listened, and this was also true for
the CEO. Members agreed that they kept abreast
of changes to the regulatory and governance
landscape, and concluded that as a result they
wereeffective in discharging their duties.
Maintain the positive momentum in monitoring
andembedding organisational culture, ensuring
values remain central to achieving objectives.
Ensurerevised workforce engagement initiatives
areimplemented.
2
Accountability
& Risk
The Board considered that sufficient time had
beenallocated to the strategic opportunities,
risks,emerging technology and changes in the
realestate industry, and that consideration of
scenario planning had improved. The Board noted
the additional work undertaken on key material
internal controlsduring the year.
Include a separate section on risks at the annual
strategy meeting and explore ways to involve the
fullBoard in discussions on evolving risks.
3
Board &
Committee
operation
There was a good balance between operational
andstrategic matters, and thatfree discussion
facilitated better oversight of the monitoring
oforganisational risks and controls. Itwas noted
that there was appropriate challenge ofthe views
ofthe Chair and CEO, which had created a feeling
of mutual respect and understanding. Whilst there
was an agreement that the Board communicated
well with key stakeholders, efficiencies could be
gained from shorter, more concise Board papers.
Review and, where necessary, further structure
thereporting processes of the remuneration
andnominations committees to ensure clarity
ofroles and effective planning.
4
Board
dynamics
Board dynamics were positive and information
wasconsidered to be of a high standard. Meetings
were well chaired and supported by the Company
Secretary. Additional informal conversations with
the Chair would be welcomed inbetween meetings.
Create more opportunities for directors to interact
outside formal meetings, particularly to support the
integration of new members and the new CFO.
Objectives and outcomes arising from 2024 internal board review results
andimplementedduring2025
Objectives Outcomes
Enhanced focus on Board succession planning to ensure skills
and experience are enhanced following Elizabeth Edwards’
retirement from the Board.
Appointment of Johannes Conradi, to enhance the Board’s
German real estate experience.
Ensure regular feedback on employee matters to ensure
culture is embedded in the organisation and it is in line with
values and long-term success of the business.
Town Hall meetings to which employees are invited, facilitating
anunderstanding of the Group’s culture and values.
Arrange deep dives into alternative strategic options. Implementation of focus session on specific strategic areas
ofthe business at Board meetings during the year. Strategy
Board meeting agenda streamlined concentrate on strategic
challenges andopportunities in the real estate market.
Increase interaction with the Chair through dedicated one-to-
one sessions. Facilitate opportunity to spend more time with
executive andmanagement teams to share experiences.
One-to-one sessions with the Chair offered to each Board
member. Property tour in Lyon to spend more time with teams
in different countries.
CLS Holdings plc Annual Report and Accounts 202580
Nomination Committee Report continued
Review of Board effectiveness continued

Dear shareholder
On behalf of the Audit Committee, I am pleased to present
thereport of the Committee for the year ended 31 December
2025. This report is intended to provide an insight into the
workof the Committee during the year.
Role of the Committee
The Committee’s main roles and responsibilities are set out
below and reflect the Code provisions. The Committee has
Terms of Reference, which are reviewed annually and are
available on the Company’s website.
Membership and attendance
Our Committee is comprised entirely of independent
non‑executive directors.
My experience means I have recent and relevant financial
experience, and my fellow Committee members all have
significant experience of the real estate and other commercial
sectors, including other audit committees on which they sit.
Further detailsof our experience can be found on pages
66and67.
The Committee met four times during 2025.
Valuations
We continue to ensure that the assumptions made by the
valuers underpinning the valuations were appropriate. InMarch
we received presentations from our valuers in each region and
had the benefit of reviewing their reports in advance. We were
able to challenge the valuers on specific properties where there
was a significant valuation variance fromthe prior period end.
The Committee is of the view that the valuations are appropriate.
Further commentary on matters relating to valuations are set
out below.
Going Concern
The Committee continued to monitor and review the
goingconcern assessment. As there has been relatively
littlechange to the macro‑environment, the key going
concernchallenges remain.
At the half year and the year end, the Committee noted that
inboth the ‘Base Case’ and the ‘Severe but plausible’ scenario,
the Group is reliant upon itsability to both refinance maturing
debt and to complete a number of investment property disposals
in the going concern period in challenging market conditions.
During 2025 we refinanced all of our maturing debt facilities,
totalling over £370 million, and have significantly fewer
refinancings due in 2026. We also sold properties to the
valueof £144.2 million during 2025. With this track record,
Management remain confident that planned refinancing
andproperty disposals will be achieved over the going
concernperiod. However, it continues to be the case that
ourrefinancings of facilities that fall due within the going
concern review period, and planned property disposals,
areoutside management’s direct control.
Consequently we reached the conclusion that a material
uncertainty existed inboth the ‘Base Case’ and ‘Severe but
plausible’ scenario thatcould cast significant doubt on the
Group’s ability to continue asa going concern.
The Auditors reviewed Management’s paper on the assessment
of the Group’s going concern and they also agreed that a material
uncertainty existed.
Notwithstanding the material uncertainty, after due
consideration, the Committee is satisfied that the assessment
of the going concern basis and statements made inconnection
with it are appropriate. In addition, having taken into account the
key judgements made in relation to the goingconcern period,
and the current progress on both the refinancings and sales,
theCommittee agreed that there is a reasonable expectation
that the Group will be able to continue in operation and meet
itsliabilities as they fall due and to continue as a going concern
for the period to at least 31 July2027.
Committee members’ attendance
during the year ended 31 December 2025
Bill Holland
Elizabeth Edwards
Eva Lindqvist
Bill Holland
Chair, Audit Committee
CLS Holdings plc Annual Report and Accounts 2025 81
Additional
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Financial
statements
Corporate
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Strategic
report
Audit Committee Report
Ensuring oversight, risk management and integrity of financialreporting

Review of Internal Controls
To ensure compliance with provision 29 of the Code,
Management have completed their assessment and
documentation of the Group’s 30 material internal controls
covering the key risk areas. The diagram below provides
asummary of the governance and oversight over these
materialcontrols across the Group.
Key material controls tested for effectiveness in 2025 include:
• Financial – authorisation procedures, financial monitoring
andreporting controls.
• Treasury & Tax – covenant compliance, bank reconciliations,
REIT tax assessment controls.
• Operational – approval of new leases and renewals, tenant
credit checks, safety compliance, valuation information.
• Governance & HR – policy adherence, whistleblowing,
Groupcommittee oversight.
• IT – cyber security training, cyber penetration testing
• Sustainability – Net Zero Carbon pathway and ESG
monitoring controls.
The testing results were presented to the Committee
throughout the year for review. It was noted that while there
were no major control failings, minor process improvements
hadbeen made where appropriate.
Sustainability
The sustainability data platform implemented last year is now
providing instant management information in relation to energy
(and therefore carbon) consumption, which is both supporting
our property management teams to focus resources to achieve
further energy and carbon savings and measuring our progress
against the Net Zero Carbon Pathway.
The Committee remained satisfied with the current process for
sustainability data assurance, which was provided by a suitably
qualified external consultant.
Effectiveness testing and reporting
Identified material controls
Financial
The financial controls ensure clear
oversight and accountability within the
organisation. They provide a structured
framework for approvals and segregation
of duty controls, budgeting oversight,
payroll approvals, monitoring financial
performance and analysing variances.
Treasury & Tax
The treasury and tax controls facilitate
robust cash management and compliance.
They provide a framework for monitoring
loans, covenant compliance checks, and
regular oversight over current and future
financing decisions and REIT and tax
compliance. This ensures effective
oversight of financing and tax activities
and adherence to regulatory requirements.
IT
The IT controls enable the security
andintegrity of critical systems and
data.They provide a framework
forrestricting access, enhancing
cybersecurity awareness and regularly
testing system defences. This ensures
protection against cyber threats and
unauthorised access.
Governance & HR
The governance and HR controls
underpin organisational resilience and
compliance. They provide a framework
for business continuity, regulatory
compliance and ethical conduct.
Thisensures legal compliance and a
supportive environment for employees.
Operational
The operational controls ensure
efficiencyand compliance in daily
activities. They provide a framework
forleasing activities, procurement, tenant
credit checks, maintenance audits, health
and safety, and emergency preparedness.
This ensures smooth operations, safety
and effective propertymanagement.
Sustainability
The sustainability controls support
theorganisation’s commitment to
environmental goals. They provide
aframework for tracking progress
ontheNet Zero Carbon Pathway and
ESGKPIs. This ensures accountability,
continuous improvement and alignment
with sustainability objectives.
The Board
Audit Committee
CLS Holdings plc Annual Report and Accounts 202582
Audit Committee Report continued

Cyber Risks
During the year, we received presentations from our
HeadofIToutlining the steps the Group had taken to reduce
the potential for a cyber security incident. This included
penetration testing, which showed that our security defences
were sufficiently resilient, and the IT training to assist employees
in preventing risks entering our IT environment has been
effective. The Committee was pleased to note that we would
be seeking Cyber Essential Plus certification during 2026 with
significant preparation having been undertaken in 2025.
Performance of the Committee
The Committee undertakes a review of its performance each
year. During 2025, this review was undertaken internally by
wayof a questionnaire and concluded that the Committee
continued to perform effectively and had unfettered access
tothe information and advice it needed to make informed
decisions on all matters related to remuneration.
Bill Holland
Chair, Audit Committee
Our focus for the year ahead
• Ensure valuations and associated assumptions
areappropriate
• Monitor principal and emerging risks to ensure the risk
register remains appropriate and mitigations are in place
• Ensure oversight of implementation of Code Provision 29
• Review and monitor material internal controls and receive
regular updates on internal controls testing
• Receive regular reviews on the implementation of MRIx
inGermany, anew property and finance software system
• Foster a good working relationship with the external
auditor, with a focus on the key issues outlined in each
audit report during the year
• Monitor the impact of changes to accounting and
governance laws and regulations
• Monitor sustainability data reporting and processes
Provision 29 timeline
2024
June
Management initiate review
ofallinternalcontrols
September
Management refines these controls to
identify those it considers to be material
November
Report to the Audit Committee outlining
process of identification and proposed
material controls
2025
January
Initial cycle of testing of selection
ofmaterialcontrols performed
February
Results of first cycle of testing of material
controls reported to Audit Committee
June
Second cycle of testing of selection
ofmaterial controls performed
August
Results of second cycle of testing ofmaterial
controls reported to AuditCommittee
November
Update provided to the Audit Committee
along with summary of our progress compared
with our peers towards readiness for declaration
of effectiveness of material controls
2026
February
Third cycle of testing of selection
ofmaterialcontrols performed
March
Results of third cycle of testing of material
controls reported to Audit Committee
August
Management to provide Audit Committee
update of progress towards declaration
ofeffectiveness of internal controls
November
Committee report to the Board on
effectiveness of material controls made
asat31 December
December
Assessment of effectiveness of material
controls made as at 31 December
CLS Holdings plc Annual Report and Accounts 2025 83
Additional
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Financial
statements
Corporate
governance
Strategic
report

Main activities during the year
Principal responsibilities of the Committee
Areas of responsibility Key areas discussed and reviewed by the Committee during the year in discharging its responsibilities
Monitoring the integrity of
the financial statements and
any formal announcements
relating tofinancial
performance, and reviewing
significant financial reporting
judgements contained inthem
At our meetings in March 2026 and August 2025 we reviewed the full year and half‑year
results, respectively. This was in conjunction with the external audit report from BDO, our
external auditor, on the year‑end financial statements.
We challenged management on the integrity of those financial statements and our discussions
with them focused on the significant financial judgements which are explained in the next table.
The Committee was satisfied with the outcome of our discussions with management on the
integrity of the financial statements.
Providing advice on whether
the annual report and
accounts, taken as a whole,
isfair,balanced and
understandable,
andproviding theinformation
necessary for shareholders
toassess CLS’ position
andperformance, business
modelandstrategy
We reviewed the 2025 annual report and accounts at our two Committee meetings in March
2026, and reported our conclusions to the Board that it contained sufficient information for
shareholders to assess the Group’s performance and strategic operations.
We also considered the Alternative Performance Measures (‘APMs’) that CLS uses alongside
statutory figures and concluded that these should remain unchanged from last year and that
these assist in providing stakeholders with additional useful information on the underlying
trends, performance and position of the Group. Note 5 and the Supplementary disclosures
tothe financial statements give a full description and reconciliation of our APMs.
Additionally, having considered how the report was formulated, reviewed internally and by the
external auditor, we considered that the 2025 annual report and accounts meets the criteria set
out in Provision 25 of the Code and recommended them to the Board. The Board’s statement
is set out on page 119.
Reviewing our risks, risk
management systems and
internal financial controls
The Committee assists the Board in undertaking a thorough assessment of the Group’s
principal and emerging risks. It receives reports at its meetings which identify principal risks
andany movements in them, which it reviews and reports to the Board on its findings, for
widerdiscussion and approval. The ways in which the Group’s principal and emerging risks
areidentified and addressed are set out on pages 53 to 60.
We reviewed the overall status of the principal risks and uncertainties, the changes in risk profile
in 2025 and the current direction of travel for 2026. It was noted that in 2025, the risk profiles
remained largely unchanged. In regard to the current direction of travel of the risks faced, our
assessment deemed that there would be no material changes in the risk profiles. We will
continue to monitor any changes to the Political & Economic risk profile and any adverse
effects this may have in the market.
As explained on page 53, during the year, in addition to reviewing the established framework
for internal controls and risk management systems, the Committee received and discussed
reports from management on the operation and testing of the Group’s internal controls.
We also continued to monitor the roll‑out of the Group’s new property and finance system,
which is now live in the UK and France. German implementation was delayed due to software
deficiencies and is now expected to be in Q1 2026. The system is now starting to provide the
operational efficiencies expected, following a significant amount of testing and development.
Monitoring and reviewing
annually whether there
isaneed for an internal
auditfunction
In light of the size and complexity of the Group, and the regular updates the Committee
receives on internal controls operation and testing, the Committee considers that there
remains no requirement for an in‑house internal audit function. How assurance on internal
controls is achieved is set out on page 82 and pages 53 and 54.
CLS Holdings plc Annual Report and Accounts 202584
Audit Committee Report continued

Areas of responsibility Key areas discussed and reviewed by the Committee during the year in discharging its responsibilities
Conducting the audit
tenderprocess and
makingrecommendations
tothe Board, about
theappointment,
reappointment and removal
of the external auditor, and
approving the remuneration
and terms of engagement
ofthe external auditor
Our last competitive tender process was undertaken in May 2024 and BDO were appointed
asthe Group’s external auditor on8 September 2024. They will stand for reappointment at
the2026 AGM.
In undertaking this tender, the Committee considers that it complied with the provisions
oftheStatutory Audit Services for Large Companies Market Investigation (Mandatory Use
ofCompetitive Tender Processes and Audit Committee Responsibilities) Order 2014 and
follow the Audit Committees and the External Audit: Minimum Standards, May 2023.
The Committee reviewed the fee for the 2025 audit at its meeting in November 2025
andconfirmed that it was appropriate.
Reviewing and monitoring
theexternal auditor’s
independence
andobjectivity
The Committee receives a report from the external auditor on their continued independence,
contained in their report at the year end and at the planning meeting in November. There were
no matters that may have hindered their independence, therefore, following consideration,
theCommittee considers BDO remains independent and objective in its external audit of
theGroup.
Reviewing the effectiveness
of the external audit
process, taking into
consideration relevant
UKprofessional and
regulatory requirements
We reviewed BDO’s reports on the external audit plan from the audit of the annual report
andaccounts. We found the reports to be comprehensive, sufficiently detailed andfocused.
We also met with the auditor prior to the Board’s final approval of these financial statements
inorder to receive in‑depth reports on the external audit process. The Committee noted
occasions where the auditor challenged management and the results of those challenges.
Weare pleased to report that there were no issues of a material nature that needed to be
brought to the Board’s attention.
After the external audit process has taken place the Committee meets with internal stakeholders
to review the effectiveness of the external audit process. This is fed back to ourexternal audit
partner. We consider that BDO provided an effective audit and that key accounting and
auditing judgements had been identified and reported in line with regulatory and professional
requirements. This allowed us to recommend their reappointment to the Board.
The Committee also met with BDO during the audit process without management present
toascertain if there were any concerns, to discuss the audit reports and to ensure that BDO
received the support and information requested from management. No concerns were identified.
During the year, the Financial Reporting Council Audit Quality Review (AQR) team inspected
the audit of the financial statements for CLS Holdings plc carried out by BDO LLP for the year
ended 31 December 2024. The Committee considered the findings from the AQR final report
and BDO’s responses and proposed future actions. In addition, the Audit Committee Chair and
Audit Partner discussed the final report and the Audit Committee Chair met representatives
from the AQR team to understand their key findings and recommendations. Based on its review
of the report and discussions with BDO and the AQR team, the Committee is satisfied that
comments raised by the AQR have been incorporated into the work carried out by the external
auditor and the audit continues to be effective.
Developing and implementing
apolicy on the engagement
of the external auditor to
supply non-audit services,
ensuring there is prior approval
of non‑audit services,
considering the impact this
may have on independence,
taking into account the relevant
regulations and ethical
guidance, and reporting to
theBoard on any improvement
or action required
The Committee has developed a policy on the supply of non‑audit services to safeguard
auditor independence and objectivity. The policy reflects the requirements of the FRC’s
ethicalstandard.
During the year non‑audit services undertaken by the external auditor amounted to £210,000
(2024: £nil). This reflected fees undertaken for reporting accountant services and was
approved by the Committee in accordance with the policy.
The Committee considers that it has complied with the provisions of the Statutory Audit
Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order 2014.
CLS Holdings plc Annual Report and Accounts 2025 85
Additional
information
Financial
statements
Corporate
governance
Strategic
report

Significant issues considered
bythe Committee relating to
thefinancial statements How these issues were addressed by the Committee
Property valuations The Committee met with the Group’s UK, German and French valuers during the year and
extended an invitation to the whole Board to attend. During the meetings we discussed the
methodology used for the six monthly valuations of the Group’s properties and received
in‑depth reports on the local markets in which the properties were located.
We discussed the risks and opportunities for the key properties in each location that were
ofsignificant value or had the largest changes in valuations to better understand the valuers’
key assumptions and how they align with our long‑term plan for each property. Independently,
the external auditor also met with the Group’s valuers using real estate specialists and provided
the Committee with a summary of their review contained within their report at year end.
The Committee was satisfied with the explanations provided by the valuers in relation to
theportfolio and that the methodology, assumptions and judgements used were appropriate.
TheCommittee recommended to the Board that the valuations were suitable for inclusion
inthefinancial statements and the work of the auditor was adequate.
Going concern and
viabilitystatements
As described above, the Committee considered management’s assessment of the Group’s
going concern and viability statements.
In accordance with Provisions 30 and 31 of the UK Corporate Governance Code, our going
concern and viability statements, and the methodology used in their preparation, can be
foundonpages 61 to 63.
Revenue recognition The Committee considered the main areas of judgement exercised by management in
accounting for revenue, including the treatment of rent, lease incentives and service charge
income. The external auditor confirmed that they had audited the timing of revenue recognition,
treatment of rents, service charge income, other property‑related income andlease incentives,
and assessed the risk of management override of controls. Based on the audit procedures
performed, they did not identify any matters to bring to the Committee’s attention. The
Committee, having consulted with the external auditor, concurred with the judgements applied
by management and was satisfied that revenue is appropriately recognised and reported.
Significant transactions The Committee considered there to be no significant transactions during the year that were
outside the ordinary course of business.
Management override
ofcontrols
The Committee assessed the framework for financial controls, which are regularly updated
bymanagement and brought to the Committee for review and approval. The Committee
foundno concerns arising from its review.
The Committee received an overview of how the Group implemented its compliance
obligations in response to the new Failure to Prevent Fraud (“FTPF”) Offence introduced
underthe Economic Crime and Corporate Transparency Act 2023 (“ECCTA”).
The external auditor performed planned audit procedures on the key areas which may be
susceptible to management override of controls. This included identifying fraud risks during
the audit planning stages, making inquiries of management about risks of fraud and the
associated controls, considering the effectiveness of management’s controls designed
toaddress the riskof fraud and performing specific procedures regardless of identified risks,
including journal entry testing. The external auditor confirmed to the Committee that they
didnot identify any matters that suggested there had been instances of management override
during the year.
CLS Holdings plc Annual Report and Accounts 202586
Audit Committee Report continued

Dear shareholder
I am pleased to present the Report of the Remuneration
Committee (‘Report’) for the year ended 31 December 2025.
2025 has been a busy year for the Committee as we undertook
a review of the Directors’ Remuneration Policy ahead of a
shareholder vote at the 2026 AGM. I am grateful for the input
provided by our largest shareholders and the proxy voting
agencies who have helped shape the design of the new policy.
The sections contained in this Report are:
• this Annual Statement from the Chair of the Committee;
• the Annual Report on Remuneration which explains how
wehave paid our Directors this year and how our framework
aligns with our wider strategy and corporate governance
bestpractice, as well as how we consider remuneration
ofthewider workforce in relation to executive pay; and
• the proposed Directors’ Remuneration Policy which sets
outthe key terms of how we intend to pay directors over
thethree year period 2026-2028.
The Annual Statement and the Annual Report on Remuneration
are subject to a single advisory shareholder vote and the
Directors’ Remuneration Policy will be subject to a binding
shareholder vote at the AGM, which will be held on 23 April 2026.
Business context
Slow economic growth and political uncertainty, both
domestically and internationally, was not conducive to improved
investment markets or occupier demand, making 2025 a
challenging year for the Group. The focus this year has been
ondelivering our strategic objectives: reducing vacancy and
cost control, reducingdebt through asset sales, completing
refinancings due in 2025 and investing in our portfolio. Despite
the market headwinds, the management team had achieved a
significant amount during the year. Group vacancy reduced in
the second half of 2025 (and it would have reduced further had
it not been for two German insolvencies), we sold £144.2 million
of property which reduced our LTV ratio and repaid, refinanced
or extended £373.7 million of debt which smoothed our debt
maturity profile, and we have invested over £14 million in the
portfolio. Improvements to vacancy was offset, as expected,
bylost income and lower NTA through asset sales, and planned
expiries. As we implement our strategic priorities in 2026,
weare aiming for £100 million to £150 million of assets sales.
This, combined with refinancing activity, lease expiries and
redevelopments, will impact both EPS and NTA in 2026.
However, we consider that this strategic repositioning of
theportfolio will deliver long-term value for shareholders.
Incentive outcomes for the year ended 31 December 2025
The 2025 annual bonus was based on four key metrics for the
Group: EPRA EPS (30%), EPRAvacancy rate (25%), Group loan
to value (15%) and strategic objectives (30%). The financial
targets were set at thestart of the year and took into account
internal forecasts and the external outlook. EPRA EPS of 7.6p
was lower than last year reflecting reduced net rental income
largely as a result of £143.3 million of properties sold and
planned expiries. This was partially offset by lower financing
costs and lower operating and administrative costs. The outcome
against this measure was above the threshold but below target.
Group LTV was 50% which reflected a balance ofasset disposals
and property value declines during the year. As a result of
second half letting activity, EPRA Vacancy ended the year at
14.5%. TheLTV and EPRA Vacancy outcomes were also above
threshold but below target.
While the EPS outcome was lower than the prior year, reflecting
the planned and executed asset disposals, they were in line with
the Board’s strategy to lower debt and LTV.
The Committee believes that the 2025 financial outcomes
arereflective of the overall performance of the Group, but also
notes the excellent progress made on our strategic priorities
which were based on ESG, operation and digitisation objectives.
As a result, the overall performance against the financial and
strategic objectives has resulted in a bonus of 46.7% of
maximum for the year which the Committee considers is
reflective of overall performance.
The LTIP awards granted in 2023 were based on relative TSR
and relative EPRA NTA growth. CLS’s TSR performance was
below median and therefore this part of the award will lapse.
TheEPRA NTA measure outcome is pending as we await the
publication of peer group reports. The outcome of this measure
will be reported in next year’s report.
Committee members’ attendance
during the year ended 31 December 2025
Eva Lindqvist
Bill Holland
Lennart Sten
Eva Lindqvist
Chair, Remuneration Committee
CLS Holdings plc Annual Report and Accounts 2025 87
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Balancing reward with performance

Director changes
Andrew Kirkman gave notice of his intention to leave CLS on
27 June 2025. Mr Kirkman ceased to be a director on5 January
2026 and remained an employee to provide a period of
handover until 31 January 2026. Mr Kirkman received his base
salary, benefits and pension until the date of cessation of
employment and he did not receive a payment for loss ofoffice.
He did not receive an annual bonus for 2025 performance
andforfeited his outstanding LTIP awards and his right to an
annual bonusfor 2026.
Harry Stokes joined the CLS Board and was appointed as
CFOon 5 January 2026. His base salary has been set at
£300,000 based on his skills and experience and will next
bereviewed in 2027 to ensure it aligns with his development
and iscomparable to market rates.
2026 Directors’ Remuneration Policy review
Background
Since approval of the Policy in 2023, the real estate industry has
seen significant challenges brought about by macro-economic
events that have continued for longer than expected, principally
driven by higher interest rates impacting financing costs,
property valuations and company leverage. The office sector
has also seen structural changes in the way occupiers use their
space with emphasis on amenities and collaboration space
aswell as regulatory and tenant requirements around
sustainability and energyconsumption.
Despite this macro-economic and structural backdrop, the
Group’s operations remain robust. We continue to make
progress reshaping the business, creating a more focused
portfolio of higher-quality, faster-growing properties to
driveearnings growth.
Proposed change to long-term incentives
Long-term incentives are currently delivered via performance-
based share awards (‘Performance Share Awards’ or ‘PSAs’).
However, going forward, the Committee wishes to move to a
hybrid structure permitting the grant of both PSAs and
Restricted Share Awards (‘RSAs’) for Executive Directors for
the following key reasons:
• Cyclical nature of the sector – The hybrid structure will
resultin a more balanced approach to incentive provision in
respect of aligning to the Company’s strategy of delivering
shareholder returns through both portfolio transformation
and long-term asset management. In addition, a blend of
performance-based awards and restricted share awards
ismuch better suited to the cyclical nature of the
Company’ssector.
• Alignment below board – the hybrid structure will align with
the approach below Board, with senior management receiving
a combination of PSAs and RSAs.
The Committee is also mindful of the need to ensure the senior
team members areappropriately retained (particularly in light of
recent senior exits), noting recent long-term awards have
vested at low or nil levels and inflight awards are likely to have
little value.
As part of the consultation with investors, the vast majority of
shareholders were supportive of the move to a dual structure
although asmall minority wanted to understand further why a
single PSA structure is not well suited at this time. In this regard,
the Committee believes it is important for part of the long-term
incentive to bebased on absolute performance so that it
incentivises the delivery of CLS’s strategic priorities and
shareholder value. However, as management implements its key
strategy to sell anumber of properties to reduce loan to value,
the smaller portfolio makes medium-term growth target setting
more challenging. Furthermore, CLS is a FTSE listed real estate
business with exposure to the pan-European office sector and
therefore has no directly comparable listed peers and this
makes relative assessment of performance more challenging.
Taking into account these factors, the Committee believes a
mix of PSAs and RSAs is appropriate as it retains performance
linkage at a time when setting robust absolute and relative
targets ischallenging.
Neutral fair value exchange of quantum
The current LTIP policy limit is 200% of salary and the actual
2025 grant level for the CEO was below this at 175% of salary.
The proposal for 2026 is to continue to operate at the lower
2025 level but by splitting the fair value equally between
performance shares (87.5% of salary) and restricted shares
(43.75% of salary) by adopting the generally accepted
exchange principle of two PSAs for one RSA.
The Committee believes that this mix for 2026 provides an
appropriate balance between (i) incentivisation to deliver
growth through the use of absolute TSR, absolute TAR and
relative TAR performance targets, and (ii) stewardship of the
share price and people retention.
In future years under the Policy, the Committee wishes to retain
flexibility on the mix of PSA and RSA awards subject to:
• retaining the two PSA for one RSA exchange ratio;
• maintaining the overall 200% of salary LTIP limit;
• applying a maximum cap on RSA quantum of 50% of
salary;and
• considering the prevailing share price and risk of windfall
gainsat grant.
Our design incorporates a maximum 50% of salary cap on the
level of RSAs that may be granted and the ability to flex up the
PSA component of the overall award in 2027 and 2028 with a
commensurate reduction in RSAs (subject to the overall 200%
LTIP limit). In determining whether a higher performance share
and lower restricted share component is appropriate, the
Committee will consider the macro-economic environment
andthe visibility in setting long-term targets, the recovery in
theCLS share price, and the balance between the need to
retain and incentivise the senior leadership team. It is envisaged
that the performance share component will be higher and the
restricted share element lower once long-term visibility in
respect of target setting has improved. This built-in flexibility
ensures that the Committee is able to react to market and
Company-specific developments over the next three years.
CLS Holdings plc Annual Report and Accounts 202588
Remuneration Committee Report continued

RSA awards will be subject to an underpin which will enable
theCommittee to reduce vesting in exceptional circumstances
if,in the round, there has been material underperformance.
Inthis regard, the Committee will consider performance against
a framework comprising strategic delivery, financial health
andthe experience of our stakeholders.
Annual bonus deferral
The current Policy states that annual bonus awards of up to
100%of salary will be paid in cash while amounts over this level
will be deferred into shares for three years, with vesting subject
tocontinued employment.
However, following the publication of the Investment
Association’s 2024 Principles of Remuneration in respect
ofreducing bonus deferral where an Executive Director has
metthe shareholding guideline, the Committee is proposing
toamend its current approach to bonus deferral.
Going forward, where an Executive Director has met their
in-employment shareholding guidelines (250% of salary for
theCEO and 200% for the CFO role), the Committee may
reduce or remove bonus deferral to the extent that this is
considered appropriate.
Implementation of Policy in 2026
The Committee reviewed base salaries for the Executive
Directors in the context of the current economic environment
and increases awarded to our general employee population.
Asa result, a 2% uplift was awarded to Fredrik Widlund,
mirroringthe percentage increase awarded to the wider
workforce. Harry Stokes’s salary has been set at £300,000
upon his appointment on 5 January 2026.
Variable pay
Bonus potential remains unchanged at 150% of salary and 125%
of salary for the CEO and CFO respectively. The 2026 annual
bonus metrics will continue to be based on the following
measures:
• EPRA EPS – 30%
• EPRA vacancy rate – 25%
• Group Loan To Value – 15%
• Strategic objectives (including ESG) – 30%
Subject to the approval of the new Policy, the CEO will receive
PSA awards with a face value of 87.5% of salary and RSA awards
with a face value of 43.75%. The CFO’s award will comprise PSA
awards with a face value of 72.5% of salary and RSAs with a face
value of 36.25%. This is equal in fair value terms to the awards
granted last year.
Our share price over the last few years has been volatile and, as
the number of long-term incentive awards is driven by the share
price at the time of grant, the Committee wishes to retain
discretion to mitigate the risk of windfall gains occurring.
In this regard, while the share price at the time of writing is
broadly in line with last year’s grant price, it is the Committee’s
intention to review award outcomes at the point of vesting to
assess ifthere is evidence of windfall gains. The PSA awards will
vest based on the following performancecriteria:
• 35% Absolute Total Shareholder Return (Share price and
dividends) – 25% of this award will vest for growth of 5% p.a.
with full vesting for 14% p.a.
• 35% Absolute Total Accounting Return (NTA plus
dividends) – 25% of this award will vest for growth of 4% p.a.
with full vesting for 8% p.a.
• 30% Relative Total Accounting Return (NTA plus dividends)
– measured against a peer group of companies from the
FTSE 350 Real Estate Supersector.
The RSA awards will vest subject to the satisfaction of an
underpin with further details set out in the Annual Report
onRemuneration.
I am grateful to the constructive input provided by shareholders
as part of the review of executive remuneration. This feedback
has helped shape the proposed Policy which will be subject to a
shareholder vote at the 2026 AGM. I hope you will support our
new Policy and the advisory vote on the rest of this Report.
Eva Lindqvist
Chair, Remuneration Committee
CLS Holdings plc Annual Report and Accounts 2025 89
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Company
Strategy
We acquire the right properties
• Invest in high-yielding properties, predominantly offices, with a focus on cash returns
• Diversify market risk by investing in geographical areas with differing characteristics
We secure the right finance
• Target a low cost of debt
• Utilise diversified sources of finance to reduce risk
• Maintain an appropriate level of liquid resources
We reward shareholders, customers and employees
• Grow dividend in line with growth of the business
• Provide cost-effective accommodation by investing profits back into the business
• Reward employees for their work and loyalty
We deliver value through active management and cost control
• Maintain high occupancy rates
• Maintain a diversified customer base underpinned by a strong core income stream
• Maintain strict cost control
We continually assess whether to hold or sell properties
• Focus on holding those properties with the potential to add value through active asset management
• Sell those properties which are low yielding or where the risk/reward ratio is unfavourably balanced
Remuneration
Principles
Our Group strategy informs our Remuneration principles
and our structure supports these objectives
Competitive • Salaries are targeted to be at a conservative level and variable pay is targeted at above median so that combined,
total remuneration should be competitive when compared with companies of similar size and scale, i.e. peers in the
FTSE 350/Small Cap real estatesector.
• LTIP ensures more competitive market positioning, provided that the executive team delivers long-term
sustainableperformance.
Performance • A significant part of the Executive Directors’ reward is determined by the Company’s success in delivering
itsstrategy.
• Failure to achieve threshold levels of annual and long-term performance may result in no bonus and/or no vesting
ofthe LTIP.
• The fixed element of the Policy remains conservative against industry and sector peers.
• The Committee retains discretion to adjust pay outcomes if they do not reflect wider business performance in line
with best practice.
Shareholder
aligned
• A considerable part of the reward is paid in shares combined with significant shareholding requirements.
• Annual bonus over 100% of salary may be deferred in shares and vest after three years subject to continued
employment.
• In the case of the LTIP, vesting and deferral applies over a period of five years from grant. This allows the build up and
retention ofmeaningful shareholdings by the Executive Directors.
• Post-employment shareholding requirement increases lock-in over longer term and incentivises effective long-term
decision-making.
Simple and
transparent
• All aspects of the remuneration structure are clear to participants and openly communicated.
• The annual bonus is aligned to market practice.
• The LTIP is aligned to market practice and is simple to understand.
• The overall framework for remuneration is therefore aligned with good governance.
Our chosen incentive plan measures
clearly support the Company strategy
Annual Bonus
(2025)
EPRA Earnings
Per Share (30%)
Group LTV (15%)
EPRA Vacancy
rate (25%)
Strategic
Objectives (30%)
LTIP
(2025)
Absolute Total Shareholder Return
(35%)
Absolute Total Accounting Return
(35%)
Relative Total Accounting Return
(30%)
Our chosen incentive plan measures clearly support the
Company strategy and culture, whilst being market consistent
Linking our Remuneration Policy to our Strategy
CLS Holdings plc Annual Report and Accounts 202590
Remuneration Committee Report continued

This section of the report has been prepared in accordance with Part 3 of The Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 (as amended) and Rule 6.6.6R of the UK Listing Rules. The Annual Statement and
Annual Report on Remuneration will be put to a single advisory shareholder vote at the AGM on 23 April 2026.
This part of the report comprises five sections:
A. Remuneration for 2025
B. Directors’ share ownership and share interests
C. Pay comparison
D. Remuneration Committee membership, governance and voting
E. Implementation of Remuneration Policy in 2026
A. Remuneration for 2025
Single total figure of Directors’ remuneration
The total remuneration of the Directors for the year ended 31 December 2025 and the prior year is shown in the table below:
Executive Directors
Salary/fees
£’000
Benefits
1
£’000
Pension
2
£’000
Fixed pay
Sub-total
3
£’000
Annual
bonus
4
£’000
LTIP
5
£’000 Other
6
Variable pay
Sub-total
£’000
7
Tot al
£’000
Fredrik Widlund 2025 522 6 52 580 365 – 1 366 946
2024 507 7 51 565 360 31 1 392 957
Andrew Kirkman 2025 335 8 33 376 – – 1 1 377
2024 325 9 33 367 192 13 1 206 573
1 Taxable benefits comprise the provision of medical insurance and gym contribution.
2 Pension comprises contributions to a pension scheme or cash payments in lieu of pension or both.
3 Fixed pay Sub-total column is the total of salary, pension and benefits.
4 Comprises the value of annual bonus in respect of 2025 performance which, in line with the 2023 Policy, will be paid in cash as the amounts are below 100%
ofbasesalary. Mr Kirkman did not receive a bonus in respect of 2025 performance.
5 The 2024 LTIP consists of the entire final value of deferred notional share balance under PIP A Account which was paid in March 2025 and no value has been
attributed to the 2022 LTIP award, which lapsed in full. No value has beenattributed to the 2025 LTIP as the 2023 LTIP is expected to lapse.
6 Other fees relate to: the Matching Shares that vested during the year under the All Employee Share Incentive Plan.
7 Variable pay Sub-total column is the total of bonus cash and deferred shares, LTIP and Other share based pay.
CLS Holdings plc Annual Report and Accounts 2025 91
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Non-Executive Directors
Base
membership
fees
1
Other
Committee
fees
Additional
fees
Taxable
benefits
8
Tot al
Johannes Conradi
1
2025 15 – – – 15
2024 – – – – –
Elizabeth Edwards
2
2025 60 10 8 – 78
2024 60 10 4 1 75
Bill Holland
3
2025 50 15 – 1 66
2024 50 15 – 2 67
Eva Lindqvist
4
2025 50 20 – 1 71
2024 50 16 – 3 69
Bengt Mortstedt
5
2025 8 – – – 8
2024 50 – – 21 71
Anna Seeley
6
2025 128 – – – 128
2024 128 – – – 128
Lennart Sten
7
2025 235 – – – 235
2024 235 – – 1 236
1 Mr Conradi was appointed on 15 September 2025 and his Board membership fee is prorated (£14,808).
2 Ms Edwards received the following annual fees: Board membership £50,000; Senior Independent Director £10,000 (included in base membership fee);
AuditCommittee membership £5,000; Nomination Committee Membership £5,000; and Workforce advisory fees £8,075 (included in Additional Fees).
Taxablebenefits £435.
3 Mr Holland received the following fees: Board membership £50,000; Audit Committee Chair £10,000; Remuneration Committee membership £5,000.
Taxablebenefits £1,006.
4 Ms Lindqvist received the following fees: Board membership £50,000; Remuneration Committee Chair £10,000; Audit Committee membership £5,000
andNomination Committee membership fee of £5,000. Taxable benefits £1,170.
5 Mr Mortstedt retired from the Board on 28 February 2025.
6 Ms Seeley received the annual following fees: Non-Executive Vice-Chair fee of £128,000 (inclusive of all Committee fees).
7 Mr Sten received the following annual fees: Non-Executive Chairman fee of £235,000 (inclusive of all Committee fees).
8 In accordance with the Company’s expenses policy, Non-Executive Directors receive reimbursement for their reasonable expenses for attending Board meetings.
Ininstances where those costs are treated by HMRC as taxable benefits, the Company also meets the associated tax cost to the Non-Executive Directors through PAYE.
Annual bonus for the year ended 31 December 2025
The 2025 annual bonus was based on EPRA EPS (30%), EPRA vacancy rate (25%), Group loan to value (15%) and strategic
objectives. A breakdown of the financial measures, targets and outcomes are set out below:
Weighting
Threshold
(25% payout)
Target
(50% payout)
Maximum
(100%
payout)
2025
Achievement
% of
maximum
earned
EPRA EPS 30% 6.50 8.50 9.50 7. 6 0 11.6
EPRA Vacancy rate 25% 15% 12% 10% 14.5% 7. 3
Grou p LT V 15% 50% 45% 43% 50% 3.8
Strategic Objectives (see details below) 30% Assessed by Remuneration
Committee
80% 24.0
Total 100% 46.7%
CLS Holdings plc Annual Report and Accounts 202592
Remuneration Committee Report continued

The strategic objectives were based on three areas covering ESG, operational performance and digitisation. Further details of the
objectives and their outcomes are set out below.
Objective Achievement
ESG specific performance
To achieve a reduction in greenhouse gas emissions in line
withthe Net Zero Carbon Pathway model (2% like-for-like)
andthe delivery of planned building electrification projects
todecarbonise heating as part of the NZC Pathway.
The Group met this objective by achieving a 9.3% reduction
incarbon emissions and 5.8% reduction in energy usage (like
forlike), andcompleted its planned energy efficiency projects
for 2025. This ensures we continue our path to significantly
reducing emissions whilst investing in our buildings.
Operational
Successfully execute the key Treasury priorities including
thedelivery of 2025 refinancings and progress with
2026refinancings.
Successful delivery of corporate projects.
The Group delivered on all refinancings totalling over
£370million and has made progress with 2026 refinancings,
which was an exceptional achievement given the macro-
economic environment.
Digitisation
To fully implement MRIx across the business and to deliver
operational efficiencies from the new system.
MRIx continues to bring operational enhancements to our
internal processes in the UK and France. Management had
committed to implementing MRIx in Germany in H1 2025,
however continued delays to supplier enhancements resulted
infurther delays. The next available implementation date is
scheduled for Q1 2026. The Committee noted that this delay
was outside of Management’s control, despite delivering on all
testing deadlines, and that the delayed implementation was the
correct decision in the circumstances to minimise business risk.
This part of the strategic bonus outcome was partially met.
The lower EPS outcome in 2025 reflected the planned asset disposals totalling £143.3 million, which resulted in reduced net
rentalincome. Areduction in respect of the implementation of MRIx was appropriate due to prolonged delays in implementation,
despite therebeing mitigating circumstances that were outside of management’s control.
The overall bonus outcome was 46.7% of maximum. This resulted in the CEO’s bonus of £365,254 equating to 70% of salary
(outof a maximum opportunity of 150% of salary).
As the CEO’s bonus is less than 100% of his base salary, the bonus willbepaid in cash in line with the 2023 Directors’
RemunerationPolicy.
In accordance with the annual bonus plan rules, the CFO was not eligible for a 2025 bonus.
The Remuneration Committee believes the bonus outcome fairly reflects the performance of the business and the CEO over
the2025financial year, with our four strategic objectives being actioned in a very challenging macro-economic environment.
TheCommittee believes that the overall bonuspayment is therefore appropriate.
Vesting outcome for the 2023 LTIP award
LTIP Awards were granted to Executive Directors on 13 March 2023. Vesting is subject to two relative measures – relative
TSR(35%) and relative EPRA NTA per share (65%) – measured against the constituent companies of the FTSE 350 Real Estate
Supersector Index.
The relative TSR element was assessed over the three-year performance period which ended on 31 December 2025. CLS’
TSRgrowth wasbelow median and therefore this resulted in nil vesting for this element, as set out in the table below.
The remaining 65% was based on a relative EPRA NTA per share performance condition. The outcome against this measure
ispending and will be confirmed when all comparator group companies have published their 2025 EPRA NTA per share figures.
When available, the Committee will assess the achievement against the EPRA NTA performance targets to determine the final
vesting level of the 2023 awards.
CLS Holdings plc Annual Report and Accounts 2025 93
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The vesting outcomes in the tables below only relate to the relative TSR element. The final vesting outcome will be presented
innext year’s remuneration report.
Performance target Actual performance
Measure Weighting
Median
(25% vesting)
Upper
quartile
(100%
vesting)
CLS
performance
LTIP ve s ti ng
outcome of
element
LTIP vesting
outcome
after
weighting
Relative TSR growth 35% 18.6% 43.9% (52.0)% Nil Nil
Relative EPRA NTA per share growth 65% tbc tbc tbc tbc tbc
Vesting of LTIP (as a % of maximum) tbc
The LTIP vesting figure for 2025 in the single figure table is based on the TSR outcome only. As this part of the award has lapsed,
the reported figure is nil. In next year’s report the 2025 figure will be updated to reflect the performance outcome against the
EPRA NTA measure.
Vesting outcome for the 2022 LTIP award
In last year’s report we reported provisional vesting outcomes for the LTIP Awards which were granted on 16 March 2022. While the
relative TSR performance period has concluded and the vesting outcome was known, the other half of the awards were subject to a
relative EPRA NTA per share performance measure and this was estimated as the comparator group companies had not all
published their 2024 EPRA NTA per share results.
This assessment was undertaken by the Committee during the year and the relative EPRA NTA measure was also not met.
Therefore the 2022 awards lapsed.
Performance target Actual performance
Measure Weighting
Median (25%
vesting)
Upper
quartile
(100%
vesting)
CLS
performance
LTIP vesting
outcome of
element
LTIP vesting
outcome
after
weighting
Relative TSR growth 50% (22.2)% (15.0)% (53.8)% Nil Nil
Relative EPRA NTA per share growth 50% (14.7)% 2.85% (38.7)% Nil Nil
Vesting of LTIP (as a % of maximum) Nil
The Committee considered that the formulaic nil vesting outcome reflected the underlying performance of the Company.
TheLTIP value in the directors’ remuneration table for 2024 was reported as nil in last year’s report and has not therefore
beenrestated.
Payments to former Directors and loss of office payments
There were no payments to former directors or loss of office payments during the year.
Andrew Kirkman ceased to be a director of the Company on 5 January 2026. Mr Kirkman continued to provide a period
ofhandover until ceasing employment on 31 January 2026.
Mr Kirkman received his base salary, pension contributions and employee benefits for the duration of his employment.
Therewasno payment in lieu of notice.
Mr Kirkman did not receive an annual bonus in respect of performance in 2025 nor is he eligible for one in respect of 2026 in
accordance with the rules of the CLSHoldings plc Annual Bonus Plan. His outstanding LTIP awards granted on 13 March 2023,
13 March 2024 and 2 April 2025 under the CLS Holdings plc Long-Term Incentive Plan lapsed upon cessation of employment.
External appointments
Mr Widlund was appointed as a Trustee of Morden College, a social and housing charity, on 31 August 2018, for which no
remuneration is paid. On 1 January 2021, Mr Kirkman was appointed as a non-executive director of A2Dominion Housing Group
Limited, a housing association, for which he is paid £13,855 per annum. In February 2024, Mr Kirkman was appointed to the Oxford
University Audit and Scrutiny Committee, for which no payment is received.
CLS Holdings plc Annual Report and Accounts 202594
Remuneration Committee Report continued

B. Directors’ share ownership and share interests
Share awards granted during 2025 under the LTIP (audited)
LTIP awards were granted on 2 April 2025 in the form of nil-cost options. The normal vesting date of the LTIP Awards will be 2 April
2028, being the third anniversary of the award date. Vested awards will be subject to a two-year holding period.
Name Role
Face value of
award (% of base
salary)
Face value of LTIP
award
% vesting at
threshold
Number of shares
granted Vesting date
End of holding
period
Fredrik Widlund CEO 175% £913,136 25% 1,409,160 2 April 2028 2 April 2030
Andrew Kirkman CFO 145% £485,498 25% 749,224 2 April 2028 2 April 2030
The number of awards was set by reference to the closing share price on the day prior to grant (64.8 pence). The LTIP awards will vest
based on the satisfaction of the following performance conditions which are each measured over a three year performance period.
Weighting Threshold Maximum
Absolute Total Shareholder Return 35% 5%p.a. 14%p.a.
Absolute Total Accounting Return 35% 4%p.a. 8%p.a.
Relative Total Accounting Return 30% Median Upper quartile
Vesting for performance between Threshold and Maximum will be determined on a straight line basis. The peer group for the
Relative TAR measures comprises around 20 companies that are constituents of the FTSE350 Real Estate Supersector.
Shareholdings and share interests
The share interests of each Director as at 31 December 2025 (together with interests held by connected persons) are set out in
thetable below. To align Executive Directors with the interests of shareholders, the Remuneration Committee has implemented
shareholding guidelines for Executive Directors which require that the Chief Executive Officer should build a holding with a value
ofat least 250% of salary and the Chief Financial Officer of at least 200% of salary.
No. of shares
owned outright
(including
connected
persons)
31 December
2025
No. of shares
owned outright
(including
connected
persons)
31 December
2024
Vested but
unexercised LTIP
awards
Unvested LTIP
awards
subject to
performance
conditions
2
SIP shares
(matching and
partnership)
Shareholding
as a % of salary
as at
31December
2025
Shareholding
guidelines met?
1
Executive directors
Fredrik Widlund
2
832,704 710,054 - 2,769,384 21,748 97 N
Andrew Kirkman
3
466,237 466,237 - 1,447,492 18,672 86 N
Non-executive directors
Johannes Conradi
4
– – - - - n/a n /a
Elizabeth Edwards
5
9,809 9,809 - - - n /a n/a
Bill Holland 51,453 18,931 - - - n/a n /a
Eva Lindqvist 21,400 – - - - n /a n /a
Bengt Mortstedt
5
26,063,140 26,063,140 - - - n /a n/a
Anna Seeley 84,273 12,273 - - - n /a n/a
Lennart Sten 111,350 111,350 - - - n /a n /a
1 Shares and share interests counting towards the shareholding requirement include beneficially owned and all SIP shares, but excludes unvested LTIP awards.
Shareholding values based on 30-day average share price up to 31 December 2025, £0.595. Fredrik Widlund met the shareholding requirement of 250% of salary
in 2021 and it is noted that his total interests increased during the year by 128,160 shares but the overall value decreased by £78,445 (2024: decrease £65,954).
MrKirkman met the shareholding requirement of 200% of salary in 2022 and it is noted that whilst his total interests remained the same the overall value decreased
by £97,218 (2024: decrease of £81,234).
2 At the date of this report, Mr Widlund’s SIP shares was 23,244 shares.
3 Mr Kirkman resigned as a director on 5 January 2026. All unvested shares subject to performance conditions lapsed upon cessation of employment
on31 January2026.
4 Johannes Conradi joined the Board on 15 September 2025.
5 Elizabeth Edwards and Bengt Mortstedt stepped down from the Board on 31 December 2025 and 28 February 2025, respectively. The number of shares
isatthedate of resignation.
CLS Holdings plc Annual Report and Accounts 2025 95
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C. Pay comparison
Percentage change in Directors’ remuneration versus employee pay
The table below shows how the annual percentage change in each Directors‘ salary/fees, benefits and bonus between 2021, 2022,
2023, 2024 and 2025 compared with the percentage in each of those components of pay for employees. Only the executive
directors are employees of CLS Holdings plc. All other employees are employed by wholly owned CLS Holdings plc subsidiaries.
Percentage change 2025/24 Percentage change 2024/23 Percentage change 2023/22 Percentage change 2022/21
Salary/
fees %
Taxable
benefits
% Bonus %
Salary/
fees %
Taxable
benefits % Bonus %
Salary/
fees %
Taxable
benefits % Bonus %
Salary/
fees %
Taxable
benefits
% Bonus %
Fredrik Widlund 3 (14) 1 3 40 3 3 – 406 3.2 (46.3) (37.0)
Andrew Kirkman 3 (11) (100) 3 29 3 3 – 492 3.4 – (36.3)
Johannes Conradi
1
100 0 n /a n /a n /a n /a n/a n /a n /a n/a n/a n/a
Elizabeth Edwards
2
5 0 n /a 12 100 – – (201) – – 100.0 –
Bill Holland 0 (50) n/a 8 0 – – 46 – – (50) –
Bengt Mortstedt
3
(84) (100) n /a 11 (30) – – 4 – – 75.0 –
Anna Seeley 0 0 n/a 7 0 – – – – – – –
Lennart Sten 0 (100) n/a 7 100 – – – – – – –
Eva Lindqvist 6 (67) n/a 371 50 – 100 100 – n/a n/a n /a
Employees (3.5) (12.7) 2.6 (7.7) (0.4) 64 (3) 2 (36) (1.5) 12.6 (25.8)
1 Mr Conradi appointed on 15 September 2025.
2 Ms Edwards retired on 31 December 2025.
3 Mr Mortstedt retired on 28 February 2025.
CEO Pay ratio
CLS Holdings plc had fewer than 250 UK employees as at 31 December 2025 and is therefore not required to disclose the CEO
payratio information under the regulations.
Total shareholder return performance graph and CEO total pay
The following graph illustrates the total return, in terms of share price growth and dividends on a notional investment of £100
inCLSHoldings plc over 10 years to 31 December 2025 against the FTSE 350 Index and the FTSE 350 Real Estate Supersector.
TheCommittee believes these are the most appropriate indices for comparison.
Total shareholder return
Key: CLS FTSE 350 Real Estate Supersector FTSE 350 Index
20162015 2017 2018 2019 2020 2021 2022 2023 2024 2025
250
2
00
150
100
50
0
CLS Holdings plc Annual Report and Accounts 202596
Remuneration Committee Report continued

The table below sets out the total single figure for the CEO role over the last 10 years as well as the PIP A/annual bonus andPIPB/
LTIP outcomes shown as a percentage of the maximum that could have been achieved.
Year CEO
CEO single figure
of total
remuneration
£’000
PIP A/Annual
bonus payout
against maximum
opportunity %
PIP B/LTIP
vesting (as & of
maximum) %
2025 Fredrik Widlund 946 46.7% 0%
2024 Fredrik Widlund 957 4 7. 0 % 0%
2023 Fredrik Widlund 952 46.9% 0%
2022 Fredrik Widlund 835 18.4% 29.9%
2021 Fredrik Widlund 944 31.1% n/a
2020 Fredrik Widlund 830 43.3% n /a
2019 Fredrik Widlund 1,078 8 7. 3 % 8 7. 3 %
2018 Fredrik Widlund 1,117 62.7% 62.7%
2017 Fredrik Widlund 1,062 93.3% 93.3%
2016 Fredrik Widlund 828 76.0% 76.0%
1 The Annual bonus plan replaced MIP Element A in 2023.
2 Percentage shown represents the percentage of salary rather than percentage of max opportunities.
Relative importance of the spend on pay
The following table shows the Company’s actual spend on pay for all Group employees relative to distributions to shareholders
andGroup revenue:
2025
(£’000)
2024
(£’000)
Percentage
change Increase/
(decrease)
Remuneration paid to employees of the Group 7,891 8,177 (3.5)%
Distributions to shareholders 15,825 31,594 (50)%
Share buyback Nil Nil Nil
Group revenue 139,725 151,879 (8)%
CLS Holdings plc Annual Report and Accounts 2025 97
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D. Remuneration Committee membership, governance and voting
The Committee’s main purpose is to assist the Board in discharging its responsibilities for:
• reviewing the overall remuneration policy for executive directors and senior management;
• recommending and monitoring the level and structure of remuneration for executive directors and senior management;
• governing all share schemes; and
• reviewing any major changes in employee compensation and benefit structures throughout the Group.
The Committee’s Terms of Reference, which are reviewed annually, are available on the Company’s website.
At the year end, the Committee comprised three independent Directors including the Chair of the Board, who was independent
onappointment. The Committee therefore complies with the provisions of the UK Corporate Governance Code (the ‘Code’).
During 2025, the Committee met five times and held a number of informal discussions with the Executive Directors and the full
Board. We believe it is important that during the year the Committee keeps up-to-date to enable timely discussions where
business decisions may affect remuneration.
The Company Secretary acts as secretary to the Committee.
To ensure that the Group’s remuneration practices are in line with best practice, the Committee has appointed an independent
external remuneration advisor. FIT Remuneration Consultants LLP (FIT) were appointed in November 2024 and during the year,
the Committee sought advice on the design of the proposed 2026 Directors’ Remuneration Policy, emerging issues and
development of good practice as well as selecting performance measures and target setting. Selected members of management
(including the CEO and the CFO) are invited to attend meetings where appropriate. The Group Company Secretary and COO is
the secretary to the Remuneration Committee. Attendees are not involved in any decisions and are not present for any discussions
regarding their own remuneration.
FIT adheres to the Remuneration Consultants Group Code of Conduct in its dealings with the Committee. The Committee reviews
the objectivity and independence of the advice it receives from FIT at a private meeting each year. It is satisfied that FIT is providing
independent, robust and professional advice.
The fees for the advice provided in 2025 by FIT were £76,081 excluding VAT (2024: £nil).
Shareholder voting
The following table represents the voting outcome for the Directors’ Remuneration Report at the 2025 Annual General Meeting
and the current Policy that was approved at the 2023 Annual General Meeting.
Directors’ Remuneration Report
(2025 AGM)
Directors’ Remuneration Policy
(2023 AGM)
Number
of votes
% of
votes cast
Number
of votes
% of
votes cast
For 286,942,189 87.40 349,550,240 99.17
Against 41,348,763 12.60 2,931,226 0.83
Total votes cast 328,290,952 352,481,466
Votes withheld 6,656,175 101,878
CLS Holdings plc Annual Report and Accounts 202598
Remuneration Committee Report continued

E. Implementation of Remuneration Policy in 2026
Base salaries
The CEO’s base salary will increase by 2% from £521,792 to £532,228 in line with the average UK workforce increase of 2%.
The new CFO’s base salary has been set at £300,000 upon his appointment and will next be reviewed in 2027.
Non-executive directors’ fees
No change.
Annual bonus
For 2026, the maximum bonus opportunities will be 150% of salary for the CEO and 125% of salary for the CFO.
The metrics for the Annual bonus will be:
EPRA EPS – 30% weighting (no change)
Group LTV – 15% weighting (no change)
EPRA Vacancy rate – 25% (no change)
Strategic Objectives (including ESG) – 30% (no change)
In line with market practice for traditional annual bonus arrangements and with the bonus increasingly being driven by commercially
sensitive targets, the Committee has not disclosed detailed annual bonus targets for 2026. However, full and transparent
disclosure of the targets and performance outcomes will continue to be set out on a retrospective basis in next year’s Directors’
Remuneration Report.
Hybrid awards
The CEO will receive a hybrid award comprising performance shares with a face value of 87.5% of salary and restricted shares
withaface value of 43.75% of salary. The CFO will receive performance shares with a face value of 72.5% of salary and restricted
shares with a face value of 36.25% of salary.
With regard to windfall gains, it is the Committee’s intention to reduce outcomes at the pointof vesting if there is evidence
ofwindfall gains.
The Performance share awards will be subject to the following measures and targets:
• (35%) Absolute TSR – 25% of this award will vest for growth of 5% p.a. with full vesting for 14% p.a.
• (35%) Absolute TAR – 25% of this award will vest for growth of 4% p.a. with full vesting for 8% p.a.
• (30%) Relative TAR – The peer group for Relative Total Accounting Return is based on the FTSE 350 Supersector Real Estate
Index andexcludes certain companies that are deemed to be less relevant for comparison. The comparator group constitutes
around 20 companies. 25% of this part of the award vests for median and 100% vests for upper quartile or better.
The Restricted share awards will be subject to a qualitative underpin which will enable the Committee to reduce vesting
inexceptional circumstances if, in the round, there has been material underperformance. In this regard, the Committee
willconsiderperformance against a framework comprising strategic delivery, financial health and stakeholders.
Factors the Committee may consider (but are not limited to), will include:
Strategic priorities Delivery of key strategic objectives over the vesting period including operational performance.
Financial health The overall financial health of the business which may have regard to Revenue, Earnings per Share,
Total Accounting Return, Total Shareholder return, Debt, Vacancy rate, Dividends and Balance
Sheet strength.
Stakeholder experience Consideration of key stakeholders including employees, customers, suppliers and shareholders.
Eva Lindqvist
Chair, Remuneration Committee
CLS Holdings plc Annual Report and Accounts 2025 99
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In accordance with the regulations, the Directors’
Remuneration Policy (the ‘Policy’) as set out below
will operate from 1 January 2026 and be putto a
binding shareholders’ vote and become formally
effective, if approved, at the 2026 AnnualGeneral
Meeting on 23 April 2026.
It will apply for a period of three years until the
2029 AGM, unless a revised Policy is approved
byshareholders before then.
Summary of proposed changes to the Policy
The Committee is proposing two main Policy changes
asfollows:
• To introduce the ability to grant hybrid long-term incentive
awards such that future LTIP Awards to Executive Directors
may be granted on an annual basis as a combination of
performance-based share awards (PSAs) and service-based
restricted share awards (RSAs) with no increase to the overall
LTIP quantum. RSAs will be subject to the same three-year
vesting period as the PSAs and the same two-year post-
vesting holding period – providing a total five-year period
between grant and the ability to sell the shares (apart from
sales to settle tax on vesting/exercise). Vesting of RSAs
willalso be subject to a robust underpin assessment by
theCommittee. The Committee will have the right to
cancelor scale back vesting if it considers that there
hasbeensignificant underperformance over the vesting
period. The underpin assessment by the Committee will
bearounded appraisal of all aspects of performance,
including: strategic delivery, financial health and the
stakeholder experience.
• To provide for the flexibility for a reduction of the level
ofbonus deferred where shareholding guidelines are met.
The current Policy states that annual bonus awards up to
100% of salary will be paid in cash with amounts over this
leveldeferred into shares for three years with vesting subject
tocontinued employment. Going forward, the Committee
may reduce or remove the deferral requirement if
anExecutive Director has met their in-employment
shareholdingguidelines (250% of salary for the CEO
and200% for other Directors).
CLS Holdings plc Annual Report and Accounts 2025100
2026 Directors’ Remuneration Policy

Element, purpose
andlinktostrategy Operation Opportunity Performance measures
Executive Directors
Base Salary
Provides a base level of
remuneration to support
recruitment and retention of
Directors with the necessary
experience and expertise to
deliver the Group’s strategy.
Keyelement of core fixed
remuneration.
Reviewed annually and usually
fixed for 12 months. Factors taken
into account include:
• remuneration practices within
the Group;
• the general performance of
the Group;
• experience and individual
performance;
• changes in the scale, scope
orresponsibilities;
• salaries within the ranges paid
by the companies in the
comparator groups used for
remuneration benchmarking
(when the Committee
determines a benchmarking
exercise is appropriate); and
• the economic environment.
Salaries will be set to be
competitive in the range for the
Company’s comparator groups.
In general, salary rises to
Executive Directors will be in
linewith the rise to UK based
employees. However, larger
increases may be offered if there
is a material change in the scope
and responsibilities of the role,
including significant changes in
Group size and/or complexity
orif it is necessary to remain
competitive to retain a Director.
None, although
individual performance
and contribution are
taken into account.
Benefits
To provide a competitive
levelof benefits and
encourage the wellbeing and
engagement of employees.
The key benefits provided to
theExecutive Directors include
private medical insurance, life
insurance, income protection,
gym contribution and staff
lunchprovision.
In the event of relocation, the
Committee may offer relocation
expenses, tax equalisation and
support in meeting specific costs
incurred by Executive Directors.
Executive Directors may
participate in benefits
programmes on the same
basisas other employees.
Otherbenefits (in line with
thosereceived by the general
workforce) may be offered at
thediscretion of the Committee,
such as long service awards
orrecognition of life events.
Market level in the range for the
Company’s comparator groups.
No maximum has been set as the
cost of providing the benefits can
vary from year to year.
None.
This section of the report is the detailed Policy table that forms part of the Remuneration Policy for
Executive and Non-Executive Directors which will be put to shareholders forapproval and, if approved,
be effective from the conclusion of the 2026 AGM for the following three years:
CLS Holdings plc Annual Report and Accounts 2025 101
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Element, purpose
andlinktostrategy Operation Opportunity Performance measures
Pensions
Provide retirement planning
and protection to employees
and their families during
theirworking life. Provides
retirement funding to enable
the Company to recruit and
retain Directors with the
experience and expertise to
deliver the Group’s strategy.
Employer retirement funding is
determined as a percentage of
gross basic salary. Contributions
may be made to a pension plan
orby way of a salary supplement
in lieu of pension. Such salary
supplement would not itself
bepensionable or form part
ofsalary for the purposes
ofdetermining the extent of
participation in the Company’s
incentive arrangements.
The maximum Company
contribution for Executive
Directors is in line with the
pension policy in force for the
wider UK workforce, which is
currently 10% of salary.
None.
All employee share plan
The Company’s Share
Incentive Plan (‘SIP’)
(oranyother HMRC favoured
arrangement adopted in the
future) allows all employees,
including Executive Directors,
to share in the potential value
created by the Company.
Increase share ownership
throughout the organisation.
In line with HMRC legislation. The maximum opportunity
willbein line with the limits
setbyHMRC.
None.
CLS Holdings plc Annual Report and Accounts 2025102
2026 Directors’ Remuneration Policy continued

Element, purpose
andlinktostrategy Operation Opportunity Performance measures
Annual Bonus Plan
(‘Bonus’)
The Annual Bonus provides
anincentive linked to
achievement of delivering
annual goals that are closely
aligned with the Company’s
strategy and the creation
ofvalue for shareholders.
Inparticular, the Annual
Bonussupports the
Company’s objectives by:
• allowing the setting of
annual targets based on
thebusiness’ strategic
objectives at that time;
• requiring deferral of bonus
into shares which provides
shareholder alignment and
retention; and
• enabling the Company
torecruit top executive
talent in a highly
competitive market.
Performance measures and
appropriately stretching targets
will normally be set at the start
ofeach financial year. At the end
of the year, the Remuneration
Committee will assess the
extentto which these have
beenmetand determine the
award level, taking into account
the underlying Company
performance and experience
ofshareholders.
Annual bonus up to 100%
ofsalary will be paid in cash.
Amounts over this level will
normally be deferred into
sharesfor three years with
vesting subject tocontinued
employment. However, the
Committee may reduce or
remove bonus deferral where
anExecutive Director
hasmettheir in-employment
shareholding guidelines.
The Committee has discretion
toprovide dividend equivalents
on deferred shares.
The Committee will have
overriding discretion to
changeformulaic outcomes
(both upwards and downwards)
ifthe outcomes are out of line
with theunderlying performance
ofthe Company.
Malus and clawback
provisionsapply.
The maximum bonus
opportunityis 150% of salary
forExecutive Directors.
At threshold up to 25%
ofthemaximum is payable.
Aton-target, typically 50%
ofthemaximum is payable.
The performance
measures for the bonus
are set individually by
the Committee and
canbe based on a
combination of financial
and non-financial
measures, aligned to
the business strategy.
Financial measures
willnot account for
lessthan 50% of the
bonus opportunity.
The bonus is normally
measured over a period
of one financial year.
The Committee retains
discretion in exceptional
circumstances to
change performance
measures and targets
for each element and
the weightings attached
to performance
measures part-way
through a performance
year, if there is a
significant and material
event which causes the
Committee to believe
the original measures,
weightings and targets
are no longer
appropriate.
CLS Holdings plc Annual Report and Accounts 2025 103
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Element, purpose
andlinktostrategy Operation Opportunity Performance measures
Long-term Incentive Plan
(‘LTIP’)
Incentivises long-term
shareholder value creation.
Drives and rewards
achievement of key long-term
Company objectives aligned
with shareholder interests and
supports retention.
Contributes towards building
ameaningful shareholding
aligning interests with wider
shareholders.
LTIP Awards will be granted on
anannual basis as a combination
of performance-based share
awards (PSAs) and restricted
share awards (RSAs).
Awards may be granted as
nil-cost options or conditional
awards.
PSAs and RSAs will normally
vestafter three years subject
toathree-year performance/
underpin period and continued
service.
A two-year post-vesting holding
period will apply to all vested
LTIPawards.
The Committee will have
overriding discretion to change
formulaic outcomes (both
upwards and downwards) if
theoutcomes are out of line
withthe underlying performance
of the Company.
The Committee has discretion
toprovide dividend equivalents
on vested shares.
Malus and clawback provisions
will operate over the full five-year
lock-in period.
The maximum LTIP opportunity
is capped at 200% of salary each
year.
For 2026, the LTIP levels will
beas follows:
CEO:
PSA: up to 87.5% of salary
RSA: up to 43.75% of salary
(equivalent to a 175% of salary
LTIP award based on a 2:1
PSA:RSA exchange)
Other Directors:
PSA: up to 72.5% of salary
RSA: up to 36.25% of salary
(equivalent to a 145% of salary
LTIP award)
In future years, the Committee
may change the mix of PSA and
RSA awards subject to: (i) the
overall 200% of salary LTIP limit,
(ii) retaining the 2 PSA for 1 RSA
exchange ratio, and (iii) applying
a maximum cap on RSA quantum
of 50% of salary.
The Committee will consider
theprevailing share price and
therisk of windfall gains when
determining award quantum
andvesting.
PSA performance
measures are set
individually by the
Committee and can be
based on a combination
of financial and
non-financial measures,
aligned to the business
strategy and normally
measured over a period
of three years. Up to
25% of the maximum
PSA award will vest for
threshold performance.
The Committee retains
discretion in exceptional
circumstances to
change performance
measures and targets
for each element and
the weightings attached
to performance
measures part way
through a performance
year, if there is a
significant and material
event which causes the
Committee to believe
the original measures,
weightings and targets
are no longer
appropriate.
The Committee will
apply a qualitative
underpin to RSAs which
will enable it to reduce
vesting in exceptional
circumstances if, in
theround, there has
been material
underperformance.
Inthis regard, the
Committee will consider
performance against a
framework comprising
strategic delivery,
financial health
andstakeholders.
CLS Holdings plc Annual Report and Accounts 2025104
2026 Directors’ Remuneration Policy continued

Element, purpose
andlinktostrategy Operation Opportunity Performance measures
Shareholding Requirement
Encourages long-term
commitment and alignment
with shareholder interests.
Executive Directors are expected
to build up and retain a significant
shareholding. The CEO is
required to hold and maintain a
shareholding of 250% of salary
and other Directors are required
to hold and maintain a
shareholding of 200% of salary.
The Executive Directors are
expected to meet the guideline
within five years.
Any shares beneficially owned
(including by a spouse or
immediate family), the post-tax
value of any vested but
unexercised LTIP awards, the
post-tax value of in-flight
deferred bonus awards and SIP
awards will count towards the
requirement.
Post-employment requirement:
Post employment, an Executive
Director shall continue to hold
shares equivalent to the minimum
of their actual shareholding on
cessation of employment and
their in-employment
shareholding requirement for a
period of two years following
termination of their employment.
The Company will establish
nominee accounts to ensure
thatit can enforce
shareholdingrequirements.
None. None.
CLS Holdings plc Annual Report and Accounts 2025 105
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Differences between Executive Directors’
andemployees’remuneration
The following differences exist between the Company’s Policy
for the remuneration of Executive Directors as set out in the
Policy table above and its approach to the payment of
employees generally:
• All employees are eligible to receive a discretionary
annualbonus, which is calculated against business targets
andobjectives.
• A lower level of maximum annual bonus opportunity applies
to employees when compared to the Executive Directors.
• Executive Directors may opt to receive a cash supplement
inlieu of pension.
• Executive Directors participate in the LTIP alongside below
board, senior management employees at the Remuneration
Committee’s discretion. For the wider workforce, the LTIP
isreplaced by a time-based, company growth-related
loyaltybonus.
In general, these differences arise from the development
ofremuneration arrangements that are market competitive
forthe various categories of individuals. They also reflect
thegreater emphasis placed on performance-related pay
forExecutive Directors.
Element, purpose
andlinktostrategy Operation Opportunity Performance measures
Non-Executive Directors
Fees
Provide a level of fees to
support recruitment and
retention of Non Executive
Directors with the necessary
experience to advise and
assist with establishing and
monitoring the Group’s
strategic objectives.
Fees are reviewed periodically
and normally fixed for 12 months
commencing 1 January. The fees
are based on equivalent roles in
the comparator groups used to
review salaries paid to the
Executive Directors.
Fees are set at a competitive
level to the comparator groups.
The Committee is responsible
forsetting the Chairman’s fee.
The Board as a whole is
responsible for setting the
remuneration of the Non-
Executive Directors.
Non-Executive Directors are
paida base fee and additional
fees for Chair and membership
ofcommittees and other specific
work outside their role as a
Non-Executive Director,
including a per day fee for Chair
of the Workforce Advisory Panel.
The Senior Independent Director
also receives an additional fee.
Additional fees may be paid
fornew Board Committees
orforundertaking additional
workstreams as deemed
appropriate by the Board.
Competitive in the range for the
Company’s comparator groups.
Non-Executive Directors do not
participate in any variable
remuneration.
The Company will pay
reasonableexpenses incurred
bythe Non-Executive Directors,
in connection to performing
theirroles, and may settle any
taxincurred in relation to these.
Other benefits include
travel,accommodation and
membership subscriptions
related to the Company’s
business.
None.
CLS Holdings plc Annual Report and Accounts 2025106
2026 Directors’ Remuneration Policy continued

Approach to recruitment remuneration
The Committee’s approach to recruitment remuneration is
topay no more than is necessary to attract candidates of
theappropriate calibre and experience needed for the role.
Theremuneration package for any new recruit would be
assessed following the same principles as for the current
Executive Directors. The Committee is mindful that it wishes
toavoid paying more than it considers necessary to secure
thepreferred candidate.
Where an existing employee is promoted to the Board,
thePolicy would apply from the date of promotion but there
would be no retrospective application of the Policy in relation
tosubsisting incentive awards or remuneration arrangements.
Accordingly, prevailing elements of the remuneration package
for an existing employee would be honoured and form part
ofthe ongoing remuneration of the employee. These would
bedisclosed to shareholders in the following year’s Annual
Report on Remuneration.
The Company’s policy when setting remuneration for the appointment of a new director is set outinthe table below:
Remuneration element Recruitment policy
Base salary and benefits The salary level will be set taking into account the responsibilities of the individual, experience
and the salaries paid to similar roles in comparable companies. The Committee will apply the
Policy set out on salaries for the current Executive Directors in the Policy table. Individuals
whoare recruited or promoted to the Board may, on occasion, have their salaries set below
thetargeted policy level until they become established in their role. In such cases, subsequent
increases in salary may be higher than the general rise for employees until the target positioning
is achieved. The Executive Director shall be eligible to receive benefits in line with the
Company’s benefits policy as set out in the Policy table. Maximum value of benefits will
besetatthe cost of providing them.
Pension The Executive Director will be entitled to receive contributions into a pension plan up to
theworkforce contribution rate (currently 10% of salary), or alternatively to receive a salary
supplement in lieu of pension contributions, in line with the Company’s pension policy as
setoutinthe Policy table.
Annual Bonus The Executive Director will be eligible to participate in the Annual Bonus Plan as set out in the
Policy table. The maximum potential opportunity under this Plan is 150% of salary (excluding
anyBuy Out incentive).
LTIP The Executive Director will be eligible to participate in the LTIP as set out in the Policy table.
Themaximum potential opportunity under this Plan in respect of LTIP awards is 200% of salary
(excluding any Buy Out incentive).
‘Buy Out’ of incentives
forfeited on cessation
ofemployment
The Company’s policy is not to provide buy-outs as a matter of course. However, should the
Committee determine that the individual circumstances of recruitment justify the provision of a
buy-out, the equivalent value of any incentives forfeited on cessation of a previous employment
will be calculated taking into account the following:
• The proportion of the performance period completed on the date of the Executive Director’s
cessation of employment;
• Any performance conditions attached to the vesting of these incentives and the likelihood
ofthem being satisfied; and
• Any other terms and conditions having a material effect on their value (‘lapsed value’).
The Committee may then grant up to the equivalent value as the lapsed value, where possible,
under the Annual Bonus and/or the LTIP. To the extent that it was not possible or practical to
provide the buy-out within the terms of the Company’s Annual Bonus Plan and LTIP, a bespoke
arrangement would be used.
Relocation Policies Where the new Executive Director is required to relocate from one work-base to another, the
Company may provide one-off/ongoing compensation as part of the Director’s relocation
benefits to reflect the cost of relocation for the Executive Director in cases where they are
expected to spend significant time away from their country of domicile. The level of the
relocation package will be assessed on a case-by-case basis but will take into consideration
anycost of living differences/housing allowance and schooling. The maximum period for
whichan allowance will be provided is normally two years from the point of recruitment.
CLS Holdings plc Annual Report and Accounts 2025 107
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The Company’s Policy when setting fees for the appointment
of new Non-Executive Directors is to apply the Policy which
applies to current Non-Executive Directors.
Directors’ service contracts and letters of appointment
Each of the Executive Directors has a service contract of no
fixed term. There is no provision in the contracts of Mr Widlund
or Mr Kirkman for contractual termination payments, save for
those payments normally due under employment law.
Each Non-Executive Director has a letter of appointment but,
inaccordance with best practice, none has a service contract.
All of the Non-Executive Directors are appointed until such
timeas they are not re-elected.
In compliance with the Code, all Company Directors will face
annual re-election at the Company’s AGM.
If a director fails to be re-elected the terms of their
appointment will cease. It is the Company’s policy not to
offernotice periods of more than 12 months exercisable
byeither party.
Harry Stokes, Chief Financial Officer and Executive Director
was appointed on 5 January 2026 and is required to provide
12 months’ notice.
Details of the service contracts or letters of appointment of those who served as Directors during the year are as follows:
Name Role Contract date Date of resignation Notice period
Fredrik Widlund Executive Director 3 November 2014 12 months
Andrew Kirkman Executive Director 1 July 2019 5 January 2026 12 months
Lennart Sten Non-Executive Chair 1 August 2014 3 months
Anna Seeley Non-Executive Director & Vice Chair 11 May 2015 3 months
Elizabeth Edwards Non-Executive Director 13 May 2014 31 December 2025 3 months
Bill Holland Non-Executive Director 20 November 2019 3 months
Eva Lindqvist Non-Executive Director 22 September 2023 3 months
Bengt Mortstedt Non-Executive Director 7 March 2017 28 February 2025 3 months
Johannes Conradi Non-Executive Director 15 September 2025 3 months
Illustration of application of Remuneration Policy
(£’000)
Minimum On-target Maximum Maximum with
share price growth
Minimum On-target Maximum Maximum with
share price growth
CEO Remuneration CFO Remuneration
2
,500
2
,000
1,500
1,000
500
0
15%
25%
45%100%
15%
9%
31%
28%
18%
10%
36%
33%
21%
14%
16%
27%
41%100%
16%
10%
33%
24%
19%
11%
38%
29%
22%
14%
£2,438
£1,202
£1,039
£743
£338
£2,088
£1,456
£591
Key: Fixed pay Annual bonus RSP PSP Share price growth
The chart above provides an illustration of some of the potential reward opportunities for executive directors in respect
oftheoperation of the Directors’ Remuneration Policy in 2026 showing the potential split between the different elements
ofremuneration under different performance scenarios: ‘minimum’, ‘on-target’, ‘maximum’ and ‘maximum with 50% share
priceappreciation’.
CLS Holdings plc Annual Report and Accounts 2025108
2026 Directors’ Remuneration Policy continued

Element Minimum On target Maximum
Maximum with
50% share price appreciation
Fixed • 2026 Base Salary
• 10% of salary as pension
• Estimated benefits
Annual Bonus No Annual Bonus 50% of Maximum 100% of Maximum
(150% of salary)
100% of Maximum
PSA No Vesting 50% of Maximum 100% of Maximum
(87.5% of salary
fortheCEO and
72.5%forthe CFO)
100% of maximum
pay-out + 50% assumed
share price growth
onRSAand PSA awards.
RSA No Vesting 100% of Maximum 100% of Maximum
(43.75% of salary
fortheCEO and
36.25%for the CFO)
Policy on malus and clawback
Malus provisions apply to the Annual Bonus and the LTIP.
Malusis the adjustment of the Annual Bonus in the year
itisearned, unvested deferred Annual Bonus shares or
unvestedLTIP awards because of the occurrence of one
ormore circumstances.
The adjustment may result in the value being reduced to nil.
Clawback is the recovery of cash payments made under
theAnnual Bonus or vested LTIP awards as a result of the
occurrence of one or more circumstances. Clawback may
applyto all or part of a participant’s cash payment under the
Annual Bonus or LTIP awards and may be achieved, among
other means, by requiring the transfer of Shares, payment
ofcash or reduction of awards or bonuses.
The circumstances in which malus and clawback could
applyareas follows:
• Discovery of a material misstatement resulting in an adjustment
in the audited consolidated accounts of theGroup or any
Group company.
• The assessment of any performance target or condition in
respect of a payment or award under the Annual Bonus or LTIP
was based on error, or inaccurate or misleading information.
• The discovery that any information used to determine
theAnnual Bonus or the LTIP award was based on error,
orinaccurate or misleading information.
• Action or conduct of a participant which, in the reasonable
opinion of the Committee, amounts to fraud or gross
misconduct.
• Events or the behaviour of a participant have led to the
censure of a Group member by a regulatory authority or
havehad a significant detrimental impact on the reputation
ofany Group member provided that the Board is satisfied
that the relevant participant was responsible for the censure
or reputational damage and that the censure or reputational
damage is attributable to the participant.
• A material failure or risk management of the Company,
aGroup member or a business unit of the Group.
• The Company or any Group Member or business of the
Groupbecomes insolvent or otherwise suffers a corporate
failure so that the value of the Plan Shares is materially
reduced provided the Board determines following an
appropriate review of accountability that the participant
should be held responsible (in whole or in part) for that
insolvency or corporate failure.
The following table sets out the periods during which malus and clawback may be applied:
Annual bonus – cash Annual bonus – deferred shares LTI P
Malus Up to the date of a payment Any time prior to vesting Any time prior to vesting
Clawback Three years post the date
ofanypayment
Not applicable as malus operated
untilvesting date
Two years from the date
ofvesting
The Committee believes it has the necessary powers under the rules of the Plans to enforce malus and clawback provisions.
CLS Holdings plc Annual Report and Accounts 2025 109
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Policy on payment for loss of office
When determining any loss of office payment for a departing
Director the Committee will always seek to minimise the cost
tothe Company whilst complying with the contractual terms
and seeking to reflect the circumstances in place at the time.
The Committee reserves the right to make additional payments
where such payments are made in good faith in discharge of
anexisting legal obligation (or by way of damages for breach
ofsuch an obligation); or by way of settlement or compromise
of any claim arising in connection with the termination of
anExecutive Director’s office or employment.
It is the Company’s policy not to offer notice periods of more
than 12 months exercisable by either party.
The following table sets out how the Committee will consider and apply the policy on payment for loss of office.
Remuneration element Approach Application of Committee discretion
Salary and benefits In the event of termination by the
Company, there will be no compensation
for loss of office due to misconduct or
normal resignation.
In other circumstances, Executive
Directors may be entitled to receive
compensation for loss of office which
willbe a maximum of 12-months salary
and benefits. Such payments willbe
equivalent to the monthly salary and
benefits that the Executive Director
would have received if still in employment
with the Company. These will be paid
over the notice period. Executive
Directors will be expected to mitigate
their loss within a 12-month period of
theirdeparture from the Company.
The Company has discretion to make a lump sum
payment in lieu.
Pension Pension contributions or payments
inlieuof pension contribution will be
made during the notice period.
The Company has discretion to make a lump sum
payment in lieu.
CLS Holdings plc Annual Report and Accounts 2025110
2026 Directors’ Remuneration Policy continued

Remuneration element Approach Application of Committee discretion
Annual Bonus (‘Bonus’) Bonus For the Year of Cessation
Good leavers: Performance conditions
will be measured at the normal
measurement date. Bonus will normally
be pro-rated for the period worked
during the financial year. Bonus up to
100% of salary will normally be paid in
cash. Bonus in excess of 100% of salary
will be deferred into shares for three years
inline with Policy.
Other leavers: No bonus payable for
year of cessation.
Deferred shares
Good leavers: Deferred shares will
normally vest on their usual vesting date.
Other leavers: Deferred shares will
beforfeited.
Bonus for the Year of Cessation
The Committee has the following elements
ofdiscretion:
• to determine that an Executive is a good leaver.
Itis the Committee’s intention to only use this
discretion in circumstances where there is an
appropriate business case which will be explained
in full to shareholders;
• to determine whether to pro-rate the bonus
awards to time. The Committee’s normal policy is
that it will pro-rate for time. It is the Committee’s
intention to use discretion to not pro-rate in
circumstances where there is an appropriate
business case which will be explained in full to
shareholders; and
• to determine whether a bonus may be paid at the
date of cessation. The Committee’s normal policy
is that a cash bonus will be paid on the normal
payment date. It is the Committee’s intention to
only use this discretion in circumstances where
there is an appropriate business case which will
beexplained in full to shareholders.
Deferred shares
The Committee has the following elements
ofdiscretion:
• to determine that an Executive is a good leaver.
Itis the Committee’s intention to only use this
discretion in circumstances where there is an
appropriate business case which will be explained
in full to shareholders; and
• to determine whether deferred shares should
vestat the date of cessation. The Committee’s
normal policy is that deferred shares will vest on
their normal vesting date. It is the Committee’s
intention to only use this discretion in
circumstances where there is an appropriate
business case which will be explained in full
toshareholders.
CLS Holdings plc Annual Report and Accounts 2025 111
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Remuneration element Approach Application of Committee discretion
LTIP Good leavers: Unvested awards will vest
on the normal vesting date subject to:
• the extent any applicable performance
targets have been satisfied at the end
of the normal performance period; and
• prorating to reflect the period of time
between grant and cessation of
employment as a proportion of the
vesting period that has elapsed.
Where LTIP awards vest within two years
of cessation, the post-vesting holding
period will continue to apply until the
second anniversary of cessation. There
will be no holding period for awards
vesting more than two years after
cessation.
Other leavers: Other leavers will forfeit
all unvested awards and vested awards
will remain subject to the holding period
as stated in the Policy.
The Committee has the following elements
ofdiscretion:
• to determine that an Executive is a good leaver.
Itis the Committee’s intention to only use this
discretion in circumstances where there is an
appropriate business case which will be explained
in full to shareholders;
• to determine whether to pro-rate the award to
time. The Remuneration Committee’s normal
policy is that it will pro-rate for time. It is the
Committee’s intention to use discretion to not
pro-rate in circumstances where there is an
appropriate business case which will be explained
in full to shareholders;
• to determine whether the LTIP award will vest on
the date of cessation or the original vesting date.
The Committee will make its determination based
amongst other factors on the reason for the
cessation of employment; and
• to determine whether the Holding Period will
apply in full or in part. The Committee will make
itsdetermination based amongst other factors
onthe reason for the cessation of employment.
Buy-out Award Where cessation of employment occurs in relation to an Executive Director who has been
granted a buy-out award, the treatment would be in line with the terms of the buy-out award.
Other contractual
obligations
There are no other contractual provisions
other than those set out above that could
impact the quantum of the payment.
None.
A good leaver is a person whose cessation of employment
isfor one of the following reasons:
• death;
• ill-health;
• injury or disability;
• redundancy;
• retirement with the agreement of the employing
GroupCompany;
• employing company ceasing to be a Group company;
• transfer of employment to a company which is not
aGroupcompany; or
• where the person is designated a good leaver at the
discretion of the Committee (as described above).
A person who ceases employment in circumstances other
thanthose set out above is designated an ‘other leaver’.
CLS Holdings plc Annual Report and Accounts 2025112
2026 Directors’ Remuneration Policy continued

Change of control
Remuneration element Approach Application of Committee discretion
Annual Bonus Bonus – for the Year of the Change
ofControl
Performance conditions will be measured
at the date of the change of control.
Bonus will normally be pro-rated to the
date of the change of control.
Bonus – deferred shares
Deferred shares will vest on the change
of control.
Bonus – for the Year of the Change of Control
The Committee has the following element
ofdiscretion:
• to determine whether to pro-rate the bonus for
time served in the year of the change of control.
The Committee’s normal policy is that it will
pro-rate for time. It is the Committee’s intention
to use discretion to not pro-rate in circumstances
where there is an appropriate business case which
will be explained in full to shareholders.
Bonus – deferred shares
The Committee has the following elements of
discretion:
• to determine whether to pro-rate unvested
deferred shares based on proportion of the
vesting period served. The Committee’s normal
policy is that it will not pro-rate. The Committee
will determine whether to pro-rate based on
thecircumstances of change of control;
• to determine whether the satisfaction of deferred
share awards should be in cash or shares or a
combination of both; and
• in the event of an internal corporate
reorganisation, the Committee may decide to
replace unvested deferred share awards with
equivalent new awards over shares in the
acquiring company
LTIP The awards will vest on the date of the
change of control and the Holding Period
will fall away. Performance conditions will
be measured at the date of the change
ofcontrol.
The award will normally be pro-rated
tothe date of the change of control.
TheCommittee will determine the
levelof vesting taking into account:
• the extent that any applicable
performance targets have been
satisfied at that time;
• the bid consideration received; and
• the portion of the vesting period
thathas then elapsed.
The Committee has the following elements
ofdiscretion:
• to determine whether the satisfaction
ofLTIPawards should be in cash or shares
oracombination of both;
• to determine whether to pro-rate the LTIP
awardto time. The Committee’s normal policy is
that it will pro-rate for time. It is the Committee’s
intention to use discretion to not pro-rate in
circumstances where there is an appropriate
business case which will be explained in full to
shareholders; and
• in the event of an internal corporate
reorganisation, the Committee may decide to
replace unvested awards with equivalent new
awards over shares in the acquiring company.
Buy-out Award Where change of control occurs in relation to an Executive Director who has been granted
abuy-out award, the treatment would be in line with the terms of the buy-out award
CLS Holdings plc Annual Report and Accounts 2025 113
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Consideration of employment conditions elsewhere
intheCompany
As part of our commitment to fairness across the business, and
in line with requirements under the UK Corporate Governance
Code, we have set out in this report information on the pay
conditions of the wider workforce and comparisons with
Executives, as well as our diversity policies and statistics. We are
committed to transparency internally and externally in relation
to developments on these important issues and will continue to
consider how our disclosures can be enhanced going forward.
In making decisions on executive pay, the Committee
considerswider workforce remuneration and conditions
recognising the central importance of all our teams in delivering
success. In order for the Committee to review the wider
workforce pay, policies and incentives, reports are regularly
considered at the Remuneration Committee meetings, setting
out key details of remuneration throughout the Company.
TheCommittee is satisfied that the approach to remuneration
across the Company is consistent with the Company’s principles
of remuneration. In the Committee’s opinion the approach to
executive remuneration aligns with wider Company pay policy
and there are no anomalies specific to the Executive Directors.
Pay structures across the Group
We aim to provide a remuneration package for our employees
which is aligned to our values and remuneration principles
across the Group. The Group aims to provide a remuneration
package for all employees which is market competitive and
operates the same core structure as for Executive Directors.
The Company’s remuneration philosophy for all senior
management from the Executive Directors downwards is that
allemployees should have a significant annual element of
performance-based pay.
For all employees, the Group operates a performance-based
annual bonus scheme. The Company also has a Share Incentive
Plan (SIP) in order to increase levels of share-ownership
throughout the Company and to allow employees to share
inthe success of the Company in a tax-efficient manner.
Additionally, the Group’s pension contributions to an
employee’s pension scheme are determined by their length
ofservice from a minimum of 5% of salary up to a maximum
of10%.
Executive Directors and senior management are participants
inthe LTIP, with the number of employees eligible to participate
being 18.
For the wider workforce, the LTIP is replaced by a time-based,
company growth-related loyalty bonus. This ensures a focus on
long-term sustainable value creation to align experience with
those of shareholders throughout the Company.
Employee engagement
We regularly communicate with our employees on a range of
issues, including executive pay, through a variety of channels
including all employee meetings, employee surveys, managers’
meetings and through our dedicated Intranet. Additionally,
in2019, Elizabeth Edwards, who retired as a director on
31 December 2025, was designated the Non-Executive
Director responsible for overseeing employee engagement
andchairs the ‘town hall’ meetings in each of our regions.
Thisprovided the opportunity for an open discussion between
employees and the Board. The annual report from Elizabeth
Edwards, as the designated Non-Executive Director
responsible for employee engagement, can be found
onpage71.
During the year, the Board reviewed the effectiveness of the
current mechanism for seeking wider workforce views. With
effect from 1 January 2026, the Board has agreed to adopt an
alternative approach that brings together a number of existing
and new practices. We believe this will continue to provide the
Board with the ability to assess, monitor and review culture
andinclude the views of our workforce in decision-making.
These practices will include:
• Involve multiple NEDs in activities rather than a single
appointed NED Workforce Engagement representative.
• Hold informal events after each Board meeting to allow
NEDsto engage with employees on key topics discussed
atmeetings.
• Host Chairman’s round table sessions with a mix
ofemployees.
• Continue Board property tours.
• Implement a new employee survey tool to provide regular
engagement data that can be shared with the Board.
• Enhance HR reporting to the Board: addition of additional
engagement data and statistics.
Consideration of shareholders’ views
In 2025, the Committee consulted with its largest shareholders,
including The Sten and Karin Mortstedt Family & Charity Trust,
(representing over 55.2% of the Company’s issued share
capital) and the main shareholder representative bodies
(TheInvestment Association, ISS and Glass Lewis).
A letter outlining our remuneration proposals was sent to this
group and invited feedback from all recipients. We received
responses through emails and had a number of meetings to
discuss the proposals. The Committee took time to review
feedback in detail and address any questions that were raised.
At the end of the consultation the majority of shareholders
consulted indicated they were supportive of the proposals.
Awrap up letter was sent, setting out the key themes raised
aspart of consultation and the Committee’s approach to
addressing each of these. The Committee is grateful for
thetime that shareholders have taken to consider proposals
andprovide feedback.
CLS Holdings plc Annual Report and Accounts 2025114
2026 Directors’ Remuneration Policy continued

The Directors present their annual report and the audited
financial statements for the year ended 31 December 2025.
The Chairman’s letter, strategic report and corporate governance
report form part of this report and should be read in conjunction
with it.
Review of business
• The Group income statement for the year is set out on
page130.
• The Group objectives, business model, strategy and KPIs
areset out on pages 20 and 21.
• Important events (including post-balance sheet events)
affecting the Company are set out on pages 1 to 119.
• The principal and emerging risks and uncertainties are set
outon pages 56 to 60.
• The use of financial instruments are set out on page 12,
andinnote 21 to the Group financial statements.
• The risk management objectives are detailed in note 21 to
theGroup financial statements. See also pages 53 to 60.
• The Group’s likely future developments are set out on
pagesInside Front Cover to 19.
Directors
Biographical details and experience of the current Directors
ofthe Company are set out on pages 66 and 67.
The provisions concerning the appointment and replacement of
directors are contained in the Company’s Articles of Association
and Companies Act 2006. The Articles may be amended by
special resolution of the shareholders. All Directors will be
subject to annual re-election at the 2026 Annual General
Meeting in accordance with the UK Corporate Governance
Code. In his role as independent Non-Executive Chairman,
Lennart Sten recommends the re-election of the retiring
Directors at the 2026 Annual General Meeting, given their
experience, performance and continued important contribution
to the long-term success of the Company. The Senior
Independent Non-Executive Director recommends the
re-election of Mr Sten.
Directors’ remuneration and interests in shares are set
outonpages 87 to 99. Related party transactions are
setoutinnote 32 to the Group financial statements.
Dividends
An interim dividend of 1.3 pence per share was paid on
2October 2025, of which 1.25 pence per share was a Property
Income Distribution (PID). The Directors are proposing a final
dividend of 2.7 pence per share (all of which is to be a PID)
making a total dividend for the year ended 31 December 2025
of 4.0 pence per share. The final dividend will be paid on 22May
2026 to shareholders who are on the register of members on
10 April 2026.
Purchase of the Company’s shares
There were no purchases of the Company’s own shares
duringthe year. A resolution will be proposed at the 2026
Annual General Meeting to seek authority for the Company
tomake market purchases of up to 10% of the current issued
share capital.
Share capital
Changes in share capital are shown in note 23 to the Group
financial statements. As at 31 December 2025, the Company’s
issued share capital consisted of 438,777,780 ordinary shares
of 2.5 pence each, of which 398,110,742 shares held voting
rights and 40,667,038 shares were held as treasury shares, and
all of which ranked pari passu. The rights (including full details
relating to voting), obligations and any restrictions on transfer
relating to the Company’s shares, and the powers of the
Directors in that regard, are set out in the Company’s Articles
ofAssociation.
Major interests in the Company’s shares
One major shareholding notification was disclosed to the
Company in accordance with DTR 5 during the year ended
31 December 2025 and no such disclosures have been made
between the year end and the date of this report. As at the
dateof this report, so far as the Company is aware and based
on theone DTR 5 notification and the Company’s register of
interests disclosed pursuant to s793of the Companies Act
2006, the interests of the top 10 shareholders (directly or
indirectly) in the Company’s issued share capital are:
No. of shares %
The Trustee of The Sten and Karin Mortstedt Family & Charity Trust 219,917,524 55.24%
Bengt Mortstedt 25,868,140 6.55%
Allianz Global Investors 13,204,066 3.32%
Peter Gyllenhammar AB 12,000,000 3.01%
Dowgate Capital 9,951,506 2.50%
UBS 7,755,019 1.95%
Interactive Investor 7, 2 6 7, 6 2 4 1.83%
Norges Bank Investment Management 6,977,977 1.75%
Hargreaves Lansdown Asset Management 6,623,355 1.66%
Columbia Threadneedle Investments 5,818,329 1.57%
CLS Holdings plc Annual Report and Accounts 2025 115
Additional
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Financial
statements
Corporate
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Strategic
report
Directors’ Report

Details of the Directors’ interests in shares are shown in the
Remuneration Committee Report on page 95. There are
noshareholders who carry special rights with regard to control
of the Company and there are no restrictions on voting rights.
The Company knows of no agreements between holders of
securities which would result in restrictions on the transfer
ofsecurities or on voting rights.
Significant agreements – change of control
A change of control of the Company may cause a number
ofagreements to which the Company or its active subsidiaries
isparty, such as commercial trading contracts, banking
arrangements, property leases and licence agreements, to
alteror terminate or provisions in those agreements to take
effect. Inthe context of the Group as a whole, only the banking
arrangements are considered to be significant. There are
noagreements between the Company and its Directors
oremployees providing for compensation for loss of office
oremployment that occur because of a change of control.
Relationship agreement – controlling shareholder
As at 31 December 2025, Creative Value Investment Group
Limited (‘CVIG’), the investment vehicle for The Sten and Karin
Mortstedt Family & Charity Trust, held through its wholly owned
subsidiaries 55.24% of the Company’s shares in issue and
wastherefore seen as a controlling shareholder under the
ListingRules.
Pursuant to UKLR 6.6.1R (13), the Company confirms that it
continues to comply with the requirement of UKLR 6.2.3R
thatit is able to carry on the business of its main activity
independently from its controlling shareholder. The Company
confirms that it has in place and will have in place at all times
aconstitution that allows the election and re-election of
independent directors to be conducted in accordance with
UKLR 6.2.8R and UKLR 6.2.9R.
Property portfolio
A valuation of all the investment properties, properties held
forsale and hotel in plant, property and equipment in the
Groupat 31 December 2025 was carried out by Cushman
&Wakefield for the UK, and Jones Lang LaSalle in Germany
and France, whichproduced an aggregate market value
(together with £88.6 million of directors’ valuations) of
£1,704.8 million (2024: £1,850.2 million). Further details can
befound in notes 11 to 14 to the Group financial statements.
Corporate governance
The Corporate Governance Statement, prepared in
accordancewith rule 7.2 of the FCA’s Disclosure Guidance
andTransparency Rules, is set out on pages 64 to 119 and forms
part of this report. It applies to the Company and its subsidiaries.
It does not include associates. The Group has nojoint ventures.
Employees, environmental and social issues
The Group’s policies on employment, environmental
andsocialissues (including the information required by
theCompanies Act 2006 (Strategic report and Directors’
report) Regulations 2013), including charitable donations, are
summarised in the Environmental, Social and Governance
Review on pages 30 to50. GHG emissions can be found
onpage 32. No political donations to any parties, organisations
or candidates, or political expenditure were made during 2025.
The Group has also published Sustainability Strategy and
NetZero Carbon Pathway documents which are available
onlineatwww.clsholdings.com.
Charitable donations during the year totalled £161,730
(2024: £203,329). As part of the Group’s ESG strategy,
itsponsors charitable events and organisations relating to
therealestate industry and, more specifically, assists charities
and organisations with donations and staff involvement
initiatives inthe areas where our properties are located.
Furtherdetails can be found on page 31.
Engagement with suppliers, customers and others
inaUKbusiness relationship with the Company
The statement in respect of the Company’s engagement with
suppliers, customers and others throughout the year is set out
in the stakeholder engagement sections on pages 26 and 27
and our Prompt Payment Code is detailed in the environmental,
social and governance review on page 48.
Human rights
The Board ensures the Group upholds and promotes respect
for human rights in all its current operating locations and aims
toprevent any negative human rights impact. As the Group
operates in the UK, Germany and France it is subject to the
European Convention on Human Rights and the UK Human
Rights Act 1998. The Group respects all human rights and in
conducting its business regards those rights relating to non-
discrimination and fair treatment to be the most relevant and
tohave the greatest potential impact on its key stakeholders,
which are deemed to be customers, employees and suppliers.
The Board has also noted its moral and legal obligations under
the Modern Slavery Act 2015 (the ‘Act’). The Board has a zero
tolerance approach towards modern slavery, and throughout
the year the Company has contacted its first tier contractors
and suppliers to ensure their compliance with the Act. Our full
statement onModern Slavery can be found on our website at
www.clsholdings.com. The Group’s policies seek to ensure that
employees comply with the relevant legislation and regulations
in place to promote good practice. The Group’s policies are
formulated and kept up to date and communicated to all
employees through the Group Intranet and, where appropriate,
individual presentations. In the year ended 31 December 2025,
the Group was not aware of any incident in which the
organisation’s activities have resulted in an abuse of
humanrights.
Insurance of directors and indemnities
The Company has arranged insurance cover in respect of legal
action against its Directors and Officers. The Company has
granted indemnities to each of the Directors and other senior
management, uncapped in amount but subject to applicable
law, in relation to certain losses and liabilities which they may
incur in the course of acting as Directors or employees of
theCompany or one or more of its subsidiaries or associates.
CLS Holdings plc Annual Report and Accounts 2025116
Directors’ Report continued

Theseindemnities are categorised as ‘qualifying third-party
indemnities’ for the purposes of the Companies Act 2006.
Auditor
A resolution to confirm the appointment of BDO LLP as
Auditorto the Company will be proposed at the forthcoming
Annual General Meeting.
2026 Annual General Meeting
The 2026 Annual General Meeting will be held on Thursday,
23 April 2026. The notice of meeting, including explanatory
notes for the resolutions to be proposed, will be posted
toshareholders.
Disclosure of information to the Auditor
Each Director has confirmed at the date of this report that:
• so far as they are aware, there is no relevant audit information
of which the Company’s auditor is unaware; and
• they have taken all the steps that they ought to have taken as
a Director in order to make themselves aware of any relevant
audit information and to establish that the Company’s auditor
is aware of that information. This confirmation is given and
should be interpreted in accordance with the provisions of
s418 of the Companies Act 2006.
Going concern
Notwithstanding the material uncertainty the Directors have a
reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for the
foreseeable future and further details of this analysis are set out
together with the viability statement on pages 61 to 63.
Therefore, the Directors continue to adopt the going concern
basis in preparing the annual report and accounts.
Disclosures under UKLR 6.6R
The table below is included to comply with the disclosure requirements under UKLR 6.6.1R. The information required by the Listing
Rules can be found in the annual report at the location stated below.
UKLR Information required Disclosure
6.6.1(1) Interest capitalised by the Group Not applicable
6.6.1(2) Publication of unaudited financial information Page 176
6.6.1(3) Long-term incentive schemes disclosure required by UKLR 9.3.3R None
6.6.1(4) Director’s waiver of emoluments None
6.6.1(5) Director’s waiver of future emoluments None
6.6.1(6) Non-pro-rata allotments for cash (issuer) None
6.6.1(7) Non-pro-rata allotments for cash (major subsidiaries) None
6.6.1(8) Listed company is subsidiary of another company None
6.6.1(9) Contracts of significance with a director None
6.6.1(10) Contracts of significance with Controlling Shareholder None
6.6.1(11) Dividend waiver Not applicable
6.6.1(12) Waiver of future dividends Not applicable
6.6.1(13) Compliance with UKLR 6.2.3R in relation to controlling shareholder Page 116
CLS Holdings plc Annual Report and Accounts 2025 117
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Corporate
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Strategic
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Employee Benefit Trust
Altum Trustees Limited (the ‘Trustee’) continues as Trustee
ofCLS Holdings plc’s Employee Benefit Trust (the ‘EBT’).
TheEBT is used to receive the Company’s shares that it has
purchased in the market or received by the Company from
atransfer from treasury from time to time, for the benefit
ofemployees to satisfy outstanding awards under the
Company’s various share plans.
On 14January 2025, 700,474 shares were transferred
fromtreasury tothe EBT to satisfy share plan awards.
At31 December 2025, following the exercise during the
yearofoptions and release of awards under the Company’s
share plans, the EBT held 255,979 shares.
A dividend waiver is in place from the Trustee in respect
ofalldividends payable by the Company on shares which
theEBT may hold. Further details regarding the EBT and
oftreasury shares issued pursuant to CLS Holdings plc
employee share plans during the year are set out in
note23tothe financial statements.
Approved by the Board and signed on its behalf by:
David Fuller BA FCG
Company Secretary
12 March 2026
The following table is included to comply with the additional disclosure requirements under the UKLR 6.6.6R
UKLR Information required Disclosure
6.6.6(1) Directors· (and Connected Persons’) interests in CLS shares at year end and at not
morethan one month prior to the date of the AGM notice
Page 95
6.6.6(2) Interests in CLS shares disclosed under DTR5 at year end and not more than one
monthprior to the date of AGM notice
Page 115
6.6.6(3) The going concern statement Page 61-62
6.6.6(4)(a) Amount of authority to purchase own shares available at year end 39,811,074 shares
6.6.6(4)(b) Off-market purchases of own shares during the year None
6.6.6(4)(c) Off-market purchases of own shares since year end None
6.6.6(4)(d) Non-pro-rata sales of treasury shares during the year None
6.6.6(5) Compliance with the Main Principles of the UK Corporate Governance Code Page 65
6.6.6(6)(b) Details of non-compliance with the UK Corporate Governance Code Pages 65, 66 and 75
6.6.6(7) Directors proposed for re-election: the unexpired term of any director’s service
contractand a statement about directors with no service contracts
Page 108
6.6.6(8) Climate-related financial disclosures consistent with the TCFD recommendations
andrecommended disclosures
Pages 39-47
CLS Holdings plc Annual Report and Accounts 2025118
Directors’ Report continued

Directors’ responsibilities
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with 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 in accordance with the Companies Act 2006 and
United Kingdom adopted International Accounting Standards
and International Financial Reporting Standards (IFRSs)
andhave elected to prepare the Parent Company financial
statements in accordance with FRS 101 of United Kingdom
Generally Accepted Accounting Practice (United Kingdom
Accounting Standards and applicable law). Under company
lawthe Directors must notapprove the accounts unless they
aresatisfied that they give a true and fair view of the state
ofaffairs of the Group andof the profit or loss of the Group
forthat period.
In preparing the Parent Company 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 applicable UK Accounting Standards have
beenfollowed, subject to any material departures disclosed
and explained in the financial statements; and
• prepare the financial statements on the going concern
basisunless it is inappropriate to presume that the
Companywill continue in business.
In preparing the Group financial statements, International
Accounting Standard 1 requires that Directors:
• properly select and apply accounting policies;
• present information, including accounting policies, in
amanner that provides relevant, reliable, comparable
andunderstandable information;
• provide additional disclosures when compliance with the
specific requirements in IFRSs are insufficient to enable
usersto understand the impact of particular transactions,
other events and conditions on the entity’s financial position
and financial performance; and
• make an assessment of the Group’s ability to continue
asagoing concern.
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 the maintenance and integrity
of the corporate and financial information included on the
Company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Responsibility statement
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with
therelevant financial reporting framework, give a true and
fairview of the assets, liabilities, financial position and profit
orloss of the Company and the undertakings included in
theconsolidation taken as a whole;
• the strategic report includes a fair review of the development
and performance of the business and the position of the
Company and the undertakings included in the consolidation
taken as a whole, together with a description of the principal
risks and uncertainties that they face; and
• the annual report and financial statements, taken as a whole,
are fair, balanced and understandable and provide the
information necessary for shareholders to assess the
Company’s position and performance, business model
andstrategy.
This statement of responsibilities was approved by the Board
on12 March 2026.
Approved and authorised on behalf of the Board
David Fuller BA FCG
Company Secretary
12 March 2026
CLS Holdings plc Annual Report and Accounts 2025 119
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Directors’ responsibility statement

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 Company’s affairs as at 31 December
2025 and of the Group’s loss for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;
• the Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice;
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of CLS Holdings plc (the ‘Company’) and its subsidiaries (the ‘Group’) for the year ended
31 December 2025 which comprise the Group income statement, the Group statement of comprehensive income, the Group and
Company balance sheets, the Group and Company statements of changes in equity, Group statement of cash flows and notes to
the financial statements, including material accounting policy information. The financial reporting framework that has been applied
in their preparation is applicable law and UK adopted international accounting standards and as regards the Company financial
statements, applicable law and United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework”
(United Kingdom Generally Accepted Accounting Practice).
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 audit committee.
Independence
Following the recommendation of the audit committee, we were appointed by Members on 6 September 2024 to audit the
financial statements for the year ended 31 December 2024 and subsequent financial periods. The period of total uninterrupted
engagement including retenders and reappointments is 2 years, covering the years ended 31 December 2024 to 2025. We remain
independent of the Group and the 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 Company.
Material uncertainty related to going concern
We draw attention to the going concern section in Note 2.1 to the financial statements, which explains that the Group is reliant
uponits ability to both refinance the debt maturing and to complete a number of investment property disposals in the going
concern period in challenging market conditions. The timing and value of both the planned refinancing of facilities falling due within
the going concern period, and planned property disposals, are outside of Management’s control. As stated in the going concern
section in Note 2.1, these events or conditions, along with the other matters as set forth in the going concern section in Note 2.1,
indicate that a material uncertainty exists that may cast significant doubt on the Group’s and the Company’s ability to continue as
going concerns. The financial statements do not include any adjustments that would be necessary if the Group and the Company
were unable to continue as going concerns. Our opinion is not modified in respect of this matter.
Consequently, we determined Going Concern to be a key audit matter.
CLS Holdings plc Annual Report and Accounts 2025120
Independent auditor’s report
tothemembers of CLS Holdings plc

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
Company’s ability to continue to adopt the going concern basis of accounting and in response to the key audit matter included:
• Assessing the appropriateness of the going concern period against the requirements of the applicable standard.
• Obtaining an understanding of the Directors’ process for assessing going concern including an understanding
ofthekeyassumptions used;
• Using our knowledge of the Group, its market sector and the current economic environment to evaluate the
Directors’identification of inherent risks to the business, and to assess how these risks could affect the Group
andtheCompany’s abilitytocontinue as going concerns over the period to 31 July 2027.
• We have reviewed the forecasts that support the Directors’ going concern assessment and;
– obtained an understanding of how management prepared the forecasts and the two separate scenarios: the Base case
andasevere but plausible scenario.
– challenged forecast assumptions through comparison with those that would be expected in the current economic and financial
environment, including forecast inflation levels and interest rates, together with other macro-economic factors which may
adversely affect future occupancy and income and cost levels, and the impact of a further fall in property valuations on
compliance with loan covenants.
– challenged the appropriateness of each of the key assumptions in the two scenarios by testing them to supporting evidence
and searching for contradictory evidence. We did this using our understanding of the Group’s business, evidence gained
during the audit, knowledge of the wider real estate market and input from our real estate valuation and debt specialists.
Weassessed historical forecasting accuracy as an input into determining the ability of management to accurately forecast
forthe going concern period;
– challenged forecast assumptions in comparison to the current performance of the Group; and
– confirmed whether the terms and conditions of the Group’s loan agreements had been appropriately incorporated into
thegoing concern scenarios and modelling, including the maturity profile of the Group’s borrowings and the requirements
inrelation to covenant compliance.
• We performed testing to evaluate whether the covenant requirements of the debt facilities would be breached under the
Basecase and the Severe but plausible case prepared by management, applied additional stress tests to observe their impact
onliquidity; and assessed proposed cures for forecasted breaches.
• We challenged the planned mitigating actions used by management in both the Base case and the Severe but plausible case,
including certain refinancing and repayment of debt, property disposals, reducing dividend distribution and capital expenditure,
by comparing to actual cash flows in 2025, obtaining supporting evidence from management and searching for contrary
evidence. We also challenged to what extent these mitigating actions are within management’s control;
• We considered the ability of management to execute the refinancings of the debt maturing in the going concern period within
the timescale required, which covered £254.2m of debt falling due within the going concern period. Our audit procedures
included considering evidence of the progress of ongoing refinancing and management’s refinancing track record. We also
obtained the perspective of our debt advisory experts in Germany on the market appetite for refinancing such loans;
• We also challenged management as to whether the Group would be able to complete the planned property disposals included
intheir going concern assessment within the timescale required. Our audit procedures included considering evidence of the
progress to date of planned disposals; and
• We read the disclosures in the Financial Statements in relation to going concern to assess whether they appropriately disclose
the risks, the impact on the Group’s operations and results and the availability of mitigating actions to be taken.
In relation to the 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 in preparing the financial statements.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
ofthis report.
Strategic
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Corporate
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Additional
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CLS Holdings plc Annual Report and Accounts 2025 121

Overview
2025 2024
Key audit matters • Valuation of the Property Portfolio
• Going concern
• Valuation of the Property Portfolio
• Going concern
Materiality Group financial statements as a whole
£17.0m (2024: £19.3m) based on 1% (2024: 1%) 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, the applicable financial reporting
framework and the Group’s system of internal control. On the basis of this, we identified and assessed the risks of material
misstatement of the Group financial statements including with respect to the consolidation process. We then applied professional
judgement to focus our audit procedures on the areas that posed the greatest risks to the group financial statements. We continually
assessed risks throughout our audit, revising the risks where necessary, with the aim of reducing the group risk of material
misstatement to an acceptable level, in order to provide a basis for our opinion.
Components in scope
The Group operates across two operating segments being other investments and investment property, with the investment
property segment being managed across three separate geographic regions, the UK, Germany and France. The other investments
segment comprises the Group’s UK hotel operation and other small corporate investments based in Sweden. The head office is
located in the UK where the other investments operating segment and UK investment property operating segment are managed.
Both the Germany and France operating segments have separate local management and accounting functions.
For components in scope, we used a combination of risk assessment procedures and further audit procedures to obtain sufficient
appropriate evidence. These further audit procedures included:
• procedures on the entire financial information of the component, including performing substantive procedures
• procedures on one or more classes of transactions, account balances or disclosures
• specific audit procedures
Based on our risk assessment, we identified that the UK component (including the Group’s UK hotel operation) and Germany
component required audits of their entire financial information due to the extent to which these components contribute to the
identified Group risks of material misstatement.
We identified that the France component required audit procedures over specific financial statement areas due to the extent to
which certain financial statement areas within this component contribute to the identified Group risks of material misstatement.
Procedures performed at the component level
The audit work performed over the UK component was performed by the UK firm and the audit work in respect of the Germany
and France components was performed by local BDO Network firms in Luxembourg and France respectively. Certain additional
procedures were performed at Group level by the Group audit team in respect of the key audit matters, together with audit
procedures over the Group consolidation which gave us the evidence we needed to form our opinion on the Group financial
statements as a whole.
The remainder of the other investments segment, comprising small corporate investments based in Sweden was not identified
ascontributing to the identified Group risks of material misstatement and the financial information related to this component
wasprincipally subject to analytical review procedures performed by the Group audit team.
Procedures performed centrally
We considered there to be a high degree of centralisation of financial reporting processes in relation to borrowings, finance costs
and going concern. We therefore designed and performed procedures centrally in these areas.
The Group operates a centralised IT function that supports IT processes for certain components. This IT function is subject to
specified risk-focused audit procedures, predominantly the testing of the relevant IT general controls and IT application controls.
CLS Holdings plc Annual Report and Accounts 2025122
Independent auditor’s report
tothemembersofCLSHoldings plc continued

Working with other auditors
As Group auditor, we determined the components at which audit work was performed, together with the resources needed to
perform this work. These resources included component auditors, who formed part of the group engagement team as reported
above. As Group auditor we are solely responsible for expressing an opinion on the financial statements.
In working with these component auditors, we held discussions with component audit teams on the significant areas of the group
audit relevant to the components based on our assessment of the group risks of material misstatement. We issued our group audit
instructions to component auditors on the nature and extent of their participation and role in the group audit, and on the group
risks of material misstatement.
We directed, supervised and reviewed the component auditors’ work. Our involvement with component auditors included
thefollowing:
• As part of our audit planning, we issued Group audit instructions to the Germany and France component teams and held
remoteplanning meetings via video conference to discuss the Group and local risks identified and to agree the testing
approachand audit timelines. The planning documentation was reviewed by senior members of the Group audit team.
• A visit to Luxembourg (Germany component) and France (France component) was conducted by senior members of the
Groupaudit team to perform a review of the complete audit files for the German component and to review the relevant audit
work in relation to the specific financial statement areas identified for the France component based on the extent to which
certain financial statement areas within this component contribute to the identified Group risks of material misstatement.
Following the review, any further work required by the Group audit team was performed by the component auditors and
reviewedby the Group audit team via remote access to the audit files.
• At the completion stage, the Group audit team attended closing meetings with the local audit team via video conference
andreviewed their reporting, addressing risks and specific procedures raised. Discussions were held with Group management
onthe findings from our audit, including adjustments raised.
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 and the Group’s independent property valuers 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 property asset class;
• Review of the minutes of Board and Audit Committee meetings and other papers related to climate change and performed
ariskassessment as to how the impact of the Group’s risk assessment as set out in the ESG: climate related Financial Disclosure
may affect the financial statements and our audit; and
• Involvement of climate-related experts in evaluating management’s risk assessment.
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 management’s going concern assessment and viability assessment.
We also assessed the consistency of management’s disclosures included as ‘Statutory Other Information’ within the Strategic
Report with our knowledge obtained from the audit.
Based on our risk assessment procedures, we considered the following Key Audit Matters to be materially affected by climate-
related risks and related commitments – Valuation of the property portfolio. The explanation of and our audit response to this
climate-related risk is included in the related key audit matter below.
Strategic
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Corporate
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Financial
statements
Additional
information
CLS Holdings plc Annual Report and Accounts 2025 123

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. In addition to the matter described in the Material uncertainty related
to going concern section of our report, we have determined the matters below to be the key audit matters to be communicated in
our report. 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.
Key audit matter How the scope of our audit addressed the key audit matter
Valuation of the
Property portfolio:
£1,704.8m
(2024: £1,850.2m)
Refer to the Audit
Committee Report
(page81); Material
accounting policies
(page135); and
Notes11,12, 13 and 14
ofthe Consolidated
Financial Statements.
The Group has engaged
Cushman & Wakefield
(UKProperties) and
Jones Lang LaSalle
(German and French
Properties) to undertake
avaluation of all the
properties in accordance
with RICS Valuation –
Global Standards, with
theexception of four
properties classified as
held for sale which have
been valued based on
Directors’ valuations.
The valuation of the
property portfolio
requires significant
judgement and use
ofestimates by
management and
theexternal valuers.
Any input inaccuracies
orunreasonable bases
used in these estimates
(such as in respect of
market rental income
andyields applied)
couldresult in a material
misstatement of the
income statement
andbalance sheet.
There is also a risk
thatmanagement may
influence the significant
judgements and
estimates in respect
ofproperty valuations
inorder to achieve
property valuation
andother performance
targets to meet
marketexpectations
orbonus targets,
throughintentionally
misstating property
orlease data provided
toexternal valuers.
Our audit work included, but was not restricted to, the following:
Group’s controls relating to the valuation of investment properties
• We reviewed and evaluated the design, implementation and appropriateness of the Group’s
controls relating to the valuation of investment properties, including the processes by which
the Group ensures that accurate data is provided to the external valuers. In doing so, we
performed a walkthrough of the relevant controls by obtaining support for the design and
implementation of the controls.
Experience of the valuers and relevance of their work
• We assessed the competency, qualifications, independence and objectivity of the
independent external valuers engaged by the Group and reviewed the terms of their
engagement for any unusual arrangements, limitations in the scope of their work or
evidenceof management bias.
• Together with our internal UK auditor’s experts we read the valuation reports and
confirmedthat all valuations had been prepared in accordance with applicable valuation
guidelines and were therefore appropriate for determining the carrying value in the
Group’sfinancial statements.
Data provided to the valuer
We validated the underlying data provided to the valuer by management which included key
observable inputs such as current rent and lease term by, agreeing a sample to the executed
lease agreements as part of our audit work.
Assumptions and estimates used by the valuer
With respect to the German and French investment properties, our internal real estate valuation
specialists for each jurisdiction performed the following procedures:
• Developed yield expectations for each property using available independent industry data,
reports and comparable transactions in the market around the period end.
• Evaluated the other key valuation assumptions, being the market rental values, taking into
account the location and specifics of each property.
• We tested the mathematical accuracy of the valuation calculations using discounted cash
flows through reperformance based on the inputs used by the external valuer.
• Attended meetings with our Group German and French property valuers, together with
senior members of the Group audit team, and discussed the assumptions used and the
valuation movement in the period with the independent valuers.
• Where the valuation yield, market rental value or recalculated valuation was outside of
ourexpected range we challenged the independent valuer on specific assumptions and
reasoning for the yields and/or market rents applied and corroborated their explanations
where relevant, including agreeing to third-party documentation and market comparisons.
With respect to the UK property valuations, the work performed was consistent with the above
and included the following areas:
• Together with our internal UK auditor’s experts we developed yield expectations for each
property using available independent industry data, reports and comparable transactions
inthe market around the period end.
• Attending the meetings with the Group’s UK property valuers to assist us in assessing that
explanations provided were appropriate and in line with market knowledge.
Related disclosures in the financial statements
We reviewed the appropriateness of the Group’s disclosures within the financial statements
inrelation to valuation methodology, key valuation assumptions and valuation sensitivity by
checking that these adhere to the disclosure requirements of the reporting framework used.
Key observations:
Based on our work we have not noted any material instance which may indicate that the
assumptions adopted by the Directors in the valuation were not reasonable or that the
methodology applied was inappropriate.
CLS Holdings plc Annual Report and Accounts 2025124
Independent auditor’s report
tothemembersofCLSHoldings plc continued

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:
Group financial statements Parent company financial statements
2025
£m
2024
£m
2025
£m
2024
£m
Materiality £17.0m £19.3m £5.2m £5.1m
Basis for determining
materiality
Materiality for the Group and Company’s financial statements was set at 1% of total assets
(2024:1%). This provides a basis for determining the nature and extent of our risk assessment
procedures, identifying and assessing the risk of material misstatement and determining the
nature and extent of further audit procedures.
Rationale for the
benchmarkapplied
We determined that total assets would be the most appropriate basis for determining overall
materiality as we consider it to be the principal consideration for the users of the financial
statements in assessing the financial performance of the Group.
Performance materiality £12.8m £11.5m £3.8m £3.1m
Basis for determining
performance materiality
Performance materiality is set at an amount to reduce to an appropriate low level the probability
that the aggregate of uncorrected and undetected misstatements exceeds materiality. On the
basis of our risk assessment, together with our assessment of the Group’s overall control
environment, our judgement was that overall performance materiality for the Group should
be75% of materiality. We determined that the same measure as the Group was appropriate
forthe Company.
Rationale for the
percentage applied
forperformance
materiality
We determined that 75% of materiality would be appropriate based on our risk assessment,
together with our assessment of the Group’s and Company’s overall control environment,
thelownumber of components and the low value of brought forward adjustments impacting
thecurrent year.
Specific materiality
We also determined that for other account balances and classes of transactions that impact the calculation of EPRA Earnings,
amisstatement of less than materiality for the financial statements as a whole, specific materiality, could influence the economic
decisions of users.
As a result, we determined materiality for these items of £1.5m (2024: £1.8m) based on 5% of EPRA Earnings. EPRA Earnings
excludes the impact of the net loss on revaluation of investment properties and related deferred tax movements, changes in
fairvalue of interest rate derivatives, changes in the fair value of equity investments, profits/(losses) on the sale of investment
property and equity investments and the amortisation of intangible assets. We further applied a performance materiality level
of75% (2024: 60%) of specific materiality to ensure that the risk of errors exceeding specific materiality was appropriately
mitigated. We consider that the EPRA Earnings benchmark is comparable with other market participants.
Strategic
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Corporate
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Financial
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Additional
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CLS Holdings plc Annual Report and Accounts 2025 125

Component performance materiality
For the purposes of our Group audit opinion, we set performance materiality for each component of the Group, apart from the
Company whose materiality and performance materiality are set out above, based on a percentage of between 30% and 65%
(2024: 30% and 60% ) of Group performance materiality dependent on a number of factors including the size and our assessment
of the risk of material misstatement of that component. Component performance materiality ranged from £5.1m to £10.2m
(2024: £3.5m to £7.2m). Specific component performance materiality ranged from £480k to £900k (2024: £330k to £741k).
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £850k
(2024: £965k) and £75k (2024: £90k) under specific materiality areas. 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
documententitled Annual Report and 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 UK 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 Company’s compliance with the provisions of the UK Corporate Governance
Code 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 pages 61–63;
• The Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment
covers and why the period is appropriate set out on page 61; and
• The Directors’ statement on whether they have a reasonable expectation that the group will be able
tocontinue in operation and meet its liabilities set out on page 63.
Other Code
provisions
• Directors’ statement on fair, balanced and understandable set out on page 84;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks
setout on page 53;
• The section of the annual report that describes the review of effectiveness of risk management
andinternal control systems set out on pages 53–55; and
• The section describing the work of the Audit Committee set out on page 81.
CLS Holdings plc Annual Report and Accounts 2025126
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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.
Strategic report and
Directors’ report
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year for
whichthefinancial statements are prepared is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in accordance with applicable
legalrequirements.
In the light of the knowledge and understanding of the Group and Company and its environment
obtainedin the course of the audit, we have not identified material misstatements in the Strategic
reportorthe Directors’ report.
Directors’
remuneration
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 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 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 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 Group and Company, or returns adequate
forour audit have not been received from branches not visited by us; or
• the 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.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, 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 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 Company or to cease operations, or have no
realisticalternative but to do so.
Strategic
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Corporate
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Financial
statements
Additional
information
CLS Holdings plc Annual Report and Accounts 2025 127

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 of the Group and the industry in which it operates;
• Discussion with management, those charged with governance and legal counsel;
• Obtaining an understanding of the Group’s policies and procedures regarding compliance with laws and regulations.
We considered the significant laws and regulations to be UK adopted international accounting standards, the Companies Act 2006,
UK Listing Rules and applicable tax regulations (including compliance with the UK REIT Regime).
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 VAT Regulations, employment law, Health and Safety Act and environmental regulations.
Our procedures in respect of the above included:
• Review of minutes of meetings 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:
– Detecting and responding to the risks of fraud; and
– Internal controls established to mitigate risks related to fraud.
• Review of minutes of meetings 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; and
• Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted
bythese.
Based on our risk assessment, we considered the areas most susceptible to fraud to be inputs to the valuation of the property
portfolio and management override of controls.
CLS Holdings plc Annual Report and Accounts 2025128
Independent auditor’s report
tothemembersofCLSHoldings plc continued

Our procedures in respect of the above included:
• Testing a sample of journal entries throughout the year, which met defined risk criteria, by agreeing to supporting documentation;
• Involvement of forensic specialists in the audit to assist in the identification and assessment of potential fraud risks relevant to
theGroup;
• Assessing significant estimates made by management for bias within the valuation of the property portfolio as mentioned under
the key audit matters heading; and
• To address the risk arising in relation to the inputs into the valuation of the property portfolio, we agreed the key observable
inputs provided by management to those used by the external valuer, which consist of the current rent, square footage of vacant
units and lease term. We agreed these inputs to a sample of executed lease agreements as part of our audit work.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including
component engagement teams 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. For component engagement teams, we also
reviewed the results of their work performed in this regard.
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 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 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 Company and the Company’s members as a body, for our audit work, for this report, or for
the opinions we have formed.
Thomas Edward Goodworth
(Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
12 March 2026
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Strategic
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Corporate
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Additional
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CLS Holdings plc Annual Report and Accounts 2025 129

Revenue
4
1 3 9 .7
151. 9
Service charges and similar expenses
4
(38.4)
(37 .9)
Net rental income
4
101.3
114. 0
Administration expenses
(16.4)
(17 .7)
Other property expenses
(17 .3)
(18 . 1)
Non-recurring items
1
(1. 7)
–
Operating profit before revaluation and disposals
65.9
78. 2
Net revaluation movements on investment property
12/14
(79.2)
(127.7)
Net revaluation movements on equity investments
0.1
(0.6)
Loss on sale of investment property
(1 0.9)
(2.3)
Loss on sale of other equity investments
–
(0 . 1)
Operating loss
(24. 1)
(5 2.5)
Finance income
8
1 .1
1 .4
Finance costs
9
(3 9 .1)
(4 5 .7)
Foreign exchange gain/(loss)
0.2
(0.6)
Loss before tax
(61. 9)
(97 .4)
Taxation
10
11.6
3.8
Loss for the year attributable to equity shareholders
(50.3)
(93. 6)
Basic and diluted earnings per share
5/24
(12.6)p
(23 . 6)p
The notes on pages 135 to 168 are an integral part of these Group financial statements.
1 During the year, we conducted a review of staffing and financial structuring. This resulted in non-recurring costs including redundancy costs being incurred.
CLS Holdings plc Annual Report and Accounts 2025130
Group income statement
for the year ended 31 December 2025

Loss for the year
(50.3)
(93. 6)
Revaluation of property, plant and equipment
26
(1.6)
1 .3
Foreign exchange differences
26
25.2
(21. 6)
Corporation tax on exchange differences
(0. 5)
–
Deferred tax on revaluation of property, plant and equipment
18
0.7
(0 . 1)
Total items that may be reclassified to profit or loss
2 3.8
(20 . 4)
Total other comprehensive income/(expense)
23.8
(20 . 4)
Total comprehensive expense for the year attributable to equity shareholders
(26.5)
(114. 0)
The notes on pages 135 to 168 are an integral part of these Group financial statements.
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CLS Holdings plc Annual Report and Accounts 2025 131
Group statement of comprehensive income
for the year ended 31 December 2025

Investment properties
12
1 ,570.8
1 ,676. 5
Property, plant and equipment
13
40.6
42 .5
Intangible assets
2.6
2.7
Equity investments
0.8
0.6
Derivative financial instruments
20
0. 5
0. 7
1,6 15.3
1,723 . 0
Trade and other receivables
15
10. 5
14.2
Current tax
0.5
–
Derivative financial instruments
20
0 .1
1 .1
Cash and cash equivalents
16
49.4
6 0. 5
60. 5
7 5.8
Assets held for sale
14
94 .9
1 3 3 .0
Total assets
1 ,7 7 0 .7
1, 93 1. 8
Trade and other payables
17
(5 7. 6 )
(6 5 .7)
Current tax
–
(0 . 9)
Borrowings
19
(198.0)
(3 72.4)
(255 .6)
(43 9.0)
Deferred tax
18
(65.4)
(78 . 1)
Borrowings
19
(703.9)
(62 6.8)
Leasehold liabilities
(3.4)
(3 .3)
Derivative financial instruments
20
(0.3)
(0 . 4)
(7 7 3.0)
(708 . 6)
Total liabilities
(1,02 8.6)
(1,14 7 .6)
Net assets
74 2 .1
784. 2
Share capital
23
11.0
11. 0
Share premium
8 3 .1
8 3.1
Other reserves
26
111.0
86.9
Retained earnings
537.0
603 .2
Total equity
74 2 .1
784. 2
The financial statements of CLS Holdings plc (registered number: 02714781) were approved by the Board of Directors
and authorised for issue on 12 March 2026 and were signed on its behalf by:
Mr F Widlund
Chief Executive Officer
Mr H Stokes
Chief Financial Officer
The notes on pages 135 to 168 are an integral part of these Group financial statements.
CLS Holdings plc Annual Report and Accounts 2025132
Group balance sheet
at 31 December 2025

Note 23
Note 26
Total comprehensive income/(expense) for the year
–
–
23.8
(50.3)
(26.5)
Share-based payments
–
–
0. 3
–
0.3
Dividends to shareholders
–
–
–
(15.9)
(15. 9)
Total changes arising in 2025
–
–
2 4 .1
(66.2)
(4 2. 1)
At 1 January 2025
11.0
8 3 .1
86 .9
603.2
784.2
At 31 December 2025
11.0
8 3 .1
111. 0
537 .0
74 2 .1
Note 23
Note 26
Total comprehensive expense for the year
–
–
(20 .4)
(93. 6)
(114 . 0)
Share-based payments
–
–
0.6
–
0.6
Dividends to shareholders
–
–
–
(31. 6)
(31. 6)
Total changes arising in 2024
–
–
(19 .8)
(125 .2)
(145 . 0)
At 1 January 2024
11. 0
8 3 .1
106 .7
7 28.4
9 29 .2
At 31 December 2024
11. 0
8 3 .1
86.9
603 .2
78 4. 2
The notes on pages 135 to 168 are an integral part of these Group financial statements.
Strategic
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CLS Holdings plc Annual Report and Accounts 2025 133
Group statement of changes in equity
for the year ended 31 December 2025

Cash generated from operations
27
52 .6
71.2
Interest received
1 .1
1 .4
Interest paid
(37 .9)
(40 . 6)
Income tax paid on operating activities
(1.2)
(2.5)
Net cash inflow from operating activities
14 .6
2 9. 5
Capital expenditure on investment properties
(17 .3)
(22.3)
Proceeds from sale of properties
1 3 6 .7
6 3.8
Income tax paid on sale of properties
(4.9)
–
Purchases of property, plant and equipment
(0. 1)
(0 .2)
Purchase of intangibles
(0.2)
(0.2)
Net cash inflow from investing activities
114.2
4 1 .1
Dividends paid
25
(15.9)
(31. 6)
Cash received on settlement of derivative financial instrument
0 .1
0. 7
Purchase of derivative financial instrument
(0.3)
(1.2)
Proceeds from borrowings
61.2
8.8
Transaction costs related to borrowings
(1.5)
(1. 0)
Repayment of borrowings
(186.5)
(55 .5)
Net cash outflow from financing activities
(142. 9)
(79 . 8)
Cash flow element of net decrease in cash and cash equivalents
(14. 1)
(9 .2)
Foreign exchange gain/(loss)
3.0
(0 .9)
Net decrease in cash and cash equivalents
(11. 1)
(10. 1)
Cash and cash equivalents at the beginning of the year
60. 5
7 0.6
Cash and cash equivalents at the end of the year
16
49.4
6 0. 5
The notes on pages 135 to 168 are an integral part of these Group financial statements.
CLS Holdings plc Annual Report and Accounts 2025134
Group statement of cash flows
for the year ended 31 December 2025

1. General information
CLS Holdings plc (the ‘Company’ or ‘Ultimate Parent’) and
its subsidiaries (together ‘CLS Holdings’ or the ‘Group’) i s an
investment property group which is principally involved in the
investment, management and development of commercial
properties. The Group’s principal operations are carried out
in the United Kingdom, Germany and France.
The Company is an incorporated public limited company
and is registered and incorporated in the United Kingdom.
Its registration number is 02714781, with its registered address
at 16 Tinworth Street, London SE11 5AL. The Company is
listed on the London Stock Exchange and domiciled in the
United Kingdom.
2. Material accounting policies
The principal accounting policies applied in the preparation
of these Group financial statements are set out below.
These policies have been consistently applied to all the
years presented, unless otherwise stated.
2.1 Basis of preparation
The financial statements have been prepared in accordance
with the requirements of the Companies Act 2006 and United
Kingdom adopted International Accounting Standards and
International Financial Reporting Standards (IFRSs).
Going concern
The Company’s going concern assessment has been
performed as part of the Group’s going concern assessment.
Background
CLS’ strategy and business model include regular secured
loan refinancings, and capital deployment and recycling
through acquisitions, capital expenditure and disposals.
Over the last thirty years, the Group has successfully navigated
several periods of economic uncertainty, including the recent
macroeconomic stresses resulting from global conflict,
the resulting inflationary pressures and transition to a higher
interest rate environment.
The Group continues to have very high levels of rent collection
and low bad debts, and has a long-term track record in financing
and refinancing debt including £373.7 million completed in the
twelve months to 31 December 2025 and a further £38.7 million
has been completed or well advanced subsequent to year-end,
whereby terms sheets have been obtained or they have
reached a first stage credit review.
The Directors note that the group financial statements for
the year ended 31 December 2024 contained disclosure of a
Material Uncertainty related to going concern due to the timing
and amounts of the planned refinancing of debt and disposals
of property being outside of Management’s control. In this
context the Directors set out their considerations and
conclusions in respect of going concern for these financial
statements below.
Going concern period and basis
The Group’s going concern assessment covers the period to
31 July 2027 (“the going concern period”). The period chosen
takes into consideration the maturity date of loans totalling
£254.2 million that expire by July 2027. The going concern
assessment uses the forecast approved by the Board at its
November 2025 meeting as the Base case. The assessment
also considers a Severe but plausible case. The Directors have
also considered the period between the date of Board approval
and the date of signing the accounts. Based on a review of
events since Board approval in November 2025, the Directors
conclude that there have been no significant changes since
the forecast was approved.
Forecast cash flows – Base case
The forecast cash flows prepared for the Base case take
account of the Group’s principal risks and uncertainties and
reflect the challenging economic backdrop. The forecast
cashflows have been updated using assumptions regarding
forecast forward interest curves, inflation and foreign exchange,
and include revenue growth, principally from contractual
increases in rent, and increasing cost levels in line with
forecast inflation.
The Base case is focused on the cash and working capital
position of the Group throughout the going concern period.
In this regard, the Base case assumes continued access to
lending facilities in the UK, Germany and France, and specifically
that debt facilities of £254.2 million with 13 lenders expiring
within the going concern period will be refinanced or extended
as expected (£164.4 million) or will be repaid (£89.8 million),
some of which are linked to forecast property disposals. The
Board acknowledges that these refinancings are not fully within
its control; however, they remain confident that refinancings or
extensions of these loans will be executed within the required
timeframe, having taken into account:
• existing banking relationships and ongoing discussions
with the lenders in relation to these refinancings;
• CLS’ track record of prior refinancings, particularly in
the 12 months to 31 December 2025 when £373.7 million
was successfully repaid, refinanced or extended;
• recent refinancings subsequent to 31 December 2025 that
have reached an initial credit committee review stage by
lenders, or where term sheets have been obtained, totalling
£38.7 million of the £164.4 million noted above; and
• other ongoing discussions with lenders.
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CLS Holdings plc Annual Report and Accounts 2025 135
Notes to the Group financial statements
for the year ended 31 December 2025

2. Material accounting policies
continued
2.1 Basis of preparation – continued
Going concern continued
Forecast cash flows – Base case continued
The Base case includes property disposals in the going
concern period in line with the Group’s business model and the
forecast cash flows approved by the Board in November 2025.
The Board acknowledges that property disposals are not fully
within its control; however, they are confident these transactions
will be completed within the going concern period, based on
their history of achieving disposals (with disposals of £144.2 million
achieved in the 12 months to 31 December 2025). The value
of the properties available for disposal is in excess of the
value of the debt maturing during the going concern period.
The Group’s financing arrangements, which utilise ring-fenced
property loans, contain Loan to Value (‘LTV’), Interest Cover
Ratio (‘ICR’) and Debt Service Coverage Ratio (‘DSCR’)
covenants. In the Base case, minimal cure payments have
been forecast given that the Group expects to maintain its
compliance with the covenant requirements.
The near-term impacts of climate change risks within the
going concern period are expected to be immaterial following
an assessment of potential significant inflation resulting from
climate change, in the context of increased property and
administrative costs, as part of the reverse stress testing
performed by CLS. Furthermore, the forecast cash flows
prepared for the Base case include all necessary capital
expenditure to meet the minimum energy efficiency
standards required in the countries where CLS operates.
Forecast cash flows – Severe but plausible case
A Severe but plausible case has been assessed which has
been produced by flexing key assumptions further including:
lower rents, increased service charges, higher property and
administration expenses, falling property values and higher
interest rates.
These flexed assumptions are more severe than CLS
experienced during the 2007-2009 global financial crisis
and other downturns such as that experienced in 2020-2022
during the Covid-19 pandemic. A key assumption in this
scenario is a further reduction to the Base case in property
values of 10% until July 2027, impacting forecast refinancings,
sales and cash cures. This is in addition to the reduction
experienced of 3.8% in 2025 and cumulative c. 25.4% decline
from 30 June 2022 to 31 December 2025.
Assumptions around refinancing and investment property
disposals are adjusted to incorporate the higher interest rates
and lower property values noted above. A reduction in property
values of 10% results in additional cure payments of £1.1 million
being necessary for the Group to remain in compliance with
its covenant requirements. Similarly, the assumptions of lower
rents and increased expenses results in additional cure
payments of £1.6 million.
Due to the severity of the assumptions used in this scenario,
which is Severe but plausible and therefore not remote, the
liquidity of the Group is exhausted even after putting in place
controllable mitigating actions as set out below.
Mitigating actions
In the Severe but plausible case, CLS is assumed to take
mitigating actions including depositing cash to cure covenant
shortfalls under the facilities’ equity-cure provisions, scaling
back uncommitted capital expenditure (specifically where
reductions do not affect tenant revenue streams over the going
concern period) and reducing the dividend to the Property
Income Distribution required under the UK REIT rules as well as
drawing the currently available £30.8 million of its existing
£80.0 million revolving credit and overdraft facilities. If needed,
further disposals could be considered as there are no sale
restrictions on CLS’ £1.7 billion of properties, albeit the timing
and the amount of these potential disposals are not in the
Group’s control.
Additionally, the Directors note that the loans that require
refinancing in the going concern period are all through
ring-fenced SPV borrower structures. Accordingly, in extremis,
the lender could enforce their security on an individual property
with no claim on the rest of the Group’s assets apart from
certain limited guarantees and limited recourse security
granted by the Company and certain Group companies.
Material uncertainty related to going concern
As described above, the Group is reliant in the Base case
and Severe but plausible case upon its ability to both refinance
the debt maturing and to complete a number of investment
property disposals in the going concern period in challenging
market conditions.
Whilst the Directors remain confident that a combination of
sufficient refinancings and property disposals will be achieved,
the timing and value of both the planned refinancing of facilities
falling due within the going concern period, and planned
property disposals, are outside of Management’s control
and consequently a material uncertainty exists that may
cast significant doubt on the Group’s and the Company’s ability
to continue as a going concern.
Notwithstanding this material uncertainty on the going
concern assumption, given our track-record and reputation,
the Directors are confident that the debt falling due for
repayment in the going concern period will be refinanced
or settled in line with their plans for the reasons set out
above, rather than requiring repayment on maturity, or will
be extinguished as part of property disposals in the period.
In extremis, the loans requiring refinancing are all through
ring-fenced SPV structures, save for certain limited guarantees
and limited recourse security granted by the Company and
certain other Group companies. Therefore, the Directors
continue to adopt the going concern basis in preparing these
Group financial statements. The financial statements do not
include any adjustments that would be necessary if the Group
and the Company were unable to continue as going concerns.
CLS Holdings plc Annual Report and Accounts 2025136
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

2. Material accounting policies
continued
2.1 Basis of preparation – continued
Historical cost and fair value
The financial statements have been prepared on the historical
cost basis, except for investment and other properties and
financial instruments that are measured at fair value at the end
of each reporting period, as explained in the accounting policies
below. Historical cost is generally based on fair value of the
consideration given in exchange for goods and services. Fair
value is the price that would be received to sell the asset or paid
to transfer a liability in an orderly transaction between market
participants at the measurement date, regardless of whether
that price is directly observable or estimated using another
valuation technique.
Presentational and functional currency
The consolidated financial statements, including the results and
financial position, are presented in pounds Sterling (GBP, £), the
functional and presentational currency of CLS Holdings plc.
The amounts presented in the financial statements are rounded
to the nearest £0.1 million.
New standards and interpretations
In the current year, the Group has applied a number of new
standards and amendments to IFRSs issued by the International
Accounting Standards Board (IASB) that are mandatorily effective
for an accounting period that begins on or after 1 January 2025.
Their adoption has not had any material impact on the disclosures
or on the amounts reported in these financial statements.
These new standards and amendments are listed below:
• Amendments to IAS 21 – Lack of exchangeability
At the date of authorisation of these financial statements,
the Group has not applied the following new and revised
IFRSs that have been issued but are not yet effective:
• Amendments to IFRS 10 and IAS 28 – Sale or contribution of
assets between an investor and its associate or joint venture
• Amendments to IFRS 9 – Classification and Measurement
of Financial Instruments
• IFRS 18 – Presentation and Disclosure in Financial Statements
• Amendments to IFRS 19 – Subsidiaries without Public
Accountability: Disclosures
• Amendments to IFRS 9 and IFRS 7 – Contracts Referencing
Nature-dependent Electricity
• Disclosures about Uncertainties in the Financial Statements
– Illustrative examples
• Translation to a Hyperinflationary Presentation Currency
(Amendments to IAS 21)
The Directors do not expect that the adoption of the
standards listed above will have a material impact on
the financial statements of the Group in future periods,
however, the presentation of the Group income statement
may change on adoption of IFRS 18.
2.2 Business combinations
Where property is acquired, via corporate acquisitions or
otherwise, management considers the substance of the assets
and liabilities and activities of the acquired entity in determining
whether the acquisition represents the acquisition of a business.
The Group determines that it has acquired a business when the
acquired set of activities and assets/liabilities include an input
and a substantive process that, together, significantly contribute
to the ability to create outputs i.e. rental income and capital
appreciation. The acquired process is considered substantive
if it is critical to the ability to continue to earn rental income
and drive capital appreciation, and the inputs acquired include
an organised workforce with the necessary skills, knowledge,
or experience to perform that process or it significantly
contributes to the ability to continue producing rental income
and drive capital appreciation and is considered unique or
scarce or cannot be replaced without significant cost, effort,
or delay in the ability to continue producing rental income
and capital appreciation.
Where such acquisitions are not determined to be an acquisition
of a business, they are not treated as business combinations.
Rather, the cost to acquire the corporate entity or assets
and liabilities is allocated between the identifiable assets
and liabilities of the entity based on their relative fair values
at the acquisition date.
(I) Subsidiary undertakings
Subsidiaries are all entities (including structured entities) over
which the Group has control. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those
returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred
to the Group. They are deconsolidated from the date that
control ceases.
(II) Goodwill
Goodwill arising on consolidation represents the excess of the
cost of acquisition over the Group’s interest in the fair value of
identifiable assets and liabilities of a subsidiary or associate at
the date of acquisition in a business combination. It is initially
recognised as an asset at cost and is subsequently measured
at cost less any accumulated impairment losses. Goodwill
which is recognised as an asset is reviewed for impairment
at least annually.
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2. Material accounting policies
continued
2.3 Assets held for sale
Assets (and disposal groups) classified as held for sale are
measured at the lower of carrying amount and fair value less
costs to sell, except for investment properties held for sale
which are measured at fair value.
Non-current assets and disposal groups are classified as held
for sale if their carrying amount will be recovered through a sale
transaction rather than through continuing use. This condition
is regarded as met only when the sale is highly probable and
the asset (or disposal group) is available-for-sale in its present
condition. Management must be committed to the sale which
should be expected to qualify for recognition as a completed
sale within one year from the date of classification.
When the Group is committed to a sale plan involving loss
of control of a subsidiary, all of the assets and liabilities of
that subsidiary are classified as held for sale when the criteria
above are met, regardless of whether the Group will retain
a non-controlling interest in its former subsidiary after sale.
2.4 Foreign currency
(I) Foreign currency transactions
Transactions in foreign currencies are translated into Sterling
using the exchange rate prevailing at the date of the
transaction. Monetary assets and liabilities denominated in
foreign currencies at the balance sheet date are translated into
Sterling at the exchange rate ruling at that date, and differences
arising on translation are recognised in the income statement.
For financial assets measured at fair value through profit and
loss, exchange differences are recognised in the income
statement in the ‘finance costs or finance income’ line item.
(II) Consolidation of foreign entities
The results and financial position of all Group entities which
have a functional currency different from Sterling are translated
into Sterling as follows:
(a) assets and liabilities are translated at the closing rate
at the date of the balance sheet;
(b) income and expenses for each income statement
are translated at the average exchange rates; and
(c) all resulting exchange differences are recognised
directly in equity in the cumulative translation reserve.
The principal exchange rates used to translate foreign currency
denominated amounts in 2025 are:
• Balance Sheet closing rate: £1 = €1.1472 (2024: £1 = €1.2085).
• Income Statement average rate: £1 = €1.1677 (2024: £1 = €1.1814).
2.5 Investment properties
Investment property comprises principally offices that are not
occupied substantially for use by, or in the operations of, the
Group, nor for sale in the ordinary course of business, but are
held primarily to earn rental income and for capital appreciation.
These buildings are substantially rented to tenants and not
intended to be sold in the ordinary course of business.
Investment properties are measured initially at cost, including
directly attributable transaction costs. Transaction costs include
transfer taxes and professional fees for legal and other services.
Additions to investment properties comprise costs of a capital
nature; in the case of investment properties under development,
these include capitalised interest and certain staff costs directly
attributable to the management of the development. Capitalised
interest is calculated at the rate on associated borrowings applied
to expenditure on the development between the date of
gaining planning consent and the date of practical completion.
The Group recognises sales and purchases of investment
property when control passes on completion of the contract.
Gains or losses on the sale of properties are calculated with
reference to the carrying value at the end of the previous year,
adjusted for subsequent capital expenditure. Income from
deposits forfeited in circumstances where potential purchasers
have failed to complete in accordance with sale and purchase
agreements are recognised upon rescission of the agreement.
Investment properties are carried at fair value, based on
market value as determined by professional external valuers
at the balance sheet date. Investment properties held for sale
are carried at fair value determined by external valuers, unless
the Group has obtained firm third party offers to purchase,
which it intends to accept. The Directors have determined
that these offers are indicative of the fair value given that they
are representative of an arm’s length transaction. Investment
properties being redeveloped for continuing use as investment
properties, or for which the market has become less active,
continue to be classified as investment properties and
measured at fair value. Changes in fair values are recognised
in the income statement.
Transfers are made to (or from) investment property only
when there is evidence of a change in use.
Lease incentives are not held as separate assets or liabilities
on the balance sheet but are instead included within the
investment property balance. Net revaluation movement
of investment properties is increased or decreased by the
movement of lease incentive balances during the period.
2.6 Property, plant and equipment
Property, plant and equipment is measured initially at cost,
being the consideration paid, including related transaction
costs. Property is subsequently measured at fair value, based
on market value as determined by professional external valuers
at the balance sheet date. Fixtures and fittings and head office
fit-out are stated at historical cost less accumulated depreciation
and any impairment loss.
Any increase arising on the revaluation of land and buildings
held as property, plant and equipment is credited to the fair value
reserve via other comprehensive income, except to the extent
that it reverses a revaluation decrease for the same asset
previously recognised as an expense, in which case the increase
in value is credited to the income statement to the extent the
decrease was previously expensed. On disposal of an asset
the revaluation reserve relating to that asset becomes realised
and is transferred in equity to retained earnings.
CLS Holdings plc Annual Report and Accounts 2025138
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

2. Material accounting policies
continued
2.6 Property, plant and equipment – continued
Land is not depreciated. Depreciation on the property, plant
and equipment that is depreciated is calculated using the
straight-line method to allocate cost less estimated residual
values over the estimated useful lives or lease length, as follows:
Fixtures and fittings 4–5 years
Head Office fit-out 10 years
Hotel 250 years
An item of property, plant and equipment is derecognised upon
disposal or when no future economic benefits are expected
to arise from the continued use of the asset. The gain or loss
arising on the disposal or retirement of an asset is determined
as the difference between the sale proceeds and the carrying
amount of the asset and is recognised in the income statement.
2.7 Financial instruments
(I) Derivative financial instruments
The Group uses derivative financial instruments, including
swaps and interest rate caps, to help manage its interest rate
and foreign exchange rate risks. Derivative financial instruments
are initially recorded at, and subsequently revalued to, fair value.
Revaluation gains and losses are recognised in finance income
or finance costs in the income statement.
(II) Financial assets at fair value through profit and
loss (FVTPL)
Financial assets at FVTPL are measured at fair value. Revaluation
gains and losses are recognised in the income statement.
(III) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand
deposits, tenant deposits and other short-term highly liquid
investments which are readily convertible to a known amount of
cash and are subject to an insignificant risk of changes in value.
(IV) Trade and other receivables/Trade and other payables
Trade and other receivables are recognised initially at their
transaction price if they do not contain any significant financing
components. Subsequently they are measured at amortised
cost with a recognised loss allowance for expected credit losses
which is measured at an amount equal to the lifetime expected
credit loss. Trade and other payables are stated at transaction
price which is approximate to their fair value and subsequently
measured at amortised cost.
(V) Borrowings
Borrowings are recognised initially at fair value less attributable
transaction costs. Subsequently, borrowings are stated at
amortised cost with any difference between the amount initially
recognised and the redemption value being recognised in
the income statement over the period of the borrowings,
using the effective interest rate method.
Where the Group has sustainability linked loans, consideration
is given to whether an embedded derivative exists. Our
assessment is that there are no embedded derivatives
associated with our sustainability linked loans.
When debt refinancing occurs, existing liabilities are treated as
being extinguished when the new liability is substantially different
from the existing liability. To determine if a liability is substantially
different, the Group considers the transaction as a whole, taking
into account both qualitative and quantitative characteristics.
Borrowing costs attributable to the construction of a qualifying
asset are capitalised at the weighted average borrowing rate
for the applicable region on direct expenditure incurred
between the date of gaining planning consent and the date
of practical completion.
2.8 Revenue
The Group’s revenue includes rental income, service charge
income and other property-related income.
(I) Rental income
Rental income from operating leases is recognised on a
straight-line basis over the lease term. Direct costs associated
with securing the rental income are also recognised on a
straight-line basis over the lease term. Rents and service
charges received in advance for the period following the
reporting date are considered deferred income.
Fixed or contractually defined rental increases, which can
take the form of actual amounts or agreed percentages,
are recognised on a straight-line basis over the term. Rental
increases related to a price index are recognised when the
increase takes place.
Lease incentives being offered to tenants to enter into a
lease, such as an initial rent-free period or a cash contribution
to fit-out or similar costs, are part of the net consideration for
the use of the property and are therefore recognised on the
same straight-line basis.
Where the total consideration due under a lease is modified,
for example to remove a break or extend the term, the revised
remaining consideration due is recognised on a straight-line
basis over the remaining term of the lease. Lease modifications
are accounted for from the effective date of modification.
Initial direct costs associated with the original lease continue
to be recognised and amortised over the remaining term of
the modified lease.
(II) Service charge income
Service charge income relates to expenditure for services
including, but not limited to, cleaning, security, repairs and
maintenance which is directly recoverable from tenants and is
recognised in the period in which it is earned as tenants benefit
from the services based on actual service charge costs incurred.
The Group generally acts as the principal in service charge
transactions as it directly controls the delivery of the services at
the point they are provided to the tenant. Where the Group acts
as a principal, service charge income is presented gross within
revenue and service charge expense presented gross within costs.
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CLS Holdings plc Annual Report and Accounts 2025 139

2. Material accounting policies
continued
2.8 Revenue – continued
(III) Other property income
Other property income relates to income from the Group’s
student accommodation and hotel in addition to dilapidations
receipts and surrender premiums.
Income from the Group’s student accommodation relates
to rents received from tenants for the provision of student
accommodation. Income is recognised on a straight-line basis
over the lease term. See rental income policy for more detail.
Hotel revenue is recognised as the rooms are occupied and
services rendered. Where the supply of service has only been
partially completed at the balance sheet date, turnover
represents the value of the service provided to date based
on a portion of the contract value.
Dilapidations income is payable by tenants when the Group
agrees with the tenant to perform required remedial works
to fulfil the contractual obligations of the lease. Dilapidation
income is recognised when the amounts become contractually
due, usually at the time an agreement between parties is
reached. Surrender premiums are payable when a lease is
terminated prior to expiry. Surrender premiums for the early
termination of a lease are recognised as revenue when the
amounts become contractually due.
2.9 Taxation
Current tax is based on taxable profit for the year and
is calculated using tax rates that have been enacted or
substantively enacted by the balance sheet date.
Deferred tax is provided using the balance sheet liability method
on temporary differences between the carrying value of assets
and liabilities for financial reporting purposes and the values
used for tax purposes. Temporary differences are not provided
for when they arise from initial recognition of goodwill or from
the initial recognition of assets or liabilities in a transaction that
does not affect accounting or taxable profit and does not give
rise to equal taxable and deductible temporary differences.
The amount of deferred tax provided is based on the expected
manner of realisation or settlement of the carrying amount
of assets and liabilities, and is calculated using rates that are
expected to apply in the period when the liability is settled
or the asset is realised, in the tax jurisdiction in which the
temporary differences arise.
Deferred tax assets are recognised only to the extent that it
is probable that future taxable profits will be available against
which the assets can be used. Deferred tax assets and liabilities
are only offset if they relate to income taxes levied by the same
taxation authority, there is a legally enforceable right of set-off
and the Group intends to settle its current tax assets and
liabilities on a net basis.
Current and deferred tax are recognised in the income
statement except when they relate to items that are recognised
in other comprehensive income or directly in equity, in which
case the current and deferred tax are also recognised in other
comprehensive income or equity respectively.
The Group has applied the exemption in IAS 12 Income Taxes
to recognising and disclosing information about deferred tax
assets and liabilities related to Pillar Two income taxes.
2.10 Leases
The Group as a lessor
Leases where the Group does not transfer substantially all
the risks and benefits of ownership of the asset are classified
as operating leases.
The Group as a lessee
The Group recognises lease liabilities to make lease payments
and right-of-use assets representing the right to use the
underlying assets for all leases, except for short-term leases
and leases of low-value assets.
(I) Lease liabilities
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease payments
to be made over the lease term which, if in respect of investment
property, forms part of the cost of that property on initial
recognition. The lease payments include fixed payments
(including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend
on an index or a rate, and amounts expected to be paid under
residual value guarantees. The lease payments also include
the exercise price of a purchase option reasonably certain to
be exercised by the Group and payments of penalties for
terminating the lease, if the lease term reflects the Group
exercising the option to terminate. Variable lease payments that
do not depend on an index or a rate are recognised as expenses
(unless they are incurred to produce inventories) in the period in
which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group
uses either the borrowing rate of the loan attached to the
property at the lease commencement date or, if the property
is not financed, then the operating segment’s incremental
borrowing rate at the lease commencement date because
the interest rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities
is increased to reflect the accretion of interest and reduced for
the lease payments made. In addition, the carrying amount of
lease liabilities is remeasured if there is a modification, a change
in the lease term, a change in the lease payments (e.g. changes
to future payments resulting from a change in an index or rate
used to determine such lease payments) or a change in the
assessment of an option to purchase the underlying asset.
CLS Holdings plc Annual Report and Accounts 2025140
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

2. Material accounting policies
continued
2.10 Leases – continued
(II) Right-of-use assets
The Group recognises right-of-use assets at the
commencement date of the lease (i.e. the date the underlying
asset is available for use). The Group leases properties that
meet the definition of investment property. These right-of-use
assets are presented as part of the line item ‘Investment
property’ in the balance sheet.
(III) Short-term leases and low value assets
The Group applies the short-term lease recognition exemption
to its short-term leases of equipment (i.e. those leases that
have a lease term of 12 months or less from the commencement
date and do not contain a purchase option). It also applies the
lease of low-value assets recognition exemption to leases of
office equipment that are considered to be low value. Lease
payments on short-term leases and leases of low-value assets
are recognised as an expense on a straight-line basis over the
lease term.
2.11 Non-recurring expenses
Non-recurring expenses are those that are not considered to
be reflective of the Group’s ongoing operational performance
such as restructuring and redundancy costs. These expenses
are also excluded from EPRA Earnings as they are considered
to be unusual in nature and unlikely to reoccur.
3. Accounting judgements and key
sources of estimation uncertainty
Accounting judgements
In accordance with IAS 1, the Directors have considered the
judgements that have been made in the process of applying
the Group’s accounting policies, which are described in note 2,
and which of those judgements have the most significant effect
on amounts recognised in the financial statements.
Going concern
For the purposes of the going concern assessment, the Group
makes judgements in determining future cash flows which are
based on assumptions. The most significant judgements relate
to the terms and ability to refinance loan facilities and recycle
capital. These judgements are made by management based
on recent performance, external factors and management’s
knowledge and expertise of cash flow drivers. See note 2 for
more details.
Key sources of estimation uncertainty
Valuation of properties
The Group uses the valuations performed by its independent
external valuers as the fair value of its investment properties
and those properties held at valuation and classified as
property, plant and equipment. The valuations are based
upon assumptions including market rentals (‘ERV’), future
development costs and an appropriate equivalent yield
and capitalisation rates as appropriate (see notes 12 and 13
for more detail). The valuers also make reference to market
evidence of transaction prices for similar properties.
Other estimates
Climate change
In preparing the financial statements, the Group has considered
the impact of climate change, taking into account the relevant
disclosures in the Strategic report, including those made in
accordance with the recommendations of the Taskforce on
Climate Related Financial Disclosure (see pages 39 to 47).
These considerations included the limited exposure in terms
of our properties to potential physical climate risks along with
a commitment to invest £65 million in our Net Zero Carbon
Pathway. On this basis, the Group has concluded that climate
change did not have a material impact on the financial reporting
judgements and estimates, consistent with the assessment that
this is not expected to have a significant impact on the Group’s
going concern or viability assessment. The Group considers
that this will remain the case until approximately 2030 after
which the differing climate scenarios diverge, resulting in
different risk profiles, the impact and mitigations of which will
be captured in the Climate Resilience strategy being developed
(see page 30 for more detail).
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CLS Holdings plc Annual Report and Accounts 2025 141

4. Segment information
Each property represents an operating segment which the Group aggregates into two reporting segments with similar
characteristics – investment properties and other investments. Other investments comprise the hotel at Spring Mews and
other small corporate investments. Central administration relates to the operating costs of the Group’s headquarters and
are not allocated to any reporting segment. The Group manages the investment properties division on a geographical basis
due to its size and geographical diversity. Consequently, the Group’s principal reporting segments are:
Investment properties: United Kingdom
Germany
France
Other investments
Rental income
44.2
38.3
12.3
–
–
94.8
Other property-related income
7.1
1.1
0.2
6.0
–
14.4
Service charge income
14.9
10.8
4.8
–
–
30.5
Revenue
66.2
50.2
1 7.3
6.0
–
139.7
Service charges and similar expenses
(18.4)
(14.4)
(5.6)
–
–
(38.4)
Net rental income
47. 8
35.8
11.7
6.0
–
101.3
Administration expenses
(7.2)
(2.9)
(1.2)
(0.1)
(5.0)
(16.4)
Other property expenses
(8.0)
(5.3)
(0.3)
(3.7)
–
(17.3)
Non-recurring items
1
(0.3)
(0.1)
(0.3)
–
(1.0)
(1.7)
Revenue less costs
32.3
27.5
9.9
2.2
(6.0)
65.9
Net revaluation movements on investment property
(35.4)
(33.4)
(10.4)
–
–
(79.2)
Net revaluation movements on equity investments
–
–
–
0.1
–
0.1
Loss on sale of investment property
(3.0)
(4.9)
(3.0)
–
–
(10.9)
Segment operating (loss)/profit
(6.1)
(10.8)
(3.5)
2.3
(6.0)
(24.1)
Finance income
0.9
–
–
0.2
–
1.1
Finance costs
(19.9)
(13.5)
(4.5)
(1.2)
–
(39.1)
Foreign exchange gain
–
–
–
0.2
–
0.2
Segment (loss)/profit before tax
(25.1)
(24.3)
(8.0)
1.5
(6.0)
(61.9)
1 During the year, we conducted a review of staffing and financial structuring. This resulted in non-recurring costs including redundancy costs being incurred.
CLS Holdings plc Annual Report and Accounts 2025142
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

4. Segment information continued
Rental income
4 7. 1
40.3
12.8
–
–
100.2
Other property-related income
1
13.2
0.3
0.3
6.0
0.1
19.9
Service charge income
15.8
11.0
5.0
–
–
31.8
Revenue
76.1
51.6
18.1
6.0
0.1
151.9
Service charges and similar expenses
(18.6)
(13.6)
(5.7)
–
–
(37.9)
Net rental income
5 7. 5
38.0
12.4
6.0
0.1
114.0
Administration expenses
(7.4)
(3.2)
(1.4)
(0.1)
(5.6)
(17.7)
Other property expenses
(9.7)
(4.1)
(0.8)
(3.5)
–
(18.1)
Revenue less costs
40.4
30.7
10.2
2.4
(5.5)
78.2
Net revaluation movements on investment property
(73.7)
(41.5)
(12.5)
–
–
(127.7)
Net revaluation movements on equity investments
–
–
–
(0.6)
–
(0.6)
(Loss)/profit on sale of investment property
(1.6)
(0.8)
–
–
0.1
(2.3)
Loss on sale of other equity investments
–
–
–
(0.1)
–
(0.1)
Segment operating (loss)/profit
(34.9)
(11.6)
(2.3)
1.7
(5.4)
(52.5)
Finance income
1.0
–
–
0.4
–
1.4
Finance costs
(26.9)
(14.2)
(4.3)
–
(0.3)
(45.7)
Foreign exchange loss
–
–
–
(0.6)
–
(0.6)
Segment (loss)/profit before tax
(60.8)
(25.8)
(6.6)
1.5
(5.7)
(97.4)
1 Other property-related income includes an amount of £2.9 million in the United Kingdom segment which is the forfeited deposit, net of costs, from the original
purchaser upon their failure to complete on the sale of Westminster Tower.
Other segment information
Assets
Liabilities
Capital expenditure
United Kingdom
688.4
825.1
409.3
510.5
4.8
9.4
Germany
813.0
828.8
457. 3
477.4
5.4
8.3
France
230.5
233.2
158.6
158.4
4.1
3.4
Other investments
38.8
44.7
3.4
1.3
–
–
1,770.7
1,931.8
1,028.6
1,147.6
14.3
21.1
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CLS Holdings plc Annual Report and Accounts 2025 143

5. Alternative Performance Measures
Alternative Performance Measures (‘APMs’) should be considered in addition to, and are not intended to be a substitute for,
or superior to, IFRS measurements. The APMs are defined in the Glossary of terms on page 182 to 184.
Introduction
The Group has applied the October 2015 European Securities and Markets Authority (‘ESMA’) guidelines on APMs and the
October 2021 Financial Reporting Council (‘FRC’) thematic review of APMs in these financial statements, whilst noting the
International Organization of Securities Commissions (‘IOSCO’) 2016 guidance and ESMA’s December 2019 report on the
use of APMs. An APM is a financial measure of historical or future financial performance, position or cash flows of the Group
which is not a measure defined or specified in IFRS.
Overview of our use of APMs
The Directors believe that APMs assist in providing additional useful information on the underlying trends, performance and position
of the Group. APMs assist our stakeholder users of the financial statements, particularly equity and debt investors, through the
comparability of information across the European real estate sector. APMs are used by the Directors and management, both
internally and externally, for performance analysis, strategic planning, reporting and incentive-setting purposes.
APMs are not defined by IFRS and therefore may not be directly comparable with other companies’ APMs, including peers in
the real estate industry. There are two sets of APMs which we utilise (European Public Real Estate Association (‘EPRA’) APMs
and similar CLS APMs) which are reconciled where possible to statutory measures on the following pages.
CLS monitors the Group’s financial performance using APMs which are EPRA measures as these are a set of standard disclosures
for the property industry and thus aid comparability for our stakeholder users. CLS considers the two measures below to be the
most relevant as we believe that these will continue to reflect the long-term nature of our property investments most accurately:
• EPRA earnings; and
• EPRA net tangible asset value (‘EPRA NTA’).
The Group adopted the EPRA Best Practice Recommendations (‘BPRs’) September 2024 (see https://www.epra.com/finance/
financial-reporting/guidelines for more details) in the reporting period ended 31 December 2024. This did not have a material
impact on the Group’s reported EPRA earnings and there was no change to the Group’s APMs, with the same APMs utilised
by the business being defined, calculated and used on a consistent basis. All other EPRA measures are shown within the
supplementary unaudited disclosures to the financial statements.
1. EPRA APMs
Weighted average number of ordinary shares in circulation
398,083,875
397,410,268
Diluted number of ordinary shares
404,492,426
402,916,907
Number of ordinary shares in circulation at 31 December
398,110,742
397,410,268
CLS Holdings plc Annual Report and Accounts 2025144
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

5. Alternative Performance Measures continued
i) Earnings – EPRA earnings
Loss for the year
(50.3)
(93.6)
Non-recurring items
1
1.7
–
Net revaluation movement on investment property
12/14
79.2
1 2 7. 7
Deferred tax thereon
(15.9)
(6.6)
Net revaluation movement on equity investments
(0.1)
0.6
Loss on sale of investment property
10.9
2.3
Current tax thereon
3.1
2.1
Movement in fair value of derivative financial instruments
9
1.3
3.4
Loss from sale of equity investments
–
0.1
Amortisation of intangible assets
0.3
0.4
EPRA earnings
30.2
36.4
Basic and diluted loss per share
(12.6)p
(23.6)p
EPRA earnings per share
7.6 p
9.2p
1 During the year, we conducted a review of staffing and financial structuring. This resulted in non-recurring costs including redundancy costs being incurred which
are excluded from EPRA earnings as they are unusual in nature and very unlikely to reoccur in the foreseeable future.
ii) Net asset value measures
2025
2024
IFRS Net assets
742.1
742.1
742.1
742.1
784.2
784.2
784.2
784.2
Other intangibles
–
(2.6)
–
–
–
(2.7)
–
–
Fair value of fixed interest debt
–
–
–
37.6
–
–
–
50.4
Tax thereon
–
–
–
(1.1)
–
–
–
(1.7)
Deferred tax on revaluation surplus
–
65.8
65.8
–
–
79.8
79.8
–
disposals
–
(5.9)
–
–
–
(5.5)
–
–
Fair value of financial instruments
–
(0.3)
(0.3)
–
–
(1.4)
(1.4)
–
Purchasers’ costs
1
–
–
122.6
–
–
–
132.6
–
742.1
799.1
930.2
778.6
784.2
854.4
995.2
832.9
Per share
186.4p
200.7p
233.7p
195.6p
197.3p
215.0p
250.4p
209.6p
1 EPRA NTA and EPRA NDV reflect IFRS values which are net of purchasers’ costs. Purchasers’ costs are added back when calculating EPRA NRV.
6. Loss for the year
Loss for the year has been arrived at after charging/(crediting):
Audit of the Parent Company and Group accounts
0.7
0.7
Audit of the Company’s subsidiaries pursuant to legislation
0.1
0.1
Audit overrun fee for prior year
1
0.1
0.2
Reporting accountant services
0.2
–
Depreciation of property, plant and equipment
13
0.5
0.6
Amortisation of intangible assets
0.3
0.4
Employee benefits expense
7
10.5
11.6
Foreign exchange (gain)/loss
(0.2)
0.6
Provision against trade and other receivables
15
0.8
0.1
1 The fee in 2024 represents fees paid to the previous auditor for overruns relating to the 2023 audit.
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CLS Holdings plc Annual Report and Accounts 2025 145

7. Employee benefits expense
Wages and salaries
7.5
7. 4
Social security costs
1.0
1.4
Pension costs – defined contribution plans
0.3
0.4
Performance incentive plan
0.4
0.8
Other employee-related expenses
1.3
1.6
10.5
11.6
The Directors are considered to be the only key management of the Group. Information on Directors’ emoluments, share options
and interests in the Company’s shares is given in the Remuneration Committee Report on pages 87 to 99.
The monthly average number of employees of the Group in continuing operations, including Executive Directors, was as follows:
2025
2024
Male
48
9
57
53
11
64
Female
47
9
56
49
10
59
95
18
113
102
21
123
8. Finance income
Interest income on bank deposits
1.1
1.4
1.1
1.4
9. Finance costs
Secured bank loans and facilities
36.3
40.6
Amortisation of loan issue costs
1.5
1.7
Total interest costs
3 7. 8
42.3
Movement in fair value of derivative financial instruments
1.3
3.4
Total finance costs
39.1
45.7
10. Taxation
Current year charge
5.0
3.0
Adjustments in respect of prior years
(0.8)
0.1
4.2
3.1
Origination and reversal of temporary differences
(15.8)
(6.9)
(15.8)
(6.9)
Tax credit for the year
(11.6)
(3.8)
CLS Holdings plc Annual Report and Accounts 2025146
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

10. Taxation continued
A deferred tax credit of £0.7 million (2024: £0.1 million charge) and a current tax charge of £0.5 million (2024: £nil) were recognised
directly in Other Comprehensive Income (note 18). The (credit)/charge for the year differs from the theoretical amount which
would arise using the weighted average tax rate applicable to profits of Group companies as follows:
Loss before tax
(61.9)
(97.4)
Expected tax credit at applicable tax rate
(12.5)
(21.2)
Expenses not deductible for tax purposes
0.7
0.3
Non-deductible loss from REIT
5.1
13.4
Deferred tax on losses not recognised
2.2
3.8
Adjustments in respect of prior years
(0.6)
0.2
Reduction in overseas tax rate
(6.7)
–
Other
0.2
(0.3)
Tax credit for the year
(11.6)
(3.8)
The weighted average applicable tax rate of 20.2% (2024: 21.8%) was derived by applying to their relevant profits and losses
the rates in the jurisdictions in which the Group operated. The standard UK rate of corporation tax applied to profits is 25.0%
(2024: 25.0%). The Germany corporate income tax rate will be gradually reduced by one percent per year over five years from
2028 to 2032. The effect of which was a reduction of the tax charge in 2025 of £6.7 million.
11. Property portfolio
Investment property
12
635.4
711.8
223.6
1,570.8
Property held as property, plant and equipment
1
13
35.7
1.7
1.7
39.1
Properties held for sale
14
6.3
88.6
–
94.9
Property portfolio at 31 December 2025
67 7.4
802.1
225.3
1,704.8
Investment property
12
6 5 7. 0
793.6
225.9
1,676.5
Property held as property, plant and equipment
1
13
3 7. 5
1.6
1.6
40.7
Properties held for sale
14
112.5
20.5
–
133.0
Property portfolio at 31 December 2024
807.0
815.7
2 2 7. 5
1,850.2
1 The total balance excludes fixtures and fittings of £1.5 million (2024: £1.8 million) as shown in note 13.
12. Investment property
At 1 January 2025
657.0
793.6
225.9
1,676.5
Capital expenditure
4.8
5.4
4.1
14.3
Disposals
–
(18.3)
( 7.9 )
(26.2)
Net revaluation movement
(35.4)
(33.4)
(10.4)
(79.2)
Lease incentive adjustments
4.5
11.4
–
15.9
Exchange rate variances
–
41.7
11.9
53.6
Transfer from/(to) properties held for sale
4.5
(88.6)
–
(84.1)
At 31 December 2025
635.4
711.8
223.6
1,570.8
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CLS Holdings plc Annual Report and Accounts 2025 147

12. Investment property continued
At 1 January 2024
836.3
768.2
246.0
1,850.5
Capital expenditure
9.4
8.3
3.4
21.1
Disposals
(8.2)
–
–
(8.2)
Net revaluation movement
(73.7)
(41.5)
(12.5)
(127.7)
Lease incentive adjustments
(0.8)
11.2
–
10.4
Exchange rate variances
–
(36.8)
(11.0)
(47.8)
Reclassification to property, plant and equipment
–
(0.1)
–
(0.1)
Transfer (to)/from properties held for sale
(106.0)
84.3
–
(21.7)
At 31 December 2024
6 5 7. 0
793.6
225.9
1,676.5
Investment properties included leasehold properties with a carrying amount of £61.9 million (2024: £62.4 million).
Interest capitalised within capital expenditure in the year amounted to £0.2 million (2024: £nil).
The property portfolio, which comprises investment properties, properties held for sale (note 14), and hotel and other, detailed
in note 13, was revalued at 31 December 2025 to its fair value. Valuations were based on current prices in an active market for
all properties. The property valuations were carried out by independent external valuers and directors as follows:
Cushman and Wakefield
635.4
42.0
67 7.4
6 5 7. 0
150.0
807.0
Jones Lang LaSalle
935.4
3.4
938.8
1,019.5
23.7
1,043.2
Directors’ valuation
1
–
88.6
88.6
–
–
–
1,570.8
134.0
1,704.8
1,676.5
173.7
1,850.2
1 The Directors’ valuation includes four properties in Germany which have been classified as held for sale. The value has been determined with reference to the third
party letters of intent to purchase the properties. Refer to note 14 for further details.
The total fees, including the fees for this assignment, earned by each of the valuers from the Group is less than 5% of their total
revenues in each jurisdiction.
Valuation process
The Group’s property portfolio, other than four properties categorised as held for sale, was valued by independent external valuers
on the basis of fair value using information provided to them by the Group such as current rents, terms and conditions of lease
agreements, service charges and capital expenditure. This information is derived from the Group’s property management systems
and is subject to the Group’s overall control environment. The valuation reports are based on assumptions and valuation models
used by the external valuers. The assumptions are typically market related, such as yields and discount rates, and are based on
professional judgement and market evidence of transactions for similar properties on arm’s length terms. The valuations are
prepared in accordance with RICS Valuation – Global standards.
Each Country Head, who reports to the Chief Executive Officer, verifies all major inputs to the external valuation reports, assesses
the individual property valuation changes from the prior year valuation report and holds discussions with the external valuers. When
the process is complete, the valuation report is recommended to the Audit Committee and the Board, which considers it as part of
its overall responsibilities.
CLS Holdings plc Annual Report and Accounts 2025148
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

12. Investment property continued
Valuation techniques
The fair value of the property portfolio (excluding ongoing developments, see below) has been determined using the following
approaches, which are consistent with valuation methodologies in their respective countries, and are in accordance with RICS
Valuation – Global Standards:
United Kingdom an income capitalisation approach whereby contracted and market rental values are capitalised with a market
capitalisation rate
Germany a 10 year discounted cash flow model with an assumed exit thereafter
France both the market capitalisation approach and a 10 year discounted cash flow approach
The resulting valuations are cross-checked against the equivalent yields and the fair market values per square foot derived from
comparable recent market transactions on arm’s length terms. Other factors taken into account in the valuations include the tenure
of the property, tenancy details, and ground and structural conditions.
Ongoing developments are valued under the ‘residual method’ of valuation, which is the same method as the income capitalisation
approach to valuation described above, with a deduction for all costs necessary to complete the development, including a notional
finance cost, together with a further allowance for remaining risk. As the development approaches completion, the valuer may
consider the income capitalisation approach to be more appropriate.
All valuations have considered the environmental, social and governance credentials of the properties and the potential cost
of improving them to local regulatory standards along with the broader potential impact of climate change.
These techniques are consistent with the principles in IFRS 13 Fair Value Measurement and use significant unobservable inputs
such that the fair value measurement of each property within the portfolio has been classified as Level 3 in the fair value hierarchy.
There were no transfers between any of the Levels in the fair value hierarchy during either 2025 or 2024. The Group determines
whether transfers have occurred between levels in the fair value hierarchy by reassessing categorisation at the end of each
reporting period.
Gains and losses recorded in profit or loss for recurring fair value measurements categorised within Level 3 of the fair value
hierarchy amount to a loss of £79.2 million (2024: a loss of £127.7 million) and are presented in the income statement in the line
item ‘Net revaluation movements on investment property’. The revaluation loss for the property, plant and equipment of
£1.6 million (2024: gain of £1.3 million) was included within the revaluation reserve via other comprehensive income.
All gains and losses recorded in profit or loss in 2025 and 2024 or recurring fair value measurements categorised within Level 3
of the fair value hierarchy are attributable to changes in unrealised gains or losses relating to investment property held at
31 December 2025 and 31 December 2024, respectively.
Quantitative information about investment property fair value measurement using unobservable inputs (Level 3)
ERV
Equivalent yield
Average
Range
Average
Range
UK
37.99
38.08
10.00–56.55
10.00–56.41
7. 5 6
7. 3 9
6.16–10.05
6.21–10.03
Germany
14.28
13.41
9.72–29.07
9.19–27.59
5.32
5.23
4.40–6.55
4.30–6.40
France
23.47
21.42
13.06–47.73
12.40–45.25
6.21
6.13
4.80–8.00
4.82–7.50
Sensitivity of measurement to variations in the significant unobservable inputs
All other factors remaining constant, an increase in estimated rental value ‘ERV’ would increase valuations, whilst an increase in the
equivalent yield would result in a fall in value, and vice versa. There are inter-relationships between these inputs as they are partially
determined by market conditions. An increase in the reversionary yield may accompany an increase in ERV and would mitigate its
impact on the fair value measurement.
A decrease in the equivalent yield by 25 basis points would result in an increase in the fair value of the Group’s investment property
by £69.0 million (2024: £79.3 million) whilst a 25 basis point increase would reduce the fair value by £68.3 million
(2024: £79.2 million). A decrease in the ERV by 5% would result in a decrease in the fair value of the Group’s investment property
by £64.5 million (2024: £70.7 million) whilst an increase in the ERV by 5% would result in an increase in the fair value of the Group’s
investment property by £59.4 million (2024: £64.4 million).
Where the Group leases out its investment property under operating leases the duration is typically three years or more. No material
variable contingent rents have been recognised in the current or prior year.
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CLS Holdings plc Annual Report and Accounts 2025 149

13. Property, plant and equipment
At 1 January 2024
30.2
9.5
3.9
43.6
Additions
–
–
0.2
0.2
Disposals
–
–
(0.1)
(0.1)
Reclassification from investment properties
–
0.1
–
0.1
Revaluation
1.2
(0.1)
–
1.1
Exchange rate variances
–
(0.2)
–
(0.2)
At 31 December 2024
31.4
9.3
4.0
44.7
Additions
–
–
0.1
0.1
Disposals
–
–
(0.1)
(0.1)
Revaluation
(2.1)
0.3
–
(1.8)
Exchange rate variances
–
0.2
–
0.2
At 31 December 2025
29.3
9.8
4.0
43.1
At cost
–
–
4.0
4.0
At valuation
29.3
9.8
–
39.1
29.3
9.8
4.0
43.1
At 1 January 2024
–
–
(1.8)
(1.8)
Depreciation charge
(0.1)
(0.1)
(0.4)
(0.6)
Revaluation
0.1
0.1
–
0.2
At 31 December 2024
–
–
(2.2)
(2.2)
Depreciation charge
(0.1)
(0.1)
(0.3)
(0.5)
Revaluation
0.1
0.1
–
0.2
At 31 December 2025
–
–
(2.5)
(2.5)
At 31 December 2025
1
29.3
9.8
1.5
40.6
At 31 December 2024
31.4
9.3
1.8
42.5
1 If the assets were held at cost, the carrying amount at 31 December 2025 would be £20.2 million for Hotel and £6.8 million for Owner-occupied property.
Valuation techniques
The fair value of the hotel and owner-occupied property has been determined using the following approach in accordance
with International Valuation Standards:
Hotel a 10-year discounted cash flow model with an assumed exit thereafter. The projected EBITDA in the
11th year is capitalised at a market yield before being brought back to present day values
Owner-occupied
property
an income capitalisation approach whereby contracted and market rental values are capitalised with
a market capitalisation rate
This technique is consistent with the principles in IFRS 13 Fair Value Measurement and uses significant unobservable inputs
such that the fair value measurement of the hotel within the portfolio has been classified as Level 3 in the fair value hierarchy.
Sensitivity of measurement to variations in the significant unobservable inputs
All other factors remaining constant, an increase in EBITDA would increase the valuation, whilst an increase in exit capitalised
yield would result in a fall in value, and vice versa. A decrease in the exit capitalisation yield by 100 basis points would result in an
increase in the fair value of the hotel by £5.0 million, whilst a 100 basis point increase would reduce the fair value by £3.7 million.
A decrease in EBITDA by 5% would result in a decrease in the fair value of the hotel by £1.5 million whilst an increase in the
EBITDA by 5% would result in an increase in the fair value of the hotel by £1.5 million.
CLS Holdings plc Annual Report and Accounts 2025150
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

14. Assets held for sale
2025
2024
At 1 January
112.5
20.5
–
133.0
4 7. 3
115.6
9.8
172.7
Disposals
(101.7)
(20.5)
–
(122.2)
(40.8)
(8.3)
(9.8)
(58.9)
property
(4.5)
88.6
1
–
84.1
106.0
(84.3)
–
21.7
Exchange rate variances
–
–
–
–
–
(2.5)
–
(2.5)
At 31 December
6.3
88.6
–
94.9
112.5
20.5
–
133.0
1 A Directors’ valuation of four properties in Germany classified as held for sale has been adopted. The valuation reflects letters of intent to purchase these
properties by third parties. The Directors believe this is the best indication of fair value as it is representative of an arm’s length transaction.
The balance above comprises six properties (2024: four properties) that at the year-end were being marketed for sale and are
expected to be disposed of within 12 months via an open market process. The properties are situated in the UK and Germany.
The Directors expect that the sale proceeds achieved to be similar to their carrying amounts.
One property classified as held for sale at 31 December 2024 was transferred back into investment property during the
period. Despite the Directors determining this property met the criteria of held for sale as at 31 December 2024, a suitable
purchaser was not identified for this property and it is no longer classified as held for sale, as it is not being actively marketed
at 31 December 2025. As held for sale properties are held at fair value, the change in classification has no material impact
on the financial statements.
15. Trade and other receivables
Trade receivables
2.6
4.2
Other receivables
5.0
5.3
Prepayments
0.8
2.7
Accrued income
2.1
2.0
10.5
14.2
Trade receivables are shown after deducting a provision of £2.1 million (2024: £1.7 million) which is calculated as an expected credit
loss. The movements in this provision were as follows:
At 1 January
1.7
1.9
Debt write-offs
(0.2)
(0.3)
Charge to the income statement
0.8
0.1
Exchange rate variances
(0.2)
–
At 31 December
2.1
1.7
The Group uses a provision matrix to calculate the expected credit loss for trade receivables. The provision rates are based
on the Group’s historical observed aging of debt and the probability of default. At every reporting date, the provision rates are
updated to incorporate the previous 12 months’ data and forward-looking information such as actual and potential impacts of
political and economic uncertainty, if applicable. In addition, on a tenant-by-tenant basis, the Group takes into account any recent
payment behaviours and future expectations of likely default events. Specific provisions are made in excess of the expected credit
loss where information is available to suggest a higher provision is required, for example individual customer credit ratings, actual
or expected insolvency filings or company voluntary arrangements, likely deferrals of payments due, agreed rent concessions
and market expectations and trends in the wider macro-economic environment in which our customers operate.
The Directors consider that the carrying amount of trade and other receivables is approximate to their fair value. There is
no concentration of credit risk with respect to trade receivables as the Group has a large number of customers who are paying
their rent in advance. Further details about the Group’s credit risk management practices are disclosed in note 21.
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CLS Holdings plc Annual Report and Accounts 2025 151

16. Cash and cash equivalents
Cash at bank
49.4
60.5
At 31 December 2025, cash at bank included £39.2 million (2024: £41.4 million) which was restricted by a third-party charge.
£10.1 million of the restricted cash related to tenant deposits (2024: £10.1 million).
17. Trade and other payables
Trade payables
3.1
5.2
Social security and other taxes
1.7
1.7
Tenant deposits
10.1
10.1
Other payables
7.1
4.6
Deferred income
12.7
14.5
Accruals
22.9
29.6
57.6
65.7
18. Deferred tax
Liabilities
Assets
At 1 January 2024
0.7
89.9
1.5
92.1
–
(3.3)
(0.1)
(3.4)
88.7
to income statement
0.2
(7.6)
(0.2)
(7.6)
–
1.0
(0.3)
0.7
(6.9)
to OCI
1
–
0.1
–
0.1
–
–
–
–
0.1
Exchange rate variances
–
(3.8)
–
(3.8)
–
–
–
–
(3.8)
At 31 December 2024
0.9
78.6
1.3
80.8
–
(2.3)
(0.4)
(2.7)
78.1
to income statement
0.2
(16.0)
(0.3)
(16.1)
–
0.3
–
0.3
(15.8)
to OCI
1
–
(0.7)
–
(0.7)
–
–
–
–
(0.7)
variances
–
3.8
–
3.8
–
–
–
–
3.8
At 31 December 2025
1.1
65.7
1.0
6 7. 8
–
(2.0)
(0.4)
(2.4)
65.4
1 Other Comprehensive Income.
Deferred tax has been calculated based on local rates applicable under local legislation substantively enacted at the balance
sheet date.
Deferred tax assets are recognised in respect of tax losses carried forward to the extent that the realisation of the related tax
benefit through future taxable profits is probable. At 31 December 2025 the Group offset tax losses valued at the applicable
local tax rate of £11.0 million (2024: £13.3 million) against the deferred tax liability arising on the fair value adjustments to properties.
At 31 December 2025 the Group did not recognise deferred tax assets of £13.8 million (2024: £13.6 million) in respect of losses
amounting to £93.3 million (2024: £78.8 million) which may be carried forward and utilised against future taxable income or gains.
There is no expiry period for the carried forward tax losses.
CLS Holdings plc Annual Report and Accounts 2025152
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

19. Borrowings
At 31 December 2025
At 31 December 2024
Secured bank loans and facilities
198.0
703.9
901.9
372.4
626.8
999.2
Issue costs of £3.9 million (2024: £4.3 million) have been offset in arriving at the balances in the above tables.
Secured bank loans
Interest on bank loans is charged at fixed rates ranging between 0.9% and 5.1% including margin (2024: 0.8% and 5.6%) and
at floating rates of typically SONIA or EURIBOR plus a margin. Floating rate margins range between 1.0% and 2.8% (2024: 1.1%
and 2.8%). The bank loans are secured by legal charges over £1,640.4 million (2024: £1,808.9 million) of the Group’s properties,
and in most cases a floating charge over the remainder of the assets held in the company which owns the property. In addition,
the share capital of some of the subsidiaries within the Group has been charged.
Secured green loans
The Group’s debt portfolio includes two sustainability linked loans:
• £146.1 million maturing between 2030 and 2032
• £57.5 million maturing in 2033.
These loans have a basis point margin incentive for meeting annual sustainability targets which align with our Net Zero Carbon
Pathway for the properties which are securing them. The targets have been independently verified to be aligned with the Loan
Market Association (LMA) Sustainability-Linked loan principles. The targets set for any given year are based on actual ESG data/
milestones achieved in the prior year. The reduction in interest rate margin is not considered to be a substantial modification of
the loan terms.
Capitalised interest
Interest capitalised within investment property capital expenditure during the year was £0.2 million (2024: £nil).
The Group has complied with all externally imposed capital requirements to which it was subject.
The maturity profile of the carrying amount of the Group’s borrowings was as follows:
Within one year or on demand
199.3
One to two years
136.0
Two to five years
386.7
More than five years
183.8
Unamortised issue costs
(3.9)
Borrowings
901.9
Due within one year
198.0
Due after one year
703.9
As at 1 January 2025, the Group outstanding borrowings due within the year of £373.7 million which consisted of £364.1 million
of loans maturing in 2025 and £9.6 million of scheduled loan amortisation payments. These amounts have been fully refinanced,
extended or repaid in 2025.
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CLS Holdings plc Annual Report and Accounts 2025 153

Within one year or on demand
373.7
One to two years
98.9
Two to five years
326.8
More than five years
204.1
Unamortised issue costs
(4.3)
Borrowings
999.2
Due within one year
372.4
Due after one year
626.8
The carrying amounts of the Group’s borrowings are denominated in the following currencies:
At 31 December 2025
At 31 December 2024
Fixed rate financial liabilities
203.6
396.5
600.1
236.1
439.6
675.7
Floating rate financial liabilities – swaps
–
25.4
25.4
1 0 7. 7
16.1
123.8
Total fixed rate
203.6
421.9
625.5
343.8
455.7
799.5
Floating rate financial liabilities – capped
–
61.9
61.9
–
37.8
37.8
Floating rate financial liabilities
174.1
44.3
218.4
131.1
35.1
166.2
Total floating rate
174.1
106.2
280.3
131.1
72.9
204.0
37 7.7
528.1
905.8
474.9
528.6
1,003.5
Unamortised issue costs
(1.9)
(2.0)
(3.9)
(2.4)
(1.9)
(4.3)
Borrowings
375.8
526.1
901.9
472.5
526.7
999.2
Of the Group’s total borrowings, 69% (2024: 80%) are considered fixed rate borrowings.
At 31 December 2025, the Group had interest rate swap agreements in place with an aggregate notional amount of £25.4 million
(2024: £123.8 million) whereby the Group pays an average fixed rate of interest of 2.7% and receives interest at a daily variable rate.
The swap is being used to hedge the exposure to changes in the variable rate of Sterling and Euro denominated loans.
The interest rate risk profile of the Group’s borrowings was as follows:
Weighted average interest rate
1
Fixed rate financial liabilities
2.6
3.4
3.1
6.2
2.4
3.7
Floating rate financial liabilities – swaps
–
4.8
4.8
–
7. 2
7. 2
2.6
3.4
3.2
6.2
2.7
3.8
Floating rate financial liabilities – capped
–
3.1
3.1
–
4.3
4.3
Floating rate financial liabilities
6.6
3.5
5.9
2.7
2.6
2.7
6.6
3.2
5.3
2.7
3.6
3.0
Gross borrowings
4.4
3.4
3.8
4.6
2.9
3.6
CLS Holdings plc Annual Report and Accounts 2025154
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

19. Borrowings continued
Weighted average interest rate
1
Fixed rate financial liabilities
2.7
3.0
2.9
6.4
2.5
3.8
Floating rate financial liabilities – swaps
5.4
4.9
5.3
0.5
4.5
1.1
3.5
3.1
3.3
4.5
2.5
3.4
Floating rate financial liabilities – capped
–
2.6
2.6
–
2.8
2.8
Floating rate financial liabilities
7. 1
4.4
6.5
0.9
7. 1
2.2
7. 1
3.4
5.8
0.9
4.9
2.3
Gross borrowings
4.5
3.1
3.8
3.5
2.9
3.2
1 The weighted average interest rates are based on the nominal value of the debt facilities.
The carrying amounts and fair values of the Group’s borrowings are as follows:
Carrying amounts
Fair values
Current borrowings
198.0
372.4
198.0
372.4
Non-current borrowings
703.9
626.8
705.3
629.8
901.9
999.2
903.3
1,002.2
The valuation methods used to measure the fair values of the Group’s fixed rate borrowings were derived from inputs which were
either observable as prices or derived from prices taken from Bloomberg (Level 2).
The Group had the following committed facilities available at 31 December:
– expiring within one year
1
70.0
20.0
– expiring after one year
2
–
30.0
70.0
50.0
1 £30.0 million of the facility expiring within one year and available as at 31 December 2025 was secured by selected UK properties.
2 £30.0 million of the facility expiring after one year and available as at 31 December 2024 was secured by selected UK properties.
As at 31 December 2025, amounts drawn under the facilities above were £42.0 million (2024: £nil). In addition to the above
committed facilities, at 31 December 2025, the Group has a £10.0 million unsecured overdraft facility available (2024: £10.0 million).
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CLS Holdings plc Annual Report and Accounts 2025 155

19. Borrowings continued
Contractual undiscounted cash outflows
The tables below show the contractual undiscounted cash outflows arising from the Group’s gross debt.
Secured bank loans
199.3
136.0
125.4
81.6
179.7
183.8
905.8
Interest payments on borrowings
1
30.5
23.2
19.0
15.9
12.1
11.4
112.1
Effect of interest rate swaps
0.1
0.1
0.1
–
–
–
0.3
Effect of interest rate caps
(0.2)
(0.1)
–
(0.1)
(0.1)
–
(0.5)
Gross loan commitments
229.7
159.2
144.5
97.4
191.7
195.2
1,017.7
Secured bank loans
373.7
98.9
125.8
115.6
85.4
204.1
1,003.5
Interest payments on borrowings
1
36.0
1 7. 7
14.8
11.1
8.2
13.8
101.6
Effect of interest rate swaps
(1.3)
0.1
0.1
0.1
–
–
(1.0)
Effect of interest rate caps
(0.4)
(0.2)
(0.1)
–
–
–
(0.7)
Gross loan commitments
408.0
116.5
140.6
126.8
93.6
217.9
1,103.4
1 Interest payments on borrowings are calculated without taking into account future events. Floating rate interest is estimated using a future interest rate curve
as at 31 December.
20. Derivative financial instruments
Interest rate caps and swaps
0.5
(0.3)
0.7
(0.4)
Interest rate caps and swaps
0.1
–
1.1
–
0.6
(0.3)
1.8
(0.4)
The valuation methods used to measure the fair value of all derivative financial instruments were derived from inputs which were
either observable as prices or derived from prices (Level 2).
There were no derivative financial instruments accounted for as hedging instruments.
Interest rate caps
The aggregate notional principal of interest rate caps at 31 December 2025 was £66.7 million (2024: £37.8 million). The average
period to maturity of these interest rate caps was 3.7 years (2024: 1.7 years).
Interest rate swaps
The aggregate notional principal of interest rate swap contracts at 31 December 2025 was £25.4 million (2024: £123.8 million).
The average period to maturity of these interest rate swaps was 3.8 years (2024: 2.5 years).
Forward foreign exchange contracts
The Group uses forward foreign exchange contracts from time to time to add certainty to, and to minimise the impact of foreign
exchange movements on, committed cash flows. At 31 December 2025, the Group had no outstanding foreign exchange
contracts (2024: none).
CLS Holdings plc Annual Report and Accounts 2025156
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

20. Derivative financial instruments continued
Derivative financial instruments cash flows
The following table provides an analysis of the anticipated contractual cash flows for the derivative financial instruments using
undiscounted cash flows. These amounts represent the gross cash flows of the derivative financial instruments and are settled
as either a net payment or receipt.
Less than 1 year
0.2
(0.2)
1.8
–
1 to 2 years
0.2
(0.1)
0.2
(0.1)
2 to 3 years
–
(0.1)
0.1
(0.1)
3 to 4 years
0.1
–
–
(0.1)
4 to 5 years
0.1
–
–
(0.1)
Over 5 years
–
–
–
–
0.6
(0.4)
2.1
(0.4)
21. Financial instruments
Categories of financial instruments
Financial assets of the Group comprise: interest rate caps; foreign currency forward contracts; financial assets at fair value through
other comprehensive income or fair value through profit and loss; trade and other receivables; and cash and cash equivalents.
Financial liabilities of the Group comprise: interest rate swaps; forward foreign currency contracts; bank loans; secured notes; and
trade and other payables.
The fair values of financial assets and liabilities are determined as follows:
(a) Interest rate swaps and caps are measured at the present value of future cash flows based on applicable yield curves derived
from quoted interest rates;
(b) Foreign currency options and forward contracts are measured using quoted forward exchange rates discounted to their present
value based on applicable yield curves derived from quoted interest rates;
(c) The fair values of non-derivative financial assets and liabilities with standard terms and conditions and traded on active liquid
markets are determined with reference to quoted market prices. Financial assets in this category include financial assets at fair
value through other comprehensive income or fair value through profit and loss such as equity investments;
(d) In more illiquid conditions, non-derivative financial assets are valued using multiple quotes obtained from market makers and
from pricing specialists. Where the spread of prices is tightly clustered the consensus price is deemed to be fair value. Where
prices become more dispersed or there is a lack of available quoted data, further procedures are undertaken such as evidence
from the last non-forced trade; and
(e) The fair values of other non-derivative financial assets and financial liabilities are determined in accordance with generally
accepted pricing models based on discounted cash flow analysis, using prices from observable current market transactions
and dealer quotes for similar instruments.
Except for fixed rate loans, the carrying amounts of financial assets and liabilities recorded at amortised cost approximate to their
fair value.
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CLS Holdings plc Annual Report and Accounts 2025 157

21. Financial instruments continued
Capital risk management
The Group manages its capital to ensure that entities within the Group will be able to continue as going concerns while maximising
the return to stakeholders through the optimisation of debt and equity balances. The capital structure of the Group consists
of debt, cash and cash equivalents and equity attributable to the owners of the parent, comprising issued capital, reserves and
retained earnings. Management perform ‘stress tests’ of the Group’s business model to ensure that the Group’s objectives can
be met and these objectives were met during 2025 and 2024.
The Directors review the capital structure on a quarterly basis to ensure that key strategic goals are being achieved. As part of this
review they consider the cost of capital and the risks associated with each class of capital.
The gearing ratio at the year-end was as follows:
Debt
19
905.8
1,003.5
Cash and cash equivalents
16
(49.4)
(60.5)
Net debt (A)
856.4
943.0
Equity (B)
742.1
784.2
Net debt to equity ratio (A/B)
115.4%
120.2%
Debt is defined as long-term and short-term borrowings before unamortised issue costs as detailed in note 19. Cash and cash
equivalents includes restricted cash (see note 16). Equity includes all capital and reserves of the Group attributable to the owners
of the Company.
Externally imposed capital requirement
The Group was subject to externally imposed capital requirements to the extent that debt covenants may require Group
companies to maintain ratios such as debt to equity (or similar) below certain levels.
Risk management objectives
The Group’s activities expose it to a variety of financial risks, which can be grouped as:
• market risk;
• credit risk; and
• liquidity risk.
The Group’s overall risk management approach seeks to minimise potential adverse effects on the Group’s financial performance
whilst maintaining flexibility.
Risk management is carried out by the Group’s treasury department in close co-operation with the Group’s operating units
and with guidance from the Board of Directors. The Board regularly assesses and reviews the financial risks and exposures
of the Group.
(a) Market risk
The Group’s activities expose it primarily to the financial risks of changes in interest rates and foreign currency exchange rates, and
to a lesser extent other price risk such as inflation. The Group enters into a variety of derivative financial instruments to manage its
exposure to interest rate and foreign currency risk and also uses natural hedging strategies such as matching the duration, interest
payments and currency of assets and liabilities. There has been no change to the Group’s exposure to market risks or the manner
in which these risks are managed and measured.
(I) Interest rate risk
The Group’s most significant interest rate risk arises from its long-term variable rate borrowings. Interest rate risk is regularly
monitored by the treasury department and by the Board on both a country and a Group basis. The Board’s policy is to mitigate
variable interest rate exposure whilst maintaining the flexibility to borrow at the best rates and with consideration to potential
penalties on termination of fixed rate loans. To manage its exposure the Group uses interest rate swaps, interest rate caps and
natural hedging from cash held on deposit.
In assessing risk, a range of scenarios is taken into consideration such as refinancing, renewal of existing positions, and
alternative financing and hedging. Under these scenarios, the Group calculates the impact on the income statement for a defined
movement in the underlying interest rate. The impact of a reasonably likely movement in interest rates, based on historic trends,
is set out below:
CLS Holdings plc Annual Report and Accounts 2025158
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

21. Financial instruments continued
Cash +50 basis points
0.2
0.3
Variable borrowings (including swaps and caps) +50 basis points
(2.1)
(1.8)
Cash -50 basis points
(0.2)
(0.3)
Variable borrowings (including swaps and caps) -50 basis points
1.4
1.0
An increase or decrease of 100 basis points on the cash balance would result in a gain/(loss) of £0.5 million/(£0.5 million) from cash
and cash equivalents. An increase of 100 basis points on variable borrowings would result in a loss of £1.8 million and a decrease of
100 basis points on variable borrowings would result in a gain of £2.8 million.
(II) Foreign exchange risk
The Group does not have any regular transactional foreign exchange exposure. However, it has operations in Europe which transact
business denominated in Euros and, to a minimal extent, in Swedish krona. Consequently, there is currency exposure caused by
translating into Sterling the local trading performance and net assets for each financial period and balance sheet, respectively.
The policy of the Group is to match the currency of investments with the related borrowing, which reduces foreign exchange risk
on property investments. A portion of the remaining operations, equating to the net assets of the foreign property operations,
is not hedged except in exceptional circumstances. Where foreign exchange risk arises from future commercial transactions,
the Group will hedge the future committed commercial transaction using foreign exchange swaps or forward foreign
exchange contracts.
The Group’s principal currency exposure is in respect of the Euro. If the value of Sterling were to increase or decrease in strength,
the Group’s net assets and profit for the year would be affected. The impact of a reasonably likely movement in exchange rates
is set out below:
1% increase in value of Sterling against the Euro
(3.7)
0.3
(3.9)
0.2
1% fall in value of Sterling against the Euro
3.8
(0.4)
4.0
(0.2)
A 10% increase in the value of the Sterling against the Euro would result in a decrease in net assets of £33.9 million and reduction of
profit before tax of £3.2 million. A 10% decrease in the value of the Sterling against the Euro would result in an increase in net assets
of £41.4 million and an increase of profit before tax of £3.9 million. The sensitivity disclosed related to the foreign operations, as the
sensitivity related to financial instruments is not considered significant.
(b) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
Credit risk arises from the ability of customers to meet outstanding receivables and future lease commitments, and from financial
institutions with which the Group places cash and cash equivalents, and enters into derivative financial instruments. The maximum
exposure to credit risk is partly represented by the carrying amounts of the financial assets which are carried in the balance sheet,
including derivatives with positive fair values.
For credit exposure other than to occupiers, the Directors believe that counterparty risk is minimised to the fullest extent possible
as the Group has policies which limit the amount of credit exposure to any individual financial institution.
The Group has policies in place to ensure that rental contracts are made with customers with an appropriate credit history. Credit
risk to customers is assessed by a process of internal and external credit review, and is reduced by obtaining bank guarantees from
the customer or its parent, and cash rental deposits. At 31 December 2025, the Group held £10.1 million in rent deposits
(2024: £10.1 million) against £3.0 million of trade receivables (2024: £4.2 million). The overall credit risk in relation to customers
is monitored on an ongoing basis. Moreover, a significant proportion of the Group portfolio is let to Government occupiers which
can be considered financially secure.
Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial
institutions, only independently rated parties with a minimum rating of investment grade are accepted.
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21. Financial instruments continued
Risk management objectives – continued
At 31 December 2025 the Group held £0.6 million (2024: £1.8 million) of financial assets at fair value through profit and loss.
Management considers the credit risk associated with individual transactions and monitors the risk on a continuing basis.
Information is gathered from external credit rating agencies and other market sources to allow management to react to any
perceived change in the underlying credit risk of the instruments in which the Group invests. This allows the Group to minimise
its credit exposure to such items and at the same time to maximise returns for shareholders.
(c) Liquidity risk
Liquidity risk management requires maintaining sufficient cash, other liquid assets and the availability of funding to meet short,
medium and long-term requirements. The Group maintains adequate levels of liquid assets to fund operations and to allow the
Group to react quickly to potential risks and opportunities. Management monitors rolling forecasts of the Group’s liquidity on
the basis of expected cash flows so that future requirements can be managed effectively.
The majority of the Group’s debt is arranged on an asset-specific, ring-fenced basis (mortgage type loans in SPVs), which is
designed to ensure that the Group’s exposure in relation to each loan is restricted to the assets of the relevant SPV borrower(s)
and its/their subsidiaries with such assets being a property or number of properties in a portfolio, save for certain limited
guarantees and limited recourse security granted by the Company and certain other Group companies. This allows the Group
a higher degree of flexibility in dealing with potential covenant defaults than if the debt was arranged under a Group-wide
borrowing facility. Portfolio loans secured by multiple properties are also used when circumstances require it or to obtain
better terms.
Banking covenants vary according to each loan agreement, but typically include loan-to-value and income related covenants.
In addition, the Group has two ‘green’ loans, each of which have a 10-basis point incentive for achieving certain sustainability
targets. The Group targets a loan-to-value in the range of 35% to 45%. Balance sheet loan-to-value at 31 December 2025
was 50.0% (2024: 50.7%).
Loan covenant compliance is closely monitored by the treasury department. Potential covenant breaches can ordinarily be
avoided by placing additional security or a cash deposit with the lender, or by partial repayment to cure an event of default.
Effect of covenants
All of the Group’s non-current borrowings amounting to £703.9 million contain covenants, which, if not met, would result in the
borrowings becoming repayable on demand. These borrowings are otherwise repayable more than 12 months after the end of the
reporting period. As at 31 December 2025, the Group complied with all the covenants that were required to be met on or before
31 December 2025. The covenants that are required to be complied with after the end of the current reporting period do not affect
the classification of the related borrowings as current or non-current at the end of the current reporting period. Therefore, all these
borrowings remain classified as non-current liabilities. The Group remains in compliance with these covenants up to the date of this
report.
The Group’s loan facilities and other borrowings are spread across a range of 23 banks and financial institutions so as to
minimise any potential concentration of risk.
22. Financial assets and liabilities
Cash and cash equivalents
–
49.4
49.4
Derivative financial assets
0.6
–
0.6
Other assets – current
1
–
9.7
9.7
0.6
59.1
59.7
Secured bank loans
–
(901.9)
(901.9)
Derivative financial liabilities
(0.3)
–
(0.3)
Other liabilities – current
2
–
(43.2)
(43.2)
(0.3)
(945.1)
(945.4)
At 31 December 2025
0.3
(886.0)
(885.7)
CLS Holdings plc Annual Report and Accounts 2025160
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

22. Financial assets and liabilities continued
Cash and cash equivalents
–
60.5
60.5
Derivative financial assets
1.8
–
1.8
Other assets – current
1
–
11.5
11.5
1.8
72.0
73.8
Secured bank loans
–
(999.2)
(999.2)
Derivative financial liabilities
(0.4)
–
(0.4)
Other liabilities – current
2
–
(49.5)
(49.5)
(0.4)
(1,048.7)
(1,049.1)
At 31 December 2024
1.4
(976.7)
(975.3)
1 Other assets included all amounts shown as trade and other receivables in note 15 except prepayments of £0.8 million (2024: £2.7 million). All current amounts
are non-interest bearing and receivable within one year.
2 Other liabilities included all amounts shown as trade and other payables in note 17 except deferred income and sales and social security taxes of £14.4 million
(2024: £16.2 million). All amounts are non-interest bearing and are due within one year.
Reconciliation of net financial assets and liabilities to borrowings and derivative financial instruments
Net financial assets and liabilities:
885.7
975.3
Other assets – current
9.7
11.5
Other liabilities – current
(43.2)
(49.5)
Cash and cash equivalents
49.4
60.5
Borrowings and derivative financial instruments
901.6
9 9 7. 8
23. Share capital
At 1 January 2025
397,410,268
41,367,512
438,777,780
9.9
1.1
11.0
Issue of shares
700,474
(700,474)
–
–
–
–
At 31 December 2025
398,110,742
40,667,038
438,777,780
9.9
1.1
11.0
At 1 January 2024 and 31 December 2024
397,410,268
41,367,512
438,777,780
9.9
1.1
11.0
The Board is authorised, by shareholder resolution, to allot shares or grant such subscription rights (as are contemplated by
sections 551(1) (a) and (b) respectively of the Companies Act 2006) up to a maximum aggregate nominal value of £3,311,752
representing one-third of the issued share capital of the Company excluding treasury shares.
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24. Earnings per share
The calculation of earnings per ordinary share is based on earnings after tax and the weighted average number of ordinary shares in
issue during the year.
Weighted average number of ordinary shares in circulation
398,083,875
397,410,268
Number of ordinary shares in circulation at the year-end
398,110,742
397,410,268
For diluted earnings per share, the weighted average number of ordinary shares in issues is adjusted to assume conversion of
all dilutive potential ordinary shares. The diluted earnings per share does not assume conversion of potential ordinary shares that
would have an antidilutive effect on earnings per share. The diluted loss per share for the year to 31 December 2025 was restricted
to a loss of 12.6 pence per share, as the loss per share cannot be reduced by dilution in accordance with IAS 33 Earnings Per Share.
The Group has three types of dilutive potential ordinary shares, being: unvested shares granted under the Long Term Incentive
Plan (LTIP) for executive directors and senior management; unvested shares granted under the Element B plan for executive
directors and senior management; and unvested shares granted under the Special Share Award plan to key management.
The issue of all these unvested shares is contingent upon satisfying specified conditions such as length of service and
company performance.
Element B/Special Share Award
–
694,695
LTIP
6,408,551
4,811,944
Total potential dilutive shares
6,408,551
5,506,639
25. Dividend
2025 final dividend
1
22 May 2026
2 . 70
–
–
2025 interim dividend
2 October 2025
1.30
5.2
–
Distribution of current year profit
4.00
5.2
–
2024 final dividend
23 May 2025
2 .6 8
10.7
–
2024 interim dividend
2 October 2024
2.60
–
10.3
Distribution of current year profit
5.28
10.7
10.3
2023 final dividend
2 May 2024
5.35
–
21.3
Dividends as reported in the Group statement of changes in equity
15.9
31.6
1 Subject to shareholder approval at the AGM on 23 April 2026. Total cost of proposed dividend is £10.7 million. The proposed dividend is not recognised as a liability
at the balance sheet date.
CLS Holdings plc Annual Report and Accounts 2025162
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

26. Other reserves
At 1 January 2025
22.7
25.8
7. 3
3.0
28.1
86.9
Exchange rate variances
–
25.2
–
–
–
25.2
Corporation tax on exchange differences
–
(0.5)
–
–
–
(0.5)
– net fair value losses in the year
13
–
–
(1.6)
–
–
(1.6)
– deferred tax thereon
18
–
–
0.7
–
–
0.7
Share-based payments
–
–
–
0.3
–
0.3
At 31 December 2025
22.7
50.5
6.4
3.3
28.1
111.0
At 1 January 2024
22.7
47.4
6.1
2.4
28.1
106.7
Exchange rate variances
–
(21.6)
–
–
–
(21.6)
– net fair value gains in the year
13
–
–
1.3
–
–
1.3
– deferred tax thereon
18
–
–
(0.1)
–
–
(0.1)
Share-based payments
–
–
–
0.6
–
0.6
At 31 December 2024
22.7
25.8
7. 3
3.0
28.1
86.9
The capital redemption reserve comprises of the nominal value of the Company’s own shares acquired as a result of share
buyback programmes.
The cumulative translation reserve comprises the aggregate effect of translating net assets of overseas subsidiaries into
Sterling since acquisition.
The fair value reserve comprises the aggregate movement in the value of financial assets classified as fair value through
comprehensive income, owner-occupied property and hotel since acquisition, net of deferred tax.
The amount classified as other reserves was created prior to listing in 1994 on a Group reconstruction and is considered
to be non-distributable.
Share options exercised have been settled using the treasury shares of the Group. The reduction in the treasury share equity
component is equal to the cost incurred to acquire the shares, on a weighted average basis. Any excess of the cash received
from employees over the reduction in treasury shares is recorded in share premium. In 2025, there were 700,474 treasury
shares transferred to the EBT (2024: none) to satisfy future awards under employee share plans. At 31 December 2025, the
Group held 40,667,038 ordinary shares (2024: 41,367,512) with a nominal value of £1.0 million (2024: £1.1 million) in treasury.
The Company’s voting rights and dividends in respect of the treasury shares, including those own shares which the EBT holds,
continue to be waived.
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CLS Holdings plc Annual Report and Accounts 2025 163

27. Notes to the cash flow
Operating loss
(24.1)
(52.5)
Net movements on revaluation of investment properties
79.2
1 2 7. 7
Net movements on revaluation of equity investments
(0.1)
0.6
Depreciation and amortisation
0.8
1.0
Loss on sale of investment property
10.9
2.3
Lease incentive debtor adjustments
(15.9)
(10.4)
Share-based payments
0.3
0.6
Loss on sale of other equity investments
–
0.1
Decrease in receivables
3.3
2.5
Decrease in payables
(1.8)
(0.7)
Cash generated from operations
52.6
71.2
Changes in liabilities arising from financing activities
Notes
Borrowings
19
999.2
(126.8)
1.9
–
2 7.6
901.9
Derivative financial instruments
20
(1.4)
(0.2)
–
1.3
–
(0.3)
Lease liabilities
3.3
–
–
–
0.1
3.4
1,001.1
(127.0)
1.9
1.3
27.7
905.0
Changes in liabilities arising from financing activities
Notes
Borrowings
19
1,070.6
(47.7)
1.7
–
(25.4)
999.2
Derivative financial instruments
20
(4.3)
(0.5)
–
3.4
–
(1.4)
Lease liabilities
3.5
–
–
–
(0.2)
3.3
1,069.8
(48.2)
1.7
3.4
(25.6)
1,001.1
CLS Holdings plc Annual Report and Accounts 2025164
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

28. Contingencies
The Group has contingent liabilities in respect of legal claims, guarantees and warranties arising in the normal course of business.
It is not anticipated that any material liabilities will arise from these contingent liabilities.
29. Commitments
At the balance sheet date the Group had contracted with customers under non-cancellable operating leases for the following
minimum lease payments:
Within one year
97.4
94.2
Between one and two years
76.1
71.3
Between two and three years
63.1
59.4
Between three and four years
51.4
4 7. 6
Between four and five years
41.1
3 7. 3
More than five years
246.8
158.8
575.9
468.6
Operating leases where the Group is the lessor are typically negotiated on a customer-by-customer basis and include break
clauses and indexation provisions.
Other commitments
At 31 December 2025 the Group had contracted capital expenditure of £16.7 million (2024: £10.3 million). At the balance sheet
date, the Group had not exchanged contracts to acquire any investment properties (2024: £nil). There were no authorised financial
commitments which were yet to be contracted with third parties (2024: £nil).
30. Post-balance sheet events
There are no post-balance sheet events requiring disclosure.
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31. Subsidiaries
The Group financial statements include the financial statements of CLS Holdings plc and all of its subsidiaries, which are listed
below. All are 100% owned unless otherwise stated. Those marked with a * were dissolved during 2025. Those marked with a **
were sold during 2025.
Certain UK subsidiaries are exempt from the requirements of the Companies Act 2006 relating to the audit of individual financial
statements by virtue of Section 479A of that Act. These subsidiaries are identified with *** on the table below.
United Kingdom
Registered Office: 16 Tinworth Street, London SE11 5AL
16 Tinworth Street (Residential)
Limited
401 King Street Limited
Apex Tower Limited
Base Offices Limited***
Brent House Limited***
Cassini Pascal Limited***
Centenary Court Limited***
Central London Securities
Limited***
Chancel House Limited*
CI Tower Investments Limited
Citadel Finance Limited***
Citadel Holdings plc
CLS Aberdeen Limited***
CLS Capital Partners
Limited***
CLS Chancery House Limited
CLS Church Road Limited
CLS Cliffords Inn Limited
CLS Clockwork Limited
CLS Crawley Limited
CLS England and Wales
Limited*
CLS Gateway House Limited
CLS Germany Limited
CLS Gresham Limited
CLS Harrow Limited
CLS Holdings UK Limited***
CLS Kings Court Limited
CLS Lloyds Avenue Limited
CLS London Limited
CLS London Properties Limited
CLS Northern Properties Limited*
CLS One Limited
CLS Pacific House Limited
CLS Prescot Limited
CLS Priory Place Limited
CLS Residential Investments
Limited
CLS South London Limited***
CLS Spring Gardens Limited
CLS Staines Limited
CLS UK Properties Limited***
CLS UK Property Finance Limited
CLS UK Property Finance 2
Limited
CLS UK Property Finance 3
Limited
CLS Watford Limited
CLSH Management Limited
Columbia Bracknell Limited
Coventry House Limited***
Dukes Road Limited
Elmfield Road Limited
Falcon Quest Limited*
Fetter Lane Apartments
Limited
Fetter Lane Leasehold
Limited
Harman House Limited
Hygeia Harrow Limited
Ingrove Limited
Instant Office Limited***
Kennington Road Limited
Larkhall Lane Limited***
Maidenhead Cloud Gate
Limited***
Mirenwest Limited***
New Printing House Square
Limited
NYK Investments Limited
One Elmfield Park Limited
Quayside Lodge Limited*
Rayman Finance Limited***
Reflex Bracknell Limited
Sentinel House Limited***
Shard of Glass Limited*
Southern House Limited
Spring Gardens III Limited
Spring Mews (Block D) Limited
Spring Mews (Hotel) Limited
Spring Mews (Student)
Limited**
Spring Mews Limited
Three Albert Embankment
Limited***
Vauxhall Square Limited***
Vauxhall Square One
Limited***
Vauxhall Square (Student)
Limited***
Wandsworth Road Limited
CLS Holdings plc Annual Report and Accounts 2025166
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

31. Subsidiaries continued
Jersey
Registered Office: 1st Floor Liberation House, Castle Street, St Helier, Jersey JE1 1GL
CLS Holdings plc Employee Benefit Trust
France
Registered Office: 36 Rue Jules Verne, 92300 Levallois-Perret, Paris
120 Jean Jaures Sàrl
235 Lyon Sarl
Avenue du Park SCI
BV France Sàrl
Capitaine Guynemer Sàrl
CLS France Sàrl
CLS Management Sàrl
Debussy SCI
De Musset Sàrl
Forum France SCI
Georges Clemenceau Sàrl
Immobilière 6 Sàrl
Immobilière 8 Sàrl*
Immobilière 10 Sàrl
Immobilière V SA
Jean Walter Sàrl**
Le D’Aubigny SCI
Le Quatuor SCI
Le Sigma Sàrl
Mission Marchand Sàrl
Parc SCI
Petits Hotels Sàrl
Rhone Alpes Sàrl
Scala Sàrl
SCI Frères Peugeot
SCI Pierre Valette
Sego Sàrl*
Solferino SCI
Germany
Registered Office: Nagelsweg 37, 20097 Hamburg
CLS Germany GmbH
CLS Green Energy GmbH
Jarrestrasse Immobilien GmbH
Luxembourg
Registered Office: 33 Avenue de la Liberte, 1931 Luxembourg
Adlershofer Sarl
Albertina Sarl
Cavernet Sarl
Chronotron Sarl
CLS Dortmund Hiltropwall Sarl
CLS Hansaallee Sarl
CLS Immobilien Stuttgart Sarl
CLS Investments Sarl
CLS Investments 2 Sarl
CLS Luxembourg Sarl
CLS Metropolis Sarl
CLS Palisade Sarl
CLS Storkower Strasse Sarl
CLS Tangentis Sarl
CLS Wendenstrasse Sarl
Freepost Sarl
Garivet Sarl
Gotic Haus Sarl
Grossglockner Sarl
Hermalux Sarl
Kapellen Sarl
Landstrasse Sarl
Naropere Sarl
Network Perlach Sarl
Prater Sarl
Salisbury Hill Sarl
Satimood Sarl
Schonbrunn Sarl
Zillertal Sarl
Netherlands
Registered Office: Burgemeester van Reenensingel 101, 2803 DA Gouda
CLS Management BV
Portapert Properties UK BV
Sweden
Registered Office: Skönabäck 122, 274 91 Skurup
Rasstaf Sweden AB
Museion Förvaltning AB
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CLS Holdings plc Annual Report and Accounts 2025 167

32. Related party transactions
Transactions with Directors
Distributions totalling £59,672 (2024: £2,176,534) were made through dividend payments in the year in respect of ordinary
shares held by the Directors and £8,752,717 (2024: £17,483,443) to the controlling shareholder.
During the year the following transactions occurred with companies associated to the controlling shareholder:
• The Group recharged salary costs in relation to providing administration services. CLS Holdings plc invoiced costs totalling
£35,039 (2024: £64,436). At the balance sheet date £nil was outstanding (2024: £nil).
• A Group company, CLS Holdings plc has a £40.0 million (2024: £20.0 million) revolving credit facility with Creative Value
Investment Group Limited, the investment vehicle for The Sten and Karin Mortstedt Family & Charity Trust. As at balance
sheet date the amount drawn on this facility was £20.0 million (2024: £nil).
During the year, or previous year, the following transactions associated with the Directors occurred:
During the year, the Group invoiced rental related charges of £nil (2024: £60,268) to IKEA Limited, a company in a group of
companies with a common Director. At the balance sheet date £1,276 was outstanding as payable (2024: £78,086 as payable).
Directors’ remuneration
The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for each
of the categories specified in IAS 24 Related Party Disclosures.
Short-term employee benefits
1,236
1,473
Post-employment benefits
–
44
Other long-term benefits
85
10
Other fees
2
2
1,323
1,529
CLS Holdings plc Annual Report and Accounts 2025168
Notes to the Group financial statements continued
for the year ended 31 December 2025 continued

Notes
2025
£m
Restated
2024
£m
Non-current assets
Investment in subsidiary undertakings 8 456.5 482.6
Intangible assets 2.6 2.7
459.1 485.3
Current assets
Trade and other receivables 9 10.5 9.3
Cash and cash equivalents – 0.1
10.5 9.4
Total assets 469.6 494.7
Current liabilities
Trade and other payables 10 (173.5) (222.5)
Borrowings 11 (20.0) –
(193.5) (222.5)
Total liabilities (193.5) (222.5)
Net assets 276.1 272.2
Equity
Share capital 12 11.0 11.0
Share premium 13 83.1 83.1
Other reserves 13 29.7 29.4
Retained earnings 13 152.3 148.7
Shareholders’ funds 14 276.1 272.2
The Company reported a profit for the financial year ended 31 December 2025 of £19 .5 million (2024: restated £1.8 million profit;
seenote 4).
The notes on pages 171 to 175 are an integral part of these Company financial statements.
These financial statements of CLS Holdings plc (registered number: 02714781) were approved by the Board of Directors
andauthorised for issue on 12 March 2026 and were signed on its behalf by:
Mr F Widlund
Chief Executive Officer
Mr H Stokes
Chief Financial Officer
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CLS Holdings plc Annual Report and Accounts 2025 169
Company balance sheet
at 31 December 2025

Notes
Share
capital
£m
Share
premium
£m
Other
reserves
£m
Retained
earnings
£m
Total
£m
Arising in 2025:
Profit for the year 6 – – – 19.5 19.5
Share-based payments 13 – – 0.3 – 0.3
Dividends to shareholders 7 – – – (15.9) (15.9)
Total changes arising in 2025 – – 0.3 3.6 3.9
At 1 January 2025 11.0 83.1 29.4 148.7 272.2
At 31 December 2025 11.0 83.1 29.7 152.3 276.1
Notes
Share
capital
£m
Share
premium
£m
Other
reserves
£m
Retained
earnings
£m
Tot al
£m
Arising in 2024:
Profit for the year (restated – note 4) 6 – – – 1.8 1.8
Share-based payments 13 – – 0.6 – 0.6
Dividends to shareholders 7 – – – (31.6) (31.6)
Total changes arising in 2024 – – 0.6 (29.8) (29.2)
At 1 January 2024 (restated – note 4) 11.0 83.1 28.8 178.5 301.4
At 31 December 2024 11.0 83.1 29.4 148.7 272.2
The notes on pages 171 to 175 are an integral part of these Company financial statements.
CLS Holdings plc Annual Report and Accounts 2025170
Company statement of changes in equity
for the year ended 31 December 2025

1. General information
These separate Company financial statements are presented as required by the Companies Act 2006 and prepared on the
historical cost basis. The Company has applied UK GAAP Financial Reporting Standard 101 ‘Reduced Disclosure Framework’
(‘FRS101’). CLS Holdings plc is the ultimate Parent Company of the CLS Holdings Group registered and incorporated in the
UnitedKingdom under Companies Act 2006. Its primary activity (which occurs exclusively within the United Kingdom) is to
holdshares in subsidiary companies.
2. Basis of accounting
As permitted by FRS 101, the Company has taken advantage of all the disclosure exemptions including the following:
• IAS 1 – exemption from capital management disclosures requirements
• IAS 7 – cash flow statement
• IAS 8 – IFRSs issued but not yet effective
• IAS 24 – related party disclosures
• IFRS 2 – share based payments
• IFRS 7 – financial instruments
• IFRS 13 – fair value measurement
Where required, equivalent disclosures are given in the Group financial statements.
Going concern
The Group and Company’s going concern assessment covers the period to 31 July 2027. The going concern assessment uses the
business plan approved by the Board at its November 2025 meeting as the Base case (see note 2.1 of the Group financial statements).
Whilst the Directors consider that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue
as a going concern (see note 2 to the Consolidated financial statements for more details) the financial statements are prepared
ona going concern basis. The financial statements do not contain the adjustments that would result if the Company was unable
tocontinue as a going concern.
3. Material accounting policies
The principal accounting policies are summarised below.
3.1 Investments in subsidiaries
Investments in subsidiaries are accounted for at cost less provisions for impairment. Dividend income is recognised when received.
3.2 Impairment
Investments are reviewed for impairment whenever events or changes in circumstances indicate that carrying amounts may not
berecoverable. Recoverability of investments are measured by comparison of the carrying amount of the investment and fair value
less costs to sell. If such assets are considered to be impaired, the impairment to be recognised is the amount by which the carrying
amount exceeds the fair value of the investments.
3.3 Pension costs
The Company operates a defined contribution pension scheme for all eligible employees. The pension costs charged represent
the contributions payable. Differences between contributions payable in the year and contributions paid are shown as either
accruals or prepayments in the balance sheet.
3.4 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown
inequity as a deduction from proceeds, net of tax. Where a Group company purchases the Company’s equity share capital, the
consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity attributable
to the owners of the Company until the shares are cancelled, reissued or disposed of. The repurchased shares are classified
astreasury shares and presented within the treasury share reserve. Where such shares are subsequently sold or reissued,
anyconsideration received, net of any directly attributable incremental transaction costs and the related income tax effects,
isincluded in equity attributable to the owners of the Company.
3.5 Foreign currencies
The financial statements are presented in Sterling, which is the currency of the primary economic environment in which the
Company operates, known as its functional currency. Transactions in currencies other than the Company’s functional currency
arerecognised at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary
assetsand liabilities that are denominated in other currencies are translated into Sterling at the rates prevailing at that date.
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CLS Holdings plc Annual Report and Accounts 2025 171
Notes to the Company financial statements
for the year ended 31 December 2025

4. Restatement of prior period results
During the preparation of this year’s financial statements, the directors noted that the comparative information of CLS Holdings plc
at 1 January 2024 and 31 December 2024 required adjustments that change the previously reported net assets and the loss for
that year.
As at the year ended 31 December 2023 CLS Holdings plc identified indicators of impairment in its subsidiary entities and a
determination of the recoverable amount was made using the net asset value of the subsidiaries which resulted in a cumulative
impairment provision of £52.1 million and was included in the opening balance disclosed at 1 January 2024.
It was subsequently noted that the net asset values used in the calculation did not include impairment adjustments in those entities
or intermediate holding groups which were subsequently booked. The impact was that the impairment of investments in
subsidiaries was understated by £72.2 million in the net assets as at 1 January 2024. Of this additional impairment of £72.2 million,
£56.6 million was recognised within the financial statements for the year ended 31 December 2024, thus overstating the loss for
the year ended 31 December 2024. Furthermore, £15.6 million of impairments were not recognised in either period, overstating
theclosing balance of investments in subsidiaries as at 31 December 2024.
As a consequence, after taking into account the impairment adjustments, the comparatives at 1 January 2024 and 31 December
2024 have been adjusted as follows:
• Investment in subsidiary undertakings at 1 January 2024 has decreased by £72.2 million from £534.5 million to £462.3 million.
• Investment in subsidiary undertakings at 31 December 2024 has decreased by £15.6 million from £498.2 million to
£482.6 million.
• Net assets at 31 December 2024 have reducedby £15.6 million from £287.8 million to £272.2 million.
• The reported results for the year 31 December 2024 have been restated by £56.6 million changing a loss of £54.8 million
toaprofit of £1.8 million.
• Distributable reserves at 31 December 2024 have reducedby £15.6 million, from £164.3 million to £148.7 million, as:
• distributable reserves at 1 January 2024 have reducedby £72.2 million;
• the reported results for the year 31 December 2024 have been restated by £56.6 million changing a loss of £54.8 million
toaprofit of £1.8 million.
There is no impact on the consolidated financial statements.
5. Accounting judgements and key sources of estimation uncertainty
Accounting judgements
In accordance with IAS 1, the Directors have considered the judgements that have been made in the process of applying the
Company’s accounting policies, which are described in note 3, and which of those judgements have the most significant effect
onthe amounts recognised in the financial statements.
Going concern
For the purposes of the going concern assessment, the Group and Company makes judgements in determining future cash flows
which are based on assumptions. The most significant judgements relate to the terms and ability to refinance loan facilities and
recycle capital. These judgements are made by management based on recent performance, external factors and management’s
knowledge and expertise of cash flow drivers. See note 2 to the Consolidated financial statements for more details.
In the opinion of the Directors, they consider the following to be ongoing judgements.
• Impairments to investment in subsidiaries – the recoverable amount is considered to be best estimated by the net asset
valueatthe subsidiaries.
Key sources of estimation uncertainty
The key sources of estimation uncertainty in the preparation of the Company’s financial statements is the value of investment
insubsidiary undertakings that is primarily determined by the property values therein (see note 3 in the consolidated
financialstatements).
6. Profit for financial year
As permitted by s408 Companies Act 2006, the Company’s profit and loss account has not been presented in these financial
statements. The Company’s profit for the financial year was £19.5 million (2024: restated £1.8 million profit).
Audit fees for the Company were £0.3 million (2024: £0.2 million).
Details of the Directors employed during the year and of their remuneration is included in the Remuneration Committee Report
onpages 87 to 99.
CLS Holdings plc Annual Report and Accounts 2025172
Notes to the Company financial statements continued
for the year ended 31 December 2025 continued

7. Dividend
Payment
date
Dividend
per share
pence
2025
£m
2024
£m
Current year
2025 final dividend
1
22 May 2026 2.70 – –
2025 interim dividend 2 October 2025 1.30 5.2 –
Distribution of current year profit 5.2 –
Prior year
2024 final dividend
1
23 May 2025 2.68 10.7 –
2024 interim dividend 2 October 2024 2.60 – 10.3
Distribution of current year profit 5.28 10.7 10.3
2023 final dividend 2 May 2024 5.35 – 21.3
Dividend as reported in the Group statement of changes in equity 15.9 31.6
1 Subject to shareholder approval at the AGM on 23 April 2026. Total cost of proposed dividend is £10.7 million.
8. Investment in subsidiary undertakings
2025
£m
Restated
2024
£m
1
At 1 January 482.6 462.3
Additions 104.5 190.0
Disposals (73.0) –
Provision for impairment (57. 6 ) (169.7)
At 31 December 456.5 482.6
1 The prior year provision for impairment has been restated as described in note 4 along with their respective totals. The proposed dividend is not recognised
asaliability at the balance sheet date.
Certain indicators of impairment were identified by the Company as at 31 December 2025. A determination of the recoverable
amount of the investments in subsidiaries were made using the net asset value at the subsidiaries, resulting in an impairment of
£57.6 million (2024 restated: £169.7 million). The recoverable amount remains sensitive to the financial performance and financial
position of both the Company and its subsidiaries, including the valuation of investment properties of its subsidiaries (see note 12
ofGroup financial statements).
9. Trade and other receivables
2025
£m
2024
£m
Amounts owed by subsidiary undertakings 4.8 3.1
Social security and other taxes 0.1 0.7
Other receivables 0.6 5.3
Prepayments and accrued income 5.0 0.2
10.5 9.3
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CLS Holdings plc Annual Report and Accounts 2025 173

10. Trade and other payables
Current
2025
£m
2024
£m
Trade payables 0.2 0.2
Amounts owed to subsidiary undertakings 170.2 219.2
Accruals 3.1 3.1
173.5 222.5
Amounts owed to subsidiary undertakings represent a loan payable to one of the Company’s subsidiaries which attracted an
interest rate of SONIA plus a margin of 3.00%. The loan was repayable on demand and the maturity date was 31 December 2025.
In January 2026, the Company entered into a new loan agreement with the subsidiary to extend the loan maturity to 31 December
2030. This new loan agreement attracts an interest rate of SONIA plus a margin of 2.75%.
11. Borrowings
Current
2025
£m
2024
£m
Borrowings 20.0 –
20.0 –
Borrowing as at 31 December 2025 of £20.0 million (2024: £nil) represent amounts drawn on the corporate borrowing facilities.
12. Share capital
Number of shares authorised, issued and fully paid
Ordinary
shares in
circulation
£m
Treasury
shares
£m
Total
ordinary
shares
£m
Ordinary
shares in
circulation
Treasury
shares
Total
ordinary
shares
At 1 January 2025 397,410,268 41,367,512 438,777,780 9.9 1.1 11.0
Issue of shares 700,474 (700,474) – – – –
At 31 December 2025 398,110,742 40,667,038 438,777,780 9.9 1.1 11.0
Number of shares authorised, issued and fully paid
Ordinary
shares in
circulation
£m
Treasury
shares
£m
Tot al
ordinary
shares
£m
Ordinary
shares in
circulation
Treasury
shares
Tot al
ordinary
shares
At 1 January 2024 and 31 December 2024 397,410,268 41,367,512 438,777,780 9.9 1.1 11.0
The Board is authorised, by shareholder resolution, to allot shares or grant such subscription rights (as are contemplated by
sections 551(1) (a) and (b) respectively of the Companies Act 2006) up to a maximum aggregate nominal value of £3,311,752
representing one-third of the issued share capital of the Company excluding treasury shares.
CLS Holdings plc Annual Report and Accounts 2025174
Notes to the Company financial statements continued
for the year ended 31 December 2025 continued

13. Reserves
Other reserves
Share
premium
£m
Capital
redemption
reserve
£m
Share-based
payment
reserve
£m
Other
£m
Total
£m
Retained
earnings
£m
At 1 January 2025 83.1 22.7 2.1 4.6 29.4 148.7
Share-based payments – – 0.3 – 0.3 –
Profit for the year – – – – – 19.5
Dividends to shareholders – – – – – (15.9)
At 31 December 2025 83.1 22.7 2.4 4.6 29.7 152.3
Other reserves
Share
premium
£m
Capital
redemption
reserve
£m
Share-based
payment
reserve
£m
Other
£m
Tot al
£m
Restated
retained
earnings
£m
At 1 January 2024 83.1 22.7 1.5 4.6 28.8 178.5
Share-based payments – – 0.6 – 0.6 –
Profit for the year – restated (note 4) – – – – – 1.8
Dividends to shareholders – – – – – (31.6)
At 31 December 2024 83.1 22.7 2.1 4.6 29.4 148.7
14. Reconciliation of movements in shareholders’ funds
2025
£m
Restated
2024
£m
At 1 January 272.2 301.4
Profit for the year (restated – note 4) 19.5 1.8
Dividends to shareholders (15.9) (31.6)
Share-based payments 0.3 0.6
At 31 December 276.1 272.2
15. Contingencies
Guarantees
At 31 December 2025 and 31 December 2024 CLS Holdings plc had guaranteed certain liabilities of Group companies. These
wereprimarily in relation to Group borrowings and covered interest and amortisation payments. The principal amount of a secured
loanfrom an external lender to a Group company was covered by a guarantee totalling £40.0 million at 31 December 2025
provided by CLS Holdings plc (2024: £20.0 million). CLS Holdings plc guarantees a £30.0 million revolving credit facility with RBS
(2024: £30.0 million). As at 31 December 2025 the amount drawn on this facility was £22.0 million (2024: £nil). Since the possibility
of payment by the Company under any of these guarantees and warranties is considered remote, no provisions in relation to these
have been made in the Company’s financial statements and no reportable contingent liability exists.
16. Commitments
At 31 December 2025, the Company had no contracted capital expenditure (2024: £nil) and no authorised financial commitments
which were yet to be contracted with third parties (2024: £nil).
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CLS Holdings plc Annual Report and Accounts 2025 175

2025
£m
2024
£m
2023
£m
2022
£m
2021
£m
Continuing operations
Revenue 139.7 151.9 148.7 139.7 139.8
Service charges and similar expenses (38.4) (37.9) (35.7) (31.9) (31.8)
Net rental income 101.3 114.0 113.0 1 0 7. 8 108.0
Administration expenses (16.4) (17.7) (18.2) (15.7) (16.2)
Other property expenses (17.3) (18.1) (15.6) (16.2) (14.4)
Non-recurring items
1
(1.7) – – – –
Operating profit before revaluation and disposals 65.9 78.2 79.2 75.9 7 7. 4
Net revaluation movements on investment property (79.2) (127.7) (302.7) (136.5) 28.5
Net revaluation movements on equity investments 0.1 (0.6) (1.3) (3.8) 7. 5
(Loss)/profit on sale of investment property (10.9) (2.3) 1.4 0.5 (0.1)
Loss on sale of other equity investments – (0.1) – – –
Operating (loss)/profit (24.1) (52.5) (223.4) (63.9) 113.3
Finance income 1.1 1.4 1.6 10.1 5.9
Finance costs (39.1) (45.7) (41.3) (26.8) (25.4)
Foreign exchange gain/(loss) 0.2 (0.6) (0.3) (0.3) (2.3)
Impairment of goodwill – – – (1.1) –
(Loss)/profit before tax (61.9) (97.4) (263.4) (82.0) 91.5
Taxation 11.6 3.8 13.6 0.1 28.0
(Loss)/profit for the year (50.3) (93.6) (249.8) (81.9) 119.5
Dividends paid 15.9 31.6 31.6 32.4 30.8
Distribution of current year’s profit 15.9 21.0 31.6 31.9 31.4
Net assets employed
Non-current assets 1,615.3 1,723.0 1,900.2 2,351.4 2,301.1
Current assets 155.4 208.8 260.7 150.0 237.4
1,770.7 1,931.8 2,160.9 2,501.4 2,538.5
Current liabilities (255.6) (439.0) (262.8) (234.0) (229.8)
Non-current liabilities (773.0) (708.6) (968.9) (1,046.6) (978.0)
Net assets 742.1 784.2 929.2 1,220.8 1,330.7
Ratios 2025 2024 2023 2022 2021
Net assets per share (pence) 186.4 1 9 7. 3 233.8 307.3 326.6
EPRA NTA per share (pence) 200.7 215.0 253.0 329.6 350.5
Earnings per share (pence) (12.6) (23.6) (62.9) (20.2) 29.3
EPRA earnings per share (pence) 7.6 9.2 10.3 11.6 11.3
Total Accounting Return – basic (%) (3.3) (12.2) (21.3) (3.5) 7. 1
Total Accounting Return – EPRA NTA (%) (4.8) (11.9) (20.8) (3.7) 3.7
Net gearing (%) 115.4 120.2 108.2 81.7 65.4
Balance sheet loan-to-value (%) 50.0 50.7 48.5 42.2 3 7. 1
Dividend cover (times) 1.9 1.7 1.3 1.5 1.5
Interest cover (times) 1.84 1.91 2.23 2.98 3.16
1 During the year, we conducted a review of staffing and financial structuring. This resulted in non-recurring costs including redundancy costs being incurred.
CLS Holdings plc Annual Report and Accounts 2025176
Five-year financial summary (unaudited)

Alternative Performance Measures
CLS discloses Alternative Performance Measures (APMs) based on methodologies determined by EPRA and used by industry
peers to ensure cross-sector consistency. We also disclose a number of APMs which are commonly used by investors to assess
acompany’s performance.
EPRA APMs
• EPRA net initial yield;
• EPRA ‘topped-up’ net initial yield;
• EPRA vacancy;
• EPRA capital expenditure;
• EPRA cost ratios;
• EPRA LTV; and
• EPRA like-for-like gross rental income growth.
Other APMs
CLS uses a number of other APMs, many of which are commonly used by industry peers:
• Total Accounting Return;
• Net debt and gearing;
• Balance sheet loan-to-value;
• Administration cost ratio;
• Dividend cover; and
• Interest cover.
1. EPRA APMs
i) EPRA net initial yield (NIY)
EPRA NIY is calculated as the annualised rental income based on the cash rents passing at the balance sheet date less
non-recoverable property operating expenses, divided by the gross market value of the property (excluding those that
areunderdevelopment, student accommodation, held as PPE or occupied by CLS).
2025 2024
United
Kingdom
£m
Germany
£m
France
£m
Total
£m
United
Kingdom
£m
Germany
£m
France
£m
Tot al
£m
Rent passing 40.2 39.1 11.8 91.1 46.6 41.6 12.9 101.1
Adjusted for properties in development (0.1) – – (0.1) (0.1) – (0.3) (0.4)
Forecast non-recoverable service charge (2.8) (3.6) (1.0) ( 7.4 ) (3.9) (2.5) (0.5) (6.9)
Annualised net rents (A) 37. 3 35.5 10.8 83.6 42.6 39.1 12.1 93.8
Property portfolio
1
641.7 800.4 223.6 1,665.7 668.4 814.1 225.9 1,708.4
Adjusted for properties in development (10.7) (1.7) (9.9) (22.3) (11.4) (2.0) (8.3) (21.7)
Purchasers’ costs at 6.8% 42.9 54.3 14.5 111.7 44.7 55.2 14.8 114.7
Property portfolio valuation including
purchasers’ costs (B) 673.9 853.0 228.2 1,755.1 701.7 867.3 232.4 1,801.4
EPRA NIY (A/B) 5.5% 4.2% 4.7% 4.8% 6.1% 4.5% 5.2% 5.2%
1 Figures in the above table include investment properties and properties held for sale and exclude owner-occupied premises, student accommodation and hotel.
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CLS Holdings plc Annual Report and Accounts 2025 177
Additional
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Financial
statements
Supplementary disclosures (unaudited)
Unaudited unless otherwise stated

Alternative Performance Measures continued
ii) EPRA ‘topped-up’ NIY
EPRA ‘topped-up’ NIY is calculated by making an adjustment to EPRA NIY in respect of the expiration of rent-free periods
(orother unexpired lease incentives such as discounted rent periods and step rents).
2025 2024
United
Kingdom
£m
Germany
£m
France
£m
Total
£m
United
Kingdom
£m
Germany
£m
France
£m
Tot al
£m
Contracted rent 47. 4 45.7 13.1 106.2 50.1 44.9 13.9 108.9
Adjusted for properties in development (0.1) – – (0.1) (0.1) – (0.3) (0.4)
Forecast non-recoverable service charge (2.8) (3.6) (1.0) ( 7.4 ) (3.9) (2.5) (0.5) (6.9)
‘Topped-up’ annualised net rents (A) 44.5 42.1 12.1 98.7 46.1 42.4 13.1 101.6
Property portfolio
1
641.7 800.4 223.6 1,665.7 668.4 814.1 225.9 1,708.4
Adjusted for properties in development (10.7) (1.7) (9.9) (22.3) (11.4) (2.0) (8.3) (21.7)
Purchasers’ costs (6.8%) 42.9 54.3 14.5 111.7 44.7 55.2 14.8 114.7
Property portfolio valuation including
purchasers’ costs (B) 673.9 853.0 228.2 1,755.1 701.7 867.3 232.4 1,801.4
EPRA ‘topped-up’ NIY (A/B) 6.6% 4.9% 5.3% 5.6% 6.6% 4.9% 5.6% 5.6%
1 Figures in the above table include investment properties and properties held for sale and exclude owner-occupied premises, student accommodation and hotel.
iii) EPRA vacancy
The EPRA vacancy rate calculates vacancy as a proportion of the ERV of the total portfolio.
2025
£m
2024
£m
ERV of vacant space (A) 16.8 15.1
ERV of let space 98.7 103.9
ERV of total portfolio (B) 115.5 119.0
EPRA vacancy rate (A/B) 14.5% 12.7%
iv) EPRA capital expenditure
This measure shows the total amounts spent on the Group’s investment properties on an accrual and cash basis with a split
between expenditure used for the creation of incremental space and enhancing space (‘no incremental space’). The sum of these
expenditures is included in Capital expenditure in note 12 of the Group financial statements. The Group is not party to any joint
venture arrangements, therefore this measure is not disclosed.
Notes
2025
£m
2024
£m
Acquisitions 12 – –
Amounts spent on the completed investment property portfolio: 12
Creation of incremental space – –
Creation of no incremental space 14.3 21.1
EPRA capital expenditure 14.3 21.1
Conversion from accrual to cash basis 3.0 1.2
EPRA capital expenditure on a cash basis CF
1
1 7.3 22.3
1 Group statement of cash flows.
CLS Holdings plc Annual Report and Accounts 2025178
Supplementary disclosures (unaudited) continued
Unaudited unless otherwise stated continued

Alternative Performance Measures continued
v) EPRA cost ratios
The Group has a policy of capitalising certain staff costs directly attributable to the management of the development
ofinvestment properties as outlined in note 2.5 of the Group financial statements.
Notes
2025
£m
2024
£m
Administration expenses 4 16.4 1 7. 7
Other property expenses 4 1 7. 3 18.1
Less: Other investments segment and student accommodation operating costs (5.0) (6.8)
28.7 29.0
Net service charge costs 4 7. 9 6.1
Service charge costs recovered through rents but not separately invoiced (0.3) (0.3)
Dilapidations receipts (2.1) (1.2)
EPRA costs (including direct vacancy costs) (A) 34.2 33.6
Direct vacancy costs (9.1) (8.2)
EPRA costs (excluding direct vacancy costs) (B) 25.1 25.4
Gross rental income 4 94.8 100.2
Service charge components of gross rental income (0.3) (0.3)
EPRA gross rental income (C) 94.5 99.9
EPRA cost ratio (including direct vacancy costs) (A/C) 36.2% 33.6%
EPRA cost ratio (excluding direct vacancy costs) (B/C) 26.6% 25.4%
vi) EPRA LTV
Notes
2025
£m
2024
£m
Borrowings from financial institutions 19 901.9 999.2
Net payables 46.6 52.4
Cash and cash equivalents 16 (49.4) (60.5)
Net debt (A) 899.1 991.1
Properties held as property, plant and equipment 13 39.1 40.7
Investment properties 12 1,570.8 1,676.5
Properties held for sale 14 94.9 133.0
Financial assets – equity investments 0.8 0.6
Total property value (B) 1,705.6 1,850.8
EPRA LTV (A/B) 52.7% 53.5%
vii) EPRA like-for-like gross rental income growth
This measure shows the growth in gross rental income on properties owned throughout the current and previous year. This growth
rate excludes properties held for development, acquired or disposed in either year.
2025 2024
(Decrease)/increase in gross rental income (%) (6.5) 1.2
(Decrease)/increase in gross rental income (£m) (6.5) 1.1
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CLS Holdings plc Annual Report and Accounts 2025 179
Additional
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Financial
statements

Alternative Performance Measures continued
2. Other APMs
i) Total Accounting Return (per share)
Notes
2025
pence
2024
pence
EPRA NTA at 31 December 5 200.7 215.0
Distribution – prior year final
1
25 2.7 5.4
Distribution – current year interim 25 1.3 2.6
Less: EPRA NTA at 1 January (A) 5 (215.0) (253.0)
Return before dividends (B) (10.3) (30.0)
Total Accounting Return (NTA) (B/-A) (4.8)% (11.9)%
1 The 2024 and 2023 final dividends were 2.68 pence and 5.35 pence respectively but have been rounded to the nearest 0.1 pence for the purpose of this note.
ii) Net debt and gearing
Notes
2025
£m
2024
£m
Borrowings short-term 19 198.0 372.4
Borrowings long-term 19 703.9 626.8
Add back: unamortised issue costs 19 3.9 4.3
Gross debt 19 905.8 1,003.5
Cash and cash equivalents 16 (49.4) (60.5)
Net debt (A) 856.4 943.0
Net assets (B) 742.1 784.2
Net gearing (A/B) 115.4% 120.2%
iii) Balance sheet loan-to-value
Notes
2025
£m
2024
£m
Borrowings short-term 19 198.0 372.4
Borrowings long-term 19 703.9 626.8
Less: cash and cash equivalents 16 (49.4) (60.5)
Net debt (A) 852.5 938.7
Investment properties 12 1,570.8 1,676.5
Properties in plant, property and equipment 13 39.1 40.7
Properties held for sale 14 94.9 133.0
Total property portfolio (B) 1,704.8 1,850.2
Balance sheet loan-to-value (A/B) 50.0% 50.7%
CLS Holdings plc Annual Report and Accounts 2025180
Supplementary disclosures (unaudited) continued
Unaudited unless otherwise stated continued

Alternative Performance Measures continued
iv) Administration cost ratio
CLS’ administration cost ratio represents the cost of running the property portfolio relative to its net income. CLS uses this
measure to monitor the efficiency of the business as it focuses on the administrative cost of active asset management across
threecountries.
Notes
2025
£m
2024
£m
Administration expenses 4 16.4 1 7. 7
Less: Other investment segment 4 (0.1) (0.1)
Underlying administration expenses (A) 16.3 1 7. 6
Net rental income (B) 4 101.3 114.0
Administration cost ratio (A/B) 16.1% 15.4%
v) Dividend cover
Notes
2025
£m
2024
£m
Interim dividend 25 5.2 10.3
Final dividend (note: 2025 final dividend is subject to approval at the AGM) 25 10.7 10.7
Total dividend (A) 15.9 21.0
EPRA earnings (B) 5 30.2 36.4
Dividend cover (B/A) (times) 1.90 1.73
vi) Interest cover
Notes
2025
£m
2024
£m
Net rental income 4 101.3 114.0
Administration expenses 4 (16.4) (17.7)
Other property expenses 4 (17.3) (18.1)
Group revenue less costs (A) 67.6 78.2
Finance income (excluding derivatives and dividend income) 8 1.1 1.4
Finance costs (excluding derivatives) 9 (37.8) (42.3)
Net interest (B) (36.7) (40.9)
Interest cover (-A/B) (times) 1.84 1.91
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CLS Holdings plc Annual Report and Accounts 2025 181
Additional
information
Financial
statements

Administration cost ratio
Recurring administration expenses of the investment
propertyoperating segment expressed as a percentage
ofnetrental income.
Balance sheet loan-to-value (LTV)
Net debt expressed as a percentage of property assets
(including Assets Held for Sale).
Building Research Establishment Environmental
Assessment Method (BREEAM)
An environmental impact assessment method for non-
domestic buildings. Their standards cover new construction,
properties in use, as well as refurbishment and fit-out. BREEAM
In-Use enables property investors, owners, managers and
occupiers to determine and drive sustainable improvements
inthe operational performance of their buildings. It provides
sustainability benchmarking and assurance for all building types
and assesses performance in a number of areas; management,
health & wellbeing, energy, transport, water, resources,
resilience, land use & ecology, and pollution. Performance
ismeasured across a series of ratings; Good, Very Good,
Excellent and Outstanding.
Carbon emissions Scopes 1, 2 and 3
Scope 1 – direct emissions;
Scope 2 – indirect emissions; and
Scope 3 – other indirect emissions.
CDP
CDP, formerly known as the Carbon Disclosure Project,
assesses the ESG performance of all major companies
worldwide and aids comparability between organisations
toallow the investor community to assess the carbon and
climate change risk of each company.
Contracted rent
Annual contracted rental income after any rent-free periods
have expired.
Dividend cover
The ratio of EPRA earnings over the dividend paid to shareholders.
Earnings before interest, tax, depreciation
andamortisation (EBITDA)
Operating profit before revaluation and disposals and before
interest and tax, adding backdepreciation and amortisation
charges and adjusting for non-recurring items.
Earnings per share
Profit for the year attributable to the owners of the Company
divided by the weighted average number of ordinary shares
inissue in the period.
Energy Performance Certificate (EPC)
An EPC is an asset rating detailing how energy efficient a
building is, rated by carbon dioxide emission on a scale of A-G,
where an A rating is the most energy efficient. They are legally
required for any building that is to be put on the market for sale
or rent.
European Public Real Estate Association (EPRA)
A not-for-profit association with a membership of Europe’s
leading property companies, investors and consultants which
strives to establish best practices in accounting, reporting and
corporate governance and to provide high-quality information
to investors. EPRA’s Best Practices Recommendations includes
guidelines for the calculation of the following performance
measures which the Group has adopted.
EPRA capital expenditure
Investment property acquisitions and expenditure split between
amounts used for the creation of additional lettable area
(‘incremental lettable space’) and enhancing existing space
(‘noincremental space’) both on an accrual and cash basis.
EPRA cost ratio
Administrative & operating costs (including & excluding costs
ofdirect vacancy) divided by gross rental income. A measure to
enable meaningful measurement of the changes in a company’s
operating costs.
EPRA earnings per share (EPS)
Earnings from operational activities. A measure of a company’s
underlying operating results and an indication of the extent to
which current dividend payments are supported by earnings.
EPRA like-for-like rental growth
Like-for-like net rental growth compares the growth of the
netrental income of the portfolio that has been consistently
inoperation, and not under development, during the two full
preceding periods that are described.
EPRA net reinstatement value (NRV)
NAV adjusted to reflect the value required to rebuild the entity
and assuming that entities never sell assets. Assets and
liabilities, such as fair value movements on financial derivatives
are not expected to crystallise in normal circumstances and
deferred taxes on property valuation surpluses are excluded.
EPRA net tangible assets (NTA)
Assumes that entities buy and sell assets, thereby crystallising
certain levels of unavoidable deferred tax.
EPRA net disposal value (NDV)
Represent the shareholders’ value under a disposal scenario,
where deferred tax, financial instruments and certain other
adjustments are calculated to the full extent of their liability,
netof any resulting tax.
CLS Holdings plc Annual Report and Accounts 2025182
Glossary

EPRA net initial yield (NIY)
Annualised rental income based on the cash rents passing at the
balance sheet date, less non-recoverable property operating
expenses, divided by the market value of the property portfolio,
including estimated purchasers’ costs.
EPR A LT V
The aim of EPRA LTV is to assess the gearing of the
shareholder equity within a real estate company by adjusting
IFRS reporting. The main overarching concepts are: any capital
which is not equity is considered as debt irrespective of its IFRS
classification; it is calculated on proportional consolidation; and
assets are included at fair value and net debt at nominal value.
EPRA ‘topped-up’ net initial yield
This measure incorporates an adjustment to the EPRA NIY
inrespect of the expiration of rent-free periods (or other
unexpired lease incentives such as discounted rent periods
andstep rents).
EPRA vacancy rate
Estimated rental value (ERV) of immediately available space
divided by the ERV of the lettable portfolio.
Estimated rental value (ERV)
The market rental value of lettable space as estimated by the
Group’s valuers.
GRESB
GRESB assesses and benchmarks the environmental, social
andgovernance (ESG) performance of real assets, providing
standardised and validated data to the capital markets.
Interest cover
The aggregate of group revenue less costs, divided by the
aggregate of interest expense and amortisation of loan issue
costs, less interest income.
Key performance indicators (KPIs)
Activities and behaviours, aligned to both business objectives
and individual goals, against which the performance of the
Group is annually assessed. Performance measured against
them is referenced in the annual report.
Liquid resources
Cash and short-term deposits.
Net assets per share or net asset value (NAV)
Equity attributable to the owners of the Company divided
bythe number of ordinary shares.
Net debt
Total borrowings less liquid resources.
Net debt:EBITDA ratio
Net debt divided by EBITDA.
Net gearing
Net debt expressed as a percentage of net assets attributable
to the owners of the Company.
Net initial yield
Net rent on investment properties and properties held for sale
expressed as a percentage of the valuation of those properties.
Net rent
Passing rent less net service charge costs.
Over-rented
The amount by which ERV falls short of the aggregate
ofcontracted rent.
Passing rent
Contracted rent before any rent-free periods have expired.
Real Estate Investment Trust (REIT)
A Real Estate Investment Trust (REIT) is a vehicle that allows an
investor to obtain broadly similar returns from their investment,
as they would have had they invested directly in property. In the
UK a REIT is exempt from UK tax on the income and gains of its
property rental business. A REIT in the UK is required to invest
mainly in property (75% of total Group’s assets and profits must
be in the tax exempt business) and to pay out 90% of the profits
from its property rental business as measured for tax purposes
as dividends to shareholders (property income distributions).
Inthe hands of the shareholder, property income distributions
(PID) are taxable as profits of a UK property rental business.
The PID is received net of withholding tax, unless it is to a
recipient entitled to gross payment.
Rent reviews
Rent reviews take place at intervals agreed in the lease (typically
every five years in the UK) and their purpose is usually to adjust
the rent to the current market level at the review date. For
upwards only rent reviews, the rent will either remain at the same
level or increase (if market rents are higher) at the review date.
Rent roll
Contracted rent.
Return on equity
The aggregate of the change in equity attributable to
theowners of the Company plus the amounts paid to the
shareholders as dividends and the purchase of shares in
themarket, divided by the opening equity attributable
totheowners of the Company.
Reversion
The amount by which ERV exceeds contracted rent.
Strategic
report
Corporate
governance
CLS Holdings plc Annual Report and Accounts 2025 183
Additional
information
Financial
statements

Streamlined energy and carbon reporting
(SECR)
The SECR regulations were introduced in April 2019 and require
companies incorporated in the UK to undertake enhanced
disclosures of their energy and carbon emissions in their
financial reporting.
The Task Force on Climate-related Financial
Disclosures (TCFD)
Set up by the Financial Stability Board (FSB) in response to the
G20 Finance Ministers and Central Bank Governors request for
greater levels of decision-useful, climate-related information;
the TCFD was asked to develop climate-related disclosures that
could promote more informed investment, credit (or lending),
and insurance underwriting decisions. In turn, this would enable
stakeholders to understand better the concentrations of
carbon-related assets in the financial sector and the financial
system’s exposures to climate-related risks.
Total Accounting Return – basic
The change in IFRS net assets before the payment of dividends.
Total Accounting Return – EPRA
The change in EPRA NTA before the payment of dividends.
Total Shareholder Return (TSR)
The growth in capital from purchasing a share, assuming that
dividends are reinvested every time they are received.
True equivalent yield
The capitalisation rate applied to future cash flows to
calculatethe gross property value, as determined by the
Group’s external valuers.
UN Sustainable Development Goals (SDGs)
The 2030 Agenda for Sustainable Development, adopted by
allUnited Nations Member States in 2015, provides a shared
blueprint for peace and prosperity for people and the planet,
now and into the future. At its heart are the 17 Sustainable
Development Goals (SDGs), which are an urgent call for action
by all countries – developed and developing – in a global
partnership. They recognise that ending poverty and other
deprivations must go hand-in-hand with strategies that improve
health and education, reduce inequality, and spur economic
growth – all while tackling climate change and working to
preserve our oceans and forests.
CLS Holdings plc Annual Report and Accounts 2025184
Glossary continued