XP POWER LIMITED

ANNUAL REPORT & ACCOUNTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Innovation

that endures

Solutions

that deliver

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

Powering

Financial

highlights

Operational

highlights

the world’s

critical systems

Order

intake

Total

revenue

£225.9m

£230.1m

2024: £181.6m 2024: £247.3m

Adjusted profit

before

tax

(Loss)/profit

before

tax

£9.5m

£(7.3)m

•

Cost discipline maintained and

further efficiency improvement

actions taken

•

Inventory reduced and optimised,

maximising cash

•

Full pipeline of new products with

24 new products launched

•

Improved customer service and

satisfaction levels

•

Improved supply chain efficiency

Founded in 1988 and

listed on the London

Stock Exchange in 2000,

XP Power now employs

c. 2,100 people across

Europe, North America

and Asia.

We design and manufacture

a diverse portfolio of

power converters, with

unrivalled customer service

and support.

We focus on sectors where

power is mission-critical,

and failure is not an option.

Our enduring relationships

are built on a reputation

for quality.

2024: £13.8m 2024: £(7.7)m

Adjusted

earnings

per

Leverage

ratio

22.5p

1.2x

2024: 42.9p 2024: 2.3x

Completion of construction of our

Malaysia plant, allowing closure of

our China manufacturing facility

Decision taken to exit RF market to

focus on higher profitability product

READ MORE ABOUT

OUR

SUSTAINABILITY ON

PAGES 46-81

Target

To release sufficient products to achieve at least 10% organic revenue growth

through the market cycle.

performance

We have continued to expand our product portfolio, releasing 24 products in

the year. We have provided tailored solutions for our customers with more

complex power requirements, including the new fully digital FLXPro range

07).

The release of new product platforms (solutions that are easy to modify and

can be reused over multiple sectors and applications). Expand our portfolio of

XP Carbon Rated Products (class-leading efficiency and low standby power).

component

We develop products that meet the highest level of safety requirements.

Legislation

Energy efficiency and reliability

Gross R&D spend: £25.0m (2024: £25.4m)

Revenue from new products (last three years): £5.9m (2024: £11.6m)

Proportion of revenue from modified products: 18% (2024: 19%)

Target

Organic revenue growth of more than 10% through the market cycle

performance

We continue to take pro-active action to target new customers using our

direct sales team and online marketing strategy, enhanced by our website

upgrade and new video content. Our network of distributors helps us to

access a broader range of customers.

We will continue to prioritise our resource with customers who fit our value

proposition. We de-emphasise customers who may have significant revenue

potential but for whom cost is more critical than quality and reliability, or

engineering support during the design phase

component

We continue to expand our range of Carbon Rated Product solutions, which

improves our energy-efficient offering to potential customers.

drivers

Customer penetration

Capital equipment

Proportion of revenue from new customers (last three years): 7.7%

(2024: 2%)

Proportion of project wins with new customers: 13.9% (6.4%)

Average project value: £0.1m (2024: £0.1m)

Our direct sales force is focused on working with

customers where we can leverage our capacity

to deliver complex solutions, while we utilise our

network of distributors to reach a broader range

of customers who have less complicated needs.

As an example, one of our local sales managers

has built a strong relationship with a large

metrology institute where we were recently able

to add value with a high-voltage power solution.

This customer needed to power a measuring

station for monitoring, detecting and quantifying

ionising radiation. The reliability of the power

solution was key in addressing the safety aspect

of this application.

The process of defining the problem, determining

the solution requirements and providing a solution

took around a year. During this time, our sales

and technical engineering teams were in regular

contact with the customer. We demonstrated our

ability to support the customer through technical

issues and demonstrated our ability to deliver the

required stability. We leveraged our track record

of quality to secure the contract to manufacture

and supply this bespoke solution.

Niche markets such as mass spectrometry,

semiconductor inspection and analytical

instrumentation continue to expand rapidly,

driven by demand for higher resolution, faster

throughput and improved measurement

accuracy. At the same time, equipment

manufacturers face rising challenges around

noise performance, system stability, space

constraints and digital control in increasingly

compact platforms.

The new HRF15 sets a high standard within XP

Power’s high-precision, high-voltage DC-DC

portfolio, reinforcing our market leadership

and supporting share expansion across core

analytical instrumentation markets.

This compact module delivers excellent load and

line regulation, low ripple and long-term stability

suited to critical noise-sensitive, load-dependent

applications. Exceptional programmability

enables easy integration across wide-ranging

loads. Its digital interface with intuitive UI,

advanced monitoring, data logging and multi-unit

synchronisation enhances reliability, accelerates

development timelines and supports scalable,

high-performance system architectures.

CONTINUED

Target

Organic revenue growth of more than 10% through the market cycle

During recent years, we have transitioned to a model where lower complexity

accounts are served via distributors, while our sales and engineering teams

focus on deepening relationships with major customers who have higher

spending potential.

Enhance customer awareness of XP’s offering through digital marketing,

thought leadership and targeted meetings with key customers to build

creditability and trust and demonstrate our capabilities.

component

We work with our customers to understand their needs for power efficiency

and provide the required solutions.

drivers

Capital equipment

Revenue growth (constant currency): (4%) (2024: (20%))

Revenue from the top 30 customers: £119m (2024: £114m)

Average project value: £0.1m (2024: £0.1m)

Target

To achieve a non-production employee turnover at <10% (metric excludes

production employees at our manufacturing sites where market forces mean

that high levels of employee turnover are the norm for our industry)

We continue to evolve and improve the support and development

opportunities that we give to our colleagues across the globe. Our “Safety

Begins with Me” programme has already yielded significant reduction in lost

time injury rates, thereby keeping our colleagues safer.

Embed global systems and process to support our goals and strengthen

organisational capability to deliver effectively into the future.

component

We aim to improve the physical and mental health of our employees, provide

a safe place to work and create an environment where our people can be at

their best.

drivers

Gender diversity: 51% male, 47% female, and 2% undisclosed (2024: 49%

male, 49% female, and 2% undisclosed)

Non-production employee turnover rate: 10.7% (2024: 12.2%)

Average training time (in days) per employee: 1.5 days (2024: 1.2 days)

Target

To reduce manufacturing costs, freight and logistics, and consistently improve

delivery performance

Building on prior initiatives, we continued transferring production from the

US to Vietnam to improve operational resilience and efficiency and completed

the construction of our new facility in Malaysia.

Adopt a new inventory holding strategy to improve customer service

through shortened lead times for high running products. Improve operational

efficiency from our facility in Vietnam and fully commission our new facility

in Malaysia.

component

We focus on minimising the impact that we, and our products, have on the

environment and adopt responsible sourcing practices that consider social

and environmental impacts.

drivers

Average customer lead time: 3.2 months (2024: 3.2 months)

Average inventory days: 178 days (2024: 205 days)

Gross margin: 41.9% (2024: 39.2%)

To ensure excellent health and safety performance, consistently reduce our

intensity and ensure there are no Code of Conduct breaches

Our Company is a full member of the Responsible Business Alliance (RBA),

and we follow the RBA Code of Conduct, which addresses important ethical

and environmental matters. Our near- and long-term targets for reducing our

carbon footprint are approved by the Science Based Target initiative (SBTi).

Our Sustainability Council monitors our progress towards our sustainability

targets, and we strive to achieve net zero by 2040.

We will continue to deliver on our Net Zero Plan.

We will lead our industry on environmental matters by minimising the impact

of our operations and our products on the environment and upholding the

highest standards of ethics and integrity.

Climate change

Absolute location-based Scope 1 and 2 emissions reduction: (5%)

(2024: 17%)

% of Group revenue from Carbon Rated Products: 37% (2024: 32%)

CDP climate score: A (2024: B)

An existing customer was experiencing a problem

with their current power unit where the cooling

fan was pulling dust into the unit, causing high

failure rates. The customer was investigating

bringing in a separate enclosure around the

power unit to solve this issue. Our Technology

Services Group presented an alternative option,

for a new-generation XP Power product which

could be supplied with a bespoke casing, rather

than using a separate enclosure.

The bespoke product not only improved reliability

over the previous product for the customer, due

to the lack of contamination in the power supply,

but the new product we provided to the customer

also delivered higher efficiency. By working

hand-in-hand with this customer, we were able to

provide a solution with no design compromises

as the new product was manufactured to their

exact specification. Easy integration freed up

development resources for the customer, only

one part was purchased instead of two and the

risk of failure was reduced.

The introduction of “Liberation Day” tariffs in

April 2025 introduced significant complexity

for managing imports into the US, our largest

single market by revenue. We took decisive

action to maintain compliance, protect supply

chain resilience and ensure continuity for our

customers.

Throughout the year, we worked closely with

customers to provide transparency around

product origin and tariff implications, reinforcing

trust and enabling informed decisions. We quickly

adapted and strengthened our compliance

processes to meet evolving regulations, and

partnered with leading freight and logistics

providers to access real-time tariff updates and

guidance. We shifted manufacturing output from

our China plant to our manufacturing facility in

Vietnam, where US import tariffs were lower.

Where our customers used manufacturing

sites outside of the US to integrate our power

converters into their final products, we supported

our customers through changing shipping routes

to avoid the additional administration and

negative cashflow consequences of import tariffs.

In 2025, we launched a tailored Leadership

Development programme in Germany. Building

on previous employee feedback, the programme

focused not only on traditional aspects of

leadership such delegation and organisational

management, but also on the interpersonal

core of leadership: trust, clear communication,

emotional intelligence and coaching skills.

The challenges of day-to-day operations,

cost pressures and varying leadership levels

highlighted that traditional, time-intensive

training would not be suitable for our local

leadership group. We delivered an approach

which combined neuroscience-based insights

with practical, bite-sized learning impulses.

Instead of lengthy seminars, leaders received

regular compact inputs – exercises, reflection

cards, videos and scientific articles – which could

easily be applied in daily work. We followed this

up with an in-person workshop to deepen key

concepts, practice skills and consolidate learning.

Our leaders in Germany now have skills to

provide vision, empowerment and effective

communication to their teams.

STRATEGY

ACTION

Ion implantation is among the most

energy-intensive processes in semiconductor

manufacturing, often consuming hundreds

of kilowatts and operating continuously in

high-throughput environments. As semiconductor

manufacturing and research facilities prioritise

sustainability, thermal management and

system uptime have become critical design

considerations.

The WBQ series is our first fully digital high-

voltage AC-DC platform with a minimum

efficiency of 90%, significantly reducing energy

losses, and waste heat compared to earlier

models. Also, the WBQ series is built in an

industry-leading 3U form factor, compared to

typical 5U alternatives and is less than half the

size of prior designs, reducing material usage and

system footprint. Its fully digital control loop,

intuitive user interface and data logging enable

real-time monitoring, predictive maintenance and

fault analysis, improving uptime and extending

equipment life. Together, these innovations

lower energy consumption, reduce operating

costs and support more sustainable high-power

semiconductor manufacturing.

Statutory

Results

Revenue in the year of £230.1m represents a reduction of

7% from 2024, reflecting the impact of continued customer

destocking, the clearance of higher order backlog in 2024

and headwinds from a weaker USD. Gross margin improved

to 41.9% due to improved efficiency. There was a minor

increase in operating expenses of £2.2m primarily due to

unfavourable foreign exchange movements in the first half

of the year, partially offset by cost saving actions. As a result,

operating profit was £0.7m. Loss for the year was £11.3m,

compared to £9.4m in 2024.

On an Adjusted basis the Group delivered operating profits

of £17.3m and a profit before tax of £9.5m, compared to a

profit before tax of £13.8m in 2024. The Chief Executive

Officer’s Review includes an explanation of revenue

performance and an analysis of order trends during the year.

Gross

Profit

The Group delivered a gross profit of £96.3m on revenue

of £230.1m for the year. This represents a gross margin of

41.9%, 270bps higher than 2024.

Adjusted Gross Margin of 42.7% was 170bps higher than

This strong underlying progress, and the resulting improved

margin baseline as we entered 2026, is encouraging and

should improve further as market recovery drives higher

factory utilisation.

We closely managed the increase to input costs arising

from new US tariffs by shifting delivery to customer

manufacturing sites outside of the US or fully passing

through the costs where necessary. Nearly all of the cost

increase is attributable to products made at our facility in

Vietnam.

Reported gross margin increased by slightly more than

Adjusted Gross Margin in the year due to the release in 2025

of one-off inventory provisions created in 2024 relating to

our decision to exit the China semiconductor market, which

proved to be partially surplus to requirements.

Operating

Expenses

Operating Expenses in 2025 totalled £95.6m, of which

£14.7m were Adjusting Items as explained more fully below.

Excluding the impact of these Adjusting Items, Adjusted

Operating Expenses for 2025 were £80.9m, a £4.7m (6%)

increase from 2024.

The increase was largely driven by the following non-

discretionary and accounting items totalling £3.6m:

Amortisation of capitalised product development costs

increased by £0.6m, as a number of significant products

were brought to market.

The capitalisation of product development costs reduced,

increasing by £1.0m the amount of development spend

Adjusting

Items

being charged to the income statement. Only project

work at the development stage can be considered for

capitalisation, but all of these activities are critical to

the success of the business, including testing of existing

products against new regulatory requirements.

We recorded an impairment of £1.2m relating to

capitalised product development costs for a customer

project which was cancelled due to US export control

restrictions (2024: £0.2m).

Foreign exchange movements increased operating

expenses by £0.6m. The weakening of the US dollar

resulted in a large foreign exchange cost headwind in the

first half of the year. This partly reversed in the second

half of the year, benefiting from actions taken to reduce

our foreign exchange exposure.

Share based payment expenses increased by £0.4m from

an unusually low base.

Other cost categories, consisting largely of discretionary

items, therefore increased by £1.1m, or 1%, with cost saving

actions helping to fund inflationary increases.

Operating

Profit

Adjusted Operating Profit for 2025 was £17.3m compared

to £25.1m in the prior year. The total reduction in Adjusted

Operating Profit arose from:

Revenue volume reduction of £7.0m

Increase in gross margin % of £3.9m

Increase in Adjusted Operating Expenses of £4.7m

Adjusted

Results

2024 and achieved despite the headwind of reduced factory

utilisation. Gross margin expanded as the year progressed,

Items which have been treated as Adjusting and are therefore excluded from underlying operating profit are shown below.

As in prior years, Adjusted and other alternative performance

measures are used in this announcement to describe the

with the first half of the year at 41.4% and the second half of

the year at 43.9%.

Income / (cost) impact by

Income Statement line

2025 2024

Group’s results. These are not recognised under International

Financial Reporting Standards (IFRS) or other generally

accepted accounting principles (GAAP).

Adjustments are items included within our statutory results

that are deemed by the Board to be unusual by virtue of

their size or incidence. Our Adjusted measures are calculated

by removing such Adjustments from our statutory results.

The Board believes Adjusted measures help the reader to

understand XP Power’s underlying results and are used

by the Board and management team to interpret Group

financial performance. Note 5 to the Consolidated Financial

Statements includes reconciliations of statutory metrics to

The improvement arose from three main sources:

£m

Reduction of supply chain overheads, in response to

production transfers to more cost-efficient plants and

reduced activity levels generally. These actions were

announced in our Interim Results and delivered as

planned in the second half of the year. They largely

impacted our facilities on the US East Coast and in China.

Negotiated savings on raw materials purchased for our

Asia manufacturing operations, totalling c. £1m for 2025.

Manufacturing efficiency improvements, including from

Lean manufacturing techniques in Asia.

Operating

profit

Net finance

expense

Profit

before

tax

Operating

profit

Net finance

expense

Profit

before

tax

their Adjusted equivalent and provides a breakdown of the

Adjustments made.

Restructuring costs incurred in the current year of £1.4m comprised of severance payments in respect of headcount

reductions which arose primarily in our manufacturing sites in the first half of 2025 reflecting the lower levels of production

output during the year.

CHIEF FINANCIAL OFFICER’S REVIEW

profitable

and cash

generating

in an

MATT

WEBB

CHIEF FINANCIAL OFFICER

Restructuring costs

(14)

–

(1.4)

(2.3)

–

(2.3)

Exit from China Semiconductor market

2.3

(6.7)

Supply chain transformation

(1.6)

Comet legal case

(2.6)

(7.6)

Amortisation of acquired intangibles

(2.6)

(3.1)

Bid defence costs

(0.2)

Costs relating to RF exit

(8.3)

(0.2)

(8.5)

Cost relating to China factory closure

(4.0)

Total

(16.6)

(0.2)

(16.8)

(21.5)

CHIEF FINANCIAL OFFICER’S REVIEW

CONTINUED

In late 2024, changes to US trade rules restricted the export

of our products to customers in China’s Semiconductor

Manufacturing Equipment sector which resulted in us

deciding to exit this market once existing export licences had

expired and led to a provision for all inventory which was

solely for use in the China semiconductor market. During

2025, we have fulfilled some additional final orders under

licence which had not been anticipated at the end of 2024.

As a result, we have reversed the provision as inventory was

consumed, with a net benefit of £2.3m.

In January 2025 the trial judge in the Comet case ruled that

plaintiff’s legal fees and pre-judgement interest were to be

paid by the Group and, as a result, the Group was required

to purchase an additional bond (£11.7m cash outflow) in

respect of this judgement, pending the hearing of our appeal.

In September 2025, our appeal was heard by the Ninth

District Court. Legal costs for our preparation for the appeal

totalled £0.7m. Over the year an additional £1.7m of interest

was accrued on the judgements to date while the case awaits

an appeal verdict, and we incurred bond management fees

of £0.2m. Interest of £1.6m was earned by the Group in

the year on cash deposited to collateralise the surety bond

pledged in this case.

Currency

Late in 2025 the Board took the decision to exit the RF

market, with an approximately three-year run-off period to

ensure that we support current customers as they transition

to new supply arrangements. As a result, we recognised

additional provisions against inventory which would not be

required to fulfil anticipated final orders with an expense of

£3.1m. We also impaired capitalised product development

where the recoverable value was assessed as nil as the

related designs would not be used in the run-off period with

a total expense of £4.3m (of which £0.2m was capitalised

finance costs). We also provided £1.0m for severance costs

of current employees, which will be paid out on their leaving

dates. Other related costs totalled £0.1m.

The closure of our manufacturing facility in China led to a

one-off severance cost of £3.4m which was fully settled

during the year. Much of the production fixed assets and

inventory will be transferred to our Vietnam or Malaysia

plant, with the remaining assets which were not suitable for

transfer resulting in £0.4m expense as they were written

down to nil. Other related costs incurred were £0.2m.

The total cash outflow for adjusting items in 2025 was

£6.0m, the majority of which was severance costs. During

2024 the total cash outflow was £3.6m.

Net

finance

expense

Adjusted Net Finance Expense was £7.8m (2024: £11.3m).

During the year, we substantially reduced our net debt from

£93.5m to £41.5m. This reduction in net debt, together with

a reduction in applicable interest rates in the second half of

the year resulted in a significant reduction in finance costs

related to external borrowings of £3.6m. During the year

we incurred additional costs in relation to renegotiating our

bank facilities, which led to an increase in financing costs

of £0.3m.

Taxation

Adjusted Tax Expense for the year was £3.3m, with an

Adjusted Effective Tax Rate for 2025 of 34.7%. This rate

was higher than 2024 largely due to the impact of foreign

exchange losses on intercompany balances which were not

tax deductible. We took action to settle these intercompany

balances during the second half of the year which will resolve

this tax inefficiency moving forwards. Our Adjusted Effective

Tax Rate is expected to reduce to circa 25% with the return

to normal market conditions, as the current low profitability

causes unrelieved tax losses in some parts of the Group.

Cash

flows

The reported tax expense of £4.0m includes an additional tax

liability of £0.8m for an historical under provision of tax in

respect of UK transfer pricing.

Profit after tax

The Group reported a loss after tax of £11.3m compared

to a loss of £9.4m in 2024. Adjusted Profit for the Year was

£6.2m compared to £10.4m in 2024. As a result of decisive

actions taken during the year, we have been able to protect

profitability despite the significant external headwinds

explained in the Chief Executive Officer’s Review.

The basic loss per s

hare was 42.0p compared with a basic

loss per share of 40.5p in 2024. Adjusted Diluted Earnings

Per Share of 22.5p was compared with 42.9p in 2024. The

decrease in Adjusted Diluted Earnings Per Share is primarily

due to the reduction in Adjusted Profit After Tax and an

increase in the number of shares in issue due to the share

placement in March 2025.

We report our results in sterling; however, most of our revenues and costs arise in other currencies. A large proportion of our

revenue and costs are denominated in US dollars, so our results are impacted by relative movements in the currencies that

the underlying transactions arise in compared to pounds sterling. The effect of foreign currency on the change in our Adjusted

Operating Profit is illustrated below:

Adjusted

£m 2025 2024

Adjusted

£m 2024

Currency

impact

Constant

Currency

2025

Revenue

247.3

(6.9)

(10.3)

230.1

Revenue growth %

(3)%

(4)%

(7)%

Cost of sales

(146.0)

4.8

9.3

(131.9)

Gross Profit

101.3

(2.1)

(1.0)

98.2

Gross margin %

41.0%

0.3%

1.4%

42.7%

Operating expenses

(76.2)

(0.6)

(4.1)

(80.9)

Operating profit

25.1

(2.7)

(5.1)

17.3

Operating margin %

10.1%

(0.8)%

(1.8)%

7.5%

The constant currency change is calculated with reference to the prior year amount at current year exchange rates.

Adjusted Operating Profit decreased by 20% in constant currency, with a 11% impact from currency movements. Currency

movements had an overall negative impact on revenue, gross profit and operating expenses, but a positive effect on cost of

sales year-over-year.

Operating

profit

Depreciation, amortisation & impairment

17.3

17.4

25.1

15.8

EBITDA

Change

in working capital

Other items

34.7

4.2

40.9

25.0

(0.3)

cash

flow

38.9

65.6

Net capital expenditure – Product development costs

(8.7)

(10.1)

Net capital expenditure – Other assets

(7.4)

(10.1)

Net capital expenditure – Government grant

1.5

Net interest paid

(8.1)

(12.1)

Tax paid

(3.2)

(6.6)

Other items

(1.9)

(1.5)

Free Cash

Flow

11.1

25.2

CONTINUED

Adjusted Free Cash Flow remained relatively healthy at

£11.1m (2024: £25.2m). Adjusted Operating Cash Flow

totalled £38.9m, meaning we converted 225% of Adjusted

Operating Profit into cash through continued tight control

of working capital, particularly inventory. £8.7m was spent

on product development costs, £1.4m less than last year

as a smaller proportion of our ongoing investment in new

products met the accounting threshold for capitalisation.

Spending on other fixed assets totalled £7.4m, £2.7m less

than last year as we near the end of our recent cycle of

investment in infrastructure. Spending in 2025 included

£6.3m spent on construction of our new manufacturing

facility in Malaysia, bringing cash spending on the project

to date to £13.0m. While construction is complete, final

stage payments of £7.0m are due in the first half of 2026.

Spending is shown net of a £0.9m landlord contribution

toward leasehold improvements in the US. A grant of

£1.5m was received from the US government toward the

construction cost of our Silicon Valley Customer Innovation

Centre. The reduction in net finance costs also led to a

reduction in net interest paid of £3.9m. The lower tax paid

reflects the weaker underlying financial performance.

Adjusted Operating Cash Conversion of 225% excludes the

effect a one-off customer prepayment of £16.4m for 2026

deliveries.

Funding

position

and

capital

structure

Our Net Debt reduced from £93.5m at 31 December 2024

to £41.5m at 31 December 2025. We continued to prioritise

the strengthening of our balance sheet in the year. This

included reducing working capital particularly inventory,

which reduced by £14.1m from 2024, and a successful share

placing in March which raised net proceeds of £39.6m.

Our gross cash balance at the end of 2025 was £33.8m

(2024: £13.9m).

At the start of the year, our revolving credit facilities totalling

$210m matured in December 2026. By the end of the year,

following a year of significant debt reduction, we were able

to reduce the facility size to $130m and extend the maturity

materially, with approximately $100m maturing in June 2028

and $30m maturing in June 2030.

The reduced facility size continues to offer ample liquidity.

At December 2025, total liquidity, combining undrawn

headroom in borrowing facilities and cash on deposit,

totalled £51.9m.

The covenants appliable to our borrowing facilities, which

are tested at each calendar quarter end, are as follows until

maturity of the facility:

Leverage ratio: Not more than 3.0x (at

31 December 2025: 1.2x)

Interest cover: Not less than 3.0x (at

31 December 2025: 5.2x)

The Board is confident that the Group will continue to de-

lever as market conditions recover until it enters its target

leverage range of 0-1x Adjusted EBITDA.

The Director’s assessment of going concern has involved

consideration of the Group’s forecast covenant position

in various scenarios, including a severe but plausible

downside case. The Group is forecast to remain compliant

with its covenants and have ample borrowing liquidity in

all scenarios. Further details can be found in Note 2 of the

Consolidated Financial Statements. The Viability Statement is

set out on page 42.

At the end of 2025, net current assets stood at £66.9m

compared to £62.8m at the end of 2024. The principal

changes in our working capital were the inventory reduction

of £14.1m from 2024 due to further efforts taken to lower

on hand inventory levels and reduction in inventory following

the China factory closure and exit of RF business and the

increase in contract liabilities of £16.4m due to the receipt of

a large customer prepayment.

Dividends

Dividend payments were suspended in 2023. Dividends

remain an important part of the Group’s long-term capital

allocation strategy. However, the Board believes it is in

shareholders’ long-term interests for debt reduction to be

prioritised over shareholder distributions until net debt

moves sustainably closer to our long-term leverage target

range of 0-1x Adjusted EBITDA. As a result, no dividends

have been declared or proposed during, or in respect of, the

financial year ended 31 December 2025.

MATT WEBB

CHIEF FINANCIAL OFFICER

Malaysia facility ready

for commissioning

Objectives

vision

Strategic

priorities

The Group has well-established risk management processes to identify and

assess risks

To be the first-choice power solutions provider,

delivering the ultimate experience for our

customers and our people

Broaden the product portfolio

Target key accounts where XP can add value

Drive penetration to grow share of wallet

Continually enhance our global supply chain

Focus on people and talent development

Maintain leadership on environmental responsibility

The Board acknowledges its responsibility for the Group’s

internal controls and the review of their effectiveness.

We have an ongoing process for identifying, evaluating

and managing significant risks faced by the Group. The

Board completes an annual risk assessment to identify the

Group’s principal risks. The principal risks are mapped onto

a risk universe, where risk mitigation or reduction can be

tracked and monitored. This facilitates further discussions

regarding risk appetite and identifies risks that require

greater attention from the Group. Reporting on specific risks

is provided to the Board as required and the management of

principal risks is monitored by tracking actions in response to

these risks.

Risk

assessment

The Board has carried out a robust risk assessment, with

actions established to mitigate or reduce identified risks that

could undermine the business model, affect performance,

compromise solvency or liquidity, or hinder strategic

objectives.

The Board identifies emerging risks through regular updates

from senior management supported by monitoring of

external developments. This includes reviewing publications

from professional firms and industry bodies, including

external risk surveys. These insights help the Board

proactively identify new or evolving risks and consider

appropriate mitigating actions.

The identified key risks and mitigating actions are classified

according to:

the assessment of their impact level to the viability of the

business if they occurred – ranging from minor to severe

and the likelihood of a risk occurring – ranging from low

to high; and

the direction in which they are trending in (the Assessed

Trend) – risks are classified according to whether they are

becoming more or less likely to occur, or whether the risk

of occurrence remains unchanged.

Although risk identity attributes are judgemental and

qualitative, the Board finds the methodology useful for

determining the relative focus for each risk.

Whilst the risks included in this report do not constitute

an exhaustive list, they do include all risks that the Board

believes would have a severe or moderate impact on the

business if they occurred.

Risk

appetite

The Board determines the type and extent of risk that

the Company is willing to take to achieve its strategic and

likelihood and level of impact

Disruption to manufacturing

Supply chain risks

Severe

Market/customer-related risks

6 5

Product-related risks

IT/data

IMPACT

8 4

Funding/treasury

Legal & Regulatory

People-related risks

Climate-related risks

LIKELIHOOD

Control

operation

Control design

Assurance

Second Line:

Control self-assessment

First Line:

Testing of material controls

Recommendations to the Board

Review

External reporting on risk

management and control

framework.

MANAGING

OUR

RISKS

Broaden the product portfolio

Target key accounts where XP

can add value

Drive penetration to grow share

of wallet

Continually enhance our global

supply chain

Focus on people and talent

development

Maintain leadership on

environmental responsibility

Increase to risk

Decrease to risk

No change to risk

operational objectives, with a risk appetite rating applied to

each risk.

The Board’s key focus is to minimise the Group’s risk

exposure in relation to IT & Data, Funding and treasury and

Legal & Regulatory matters, as the risk appetite of the Board

in these areas is low.

The Board’s risk appetite reflects the experiences and

learnings from the pandemic, recent global supply chain

disruptions and ongoing transformation initiatives, which

strengthen our response to future disruptive events.

Risk

management

The Group manages the principal and emerging risks

identified above through a programme of mitigation and

controls and with assurance provided by three lines of

defence, outlined below, with oversight provided by the

Board and the Audit Committee:

The first line of defence includes the site’s operational

and finance teams, who are responsible for the day-

to-day management of risks and the implementation

of control procedures, supported by Group company

managers.

The second line of defence includes divisional and Group

compliance teams with oversight and monitoring from

the Executive Leadership Team and Senior Management.

The third line of defence includes independent assurance

from Internal Audit.

Emerging

risks

For the current year, the Board has not identified any new

Principal Risks. The ‘Business Transformation’ risk has been

removed as a Principal Risk, as its components are now

managed under other Principal Risks.

The assessed risk of disruption to manufacturing has

temporarily increased as, following the closure of the

Kunshan manufacturing facility, the Group will have a single

full manufacturing location in Asia for a short period of time,

while the commissioning at the Malaysia site is completed.

The Board is satisfied that this risk can be adequately

managed due to inventory build prior to the closure, spare

capacity currently available in the Vietnam site and the ability

to complete short production runs in other manufacturing

locations.

The risk related to the use of AI (both inadvertently

sharing proprietary data externally and not grasping the

opportunities presented) has been added to the ‘IT and data’

Principal Risks. During the year, the Group has implemented

a new enterprise-grade AI tool, which ensures that any

uploaded data is not shared outside of the XP environment

and which has been trained on Company-specific documents

and standards.

The ongoing impact of climate-related change and severe

weather events are assessed through our Sustainability

Committee; they are specific areas of focus and are included

in our Sustainability Report.

Principal

risks

The Board uses the risk management framework, detailed

on page 34, to identify the risks most critical to the Group.

These risks are highlighted due to their potential to disrupt

the achievement of the Group’s strategic objectives.

An event that causes the temporary or permanent loss of a

manufacturing

facility could restrict the Group’s ability to sell

products to customers.

This

could include fire, flood, infectious disease or climate-

events.

Reliance on a single Asian manufacturing site in Vietnam

following the closure of our manufacturing plant in China,

combined

with the commissioning of our new site in Malaysia,

may lead to operational disruption, capacity constraints or

delays.

impact

the Group manufactures 80% of revenues, this would

cause

short-term loss of revenues and profits, and disruption to

our

customers, which could cause reputational damage.

Mitigation

We have disaster recovery plans in place.

We hold inventory in sales markets to meet short-term

demand in the event of disruption.

We implement epidemic control and prevention measures

at all facilities in line with local guidelines and regulations.

We own key facilities or have long-term leases.

We have business interruption insurance in place.

We will establish a cross-functional commissioning team to

ensure the controlled and effective commissioning of the

Malaysia manufacturing site.

We will review and update business continuity and

disaster

recovery plans to ensure they remain current and effective.

We will review business interruption insurance annually to

ensure cover adapts to evolving risks.

1 2 3 4

The

success of the Group depends on its ability to retain key

suppliers,

ensure on-time deliveries and maintain high-quality

materials.

The

Group’s significant use of its Asian manufacturing footprint

to supply US and European markets exposes it to global

shipping

-related risks.

impact

make most of the products we sell, but are reliant on third-

party suppliers for a small number of products.

Some

key product components require relatively long lead

times,

which increases the risk of shortages at the point of

manufacture.

Poor supplier conduct or unsuitable contractual commitments

could

disrupt operations, impact quality, or create financial and

reputational

exposure.

Mitigation

We dual source components wherever possible.

We maintain an appropriate safety inventory of key

components, with levels regularly reviewed against

demand

and lead times.

We monitor risks to our transport routes, implement

contingency plans, and keep customers informed of any

issues and their potential impact.

Our Code of Conduct is issued to our suppliers, who must

agree to comply with it.

Our delegation of authority ensures appropriate review and

approval of purchasing decisions.

We will adopt a new inventory holding strategy in 2026

to increase component availability and fulfilment service

levels.

We will ensure that dual sourcing is built into new product

designs.

We will continue to monitor and review our demand

planning processes and supply chain model.

We will add to our inventory of critical components whose

delivery lead times are known to increase as markets

recover.

1 2 3 4 6

3 6

MANAGING

OUR

RISKS

Target key accounts where XP

can add value

Drive penetration to grow share

of wallet

Continually enhance our global

supply chain

Focus on people and talent

Maintain leadership on

environmental responsibility

Increase to risk

Decrease to risk

No change to risk

2 3

The semiconductor market represents a significant percentage

of Group revenue and is inherently cyclical.

The Group derives a material proportion of its revenue from

its largest customers. Gains or losses of business with these

customers may impact materially on demand for our products.

impact

Inherent cycles in the Semiconductor Manufacturing Equipment

market could significantly impact the Group’s revenue,

profitability and financial condition, both positively and

negatively, leading to unexpected changes in performance.

Losing key customers could materially impact the Group’s

performance.

We stay close to our key customers and monitor

developments in our markets for early warning signs of

changes in demand conditions.

The Group maintains conservative leverage to

accommodate any cyclicality.

We ensure the business is sufficiently diversified by sector

to balance cyclicality in any one sector.

The Group has developed plans to rapidly add capacity to

manufacturing sites if required.

We focus on retaining key customers through providing

excellent service. Members of the Executive Leadership

Team conduct a monthly review of customer complaints

non-conformances.

While customer inventory visibility is limited, our sales

teams engage with customers and incorporate this insight

into revenue projections.

We will continue to refine our forecasting processes at the

appropriate level of market/customer detail to ensure the

best possible view on future orders and revenue.

Customer concentration remains a risk due to the Group’s

focus on key accounts; however, this risk is naturally

mitigated through revenue being derived from multiple

independent programmes within the same customer and

products are typically integrated for the full life-cycle of end

We will continue to deliver excellent service and ensure

that our pricing remains competitive.

trend

1 2 3 6

Products

are recalled due to a quality or safety issue.

The

Group may fail to develop new products or respond to new

disruptive

technologies.

Transferring facilities, equipment and processes between

factories

disrupts production, affects quality and impacts

customer

deliveries.

impact

A major product recall could seriously impact the business,

causing

potential cost and reputation damage as a supplier to

critical

systems.

New

products or technologies introduced by third parties could

adversely impact the Group’s revenue.

The Group performs 100% functional testing on all its

manufactured products and conducts 100% hipot testing,

which determines the adequacy of electrical insulation. This

ensures the integrity of the isolation barrier between the

mains supply and the equipment’s end user.

Regarding contracts with customers, we limit our

contractual liability regarding recall costs.

The Group prioritises investment and works closely with

our customers to ensure that our product offering remains

market leading.

The Group implements standardised business processes

to ensure consistency, efficiency and compliance across

business units.

We will continue to enhance our product design processes.

We will review and optimise our approach to appropriate

investment in sustaining activities.

We will expand supplier quality capabilities.

We will implement a global quality engagement programme.

trend

risks

The Group is reliant on information technology in multiple

aspects

of the business from communications to data storage.

Data is potentially vulnerable to theft or encryption, and

customer channels are vulnerable to disruption.

Any

failure or downtime of these systems, or any data theft or

encryption,

could significantly impact on the Group’s reputation

or ability to operate.

Incomplete

or inaccurate data can lead to poor decision making.

Sub

-optimal use of AI could lead to missed opportunities for

efficiency

and innovation, or introduce new risks, including data

quality, bias and compliance issues.

The Group’s defined Business Impact Assessment identifies

key information assets, replication of data on different

systems or in the Cloud, an established backup process in

place and robust cybersecurity protection on our networks.

The Group uses internally produced training materials to

educate users on good IT security practice and promote the

Group’s IT policy.

A large proportion of the Group uses a single unified ERP

platform with standardised processes, comprehensive

training and robust financial reporting controls, supported

by an experienced management team and effective

governance mechanisms.

The Group has cybersecurity insurance in place.

The Group has established a Cybersecurity Steering

Committee and a Cybersecurity Roadmap to continually

strengthen governance and guide the implementation of

additional security initiatives.

We will continue to enhance our cybersecurity tools

and processes and promote heightened awareness to

cybersecurity risks among our people.

We will continue to improve quality and Group-wide

consistency of Master Data.

We will expand AI governance and broaden staff training to

include advanced AI use cases and risk awareness.

trend

risks

1 4

The

Group is reliant on external bank funding and needs to

comply with the related covenants.

Changes

in interest rates impact interest payments and charges.

Most of the Group’s sales and material purchases are in US

dollars,

which creates a natural transactional hedge. However, a

small

number of sales and costs in other currencies expose the

Group to transactional currency risks.

The

Group faces translational currency risk from reporting in

sterling.

Group could breach banking covenants and lose access

to its funding.

The full viability statement can be found on

page

42.

The Group is exposed to foreign currency fluctuations. This

could

lead to material adverse movements in reported earnings

and cash flows.

The Group sets a clear and conservative leverage policy and

performs detailed and regular cash forecasting to ensure

leverage targets are met.

The Group reviews balance sheet and cash flow currency

exposures and, where appropriate, uses forward exchange

contracts to hedge these exposures.

The Group restructures intercompany loans to eliminate

translation currency risk.

The Group manages interest costs using an interest rate

hedging policy.

We will continue regular and detailed reviews of forecast

and actual results to ensure maximum visibility of profit,

interest, net debt and bank covenant performance, to

identify any potential exposures and implement mitigating

actions.

We will continue to improve the funding position by seeking

cost savings and maximising cash generation.

We will continue to review the maturity of our debt

facilities, extending as needed to ensure funding continuity.

trend

3 6

MANAGING

OUR

RISKS

of wallet

4 6

Group is exposed to climate-related risks that could have a

negative impact on the business.

Severe

weather could affect the operations or our upstream

supply

chain.

Failing

to meet net zero targets and sustainability-related

customer

expectations could cause reputational damage,

reduced revenue and significant environmental harm.

The Group maintains a flexible manufacturing footprint to

allow us to respond to single-site disruptions for many of

our product lines.

The Group has dual-sourced supplies for material

purchases

and conducts regular reviews of safety inventories to

ensure there is sufficient stock.

The Group’s net zero transition plan includes relevant

policies and KPIs to ensure environmental targets are

delivered.

The Group implements procedures to prevent

environmental damage.

We will continue to review and respond to areas of single

point exposure for manufacturing capability and material

sourcing.

We will engage the entire organisation to meet our net

zero

targets.

1 2 3 4

The Group operates in multiple jurisdictions

with applicable

trade,

company law and tax regulations, which vary by location.

Intellectual

property, in terms of product design, is an important

feature of the power converter industry.

Group ships raw materials and finished goods internationally,

meaning

compliance with import and export laws is critical.

Global

trade policies, tariffs and export controls may limit the

Group’s ability

to trade profitably in some locations.

Group must comply with export and import rules, which

may

change

over time and could directly or indirectly impact its

ability

sell.

Failing

to comply with local law and regulations could impact the

profits and reputation of

the Group and its ability to conduct

business.

geographical location of the Group’s profits impacts on its

effective

tax rate. The Group’s effective tax rate could, therefore,

fluctuate

over time and impact on earnings and share price. If an

efficient

Group tax structure is not maintained, the effective tax

rate could also fluctuate.

enactment of new international trade controls and tariffs

may

reduce revenue from existing customers and limit the

markets in

which we can trade profitably.

New

export and import rules may limit our ability to serve some

Failure to adhere to trade compliance controls could

lead to financial penalties

The Group hires employees with relevant skills and uses

external advisers to maintain regulatory compliance.

The Group uses external specialists to manage tax risk

and regulatory compliance. The Group uses global trade

compliance software to monitor transactions.

A co-sourced Internal Audit function provides risk

assurance in targeted areas of the business and provides

recommendations for improvement.

The Group establishes a clear Health and Safety Policy and

procedures.

The Group carries out automated due diligence checks for

new customers.

We will stay current with the latest legislation and ensure

our policies and processes are updated to ensure we

remain

compliant.

We will provide comprehensive training to all sales staff to

highlight the importance of understanding and adhering to

export control regulations as they evolve.

We will continue to strengthen our global health and

safety

structure, policies and processes.

We will continue to monitor global developments in trade

policy.

Group’s future success depends on the continuing services

contributions of its Directors, senior management and other

key

personnel.

People

-related issues may arise from changing workforce

dynamics,

competition for talent, and evolving expectations

around workplace culture and career development.

loss of key employees could have a material adverse effect

on the Group’s business.

decline in employee morale and engagement could have a

significant

impact on productivity and business performance.

Organisational

design may hinder clear ownership and effective

decision

making.

Fraudulent and unethical behaviour

could have negative

reputational

impact and cause financial loss to the Group.

The Group undertakes performance evaluations and

reviews to help it stay close to its key personnel. Where

appropriate, the Group also makes use of financial retention

tools, such as share-based compensation.

The Group focuses on training, upskilling and career

progression opportunities for employees.

The Group holds an annual employee survey to assess

engagement and identify improvement actions.

The Group delivers annual Code of Conduct training

We will continue to focus on people management and

leadership development.

We will roll out updated training for line managers.

We will review the Group’s organisational structure and

associated incentive plans to ensure they continue to

support the Group’s long-term strategy

3 6

VIABILITY STATEMENT HOW WE

ENGAGE WITH

OUR

STAKEHOLDERS

In accordance with provision 31 of the 2024 UK Corporate Governance Code,

the Directors are required to assess the prospects of the Group over a period

longer than the 12 months required by the ‘Going Concern’ provision.

In accordance with section 172 of the Companies Act 2006, Directors are required to act in a way they consider, in good faith,

would be most likely to promote the success of the Company for the benefit of its members as a whole and, in so doing so,

have regard to the interests of its wider stakeholders. The Company’s statement demonstrating how s.172(1) factors informed

Board discussion and decision-making can be found on pages 98-99 of the Governance Report.

Further information on where s.172(1) factors are discussed throughout the Annual Report are set out below.

In making this assessment, the Directors considered the

Group’s current financial position, its recent and historic

financial performance and forecasts, strategy and business

model (pages 16-17), and the principal risks and uncertainties

(pages 35-41).

The Directors have determined the three-year period to

December 2028 to be an appropriate period to assess the

Group’s viability, as this timeframe is within the Group’s

strategic financial planning period used to evaluate

performance and liquidity, and aligns with the design-in cycle

that the Group has visibility of. In making the assessment,

the Directors considered a three-year period using the latest

available financial forecasts for the Group.

The Group has a business model where its products are

designed into numerous applications, with numerous

customers, in numerous geographies. The Group’s products

are all designed into capital equipment, which is generally

in production for several consecutive years, resulting in a

revenue annuity. This diversity and revenue annuity are both

deemed important factors in mitigating many of the risks that

could affect the long-term viability of the Group.

In performing their review, the Board assessed the

conservative scenarios against the controls in place to

prevent or mitigate the principal risks of the Group.

It al

so considered them against the Group’s current banking

facilities, a Revolving Credit Facility (RCF) comprised of

$130m with approximately $100m maturing in June 2028

and $30m maturing in June 2030.

In forming the viability statement, the Directors carried

out an assessment of the principal risks and uncertainties

facing the Group that could impact the business. The most

significant financial risks arise from a downturn in revenue,

either due to general market weakness or the loss of a major

customer, or operational disruption, due to temporary loss of

a facility or significant supply chain disruption.

The financial model was stress-tested with various downside

scenarios. The potential impact of the principal risks was

then considered in the context of each of these downside

scenarios. Certain subjective assumptions and judgments

were made to achieve this. Each risk scenario occurring

in isolation did not breach the Group’s borrowing facility

headroom or either of its financial covenants. The most

severe threats occurring in isolation were found to be a

prolonged closure of a manufacturing facility, or a significant

delay in the expected market recovery, particularly in relation

to the end of current destocking in our Industrial Technology

and Healthcare markets.

In the event that multiple risks were to crystallise at the

same time, then breaches of our banking covenants would

occur, but in applying a “probability and impact” approach

no breaches are identified. In the event that results started

to trend significantly below those in the forecast, additional

mitigation actions have been identified that would be

implemented which are not factored into the current

scenario analyses. These include reduction of non-critical

capital expenditure and reduction of discretionary spend.

Within the Viability Statement timeframe, the current bank

facility would need to be renewed, but there is nothing

currently to indicate that this would not be achieved.

Based on this assessment, the Directors confirm that they

have a reasonable expectation that the Group will continue

in operation and meet its liabilities as they fall due for at least

a period of three years to 31 December 2028.

S 172(1) factors

Further

information

Page

reference

likely

consequences of

any decision in the

long term

Chair’s Statement

08-09

Our Business model

16-17

Chief Executive Officer Review

18-23

Our Strategy

24-27

Chief Financial Officer Review

28-32

Managing Our Risks

35-41

Our Sustainability Strategy

The interests of the

Company’s employees

People and workplace

66-71

Board in action

96-97

Culture and Employee Engagement

100-101

Remuneration Committee Report

117-140

The need to foster the

Company’s business

relationships with

suppliers, customers

and others

Our Markets

12-15

Our Business model

16-17

Chief Executive Officer Review

18-23

Sustainability Report

46-80

Board in action

96-97

Shareholder communication

103-104

The impact of the

Company’s operations

on the community and

the environment

18-23

Our Strategy

24-27

Our Sustainability Strategy and Our Strategy in action

44-45

Our Sustainability Report and TCFD

46-80

The Company’s

desire to maintain a

reputation for high

standards of business

conduct

16-17

Ethics and Compliance

72-73

Introduction to Governance

86-87

Risk management and internal control

103

Culture and Board oversight

100

f. The need to act fairly

between members of

the Company

Corporate Governance Report

86-104

Remuneration Committee Report

117-140

Directors’ Report

141-144

OUR SUSTAINABILITY STRATEGY OUR STRATEGY IN ACTION

At XP Power, sustainability is a cornerstone of our strategy and driver of growth. It is

central to our vision of being a trusted partner for our customers and a recognised leader in

sustainability within our industry.

What we’ve

done

this year

We made significant improvements in our health and

safety performance with a 64% reduction in Injury Rate

(TRIR) and 79% reduction in Lost Time Injury Rate (LTIR)

Internal Audit Score; and Local Impact Programmes.

Through the dashboard, we can further identify

site-specific opportunities to improve our performance

and work towards our Net Zero by 2040 target.

Sustainability guides our efforts to minimise negative impacts

on stakeholders and the environment while creating value

across our entire value chain. It also reinforces our “Powering

Progress” initiatives as well as our Safety and Quality

frameworks.

Our sustainability strategy addresses issues identified

as material through our 2021 materiality assessment

(see page 54 of our 2021 Annual Report) and is reconfirmed

through continued engagement with internal and external

stakeholders.

We group our material issues under four areas: Sustainable

Products, Environmental Leadership, People and Workplace,

and Ethics and Compliance.

People and

Workplace

vs 2024.

We transformed our Environmental, Health and Safety

(EHS) training approach by establishing a global EHS

programme that delivered universal standards across

all locations, ensuring consistent practices, clear

accountability and site-level compliance worldwide.

In 2025, we reassessed our supplier engagement

programme and enhanced it by expanding ESG surveys

to manage risks. We launched the process in a pragmatic,

value-driven way, with a view to expanding its scope

over time.

We continued to integrate the Product Carbon Rating

system launched last year to influence our sales and bring

2026

plan

We will develop and implement an action plan that will

help us deliver improvements against key rating agencies

such as MSCI and EcoVadis.

We will continue to assess our sales and New Product

Development (NPD) against our Carbon Rating

Framework with further progression on higher efficiency

open-frame products and expansion of framework

coverage to include more products.

We will strengthen sustainability culture by driving

meaningful engagement, ensuring leaders and employees

connect sustainability goals with their work, and building

We ensure that XP Power

is a workplace in which

our people can be at their

best. We maintain a safe,

diverse and inclusive

environment, which

attracts and retains the

best talent.

Our sustainable business

goal is to improve the

physical and mental health

of our employees, provide

them with a safe place

to work and create an

environment in which our

people can be their best.

Link

Material issues

04 05 06 08

We uphold the highest

standards of business

ethics and integrity.

Our sustainable business

goal is to have zero

breaches of our Code of

Conduct and uphold the

highest standard of ethics

and integrity.

Link

Material issues

more efficient products to market. In 2025, we launched

11 product families (2024: 6) in our highest efficiency

ratings of Titanium, Platinum or Gold.

In recognition of the strength of our climate transparency

and action, we received an A in our CDP Climate Change

2025 disclosure, from a B in 2024, placing us in the top

4% of c.20,000 assessed companies.

We received EcoVadis Bronze Medal status for our 2025

disclosure, which placed us in the top 30% of businesses

assessed. Our overall score improved from 60/100 to

65/100, and we aim to improve further this year.

We launched our “Powering Progress” initiative, based on

the three pillars of Quality, Sustainability and Safety. The

initiative provides a platform for team engagement and

internal ambition in 2026.

We developed a site-specific Sustainability Dashboard to

better monitor site performance against our new KPIs:

Energy Efficiency (energy/output); Waste Diversion;

ESG

indicators

Rating

agency

scores

a culture of visibility and shared ownership.

We will implement Responsible Business Alliance (RBA)

standards by developing and deploying a scalable

management system to meet customer expectations

while navigating RBA protocols.

We will continue our roll-out of solar installations across

our estate, driving progress towards our 2040 Net

Zero target, engaging employees and showcasing our

sustainability leadership.

We will enhance supplier engagement through

expanded ESG surveys to manage risks, while selecting

a practical tool and launching the process in a pragmatic,

value-driven way.

We will elevate electrical safety as a core risk-reduction

focus by standardising practices across sites and engaging

employees in hazard identification and elimination goals.

UN SDGs

We engage with the following rating agencies to assess our sustainability performance and delivery

against our sustainability strategy:

Material issues key:

Product responsibility (safety and quality)

Responsible supply chain

Product solutions and innovation

Attracting retaining and rewarding talent

Employee welfare

Health and Safety (inc. Occupational)

Ethical conduct and compliance

Diversity and equal opportunity

Energy efficiency

Waste management

Emissions

Our Sustainability Council delivers the XP Power sustainability action plan and, within this, the net zero action plan. The CEO

chairs the Council and receives support from sustainability representatives within each business unit, who play an active part

in reporting and leading site ESG initiatives. Full details of our sustainability governance model and its responsibilities are

outlined in our Climate-Related Risk Report on pages 56-65.

More information on our engagement with stakeholders can be found in our Section 172 statement (page 98).

We produce quality

products that are safe

solve our

customers’

power problems.

Our power converters are

safety critical elements

of the end application

and provide an isolation

barrier

between the end

user

and relatively high-

voltage mains electricity.

Material

issues

We minimise the impact

that

we, and our products,

have

on the environment.

We adopt responsible

sourcing practices that

consider social and

environmental

impacts.

goal

is to lead our

industry

environmental matters,

and minimise the impact

we, and our products,

have on the environment.

Material

issues

MSCI

(2024: B)

Non-Prime with a decile

ranking of 3 (2024: C,

Non-Prime with a decile

ranking of 3)

score:

48.05

score:

66.7

(Strong)

within

the Electrical

Equipment Industry

17.6

(Low Risk)

65/100

‘Bronze Medal’

Ethics and

Compliance

In the following chapters, we report

on our performance in 2025 in

line

with our strategic pillars on

sustainability.

ETHICS

AND COMPLIANCE

SUSTAINABILITY REPORT

SUSTAINABLE PRODUCTS

How this strategic pillar links to the UN SDGs:

UN SDG 9 “Industry, innovation and infrastructure” in

promoting sustainable industrialisation, and UN SDG 12

“Responsible consumption and production” in the efficient

use of natural resources.

Our R&D investment drives our ambition to be an industry

leader on sustainability. We have one of the broadest ranges

of efficient products in our industry.

To maintain our leadership position, we recognise a continued need to develop

low-carbon products that solve our customers’ power problems, optimise energy

efficiencies and safety, and remain cost effective.

The carbon footprint of power conversion products is dominated by their lifetime

conversion efficiency. By increasing energy efficiency, we can make a significant

reduction to the lifetime environmental impact of a power system and the

equipment into which it is installed, while supporting compliance with applicable

downstream energy-efficiency criteria.

By developing smaller power conversion products, which consume less physical

material and reduce component count, we can also further reduce our carbon

footprint and help our customers limit their environmental impact.

Sustainable

aquaculture

Sea lice control is a major challenge in salmon and

trout aquaculture. Traditional chemical and mechanical

delousing methods can harm marine ecosystems, increase

fish stress and contribute to parasite resistance. As the

industry moves towards more sustainable practices,

optical, laser-based delousing systems are emerging as a

low-impact alternative.

XP Power’s CCR200, a 200W high-efficiency AC-DC

power supply, was selected to power a low-energy laser

delousing system deployed in commercial aquaculture.

CCR200 delivers stable, efficient power to the system’s

optical sensors, control electronics and precision laser

modules, enabling continuous, unattended operation.

CASE STUDY

High conversion efficiency minimises energy losses and

heat generation, reducing overall power consumption

and life-cycle emissions. Reliable operation supports

non-invasive, chemical-free lice removal, improving

fish welfare while protecting surrounding marine

environments.

By combining efficiency, reliability and compact design,

the CCR200 series demonstrates how XP Power enables

sustainable innovation, helping aquaculture operators

reduce environmental impact while maintaining high

system performance.

series

The FLXPro’s compact size, high power density and

extensive range of user-defined performance parameters

reduced application size, complexity and component

count while enhancing end application efficiency,

addressing application space constraints and the need

for increased power. Designed with SiC/GaN technology

and a fully digital architecture, the FLXPro achieves

efficiencies up to 93%, which reduces system operating

costs and cooling requirements. With these improvements

in efficiency versus the fleXPower series, our initial

calculations indicate ~20% reduction in carbon emissions.

Additionally, multiple internal temperature measurements

enable fast status checks through extensive temperature

diagnostics, which drive intelligent fan control and over

temperature warnings and alarms.

Material issues UN SDGs

Sustainable products

We produce quality products that

are safe and solve our customers’

power problems.

Our power converters are

safety-critical elements of the end

application and provide an isolation

barrier between the end user

and relatively high-voltage mains

electricity.

During the year, our Vietnamese site led the

development of a more sustainable packaging

initiative. The site designed and tested alternative

packaging solutions that reduce or eliminate foam

and plastic, using recyclable and renewable materials.

The team partnered with a supplier to develop a

corrugated-based prototype. The initial prototype

underwent drop testing but did not meet performance

requirements, indicating that further design

strengthening is needed. During the next phase, we

will refine the packaging design with the supplier,

develop a revised prototype and conduct a new round

of performance testing. The goal remains to transition

towards recyclable and renewable packaging materials

while ensuring product protection and logistics

integrity.

SUSTAINABILITY REPORT

SUSTAINABLE PRODUCTS

2025 Product Carbon Rating Framework results

During 2025, we revisited the carbon rating for our low voltage DC-DC portfolio and have

increased the scope of the Product Carbon Rating Framework (PCRF) to include them, based

on conversion efficiency, to identify products with the lowest operational losses. These

products are now included in the overall sales data by carbon rating, allowing us to monitor

performance across the entire low-voltage portfolio.

Our PCRF divides products into five groups reflecting various efficiency levels – Titanium, Platinum, Gold, Silver and Bronze.

This creates an easy and transparent process for customers to identify external and component power supplies with the

highest energy efficiency and lowest waste power.

In 2025, 53% of Group revenue (86% of sales volume) were included in the analysis boundary of our Product Carbon Rating

Framework.

In 2025, 14% of sales by volume came from Titanium and Platinum products, 33% were Gold products and 25% Silver. From a

revenue perspective the percentage of Group revenue from Carbon Rated Products increased from 32% in 2024, after adding

the DC-DC portfolio into the 2024 base, to 37% in 2025.

Internally, we can better grade our products and manage

our sales towards more efficient products to reduce our

Scope 3 downstream emissions. We will not set any public

sales targets on these criteria as we need to balance our

customers’ commercial considerations alongside improving

efficiency.

2025 marked a significant improvement over 2024:

Launched 20 carbon-rated product families, 17 of which

were Titanium, Platinum or Gold, which have our highest

efficiency ratings.

Two of our introduced products were Titanium rated.

Number of

Carbon

product

rating

introduced

Titanium

Platinum

Gold

Silver

Boosting

innovation

We embed environmental considerations in our product

development process with “Design for Sustainability” serving

as an important area of focus reviewed by our Sustainability

Council. Our design process considers energy efficiencies

in product manufacturing and in the product use-phase, in

addition to products’ various applications in the broader

energy transition. Our New Product Development process

is guided by a sustainability policy, which requires the

development team, where economically feasible, to maximise

product efficiency and reduce the component count.

Emerging indications suggest that customers focus more

on in-use efficiency. Interest in our FLXPro power supply

series is a good example of this, as it boasts a market-leading

efficiency of 93%, which helps to reduce our customers’

carbon footprints.

Our product design process considers:

Energy efficiency – We consistently lead the industry in

developing high-efficiency XP Carbon Rated Products

in the industrial and healthcare sectors, consuming less

electricity in powering the application or on standby,

resulting in significantly reduced CO

emissions over the

lifetime of the customers’ equipment (c.7–10 years).

Novel materials – Where possible, we introduce novel

materials into our higher-end products, such as ultra-

efficient silicon carbide devices. Future developments

in power transistor technology are expected to

significantly reduce the size of power converters, which

will increase their efficiency in some applications. We

will continue to investigate opportunities to reduce this

component count.

Product life-cycle management – Our design process

considers the complete product life-cycle of our power

conversion products from the outset, extending useful

product life wherever possible. Characteristics that

improve energy efficiency also increase reliability and

useful lifetime, as highly efficient products run cooler,

which reduces the impact on heat-sensitive components,

such as electrolytic capacitors. This year, we started a

cradle-to-grave product carbon footprint on two of our

products in accordance with the GHG Protocol Product

Standard. The goal was to compare carbon performance

across the products’ life-cycles and identify carbon

hotspots. We are finalising the results of the product

carbon footprint and will disclose further detail on the

results in the coming months.

Hazardous substances – We avoid the use of hazardous

substances in our products, facilitating the recycling at

the end of their lifetime and reducing their environmental

impact.

Low-carbon manufacturing – We also consider energy

use in the manufacturing process. Post-manufacturing,

products traditionally undergo stress testing (burn-in)

to eliminate early failures. We actively reduce burn-in

where we can and we recycle burn-in power into the

manufacturing facility to significantly reduce our carbon

footprint.

Product safety – A power converter is critical to the

safety of any electrical system or application as it

provides the isolation barrier between the end-user and

potentially lethal high-voltage mains electricity. 74% of

our sites in 2025 are certified to ISO 9001, and we carry

out employee training to ensure product safety.

Packaging – We need to improve our use of plastics

within our product packaging. While most products are

shipped using cardboard containers, many items are

still packed in plastic or foam. We aim to optimise our

packaging to become more sustainable and focus on

more renewable materials.

revenue 2025

Low Carbon Power Titanium

Low

Carbon Power

Platinum

Low Carbon Power Bronze

Low Carbon Power Titanium

Low

Carbon Power

Platinum

Low Carbon Power Bronze

SUSTAINABLE

PRODUCTS

Product

Responsibility

Policy

Our Product Responsibility Policy outlines our commitment

to the responsible design, manufacturing and disposal

of products, and their positive impact on individuals,

society and the environment. The policy can be found

here: corporate.xppower.com/sustainability/policies-and-

procedures.

Responsible sourcing and

We require all suppliers to adhere to our Code of Conduct

and Supply Chain Policy, which cover diversity, modern

slavery, human trafficking, health and safety, business

integrity and ethics, the environment and sustainability. It

is vital that our suppliers apply the same principles of value,

transparency and respect as we do.

Our supplier qualification and audit programme evaluates

suppliers’ adherence to our Code of Conduct and Supply

Chain Policy and we disengage from those who fail to meet

these standards. As part of our commitment to achieving net

zero, we will further engage with suppliers and component

distributors to address and reduce emissions across our

upstream supply chain.

This year, we have reassessed our supplier management

strategy, which will help improve information flow between

XP and our suppliers, improve transparency and support our

broader corporate objective for supply chain resilience. We

are currently developing a new ESG Supplier questionnaire,

risk assessments, supplier non-conformance procedures,

training plans and a new supplier metrics scorecard to track

progress. We plan to roll this out during 2026.

XP Power’s Code of Conduct and Supply Chain Policy are

available at corporate.xppower.com/sustainability/policies-

and-procedures.

Conflict

minerals

We support initiatives and regulations to avoid the use of

any “conflict minerals”, or 3TG, which originate from mining

operations in the Democratic Republic of the Congo (DRC)

and adjoining countries. We only purchase our electronic

components from reputable sources, and materials such

as solder are purchased from vendors on the Conformant

Smelter & Refiner Lists. We obtain information from our

suppliers, concerning the origin of the metals used in the

manufacture of our products, to assure our stakeholders that

we do not knowingly use conflict minerals.

Our supply chain organisation is responsible for the

qualification and ongoing monitoring of our suppliers. We

can confirm that 100% of our products’ minerals come from

verified conflict-free suppliers. XP Power’s policy on conflict

minerals is set out at xppower.com/company/policies.

Substances

concern

Our use and management of substances of concern in our

operations is conducted within the bounds of international

regulation and our Environmental Management System.

We are governed by ROHS, REACH and Conflict minerals

directives and our main production sites are ISO 14001

approved. With third-party-audited systems in place, we

ensure we have appropriate controls in our operations for

the management of substances of concern.

Product

recall

procedure

XP Power has an established product recall system, which

assigns responsibilities for recalled products, enabling us

to monitor product safety and performance. All customer

complaints, field non-conformances and manufacturing

defects related to the safety or quality performance of an

XP Power product are investigated. The investigation and

failure analysis is reviewed by our Quality and Engineering

teams. If the return is a potential safety risk or abnormal

field reliability issue, then we initiate and coordinate a Recall

Committee team meeting. The CEO is informed immediately

if there is a potential safety issue. If it is agreed that a recall

is the appropriate action, then a Recovery Plan must be

developed by the Recall Committee. Product performance

feedback and return data are monitored and documented,

and appropriate corrective and preventive actions are

implemented as needed.

How this strategic pillar links to the UN SDGs:

UN SDG 13 “Climate action”

XP Power recognises the significance of climate change and

aims to reduce its climate impact across all operations by

managing and reducing carbon emissions.

Our near-term and long-term targets are approved by the SBTi, and our targets

reaffirm our long-term goal of net zero across our value chain by 2040. More detail

on our targets and plans for achieving them are included in our Net Zero Transition

Plan corporate.xppower.com/storage/reports/XPPower-NetZero2023.pdf.

Our transparency commitments include regular public disclosures of our carbon

emissions, collaboration with CDP Climate Change, and reporting against

TCFD recommendations (page 56), which includes details of our oversight, risk

assessment and climate-related strategy.

Managing environmental

The Group’s comprehensive environmental policy

outlines our commitment to continuously improving

our environmental performance. We communicate our

environmental policy and objectives to our suppliers

and employees and encourage their participation in

environmental best practices. Our environmental policy is

available at corporate.xppower.com/sustainability/policies-

and-procedures.

As part of our environmental commitment and to monitor

environmental performance, our main production centres,

which account for around 72% of the Group’s employees,

have an internationally accredited Environmental

Management System (ISO 14001). Our ISO 14001-certified

management system includes our handling and auditing

of waste and hazardous materials, among other issues.

Compliance is ensured through our internal audit process

together with external assessments by our registrar, the

British Standards Institution (BSI). Our new Sustainability

Scorecard ensures all sites are internally audited each year,

including environmental audits. The Group has had no

environmental fines in the last 12 months (2024: nil).

Material issues UN SDGs

In 2025, XP Power expanded its training framework

to include sustainability education and launched a

dedicated sustainability training video through the

LMS as part of its Earth Day initiative. The course

achieved 100% completion and significantly increased

employee engagement and awareness of XP Power’s

net zero goals, reinforcing the connection between

individual actions and environmental performance.

The success of this initiative strengthened enterprise-

wide sustainability awareness and positioned EHS

leadership to take on ownership of XP Power’s

broader sustainability programme, further integrating

safety, environmental responsibility and operational

excellence across the business.

Environmental leadership

We minimise the impact that we,

and our products, have on the

environment. We adopt responsible

sourcing practices that consider

social and environmental impacts.

Our sustainable business goal is to

lead our industry in environmental

matters, and minimise the impact

we, and our products, have on the

environment.

ENVIRONMENTAL

LEADERSHIP

Update

net

zero

Our net zero targets were approved by the Science Based Target initiative (SBTi) in 2024. This year, we continue to report our

progress against our net zero targets in line with the SBTi and Transition Plan Taskforce (TPT) criteria.

Scope

Our 2025 Scope 3 emissions were 333,445 tCO

e. This

reflects a 51% decrease on our base year emissions of

674,968 tCO

e. Our reductions in Scope 3 emissions to date

have put us on track to achieve our interim target.

Energy consumption reduction

activities

XP Power continued its programme of renewable energy

installations in 2025, with the replacement of damaged or

low-efficiency panels in Vietnam and further plans to extend

Scope 1 and 2 emissions

Near-term target

(2030)

Long-term target

(2040)

Scope

emissions

800,000

700,000

600,000

500,000

the rooftop solar array and scoping of solar installations at

other Group sites. In addition, the facility in Rosenheim,

Germany benefitted from the installation of a heat pump

170 kWh.

Our 2025 market-based operational emissions were 539 tCO

e. This reflects a 92% reduction on our base-year emissions,

which were 6,821 tCO

e. We surpassed our near-term targets largely due to our purchase of Energy Attributable Certificates

(EACs) as an interim measure to reduce Scope 2 emissions, which contribute the largest portion of our base-year emissions.

During 2025, all electrical energy within German operations was procured from renewable sources. For our operations in

the UK, USA, Singapore, Vietnam and China, we purchased EACs. This has resulted in the Group having no market-based

Scope 2 electricity emissions for 2025. The purchase of EACs will continue to be a temporary strategy until we can purchase

green energy directly from the energy provider or increase our own renewable energy generation via solar panels. Our

remaining market-based Scope 2 emissions reflect the use of municipal heat in our German operations.

400,000

300,000

200,000

100,000

Base-year

emissions

FY24

emissions

FY25

emissions

2030

target

2040

target

Scope

(market-based)

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

FY 25

Scope

and 2

emissions (market-based)

Scope 2

17 tCO

Scope 1

emissions:

522 tCO e

During 2025, our Scope 3 footprint reduced 8% year on year,

with the categories “Use of Sold Products” and “Purchased

Goods and Services” remaining the most material,

representing 77% and 21% of the footprint, respectively,

in 2025. Use of sold products decreased 12% compared

to 2024, reflecting a modest decline in sales volumes,

reductions in grid intensity in the Group’s key markets, and

an increase in the sales’ higher-efficiency products. This

counteracted increases to upstream Scope 3 emissions,

in particular increases to Purchased Goods and Services

emissions from increased output in China and Vietnam,

helping to build product inventory.

Our full emissions data and tables can be found in our

non-financial performance indicators section on page 74.

Base-year

FY24

FY25

2030

target

2040

target

Energy

efficiency

initiatives

Energy efficiency initiatives are key to reducing our

operational emissions. During 2025, a range of initiatives

were implemented that reduced our energy consumption and

carbon footprint. These included:

During 2025, absolute location-based Scope 1 and 2 emissions increased 5% year on year. This partly reflects an increase

in natural gas combustion at the Group’s Rosenheim and Gloucester facilities. An increase to location-based Scope 2

emissions also reflected the increased power usage at our Vietnam facility, reflecting less frequent power cuts in the year and

consequently lower reliance on diesel fuel to power back-up generators.

We report our emissions and energy intensity as tonnes CO

e/£m revenue and kWh/£m revenue. Our overall location-based

Scope 1 and 2 emissions intensity increased by 9% this year, while our energy intensity increased by 7%. The general energy

efficiency measures used to drive energy reductions are discussed in detail below.

the phasing out of fluorescent/compact lights and

installation of energy-efficient LED lights on our premises

and on neighbouring street lights;

enhanced testing for air leakage and the installation of

sensor door alarms to prevent loss of air conditioning and

the replacement of inefficient air-conditioning units;

modifications to chillers to set minimum

temperatures; and

relocation of operations in Silicon Valley and Orange

County to new facilities that are compliant with the

latest building regulations and feature energy-efficient

technologies to reduce energy costs and consumption.

XP Power’s new manufacturing facility in Perak,

Malaysia demonstrates the Group’s strong

sustainability credentials and alignment with leading

international building standards. Although located

outside Singapore, the facility has been developed

to align with the Singapore Green Building Index and

targets BCA Green Mark Gold certification, reflecting

XP Power’s commitment to energy efficiency and best

practice across its global estate.

The facility performs strongly on energy efficiency.

High-performance walls and glazing reduce heat gain

while maximising natural daylight, contributing to

lower cooling demand. Overall heat transfer through

the building envelope is approximately 10% better than

Singapore’s regulatory maximum. Cooling is provided

by a highly efficient, water-cooled air-conditioning

system, supported by smart controls that adjust

ventilation based on occupancy and enable continuous

performance monitoring.

Water efficiency measures are embedded across the

site. The facility incorporates rainwater harvesting for

landscape irrigation, alongside water-efficient fittings,

sub-metering and leak-detection systems to support

effective water management. Landscaping uses

drought-tolerant planting to minimise ongoing water

demand.

The facility also integrates measures to reduce wider

environmental impacts. Lower-carbon materials

have been used where feasible, including cement

with reduced clinker content and masonry products

containing recycled materials. Recycling facilities

and electric vehicle charging points are provided for

building users.

The building has been future-proofed, with a flat

rooftop designed to accommodate solar photovoltaic

panels in the future. Independent assessment by

Singapore’s Building and Construction Authority is

planned.

Scopes 1 & 2

42%

reduction

Net zero

Scope 3

25%

reduction

Net zero

TCFD

This report, in conjunction with our net zero ambition, covers

our governance of climate change and demonstrates how we

incorporate climate-related risks and opportunities into our

risk management, strategic planning and decision-making

processes.

Specific details of our pathway to net zero are outlined in

our Transition Plan. We believe the following disclosure

is consistent with the TCFD All Sector Guidance and the

obligations under Listing Rule 6.6.6R(8). Additionally, they

fulfil the climate-related financial disclosure requirements

outlined in the Companies (Strategic Report) (Climate-related

Financial Disclosure) Regulations 2022. This alignment is

further detailed in the TCFD cross-reference and disclosure

consistency summary provided above.

Governance

Board

level

XP Power has a robust governance structure to manage

its climate-related risks and opportunities. The Board

of Directors has overall responsibility and oversight of

climate-related risks and opportunities, all Group policies

(including the Environmental Policy) and all matters that

impact the strategy, risk management, vision and values of

the Group.

Climate change is a standing item on the Board agenda

and is discussed twice a year at scheduled Board meetings

and more regularly if anything more urgent is required,

such as signing off major capital expenditure. The flow of

information regarding climate-related issues occurs within

both the strategic and risk functions of the Group. The

Board monitors the Group’s sustainability strategy, progress

against key initiatives and performance in relation to the

net zero plan, and our sustainability scorecard. This ensures

climate-related issues are considered within strategy,

budgets, major capital expenditures and business plans. Polly

Williams, the Senior Independent Director, supported the

Board in this function throughout 2025. Through the risk

function, the Audit Committee integrates climate-related

issues into the Group’s risk management process and is

responsible for approving the Group’s TCFD disclosure.

Management

level

At management level, the Executive Leadership Team (ELT)

meets monthly to monitor progress and key sustainability

strategy actions, and reports to the Board. The Sustainability

Council supports the ELT with the Group’s sustainability

objectives. The Sustainability Council, which meets quarterly,

is a cross-functional team chaired by the CEO tasked with

the formation and successful delivery of our sustainability

action plan (including the net zero plan). The Council

monitors the policies, processes, objectives, targets and

KPIs lin

ked to our sustainability issues. By reviewing our

sustainability scorecard, the Council determines progress

against our plan, resolves issues, mitigates plan risks and

creates actions for the ELT, senior management and site

representatives. In relation to net zero, the sustainability

scorecard tracks our Scope 1, 2 and 3 emissions, renewable

electricity roll out, low-carbon product introduction, waste

reduction and supply chain initiatives.

Sitting below the Sustainability Council, sustainability reps

are appointed within each business unit and play an active

part in reporting and leading site-specific ESG initiatives.

Each representative is responsible for the regular monitoring

and reporting of site-specific sustainability metrics and

risks, as well as the implementation of site-level corporate

projects.

Risk

Our process for identifying and assessing

climate-related risks

Our external consultants, CEN Group, assisted in the

identification and analysis of climate-related risks and

opportunities, which were refined through Sustainability

Council consultation. XP Power considers climate-related

risks and opportunities in all physical and transition risk

categories (current and emerging) whether they occur within

our operations, upstream or downstream of the Group. Our

stakeholder engagement and desktop review ensure we are

aware of relevant or emerging risks. We assess risks within

our short-, medium- or long-term strategic planning horizons.

Typically, transition risks occur top down and are considered

at Group level. As part of operational risk assessments, the

Group undertakes site-level environmental risk assessments.

Our site-level analysis of physical climate risks enhances the

depth of insight into our global operations and, this year, no

physical climate-related incidents impacted our operations.

Climate-related risk management is integrated into the XP

Power risk management framework. Risks are assessed

in the same manner as other Group risks, so their relative

significance is comparable. This includes an assessment of

likelihood (on a five-point scale, low to high) and impact

(on a five-point scale, minor to severe), to ensure the

significance of climate-related risks is considered in

relation to risks identified during our standard risk

management processes. The same process is used to

assess climate-related opportunities. Climate-related

risks are included in the risk register and reviewed by the

Audit Committee to incorporate ongoing refinement and

risk quantification, and to ensure the register reflects

any material changes in the operating environment and

business strategy. Further details on each key risk and

opportunity, such as a quantification of the financial impact,

the appropriate strategic response, the cost of the response

and the variance of key risks regarding climate-related

scenarios, are provided where possible. We combine this

with the impact and likelihood assessment to determine

the treatment of each risk (e.g. mitigation, acceptance or

control) to help us prioritise resources to manage the most

material climate-related impacts. Other risks that require

further analysis are accepted within the Group’s business-

as-usual risk appetite. This year, we reviewed both our

transition and physical risks and opportunities to ensure

there was no change in exposure during the year.

Strategy

Climate-related

risks

opportunities

The identification of climate-related risks and opportunities

underpins our net zero strategy and the management of

these dovetails with our Net Zero Transition Plan; the

mitigation of climate-related risks and the development of

opportunities are effectively integrated into our strategic

planning. The analysis has helped focus our strategy

towards managing these issues. The time horizons for our

climate-related risk assessment are as follows:

Time

horizon Rationale

2026-2028 Short

term

In line with the existing risk

management time horizon and

specific business plan strategy

2028–2035

Medium

term

Encompasses XP Power’s

near-term emission targets

2035

Long

onwards term

Encompasses the Group’s net

zero by 2040 target and the UK

Government’s net zero by 2050

target

As part of our assessment of climate-related risks and

opportunities, we use climate scenario analysis to assess

the resilience of the Group’s business model and strategy to

climate change under different scenarios. Please see the risk

and opportunities tables on pages 58-62 for the implications

of this scenario analysis.

IEA (2025), World Energy Outlook 2025, IEA, Paris www.iea.org/reports/

world-energy-outlook-2025, Licence: CC BY 4.0 (report); CC BY NC SA

4.0 (Annex A)

In aggregate, our risk assessment and scenario analysis

shows that our overall climate risk exposure is moderate.

The Group is financially resilient and strategically robust

to climate change. We understand that, considering our

existing and planned mitigation strategies and net zero

action plan, any asset impacts are limited, and risks can be

accommodated in our business-as-usual activities. We do not

foresee any additional fundamental changes to our business

strategy or capital expenditure envelopes resulting from

climate change or net zero for the foreseeable future. No

effects of climate-related matters reflected in judgements

and estimates are applied in the Financial Statements.

We will continue to develop our analysis as new data

becomes available, internally and externally, and we will

continue to monitor our climate exposures and action plans

through the Group’s risk management framework. We will

continue to develop the opportunities identified in line with

Company strategy and objectives.

Transition

opportunities

We have assessed the risks and opportunities arising from

the transition to a low-carbon economy, which may have a

material impact on the Group. Risks may carry financial, legal

and/or reputational impacts. Our Net Zero Transition Plan

helps mitigate transition-related risks. We used the following

two International Energy Agency (IEA) scenarios to perform

scenario analysis for our transition risks and opportunities.

Net Zero 2050 (NZE): a narrow but achievable pathway for

the global energy sector to achieve net zero CO

by 2050. This scenario meets the requirement for a “below

2°C” scenario and is used as a positive climate pathway.

NZE also informs the decarbonisation pathways used by the

Science Based Targets initiative (SBTi).

Stated Policies Scenario (STEPS)

: represents projections

based on the current policy landscape and is used as a base/

low-case pathway. Global temperatures rise by around 2.5°C

by 2100 from pre-industrial levels, with a 50% probability.

Assumptions

Scenarios often only provide high-level global and

regional forecasts.

Not all risks are easily subject to scenario analysis.

Scenario analysis analyses specific factors and models

them with fixed assumptions.

Impacts will be considered in the context of current

financial performance and prices.

Net impacts are assumed to occur with assumptions and

reduction initiatives from our Transition Plan to mitigate

risk exposure.

Impacts are modelled to occur in a linear fashion, when,

in practice, dramatic climate-related impacts may occur

suddenly after tipping points are breached.

The analysis considers each risk and scenario in isolation,

when, in practice, climate-related risks may occur in

parallel as part of wider set of potential global impacts.

Carbon pricing is informed by the Global Energy Outlook

2025 report from the International Energy Agency (IEA).

Board

Polly Audit

Williams Committee

Council

Cross-functional committee tasked with

representatives

Medium

Minor

Medium

High

Minor

High

TCFD

Transition

identified

Response/actions we’re taking and how they are

managed

Low Scope 1 & 2 exposure, with a 42% reduction target

by 2030; near-zero market-based Scope 2 emissions

minimise carbon tax impact.

Scenario

implications

Carbon prices are expected to rise under NZE and STEPS,

impacting operations and supply chain.

Response/actions we’re taking and how they are

managed

Expanding global solar capacity lowers adoption costs,

enabling greater renewable generation; planned Vietnam

site installation will supply ~25% of electricity needs.

Scenario

implications

Global solar PV capacity is projected to double by 2030 under

STEPS and quadruple under NZE.

Risk

type

Policy and Legal

KPIs

Scope 1 and 2 emissions

Potential impact

on the business

Higher cost of inputs

Time

horizon

Medium term

Likelihood

Magnitude

type

Energy source and

resilience

KPIs

Scope 2 emissions

% of renewable from total

electricity

Potential impact

on the business

Reduced direct costs

Time

horizon

Short to medium term

Likelihood

Magnitude

managed

Targeting 25% Scope 3 reduction by 2030 and net

zero by 2040; emissions reduced through product

innovation, supplier engagement, logistics and global grid

Scenario

Carbon prices are expected to rise under NZE and STEPS,

impacting operations and supply chain.

managed

Non-European sites use EACs, while European sites are

supplied via PPAs.

Scenario

Global renewable energy investment is projected at $2.5tn by

2030 under NZE versus $1.7tn under STEPS.

decarbonisation.

type

Policy and Legal

KPIs

Upstream Scope 3

Higher cost of inputs

Time

horizon

Medium term

Magnitude

type

Energy source

KPIs

Scope 2 emissions

% of renewable from total

electricity

Reduced direct costs

Time

horizon

Short to medium term

Magnitude

managed

Scope 2 emissions are cut via EACs, efficiency and onsite

renewables; use-phase emissions improve through

Scenario

NZE accelerates policy and technology progress, while STEPS

poses higher risk due to slower development.

Supply routes are assessed to manage transportation

NZE offers greater opportunities than STEPS due to faster

investment, electrification and freight decarbonisation.

product design, and transportation emissions are reduced

via freight, travel and commuting initiatives.

type

Transportation

Potential

Reduced costs

horizon

Magnitude

Market and reputation

KPIs

Scope 1, 2 and 3 emissions

Lower profit margins

through increased costs

and lower revenue

Long term

Scope 3 emissions –

upstream transportation

and distribution

Carbon price impacts in own operations

XP Power is exposed to potential carbon prices within its direct operations.

Solar

power

The Group invests in solar where viable, reducing grid reliance, emissions, carbon tax exposure and operating costs.

Medium

Moderate

Carbon

price

impacts

the

value

chain

XP Power faces potential upstream carbon price impacts, increasing transportation and goods costs.

Purchased

renewable

energy

EACs reduce market-based Scope 2 emissions without capital investment

Moderate

Reduction of air freight

Shifting from air to sea freight provides reductions in both costs and emissions for the Group.

Low

Major

not

meeting

net-zero

Achieving net zero partly depends on emerging technologies and third parties; failure could raise costs, impact reputation

and affect investor confidence.

Medium-high

TCFD

Market and policy trends are expected to drive the

adoption of our low-carbon innovations, e.g. power

conversion efficiency legislation and future standards

NZE expects stronger enforcement of energy standards and

higher demand for efficient products, while STEPS anticipates

slower developments.

Site-specific and Group-wide initiatives, including

packaging reductions and enhancing energy efficiency.

NZE provides greater opportunities than STEPS due to

increased investment and a focus on energy-efficiency

measures.

are anticipated to extend to healthcare and industrial

applications.

Material efficiency

Potential

Reduced costs

Risk type

Products and

services, market

Scope 3 emissions – use of

sold products, purchased

goods and services

Higher revenue

Long term

Energy use Scope 1, Scope

2 emissions (location-

based) waste generation

Focus areas monitored to capitalise on opportunities

include wind turbines, 5G infrastructure and mobile

network densification

Electrification drives growth in NZE and STEPS, fuelled by

electric mobility, heating technologies and market confidence

in new technologies.

We engage with key suppliers to drive material and

energy efficiencies, as well as collaboratively develop

value-adding products.

Under NZE, increased regulatory and market pressure is

expected to encourage suppliers to engage and improve

efficiencies.

Market

Revenue growth rate

Higher revenue

Medium to long term

High

Material efficiency and

products and services

Scope 3 emissions –

Purchased goods and

services

Energy

waste

savings

Energy efficiency and consumption reduction actions improve emissions at low or zero cost.

Minor

High

Minor

Electrification

Electrification is a global megatrend, creating opportunities and reducing reliance on fossil fuels in the transition to net zero.

Major

Minor

Supplier

efficiencies

We are committed to high supplier standards to reduce environmental risks and costs, enhancing long-term efficiency and

partnerships.

for

lower

carbon

The Group’s NPI process targets lower-carbon products by improving efficiency and reducing component count, also limiting

upstream carbon pricing exposure.

Medium-high

Moderate

TCFD

Physical

climate-related

We continue to use a location risk analysis tool to better understand the exposure of our sites and develop further mitigation

efforts. Our risk assessment evaluates site-specific exposure to natural hazards, and the evolution of climate risks under the

scenarios for global temperature rise. The scenarios embedded in the physical risks tool are as follows:

RCP 4.5

: an intermediate scenario, more likely than not to result in global temperature rise between 2°C and 3°C, by 2100.

RCP 8.5

: a bad case scenario where global temperatures rise between 4.1 and 4.8°C by 2100.

www.ipcc.ch/report/ar5/syr/.

Metrics

targets

Climate-related

metrics

We report on our Scope 1, 2 and 3 emissions. Our carbon

footprint is calculated using methodologies consistent

with the Greenhouse Gas (GHG) Protocol: A Corporate

Accounting and Reporting Standard, with additional guidance

from the GHG Protocol Corporate Value Chain (Scope 3)

Accounting and Reporting Standard and the GHG Protocol

Technical Guidance for Calculating Scope 3 Emissions, as

required. We measure all greenhouse gases as relevant and

our targets cover CO

, CH

, N2O and HFCs. Our Scope 1 and

targets

Our science-based, net-zero targets ensure that we are

aligned to the UK Government’s Net Zero Strategy and set

out our pathway to reaching net-zero GHG emissions ahead

of 2050. Our science-based targets were approved by the

Science Based Targets initiative (SBTi) in February 2024.

See the XP Power Transition Plan for further details on our

science-based targets and Transition Plan. In line with the

SBTi, our targets and Transition Plan do not use carbon

credits. While we do not plan such action, we may consider

Business interruption insurance, flexible production

shifts, adjusted working patterns and a new Malaysia site

enhance operational resilience.

Heavy rainfall is expected to be more frequent and intense

under RCP 8.5, increasing flood risk.

2 GHG emissions are derived from measured data sources

with no estimates. Most of our emissions are represented by

our Scope 3 emissions (99% of footprint) and, within that,

our downstream Scope 3 emissions associated with the use

phase of our products (77%). We calculated all applicable

using offsets to achieve additional emission reductions

beyond the science-based targets.

Our aim is to be net zero across Scopes 1, 2 and 3 by

2040 with minimal use of offsets. Our absolute emissions

reduction targets, which have been approved by the Science

Acute

Approximate revenue

contribution

Lost production and

revenue

Scope 3 categories for our 2025 carbon footprint. Five

Scope 3 categories of are not applicable to our business.

Four Scope 3 categories (Capital goods, Waste are generated

in operations, Processing of sold products and End-of-life

treatment of sold products), are excluded from our reporting

and our science-based targets as they are negligible and

collectively account for under c. 0.5% of our Scope 3

inventory. For more information on our emissions, see Energy

and Greenhouse Gas Emissions (pages 74-75).

We monitor additional environmental metrics including

emissions intensity, energy use, energy intensity, renewable

solar energy generation, freshwater withdrawal and waste

Based Targets initiative (SBTi), are to:

reduce absolute Scope 1 and 2 GHG emissions by 42%

by 2030 from a 2022 base year;

reduce absolute Scope 3 GHG emissions by 25% by 2030

from a 2022 base year; and

reach net-zero GHG emissions across the value chain

by 2040.

ESG targets are embedded in our Executive Leadership

Team’s remuneration. Part of this includes climate action.

For more information on our performance against these

Supplier exposure is mitigated through multiple sourcing,

strategic reviews of critical suppliers, and engagement

surveys assessing upstream emissions and risks.

RCP 8.5 projects more frequent extreme weather, increasing

risk exposure in key supply chain regions.

management, as reported on page 76. We report on our

annual launch products under our Product Carbon-Rating

system, designed for a lower-carbon economy, and the

lifetime emissions savings from the use of efficient products

(in relation to standard products) sold in the year as reported

on page 50.

targets, see Energy and Greenhouse Gas Emissions on

pages 74-75.

Acute

N/A

Potential

Lost production and

revenue

Flood

risk

Rosenheim (5% revenue) faces localised river flooding, which could disrupt operations and reduce output.

Medium

Moderate

Supply

chain

Physical climate impacts may disrupt supply chains via affected supplier sites, transport or energy; metals supply is flexible,

but some specialised electronic components are less replaceable.

Vietnam

waste

plastic

reduction

XP Power implemented on-site segregation of hazardous,

recyclable and non-recyclable waste, with all streams

managed by licensed contractors. Employees were

provided with clear waste classification guidance to

support correct segregation at source. The Company also

restricted the use of single-use plastics across operations,

supporting responsible resource use and reduced

environmental impact.

TCFD

Waste

Our manufacturing processes produce relatively little waste,

but we are committed to reducing both non-hazardous and

hazardous waste where possible across our operations.

We have a specific Waste Management Procedure, which

outlines our risk prevention measures, how waste should

Waste

data

(tonnes)

638

530

Water

We do not consider water to be a material topic for our

business. We have a low water intensity in operations and,

unlike some of our electronics industry peers, we do not

use water in our products’ design, manufacture or service.

Our water use is almost entirely related to our employees

In 2025, our freshwater withdrawal increased by 7%. Water

withdrawal per employee was 24.4 m

, slightly above the

2024 intensity.

Actions

reduce water usage

We established a range of initiatives to reduce our water

be classified, handled, collected, stored and disposed. In

case of waste-related emergencies, employees follow the

“Emergency Preparedness and Response Control Procedure”.

Additionally, any employees involved in hazardous waste

disposal have appropriate personal protective equipment

(PPE) to protect them against environmental and health

and safety accidents. Our People and Organisation

326

276

261

208

313

254

(amenities, catering and personal consumption). Of our

11 facilities, our Southern California design centre is the

only facility in an area of extremely high-water stress

identified by the WRI Aqueduct Tool. As an R&D-focused

facility, its water requirements are minimal. Our Group’s

water policy is available at xppower.com/company/policies.

withdrawal and increase the amount of water recycled and

reused. In FY 25, these initiatives included the installation

of new water dispensers with flow metres, the separation of

deionised water from other wastewater to avoid unnecessary

treatment, and the installation of low-flow faucets and other

water-saving adaptations to employee amenities.

(P&O) department supervises annual training on waste

management with prompt additional training if procedures

or personnel change. Training includes waste management

waste

recycled

waste

incinerated

waste sent

to landfill

Total waste

non-recycled

waste

Global

water

metrics

targets

Our global freshwater withdrawal is outlined in the table

below. Our full data on water, including regional breakdown,

Biodiversity

We understand the importance of, and are committed to,

protecting the natural environment, preserving biodiversity

proficiency, including handling measures in emergency

situations and enhancing environmental awareness.

As part of our RBA-compliance approach, our facilities

undergo internal assessments aligned with RBA

requirements, applicable local regulations and XP Power

standards. These assessments include environmental aspects

such as waste management, air emissions and water.

A major waste source is excess solder from wave solder

machines, so-called “solder dross”, which is recycled into

new solder and reused. In 2025, we sent 9.8 tonnes of solder

dross for recycling and received 8.2 tonnes of recycled

solder back, which is an 83% recovery rate. We use activated

carbon and certain chemicals to clean flux from printed

circuit boards. These chemicals and their containers are

safely disposed of through a certified, licensed third-party

professional. In 2025, we had no reportable spills.

2025

2024

The figure below outlines XP Power’s waste by treatment

type. Full waste data can be found in our non-financial

performance indicators section on page 76. We are still

refining our processes for the collection and reporting of

waste data. Consequently, we expect some variability in the

waste data as coverage of reporting increases across sites.

We aim to reduce our waste intensity (Tonnes/$m) by 10%

year on year. However, in 2025, both total absolute waste

and total waste intensity increased from 2024 by 20% and

28%, respectively, primarily due to increase operation at our

Vietnam site.

are included in the non-financial metrics section on page 76.

2025 2024

Freshwater withdrawal (m

) 54,988

51,800

Freshwater withdrawal

intensity (per employee)

Assessed using the World Resources Institute’s (WRI) Aqueduct Water

Risk Atlas tool. Areas of extremely high-water stress, according to the WRI

definition, are where human demand for water exceeds 80% of resources.

and, where possible, minimising the potential negative

impact that our business may have on the environment.

We recognise that climate change, deforestation, land

degradation and water pollution each pose a severe threat

to the sustainability of important ecosystems, and that

business and industry contribute to this. We do not consider

biodiversity to be a material topic for our business. Our

biodiversity policy is also available at corporate.xppower.

com/sustainability/environment.

In 2025, XP Power transformed its Environmental, Health and Safety (EHS) training approach by establishing a Global

EHS Programme that delivers universal standards across all locations, ensuring consistent practices, clear accountability

and site-level compliance worldwide. Each site was audited to verify adherence to these standards, and detailed

Standard Operating Procedures (SOPs) were developed for key EHS areas, providing clear guidance and a strong

foundation for ongoing compliance and operational excellence. This effort addressed previous inconsistencies in

site-specific training and created a unified framework aligned with XP Power’s Safety Begins with Me culture.

To support global deployment and accessibility, XP Power transitioned to a centralised Learning Management

System (LMS), replacing fragmented local training methods with structured, video-based courses. The LMS leveraged

AI-powered voice translation to support multiple languages and QR code access to ensure participation from employees

without regular computer access. In 2025, ten custom EHS training courses were developed and deployed globally

through the LMS, which achieved a 99% completion rate and ensured consistent EHS knowledge, expectations and

accountability across the organisation.

UN SDG 3 “Good health and wellbeing”, 5 “Gender equality”,

8 “Decent work and economic growth”, and 10 “Reduced

inequalities”

As a responsible employer, health and safety is of paramount

importance. Whether working on site or from home, we strive

to safeguard the health, safety and wellbeing of all our people

(including contractors).

Our health and safety programme is driven from the top, with ultimate

responsibility sitting with the Board.

Our c

orporate health and safety framework defines those who are responsible and

accountable at each of our key sites, while our Company procedures define the

minimum standards required. These can be summarised as follows:

Risk assessments are based on the activities performed at each site, which are

reviewed and updated annually.

An annual internal audit of health and safety processes is conducted at

each site to ensure they are in line with RBA requirements, applicable local

regulations and XP Power standards.

Health and safety metrics are recorded covering incidents and near misses,

and these are reported and analysed. The Board reviews these metrics at each

Board meeting.

Metrics related to walkthrough safety audits, fire drills and risk assessment

updates are recorded and monitored.

Consideration is given at each site to ergonomics, laboratory and electrical

safety, legal requirements, use of chemicals, use of equipment and tools, facility

preparedness and evacuation, and slips, trips and falls.

We are committed to maintaining a healthy and safe working

environment to minimise the number of occupational

accidents, diseases and illnesses, and ultimately achieve an

accident-free workplace. We have enhanced health and

safety at XP Power through improved product safety tracking,

and the use of health and safety consultants, advisers and

Auditors. XP Power’s Health and Safety Policy is available on

our website at xppower.com/company/policies.

All our employees have role-appropriate health and safety

training. The number of employees trained on health and

safety standards within 2025 is 2,336 (2024: 2,465), which

gives us a training completion rate of 99%.

Our full list of employee-related data can be found in our non-

financial performance indicators section on pages 77-79.

Safety

We keep safety front of mind in everything we do and ensure

that employees actively recognise and manage risks to keep

everyone safe, with the ultimate aim of achieving no injuries

across our operations.

The safety of XP Power employees is paramount, and we

do everything we can to protect them. We have established

safety policies to ensure hazard control systems are effective

and to achieve our no injury goal. Our health and safety

performance this year highlights how our “Safety Begins with

Me” approach has strengthened engagement, empowered

individuals at every level, and further embedded a proactive,

people-focused safety culture across XP Power.

We ended 2025 with a global TRIR of 0.15, representing

a 64% reduction compared to 2024 (0.42 to 0.15). This

significant improvement reflects the continued maturation

of our EHS framework, stronger site-level engagement

and increased focus on hazard identification, training and

prevention. The sustained downward trend throughout

the year demonstrates meaningful progress in reducing

overall injury frequency. Our LTIR closed at 0.04, a 79%

reduction from 2024 (0.19 to 0.04). This result highlights

continued improvement in preventing more serious injuries

and reinforces the effectiveness of our controls, training and

leadership engagement across sites.

Absolute injury counts show a clear and sustained

improvement over time, with the most significant reductions

occurring in 2025. First Aid/Record Only cases declined

sharply from 55 in 2024 to 18 in 2025, while Medical

Treatment cases dropped from 11 to four. Lost Time injuries

were reduced to a single case in 2025, compared to five in

2024 and nine in 2023. These improvements were achieved

despite an increase in total hours worked compared to

2024, confirming that the reductions reflect meaningful

improvements in safety performance.

This ye

ar, we will continue to strengthen governance and

evolve our safety culture to ensure every employee goes home

safe each day.

Our health and safety statistics are reported below. The

figures cover all employees and contractors.

Health

safety

LTIR

TRIR

table

2025 2024

LTIR 0.04 0.19

TRIR 0.15 0.42

Lost-time Incident Rate (LTIR) is defined as total number of lost time incidents in a year, divided by the total number of hours worked, multiplied by 200,000.

We define a lost time incident as an incident that occur when a worker sustains a lost time injury that results in time off from work, or loss of productive work

Total Recordable Incident Rate (TRIR) is defined as total number of medical injuries, divided by the total number of hours worked, multiplied by 200,000.

Board of

Directors

health and safety

programme at XP Power

Site leaders across 17 diﬀerent sites

Responsible for health and safety

at the site and

that appropriate resources are available

Responsible for day-to-day health and

safety programme through a cross-functional team

People and Workplace

We ensure that XP Power is a

workplace in which our people can

be at their best. We maintain a safe,

diverse and inclusive environment,

which attracts and retains the best

talent.

Our sustainable business goal is to

improve the physical and mental

health of our employees, provide

them with a safe place to work and

create an environment in which our

people can be their best.

Health and wellbeing

We encourage our employees to have active lifestyles, and

we provide facilities and programmes designed to improve

wellbeing. These include sports facilities (e.g. basketball

courts), shower facilities on site and group events (e.g. softball

leagues and yoga sessions). At XP Power, the wellbeing of

our people is vital. Examples of initiatives run by our sites to

promote health and wellbeing amongst our employees are set

out below:

Our comprehensive Employee Assistance Programme

(EAP) provides confidential expert advice and

compassionate guidance 24/7, online or by phone.

The programme offers a complete support network, is

delivered in the relevant languages, and covers a wide

range of topics and resources for our employees and their

families.

Alongside the EAP, we offer a cycle-to-work scheme

within the business, which is beneficial for both employees

and employers through tax savings, health improvements

and environmental contribution.

We held our third European Fitness Challenge this year,

which encouraged a significant increase in physical activity

and the active collaboration of teams across the region.

In Vietnam, all employees completed a medical check-up in

Q4 2025.

Throughout the year, we focused on facilitating access

to mental health services and reducing the associated

stigma, with the appointment of four mental health first

aiders, flexible working arrangements for staff where

required, and team-building activities around culture and

staff wellbeing. At our German locations, we implemented

wellness initiatives such as a wellness pass, which provides

access to a wide range of fitness, health and relaxation

offerings, a health day offering services such as health

checks, ergonomic advice, and prevention workshops, and

team activities to support social and mental health.

Our people

We look after our employees, support their training and

development, recognise cultural differences, respect their

human rights and promote a fair working environment with

equal opportunities for all. As a global business, we capitalise

on our cultural differences and strive to make XP Power a

fulfilling workplace.

Engagement

Our vision is to deliver the ultimate experience for our

stakeholders. Through workforce engagement, our Board

listens to employees’ views and these are discussed when

decisions are made. Pauline Lafferty is the designated

Non-Executive Director responsible for workforce

engagement. As a former Chief People Officer, she is

passionate about employee engagement.

We use several methods to engage our people but derive high

value from our Gallup engagement survey, first conducted

in 2020. We use the survey to drive further employee

programmes and enhancements to our engagement and

retention. Participation rates were excellent again in 2025, at

93% (2024: 92%). This year, our engagement score was 4.15

out of 5.00

(2024: 4.03), putting us at the 54th percentile in

the Gallup database. We compare our year-on-year results

to observe consistent significant improvements in the

engagement levels of the people within our organisation. This

improvement is driven by engagement initiatives such as the

provision of monthly engagement calendars, opportunities

to provide feedback on GALLUP, and virtual and in-person

meet-ups to connect and check in with colleagues. Our

goal is to offer a consistent employee experience globally

and observe the current spread in results. We distribute

newsletters, hold townhalls and update the intranet to

further engage our employees and keep them informed of our

progress and sustainability-related information, such as plastic

reduction initiatives.

Results exclude Vietnam and China employees.

Labour

We are committed to the fair treatment of our employees.

We recognise the importance of work–life balance and offer

flexible working arrangements to allow employees to balance

their work and other priorities. The Group aims to eliminate

excessive working hours and respect national legislation and

industry-referenced maximum working hours standards.

Diversity and equality

Becoming a truly diverse and inclusive company is crucial

to supporting business growth and innovation, attracting

and retaining talent, and engaging customers. Different

experiences and perspectives allow us to explore options

and decisions more widely, which generates better outcomes

for the business and its stakeholders. We recognise the

cultural differences that exist in our global operations and

acknowledge that a diverse workforce reflects our markets

and will help us be successful.

We are committed to non-discrimination and offer equal

opportunities in all our employment practices, procedures

and policies. When hiring, promoting or considering business

partners, we choose the best candidate, irrespective of

age, race, national origin, disability, religion, gender, gender

reassignment, sexual preference, social background, political

opinion, marital status or membership/non-membership of

any trade unions.

We support initiatives that promote inclusion, engagement

and representation across the organisation. During 2025,

foundational work was completed to design a Women

Employee Resource Group (ERG), including defining its

purpose and structure. The ERG will formally launch in North

America in 2026 as a pilot programme and will provide a

platform for connection, development and engagement

aligned with business priorities.

In 2025, XP Power increased focus on International

Women’s Day through employee engagement activities

across sites in North America. This included an internal

leadership interview that highlighted the experiences

of our North America Controller, employee-submitted

stories celebrating inspirational women, and site-wide

participation to raise visibility and foster connection. We

shared activities, internally and externally, on social media

to reinforce engagement. During a year focused primarily

on restructuring rather than hiring, XP Power conducted

appropriate reviews to ensure workforce actions did not

disproportionately impact women or other underrepresented

groups. These efforts reflect our continued commitment to

fairness, equity and responsible people practices.

We have promoted inclusivity through initiatives such as

structured mentorship programmes, which enable more

experienced employees to share knowledge with junior

employees, multilingual communications and town halls,

cross-site workshops and visits, and flexible working

arrangements.

Our employees receive annual training on diversity through

our Code of Conduct training. Employees in the UK and

Europe receive bi-annual training on Equality, Diversity and

Inclusion. This course is CPD accredited and IIRSM and

Citation approved. In 2025, 59 employees completed this

training (2024: 57).

We will:

create an environment in which individual differences

and the contributions of all team members are recognised

and valued;

create a working environment that promotes dignity and

respect for every employee;

not tolerate any form of intimidation, bullying or

harassment, and will discipline those that breach this

policy;

make training, development and progression

opportunities available to all employees;

promote equality in the workplace, which we believe

is good management practice and makes sound

business sense;

encourage anyone who feels they have been subject to

discrimination to raise their concerns so we can apply

corrective measures; and

regularly review our employment practices and

procedures to maintain fairness.

The Group is supportive of flexible working, including

working from home, part-time and flexible hours according

to the requirements of the position. This commitment to

flexible working ensures that we recruit from a wider pool

of candidates with different personal circumstances. The

Group employs contract and temporary workers across

many locations to fill local requirements, sometimes for

short periods. We do this, particularly, in our manufacturing

facilities globally, to ensure we meet customer requirements.

Many temporary staff choose to become permanent

employees.

In the UK, we pay employees who have more than two years

of service maternity or adoption leave for three months at

100% of salary compared to the statutory six weeks at 90%

of salary. We also provide two weeks of paid paternity leave

at 100% of salary compared to statutory paternity leave of

two weeks at £151 or 90% of usual pay if lower.

We recognise the importance of pay equality and undertook

analysis around gender representation to help understand

our gender pay gap. We report our UK gender pay gap, even

though we have fewer than 250 employees in the UK and

are exempt from gender pay gap reporting. For 2025, our

mean gender pay gap is 43.8% and our median gender pay

gap is 43.8% (2024 mean: 36.4%, median 38%).

The Board oversees the Company’s Diversity Policy, which is

embedded in our Code of Conduct at corporate.xppower.com

In 2025, XP Power built on the strong foundation established in 2024 to further advance our global Environmental, Health

and Safety (EHS) programmes. Following the launch of the Safety Begins with Me programme, we implemented a unified

global EHS standard, strengthened governance and continued evolving our safety culture to ensure every employee goes

home safe each day. Throughout the year, initiatives were scaled, global processes were standardised and consistent safety

best practices were reinforced across all regions.

To drive engagement and celebrate site-level success, XP Power launched its first-ever Global Safety Day video contest.

The contest showcased creativity, collaboration and a proactive safety mindset across our global sites, bringing the Safety

Begins with Me programme to life through real employee experiences. Teams demonstrated how safety ownership,

leadership commitment, and employee involvement translated into meaningful actions on the shop floor and beyond.

The contest reinforced the impact of the Safety Begins with Me programme by highlighting shared accountability for

safety and encouraging peer-to-peer learning across regions. In parallel, 2025 also marked the global rollout of the Safety

Begins with Me observation programme and dashboards, which provided employees with practical tools to identify,

report and address safety risks. Together with the Global Safety Day campaign, these initiatives strengthened engagement,

empowered individuals at every level, and further embedded a proactive, people-focused safety culture across XP Power.

Talent

career

We have a wealth of talented individuals working across

the business and recognise the importance of supporting

and developing the skills, knowledge and experience of

our teams. From our structured onboarding process, during

which managers identify a day-one buddy and build a

detailed initial training plan, to career conversations as part

of the annual review process, we commit to promoting

training and career development.

Developing our talent is key to our ongoing success. As a

key leadership responsibility, our line managers identify

high-potential employees, create development opportunities

and support internal progression. Talent management and

succession planning for the Executive Directors and Senior

Leadership team is reviewed and discussed at Board level.

We agree personalised people and organisation plans,

aligned with the attainment of the Group’s strategy, with all

our executive leaders.

We aspire to ensure that all XP Power employees receive

regular performance feedback. We run this alongside

our formal performance review process, through which

objectives are set, aligned and measured against our Core

Values and key business priorities. In most cases, employees

receive performance reviews twice or more in a year. 100%

of employees receive a performance review at least once a

year. We operate various bonus schemes, and all non-sales

commissioned employees are eligible to participate in our

general or executive bonus scheme. Healthcare benefits and

life assurance are provided according to the customs in the

regions in which we operate.

During the year, we launched a Leadership Programme for

Germany, which is designed to support our leaders and

strengthen their leadership capabilities. The programme

focuses on developing skills in areas such as people

management, communication and change management,

with the goal of enhancing team performance and overall

engagement.

In 2025, we had 18 apprenticeships and 43 interns (2024: 18

apprenticeships and 31 interns), and ran programmes in areas

such as finance, human resources, information technology

and logistics.

Average

training

time

(in

days)

per

employee

2025 2024

Global

Average number of

employees

2,062 2,303

Total hours 24,591

21,971

Hours per

employee

Days per employee 1.5 1.2

Freedom of association

We allow our employees to freely associate with any relevant

unions. The number and percentage of employees covered

by collective agreements in 2025 was 923 and 44.8%

(2024: 818 and 35.5%). See page 79 for a full breakdown of

employees covered by collective bargaining agreements by

region.

Community

partnerships

We believe that we should give back to the communities

we work in as they are an integral part of our lives.

We encourage all employees to get involved in local

environmental and community activities and we provide

every employee with a day’s paid leave so they can

contribute to a charitable or worthy cause in the community.

In June and July, we encouraged our employees to use their

volunteering day at a local charity called Greenshoots. The

charity serves to provide rehabilitation and training for adults

with recurring mental ill health or learning disabilities. We

help on site with general maintenance, such as painting,

weeding and building sheds.

Employees are encouraged to use their volunteering day to

support other charities that are close to their hearts. During

the year, XP Power supported Macmillan Cancer Support,

Breast Cancer Awareness and Crisis, which the Group

supported through coffee mornings, raffles, bake offs and

“Wear it Pink” days.

The Group and its employees made donations to local

charities totalling £8,860 in 2025 (2024: £4,003).

1,390

1,998

1,028

Europe

America

Asia

Male Female Unknown Total

Executive

Male Female

This page provides a workforce summary. Full data can be found in our non-financial performance indicators on pages 77-79.

workers to total employees

2025 2024

Of the members of our Board, 38% are women, including in roles such as Chair of the Remuneration Committee, Senior

Independent Director and Designated Director for Workforce Engagement.

Global

Average number of employees 2,062 2,303

Average number of temporary

or contract employees

187

263

Percentage of temporary

or contract employees to

permanent

11%

Global

Average number of

employees

2062 2,303

Voluntary leavers 656

870

Voluntary turnover

32%

38%

have zero breaches of our Code of

Conduct and uphold the highest

standard of ethics and integrity.

We uphold the highest standards of

business ethics and integrity.

Ethics and compliance

UN SDG 16 “Peace, justice and strong institutions” through

internationally promoting the rule of law and reducing

corruption and bribery in all forms

It is Company policy to conduct all business in an honest

and ethical manner. “Integrity” is the first of five core values

embedded into our culture, as well as our Code of Conduct

and the policies outlined in the following sub-sections.

To ensure our employees are aware of and understand the Code of Conduct, we

use our learning management system (LMS) to monitor all employees on their

annual Code of Conduct training. In 2025, employee compliance with the annual

Code of Conduct training was 93% (2024: 96%).

suppliers, who must comply with its provisions. In 2025,

Executive Management and the Board were not aware of any

instances of bribery and corruption.

Our UK and EU employees also conduct biennial training on

anti-bribery, which is CPD accredited and IIRSM approved.

In 2025, 49 employees conducted Anti-Bribery training

(2024: 79), 64 conducted Insider Dealing training and 308

conducted Fraud training.

Modern

slavery

The Board reviews and publishes an annual statement, which

sets our relevant and supporting policies to prevent slavery

or human trafficking in our own business and supply chains.

A copy of the latest Modern Slavery Statement is available on

the Company’s website at corporate.xppower.com

Human

rights

Human rights are at the heart of sustainable business. We

are committed to respecting human rights in accordance

with international principles, including the UN Guiding

Principles on Business and Human Rights, the UN Universal

Declaration of Human Rights, and the International Labour

Organisation’s Declaration on Fundamental Principles and

Rights at Work. Employees are trained on Human Rights

through our annual Code of Conduct training. No human

rights violation incidents were reported during 2025

(2024: 0). Our Human Rights Policy is available here:

corporate.xppower.com/ about-us/corporategovernance

various processes, software and hardware prevent data

security breaches and unauthorised access to the Group’s

systems and data. The Group holds regular cybersecurity

training and awareness to ensure that our employees remain

alert to threats. During 2025, the Group experienced no

cyber incidents (2024: 1).

Tax

transparency

The Group is compliant with all applicable tax laws and

regulations in all areas in which it operates or is required to

make filings. All required tax filings are made accurately and

on time with the relevant authorities. It is Group policy to

not engage in any aggressive tax planning or tax avoidance

schemes.

We prohibit tax avoidance through transfer pricing. All

intra-group transactions are priced on an arm’s length basis

in accordance with the Group’s internal transfer pricing

policies, which reflect internationally accepted transfer

pricing standards and local tax laws. We commit to not

transferring value created to low tax jurisdictions and not use

tax structures intended for tax avoidance.

Government

contracts

The Group has no direct relationships with any government

entity through which it sells products or services.

Whistleblowing

We provide an environment in which open, honest

communications are expected. Employees should feel

comfortable bringing forward any concerns regarding

violations of policies or standards and know that their

concerns will be taken seriously. They should be aware that,

when they have acted in good faith, we will protect them

from adverse repercussions and/or detrimental treatment,

as set out in our Code of Conduct. An independent

whistleblowing service is available to employees who cannot

raise issues of concern with their line manager or superior.

Our confidential whistleblowing programme “Speak Up” is

administered through an independent third party, which is

available 24/7. Speak Up runs in each operational country

and is available in each local language. This guarantees

that employees’ experiences of legal or ethical misconduct,

such as discrimination, are heard and acted upon quickly.

Concerns can be raised anonymously online or by phone.

The Audit Committee is responsible for monitoring

whistleblowing, and compliance matters are regularly

reviewed by the Board. A whistleblowing report is

automatically distributed to the Chair of the Audit

Committee by the independent third-party provider. It is then

reviewed and assigned to management or an independent

third party for further investigation and response as required.

Whistleblowing and Fraud is a scheduled agenda item at

Audit Committee meetings. The Company takes appropriate

action regarding all upheld qualifying disclosures. In 2025,

there were two whistleblowing reports (2024: five), relating

to discrimination. Both reports were investigated and closed.

While the reports highlighted that effective processes for

handling concerns were established, they indirectly led to the

re-launch of the Ethics & Speak Up process, and updates to

the formal reporting process through NAVEX to ensure that

all employees had knowledge of the process. We provided

counselling for managers to ensure that issues are raised

promptly, with a review of expectations and training for line

managers to manage issues quickly and sensitively.

Anti-bribery

corruption

XP Power has a zero-tolerance approach to bribery and

corruption, and is committed to acting professionally, fairly

and with integrity in all business dealings and relationships,

enforcing effective systems to counter bribery. Our policy

on anti-bribery and corruption is embedded in our Code

of Conduct, which includes numerous examples to ensure

employees understand what is and is not acceptable. Our

Code of Conduct requirements are communicated to our

Information

systems

technology

The Group has appropriately robust and secure information

technology (IT) systems but acknowledges that no IT

system can be completely secure. The Group IT Director is

responsible for the integrity and security of the IT systems

and communications network. The Group has penetration

testing, data back-up and recovery processes in place and

KEY NON-FINANCIAL

PERFORMANCE INDICATORS

Environmental

data

Emissions

energy

The Group has prepared this section for the reporting period 1 January 2025 to 31 December 2025. The Group defines its

organisational boundary using an operational control approach with no material omissions from within the organisational

boundary of the Group. We report on all material GHG emissions sources and GHG emissions have been calculated from

business activities in accordance with the principles and requirements of the World Resources Institute (WRI) GHG Protocol:

A Corporate Accounting and Reporting Standard (revised version) and Environmental Reporting Guidelines: Including

Streamlined Energy and Carbon Reporting requirements (March 2019). The information in this section and tables in our key

non-financial performance indicators on pages 74-79 address our requirements under Part 7 of the Companies Act 2006

(Strategic Report and Directors’ Report) Regulations 2013 and under the UK’s Streamlined Energy and Carbon Reporting

(SECR). In line with the Greenhouse Gas Protocol, we continue to review our reporting considering any changes in business

structure, calculation methodology and the accuracy or availability of data. We have verified our Scope 1, 2 and 3 emissions

for 2024 in accordance with the requirements of “Limited Assurance” procedures by Carbonology. The verifications were

performed in accordance with ISO 14064-1: 2019 and may represent minor differences to those reported in the 2024 Annual

Report. Please see www.xppower.com/company/certification for more information.

Environmental

data

continued

All electricity consumed is either covered by EACs, generated by solar or purchased from renewable contracts

Energy

consumption

(kWh)

(excl

UK)

Group

(excl

UK)

Group

renewable

fuels

(kWh)

Diesel

3,702

5,603

Gas

1,796,071

21,929

1,640,772

1,622,701

Propane

481,796

381,448

non-renewable

fuels

(kWh)

2,281,569

21,929

2,027,823

2,049,751

fuels

(kWh)

2,281,569

21,929

2,027,823

2,049,751

Consumption of purchased or acquired

electricity renewable

475,885

489,045

Consumption of self-generated non-fuel

renewable energy (solar)

26,829

33,514

60,343

27,887

28,606

56,493

Consumption of purchased or acquired

electricity non-renewable

97,926

10,905,502

11,003,428

87,443

10,859,607

10,947,050

(kWh)

124,755

11,414,901

11,539,656

115,330

11,377,258

11,492,588

Consumption

purchased

acquired

heating

94,639

63,808

renewable

energy

26,829

509,399

536,228

27,887

517,651

545,538

Total non-renewable energy

consumption (kWh)

97,926

13,281,711

13,379,637

109,372

12,951,237

13,060,609

energy

124,755

13,791,110

13,915,865

137,259

13,468,888

13,606,147

renewable

electricity from

total

100%

24%

100%

96%

% On-site solar generation

22%

0.29%

24%

0.25%

% Renewable electricity purchased

% Electricity purchased covered by Energy

Attribute Certificates (EACs)

78%

96%

95%

% Grid electricity from total electricity

78%

96%

95%

76%

95%

Energy intensity ratio (per Group

turnover) £m

58,966

55,019

Operational

(excl

UK)

Group

(excl

UK)

Group

Scope

1 fugitive emissions (tCO

188

197

1 combustion emissions (tCO

433

384

388

(tCO

520

522

572

585

Scope 2 market based (tCO

2 location based (tCO

5,482 5,499

5,139 5,157

2 purchased heat and steam (tCO

Scope 2 – Market based (tCO

Scope 2 – Location based (tCO

5,499

5,516

5,151

5,169

Scopes 1 & 2 – Market based (tCO

537

539

584

602

Scopes 1 & 2 – Location based (tCO

6,019

6,038

5,723

5,754

(tCO

Purchased goods and services

69,682

63,637

3. Fuel

-and-energy-related activities (not

included in Scope 1 or 2)

1,288

1,204

Upstream transportation and distribution

3,065

2,367

Business travel

284

441

Employee commuting

2,549

2,764

Use of sold products

256,577

290,817

Upstream Scope 3 (tCO

76,865

70,413

Downstream

Scope 3 (tCO

256,577

290,817

(tCO

333,442

361,230

Total Scope 1, 2 & 3 – Market based (tCO

333,981

361,832

Total Scope 1, 2 & 3 – Location based (tCO

339,480

366,984

Scope 1 + 2 GHG Emissions Intensity ratio

(location-based) (per Group turnover) £’m

25.6 23.3

REPORT GOVERNANCE

FINANCIALS

REPORT

GOVERNANCE

KEY NON-FINANCIAL

PERFORMANCE INDICATORS

data

continued

Social

data

Freshwater

withdrawal

2024

Health

safety

training

Europe

284

233

Asia

1,710

1,775

342

457

2,336

2,465

Waste

generation

(tonnes)

Hazardous

Waste

Non-Hazardous Waste

592

513

Waste

648

530

Hazardous

Intensity

ratio

(per

Group

turnover)

0.24

0.07

Treatment/disposal

(tonnes)

Hazardous Waste recycled

Hazardous Waste incinerated

Hazardous Waste sent to landfill

Non-Hazardous Waste recycled

249

263

Non-Hazardous Waste incinerated

Non-Hazardous Waste sent to landfill

250

207

Solder sent for internal recycling

Recycled waste (solder) received and used

Internal rate of recovery of solder (%)

83%

72%

Solder dross disposed

recycled

326

276

incinerated

sent

landfill

261

208

non-recycled

313

254

638

530

Transferred to treatment contractor for recycling.

Full-time

employee

voluntary

turnover

percentage

(%)

Average number of employees

287

319

Europe

Voluntary leavers

Voluntary turnover

Average number of employees

1,396

1,522

Voluntary leavers

603

793

43%

52%

379

463

10%

13%

Average

number

employees

2,062

2,303

Voluntary

leavers

656

870

Voluntary

turnover

32%

38%

Number

percentage

(%)

contract

temporary

workers

total

employees

287

319

Average number of temporary or contract employees

Percentage of temporary or contract employees to permanent

1,396

1,522

Average number of temporary or contract employees

161

226

Percentage of temporary or contract employees to permanent

12%

15%

379

463

Average

number

employees

2,062

2,303

Average

number

temporary

contract

187

263

Percentage

temporary

contract

permanent

11%

360

Germany

1,850

2,057

China

14,731

11,793

USA

5,058

8,539

Vietnam

30,832

26,193

Singapore

2,475

2,682

Global (excl UK)

54,946

51,265

54,989

51,625

Water

Intensity

ratio

(per

turnover)

233.0

209.2

Water Intensity ratio

(per employee)

24.4

22.4

Social

continued

UK gender pay gap – April 2025

Male

(hourly

pay)

Female

(hourly

pay)

Male

Female

Social

continued

Average

training

time

per

employee

Lower quartile pay band

11 14 25 44% 56%

Lower-middle quartile pay band

10 15 25 40% 60%

Upper-middle quartile pay band 17 8 25 68% 32%

Upper quartile pay band 20 5 25 80% 20%

Total 58 42 100 58% 42%

Employees

gender

region

Male Female Total Male Female Total

165

272

180

303

North America

209

113

336

264

139

420

654

736

1,390

613

802

1,415

1,028

935

1,998

1,057

1,039

2,138

Gender

diversity

statistics

Male Female Total Male Female Total

Board

Executive Management

Management

All other

972

919

1,924

980

1,019

2,038

1,030

938

2,003

1,058

1,043

2,143

Board

63%

38%

50%

Executive Management

83%

17%

83%

17%

74%

23%

76%

21%

All other

51%

48%

50%

51%

47%

49%

There are a total of 35 undisclosed employees, 2 of whom are in the management layer and the remaining 33 are in ‘All other’ layer.

Freedom

of Association

287

319

Average number of employees covered by collective agreements

Percentage of employees covered by collective agreements

1,396

1,522

Average number of employees covered by collective agreement

923

818

Percentage of employees covered by collective agreements

66%

54%

379

463

Average number of employees covered by collective agreement

Percentage of employees

number

2,062

2,303

number

covered

by collective

agreement

923

818

Percentage

of employees

45%

36%

Total hours

Hours

per employee

Days per employee

number of employees

hours

Hours

per employee

Days per employee

number of employees

hours

Hours

hours

1.2

11,273

1.0

10,588

3.5

2,062

1.5

1.0

15,411

1.3

1.1

2,303

1.2

SASB INDEX

Topic Metric Category

Unit

measure Code

response

Energy

Hazardous

Total energy consumed

Percentage grid electricity

Percentage renewable energy

Amount of hazardous waste generated

Percentage recycled waste

Number and aggregate quantity of

reportable spills

Quantity recovered (long-term

activities

to remediate spills that occurred

in years prior to the reporting period

but

for which remediation activities are

ongoing)

Number of recalls issued

Total units recalled

Total amount of monetary losses as a

result

of legal proceedings associated with

product safety

Percentage of products by revenue that

contain IEC 62474 declarable substances

Gigajoules

(GJ),

(%)

RT-EE-130a.1 Page 75

Metric tonnes

(t)

(%)

Number,

Kilogrammes

(kg)

RT-EE-150a.1

Page 76

RT-EE-150a.2

Page 64

Presentation

currency

RT-EE-250a.1

RT-EE-250a.2

Quantitative Percentage RT-EE-410a.1 Not

reported

Business

Ethics

revenue,

certified to an energy efficiency

from renewable energy-related

and energy efficiency

-related products

Description of the management of

associated with the use of critical

materials

bribery

and (2) anti-competitive behaviour

Total amount of monetary losses as a

result

of legal proceedings associated with

bribery or corruption

result

anti

-competitive behaviour regulations

result

anti-competitive behaviour regulations

(%) by revenue

RT-EE-410a.2

Page 50

Discussion

and analysis

Presentation RT-EE-410a.3

currency

Materials

Sourcing

RT-EE-440a.1

Page 52

Discussion

and analysis

RT-EE-510a.1 Page 72

Presentation

currency

RT-EE-510a.2 Zero

RT-EE-510a.3 Zero

CONTENTS

GOVERNANCE AT A GLANCE

BOARD AND COMMITTEE ATTENDANCE

INTRODUCTION TO GOVERNANCE

BOARD OF DIRECTORS

CORPORATE GOVERNANCE REPORT

SECTION 172(1) STATEMENT 98

NOMINATION COMMITTEE REPORT

105

AUDIT COMMITTEE REPORT

110

REMUNERATION COMMITTEE REPORT

117

DIRECTORS' REPORT 141

DIRECTORS' RESPONSIBILITIES STATEMENT 145

Male

Female

Data as at 2 March 2026.

Asian

56+

as at 2 March 2026

Pauline Lafferty (December 2019)

Jamie Pike (March 2022)

Sandra

Breene (October 2022)

Daniel Shook (January 2025)

Charlotta Ginman (January 2026)

Our Board

The Board and its Committees comprise a diverse and highly experienced membership,

providing valuable external perspectives and enabling strategic challenge and oversight.

Board

member

skills

Gavin

Griggs

Matt

Webb

Andy

Sng

Jamie

Pike

Pauline

Lafferty

Sandra

Breene

Daniel

Shook

Charlotta

Ginman Total

Committee

attendance

The attendance at each Board and Committee meeting for the year ended 31 December 2025 is set out in the table

below. Beyond formal meetings, the Board also received presentations from the wider business and external advisers.

Key areas and activities covered by the Board to support our strategy during the year are detailed on pages 94–97.

Audit

Member Board Committee

Remuneration

Committee

Nomination

Committee

Jamie Pike

4/4

3/3

Gavin Griggs

4/4

Matt Webb

4/4

Andy Sng

4/4

Pauline Lafferty

4/4

5/5

3/3

Polly Williams

3/4

4/5

2/3

Sandra Breene

3/3

Amina Hamidi

3/3

2/2

Daniel Shook

5/5

3/3

Stepped down from the Board on 2 October 2025.

Power electronics

Industrial tech

Risk management

Strategic human resource

Business development and

managing growth

Prior public company

experience

Investor relations

Financial

ESG and climate experience

Through active oversight, the Board ensures that our culture

reflects our values and supports long

-term sustainable

performance.

The Board demonstrated decisive leadership to support proactive

action in response to continuing challenging market conditions,

maintaining focus on the delivery of the Group’s strategy, and

positioning the business for market recovery.

INTRODUCTION

During challenging conditions,

we maintained disciplined focus

on strategy and governance,

positioning XP Power for growth.

JAMIE

PIKE

CHAIR

I am pleased to present our Governance Report for the

financial year-ended 31 December 2025. This report

describes how the Group is managed and outlines our

approach to governance and culture, together with the

framework that supports XP’s operations.

The Board remains firmly committed to maintaining high

standards of governance across the Group. Together with

the Strategic and Committee Reports, this report explains

how the Company has applied the principles and provisions

of the UK Corporate Governance Code 2024 (the Code)

issued by the Financial Reporting Council. I am pleased to

confirm that the Company maintained full compliance with

the Code throughout 2025. As part of this assessment, the

Board considered the Code’s guidance on independence

and concluded that all its Non-Executive Directors were

independent. For further information, please see page 103.

Positioning

for

growth

In my opening statement on pages 8 to 9, I provide an

overview of business in 2025. The Board has addressed

several key decisions in response to the challenging market

conditions over the last two-to-three years. These have

included the exit from the RF market, restructuring of our

supply chain through completing the construction of our new

production facility in Malaysia and the closure of our facility

in China. Alongside these decisions, the Board and senior

management have maintained their focus on controllable

elements of the business, which places XP in a strong

position as we begin to see signs of improvement in our end

markets. Appropriate corporate governance and effective

Board leadership have empowered the Executive Leadership

Team to execute the key strategic decisions made, supporting

the implementation of operational changes.

Purpose and culture

The Board is responsible for promoting the Company’s long-

term sustainable success, creating value while having regard

to the interests of all stakeholders in its decision making. To

achieve this, we focus on our vision: “To be the first-choice

power solutions provider, delivering the ultimate experience

to our customers and our people”, and our purpose:

“Powering the world’s critical systems”.

The defined core values that shape our culture are Integrity,

Knowledge, Speed, Flexibility and Customer Focus. The

Board and senior management monitor our culture alongside

workforce policies and practices and are satisfied that they

consistently align with the Company’s purpose, strategy

and values.

composition

Throughout 2025, the Board’s skills and experience

were assessed to ensure we have the right balance and

composition with succession plans in place. In October 2025,

Amina Hamidi stepped down as a Non-Executive Director

after serving three years, following a promotion to a new role

with her current employer.

As part of succession plans for the role of Senior

Independent Director, Polly Williams retired from the Board

in February 2026 after over nine years with the Group.

I would like to express my thanks to Amina and Polly for their

service, support and contribution over the years.

The appointment of a new Senior Independent Director

followed a thorough search process, at the conclusion

of which the Board was pleased to appoint Charlotta

Ginman as a Non-Executive Director and SID designate.

Charlotta joined as a member of the Audit, Remuneration

and Nomination Committees from 1 January 2026 and

succeeded Polly Williams as Senior Independent Director

from 26 February 2026. Polly supported Charlotta during her

transition to this important role. Charlotta is an experienced

Non-Executive Director with a strong financial background.

She has held Non-Executive roles with a broad range of

international companies across several sectors, including

technology, healthcare and financial services. Prior to that,

she worked in investment banking and held senior finance

and management roles within the telecommunications

industry. Full details of the recruitment process, succession

and transition planning, and our commitment to diversity

are outlined in the Nomination Committee Report on pages

105–109.

effectiveness

Considering changes to the Board’s composition during the

year, the Board agreed to conduct an internal review of its

performance and effectiveness in 2025. Further information

and an explanation of the process and findings are outlined in

the Nomination Committee Report on page 109. The review

confirmed that we continue to operate effectively as a Board

in accordance with good corporate governance principles.

As Chair, I am pleased to see a culture of open dialogue and

supportive relationships with Executive management.

Looking ahead, our clear strategy, continued progress in new

product development, and culture and governance, which

underpin the business, position us well for the next phase of

the business’s development and to take advantage as market

conditions recover.

JAMIE

PIKE

CHAIR

The Board actively engages with stakeholders to understand their

perspectives and inform decision making in line with our strategy.

Charlotta Ginman joined the Board on 1 January 2026 and in

line

with succession plans, succeeded Polly Williams as Senior

Independent

Director on 26 February 2026 when Polly retired

from the Board.

Pike

Chair

date:

Executive:

Nomination (Chair)

Jamie spent nine years with

Burmah Castrol, becoming Chief

Executive of Burmah Castrol

Chemicals before leading the

buy-out of Foseco in 2001 and its

subsequent IPO in 2005. Prior to

that, he was a partner at Bain &

Company.

Jamie has held the role of Chair

several public companies; he was

Chair of the Board at Spirax

plc until December 2024.

He holds an MBA from INSEAD

and is a Member of the Institute

of Mechanical Engineers.

Jamie is currently Chair of the Board

at IMI plc.

Griggs

date:

31 October 2017 as CFO.

Appointed CEO from 1 January 2021

Executive:

Executive

Gavin is a qualified accountant

who has worked in a range of

acquisitive, growth-focused

businesses with an international

footprint across several industries.

He has held senior finance and

strategy roles at Alternative

Networks, Daisy, Logica, Sodexo,

PepsiCo and SABMiller.

Gavin has served as CFO of

three fast-growth technology

businesses.

October 2017 and became CEO

None.

Matt Webb

date:

5 October 2023

Executive

Matt is a Chartered Accountant

and holds a degree in Engineering

from Oxford University.

He has a broad strategic and

operational skill set, with over

25 years’ experience within

international businesses at group

and divisional level.

Matt held strategic and financial

roles at BPB plc, Saint-Gobain and

Ferguson plc, including Finance

Director for Ferguson’s largest

US division. He served as CFO at

Luceco plc, a FTSE Main Market

designer and manufacturer of

LED

lighting, EV charging equipment

and electrical wiring devices,

from

February 2018 until April 2023.

None.

date:

1 January 2016

Audit, Remuneration, Nomination,

Board representative for ESG

Polly is a Chartered Accountant

and a former Partner at KPMG

LLP. She resigned from her

partnership in 2003 and has

since held several Non-Executive

Directorship roles.

She formerly acted as Non-

Executive Director for Jupiter

Fund Management plc between

2015 and 2022.

Polly is currently a Non-Executive

Director at Royal Bank of Canada

Europe Ltd and ClearBank Group

Holdings Limited, Senior

Independent

Director and Audit Committee Chair

at The Rugby Football Union and

Non-Executive Director and Audit

Committee Chair at Videndum

plc. She is also a Trustee and Chair

of the Audit, Investment and

Risk Committee for The Duke of

Edinburgh Award.

Ginman

Director

date:

1 January 2026

Audit, Remuneration, Nomination

Charlotta is an experienced

Non-Executive Director and

Chartered Accountant.

She has held Non-Executive

roles with a broad range of

international companies across

several sectors, including

technology, healthcare and

financial services.

Previously, Charlotta worked in

investment banking and held

senior finance and management

roles at Nokia and Vertu.

External appointments:

Charlotta is currently a

Non-Executive Director of

BOKU Inc, JPMorgan India

Growth & Income plc, Gamma

Communications plc and VinaCapital

Vietnam Opportunity Fund Ltd.

While Charlotta currently serves

on five boards, two of these

appointments are with investment

trusts that typically hold no more

than four to five board meetings

a year and, accordingly, she has

sufficient capacity to devote

appropriate time and attention to

each role.

Sng

Executive

Andy has over 22 years’

experience in the power

converter

industry.

He graduated from Nanyang

Technological University with a

degree in Electrical and Electronic

Engineering, and an MBA from

Manchester Business School.

Prior to joining the Group, Andy

held technical and commercial

roles with Silicon Systems

(Singapore) and Advanced Micro

Devices (Singapore).

None.

changes

Amina Hamidi stepped down from the Board on 2 October 2025.

Charlotta Ginman was appointed to the Board on 1 January 2026 and succeeded Polly Williams as Senior Independent

Director on 26 February 2026.

Polly Williams retired from the Board on 26 February 2026.

Pauline

Lafferty

Independent Non-Executive

Director

Appointment

3 December 2019

Executive/Non-

Non-Executive

Committee membership:

Remuneration (Chair), Audit,

Nomination, designated NED for

Employee Engagement

Skills

experience:

Pauline was formerly Chief People

Officer at The Weir Group plc, a

position she held between 2011

and 2017.

Between 1998 and 2011, she

worked in executive search for

The Miles Partnership and Russell

Reynolds Associates. Prior to that,

she worked in supply chain roles

for Digital Equipment Corporation

and Motorola.

Pauline previously acted as Chair

of the Remuneration Committee

at Scottish Event Campus Limited

and as a Non-Executive Director

at Centurion Group.

External

appointments:

Pauline is currently a Non-Executive

Director and Remuneration

Committee Chair at Breedon

Group plc, where she is the

designated NED for Employee

Engagement.

Daniel

Shook

Independent Non-Executive

Director

Appointment

1 January 2025

Executive/Non-

Non-Executive

Committee

membership:

Audit (Chair), Remuneration,

Nomination

Skills

experience:

Daniel was previously Chief

Financial Officer at IMI plc,

the FTSE 100 international

engineering group, a position

he held between 2015 and

1 August 2025. He has extensive

financial management experience

and knowledge of complex

manufacturing processes across a

range of global industrial sectors.

Prior to this, Daniel was CFO

and a member of the Executive

Board at Borealis AG, having

previously held senior financial

and management roles at The

BOC Group plc. Daniel was a

Non-Executive Director and

Audit Committee Chair of Ultra

Electronics Holdings plc from

2019 to 2022.

External

appointments:

None.

Sandra

Breene

Director

11 October 2022

Committee

membership:

Audit, Nomination

Skills

Sandra is currently President of

Consumer Care at Croda.

Prior to this, she spent three years

as President of Regional Delivery

and four years as President of

the Personal Care Division and

President of Croda in North

America. Sandra has over 30

years’ experience working across

Croda’s market sectors in a variety

of commercial roles, giving her

an extensive understanding of

customer needs.

Sandra took an instrumental

role on numerous acquisitions

conducted by Croda, and spent

five years living and working in

Asia, providing her with valuable

insight into emerging markets and

cultural differences.

Sandra holds an MBA and has a

BSc in Chemistry.

External

Sandra is currently a Trustee Director

at Edukos Education Trust.

Corporate Governance Statement 2025

The primary remit of the Board of Directors is to provide direction to shape the Group’s strategy and to ensure this is

executed effectively within a structure that is well controlled, mitigates risk and upholds corporate and social responsibility.

Good corporate governance emanates from the top and the Board gives continued prominence to this area.

XP Power Limited was incorporated and is domiciled in Singapore, under the Singapore Companies Act 1967 (the Act). We are

not required to follow the Singapore Code of Corporate Governance. The Company is listed on the London Stock Exchange

and reports against the application of the principles of corporate governance contained in the UK Corporate Governance

Code 2024 (the Code).

We h

ave clearly laid out how the principles of the Code have been applied under the areas of:

Areas Heading

Page

Board leadership

Effective Board Pages 88–90

Company

Purposes, values and culture Page 100

purpose

Key matters considered by the Board and Board

Pages 94–97

outcomes in 2025

Stakeholder engagement Pages 101 and 103–104

Workforce policies and practices Page 101

Division of

responsibilities

Board roles Page 93

Independence Page 103

External commitments and conflicts of interest Pages 88–90 and 102

Governance framework and Board resources Pages 92–93

Composition,

succession and

evaluation

Appointments to the Board Page 108

Board skills, experience and knowledge Pages 84 and 88–90

Board performance review Page 109

Audit, risk and

internal control

Financial reporting Pages 111–114

External Audit and Internal Audit Pages 115-116

Review of the 2025 Annual Report Pages 111–114

Internal financial controls Pages 114-115

Remuneration

Linking remuneration with purpose and strategy Pages 117-119

Remuneration Policy Pages 134–140

Performance outcomes in 2025 and strategic targets Pages 124–127

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

Our approach

governance

Our governance structure supports the promotion of good governance practices across the Group.

The Board delegates certain of its responsibilities to its Nomination, Remuneration and Audit Committees, whose work,

roles, responsibilities and composition are detailed in separate reports on pages 105, 117 and 110. Each Committee operates

under Terms of Reference, which were reviewed by the Committees and the Board during the year, and their performance is

assessed annually as part of the annual performance review process.

Board and Committee meetings are scheduled to align with key decision-making points throughout the year. Where

appropriate, informal discussions take place, with updates and progress reports circulated between meetings. To ensure an

effective flow of information, the Chair consults with the CEO and, with support from the Company Secretary, proposes

agendas that align with the agreed annual schedule of Board items and incorporate feedback from the Non-Executive

Directors. Board materials are distributed through a secure portal, highlighting action points for each agenda item, as required.

Meeting minutes are prepared and shared with attendees, and action lists are monitored and updated to ensure the timely

completion of key tasks.

Operational matters are delegated to the Executive Directors, except for those specifically reserved for the Board. The

schedule of matters reserved for the Board is reviewed annually and is available on the Company website at

corporate.xppower.com. Further details on the matters reserved can be found on page 102.

Division

responsibilities

The roles of Chair, Senior Independent Director and CEO are formalised, with a clear division of responsibility between their

roles. The Chair leads the Board and ensures its overall effectiveness in directing the Company. The Senior Independent

Director provides support for the role of Chair and leads the succession process for the Chair’s appointment. The CEO is

responsible for the day-to-day operation of the Company and execution of our strategy. The CEO and CFO ensure that

Directors receive accurate, timely and clear information to allow them to discharge their duties.

To e

nsure the Board is effective, we review and monitor the Directors’ skill sets.

Responsibilities

the

Chair

The Chair is responsible for setting the Board’s calendar and agenda and for guiding discussions to ensure

they are focused, effective and aligned with strategic priorities. The Chair also leads and

co-ordinates the processes that assess the performance and effectiveness of the Board as a whole, and the

contribution of individual Directors.

How our Chair promotes a culture of openness

The Chair demonstrates objective judgement and conducts Board meetings in a way that encourages

openness and debate. By ensuring all views are heard and considered, the Chair fosters a culture where all

Non-Executive Directors can contribute effectively and challenge constructively.

Executive

Directors

Other than their normal attendance and participation in discussions at Board meetings, the Executive

Directors are responsible for the day-to-day running of the Company and the implementation of the

agreed strategy.

Senior Independent

Director (SID)

The Senior Independent Director supports the Chair in their role and acts as an intermediary between

other Directors. The SID leads the Non-Executive Directors in the annual review of the Chair and is

available to shareholders if they have concerns that have not been resolved through contact with the

Chair, CEO or CFO.

Throughout 2025, Polly Williams was the Senior Independent Director. Charlotta Ginman succeeded Polly

in this role from 26 February 2026 when Polly retired from the Board.

Directors

The Non-Executive Directors challenge and support the Executive Directors and act in the best interests

of the Company’s stakeholders and actively participate in the review and determination of the Company’s

strategy.

Designated

Director

The designated Non-Executive Director engages with the workforce and ensures that their views and

interests are considered in Board discussions and decision making.

Pauline Lafferty is the designated Non-Executive Director for Employee Engagement.

Polly Williams was the Board representative for ESG matters until she retired from the Board.

STRATEGIC REPORT

Committee membership numbers as at 2 March 2026

Supports the CEO in shaping and executing the Group’s strategic plans by driving key initiatives and providing leadership across all

locations within the organisation.

The CEO and ELT lead internal councils and committees that provide governance

oversight on key business activities. These include:

Health and Safety Council – delivering the strategy for health and safety

across the Group

Sustainability Council – providing oversight on environmental, social and

governance initiatives

Export Compliance Committee – oversees adherence to export control

laws, licensing and trade regulations

Manages the overall operations

and resources of the Company

in accordance with the

Board-approved strategy.

The role of the Board is to promote

the long-term sustainable success

of the Company, and establish its

purpose, values and strategy.

The Board consists of the Chair,

a Senior Independent Director,

three Executive Directors and three

Non-Executive Directors.

Certain matters are delegated to

the main Committees appointed by

the Board.

Oversees information that is, or may become, Inside Information, ensuring it

is identified, controlled and handled in line with regulatory requirements and

internal procedures.

Sets the Remuneration Policy for the Executive Directors and Executive

Leadership Team.

Provides oversight of financial reporting, the audit process, the Company’s

system of internal controls, and compliance with laws and regulations.

AUDIT COMMITTEE REPORT PAGES 110–116

Reviews and considers the appointment of new Directors, and succession

planning for the Board and Executive Leadership Team.

Reviewed business performance and strategic priorities at each Board meeting, including

consideration of trading updates made to the market

Approved supply chain restructuring plans, completed the construction of the Malaysia

manufacturing facility and closed the China facility, providing greater flexibility for end markets

Approved structured exit from the RF market, allowing the Group to maximise investment and

returns from other parts of the product portfolio

Reviewed new product developments

Received updates on European and Asia sales strategies

Received presentation on the opportunities and risks of artificial intelligence on business

operations

Received a presentation from the Company’s brokers, providing an external perspective on

XP’s positioning, valuation and shareholder feedback

Received analysis of shareholder feedback following investor roadshows

Continued to consult with shareholders on remuneration matters, in particular the 2026

Remuneration Policy review

Received feedback from Employee Engagement sessions held by NED, Pauline Lafferty

Communicated and engaged with stakeholders on the Placing

Discussed our net promoter scores and feedback from customers

Held an Investor Seminar covering “why we win”, our market position, product development

and portfolio, technology, sustainability and financial framework

Monitored actions taken to support the delivery of the supply chain restructuring and exit from

the RF market

Monitored inventory, cost-reduction measures and cash and liquidity management during

slower market conditions

Considered outlook and approved the planned budget for 2025

Approved extensions to the Group’s finance facilities

Approved share Placing

Considered and confirmed the Group’s risk appetite; discussed and agreed principal and

emerging risks and uncertainties across the Group

Received an update briefing on our cybersecurity roadmap

Approved proposals to restructure intercompany loans to manage USD exchange rate exposure

Reviewed approach to insurance programme renewal

Approved the Internal Audit plan and Charter

Assessed the financial performance of the Group, approved the Half- and Full-Year Financial

Statements and the Annual Report and Accounts

Approved updates to Matters reserved for the Board and committee Terms of Reference

Reviewed and discussed outcomes from the internal Board performance review, including

committee reviews

Reviewed and updated the composition of Board Committees, considering tenure, skills,

experience and diversity characteristics to inform succession planning

Approved AGM Notice and discussed reports on AGM voting and proxy agency feedback

Approved Anti-Fraud Policy as part of procedures in place to support compliance with the

Economic Crime and Corporate Transparency Act 2023

Assessed Board and Senior Leadership succession plan

Recruited a new NED and SID designate, appointing Charlotta Ginman from 1 January 2026

Monitored the Group’s culture, and site Employee Engagement plans

Reviewed diversity and inclusion initiatives, including Board-level policy

Reviewed the results of the 2025 Employee Engagement survey and resulting actions

Maintained oversight of the sustainability strategy and progress against our SBTi-registered

targets

Received an update on TCFD risks, opportunities and annual reporting

Monitored global health and safety reporting dashboards and received updates on key

initiatives, including “Safety Begins with Me”, seeing reductions in TRIR and LTIR rates

Reviewed and approved annual Modern Slavery Statement

Key matters considered by the Board

At each meeting,

the Board receives a

business update and

outlook, Global Health

and Safety report, an

update on governance

matters and a summary

of Board Committee

activity. Other key

activities covered by the

Board during 2025 are

shown below.

Outcomes

March share Placing reduced net debt by £39.6m

Committed borrowing facilities reduced by $80m to $130m as part of

amendments signed during 2025, following deleveraging delivered in

the year

December amendment extended borrowing facilities to give

sufficient maturity for going concern purposes when signing 2025

and 2026 accounts

In March 2025, the Board approved a Placing to raise funds from

shareholders to strengthen the Group’s capital structure, enhance

cash generation and reduce leverage. In May

and December 2025,

the

Board considered key decisions relating to the Group’s financing

facilities,

including the extension of existing arrangements to ensure

they

remained appropriate to support the Group’s strategic direction.

In its deliberations, the Board carefully considered the interests of

shareholders, lenders and other

key stakeholders, recognising the wide

range

of potential Full-Year outcomes and the uncertainty surrounding

timing and scale of market recovery. The Board determined that it

was

in shareholders’ long-term interest to prioritise net debt reduction

until leverage moves closer to its long

-term target of 0–1x Adjusted

EBITDA.

These

actions were taken to proactively manage the business through

relatively challenging market conditions, while ensuring appropriate

financing

is in place to support the Group’s long-term growth potential

and position it for recovery.

Share Placing, Annual Results

Amendment of

RCF,

and investor roadshow Board Strategy Day

Interim

Results

investor roadshow

Board and

performance review

2026

and Full-

Year

Trading Update

Customers

and strategic partners

Suppliers

Communities

and our environment

Shareholders

Q1 Trading Update,

Annual General Meeting

Feedback from Employee

Engagement

survey, Export

Controls Update

Company

culture review, Q3 Trading

Update,

Risk Review, Updates on Health and Safety,

Cybersecurity and Sustainability

Appointment of NED, Feedback from NED

-led Employee

Engagement sessions, Broker

Presentation, extension of RCF,

Decisions to exit RF and close China manufacturing facility

Outcomes

Consolidated our supply chain footprint into Vietnam and Malaysia

Secured future flexible supply chain to serve our US markets,

without

trade or tariff barriers

Coordinated the closure of the Kunshan facility

The Board approved the recommencement of construction work in

Malaysia in early 2025, following a short period during which the

of the project was put on hold while the business

navigated

market pressures and ongoing destocking by customers.

Available capacity at the Group’s manufacturing facility in Vietnam,

together

with progress made on the Malaysian site, enabled the Board

review its global manufacturing presence. The Board acknowledged

the geopolitical challenges and considered the interests of customers

based

in the US, being the largest geographical market by revenue. The

decided to close our manufacturing facility in China at the end of

December 2025.

SECTION 172(1)

STATEMENT

Engaging with our

stakeholders is

fundamental, so we focus

on what matters

Throughout the year, when making

key decisions, careful consideration

was given to the likely impacted

stakeholders. The Board and

management acted in good faith to

ensure their actions aligned with our

strategic aims, to best position XP for

long-term success and in so doing they

have regard to:

the likely consequences of any

decision in the long term;

the interests of the company’s

employees;

the need to foster the company’s

business relationships with

suppliers, customers and others;

the impact of the company’s

operations on the community and

the environment;

the desirability of the company

maintaining a reputation for

high standards of business

conduct; and

the need to act fairly between

members of the company.

The Board drives the Company culture

to achieve high business standards

through the Code of Conduct

framework, to which all employees

and key suppliers sign up. Our Code

of Conduct covers stakeholder

expectations on business ethics,

responsible environmental behaviour,

health and safety, and the treatment

of people.

A table setting out further information

on where s.172(1) factors are

discussed throughout the Annual

Report can be found on page 43.

Why we

engage

Our workforce is key to our long-term

success. Their health, safety and wellbeing

are essential.

Diverse perspectives and inclusive teams

are important to achieving our goals. We

strive for a culture in which all colleagues

are engaged and committed to our vision.

How we

engage

Regular town halls are held with senior

management and information is cascaded

and discussed across teams, including via

regional employee updates. We assess

our effectiveness using all-employee

engagement surveys. The designated

Non-Executive Director hosted three virtual

Employee Engagement sessions across

Europe, the US and Asia.

Key topics

discussed

Global Health and safety and a refocus

on quality in everything we do

Embedding culture and inclusion across

the business

Annual engagement survey results

Workforce retention at the Vietnam

manufacturing facility

A people plan to support the closure of

Kunshan manufacturing facility

How we

responded

Built on our "Safety Begins with

Me" campaign and held a quality

awareness day

Interaction with the Executive Team was

enhanced through local site visits, and

open communication was improved with

senior leaders

Introduced people development

training, cascaded engagement survey

results and facilitated response plans

Supported our inclusivity initiatives

through structured mentorship

programmes

Improved compensation arrangements

and skills development to support

retention in Vietnam

Supported those employees impacted

by the closure of our Kunshan facility

through transparent communication and

appropriate outplacement services

Customers and

strategic partners

Why we

engage

Meeting customer needs is our priority in

new product development.

We enable our customers to deliver power

products and solutions that improve their

business sustainability while creating

shared economic benefits essential to the

long-term success of the Company.

How we

engage

We listen to our customers’ technology

roadmaps to partner effectively.

Strong customer relationships are formed

through regular sales team interactions with

focus customers to gather feedback on our

performance and their challenges.

We use anonymous customer satisfaction

surveys to further understand our

Key topics

discussed

Exit from the RF market

Improving customer experience

Product innovation and development

How we

responded

Worked with principal customers to

map out a mutually agreeable exit from

the RF market, taking final orders

Worked closely with US customers to

reduce impact from US tariffs by shifting

production to lower-tariff countries

or drop-shipping directly to their

manufacturing plants outside of the US

Opened a new global design and

services centre in the Philippines

and reviewed our annual customer

satisfaction survey results

Launched 24 new innovative products

in 2025

Led the way by creating more

power-efficient products, with FLXPro

being digitally enable to allow customers

to monitor and optimise energy usage

Suppliers

Why we

engage

We uphold the highest supplier standards

to minimise risks and build long-term

partnerships of mutual trust and success.

We recognise our suppliers as vital partners

in our supply chain and work together to

enhance the strength and sustainability of

our entire network.

How we

We collaborate with key suppliers to track

performance and proactively understand

and resolve concerns.

We work with suppliers to foster stronger

partnerships and reduce lead times for key

components.

discussed

Maintaining high standards across our

supplier base

Sustainability-related matters

Supply chain performance and lead time

reduction

responded

Reviewed our Modern Slavery

Statement and enhanced our supplier

engagement programme to include ESG

surveys to better manage risk

Engaged with suppliers to monitor

their supply chains to understand their

progress and challenges in improving

sustainability

Continued to improve sourcing

capabilities in Asia and deliver

annualised component cost savings by

identifying alternative suppliers and

negotiating with key suppliers, which

resulted in more flexible and resilient

arrangements

Communities and

our environment

Why we

We engage with the communities in which

we operate to develop trust and understand

important local issues.

We have a long-standing commitment to

minimise our environmental impact as we

continue to work towards our interim and

long-term SBTi-registered targets.

Our key focus areas include how we

can support local causes and issues,

develop local talent and protect the

environment. We consider local and national

environmental impact when we make

decisions.

We encourage employees to get involved

with local environmental and community

activities and the Board receives updates.

discussed

Progress against the ESG strategy,

impact from the Group’s electricity

usage alongside the build and future

operations at the new Malaysian

manufacturing facility

Engaging employees in identifying local

charities and causes that will be most

impacted by their support

responded

Developed a site-specific sustainability

dashboard to monitor against

Energy Efficiency, Waste Diversion,

Internal Audit Score and Local Impact

Programme KPIs

Conducted a climate assessment for the

new Malaysian manufacturing facility

Fostered a culture that encourages

our people to get involved in charity

fundraising activities. Employees

are offered one volunteering day to

participate in an environmental or

community project

Why we

Effective shareholder engagement is crucial

to achieving our goals.

We commit to open and transparent

engagement with our investors, providing

them with clear and accurate information

about our business and its performance.

Our CEO, CFO and IR team regularly meet

with current and prospective investors to

ensure they understand our investment

proposition, ESG progress and current

Our Chair and Remuneration Committee

Chair engage with shareholders on

performance, governance and Executive

remuneration to ensure we consider their

views. Feedback is sought in response to

votes against general meeting resolutions.

discussed

Management of the ongoing challenging

market conditions, including short-term

mitigating actions

Capital management to support

long-term growth ambitions and supply

chain flexibility from our new Malaysian

Renewal of Directors’ Remuneration

Policy and understanding 2025 AGM

voting outcomes

The Group’s long-term growth potential,

including the structural drivers of

long-term growth and growth strategy

responded

Controlled costs to position the Group

to take advantage of market recovery

Completed share Placing and the

amendment and extension of the

Group’s RCF to materially improve

balance sheet resilience

Conducted shareholder consultation

on the Directors’ Remuneration Policy

renewal and the 2025 AGM voting

outcome

Held our first Investor Seminar on our

long-term growth strategy, including

“Why We Win” and progress made on

new product development

Shareholders

Culture and Board oversight

The Board has overall responsibility for establishing and maintaining the Company’s culture, which is underpinned by its values

of Integrity, Knowledge, Speed, Flexibility and Customer Focus. The Board continues to influence and oversee culture across

the Group, ensuring that the desired beliefs and behaviours are consistently demonstrated both within, and beyond, the

Boardroom, as outlined below.

Action Description

Monitoring

Throughout 2025, the Board continued to oversee the Company’s culture and reviewed

results of cultural and employee engagement surveys, KPIs and Net Promoter scores. Trends

were monitored to assess how effectively the Company’s core values are embedded across

the organisation and to inform Board discussions on culture, behaviours and workforce

practices.

surveys

Gallup engagement surveys continue to inform the Board on Employee Engagement and

sentiment, supporting the Board in monitoring alignment with the Company’s values and in

identifying areas to enhance engagement. Further information on the survey results can be

found on page 68.

Code

of Conduct

Our values drive all our business decisions and are underpinned by our Code of Conduct,

which is reviewed annually. All employees undertake mandatory training to ensure a clear

understanding of governance requirements and to reinforce the Company’s core values.

Direct

Workforce engagement by the designated Non-Executive Director provides the Board with

feedback from a broad range of employees ensuring our group-wide culture is aligned to our

purpose, values and strategy.

Communication Through regular global updates, the Executive Leadership Team communicates strategic

direction and upcoming priorities. Attendees then share the key themes from these sessions

with their teams to ensure alignment across the organisation.

The Board and its committees receive reports on whistleblowing, talent and retention, health

and safety matters, and diversity and inclusion metrics. The senior management presentation

to the Board on Health and Safety initiatives provide insights into employee sentiment and

organisational culture.

Speak

Up The Company operates a whistleblowing hotline that enables employees to raise concerns in

confidence. Any potential misalignments to our desired culture are investigated to determine

appropriate actions. More details on our Whistleblowing programme can be found on

page 72.

Health and safety

The Board is committed to providing all employees, contractors and partners across the Group with a safe working

environment. Health and safety at XP Power is sponsored by the Executive Leadership Team, who ensures all employees

have the necessary resources and support to build a safe workplace. The CEO reviews health and safety reports from the

Group, and the Board receives a structured update, including statistics on any health and safety issues, education and training

activities, and an update on the global agenda for health and safety matters. Our safety governance structure is strong, which

ensures safety is prioritised and continuously improved. For further information and associated case studies, please see

pages 66-68.

PAULINE

LAFFERTY

DESIGNATED NON-EXECUTIVE DIRECTOR

FOR WORKFORCE ENGAGEMENT

How we ensured employees’ voices

were heard by the Board in 2025

During the year, I held three virtual employee engagement

sessions across all our regions. I had the opportunity to hear

directly from employees with differing tenures, at various

levels of the organisation, and welcomed their constructive

engagement. The sessions were structured to promote open and

transparent communication, enabling employees to share views

on their working environment and raise questions on any topic,

including Executive remuneration and the wider pay policy.

A w

ide range of topics were explored during these sessions,

including Company culture, communication, operational

initiatives, and opportunities to enhance the employee

experience at XP Power. These sessions raised several discussion

points, including supporting cooperation across teams and

ensuring alignment on strategy deployment.

The outcome and key observations from these sessions,

together with feedback from the anonymous employee surveys

and internal communications, were reported to and discussed by

the Board.

How we uphold culture across our

workforce

encourage

Our processes enable us to request and consider the views

of our employees. The annual employee survey, which is

benchmarked against a broad range of companies, provides the

Board with insight on how effectively our culture and employee

engagement supports our strategic growth plans.

Following a strong focus on team-level accountability and action

planning, we saw a significant improvement in employees’ views

on the delivery of the business’s commitments. For instances

where the response to the employee survey results needed a

more tailored approach, supportive coaching was provided by

the People and Organisation team, with leadership determining

the appropriate course of action.

Ongoing engagement throughout the year was facilitated by

global initiatives, regular site and regional engagement activities,

and clear ownership within local teams. Momentum was driven

through the global "Safety Begins With Me" campaign, which

helped embed a much stronger culture of ownership and

communication across the business. This campaign resulted in a

notable reduction in workplace accidents and increased cross-

region collaboration on safety. An active campaign for Executive

Leadership to visit, and be visible on individual sites globally,

allowed for greater transparency and communication.

The Board fully supports a range of employee initiatives to

support health, wellbeing, diversity and equality, such as the

Women Employee Resource Group. Please see pages 68 and 69

for further information.

Results exclude Vietnam and China employees.

100

101

AUDIT COMMITTEE

Designated Non-Executive Director,

Pauline Lafferty

CONFIDENTIAL, INDEPENDENT

THE BOARD

4.15/5

2025 Employee Engagement score.

(2024: 4.03)

Matters

reserved

for the

The Board has a formal schedule of matters reserved to it,

including:

the assessment of the Group’s long-term viability and

going concern status;

the approval of the Group’s strategy, long-term

objectives, financial plans and budgets, and any material

changes to them;

oversight of the Group’s operations, ensuring competent

and prudent management, sound planning, an adequate

system of internal control, and adequate accounting and

other records;

the approval of the Group’s risk appetite, principal and

emerging risks and oversight of the effectiveness of the

Group’s risk management framework and internal control

systems;

the approval of changes to the structure, size and

composition of the Board, ensuring adequate succession

planning;

consideration of the independence of Non-Executive

Directors;

oversight of the Group’s Remuneration Policy, with the

support of the Remuneration Committee;

final approval of Interim and Annual Financial Statements

and significant accounting policies;

the approval of the Dividend Policy;

the approval of significant acquisitions disposals

investments and major capital projects; and

the delegation of the Board’s authorities, including the

division of responsibilities between the Chair, Chief

Executive Officer and other Executive Directors.

Change

Directors’

Amina Hamidi and Polly Williams stepped down from

the Board on 2 October 2025 and 26 February 2026,

respectively.

Charlotta Ginman joined the Board as a Non-Executive

Director on 1 January 2026, and became a member of the

Audit, Remuneration and Nomination Committees from the

same date. She became Senior Independent Director on

26 February 2026 when Polly Williams retired from this role.

Conflicts of interest and time

commitment

Directors are required to disclose any actual or potential

conflicts of interest prior to their appointment and on an

ongoing basis. A register of Directors’ interests and conflicts

is maintained by the Company Secretary and is regularly

reviewed. The Board considers its Directors’ interests and

any conflicts that these may present at each Board and

Committee meeting.

The Board recognises the importance of ensuring that

Non-Executive Directors have sufficient time to discharge

their responsibilities effectively. Any proposed new

appointments are reviewed and approved in advance by

the Chair of the Board. During 2025, the Non-Executive

Directors provided constructive challenge, strategic oversight

and specialist insight and held management to account.

There were no material changes to Directors’ external

commitments during 2025. Each Director devoted significant

time to their XP Power Board responsibilities, and all

Directors attended all Board meetings during the year.

The Board notes that Charlotta Ginman serves on five

boards, two of which are with investment trusts that

typically convene four to five board meetings annually. The

Board is satisfied that she has sufficient capacity to devote

appropriate time and attention to each role.

Following the Chair’s review of individual Director

performance and time commitment, the Board is satisfied

that all Directors remain fully engaged and continue to

devote the appropriate amount of time and attention to their

duties.

independence

The Board currently consists of five Non-Executive Directors,

including the Chair and three Executive Directors. All

Non-Executive Directors are considered to be 100%

independent. The division of responsibilities between the

Executive and Non-Executive Directors is clear.

In assessing the independence of its Non-Executive Directors

in line with Provision 10 of the Code, the Board recognises

that, during 2025, there were certain circumstances that may

appear to impair Directors’ independence. Polly Williams

had served on the Board for over nine years from January

However, the Board considered that she retained her

independence and that, in part, her valuable expertise was

informed by her long service.

Jamie Pike and Daniel Shook held a common external Board

role at IMI plc until August 2025, while Daniel transitioned

his responsibilities as CFO prior to stepping down from the

Board. The Board was satisfied that this relationship did not

compromise their ability to exercise independent judgement

and concluded that all Non-Executive Directors remained

independent during 2025 and up to the date of this report.

Details of the beneficially owned ordinary shares in the

Company held by the Non-Executive Directors are included

in the Remuneration Committee Report on page 128.

internal

control

The Board is responsible for the Company’s overall approach

to risk management and internal control. It has an ongoing

process for identifying, evaluating and managing the

emerging and principal risks faced by the Group, which is

set out in the Managing Our Risks section on pages 35–41.

The risk management framework and related processes

have been in place throughout the year, with the framework

ensuring that risk management is embedded in the

day-to-day operations of the business.

While the Board retains overall responsibility for risk

management, the delivery of risk management processes is

overseen on a day-to-day basis by the Executive Directors

and the senior leadership team. Managers across the

business are responsible for the effective operation of key

controls and established processes. Examples of these key

controls are as follows:

Authority matrices to clearly define who can authorise

transactions, transfer funds, commit Group resources and

enter into agreements.

Quality control checks are conducted throughout our

manufacturing process, burn-in and electrical testing to

detect early failures, as well as 100% functional testing

and quality inspection.

Disaster recovery and business continuity plans are

maintained at all key facilities.

The Group has established robust financial reporting

procedures and controls, including monthly management

accounts and key metrics reviewed by senior management,

with performance monitored against budget and material

variances reported to the Board. Key judgements and

estimates are subject to regular review. Standardised

accounting policies and reporting formats are applied across

the Group to ensure consistency and transparency. Financial

systems incorporate appropriate access and segregation

controls to mitigate the risk of unauthorised transactions.

Financial reporting risks are identified and managed as part

of the Group’s wider risk management framework and are

subject to regular review by management and the Audit

Committee. The Audit Committee oversees the integrity of

financial reporting and reviews the effectiveness of internal

control and risk management systems, supported by internal

audit and external audit where appropriate.

Details of the Company’s internal controls, and how

the Board and Audit Committee assess the operational

effectiveness of internal controls and risk management

systems during the year, and up to the date of approval of

the Annual Report and Accounts, are set out in the Audit

Committee Report on pages 114-115. During the year, no

significant internal control issues were identified.

Shareholder

communication

The Company maintains effective engagement with

shareholders and other stakeholders through a range

of channels. The Group seeks to maintain an open and

constructive dialogue with both institutional and private

investors and responds promptly to investor enquires. In

November 2025, the Company held its first Investor Seminar,

which provided an opportunity to set out our investment

case. The CEO and CFO, along with senior leaders from the

business, covered “why we win”, our market position, product

development and portfolio, technology, sustainability and

financial framework.

The Group uses its website (corporate.xppower.com)

to ensure that private investors can access the same

information as institutional investors, including investor

presentations and video interviews with the CEO and CFO,

which are published when the interim and annual results are

released. The corporate website provides information on the

Group’s products, markets, strategy, business model, growth

drivers and its investment proposition. Interested parties may

to receive timely announcements and other published

information.

102

103

Jamie Pike

Chair

Polly Williams

Sandra Breene

Daniel Shook

Charlotta Ginman

From 1 January 2026.

The Chair and Senior Independent Director are available

to meet shareholders to understand their views on the

Company’s governance and performance. To ensure the

Board remains informed on shareholder perspectives,

Directors receive regular feedback from the Company’s

brokers and financial PR advisers following investor

meetings.

The Remuneration Committee Chair consults with major

shareholders about significant decisions related to Executive

remuneration. In the current Directors’ Remuneration

Policy review year, the Chair engaged with several major

shareholders to understand their views on remuneration

structure and its alignment with the business strategy

and shareholder interests. Shareholders’ feedback was

communicated with the Board and the Remuneration

Committee and informed the policy review process ahead of

the Directors’ Remuneration Policy being presented at the

2026 AGM.

At the Annual General Meeting in April 2025, Resolution 2,

to re-elect Jamie Pike as a Director and Resolution 15, to

authorise the Directors to allot shares up to two-thirds of the

Company's issued share capital, were approved by 77.80%

and 74.85% of the votes cast, respectively. Resolution 13,

the advisory vote on the Directors' Remuneration Report

was not passed by the requisite majority. Please refer to the

Remuneration Committee Report on page 117 for an update

on shareholders’ views on this resolution.

The voting outcomes for Resolutions 2 and 15 were primarily

driven by two significant shareholders who voted against

the Resolutions. Feedback indicated that opposition to

the re-election of Jamie Pike reflected, in part, shareholder

dissatisfaction with the Company’s recent performance. In

relation to Resolution 15, the Board had previously engaged

with the relevant shareholders to understand their positions,

and their votes were consistent with established internal

investment policies. The Board concluded that no further

consultation was required and that the feedback received

would not change its approach.

The Company remains committed to maintaining open and

transparent communication with shareholders and values any

feedback received.

Constructive use of the AGM

Certain Directors are available at the Annual General

Meeting (AGM) to answer any questions from shareholders.

As the Group’s Parent Company is based in Singapore, we

recognise that attendance at the AGM may not be practical

for our UK-based investors. The CEO and CFO maintain

regular engagement with shareholders throughout the year

and are available to respond to questions and feedback.

The Committee oversees Board

succession, ensuring the right

mix of skills and expertise

aligned with our strategy.

JAMIE

PIKE

NOMINATION COMMITTEE CHAIR

Dear

shareholder,

This report sets out the activities of the Nomination

Committee during the year-ended 31 December 2025.

It describes the Committee’s responsibilities and the

key matters considered in relation to governance, Board

composition and succession planning.

Membership

The Nomination Committee members are all independent

Non-Executive Directors. Amina Hamidi and Polly Williams

served on the Committee until they stepped down from

the Board on 2 October 2025 and 26 February 2026,

respectively, and Charlotta Ginman was appointed to the

Committee on 1 January 2026. The Committee met on three

occasions during the reporting period, with the CEO invited

to attend as appropriate. See page 85 for details of meeting

attendance.

The Committee’s main responsibilities include reviewing the

Board’s structure, size and composition, with particular focus

on the balance of skills, knowledge, capabilities, experience

and diversity required to support the Company’s strategy and

long-term success.

The Committee also oversees succession planning for

Directors and other senior Executives, considering the future

skills and expertise needed on the Board. In this context,

the Committee is responsible for identifying and nominating

suitable candidates to fill Board vacancies as they arise. New

Director appointments are assessed by the Committee, and

all Non-Executive Directors are involved in the selection

process. Final approval of new Director appointments is

made by the full Board.

In addition, the Committee reviews the organisation’s

leadership needs at both Executive and Non-Executive

level to ensure the Company continues to have effective

leadership and remains well positioned to compete in the

marketplace. The Committee also considers the outcomes of

the Board performance review process insofar as they relate

to Board composition and succession planning.

The Nomination Committee’s Terms of Reference are

reviewed annually and are available in the Corporate

Governance section of the Company’s investor relations

website corporate.xppower.com.

Activities

future

areas

focus

The Committee’s key areas of focus during the year included:

the search for a new Senior Independent Director in line

with the Board’s succession plans, culminating in the

recommendation to the Board for Charlotta Ginman to

succeed Polly Williams in this role;

the continuation of an induction programme for Daniel

Shook and planning for Charlotta Ginman’s induction;

a review of the composition of the Board’s Committees,

considering members’ skills and expertise;

104

105

106

107

a recommendation to the Board for the re-election of

Directors standing at the Annual General Meeting, taking

account of the performance review process conducted

for all Directors;

a review of the Board Diversity and Inclusion Policy

and targets, monitoring the Listing Rules requirements

pertaining to diversity and assessing the Board skills

matrix; and

partnership, pregnancy and maternity, race, country of

origin, nationality, cultural background or ethnicity, religion

or belief, sex or sexual orientation, and gender identity or

expression, including LGBTQ+ or trade union membership.

These principles apply equally to Board and Committee

appointments and to the selection of business partners.

During the year, we reviewed the Board Diversity and

Inclusion Policy and concluded that it reaffirms our

As an international business, XP Power understands and meets its aspiration for a diverse leadership group. Further details of

diversity beyond the Board can be found on pages 69–70. Details of gender and ethnic representation, as prescribed by UK

Listing Rule 6.6.6R, are set out in the following tables. The Board and the Executive Leadership Team completed a diversity

disclosure to confirm which categories in the following table they identified with.

Gender

representation

December

Number of

senior

ongoing discussions regarding Board and senior

leadership succession and reviewing the senior

management leadership needs.

Looking ahead, the Committee will consider whether an

additional Non-Executive Director is required and will

maintain its focus on succession planning by assessing

the skills, experience and depth of talent across the Board

commitment to diversity, inclusion and equal opportunity,

with measurable objectives aligned to the UK Listing Rules.

These objectives were monitored throughout the year. The

Policy also reflects our commitment to open advertising and

to partnering with executive search firms that are signatories

to the Voluntary Code of Conduct for Executive Search

Firms, ensuring balanced and inclusive shortlists.

Number

of Board

members

% of the

positions

(CEO,

CFO,

SID,

Chair)

Number in

and senior management. This approach will ensure that

the Company continues to attract, retain and develop the

capabilities required to support the business and deliver its

strategic objectives.

The Committee acknowledges that, following recent

changes, the Board does not currently meet the UK

Listing Rules target of at least 40% female representation.

The Board meets all other UK Listing Rules diversity

Ethnic

representation

December

Number

Number of

senior Board

positions

Number

Diversity and inclusion

The Committee regards diversity and inclusion as integral

to XP’s success, driving growth, innovation, talent attraction

and retention, and customer engagement. Operating globally,

we value cultural differences, aim for a workforce that

reflects our markets and recognise that diversity strengthens

our ability to succeed in them. Similarly, a diverse

Board contributes a range of viewpoints and supports

targets. The Board aspires to meet these targets, and the

Committee will continue to consider these in its approach

to succession planning and future appointments. The Board

currently comprises eight members, three of whom are

women (37.5%), and one of whom is ethnically diverse,

according to the definition in the UK Listing Rules. Our

Senior Independent Director is female. The composition of

nationalities within the Board includes five British individuals,

one with dual British and American nationality, one with dual

British and Finnish nationality and one Singaporean.

of Board

members

% of the

(CEO,

CFO,

SID,

Chair)

effective decision making. We maintain zero tolerance for

discrimination and commit to equal opportunities across

our employment policies and practices. Appointments

The Board Committees’ gender representation is

shown below:

Executive members of the Board are included in both the Board and Executive management figures.

Our Board Diversity and Inclusion Policy is available on our website at corporate.xppower.com.

and promotions are made on merit, irrespective of

age, disability, gender reassignment, marriage and civil

skills,

experience

composition

The Committee regularly reviews the Board’s size, structure

and composition to ensure an appropriate balance of

skills, expertise, experience and time commitment. This

enables the Board to meet both current and future strategic

challenges and supports the Company’s long-term objectives.

The appointment of our new Non-Executive Director,

Charlotta Ginman, refreshed the Board’s composition and its

committees, providing an opportunity to target, and benefit

from, additional skills, expertise and experience aligned with

the Company’s strategic priorities.

Board capabilities are assessed using a skills matrix, which

captures the relevant skills and experience of our individual

Directors. The matrix is reviewed regularly to identify any

gaps, which are addressed through future appointments

or ongoing Board development, education and updates.

Skills considered include industry-specific expertise and

broader competencies, such as strategic human resource

management, business development and growth, and ESG

and climate experience.

The Committee considers that the Board’s overall structure,

balance of skills and diversity is appropriate. This is illustrated

in the charts and matrix on pages 84–85. Further details

of each Director’s skills and experience are set out in their

biographies on pages 88–90.

Appointments to the Board and Director

re-election

Charlotta Ginman was appointed to the Board on

1 January 2026 and will offer herself for re-election at

the forthcoming AGM. Each relevant Director will offer

themselves for re-election each year. A simple AGM majority

vote is required for Director re-election.

On the Board Committees, female representation is:

Female

Data as at 2 March 2026.

Men

62.5%

80%

Women

37.5%

20%

Not specified/prefer not to say

White British or other White

(including minority-white groups)

87.5%

80%

Mixed/Multiple Ethnic Groups

Asian/Asian British

12.5%

20%

Black/African/Caribbean/Black British

Other ethnic group

Not specified/prefer not to say

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109

Appointing our new Non-Executive Director

and Senior Independent Director

Candidate

specification

criteria

During 2025, the Committee continued its search for a

new Non-Executive Director with the skills and experience

to act as the Senior Independent Director. The executive

search firm Russell Reynolds led the search. Russell Reynolds

is independent of, and has no other connection with, the

Company and its Directors.

The position specification set out the role’s responsibilities,

and the candidate profile defined the required experience,

leadership and cultural alignment. From a long list, two

candidates were shortlisted and interviewed by the Chair,

CEO, CFO and all Non-Executive Directors. In mid-2025,

the Board paused the recruitment process for a period while

it assessed its needs in light of evolving macroeconomic

conditions. In December 2025, the Committee

recommended the appointment of Charlotta Ginman to

the Board, and the Nomination, Audit and Remuneration

Committees with effect from 1 January 2026, and as Senior

Independent Director with effect from 26 February 2026.

Charlotta brings a wealth of experience from Non-Executive

roles with a broad range of international companies across

several sectors. She is a chartered accountant and has

experience in investment banking as well as senior finance

and management roles.

review

Each year, the Board conducts a review of its own

performance and effectiveness, and that of its committees.

The Chair and Non-Executive Directors regularly meet

without the Executive Directors present, to allow the

discussion of potentially sensitive matters. At least

annually, the Senior Independent Director meets with the

Non-Executive Directors, excluding the Chair, to evaluate the

Chair’s performance.

The findings and proposed actions from the Board and

committee reviews are presented to the Board and at

relevant committee meetings. The Company Secretary

monitors progress against agreed actions throughout the

year, with a formal review undertaken prior to the next

review cycle to ensure actions are appropriately closed.

The Board discussed the process for the 2025 review,

noting that the best practice recommendation for an

externally facilitated performance review was every third

year, and recognising that, for XP Power, this would typically

have been in 2025. Considering changes to the Board’s

composition during the year, the Board agreed to conduct

the 2025 review process internally. The timing of the

subsequent externally facilitated review will be determined

once the refreshed Board composition has had time to

embed; this is anticipated in 2026.

Director induction

All new Directors receive a tailored induction programme,

which typically includes reading material, and dedicated

time with each Non-Executive and Executive Board member

and the Company Secretary. The induction programme

develops a thorough understanding of the business,

strategy, operations, products and markets, and establishes

relationships with the management team and external

advisers. Directors are invited to provide feedback on any

further development areas to support their induction.

Daniel Shook joined the Board in January 2025; he is an

experienced listed company Board member and was CFO

of a FTSE-listed company until mid-2025. To support his

induction, Daniel visited the Company’s offices in the UK

where he met with the CEO and CFO and members of

the Group finance teams and the Internal Audit partner.

The sessions covered market and strategy overview, our

stakeholders and operations, financial performance and risk

management. Daniel also visited XP Power locations in the

US and Singapore, where he met with members of the sales

and finance teams and the external audit partner.

Charlotta Ginman joined the Board in January 2026; she has

a wide breadth of experience as a Non-Executive Director.

To commence her induction, Charlotta received a Group and

market overview from the CEO. This included information on

our customers, people and investors as well as operations,

including health and safety, quality and cybersecurity.

Charlotta also met with the CFO and Company Secretary.

The CFO updated Charlotta on finance performance,

systems and teams, and the Company Secretary provided an

overview of the structure and history of the Company, listing

requirements, and Board and governance procedures.

Non-Executive Directors are primarily responsible for their

own continuing professional development, supported by

internal and external speakers who provide updates on

strategic and operational topics at the Board Strategy Day

and throughout the year. Directors’ training and development

needs are reviewed at least annually. In 2025, the Board

received in-depth presentations on European and Asia sales

strategies, supply chain improvements, product development

and marketing. An update on our health and safety

programme highlighted a developing culture of continuous

improvement with measurable results. The Board also

heard from the Company’s brokers, providing an external

perspective on XP’s positioning, valuation and shareholder

feedback.

review

The Company conducted the internal review using an

anonymous online questionnaire, which covered all aspects

of effectiveness: capabilities and communication; culture

and practice; process and organisation; meeting rigour; and

relationships. Directors were also asked to comment on what

the Board should stop, start and continue doing.

Overall, the Company maintained a high favourable average

score across all areas and acknowledged that the Board is

operating effectively and in accordance with good corporate

governance principles. The review highlighted that the Board

holds open and robust discussions and maintains a frank and

open relationship with Executive Management.

The Board identified several actions to support its

continuous improvement. These included greater focus on

assessing the culture of the business against management’s

longer-term aspirations and medium- and long-term

priorities, with more debate on key topics that may drive

future growth. The Board also recognised the value in

inviting guest speakers to present at Board meetings,

including members of the XP Power team and external

advisers and of further refining the Board’s papers to

be more concise and focused on key topics for deeper

discussion.

2024 Board performance review progress

Following the 2024 Board performance review, the Board’s

agendas included items to help focus dialogue and discussion

on strategic topics, including new product development

and product growth plans. A strategy day held during the

year provided an opportunity for members of the Executive

Leadership Team to present updates and continue discussion

with the Board during an informal dinner. In response

to feedback from the review, Board papers continue to

be refined to improve clarity and focus. In addition, the

Company’s broker presented to the Board, which provided an

external perspective on investor sentiment.

review

As part of the Board’s annual review process, the Committee

assessed its performance for the year, supported by an

internal anonymous online survey. The results were positive,

and the Committee concluded that it was operating

effectively overall, with members bringing an appropriate

balance of knowledge and expertise to make informed

recommendations on Board changes. It was noted that

Committee meetings were conducted in a manner that

fostered open and constructive challenge.

JAMIE

NOMINATION COMMITTEE CHAIR

Questions were reviewed

agreed by the Chair,

Company

Secretary and

committee Chairs.

The Directors completed

an anonymous online

questionnaire,

with

questions that included

whether

they operate with

independent judgement.

The results of the

questionnaire

were

collated,

and a

summary

report

was produced

for

report was discussed

Board and

improvement

actions were determined.

Q1 2025

position

specification

candidate profile

was

agreed with executive

search firm, Russell

Reynolds.

A candidate

longlist was compiled.

Q2 2025

assessments

Two

candidates

were

shortlisted

interviewed by the

Chair, CEO, CFO

Directors.

Q3 2025

recruitment

process

was

temporarily paused

Q4 2025

decision

Recruitment recommenced and the process

concluded. In December 2025, the Nomination

Committee unanimously recommended to the

Board that Charlotta Ginman be appointed as

Non

-Executive Director and Senior

designate.

The Board approved the

appointment

to take effect from 1 January 2026, and the

transition to the role of Senior Independent

Director will take effect from 26 February 2026.

Chair

Charlotta Ginman

From 1 January 2026.

Until 26 February 2026.

In presenting my first report, I

reflect the Committee’s continued

work to enhance oversight and

internal controls.

DANIEL

SHOOK

AUDIT COMMITTEE CHAIR

Dear

shareholder,

I am pleased to present my first Audit Committee report

following joining the Committee in January 2025 and my

appointment as Committee Chair in April. This report will

provide you with an insight on the matters overseen in 2025

and the Committee’s future areas of focus.

I would like to thank my predecessor, Polly Williams, for

her support and guidance throughout the handover period,

which enabled a structured transfer of responsibilities

following the conclusion of the 2024 year-end process. As

part of my transition into the role of Committee Chair, I

visited a number of XP locations during 2025, and I met with

key individuals across the business as well as the internal and

external audit partners.

Membership

The Audit Committee members are all independent

Non-Executive Directors with financial and/or related

business experience from senior positions in other diverse

organisations. The Committee met on five occasions during

the year, with each session including a private discussion

with the external and internal Auditors without management

present. Additional discussions were also held with

management only at each meeting. See page 85 for details of

attendance at meetings during the year.

The Committee assists the Board in fulfilling its oversight

responsibilities, with a focus on upholding the integrity of

financial reporting, the effectiveness of the risk management

framework and our system of internal controls. It also

oversees ethics and compliance matters, including responses

to regulatory and governance developments.

In carrying out its role, the Committee is responsible for

ensuring the financial performance of the Group is properly

reported and monitored and for advising the Board on

whether it believes the Annual Report and Accounts, taken as

a whole, is fair, balanced and understandable. The Committee

oversees compliance with legal requirements, including

the FCA’s UK Listing regime, and the adoption and correct

implementation of accounting standards. It also assesses the

Group’s internal control processes and assurance framework

and assists the Board in reviewing the appropriateness of the

Group’s tax and treasury policies, and the analysis supporting

the going concern and viability statements.

The Committee further oversees the relationship of the

External and Internal Auditors, supervises their performance

and assesses the effectiveness and quality of the external

Audit. The Committee reviews the nature and extent

of audit and non-audit services provided to the Group

by the External Auditor to safeguard independence and

objectivity and thoroughly reviews any allegations of fraud or

whistleblowing.

The Audit Committee’s Terms of Reference are reviewed

annually and are available in the Corporate Governance

section of the Company’s investor relations website

corporate.xppower.com.

Activities

The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act 1967 and consideration

was given to the FRC’s Minimum Standard for Audit Committees. In 2025, the Audit Committee’s activities included:

110

111

Financial

reporting

disclosures

receiving reports from management and the External

Auditor on key accounting issues, areas of significant

judgement and disclosure levels, which are reviewed

and challenged by the Committee (see “Consideration

of significant financial reporting matters” for key

items);

examining the Half-Year results and Annual Report;

reviewing the balance sheet of the Company,

Consolidated Financial Statements of the Group and

the independent Auditor’s Report;

assessing the accounting principles to be adopted in

the preparation of the statutory accounts;

reviewing any dividend flows across Group entities;

reviewing and approving the use of alternative

performance measures (APMs); and

recommending the Annual Report to the Board after

concluding that, taken as a whole, it was fair, balanced

and understandable.

Internal

controls

governance

approving the process to identify and classify

material financial and non-financial risks and controls,

including operational, compliance and reporting

risks, to support changes arising from the 2024 UK

Corporate Governance Code;

reviewing the effectiveness of the Group’s internal

control environment;

assessing disclosures made in the Annual Report and

Financial Statements; and

oversight of the Group’s tax and treasury structure

and intercompany arrangements, including reviewing

proposals to restructure intercompany loans to

manage USD exchange rate exposure.

External

Audit

reviewing the external audit plan and delivery

updates;

reviewing how management supported the External

Auditor;

reviewing reports from the External Auditor on the

Group’s financial reporting and their observations on

the internal financial control environment; and

assessing the quality and effectiveness of the external

audit process.

Going

concern

viability

challenging management’s assumptions and analysis

underpinning:

the Group’s going concern basis of preparation;

the long-term viability statement and associated

risk assumptions;

accounting policies and disclosures; and

key financial reporting judgements and

adjustments, including those related to goodwill

and capitalised product development.

placing appropriate emphasis on a detailed review of

severe but plausible downside modelling to ensure:

the Group’s capital structure can withstand

unforeseen changes in circumstances; and

the current and forecast headroom under

banking covenant limits is adequate.

recommending the viability statement and going

concern statement to the Board.

Risk,

Assurance

Internal

Audit

reviewing the assurance map, which describes all

assurance activities over a multi-year cycle;

approving the internal audit plan;

overseeing the Group’s risk and compliance

framework;

directing the work of Internal Audit;

reviewing internal audit findings and follow-up

actions;

assessing delivery methods for the future internal

audit activity; and

evaluating the effectiveness of the Internal Audit

service partner.

Sustainability,

ethics

compliance

reviewing the Group’s approach to the Task Force on

Climate-related Financial Disclosures (TCFD); and

considering any material matters relating to fraud,

whistleblowing and litigation, including reviewing the

plans, policies and procedures in place to support

compliance with the Economic Crime and Corporate

Transparency Act 2023 (ECCTA).

112

113

Composition

As a former CFO with extensive financial management

and manufacturing processes experience, I assumed the

role of Audit Committee Chair following the conclusion of

the Annual General Meeting on 24 April 2025, succeeding

Polly Williams, who remained on the Committee until

Fair,

balanced

understandable

At its February 2026 meeting, at the Board’s request, the

Committee reviewed the content of the 2025 Annual

Report and Accounts. Following the Committee’s review

and incorporation of its comments, it confirmed that the

document was true and fair, that the External Auditor’s work

Consideration

significant

financial

reporting

matters

Regarding the 31 December 2025 Financial Statements (pages 153–210), the Audit Committee considered the following

topics, which, due to the level of materiality and degree of judgement exercised by management, are considered significant.

The Committee questioned the judgements and estimates made on each significant matter and deemed them appropriate and

acceptable.

26 February 2026, when she retired from the Board.

On 1 January 2026, Charlotta Ginman, a qualified chartered

accountant, former investment banker and CFO, joined

the Board and the Audit Committee. The Board is satisfied

that Charlotta and I bring recent and relevant financial

experience, representing 50% of the current Committee, and

that, supported by our Internal Audit co-source provider and

our External Auditor, the Audit Committee has the necessary

collective expertise and financial understanding to fulfil its

responsibilities and support ongoing initiatives.

Regular attendees at Committee meetings included the CEO,

CFO, Group Financial Controller, Company Secretary, and

representatives from our External Auditor and Internal Audit

co-source provider.

review

As part of the Board’s annual review process, the Committee

assessed its performance during the year. This review was

supported by an anonymous, internal online survey. The

review indicated an open environment that encouraged

curiosity and constructive challenge, together with

well-chaired meetings facilitating clearly framed discussions.

Actions arising from this review agreed by the Committee

included enhancing value as part of the external audit tender

process. The review also highlighted that, in 2026, the

Committee will continue to consider how risk matters are

managed under the Board’s oversight. In addition, further

building a relationship with the Internal Audit co-source

partner, BDO LLP, to ensure alignment with the business and

delivery against objectives was agreed as an action for 2026.

Overall, the Committee concluded that the review

demonstrated that it was operating effectively in 2025,

fulfilling its role in accordance with its Terms of Reference.

was effective, and that the process supporting the viability

statement was robust. The Committee considered that

the 2025 Annual Report and Accounts, taken as a whole,

was fair, balanced and understandable, and provided the

information necessary for shareholders to assess the Group’s

position, performance, business model and strategy.

To assist in the assessment process, the Committee

considered:

External Auditor comments as part of its review of

narrative reporting;

reviews of the monthly management accounts, enabling

trends to be monitored throughout the year;

the Group’s use of APMs, including the appropriateness

of their current use and disclosure in the Financial

Statements and Strategic Report;

evidence provided by management around the content

and process for preparing the 2025 Annual Report and

Accounts;

reviews of the Annual Report undertaken at different

Group levels, with confirmation provided to the

Committee that the reporting meets the required

standards; and

reviews of the narrative reporting by all Directors prior

to the Board’s formal consideration of the draft Annual

Report.

Significant matters for the year-ended

31 December 2025

How the Audit

addressed

these

matters Conclusion

Valuation

goodwill

The carrying value of

goodwill is a material item

on the Group balance sheet

and may require impairment

if expected future benefit of

cash-generating units

reduces.

The Committee reviews the impairment assessments

performed by management at least annually (discounted

cash flow forecast for each cash-generating unit (CGU)) to

provide comfort over the balance sheet value.

The Committee challenges the appropriateness of

judgements and forecasts used in management’s

impairment assessment, including the calculation of

WACC rates and forecast growth rates.

The Committee concurred

with management’s

conclusion that, for the

America and Europe CGU,

there remains adequate

headroom between

the value in use and

the carrying value. The

Committee was satisfied

that there was no further

indication of impairment.

Capitalised

product

As part of the Group’s

product development

process, direct costs

associated with new

products are capitalised

and amortised over their

expected useful life.

The carrying value of

these costs is rising in line

with increased product

development as the

business has grown, and

requires judgement over the

capitalisation, amortisation

and recoverability of these

assets associated with these

products.

The Committee reviewed three key aspects of this

accounting: appropriateness of capitalisation, timing

and quantum of amortisation, and recoverability of the

capitalised amount.

Capitalisation

The Committee reviewed rates of capitalisation relative

to gross spend and assessed whether the approach to

capitalisation was consistent with relevant accounting

standards and with prior years.

Amortisation

The Committee reviewed rates of amortisation relative to

prior years and assessed whether the useful lives applied

were consistent with the Group’s published policies.

Recoverability

The Committee was

satisfied with the

judgements used and

the carrying value of

capitalised product

development at year-end

including the decision

to impair certain values

due to changes in future

revenue estimates.

The Committee reviewed revenue streams for capitalised

products that have been released for sale, as presented by

management.

This enables challenge of performance of new products

compared to expectations and the opportunity for the

Audit Committee to conclude on the recoverability of

capitalised product development.

114

115

Significant matters for the year-ended

31 December 2025

How the Audit

addressed

these

matters Conclusion

To ensure readiness for compliance with Provision 29 of the

UK Corporate Governance Code 2024, which came into

effect on 1 January 2026, the Committee actively engaged

with management throughout the year and received regular

updates on progress. Material financial and non-financial risk

and controls, covering operational, compliance and reporting

risks, were reviewed and approved by the Committee.

A structured programme of dry-run controls testing, within

the scope of the Board’s internal controls attestation

commenced during the year. Testing was performed by the

second line of defence, with internal audit commencing

selective validation, which will continue into 2026.

The Committee is pleased with the progress made in 2025

to strengthen the control environment. No material control

weaknesses were identified. Areas for further enhancement

identified through dry-run testing will be addressed through

agreed management actions and the Committee will

continue to monitor this in 2026.

Overall, the Committee is satisfied with the Company’s risk

management and internal controls through the year, and

the adequacy of the planned and resourced internal audit

programme.

Internal

audit

The 2025 internal audit plan was delivered in partnership

with BDO LLP (BDO), who were appointed as the Internal

Audit co-source provider from the beginning of 2025.

Alongside our team, BDO delivered independent and

objective assurance on the effectiveness of the Group’s risk

management processes and controls, in line with the internal

audit plan approved by the Committee. They conducted

financial and non-financial internal audits as part of the 2025

internal audit plan.

Key activities included:

an evaluation of XP’s processes and key financial controls

at the Company’s Singapore site;

a review of the design and implementation of key

The quality, experience and expertise of our internal audit

service partner is assessed annually through an internal

survey and the results of the 2025 review confirmed the

Committee’s satisfaction. These findings also contributed

to discussions regarding the presentation of internal audit

reports.

Given th

e scale and complexity of the Group, the Committee

remains confident that a co-sourced model is the most

effective approach to ensuring independent and objective

assurance of the Group’s risk management, control and

governance processes for higher-risk locations, and access

to subject matter expertise linked to our risk profile. The

Committee agreed updates to the delivery of the internal

audit plan throughout the year to ensure the framework and

audit timings remained appropriate.

The Committee further reviewed the scope and planned

activity of internal audit, as part of finalising the internal

audit plan for the year ahead. This was aligned with the risk

assurance map and the Board’s risk monitoring process,

which guided the selection of areas for risk assurance and

internal audits and was informed by the Board’s most recent

annual risk assessment. The Committee agreed that controls

testing for medium-risk locations would continue to be

performed internally, enabling BDO to focus on higher-risk

locations and other non-financial internal audits that required

their specific expertise.

Application

accounting

policies

The Group’s accounting policies are set out in Note 2 to the Financial Statements on page 157. The Committee has reviewed

these policies to ensure they are appropriate and have been properly disclosed and applied.

Internal

control

The Board is ultimately responsible for the Group’s system of internal controls and their ongoing assessment. For further

details, see our Risk Management Framework on page 34.

In 2025, on behalf of the Board and with the assistance of a risk assurance map and internal audit function, the Committee

maintained strong oversight of the Group’s internal controls, risk management framework and principal financial risks

throughout the year, ensuring these critical areas operated effectively. The Committee reviewed the outcome of the key

financial controls audits and non-financial audits included in the internal audit programme. Management provides the

Committee with timely updates on key accounting issues and financial controls.

controls over cybersecurity risks;

a review of XP’s fraud risk management framework and a

readiness assessment against ECCTA; and

an assessment of the Group’s approach, methodology,

scoping and planned future work to meet the

requirement of Provision 29 of the UK Corporate

Governance Code, alongside the Group’s controls

self-assessment programme covering all sites.

The reviews’ findings, recommendations and controls

observations were rated and presented to the Committee

for feedback or further action. Management assessed the

recommendations and implemented agreed actions within

specified timelines. The Internal Auditor regularly tracked

progress and provided the Committee with status updates.

Inventory

The risk of obsolescence

and ongoing control over

existence and completeness

of inventory balances is a

key focus for balance sheet

accuracy.

Physical inventory across all sites was validated primarily

through cycle counts and, where appropriate, sample

counts held at year-end (e.g. for the Work in progress

inventory). The Committee reviewed the accuracy of

ongoing cycle counts and targets set by management.

The Committee reviewed management’s inventory

obsolescence provision, reviewing it for consistency

with the Group’s accounting policy. The Committee also

considered the treatment of the reversal of provisions in

respect of inventory in Asia that was specific to the China

semiconductor market, where this was sold through on

final customer orders.

The Committee was

satisfied that the

counts were conducted

appropriately and that

the current levels of

inventory provisioning are

appropriate.

Viability

statement and

going

concern

Management prepares a

going concern assessment

and viability statement with

consideration of longer-

term forecast cash flows

that consider principal risks,

including climate-related

considerations.

The Committee reviewed the period that viability should

be assessed and reaffirmed that three years remains

appropriate. They also considered how the Group’s

principal risks should be reflected in the modelling of

sensitivity analysis for liquidity and solvency.

It reviewed the results of management’s scenario

modelling and the reverse stress-testing of these models,

along with consideration of the Group’s financing facilities,

covenant tests and future funding plans.

The Committee challenged management to ensure that

the basis of the severe but plausible downside scenario

was sufficiently robust.

Based on this review, the

Committee confirmed

that the application of

the going concern basis

for the preparation

of the Financial

Statements continued

to be appropriate, and

recommended the

approval of the viability

statement, which can be

found on page 42.

Adjusting

items

adjusted

measures

Adjusted measures are

not reported as part of the

Financial Statements but are

used in the Annual Report

and Accounts to clarify

underlying performance for

users of the accounts by

excluding items deemed to

be unusual by virtue of their

size or incidence.

The classification of adjusting items is reviewed by the

Committee and only includes items of significant income

and expense, which, due to their size, nature or frequency,

merit separate presentation to allow shareholders to

better understand the elements of financial performance.

The Committee reviewed items to be included throughout

the year to confirm appropriateness.

The Committee also considers the disclosure of adjusting

items to ensure that they are adequately explained, not

given undue prominence and are clearly reconciled to the

reported results.

satisfied that the

classification of adjusting

items was appropriate.

Chair

External audit effectiveness and

independence

The Committee assesses audit effectiveness throughout the

financial year using an assurance-based qualitative approach

involving all appropriate stakeholders. Questionnaire

responses are combined with evidence-based reports to

the Committee for discussion. This involves reviewing the

detailed audit plan and its key audit risks, the amount,

experience and composition of resources on the audit, and,

where appropriate, the use of specialists and technology.

Management provides feedback, evaluates the performance

of the external audit teams, and considers the quality of the

audit alongside any communication and interaction with the

finance teams across the Group. The Committee reviewed

issues that arose during the audit and agreed resolutions

with the External Auditor. Management and the Committee

concluded that the External Auditor relationship and

audit process remained effective and that the audit teams

provided appropriate challenge. On this basis, the Committee

has recommended to the Board that the reappointment of

PricewaterhouseCoopers LLP (PwC) as External Auditor will

be proposed at the forthcoming AGM.

The last tender for the External Auditor was conducted

in 2023 when the Board approved the reappointment of

PwC. In line with UK domestic law as reflected in the Audit

Committee and External Audit Minimum Standard, which

includes the requirement to rotate the statutory Auditor

after 20 years, XP recognises that, as PwC were appointed

in 2007, a new auditor is required for the accounts in 2027.

Planning for the tender process continued throughout 2025,

during which the business has managed relationships with its

advisers to ensure that the considered audit firms are able to

be independent. It is expected that the tender process will be

conducted and concluded during 2026, with the new Auditor

to be appointed for the 2027 Audit. In accordance with best

practice, the audit partner rotated off after five years in

2024, when the current audit partner, Lee Chian Yorn, took

over the engagement.

The Audit Committee reviews the role, independence and

objectivity of the External Auditor. A formal statement of

independence is received each year, alongside a report on

the safeguards in place to maintain their independence, and

internal measures to ensure objectivity. The Committee and

External Auditor discuss areas where management has been

challenged, whether matters have been addressed correctly

by management and how any disagreements have been

resolved. The Committee is satisfied that this independence

has been maintained.

The policy on the engagement of the External Auditor

for non-audit work reflects regulatory requirements. It

requires approval by the Committee Chair for any non-audit

engagement where the estimated fees are below £10,000,

and approval by the full Committee when the fees exceed

£10,000. The Chief Financial Officer monitors any proposed

non-audit engagements of PwC and refers them to the Chair

for approval as appropriate. The policy does not permit

work to be placed with the Auditor if it could compromise

auditor independence, such as functioning in the role of

management. Non-audit fees paid to the Auditor were

£0.03m (2024: £0.05m), which represents 3.5% of the audit

fee. The only non-audit engagement during the year was in

respect of the interim results review, which is technically not

statutory audit work but is typically assigned to the audit

firm and was approved by the Committee. The Committee

considers the level and nature of non-audit work to be

modest and not to compromise the independence of the

External Auditor.

DANIEL

SHOOK

AUDIT COMMITTEE CHAIR

The Committee’s focus remains

on ensuring reward programmes

incentivise employees to deliver

XP Power's strategy.

PAULINE

LAFFERTY

REMUNERATION COMMITTEE CHAIR

Dear

This report sets out details of the Directors’ remuneration

in 2025 and how the Remuneration Committee anticipates

operating the Directors’ Remuneration Policy in 2026.

The current Remuneration Committee members are all

independent Non-Executive Directors. Amina Hamidi

and Polly Williams served on the Committee until they

stepped down from the Board on 2 October 2025 and

26 February 2026, respectively, and Charlotta Ginman

was appointed to the Committee on 1 January 2026. The

Committee met on five occasions during the reporting

period, with the CEO invited to attend as appropriate. See

page 85 for details of meeting attendance.

2025 AGM result

The Committee carefully considered the results of the

shareholder vote on the resolution to approve last year’s

Remuneration Report, which received support by only 48%

of votes cast at the 2025 AGM, significantly below the

percentage of votes for our remuneration reports in previous

years. Ahead of the AGM, the Remuneration Committee

Chair wrote to the Company’s top 20 shareholders and

engaged with its key investors. During that process,

shareholders indicated strong support for the Executive

Leadership Team overall, but some challenged the level of

bonus payout against the Adjusted Profit Before Tax metric

(of 13% of the bonus opportunity for the CEO and CFO) in a

year where wider performance was not robust. This view was

reflected in commentary by certain proxy voting advisers,

who recommended voting against this resolution.

Following our engagement, we are comfortable that those

shareholders who voted against the Remuneration Report

did not have ongoing concerns with the overall remuneration

structure at XP Power, only around its implementation in

The Committee has taken this feedback on board in

the implementation of the Policy for the 2025 financial year

and in its review of the Remuneration Policy for 2026.

Key

remuneration

decisions

for

2025 brought slower market conditions due to customer

destocking, while macroeconomic and geopolitical

uncertainty inevitably delayed the expected market recovery.

The Executive Directors closely monitored and responded

to the conditions, with mitigating actions put in place early

in the year. The Group lowered costs, maximised cash

and improved balance sheet resilience via a prudent share

Placing, which led to a significantly improved and increasingly

resilient financial performance as the year progressed.

Our long-term progress was supported by numerous new

product launches, strong growth in new business wins and

important strategic decisions, such as the exit of the RF

Division and the relocation of manufacturing from China

to Malaysia. As a result, the Group ended the year with

renewed momentum and is ready to maximise the benefits

as market conditions improve.

116

117

118

119

Annual

bonus

The 2025 annual bonus was based 80% on financial

performance and 20% on the attainment of strategic goals,

as it was in the prior year. The financial component was

most heavily weighted on Adjusted Profit Before Tax (50%)

to ensure a focus on top-line performance and efficient

operations, with a 30% weighting on Adjusted Operating

Cash Conversion to reward balance sheet strength.

The on-target performance level for Adjusted Profit Before

Tax was set to outperform the budget and market consensus

at the time the bonus targets were set. While the Adjusted

Profit Before Tax threshold was missed due to market

conditions not improving to the extent envisaged at the time

we set the budget, cash conversion performance materially

exceeded the stretch level following strong underlying cash

generation (noting that the performance excluded any impact

of the Placing).

The Executive Directors performed well against the strategic

objectives set for 2025. These were selected primarily to

reinforce operational efficiencies and financial resilience,

and to ensure a pathway to future growth when our end

markets improve. 2025 has seen a significant increase in

our new product development pipeline and strong levels of

engagement with key customers, creating significant new

product opportunities. Stretching working capital reduction

targets have been met, with the priority now shifting from

reduction to optimisation of inventory to support future

volume growth. Product-cost reductions were also achieved.

Reflecting on the significant achievements made in 2025,

including the strength of the outcome against Health and

Safety performance metrics, the Committee determined that

the strategic objectives element of the bonus will pay-out, as

a percentage of maximum at 86%, 86% and 60% for Gavin

Griggs, Matt Webb and Andy Sng, respectively.

In its deliberations around the bonus outcome, the

Committee reviewed the low vote at the 2025 AGM and

the feedback it received during the 2026 Policy renewal

consultation. The Committee considered whether a

discretionary reduction to the formulaic bonus outcome

should be applied to reflect the reduction in Adjusted Profit

Before Tax year-on-year and the Placing in March. However,

we are mindful that market conditions remained very

challenging during 2025 and that those targets which were

achieved are essential in securing XP Power’s future growth.

Our Executives remain fully committed to the business;

applying downward discretion would harm our ability

to retain and motivate our talent, at Executive level and

across the wider workforce, just as they should be focused

on maximising opportunities from the upturn in market

confidence we have recently observed. As a result, no

discretion has been applied. The Committee believes this

outcome is proportionate, balanced and a fair recognition

of the significant contribution to the improving underlying

operational performance of the business. In reaching this

conclusion, the Committee is mindful that there continues to

be strong ongoing alignment of Executive pay outcomes to

the shareholder experience, through the significant weighting

in the package to share-based remuneration, and the linkage

of the LTIP to stretching EPS and TSR outcomes.

In summary, bonus payments for 2025, as a percentage of

maximum, were 47.2%, 47.2% and 42% for Gavin Griggs,

Matt Webb and Andy Sng, respectively. Half the bonuses

earned by the Executive Directors are deferred into a two-

year share-based award.

Vesting of the 2023 LTIP award

We assessed the Long-Term Incentive Plan (LTIP) awards

granted in 2023 based on three-year performance through to

the end of 2025, with vesting based on cumulative adjusted

EPS growth (for 67% of the award) and relative Total

Shareholder Return (33%).

The EPS target range was 480p to 602p, with an actual

EPS outcome of 147.2p, resulting in zero vesting of the

EPS portion of the awards.

Our relative TSR performance was below median,

resulting in zero vesting of the TSR portion of the awards.

Given that neither performance condition was achieved, the

award will lapse in full.

In the year-ending 31 December 2025, no malus and/or

clawback provisions were applied to prior awards.

How we ensured employees’ voices

were heard at Board level in 2025

In my role as Chair of the Remuneration Committee and as

the Board’s designated Non-Executive Director for Employee

Engagement, over the course of the year, I held three

virtual engagement meetings with a broad cross-section

of employees. Sessions were held across each geographic

region in which we operate, which enabled employees across

the Group, at various levels and with different tenures, to

share their views on the working environment, ways of

working and agility in decision making, including efficiencies

and any required improvements.

Insights from discussions on cross-team co-operation

and alignment on strategy deployment will inform future

communication planning and operational initiatives. This

feedback, together with findings from the Company’s

anonymous employee surveys, was subsequently reviewed

at Board meetings, with progress subject to ongoing Board

oversight.

The interactive focus groups provided employees with the

opportunity to raise questions and share their views on

remuneration. While no specific comments on Executive pay

were received in 2025, the Remuneration Committee will

give due consideration to any such feedback in the future as

part of its deliberations.

The 2026 Directors’

Remuneration Policy

In line with the normal three-year cycle, we will seek

shareholder approval for a new Directors’ Remuneration

Policy at the 2026 AGM. In advance of this, the Committee

undertook a comprehensive review, considering the incentive

structure, award opportunities and measures that govern

the vesting of awards. We engaged with major shareholders

to ensure a range of perspectives informed this process. In

summary, we do not propose any changes to the existing

executive remuneration framework, which has been in

place since 2020, and which received a strong vote (of 93%)

when it was last submitted for approval at the 2023 AGM.

The Committee believes the current structure continues to

provide the appropriate framework with which to secure

Executive talent, reward performance and our strategy’s

delivery, and align with the interests of our shareholders.

The combination of performance shares and restricted

shares, which we have used for several years, continues to

support XP Power’s ability to recruit, motivate and retain

key talent in markets in which such practices are common,

including growing prevalence across the FTSE landscape.

The 2026 Policy, if supported by shareholders at the 2026

AGM, will cover the next three years. During this period,

the Committee will continue to monitor trading conditions,

market practices and investor guidance to ensure its

implementation supports XP Power’s ambition and aligns

with shareholder interests.

2026

Throughout 2025, the Committee reviewed pay trends and

inflationary pressures across all regions in which the Group

operates. These findings shaped the approach to the annual

pay review, which will be effective from April 2026. As a

result, a total average salary increase of 3.5% was approved,

with scope to prioritise larger adjustments for employees

whose pay had fallen behind market rates and for

business-critical or high-potential individuals.

When assessing fixed pay for Executive Directors and other

senior Executives, the Committee considered a broad range

of factors. These included prevailing pay inflation, delivery

against strategic financial objectives, leadership actions taken

to continue to manage controllable factors, progress made

in positioning the Company for a market recovery, and the

need to maintain an appropriate balance between market

competitiveness and wider stakeholder expectations. Having

weighed these factors, the Committee determined that

senior Executives, including the CEO and CFO, would receive

a 3.5% salary increase in 2026, with some variation to reflect

local-country general inflation. Consistent with this approach,

the EVP Asia will receive an increase of 3.9% in 2026.

The structure of the bonus scorecard for Executive

Directors in 2026 remains unchanged from 2025 and

aligns with our short-term strategic and financial priorities

to comprise: Adjusted Profit Before Tax (weighted 50%),

Adjusted Operating Cash Conversion (30%) and strategic

objectives (20%).

In 2026, the Committee plans to grant performance shares

with face values of 120% of salary to Gavin Griggs and Matt

Webb and 75% of salary to Andy Sng. Vesting will remain

dependent on equally weighted, appropriately stretching EPS

and relative TSR performance conditions. The Committee

has approved a TSR range consistent with prior-year awards,

and a FY28 EPS performance range of between 52.0p and

65.1p. This EPS range resulted from detailed consideration

of market conditions (which are expected to improve)

and appropriate longer-term growth rates (informed by

historical EPS growth delivered by XP). The Committee is

satisfied that the range is appropriately stretching given the

Board's view, at the time the targets were set (and when no

market consensus for FY28 was published), of how market

conditions might improve over the next three years. The

2026 performance share grant will be within the limits of the

Policy but higher, by 20% of salary, for the CEO and CFO

than has been granted in recent years, as the Committee is

keen to ensure the award opportunity reflects the quality

of our CEO and CFO and their ongoing contribution to

delivering XP Power’s strategy. The Committee intends

to grant awards of up to 100% of salary in March to the

CEO and CFO (and 75% of salary to Andy Sng) following

announcement of full-year results, consistent with our

historical practice, with the additional 20% of salary to the

CEO and CFO being granted following the shareholder vote

on the 2026 Remuneration Policy at the AGM, consistent

with the views of some shareholders expressed during our

consultation.

Restricted shares will be granted with face values of 15%

of salary for all Executive Directors. In setting these award

levels, the Committee considered the resulting number

of shares and determined that it was appropriate to make

a marginal increase to the face value (for the CEO and

CFO, who were granted 12.5% under previous cycles) as

permitted in the Policy. As for the performance share awards,

the additional 2.5% of salary for the CEO and CFO will be

granted following the shareholder vote at the 2026 AGM.

At vesting, the Committee will assess whether the outcome

gives rise to any windfall gains and will exercise discretion to

adjust the result if necessary.

Our proposed Remuneration Policy and the Directors’

Remuneration Report will be put to shareholders for approval

at the 2026 AGM. We value the views of our shareholders

and hope you will support these resolutions. If you have any

questions or wish to share feedback, I would be pleased to

hear from you at remcomc[email protected].

PAULINE

LAFFERTY

REMUNERATION COMMITTEE CHAIR

120

121

Webb

214

346

583

775

450

319

190

20 36

Basic salary

Pension

Annual Bonus

Long-term incentives

Threshold

On-target

Maximum

Threshold

On-target

Maximum

SEE PAGE 124 FOR MORE INFORMATION

£9.5m

glance

This table summarises the key components of the Directors’ Remuneration Policy (the “Policy”) set out on pages 134–140,

which is subject to approval by shareholders at the AGM on 23 April 2026, and how the Committee intends to implement the

Policy in 2026.

Component

Summary

policy

Operation

2026

Base

salary

Base salaries are reviewed annually.

Increases will not normally exceed

the range of increases awarded to

other employees within the Group.

The Remuneration Committee may

also increase a Director’s salary if

there is a change in their role, the

scale or complexity of the business,

or if significant changes to market

practice arise.

The Remuneration Committee undertook its regular review of

Executive Directors’ base salaries and determined that these

should be increased from 1 April 2026 by 3.5% for the CEO and

CFO, in line with salary increases for the UK workforce, and

by 3.9% for the EVP Asia, in line with salary increases for the

Singapore workforce.

Benefits

Benefits are set by the

Remuneration Committee and are

reviewed annually.

Benefits include life insurance, private medical cover and car

allowance.

Pensions

Executive Directors’ pension

contributions are in line with the

pension benefits offered to the

wider workforce in the relevant

geography, which is currently 8% of

salary in the UK.

Gavin Griggs and Matt Webb receive a pension contribution of

8% of base salary. Andy Sng receives a pension contribution in line

with Singaporean employees’ pension benefits.

Annual

The maximum bonus opportunity

is 125% of base salary for the CEO

and 100% for other Executive

Directors.

50% of any annual bonus is

deferred in shares, which vest after

two years, subject to continued

employment.

Specific targets and weightings

may vary according to strategic

priorities, and may include:

financial performance; and

the attainment of personal and

strategic objectives.

For 2026, the maximum bonus opportunity will be capped

at 125% of salary for the CEO and 100% for other Executive

Directors, with on-target pay-outs of 50% of maximum.

Bonuses will continue to be based on financial and strategic

performance measures. Targets are considered commercially

sensitive so will not be disclosed prospectively and, together

with performance outturns against these, will be published in

next year’s Annual Report on Remuneration. The performance

measures that will apply are:

Adjusted Profit Before Tax (50%);

Adjusted Operating Cash Conversion (30%); and

Strategic objectives (20%).

Andy Sng’s performance objectives are set, in part, with reference

to divisional performance in Asia. His strategic objectives largely

reflect the priorities set out for Gavin Griggs and Matt Webb.

bonuses

100%

125%

150%

225%

SEE PAGE 117 FOR MORE INFORMATION

Rapidly evolving macroeconomic

and geopolitical environment,

with consequential impact on

market conditions requiring

monitoring and proactive action

Delayed market recovery

required improvement of

financial performance through

appropriate self-help measures

Need for further improvement

balance sheet resilience,

building

on the progress made in 2024

Need to continue to execute

long-term strategy to position

the Group for long-term success

Context to

SEE PAGE 118 FOR MORE INFORMATION

Actions were taken proactively

in H1 to reduce cost and

materially improve financial

performance in H2

Continued strong operating

cash

generation and a proactive

Placing delivered significant

balance sheet deleveraging

Strong progress across all six

key

strategic objectives, including

increased new business wins

and a robust pipeline of new

products, supporting long-term

the year

SEE PAGES 118–119 FOR MORE

INFORMATION

2025 bonus outcomes of 47.2%,

47.2% and 42% of maximum for

the CEO, CFO and EVP Asia

Zero vesting under the 2023 LTIP

3.5% increase to the base

salaries

for the CEO and CFO and 3.9%

for the EVP Asia in 2026

for 2025 and 2026

122

123

2025 41 – – 41 – – – 41

2025 61 – – 61 – – – 61

2025 54 – – 54 – – – 54

2025 68 – – 68 – – – 68

2025 70 – – 70 – – – 70

2025 225 – – 225 – – – 225

2025 190 11 10 211 80 28 108 319

2025 450 20 36 506 214 55 269 775

Component

Summary

policy

Operation

2026

Annual Report on Remuneration

Single

total

figure

remuneration

(audited)

The table below shows the total remuneration receivable for each Executive Director for the years-ended 31 December 2025

and 2024, respectively.

£’000

Directors

Salary/

fees

Benefits

Pension

fixed

pay

Annual

bonus

Share-based

incentives

variable

pay Total

Gavin Griggs 2025 583 26 47 656 346 71 417 1,073

570

639

420

491

1,130

Matt Webb

Andy Sng

440

495

268

323

818

187

207

113

141

348

Directors

Amina Hamidi

220

Benefits include life insurance, private medical cover and car allowance.

The pension allowance for Gavin Griggs combines pension contributions and cash in lieu of pension for contributions in excess of £10,000.

The annual bonus value represents performance over the relevant financial year: 50% of the pay-out values shown above is deferred into shares. Further 2025

annual bonus details, including performance measures, actual performance and bonus payouts, can be found on pages 124–126.

The value of share-based incentives for 2025 represents:

For Gavin Griggs, Matt Webb and Andy Sng, the value at grant of the restricted share awards granted on 5 March 2025 based on a £9.70 share price.

ii.

For Gavin Griggs, Matt Webb and Andy Sng, no value is recorded for the vesting of 2023 LTIP awards as the performance conditions were not achieved

and these awards will lapse in full.

iii.

Further LTIP details, including performance measures, actual performance and vesting can be found on page 127. Further details of the 2025 RSP can be

Daniel Shook joined the Board on 1 January 2025.

Amina Hamidi stepped down from the Board with effect from 2 October 2025. 2025 remuneration reflects the portion of the year that she was a

Non-Executive Director.

found on page 127.

Share-based

incentives

Share-based incentives are made up

of a Long-Term Incentive Plan (LTIP)

and a Restricted Share Plan (RSP).

Remuneration Committee anticipates that it will grant the

following awards in 2026:

LTIP

award

RSP

award

Name

salary)

The normal maximum award level

under share-based incentives

is 150% of base salary or up to

200% of base salary in exceptional

circumstances. Up to a maximum

of 15% of base salary may be

granted as restricted shares

without performance conditions. In

calculating value against the limit

for share-based incentives, the

value of restricted share awards

will be multiplied by two to reflect

that they do not have performance

conditions attached.

Gavin

Griggs

Matt

Webb

Andy Sng

120

LTIP

awards will vest based 50% on 2028 Adjusted EPS and

50%

on TSR versus the FTSE 250 (excluding investment trusts)

measured over three financial years.

The targets for each

element

are:

2028

EPS

(50%

maximum)

Vesting

65.1

pence per share or above Maximum (100%)

At or below 52.0 pence per share Threshold

(0%)

LTIP performance is typically

measured over three financial

years, starting with the year of

grant. Vesting occurs on the fifth

anniversary from the date of grant.

TSR

vs FTSE 250 excl. investment trusts

(50%

of maximum)

Vesting

Upper quintile (80th percentile) or above

Maximum (100%)

Median (50th percentile) Threshold

(25%)

RSP awards may be granted

without performance conditions.

Below median

No vesting

Vesting

between threshold and maximum will be measured on a

straight

-line basis.

Non-

Fees are set at a level sufficient to

attract, motivate and retain quality

Non-Executive Directors. Fees are

reviewed periodically.

Non-Executive Directors are

not entitled to participate in the

Group’s incentive plans.

Non

-Executive Director fees were reviewed by the Board

and the Executive Directors in February 2026 and it was

determined, with effect from 1 April 2026, that the base fee

and additional fee for chairing the Remuneration and Audit

Committees,

and for acting as Senior Independent Director, would

increased by 3.5% (rounded up to the nearest £100) to keep

pace with inflationary rises for employees. The Chair’s fee was

reviewed by

the Committee, and an inflationary rise of 3.5% will

be made for 2026. In accordance with the Singapore Companies

Act 1967, a total capped fee amount for

Non-Executive Directors

will be proposed at the forthcoming AGM.

Fee from

1 April 2025 1 April 2026

Chair’s

fee £226,000 £234,600

Base

fee £54,600 £56,600

Additional

fee for Audit or

Committee Chair £10,300 £10,700

Additional

fee for acting as Senior

Director £10,300 £10,700

fee for extra

responsibility

£5,200 £5,400

Extra responsibilities include acting as designated NED for workforce engagement

or as a Board representative on an Executive Committee.

Directors’

fees

124

125

Notes to the single total figure table

Base

salary

year-ended

December

Executive Directors’ base salaries are reviewed by the Committee with effect from 1 April each year and when the position or

responsibility of an individual changes. Executive Director base salary changes during the year were:

The Committee assessed the Executive Director strategic objectives against the targets set at the start of the year. These are

summarised below for Gavin Griggs and Matt Webb. Andy Sng’s objectives are set largely to reflect these priorities but with

reference to divisional performance in Asia. These objectives are not disclosed in detail in the following table as the Board

consider them to be highly commercially sensitive which, if disclosed, could reduce our ability to operate competitively.

Performance

Overall

Delivery

Base salary from

1 April

Base

salary

from

1 April

Increase

Gavin Griggs

£570,000

£587,100

Matt Webb

£440,000

£453,200

Andy Sng

S$320,000

S$329,600

Pensions

the year-ended

December 2025

(audited)

Executive Directors’ pension contributions are aligned to those offered to all employees in their respective countries of

employment. They are 8% of base salary for UK Executive Directors and equivalent to c.5% of base salary for Andy Sng, who is

based in Singapore.

Directors may opt to receive their pension allowance as cash in lieu of pension contribution.

Annual

bonus

the year ended

December 2025

(audited)

The maximum annual bonus opportunity in 2025 was 125% of base salary for the CEO and 100% of base salary for other

Executive Directors. The table below summarises performance against the Group performance targets set by the Committee

for the year. For the 2025 financial year, the Committee made a one-off adjustment to the payout curve for the financial

metrics such that achieving threshold performance would deliver 10% of max, down from 25% used by XP Power in

recent years.

Threshold

On-

Maximum

Weighting

(10%)

(50%)

(100%)

Actual

achieved

Adjusted profit before tax

50%

£14.3m

£19.3m

£24.3m

£9.5m

Adjusted operating cash conversion

30%

125%

150%

225%

Strategic objectives

20%

See below

For Gavin Griggs, Matt Webb and Andy Sng, calculated as Adjusted cash generated from operations as a percentage of Adjusted operating profit for the

full year.

Strategic

objectives

Strategic progress –

reset group for future

growth and ensure

delivery of the plan

'the right way'

Record levels of sampling, up 21% on 2024 and new business wins, up 12%

on 2024, both above target levels.

Reset product portfolio for future growth by negotiating exit from the RF

market while maintaining support for key customers.

Launched 24 new products to the market (the highest level for more than

eight years) with a clear pipeline for 2026.

Exit from the Kunshan manufacturing facility and completion of the

Malaysia build.

Customer Target for 2025 was to improve weighted average NPS score of 25 for 2024.

This target was exceeded with a weighted NPS score of 29. Even though

the target was achieved, the achievement of this objective was determined

as 70%, in recognition that the NPS score remains below the highest levels

observed externally.

Supply chain reset in 2025 to improve overall customer experience in 2026.

The operational performance and customer experience will improve with

respect to lead times and product availability.

70%

Employee

Engagement and

Experience

Employee Engagement results at 4.15 out of 5.00

(2024: 4.03), the highest

result for four years.

Significant progress engaging all employees in the Health and Safety agenda

following the launch of the “Safety Begins with Me” programme in 2024.

The following metrics evidence the progress made.

Total Recordable Injury Rate (TRIR): 0.15. This is a 64% reduction from

2024 (0.42 → 0.15) and the lowest level since we started tracking this

measure, reflecting stronger site-level engagement and enhanced focus

on hazard identification, training and prevention.

Lost Time Injury Rate (LTIR): 0.04, a 79% reduction from 2024 (0.19 →

0.04) and the lowest level since we started tracking this measure,

Absolute injury counts: First Aid/Record Only cases declined from 55 to

18; Medical Treatment cases decreased from 11 to 4; Lost Time injuries

reduced to 1.

126

127

Aim to lead

Performance

Overall

Delivery

Long-term incentive awards vested, or due to vest, with respect to performance in the

year-ended 31 December 2025

Graded ‘A’ by Carbon Disclosure Project (CDP) ~ top 4% of rated companies,

up from ‘B’ in 2024.

Rated number one by Sustainalytics and MSCI versus their defined

peer group.

Considerable progress was made against SBTi targets. Renewable energy

reached 53% of both on-site renewable generation and renewable

electricity purchased from the grid, providing a more complete and accurate

view of progress toward our Net Zero by 2040 commitment.

XP regularly benchmarks its sustainability performance against close peers.

Its sustainability ratings and initiatives are at the top of the peer group

across most metrics or high and on an improving trend.

75%

2023

LTIP

awards

(audited)

LTIP awards were granted on 17 March 2023 (and on 14 September 2023 to Matt Webb on his joining), the vesting of which

was based 67% on cumulative EPS and 33% on TSR versus the FTSE 250 index excluding investment trusts over the three

financial years ended 31 December 2025. The table below summarises performance against the targets.

Weighting

Threshold

(25%

vesting)

Maximum

(100%

vesting)

Actual

achieved

Cumulative EPS

67%

480.0p

602.0p

147.2p

TSR

33%

Median

Upper quintile

Below median

Shares under this award, with performance measured over the three financial years ended 31 December 2025, will lapse in full.

All categories carry equal weighting and contribute proportionally to the overall result.

As summarised above, the Committee assessed the performance against each objective set at the start of the year. We

reviewed the resulting payout warranted under this element by considering the additional context of the business and sector

headwinds, which persisted throughout the year. This resulted in an overall payment of 86% of the maximum opportunity for

the strategic element of the bonus for the CEO and CFO. The Committee concluded that this outcome appropriately balances

the recognition of the Executive Directors' leadership and contribution to managing the significant challenges of 2025 with

the stakeholder experience.

Taking into account financial performance and achievement of the strategic objectives, the overall bonus outcome for 2025

was approved at 47.2% of the maximum opportunity for the CEO and CFO.

Andy Sng’s strategic performance objectives are partially set with reference to the performance of our Asia operations. While

these remain commercially sensitive, they are set to align with, and support, the priorities set out for Gavin Griggs and Matt

Webb. The Committee acknowledges Andy’s leadership of the Asia business during a challenging year, particularly his focus

on Customer and Employee Engagement and his strategic agility to respond to the macro and geopolitical backdrop. However,

certain objectives set at the start of the year were not met, resulting in an overall assessment by the Committee warranting

the payout of 60% of the maximum opportunity for this bonus element and an overall bonus outcome for 2025 of 42% of

maximum.

The Committee carefully considered whether those outturns were appropriate and, reflecting on performance achieved in

the year, no discretion was applied to amend the 2025 formulaic outputs. Half of the 2025 annual bonuses for Executive

Directors are deferred into shares, vesting after two years.

Scheme

interests

awarded

year-ended

December

(audited)

LTIP and RSP awards were granted to Executive Directors in 2025 and were equal in value to 100% of salary (LTIP) and 12.5%

of salary (RSP) for both Gavin Griggs and Matt Webb, and 75% of salary (LTIP) and 15% of salary (RSP) for Andy Sng, as

follows:

Date

grant

Plan

Type of award

Face value

award

Number

of shares

awarded

End of

period

5 March 2025

LTIP 2017

Nominal-cost options

£569,991

58,762

31/12/2027

5 March 2025

RSP 2020

Nominal-cost options

£71,247

7,345

n/a

DBP 2017

Nil-cost options

£210,170

21,667

n/a

Matt Webb

LTIP 2017

£439,992

45,360

31/12/2027

RSP 2020

£55,000

5,670

n/a

DBP 2017

Nil-cost options

£134,190

13,834

n/a

Andy Sng

LTIP 2017

£140,155

14,449

RSP 2020

£28,023

2,889

n/a

DBP 2017

£56,134

5,787

Awards granted on 5 March 2025 were based on the mid-market share price on the day prior to the grant date, being £9.70.

Date

grant

Type of award

of shares

awarded

vesting

Dividend

equivalent

payments

per share

of shares

vested or

due

to vest

Value of

vested or

due

to vest

17 March 2023

26,536

14 September 2023

20,027

17 March 2023

6,845

128

129

Long-term

incentive

measures

targets

The performance targets for the 2025 LTIP awards are:

The table below summarises Gavin Griggs’ outstanding share awards:

Earnings per

shareholder

return

award

(50%

EPS

50% TSR)

Basis 2027 Adjusted EPS

Threshold (0% vest) At or below 44.5 pence

Maximum (100% vest) 61.4 pence or above

Basis Three-year relative TSR compared with that for the constituents of the

FTSE 250 index (excluding investment trusts)

Threshold (25% vest) Median (50th percentile)

Maximum (100% vest) Upper quintile (80th percentile or above)

Date

grant

Exercise

price

Interest as at

December

Granted

in the

year

Forfeited

in the

year

Exercised

in the

year

Interest as at

Vesting date

Expiry

date

Vesting between threshold and maximum will be calculated on a straight-line basis.

Awards of restricted shares granted to Executive Directors in 2025 are not subject to performance conditions on vesting.

shareholding

interests

A shareholding guideline applies to Executive Directors, which requires them to build and maintain a shareholding equal to

200% of base salary. The guideline will continue to apply in full for one-year post-cessation, with 50% of the guideline level

(100% of base salary) applying for a second year. Deferred bonus shares, restricted shares, vested share options and LTIP

shares, which are still in their holding period or unexercised, will be counted against these requirements on a net of tax basis.

The table below summarises the Directors’ beneficial interests (including that of their connected persons) in the Company’s

On 16 December 2025, awards over 6,371 shares were exercised at a market price of £9.04.

Matt Webb’s outstanding share awards are:

Interest

awards

Unvested

RSP

awards

Exercise

Date

grant

price

Granted

in the

year

Forfeited

in the

Exercised

Vesting date

Expiry

date

Beneficially

LTIP

Unvested

Vested

but

owned

awards

LTIP

awards

unexercised

Unvested

which

Deferred

Bonus,

RSP

Shareholding

Bonus

period

has

period is in

guideline

completed

progress

salary)

met?

Gavin Griggs 16,904

23,350

36,593

20,411

111,834

4,015

200%

Building

12,173

16,312

17,182

13,294

86,328

200%

Building

Andy Sng 34,323 34,323 9,496 7,892 27,540 1,304 200% Met

12,533

17,661

4,347

4,999

1,739

2,000

2,391

3,548

4,948

2,051

Daniel Shook joined the Board on 1 January 2025.

Amina Hamidi stepped down from the Board with effect from 2 October 2025. The beneficially owned shares shown for Amina represent her shareholding at

2 October 2025.

2017 LTIP

22/04/2020

£0.01

2,708

22/04/2025 22/04/2026

08/03/2022

£0.01

15,277

(15,277)

08/03/2027 08/03/2028

17/03/2023

£0.01

26,536

17/03/2028 17/03/2029

12/03/2024

£0.01

53,072

12/03/2029

12/03/2030

05/03/2025

58,762

05/03/2030

05/03/2031

2020 RSP

22/04/2020

£0.01

1,307

22/04/2025 22/04/2026

03/03/2021

1,206

03/03/2026 03/03/2027

08/03/2022

1,909

08/03/2027 08/03/2028

17/03/2023

3,317

17/03/2028 17/03/2029

12/03/2024

6,634

12/03/2029 12/03/2030

05/03/2025

7,345

05/03/2030 05/03/2031

Deferred Bonus

6,371

28/02/2024 28/02/2026

14,926

06/03/2026 06/03/2028

21,667

05/03/2027 05/03/2029

2017 LTIP

14/09/2023

20,027

14/09/2028 14/09/2029

40,968

12/03/2029 12/03/2030

45,360

05/03/2030 05/03/2031

2020 RSP

14/09/2023

2,503

14/09/2028 14/09/2029

5,121

12/03/2029

2/03/2030

5,670

Deferred Bonus

3,348

06/03/2026

06/03/2028

13,834

05/03/2027

05/03/2029

130

131

Andy Sng’s outstanding share awards are: Total remuneration, annual bonus outturn and long-term incentive outturn for the CEO over the same period is shown below.

Exercise

Date

grant

price

Granted

Forfeited

Exercised

Expiry

date

2016 2017 2018 2019 2020 2021¹ 2022 2023 2024 2025

The closing share price of the Company’s shares at 31 December 2025 was £9.00 (31 December 2024: £13.06) and the price

range fluctuated between £6.21 and £13.14 over the financial year.

Payments for past Directors (audited)

No payments were made to former Directors in the year.

Payments for loss

of office

There were no payments for loss of office.

Assessing

pay

This chart shows XP Power’s Total Shareholder Return since 31 December 2015 compared with that of the FTSE 250

(excluding investment trusts), rebased at 100.

500

Data in the table is relevant to Duncan Penny up to 2020, and Gavin Griggs from 2021.

Context

While the Committee has not engaged directly with employees on Executive remuneration alignment with the wider pay

policy, the Board has involved the workforce through Employee Engagement sessions (see page 101). The Committee Chair

acts as the designated Non-Executive Director for Employee Engagement, and employees who wish to discuss Executive

pay are encouraged to ask questions on this and any other topics. Any feedback from employees is shared with the Board (or

relevant Board Committee) and forms a valuable input to decision making.

change

employee

The table below shows the percentage change (on a full-time equivalent basis, to permit meaningful comparison) in salary,

taxable benefits and annual bonus earned by each Director serving in 2025, compared to the average employee (excluding

Chinese and Vietnamese employees, for whom there has been significant salary inflation). Similar information for former

Directors is published in the relevant Annual Report.

Percentage change

between 2020 and

Percentage change

between 2021 and

between 2022 and

between 2023 and

between 2024 and

2021

2022

2023

Base

Taxable Annual

salary benefits bonus

400

300

200

100

XP Power Ltd

FTSE Mid 250

Excluding Investment Trust Index

Gavin Griggs was appointed CEO with effect from 1 January 2021. The percentage change between 2020 and 2021 compared his CEO pay with his CFO pay.

Matt Webb was appointed as CFO with effect from 4 September 2023. The percentage change between 2023 and 2024 assumes a full-time equivalent

for 2023.

Jamie Pike joined the Board on 1 March 2022, becoming Chair on 18 April 2023. The percentage change between 2022 and 2023 reflects this change in role

and assumes a full-time equivalent for 2022.

Polly Williams stepped down from her role as Audit Chair on 24 April 2025, reducing her total fees in 2025.

Sandra Breene joined the Board on 11 October 2022; the percentage change between 2022 and 2023 is based on a full-time equivalent for 2022.

Daniel Shook joined the Board on 1 January 2025, no comparative data is available for 2024.

Amina Hamidi joined the Board on 11 October 2022 and stepped down from the Board on 2 October 2025. The percentage change between 2022 and 2023

is based on a full-time equivalent for 2022 and the percentage change between 2024 and 2025 is based on a full-time equivalent for 2025.

Shareholder

Return, rebased to 100

at 31 December 2015 (£)

31/12/2015

31/12/2016

31/12/2017

31/12/2018

31/12/2019

31/12/2020

31/12/2021

31/12/2022

31/12/2023

31/12/2024

31/12/2025

CEO total remuneration (£’000)

£800

£531

£684

£562

£1,357

£1,211

£730

£1,026

£1,130

£1,073

Annual bonus (% of maximum)

27%

71%

11%

98%

73%

45%

59%

47.2%

Long-term incentives

maximum)

81%

80%

81%

33%

26%

2012 Share Options

23/02/2016

£15.43

23/02/2020

23/02/2026

2017 LTIP

839

22/04/2025

22/04/2026

3,639

(3,639)

08/03/2027

08/03/2028

6,845

17/03/2028

17/03/2029

13,091

12/03/2030

14,449

05/03/2030

05/03/2031

2020 RSP

405

22/04/2025

22/04/2026

03/03/2021

289

03/03/2026

03/03/2027

727

08/03/2027

08/03/2028

1,369

17/03/2028

17/03/2029

2,618

2,889

05/03/2020

3,709

06/03/2026

6/03/2028

5,787

05/03/2027

05/03/2029

(33%)

41%

19%

(69%)

270%

(4)%

(13)%

(24)%

(2%)

15%

23%

57%

Matt

Webb

Andy

Sng 6%

(22%)

(24%)

43%

(23%)

13%

22%

(66%)

(100%)

(1)%

31%

22%

41%

11%

12%

(18)%

(20)%

(28)%

239%

(2%)

14%

16%

(3%)

15%

10%

132

133

CEO pay ratio

In line with UK remuneration reporting regulations, the table below shows the ratio of the CEO’s total remuneration to that of

the lower quartile, median and upper quartile of UK employees.

information

Responsibilities

The Committee is responsible for the remuneration arrangements for Executive Directors and members of the Executive

Year Method

25th

percentile

pay

ratio

50th

percentile

pay

ratio

75th

pay

Leadership Team and for providing general guidance on aspects of the Remuneration Policy throughout the Group. The

Committee Terms of Reference are reviewed annually and are available in the Corporate Governance section of the Company’s

investor relations website corporate.xppower.com.

2024 Option A 32:1 20:1 13:1

2023 Option A 30:1 18:1 12:1

2022 Option A 23:1 15:1 9:1

2021 Option A 40:1 25:1 15:1

2020 Option A 50:1 31:1 18:1

2019 Option A 21:1 13:1 7:1

The reference date for the calculation is 31 December 2025. Methods of calculation are set out in The Companies (Miscellaneous Reporting) Regulations 2018.

Option A was selected as it best reflects the underlying data. As a large portion of the CEO’s pay is variable, the pay ratio is heavily dependent on variable pay

plan outcomes and, for long-term share-based awards, share price movements.

The year-on-year difference in the CEO pay ratio can be principally explained by changes in variable pay outturns over

time. Incentive opportunities make up a significant proportion of Executive remuneration, meaning that the single figure is

correlated to incentive outcomes, and packages for the wider workforce (against which the CEO’s single figure is compared

in this analysis) are typically more weighted towards fixed pay and are, therefore, less variable year-on-year. Lower incentive

outcomes since 2022 explain the decrease in the median CEO pay ratio in recent years. The Committee also considers the

ratio in fixed pay over time, and notes that it is more stable and reflective of XP Power’s policy to determine Executive salary

increases by reference to those awarded to the wider workforce in the relevant jurisdiction.

The table below shows the total pay and benefits, and the salary component, for employees at each of the three quartiles

review

During the year, the Remuneration Committee assessed its performance, facilitated through an internally managed

anonymous online survey. The results were positive, and the Committee concluded that its performance was effective in

2025 and that it had fulfilled its role in accordance with its Terms of Reference. A key strength identified was that members

individually assimilated the key issues in advance of meetings, enabling informed debate and effective decision making.

Advice

received

the year

During the year, Ellason provided remuneration advice to the Company. Ellason provides no other services to the Committee

and has no further connection with the Company or individual Directors. Ellason is a signatory to the Remuneration

Consultants Group’s Code of Conduct. On this basis, the Committee was satisfied that Ellason’s advice was objective and

independent. Fees of £69,100 excluding VAT were paid to Ellason in the year, based on agreed hourly rates and time spent.

Voting on remuneration

The table below sets out voting in respect of the approval of the Directors’ Remuneration Policy at the AGM in 2023 and the

Directors’ Remuneration Report at the 24 April 2025 AGM.

in 2025.

Salary

Approval of the Directors’

Meeting

Votes

of votes

Votes

against

of votes

against

Votes

withheld

Year benefits

of total pay

Remuneration Policy 18 April 2023 14,041,945 92.61% 1,120,232 7.39% 1,501

25th percentile £34,305 £32,527

50th percentile

£60,570

£54,075

75th percentile

£97,395

£85,750

Chief Executive

£1,073,000

£582,825

The CEO’s pay ratio to the median pay of UK employees is a function of our pay, reward and progression policies for the

Company’s UK employees and all XP employees. The Company aims to pay all employees, including the CEO, in accordance

with its values, its desire to pay for performance, internal relativities and appropriate external market reference points.

Relative

importance

spend

This chart illustrates the relative importance of spend on pay compared to shareholder dividends paid.

Approval of the Directors’

Remuneration Report 24 April 2025 9,751,317 48.38% 10,404,802 51.62% 1,533,151

We continue to engage on Executive remuneration, seeking to strike the right balance of interest among all shareholders.

£100m

£80m

£91.3m

£88.1m

Group employment costs include

Directors’ remuneration. Refer to

Note 6 in the Financial Statements

for more details.

£60m

£40m

£20m

£0m

Distribution

shareholder dividends

Group employment

costs

£0

134

135

Policy

The Directors’ Remuneration Policy is subject to a binding vote at the AGM on 23 April 2026 and, if approved, will apply from

this date. The intention is that the Policy will apply for a period of at least three years.

During 2025, the Committee reviewed the existing Policy from the perspectives of its suitability to the Company, its

compliance with investor and governance guidelines, and its competitiveness against relevant markets for talent. As part of

the review process, the Committee sought the views of other Board members, Executives and external advisers, as well as our

larger shareholders and shareholder advisory bodies. The Committee is satisfied that the Policy continues to be appropriate

for the Company and no changes are proposed.

The information in this section is not subject to audit. A copy of the Policy is available in the Corporate Governance section of

the Company’s investor relations website corporate.xppower.com.

policy table

The objectives of the Remuneration Policy are to:

reward employees and Executive Directors appropriately for the work they do (base salary);

provide market-competitive remuneration packages to enable retention or recruitment (base salary plus benefits);

incentivise employees and Executive Directors to perform at their best consistently (bonus/long-term incentive plan/

restricted share plan);

align shareholders’ and senior management’s interests (bonus in shares, long-term incentive plan/restricted share plan and

shareholding guidelines); and

retain key staff (long-term structures with delayed vesting).

The following Directors’ Remuneration Policy table provides a summary of the key components of the remuneration package

proposed for approval at the 2026 AGM. Other than a minor clarification to explain the operation of our incentives, no

changes were made to the prior policy table.

Purpose Operation Opportunity

Applicable

performance measures

Purpose Operation Opportunity

Applicable

performance measures

salary

To help recruit, retain and

motivate high-performing

Executives.

Reflects the individual

experience, role and

importance of the Executive

Director to the business.

Base salaries are set by the Remuneration

Committee and normally reviewed annually.

Increases are effective from 1 April, although

increases may be awarded at other times if

the Remuneration Committee considers it

appropriate.

A market benchmarking exercise will be

undertaken periodically as determined by

the Remuneration Committee to ensure that

base salary remains around the median of the

market level for roles of a similar nature, and

to reflect the individual’s skills, experience and

Base salaries are reviewed

annually. Increases will not

normally exceed the range of

increases awarded to other

employees within the Group.

The Remuneration Committee

may also increase a Director’s

salary if there is a change in

the scope of their role, the

scale or complexity of the

business, or if significant

changes to market practice

arise, which the Remuneration

Committee believes justifies a

further increase in base salary.

Benefits

To help recruit, retain and

motivate high-performing

Executives.

Benefits are set by the Remuneration

Committee and reviewed annually.

Benefits currently received by the Executive

Directors include:

The Company provides a

range of market-benchmarked

benefits. The costs of these

benefits may change

year-on-year due to

external costs.

The Remuneration Committee

has flexibility to provide benefits

that would typically have

been available to an Executive

Director in an overseas

jurisdiction when recruiting from

outside of the UK.

To provide market

competitive benefits.

Paid holidays

Life insurance

Private medical cover

Housing allowance

Car allowance

Other allowances provided to the wider

workforce may also be provided.

bonuses

Align the interests of

Executive Directors and

shareholders in the short and

medium terms.

The annual bonus scheme participation

levels (including maximum opportunities) are

determined by the Remuneration Committee

following the end of the year, based on

performance achieved against the performance

metrics set.

Awards are split equally between (i) cash; and

(ii) shares vesting after two years, subject to

continued employment or good leaver status.

Amounts equivalent to any dividends or

shareholder distributions made in respect of

awards at vesting, are paid at the discretion of

the Remuneration Committee.

Up to 125% of base salary for

CEO and up to 100% for other

Executive Directors. Executive

Directors will receive 25% of the

maximum award for threshold

performance and 50% for on-

target performance.

Specific targets and

weightings may vary

according to strategic

priorities and may include:

financial performance;

the attainment of

personal, operational,

and strategic

objectives; and

weighting which

will focus on Group

financial performance.

The Remuneration Committee has the

power to reduce unpaid annual bonuses and

clawback bonuses already paid on a net basis in

circumstances set out following this table.

Pensions

Provide a basic pension

benefit that would be

expected for the position.

A percentage of base salary is paid into a

defined contribution scheme.

In line with pension benefits

offered to the wider workforce

in the relevant geography, which

is currently 8% in the UK and

6% in Singapore.

Align the interests of

Executive Directors and

shareholders in the long term.

Incentivise long-term value

creation.

Share-based incentives are made up of a

Long-Term Incentive Plan (LTIP), and a

Restricted Share Plan (RSP).

The normal maximum award

level under share-based

incentive plans is 150% of base

salary or such higher amount as

the Remuneration Committee

in its absolute discretion may

determine, up to a maximum of

200% of base salary. The 200%

cap is restricted to exceptional

circumstances only.

LTIP awards may be made in the form of

conditional share awards, nil or nominal cost

options. The LTIP also provides for awards to

be structured as stock appreciation or phantom

rights, which may be suitable for awards

granted in overseas jurisdictions.

25% of a LTIP award will vest for

threshold performance.

Specific targets and

weightings may vary

according to strategic

priorities at the start of

each performance period

and may include:

Performance is typically measured over three

financial years starting with the year of date of

grant, or any longer period as the Remuneration

Committee may decide.

financial

(such as EPS);

value creation (such

as TSR); and

An award will be subject to a two-year holding

period.

Weighting is expected to

focus on Group financial

and value creation

performance measures.

RSP awards may be granted without

performance conditions.

Restricted share awards normally vest five years

from the date of award.

Up to a maximum of 15% of

base salary may be granted

as restricted shares without

performance conditions.

In calculating value against the

150% of salary limit for

share-based incentives, the

value of restricted share

awards will be multiplied by

two to reflect that they do not

have performance conditions

attached.

136

137

Use

discretion

the treatment of leavers, and discretion when dealing with adjustments for corporate events (such as changes in control,

rights issues, de-mergers and acquisitions etc.).

Annual bonus documentation and the LTIP rules contain provisions to give the Committee the ability to apply discretion to

adjust any formulae and workings to reduce vesting levels to ensure pay-outs fully and properly reflect overall performance

and the shareholder experience, and in response to exceptional negative events.

measures

The Company’s incentive plans use a range of performance measures linked to business strategy and current key priorities.

Measures and weightings will be described in the respective Directors’ Remuneration Report. Performance targets will be

challenging, yet achievable, and will require stretching out-performance to achieve the maximum. Annual bonus targets will

usually be disclosed when they are no longer commercially sensitive. LTIP targets will usually be disclosed on a prospective

basis where possible.

Malus

clawback

Annual bonus documentation, the LTIP and RSP rules, will contain provisions enabling the Committee to apply malus and

clawback provisions. These allow the Committee to determine, in its absolute discretion, that an unvested award or bonus

award (or part of an award) may not be permitted to vest, or that the level of vesting is reduced in certain circumstances or

when payment back of some, or all, of an award is required after vesting. The Committee considers a period not exceeding

three years from the determination of an award to be sufficient for the Group's processes and systems to identify the

occurrence of any relevant trigger event. Where the Committee acts fairly and reasonably within a period not exceeding three

years to determine that:

a serious breach of the Company’s code of ethics has arisen; or

a serious health and safety issue has occurred; or

the award holder has participated in, or was responsible for, conduct that has resulted in significant losses to the Group; or

the award holder has failed to meet appropriate standards of fitness and propriety resulting in a material negative effect

on the Group; or

the award holder has committed material wrongdoing or has breached the terms of their employment contract in such

manner as would result in a potentially fair reason for dismissal; or

there was a material error in determining whether an award should be made, in determining the size or nature of the award

or the extent to which it has vested,

it may require any unvested awards held by the award-holder to lapse in whole, or in part, immediately, and/or may require the

award holder to repay the Company the after-tax value of some, or all, vested awards received during that period, in such form

as it may determine.

Malus and clawback will continue to apply to any awards held by leavers and those vesting in connection with corporate

events/changes in control. The Committee has the right to apply the malus provision to an individual or on a collective basis. It

shall also (acting reasonably and in good faith) determine the amount or award subject to clawback.

Legacy

commitments

The Committee reserves the right to honour any legacy remuneration arrangements including those made under a previously

The Company’s incentive plans, including the annual bonus scheme, share option scheme, LTIP and RSP will be operated

within the rules of the relevant scheme, together with all applicable laws and regulations. The Remuneration Committee may

operate the discretion contained in the relevant plan in order to facilitate its administration and operation. Discretion includes

(but is not limited to):

who is invited to participate or receive awards, the size and timing of awards, or payments;

the setting of appropriate performance measures and targets from year to year, and any adjustment of these, considering

market conditions;

the annual review of performance against targets for the determination of bonuses and awards;

the determination of vesting and performance periods; and

approved Directors’ Remuneration Policy.

Approach

recruitment

In the event of the recruitment of a new Executive Director, the Remuneration Committee considers the structure and

levels of the remuneration for existing Directors and prevailing market practice, together with the skills and value it believes

the new Director will bring to the Company. It is, therefore, expected that a new Director’s package will include the same

elements as those of existing Directors, and the maximum level of variable remuneration for annual bonus and LTIP will be

capped as it is for existing Executive Directors. Depending on the timing of any appointment, the performance measures

and targets used for incentive purposes may differ from existing Executive Directors for the first performance cycle. The

Committee may agree to meet any relocation expenses or other benefit arrangements if they are in the best interests of

shareholders. In addition, the Remuneration Committee will have discretion to make payments or awards to buy out incentive

shareholders in the long term.

Incentivise long-term

value creation.

Clawback: The Remuneration Committee

has the discretion to claw back some, or all,

awards granted under share-based incentive

plans by reducing unvested awards or

requiring the return of the net value of vested

awards to the Company in circumstances set

out following this table.

Amounts equivalent to any dividends or

shareholder distributions made in respect of

awards at vesting, are paid at the discretion of

the Remuneration Committee.

(minimum)

shareholders in the long

term.

To build a minimum shareholding equivalent

to two years’ salary. Directors have a period of

five years from appointment to achieve this.

Post-employment

shareholding

Post cessation, Executive Directors must hold

shares equivalent to 200% of salary for the

first year and 100% of salary for the second

year or, if their holding is lower than this at

cessation, the value of their holding at the

point of cessation. The Committee will ensure

the application of this requirement through a

signed agreement with the Executive.

Shares that have been, or are, in future,

purchased by Executives, will not be subject

to restrictions on sale.

Deferred bonus shares in their deferral period

and vested LTIP awards that are still in their

holding period will be counted against the

percentage requirement on a net-of-tax basis.

fees

Fees are set at a level that is

sufficient to attract, motivate

and retain quality

Non-Executive Directors.

Fees are reviewed periodically. The Board

(excluding the Non-Executive Directors)

are responsible for setting Non-Executive

Directors’ fees.

Non-Executive Directors are not entitled to

participate in the Group’s incentive plans.

The total amount of

Non-Executive Directors’ fees

shall not exceed that approved

by shareholders at a General

Meeting (currently £600,000 in

accordance with the Articles).

138

139

arrangements forfeited on leaving a previous employer, i.e. over and above the approach outlined in the previous table, and

may exercise the discretion available under Listing Rule 9.3.2R if necessary. In doing so, the Remuneration Committee will

seek, to the best possible extent, to do no more than match the fair value of the awards forfeited, considering the applicable

performance conditions, the likelihood of those conditions being met and the proportion of the applicable vesting period

remaining. Where an Executive Director appointment is an internal candidate, the Remuneration Committee will honour any

pre-existing remuneration obligations or outstanding variable pay arrangements that relate to the individual’s previous role.

The Remuneration Committee retains the discretion to offer appropriate remuneration outside the standard policy where an

interim appointment is made to fill an Executive role on a short-term basis or where exceptional circumstances require that

the Chair or a Non-Executive Director takes on an Executive function.

Executive Directors’ contracts

The Executive Directors’ contracts run for an indefinite period, and the Company can terminate the contracts without cause,

giving 12 months’ notice. When a Director is terminated without cause, the Director is entitled to a termination payment of

12 months’ basic pay. Directors’ service contracts are available for inspection at the Company’s AGM. Directors can terminate

contracts giving 12 months’ notice.

The Executive Director may, at the discretion of the Committee, remain eligible to receive a bonus award for the financial year

in which they cease to be an employee, if the Committee decides that good leaver terms should apply. Any such bonus will be

determined by the Committee considering the leaver’s time in employment and performance. Any deferred bonus and

share-based incentives will be subject to the leaver terms in the respective plan rules.

The Committee may determine it appropriate to provide reasonable outplacement support to a departing Executive Director,

the reimbursement of legal advice at the expense of the Company and any payments required by statute.

Leaver

provisions

The table below outlines the treatment of outstanding share awards under the short and long-term incentive plans for “good”

and “bad” leavers, and in circumstances where the Company undergoes a change of control. A “good” leaver will generally

mean an Executive Director who ceases to be an employee for any of the following reasons: death, retirement, injury or

disability, the employing Company ceasing to be part of the Group, redundancy, or any other reason, subject to Remuneration

Committee discretion. A “bad” leaver will generally mean any leaving scenario that is not provided for under the good leaver

Type of

leaver

Deferred

Bonus

Plan

Long-Term

Incentive

Plan

Restricted

Plan

definition.

Type of

leaver

Deferred

Bonus

Plan

Long-Term

Incentive

Restricted

The Remuneration Committee has the discretion to permit acceleration of vesting and to disapply pro-rating.

contracts

The Non-Executive Directors’ contracts run for an indefinite period, and the Company can terminate contracts without cause

giving 12 months’ notice. If the shareholders do not re-elect a Non-Executive Director, or they are retired from office under

the Articles, their appointment terminates automatically with immediate effect and without compensation. In accordance with

the Code, Non-Executive Directors do not typically serve more than nine years. Non-Executive Directors are not entitled to

share-based incentives or pensions.

consultation

The Remuneration Committee’s policy is to consult with major shareholders on significant Executive remuneration decisions.

The development of this Policy was subject to shareholders’ and proxy agency adviser consultations. Feedback from any

engagement is considered by the Committee on a timely basis.

More generally, the Committee is kept updated on and reviews the latest guidance from the proxy agencies and major

institutional shareholders.

Statement

consideration

employment

conditions

elsewhere

Company

The Committee considers pay and conditions throughout the Group when setting the Remuneration Policy. The Committee

is regularly informed of remuneration trends and issues throughout the workforce and considers these when determining the

Policy for Executive Directors.

Fixed pay is set for wider employees in a similar way to that for the Executive Directors, albeit, in some locations, pay is

subject to local regulatory compliance. The use of incentive pay varies across the business and any performance measures

used will reflect the nature of the specific role and its location.

Bad

leaver

Where a participant

ceases to be an

employee before the

end of the deferral

period, awards will

Where a participant ceases to be an

employee during the first three years of

the performance period, all outstanding

shares will lapse immediately on

cessation.

Where a participant ceases to be an

employee during the first three years

of the restricted period, all outstanding

shares will lapse immediately on

cessation.

lapse in full on date

of cessation. The

Committee retains

discretion to override

this rule in whole or

in part, except where

the participant is

dismissed for reason

of misconduct.

Where a participant ceases employment

after the first three years of the

performance period, awards will vest

on the fifth anniversary of the grant of

the award or such earlier date as the

Committee may determine, except where

the participant is dismissed.

Where a participant cease employment

after the first three years of the

restricted period, awards will vest on

the fifth anniversary of the grant of

the award or such earlier date as the

Committee may determine, except

where the participant is dismissed.

Change

On a change of

control of the

Company during

the deferral period,

awards will vest in

full on the date of

the event.

On a change of control of the Company

prior to the vesting date of an LTIP

award (the fifth anniversary of grant), an

award will vest on the date of the event

and the Remuneration Committee has

the discretion to determine the number

of shares vesting by assessing the

achievement of the relevant performance

conditions and apply a pro rata

reduction based on the proportion of the

performance period elapsed at the time of

the event, unless it determines a pro rata

reduction is not appropriate.

On a change of control of the Company

prior to the vesting date of an RSP

award, an award will vest on the date of

the event over such number of shares as

the Committee determines, considering

the time elapsed since the grant date

and any other relevant factors.

control

Good

Where a participant Where a participant ceases to be an

ceases to be an employee during the first three years of

employee before the the performance period, the number of

end of the deferral shares vesting will be subject to a

period, awards will pro rata reduction by reference to

vest in full on the relevant performance achievement,

date of cessation. and the period elapsed between the

commencement of the performance

period and the end of the calendar month

in which the date of cessation occurs,

unless the Remuneration Committee

determines the reduction is not

appropriate. Shares will vest at the end of

the vesting period (five years from grant)

or such earlier date as the Remuneration

Committee determines.

Where a participant ceases employment

performance period, no pro-rating will

apply but awards will vest on the fifth

anniversary of the award grant unless the

Remuneration Committee exercises its

discretion to permit earlier vesting.

employee during the first three years

of the restricted period, the number of

shares vesting will be subject to a

pro rata reduction by reference to the

period elapsed between the award date

and the end of the calendar month in

which the date of cessation occurs,

unless the Remuneration Committee

determines that the reduction is not

appropriate. Shares will vest at the

end of the vesting period (five years

from grant) or such earlier date as the

Remuneration Committee determines.

Where participants cease employment

restricted period, no pro-rating will

apply but awards will vest on the fifth

anniversary of the grant of the award

exercises its discretion to permit earlier

vesting.

leaver

140

141

DIRECTORS’ REPORT

The Remuneration Committee does not consult directly with other employees when setting Executive Director remuneration.

However, the Remuneration Committee Chair is the designated Non-Executive Director responsible for workforce engagement

and has conducted several activities that have included the opportunity to discuss Executive remuneration with employees.

Illustration

application

Policy

The charts below indicate the level of remuneration that would be received by each Executive in accordance with the

approved Directors’ Remuneration Policy.

All figures are shown in thousands.

Gavin

Griggs

Matt

Webb

Andy

Sng

The Directors present their report and audited Financial

Statements for the year-ended 31 December 2025

(Directors’ Report). The Directors have incorporated certain

disclosure requirements for inclusion in the Directors’ Report

by cross-referencing content elsewhere in the Annual Report,

which are referenced below. This report should be read in

conjunction with the following:

Greenhouse gas emissions reported information –

Sustainability Report, pages 53–55

Energy consumption information – Sustainability Report,

The Corporate Governance Report – pages 91–104

The Group’s key activity in Research and Development –

Chief Executive Officer’s Review, page 21

The Strategic Report presents the Company’s business

activities, together with factors that potentially affect

its future development, performance or position, on

pages 11–80.

The Chief Financial Officer’s Review outlines details of

the Company’s financial position and its cash flows on

£3000

£2500

£2000

£1500

£1,335

14%

£2,262

£2,672

£1,629

£1,946

S$431

S$666

S$1,030

S$1,185

S$1200

S$1000

S$800

S$600

page 75

Gas emissions, energy consumption and energy efficiency

(other disclosures) – Sustainability Report, pages 53–55

and 74–75

For the purposes of UK Listing Rule (UKLR) 6.6.6R(8),

information on climate-related financial disclosures

pages 28–32.

The Long-term Viability Statement includes information on

the appropriateness of adopting the going concern basis of

the accounts on page 42.

Our approach to risk management is outlined from page 34.

The Board reviewed the process to ensure that the primary

£1000

£500

£773

12%

£597

12%

88%

£972

54%

32%

27%

12%

S$400

S$200

consistent with the TCFD recommendation and the TCFD

recommended disclosure – pages 56–65

Further details of the actions that the Group takes to

Financial Statements and the notes to the Financial

Statements, had been tagged in line with the required

taxonomy.

£0

Minimum

On-target Maximum Maximum

with 50%

share price

Minimum

On-target Maximum Maximum

with 50%

share price

Minimum

Maximum

with 50%

S$0

reduce emissions – Sustainability Report, pages 44–45

Reported information about Group employees –

Sustainability Report, pages 66–71

Information required to be disclosed by UK Listing Rule

(UKLR) 6.6.1R is located in the Annual Report locations as

follows:

Fixed RSP Annual bonus LTIP

The charts above illustrate the value of the remuneration package for each Executive in 2026, under four scenarios:

Minimum: Fixed pay (consisting of base salary, benefits and pension) and full vesting under the RSP

On-target: Fixed pay, full vesting under the RSP, on-target outturn under the annual bonus (50% of maximum) and

threshold vesting under the LTIP (12.5% of maximum)

Maximum: Fixed pay, full vesting under the RSP, maximum outturn under the annual bonus and full vesting under the LTIP

Maximum (with 50% share price growth): As shown in the “maximum” scenario, with 50% share price appreciation

assumed for the RSP and LTIP

For the purposes of the charts above, the fixed elements of remuneration are as follows (on annualised basis):

Information concerning employee share schemes –

Note 30, pages 192–205

Listing

Rule

Section Topic

Location

page

Position Name

salary

(effective

April

2026)

Benefits

(as per FY25)

Pension

fixed

Chief Executive Officer

£607,600

£26,000

£48,600

£682,200

Chief Financial Officer

£469,100

£20,000

£37,500

£526,600

Executive Vice President, Asia

S$342,500

S$19,800

S$17,300

S$379,600

15%

24%

(1)

Capitalised interest

Note 7 to the Group’s Consolidated Financial

Statements on page 175. Related tax relief is not

material.

(2)

Publication of unaudited financial information Nothing to disclose

(3)

Details of long-term incentive plans established

specifically to recruit or retain a Director

Nothing to disclose

(4)

(5)

Waiver of emoluments by a Director of the Company Nothing to disclose

(6)

(7)

Allotments for cash of ordinary shares Note 27 to the Group’s Consolidated Financial

statements on pages 189–190 and Note 48 to

the Company balance sheet on page 216. Other

disclosures on page 32 and 143.

(8)

Parent participation in a placing by a listed subsidiary Nothing to disclose

(9)

Contracts of significance Nothing to disclose

(10)

(13) Controlling shareholder disclosures Nothing to disclose

(11)

(12) Dividend waiver Directors’ Report on page 142

142

143

DIRECTORS’ REPORT

Other

statutory disclosures

Location

details

Areas

for disclosure

(1) Directors Director biographies on pages 88–90

Nomination Committee Report on

pages 105–109

(2) Employee engagement and business relationships Pages 66–71 and 101

(3) Financial risks Note 31, pages 205–210

(4) Future developments Strategic Report on pages 11–80

(5) Greenhouse gas emissions Pages 53–55 and 74–75

(6) Post-balance sheet events Note 32, page 210, no disclosure

(7) Reporting under Section 172 Companies Act and engagement with stakeholders Pages 43 and 98–99

(8) Viability statement Page 42

their interests in the shares of the Company on page 128.

and prevailing legislation and no other classes of share

capital exist.

There are no restrictions on the voting rights attached to

the Company’s ordinary shares or on the transfer of shares

in the Company, other than certain restrictions which may

from time to time be imposed by laws and regulations (for

example insider trading laws). No shareholder holds shares

in the Company that carry special rights or control of the

Company’s share capital. The Directors are not aware of

any agreements between shareholders that may restrict the

transfer of shares or voting rights.

Power to issue and allot

At the AGM, held on 24 April 2025, Directors were given

authority to allot and issue shares in the Company up to a

maximum amount equivalent to approximately one-third of

the issued share capital, excluding shares held in treasury,

for general purposes, plus up to a further one-third of the

Company’s issued share capital, excluding shares held in

new ordinary shares as part of the Placing and 97,860 new

ordinary shares as part of the Retail Offer (together “the

Offer Shares”), which represented, approximately, 17.7%

of the Company’s issued ordinary share capital. Settlement

for the Offer Shares and Admission to trading on the main

market for listed securities of the London Stock Exchange

took place on 6 March 2025. In aggregate, the Fundraise

raised gross proceeds of £41 million and net proceeds of,

approximately, £39.6 million.

Soft pre-emption (which seeks, where possible, to replicate

the existing shareholder base) was adhered to in the

allocations process for the Placing. Management was

involved in the allocations process, which was carried out

in compliance with the MiFID II Allocation requirements.

Allocations made outside of soft pre-emption were

preferentially directed towards existing shareholders in

excess of their pro rata interests and wall-crossed accounts.

The Fundraise included the Retail Offer, for a total of 97,860

Retail Offer Shares, via the RetailBook platform, alongside

Dividends

XP Power’s policy is to declare quarterly dividends. Dividend

payments were suspended in late 2023 and no dividends

were declared for the 2025 financial year. While Dividends

remain an important element of the Group’s long-term

capital allocation strategy, the Board believes it is in the

shareholders’ long-term interests to prioritise debt reduction

over distributions until net debt is closer to our long-term

leverage target.

The trustee of the Employee Benefit Trust waives its right

o dividends paid on any ordinary shares it holds on the

terms of the Employee Benefit Trust in respect of the period

covered by the Financial Statements and future periods. Such

waivers represent less than 1% of any total dividend payable

on the Company’s ordinary shares.

interests

Under the Company’s Articles of Association (the Articles),

Directors have the power to appoint and replace Directors.

Under the Nomination Committee’s Terms of Reference,

any appointment must be recommended by the Nomination

Committee for Board approval. Shareholders may, by

ordinary resolution, of which special notice has been given in

accordance with section 152 of the Act, remove any Director

before the expiration of their period of office.

Directors of the Company in office at 31 December 2025,

and at the date of this report, together with their biographical

details, are presented on pages 88–90. Polly Williams retired

from the Board on 26 February 2026 and Charlotta Ginman

was appointed on 1 January 2026. In addition, Amina Hamidi

served as a Non-Executive Director until 2 October 2025.

The Directors’ Remuneration Report presents details of

the Directors’ service contracts on pages 138 and 139 and

No Director had any dealings in the shares of the Company

between 31 December 2025 and the date of this report.

In line with the 2024 UK Corporate Governance Code, each

Director will stand for re-election at the forthcoming AGM.

The Company business, including the allotment and issuance

of ordinary shares, is managed by the Board, which may

exercise all the powers of the Company subject to the

Company’s Articles, any directions given by the Company by

special resolution, and any relevant statutes and regulations.

The Corporate Governance Report provides a summary of

Matters reserved for the Board on page 102.

Liability

insurance

indemnities

The Company has agreed to indemnify, to the extent

permitted by law, each Director against any liability incurred

in respect of acts or omissions arising during their office.

Each Director is covered by appropriate Directors’ and

officers’ liability insurance, at the Company’s expense.

capital

structure

At the date of this report, the total share capital of the

Company was 28,039,678 ordinary shares, of which 7,500

were held in treasury. Therefore, the total voting rights in

the Company are 28,032,178. Ordinary shareholders are

entitled to receive notice of, and to attend and speak at,

general meetings. On a show of hands, every shareholder

present in person or by proxy (or a duly authorised corporate

representative) shall have one vote and, on a poll, every

member present in person or by proxy (or a duly authorised

corporate representative) shall have one vote for every

share held by that member. The rights and obligations

attached to the ordinary shares are governed by the Articles

treasury, but only in the case of a rights issue. The Directors

acknowledge the voting outcome of this resolution, which

was approved with 74.85% of the votes cast. Please see page

104 for an update on shareholders' views on this resolution.

Directors were granted additional powers at the 2025 AGM

to allot new shares in the Company for cash: (i) up to an

aggregate number of 2,793,217 (being approximately 10%

of the Company’s then issued ordinary share capital) and an

additional 558,643 new shares (being approximately 20%

of any allotment under (i)); and (ii) up to a further aggregate

number of 2,793,217, and an additional 558,643 new shares

(being approximately 20% of any allotment under (ii)), in each

case without regard to the pre-emption rights, provided that

the authority under (ii) can only be used in connection with

acquisitions or capital investments. No allotments were made

under this authority.

These authorities expire on the date of the 2026 AGM,

during which the Directors propose to renew them for

a further year. The Directors do not intend to exercise

authorities, if granted, other than to satisfy the exercise of

options or vesting of awards under the Company’s employee

share schemes.

Using authority granted at the 2024 AGM, on 4 March 2025,

the Company announced a non-pre-emptive placing (“the

Placing”) and a separate retail offer (“the Retail Offer”)

(together “the Fundraise”) at a fixed price of 975p (“the

Offer P

rice”) per new ordinary share, which represented

a discount of, approximately, 5.2% to the closing middle

market price on 3 March 2025, being the last practicable

date prior to the publication of the announcement of the

Fundraise. The results of the Fundraise were also announced

on 4 March 2025, and the Company issued and allotted a

total of 4,200,424 ordinary shares, comprising 4,102,564

the Placing. Retail investors, who participated in the Retail

Offer, could do so at the same Offer Price as all other

investors participating in the Fundraise. The Retail Offer

was made available to existing shareholders and new retail

investors in the UK. Investors could participate through the

RetailBook platform. Allocations in the Retail Offer were

preferentially directed towards existing shareholders in

keeping with the principle of soft pre-emption.

Authority to

purchase

own

At the 2025 AGM, shareholders gave the Company authority

to make market purchases of up to 10% of the Company’s

then issued ordinary share capital. Any shares purchased

in this way could be cancelled or held in treasury (or a

combination of these). No purchases were made under

this authority. The Directors propose to seek an equivalent

authority at the 2026 AGM, but, if granted, do not intend to

use this authority.

General

Meeting

Details of the Company’s AGM and the proposed resolutions

will be set out in a separate Notice of Meeting.

Auditor

Our Auditor, PwC LLP, has indicated its willingness to

continue in office, and on Audit Committee recommendation,

resolutions to reappoint PwC LLP as Auditor and to authorise

the Directors to determine the Auditor’s remuneration will be

proposed at the forthcoming AGM.

144

145

DIRECTORS’ RESPONSIBILITIES STATEMENT

Articles

of Association

Any amendments to the Articles of Association of the

Company may be made by special resolution of the

shareholders.

Significant contracts and change of

control

The Group has borrowing facilities that may require the

immediate repayment of all outstanding loans together with

accrued interest in the event of a change of control.

The rules of the Company’s employee share plans set out

Substantial

shareholders

We have safeguards to monitor transactions by major

Company shareholders, including reviewing our major

shareholders’ holdings on a quarterly basis and monitoring

any regulatory notifications of acquisition or disposal by

major shareholders.

As at 31 December 2025, in accordance with DTR 5.1.2 (as

applicable to non-UK issuers), the Company had received

notifications of the following interests in voting rights

exceeding 5%, attached to ordinary shares and financial

instruments relating to the Company’s share capital:

Statement of Directors’ responsibilities

in respect of the Annual Report and

the Financial Statements

The Directors are responsible for preparing the Annual

Report and the Financial Statements in accordance with

applicable law and regulation.

Company law requires the Directors to prepare Group

Financial Statements and a Parent Company balance sheet

for each financial year. Under that law, the Directors have

prepared the Group Financial Statements in accordance

Singapore legislation, which governs the preparation and

dissemination of Financial Statements, may differ from

legislation in other jurisdictions.

Fair,

balanced

understandable

The Directors consider the Annual Report and Accounts,

taken as a whole, is fair, balanced and understandable, and

provides the information necessary for shareholders to

assess the Group’s position, performance, business model

and strategy. Details of the process followed to enable the

Board to make this statement are provided in the Audit

Committee Report on page 112.

change-in-control consequences of the Company on

participants’ rights under the plans. Awards may vest,

becoming exercisable on a change of control, subject to the

satisfaction of performance conditions and in accordance

with the rules of the plan.

None of the Executive Directors’ service contracts contain

provisions that are affected by a change of control and

there are no other agreements that the Company is party to

that take effect, alter or terminate in the event of a change

of voting

rights

voting

rights

with International Accounting Standards and the Parent

Company balance sheet in accordance with Singapore

Financial Reporting Standards (International) (SFRS(I)s) and

Responsibility statement of the

Directors in respect of the Annual

Financial Report

Each of the Directors, whose names and functions are listed

in the Annual Report and Financial Statements, confirm, to

the best of their knowledge, that:

the balance sheet of the Company and Consolidated

Financial Statements of the Group, as set out on pages

of control of the Company, which are considered to be

significant in terms of their potential impact on the Group.

Steel Connect Sub LLC 2,114,957 7.57

Parent Company, and of the profit or loss of the Group for

that period. In preparing the Group and Parent Company

211 and 153–156, are drawn up in accordance with the

applicable set of accounting standards, to give a true and

The Company has no contractual or other arrangements that

are essential to the Group’s business.

Political

charitable

donations

The Wellcome Trust

Limited as trustee of The

Wellcome Trust

1,796,317 6.43

balance sheet, the Directors are required to:

select suitable accounting policies and apply them

consistently;

fair view of the assets, liabilities, financial position, and

profit or loss of the Group for the financial year-ended

31 December 2025;

The Group did not make any political donations or incur

any political expenditure during the year. See page 71 for

information on charitable donations.

Branches

The Company had no branches in existence during the year

under review and to the date of this report.

Financial

risk

The Group’s exposure to, and management of, capital,

liquidity, credit, interest rate and foreign currency risks are

contained in Note 31 on page 205.

As at 27 February 2026, no further notifications have been

received by the Company in accordance with DTR5.

Post-balance

sheet

events

No material post-balance sheet events were required to be

disclosed.

Signed on behalf of the Board by:

GAVIN

GRIGGS

XP Power Limited 19 Tai Seng Avenue, #07-01, Singapore 534054

Company Registration Number: 200702520N, registered in Singapore

state whether applicable International Accounting

Standards and International Financial Reporting

Standards have been followed for the Group Financial

Statements and adhered to SFRS(I)s for the Parent

Company balance sheet, subject to any material

departures disclosed and explained in the Financial

Statements;

make judgements and accounting estimates that are

reasonable and prudent; and

prepare the Financial Statements on the going concern

basis unless it is inappropriate to presume that the Group

and Parent Company will continue in business.

The Directors are responsible for safeguarding Group and

Parent Company assets and, hence, for taking reasonable

steps for the prevention and detection of fraud and other

irregularities.

The Directors are also responsible for maintaining adequate

accounting records sufficient to show and explain the

Group’s and Parent Company’s transactions and disclose with

reasonable accuracy, at any time, the financial position of

the Group and Parent Company, to ensure that the Financial

Statements and the Directors’ Remuneration Report comply

with relevant legislation.

The Directors are responsible for the maintenance and

integrity of the Company’s website.

the Annual Report includes a fair review of the

development and performance of the business and

the financial position of the Group and the Company,

together with a description of the principal risks and

uncertainties they face;

so far as they are aware, there is no relevant audit

information of which the Group’s and Parent Company’s

Auditor is unaware; and

they have taken all the steps that they ought to have

taken as a Director to make themselves aware of any

relevant audit information and to establish that the

Group’s and Parent Company’s Auditor is aware of that

information.

The Directors’ Report, together with the Strategic Report

on pages 11–80, which forms the Management Report for

the purposes of Financial Conduct Authority Disclosure

Guidance and Transparency Rules (DTR 4.1.8), was approved

by the Board on 2 March 2026 and is signed on its behalf by:

CHAIR

GAVIN

GRIGGS

Odyssean Investment Trust

PLC

2,950,000 10.56

applicable law.

The Group has prepared Financial Statements in accordance

Aberforth Partners LLP

2,814,839

10.08

with International Financial Reporting Standards.

Van Lanschot Kempen

Investment Management

2,653,905 9.50

Under company law, Directors must not approve the

Financial Statements unless they are satisfied that they give

a true and fair view of the state of affairs of the Group and

146

147

CONTENTS

INDEPENDENT AUDITOR’S REPORT 148

CONSOLIDATED STATEMENT OF COMPREHENSIVE 153

INCOME

CONSOLIDATED BALANCE SHEET 154

CONSOLIDATED STATEMENT OF CHANGES IN 155

EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS 156

NOTES TO THE CONSOLIDATED FINANCIAL 157

STATEMENTS

COMPANY BALANCE SHEET

211

NOTES TO THE COMPANY BALANCE SHEET 212

FIVE-YEAR REVIEW CONSOLIDATED 223

INFORMATION

ADVISERS 224

148

149

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF XP POWER LIMITED

the Audit

of the

Statements

determined

materiality

The scope of our audit was influenced by our application

We tailored the scope of our audit to ensure that we

performed sufficient work to be able to give an opinion on

Our opinion

In our opinion, the accompanying consolidated financial

statements of XP Power Limited (the “Company”) and

its subsidiary corporations (the “Group”) and the balance

sheet of the Company are properly drawn up in accordance

with the provisions of the Singapore Companies Act

1967 (the “Act”), Singapore Financial Reporting Standards

(International) (“SFRS(I)s”) and International Financial

Reporting Standards (“IFRSs”) as issued by the International

Accounting Standards Board (“IFRSs as issued by the IASB”),

so as to give a true and fair view of the consolidated financial

position of the Group and the financial position of the

Company as at 31 December 2025, and of the consolidated

financial performance, consolidated changes in equity and

consolidated cash flows of the Group for the financial year

ended on that date.

What we

have

audited

The financial statements of the Company and the Group

comprise:

The consolidated statement of profit or loss of the Group

for the financial year ended 31 December 2025;

The consolidated statement of comprehensive

income of the Group for the financial year ended

31 December 2025;

The consolidated balance sheet of the Group as at

The balance sheet of the Company as at

The consolidated statement of changes in equity of the

Group for the financial year then ended;

The consolidated statement of cash flows of the Group

for the financial year then ended; and

The notes to the financial statements, including material

accounting policy information.

Basis for our opinion

We conducted our audit in accordance with International

Standards on Auditing (“ISAs”). 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.

Independence

We are independent of the Group in accordance with the

Accounting and Corporate Regulatory Authority Code of

Professional Conduct and Ethics for Public Accountants and

Accounting Entities (“ACRA Code”), as applicable to audits of

financial statements of public interest entities, together with

the ethical requirements that are relevant to audits of the

financial statements of public interest entities in Singapore.

We have also fulfilled our other ethical responsibilities in

accordance with these requirements and the ACRA Code.

Our audit

approach –

overview

Materiality

The overall materiality which we have used to plan our work

for the Group amounted to £0.3m. The overall materiality

applied to the audit of the Company balance sheet amounted

to £0.3m.

Audit

scope

We performed an audit of the complete financial information

and of significant financial statement line items for significant

reporting units which included operations based in North

America, Europe and Asia. This accounted for approximately

91% of Group revenues and 94% of Group assets.

Key audit matters

We identified the following key audit matters:

Goodwill; and

Capitalised product development costs.

of materiality. We set certain quantitative thresholds for

materiality. These, together with qualitative considerations,

helped us to determine the scope of our audit and the

nature, timing and extent of our audit procedures on

the financial statement line items and disclosures and in

evaluating the effect of misstatements, both individually and

in aggregate on the financial statements as a whole.

For each component in the scope of our Group audit, we

allocated a materiality that is less than our overall Group

materiality. The range of materiality allocated across

components was £0.1m to £0.3m. Certain components were

audited to a local statutory audit materiality that was also

less than our overall Group materiality.

Based on our professional judgement, we determined

that the benchmark of Adjusted Profit before Taxation is

appropriate as it reflects the Group’s growth and investment

plans. We believe this is a key measure used by shareholders

in assessing the performance of the Group.

We agreed with the Audit Committee that we would report

to them misstatements identified during our audit above

£0.1m, as well as misstatements below that amount that, in

our view, warranted reporting for qualitative reasons.

How we tailored the audit scope

The Group operates across North America, Europe and Asia.

In establishing the overall approach to the Group audit, we

determined the type of work that needed to be performed

at the local operations by us, as the Group engagement

team, or component auditors from other PwC network

firms operating under our instruction. Where the work was

performed by component auditors, we determined the level

of involvement we needed to have in the audit work at those

local operations to be able to conclude whether sufficient

appropriate audit evidence had been obtained as a basis for

our opinion on the Group financial statements as a whole.

As part of designing our audit, we determined materiality

and assessed the risks of material misstatement in the

accompanying financial statements. In particular, we

considered where management made subjective judgements;

for example, in respect of significant accounting estimates

that involved making assumptions and considering future

events that are inherently uncertain. As in all of our audits,

we also addressed the risk of management override

of internal controls, including among other matters

consideration of whether there was evidence of bias that

represented a risk of material misstatement due to fraud.

the financial statements as a whole, taking into account

the geographical structure of the Group, the accounting

processes and controls, and the industry in which the Group

operates.

What are the key audit matters

Key audit matters are those matters that, in the auditor’s

professional judgement, were of most significance in the

audit of the financial statements for the financial year ended

31 December 2025. Key audit matters include the most

significant assessed risks of material misstatement (whether

or not due to fraud) identified by the auditors, including

those which had the greatest effect on: the overall audit

strategy; the allocation of resources in the audit; and the

directing of efforts of the engagement team. These matters,

and any comments we make on the results of our procedures

thereon, 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. This is not a complete list of all risks identified by

our audit.

150

151

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF XP POWER LIMITED

Goodwill

Refer to page 110 (Audit Committee Report), page 169

(Critical accounting estimates, assumptions and judgements

– Recoverable amount of cash-generating units for goodwill

impairment) and page 170 (Note 11 – Goodwill).

The Group has goodwill of £72.8m at 31 December 2025

contained within three cash-generating units (“CGUs”) defined

by its geographical split – North America, Europe and Asia.

We focused on this area due to the relative size of the carrying

amount of goodwill, which represents 17% of total assets, and

because of the significant judgements used to estimate key

assumptions applied in computing the recoverable amounts of

different CGUs for the purpose of impairment assessment.

Key assumptions include future revenue growth rate, terminal

growth rate and discount rate.

The Group has also assessed the impact of climate change on

the assumptions used in goodwill impairment assessment and

disclosed them in Note 11 to the financial statements.

Capitalised

costs

Refer to page 110 (Audit Committee Report), page 169

(Critical accounting estimates, assumptions and judgements

– Capitalisation of product development costs, Recoverable

amount of capitalised product development costs, Useful lives

of capitalised product development costs and start date for

amortisation) and pages 169–170 (Note 12 – Intangible assets).

Part of the Group’s strategy is to invest in research and

development to create new products. As at 31 December 2025,

the carrying amount of capitalised product development costs

is £32.1m, of which £8.7m was capitalised in the current

financial year.

We focused on the appropriateness of capitalisation of product

development costs due to the relative size of the carrying

amount of this intangible asset, which represented 8% of

total assets, and because significant judgement is involved in

determining whether the criteria to capitalise such product

development costs, as set out in IAS 38 Intangible Assets, have

been fulfilled and that the capitalised amounts are recoverable.

We also identified the useful lives of the capitalised product

development costs as an area involving significant judgement.

The carrying amount of the capitalised product development

costs is heavily dependent on the useful lives of the developed

products and start date for amortisation. Management has

determined the useful lives of the developed products and

start date for amortisation, based on the expected life cycle of

these products, taking into consideration expected customer

demand and technological innovation. Management takes the

view that amortisation should start when product is capable of

operation in a manner intended by management, with the use of

established principals.

We inquired and evaluated management’s definition

of CGUs.

We assessed the reasonableness of management’s

assumptions used to compute the recoverable amounts

of the CGUs by:

Reviewing historical revenue and cost trends;

Inquiring management’s future plans for growth and

cost optimisation;

Benchmarking key market-related assumptions with

relevant economic and industry indicators;

Reviewing forecasted capital expenditure to

management’s budget and plans;

Benchmarking terminal growth rate with forecasted

long-term growth rates of each region; and

Computing independent discount rates.

We reviewed management’s sensitivity analysis

which considers reasonably possible changes to key

assumptions, including unfavourable changes to

assumptions arising from climate change.

Based on the above, no exceptions were noted.

We assessed the appropriateness of capitalisation of

product development costs by challenging management

through discussions and qualitative reviews of the

products’ technical and commercial feasibility. We also

tested the accuracy and allocation of capitalised material

costs and labour costs.

We reviewed management’s impairment assessment

on capitalised product development costs and verified

inputs such as historical sales, unfulfilled customer

orders and correspondences with customers on

forecasted demand and future plans. We also reviewed

the business cases of products in development and

verified that the growth assumptions applied are not

unreasonable.

We also performed a benchmarking exercise to compare

the useful lives of the capitalised product development

costs against other companies within the same industry.

The useful lives as determined by management are in

line with that of the industry and consistent with our

understanding of the life cycle of the products.

We assessed the appropriateness of the start date

for amortisation by challenging management through

discussions and quantitative review of the products’

historical sales

Based on the above, no exceptions were noted.

Information other than the Financial

Statements and Auditor’s Report

thereon

Going

concern

Under the UK Listing Rules (“Listing Rules”) we are required

to review the Directors’ statement, set out on page 145, in

relation to going concern.

Our evaluation of the directors’ assessment of the

Group’s and the Company’s ability to continue to adopt

the going concern basis of accounting included;

Evaluation of management’s base case and downside

scenarios, understanding and evaluating the key

assumptions;

Assessment of the historical accuracy and reasonableness

of management’s forecasting;

Consideration of the Group’s available financing and debt

maturity profile; Testing of the mathematical integrity of

management’s liquidity headroom, sensitivity and stress

testing calculations; and

Review of the disclosures in the Annual Report in relation

to going concern.

Based on the work we have performed, we have not

identified any material uncertainties relating to events

or conditions that, individually or collectively, may cast

significant doubt on the Group’s and the Company’s ability

to continue as a going concern for a period of at least twelve

months from when the financial statements are authorised

for issue.

In 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.

However, because not all future events or conditions can

be predicted, this conclusion is not a guarantee as to the

Group’s and the Company’s ability to continue as a going

concern.

In relation to the directors’ reporting on how they have

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.

Corporate

statement

Under the Listing Rules, we are required to review the part of

the Corporate Governance Statement relating to Provisions

6 and 24 to 29 of the UK Corporate Governance Code. We

have nothing to report having performed our review.

Other

Management is responsible for the other information. The

other information comprises the “Overview” section set out

on pages 2–9, “Strategic Report” section set out on pages

10–80, “Governance” section set out on pages 82–145, and

the “Financials” section on page 223 of the Annual Report.

Other information, as defined in this section, does not

include matters that we are required to review and report on

under the Listing Rules, as described above.

Our opinion on the financial statements does not cover

the other information and we do not express any form of

assurance conclusion thereon.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially

misstated. 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.

Responsibilities for the financial

statements and the audit

Responsibilities of Management and

Directors for the Financial Statements

Management is responsible for the preparation of financial

statements that give a true and fair view in accordance

with the provisions of the Act, SFRS(I)s and IFRSs as issued

by the IASB, and for devising and maintaining a system

of internal accounting controls sufficient to provide a

reasonable assurance that assets are safeguarded against

loss from unauthorised use or disposition; and transactions

are properly authorised and that they are recorded as

necessary to permit the preparation of true and fair financial

statements and to maintain accountability of assets.

In preparing the financial statements, management is

responsible for assessing the Group’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 management either intends to liquidate

the Group or to cease operations, or has no realistic

alternative but to do so.

The Directors are responsible for overseeing the Group’s

financial reporting process.

Key audit matters How did our audit address these

152

153

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2025

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 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.

As part of an audit in accordance with ISAs, we exercise

professional judgement and maintain professional scepticism

throughout the audit. We also:

Identify and assess the risks of material misstatement of

the financial statements, whether due to fraud or error,

design and perform audit procedures responsive to those

risks, and obtain audit evidence that is sufficient and

appropriate to provide a basis for our opinion. The risk

of not detecting a material misstatement resulting from

fraud is higher than for one resulting from error, as fraud

may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to

the audit in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose

of expressing an opinion on the effectiveness of the

Group’s internal control.

Evaluate the appropriateness of accounting policies used

and the reasonableness of accounting estimates and

related disclosures made by management.

Conclude on the appropriateness of management’s use of

the going concern basis of accounting and based on the

audit evidence obtained, whether a material uncertainty

exists related to events or conditions that may cast

significant doubt on the Group’s ability to continue as a

going concern. If we conclude that a material uncertainty

exists, we are required to draw attention in our auditor’s

report to the related disclosures in the financial

statements or, if such disclosures are inadequate, to

modify our opinion. Our conclusions are based on the

audit evidence obtained up to the date of our auditor’s

report. However, future events or conditions may cause

the Group to cease to continue as a going concern.

Evaluate the overall presentation, structure and content

of the financial statements, including the disclosures,

and whether the financial statements represent the

underlying transactions and events in a manner that

achieves fair presentation.

Plan and perform the group audit to obtain sufficient

appropriate audit evidence regarding the financial

information of the entities or business units within

the group as a basis for forming an opinion on the

group financial statements. We are responsible for the

direction, supervision and review of the audit work

performed for purposes of the group audit. We remain

solely responsible for our audit opinion.

We communicate with the Audit Committee regarding,

among other matters, the planned scope and timing of the

audit and significant audit findings, including any significant

deficiencies in internal control that we identify during our

audit.

We also provide the Audit Committee with a statement

that we have complied with relevant ethical requirements

regarding independence, and to communicate with them

all relationships and other matters that may reasonably be

thought to bear on our independence, and where applicable,

actions taken to eliminate threats or safeguards applied.

From the matters communicated with the Audit Committee,

we determine those matters that were of most significance

in the audit of the financial statements of the current year

and are therefore the key audit matters. We describe these

matters in our auditor’s report, unless law or regulation

precludes public disclosure about the matter or when, in

extremely rare circumstances, we determine that a matter

should not be communicated in our report because the

adverse consequences of doing so would reasonably be

expected to outweigh the public interest benefits of such

communication.

Report on other legal and regulatory

requirements

In our opinion, the accounting and other records required by

the Act to be kept by the Company and by those subsidiaries

incorporated in Singapore of which we are the auditors, have

been properly kept in accordance with the provisions of

the Act.

The engagement partner on the audit resulting in this

independent auditor’s report is Lee Chian Yorn.

PricewaterhouseCoopers

LLP

Public Accountants and Chartered Accountants

Singapore, 3 March 2026

Note

Adjustments

230.1

247.3

Cost of sales

(131.9)

(1.9)

(133.8)

(146.0)

(4.3)

(150.3)

Gross

profit

98.2

(1.9)

96.3

101.3

(4.3)

97.0

Operating expenses

Distribution and marketing

(55.3)

(11.0)

(66.3)

(52.1)

(6.6)

(58.7)

Administrative

(4.1)

(3.7)

(7.8)

(4.2)

(10.6)

(14.8)

Research and development

(21.5)

(19.9)

profit

17.3

(16.6)

0.7

25.1

(21.5)

3.6

Net finance expense

(7.8)

(0.2)

(8.0)

(11.3)

Profit/(loss)

before

tax

9.5

(16.8)

(7.3)

13.8

(7.7)

Tax (expense) / credit

(3.3)

(0.7)

(4.0)

(3.4)

1.7

(1.7)

Profit/(loss)

6.2

(17.5)

(11.3)

10.4

(19.8)

(9.4)

Attributable to:

Equity shareholders

(11.4)

(9.6)

Non-controlling interests

0.1

0.2

Loss for the year

(11.3)

(9.4)

Earnings

per

Basic earnings/(loss) per share

22.5

(64.5)

(42.0)

43.0

(83.5)

(40.5)

Diluted earnings/(loss)

per share

22.5

(64.5)

(42.0)

42.9

(83.3)

(40.4)

CONSOLIDATED STATEMENT OF COMPREHENSIVE

INCOME

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2025

Loss

(11.3)

(9.4)

Items

that

may

reclassified

subsequently

loss:

Exchange differences on translation of foreign operations

(2.3)

(1.8)

Exchange differences reclassified to profit or loss on disposal of foreign operation

(0.7)

Other

comprehensive

loss

year,

net

(3.0)

(1.8)

comprehensive

loss

(14.3)

(11.2)

Attributable to:

Equity shareholders

(14.4)

Non-controlling interests

0.1

loss

(14.3)

(11.2)

The accompanying notes form an integral part of these financial statements.

154

155

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2025

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

The accompanying notes form an integral part of these financial statements.

Attributable to equity holders of the Company

Share-

Note

capital

Merger

reserve

based

payments

reserve

Translation

reserve

Other

reserve

Retained

earnings

Non-

controlling

interests

equity

Balance

January

71.2

0.2

2.1

(0.9)

7.6

74.4

154.6

0.7

155.3

Exercise of share-based

payment awards

(0.9)

0.9

Share-based payment

expenses, net of tax

1.9

Dividends paid

Future acquisition of non-

controlling interest

0.1

Exchange differences on

translation of financial

statements of foreign

(1.7)

(0.1)

(1.8)

(Loss)/profit for the year

(9.6)

0.2

(9.4)

Total comprehensive (loss)/

income for the year

(1.7)

(9.6)

(11.2)

Balance

31 December 2024

71.2

0.2

3.1

(2.6)

8.6

64.8

145.3

0.6

145.9

Exercise of share-based

payment awards

(1.7)

1.7

Share-based payment

expenses, net of tax

1.9

Issuance of shares

39.6

Dividends paid

(0.1)

(0.3)

Future acquisition of non-

controlling interest

Exchange differences on

translation of financial

statements of foreign

(2.3)

Realisation of translation

reserve upon liquidation of

subsidiary

(0.7)

(Loss)/profit for the year

(11.4)

Total comprehensive (loss)/

income for the year

(3.0)

(11.4)

(14.4)

(14.3)

Balance

110.8

0.2

3.3

(5.6)

10.1

53.3

172.1

0.5

172.6

£m Note

ASSETS

Current

assets

Cash and bank balances 16

33.8

13.9

Inventories 18

57.0

71.1

Trade receivables 19

34.2

30.2

Bond receivable 25

48.8

39.2

Other current assets 20

5.9

5.6

Current income tax receivable

1.2

0.7

current

assets

180.9

160.7

Non-current

assets

Goodwill

72.8

73.2

Intangible assets

54.2

63.5

Property, plant and equipment

65.6

64.4

Right-of-use assets

47.8

51.8

Cash collateral

1.7

1.5

Deferred income tax assets

0.7

1.0

ESOP loan to employees

non-current

assets

242.8

255.5

assets

423.7

416.2

LIABILITIES

Current

liabilities

Accrued consideration

0.8

Current income tax liabilities

2.6

0.4

Trade and other payables

59.2

40.8

Lease liabilities

1.8

1.6

Provisions

50.1

54.0

Borrowings

0.3

current

liabilities

114.0

97.9

Non-current

Accrued consideration

1.7

0.7

Borrowings

76.7

108.6

Deferred income tax liabilities

7.9

9.1

Provisions

1.2

1.3

Lease liabilities

49.6

52.7

non-current

137.1

172.4

251.1

270.3

NET ASSETS

172.6

145.9

EQUITY

Equity

attributable

equity

holders

Company

Share capital

110.8

71.2

Merger reserve

Share-based payments reserve

3.3

3.1

Translation reserve

(5.6)

Other reserve

10.1

8.6

Retained earnings

53.3

64.8

172.1

145.3

Non-controlling

interests

0.5

0.6

TOTAL EQUITY

172.6

145.9

156

157

CONSOLIDATED STATEMENT OF CASH FLOWS

NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS

General

XP Power Limited (the “Company”) is listed on the London Stock Exchange and incorporated and domiciled in Singapore. The

address of its registered office is 19 Tai Seng Avenue, #07-01, Singapore 534054.

The nature of XP Power Limited and its subsidiaries’ operations and its principal activities are set out in the “Our Business

Model” section of the Annual Report on pages 16-17.

Material

accounting

policy

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.

These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

The consolidated financial statements of XP Power Limited and its subsidiaries (the “Group”) have been prepared in

accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards

Board (“IFRSs as issued by the IASB”) and Singapore Financial Reporting Standards (International) (“SFRS(I)s”).

All references to SFRS(I)s and IFRSs as issued by the IASB are subsequently referred to as IFRS in these consolidated financial

statements unless otherwise specified.

The consolidated financial statements have been prepared on the historical cost convention except as disclosed in the

accounting policies below.

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and

assumptions that affect the application of these accounting policies and the reported amounts of assets, liabilities, income

and expenses. The estimates and associated assumptions are based on historical experience and various other factors that

are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about

carrying amounts of assets and liabilities that are not readily apparent from other sources. Areas involving a higher degree of

judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements,

are disclosed in Note 3.

Going

concern

The Group’s business activities, together with the factors likely to affect its future development, performance and position

are set out in the Strategic Report on pages 18-23. The financial position of the Group, its cash flows, liquidity position and

borrowing facilities are described in the financial review on pages 28-32. The principal risks of the Group are set out on pages

35-41. The Directors have considered these areas alongside the principal risks and how they may impact going concern.

Overview

liquidity

The Group has available to it a Revolving Credit Facility (RCF) of $130m with approximately $100m maturing in June 2028 and

$30m maturing in June 2030 and therefore the whole facility is committed throughout the minimum period for which going

concern is assessed, which is 12 months from the date of signing these financial statements.

At 31 December 2025, the Group had drawn down $106m (£79m) from the RCF, leaving undrawn facility headroom of $24m

(£18m). The Group has been in compliance with the associated covenants, which are leverage ratio (Net Debt to Adjusted

EBITDA) of not more than 3:00 and interest cover (Adjusted EBITDA to Adjusted Net Finance Expense) of not less than 3.00.

Each covenant is tested quarterly.

Approach

going

As part of its going concern review, the Group has developed both base case and downside case financial scenarios, with

the latter representing a severe but plausible downside scenario, assessing forecast liquidity and covenant compliance in

each case.

The key assumption in these scenarios was revenue, particularly revenue beyond the initial circa six-month period for which

the business already has visibility via existing sales orders. Revenue beyond this initial period will be determined by, amongst

other things, the timing of the semiconductor upcycle and general global macroeconomic conditions.

£m Note

Cash

flows

from

operating

Loss for the year

(9.4)

Adjustments for:

– Income tax expense 9

4.0

1.7

– Amortisation and depreciation 8

18.8

18.7

– Net finance expense 7

8.0

11.3

– Share-based payment expenses 6

2.1

1.6

– Loss on disposal of property, plant, and equipment

0.4

– Impairment loss on goodwill 11

1.4

– Impairment loss on intangible assets

5.3

– Impairment loss on right-of-use of assets

0.3

– Realisation of translation reserve upon liquidation of subsidiary 15

– Property, plant and equipment written off

– Unrealised currency translation loss/(gain)

2.5

(1.0)

– Provision for doubtful debts 31(d)

Change in working capital:

– Inventories 28

9.9

21.2

– Trade receivables and other current assets 28

(4.2)

15.4

– Trade and other payables 28

14.6

(8.0)

– Provision 28

8.3

Cash

generated

from

49.3

62.0

Income tax paid, net of refund

(3.2)

(6.6)

Net

cash

provided

operating

46.1

55.4

Cash

flows

from

investing

Government grant relating to the purchase of property, plant and equipment

1.5

Purchases and construction of property, plant and equipment

(7.1)

(9.8)

Additions of product development costs

(8.7)

(10.0)

Additions of software and software under development

(0.3)

Purchase of bond receivables

(11.7)

Bond premium paid

Proceeds from repayment of ESOP loans

Interest received

Net

cash

used

investing

(26.7)

(20.0)

Cash

flows

financing

Proceeds from issuance of new ordinary shares

39.6

Proceeds from borrowings

40.0

3.8

Repayment of borrowings

(67.3)

(23.4)

Principal payment of lease liabilities

(1.8)

(1.6)

Interest paid

(8.3)

(12.1)

Dividend paid to equity holders of the Company

(0.1)

Dividend paid to non-controlling interests

Bank deposit pledged

(0.3)

Net

provided

by/(used

in)

financing

1.6

(33.5)

Net

increase

equivalents

21.0

Cash and cash equivalents at beginning of financial year

13.9

12.0

Effects of currency translation on cash and cash equivalents

(1.1)

equivalents

end

financial

33.8

13.9

158

159

NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS

Material

policy

continued

The Group remains fully compliant with its financial covenants and maintains adequate liquidity in both Base and Downside

Case under those scenarios.

Outcome

downside

scenario

The downside case assumes a 2% decline in revenue between 2025 and 2026 due largely to reduced sales to China following

the expiry of available export licences. The downside case assumes no broader market recovery to compensate for this, which

is expected in the base case.

The lowest point of headroom in the Leverage Ratio covenant in this scenario was at 31 March 2026. EBITDA would need

to fall c. 51% short of expectations in the period 1 January to 31 March 2026 for a breach to occur. The lowest point of

headroom in the Interest Cover covenant was at 31 December 2026. EBITDA would need to fall c. 46% short of expectations

in the period 1 January to 31 December 2026 for a breach to occur. c. 51% of 2026 Downside Case revenue is now covered

by firm orders in hand.

Conclusions

The Directors are confident that the base case and downside case provide an appropriate basis for the going concern

assumption to be applied in preparing the financial statements, while recognising more modest headroom in the severe

but plausible case. In both cases, the Group remains in full compliance with its financial covenants and with ample liquidity

throughout the going concern assessment period.

Therefore, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational

existence for the foreseeable future. The Group, therefore, continues to adopt the going concern basis in preparing its

consolidated financial statements.

Changes

policy

disclosures

New

amended

standards

adopted

On 1 January 2025, the Group adopted the new or amended IFRS, Interpretations issued by the IFRS Interpretations

Committee of the IASB (IFRIC) and Interpretations of SFRS(I) (INT SFRIS(I)) (collectively referred to as “Standards and

Interpretations”) that are mandatory for application for the financial year. Changes to the Group’s accounting policies have

been made as required, in accordance with the transitional provisions in the respective Standards and Interpretations.

The adoption of these new or amended Standards and Interpretations, specifically the amendments to IAS 21, did not result in

substantial changes to the Group’s accounting policies and had no material effect on the amounts reported for the current or

previous financial years.

ii.

New

Standards

Interpretations

issued

not

yet

adopted

Certain new accounting Standards and Interpretations have been published that are not mandatory for 31 December 2025

reporting periods and have not been early adopted by the Group. These are not expected to have a material impact on the

Group in the current or future reporting periods and on foreseeable future transactions except for SFRS(I) 18 Presentation and

Disclosure in Financial Statements as its impacts on presentation and disclosure are expected to be pervasive, in particular,

those related to the consolidated statement of comprehensive income and providing management-defined performance

measures within the financial statements. The Group is currently assessing the detailed implication of applying the new

standard on the Group’s consolidated financial statements.

recognition

Sales

goods

The Group manufactures and sells a range of power products. Sales are recognised at a point in time when control of the

products has transferred to the customer. Transfer of control usually occurs when delivery to the customer takes place. Where

the terms of the contract with the customer vary, for example where the customer collects the products from an XP Power

site rather than receives a delivery, the transfer of control occurs when the customer collects the products.

Power products are sometimes sold with volume discounts based on aggregate sales over a 12-month period or early

payment discounts. Revenue from these sales is recognised based on the price specified in the contract, net of the discounts.

Accumulated experience is used to estimate and provide for the volume discounts, using the expected value method, and

early payment discounts, using the most likely approach.

The Group has agreements with certain distributors which include right of return provisions for a specified quantity of items

purchased but not sold by the distributor over a specified period of time. Revenue is adjusted based on an estimate of the

value of items which will be returned by distributors. Accumulated experience is used to make this estimate, using the most

likely approach.

Revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur.

A receivable (financial asset) is recognised when the control of the products is transferred as this is the point in time that the

consideration is unconditional because only the passage of time is required before payment is due.

Volume rebates and early payment discounts are recognised when the control of the products is transferred and are presented

as a reduction in trade and other receivables.

The Group has elected to apply the practical expedient not to adjust the transaction price for the existence of significant

financing component when the period between the transfer of control of good or service to a customer and the payment date

is one year or less.

The Group operates sales commission plans for direct sales teams. The related costs are incremental costs of obtaining a

contract. No asset is recognised in respect of these costs as the commissions are earned at the same point that the revenue is

recognised.

The Group does not recognise an asset in relation to costs to fulfil a contract, aside from Inventory which is measured as in

Note 2.5. Other costs to fulfil a contract comprises delivery costs, which are recognised when incurred.

Interest

income

Interest income from financial assets at amortised cost is recognised using the effective interest rate method.

Government

Grants from the government are recognised as a receivable at their fair value when there is reasonable assurance that the

grant will be received and that the Group will comply with all attached conditions. The Group receives government grants

relating to the construction of property, plant and equipment. These grants are deducted directly from the carrying amount of

the related asset. This reduces the depreciable amount of the asset and therefore lowers the depreciation expense recognised

in profit or loss over the asset’s useful life.

Subsidiaries

Consolidation

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 the 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.

In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between

Group entities are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment

indicator of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure

consistency with the policies adopted by the Group.

Non-controlling interests comprise the portion of a subsidiary’s net results of operations and its net assets, which are

attributable to the interests that are not owned directly or indirectly by the equity holders of the Company. They are shown

separately in the consolidated statement of comprehensive income, statement of changes in equity and balance sheet. Total

comprehensive income is attributed to the non-controlling interests based on their respective interests in a subsidiary, even if

this results in the non-controlling interests having a deficit balance.

ii.

Acquisitions

The acquisition method of accounting is used to account for business combinations entered into by the Group.

160

161

Material

The consideration transferred for the acquisition of a subsidiary or business comprises the fair value of the assets transferred,

the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes any contingent

consideration arrangement and any pre-existing equity interest in the subsidiary measured at their fair values at the

acquisition date.

Acquisition-related costs are expensed as incurred.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited

exceptions, measured initially at their fair values at the acquisition date.

On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of

acquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.

The excess of (a) the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-

date fair value of any previous equity interest in the acquiree over the (b) fair value of the identifiable net assets acquired is

recorded as goodwill. Please refer to Note 2.7 for the subsequent accounting policy on goodwill.

Transactions

with

non-controlling

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control over the subsidiary are

accounted for as transactions with equity owners of the Company. Any difference between the change in the carrying

amounts of the non-controlling interest and the fair value of the consideration paid or received is recognised within equity

attributable to the equity holders of the Company.

Foreign

translation

Functional

presentation

Items included in the financial statements of each entity in the Group are measured using the currency of the primary

economic environment in which the entity operates (“functional currency”). The consolidated financial statements are

presented in pounds sterling, which is different from the Company’s functional currency. The Company’s functional currency is

the US dollar.

The financial statements are presented in pounds sterling, as the majority of the Company’s shareholders are based in the

UK and the Company is listed on the London Stock Exchange. It is the currency that the Directors of the Group use when

controlling and monitoring the performance and financial position of the Group.

Transactions

balances

Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency

using the exchange rates at the dates of the transactions. Currency exchange differences resulting from the settlement of such

transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates

at the balance sheet date are recognised in profit or loss. Monetary items include primarily financial assets (other than equity

investments), contract assets and financial liabilities. Foreign exchange gains and losses impacting profit or loss are presented

in the income statement within “operating expenses”.

Non-monetary items measured at fair value in foreign currencies are translated using the exchange rates at the date when the

fair values are determined.

Translation

entities’

financial

statements

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy)

that have a functional currency different from the presentation currency are translated into the presentation currency as

follows:

Assets and liabilities are translated at the closing exchange rates at the reporting date;

Income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of

the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated

using the exchange rates at the dates of the transactions); and

All resulting currency translation differences are recognised in other comprehensive income and accumulated in the

currency translation reserve. These currency translation differences are reclassified to profit or loss on disposal or partial

disposal with loss of control of the foreign operation.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the

foreign operations and translated at the closing rates at the reporting date.

The Group has elected to treat goodwill and fair value adjustments arising on the acquisitions before the date of initial

transition to IFRS as pounds sterling-denominated assets and liabilities translated using the exchange rates at the dates of the

acquisitions.

Inventories

Inventories are carried at the lower of cost and net realisable value. Cost is determined using the weighted-average cost

formula. The cost of finished goods and work-in-progress comprises raw materials, direct labour, other direct costs and related

production overheads (based on normal operating capacity). Net realisable value is the estimated selling price in the ordinary

course of business, less the estimated costs of completion and applicable variable selling expenses.

The Group applies provisions based on product shelf-life and inventory aging to ensure adequate coverage. Finished goods

with defined shelf-life are provisioned at 50% when 12–24 months from expiry and 100% within 12 months of expiry. For

finished goods without shelf-life, provisions are 50% after two years and 100% after three years. Raw materials are written

down by 100% if the last goods received date and last sales date are both more than 12 months, and by 50% if the last goods

received date is more than 12 months and last sales date is between 7–12 months. Provisions are reviewed periodically, and

reversals are made if net realizable value improves.

Property,

plant

equipment

Measurement

Property,

plant

equipment

Items of property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated

depreciation and accumulated impairment losses.

ii.

Components

costs

The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is

directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the

manner intended by management.

Depreciation

Freehold land and assets under construction are not depreciated. Depreciation on other items of property, plant and

equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives

as follows: Useful lives Buildings 20–50 years Plant and equipment 2–10 years Motor vehicles4–5 yearsBuilding improvements Over the remaining lease term or shorter

The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and

adjusted as appropriate, at each balance sheet date. The effects of any revision are recognised in profit or loss when the

changes arise.

Subsequent

expenditure

Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying

amount of the asset only when it is probable that future economic benefits associated with the item will flow to the entity

and the cost of the item can be measured reliably. All other repairs and maintenance expenses are recognised in profit or loss

when incurred.

162

163

Material

Disposal

On disposal of an item of property, plant and equipment, the difference between the disposal proceeds and its carrying

amount is recognised in profit or loss within Operating Expenses.

Intangible

Goodwill

Goodwill on acquisitions of subsidiaries and businesses represents the excess of (i) the sum of consideration transferred, the

amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in

the acquiree over (ii) the fair value of the identifiable net assets acquired. Goodwill on subsidiaries is recognised separately as

intangible assets and carried at cost less accumulated impairment losses.

Other

intangible

Other intangible assets include internally generated assets and acquired assets. They are initially capitalised at cost and

subsequently carried at cost less accumulated amortisation and accumulated impairment losses. These costs are amortised to

profit or loss using the straight-line method over their estimated useful lives as follows:

Useful lives Product development costs 5–7 years Software 10 years Brand 2–10 years Technology5–10 yearsCustomer relationships 4–9 years Customer contracts 1–3 years

The amortisation period and amortisation method of intangible assets other than goodwill are reviewed at least at each

balance sheet date. The effects of any revision are recognised in profit or loss when the changes arise.

Product

costs

(internally

generated)

The Group is involved in research and development activities. Research costs are recognised as an expense when incurred.

Costs directly attributable to the development of products are capitalised as intangible assets only when technical feasibility

of the project is demonstrated, the Group has an intention and ability to complete and use the products and the costs can

be measured reliably. Such costs include purchases of materials and services and payroll-related costs of employees directly

involved in the project.

ii.

Software

(internally

generated)

Costs associated with maintaining software programmes are recognised as an expense when incurred. Costs that are directly

attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as

intangible assets when the capitalisation criteria for development phase stated in IAS 38 Intangible Assets is met. Such costs

mainly include consultancy costs and payroll-related costs of employees directly involved in the implementation.

Borrowing

costs

Borrowing costs are recognised in profit or loss using the effective interest method. Borrowing costs that are directly

attributable to the development of internally generated intangible assets and property, plant and equipment are capitalised

by applying a capitalisation rate to development expenditures that are financed by general borrowings. Costs are capitalised

during the period of time that is required to complete and prepare the qualifying asset for its intended use or sale. Qualifying

assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.

Impairment

non-financial

Goodwill

Goodwill recognised separately as an intangible asset is tested for impairment annually and whenever there is indication that

the goodwill may be impaired.

For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash-generating units (“CGUs”)

expected to benefit from synergies arising from the business combination.

An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds the recoverable amount

of the CGU. The recoverable amount of a CGU is the higher of the CGU’s fair value less cost to sell and value-in-use.

The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then

to the other assets of the CGU pro rata on the basis of the carrying amount of each asset in the CGU.

An impairment loss on goodwill recognised as an expense is not reversed in a subsequent period.

Intangible

assets,

property,

plant

equipment,

right-of-use

Intangible assets, property, plant and equipment and right-of-use assets are tested for impairment whenever there is any

objective evidence or indication that these assets may be impaired. For intangible assets that are not available for use, the

Group also tests them for impairment, at least annually.

For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-

in-use) is determined on an individual asset basis unless the asset does not generate cash inflows that are largely independent

of those from other assets. If this is the case, the recoverable amount is determined for the CGU to which the asset belongs.

If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the

asset (or CGU) is reduced to its recoverable amount.

The difference between the carrying amount and recoverable amount is recognised as an impairment loss in profit or loss.

For an asset other than goodwill, management assesses at the end of the reporting period whether there is any indication

that an impairment recognised in prior periods may no longer exist or may have decreased. If any such indication exists, the

recoverable amount of that asset is estimated and may result in a reversal of impairment loss. The carrying amount of this

asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that

would have been determined (net of any accumulated amortisation or depreciation) had no impairment loss been recognised

for the asset in prior years.

A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss.

Classification

measurement

The Group classifies its financial assets in the following measurement categories:

Amortised cost;

Fair value through other comprehensive income (“FVOCI”); and

Fair value through profit or loss (“FVPL”).

The classification depends on the Group’s business model for managing the financial assets as well as the contractual terms of

the cash flows of the financial asset.

The Group reclassifies debt instruments when and only when its business model for managing those assets changes.

initial

recognition

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value

through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs

of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Subsequent measurement

Debt instruments

Debt instruments mainly comprise of cash and bank balances, trade receivables, other current assets (excluding prepayments,

VAT receivables and rights to returned goods) and bond receivable.

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There are three subsequent measurement categories, depending on the Group’s business model for managing the asset and

the cash flow characteristics of the asset:

Amortised cost: Debt instruments that are held for collection of contractual cash flows where those cash flows represent

solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt instrument that is

subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when

the asset is derecognised or impaired. Interest income from these financial assets is included in interest income using the

effective interest rate method.

FVOCI: Debt instruments that are held for collection of contractual cash flows and for sale, where the assets’ cash flows

represent solely payments of principal and interest, are measured at FVOCI. Movements in fair values are recognised in

Other Comprehensive Income (“OCI”) and accumulated in fair value reserve, except for the recognition of impairment gains

or losses, interest income and foreign exchange gains and losses, which are recognised in profit or loss. When the financial

asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss

and presented in “other income”. Interest income from these financial assets is recognised using the effective interest rate

method and presented in “interest income”.

FVPL: Debt instruments that are held for trading as well as those that do not meet the criteria for classification as

amortised cost or FVOCI are classified as FVPL. Movement in fair values and interest income is recognised in profit or loss

in the period in which it arises and presented in “other income”.

Impairment

The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at

amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in

credit risk. Note 31 details how the Group determines whether there has been a significant increase in credit risk.

For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses

to be recognised from initial recognition of the receivables.

Recognition

derecognition

Regular way purchases and sales of financial assets are recognised on trade date – the date on which the Group commits to

purchase or sell the asset.

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been

transferred and the Group has transferred substantially all risks and rewards of ownership.

On disposal of a debt instrument, the difference between the carrying amount and the sale proceeds is recognised in profit or

loss. Any amount previously recognised in other comprehensive income relating to that asset is reclassified to profit or loss.

Offsetting

financial

instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable

right to offset and there is an intention to settle on a net basis or realise the asset and the liability simultaneously.

Trade

other

payables

Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of financial year

which are unpaid. They are classified as current liabilities if payment is due within one year or less (or in the normal operating

cycle of the business if longer). Otherwise, they are presented as non-current liabilities.

Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using the effective

interest method.

Provision for legal dispute is recognised when the Group has a present legal or constructive obligation as a result of past

events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been

reliably estimated.

Other provisions are measured at the present value of the expenditure expected to be required to settle the obligation using

a pre-tax discount rate that reflects the current market assessment of the time value of money and the risks specific to the

obligation. The increase in the provision due to the passage of time is recognised in the statement of comprehensive income

as finance expense.

Changes in the estimated timing or amount of the expenditure or discount rate are recognised in profit or loss when the

changes arise.

Provisions for asset dismantlement, removal or restoration are recognised when the Group has a present legal or constructive

obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the

obligation and the amounts have been reliably estimated.

This provision is estimated based on the best estimate of the expenditure required to settle the obligation, taking into

consideration time value of money.

Changes in the estimated timing or amount of the expenditure or discount rate for asset dismantlement, removal and

restoration costs are adjusted against the cost of the right-of-use asset, unless the decrease in the liability exceeds the

carrying amount of the asset or the asset has reached the end of its useful life. In such cases, the excess of the decrease over

the carrying amount of the asset or the changes in the liability is recognised in profit or loss immediately.

Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised cost. Any

difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the

period of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable

that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent

there is evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment

for liquidity services and amortised over the period of the facility to which it relates.

When the contractual cash flows of borrowings are modified and do not result in derecognition, differences between

the recalculated gross carrying amount and the carrying amount before modification are recognised in profit or loss as

modification gain or loss, at the date of modification.

Borrowings are derecognised when the obligation is discharged, cancelled or expired. The difference between the carrying

amount and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit

or loss.

Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at least

12 months after the balance sheet date, in which case they are presented as non-current liabilities.

Leases

When the Group is the lessee: At the inception of the contract, the Group assesses if the contract contains a lease. A contract

contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for

consideration. Reassessment is only required when the terms and conditions of the contract are changed.

Right-of-use

The Group recognises a right-of-use asset and lease liability at the date which the underlying asset is available for use. Right-

of-use assets are measured at cost which comprises the initial measurement of lease liabilities adjusted for any lease payments

made at or before the commencement date and lease incentive received. Any initial direct costs that would not have been

incurred if the lease had not been obtained are added to the carrying amount of the right-of-use assets. The cost of the right-

of-use assets also includes an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset,

restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions

of the lease, unless those costs are incurred to produce inventories.

These right-of-use assets are subsequently depreciated using the straight-line method from the commencement date to the

earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

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167

Lease

The initial measurement of lease liability is measured at the present value of the lease payments discounted using the implicit

rate in the lease, if the rate can be readily determined. If that rate cannot be readily determined, the Group shall use its

incremental borrowing rate.

Lease payments include the following:

Fixed payment (including in-substance fixed payments), less any lease incentive receivables;

Variable lease payment that is based on an index or rate, initially measured using the index or rate at the

commencement date;

Amount expected to be payable under residual value guarantees;

The exercise price of a purchase option if it is reasonably certain to exercise the option; and

Payment of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

For contracts that contain both lease and non-lease components, the Group allocates the consideration to each lease

component on the basis of the relative standalone price of the lease and non-lease component. The Group has elected to not

separate lease and non-lease components for property leases and account these as one single lease component.

Lease liabilities are measured at amortised cost using the effective interest method. Lease liabilities shall be remeasured when:

There is a change in future lease payments arising from changes in an index or rate;

There is a change in the Group’s assessment of whether it will exercise an extension option; or

There is a modification in the scope or the consideration of the lease that was not part of the original term.

Lease liabilities are remeasured with a corresponding adjustment to the right-of-use asset, or are recorded in profit or loss if

the carrying amount of the right-of-use asset has been reduced to zero.

Short-term

low-value

leases

The Group has elected to not recognise right-of-use assets and lease liabilities for short-term leases that have lease terms

of 12 months or less and leases of low-value, except for sublease arrangements. Lease payments relating to these leases are

expensed to profit or loss on a straight-line basis over the lease term.

Variable

lease

payments

Variable lease payments that are not based on an index or a rate are not included as part of the measurement and initial

recognition of lease liability. The Group shall recognise those lease payments in profit or loss in the periods that triggered

those lease payments.

Derivative

A derivative financial instrument for which no hedge accounting is applied is initially recognised at its fair value on the date the

contract is entered into and is subsequently carried at its fair value. Changes in fair value are recognised in profit or loss.

The Group does not apply hedge accounting for its derivative financial instruments.

Income

taxes

Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from tax

authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation

is subject to interpretation and considers whether it is probable that a tax authority will accept an uncertain tax treatment.

The Group measures its tax balances either based on the most likely amount or the expected value, depending on which

method provides a better prediction of the resolution of the uncertainty.

Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and

their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of

goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable

profit or loss at the time of the transaction.

A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries except where the

Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference

will not reverse in the foreseeable future.

A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available against

which the deductible temporary differences and tax losses can be utilised.

Deferred income tax is measured:

at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income

tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the balance

sheet date; and

based on the tax consequence that will follow from the manner in which the Group expects, at the balance sheet date, to

recover or settle the carrying amounts of its assets and liabilities.

Current and deferred income taxes are recognised as income or expense in profit or loss, except to the extent that the tax

arises from a business combination or a transaction which is recognised directly in equity. Deferred tax arising from a business

combination is adjusted against goodwill on acquisition.

The Group accounts for investment tax credits similar to accounting for other tax credits where a deferred tax asset is

recognised for unused tax credits to the extent that it is probable that future taxable profit will be available against which the

unused tax credits can be utilised.

For equity-settled share-based payments, as the timing of the tax deduction and the recognition of the share-based payment

expenses differs, the Group recognises the related deferred tax asset if the deferred tax asset recognition criteria are met.

If the cumulative amount of tax deduction exceeds the tax effect of the related cumulative remuneration expense at the

reporting date, the excess of the associated deferred tax shall be recognised directly in equity.

For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents include cash on

hand, deposits with financial institutions that are subject to an insignificant risk of change in value, and bank overdrafts. Bank

overdrafts are presented as current borrowings on the balance sheet. For cash subjected to restriction, assessment is made on

the economic substance of the restriction and whether they meet the definition of cash and cash equivalents.

Employee

compensation

Employee benefits are recognised as an expense, unless the cost qualifies to be capitalised as an asset.

Defined

contribution

plans

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate

entities such as the Central Provident Fund in Singapore on a mandatory, contractual or voluntary basis. The Group has no

further obligations once the contributions have been paid.

compensation

The Group operates both equity-settled and cash-settled share-based compensation plan.

Equity-settled

plans

The value of the employee services received in exchange for the grant of share-based payment awards is recognised as an

expense with a corresponding increase in the share-based payments reserve over the vesting period. The total amount to be

recognised over the vesting period is determined by reference to the fair value of the share-based payment awards granted

on grant date. Market vesting conditions are taken into account in determining the fair value. Non-market vesting conditions

are not taken into account in determining the fair value but are taken into account by adjusting the number of shares under

awards that are expected to become exercisable on the vesting date.

At each balance sheet date, the Group revises its estimates of the number of shares under awards that are expected to

become exercisable on the vesting date and recognises the impact of the revision of the estimates in profit or loss, with a

corresponding adjustment to the share-based payments reserve over the remaining vesting period.

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When the share-based payment awards are exercised, the proceeds received (net of transaction costs) and the related balance

previously recognised in the share-based payments reserve are credited to the share capital account, when new ordinary

shares are issued, or to the “treasury shares” account, when treasury shares are re-issued to the employees. Upon expiry

of the share-based payment awards, the balance previously recognised in the share-based payments reserve is credited to

retained earnings.

The Group’s equity-settled plan includes the Directors’ deferred bonus plan, under which 50% of Directors’ annual bonuses

is delivered in shares that vest over two years. The number of shares is determined based on the grant date fair value, and

the value of employee services received in exchange for the grant of the share-based payment awards is recognised over the

vesting period.

Cash-settled

plans

The fair value of the employee services for the grant of cash-settled share-based payment awards is recognised as an expense

with the recognition of a corresponding liability over the vesting period. Until the liability is settled, it is re-measured at each

reporting date with changes in fair value recognised in profit or loss.

At each balance sheet date, the Group revises its estimates of the number of shares under awards that are expected to

become exercisable on the vesting date and recognises the impact of the revision of the estimates in profit or loss, with a

corresponding adjustment to the liability over the remaining vesting period.

When the share-based payment awards are exercised, cash payment of an amount equal to the Market Value of a Share on

the exercise date less the Option Price and accumulated dividends from the grant date to the exercise date will be paid to the

participant and the related balance previously recognised in the liability will be reverse out accordingly.

Profit

sharing

bonus

plans

The Group recognises a liability and an expense for bonuses and profit sharing, based on a formula that takes into

consideration the profit attributable to the Company’s shareholders after certain adjustments. The Group recognises an

accrual when it is contractually obliged to pay or when there is a past practice that has created a constructive obligation

to pay. Under some profit-sharing or deferred bonus plans, employees receive a share of the profits or bonus only if they

remain with the entity for a specified period in the future. The measurement of such benefit reflects the possibility that some

employees may leave without receiving the profits or bonus. A liability for the benefit shall be accrued over the vesting period.

Employee leave entitlements

Employee entitlements to annual leave are recognised in profit or loss when they accrue to employees. A provision is made for

the estimated liability for leave as a result of services rendered by employees up to the balance sheet date.

capital,

treasury

other

reserve

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are

deducted against the share capital account.

When any entity within the Group purchases the Company’s ordinary shares (“treasury shares”), the carrying amount, which

includes the consideration paid and any directly attributable transaction cost, is presented as a component within equity

attributable to the Company’s equity holders, until they are cancelled, sold or reissued.

When treasury shares are subsequently cancelled, the cost of treasury shares is deducted against the share capital account

if the shares are purchased out of capital of the Company, or against the retained earnings of the Company if the shares are

purchased out of earnings of the Company.

When treasury shares are subsequently sold or reissued pursuant to an equity-settled share-based payment plan, the cost of

treasury shares is reversed from the treasury share account and the realised gain or loss on sale or reissue, net of any directly

attributable incremental transaction costs and related income tax, is recognised in the other reserve.

Other reserve also comprises future transactions with the non-controlling interest. The amount that may become

payable under the agreement is initially recognised at the present value of the redemption amount within liabilities with a

corresponding charge directly to equity. The liability is subsequently accreted through equity up to the redemption amount

that is payable at the date at which the agreement first becomes exercisable.

Dividend

distribution

Dividends to the Company’s shareholders are recognised when the dividends are approved for payment, or, in the case of

interim dividends, when paid.

Segment

reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision

Maker (“CODM”) who is responsible for allocating resources and assessing performance of the operating segments. Segment

reporting is disclosed in Note 4.

Critical

estimates,

assumptions

judgements

In the process of applying the Group’s accounting policies, as described in Note 2, management has made the following

judgements and estimations that have the most significant effect on the amounts recognised in the financial statements.

Critical

judgements

applying

Group’s

policies

Capitalisation

During the year, £8.7m (2024: £10.2m) of product development costs have been capitalised. Management has evaluated

whether a project has entered the development phase before capitalising the costs that are directly attributable to the project.

The assessment is based on information documented in business cases prepared by the engineering teams and approved by

senior management. Management has considered the capitalisation criteria stated in IAS 38 Intangible Assets, which includes

the technical feasibility, intention and ability to complete the project when reviewing the business cases. The business cases

also contain sales forecasts, which indicate the probable future economic benefits of the projects. All product development

costs are tracked and monitored, which allows management to measure reliably the expenditure attributable to each project.

Significant judgements are involved when management performs the assessment.

Going

Note 2.1(a) confirms that these financial statements have been prepared on a going concern basis and explains the basis for

the Directors’ conclusion that a going concern basis is appropriate. In determining whether the Group’s accounts should be

prepared on a going concern basis, the Directors considered the Group’s business activities, its current liquidity position and

banking covenants and factors likely to affect its future performance and financial position, including the principal risks as

set out on pages 35-41. This assessment is considered to be a critical accounting judgement. In performing this assessment,

the Directors prepared two scenarios. The key variables and sensitivities in these scenarios are the timing of the recovery of

revenue, particularly revenue beyond the first half of 2026 for which the business already has reasonable visibility via existing

sales orders. The revenue beyond this initial period, of which the Group has limited visibility currently, will depend on various

factors including the impact of stock movements within the sales channel on future orders and changes in underlying market

demand, particularly within the Semiconductor Manufacturing Equipment sector which has seen a cyclical downcycle recently.

Profit beyond this initial period will also be dependent on actions taken in response to the revenue achieved. Further details

are set out in Note 2.1(a). Under the assessed scenarios, the Group has liquidity headroom and is in compliance with its

banking covenants for the period under review. Inevitably if market condition were to be worse than we have modelled or if

more severe risks were to crystallise then the Group would seek to identify and implement additional operational and financial

measures to ensure ongoing compliance with covenants and adequate liquidity.

Critical

estimates

assumptions

Recoverable

amount

capitalised

As at 31 December 2025, the net book value of capitalised product development costs amounts to £32.1m (2024: £36.5m).

For the purpose of reviewing for impairment, management has compared the carrying amount of the respective projects to

their forecasted revenues. For some projects, significant judgements are used to estimate the future sales and growth rates

applied in computing the recoverable amounts. In making these estimates, management has relied on performance of past

projects, its communications with the intended customers and its expectations of industry trends and market development in

the respective regions where the finished products will be marketed.

Useful

lives

capitalised

start

date

amortisation

The Group estimates the useful lives of capitalised product development costs based on the period over which the assets are

expected to be available for use by the Group. Significant judgements are used by the Group in determining the useful lives of

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Critical

estimates,

capitalised product development costs based on the expected life cycle of these products, taking into consideration expected

customer demand and technological innovation.

The Group determines the timing for amortisation to commence based on the date a product is considered capable of being

used in the manner intended by management. Significant judgement is required in determining this date, particularly for

projects following an iterative design process where the transition from development to commercial sale is not clearly defined.

Recoverable

amount

cash-generating

units

goodwill

impairment

The Group tests annually for impairment of goodwill, or more frequently if there are indications that goodwill might be

impaired.

An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds the recoverable amount

of the CGU. The recoverable amount of a CGU is the higher of the CGU’s fair value less cost to sell and value-in-use.

The recoverable amount of the goodwill is determined from value-in-use calculations. The key assumptions and estimates

for the value-in-use calculations are those regarding the discount rates, revenue growth rates and terminal growth rates.

Management e

stimates discount rates using pre-tax rates that reflect current market assessments of the time value of money

and the risks specific to the CGUs.

The Group prepares cash flow forecasts derived from the most recent financial results and takes into account industry growth

forecasts for the next five years and extrapolates cash flows for the following five years with a terminal growth rate of 2%

after this. The carrying amount of goodwill as at 31 December 2025 was £72.8m (2024: £73.2m).

Management has performed sensitivity analysis testing on the key assumptions and the impact of climate-related risks for the

North America and Europe CGUs. The recoverable amounts remain higher than the carrying amounts as at 31 December 2025

and no impairment loss is recognised. No sensitivity analysis was performed for the Asia CGU as the goodwill balance is fully

impaired.

Segment

Management has determined the operating segments based on the reports reviewed by the Chief Operating Decision Maker

(“CODM”) that are used to make strategic decisions. The CODM is the Board of Directors who will review the operating

results and forecasts to make decisions about resources to be allocated to the segments and assess their performance.

The Board of Directors considers and manages the business on a geographical basis. Management manages and monitors the

business based on the three primary geographical areas: North America, Europe and Asia. All geographical locations market

the same class of products to their respective customer base.

The Board of Directors assesses the performance of the operating segments based on net sales and operating income. Net

sales for geographic segments are based on the location of the design win rather than the physical location for delivery of the

goods. The operating income for each segment includes net sales to third parties, related cost of sales, operating expenses

directly attributable to the segment, and a portion of corporate expenses. As set out in (ii) below, costs excluded from segment

operating income include centrally managed general and administrative costs, share-based payment expense, various non-

operating charges, income taxes and Adjusting items as they do not relate to the underlying cost base of the segment.

Measures of a

ssets and liabilities are no longer provided for each reportable segment as they are not regularly provided to

the CODM.

The Group derives revenue from the transfer of goods to customers in the following market sectors and geographical regions.

The revenue by class of customer and location of the design win is as follows:

Year to 31 December 2025Year to 31 December 2024North North £m Europe AmericaAsia Total Europe AmericaAsia Total Semiconductor Manufacturing Equipment 6.0 69.3 10.3 85.6 4.1 79.0 11.7 94.8 Industrial Technology 43.4 35.8 8.1 87.3 52.2 32.8 9.8 94.8 Healthcare 16.5 36.9 3.8 57.2 20.6 32.4 4.7 57.7 Total 65.9 142.0 22.2 230.1 76.9 144.2 26.2 247.3

Revenues of £48.6m (2024: £59.0m) are derived from a single external customer. These revenues are attributable to the

Semiconductor Manufacturing Equipment sector across all geographical regions.

The revenue by region or country based on the location of the design win is as follows: £m 2025 2024 North America136.9 143.8 United Kingdom 14.8 17.1 Singapore 29.4 30.0 Germany 37.6 43.4 Denmark 1.8 2.3 Italy 3.4 3.6 France 2.3 3.4 Other countries 3.9 3.7 Total revenue 230.1 247.3

The majority of North America’s revenue is generated from the United States of America.

As permitted under IFRS 15 Revenue from Contracts with Customers, the aggregate transaction price allocated to unsatisfied

contracts of periods one year or less, or billed based on time incurred, is not disclosed.

Segment

The segment information provided to the CODM for the reportable segments for the year ended 31 December 2025 and prior

year comparatives is as follows:

Reconciliation of segment results to loss after tax:

£m 2025 2024 Europe 14.9 18.7 North America41.3 40.7 Asia 8.4 10.3 Segmentresults64.6 69.7 Research and development (17.3)(16.5) Manufacturing (14.0)(12.4) Corporate cost (16.0)(15.7) AdjustedOperatingProfit17.3 25.1 Net finance expense (8.0)(11.3) Adjusting items (see Note 5) (16.6)(21.5) Loss before tax (7.3)(7.7) Income tax expense (4.0)(1.7) Lossaftertax(11.3)(9.4)

The segment results include noncash items as follows. For Europe £1.5m of depreciation and amortisation (2024: £1.7m),

for North America £2.5m of depreciation and amortisation (2024: £4.4m) and £1.2m of impairment (2024: £nil) and for Asia

£0.3m of depreciation and amortisation (2024: £0.4m).

Non-current assets, other than deferred income tax assets, by region or country:

£m 2025 2024 North America118.0 135.3 United Kingdom 10.6 10.9 Singapore 36.6 43.3 Germany 42.3 41.1 Malaysia 24.8 12.4 Vietnam 7.6 8.3 Other countries 2.2 3.2 Totalnon-currentassets242.1 254.5

The majority of North America’s non-current assets are located in the United States of America.

172

173

Reconciliation

non-statutory

measures

The Group presents Adjusted Gross Profit, Adjusted Operating Expenses and Adjusted Operating Profit by making

adjustments for costs and profits, which management believes to be significant by virtue of their size, nature or incidence

or which have a distortive effect on current year earnings. Such items may include, but are limited to, costs associated

with business combinations, gains and losses on the disposal of businesses, fair value movements, restructuring charges,

acquisition related costs and amortisation of intangible assets arising from business combinations. In addition, the Group

presents Adjusted profit measures for the year by adjusting for certain tax charges and credits which represent the tax effect

of Adjusting items or which management believe to be significant by virtue of their size, nature, or incidence or which have a

distortive effect (shown as Tax effects of Adjusting items below).

As a result, the Group also presents certain Adjusted measures which include the consequential impact of the adjustments

made in Adjusted Gross Profit, Adjusted Operating Profit and Adjusted Tax Expense / Credit. This includes Adjusted Gross

Margin, Adjusted Operating Margin, Adjusted Profit For The Year, Adjusted Diluted Earnings Per Share, Adjusted Operating

Cashflow and Cash Conversion %.

The Group uses these Adjusted measures to evaluate performance and as a method to provide shareholders with clear and

consistent reporting. The Group also reports key financing measures which are relevant to shareholders as they are used in

determining covenant compliance. These include Leverage, Interest Cover, Net Debt, Adjusted Net Finance Expense and

Adjusted EBITDA.

In o

rder to assist shareholders in understanding year-on-year trading performance excluding the translational effect of foreign

currencies, we present certain performance measures in constant currency. Constant currency performance measures are

calculated by translating results which were recorded in a foreign currency into the reporting currency at the actual foreign

exchange rates from the comparative period.

See below for a reconciliation of all non-statutory measures to the closest statutory measure included in these financial

statements.

Adjusted profit or loss measures

Net (Loss)/

Tax (Loss)/

Gross

finance profit (expense)/ profit for

profit expenses profit expense

before tax credit

Statutory result

96.3

(95.6)

(8.0)

(7.3)

(4.0)

Adjusted for:

Restructuring costs

1.4

(0.1)

1.3

Exit from China

semiconductor market

(1.4)

(0.9)

0.4

(1.9)

Costs relating to legal dispute

2.6

Amortisation of intangible assets

acquired from business combinations

2.3

Costs relating to RF exit

3.0

5.3

8.3

8.5

8.4

Costs relating to China factory

closure

0.3

3.7

4.0

Historical under provision of tax

0.8

adjustments

14.7

16.6

16.8

17.5

result

98.2

(80.9)

17.3

(7.8)

9.5

(3.3)

6.2

Adjusted Gross Margin is the Adjusted Gross Profit expressed as a percentage of revenue. Adjusted Operating Margin is the

Adjusted Operating Profit expressed as a percentage of revenue.

The historical under provision of tax relates to additional tax potentially due in the UK relating to prior years, following a

transfer pricing change. The current year impact of the correction is reflected in the underlying results for 2025.

Gross

expenses

finance

expense

(Loss)/

Tax

expense

(Loss)/

profit for

the year

Statutory result

97.0

(93.4)

3.6

(7.7)

Adjusted for:

2.3

(0.5)

1.8

Exit from China

semiconductor market

4.3

2.4

6.7

(0.8)

5.9

Costs relating to legal dispute

7.6

Amortisation of intangible assets

acquired from business combinations

3.1

(0.4)

2.7

Global supply chain transformation

1.6

Bid defence costs

adjustments

4.3

17.2

21.5

19.8

101.3

(76.2)

25.1

13.8

(3.4)

10.4

Flow and

Conversion

generated

49.3

62.0

Adjusted for cash flows in respect of:

0.9

1.1

0.5

Global supply chain information

0.9

1.3

Costs relating to China factory closure

3.3

Prepayment from an RF customer

(16.4)

Flow

38.9

65.6

17.3

25.1

Conversion

225%

261%

EBITDA

3.6

Depreciation

8.8

Amortisation

10.0

9.9

5.3

EBITDA

24.8

24.2

1.4

2.0

Exit from China Semiconductor market

5.3

Global supply chain transformation

4.2

Costs relating to China factory closure

4.0

EBITDA

34.7

40.9

Restructuring costs for 2024 does not include £0.3m of impairment loss on Rights-of-used assets which has already been adjusted as part of the impairment

adjustment above.

Exit from China Semiconductor market for 2024 does not include £1.4m of impairment loss on goodwill which has already been adjusted as part of the

impairment adjustment above.

Costs relating to RF exit does not include £4.1m of impairment loss on intangible assets which has already been adjusted as part of the impairment adjustment

above.

174

175

Reconciliation

non-statutory

Net Debt

Current

0.3

76.7

108.6

borrowings

77.0

108.9

Cash and cash collateral

Cash at bank and on hand

33.6

13.8

Short-term bank deposits

Cash collateral

1.5

collateral

35.5

15.4

Debt

41.5

93.5

Leverage

(Net

Debt:

EBITDA)

Net Debt (Note 5 (d))

Adjusted EBITDA (Note 5(c))

93.5

40.9

41.5

34.7

Leverage

Ratio

(Net

Debt

EBITDA)

1.2x

2.3x

Interest

Cover

(Adjusted

EBITDA:

Finance

Expense)

Adjusted EBITDA (Note 5(c))

40.9

34.7

Net finance expense

8.0

11.3

Amortisation of financing costs

(1.1)

Conformed Net Finance Expense

6.7

11.3

Interest

Cover

(Adjusted

EBITDA:

Finance

Expense)

5.2x

3.6x

Costs relating to RF exit consists of the impairment of capitalised borrowing costs previously recognised.

Conformed Net Finance Expense reflects the definition of interest used to calculate Interest Cover for our borrowing facility

covenants.

6.Employeecompensation(includingDirectors)£m 2025 2024 Wages and salaries 77.3 80.7 Employers’ contribution to defined contribution plans 8.7 9.0 Share-based payment expenses (see Note 30 (h)) 2.1 1.6 88.1 91.3 Less: amount capitalised in intangible assets and property, plant and equipment (7.4)(8.5) Total 80.7 82.8

finance

£m2025 2024 Interest income Bond receivables (1.9)(2.0)Others (0.2)(0.1) (2.1)(2.1) Interest expense Amortisation of bond premium 0.5 0.4 Bank borrowings and overdrafts 7.3 10.6 Lease liabilities 3.2 3.3 11.0 14.3 Unwinding of discount for accrued consideration 0.1 0.1 9.0 12.3 Less: amount capitalised in Intangible assets and Property, plant and equipment (1.0)(1.0) Amountrecognisedinprofitorloss8.0 11.3

Finance expenses on general financing were capitalised at a rate of 6.6% per annum (2024: 7.5% per annum).

Of the amount capitalised, £0.2m (2024: £0.7m) was capitalised to Product Development costs and £0.8m (2024: £0.3m) to

Buildings costs.

176

177

Expenses

nature

£m 2025 2024 Lossaftertaxisaftercharging:Costof sales131.9 146.0 Depreciation of property, plant & equipment (Note 13) 2.6 2.7 Depreciation of right-of-use assets (Note 14) 0.2 0.2 Employee compensation (Note 6) 31.6 35.5 Purchases of inventories 83.4 87.1 Changes in inventories 14.1 20.5 DistributionandMarketing55.3 52.1 Amortisation of intangible assets (Note 12) 2.5 2.4 Employee compensation (Note 6) 38.3 36.7 Impairment of intangible assets (Note 12) – 0.1 Fees payable to the Group’s Auditor for the audit of the Group’s accounts 0.9 0.8 Fees payable for audit-related services 0.1 –Other charges 13.5 12.1 Administrative 4.1 4.2 Depreciation of property, plant & equipment (Note 13) 1.9 1.9 Depreciation of right-of-use assets (Note 14) 2.2 2.3 Researchanddevelopment21.5 19.9 Amortisation of intangible assets (Note 12) 4.9 4.4 Depreciation of property, plant & equipment (Note 13) 1.1 1.0 Depreciation of right-of-use assets (Note 14) 0.8 0.7 Employee compensation (Note 6) 10.8 10.6 Impairment of intangible assets (Note 12) 1.2 0.1 Other charges 2.7 3.1 Adjustingitems(Note5)16.6 21.5 Amortisation of intangible assets acquired from business combinations (Note 12) 2.6 3.1 Impairment of intangible assets (included within costs relating to RF exit) (Note 12) 4.1 –Impairment of goodwill (Note 11) – 1.4 Impairment of right-of-use assets (Note 14) – 0.3 Other charges 9.9 16.7 Total cost of sales, distribution and marketing, administrative and research and development expenses 229.4 243.7

Income

taxes

£m 2025 2024 Tax expense attributable to profit is made up of: Profit for the financial year –Singapore 1.5 (0.3)– Foreign 3.3 2.2 Current income tax 4.8 1.9 Deferred income tax (0.9)(0.2) 3.9 1.7 Over provision in prior financial years – Foreign– (0.1) Current income tax – (0.1) Deferred income tax – –– (0.1) Withholding tax 0.1 0.1 Income tax expense 4.0 1.7

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions at the balance sheet date.

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the Singapore standard

rate of income tax as follows: £m2025 2024 Loss before tax (7.3)(7.7) Tax on profit at standard Singapore tax rate of 17% (2024: 17%) (1.2)(1.3) Tax incentives (0.5)(0.3) Higher rates of overseas corporation tax (2.2)(0.3) Expenses not deductible for tax purposes 1.9 1.4 Income not subject to tax (0.3)(0.3) Deferred tax effect of change in tax rate 0.1 (0.1) Deferred tax asset on tax losses and wear and tear allowances not provided for 5.3 2.6 Under / (over) provision of tax in prior financial years 0.8 (0.1) Withholding tax 0.1 0.1 Income taxexpense4.0 1.7

Aggregate deferred tax asset arising in the reporting period and not recognised in net profit or loss or other comprehensive

income but directly charged/(credited) to equity:

£m 2025 2024 Deferred tax asset/(liabilities) – share-based payments 0.1 (0.3) Total 0.1 (0.3)

OECD Pillar Two legislation was enacted in Singapore, the jurisdiction in which XP Power Limited is incorporated. The Group

is not within the scope of the OECD Pillar Two model rule as the Group does not meet the consolidated revenue threshold of

EUR 750m in at least two of the last four years.

178

179

10.

Earnings

per

The calculations of the basic and diluted earnings per share attributable to the ordinary equity holders of the Company are

based on the following data:

£m2025 2024 LossLoss after tax attributable to equity holders of the Company (11.4)(9.6) Lossforlossespershare(11.4)(9.6) Number of sharesWeighted average number of ordinary shares outstanding for basic earnings per share (thousands) 27,122 23,720Effect of dilutive potential share awards (thousands) 4 60Weightedaveragenumberofsharesfordilutedearningspershare(thousands)27,126 23,780Earnings/(loss)pershareBasic (42.0)p(40.5)p 1 Basic Adjusted22.5p 43.0p Diluted (42.0)p(40.4)p 1 Diluted Adjusted22.5p 42.9p

1 Reconciliation to compute the Adjusted Earnings is as per below:

£m 2025 2024 Loss after tax attributable to equity holders of the Company (11.4)(9.6) Restructuring costs 1.3 1.8 Exit from China semiconductor market (1.9)5.9 Costs relating to legal dispute 2.6 7.6 Amortisation of intangible assets acquired from business combination 2.3 2.7 Costs relating to RF exit 8.4 –Costs relating to China factory closure 4.0 –Global supply chain transformation – 1.6 Bid defence cost – 0.2 Under provision of tax in prior financial years 0.8 –AdjustedEarnings6.1 10.2

11.

Goodwill

£m 2025 2024 CostAt 1 January 74.6 75.6 Accrued consideration (Note 22) – (0.2) Currency translation differences (0.4)(0.8) At31December74.2 74.6 Accumulated impairment At 1 January (1.4)–Impairment charge – (1.4) At31December(1.4)(1.4) Netbook value72.8 73.2

Goodwill arises on the consolidation of subsidiary undertakings.

For the purpose of impairment tests for goodwill, goodwill is allocated to the cash-generating units (“CGUs”) which are aligned

to the operating segments identified in Note 4.

A segment-level summary of the goodwill allocation is as follows: £m 2025 2024 North America41.4 43.0 Europe 31.4 30.2 Asia – –At31December72.8 73.2

The recoverable amount of the CGU is determined from value-in-use calculations. Cash flow projections used in the value-in-

use calculations were based on financial models prepared by management covering a five-year period. Cash flows beyond the

five-year period were extrapolated using the estimated growth rates stated below. The goodwill for the Asia CGU has been

fully impaired.

Key assumptions used for value-in-use calculations:

31December202531December2024Growth Discount Terminal Growth Discount Terminal 1 2 1 rategrowthrateraterate2 rategrowthrateNorth America5.0%9.9%2.0%5.0% 10.0% 2.0% Europe 5.0%11.5%2.0%5.0% 11.5% 2.0%

Compound annual growth rate of projected revenue over five years.

Pre-tax discount rate applied to the pre-tax cash flow projections.

A sensitivity analysis was performed for the North America and Europe CGUs. Management concluded that no reasonably

possible change in any of the key assumptions would result in the carrying value of the CGU exceeding its recoverable

amount. No sensitivity analysis was performed for the Asia CGU as the goodwill balance is fully impaired.

The impairment test carried out at 31 December 2025 for the North America CGU, which includes 57% of the goodwill

recognised on the balance sheet, calculated a recoverable amount of the CGU of £145.3m. An absolute increase in the

discount rate by 280bps or a decrease in growth rate by 180bps would result in the recoverable amount of the North America

CGU being equal to its carrying value.

The impairment test carried out at 31 December 2025 for the Europe CGU, which includes 43% of the goodwill recognised

on the balance sheet, calculated a recoverable amount of the CGU of £51.0m. An absolute increase in the discount rate by

110bps or a decrease in growth rate by 300bps would result in the recoverable amount of the Europe CGU being equal to its

carrying value.

The impairment test also modelled the potential impact on future cash flows from climate change. A sensitivity analysis was

performed for each CGU to demonstrate the financial impact of the following key climate-related risks (see Climate Risks in

the Sustainability Report):

Storm and flood disruption – major flood or fire could cause a disruption to the manufacturing sites

Supply chain risks – climate change could result in disruption to our supply chain, either through supplier sites being

directly affected, or by disruption to transportation and electricity supply

Carbon price impacts in the value chain – the increase in carbon price may result in increased cost of goods sold and

increased cost of transportation

Risk of not meeting net zero target – failure to meet the defined net zero targets may cause reputational damage, dissuade

potential investors, or result in greater costs due to the introduction of carbon pricing

These downside scenarios would result in 5-11% reduction of revenue and 5-10% increase in operating costs for one year.

They are considered to be reasonable tests as they reflect the expectation that financial impacts would be time-bound and

most likely to impact the organisation’s ability to meet demand for a limited period due to mitigating actions available. The

maximum impact to headroom based on the sensitivities tested for North America and Europe is a reduction of £0.8m and

£1.1m, respectively. These impacts would still leave significant headroom and as a result no potential indicator of impairment

was identified.

180

181

12.

13.

Property,

plant

Assets under development pertains to cost incurred for software development of £0.1m and product development costs of £16.4m.

The remaining amortisation period for customer relationships ranges from two to seven years.

The Group’s trademarks used to identify and distinguish the Group’s name and logo have a carrying amount of £0.1m (2024:

£0.1m). The Group intends to renew the trademarks continuously and evidence supports its ability to do so, based on its

past experience. An analysis of market and competitive trends provides evidence that the trademarks will generate net cash

inflows for the Group for an indefinite period. Therefore, the trademarks are carried at cost without amortisation, but are

tested for impairment on an annual basis.

Assets under construction pertains to cost incurred for the building of Malaysia factory of £20.2m and testing equipment of £0.1m in North America.

The cost adjustment of £3.6m recognised within property, plant and equipment comprises £0.9m received as reimbursement from the landlord in respect of

building improvement works and £2.7m relating to a government grant for the purchase of property, plant and equipment under Section 48D of the Advanced

Manufacturing Investment Tax Credit. Of the £2.7m government grant, £1.5m was received in cash during the year ended 31 December 2025, with the

remaining £1.2m received subsequent to the reporting date in January 2026.

Freehold Plantand Motor BuildingAssets under1 £m landBuildingsequipment vehicles improvementsconstructionTotal Cost At 1 January 2024 1.5 18.2 38.1 0.2 26.9 7.6 92.5 Additions–0.3 2.3 ––7.2 9.8 Disposals ––(0.6) (0.1) (1.8) –(2.5) Transfers ––2.1 –3.2 (5.3) –Currency translation differences –0.2 0.4 –0.5 0.2 1.3 At 31 December 20241.5 18.7 42.3 0.1 28.8 9.7 101.1 Additions–0.7 1.4 –0.2 11.1 13.4 2 Cost adjustments––––(3.6) –(3.6) Disposals ––(3.6) –(0.1) –(3.7) Transfers ––0.8 –0.1 (0.9) –Currency translation differences –(1.1) (2.3) –(1.7) 0.4 (4.7) At 31 December 20251.5 18.3 38.6 0.1 23.7 20.3 102.5 Accumulated depreciation At 1 January 2024 –5.3 22.9 0.2 4.6 –33.0 Depreciation charge –0.5 4.0 –1.1 –5.6 Disposals ––(0.5) (0.1) (1.8) –(2.4) Impairment charge ––0.2 –––0.2 Currency translation differences –0.1 0.2 –––0.3 At 31 December 2024–5.9 26.8 0.1 3.9 –36.7 Depreciation charge –0.5 3.9 –1.2 –5.6 Disposals ––(3.2) –(0.1) –(3.3) Currency translation differences –(0.3) (1.6) –(0.2) –(2.1) At 31 December 2025– 6.1 25.9 0.1 4.8 – 36.9 Netbook valueAt 31 December 20251.5 12.2 12.7 – 18.9 20.3 65.6 At 31 December 2024 1.5 12.8 15.5 –24.9 9.7 64.4

ProductDevelopmentCustomer CustomerAssetsunder1 £m costs Brand Trademarks Technology relationshipscontracts Software developmentTotal Cost At 1 January 2024 51.0 1.8 1.1 7.9 24.8 2.6 24.2 25.6 139.0 Additions––––––0.1 10.2 10.3 Disposals ––––––(0.2) –(0.2) Transfers 8.6 ––––––(8.6) –Reclassification –––––––(0.9) (0.9) Currency translation differences 0.6 (0.1) ––––0.4 0.4 1.3 At 31 December 202460.2 1.7 1.1 7.9 24.8 2.6 24.5 26.7 149.5 Additions––––––0.1 8.9 9.0 Disposals ––––––(0.6) –(0.6) Transfers 5.2 –––––0.3 (5.5) –Currency translation differences (3.2) (0.1) –(0.2) (0.9) –(1.6) (1.9) (7.9) At 31 December 202562.2 1.6 1.1 7.7 23.9 2.6 22.7 28.2 150.0 Accumulated amortisation and impairmentlossesAt 1 January 2024 35.9 0.8 1.0 4.4 13.6 1.9 8.3 10.0 75.9 Amortisation charge 4.6 0.1 –0.7 1.6 0.7 2.2 –9.9 Impairment charge –––––––0.2 0.2 Disposals ––––––(0.2) –(0.2) Reclassification (0.9) –––––––(0.9) Currency translation differences 0.4 ––0.1 0.2 –0.2 0.2 1.1 At 31 December 202440.0 0.9 1.0 5.2 15.4 2.6 10.5 10.4 86.0 Amortisation charge 5.2 0.1 –0.5 1.9 0.1 2.2 –10.0 Impairment charge 1.5 ––––––3.8 5.3 Disposals ––––––(0.6) –(0.6) Currency translation differences (1.9) ––(0.3) (1.1) (0.1) (0.7) (0.8) (4.9) At 31 December 202544.8 1.0 1.0 5.4 16.2 2.6 11.4 13.4 95.8 Netbook valueAt 31 December 202517.4 0.6 0.1 2.3 7.7 – 11.3 14.8 54.2 At 31 December 2024 20.2 0.8 0.1 2.7 9.4 –14.0 16.3 63.5

182

183

14.

Leases

Nature

Group’s

leasing

Leasehold

land

buildings

The Group has made an upfront payment to secure the right-of-use of two 50-year leasehold plots of land, which are used

in the Group’s production operations. The Group also leases office space for the purpose of back-office operations, sales

activities, warehousing activities and product development uses.

Equipment

motor

vehicles

The Group leases vehicles to render logistic services, and leases copier machines for back-office use.

Right-of-use

Carrying

amounts and depreciation charge during the year:

Leasehold Equipment land and and motor £m buildingsvehicles Total Cost At 1 January 2024 53.3 0.7 54.0 Additions0.8 0.4 1.2 Depreciation charge (2.9) (0.3) (3.2) Impairment (0.3) –(0.3) Currency translation differences 0.1 –0.1 At 31 December 202451.0 0.8 51.8 Additions0.8 0.4 1.2 Disposal (0.2)– (0.2)Depreciation charge (2.9)(0.3)(3.2)Currency translation differences (1.8)– (1.8)At 31 December 202546.9 0.9 47.8

Lease

not

lease

£m2025 2024 Lease expense – short-term leases 0.1 0.1 Lease expense – low-value leases – –Total 0.1 0.1

See Note 23 for details of lease liabilities.

outflow

current

Total cash outflow for all leases in 2025 was £5.1m (2024: £4.8m).

Future

outflows

which

are

not

lease

Extension

options

The leases for certain office spaces contain extension options, for which the related lease payments have not been included

in lease liabilities as the Group is not reasonably certain to exercise these extension options. The Group negotiates extension

options to optimise operational flexibility in terms of managing the assets used in the Group’s operations. All the extensions

are exercisable by the Group and not by the lessor.

15.

Subsidiaries

The Group has the following principal subsidiaries (excludes dormant subsidiaries) as at 31 December 2025 and 2024:

business/

Ownership Ownership interestinterestCountry of 2025 2024 Nameof subsidiaryincorporation(%)(%)Directly ownedby theCompanyXP Power PlcUK100 100XP Power Singapore Holdings Pte Limited Singapore 100 100IndirectlyownedbytheCompanyXP PLCUK100 100XP Power Holdings Limited UK100 1002 XP Power AGSwitzerland – 1001 Powersolve Electronics LimitedUK91 91XP Power SrlItaly 100 100XP Power ApSDenmark 100 100XP Power Sweden AB Sweden 100 100XP Power GmbHGermany 100 100FuG Elektronik GmbH Germany 100 100Guth High Voltage GmbH Germany 100 100XP Power SAFrance 100 100XP Power Norway AS Norway100 100XP Power International Limited UK100 100XP Power LLCUSA100 100XP Power (Shanghai) Co., Limited China 100 100XP Power (Hong Kong) Limited Hong Kong 100 100XP Power (Vietnam) Co., Limited Vietnam 100 100XP Power Singapore Manufacturing Pte. Ltd. Singapore 100 100XP Power (Kunshan) Co., Limited China 100 100XP Power (Philippines) Inc. Philippines 100 100XP Power (Malaysia) Sdn. Bhd. Malaysia 100 1001 Hanpower Co., LtdSouth Korea 66 66XP Power (India) Pte. Ltd. India 100 100

XP Power AG was dissolved on 17 April 2025. Following the liquidation during the year, cumulative foreign exchange translation differences previously

recorded in other comprehensive income were released to profit or loss, resulting in a realisation of £0.7 million.

2 Refer to Note 22.

184

185

16.Cashandbankbalances£m 2025 2024 Cash at bank and on hand 33.6 13.8 Short-term bank deposits 0.2 0.1 Total 33.8 13.9

Cash collateral£m 2025 2024 Cash collateral 1.7 1.5

Cash collateral represents bank deposits pledged as a collateral to obtain a letter of credit for the security deposit of a lease.

The deposit is classified as a non-current asset as it is restricted from being exchanged or used to settle a liability for at least

12 months after the reporting period.

18.

Inventories

£m 2025 2024 Finished goods 21.3 24.1 Raw materials 26.0 31.2 Work in progress 9.7 15.8 Total 57.0 71.1

The cost of inventories recognised as an expense and included in “cost of sales” amounts to £97.5m (2024: £107.6m) as

disclosed in note 8.

19.

Trade

receivables

£m 2025 2024 Trade receivables 34.3 30.2 Less: Loss allowance (Note 31(d)) (0.1)–Total 34.2 30.2

The average credit period taken on sales of goods is 54 days (2024: 45 days). No interest is charged on the outstanding

receivables balance. The carrying amounts of trade receivables approximate to their fair values.

20.Other currentassets£m 2025 2024 Prepayments 2.5 3.2 Deposits 0.6 0.5 VAT receivables1.2 1.4 Withholding tax 0.1 –Rights to returned goods 0.2 0.1 Government grant relating to purchase of property, plant and equipment 1.2 –Other receivables 0.1 0.4 Total 5.9 5.6

Other current assets are not impaired as at 31 December 2025 and 31 December 2024.

21.

Trade

other

payables

£m 2025 2024 Trade payables 17.8 17.9 VAT payables 1.3 1.8 Withholding tax 0.4 0.2 Accruals for operating expenses 21.4 19.2 Contract liabilities 17.8 1.4 Refund liabilities 0.5 0.3 Total 59.2 40.8

The Group recognised contract liabilities for payments from customers that are received in advance of the transfer of goods.

Revenue recognised in the current period that was included in the contract liabilities at the beginning of the period amounts

to £1.3m (2024: £2.8m).

Customers have a right to return goods to the Group within a given period. The Group recognised the refund liabilities for the

amounts of consideration received for which the Group does not expect to be entitled. The Group also recognised a right to

the returned goods measured by reference to the former carrying amount of the goods.

22.

Accrued

consideration

£m2025 2024 At 1 January 1.5 1.7 Provision made/(reversed) 0.2 (0.2) At31December1.7 1.5 £m2025 2024 Current – 0.8 Non-current1.7 0.7 At31December1.7 1.5

As at 31 December 2025, the Group owns 90.6% (2024: 90.6%) of the shares of Powersolve Electronics Limited

(“Powersolve”). On 19 December 2024, the Group entered into a deed of variation to amend the period over which the

purchase of the remaining 9.4% can occur between 1 January 2025 and 1 January 2027. Management does not intend to

exercise this option prior to the end of 2026; therefore, it remains classified as non-current.

As at 31 December 2025, the Group owns 66% (2024: 66%) of the shares of Hanpower Co Ltd (“Hanpower”). On

21 April 2025, the Group entered into an amended agreement to purchase the remaining 34% of the shares in Hanpower in

May 2030 with an option to defer the purchase of 15% of the shares until May 2035.

For the purchase of Hanpower, the commitments to purchase the remaining ownership interests have been accounted for as

accrued consideration and are calculated based on the expected future payment which will be based on a predefined multiple

of the average earnings for the past three years at the point of payment. For Powersolve, the accrued consideration is similarly

recognised, but the expected payment is calculated using a predefined multiple of the average earnings for the fiscal years

2022 to 2024.

The future payment is discounted to the present value, with the discount amortised to interest expense each period as the

payment draws nearer. For Hanpower, the amount that is payable under the agreement is initially recognised at the present

value of the redemption amount within liabilities with a corresponding charge directly to equity. The liability is subsequently

accreted through equity up to the redemption amount that is payable in 2030 with the assumption that management has no

intention to extend the purchase of 15% shares until 2035.

23.

lease

£m 2025 2024 CurrentBank borrowings 0.3 0.3 Lease liabilities 1.8 1.6 Total 2.1 1.9 Non-currentBank borrowings 76.7 108.6 Lease liabilities 49.6 52.7 Total 126.3 161.3

Undrawn

borrowing

facilities

£m 2025 2024 Expiring beyond one year 18.1 57.5 Total 18.1 57.5

The revolving credit facility was renegotiated in December 2025 to introduce a new lender and as result the loan was split

into two facilities: Facility A and Facility B. The total facility reduced to $130m with Facility A having a committed facility of

$100.7m and Facility B of £22.2m. The facility has no fixed repayments until maturity which is June 2028 for Facility A and

June 2030 for Facility B. Interest on Facility A accrues at SOFR for US dollar borrowings and SONIA for sterling borrowings,

plus a margin of 1.95%-3.2% depending on Leverage. Interest on Facility B accrues at SONIA plus a margin of 4.75%. Both

facilities incur a fee of 40% of the margin for the unutilised facility.

The fair values of the Group’s bank borrowings and overdrafts approximate to their carrying amounts.

arising

financing

24.

£mCurrent 2025 2024 Legal dispute (Note (a) below) 49.6 51.4 Onerous contract 0.1 0.9 Prolongation costs – 1.4 Warranty 0.2 –Others 0.2 0.3 Total 50.1 54.0 Non-current Warranty 0.3 0.2 Asset Retirement Obligation 0.7 0.7 Others 0.2 0.4 Total 1.2 1.3

Legal

dispute

£m 2025 2024 At 1 January 51.4 43.6 Provision made 1.8 7.0 Currency translation differences (3.6)0.8 At 31 December 202549.6 51.4

In March 2022, an award for damages was made against XP for a total of $40m in respect of a US legal action brought by

Comet Technologies USA Inc., Comet AG, and YXLON International (“Comet”). Our appeal against the original ruling was

filed with the Appellate Court in August 2023. In January 2025, the judge further awarded Comet US $1.3m in pre-judgment

interest and legal fees of US $17.4m. Our appeal against these judgements was heard in September 2025. During the year we

accrued for additional post-judgement interest on the outstanding judgements. The settlement amounts will not be finalised

until the conclusion of the appeals process, which is expected within 12 months of the balance sheet date.

25.

Bond

receivable

The Group has purchased appeal bonds from an insurance company as required for our appeal to be lodged with the Appellate

Court. Interest is accrued on the bonds at an annual rate equivalent to the rate for the three-month Treasury Bill as published

by the Board of Governors of the Federal Reserve System. A management fee of 0.4% of the bonds is calculated on an

annualised basis and payable to the issuer of the bond. The bond receivable is restricted until the conclusion of the appeal.

As at 31

December 2025, the carrying amount of bond receivable amounts to £48.8m (2024: £39.2m) which comprises the

initial bond value of £32.7m (2024: £35.1m), new purchase of bond during the year of £10.8m (2024: £nil) plus bond premium

of £1.4m (2024: £1.2m), interest receivable of £4.3m (2024: £3.2m) less the management fees paid of £0.4m (2024: £0.3m).

The bond receivable is denominated in USD and is revalued at each reporting date. During 2025, the increase in the bond to

£48.8m from £39.2m at the end of the preceding year is comprised of new bond purchase of £11.7m, plus bond premium of

£0.3m, interest income of £1.4m less the management fee paid of £0.2m and currency translation loss of £3.6m.

186

187

Non-cashchangesProceeds Principal, Addition Disposal Net Foreign 31 1 Januaryfrom interest and during duringtheinterest exchange December £m 2025 borrowingsfee paymentsthe yearyearexpensemovement2025 Bank borrowings 108.9 40.0 (72.4)– – 6.3 (5.8)77.0 Lease liabilities 54.3 – (5.0)1.2 (0.2)3.2 (2.1)51.4 Non-cashchangesProceeds Principal,AdditionDisposalNet Foreign 31 1 Januaryfrom interest and duringduring the interest exchange December £m 2024 borrowingsfee paymentsthe year yearexpensemovement2024 Bank borrowings 126.1 3.8 (32.4) ––9.6 1.8 108.9 Lease liabilities 54.7 –(4.7) 1.2 –3.3 (0.2) 54.3

188

189

26.

Deferred

income

taxes

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current income tax

assets against current income tax liabilities and when the deferred income taxes relate to the same taxation authority.

The amounts, determined after appropriate offsetting, are shown on the balance sheet as follows:

b. Deferred income tax liabilities

The movement in the net deferred income tax account is as follows:

Accelerated Intangibletax assets Lease £m depreciationamortisationassets Others Total At 1 January 2024 (0.8) (8.5) (4.5) (0.1) (13.9) Credited/(charged) to profit or loss – 0.4 0.3 (0.4) 0.3 Currency translation differences – 0.1 0.2 (0.1) 0.2 At 31 December 2024 (0.8) (8.0) (4.0) (0.6) (13.4) Credited/(charged) to profit or loss 0.1 0.8 0.2 (0.2) 0.9 Currency translation differences 0.1 0.2 (0.1) (0.1) 0.1

27.

capital

reserves

The movement in deferred income tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) is

as follows:

income

Provision for legalShare-basedLease £m dispute payments Tax lossesliabilitiesOthers Total At 1 January 2024 0.1 0.4 0.3 4.5 –5.3 Credited/(charged) to profit or loss –0.3 (0.1) (0.3) –(0.1) Debited to equity –0.3 –––0.3 Currency translation differences –––(0.2) –(0.2) At 31 December 20240.1 1.0 0.2 4.0 – 5.3 (Charged)/credited to profit or loss – (0.1)(0.1)(0.2)0.4 – Debited to equity – (0.1)– – – (0.1)At 31 December 20250.1 0.8 0.1 3.8 0.4 5.2

At 31 December 2025, the Group has unutilised tax losses and other credits of £31.8m (2024: £39.8m) for which no deferred

tax benefit is recognised in the balance sheet due to the current uncertainty as to the Group’s ability to utilise these losses.

These tax losses and capital allowances can be carried forward and used to offset against future taxable income subject

to meeting certain local statutory requirements. Tax losses amounting to £4.8m (2024: £1.3m) can be carried forward

indefinitely, losses amounting to £22.8m (2024: £35.0m) begin to expire in 2029 and losses amounting to £4.2m (2024:

£3.5m) begin to expire in 2034.

All issued ordinary shares are fully paid. There is no par value for these ordinary shares. Fully paid ordinary shares carry one

vote per share and carry a right to dividends as and when declared by the Company.

In 2025, the Company issued 4,350,424 ordinary shares for a net consideration of £39.6 million. The newly issued shares rank

pari passu in all aspects with the previously issued shares.

Treasury

Treasury shares are shares in the Company that are held by the Company’s Employee Share Ownership Plan (“ESOP”) Trust

for the purpose of issuing shares under the Company’s ESOP. Shares issued to employees are recognised on a first-in, first-

out basis.

The Company re-issued 64,779 (2024: 28,301) treasury shares during the financial year pursuant to the Company’s ESOP at

the exercise price of £nil to £0.01 (2024: £nil to £0.01). The cost of the treasury shares re-issued amounted to £5,000 (2024:

£13,000). The total consideration (net of expense) for the treasury shares issued is as follows:

£m 2025 2024 Value of employee services 1.7 0.9 Totalnetconsideration1.7 0.9

Accordingly, a gain on re-issue of treasury shares of £1.7m (2024: £0.9m) is recognised in other reserve.

£m2025 2024 Deferred income tax assets 0.7 1.0 Deferred income tax liabilities (7.9)(9.1) Netdeferredtaxliabilities(7.2)(8.1)

£m 2025 2024 Beginning of financial year (8.1)(8.6) Currency translation differences 0.1 –Tax (charged)/credited to: – Profit or loss (Note 9) 0.9 0.2 – Equity (Note 9) (0.1)0.3 Endoffinancialyear(7.2)(8.1)

No.of ordinary sharesAmount £m Issued Issued share Treasury share Treasury capitalsharescapitalshares2025 Beginning of financial year 23,689,254 (20,582)71.2 – Shares issued 4,350,424 – 39.6 – Treasury shares purchased (150,000)Treasury shares re-issued – 64,779 – – Endoffinancialyear28,039,678 (105,803)110.8 – 2024Beginning of financial year 23,689,254 (48,883) 71.2 –Treasury shares re-issued –28,301––Endoffinancialyear23,689,254 (20,582) 71.2 –

190

191

27.

reserves

Merger

Merger reserve represents the difference between the value of shares issued by the Company in exchange for the value of

shares of subsidiaries acquired under common control.

payments

Share-based payments reserve represents the equity-settled share-based payments granted to employees. The reserve is

made up of the cumulative value of services received from employees recorded over the vesting period commencing from the

grant date of equity-settled share-based payments and is reduced by the expiry or exercise of share-based payments.

Translation reserve represents exchange differences arising from the translation of financial statements of foreign operations

whose functional currencies are different from that of the Group’s presentation currency.

Other reserve comprises:

future transactions with the non-controlling interest. The Group has an agreement with the non-controlling shareholders

29.

Related-party

transactions

Key

personnel

ade

current

Trade

other

Accrued

(current

non-

of Hanpower Co. Ltd, a subsidiary, to purchase a remaining 34.0% of the shares in 2030. The amount that may become

payable under the agreement is initially recognised at the present value of the redemption amount within liabilities with

a corresponding change directly to equity. The liability is subsequently accreted through finance expenses up to the

redemption amount that is payable at the date at which the agreement first becomes exercisable, and

the value relating to the exercise of share-based payment awards.

28.

flow

movement

working

The following adjustments have been made to reconcile from the movement in balance sheet heading to the amount

presented in the cash flow from the movement in working capital. This is in order to more appropriately reflect the cash

impact of the underlying transactions.

Key management personnel are the Directors of the Group.

£m 2025 2024 Short-term employee benefits 2.5 2.5 Post-employment benefits 0.1 0.1 Share-based payment expenses 0.7 0.3 Total 3.3 2.9

Fees payable to non-executive Directors totalled £0.5m (2024: £0.5m).

Further information about the remuneration of the individual Directors is provided in the Directors’ Remuneration Report on

pages 117–141.

(Note

18)

Trade

receivables

(Note

19)

current

(Note

20)

and other

payables

(Note

21)

Accrued

(Note

22)

(current

and non-

current)

(Note 24)

At 31 December 2025

57.0

34.2

5.9

59.2

51.3

At 31 December 2024

71.1

30.2

5.6

40.8

55.3

Balance sheet movement

14.1

(4.0)

18.4

Accrued consideration provision

Withholding tax payable

Interest accrual movement

Malaysia construction

(5.5)

Accrual of government grant

relating to the purchase of

property, plant and equipment

1.2

Bond premium accruals

Reclassification

Currency translation differences

(4.2)

(1.2)

1.8

3.6

9.9

(5.0)

0.8

14.6

payables

current)

18)

19)

20)

21)

22)

24)

At 31 December 2024

71.1

30.2

5.6

40.8

55.3

At 31 December 2023

91.6

43.1

8.1

48.3

45.9

Balance sheet movement

20.5

12.9

2.5

(7.5)

9.4

Accrued consideration provision

Withholding tax payable

Interest accrual movement

Bond premium accruals

Reclassification

Currency translation differences

(0.4)

(0.8)

21.2

12.9

2.5

(8.0)

8.3

192

193

30.

payments

The Group operates several equity-settled and cash-settled share-based payment plans.

Legacy Share Option plan

a. XP Power Share Option Plan (the “SOP”)

Established in 2012 and amended in 2016. Options over ordinary shares in the Company granted under the SOP were

subject to performance conditions based on total shareholder return (TSR) relative to the FTSE350 Electronic and Electric

Equipment Sector. The maximum life of options granted under the SOP is ten years and on exercise of the options are

equity settled, ordinary shares in the Company are issued to the participant. All options under the SOP are fully vested as at

31 December 2025.

Set out below are summaries of outstanding options granted under the plan:

2025 2024 Weighted Weighted average average Number exercise Number exercise of share price per of share price per options shareoptionoptions shareoptionAt 1 January 31,692 £15.43 38,677£15.43Forfeited during the year (410)£15.43 (6,985) £15.43At31December31,282 £15.43 31,692£15.43Exercisableat31December31,282 £15.43 31,692£15.43

Share options outstanding at the end of the year have the following expiry dates and exercise prices:

Share Share options 31 options 31 Exercise December December Grant date Expiry date price 2025 2024 23 February 2016 23 February 2026 £15.4331,282 31,692Total 31,282 31,692Weighted average remaining contractual life of options outstanding at end of period 0.4 year 1.1 year

Director plans

The only participants under plans a, b and c below are the Executive Directors. Awards are granted in the form of share

options over ordinary shares in the Company priced at £0.01 each, with the exception of the Deferred Bonus Plan which are

nil-cost options. The maximum life of awards granted under the plans is six years, and for the Deferred Bonus Plan is four

years. Share awards are equity settled on exercise with ordinary shares in the Company issued to the participant. A cash

amount equal to accumulated dividends from the grant date to the vesting date will be paid to the participant across these

plans.

Limited

Incentive

2017

(the

“XP

2017”)

Established in 2017 and amended in 2020. Vesting is subject to continued employment for three years from the grant date or

good leaver status and the achievement of performance conditions based on specific targets and weightings. These currently

include value creation through total shareholder return and financial performance through earnings per share growth. Vesting

normally occurs on the fifth anniversary from the grant date.

Set out below are summaries of outstanding Awards granted under the plan:

1 2025 2024Weighted Weighted average average exercise exercise Outstanding price per Outstanding price per shares shareundershares shareunderunderawardawardunderawardawardAt 1 January 186,041 £0.01 93,583£0.01 Granted during the year 118,571 £0.01 107,131£0.01 Forfeited during the year (18,916)£0.01 (11,582) £0.01 2 Exercised during the year(3,039)£0.01 (3,091) £0.01 At31December282,657 £0.01 186,041£0.01 Exercisableat31December3,547 £0.01 ––

Except where awards have been forfeited due to the award holder ceasing to be an employee of the Group, forfeitures are now disclosed in the year in which

the vesting period concludes. Previously, there was a difference between this disclosure and the Remuneration Committee Report in this regard, however,

these two disclosures now align for both financial years presented. The corresponding difference on financial results as a result of this change was not material.

The weighted average share price at the date of exercise of options exercised during the year ended 31 December 2025 was £7.00 (2024: £10.31).

Awards outstanding at the end of the year have the following expiry dates and exercise prices.

Outstanding Outstanding shares under shares under award 31 award 31 Exercise December December Grant date Expiry date price 2025 2024 22 April 202022 April 2026£0.01 3,547 6,586 8 March 20228 March 2028£0.01 – 18,91617 March 202317 March 2029£0.01 33,381 33,38114 September 2023 14 September 2029 £0.01 20,027 20,02712 March 202412 March 2030£0.01 107,131 107,1315 March 20255 March 2031£0.01 118,571 –Total 282,657 186,041

Limited

2020

(the

“XP

RSP

2020”)

Established in 2020. Awards normally vest five years from the grant date, subject to continued employment for three years

from the grant date or good leaver status. There is no performance condition attached.

Set out below are summaries of outstanding Restricted Shares granted under the plan:

2025 2024 Weighted Weighted average average exercise exercise Outstanding price per Outstanding price per shares shareundershares shareunderunderawardawardunderawardawardAt 1 January 28,668 £0.01 14,295£0.01 Granted during the year 15,904 £0.01 14,373£0.01 1 Exercised during the year(1,263)£0.01 ––At31December43,309 £0.01 28,668£0.01 Exercisableat31December1,712 £0.01 ––

The weighted average share price at the date of exercise of options exercised during the year ended 31 December 2025 was £7.00 (2024: £nil).

194

195

30.

Awards outstanding at the end of the year have the following expiry dates and exercise prices:

Outstanding Outstanding shares under shares under award 31 award 31 Exercise December December Grant date Expiry date price 2025 2024 22 April 202022 October 2025 £0.01 – 1,263 22 April 202022 April 2026£0.01 1,712 1,712 3 March 20213 March 2027£0.01 1,495 1,495 8 March 20228 March 2028£0.01 2,636 2,636 17 March 202317 March 2029£0.01 4,686 4,686 14 September 2023 14 September 2029 £0.01 2,503 2,503 12 March 202412 March 2030£0.01 14,373 14,3735 March 20255 March 2031£0.01 15,904 –Total 43,309 28,668

Fair

value

The fair values at grant date of awards granted during the year under the XP LTIP 2017 and XP RSP 2020 are determined

using the valuation models below. For the XP LTIP 2017 Monte Carlo model is used for the portion of the award with the

TSR performance condition and Black–Scholes model is used for the portion of the award with earnings per share growth

performance condition. The model inputs are as follows:

XP Power Limited

Bonus

2017

(the

“XP DBP 2017”)

Established in 2017 and amended in 2020. The Executive Directors bonus award is equally split between cash and a nil-

cost share option award, which normally vests after two years from the date of the bonus statement, subject to continued

employment or good leaver status.

Set out below are summaries of outstanding Deferred Bonus Shares granted under the plan:

2025 2024 Weighted average Weighted exercise average Outstanding price per Outstanding exercise price sharesundershareundersharesunderper share awardawardawardunder award At 1 January 28,354 – 12,259–Granted during the year 41,288 – 21,983–1 Exercised during the year(6,371)– (5,888) –At31December63,271 – 28,354–Exercisableat31December– – 6,371 –

The weighted average share price at the date of exercise of awards exercised during the year ended 31 December 2025 was £9.05 (2024: £11.50).

Awards outstanding at the end of the year have the following expiry dates and exercise prices:

Expected option life is estimated as being equal to the option life, on the grounds that there is a nominal exercise price.

Four different types of awards are granted under the plans:

Performance Share Awards: granted in the form of share options over ordinary shares in the Company, priced at £0.01

each, to eligible employees resident outside of the United States.

Performance Restricted Stock Units (“Performance RSUs“): a nil-cost award, granted to eligible employees resident in the

United States. Each Performance RSU represents the right to receive one ordinary share in the Company.

iii.

Restricted Share Awards: granted in the form of share options over ordinary shares in the Company, priced at £0.01 each,

to eligible employees resident outside of the United States.

iv.

Restricted Stock Units (“RSUs”): a nil-cost award, granted to eligible employees resident in the United States. Each RSU

represents the right to receive one ordinary share in the Company.

Vesting of Performance Share Awards and Performance RSUs is subject to continued employment for three years from the

grant date or good leaver status and the achievement of performance conditions based on specific targets and weightings.

Outstanding Outstanding shares under shares under award 31 award 31 Exercise December December GrantdateExpiry date price 2025 2024 8 March 2022 28 February 2026 – – 6,371 12 March 20246 March 2028–21,98321,9835 March 20255 March 2029–41,288 –Total 63,271 28,354

Equity

settled

Senior

Manager

Plans

The participants under plans a and b below, are the senior management of companies under the Group. The XP Power Limited

Senior Managers Long-Term Incentive Plan 2017 (the “XP Senior Managers LTIP 2017”) was established in 2017 and amended

XP LTIP 2017XPRSP2020Options granted 118,571 15,904 Fair value at grant date £7.36 to £9.70 £9.70 Monte Carlo and Black– Model used Black–Scholes models Scholes models Assumptions used: Share price £9.70 £9.70 Exercise price £0.01 £0.01 1 Expected volatility61.36% 61.32% 2 Expected option life5 years 5 years Expected dividend yield 0.00% 0.00% Risk-free interest rate 4.34% 4.34%

in 2020 and the XP Power Limited Senior Managers Long-Term Incentive Plan 2023 (the “XP Senior Managers LTIP 2023”) was

established in 2023.

Volatility was estimated based on the historical volatility of the shares over a five-year period prior to grant date.

196

197

30.

These include value creation, through total shareholder return, and financial performance, through earnings per share growth.

Vesting normally occurs on the third anniversary from the grant date.

Restricted Share Awards and RSUs under the XP Power Senior Managers LTIP 2017 normally vest three years from the grant

date, and under the XP Senior Manager LTIP 2023 vest evenly in three tranches over a three-year period. All awards are

subject to continued employment or good leaver status. There is no performance condition attached to these awards.

The maximum life of awards granted under the XP Power Senior Managers LTIP 2017 is four years and ten years under the XP

Senior Managers LTIP 2023. On the exercise of share options or the settlement of Performance RSUs and RSUs following each

vesting date, awards are equity settled with ordinary shares in the Company issued to the participant. A cash amount equal

to accumulated dividends from the grant date to the vesting date for Performance RSUs and RSUs, or to the exercise date for

Performance and Restricted Share Awards will be paid to the participant.

Senior

Managers

2017

Awards

Set out below are summaries of outstanding Performance Share Awards granted under the plan: 1 2025 2024Weighted Weighted average average exercise exercise Outstanding price per Outstanding price per sharesundershareundersharesundershareunderawardawardawardawardAt 1 January 18,102 £0.01 38,718£0.01 Forfeited during the year (18,102)£0.01 (14,743) £0.01 Cancelled during the year – – (831) £0.01 2 Exercised during the year– – (5,042) £0.01 At31December– – 18,102£0.01 Exercisableat31December– – ––

Except where awards have been forfeited due to the award holder ceasing to be an employee of the Group, forfeitures are now disclosed in the year in which

the vesting period concludes. Previously, there was a difference between this disclosure and the Remuneration Committee Report in this regard, however,

these two disclosures now align for both financial years presented. The corresponding difference on financial results as a result of this change was not material.

The weighted average share price at the date of exercise of awards exercised during the year ended 31 December 2025 was £nil (2024: £10.47).

RSUs

Set out below are summaries of outstanding Performance RSUs granted under the plan:

Outstanding Outstanding shares shares under under award 31 award 31 Exercise DecemberDecemberGrantdateExpiry date price 2025 2024 8 March 2022––– 9,391 17 August 2022 – – – 966Total – 10,357

Outstanding Outstanding shares shares under under award 31 award 31 Exercise DecemberDecemberGrant date Expiry date price 2025 2024 8 March 20228 March 2026£0.01 – 18,102Total – 18,102

198

199

30.

iii.

Awards

Set out below are summaries of outstanding Restricted Share Awards granted under the plan: 2025 2024 Weighted Weighted average average exercise exercise Outstanding price per Outstanding price per shares shareundershares shareunderunderawardawardunderawardawardAt 1 January 4,146 £0.01 8,678 £0.01 Forfeited during the year – – (1,857) £0.01 1 Exercised during the year(3,171)£0.01 (2,675) £0.01 At31December975 £0.01 4,146 £0.01 Exercisableat31December975 £0.01 ––

Outstanding Outstanding shares shares under under award 31 award 31 Exercise DecemberDecemberGrantdateExpiry date price 2025 2024 1 8 March 20228 March 2026£0.01975 4,146 Total 975 4,146

These awards are fully vested.

iv.

RSUs

Set out below are summaries of outstanding RSUs granted under the plan:

2025 2024 Weighted Weighted average average exercise exercise Outstanding price per Outstanding price per shares shareundershares shareunderunderawardawardunderawardawardAt 1 January 18,202 – 21,234–Forfeited during the year – – (1,288) –1 Exercised during the year(18,202)– (1,744) –At31December– – 18,202–Exercisableat31December– – ––

Senior

Managers

2023

Awards

Set out below are summaries of outstanding Performance Share Awards granted under the plan:

200

201

30.

RSUs

Set out below are summaries of outstanding Performance RSUs granted under the plan:

iii.

Awards

Set out below are summaries of outstanding Restricted Share Awards granted under the plan:

Outstanding Outstanding shares shares under under award 31 award 31 Exercise DecemberDecemberGrant dateExpiry date price 2025 2024 1 13 June 202313 June 2033 £0.01 13,199 14,20114 September 2023 14 September 2033 £0.01 – 2,844 2 21 March 202421 March 2034£0.01 28,148 37,32612 November 2024 21 March 2034£0.01 – 3,546 6 March 20256 March 2035£0.01 38,013 –Total 79,360 57,917

Two-third of these awards are vested and the remaining awards will vest in 2026.

One-third of these awards are vested, one-third of the awards will vest in 2026 and the remaining awards will vest in 2027.

iv.

RSUs

Set out below are summaries of outstanding RSUs granted under the plan:

Two-third of these awards are vested and the remaining awards will vest in 2026.

One-third of these awards are vested, one-third will vest in 2026, and the remaining awards will vest in 2027.

202

203

Fair

value

The fair values at grant date of awards granted during the year under the XP Senior Managers LTIP 2023 are determined

using Monte Carlo model and Black–Scholes model. Monte Carlo model is used for the portion of the award with the

TSR performance condition and Black–Scholes model is used for the portion of the award with earnings per share growth

performance condition.

The model inputs are as follows:

Performance Share RestrictedShareAward Performance RSU Award RSU Options granted 85,70356,46038,01375,609Fair value at grant date £6.90 to £9.60 £6.90 to £9.60 £9.60 £9.60 to £9.67 Monte Carlo model and Monte Carlo model and Model used Black–Scholes model Black–Scholes model Black–Scholes model Black–Scholes model Assumptions used: Share price £9.60 £9.60 £9.60 £9.60 Exercise price £0.01 –£0.01 –1 Expected volatility71.33% 71.33% 55.80% to 80.18% 47.20% to 80.18% 2 Expected option life3 years 3 years 1 to 3 years 1 to 3 years Expected dividend yield 0.00% 0.00% 0.00% 0.00% Risk-free interest rate 4.21% 4.21% 3.97% to 4.22% 3.90% to 4.22%

Volatility was estimated based on the historical volatility of the shares over the expected option life prior to grant date.

Expected option life is estimated as being equal to the option life, on the grounds that there is a nominal exercise price.

settled

Senior

Manager

plan

XP Power Limited Senior Managers Phantom Incentive Plan 2024 (the “XP Senior Managers Phantom Plan

2024”)

Established in 2024, participants under the XP Senior Managers Phantom Plan 2024 are the senior management of companies

under the Group. Awards are granted in the form of phantom options, priced at £0.01 each. There are currently two different

types of awards granted under the XP Senior Managers Phantom Plan 2024:

Phantom Performance Share Awards.

Phantom Restricted Share Awards.

Vesting of Phantom Performance Share Awards is subject to continued employment for three years from the grant date or

good leaver status and the achievement of performance conditions based on specific targets and weightings. These currently

include value creation, through total shareholder return, and financial performance, through earnings per share growth.

Vesting normally occurs on the third anniversary from the grant date.

The majority of Phantom Restricted Share Awards vest evenly in three tranches over a three-year period subject to continued

employment or good leaver status. There is no performance condition attached to these awards.

The m

aximum life of phantom options granted under the XP Senior Managers Phantom Plan 2024 is 10 years. On the exercise

of phantom options, a participant will be entitled to receive cash payment from the Company of an amount equal to the

Market Value of an ordinary share in the Company on the exercise date, less the phantom option price. A cash amount equal

to accumulated dividends from the grant date to the exercise date will be paid to the participant.

Phantom

Awards

Set out below are summaries of outstanding Phantom Performance Share Awards granted under the plan:

Outstanding Outstanding shares shares under under award 31 award 31 Exercise DecemberDecemberGrant date Expiry date price 2025 2024 21 March 202421 March 2034£0.01 5,712 5,712 6 August 2024 6 August 2034 £0.01 1,824 2,655 6 March 20256 March 2035£0.01 6,246 –Total 13,782 8,367

Phantom

Set out below are summaries of outstanding Phantom Restricted Share Awards granted under the plan:

204

205

One-third of these awards are vested, one-third will vest in 2026, and the remaining awards will vest in 2027.

Two-third of these awards are vested, and the remaining awards will vest in 2026.

iii.

Fair

The fair values at grant date and measurement date of the Phantom share awards granted during the year is determined

using the Monte Carlo model and Black Scholes model. Monte Carlo model is used for the portion of the award with the

performance condition. The model inputs are as follows:

At grant date At grant date Atmeasurementdate6March202525 June 202531December2025Phantom Phantom Phantom Phantom Phantom Phantom Performance Restricted Restricted Performance Restricted Restricted ShareAwardShareAwardShareAwardShare Award Share Award Share Award Options granted 6,246 3,120 4,864 6,246 3,120 4,864 Fair value £6.90 to £9.60 £9.60 £9.25 £5.89 to £9.00 £9.00 £9.00 MonteMonteCarlo model Carlo model and Black– Black– Black– and Black– Black– Black– Model used Scholes model Scholes model Scholes model Scholes model Scholes model Scholes model Assumptions used: Share price £9.60 £9.60 £9.25 £9.00 £9.00 £9.00 Exercise price £0.01 £0.01 £0.01 £0.01 £0.01 £0.01 55.80% 49.77% 29.50% 29.50% to 1 Expected volatility71.22% to 80.18% to 73.80% 60.9% to 62.70% 62.70% 0.2 to 0.2 to 2 Expected option life3 years 1 to 3 years 1 to 3 years 2.2 years 2.2 years 2.2 years Expected dividend yield 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Risk-free interest rate 4.21% 3.97% to 4.22% 3.74% to 3.81% 3.76% 3.61% to 3.76% 3.61% to 3.76%

Volatility was estimated based on the historical volatility of the shares over expected option life prior to grant date.

Expenses

arising

share-based

payment

transactions

Total expenses arising from share-based payment transactions recognised during the period as part of employee

compensation were as follows:

31 31 December December 2025 2024 Share awards issued under the XP LTIP 2017 0.2 0.1 Share awards issued under the XP RSP 2020 0.1 0.1 Share awards issued under the XP DBP 2017 0.2 0.1 Share awards issued under the XP Senior Managers LTIP 2017 0.1 0.3 Share awards issued under the XP Senior Managers LTIP 2023 1.4 1.0 Share awards issued under Phantom Share Plan 2024 0.1 –Total 2.1 1.6

31.

risk

The Group’s activities expose it to capital risk, market risk (including currency risk and interest rate risk), credit risk and

liquidity risk. The Group seeks to minimise adverse effects from the unpredictability of financial markets on the Group’s

financial performance.

Capital

risk

The Group manages its capital to ensure that the entities in the Group will be able to continue as a going concern while

maximising the return to shareholders through the optimisation of the debt and equity.

The capital structure of the Group consists of debt, which includes the borrowings disclosed in Note 23, cash and equity

attributable to equity holders of the Company, comprising issued capital, reserves and retained earnings as disclosed in

Note 2.

The Board reviews the capital structure of the business and considers the cost of capital and risks associated with each class

of capital. The Group aims to balance its overall capital structure through the payment of dividends, new share issues and

share buyback as well as the issue of new debt or the redemption of existing debt.

206

207

31.

risk

Currency

The Group operates in North America, Europe and Asia. Entities in the Group regularly transact in currencies other than their

respective functional currencies (“foreign currencies”). The Group monitors and manages the currency risk through review

of internal reports analysing major currency exposures. Where possible, the Group seeks to offset exposures by matching

monetary asset and liability exposures in like currencies against each other, often using its bank facilities to square off or

reduce exposures. The Group also manages some currency exposure by entering into currency forwards with banks.

The Group’s currency exposure is as follows:

£m GBP EUR USD SGD Others Total

At 31 December 2025

Cash and cash equivalents

0.8

2.1

29.5

33.8

Trade receivables

5.0

27.6

34.2

Bond receivables

48.8

Other current assets

1.3

Subtotal

7.4

108.9

120.4

(20.4)

(56.6)

(77.0)

Trade and other payables

(3.1)

(1.6)

(25.8)

(9.1)

(39.7)

(0.4)

(12.3)

(35.6)

(2.8)

(51.4)

(50.7)

(51.3)

(0.8)

(0.9)

Subtotal

(25.0)

(14.1)

(169.6)

(3.0)

(221.1)

(22.7)

(6.7)

(60.7)

(2.8)

(7.8)

(100.7)

Currency

profile

(22.7)

(6.7)

(60.7)

(2.8)

(7.8)

(100.7)

Financial liabilities denominated in the

respective entities’ functional currencies

22.2

7.5

70.2

6.4

106.3

Currency exposure of financial

(liabilities)/ assets

(0.5)

9.5

(2.8)

(1.4)

5.6

GBP

EUR

USD

SGD

Others

Financial assets

Cash and cash equivalents

2.0

11.1

15.4

Trade receivables

3.3

30.2

Bond receivables

39.2

Other current assets

0.4

0.9

ESOP loan to employees

Subtotal

3.0

5.7

75.7

1.1

85.8

(108.9)

(3.4)

(1.5)

(27.5)

(4.3)

(37.4)

(0.5)

(12.0)

(38.3)

(3.2)

(54.3)

(53.3)

(1.3)

(55.3)

(0.8)

(1.5)

Subtotal

(4.9)

(13.8)

(228.0)

(6.7)

(257.4)

(1.9)

(8.1)

(152.3)

(3.7)

(5.6)

(171.6)

profile

(8.1)

(152.3)

(3.7)

(5.6)

(171.6)

Financial liabilities denominated in the

respective entities’ functional currencies

8.3

155.2

168.0

Currency exposure of financial

(liabilities)/ assets

(0.5)

2.9

(3.7)

(2.5)

(3.6)

Within the Group, the Company has USD as its functional currency and is therefore exposed to currency risk with respect to

financial assets and liabilities denominated in GBP and SGD. During the year, the change in average exchange rates between

GBP and SGD against USD was 2.8% and 0.0% respectively (2024: GBP 2.8%, SGD 0.5%).The impact of this change in average

exchange rates, with all other variables, including tax rates, being held constant, on the net financial asset/(liability) that is

exposed to currency risk from these currency pairs as at 31 December 2025 would be as follows:

2025 Loss

after

Loss

after

GBP against USD

– Strengthened

2.1

– Weakened

(2.1)

SGD against USD

– Strengthened

– Weakened

Subsidiaries with other functional currencies are not exposed to significant foreign exchange risks.

The impact of the currency risk on other comprehensive income is not significant.

Exchange rates applied in these financial statements are the average for the twelve-month period for Income Statement

items (including £1/USD1.3156, £1/€1.1717, £1/SGD1.7215) and are the closing rate for Balance Sheet items (including £1/

USD1.3445, £1/€1.1454, £1/SGD1.7290 at 31 December 2025).

Interest

rate

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in

market interest rates. As the Group has no significant interest-bearing assets, the Group’s income is substantially independent

of changes in the market interest rates.

All of the Group’s borrowings are at variable interest rates with £56.6m denominated in USD and £20.4m denominated in

GBP. As at 31 December 2025, SOFR and SONIA were 3.9% and 3.7%, respectively.

208

209

31.

If the USD interest rates on the year end borrowings increased/decreased by 1.1% (2024: 1.1%) with all other variables,

including tax rates, being held constant, the profit after tax for the year will be lower/higher by £1.2m (2024: £0.5m) as a

result of higher/lower interest expense on these borrowings.

Credit

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in a financial loss to the

Group. For trade receivables the Group adopts a policy of only dealing with customers of appropriate credit history or rating.

For other financial assets, the Group adopts the policy of only dealing with high credit quality counterparties.

The Group uses a provision matrix to measure the lifetime expected credit loss allowance for trade receivables. In measuring

the expected credit loss, trade receivables are grouped based on shared credit risk characteristics and days past due.

In calculating the expected credit loss rates, the Group considers historical loss rates for each category of customers and

adjusts to reflect current and forward macroeconomic factors affecting the ability of the customers to settle the receivables.

The Group has identified gross domestic product (GDP) and the public policy of the countries in which it sells goods as the

most relevant factors.

Trade receivables are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a

repayment plan with the Group. The Group generally considers a financial asset as in default if the counterparty fails to make

contractual payments within 90 days of when they fall due and writes off the financial asset when a debtor is in significant

financial difficulties and has defaulted on payment that is usually greater than 120 days past due. Where receivables are

written off, the Company continues to engage in enforcement activity to attempt to recover the receivables due. Where

recoveries are made, these are recognised in profit or loss.

The Group’s credit risk exposure in relation to trade receivables under IFRS 9 is set out in the provision matrix as follows:

Past

due

Current

1–30

days

31–60

days

61–90

days

91–120

days

>120

days

North

America

region

Expected loss rate

0.0%

0.1%

0.2%

0.3%

15.2%

16.3

0.6

19.2

Loss allowance

region

Expected loss rate

0.0%

0.1%

0.2%

0.3%

0.0%

6.4

8.0

Loss allowance

region

0.0%

3.0

The movement in the allowance for impairment of trade receivables is as follows:

Past

due

£m Current

1–30

31–60

61–90

91–120

>120

North

America

0.1%

0.2%

0.3%

4.3%

14.9

2.1

0.5

0.4

18.1

0.1%

0.3%

21.4%

9.6

10.6

4.6

5.6

(a) Loss allowance measured at lifetime expected credit loss.

Liquidity

Prudent liquidity risk management includes maintaining sufficient cash, the availability of funding through an adequate

amount of committed credit facilities (Note 23) and the ability to close out market positions at a short notice. The Group

manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously

monitoring forecast and actual cash flows. All significant subsidiaries prepare weekly cash forecasts on a 20-weeks outlook

basis and review them on a weekly basis with management.

At the balance sheet date, assets held by the Group and the Company for managing liquidity risk included cash and short-term

deposits and are disclosed in Note 16.

The Group’s debt is sourced from a Revolving Credit Facility (“RCF”) provided by HSBC UK Bank PLC, J.P. Morgan Securities

PLC, DBS Bank Ltd, Banco de Sabadell S.A., Commerzbank Aktiengesellschaft and Bank of China Limited. In December 2025,

there is an amendment to our revolving credit facility, which including introduction an additional lender. This allowed the

current lenders to reduce their commitment under Facility A with the new lender providing additional commitment under

Facility B. Facility A matures on 30 June 2028 and Facility B matures on 30 June 2030. The facility has no fixed repayment

until maturity. Both facilities incur a fee of 40% of the margin for the unutilised facility.

The main features of the RCF are as follows:

Interest accrues for amounts drawn down on Facility A at SOFR for US dollar borrowings and SONIA for sterling

borrowings, plus a margin of 1.95%-3.2% depending on Leverage. For Facility B interest accrues at SONIA plus a margin of

4.75%.

Financial covenants of the facility, a leverage ratio (Net Debt to Adjusted EBITDA) of not more than 3:00 and interest

cover (Adjusted EBITDA to Adjusted Net Finance Expense) of not less than 3:00. Each covenant is tested quarterly. For

covenant testing purposes, the Group’s definition of Adjusted EBITDA and Adjusted Net Finance Expenses includes certain

Adjustments, as detailed in Note 5. Adjusted EBITDA, for covenant test purposes, is based on the previous 12-month

period, measured on the last day of each financial quarter of the Group. Throughout the year and at 31 December 2025

both of these covenants were met.

Commitments of USD $100.7m under Facility A and £22.2m under Facility B.

Beginning of financial year

Loss

allowance

(a)

recognised in profit or loss during the year on assets acquired/originated

Receivables written off as uncollectible

End of the financial year

210

211

COMPANY BALANCE

SHEET

AS AT 31 DECEMBER 2025

31.

The table below analyses non-derivative financial liabilities of the Group into relevant maturity groupings based on the

remaining period from the balance sheet date to the contractual maturity date. The amounts disclosed in the table are

the contractual undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of

discounting is not significant.

Less

than

Between

Over

and 2 years

and 5 years

years

39.6

39.7

4.6

5.0

13.1

70.6

93.3

0.9

Borrowings,

including

interest

6.1

63.9

23.3

93.3

50.3

69.8

37.3

70.6

228.0

37.2

37.4

5.0

5.9

13.9

79.6

104.4

Borrowings, including interest

8.4

116.5

124.9

51.4

122.5

14.7

79.6

268.2

The Group manages the liquidity risk by maintaining sufficient cash and bank facilities to enable it to meet its normal

operating commitments.

11-01

Singapore 068877

Auditors

PricewaterhouseCoopers LLP

7 Straits View

Marina One, East Tower, Level 12

Singapore 018936

The production of this report supports the work of the

Woodland Trust, the UK’s leading woodland conservation

charity. Each tree planted will grow into a vital carbon store,

helping to reduce environmental impact as well as creating

natural havens for wildlife and people.

XP POWER LIMITED

19 Tai Seng Avenue, #07-01, Singapore 534054

T: +65 6411 6900

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