Dialight plc

Annual Report and Accounts 2026

ILLUMINATING

PROGRESS

In this report

Dialight is a world

leader in industrial

LED lighting solutions

with millions of

fixtures installed

worldwide.

With over 50 years of

industrial LED lighting

experience and one

of the largest installed

bases across the

world, Dialight offers a

comprehensive range

of rugged, cutting-edge

products to suit virtually

any industrial application.

Our commitment to quality

is demonstrated by the

industry-leading 10-year

warranty offered across

most of our products.

www.dialight.com

Strategic Report

Performance at a glance 1

Our business at a glance 2

Our business model 4

Chair’s statement 5

Chief Executive Officer’s review 6

Our strategic progress 10

Delivering our Transformation Plan 12

Key performance indicators 16

The right solution 18

Sustainability 19

Non-financial and sustainability information statement 26

Risk management 29

Principal and emerging risks and uncertainties 31

Chief Financial Officer’s review 34

Going concern statement 38

Viability statement 40

Governance

Chair’s introduction to governance 42

Compliance with the Code 45

Governance overview 46

Board of Directors 50

Governance structure and division of responsibilities 52

Stakeholder engagement 57

Section 172 statement 62

Board composition, succession and evaluation 63

Nominations Committee report 66

Audit Committee report 70

Remuneration Committee report 75

2026 annual report on remuneration 89

Implementation of the Remuneration Policy for 2027 95

Directors’ report 98

Directors’ responsibility statement 101

Financial Statements

Independent auditor’s report to the members of Dialight plc 103

Consolidated statement of profit or loss 117

Consolidated statement of comprehensive income 118

Consolidated statement of financial position 119

Consolidated statement of changes in equity 120

Consolidated statement of cash flows 121

Notes to the consolidated financial statements 122

Company balance sheet 163

Company statement of changes in equity 164

Notes to the Company financial statements 165

Other Information

Directory and shareholder information 174

Dialight plc Annual Report and Accounts 2026

• Strategic Report • Governance • Financial Statements • Other Information

1 The Group uses certain alternative performance measures (“APMs”) to track and assess the underlying performance of the business.

The definitions of the adjustments made and the reconciliation to the statutory results can be found in Note 28 to the consolidated

financial statements.

Performance at a glance

Financial performance

Group revenue

$166.9M

2025: $183.5m

Underlying gross margin

39.0%

2025: 35.6%

Underlying EBITDA

$19.8M

2025: $12.9m

Underlying operating profit

$10.3M

2025: $4.2m

Underlying operating cash flow

$34.2M

2025: $19.7m

Operating profit

$6.2M

2025: $(11.6)m operating loss

Profit before tax

$3.8M

2025: $(14.1)m loss before tax

Profit after tax

$0.5M

2025: $(13.6)m loss after tax

Earnings per share – diluted

1.0 CENT

2025: (34.7) cents loss per share

Net bank debt

$1.9M

2025: $17.8m

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Dialight plc Annual Report and Accounts 2026

Dialight is a world

leaderinindustrial LED

lighting technology.

At Dialight, we are committed to increasing

safety and efficiency, reducing customer

operating costs and lowering carbon emissions,

recognising the transition to a lower-carbon

future as both an opportunity and a responsibility

to drive meaningful change across

theindustrialsector.

Our purpose

Our purpose is to improve the world we live

inthrough intelligent LED lighting technologies.

We enable industrial customers operating in

demanding environments to reduce their costs

and carbon footprint, while maximising the safety

and productivity of their facilities.

Our values

Our core values are accountability, discipline,

commitment and integrity.

Our business at a glance

Our geographical footprint

Our global footprint supports our international customer base.

We are investing in our operations to ensure efficiency across our network.

North America

Revenue: $139.9m

Employees: 1,002

Rest of the world

Revenu e: $ 27.0 m

Employees: 171

Ensenada

and Tijuana,

Mexico

Manufacturing

and distribution

North

Carolina, US

Manufacturing

New Jersey, US

Headquarters

Distribution

Penang, Malaysia

Manufacturing

Singapore

Distribution

Perth, Australia

Distribution

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Dialight plc Annual Report and Accounts 2026

Our divisions

Signals & Components

Our Signals & Components division has a diverse range

of products with extended life-cycle opportunities in

both mature markets and fast-growing markets for

medical and wearable technology. It uses LED lights

in a variety of safety products and as performance

status indicators.

Revenue

$44.8M

Lighting

Our range of LED industrial lighting is aimed at a market

still dominated by older, more inefficient technologies.

With low levels of conversion to LED, the catalyst for

mass conversion is increased energy savings, lower

maintenance costs and increased regulation to phase

out older technologies.

Revenue

$122.1M

Product spotlight:

Dialight’s LED floodlights

Consuming at least 50% less energy than traditional

high-intensity discharge (“HID”) lighting sources

to drastically reduce electricity costs, while greatly

reducing carbon emissions.

Product spotlight:

Marine panel mount indicators

Built for harsh marine environments, Dialight’s LED

panel mount indicators are waterproof, shock and

vibration-resistant, and daylight-viewable, providing

clear status monitoring and visual alarms for

mission-critical systems.

Our key strengths

Premium products and strong brand awareness

Trusted worldwide for rugged industrial LED

lighting solutions.

Our industry-leading 10-year warranty

Designed for long-term performance and confidence.

In-house power supplies

Long-life potted drivers engineered for harsh

industrial environments.

Strong relationships with customers,

distributorsand contractors

Established across global industrial markets.

Our people

Experienced teams focused on innovation,

quality andcustomer support.

Read more about our people on pages 21 to 23

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Dialight plc Annual Report and Accounts 2026

Our business model

What we do

Our business model is underpinned by our key strengths.

Dialight develops market-leading, sustainable LED products for the industrial

markets–helping our customers reduce their carbon emissions and provide

asaferworkingenvironment for their people.

Our revenue mainly derives from the sale of lighting fixtures, both via distribution

channels and direct to the end customer, using our highly-technical sales personnel.

Our factories operate lean processes, supported by our robust supply

chainandrelationships with key suppliers. We also maintain close partnerships

withourglobal distributor network and end customers.

We certify our products using EN 15804 with independently

verifiedEnvironmentalProductDeclarations.

We offer a 10-year warranty on the majority of our products backed

upbyreal-worldoperational experience and third-party verified

warrantydataandengineering approach.

The value we create

• Our aim is to deliver long-term value for our

shareholders by developing market-leading,

sustainable products in a market with very low

penetration. We carefully balance the need for

investment, working capital and shareholder returns.

• We provide a creative working environment for our

employees with scope for individual responsibility

and personal achievement. We help them develop

their skills and provide competitive rewards linked

toperformance.

• We work closely with our customers to understand

and meet their objectives, including reducing their

carbon footprint by lowering their energy and

maintenance costs.

• We create jobs for local communities around the

world, supporting local supplier development and

delivering economic benefits.

• We support local economies by creating

employment, paying local taxes and stimulating

localeconomic prosperity.

Read more about these on page 11

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Dialight plc Annual Report and Accounts 2026

Chair’s statement

impact margins. We continue to focus on the things we

cancontrol, while planning to cope with all eventualities,

allthe while maintaining a laser focus on profitable growth.

Under the leadership of Steve Blair, our Group Chief

Executive Officer, and supported by the rest of the senior

team, who have led by example, the impact is evident in the

results of the business. You can see and feel that progress,

whether at our headquarters in Farmingdale or on our factory

floors. As I have travelled around all the Group’s sites during

the year, you can feel that there is a buzz about the place –

people are working hard, in teams and they can see and feel

the positive results of their efforts.

By doing what we said we would do – and achieving genuine

tangible results – there has been a noticeable turnaround.

There is enthusiasm and passion wherever you look. A good

example was a recent townhall meeting, where dozens of

hands went up immediately when asked if anybody had any

questions for the Board. What is also hugely encouraging is

there is challenge, feedback and discussion.

Our employees have also told us how reassured they are by

the senior-level understanding of the Executive team and the

work happening around the Group – which means we can

properly interact with, and understand, our people and their

needs. Employees were pleased when in July, for the first time

in the Group’s history, a bonus was paid to all employees.

Now as we look forward, we can see that the foundations

have been put in place to allow the business to start growing

again. The expenditure phase of the re-organisation plan

may have ceased but the benefits have not. These benefits

will continue to grow over the next two to three financial

years. The final phase in the execution of the benefits of the

Transformation Plan will see focus on consolidation and

optimisation of manufacturing footprints to increase profit,

capacity, and flexibility. Further detail can be found in Steve’s

report on page 9. I am very encouraged that this final phase

is being so carefully planned with an eye to detail and with

care and compassion.

Now, we can allow ourselves to begin to look at new products

and services, new technologies and long-term strategies as

we look forward to a future in which the Group will once again

become debt-free. The Strategy & Innovation Committee is

certainly investigating several product and services additions

to the Group portfolio.

This is a new Dialight – Board members and employees across

the Group, from engineering and manufacturing to customer

service and finance, have worked extremely hard toget to this

point. That is something I’m both grateful for and very proud

of – and they all should be too. To our customers, suppliers,

bankers and shareholders, thank you on behalf ofthe Board

for your continued support and patience. Many of you are

clearly very engaged in Dialight and its long-term success,

and we will continue to put in the hard work, with appropriate

transparency, to make good on your commitment and support.

Neil Johnson

Group Chair

22 June 2026

2026 was a good year for Dialight as the

business more than doubled its underlying

operating profit to $10.3m and made a

substantial impact on reducing our net bank

debt. We made excellent progress on the

Transformation Plan introduced two years

ago and completed the investment phase

ofthe plan with costs of $4.4m for the year.

This has created a more streamlined

business, with amore focused commercial

offering and abusiness right-sized for

profitable growth and cash generation.

“DIALIGHT IS CONTINUALLY EVOLVING

AND IMPROVING; STAKEHOLDERS

ARE BECOMING MORE CONFIDENT

IN OUR ABILITY TO DELIVER AND

OUR RESULTS DEMONSTRATE THIS.”

Neil Johnson, Group Chair

Cash generated from operations is $35.4m for the year, which

has enabled a reduction in net bank debt from $17.8m in the

prior year to $1.9m at the end of the financial year. During the

year, we also paid all outstanding sums due to Sanmina

Corporation (“Sanmina”) under the settlement agreement

almost a year ahead of the scheduled payment profile, which

represents asignificant weight lifted from the whole Group.

The continuing uncertainty of the macroeconomic landscape

has dampened demand for the Group’s lighting products

although there was a pick-up in order activity in the last

quarter of the year, which delivered a closing backlog of

orders that was up by almost 25% on the prior year.

While the geopolitical situation remains uncertain, it remains

to be seen just how negatively the Middle East conflict

affects our supply chain and how the knock-on effects will

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Dialight plc Annual Report and Accounts 2026

“THE OUTLOOK IS PROMISING

AS WE EXECUTE THREE

KEY PRODUCTION-RELATED

TRANSFORMATION PROJECTS

ANDDRIVE SALES GROWTH THROUGH

NEW PEOPLE, NEW MARKETS

ANDNEW PRODUCTS.”

Steve Blair, Group Chief Executive Officer

Chief Executive Officer’s review

This performance demonstrates the continuing and

growing financial impact of the first four key pillars of

the Transformation Plan (winning hearts and minds,

salestransformation, operational transformation, and margin

improvement and cash generation). This performance

has been achieved despite depressed market conditions

with tariff uncertainty and higher cost of other materials

needed to complete installations (caused by tariff increases)

necessitating customers to delay sales orders. Group revenue

for the year ended 31 March 2026 was $166.9m, down 9.0%

from the prior year. A reduction of 11.5% was reported in the

Lighting segment with business continuing to be impacted

by challenging market conditions as capital projects were

deferred. This was partly offset by increased revenues of

13.7% in Signals & Components (excluding Traffic in both

years). The fifth pillar of the Transformation Plan, which

is creating a platform for future growth, has made early

The Group had an excellent year, with

underlying operating profit of $10.3m, more

than double the $4.2m for the previous year.

encouraging progress with order performance much

stronger in the fourth financial quarter and a backlog which

has increased by over 25% on the previous year.

The geopolitical situation being experienced currently and

across the year has been challenging. At the start of the

financial year, tariffs were the main concern; by the end of

the financial year this had moved to the conflict in the Middle

East. All of the Group’s products manufactured in Mexico are

currently tariff-free under the United States-Mexico-Canada

Agreement (“USMCA”) free trade agreement and have been

for almost all of the year. Although some of the Group’s

components are imported from outside the US and Mexico

and have been subject to tariffs, the overall impact of this has

been less than 1% of material cost and this has been offset

by supplier price reductions. Towards the end of the financial

year, concern moved to the risks of freight cost inflation and

supply chain shortages (particularly with semiconductors

and components). We continue to keep both under review

and have developed alternative plans depending on which

scenario plays out. We continue to plan for the worst and

hope for the best, while rigorously controlling whatwe

can control.

Lighting sales/sales transformation

We have been focused on stabilising the business over

the last two years, achieving considerable success in

returning the business to profitability, generating cash and

significantly reducing net bank debt, despite paying back

Sanmina early. Over the last six months we have begun

to turn more of our attention to future growth across the

business looking at short, medium and long-term strategic

opportunities. This will continue to be our focus moving

forward, despitetheprevailing macroeconomic climate,

asthe transformation of the operational side of the business

transitions to business as usual.

The Group’s sales transformation is still tracking slightly

behind the business, financial and operational transformation

but has rapidly accelerated its progress in the second half of

the year. The Group has introduced a tollgate order tracking

and margin approval system. This is working very well and

Group CEO or Group CFO approval is required for all bids

that are below our required gross margin targets. During the

year, we have removed under-performing sales staff and

have also implemented a project to optimise sales. We have

also re-created the global Engineering, Procurementand

Contracting (“EPC”) team, including specifications

development capability, employing key, new expertise in this

area. We are seeking to return to the levels of sales that the

Group used to generate from specified projects that EPCs

control. We have also seen a good improvement in pricing

discipline and an increased focus on selling the higher-margin

products from a more focused number of stock keeping

units(“SKUs”).

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Dialight plc Annual Report and Accounts 2026

During the year, there was a re-organisation of the sales

team in the US. The sales team is now focused on selling

the most profitable products in the most profitable markets

whilst continuing to meet our customers’ needs. For the year

ahead, we now have an upgraded and enhanced sales team

selling the right products and at the right margins. To that

end, sales commissions are now based on order profitability

not just the sales value of the order. This will pay a higher

commission to those individuals that beat their sales target

and, moreimportantly, beat their gross margin target.

Finally, in the year, the Group opened new geographic

markets (e.g. Lighting sales in Nigeria and Angola for oil and

gas) and launched several new Lighting products. These have

included self-developed products, for instance lights for use

in hydrogen production and storage environments, as well as,

for the first time, source and sell products. This latter group

includes lower cost linear lights and high-output floodlights.

These source and sell products are still expected to generate

returns in line with our three-year gross margin ambitions.

Signals & Components

The Group has made good progress during the year with

Signals & Components. We have conducted a thorough

strategic review of our opto-electronics (“OE”) product

line. This has, for a long time, been the “junior” product

line that has been flat to marginally declining over the last

decade. The OE product line generates good gross margins

above the average Group return on sales. We have decided

to reinvigorate and to invest in this product line. This will

include recruiting new salespeople, investing in new product

development and SKU reductions. We are reducing lead

times, have a more aggressive sales outlook, increasing

sales win rates and partnering with Asian contract equipment

manufacturers. This should stimulate growth in this product

line which has a direct correlation to the growth in data

centres and artificial intelligence (“AI”), as our OE products

are used on servers and equipment. The results ofthis have

been that the overall segment excluding Traffic inboth years

has seen a 13.7% increase in revenue.

The Group’s Traffic business, disposed of in the prior year but

for which the Group had an assembly commitment through

to the end of October 2025, has now ceased production.

Sales to 31 March 2026 were $8.2m compared to $13.3m in

the prior year. The Group’s Traffic business has historically

been loss making although a small exit profit of $0.3m was

made in the year. A substantial amount of the inventory

associated with this business has been successfully sold

(andcollected) with a reduction of almost $4.0m in the year.

With the exit from Traffic, overall Signals & Components

revenue declined by 1.5% to $44.8m (2025: $45.5m).

Sales growth

The Group is confident that after several years of revenue

decline, revenue should return to growth (excluding the

impact of the disposal of the Traffic business) moving

forward. The reasons for this confidence are multifaceted

andinclude: a significantly larger opening backlog of won

orders from the prior year; a significant strengthening in the

quality of the Lighting sales team; investment in the new

global EPC team; the introduction of a revised volume and

margin-based commission scheme for the Lighting sales

team tied to achieving profitable revenue growth; growth

in Signals & Components sales from data centres and AI;

andinvestment in new products to grow into a number of

contract equipment manufacturers.

Dialight’s DuroSite® High Output

LEDFloodlight brings high-efficiency,

wide-area lighting to industrial sites

across Asia-Pacific (“APAC”), offering

areliable, lower-cost alternative to

legacy HID systems for ports, rail yards,

supply bases and processing facilities.

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Dialight plc Annual Report and Accounts 2026

Chief Executive Officer’s review continued

Operational transformation

Our Operations function has delivered on a number of

projects in the year. Following on from the success of the

reduction in sub-assembly SKU numbers, finished goods

SKUs have reduced by around one-third. Cost reductions

and purchase price variances have not only offset tariff

pressure but increased gross margin. Our factory in

Ensenada has been right-sized and several new products

have been introduced. This group has led (through

cross-functional teams) the product portfolio optimisation,

business simplification, inventory reduction (inventory has

reduced by 36% to $30.0m in the last year), right-sizing

themanufacturing facilities and SKU reductions.

During the year, the Group successfully moved certain key

lighting products from Ensenada, Mexico to our new facility

inPenang, Malaysia. This move was conducted flawlessly

bythe respective teams and has reduced our lead times

andtariffs into the Asian market. The continued delivery

of efficiencies associated with the implementation of the

Transformation Plan, as well as the move of Asian lighting

to Malaysia, SKU reductions and discontinuing loss-making

products, has resulted in the Group conducting four reductions

in workforce in the year. The overall headcount reduction has

been almost 300 direct, indirect and salaried staff.

The cost of redundancy of $3.2m has been treated as

non-underlying. The ongoing annual cost saving from these

reductions is almost $5m. Overall, the Group headcount in

our main location (Mexico) has reduced by just under 30%

in the year to just over 750 heads. Despite these right-sizing

actions, the Group has maintained the flexibility in the

workforce to materially step-up production when the Group

Lighting sales return to growth.

Historically, the Group engineering function continued to work

through the Covid-19 pandemic. The US Internal Revenue

Service allowed an Employee Retention Credit (“ERC”)

to compensate such companies that continued investing

in people and growth. The Group submitted two claims

totalling $2.9m and these were both paid in the first half of the

financial year. These have been credited to other operating

income but are not included in underlying operating profit

asthis income is a one off with no more claims to follow.

Profit performance

Underlying operating profit before interest and tax has

more than doubled to $10.3m compared to the $4.2m

in the prior year. The primary factors for the increased

underlying operating profit are increased gross margin and

reduced overheads.

Gross margin overall has increased to 39.0% from 35.6% in

the prior year. This increase has added over $5m to operating

profit. The increase has been driven by sales pricing,

reduction in sub-assembly SKUs, reduction in finished goods

SKUs, cost reduction, right-sizing direct labour, reduction in

gross to net sales adjustments, reduced sales commission,

procurement savings and freight optimisation.

The overall underlying Group overhead of $54.8m has

reduced by $6.3m compared to the prior year. This has been

achieved by reduced headcount, lower legal and professional

fees and better overall control of costs. All businesses in the

Group now have monthly cost centre cost report analyses

with appropriate delegated authority levels to improve overall

control of costs.

Winning hearts and minds

We have a people-first culture and strive to keep our

employees safe at all times. We take health and

safetyextremely seriously with monthly reporting on

healthand safety performance across the Group to the

Board, including individual site data on improving accident

near-miss statistics.

We have a clear and coherent strategy. Our employees

are invested in the Transformation Plan to improve Dialight

and make it a better place to work with a more certain

future. Through the year, we have had around a dozen

cross-functional teams with representation from every

department looking to simplify and improve our business.

It is testament to our staff and these teams that the positive

progress reported here has occurred. The result of this work

is reflected in the increased profit and cash generation.

From this, for the first time, in July we paid a bonus to all

eligible employees not already participating in a bonus or

commission scheme as a statement of gratitude and thanks.

The management bonus also paid out for the first time in

several years.

During the year, we conducted a Group-wide employee

survey. The results of this showed that we are making good

progress but also that there are plenty of improvements still

to come. These recommendations are now being worked on

by each department.

Lynn Brubaker, our Chair of the Remuneration Committee

and Non-Executive Director (“NED”), has continued a

wide-ranging series of employee engagements including

at Ensenada, New Jersey and London in her role as our

Workforce Engagement NED (“WENED”).

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Dialight plc Annual Report and Accounts 2026

Cash from operations and net bank debt

I am delighted by the success of the Group’s cash

performance. Overall cash generated by operations has

increased to $35.4m in the year (2025: $12.4m). This has been

achieved through underlying EBITDA for the year of $19.8m

and a $17.4m reduction in working capital.

After capital expenditure of $4.8m (2025: $8.0m), of which

more than half is internally capitalised development costs,

interest paid of $1.9m (2025: $2.8m), tax paid of $2.2m

(2025:$1.7m), Sanmina payments (see below) of $7.7m

(2025:$4.0m) and other cash outflows of $2.9m (2025: inflow

of $2.7m), the overall increase in cash (before bank debt cash

flows) is $15.9m (2025: $1.4m decrease) which has seen net

bank debt reduce from $17.8m to $1.9m. On 22 April 2026,

HSBC UK Bank plc (“HSBC”), our Group bankers, signed

up to a new three-year revolving credit facility (“RCF”) of

£15.0m on attractive terms with a further £10.0m accordion

and an option to extend for up to a further two years at the

lender’s discretion.

Sanmina settlement

In December, the Group paid Sanmina $5.7m (a reduction of

$0.3m over what would otherwise have been paid) in full and

final settlement of all legal claims. This brought the total paid

in the year to $7.7m and removes this strategic uncertainty

from the Group. I would once again like to thank Jure Sola,

chair, and Jon Faust, chief financial officer, of Sanmina for

their patience and grace in agreeing this settlement. We are

now working with Sanmina to see how wemight grow our

Component sales to them. This hopefully can deliver a true

“win-win” for both organisations.

Next steps

Following our successful first stage Transformation initiatives

(product simplification, supply chain, inventory, factory

efficiency and labour optimisation, sales transformation,

re-alignment of our Component business and divestment

of Traffic), we have now commenced the next round,

whereour focus is on consolidation and optimisation of

ourmanufacturing footprints to increase profit, capacity and

flexibility. The following three items are key initiatives in order

of importance:

1. transfer of manufacturing from Roxboro, North Carolina

toour factories in Mexico;

2. transfer of the remaining Component assembly from

Ensenada, Mexico to Penang, Malaysia – most of our

OE manufacturing is already done in Penang and was

implemented in the first stage of re-organisation; and

3. hybrid manufacturing (internal manufacture and use of

contract manufacturers) of power supplies and select

commodity moulded parts – the hybrid model will bring

cost saving, labour saving and flexibility to increase

capacity in a quick and cost-effective manner.

We expect to complete these initiatives within 18 months.

These initiatives and plans were agreed and communicated

to the respective teams before the end of March 2026.

The successful completion of project item 1) will result in

the closure of our Roxboro factory which has been provided

for at 31 March 2026 and will result in a cash outflow of

approximately $0.3m.

Outlook

For the current financial year, we continue to expect to deliver

strong and tangible progress benefitting from annualisation

of savings and improvements from the first stage of the

Transformation Plan, and we will implement stage two

as detailed above, which will bring further annualisation

benefits to 2028 and beyond. We also expect to start

growing both Lighting and Component sales which have

astrong flow through to profitability. So, despite the difficult

geopolitical headwinds, we are confident in our focus to

continue to achieve steady sales growth, achieve strong

profit growth and eliminate bank debt in the year, with further

progress thereafter.

Steve Blair

Group Chief Executive Officer

22 June 2026

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Dialight plc Annual Report and Accounts 2026

Our strategic progress

TRANSFORMING DIALIGHT

Three key objectives

Streamlining the Group

The Group has been simplified and has

become more focused on delivering

value for all stakeholders.

Focusing on selling a smaller sub-set of

our most profitable products is starting

to show success with more to follow.

Resetting cost and productivity

We have reduced complexity in our

product range and realigned the flows

through our site network.

We have reset our direct labour

workforce, factory footprint and

reduced our fixed overhead cost base.

We have reduced the overall level of

working capital whilst increasing the

investment in faster moving, more

profitable inventory.

Accelerating growth in lighting

After a difficult few years, the industrial

LED lighting market is expected to

return to growth with higher global

energy prices leading to improved

payback from LED lighting.

Increasing focus on safety and

sustainability, supporting long-term

structural growth.

In September 2023, Dialight announced its Transformation Plan – reconfirming the significant

opportunities in the growing industrial LED market, and the potential for the Group to realise

increased growth and improved profitability.

The first phase of the Transformation Plan concluded in March 2026, having demonstrated the ability to increase profit

materially, and should deliver meaningful growth in the medium term. It is now embedded as business as usual within the

operational management of the business. On the following pages, we set out some of the progress Dialight has made

underthe Transformation Plan.

Rizwan Ahmad – Powering operational transformation

Rizwan began his career with

Dialight in 2001 as a Design

Engineer, and with more than

20 years’ experience working in

multiple disciplines, has developed

extensive knowledge of the

business, its customers, its people,

and its processes. Since taking

on the role of Chief Operating

Officer in 2024, Rizwan has been

central to the Group’s operational

transformation, spearheading

a comprehensive review of the

Group’s end-to-end processes

tostreamline operations, optimise

productivity and reset the

cost base across the Group’s

global footprint.

Leveraging his deep understanding

of the organisation and its

operations, Rizwan has helped to

embed the Group’s “One Dialight”

ethos, driving progress through

collaboration, discipline, and a

shared commitment to continuous

improvement. With the support

of a clear strategic focus from the

Board and Executive leadership,

the transformation has been

delivered through a series of

incremental improvements that

together have driven substantial

and lasting change.

Alongside improved financial

performance, Rizwan’s leadership

and commitment to the Group’s

core values and pillars have

helped foster a culture that

supports employee development

and career progression.

During 2026, 15 employees

across Engineering, Supply Chain,

Customer Service and Operations

were promoted as part of the

Group’s focus on developing

internal talent.

With the first phase of the

transformation programme

now complete, Rizwan’s

attention has turned to the next

stage of growth, focusing on

strengthening the Group’s position

as a market leader through the

development of next-generation

sustainable lighting technologies,

whilstcontinuing to simplify

operations and improve efficiency

and profitability across the

global business.

“ TRANSFORMATION IS RARELY ABOUT

ONE MAJOR CHANGE – LASTING

SUCCESS COMES FROM CONSISTENTLY

IMPROVING THE SMALL THINGS EVERY DAY.”

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Dialight plc Annual Report and Accounts 2026

Key highlights

• Embedding a people-first culture

• Monthly health and safety

reporting and monitoring

• Informative monthly blog and

in-person meetings

(e.g.townhalls, roundtables)

• Teams working together (e.g.

sales, operations and finance)

• Opportunities for upskilling and

individual growth

• Payment of a bonus to all eligible

employees not already

participating in a bonus or

commission scheme

• Employee meetings with

theWENED

Five key pillars

1. Winning hearts and minds

• Re-creation of global EPC team

• Investing in the sales team with

better training and more

regularreviews

• Tollgate order tracking and margin

approval system

2. Sales transformation

Key highlights

• We reviewed the global make-up

of our team, and we now have the

right structure to capitalise on the

opportunities we have identified

• Change in commission plan to

help drive margins

Revenue

$166.9M

• Continuing to innovate and

automate in order to counter

inflationary pressure

• Introduction of several

newproducts

• Quick-win new product

introduction including source

andsell

3. Operations transformation

Key highlights

• End-to-end process mapping for

all initiatives

• Rationalisation and consolidation

of sites being actioned

• Rationalised product portfolio

and reduced SKUs significantly

Reduction in

sub-assembly SKUs

85%

• Right-sized the Group with the

right people in the right roles

• Allowed early repayment of

Sanmina to remove a significant

contingent risk

4. Margin improvement and cash generation

Key highlights

• Significant reduction in net bank

debt from $17.8m to $1.9m in

the year

• Inventory reduction of 36%

Cash generated

by operations

$35.4M

• New product introduction and

product partnership in Signals

&Components

• Re-creation of global EPC team

5. Creating a platform for future growth

Key highlights

• Reinvigorated Salesforce

under new leadership and

new commission scheme

• Strategy & Innovation Committee

with external adviser support

• Strategy development to identify

new products and markets

•

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Dialight plc Annual Report and Accounts 2026

DELIVERING OUR

TRANSFORMATION PLAN

The successful delivery of our Transformation Plan is driven by the

individuals across our business who bring our strategy to life every day.

Through their leadership, commitment and expertise, they have played

an instrumental role in advancing our five key pillars and embedding

our core values throughout the organisation.

This section highlights a selection of colleagues whose contributions

exemplify the behaviours and standards we seek to cultivate –

demonstrating collaboration, accountability and a shared focus on

delivering sustainable outcomes. Their stories showcase not only the

tangible progress we are making, but also the strength of our culture

and the vital role our people play in shaping our future.

•

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Dialight plc Annual Report and Accounts 2026

Simplification of the solid-state

lighting (“SSL”) product range,

including reductions in

sub-assembly and finished goods

SKUs, and the introduction of power

supply automation, has reduced

supply chain complexity, improved

production efficiency, and increased

product profit margins.

Supply chain optimisation has

been strengthened through the

implementation of a global Sales,

Inventory and Operations Planning

(“SIOP”) programme, inventory

reduction initiatives and the

introduction of a structured

stage-gate process, supporting

a transition from reactive to

more disciplined, process-driven

operations. Strategic supplier

management programmes have

further enhanced resilience and

cost control.

In addition, targeted “quick-win”

projects, including core product

upgrades, have delivered incremental

revenue opportunities and

cost savings.

Winnie Lu,

Senior Global Supply Chain

Director, Farmingdale,

New Jersey

Improving supplier programme implementation

using vendor managed inventory and

consignment has enhanced material flexibility

and availability, delivering a significant reduction

in inventory levels globally. Furthermore,

through sub-assembly SKU rationalisation and

the introduction of automation, collaboration

between the supply chain and suppliers has

been strengthened, improving visibility of

raw material pipeline flows and enhancing

production efficiency.

Standardising global supply chain operating

procedures across planning, procurement and

warehousing has helped to align practices

across sites and strengthen operational

discipline. In parallel, the introduction of more

structured planning approaches, including

establishing a kanban system and optimised

safety stock for finished goods and critical

sub-assemblies, has supported a more agile

and responsive order fulfilment environment.

Working collaboratively with product

management, engineering, sales teams and

suppliers has driven initiatives to rationalise

sub-assemblies and inventory, improving

visibility of material flows, stabilising production

of high-volume products and enhancing overall

manufacturing efficiency.

Nydia Zarzosa,

Supply Chain Manager,

Ensenada, Mexico

•

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Dialight plc Annual Report and Accounts 2026

Delivering our Transformation Plan continued

By upgrading and automating

the EAX quote system, we have

significantly improved quote

turnaround times for the OE

business. OE distributors, sales

representatives and sales managers

are now able to review, download

and follow up on all active quotes,

enabling more efficient day-to-

day operations and an improved

customer experience.

Working with our Finance team

to determine margin guidelines

across the OE product lines has

also resulted in strengthening our

quoting procedure and provided

a more efficient method across

the board for OE quotes and

design registrations.

In addition, the rationalisation

of customer price books has

significantly reduced complexity,

streamlined internal processes and

contributed to improved operational

efficiency and ease of doing

business across the Group.

Developing disciplined and efficient

front-end sales processes has

driven better decisions, accelerated

conversion, reduced commercial risk

and maximised profitability.

Enhancing the sales and quote/bid

approval processes in Salesforce

(our customer relationship

management tool) and implementing

margin visibility, we were able to

strengthen the quality of pricing data

available to the Sales team, enabling

them to make more informed and

effective pricing decisions.

The results of these initiatives

exceeded expectations, particularly

in relation to data automation and

cleansing, including pricing list

alignment, SKU rationalisation

and improved order reporting

accuracy. In addition, enhancements

to approval workflows within

Salesforce have strengthened

process efficiency and enabled

more robust profitability analysis.

Everyone involved in the sales

transformation did an amazing

job achieving the target goals,

directly contributing to the

Group’s improved operational

and financial performance.

Christina Emmert,

Customer Service Manager,

Farmingdale, New Jersey

Andy Smith,

Director of Sales SSL,

Field based

•

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Dialight plc Annual Report and Accounts 2026

A disciplined, Group-wide transformation

of Salesforce has strengthened Dialight’s

commercial execution, pricing governance,

andmargin control.

By embedding a structured three-layer sales

transformation approach, our Salesforce

implementation was redesigned to standardise

global sales, pricing, and approval processes,

delivering real-time marginvisibility

at the point of quote and improving

decision-making quality.

These enhancements reduced commercial

risk, improved pricing discipline, and

reinforced a profitability-focused sales culture.

Improved product, inventory, and financial

transparency within Salesforce enabled SKU

rationalisation, better utilisation of existing

stock, faster order fulfilment and stronger

working capital efficiency.

Consistent workflows, approval controls and

executive dashboards increased accountability

and adoption across Sales, Finance, Supply

Chain, Product and Customer Service.

Together, these initiatives strengthened margin

performance, improved cost control and

established a scalable, data-driven foundation

to support long-term growth.

We have transformed our

manufacturing facilities to

create a safer, more efficient

and better-equipped working

environment. Alongside these

improvements, we have optimised

the use of factory space to support

future growth and scalability.

This progress has been made

possible through the strong

commitment, engagement and

collaboration of our employees

across all sites.

As part of this transformation, we

have enhanced manufacturability,

improved operational efficiency

and increased available capacity

within our facilities. We continue

to identify further opportunities for

improvement, driven by the ideas

and contributions of our teams.

This programme represents an

important step in the Group’s

ongoing development and provides

a solid foundation for future growth.

Kavitha Nadimpally and Ahmet Yilmaz,

Salesforce Engineers, Farmingdale, New Jersey

Diener Arellanes,

Plant Manager,

Ensenada, Mexico

•

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Dialight plc Annual Report and Accounts 2026

Key performance indicators

1 The Group uses certain APMs to track and assess the underlying performance of the business. The definitions of the adjustments made and

the reconciliation to the statutory results can be found in Note 28 to the consolidated financial statements.

Group revenue Lighting revenue Lighting underlying

gross profit/gross

margin

Signals &

Components

revenue

$166.9M $122.1M $49.8M 40.8% $44.8M

2025: $183.5m 2025: $138.0m 2025: $54.1m 39.2% 2025: $45.5m

Description

Revenue from sales.

Description

Revenue recognised

forLighting products.

Description

The gross profit related to the

performance of the underlying

Lighting business.

Description

Revenue recognised

for Signals &

Components products.

Definition

Revenue from continuing

operations and

organic growth.

Definition

Total revenue recognised

for Lighting products in

the year.

Definition

Gross profit of the Lighting

business excluding items that

are considered not reflective

of the underlying performance

of the business (see Note 5).

Underlying gross margin is

underlying gross profit divided

by revenue.

Definition

Total revenue recognised

for Signals & Components

products in the year.

Remuneration linkage

Revenue growth is a key

element in achieving

short and long-term

incentive targets.

Remuneration linkage

Sector growth drives

Group revenue, which

in turn drives operating

profit, both of which

form part of the

remuneration targets.

Remuneration linkage

Lighting gross profit and gross

margin expansion is a key part

in achieving increased operating

profit and short and long-term

incentive targets.

Remuneration linkage

Sector growth drives

Group revenue, which

in turn drives operating

profit, both of which

form part of the

remuneration targets.

Target

Year-on-year

revenue growth.

Target

Year-on-year

revenue growth.

Target

We target year-on-year expansion

of Lighting gross profit and

gross margin.

Target

Year-on-year

revenue growth.

Link to strategy

Profitable revenue

growth is essential to

long-term success.

Link to strategy

Lighting sector growth

is a lead indicator of the

financial strength of our

end markets.

Link to strategy

One of the key near-term strategic

goals is to build a robust and

scalable operational platform.

Lighting gross profit/gross margin

is a good indicator of the success

of this target.

Link to strategy

Signals & Components

sector growth is a

lead indicator of the

financial strength of our

end markets.

•

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Dialight plc Annual Report and Accounts 2026

1 The Group uses certain APMs to track and assess the underlying performance of the business. The definitions of the adjustments made and

the reconciliation to the statutory results can be found in Note 28 to the consolidated financial statements.

Signals & Components

underlying gross profit/

gross margin

Underlying

operating profit

Underlying

operating

cash flow

Net bank debt

$15.3M 34.2% $10.3M $34.2M $1.9M

2025: $11.2m 24.6% 2025: $4.2m 2025: $19.7m 2025: $17.8m

Description

The gross profit related to the

performance of the underlying

Signals & Components business.

Description

The underlying operating

profit related to the

performance of the

underlying business.

Description

The ability to turn

profitsinto cash.

Description

To manage the Group’s

borrowings within the

available facilities.

Definition

Gross profit of the Signals &

Components business excluding

items that are considered not

reflective of the underlying

performance of the business (see

Note 5). Underlying gross margin

is underlying gross profit divided

by revenue.

Definition

Operating profit of the

business excluding items

that are considered as not

reflective of the underlying

performance of the

business (see Note 5).

Definition

Cash generated by

operations excluding

the cash impact of

non-underlying items

but inclusive of lease

payments (including

interest paid).

Definition

Total Group borrowings

(excluding lease

liabilities) less cash

andcash equivalents.

Remuneration linkage

Signals & Components gross

profit and gross margin

expansion is a key part in

achieving increased operating

profit and short and long-term

incentive targets.

Remuneration

linkage

Underlying operating

profit is one of themain

measures used in

short and long-term

incentive targets.

Remuneration linkage

Underlying operating cash

flow does not directly

link to remuneration but

impacts net bank debt,

which is directly linked.

Remuneration

linkage

Net bank debt is directly

linked to remuneration

to ensure the business

maintains adequate

headroom against its

bank facilities.

Target

We target year-on-year

expansion of Signals &

Components gross profit and

gross margin.

Target

For 2026, the target was

consensus underlying

operating profit at the

start of the year, which

was $5.6m.

Target

Accelerate the settlement

of the Sanmina liability

whilst still reducing net

bank debt.

Target

Accelerate the settlement

of the Sanmina liability

whilst still reducing net

bank debt.

Link to strategy

One of the key near-term

strategic goals is to build a

robust and scalable operational

platform. Signals & Components

gross profit/gross margin is a

good indicator of the success

ofthis target.

Link to strategy

The key measure of

the success of our

near-term strategic goals

is growth in underlying

operating profit.

Link to strategy

Underlying operating cash

flow is critical to support

our growth ambitions.

Link to strategy

Net bank debt is a critical

measure to ensure the

business has sufficient

liquidity to support

growth ambitions.

•

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Dialight plc Annual Report and Accounts 2026

Matandy Steel, a steel service centre located in Hamilton,

Ohio, specialises in flat rolled steel products in coils, sheets,

and blanks for a wide range of customers, including heating,

ventilation and air conditioning (“HVAC”) manufacturers and

original equipment manufacturers (“OEMs”). With a focus

on service and responsiveness, Matandy Steel’s success

depends on maintaining a safe, clean, and efficient production

environment. However, upgrading the facility’s older metal

halide lighting offered an opportunity to enhance visibility and

support an even safer, more productive work environment,

while also reducing maintenance needs.

Lighting challenges before Dialight

Matandy Steel had been using 1,000-watt and 400-watt metal

halide fixtures throughout the facility. Failures were frequent.

Maintenance crews were replacing lamps and ballasts several

times each week. This made lighting maintenance a constant

distraction from higher-value work such as equipment upkeep

and operational support.

The quality of light had also deteriorated. Enhancing visibility

and colour quality would allow operators to view materials

with greater clarity and help maintain consistently efficient

workflows. Maintenance costs, downtime and energy

consumption were all increasing.

THE RIGHT

SOLUTION

Lighting upgrade delivers

safer, brighter workspaces and

near-elimination of maintenance

at Steel Service Centre

Business: Matandy Steel

Location: Hamilton, Ohio, US

Matandy Steel’s leadership, with experience in electrical

operations and energy management, saw a clear opportunity

for improvement.

Choosing Dialight through a proven evaluation process

Matandy Steel conducted a structured evaluation using

sample fixtures from multiple manufacturers. Dialight’s fixtures

delivered the visibility improvements the team was looking

for. The light on the work surface was clear, bright and evenly

distributed, and glare was significantly reduced.

The team also valued the detailed testing documentation

provided with the Dialight fixtures. Every question regarding

performance and safety was supported with technical data.

That transparency helped their leadership feel confident in

the long-term reliability of the solution.

This combination of clarity, documentation and support

positioned Dialight as the preferred choice for the facility.

Results: Significant improvements across operations

andimmediate improvement in visibility

Operators noted a major difference in clarity and

brightness after the new fixtures were installed. The colour

and light distribution helped employees better perform

inspections, maintain accuracy and feel more confident

attheir workstations.

Maintenance nearly eliminated

Dialight fixtures eliminated the need for lamps and ballasts,

dramatically reducing maintenance compared to the facility’s

previous metal halide lighting system.

Stronger operational efficiency

With clearer light and virtually no fixture failures, the facility

runs more efficiently. Maintenance teams can stay focused

on equipment reliability. Operators can see their work more

clearly. Work areas stay orderly and easier to manage.

Energy savings and sustainability

The upgrade delivered measurable long-term value:

• 352,294 kilowatt hours saved each year;

• $31,706 annual electricity savings (based on 2018 rates);

• a total project payback of 4.3 years including fixtures,

installation and disposal;

• a 30% reduction in electrical load; and

• lower environmental impact with no lamps, ballasts

orhazardous waste.

This reduction in electrical demand also supports longer

lifefor switchgear, transformers, and electrical circuits.

Installation snapshot:

• Steel processing and service centre in Hamilton, Ohio.

• Upgraded from metal halide fixtures to approximately

175Dialight LED fixtures.

• 352,294 kilowatt hours saved annually.

• $31,706 annual energy savings.

• 4.3–year project payback.

• Dramatic reduction in lighting maintenance.

• 30% reduction in electrical load.

• Strong improvement in visibility and operator safety.

•

Strategic Report • Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Sustainability

ENVIRONMENTAL

This section deals with the environmental

matters in relation to environmental, social

and governance(“ESG”).

Responsibility

We are a sustainability business not just in our

own operations but by providing the products

that enable our customers to make their

businesses sustainable and achieve net zero.

Today, the emissions avoided by customers

switching to our highly efficient LED lighting

(compared to inefficient legacy lighting), more

than outweigh the emissions from production

and use of our lighting. The more lights that we

sell, the greater the overall benefit is to society

through avoided emissions.

Environmental reporting

Over the past few years we have invested time in

understanding our existing carbon footprint and looking

atreduction plans. We used 2020 as our baseline year and

performed our first full greenhouse gas (“GHG”) inventory

(excluding the emissions from customer usage). Our figures

for the year ending 31 March 2026 have been externally

verified to a limited level of assurance in accordance with

ISAE 3000.

Streamlined Energy and Carbon Reporting (“SECR”)

To comply with the UK Government’s SECR requirements,

the Group presents its energy performance in emissions

disclosures and intensity ratios table on pages 19 and 20.

The basis of the emission calculations varies depending on

the emission type. Scope 1 and 2 emissions relate primarily

to electricity and gas usage and the quantities used were

mainly extracted from utility bills with a relevant emission

factor by geography applied to derive the emissions.

Scope 3 emissions usage by customers relates to the impact

of electricity usage at customer sites whilst using the product

over the current reporting year. This is a highly subjective

calculation as we do not have access to the electricity usage

of our customer base. The calculated impact is derived

from internal calculations, and due to its subjectivity, it is

not possible to get assurance over this number. In order

toestimate the impact we have to make assumptions about

key variables:

• the number of hours that lights are in use during the year.

Dialight sells to industrial customers across a broad range

of markets. Some customers have facilities that are run

“24/7” (i.e. 24 hours per day, seven days per week) such as

oil and gas refining; others such as power generation may

run “18/7”, and food and beverage could run “12/6”.

As a result of this, we have taken a simple average of the

outcomes based on 24/7 and 12/6 usage as an

approximation;

• the use of control systems by customers. Control systems

reduce the number of hours that lights are in use which

inturn reduces electricity usage;

• the use of green energy by customers. As green energy

becomes more available, customers will be able to utilise

this to reduce their emissions impact and we have no way

to track the emissions reduction impact; and

• emission factors vary by country and can vary significantly

by state within countries. We would need to monitor sales

on a very granular basis to track this usage and apply the

correct emissions factor.

Environmental impact

The largest environmental impact comes from the emissions

avoided by our customers, so the more efficient we can make

our lights; the greater the benefit will be to society.

The next largest element relates to the size of the lighting

fixtures and the types of materials used. The smaller the

fixture, the lower the materials emissions.

The impact of inbound and outbound logistics is

largely outside of our control until a broader portfolio of

decarbonised freight transport becomes widely available.

While we seek to localise the supply chain and regularly

review our operating locations, this can introduce risks to

manufacturing continuity, and consequently, may affect the

overall level of avoided emissions.

Our internal operations are not very resource intensive and,

therefore, the benefits from reductions will be quite small.

•

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Dialight plc Annual Report and Accounts 2026

Sustainability continued

Emissions avoided by customers

One of the major advantages of LED lighting is that it is up

to 80% more efficient than traditional lighting and, therefore,

generates significant electricity savings and reductions

in emissions. These avoided emissions are known as

Scope4 emissions.

The calculation is very subjective, is internally generated and

has not been verified. The basis used is to compare with

themajor product categories sold with the most common

non-LED products that they replace.

By doing this, we can calculate the electricity usage with LED

and without LED and the wattage saving by product. We then

apply the same assumptions as Scope 3. As the assumptions

used for both the usage with LED and without LED are the

same, some of the subjectivity is mitigated and the emissions

avoided is based on the efficiency of LED and the total light

output of units sold.

In order to provide a better understanding of the

environmental impact of the business, we include Scopes

1 to 3 and a calculation of avoided emissions (Scope 4)

inour reporting.

Targets

The Group’s targets for the year ended 31 March 2026 were

to reduce Scope 1 and 2 (combined) by 3% per annum

(per$m of revenue). The Group’s other target was to reduce

water consumption by 5% per $m of revenue. As per the

table below, the Group achieved both targets in the year

ended 31 March 2026.

Intensity ratios

The Group’s actual intensity ratios for the year ended

31 March 2026 showed improvements over 2025 for

emissions from the combustion of fuel (Scope 1),

forelectricity and for water usage. The Group’s targets

for2026 are set out above.

Consumption per $m of revenue 2026 2025 Variance

Revenue 166.9 183.5 (9)%

Scope 1 Tonnes per $m of revenue 4.6 5.5 +16%

Scope 2 Tonnes per $m of revenue 18.8 18.7 (1)%

Scope 1 and 2 combined Tonnes per $m of revenue 23.4 24.2 +3%

Electricity MWh per $m of revenue 49.1 49.6 +1%

Water Kilolitre per $m revenue 65.3 78.4 +17%

Consumption

2026

Millions

2025

Millions

Variance

Millions

Electricity kWh 8.2 9.1 0.9

Water Litres 10.9 14.4 3.5

1 Scope 1 combustion engine emissions were calculated based on distance-based emission factors.

2 Scope 3 emissions from customer usage were calculated as usage over the current reporting period.

2026 2025 Variance

Scope 1

Emissions from combustion of fuel Tonnes 774 1,002 23%

Scope 2 Emissions from location-based purchased electricity Tonnes 3,139 3,435 9%

Total Scope 1 and Scope 2 emissions Tonnes 3,913 4,437 12%

Scope 3

Emissions from customer usage Tonnes 92,167 103,227 11%

Total emissions using GHG protocol Tonnes 96,080 107,664 11%

Emissions if customers did not convert to LED Tonnes 279,004 302,444 8%

Scope 4 Emissions avoided by customers Tonnes (186,837) (199,216) 6%

Net emissions impact Tonnes (182,924) (194,780) 6%

•

Strategic Report • Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

SOCIAL

Our people

As a business at the forefront of industrial LED

technology, our people are fundamental to our

success. We are committed to fostering a safe,

inclusive and collaborative working environment

in which individuals are supported to develop,

contribute and thrive.

Winning hearts and minds is one of the key pillars

of our Transformation Plan (see page 11).

Engaged, motivated and appropriately skilled

employees are critical to the successful delivery

of our strategy and long-term growth ambitions.

Therefore we continue to focus on building a

high-performing, inclusive culture that empowers

our people, supports innovation and strengthens

the Group’s ability to deliver sustainable growth.

A safe working environment

We are committed to safeguarding the health, safety and

wellbeing of all our employees and recognise our responsibility

to maintain a safe working environment across the Group.

Our objective is to achieve zero recordable incidents across

all sites, reflecting our commitment to operating as a

responsible business. As a manufacturer of lighting solutions

used in heavy industrial and hazardous environments,

ourfocus on safety extends beyond our own workforce to

supporting the safety of our customers and end users.

All new employees receive site-specific safety briefings

in their local language before commencing work.

Safety awareness is reinforced through ongoing

communications, including bulletin boards and visual

media displayed in communal areas. Appropriate personal

protective equipment is provided across all operational sites,

supporting a culture in which safety remains a core priority.

All near misses are investigated and reported to leadership

teams to identify root causes and implement corrective

actions aimed at preventing recurrence and promoting

continuous improvement.

During the year ended 31 March 2026, the Group recorded

two reportable safety incidents (2025: two) and 218 near

misses (2025: 199). All incidents were fully investigated,

withappropriate corrective and preventative actions

implemented to reduce the risk of recurrence.

SPOTLIGHT ON SAFETY INITIATIVES

INPENANG

Wheel chocks for truck loading

andunloading

• To reduce the risk of vehicle movement during loading

and unloading operations, wheel chocks were

introduced at all loading bays. This control measure

helps prevent trucks from unintentionally rolling

forward or backward in the event that parking brakes

are not fully engaged.

• All trucks are now required to be secured with wheel

chocks upon arrival at the loading bay. Wheel chocks

may only be removed by security personnel once all

required documentation has been completed, signed

and stamped by the driver.

• Drivers are required to comply with these procedures

as a condition of site access. Any non-compliance

is escalated to the relevant transport company and

repeat or serious breaches may result in suspension

of site access privileges.

Traffic cones and barrier separation

atmain entrance gate

• To improve traffic management and enhance safety

atthe site entrance, cones and barriers were installed

to clearly define separate entry and exit routes.

• Previously, vehicles and pedestrians shared

an undefined flow through the main gate area,

increasingthe risk of congestion and potential

accidents. The introduction of clearly marked lanes

now provides a structured traffic flow, reducing

confusion and improving safety for all site users.

•

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Dialight plc Annual Report and Accounts 2026

Sustainability continued

The Group maintains a strong focus on workplace safety

and continuous improvement. All incidents are reviewed

to identify root causes and reinforce training, operational

controls and safe working practices across sites.

Mandatory safety requirements are in place across all

operational facilities, including the use of safety footwear,

eyeprotection on production floors and high-visibility clothing

in areas where moving vehicles operate. These are supported

by a range of site-based safety initiatives, including fire

safety training, first aid training, working at height training,

safeforklift operation training and regular evacuation drills.

Engaging with our people

As a global business operating across multiple time zones,

we place strong emphasis on clear, consistent and accessible

communication with our employees. We use a combination

of formal and informal channels to keep colleagues informed

and engaged, including regular updates from the Group Chief

Executive Officer, all-employee and team briefings, employee

forums and digital communications. At our manufacturing

sites, these are supplemented by local-language notice

boards and digital displays to ensure key messages are

effectively communicated across all locations.

Employee engagement is further supported through a range

of Group-wide initiatives, including engagement surveys,

performance and development reviews, training programmes,

recognition schemes and wellbeing initiatives, all underpinned

by our global intranet and broader internal communications.

At Board level, workforce engagement is maintained

through WENED-led interactions with employees, site visits

and confidential whistleblowing channels operated by an

independent third party.

More details about how the Group and the Board engage

with employees can be found in the Corporate Governance

Report on pages 57 and 58.

Training and development

As a business that relies heavily on research and development,

we recognise that continuous development is central to

improving the quality and capability of our organisation.

Our colleagues undertake a wide range of complex

processes and procedures, and we continue to focus

on maintaining high levels of operational competence

across the Group. Employees are encouraged to pursue

ongoing professional development to ensure their skills

and knowledge remain current, alongside a continued

emphasis on strengthening management and leadership

capability, including through coaching and other targeted

development initiatives.

In addition, our third-party HR learning management system

enables the targeted deployment of internal training modules

across the organisation. Regular IT security training and

simulated phishing exercises are undertaken to enhance cyber

awareness and strengthen cyber resilience across the Group.

This year, the Group also delivered comprehensive

compliance training in multiple languages covering areas

such as anti-corruption and bribery, conflicts of interest,

sanctions and embargoes, fraud prevention, modern slavery

and whistleblowing. This programme has been completed by

all employees, including members of the Board, reinforcing

our commitment to conducting business responsibly and

maintaining the highest standards of conduct.

Diversity

The Group is committed to fostering an inclusive and diverse

culture across the Group, reflecting the communities in

which it operates and ensuring an environment in which

all employees are able to develop and succeed in their

roles. The Group recognises that a breadth of expertise,

backgrounds and experiences enhances organisational

capability and supports stronger decision making.

The Group’s workforce spans four continents and

encompasses a wide range of roles, from manufacturing

and operational teams to highly-skilled engineering and

commercial functions. The composition of local labour varies

by geography; for example, operations in Mexico are staffed

entirely by local employees, while operations in Malaysia are

predominantly locally staffed and supplemented by a small

number of directly employed migrant workers on permanent

contracts, who are treated equally in all respects. In North

America, employees are drawn from diverse backgrounds

across the US, Canada and Mexico, reflecting the Group’s

broad regional presence.

As a people-dependent business, the Group relies on the

capability, commitment and diversity of its workforce to drive

innovation, deliver efficient and high-quality manufacturing,

and support successful commercial outcomes.

Employee engagement remains a key priority, providing

valuable insight into employee perspectives and supporting

the development of an inclusive, diverse, high-performing

andvalues-led culture.

Further details on how the Group and the Board engage with

employees are set out in the Corporate Governance report on

pages 57 and 58.

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Dialight plc Annual Report and Accounts 2026

Employee wellbeing

The Group is committed to supporting the wellbeing of its

employees, with a range of initiatives in place to promote

both physical and mental wellbeing and encourage healthy

lifestyles across all locations.

During the year, these included vaccination campaigns,

health awareness and screening initiatives, and targeted

programmes focused on key health topics such as cancer

awareness and sexual health, alongside structured health and

nutrition challenges designed to encourage healthier habits.

The Group also delivered health and wellbeing activities such

as workplace wellness days, healthy eating demonstrations

and broader wellbeing programmes supported by

external healthcare providers, complemented by regular

communications through wellness newsletters.

Employees have access to a range of support services,

including, in some locations, digital GP access and employee

assistance programmes, which provide confidential advice,

information and counselling support. In addition, anonymous

feedback channels have been introduced following

employee engagement forums, enabling colleagues to raise

wellbeing-related matters. Across the Group, support is

also provided through participation in nationally recognised

health awareness campaigns and seasonal workplace

events, as well as enhanced employee welfare measures

at manufacturing sites, including improved food provisions,

transportation to and from sites and on-site medical support.

These initiatives reflect the Group’s ongoing commitment

to fostering a safe, supportive and inclusive working

environment and promoting employee wellbeing across its

global operations.

Community engagement

We recognise that each of the Group’s operations has

an important role to play within its local community.

Particularly in challenging times, our responsibility extends

beyond supporting our own employees to making a

meaningful contribution to the communities in which we

operate. Across the Group, our global teams actively

participate in corporate volunteering, community initiatives

and charitable programmes that reflect this commitment.

In 2026, our employees in Farmingdale, New Jersey

volunteered at Fulfill Food Bank, a local food pantry

dedicated to supporting individuals and families across the

region. We value this longstanding partnership and take pride

in our continued volunteering efforts, contributing to Fulfill’s

work in providing meals, nutrition education and sustainable

support for the community. During October 2025, employees

in Farmingdale also supported Breast Cancer Awareness

Month, helping to raise awareness and encourage early

detection within the local community.

In Mexico, our “Open Doors to Production” initiative promotes

vocational and technical education, helping to guide young

people towards future career opportunities. By investing time

in local students, we strengthen community connections,

while supporting the development of the next generation

ofskilled professionals.

Our employees in Mexico also participated in a beach

clean-up initiative to help protect local biodiversity and

maintain safe, welcoming public spaces for both residents

and visitors, while fostering a culture of environmental

responsibility. In addition, employees supported a cervical

cancer prevention campaign, helping to raise awareness of

early screening and preventative care. In December 2025,

employees organised a winter clothing and blanket donation

drive to support vulnerable members of the community.

By responding to essential needs, these efforts reinforce

community solidarity and reflect our broader commitment

toresponsible and inclusive engagement.

People in the supply chain

Our moral obligations to people extend back through the

supply chain to ensure sustainable production.

Supply chain and human rights

The Group is committed to conducting its business in

an ethical and responsible manner at all times, and in full

compliance with all applicable laws and regulations.

All employees and all third parties who act on the Group’s

behalf are required to comply with our standards of behaviour

and business conduct, as set out within the Code of Business

Conduct, and applicable laws and regulations in all of the

countries in which we operate.

We have an up-to-date Modern Slavery Statement on the

Group’s website and are fully compliant with the legislation

inthis area.

We expect our employees and suppliers:

• to behave with honesty and integrity at all times and

tocomply with our zero-tolerance policy on bribery

andcorruption;

• to ensure they do not engage with suppliers in countries

that are subject to sanctions or embargoes;

• to ensure that they only engage with suppliers that adhere

to anti-slavery and human trafficking legislation;

• to ensure that all staff have a safe and secure working

environment that is free from discrimination; and

• to ensure all staff are paid a fair wage and do not have

towork beyond the legal requirements.

•

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Dialight plc Annual Report and Accounts 2026

GOVERNANCE

Introduction

This section deals with governance in relation

toESG. The main corporate governance section

is located on pages 41 to 101. We adhere to strict

governance practices and our structure puts a

priority on ethical behaviour, transparency, and

accountability. The Board is committed to

developing and monitoring progress against the

Group’s ESG strategy and performance, with

primary oversight in Board meetings where ESG

is a standing agenda item.

Our approach

We are committed to promoting a culture within Dialight

where everyone does the right thing and takes personal

responsibility for their actions. Our Operational Framework

and Code of Business Conduct set out the standards of

business conduct and behaviours we expect of all of our

businesses, our employees and all third parties who act

onour behalf.

Operational Framework

Our Operational Framework incorporates a broad range

of policies and procedures. The Operational Framework

implements a robust governance and compliance

framework to enable us to operate in a safe, consistent

andaccountable way.

• Every employee, at every level of the organisation, has

access to, and understands, the requirements of the

Operational Framework.

• Appropriate training and monitoring processes are in

placeto ensure proper implementation of the

OperationalFramework.

• Local procedures and processes are adopted to implement

the requirements of the Operational Framework.

Ethics and business conduct

At Dialight, we are committed to doing business the right

way. This means acting professionally, morally, ethically

and lawfully in our dealings with all of our colleagues,

business partners, customers, suppliers and shareholders.

Our Code of Business Conduct explains what we really mean

by this. It provides guidance and sets out key company

principles that apply toeveryone at Dialight. We also expect

our business partners to uphold the same commitment

and principles.

Terms and conditions

Our template managed services/goods agreement sets

outthe requirements of our suppliers to align with our Group

policies, including compliance with:

• anti-slavery and human trafficking legislation

(includingtheUK Modern Slavery Act 2015);

• anti-corruption and bribery legislation;

• sanctions and embargoes regulation as per the Office of

Foreign Assets Control (“OFAC”) (USGovernment) and the

Government of the UK; and

• anti-trust and competition law.

Human rights

The Group is committed to respecting human rights in the

countries in which we do business. Our Code of Business

Conduct and other applicable policies under the Operational

Framework support our commitment to ensuring, as far as

we are able, that there is no slavery or human trafficking

in any part of our business or in our supply chain. We see

compliance with local legislation as a minimum requirement

and strive to operate at a higher level.

Anti-corruption and bribery

Dialight has a zero-tolerance policy in respect of corruption

and bribery. This extends to all business dealings and

transactions and includes a prohibition on offering or

receiving inappropriate gifts or making undue payments to

influence the outcome of business dealings. Compliance with

the policy is checked as part of the half-year and year-end

process. All employees have been trained on anti-corruption

andbribery policies.

At a corporate level, the Group does not make political

donations and does not make payments to lobbyists.

Sustainability continued

•

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Dialight plc Annual Report and Accounts 2026

Information security

The level of information security is proportionate to the nature

of the information and systems, and to the potential risk

and impact of any breach, disclosure or loss for individuals,

customers and the Group.

Access to information is therefore strictly limited to authorised

personnel, with robust controls in place to secure computers

and mobile devices, including those used by a mobile or

remote workforce. We recognise that working outside traditional

office environments introduces additional risks, including the

handling of physical documents, and expect employees to

apply consistent standards at all times, irrespective of location,

to ensure the ongoing protection of customer data.

To support this, the Group has invested $0.5m in upgrading

its IT infrastructure, hardware and software, including the

implementation of enhanced firewall protection, resilience

and backup capabilities. A newly created Chief Information

Security Officer role has been established to drive IT and data

efficiency initiatives, alongside strengthened governance.

In addition comprehensive and increasingly frequent

employee training programmes have been introduced,

withstandardised information security training provided to

all employees with email access, reinforcing awareness and

accountability across the Group.

Non-financial and sustainability information statement

Produced in compliance with sections 414CA and 414CB of the Companies Act 2006. Information is incorporated by

cross reference.

Requirement Relevant policies and standards Additional information Page

Environmental matters Sustainability Data and Reporting

PolicyQuality and EHS Policy

Business Partner Policy

Sustainability 19 to 25

Climate-related risks and

opportunities

Non-financial and

sustainability report

Non-financial and

sustainabilityreport

26 to 28

Employees Code of Business Conduct

Health and Safety Policy

Whistleblower Policy

Health, safety and wellbeing

Ethics and compliance

Stakeholder value: employees

19 to 25

and 58

Social and

community matters

Sustainability Data and

Reporting Policy

Community Engagement Policy

Code of Business Conduct

Social value reporting

Ethics and compliance

Stakeholder value: communities

19 to 25

and 61

Human rights Code of Business Conduct

Modern Slavery Policy

Business Partner Policy

Ethics and compliance 24 and 25

Anti-corruption and bribery

matters and sanctions

Code of Business Conduct

Anti-Corruption and Bribery Policy

Sanctions and Export Policy

Business Partner Policy

Ethics and compliance 24 and 25

Whistleblowing

We have a Whistleblowing

Policy and procedures in place

which enable all employees to

raise concerns, in confidence,

about possible improprieties

or wrongdoing within the

business. No substantive

concerns were raised on the

official whistleblowing hotline

during the year.

Third-party agency

We use an arm’s-length third-

party agency who provide

a24-hour whistleblowing

reporting service, which can be internationally accessed by

telephone, the number and details of this service are visible

at all Dialight locations globally. Whistleblowers can remain

anonymous and all reported issues are investigated and

reported to the Audit Committee.

Due to our workforce diversity, posters are displayed at

operational sites in local languages and the third party

usesmulti-lingual staff.

•

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Dialight plc Annual Report and Accounts 2026

Non-financial and sustainability information statement

As a sustainability solution provider to our

customers, our business is primarily focused on

the opportunity that arises from the transition of

the industrial market away from traditional lighting

and towards LED as an alternative.

Statement of compliance

We report in line with the FCA Listing Rule UKLR 6.6.6R(8),

which requires us to report on a “comply or explain” basis

against the Task Force on Climate-Related Financial

Disclosures (“TCFD”) Recommendations and Recommended

Disclosures in respect of the year ended 31 March 2026.

We have not yet fully complied with the FCA listing rule UKLR

6.6.6R(8) but we have considered relevant and material

elements of the recommended TCFD disclosures, and are

aligned with the Companies Act 2006 section 414CB (2A),

as amended by the Regulations 2022. This statement uses

the four thematic areas and 11 recommended disclosures,

as set out in the Implementing the Recommendations of the

TCFD. We consider our climate-related financial disclosures

to be consistent with 10 of the 11 recommended disclosures.

The one recommended disclosure the Group is not currently

compliant with relates to metrics and targets. We continue

to work to establish relevant longer-term net zero ambition

metrics and targets, and we expect to continue to finalise our

net zero plan in future annual reports and thereby enhancing

our reporting and further integrate climate disclosures.

Governance

The Board of Directors oversees sustainability-related

matters, including climate-related risks and opportunities,

as part of the Group’s overall strategy and risk

management framework.

Responsibility for specific areas is allocated across the

existing governance structure. The Audit Committee oversees

climate-related reporting, risk management and internal

controls, while workforce, culture and people-related

matters are considered by the Nominations and

Remuneration Committees.

The Board monitors and oversees the Group’s GHG

emissions (actual and avoided) and any related targets,

see page 20 for further details, and is responsible for

approving the content of the Group’s climate-related

financial disclosures.

Day-to-day management and coordination of sustainability

matters are undertaken by the Executive Committee, with

relevant updates and developments reported to the Board

and its Committees as appropriate.

Strategy

In preparing the consolidated financial statements,

theDirectors have considered the potential impact of climate

change, particularly in the context of the principal risks

identified by the Group. No material impact on the financial

reporting judgements and estimates has been identified.

The Group Chief Executive Officer maintains oversight of

climate-related matters affecting the Group’s strategy and

is supported by the relevant global teams monitoring and

responding todevelopments in this area.

In particular, the Directors have considered the impact

ofclimate change in respect of the following areas:

• impairment reviews and useful economic lives of

assets;and

• going concern, viability statements, and budgets

and forecasts

Based on the assessment outlined in this report, no material

climate change-related risks or impacts have been identified.

The Directors nevertheless recognise the evolving nature

of climate-related risks and will continue to assess their

potential impact on the judgements and estimates applied

in the preparation of the Group’s financial statements on an

ongoing basis.

With customers operating across a wide range of industries

globally, the continued adoption of LED lighting remains one

of the most energy-efficient ways to reduce carbon emissions

and support progress towards net zero targets. As a result,

the Group’s products contribute positively to climate-related

objectives, supporting the resilience and continued relevance

of the business across a range of climate-related scenarios.

As part of our annual viability assessment, we undertake

scenario risk modelling focusing on stress testing the

statement of profit or loss and cash flow projections to

determine the resulting impact on the Group’s banking

covenants and liquidity headroom, to ascertain the potential

revenue or underlying operating profit impacts that could

arise from one, or a combination, of the Group’s principal

risks. As part of this review, we have taken into account

scenario analysis for a 2°C warming scenario. This includes,

predominantly, physical risks such as flooding, fire and heat

stress as well as physical risk exposure regarding the Group’s

locations (manufacturing and office) as well the major/critical

Group suppliers.

Risk management

The Group considers climate-related risks and opportunities

in all physical and transition risk categories, current and

emerging, whether they occur within our own operations,

upstream and downstream of the Group and whether they

occur within the short (one to three years), medium (three to

ten years) orlong-term (over ten years) time horizons.

Risks and opportunities relevant to the Group are identified

and refined through consultation with the Risk Committee

and senior management. The Risk Committee evaluates

climate-related risks on the Group’s four-point risk

management scale for likelihood (remote to likely) and impact

(low to high).

A substantial financial risk is one that would have an

underlying operating profit impact of more than 25% in any

one year. A strategic risk is one that would have a similar

impact per annum over at least three years and could

severely impact the ongoing business.

The risks identified relating to climate-related disclosures

aresubsets of the Group risks (see pages 31 to 33).

•

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Dialight plc Annual Report and Accounts 2026

Metrics and targets

The Group reports on GHG emissions, Scope 1 (direct

emissions), Scope 2 (indirect emissions), Scope 3 (emissions

from customer usage), Scope 4 (emissions avoided by

customers), carbon intensity and water usage. Scope 3

emissions from suppliers have been excluded. Emissions are

calculated using the GHG Protocol. Scope 1, Scope 2 and

water usage are verified through third-party audits.

We continue to work to establish relevant longer-term net

zero ambition metrics and targets.

Our specific emissions reporting and targets are both

onpage 20.

Reporting and data

The Group has established processes to support the

preparation of non-financial disclosures, including

defined timelines and internal review procedures.

Emissions disclosures are subject to limited independent

assurance, providing an additional level of confidence

overthe reliability of reported information on page 20.

The Group continues to develop its approach to

data governance, methodologies, and controls over

sustainability information.

Climate-related opportunities

Regulatory pressure to reduce emissions

andbanolderlighting technologies

Medium–Long term

Link to strategy

The business strategy is growth from

replacing older inefficient lighting

technology with high-performance

LED lighting so changes in the

regulatory environment are consistent

withthebusiness strategy.

Description

There is increasing regulatory pressure at a

national and international level to ban older

lighting technology. These often use hazardous

materials in their manufacture and generate

up to 60% more carbon emissions than LED

lighting. In addition, customers who have set

their own net zero targets need to find carbon

reduction initiatives and conversion to LED is

one of the quickest ways to have a substantial

impact on a company’s carbon footprint.

Financial impact

We have not quantified the

financial impact at this stage.

Customer expectations on sustainability

performance within industrial lighting

Medium–Long term

Link to strategy

To achieve commercial growth

inEurope, the Group engaged

Thrive Consulting Services Limited

to determine customer expectations

on sustainability performance to

safeguard existing business and

capturenew opportunities.

Description

There is a growing legal and commercial

pressure on organisations to effectively

manage, monitor, and report ESG metrics.

ESG performance is increasingly linked

to product efficiency, reliability, lifecycle

management, and safety, while also playing

a key role in customer decision making by

influencing perceptions of supplier risk,

capability, and credibility. Although customers

may not be purchasing ESG outcomes

directly, they are placing greater value on the

operational efficiencies, cost savings, improved

performance, and risk reduction that strong

ESG practices can deliver.

Financial impact

We have not quantified the

financial impact at this stage.

•

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Dialight plc Annual Report and Accounts 2026

Energy usage optimisation

Short term

Link to strategy

Reduce cost base in parallel with an

environmentally friendly solution to

energy optimisation. This is consistent

with that aim.

Description

Reverse osmosis water treatment installed in

the Tijuana plant, this has reduced the need to

buy clean water for the paint system. The water

not used for the paint cleaning process is stored

and then used in the bathroom and mopping,

reducing supplier cost and water usage.

Financial impact

Reduced cost by approximately

$35,000 per year.

Packaging improvement

Short–Medium term

Link to strategy

One of the growth enablers is toreduce

the transportation cost per fixture.

This is consistent withthat aim.

Description

Packaging improvement of fixtures and

brackets of some products. Packaging the

items unattached, increased improvement for

customer installation. This has resulted in an

increased amount of pieces fitting on pallets

fortransportation and has led to reduced

package cost. Downstream transportation

costreduction and emissions.

Financial impact

Reduced package cost by

approximately 39% and

overall, potential savings per

year of approximately $33,000

for the area light. This in

turn leads to a downturn in

transport-related emissions.

Consolidated shipping programme

Short–Medium term

Link to strategy

One of the growth enablers is to

reducethe transportation cost.

This isconsistent with that aim.

Description

The Group launched a programme with a major

casting supplier to minimise air shipment and

optimise ocean consolidation, of a full container

load shipment. Further improvement to this

with the containers arriving in Ensenada port

instead of the Port of Los Angeles, reducing

the transportation from the Port of Los Angeles

toMexico. Downstream transportation

reducedcosts and emissions.

Financial impact

Reduced air and ocean shipping

cost, potential savings per

year of approximately $9,000.

This in turn leads to a downturn

intransport-related emissions.

Non-financial and sustainability information statement continued

Climate-related opportunities continued

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Dialight plc Annual Report and Accounts 2026

Risk management

Strategic risk approach and risk culture

The Group’s approach to effective risk management involves

our people, at all levels in the organisation, being empowered

to manage risks and take advantage of opportunities as

an integral part of their day-to-day activities – creating an

entrepreneurial organisation with a high level of risk-literacy.

Our risk awareness culture allows management to make

better commercial decisions and helps to maximise the

benefits of our business model.

Risk management principles

The effective understanding, acceptance and management

of risk is fundamental to the long-term success of the

Group. The Group has developed specialist knowledge in

products, services, processes and regions, which allows

us to understand the associated risks and accept them in

an informed way. Our approach is encapsulated in the key

principles of our risk management process:

• to understand the nature and extent of risks facing

the Group;

• to accept and manage within the business those risks that

our employees have the skills and expertise to understand

and leverage;

• to assess, transfer, or avoid, those risks which are beyond

our appetite for risk; and

• by consideration of materiality, establish the authority

layers within the Group at which decisions on acceptance

and mitigation of levels of risk are taken.

Embedding internal controls and risk management further

into the operations of the business is an ongoing process

and we continually strive for improvement. This is not a

static process with an end-point, but a continuously evolving

process as we adapt to a changing business environment.

Our integrated approach to risk, our simple and flat corporate

structure and our flexible and adaptable ways of applying our

risk framework, enable the Group to respond quickly, and

identify opportunities, in emerging challenges to our supply

chain, product development and production operations,

and our end markets.

Risk governance and controls

The Risk Committee is responsible for overseeing the

risk management processes and procedures. It primarily

comprises the members of the Executive Committee and

reports to the Board through the Audit Committee on the key

risks facing the Group. It monitors the mitigating actions put

in place by the relevant operational managers to address the

identified risks. The Board has approved the acceptance of

certain risks which are considered appropriate to achieve

the Group’s strategic objectives. The degree of risk to be

accepted within the business is managed on a day-to-day

basis through the Board-delegated authority levels. These are

the framework for informed risk taking within the businesses

and the route for escalating decision making up to the Board.

Further details on the governance structure in the Group

are provided on pages 52 to 56. This governance structure

provides the framework for the Group’s approach to,

and management of, risk, and provides the structure for

changes in current and emerging risks to be highlighted

and addressed.

Risk management framework

The Board has approved the following structure for

risk assessment:

• a formally constituted Risk Committee, made up of

members of the Group Executive Committee and

representing each function. At present, this is comprised

ofthe Group Chief Executive Officer, the Group Chief

Financial Officer, the Chief Information Security Officer,

theChief Operating Officer and the Head of Legal;

• allocation of identified risks to a specific risk owner with

responsibility for monitoring and mitigating that risk;

• periodic meetings of the Risk Committee; and

• periodic briefings on new and emerging risk themes.

Other structures within the Group that track and report

onrisk include:

• the Board of Directors and Audit Committee oversight

ofthe risk register and risk review process;

• monthly operational/functional reporting;

• the control structure for delegated authorities;

• external audit; and

• input from external insurers surveys and reports.

The process, therefore, takes both a top-down and

bottom-up approach.

The bottom-up approach:

• uses department-specific risk registers (e.g. Finance or

Obstruction) that can be used to identify and mitigate risks

that are relevant at the Group level; and

• encourages and promotes upward reporting of key

residual risks.

The top-down approach:

• uses the experience and business knowledge of the

executive to identify known and emerging risks and

thentoassess their impact and likelihood;

• provides oversight in respect of Group compliance and

principal risks; and

• sets the Group risk policy, strategy and appetite.

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Dialight plc Annual Report and Accounts 2026

Risk management continued

Group risk control and visibility cascade

The Board has overall responsibility for Dialight’s approach

to risk management and internal control. More specifically,

andas set out in the Corporate Governance Code guidance,

the Board’s responsibility includes:

• ensuring the design and implementation of appropriate

riskmanagement and internal control systems;

• determining the nature and extent of the principal risks

faced and those which Dialight is willing to take;

• ensuring that appropriate culture and reward systems

havebeen embedded;

• agreeing on how the principal risks should be managed

ormitigated; and

• ensuring that the risk management and control systems

are functioning effectively, and that corrective action is

being taken.

Our control framework follows the three lines of

defence model:

• the first line of defence at the Business Unit/operator level;

• the second line of defence through Group Finance,

alongside Group Chief Executive Officer and Group Chief

Financial Officer reviews; and

• the third line of defence relates to the role of Internal Audit.

Since November 2025, the Group has had an Internal Audit

function in place (see page 72 for further details).

The key areas of the Group’s system of internal controls are

as follows:

• the key component in any risk management system is

people. Dialight invests heavily in its people, recruiting

capable and adaptable individuals and focusing on the

retention of our skilled workforce. It is our employees that

maintain our high standards of risk control and create a

culture in which risk can be managed to the advantage

ofthe Group.

• functional reviews (e.g. finance, operational, legal and

compliance reviews) are hard-coded into our approvals

systems. All cash payments from the Group are reviewed

and approved at a supplier level by Group Finance and the

Group Chief Financial Officer. Cash forecasting has been

enhanced to be at a more granular level and rolling

26-week forecasts are updated regularly.

• manufacturing operations, including relevant supply chain,

inventory and production metrics are reviewed daily.

Sales and orders reports are reviewed daily in order to

assess any changing risk profile on sales activity by

geographic location. The Board approves the annual

budget, strategic plan and in-year forecasts and tracks

their achievement.

• a comprehensive Financial Controls Framework (“FCF”)

isin place across the Group. The FCF forms the basis of

internal audits and is centrally monitored by the Group

Finance team. The controls laid out in the FCF apply to

allthe subsidiaries within the Group.

• a comprehensive financial reporting package is received from

all operating units on a monthly basis, with comparisons

against budget, forecast and prior-year performance.

Each operating unit is required to submit aquarterly

self-certification on compliance and controls.

• each month the Group Chief Executive Officer and Group

Chief Financial Officer report to the Board. The CEO report

outlines the Group’s operations and provides analysis of

significant risks and opportunities. The paper covers

progress against strategic objectives andshareholder-

related issues. The CFO report sets out progress against

internal targets and external expectations – including

routine reporting on liquidity risk and covenant compliance.

• the Group Chief Executive Officer and Group Chief

Financial Officer report to the Audit Committee periodically

on all aspects of internal control. The Board receives

regular reports from the Audit Committee, and thepapers

and minutes of the Audit Committee are used asa basis

forthe Board’s annual review of internal controls.

• the Board reports annually to shareholders on its

risk management framework, providing shareholders

with an opportunity to challenge Group strategy,

includinginrespect of the Group’s risk mitigation.

Provision 29

During the year, good progress has been made on provision

29 of the 2024 UK Corporate Governance Code (the “Code”),

which the Group will adopt in the 31 March 2027 Annual

Report and Accounts. The Group’s material controls have

been identified and assessed for effectiveness which

has been reviewed by the Board. These have also been

shared with the Audit Committee. “Dry run” testing of the

material controls will commence shortly with any which

are not operating effectively remedied where practicable.

The outcome of this work will be reported to the Board.

Operational

Chief Executive

Compliance

Audit Committee

Dialight plc Board

Risk Committee

Executive Committee

Senior Managers

Company Secretary

Regional Finance Staff

Group Finance staff

Risk management framework

•

Strategic Report • Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Principal and emerging risks and uncertainties

The Board has conducted a robust assessment

of the Group’s principal and emerging risks.

Therisks outlined in this section are the principal

risks that we have identified as material to the

Group. They represent a “point-in-time”

assessment as the environment in which the

Group operates is constantly changing and new

risks may always arise.

Risks are considered in terms of probability and impact,

andare based on a residual risk rating of: high, medium and

low. Mapping risks in this way helps not only to prioritise the

risks and required actions, but also to direct the required

resource to maintain the effectiveness of controls already

inplace and mitigate further where required.

The risks outlined in this section are not set out in any order

of priority and do not include all risks associated with the

Group’s activities. Additional risks not presently known to

management, or currently deemed less material, may also

have an adverse effect on the business.

Impact on

strategy Description

Impact on viability,

reputation and

health and safety Mitigation Time horizon

Regulatory and compliance

Medium

Short

<2 yrs

Medium

<2-5 yrs

Long

>5 yrs

• Revenue

• Underlying

operating

profit

• Tax liability

Risk around gaps in knowledge

with regard to local authority

regulation in Mexico relating to

the Group’s primary

manufacturing sites. In part,

this is exacerbated by the

Mexican Government’s

tax-raising power, as is also the

case with the Inland Revenue

Board of Malaysia.

Emerging risks relate to

compliance around new UK

failure to prevent fraud

legislation under the Economic

Crime and Corporate

Transparency Act 2023 and

compliance with the revised

provision 29 of the Code.

• Legal and

compliance risk

• Unforeseen

liabilities

Continuous monitoring of

Group compliance, supported

by engagement of local

external consultant to “plug”

knowledge gaps to ensure

understanding and compliance

with Mexican Municipal

Authority regulations.

An Internal Auditor has been

recruited which supports

increased due diligence with

regard to reporting processes

and internal controls.

Implementation of new

anti-fraud policy and Group-

wide online compliance training

assessments for Dialight

personnel globally.

Market: Sales and growth

Medium

Short

<2 yrs

Medium

<2-5 yrs

Long

>5 yrs

• Revenue

• Underlying

operating

profit

Risk of concentration on North

American markets, risk around

verticals and geographic

growth due to impact of tariff

imposition.

Lighting market contraction,

demonstrated by competitor

reduction in force.

The Group has experienced

declining revenue over a

number of years. Actions have

been taken to more than offset

the impact of this on profit and

a number of key steps have

been taken to put the

foundations in place to grow

Group revenue by 3% to 5%

minimum moving forward.

• Reduced

financial

performance

• Lack of growth

Driving sales growth outside

ofNorth America, including

expansion of APAC reach

toinclude Middle East sales.

US tariffs on Chinese goods

maysupport a reduction in

competition from China in the

North American market.

Targeted investment in APAC

sales with migration of OE to

Group’s Penangfacility.

Focus on penetration of new

markets with tailored products,

such as source and sell

strategy with new product as

aconduit into APAC market in

support of wider generation of

product diversity appropriate

for each region.

Low HighMedium

Magnitude of impact (pre-mitigation)

Increased Decreased No change New

Change in year

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Dialight plc Annual Report and Accounts 2026

Impact on

strategy Description

Impact on viability,

reputation and

health and safety Mitigation Time horizon

Cyber and data integrity

High

Short

<2 yrs

Medium

<2-5 yrs

Long

>5 yrs

• Revenue

• Underlying

operating

profit

• On-time

delivery

• Order growth

• Business

disruption

• Loss of

sensitive

data

• Damage to

reputation

Insufficient security and

utilisation of data. In addition,

disruption to business systems

would have an adverse impact

on the Group if our systems

suffered a cyber attack or loss

of data/data integrity issues.

• Inability to

supply

customers

• Loss of revenue

and significant

business

disruption

• Loss of

commercially

sensitive

information

The Group has spent $0.5m

upgrading IT infrastructure,

hardware and software.

This included state-of-the-art

firewall protection, resilience

and backup.

Targeted hire in a newly created

Chief Information Security

Officer role to drive IT and data

efficiencies within the Group.

Educational training support for

all employees, this is increasing

in frequency with standardised

training packages for all

employees with access

toemail.

Manufacturing footprint and operations

Medium

Short

<2 yrs

Medium

<2-5 yrs

Long

>5 yrs

• Revenue

• Underlying

operating

profit

Impact of location of

manufacturing sites on

continuity of production,

production capacity

andworkforce.

Concentration of operations in

Mexico due to impending

Roxboro plant closure

increases the potential for

production interruption due to

increased cartel tensions and

Mexican Government’s

increasing regulation as a

means of raising taxes to fund

security improvements.

• Inability to

supply

customers

• Loss of revenue

and significant

business

disruption

Multi-site manufacturing

capability to avoid over

reliance, including move of

GRP Linear and Bulkhead

production to Penang facility.

Dual sourcing number

hasincreased.

Modularisation of new

productssimplifies supply

chain, inventory and

manufacturingprocesses.

Geopolitical and macroeconomic impacts

Medium

Short

<2 yrs

Medium

<2-5 yrs

Long

>5 yrs

• Revenue

• Underlying

operating

profit

Risk attaching to

macroeconomic uncertainty.

Global economic/political

uncertainty has sharply

increased due to the imposition

ofUS Government tariffs as

well as by the impact of the

US–Iran conflict in the Middle

East and Mexican political

instability attributable to cartel

activity. Thiscould impact the

Group’s business given its

manufacturing presence in

Mexico and Malaysia,

andprimary downstream

market in the US.

• Reduced

financial

performance

• Lack of growth

Manufacturing and sales

presence in multiple markets.

Scenario planning and

implementation has mitigated

tariff risk to some degree.

“One Dialight” strategy

including diversifying

manufacturing capability and

supply chain reduces exposure

to supply interruptions,

especially having regard to

current global politicalinstability.

Principal and emerging risks and uncertainties continued

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Strategic Report • Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Impact on

strategy Description

Impact on viability,

reputation and

health and safety Mitigation Time horizon

Inbound/outbound supply chain and manufacturing

High

Short

<2 yrs

Medium

<2-5 yrs

Long

>5 yrs

• Revenue

• Underlying

operating

profit

Extended supply chain risk

including China impact on raw

materials. This risk is

exacerbated due to potential

supply chain shortages as a

result of the Middle East

conflict, for instance helium

that is needed to manufacture

semiconductors at a time of

huge global demand.

Logistics risk due to imposition

ofcross-border US

Government tariffs which

impacts the Group due to

location of key manufacturing

locations in Mexico

andMalaysia.

• Reduced

financial

performance

• Loss of

market share

Manufacturing of select

product lines moved to Penang

factory from Roxboro site

which mitigates supply

chaincosts.

Greater insourcing of multi-site

manufacturing capacity.

Modularisation of new products

simplifies supply chain,

inventory and manufacturing

processes. SKU reductions

and addressing the “tail” have

mitigated riskimpact.

Product: Competition and product development

Medium

Short

<2 yrs

Medium

<2-5 yrs

Long

>5 yrs

• Revenue

• Underlying

operating

profit

Risk attached to translating

market requirements into:

(a)product specifications;

and(b) profitable products.

Challenge to drive innovation of

new competitive products.

Managing post-sales risk.

• Reduced

financial

performance

• Loss of

market share

Diverse product/business

portfolio across product types

and sectors. New source and

sell strategy for white label

products driving cost savings

and market penetration.

Product development including

cost-out re-design and process

improvements focused on

gross margin improvement.

Major incident and external hazards

High

Short

<2 yrs

Medium

<2-5 yrs

Long

>5 yrs

• Revenue

• Underlying

operating

profit

• Damage to

reputation

Internal controls gap regarding

unforeseeable incidents (for

example terrorism, cartel

violence, natural disaster,

cyberbreach and war) that could

lead to the loss of, ordisruption

to, the Group’s operations and

itspeople.

• Inability to

supply

customers

• Loss of revenue

and significant

business

disruption

• Safety and

security of

personnel

Regular staff training.

Cybersecurity and physical

security access controls.

Conducting post-incident

reviews to prevent recurrence.

Business continuity plans for

allmanufacturing locations.

Formulation of a specific

incidentresponse plan to be

implemented. Travel policy

tobe updated to manage

movement of Group personnel

during majorincidents.

Low HighMedium

Magnitude of impact (pre-mitigation)

Increased Decreased No change New

Change in year

•

Strategic Report • Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Chief Financial Officer’s review

During the year, we have significantly enhanced both the

financial controls in the business and the financial reporting

ofresults as well as significantly improving our forecasting

and project financial planning capability. We now have a

clearer understanding of the drivers behind variability in our

results, we have rebuilt key relationships with our banking

partners and shareholders, and delivered performance

ahead of our forecasts and expectations. The strong financial

performance for the year was driven by the successful

execution of our Transformation Plan, underpinned by

a renewed financial focus. The financial impact of the

transformation does not stop here. Not only are there the

annualisation benefits of what has been fully implemented

todate but we have a clear, well-planned and consulted set

ofadditional actions that will benefit 2028 and beyond.

We are getting the business back to where it once was –

inahealthy financial position. We now have a much clearer

vision to achieving our financial goals.

Financial review

Financial performance

Group revenue of $166.9m for the year ended 31 March 2026

(2025: $183.5m) generated a gross profit of $65.1m (2025:

$65.3m on an underlying basis), giving a gross margin of

39.0% (2025: 35.6% on an underlying basis). This represents

a good increase driven by selling more profitable products,

product cost down, purchase savings on components and

better financial discipline on pricing/margin. If the now-exited

Traffic business margin is excluded from the gross margin for

the year, the overall increase is to 40.8%.

Underlying performance

Total underlying overheads of $54.3m (2025: $61.1m) and net

impairment losses on financial assets of $0.5m (2025: $2.1m)

resulted in an underlying operating profit of $10.3m for the

year (2025: $4.2m).

Lighting before central costs

The Lighting segment represents approximately 75% of the

Group’s revenue and consists of two main revenue streams:

large capital expenditure projects and ongoing maintenance,

repair and operations (“MRO”) spend.

($m unless otherwise stated)

Lighting 2026 2025 Variance

Revenue 122.1 138.0 (15.9)

Underlying gross profit 49.8 54.1 (4.3)

Underlying gross profit margin 40.8% 39.2% 160 bps

Underlying overheads (38.7) (41.2) 2.5

Underlying operating profit

before central costs 11.1 12.9 (1.8)

For the year ended 31 March 2026, Lighting revenue was

down 11.5% at $122.1m compared to $138.0m in 2025.

Underlying gross margins significantly improved during

the year, following the launch of cost-reduction projects

and improvements in procurement costs. The Group

has also concentrated on selling a reduced number of

SKUs and focusing on the sale of a better mix of more

profitable products.

When I rejoined the business 18 months

ago, we set out targets for our stakeholders

to steadily grow sales, achieve 45% gross

margin, achieve 11% to 13% minimum return

on sales, achieve a minimum 25% return on

capital, halve working capital and become

debt-free. We set a timescale to achieve

these of three to five financial years; i.e. 2028

at the earliest to 2030 at the latest. Dialight

isa business with high ambitions. We have

therefore decided, given the strong progress

made in the year, to increase these targets

to15% return on sales and we have an

ambition to achieve in excess of 25% return

on capital.

“WE ARE GETTING THE BUSINESS

BACK TO WHERE IT ONCE WAS –

INAHEALTHY FINANCIAL POSITION.”

Mark Fryer, Group Chief Financial Officer

•

Strategic Report • Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Signals & Components before central costs

Signals & Components is a high-volume business operating

within highly competitive markets. There are three main

elements: OE components, vehicle lights and traffic lights

(now exited).

($m unless otherwise stated)

Signals & Components 2026 2025 Variance

Revenue 44.8 45.5 (0.7)

Gross profit 15.3 11.2 4.1

Gross profit margin 34.2% 24.6% 960 bps

Underlying overheads (6.9) (7.9) 1.0

Underlying operating profit

before central costs 8.4 3.3 5.1

Overall, Signals & Components revenue decreased from

$45.5m in 2025 to $44.8m in the year ended 31 March 2026.

The main impact has been the reduction in Traffic sales

(exited in October 2025). Without this impact, Signals &

Component revenue increased by 13.7%. The overall gross

margin in Signals & Components has increased due to higher

OE sales and the Traffic exit which was a low-margin activity.

Central costs

Central overheads comprise costs not directly attributable

to a segment and are shown separately. In the year ended

31 March 2026, unallocated costs were $13.6m (2025:

$15.9m) representing $9.2m of central costs (2025: $12.0m)

and $4.4m (2025: $3.9m) of net non-underlying costs.

Underlying costs primarily relate to head office costs and

professional fees with non-underlying costs relating to the

costs of delivery of the Transformation Plan and the pension

buy-in (see page 135 for more details). In the prior year these

costs were primarily legal costs.

Non-underlying items

2026

2025

ERCs 2.9 –

Transformation Plan (4.4) (4.1)

Defined benefit pension scheme

administrative costs (1.3) –

Sanmina litigation costs (0.2) (17.8)

Business disposal income – 0.9

Other (1.0) (0.6)

Total (4.0) (21.6)

To give a full understanding of the Group’s performance and

aid comparability between years, the Group reports certain

items as non-underlying to normal trading.

As explained above, in the year the Group received ERCs

of$2.9m which are one-off in nature and will not recur.

The Group has incurred $6.9m of non-underlying costs during

the year, $4.4m of which relate to the Transformation Plan.

This is a significant multi-year change programme for the

Group which is designed to address legacy issues associated

with excess cost and complexity within the organisation,

while at the same time focusing more resources on the most

attractive growth opportunities within its core industrial LED

lighting market. Implementation of the expenditure element

of the Transformation Plan is now complete. The multi-year

Transformation Plan is a material, infrequent programme and

is not considered to be part of the underlying performance

ofthe business.

As explained in more detail on pages 147 to 149, the Group

completed its pension buy-in transactions of the Executive

Scheme and the Main Scheme on 5 August 2025 and 4 July

2024, respectively. In the current year, the Group has incurred

$1.0m of non-underlying administrative costs representing

legal and professional fees as the Trustees of the schemes

and their advisers work on various completion steps and

$0.3m ofother fees.

Inventory

Inventory of $30.0m decreased by $16.6m from $46.6m

in March 2025, which itself had reduced from $64.8m in

December 2022. The Group may see an increase to the

balance as the Component product range is enhanced

andLighting sales grow.

2026

2025

Raw materials 11.8 20.0

Sub-assemblies 7.8 10.7

Finished goods 10.4 15.7

Spare parts – 0.2

Total 30.0 46.6

The aged inventory provision has decreased to $2.3m in

March 2026 compared with $5.9m in March 2025 as a

significant volume of aged inventory has been disposed of.

•

Strategic Report • Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Cash and borrowings

The Group ended March 2026 with net bank debt of $1.9m,

adecrease of $15.9m from the March 2025 balance of

$17.8m. Net bank debt excludes IFRS 16 lease liabilities of

$8.3m, which are excluded for covenant testing purposes.

The roll-forward of net bank debt was as follows:

2026

$m $m

At 1 April 2025 (17.8)

Underlying EBITDA 19.8

Share-based payments 1.0

Net impairment losses on financial assets 0.5

Decrease in inventories (after impact of

$0.4m non-underlying) 17.5

Decrease in trade and other receivables 5.2

Decrease in trade and other payables

(after impact of $0.5m non-underlying) (5.4)

Provisions and pensions (after impact of

$0.1m non-underlying) (1.4)

Repayment of lease liabilities

(including $0.5m interest) (3.0)

Underlying operating cash flow 34.2

Cash outflows and other movements:

Sanmina payments (7.7)

Non-underlying ERCs cash receipts

(see Note 6) 2.9

Non-underlying cash costs (see Note 7) (4.7)

Capital expenditure (including additions

to intangible assets) (4.8)

Interest and tax paid (excluding $0.5m

interest on leases) (3.6)

Proceeds on disposal of business 0.5

Purchase of own shares (0.1)

Effect of foreign exchange rates (0.8)

At 31 March 2026 (1.9)

Gross bank debt of $9.0m was offset by cash on hand

of $7.1m. Refer to Note 23 of the consolidated financial

statements for further details on bank borrowings.

The Group’s net finance expense of $2.4m is analysed

inNote9.

Banking and covenants

At 31 March 2026, the Group’s bank facility comprised an

RCF of $28.8m from HSBC which was extended on 5 June

2025 to 21 July 2027 on the same terms as the original

agreement. This facility was replaced on 22 April 2026

with a new £15.0m RCF and a £10.0m accordion facility.

See Note23 to the consolidated financial statements for

further details.

Going concern

The Directors consider it remains appropriate to continue

toadopt the going concern basis in the preparation of these

consolidated financial statements. Furthermore, the Directors

have assessed whether there are any material uncertainties

that may cast significant doubt on the Group’s ability to

continue as a going concern and, unlike in prior periods,

haveconcluded that none are present. Further details are

provided in Note 2b to the consolidated financial statements

on pages 122 and 123.

Tax

Based on a profit before tax of $3.8m for the year ended

31 March 2026, the Group had an effective tax rate (“ETR”)

of 86.8% (2025: 3.5%) resulting in a tax charge of $3.3m

(2025: credit of $0.5m). The ETR is above the standard

UK corporation tax rate of 25.0% due to the effect of

unrecognised tax losses and adjustments in respect of

prior years. During the year, the Group made a net cash

tax payment of $2.2m (2025: $1.7m). See Note 10 to the

consolidated financial statements for further details.

Pension schemes

The Group makes contributions to the cost of running two

closed defined benefit schemes to provide benefits for

employees and former employees upon retirement. These are

the Roxboro UK Executive Pension Fund (the “Executive

Scheme”) and the Roxboro UK Pension Fund (the “Main

Scheme”). On an IAS 19 Employee Benefits (“IAS 19”)

basis, at 31 March 2026 the schemes are in balance (2025:

$2.2m asset) on an aggregate basis with the consolidated

statement of financial position showing employee benefit

assets of $0.7m and employee benefit liabilities of $0.7m.

Both schemes have each purchased a bulk annuity policy

covering the majority of their respective liabilities with an

insurer (a “buy-in”). See Note 17 to the consolidated financial

statements for further details.

Chief Financial Officer’s review continued

•

Strategic Report • Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Parent company

The parent company has carried out a review of the

carrying value of investments in subsidiaries as well as the

recoverability of intercompany account balances at 31 March

2026. This is a requirement of Financial Reporting Standard

102 where there is objective evidence of impairment or

indicators of potential impairment. This standard also requires

impairment losses recognised in prior periods to be reversed

if there has been a change in the estimates used to determine

the recoverable amount. This impairment review does not

impact the consolidated reported results.

Having completed the impairment review for 2026 and as

a result of certain Group businesses now being profitable,

the parent company has booked an impairment reversal

of £15.4m (2025: impairment charge of £17.6m) relating

to investments in, and amounts owed from, subsidiaries.

The parent company’s distributable reserves have increased

from £8.3m at 31 March 2025 to £21.6m at 31 March 2026.

Capital management and dividend

The Board’s policy is to have a strong capital base to

maintain customer, investor and creditor confidence and

to sustain future development of the business. The Board

considers Group consolidated total equity as capital, which at

31 March 2026 was $47.1m (2025: $47.3m). The Board is not

declaring adividend payment for the year ended 31 March

2026 (2025: $nil).

The Group has a clear capital allocation discipline and

is committed to returning excess funds to shareholders

via future dividends or share repurchases. The Board will

continue to consult with shareholders on returns of capital

asthe Group moves into a debt-free position.

Events after the reporting period

The Group’s multi-currency RCF of $28.8m with HSBC was

replaced by a £15.0m RCF and an uncommitted £10.0m

accordion on 22 April 2026 on improved terms than the

original RCF agreement.

Mark Fryer

Group Chief Financial Officer

22 June 2026

•

Strategic Report • Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Going concern statement

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 1 to 40.

The financial position of the Group, its cash

flows, liquidity position and borrowing facilities

are discussed in the Chief Financial Officer’s

review on pages 34 to 37.

The Directors’ assessment of the viability of the Group

issetout in the viability statement on page 40. In addition,

Note 24 to the consolidated financial statements includes

the Group’s objectives, policies and processes for managing

its capital; its financial risk management objectives; details

of its financial instruments and hedging activities; and its

exposures to credit risk and liquidity risk.

Net bank debt has decreased to $1.9m at 31 March

2026 (2025: $17.8m) comprising borrowings of $9.0m

(2025:$25.7m) with cash and cash equivalents of $7.1m

(2025:$7.9m). Further details of borrowings are included

inNote23.

At 31 March 2026, the Group’s bank facility comprised an

RCF of $28.8m from HSBC. The facility was extended to

21 July 2027 on the same terms as the original agreement

on 5 June 2025. As set out in Note 23, on 22 April 2026,

the Group entered into a new £15.0m (equivalent to

approximately $20.0m) RCF agreement with HSBC with an

initial maturity date of 22 April 2029. The new agreement with

HSBC also includes an uncommitted accordion of £10.0m

(equivalent to approximately $13.5m). The decrease in the

size of the Group’s committed bank facility aligns with the

Group’s liquidity needs and has no adverse impact on the

Group’s viability.

Both the old and new RCF facilities were/are subject to

quarterly covenants encompassing maximum leverage and

minimum interest cover. The financial covenants of the new

facility require a leverage ratio maximum target of less than

2.5 times adjusted EBITDA (the old facility was 3.0 times)

and an interest cover minimum target of 4.0 times adjusted

EBITDA (the same as the old facility). The covenants under

the old facility were met for all four quarters of the year.

At 31 March 2026, there was $16.2m of headroom on the

leverage covenant and $11.1m on the interest cover covenant.

See Note 23 to the consolidated financial statements

for further details on the Group’s banking covenants.

The following going concern assessment has been carried

out based on the new facility.

In assessing the going concern assumptions, the Directors

have prepared three main scenarios over the going concern

period which the Directors have assessed as a period of

at least 12 months from the date of authorisation of these

consolidated financial statements to 30 June 2027, being:

• the base case;

• a severe but plausible downside case in relation to revenue

and margin (“downside case”); and

• a reverse stress test (break-even assessment).

Various upside scenarios also exist, but those result in

positive outcomes and have not been included here given the

focus of the Directors and the Group’s auditor is on the risk

to the going concern basis of preparation to the consolidated

financial statements. Nonetheless, the Directors consider

these upside scenarios as realistic outcomes and continue

todrive the Group’s performance and other activities to seek

to achieve those positive results.

The downside scenarios reflect the risk of lower-than-

expected organic revenue growth in core Lighting markets,

lower gross margins than forecast and cost savings not being

realised to the full extent forecasted.

Base case

The base case is derived from the Board-approved Budget for

the year to 31 March 2027 together with growth assumptions

for the quarter to 30 June 2027, which assume that the

margin will improve over the going concern period through

various Group initiatives. The base case is driven by sales

price increase, margin approval on sales, SKUreduction and

workforce optimisation. In this scenario, the Directors consider

that the Group will continue to operate within its available

committed facilities of £15.0m (per the new bank facility) with

sufficient headroom and covenant compliance throughout the

forecast period.

The key assumptions in the base case include:

• net revenue for the year to 31 March 2027 is forecast to

grow by 2.9% compared to the year ended 31 March 2026

(8.4% excluding Traffic and Rail). This is driven by a

combination of factors including increasing benefits from

strategic relationships, price increases and continued

growth in Signals & Components;

• gross margin improvement due to the sales price increases,

normalisation of freight costs and right-sizing of the

workforce in the production sites. The various initiatives

areexpected to deliver a year-on-year gross profit margin

improvement of 4.8% in the year to 31 March 2027

andafurther marginal increase in the quarter to

30 June2027;and

• operating costs are expected to be 34.0% of revenue

inthe year to 31 March 2027 and 32.7% in the quarter

to30 June 2027.

•

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Dialight plc Annual Report and Accounts 2026

Severe but plausible downside case

(“downside case”)

The key assumptions in this case are:

• year to 31 March 2027: reduction of Budget revenue

of10.0% across Lighting, Obstruction, OE and Vehicle;

• quarter to 30 June 2027: no growth in revenue;

• year to 31 March 2027: further margin reduction of

2.0%/$3.0m across materials, labour and overheads

with a similar reduction (pro rated) in the quarter to

30 June2027;and

• no mitigating actions are assumed apart from the removal

of a bonus provision for the year to 31 March 2027 and the

quarter to 30 June 2027.

Reverse stress test

(break-evenassessment)

The key assumptions in this case are:

• year to 31 March 2027: reduction of Budget revenue

by16.7% across Lighting, Obstruction, OE and Vehicle;

• quarter to 30 June 2027: no growth in revenue;

• year to 31 March 2027: further margin reduction of

2.0%/$3m across materials, labour and overheads

withasimilar reduction (pro rated) in the quarter to

30 June2027;and

• no mitigating actions are assumed apart from the removal

of a bonus provision for year to 31 March 2027 and the

quarter to 30 June 2027.

As indicated above, the downside and reverse stress testing

scenarios do not consider any mitigating actions apart from

the removal of a bonus provision. In all these scenarios, the

Group has a series of controllable mitigating actions that can

be taken swiftly, including various temporary and permanent

cost and cash-saving measures.

In the base case and downside case scenarios, the Group

isnot forecast to breach any covenants in the going concern

period. The Directors have considered the circumstances

which would be needed to breach at least one covenant

– areverse stress test. This indicates that a 16.7% fall in

revenue from 2027 without any controllable mitigating actions

being taken (apart from the removal of a bonus provision)

would trigger a breach of the leverage covenant in the fourth

quarter of the year to 31 March 2027. The likelihood of this

circumstance is considered remote and management could

take substantial mitigating actions, such as taking various

cost-cutting measures. Therefore, the Directors consider it

remains appropriate to continue to adopt the going concern

basis in the preparation of these consolidated financial

statements. Furthermore, the Directors have assessed

whether there are any material uncertainties that may cast

significant doubt on the Group’s ability to continue as a going

concern and, unlike in previous periods, have concluded that

there are none.

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Dialight plc Annual Report and Accounts 2026

Viability statement

The Board have assessed the Group’s

longer-term prospects, primarily with reference

tothe Board-approved year to 31 March 2027

Budget and strategic plan.

This is driven by the Group’s business model and

strategy as detailed on pages 4 to 15, which are

fundamental to understanding the future

direction of the business, while factoring in

theGroup’s principal risks detailed on pages

31to33.

The Board has assessed the viability of the Group over

a three-year period, considering the Group’s current

position and the potential impact of the principal risks

and uncertainties. Whilst the Board has no reason to

believe that the Group will not be viable over a longer

period, ithas determined that three years is an appropriate

period. The Board believes that this approach provides an

appropriate alignment with the annual awards under the

share-based incentive plan and our external banking facilities.

In making their assessment, the Board carried out a

comprehensive exercise of financial modelling and

stress-tested the model with various scenarios based

on the principal risks identified in the Group’s annual risk

assessment process. The scenarios modelled used the

same assumptions and mitigations as for the going concern

statement on pages 38 and 39. These scenarios included

lower-than-expected growth in all segments and efficiency

improvements not fully realised. In each scenario, the effect

on the Group’s key performance indicators (“KPIs”) and

remaining borrowing covenants was considered, along with

any mitigating factors.

In reviewing the Group’s viability, the Directors have

identified the following factors which they believe support

their assessment:

• continued strong market drivers for LED adoption due to

the increasing focus on sustainability and high utility costs;

• the Group operates in diverse end markets, with no material

individual customer concentration;

• positive customer and distributor feedback and invitations

to bid on large projects;

• structural changes across sales and operations to improve

planning and enable earlier participation in major

bidprojects;

• dedicated team established to accelerate growth in the

Components sector;

• new product development to close portfolio gaps and

support expansion into new verticals;

• increased backlog and efficient salesforce

pipelinemanagement;

• investment in manufacturing rationalisation and automation,

together with component standardisation;

• further strengthening of the balance sheet, targeting a net

cash position by the end of the year to 31 March 2027; and

• the Group’s long-term, strong relationship with HSBC

and its new £15.0m multi-currency RCF signed on

22 April 2026.

Based on this assessment, the Board confirms that it has

a reasonable expectation that the Group will be able to

continue in operation and meet its liabilities as they fall

dueover the three-year period to 31 March 2029.

The Strategic Report was approved by the Board and signed

on its behalf by Steve Blair, Group Chief Executive Officer,

on22 June 2026.

Steve Blair

Group Chief Executive Officer

22 June 2026

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Dialight plc Annual Report and Accounts 2026

GOVERNANCE

Chair’s introduction to governance 42

Compliance with the Code 45

Governance overview 46

Board of Directors 50

Governance structure and division of responsibilities 52

Stakeholder engagement 57

Section 172 statement 62

Board composition, succession and evaluation 63

Nominations Committee report 66

Audit Committee report 70

Remuneration Committee report 75

2026 annual report on remuneration 89

Implementation of the Remuneration Policy for 2027 95

Directors’ report 98

Directors’ responsibility statement 101

In this section

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Dialight plc Annual Report and Accounts 2026

Overview

Good governance is central to the long-term success of the

Group, supporting sustainable value creation and ensuring

effective oversight, accountability and alignment with

stakeholder interests. As Group Chair, I am committed to

ensuring the Board upholds the highest standards of integrity,

accountability and transparency in all aspects of its work.

During the year, we have continued to strengthen our

governance framework in line with the principles of the Code,

ensuring our practices remain robust, proportionate and

aligned with stakeholder expectations.

The Board has remained actively engaged in key areas

including risk management, internal controls and succession

planning, while placing particular emphasis on understanding

the views of our stakeholders – employees, customers and

shareholders – and reflecting these in our decision making.

Culture remains a priority for the Group. We believe a healthy

organisational culture underpins sustainable performance,

and we continue to promote behaviours aligned with

our values.

Looking ahead, we will build on this progress, with a focus on

continuous improvement and effective oversight of emerging

risks. I am confident that our governance framework supports

the delivery of our strategy and positions the Group for

long-term success.

Board composition and effectiveness

The composition of the Board has remained stable

throughout the year, providing continuity and a strong

platform for execution. In May 2025, we were pleased to

confirm the permanent appointment of Mark Fryer, a highly

experienced FTSE CFO, further strengthening the Board’s

financial and strategic capability.

There have been no other changes to Board composition

during the year, and we believe this stability supports our

focus on profitable growth and cash generation.

I am satisfied that the Board has an appropriate balance

of skills, experience and perspectives to provide constructive

challenge and effective independent oversight, and that

it operates effectively in supporting the delivery of the

Group’s strategy.

Further details on Board composition and leadership can

be found on pages 50 and 51.

Board focus areas in 2026

During the year, the Board remained focused on

overseeing the delivery of the Group’s Transformation

Plan, structured around five key pillars: winning hearts and

minds, sales transformation, operational transformation,

margin improvement and cash generation, and creating

a platform for future growth. Alongside this, the Board

prioritised achieving financial stability, improving operational

performance and delivering against the Group’s annual

objectives, while also achieving the resolution of historic

litigation with Sanmina and adapting to, and navigating,

external geopolitical developments, such as tariffs and

the conflict in the Middle East.

Chair’s introduction to governance

Dear shareholders,

On behalf of the Board, I am pleased to

present our Corporate Governance report

forthe year ended 31 March 2026.

This report provides insight into the work

and activities of the Board and its

Committees during the year and explains

how we have applied the principles of

the2024 UK Corporate Governance Code

(the “Code”).

“WE HAVE CONTINUED

TO STRENGTHEN OUR

GOVERNANCE FRAMEWORK.”

Neil Johnson, Group Chair

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Dialight plc Annual Report and Accounts 2026

Stakeholder engagement

The Board recognises that effective engagement with

stakeholders is critical to the long-term success of the

Group and has remained focused on rebuilding shareholder

and market confidence, supporting the return to a stronger

financial and operational position.

During the year, the Board maintained regular and

constructive dialogue with shareholders and banking partners

through a range of channels, including investor roadshows,

the Annual General Meeting (“AGM”) and direct meetings

between myself and major shareholders. Other Board

members also met with shareholders during the year,

supporting broader engagement and providing additional

perspectives from across the Board. These interactions

have been instrumental in strengthening relationships and

supporting improved financial stability and performance.

Employee engagement also remained a key priority.

The Board considered feedback from the global employee

survey, alongside insights from meetings with our WENED,

Lynn Brubaker, and monitored actions taken in response.

Engagement with the workforce was further enhanced

through regular townhalls, Lunch-n-Share sessions and site

visits by Board members, providing additional visibility and

direct feedback channels across the Group.

The Board also receives regular updates from Executive

Directors regarding customers and suppliers, supplemented

by customer feedback and insights from the Strategy &

Innovation Committee.

More broadly, the Board has continued to have regard to

the interests of all stakeholders in line with its duties under

the Companies Act 2006 section 172(1), ensuring these

perspectives are appropriately reflected in the delivery of the

Group’s strategy. Refer to pages 57 to 62 for further details.

Meetings and Director site visits

Board and Committee meetings are scheduled throughout

the year and include a combination of in-person meetings

and site visits across the Group’s UK and international

operations. Locations are agreed annually and coordinated

by the Company Secretary, with support from local senior

management where appropriate. During the year, the Board

held in-person meetings in London, alongside a number of

meetings conducted virtually.

In October 2025, the Board held its annual strategy meeting

in Mexico, hosted by the teams in Ensenada and Tijuana.

The visit included tours of both facilities and provided an

opportunity for Directors to engage directly with employees

through Q&A sessions, offering valuable insight into local

operations, culture and strategic priorities.

During 2026, I undertook a programme of site visits across

the Group’s operations, including facilities in Farmingdale,

Roxboro, Ensenada, Mexico and Perth, Australia. These visits

provided valuable opportunities to engage with local

management and employees and to gain deeper insight

into operational performance, culture and regional priorities.

Nigel Lingwood, in his capacity as Senior Independent

Director, visited the Group’s facility in Penang, Malaysia,

providing an opportunity to observe operations first-hand

and engage with the local team.

Risk management and internal controls

The Board is responsible for the Group’s system of risk

management and internal controls, which is designed to

safeguard performance, ensure compliance and support

the delivery of the Group’s strategic objectives. During the

year, the Group further strengthened its financial controls

and continued to enhance its risk management framework,

including regular reviews of principal risks and ongoing

compliance training across the business. Appropriate policies

and procedures remain in place to help prevent fraud and

promote a strong control environment.

In November 2025, the Group appointed an Internal

Auditor, marking an important step in further strengthening

independent assurance over key processes and controls.

Looking ahead, the Group is actively preparing for the

requirements of provision 29 of the Code which apply to the

financial year beginning 1 April 2026.

The Group’s approach to risk management and internal

controls is set out on pages 29 and 30.

Remuneration

The 2025 Remuneration Committee report received a very

high level of support at last year’s AGM, reflecting strong

shareholder endorsement of the Committee’s approach.

During the year, the Committee has focused on ensuring that

our Remuneration Policy continues to operate as intended,

appropriately rewarding, retaining and incentivising the

Executive Directors to deliver the Group’s strategic objectives

and long-term sustainable performance. Annual bonus

outcomes this year reflect delivery against financial and

operational targets, with a clear emphasis on supporting

the execution of the Transformation Plan and improving

underlying business performance and cash generation.

The Committee also engaged with major shareholders on

remuneration matters during the year, with feedback helping

to inform its approach.

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Dialight plc Annual Report and Accounts 2026

Looking ahead, a further three-yearly review of our

Remuneration Policy is scheduled for next year. In advance

ofthis, we will actively engage with shareholders to ensure

the proposed framework is clearly understood, remains

robust and transparent, and continues to reflect both market

best practice and stakeholder expectations.

Culture and values

People and culture remain central to the way the Board

sets the tone from the top and oversees the business.

During the year, we achieved an 80% response rate to our

global employee survey, reflecting strong engagement

and providing encouraging results. In response, the Group

introduced a highly-successful monthly Lunch-n-Share

initiative, which is recorded and shared globally to promote

transparency and connection across the Group. Steve Blair,

Group Chief Executive Officer, also publishes a monthly blog,

further strengthening open communication and visibility

from leadership.

We continue to invest in a range of initiatives to support

employee wellbeing, including structured goal setting and

appraisal processes, alongside established feedback

mechanisms that promote continuous learning and

development. This year also saw the rollout of a new

learning management tool, underlining our commitment to

nurturing talent and building a strong pipeline for succession.

In addition, 30 internal promotions were made during the

year, reflecting the strength of the internal talent pool and

the effectiveness of our development and progression

pathways. The Board views this positively as evidence of a

culture that supports growth from within, enhances employee

engagement and retention, and helps to ensure continuity in

leadership capability across the Group. In addition, regular

social events and volunteering opportunities across the

Group help to foster a supportive and inclusive culture in

which employees feel valued and engaged.

Diversity and inclusion

The Board continues to consider diversity in its broadest

sense, including skills, experience, gender, ethnicity and

background when reviewing Board composition and

succession planning, and that a wide range of perspectives

strengthens decision making, supports innovation and

enhances long-term performance. While the current

composition does not meet the diversity targets set out

under the applicable listing requirements, appointments are

made on merit, with a focus on ensuring the Board has the

appropriate balance of skills and experience to support the

delivery of the Group’s strategy. The Board is satisfied that

its current composition provides the capability required to

doso effectively.

The Board is committed to broadening the pipeline of

candidates for future appointments where possible and

diversity considerations are embedded within succession

planning and recruitment practices. The Board acknowledges

that further progress is required and remains committed to

enhancing diversity over time in a way that is consistent with

maintaining strong governance and Board effectiveness.

Throughout the Group, the voice of the employee is key

and feedback from our employee engagement mechanisms

help to shape targeted actions to improve engagement and

inclusion across the Group.

Board priorities

Looking ahead, the Board’s priorities for the forthcoming

year will continue to focus on sustaining operational

performance, improving margins and cash generation, and

embedding a platform for future growth. Financial discipline

will remain central to this, including further strengthening of

forecasting accuracy, planning processes and working capital

management to support continued resilience in a dynamic

external environment.

Alongside this, a key priority will be the continued

enhancement of the Group’s risk management and internal

control framework, including preparation for the requirements

of provision 29 of the Code. The Board will also maintain a

strong focus on stakeholder engagement, including ongoing

dialogue with shareholders in advance of the proposed

Remuneration Policy renewal next year, as well as continued

engagement with employees and other key stakeholders.

In parallel, succession planning, leadership development and

the strengthening of the broader talent pipeline will remain

central to the Board’s agenda, supported by continued

investment in employee engagement and communication

initiatives. The Board will also continue to review its

own effectiveness and composition to ensure it remains

appropriately structured and well positioned to support

the Group’s strategic objectives.

Re-election of Directors

The Board has undertaken its annual review of Director

performance and is satisfied that each Director continues

to contribute effectively and demonstrates the commitment

required to fulfil their role. Accordingly, all Directors will

stand for re-election at the forthcoming AGM.

AGM

We are pleased to once again welcome shareholders to

our AGM, taking place at 9.30 am on Tuesday 1 September

2026 at the offices of Investec Bank plc, 30 Gresham Street,

London EC2V 7QP. The Notice of AGM and related papers

will, unless otherwise noted, be sent to shareholders at least

20 working days before the meeting. For those shareholders

who have elected to receive communications electronically,

notice of availability will be given for you to access the

documents at: www.dialight.com/ir/reports-news/.

Neil Johnson

Group Chair

22 June 2026

Chair’s introduction to governance continued

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Dialight plc Annual Report and Accounts 2026

Compliance with the Code

The Group has applied

the principles of the Code

throughout the year ended

31 March 2026.

The Board considers that the Group has

complied with the provisions of the Code during

the year, with the exception of provision 32,

which requires the Chair of the Remuneration

Committee to have served on the Committee

forat least 12 months prior to appointment.

As noted in the 2024 and 2025 annual reports

and accounts, the current Chair of the

Remuneration Committee had not served on

theRemuneration Committee for the required

12-month period prior to assuming the role.

However, the Chair brings extensive experience

of listed company environments and

remuneration governance within a UK plc

context, and the Board is satisfied that Lynn

provides appropriate knowledge and oversight

todischarge the responsibilities of her

roleeffectively.

The Group has prepared for the requirements of provision

29 of the Code, which applies to our financial year beginning

1 April 2026. Further disclosures required under the

Disclosure Guidance and Transparency Rules (“DTRs”)

are also included within this report, including information

relating to the Group’s responsibilities for the preparation

and approval of the 2026 Annual Report and Accounts

and the effectiveness of the Group’s risk management

andinternal control systems.

Board leadership and

Group purpose

Page

Section 172 statement 62

Board of Directors 50

Purpose, values and culture 2

Workforce engagement mechanisms 22

Whistleblowing 25

Management of conflicts of interest 64

Division of responsibilities Page

Director independence 50

Division of responsibilities 52

Board and Committee attendance 46, 66, 70, 75

Composition, succession

and evaluation

Page

Nominations Committee report 66

Annual re-election of Directors 65

Performance evaluation 63

Diversity and inclusion 69

Audit, risk and internal control Page

Audit Committee report 70

Risk management and internal control framework 29

Internal Audit 72

Remuneration Page

Remuneration Committee report 75

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Dialight plc Annual Report and Accounts 2026

Governance overview

This report aims to provide shareholders and

other stakeholders with an understanding of how

the Group is managed and the governance and

control framework within which it operates.

As a smaller FTSE-listed Group with a focused product

portfolio, the organisation benefits from having a lean and

agile management structure that is designed to ensure that

governance, risk management and internal controls remain

appropriate and proportionate to the size and complexity

of the business, whilst still providing effective oversight

and accountability.

The Board recognises the importance of applying the

principles of the Code in a way that reflects the nature of

the Group. It therefore seeks to balance robust oversight

with practical and proportionate application, ensuring that

governance arrangements remain effective and aligned to the

Group’s strategic objectives.

Executive 50%

Non-Executive 50%

Executive/Non-Executive

Independent NEDs

Executive 0%

Independent 100%

0 to 3 years 83%

4 to 6 years 17%

7+ years 0%

Directors (term profile)

UK 83%

US 17%

Directors (nationality)

Female 14%

Male 86%

Senior roles

(gender)

Directors (gender)

Female 17%

Male 83%

Female 38%

Male 62%

Exec. Committee (gender)

All employees (gender)

Female 51%

Male 49%

NED skills and experience matrix

Skills/experience

Direct

experience

Indirect

experience

Industry/sector:

– Manufacturing (general)

  

– Manufacturing

(high-mix, low-volume)

  

– Lighting

  

– Heavy industrial

  

CEO role



Strategy

  

UK plc

 

Industry/sector:

– Accounting

 

– Sustainability

  

– Finance/private equity

  

– People/social

  

Territories:

– Non-US markets

  

– US markets

  

At 31 March 2026

Further information on diversity and inclusion, including the Board’s current non-compliance with the diversity targets set out in

UK Listing Rule 6.6.6R is provided in the Nominations Committee report on pages 66 to 69.

Board meetings and attendance

The table below sets out the number of Board meetings held

during the year and attendance by each Director. In the year

ended 31 March 2026, there were nine scheduled Board

meetings and one ad hoc meeting.

Board member

Scheduled

meetings

Ad hoc

meeting Total

Neil Johnson 8/9 1/1 9/10

Steve Blair 9/9 1/1 10/10

Mark Fryer 9/9 1/1 10/10

Lynn Brubaker 9/9 1/1 10/10

Nigel Lingwood 9/9 1/1 10/10

John Lincoln 9/9 1/1 10/10

1 Senior roles comprise the Group Chair, the Group Chief Executive

Officer, the Group Chief Financial Officer, the Senior Independent

Director and the Nominations, Audit and Remuneration

Committee Chairs.

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Dialight plc Annual Report and Accounts 2026

1. Winning hearts and minds

HOW THE BOARD AND GOVERNANCE

SUPPORTED STRATEGY

Read more about our strategy on pages 10 and 11

The Board maintains oversight of

the Group’s core values to ensure

they remain aligned with the

Group’s purpose and strategy and

are effectively embedded across

the Group.

Through regular monitoring and

engagement, the Board seeks

to ensure these values underpin

behaviours, decision making and

individual contribution at all levels, and

that engagement mechanisms with key

stakeholders operate effectively.

Read more about our core values on

page 44.

Board actions and outcomes during the year

Actions:

• Board members attended site visits and employee townhalls throughout

the year

• Workforce engagement sessions were carried out by the Group Chair and

the WENED, including small group discussions with employees across

functions and locations

• Regular feedback was provided to the Board from both senior leaders

and the WENED following employee engagement activities

Outcomes:

• Enhanced Board presence and engagement across key operational locations

• Enhanced understanding of operational and cultural challenges across

theGroup

• Strengthened consideration of employee perspectives in Board discussions

and decision making

Spotlight on: Colleen Furniss – Senior Director, HR North America

In November 2025, Colleen Furniss was promoted to Senior Director, HR North America,

reporting directly to the Group Chief Executive Officer. Colleen has played a key role

in strengthening the Board’s ability to oversee culture, engagement and organisational

effectiveness in support of the Group’s strategy. By enhancing feedback mechanisms,

including performance appraisals and employee engagement surveys, Colleen has

improved the quality of workforce insights available to the Board, enabling better informed

decision making and stronger alignment between employee priorities and strategic

objectives. In addition, the development of a more robust people framework, including

succession planning and incentive structures, has supported the delivery of transformation

initiatives and ensured the Group has the capabilities and leadership required to execute its

strategy effectively.

Read more about our culture and values on page 44.

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Dialight plc Annual Report and Accounts 2026

2. Sales transformation

3. Operational transformation

The Board approves the Group’s sales

strategy and monitors its performance,

ensuring the appropriate capabilities,

incentives and governance frameworks

are in place to support delivery.

It reviews key sales metrics, including

orders, revenue, margin and pipeline

quality, and challenges management

on progress against growth objectives.

In doing so, the Board ensures that

the sales strategy is aligned with the

Group’s broader objective of delivering

sustainable, high-quality growth.

Read more on page 8.

Board actions and outcomes during the year

Actions:

• Reviewed and challenged the Group’s sales strategy, including key markets,

customers and growth drivers

• Reviewed a revised commission structure for the Sales team

• Monitored the implementation of strengthened sales processes, controls

andgovernance frameworks

Outcomes:

• Enhanced Board understanding of strategic markets and customers

• Strengthened oversight of sales discipline and margin improvement

• Enhanced Board oversight of sales processes and controls

Board actions and outcomes during the year

Actions:

• Oversight of the ongoing delivery of the Group’s transformation initiatives

• Monitored and responded to evolving geopolitical and macroeconomic

conditions, ensuring the Group’s strategy remained resilient and appropriately

aligned to the external environment

• Monitored the implementation of organisational restructuring programmes,

to support alignment with the Group’s operational strategy

Outcomes:

• Strengthened Board understanding of business processes

• Enhanced Board visibility of product portfolio prioritisation and core

productcost base

Spotlight on: New Penang facility

The opening of the Group’s new manufacturing facility in Penang, Malaysia in August 2025

represents a key milestone in the delivery of the Group’s global growth strategy and

long-term commitment to the Asia-Pacific region. The consolidation of SSL and OE

production into a single, integrated site, will support improved operational efficiency,

process optimisation and enhanced service levels for customers through greater

cross-product synergies. The facility also reflects the Group’s strategic priorities around

sustainability and operational excellence.

Governance overview continued

Read more about operational transformation on page 8.

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Dialight plc Annual Report and Accounts 2026

4. Margin improvement and cash generation

5. Creating a platform for future growth

The Board receives regular financial and

operational reporting, enabling it to monitor

performance, constructively challenge

assumptions and ensure the business is being

managed in a financially sustainable manner.

Through its oversight of financial performance,

cost discipline and strategic priorities,

the Board supports the Group’s focus on

improving margins and strengthening cash

generation, including review and challenge of

internal plans and execution to support the

long-term resilience of the business.

Read more on page 9.

Board actions and outcomes during the year

Actions:

• Monitored progress against the Group’s financial objectives

• Monitored progress on workforce and operational rationalisation

initiatives, supported by enhanced KPIs to strengthen accountability

and performance visibility

Outcomes:

• Strengthened financial position including a significant reduction

in net bank debt, supporting balance sheet resilience

• Improved Board visibility of cost drivers and margin

performance, supporting a stronger focus on cash generation

and financial discipline

Board actions and outcomes during the year

Actions:

• Supported the appointment of external advisers to the Strategy &

Innovation Committee to provide independent challenge and insight

into strategic opportunities

• Provided oversight of strategy development to identify and

prioritise new product and market opportunities to support growth

and revenue generation

• Monitored progress against the Group’s growth ambitions ensuring

alignment with strategic priorities and long-term value creation

Outcomes:

• Strengthened Board oversight of short-term commercial

opportunities, supporting prioritisation of initiatives with clear

revenue potential

• Enhanced Board oversight of the innovation pipeline, supporting

clearer prioritisation of opportunities aligned to strategic objectives

• Enhanced Board visibility of new product development, supporting

delivery of innovative solutions that improve efficiency, durability

andcustomer value

Spotlight on: UK Ports Innovation Award

In November 2025, Dialight received the UK Ports Innovation Award 2025 for Excellence in LED Technology,

recognising its contribution to advancing safety, efficiency and sustainability within the maritime and

ports sector.

This recognition provides external validation of the Group’s strategic positioning in delivering high-

performance lighting solutions for harsh and hazardous environments and further reinforces Board

confidence that investment in product development and customer-focused solutions is aligned with market

needs and long-term growth priorities.

Read more about future growth on pages 6 to 9.

• Strategic Report

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Dialight plc Annual Report and Accounts 2026

Board of Directors

Neil Johnson

Independent on appointment as

Group Chair

Steve Blair

Group Chief Executive Officer

Mark Fryer

Group Chief Financial Officer

Appointed

17 May 2023 and Executive

Group Chair on 20 March 2025.

Nominations Committee Chair effective

17 May 2023.

Background and career

Neil has considerable experience in

international business development

and a varied range of strategic

corporate activity in multiple sectors

and geographies. He has held

a number of senior board roles,

including chairman of Tenon Group,

Hornby, Cybit, Umeco, Synthomer plc,

Motability Operations Group plc, e2v

technologies plc, Electra Private Equity

plc and Centaur Media plc. He was

formerly chief executive officer of the

RAC and chaired telematics company

Cybit Holdings plc through initial public

offering and ultimate sale to a US

private equity firm in 2010.

He has been adviser to the UK Prime

Minister on the Citizen’s Charter, a

member of a Ministry of Defence

advisory board, and was formerly

an independent member of the

Metropolitan Police Authority.

Current external appointments

Chair and Chair of the Nominations

Committee of QinetiQ plc.

Appointed

15 February 2024.

Background and career

Steve is a qualified electronic engineer

with considerable experience in

international business development

– with particular focus on North

American markets. He held senior

roles at Invensys Process Systems

as president of its North American

operations and as chief operating

officer of Spectris plc’s instrumentation

and industrial controls divisions.

Steve was chief executive officer of

e2v plc, steering the group through a

complex organisational transformation

through to its acquisition by Teledyne

Inc. in 2017. Steve was then chief

executive officer of The Ordnance

Survey until retirement in 2021.

Steve has also held a non-executive

director role at Oxford Instruments plc

where he was the senior independent

director and a member of the Audit,

Nominations and Remuneration

Committees prior to stepping down

in September 2021.

Current external appointments

None.

Appointed

6 January 2025 as Interim Group CFO.

1 May 2025 as Group Chief

Financial Officer.

Background and career

Mark is a qualified Chartered

Accountant and experienced Chief

Financial Officer with extensive

listed public company, private equity

and private company experience in

global manufacturing and industrial

service companies.

Mark was previously Chief Financial

Officer at Dialight from 2010 to 2014

and has held roles as a director of

Augean Limited (previously Augean

plc), Manganese Bronze Holdings

plc, Franchise Brands plc and Anexo

Group plc.

Current external appointments

None.

Appointments and Committee membership

Nominations Committee Remuneration Committee Senior Independent Director

Audit Committee WENED Committee Chair

• Strategic Report

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Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Nigel Lingwood

Independent NED

Lynn Brubaker

Independent NED

John Lincoln

Independent NED

Appointed

1 November 2022. Audit Committee

Chair effective 12 January 2023.

Senior Independent Director effective

17 February 2024.

Background and career

Between 2001 and 2020, Nigel was

group finance director at Diploma

plc until his retirement in September

2020. Nigel brings extensive, relevant

and recent financial and accounting

expertise, together with international

listed public company experience.

Current external appointments

Chair of Volution Group plc.

Chair of Forterra plc.

Appointed

1 July 2023. WENED effective 1 July

2023. Remuneration Committee Chair

effective 1 November 2023.

Background and career

Lynn is based in North America and

has spent her executive career in the

aerospace industry, most recently as

vice president and general manager of

Commercial Aerospace at Honeywell

International. Prior to that, she held

senior roles at Honeywell International

(Allied Signal) and at McDonnell

Douglas (Boeing). Lynn has also

held non-executive roles at QinetiQ

Group plc, Hexcel Corporation where

she chaired the Nominating and

Governance Committee, Nordham

Group where she chaired the

Compensation Committee and FARO

Technologies Inc. where she chaired

the Nominating, Governance and

Sustainability Committee.

Current external appointments

None.

Appointed

1 August 2024.

Background and career

John has 33 years’ experience of

the photonics industry across the

supply chain from components to

systems with a focus on business and

product development. He has a broad

experience of international markets and

developing technologies, and has been

based in both the UK and US.

Current external appointments

Chief executive officer of the

Photonics Leadership Group.

Chairs of the steering board of the

EPSRC Centre for Doctoral Training

in Photonic Integration & Advanced

Data Storage.

Elected member of the Photonics21

board of stakeholders.

Coach for the European

Innovation Council.

• Strategic Report

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Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Governance structure and division of responsibilities

Governance framework

The Board is collectively responsible for promoting the

long-term sustainable success of the Company, generating

value for shareholders while having regard to the interests of

wider stakeholders. It provides leadership within a framework

of prudent and effective controls, setting the Company’s

purpose, values and strategic direction, and ensuring these

are embedded in the Company’s culture and aligned with

stakeholder interests. The Board has ultimate responsibility

for the Company’s management, direction and performance,

and is accountable to shareholders, reporting to them at

general meetings.

Board Committees

Nominations Committee Audit Committee Remuneration Committee Disclosure Committee

• Reviews the structure,

size and composition

ofthe Board.

• Oversees succession

planning for the Board

and senior leadership.

• Keeps under

reviewtheleadership

requirements of

theGroup.

• Oversees the process

for Board evaluation,

including its

Committees and

individual Directors.

• Monitors the integrity of

the Group’s financial

statements, formal

announcements

relating to financial

performance and its

narrative reporting.

• Oversees the

effectiveness of the

Group’s risk

management and

internal control

systems.

• Oversees the internal

audit function, including

its effectiveness and

scope of work.

• Reviews the

independence and

effectiveness of the

external auditor and

leads the audit tender

process.

• Sets and keeps under

review the framework

and policy on Executive

Director and senior

management

remuneration (including

pension arrangements).

• Oversees the design

and operation of share

incentive plans,

including the setting

of appropriate

performance measures

and targets.

• Assesses the

independence and

effectiveness of

external remuneration

consultants and

considers their advice

in the development of

remuneration policies.

• Manages compliance

withpublic reporting

andannouncement

requirements.

• Formalised as required

from time to time by

theBoard.

In discharging its responsibilities, the Board places

importance on ongoing engagement with key stakeholders,

seeking to understand their perspectives and reflecting

these in its deliberations and decision making. It also

supports the effective assessment and management of

risk, safeguards the integrity of financial reporting and

ensures compliance with applicable laws, regulations and

governance requirements.

The Board’s responsibilities are set out in a formal schedule

of matters reserved for the Board. To support the effective

discharge of its duties, certain responsibilities are delegated

to Board Committees, while overall accountability remains

with the Board. This schedule, together with the terms of

reference for each Committee, is available on the Group’s

website at: www.dialight.com/ir/governance.

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Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Management Committees

Risk Committee Executive Committee Strategy & Innovation Committee

• Supports the Board in the

oversight of the Group’s risk

management and internal controls

framework, under the leadership

of the Head of Legal.

• Oversees the identification and

review of principal and emerging

risks facing the Group.

• Maintains and monitors the Group

risk register, ensuring it remains

current and reflective of the

risklandscape.

• Promotes a consistent approach

to risk management across the

Group and reports key risk

matters to the Board.

• Comprised of senior functional

leaders from across the Group

and chaired by the Group Chief

Executive Officer, meeting on

a quarterly basis to review

operational matters and

business performance.

• Supports the delivery of the

Group’s strategy by reinforcing

effective operational and

governance structures across

the business.

• Acts as a key forum for

management discussion and

decision making on operational

and strategic priorities.

• Monitors performance and

progress against objectives,

escalating key issues and risks

to the Board, as appropriate.

• Chaired by John Lincoln,

Independent NED, with

membership comprising senior

functional leaders from across

theGroup and input from leading

global external experts.

• Meets on a quarterly basis to

support the development of

theGroup’s medium to long-term

strategy, with a focus on

innovation and strategic

planningas key drivers of

sustainable growth.

• Undertakes periodic reviews of

the Group’s strategy and makes

recommendations to the Board,

including in relation to any

significant developments or

proposed changes.

Group Chair, Neil Johnson

• Ensuring the Board receives timely,

accurate and clear information on

performance, risks, opportunities and key

decision matters

• Overseeing compliance with governance

frameworks, including Board procedures

and reserved matters

• Leading Board evaluation, succession

planning and the ongoing development of

governance practices

• Supporting effective engagement and

communication with shareholders and other

stakeholders and ensuring their views are

understood by the Board

Division of responsibilities

Main responsibilities

• Providing leadership to the Board and

ensuring its effectiveness in setting and

overseeing the Group’s strategy and

long-term objectives

• Setting the Board agenda, prioritising

strategic matters and ensuring sufficient

time for high-quality discussion and

constructive challenge

• Promoting a culture of openness,

constructive debate and high standards of

corporate governance

• Facilitating the effective contribution of all

Directors and ensuring the Board

operatescohesively

• Strategic Report

•

Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Governance structure and division of responsibilities continued

Independent NEDs: Nigel Lingwood, Lynn Brubaker and John Lincoln

• Safeguarding the interests of shareholders

and having regard to the interests of wider

stakeholders in line with section 172 duties

• Overseeing the effectiveness of governance

frameworks and supporting high standards

of corporate governance

• Determining appropriate levels of

executive remuneration (where applicable

through Committee roles) and contributing

to succession planning

• Engaging with shareholders and other

stakeholders, as appropriate, to understand

their views and ensure these are considered

by the Board

Division of responsibilities continued

Main responsibilities

• Providing independent judgement and

constructive challenge to the Board,

particularly in relation to strategy,

performance and risk

• Scrutinising the performance of Executive

Directors’ agreed objectives and monitoring

reporting of performance

• Ensuring the integrity of financial

information and the robustness of financial

controls and systems of risk management

• Contributing to the development and review

of the Group’s strategy, bringing external

perspective and experience

Senior Independent Director, Nigel Lingwood

• Being available to Directors if they have

concerns that have not been resolved

through the usual channels

• Engaging with shareholders, as appropriate,

to understand their views and ensure these

are communicated to the Board

• Providing independent judgement and

constructive challenge to support the

effective operation of the Board

Main responsibilities

• Acting as an alternative point of contact

for shareholders where concerns cannot

be addressed through the Group Chair,

the Group Chief Executive Officer or other

Executive Directors

• Supporting the Group Chair in delivering

effective leadership of the Board

and providing a sounding board on

Board matters

• Leading the annual appraisal of the Group

Chair’s performance and overseeing

succession planning for the Group Chair

• Strategic Report

•

Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Group Chief Executive Officer, Steve Blair

• Leading and developing the Executive

Committee, including performance

management and succession planning

• Overseeing the identification and

management of principal and emerging

risks and supporting the Board in

maintaining effective risk management

and internal controls

• Promoting the Group’s purpose, values,

culture and high standards of integrity,

including a strong focus on health, safety

and employee wellbeing

• Maintaining effective engagement and

communication with shareholders,

employees and other key stakeholders,

ensuring the Board is aware of their views

Main responsibilities

• Providing overall leadership of the Group’s

Executive Committee and, together with

the Group Chair, supporting the effective

leadership of the Group

• Developing the Group’s strategy and

objectives for Board approval and leading

their implementation

• Ensuring the effective day-to-day

management and operational performance

of the Group, including safeguarding

its assets

• Maintaining an open and constructive

dialogue with the Group Chair and keeping

the Board informed of key strategic and

operational issues

• Ensuring the provision of timely, accurate

and high-quality information to the Board to

support effective decision making and input

to Board agendas

Group Chief Financial Officer, Mark Fryer

WENED, Lynn Brubaker

• Overseeing financial performance,

planning and capital management

• Supporting the Board with high-quality

financial insight to inform decision making

• Ensuring compliance with applicable

financial, regulatory and reporting

requirements

• Supporting the Board in monitoring the

alignment of culture with the Group’s

purpose and values

• Reviewing the effectiveness of workforce

engagement arrangements and supporting

continuous improvement

Main responsibilities

• Supporting the delivery of the Group’s

strategy through effective financial

leadership and oversight

• Ensuring the integrity of the Group’s

financial reporting and the robustness of

financial controls

Main responsibilities

• Acting as the Board’s designated WENED,

ensuring employee perspectives are

understood and considered by the Board

• Facilitating effective workforce

engagement and communicating key

insights to the Board

• Providing oversight to ensure workforce

considerations and corporate culture are

reflected in Board discussions and

decision making

• Strategic Report

•

Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Governance structure and division of responsibilities continued

Company Secretary, Laura Walker

• Facilitating the timely flow of high-quality

information to the Board to support

effective decision making

• Ensuring accurate recording of Board and

Committee proceedings and maintaining

statutory records

• Supporting the induction, training and

ongoing development of Directors

• Acting as a key point of contact between

the Board, senior management and

shareholders on governance-related

matters

Main responsibilities

• Supporting the Group Chair and the Board

to ensure the effective operation of the

Board and its Committees

• Advising the Board on corporate

governance matters, including compliance

with the Code, UK Listing Rules and legal

and regulatory requirements

• Ensuring appropriate governance

processes are followed

Matters reserved for the Board

Standing Board agenda items Matters reserved for the Board

• Review and approval of

the minutes from the

previous meeting.

• Review of actions and

matters outstanding from

previous meetings.

• Updates from Board

Committees on activities

since the last meeting.

• Report from the Group Chief

Executive Officer including

environmental, health and

safety matters.

• Report from the Group Chief

Financial Officer on financial

performance.

• Report from the Company

Secretary and Head of Legal

including investor analyses.

• Setting the Group’s purpose, values, culture and strategy, and approving

its long-term objectives and commercial direction.

• Ensuring that the views of shareholders and wider stakeholders are

considered in decision making to support the Group’s long-term

sustainable success.

• Approving the annual operating plan, capital expenditure budgets and

monitoring financial and operational performance.

• Approving the Group’s financial results, annual and half-year reports, dividend

policy and the declaration of dividends.

• Approving significant changes to accounting policies and ensuring the

integrity of financial reporting.

• Overseeing the effectiveness of the Group’s risk management framework and

internal control systems.

• Approving major investments, acquisitions, disposals, capital projects,

financing arrangements (including borrowings) and the provision of

guarantees or material indemnities.

• Approving changes to the Group’s capital structure, corporate structure,

or listing status.

• Approving key governance and compliance policies, including those relating

to anti-bribery, anti-corruption and failure to prevent fraud.

• Maintaining oversight of shareholder engagement, including approving

resolutions and circulars issued to shareholders and ensuring

effective dialogue.

• Approving changes to the Board’s structure, size and composition, including

the appointment and independence of Directors, and approving the

Remuneration Policy for Executive Directors and the Company Secretary

(following Committee recommendations).

• Reviewing the overall corporate governance framework, including the

establishment of Board Committees and approval of their terms of reference.

• Undertaking an annual evaluation of the Board, its Committees and individual

Directors to ensure continued effectiveness.

Division of responsibilities continued

• Strategic Report

•

Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Stakeholder engagement

The Board believes that a strong corporate

culture, underpinned by clear values and high

standards of conduct, is fundamental to the

successful delivery of the Group’s purpose

andstrategy. The Group’s culture shapes

howdecisions are made, how colleagues

worktogether and how the Group engages

withits stakeholders. Central to our culture

isacommitment to our values: being

customer-centric; delivering value in everything

we do; creating sustainable stakeholder value;

promoting accountability; empowering our

people; and driving transformational change

across the business.

The Board recognises that embedding these values

throughout the Group supports responsible decision

making, encourages accountability and integrity, and helps

ensure that the Group’s strategic objectives are pursued

in a sustainable and consistent manner. Through ongoing

engagement with stakeholders, the Board seeks to

understand their perspectives, interests and expectations

through a range of formal and informal mechanisms,

including direct engagement, management reporting,

employee feedback, customer insights, investor engagement

and operational updates.

This ongoing dialogue enhances the Board’s understanding

of the matters most important to stakeholders and supports

effective decision making, helping to ensure that stakeholder

considerations remain integral to the delivery of the Group’s

long-term strategy and sustainable success. In addition, the

Board receives regular reporting on people matters, including

health and safety performance and community engagement

activities, which provides further insight into the Group’s

broader stakeholder impact. The WENED also reports

periodically to the Board on employee engagement and the

feedback received, helping to inform the Board’s oversight

of workforce matters.

• Strategic Report

•

Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Stakeholder engagement continued

Why engagement matters How the Group engages? How the Board engages?

Outcomes: Board decision-making

impact and what we did in 2026

Employees

The Board recognises that its

employees are central to the

Group’s long-term success

and the delivery of its strategy.

Employee engagement plays

a key role in “winning hearts

and minds” by fostering trust,

alignment and a shared sense

of purpose across the Group.

The Group has a diverse

workforce across four

continents, ranging from

manufacturing production

operatives to highly-skilled

design engineers. It is

entirely reliant on its people

for differentiated innovation,

efficient and high-quality

manufacturing, and the

successful delivery and sale of

its products in end markets.

Engagement with employees

provides valuable insight

into their perspectives and

supports the development of an

inclusive, high-performing and

values-led culture.

A strong employee experience

is also key to attracting,

developing and retaining talent,

while also informing the Board’s

understanding and decision

making in support of the

Group’s continued success.

• Employee engagement survey

• Monthly Group CEO

communications with

opportunities for direct

feedback

• Townhall meetings

• Lunch-n-Share sessions

recorded live and shared

globally

• Training and development

programmes

• Individual performance

reviews

• Recognition and reward

initiatives

• Internship programmes

• Regular internal

communications, including

wellbeing updates

• Global employee intranet

• Social activities

• Supporting nationally

recognised health awareness

campaigns and initiatives

• Seasonal workplace events

• Employee welfare measures

at our manufacturing plants,

including enhanced food

provisions, transportation to,

and from, factory sites, and

on-site medical support

• WENED-led

“skip-level”

roundtable meetings

and one-to-ones

• Site visits

• Confidential

whistleblowing

hotlineoperated by

an independent

thirdparty

• Review of employee

engagement survey results and

subsequent development of

Group-wide action plans

• Deep-dive session on

succession planning and

workforce capability leading to

a clear Group-wide succession

plan for all key positions

• Monitoring of health and safety

performance and reporting

• WENED engagement

sessionsheld in Farmingdale

and London, providing direct

employee feedback to

theBoard

• Board strategy session held in

Ensenada, Mexico, including

engagement with local

leadership resulting in a clear,

definable five-year strategy

• Group Chair visits to operations

in Roxboro, Farmingdale,

Ensenada and Perth, Australia

• Senior Independent Director

visit to manufacturing

operations in Penang, Malaysia,

leading to a clear controls

improvement plan

• Payment of a £250 bonus

to all eligible employees not

already participating in a bonus

or commission scheme

• Roll-out of externally-provided

online compliance training

across the Group

• Strategic Report

•

Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Why engagement matters How the Group engages? How the Board engages?

Outcomes: Board decision-making

impact and what we did in 2026

Customer

Engagement with our

customers is fundamental to

the Group’s long-term success,

ensuring we remain closely

aligned with their evolving

needs and expectations

in competitive and

differentiated markets.

A strong understanding

of customer needs and

behaviours enables us to

deliver relevant products

and services, retain existing

customers and attracting new

ones, whilst also improving

product performance and

supporting sustainable growth.

Our strong competitive

position is underpinned by

continuous innovation and

new product development.

Our ability to capture the

“voice of the customer”

and translate it into product

design, functionality, pricing

and service enhancements

is a key driver of the Group’s

future success.

• Market-leading

warrantyoffering

• Investment in high-margin

products

• Recruiting and developing a

high-performing Sales team

• Investment in new product

development

• Simplifying the product

portfolio

• Enhancing customer

relationship management

capabilities through the

Group’s Salesforce platform

• Re-establishing the global

EPC team to strengthen

engagement with key project

customers and partners

• Expanding into new

geographic markets to

broaden customer reach and

support long-term growth

• Customer events and

product launches

• Participation in industry

exhibitions and trade shows

• Customer visits supporting

day-to-day sales activity

• Site and facility assessments

to identify and evaluate

futureopportunities

• Social media platforms

toenhance visibility

andengagement

• Regular updates from

the Executive

Directors and senior

management

• Customer feedback

• Insights from the

Strategy & Innovation

Committee

• Enhanced Board

understanding of strategic

markets, customers,

leadingto a better-defined

customer-orientated

growthstrategy

• Strengthened oversight of

sales discipline, leading to

gross margin improvement

• Enhanced Board oversight

ofsales processes and

controls, leading to improved

gross margin

• Enhanced Board visibility of

product portfolio prioritisation

and core product cost base

• Strengthened Board insight

into commercial opportunities

and new product development

• Strategic Report

•

Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Stakeholder engagement continued

Why engagement matters How the Group engages? How the Board engages?

Outcomes: Board decision-making

impact and what we did in 2026

Suppliers

Engagement with our

suppliers and commercial

partners is fundamental

to the Group’s operational

performance, product quality

and long-term success.

The Group maintains strong

and collaborative relationships

across both its inbound supply

chain and outbound distribution

networks, helping to ensure

a reliable supply, operational

efficiency and speed to

market across its multi-SKU

product range.

In addition, our key commercial

relationships play a critical

role in supporting innovation,

maintaining consistent

product quality and meeting

customer expectations.

Through ongoing engagement

with suppliers and partners, the

Group is better positioned to

support customer satisfaction,

operational resilience and

sustainable growth.

• Working collaboratively

with suppliers to mitigate

tariff impacts, including

optimising use of the

Free Trade Zone hub

• Working with suppliers to

enhance global stocking

programmes, supporting

inventory optimisation and

greater raw material flexibility

• Collaborating with key

suppliers to streamline SKU

rationalisation and consolidate

demand, supporting cost

efficiencies and margin

improvement

• Simplifying finished goods

SKUs to focus on

higher-volume products,

supporting more efficient

manufacturing and improved

on-time delivery to customers

• Strengthening supplier

compliance and social

responsibility standards,

supported by quarterly

supplier audits to ensure

consistent product quality

• Implementing dual sourcing

for key components through

an approved supplier list,

helping to reduce supply

chain risk and enhance

resilience to geopolitical

disruption

• Onboarding and ongoing

due diligence (financial,

quality, business integrity

and compliance, including

our Code of Business

Conduct and policies on

anti-bribery and corruption,

failure to prevent fraud and

modern slavery)

• Regular updates

from the Executive

Directors and senior

management

• Oversight of supply

chain performance,

risk and resilience

• Reviewed and responded to

evolving geopolitical and

macroeconomic conditions,

adjusting supply chain and

sourcing strategies to maintain

resilience and alignment with

the external environment, whilst

also reducing working capital

• Strategic Report

•

Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Why engagement matters How the Group engages? How the Board engages?

Outcomes: Board decision-making

impact and what we did in 2026

Shareholders

As a Company with a premium

listing on the London Stock

Exchange, the Group is

committed to providing fair,

balanced and understandable

information about the

business to enable informed

investment decisions.

Regular and constructive

dialogue with shareholders

supports the Board in

understanding investor

perspectives, communicating

strategy and performance

effectively, and maintaining

confidence in the Group’s

long-term prospects,

financial discipline and

governance framework.

• Annual Report and Accounts

• AGM

• Corporate website including

dedicated section for Investor

Relations

• Results presentations and

post-results engagement with

current and potential

shareholders

• Investor roadshows and site

visits, face-to-face meetings

• Addressing enquiries from

investors and analysts

• Regulatory announcements

• One-to-one

shareholder

engagement with

all members of

the Board

• Availability of the

Board and

Committee Chairs

at the AGM to

address shareholder

questions

• Regular updates

from Investor

Relations on

shareholder

feedback, market

sentiment and

engagement

outcomes

• Strengthened financial position

and business resilience, leading

to reduced net bank debt

• Strengthened understanding

of shareholder views and

expectations, resulting in a

more growth-orientated

strategy and increased

shareholder value

• Strengthened alignment of

remuneration structures with

long-term value creation and

sustainable growth

Communities and environment

Engagement with the

communities in which we

operate, together with

responsible management

ofour environmental impact,

isintegral to the Group’s

long-term sustainability.

By understanding local priorities

and managing our environmental

footprint responsibly, we are

better able to build trust, support

positive social outcomes and

ensure that our operations

contribute constructively to

the areas in which we operate,

particularly those surrounding

our long-standing manufacturing

sites in Ensenada and Tijuana

(Mexico), Roxboro (North

Carolina, US) and Penang

(Malaysia).

• Environmental Product

Declarations (“EPDs”) to

support transparency on the

lifecycle environmental impact

of our products

• Rated by EcoVadis for

sustainability performance,

enhancing transparency and

providing independent

validation of the Group’s

environmental, social and

governance practices

• Sponsorship and volunteering

opportunities

• Membership of local trade

associations and industry

bodies

• Monitoring of

environmental risks

and opportunities

• Ensures appropriate

governance and

controls are in place

• Considers

environmental and

community impact

as part of major

investment, capital

allocation and

operational decisions

• Regular updates on

environmental, health

and safety, and

community matters

• Opening of new manufacturing

facility in Penang contributed to

local economy through

employment of skilled workers

and enhanced operational

efficiency through modern

facilities and more energy-

efficient manufacturing

processes

• Investment in automation,

process optimisation and waste

reduction initiatives to reduce

environmental impact and

costs

• Product development roadmap

focused on designing lighting

products that are easier to

recycle and disassemble, in

anticipation of evolving

European regulatory

requirements

• Support for a dedicated

volunteering day across the

whole Group to encourage

employee involvement in

local communities

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Dialight plc Annual Report and Accounts 2026

Section 172 statement

Sustainable long-term success is achieved through effective

engagement with, and consideration of, the interests of the

Group’s stakeholders.

The Board recognises that strong stakeholder relationships

are fundamental to the delivery of the Group’s strategy and

the creation of sustainable long-term value.

Effective engagement with the Group’s key stakeholders

(being its employees, customers, suppliers, shareholders

and the communities and environment in which the Group

operates), supports informed and balanced decision making,

strengthens the resilience of the business and supports

the Group’s commitment to maintaining high standards of

business conduct.

The Board maintains regular engagement with its

stakeholders to understand their perspectives, interests and

priorities, and to assess the impact of the Group’s activities

and decisions. This engagement supports the Board in

identifying opportunities, managing risk and considering the

long-term implications of its decisions in line with the Group’s

purpose, values and strategic objectives.

In accordance with section 172(1) of the Companies Act 2006,

the Directors are required to act in the 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,

having regard (amongst other matters) to:

• the likely consequences of any decision in the long term;

• the interests of the Group’s employees;

• the need to foster the Group’s business relationships

with suppliers, customers and others;

• the impact of the Group’s operations on the community

and the environment;

• the desirability of the Group maintaining a reputation for

high standards of business conduct; and

• the need to balance the interests of different

shareholder groups.

The Board receives regular updates from management on

stakeholder matters and considers stakeholder interests

as part of its decision-making processes throughout the

year. The Board also recognises the importance of good

governance, ethical business conduct and corporate integrity

in maintaining the confidence of stakeholders and supporting

the long-term success of the Group.

The Directors have had regard to their duties under section

172(1) of the Companies Act 2006 in carrying out their

responsibilities during the year ended 31 March 2026.

The Directors consider that they have acted, in good

faith, in the way most likely to promote the success of the

Company for the benefit of its members as a whole, whilst

having appropriate regard to the interests of the Group’s

wider stakeholders.

By order of the Board.

Laura Walker

Company Secretary

22 June 2026

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Dialight plc Annual Report and Accounts 2026

Board composition, succession and evaluation

Board performance evaluation

During the year ended 31 March 2025, the Board undertook

an internally facilitated evaluation of its effectiveness in

line with the requirements of the Code. The review also

considered the performance and effectiveness of the Board’s

principal Committees and individual Directors.

The evaluation considered a range of areas including Board

composition and dynamics, strategic oversight, governance,

stakeholder engagement, succession planning and

risk management.

Prior year Board evaluation: actions and outcomes

Strategic focus

Last year’s evaluation highlighted the need for more

dedicated time for strategic thinking beyond day-to-day

operations. A key outcome was the strategy session

and operational site visit to the manufacturing plants

in Mexico. This provided structured time to focus on

strategic issues alongside direct engagement with

employees on the ground. This allowed the Board to gain

first-hand insight into operational realities and a clearer

understanding of how Board-level decisions translate

intothemanufacturing environment.

A platform for future growth

The Strategy & Innovation Committee has continued to

enable broader, forward-looking discussions beyond

day-to-day operations, supporting the development of a

more diverse pipeline of strategic growth opportunities

and strengthening the Board’s role in shaping the Group’s

long-term direction. Board members actively participate

in this Committee, bringing independent challenge and

perspective to the development of strategic initiatives,

with the Committee Chair providing regular updates to

the Board following each meeting. During the year, the

Committee also appointed two external consultants whose

complementary industry and strategic expertise brought

additional independent challenge, diversity of thought and

external market insight to discussions. Their experience

and objective perspectives have helped to strengthen

the quality of debate, support robust decision making

and ensure the Committee continues to consider

emerging trends.

Succession planning

In response to the Board’s request for strengthened

succession planning at both Board and senior management

levels, a comprehensive review was undertaken in

November 2025 covering leadership succession across the

Group, including a detailed assessment of talent pipelines

across all functions. Consideration was given to internal

development opportunities, as well as early career and

high-potential talent, with emphasis on career progression,

retentionandstrengthening the future leadership pipeline.

Findings from the review were considered by the Board and

informed discussions on strategic priorities and opportunities

to further strengthen governance and oversight. The Group

Chair also led the appraisal of individual Directors, while the

Senior Independent Director conducted the appraisal of the

Group Chair.

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Dialight plc Annual Report and Accounts 2026

Board composition, succession and evaluation continued

The results of the evaluation demonstrated that the

composition and performance of the Board and its

Committees (and the performance of the Chair) were

rated highly and continue to operate effectively.

As a separate exercise, the Senior Independent Director,

together with the Non-Executive Directors, conducted

the Chair’s performance evaluation.

Directors: independence

Neil Johnson was considered independent on appointment

as Group Chair. As announced on 20 March 2025,

hesubsequently assumed the title of Executive Chair.

This change reflects his participation in the Company’s

Value Creation Plan (“VCP”), asapproved by shareholders

at the 2024 AGM, and does not alter the substance of his

roleor responsibilities.

Notwithstanding this title, the Group Chair does not have

responsibility for the day-to-day management of the

Company, which remains the responsibility of the Group

CEO. The division of responsibilities between the Group

Chair and the Group CEO continues to be clearly defined

and aligned with the Group Chair’s role in leading the Board

and overseeing governance. The Board is therefore satisfied

that this arrangement remains consistent with the principles

of the Code and that the Group Chair’s independence

is maintained.

The Board also considers that each of the NEDs remains

independent in character and judgement and is free from

any relationship or circumstance that could materially

interfere with, or reasonably be perceived to interfere with,

the exercise of independent judgement. In reaching this

conclusion, the Board has considered the factors relevant

to independence, including tenure, externalcommitments,

relationships and any potential conflicts of interest.

The Board is satisfied that the NEDs continue to provide

objective oversight and constructive challenge in support

of effective decision making.

Directors: time allocation

The Board benefits from the wide range of skills, experience

and knowledge that each Director brings to their role.

However, the ability to commit sufficient time to the Group

is essential. The number of external appointments held

by NEDs is therefore carefully considered both at the time

of appointment and as part of the annual evaluation of

their effectiveness.

Executive Directors may accept one external appointment,

subject to prior approval by the Group Chair. Such approval

will only be granted where the appointment does not give

rise to a conflict of interest and is considered to support the

individual’s development, to the benefit of the Group.

In addition to scheduled Board and Committee meetings,

NEDs are expected to attend the AGM, the annual strategy

session, and other key Company events and site visits during

the year. The expected time commitment for each NED is a

minimum of 20 days per annum.

2026 Board and Committee

evaluation recommendations

Strategy and growth

Maintain a continued focus on strategy and

sustainable growth, with enhanced and more

structured engagement with key operational functions,

including sales and supply chain

Succession planning and talent management

Continue to prioritise Board and senior management

succession planning to support long-term

leadership strength

Key risks and material controls

Enhance oversight of principal risks and material

controls to support robust monitoring and challenge

inline with provision 29

Shareholder engagement

Proactively strengthen engagement with major

shareholders in relation to executive remuneration, the

VCP and the Remuneration Policy vote at the 2027 AGM

Process for the 2026 Board

andCommitteeevaluation

For 2026, the Board considered it appropriate for the

evaluation to again be conducted internally through

a structured questionnaire process, recognising that

this approach remains proportionate and effective for

the Company’s current size, stage of development and

governance structure. The Board will continue to keep

its approach to evaluation under review and will consider

undertaking an externally facilitated evaluation at an

appropriate stage as the business continues to evolve.

This year’s process involved the Group Chair, the Committee

Chairs and the Company Secretary discussing and agreeing

the scope of the evaluation, including a tailored set of

questions designed to assess overall effectiveness and

monitor progress against the actions and recommendations

identified through the prior year’s review.

Reports summarising the findings were prepared and shared

with the Board and Committee members, with the outcomes

discussed in detail at the Board meeting held in May 2026.

Following these discussions, the following recommendations

were agreed.

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Dialight plc Annual Report and Accounts 2026

The Group Chair and NEDs meet at least twice annually

without Executive Directors present, providing an

opportunity for open discussion of matters that may be

sensitive in nature. In addition, the Senior Independent

Director meets with the NEDs, in the absence of the Group

Chair, at least once each year to lead the evaluation of the

Chair’s performance.

Directors: re-election

In compliance with the Code, all of the Directors in place will

stand for re-election at the forthcoming AGM. Following the

annual evaluation of the Board and its Committees, the Board

has determined that all Directors standing for re-election at

the AGM continue to be effective, hold recent and relevant

experience and continue to demonstrate commitment to

the role.

Biographical details of each Director standing for election or

re-election are set on pages 50 and 51 and will be included

in the notice of AGM which will be available on the Group’s

website: www.dialight.com/ir.

Directors: succession planning

The Nominations Committee, on behalf of the Board,

oversees succession planning for both Board and senior

management roles. Following the prior year Board evaluation,

a comprehensive review of leadership succession was

undertaken, including assessment of talent pipelines, internal

development opportunities and high-potential individuals,

with a focus on retention and long-term capability. This has

led to the adoption of a more structured and proactive

approach, including annual succession reviews, more

regular Board visibility of people matters, and increased

engagement with senior leaders. The Board continues to

support a balanced composition through a rigorous and

open recruitment process and the use of external advisers.

In considering succession, the Board is mindful of the

importance of diversity in its broadest sense; however,

appointments are ultimately made on merit, with the priority

being to ensure the right individual is in place to deliver

effective leadership and support the long-term success

of the Group.

Directors: induction

Newly appointed NEDs receive a tailored induction

programme designed to support their effective contribution

to the Board. This typically includes meetings with the

Executive Directors, briefings from key external advisers

and introductions to the Group’s products, technologies

and operations, supported by visits to key sites and

regional offices.

Comprehensive induction materials are provided, covering

the Group’s strategy, legal and organisational structure,

governance framework, the role and responsibilities of a NED,

key internal contacts and details of the Group’s principal

advisers. Directors are also provided with recent corporate

reporting, including the latest Annual Report and Accounts

and market announcements, as well as relevant external

insight such as broker research and the outcomes ofthe

most recent Board evaluation.

The Board recognises that induction is an ongoing process.

Directors are therefore supported in continually developing

their knowledge of the Group through regular site visits,

engagement with employees and other key stakeholders,

ongoing briefings on business developments and market

conditions and participation in applicable compliance and

regulatory training programmes.

Directors: liability insurance

Each Director is covered by appropriate Directors’ and

Officers’ liability insurance, maintained by the Company

atits expense.

In addition, the Company has in place qualifying third-party

indemnity provisions for the benefit of its Directors, as

permitted by law and the Company’s Articles of Association

(“Articles”), in respect of liabilities that may arise in the

discharge of their duties. These indemnities were in force

throughout the year under review and remain in force at the

date of approval of this Annual Report and Accounts.

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Dialight plc Annual Report and Accounts 2026

Nominations Committee report

Neil Johnson

Group Chair

Dear shareholders,

The Nominations Committee (the “Committee”) has

continued to focus on strengthening the Group’s governance

framework and ensuring the Board and senior management

are well positioned to support the Group’s long-term strategy.

Following the appointment of Mark Fryer as Group Chief

Financial Officer on a permanent basis on 1 May 2025, there

have been no further changes to the Board during the year.

The Board, therefore, continues to operate in a period of

stability, enabling the Committee to place greater emphasis

on forward-looking succession planning at both Board and

senior management levels. In November 2025, the Committee

undertook a comprehensive review of succession planning

and skills gaps across the Group, which included the

ongoing evolution of the Sales function (aimed at enhancing

performance and growth opportunities) under the leadership

of Ben Myer, who was appointed VP of Global Sales

Enablement in March 2025.

This review also identified capability gaps within the

Technology and Information Security function, leading to the

appointment of a Chief Information Security Officer reporting

to the Group Chief Executive Officer. Both roles are part of

the Executive Committee and further strengthen leadership

capability in key areas of the business.

The Committee has also increased its focus on diversity

and inclusion, reflecting feedback from stakeholders.

Whilst recognising that further progress is required in relation

to applicable regulatory targets, the Committee remains

committed to improving diversity across the organisation.

In doing so, it takes a broad view of diversity, encompassing

a range of attributes including gender, skills, experience,

background and perspectives, recognising the value these

bring to effective decision making. All appointments continue

to be made on merit and against objective criteria, with due

regard to the Group’s strategic priorities and the capabilities

required across the Board both now and in the future.

Overall, the Committee remains committed to supporting

a balanced, effective and diverse Board and organisation,

underpinned by robust governance practices and a clear

focus on long-term value creation.

Composition and attendance

Committee member Joining date Attendance

Neil Johnson (Chair) 17 May 2023 3/3

Lynn Brubaker 1 July 2023 3/3

Nigel Lingwood 1 November 2022 3/3

John Lincoln 1 August 2024 3/3

The Committee noted feedback from stakeholders regarding

Neil Johnson continuing to Chair the Nominations Committee

following his transition to Executive Group Chair. Neil’s

move to Executive Group Chair was triggered following the

implementation of the shareholder-led VCP and reflects the

transitional nature of the arrangement. In practice, the Chair

continues to operate in a manner consistent with that of a

Non-Executive Chair, with no blurring of lines in respect of

independence or decision making.

The Group Chair continues to lead the Nominations

Committee effectively, exercising independent judgement

and ensuring that all decisions are taken in the best

interests of the Group. The Board remains satisfied that

the governance arrangements in place are appropriate,

proportionate and continue to support robust and

independent oversight of succession planning and

Board composition.

2026 highlights

• Permanent appointment of Mark Fryer as Group Chief

Financial Officer

• Review of Board and senior management succession

plans and strengthening of internal talent pipeline

• Overseeing appointments to the senior leadership

team in HR and IT, reporting directly to the Group Chief

Executive Officer

• Enhancing the Board’s Diversity and Inclusion Policy

2027 priorities

• Continued monitoring and development of Board and

senior management succession plans

• Ongoing review of Board composition and collective

skills to ensure alignment with the Group’s strategic

priorities and future capability needs

• Continued focus on governance best practice

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Dialight plc Annual Report and Accounts 2026

Committee activities in 2026

The activities of the Committee are summarised below:

Meeting Actions

19 June 2025 • considered the outcomes of the annual Board and Committee effectiveness evaluations and agreed

resulting actions for implementation;

• considered individual Director performance as part of the annual effectiveness review process;

• reviewed and recommended the annual election and re-election of Directors at the 2025 AGM; and

• reviewed and approved the Nominations Committee report for inclusion in the 2025 annual report

and accounts.

6 November 2025 • oversaw succession planning for the Board and senior management team, supporting the

development of a robust internal talent pipeline and long-term leadership continuity.

25 February 2026 • reviewed and updated the Committee’s terms of reference to ensure alignment with the Code;

• reviewed Board composition and Director time commitments to ensure appropriate balance of skills,

experience and capacity across the Board; and

• considered diversity and inclusion across the Board and senior leadership, with reference to

applicable regulatory requirements.

Role and responsibilities

The Committee’s key responsibilities include:

• reviewing the structure, size and composition of the

Board and its Committees, including the balance of skills,

experience, independence, knowledge and diversity,

and making recommendations required to support the

Group’s strategy;

• ensuring that Board composition and succession

planning are aligned with the Group’s purpose, values,

strategy and desired culture, and supporting long-term

sustainable success;

• leading the process for Board appointments and making

recommendations to the Board, ensuring a formal,

rigorous and transparent procedure, including appropriate

induction training;

• considering the outcomes of the annual Board and

Committee effectiveness evaluation process insofar as they

relate to Board composition, succession and effectiveness,

and agreeing appropriate actions for improvement; and

• reviewing senior leadership requirements across the Group

to ensure alignment with the Group’s long-term strategy

Terms of reference

During the year, the Committee has undertaken a review

and update of its terms of reference to ensure alignment

with the Code. This forms part of a broader commitment to

maintaining high standards of governance and responding

proactively to evolving regulatory and investor expectations.

A copy of the terms of reference for the Committee is

available on the Group’s website or on request from the

Company Secretary at the registered office.

Board changes

Mark Fryer joined the Board on 6 January 2025 as Interim

Group Chief Financial Officer. His position was made

permanent on 1 May 2025.

There were no further changes to the composition of the

Board during the year; no additional appointments were

made and no external advice was sought.

Board evaluation

In 2025, the Board conducted an internal evaluation of the

Board, the Committees and individual Directors.

The key priorities and action points identified in the prior

year led to a number of actions being taken to strengthen

the Group’s commercial capability and position it for future

growth. The global structure of the Sales team was reviewed,

and changes were made to the commission structure to

better support margin enhancement and align incentives with

profitability objectives. The Group also continued to invest

in its Sales function through enhanced training programmes

and more regular performance reviews, with the aim of

improving capability, consistency and overall effectiveness.

The Company Secretary, in conjunction with the respective

Committee Chairs, developed annual work programmes for

the Board and each Committee, providing enhanced focus,

structure and forward planning.

A comprehensive review of succession planning was

carried out in November 2025, which highlighted future

leaders within the Group, as well as identifying skills gaps

which were subsequently addressed.

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Nominations Committee report continued

Having substantially addressed the key priorities arising from

last year’s evaluation, reflecting not only progress against the

Transformation Plan but continued enhancements in Board

processes and effectiveness, the Board undertook a further

internal evaluation in 2026.

This review was conducted through an anonymous

questionnaire completed by each Board and Committee

member. The responses were collated and analysed by the

Company Secretary, in consultation with the Group Chair and

Committee Chairs, with the findings discussed in detail at the

May 2026 Board meeting.

Further details about the Board evaluation process and

recommendations following this year’s evaluation can be

found on page 63.

The Board will consider commissioning an externally

facilitated review in the next reporting period, if appropriate.

The Group Chair’s individual performance

Nigel Lingwood, as Senior Independent Director, led the

annual evaluation of the Group Chair’s performance.

This process was informed by feedback gathered from Board

members, including through one-to-one discussions and

the Board evaluation process. The review considered the

Group Chair’s effectiveness in leading the Board, fostering

constructive challenge, maintaining strong governance

standards and supporting open and transparent dialogue.

The outcomes of the review were discussed with the Group

Chair, with overall performance assessed as effective

and constructive.

The Directors’ individual performances

Individual performance discussions were conducted by

the Group Chair with each Board member, covering their

contribution, effectiveness and development requirements.

Following these discussions, the Group Chair reported to

the Nominations Committee that all Directors continued to

demonstrate appropriate commitment and effectiveness in

their roles.

Nominations Committee evaluation

As per the Code and the Committee’s terms of reference,

the Committee undertakes an annual assessment of its

performance to assess its effectiveness and ensure it

continues to operate in line with regulatory expectations and

evolving best practice.

In 2025, Committee members completed an anonymous

questionnaire to assess effectiveness. Overall, the

Nominations Committee’s performance, particularly in

relation to Board composition, was viewed positively,

with recognition of its effectiveness during a period of

significant change.

Succession planning was identified as an area for further

focus, as well as the development of an annual work

programme to ensure the Committee remains focused and

efficient and to support a robust leadership pipeline.

Following the progress made against these

recommendations, the Committee undertook a further

anonymous questionnaire in 2026, facilitated by the Company

Secretary. The findings were subsequently discussed in detail

at the May 2026 Board meeting.

The review confirmed that the majority of recommendations

were effectively progressed during the year, while

highlighting that succession planning remains a key priority.

The actions the Board will take in response are set out in the

following section.

Succession planning

Succession planning was a key area of focus for the

Committee during the year, informed by the outcomes

of the Board evaluation. A comprehensive session was

held in November 2025, covering both Board and senior

management succession, with a detailed review of talent and

pipeline across all functions of the business. This included

consideration of internal development opportunities, targeted

coaching and actions to strengthen readiness for future roles.

The Committee also reviewed the progression of

early-career and high-potential talent, with a focus on

career pathways, retention and strengthening the future

leadership pipeline. As highlighted in the Group Chair’s

introduction to governance, 30 internal promotions were

made during the year, demonstrating the depth of internal

capability and the effectiveness of the Group’s talent

development approach.

The succession planning programme will continue on an

annual basis and will include a structured review of Board

and senior managers’ skills and experience, their progress

and notable achievements.

In addition, the Board will continue to provide opportunities

for senior leaders to present at Board meetings, alongside

regular site visits, enabling Directors to observe working

practices and stakeholder relationships first-hand,

complementing the assessments provided by

theExecutive Directors.

The Committee is satisfied that a structured and proactive

approach to succession planning is in place, supporting

continuity in leadership and the long-term success of

the Group.

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Diversity and inclusion

As noted in the introduction, the Board remains committed

to promoting diversity and inclusion across the Group,

recognising that a breadth of perspectives, experiences

and backgrounds supports stronger decision making, more

effective governance and long-term sustainable success.

The Board further recognises that a diverse and inclusive

culture is central to attracting and retaining talent and to

enabling the Group to better serve its customers and the

communities in which it operates.

Whilst all appointments will continue to be made on merit,

against objective criteria and with careful consideration of the

Group’s strategic needs, the Board acknowledges that it does

not currently meet the diversity targets set out in UK Listing

Rule 6.6.6R(9), with only one female director on the Board

and no representation from an ethnic minority background.

The composition of the Board remained unchanged during

the year, reflecting the outcomes of previous appointment

processes. Notwithstanding this, the Board remains focused

on improving diversity over time and ensuring that inclusive

practices are embedded within succession planning and

broader talent development activities.

Progress has been made at senior leadership level, including

an increase in female representation within the Executive

Committee following the appointment of a female Chief

Information Security Officer reporting directly to the Group

Chief Executive Officer. The Board will continue to monitor

progress in this area and to develop diverse talent pipelines

to support future Board and leadership succession, with the

aim of ensuring that wherever possible, the leadership better

reflects the breadth of stakeholders and communities the

Group serves.

Ongoing Director training

Directors completed externally provided online compliance

training to support understanding of their regulatory

obligations, ethical standards and Group policies, with

modules incorporating assessments requiring a minimum

pass mark. The Company Secretary and Head of Legal

also provide regular updates to the Board on relevant

regulatory developments.

Priorities for the coming year

Looking ahead, the Committee will continue to focus on the

ongoing development and regular review of succession plans

for both the Board and senior management, ensuring a

strong and sustainable leadership pipeline. It will monitor

progress against diversity objectives, including alignment

with targets set out in the UK Listing Rules, whilst continuing

to promote a broad and inclusive approach to appointments.

The Committee will also keep the composition and collective

skills of the Board under review to ensure they remain

aligned with the Group’s strategic priorities and evolving

capability requirements. In parallel, it will maintain its focus

on governance best practice, ensuring that the Group’s

frameworks and processes remain robust, proportionate and

in line with evolving regulatory and investor expectations.

Re-election of Directors

The Board has undertaken its annual review of Director

performance and is satisfied that each Director continues

to contribute effectively and demonstrates the commitment

required to fulfil their role. Accordingly, all Directors will stand

for re-election at the forthcoming AGM.

On behalf of the Nominations Committee.

Neil Johnson

Chair of the Nominations Committee

22 June 2026

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Dialight plc Annual Report and Accounts 2026

Audit Committee report

Dear shareholders,

I am pleased to present this Audit Committee report for the

year ended 31 March 2026. This report provides an insight

into the activities undertaken or overseen by the Audit

Committee (the “Committee”) during the year.

Throughout the year, the Committee has continued its

focus on the key areas of financial reporting and risk to

ensure a robust system of internal controls are in place

which are fundamental to the long-term resilience of the

Group. The Committee also discussed and challenged

the assumptions and judgements made by management

in the preparation of the published financial information,

particularly regarding the Group’s cash flows and bank

facilities and the carrying value of certain tangible and

intangible assets.

The financial resources in the Group were further

strengthened at the beginning of the financial year with the

appointment of an experienced Group Financial Controller

to add focus to ensuring that a robust and consistent set

of financial reporting and internal controls were firmly

established in all the Group’s geographies. A key element

of this was the development of the FCF which was rolled

out across all reporting finance departments and set out

expected standards and procedures to be followed in

monthly reporting to Group Finance. Further adjustments

were made to financial reporting structures with the

Group which included refreshing certain roles and thereby

strengthening oversight and improved segregation of duties.

The implementation of the FCF provides the foundation

for assessing and enhancing the reporting controls and

processes required to support compliance with provision

29 of the Code. This work will continue into the new

financial year.

As reported in last year’s Committee report, areturn to a

more settled and robust financial reporting environment

has provided an opportunity this year to re-establish

an independent Internal Audit department, led by an

experienced Internal Auditor recruited from outside the

Group. This has allowed a comprehensive work programme

of internal audits to be developed, which are already

providing the Committee with good insights into operating

controls across the reporting regions.

Finally, but no less important, the Committee supported the

Group Chief Financial Officer in an external review of the

efficiency of the Group’s tax structure which was then the

basis of revising the Group’s tax transfer pricing policies to

ensure they met best practice in each of the tax geographies

in which the Group operates.

Composition and attendance

Committee member Joining date Attendance

Nigel Lingwood

(Chair)

1 November 2022; Chair

from 12January 2023

7/7

Lynn Brubaker 1 July 2023 7/7

John Lincoln 3 July 2024 7/7

Nigel Lingwood

Chair of the Audit Committee

2026 highlights

• Challenged the business forecasts versus available

banking facilities as part of going concern and viability

reviews, particularly in light of the Sanmina settlement

• Supported the Group CFO with his work to continue

torestructure and strengthen finance department

resource at both Group and operating levels

• Continued to oversee and support the focus on

working capital management, particularly inventory

levels andageing

• Supported Group CFO in developing appropriate

corporate tax structure and revised tax transfer

pricing policies

• Supported the Group CFO with a project to assess

andimplement appropriate reporting controls and

processes in connection with provision 29 of the Code

• Worked with Group CFO to re-establish an independent

Internal Audit department and focus the activity to cover

principal Group locations and functions

• Reviewed and oversaw the Group’s internal control

andrisk management process

• Supported the Group CFO with the renewal of the Group

funding facilities with HSBC, including associated legal

documentation/security

2027 priorities

• Continue to focus on the implementation of the new

requirements under provision 29 of the Code, including

a “dry-run” for the testing of material controls to ensure

readiness for the first year of application of provision 29

• Work with the newly established Internal Audit

department on development of work programmes

and ongoing review of Internal Audit reports to monitor

governance, controls and compliance across

the Group

• Continued monitoring of requirements for external

assurance to reinforce the strength and reliability of the

internal control environment

• Ensuring the Group receives the best possible service

and value from external assurance including external

benchmarking if necessary

• Strategic Report

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Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Role and responsibilities

The role of the Committee is primarily to support the Board in

fulfilling its corporate governance obligations in so far as they

relate to the effectiveness of the Group’s risk management

systems, internal control processes and financial reporting.

Its key responsibilities include:

• reviewing the integrity of financial statements and any

announcements relating to financial performance;

• reviewing and challenging key accounting judgements

and narrative disclosures;

• monitoring internal control and risk

management processes;

• performing a robust assessment of the Group’s principal

and emerging risks;

• monitoring and reviewing the effectiveness of

Internal Audit activity;

• considering the appointment of the external audit partner,

and the audit teams reports, performance, effectiveness

and independence;

• agreeing the external auditor’s terms of engagement and

the appropriateness of the audit fee; and

• oversees the Group’s climate-related reporting and

disclosures, including compliance with applicable

regulatory and reporting standards.

Terms of reference

The terms of reference are reviewed annually by the

Committee. A copy of the terms of reference for the

Committee is available on the Group’s website or on request

from the Company Secretary at the registered office.

Committee meetings

The Committee met seven times during the year ended

31 March 2026 and had a programme of business that

reflects the Committee’s terms of reference and issues,

including those outlined, that could impact the effectiveness

of the Group’s risk management systems, internal control

processes and financial reporting.

In addition to Committee members, meetings are also

attended by the Group Chair, the Group Chief Executive

Officer, the Group Chief Financial Officer, the Group Financial

Controller, Head of Legal, the Company Secretary, the

Internal Auditor and the external auditors.

The Committee met separately with Grant Thornton UK

LLP (“Grant Thornton”) who were provided the opportunity

at each meeting to discuss any issues with the Committee

without the presence of management.

The Chair meets regularly with members of the Executive

and management teams as well as Grant Thornton, outside

of formal Committee meetings to discuss matters which fall

within the Committee’s terms of reference.

Governance

The membership of the Committee has remained unchanged

during the year and is set out on page 70. I wish to thank

my fellow Committee members for their support and advice

I have received in undertaking the Committee’s work

programme this year.

All members of the Committee are independent NEDs whose

qualifications are outlined in the Directors’ biographies on

pages 50 and 51. Members of the Committee have a detailed

understanding of the Group’s strategy, business model and

the Group’s culture and core values, together with significant

knowledge and business experience in financial reporting,

risk management, internal control and strategic management.

In addition, I meet the requirement to bring recent and

relevant financial experience to the Committee and further

information about my experience can be found on page 51.

The Board is satisfied that the Committee has the resources

and expertise to fulfil its responsibilities and has competence

relevant to the sector in which the Group operates.

Audit Committee evaluation

The Board is required to carry out a formal review of the

effectiveness of the Committee during each reporting period.

This review was accomplished through an internal evaluation

process carried out at the March 2026 meeting and the

results were reported and discussed with the Board at their

meeting in May 2026. The results of this evaluation process

were positive and concluded that the Committee had fulfilled

its role effectively.

Internal control and risk management

processes

The Board has overall responsibility for the risk management

framework, as explained on page 29. The Board delegates

responsibility for reviewing the effectiveness of the Group’s

systems of internal control to the Committee. This covers

all material controls including financial, operational and

compliance controls and risk management systems.

The Board sets the risk appetite that forms the basis of the

approach to risk management, accepting that some level

of risk-taking is necessary to meet business objectives.

The Group has a risk management process, which is led

by the Risk Committee. This process identifies risks and

assesses the probability and impact from these risks and

assigns an owner to manage mitigation activities at the

operational level. During the year, the Committee received

reports that enabled them to maintain oversight and discuss

the risks and challenges to the Group.

The structures within the Group that track and report on

controls include:

• a formally constituted Risk Committee that meets

periodically, made up of members of the Executive

Committee and representing each primary function

of the business;

• allocation of identified risks to a specific risk owner with

responsibility for monitoring and mitigating that risk;

• periodic, externally-facilitated briefings on new and

emerging risk themes across our sector and generally;

• Strategic Report

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Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Audit Committee report continued

• the Board of Directors and Committee oversight on the risk

• monthly operational and financial reporting;

• the control structure for delegated authorities; and

• external and internal auditors (see following page).

The Committee also reviews the Group’s internal control

systems and their effectiveness prior to reporting any

significant matters to the Board. Internal controls are

the responsibility of the Group Chief Financial Officer.

Confirmation that the controls and processes are being

adhered to throughout the business is the responsibility of

the relevant managers and is continually tested by the work of

Group Finance. These controls include monthly management

accounts, balance sheet reviews, regular forecasting and

investigation of variances against budget/forecast.

The Committee also reviews the Group risk register on a

regular basis and assesses the actions being taken by

senior management to monitor and mitigate the risks.

The Group’s principal risks and uncertainties, the areas that

they impact and how they are mitigated are described on

pages 31 to 33.

Internal Audit

This year, the Group re-established a dedicated and

independent Internal Audit function led by an experienced

Internal Auditor. This follows a temporary pause in internal

audit activities in the previous financial year in light of the

constraint last year on available resources and conflicting

priorities and challenges faced by the Group‘s financial

operations. Internal Audit work completed so far this year has

focused on internal financial controls operating in Mexico,

Australia and Malaysia. This work identified a number of areas

where segregation of duties could be stronger and general

“house-keeping” controls which needed to be addressed and

refreshed. A detailed work programme of internal audit work

has now been agreed for the year to 31 March 2027.

Fair, balanced and understandable

One of the key compliance requirements of the Group’s

financial statements is for the Annual Report and Accounts

to be fair, balanced and understandable. The coordination

and review of Group-wide contributions to the Annual Report

Key judgements and financial reporting matters for 2026 Audit Committee review and conclusions

Going concern and viability statement

The Directors must determine that the business will continue

as a going concern for a period of at least 12 months from the

date of signing the financial statements. Furthermore, the

Directors are required to make a statement in the Annual

Report and Accounts as to the longer-term viability of the

Group. This has been analysed in detail, particularly the

downside scenarios modelled in the viability statement, in light

of the current economic environment and worldwide

commodity and logistics challenges.

The Committee conducted an annual assessment pursuant to

which the Directors concluded that the Group could prepare the

financial statements on a going concern basis, as set out in

more detail in Note 2(b) to the consolidated financial statements.

The Committee also evaluated management’s work in

conducting a robust assessment of the Group’s longer-term

viability, affirmed the reasonableness of the assumptions,

considered whether a viability period of three financial years

was most appropriate, and confirmed that it was as part of a

recommendation to the Board. These conclusions were subject

to robust challenge from the external auditors. Further detail can

be found on pages 103 and 104.

and Accounts follows a well-established process, which is

performed in parallel with the formal process undertaken by

the external auditor. A summary of the process is as follows:

• the Annual Report and Accounts are drafted by the

appropriate senior management with overall coordination

by a team comprising of the Company Secretary and the

Group Chief Financial Officer to ensure consistency;

• comprehensive reviews of the drafts of the Annual Report

and Accounts are undertaken by management, the Group

Chair and respective Chairs of each Committee to ensure

that (i) all key events and issues, which had been reported

to the Board in the Executive Board reports during the year

had been appropriately referenced or reflected within the

Annual Report and Accounts; and (ii) the completeness and

accuracy of definitions of APMs used in the Annual Report

and Accounts, their consistency of use, relevance to users

of the Annual Report and Accounts and balance with

statutory metrics;

• a near-final draft is reviewed by the Committee;

• a final draft is reviewed by the Board; and

• formal approval of the Annual Report and Accounts is given

by a sub-Committee of the Board.

This approach enabled the Committee, and then the Board,

to confirm that the Group’s 2026 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 and performance, business

model and strategy.

Key judgements and financial

reportingmatters

The Committee assesses and challenges whether suitable

accounting policies have been adopted during the year and

whether the Directors have made appropriate estimates

and judgements. Key accounting judgements considered,

conclusions reached and their financial impacts during the

year under review are set out in the table below. These were

also the key judgements challenged by Grant Thornton

during their audit. Additionally, the Committee discussed

with the external auditor the significant issues addressed

during the year, and the areas of particular focus, as

described in the independent auditor’s report on pages

103 to 116.

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Dialight plc Annual Report and Accounts 2026

Key judgements and financial reporting matters for 2026 Audit Committee review and conclusions

Inventory valuation and absorbed overhead costs

The Committee reviewed the nature of the costs absorbed into

inventory, the level of production over which these costs were

absorbed, the variances (including in respect of material usage

and purchase price) between standard cost and actual cost,

and the reasons for movements in inventory value period to

period. The basis for, and level of, provisioning, including for

aged and obsolete product which are judgemental or require a

high degree of estimation, were presented to the Committee by

management.

The Committee and the external auditors discussed and

assessed the information provided by management and

concluded, after appropriate challenge, that the valuation

of inventory and level of provisioning were reasonable.

The Committee approved the continued application of the

two-year provisioning policy in respect of raw materials and

sub-assemblies (see Note 2(c) to the consolidated financial

statements).

Capitalised development costs

Data in relation to historic and current year development cost

capitalisation was reviewed and the appropriate application of

the development costs capitalisation policy, in line with

accounting standards, was considered. The adequacy of the

Group’s disclosures was reviewed with management, including

the judgement involved in assessing the carrying amount and

degree of estimation involved in assessing the recoverable

amount of capitalised development costs.

The Committee and the external auditors challenged the

assumptions used to determine the capitalisation of

development costs. The Committee and the external auditors

concurred with management that a provision for impairment of

$1.3m was necessary in respect of the carrying value of

capitalised development costs at 31 March 2026.

Impairment review

For indefinite-life assets and capitalised development costs

that arenot yet available for use, the Group performs an

annualimpairment review. In addition, the Group reviews

assets thatare subject to amortisation or depreciation for

events orchanges in circumstances that indicate that the

carrying amount of an asset or cash-generating unit (“CGU”)

may notbe recoverable. If an asset has previously been

impaired, theGroup considers whether there has been a

change in circumstances or event that may indicate the

impairment isnolonger required.

The parent company performs an annual impairment

assessment for its investments in subsidiaries and loans to

subsidiaries and also assesses whether amounts owed by

subsidiary undertakings are recoverable.

The Committee and the external auditors reviewed

management’s impairment review process including, where

applicable, the potential indicators of impairment and/or

reversal, cash flow projections, growth margin and discount

rates used to derive a value-in-use as well as the sensitivity

to assumptions made and consistency with the prior year.

The Committee and the external auditors concluded that,

at 31 March 2026, certain of the Group’s intangible assets

relating to specific projects should be impaired by $1.6m and

property, plant and equipment should be impaired by $0.7m.

The parent company recorded a total impairment reversal of

£15.4m in the year ended 31 March 2026 relating to loans to

subsidiaries (£5.5m) and amounts owed by subsidiary

undertakings (£9.9m).

Non-underlying items

The Group separately discloses certain costs and income in

order to provide visibility of the underlying performance and

trends between periods. The separately disclosed items are

material and infrequent in nature and/or do not relate to

underlying business performance. Judgement is required

in determining whether an item should be classified as

non-underlying or included within the underlying results.

The Committee and the external auditors reviewed the

presentation treatment of non-underlying items and agreed

thatthe items set out in Note 7 to the consolidated financial

statements are appropriately classified anddisclosed.

Deferred tax assets

The Directors must determine the extent to which deferred tax

assets can be recognised and this determination is based on

an assessment of the probability that future taxable income

will be available, against which the deductible temporary

differences and tax loss carry-forwards can be utilised.

Inaddition, significant judgement is required in assessing the

impact of any legal or economic limits or uncertainties in

various tax jurisdictions.

The Committee and the external auditors discussed and

assessed the information provided by management and

concluded, after appropriate challenge, that the amount of

deferred tax assets recognised was reasonable. Where the

Group has significant historical tax losses which have not been

recognised and additional losses arise, the deferred tax assets

associated with these in-year losses are not recognised. This

has had the effect in the current year of significantly increasing

the overall ETR.

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Dialight plc Annual Report and Accounts 2026

Audit Committee report continued

External audit effectiveness

andindependence

The shareholders confirmed the appointment of Grant

Thornton as external auditor at the AGM on 1 September

2025. The year ended 31 March 2026 will be the third financial

reporting period in which Grant Thornton has reported

on the consolidated and Company’s financial statements.

The lead partner for the current financial year was Mark

Overfield. Other than this role, Mark has not had any previous

involvement with the Group.

The Company confirms that, during the year under review,

it has complied with the provisions of The Statutory

Audit Services for Large Companies Market Investigation

(Mandatory Use of Competitive Tender Processes and Audit

Committee Responsibilities) Order 2014.

Grant Thornton is engaged to express an opinion on the

financial statements. They review the disclosures contained

in the financial statements to the extent necessary to express

its opinion. It discusses with management the reporting of

operational results and the financial position of the Group

and presents findings to the Committee. The Directors in

office at the date of this report are not aware of any relevant

information that has not been made available to Grant

Thornton and each Director has taken steps to be aware

of all such information and to ensure it is available to Grant

Thornton. Grant Thornton’s audit report is published on

pages 103 to 116.

During the current year, the Committee assessed the

effectiveness of the external audit process for the year ended

31 March 2025. As part of this review, feedback was sought

from members of the Committee and senior management of

the business areas subject to the audit. The feedback was

considered, discussed and summarised by management and

reported to the Committee and the Board. Having conducted

such review, and reviewed overall performance, the

Committee concluded that the audit effectiveness and

independence of the external auditor, and the audit process

applied to the audit of the financial statements for the year

ended 31 March 2025 was satisfactory and effective.

Non-audit services

The Committee reviews and approves the fees paid

to the external auditor in respect of its audit services.

The Committee also oversees the nature and amount of

all non-audit work undertaken by the external auditor to

ensure that it remains independent. When seeking external

accounting-related advice in relation to non-audit matters,

the Group’s policy is to invite competitive tenders where

appropriate. In the year ended 31 March 2026, Ernst & Young

LLP provided taxation advice and support services to the

Group in connection with overseas transfer pricing and more

general corporate tax matters, including accounting for tax

in the Annual Report and Accounts. It is the Group’s policy

to balance the need to safeguard auditor independence with

the benefits of obtaining advice from the most appropriately

qualified firm on the matter concerned, whilst also

maintaining operational efficiency.

In the year, the Group incurred $26,000 of fees from Grant

Thornton in respect of certain agreed-upon procedures

relating to the half-year financial statements. There were no

other non-audit fees relating to assurance-related services

paid to Grant Thornton during the year under review.

Whistleblowing, the Bribery Act and fraud

The Board has reviewed and approved the Group’s policies

and procedures covering whistleblowing, anti-bribery and

corruption and fraud prevention, including the controls in

place todetect fraud and to ensure compliance with both

competition and anti-bribery legislation. The Group maintains

a zero-tolerance approach to breaches of this legislation

andcertain employees in commercial roles, selected using

a risk-based approach, are provided with dedicated training

and guidance appropriate to their roles. The Group, via a

third-party, operates Speak Up, an anonymous incident

reporting system that allows employees to report any

wrongdoing or concerns with confidentiality assured.

There were no substantive concerns notified to the Group

that required the attention of the Committee during theyear

and up to the date of the report.

In concluding this report, and on behalf of the Committee,

Iwish to thank the Dialight management and Finance teams

and Grant Thornton for their commitment and valuable

contributions during what has been a significantly improved

and more rewarding year and from which has emerged a

stronger and more effective financial operation.

I will be available to answer any questions in relation to this

report before the AGM. Please email your questions to the

contact details in the AGM notice.

Nigel Lingwood

Chair of the Audit Committee

22 June 2026

• Strategic Report

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Governance • Financial Statements • Other Information

Dialight plc Annual Report and Accounts 2026

Remuneration Committee report

Lynn Brubaker

Chair of the Remuneration Committee

Dear shareholders,

On behalf of the Board of Directors, I am pleased to present

the Remuneration Committee report for the year ended

31 March 2026.

The Remuneration Committee’s approach during the year

has remained focused on the continued operation of the

Directors’ 2024 Remuneration Policy (the “2024 Policy”)

and ensuring that Executive Director remuneration is clearly

aligned with the Group’s strategy, performance and the

long-term interests of shareholders, whilst having regard

to pay and conditions across the wider workforce.

The Group delivered a solid financial and operational

performance for the year ended 31 March 2026, with underlying

operating profit of $10.3m, more than double what was

achieved in the prior year. Net bank debt has been significantly

reduced to $1.9m, demonstrating strong progress against our

strategic priorities. In light of this performance, annual bonuses

for Executive Directors will pay out at 60% of maximum,

which reflects the strong profit and cash performance but

underperformance with regards to the revenue metric.

In determining remuneration outcomes, the Remuneration

Committee (the “Committee”) carefully considered overall

Group performance, the shareholder experience and the

consistency of outcomes across the Group. The Committee

has not exercised any discretion during the reporting year

interms of incentive plan outcomes.

During the year, Mark Fryer’s role as Group Chief Financial

Officer was made permanent. Details of Mark’s remuneration

during the reporting period is set out on page 89.

The Committee also:

• reviewed the operation of the Group’s incentive

arrangements to ensure continued alignment with strategy;

• considered workforce pay and conditions across the

Group; and

• engaged with major shareholders on remuneration matters,

receiving supportive feedback on our approach.

Looking ahead to 2027, the Committee will continue to

monitor the evolving expectations under the Code and ensure

that our remuneration framework remains appropriate.

Composition and attendance

The members of the Committee who served during the year

and up to the date of this report are set out inthe table below.

The Committee met ten times during the year. Of these,

seven were scheduled meetings, with the remaining three

convened on an ad hoc basis to consider and approve

specific technical remuneration matters.

Committee

member Joining date

Scheduled

meetings

Ad hoc

meetings Total

Lynn Brubaker

(Committee

Chair)

1 July 2023

(Chair from

1 November

2023)

7/7 3/3 10/10

Nigel

Lingwood

1 November

2022

7/7 3/3 10/10

John Lincoln 1 August 2024 7/7 3/3 10/10

At a glance

Remuneration element 2026 2025

Group CEO total remuneration £962,981 £818,945

Bonus achieved (% of max.

) 60% 43%

Group CFO total remuneration £556,727 £111,042

Bonus achieved 60% £41,250

1 The maximum bonus opportunity is 150% of base salary for

the Group CEO and 125% of base salary for the Group CFO,

payable in a combination of cash and, for performance above

target, shares.

2 Under the terms of Mark Fryer’s interim service agreement

with the Company, he was entitled to a bonus totalling

£41,250, payable in July 2025, subject to a set of deliverables

as agreed with the Board.

2026 highlights

• Annual bonus outcomes reflected performance against

financial and operational targets, including progress

oncash generation and margin improvement

• Ensured remuneration structures supported

leadershipstability across the Board and senior

managementteam

• Awards under the VCP continued to align leadership

with long-term value creation for shareholders

2027 priorities

• Ensuring remuneration remains appropriate and

competitive to support the attraction, retention and

motivation of key talent across the organisation

• Continued refinement of incentive metrics to

strengthen alignment with shareholder interests

including cash generation and long-term value creation

• Preparation for the three-yearly Remuneration Policy

review, including proactive engagement with

shareholders to ensure continued alignment with

market practice and stakeholder expectations

• Continued strengthening of remuneration governance

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Dialight plc Annual Report and Accounts 2026

Remuneration Committee report continued

All members of the Committee are independent NEDs.

No member has any personal financial interest in the

Company (other than as a shareholder), any conflicts of

interest arising from cross-directorships, or any day-to-day

involvement in the management of the business.

Attendance at Committee meetings is restricted to members

of the Committee. The Group Chair, Group Chief Executive

Officer and Company Secretary attend meetings by invitation,

as appropriate, but are not present when matters relating to

their own remuneration are discussed.

Role and responsibilities

The primary responsibilities of the Committee are to:

• set the Remuneration Policy for the Executive Directors

andthe Group Chair, including, where appropriate, salary,

bonuses, incentive arrangements, share-based incentive

schemes and post-employment benefits;

• determine, within the terms of the approved policy,

theremuneration packages for the Executive Directors,

theGroup Chair and the Company Secretary;

• review and monitor the structure of remuneration for

senior management, informed by market data and the

Group Chief Executive Officer’s recommendations;

• approve the design of, and determine performance

measures and targets for, any performance-related and

share-based incentive schemes operated by the Group,

and approve the total annual payments made under such

schemes, having regard to the provisions of the Code; and

• review the design of all share incentive plans requiring

approval by the Board and shareholders and determine,

each year, whether awards will be made under such plans

and, if so, the level of such awards and the applicable

performance conditions. In doing so, the Committee will

take into account the recommendations of the Group Chief

Executive Officer in respect of awards to the Executive

Directors, the Company Secretary, members ofthe

Executive Committee and other senior employees of

the Group.

Terms of reference

The terms of reference of the Committee are available on

the Group’s website and on request from the Company

Secretary at the registered office.

The terms of reference are reviewed annually as part of

the Group’s governance framework, and the Committee

is satisfied that they remain appropriate and effective and

aligned with the provisions of the Code.

Committee activities in 2026

• Consideration of remuneration arrangements in connection

with the retirement of the VP HR, including the

remuneration framework for the successor role.

• Provided input on remuneration structures in relation to

thedevelopment of the Chief Operating Officer role.

• Oversaw remuneration aspects of the Group Chief

Financial Officer’s transition from an interim to a

permanentposition.

• Consideration of remuneration implications arising from

the departure of the General Counsel and Company

Secretary, including the remuneration framework for the

successorrole(s).

• Reviewed remuneration considerations associated with

changes to the Sales and Marketing leadership structure.

• Determination of bonus outcomes for the year ended

31 March 2026.

• Assessment and monitoring of the VCP.

• Review of performance measures to ensure alignment

withstrategy.

• Review of remuneration for the Group Chair and

Executive Directors, both in the context of wider

workforce pay trends.

• Consultation with major shareholders on

remunerationmatters.

• Oversaw the administration of the employee benefit trust

(“EBT”) and the Dialight Restricted Share Plan (“DRSP”).

External advice to the Committee

The Committee has access to the advice of the Group

Chair, the Group Chief Executive Officer, the Group Chief

Financial Officer, Head of Legal, the Company Secretary and

the Senior Director, HR North America, as well as external

advisers, where appropriate.

During the year ended 31 March 2026, the Committee

received independent advice from Mercer Limited (“Mercer”)

for a total fee of £70,665 on executive remuneration, wider

workforce pay, corporate governance developments and

related disclosure requirements, including support in the

preparation of this report.

The Committee is responsible for the appointment, oversight

and remuneration of its advisers. It keeps their independence

under regular review and is satisfied that the advice it

receives is objective and independent.

Mercer is a signatory to the Remuneration Consultants Group

Code of Conduct and adheres to its principles in providing

transparent and impartial advice. The Committee confirms

that Mercer did not provide any other services to the Group

during the year.

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Dialight plc Annual Report and Accounts 2026

Committee evaluation

The Committee undertakes an annual evaluation of its

effectiveness, including consideration of its alignment with

the requirements of the Code and relevant best practice.

This review supports the continued effectiveness of

the Committee in overseeing the Group’s remuneration

framework and governance processes.

Following this year’s evaluation, which was conducted by

way of a self-assessment questionnaire, the Committee

concluded that it continues to operate effectively and in line

with its terms of reference.

The review identified a number of areas for optimisation,

including strengthening meeting processes, enhancing

engagement with major shareholders and continuing to

ensure that broader workforce remuneration and employment

conditions are carefully and consistently considered in

executive pay decisions. The Committee has agreed

appropriate actions to progress these areas during the

forthcoming year.

Statement of shareholder voting

(2025AGM)

At the Company’s AGM held on 1 September 2025,

shareholders approved the Annual Directors’ Remuneration

Report 2025 with 99.98% of votes cast in favour and

0.02%against.

The Board notes the strong level of shareholder support

for the Directors’ Remuneration Report for the year ended

31 March 2025 and will continue to engage with shareholders

to ensure that the Group’s remuneration framework remains

aligned with shareholder interests.

% votes for

% votes

against

Votes

withheld

Directors’

Remuneration Report

2025 99.98 0.02

1,568 (out of

34,728,317

votes cast)

Group Chair remuneration

The Group Chair’s fee was set at £250,000 per annum in

February 2023 following an external benchmarking exercise

undertaken in connection with the appointment of the

current Group Chair. This level reflected the anticipated

considerable demands of the role, including the significant

time commitment required to lead the Group’s transformation

and strategic plan.

In March 2025, the Group Chair entered into a new Executive

Group Chair service agreement as a result of the award of

units under the VCP. There was no increase to the Group

Chair’s fee as a result of this change and the Committee

continued tokeep this fee level under periodic review.

As the business advanced into a stable position, with a strong

and well-established executive team and the Transformation

Plan firmly embedded, the time commitment initially required

of the Group Chair had reduced. Following a review by the

Committee, in conjunction with further external benchmarking

advice from Mercer, the Committee agreed a reduction in the

Group Chair’s fee to £200,000 per annum with effect from

1 October 2025.

Group Chief Executive Officer

remuneration

The Group Chief Executive Officer received a 3% salary

increase, effective 1 July 2025, in line with the average

increase awarded to the wider workforce.

2024 Policy

The 2024 Policy was approved by shareholders at the 2024

AGM with 96.63% of votes in favour and is intended to apply

for a period of three years. In accordance with applicable

regulations, the Company will seek shareholder approval

foranew Remuneration Policy at the 2027 AGM.

Malus and clawback

No malus or clawback provisions were invoked in respect of

the Executive Directors during the year ended 31 March 2026.

Post-year-end activities

Under the terms of the 2025 Annual Performance Bonus

Plan (“APBP”), the performance thresholds for the underlying

operating profit and net bank debt metrics were reached

and the Executive Directors are eligible for a bonus, payable

in July 2026. Further details ofthe APBP and the bonuses

achieved can be found on page90.

Except for the implementation of the matters set out above,

following the end of the financial year, there have been no

material changes to the Group’s remuneration framework.

Any remuneration decisions or changes effective after

the year-end have been disclosed, where relevant, within

this report.

Matters to be considered at the 2026 AGM

Aside from the routine resolution relating to this Remuneration

Committee report, there are no further remuneration

resolutions for consideration at this year’s AGM.

Compliance statement

This Remuneration Committee report (inclusive of

the introduction and statement by Lynn Brubaker, the

Remuneration Policy outlined on pages 78 to 85 and the

report on the implementation of the 2024 Policy on pages

95 to 97) has been prepared in accordance with the

requirements of the Companies Act 2006 and the Large

and Medium-sized Companies and Groups (Accounts and

Reports) Regulations 2013 (as amended). The report also

meets the requirements of the UK Listing Rules and the

Disclosure Guidance and Transparency Rules. The Group

has complied with the applicable provisions of the Code in

respect of remuneration throughout the year. The sections of

the Remuneration Committee report that are subject to audit

are marked as “audited information”.

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Dialight plc Annual Report and Accounts 2026

Remuneration Committee report continued

Directors’ Remuneration Policy

This section of the report details the Remuneration Policy

which was approved by shareholders at the September

2024 AGM (approved by 96.63% of votes cast on the

resolution) and is effective for up to three years from the date

of approval. The 2024 Policy significantly strengthened the

linkage between pay and performance and the alignment

between the pay of Executive Directors and the shareholder

experience, and introduced the VCP.

Background and overview of the 2024 Policy

The Committee has a clear policy on remuneration: that

base salary and benefits for Executive Directors should

represent a fair return for employment but that the majority of

remuneration should be dependent on the continued success

of the Group and be aligned with delivery of the Group’s

strategic plan and the creation of shareholder value.

The 2024 Policy was designed and reviewed to reinforce

those principles, in particular to offer significant rewards for

a substantial increase in shareholder value with no long-term

incentives being earned if total shareholder return (“TSR”) is

below a stretching threshold. The Committee consulted very

extensively with major shareholders in late 2023 and early

2024 prior to implementing the 2024 Policy. It also took into

account prevailing best practice investor expectations, along

with remuneration made generally to employees of the Group.

2024 Policy table

Link to strategy Operation Opportunity Performance metrics

Base salary/fees

To recruit, retain and

motivate individuals

of high calibre, and

reflect the skills,

experience and

contribution of the

relevant Director; to

ensure that fixed

pay represents a fair

return for

employment.

The Committee sets base

salary with reference to relevant

market data and an individual’s

experience, responsibilities and

performance. Base salary is

considered by the Committee

on an individual’s appointment

and then generally reviewed

once a year or when an

individual changes position or

responsibilities. When making

a determination as to the

appropriate level of remuneration,

the Committee firstly considers

pay and conditions for employees

across the Group, the general

performance of the Group and

the wider economic environment.

The Committee may also

undertake periodic benchmarking

for similar roles in comparable

organisations.

Any base salary increases are

applied in line with the outcome of

the review. In respect of existing

Executive Directors, it is anticipated

that salary increases will generally

bein line with the broader

employee population. In exceptional

circumstances (including, but not

limited to, material increases in role

size or complexity), the Committee

has discretion to make appropriate

adjustments to salary levels to

ensure that they remain market

competitive. It is not envisaged that

this will be a frequent occurrence.

Detail of current salaries for the

Executive Directors can be found

on page 89.

None.

Benefits

To provide market

competitive, yet cost

effective, benefits to

attract and retain

high-calibre

Executive Directors.

Executive Directors receive

benefits which consist primarily

of the provision of a car

allowance, life insurance and

private medical insurance,

although they may include such

other benefits as the Committee

deems appropriate including

in circumstances where new

benefits are introduced for other

employees inthe location where

an Executive Director is based.

Benefits vary by role and individual

circumstances; eligibility and cost

arereviewed periodically.

The Committee retains the discretion

to approve a higher total benefit

cost in exceptional circumstances

(e.g. relocation) or in circumstances

where factors outside the Group’s

control have changed materially

(e.g. increases in life insurance

premiums). The value of benefits

awarded to the Executive Directors

can be found in the table

onpage 89.

None.

1 Not applicable to the Group Chair.

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Dialight plc Annual Report and Accounts 2026

Link to strategy Operation Opportunity Performance metrics

Pension

To provide market

competitive, yet cost

effective, benefits to

attract and retain

high-calibre

Executive Directors.

A Company contribution to a

defined contribution pension

scheme or provision of a cash

payment in lieu ofa pension

contribution (or combination of

such) for UK-based Directors.

In the US, Dialight operates a

401(k) and supplementary

executive retirement plan

(“SERP”) or cash equivalent

payment in lieu in respect of the

latter. Salary is the only element of

remuneration that is pensionable

for Executive Directors.

Executive Directors will receive

pension arrangements consistent

with the majority of employees in

the relevant jurisdiction.

• UK-based Executive Directors

will be entitled to join the existing

defined contribution scheme

offering employer contributions of

up to 5% of salary, or to receive an

equivalent cash payment in lieu.

• US-based Executive Directors will

be entitled to participate in the

401(k) and the SERP (or to receive

a cash equivalent payment in lieu

of employer contribution in respect

of the latter) on terms consistent

with the majority of US employees.

None.

APBP

The APBP

incentivises the

achievement of

annual objectives,

which support the

short-term

performance goals

of the Group.

APBP measures, weightings and

targets are set by the Committee

at the beginning of each financial

year following the finalisation of

the budget for that year.

Bonuses up to target are paid in

cash, with pay-outs above target

delivered in Dialight shares.

Where the Executive Director

receives Dialight shares, half of

these vest after two years with the

balance vesting after three years,

subject to continued employment

with the Group. Dividends are

accrued on these deferred shares

and are paid to the participant on

release of shares that are subject

to the award.

Awards under the APBP are

subject to malus and clawback

provisions, further details of which

are included as a note to the 2024

Policy table.

The maximum bonus opportunity

is150% of salary. Threshold

performance will deliver payouts

of upto 20% of maximum, while

payouts for target performance will

beup to 50% of maximum.

Performance is assessed on

an annual basis, as measured

against specific objectives set

at the start of each year.

Financial measures will make

up at least 75% of the total

annual bonus opportunity in

any given year, with up to 25%

based on objectives linked to

Dialight’s strategy.

The Committee has discretion

to adjust the formulaic bonus

outcomes both upwards

(within the plan limits) and

downwards (including to zero)

to ensure alignment of pay

with performance, e.g. in the

event of one of the targets

under the bonus being

significantly missed or if there

are unforeseen circumstances

outside management’s control.

The Committee also considers

measures outside the bonus

framework (including ESG

factors) to ensure there isno

reward for failure and that

outcomes are fair in the

context of overall performance

and the Group’s wider

environmental and

societal impact.

1 Not applicable to the Group Chair.

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Dialight plc Annual Report and Accounts 2026

Remuneration Committee report continued

Link to strategy Operation Opportunity Performance metrics

VCP

Executive Directors

are eligible for

awards under the

VCP. No Executive

Director that receives

a VCP award was

eligible for a DRSP

award in either

2024 or 2025

except potentially

in the case of

“buy-outs” under

the appointments

policy. It is

anticipated that

DRSP awards will

recommence in

the year ending

31 March 2027.

The VCP provides

a way to align

remuneration more

closely to

shareholder value

creation. The aim

of the VCP is to

incentivise the Group

Chair, Group Chief

Executive Officer

and Group Chief

Financial Officer and

other key executives

to pursue ambitious

targets for growth.

Participants will be eligible for a

share in a pool of excess value

created over three and four-year

periods. The total pool will be

calculated as 7.5% of value

created through share price

growth plus dividends (i.e.TSR)

inexcess of 350p versus a

four-week average share price

ending 1 April) ofapproximately

166p; i.e. growth of

approximately110%.

The award will have two

independent three and four-year

performance measurement periods

(1 April 2024 to 31 March 2027 and

1 April 2024 to 31 March 2028).

Each period will determine 50%

ofthe award, i.e.3.75% of value

created willapply to each

measurementperiod.

A three-month average opening

and closing share price will be

used to measure value creation for

the pool. Awards will be granted

as a number of units in the pool.

At the end of each performance

period, units will be converted into

an award of shares/nil cost

options with participants required

to hold onto their vested shares

after any sales required to settle

tax and withholdings on vesting

for a period of five years from

grant, in line with the provisions

ofthe Code and market best

practice. To avoid excessive

payouts and shareholder dilution,

the total value of the pool for all

participants will be capped at 3%

of shares in issue. If the aggregate

value of the pool exceeds this

cap, then awards will be scaled

back pro-rata on the same basis

for all participants. The implication

is that the slope of the payout

curve reduces once the share

price exceeds 583p.

Awards to be granted to four to five

key individuals including the Group

Chair, the Group Chief Executive

Officer and the Group Chief Financial

Officer. Both the Group Chair and

Group Chief Executive Officer are

each eligible for awards over units

representing 34% of the pool and the

Group Chief Financial Officer is

eligible for awards over 17% of the

pool, with the remaining 15%

allocated among other current or

future participants as determined by

the Board. At a share price of 500p,

the awards to the Group Chair and

the Group Chief Executive Officer

would be worth approximately

£1.5m each, representing around

0.34% each of the value created

for shareholders above the hurdle.

TheGroup Chair and Group Chief

Executive Officer were required to

acquire £150,000 worth of Dialight

shares by 31 March 2025 in order

tobe eligible for VCP payouts.

No awards are to be made under the

DRSP to VCP participants until 2026.

These awards would vest in 2029,

one year after the second element

ofthe VCP awards vest, ensuring the

ongoing retention of plan participants.

Other senior management DRSP

participants may receive awards

inthe usual way.

Awards under the VCP are subject

tomalus and clawback provisions,

further details of which are included

as a note to the 2024 Policy table.

As described under

“Operation”, the amounts

received by participants are

directly proportional

toshareholder value generated

in excess of athreshold that

represents substantial growth.

The Committee has discretion

to adjust outcomes as

described inthe 2024 Policy.

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Dialight plc Annual Report and Accounts 2026

Link to strategy Operation Opportunity Performance metrics

DRSP

The DRSP replaced

the 2014 Dialight

Performance Share

Plan (“DPSP”) for

awards to Executive

Directors in 2023

and thereafter. There

are no outstanding

DPSP awards to any

Executive Directors.

As noted above,

no DRSP awards

were made to any

Executive Director

that received a VCP

award in either 2025

or 2026. It is

anticipated that

DRSP awards will

recommence for

Executive Directors

in the year to

31 March 2027.

The DRSP provides

asimple and

transparent

long-term incentive

award to help ensure

alignment between

the interests of

shareholders and

those of the

Executive Directors,

and is aligned to the

plans operated below

Board level.

DRSP awards may be structured

as conditional shares or nil-cost

options with a two-year exercise

window from the date of vesting.

The release of awards may, at the

discretion of the Committee, be

deferred in whole, or in part,

following the end of a three-year

vesting period.

The Committee’s intention is

thatall vested awards will be

subject to a two-year post-vesting

holding period.

The Committee has the power

toauthorise the payment of

dividends ordividend equivalents

under the rules of the DRSP.

Awards under the DRSP are

subject to malus and clawback

provisions, further details of which

are included as a note to the 2024

Policy table.

The DRSP provides for an award up

to a normal limit of 62.5% of salary

forExecutive Directors, with an

overall limit of 75% of salary for use

in exceptional circumstances.

These maximum opportunities under

the DRSP represent a 50% reduction

against the maximum opportunity that

was available under the previous

DPSPscheme.

The Remuneration Committee has

discretion to reduce awards in the

event that there has been a significant

fall in the shareprice.

Vesting of awards will

requirethat:

• the recipient remains in role

as at the date of vesting

(subject to the “leaver”

provisions of the

shareholder approved

shareplan); and

• the Committee is satisfied

that Dialight’s underlying

performance and delivery

against strategy are

sufficient tojustify the level

of payout, taking into

consideration factors

suchas absolute TSR,

relativeTSR, environmental

impact and operational

performance over the

period, as well as individual

contribution and the

workforce and wider

stakeholder experience.

The Committee will have

discretion to reduce the

vesting of awards (including

tozero) in the event that it

considers that the outcome

would be otherwise misaligned

with the experience of

shareholders and other

stakeholders.

1 Not applicable to the Group Chair.

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Dialight plc Annual Report and Accounts 2026

Remuneration Committee report continued

Link to strategy Operation Opportunity Performance metrics

NED fees

The Group sets fee

levels to attract and

retain NEDs with the

necessary

experience and

expertise to advise

and assist with

establishing and

monitoring the

strategic objectives

of the Group.

Fee levels are typically considered

annually, taking into account fees

paid for equivalent roles at

companies of similar size, time

commitment and complexity.

Inthe event of the Group reverting

to having a non-Executive Group

Chair, the fees for that role will be

determined by the Committee,

while fees for NEDs are

determined by the Board.

Additional fees are payable for

acting as Senior Independent

Director and as Chair of any of the

Board’s Committees. NEDs do not

receive any bonus, do not

participate in awards under the

Group’s share plans and are not

eligible to join the Company’s

pensionscheme.

The Group’s 2024 Policy in relation to

NEDs fees is to reflect the time

commitment and responsibilities of

the roles, normally by paying up to

median level fees, compared to

market, depending on the experience

and background of the NEDs.

TheCompany also reimburses the

NEDs for expenses reasonably and

properly incurred in the performance

of their duties. In normal

circumstances, increases to fees will

be broadly in line with price inflation,

subject to cases of material

misalignment with the market or a

change in the complexity,

responsibility or time commitment

required to fulfil a NED role.

It remains important for the Board to

have the necessary flexibility to step

outside this general policy should the

requirement be clear that a certain

type of individual is required to

conform with new governance

requirements or legislation. Aggregate

fees for all NEDs will be within the

limits set by the Company’s Articles

ofAssociation. Details of current NED

fees can be found on page 89.

None.

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Dialight plc Annual Report and Accounts 2026

Notes to the Remuneration Policy table

Explanatory detail for future Remuneration Policy table

For the avoidance of doubt, in approving this 2024

Policy, authority is given to the Company to honour any

commitments previously entered into with current or

former Directors (such as the vesting or exercise of past

share awards).

Performance measures and targets

Measures used under the APBP are selected annually

toreflect Dialight’s main short-term objectives and reflect

both financial and non-financial priorities, as appropriate.

The performance underpinned to any future DRSP awards

will be based on those which best reflect the overall

performance of the business. These might include, but not

be limited to, absolute TSR, relative TSR, ESG metrics and

operational performance over the period, as well as individual

contribution and broader stakeholder experience.

For the APBP, underlying operating profit continues to be

used as the primary measure to provide a direct link to one

of our KPIs. In the year ended 31 March 2026, the Executive

Director APBP performance targets were based upon

underlying operating profit, revenue and net bank debt.

Up to 25% of the APBP may be based on strategic or other

non-financial goals in order to reflect the importance of

incentivising non-financial objectives linked to the Group’s

strategy. Targets are set on an annual basis taking into

account the Group’s budget as well as external expectations

for Dialight and the sector.

If an event occurs which causes the Committee to consider

that an outstanding DRSP or APBP award would not achieve

its original purpose without alteration, the Committee has

discretion to amend the targets, provided the new conditions

are materially no less challenging than was intended when

originally imposed. Such discretion could be used to

appropriately adjust for the impact of material acquisitions or

disposals, or for exceptional and unforeseen events outside

the control of the management team and would be disclosed

in the relevant remuneration report.

Any potential VCP payout is based entirely on TSR.

However,the Committee is mindful of potential windfall

impacts and will, therefore, have the ability to make

adjustments to the share price hurdle and/or to payouts.

Adjustments may also be made in the event of a capital raise

and in other circumstances where the Committee considers

this to be necessary and in the interest of the Group. In the

event that a discretionary adjustment in favour of participants

is proposed (within the cost and dilution parameters of the

plan) that goes beyond the usual provisions that exist in

relation to obtaining or maintaining favourable tax, exchange

control or regulatory treatments, then the Committee will

consult with major shareholders.

Difference between the Directors’ Remuneration Policy

and that for other employees

All employees receive salaries and benefits which

are consistent with local market practice, with any

review of fixed pay taking into account experience,

responsibility, individualperformance and salary levels at

comparable companies.

Senior management roles are typically eligible to participate

in the APBP, with opportunities and performance

measures reflecting organisational level and business

area, as appropriate. Certain other employees at senior

management level or in key roles may receive DRSP awards.

These arrangements help the Group remain competitive

in the main talent markets in which it operates, while also

continuing to align plan participants with the interests of

shareholders in growing the value of the Group over the

longer term.

Shareholding guidelines

Executive Directors are required to accumulate and

maintain a holding of Dialight shares equivalent in value

to 200% of their base salary. The net of tax number of

vested shares under the Company’s DRSP will normally

be required to be retained until the guideline has been

met. Current shareholding levels are set out on page 96.

The Executive Directors have a period of five years from

the date of their appointment to build up their respective

shareholdings to meet this requirement. However,

notwithstanding such period, Steve Blair, Group Chief

Executive Officer, was still required the meet the requirement

to purchase £150,000 worth of Dialight shares by 31 March

2025 in order to be eligible for VCP payments.

In addition to the above, specific share purchase

requirements were applied to the Group Chair and the

Group Chief Executive Officer in order to be eligible for

awards under the VCP as set out in the 2024 Policy table.

The general shareholding requirement does not apply to the

Group Chair role of Neil Johnson on the basis that he is not,

in that role, eligible to participate in any bonus scheme, nor

be eligible for any DRSP grants. Neil was, however, required

to meet the shareholding requirement specific to the VCP

– i.e. the purchase of £150,000 worth of Dialight shares by

31 March 2025.

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Dialight plc Annual Report and Accounts 2026

Remuneration Committee report continued

Committee discretion

As it is not possible for any remuneration policy to anticipate

every possible scenario, the Committee retains the ability

to apply various discretions and judgements in order to

ensure the achievement of fair outcomes and to maintain the

flexibility required to balance the interests of individuals and

those of the Group.

For example, the Committee may be required to exercise

discretion when determining whether or not the outcomes

of performance measures and targets applicable to variable

incentives are fair in context, or if realities encourage the use

of upward or downward adjustments (within scheme limits).

Accordingly, the Committee retains a number of discretions

including the ability to determine the following:

• scheme participants;

• the timing of grant and size of awards, subject to the

maximum levels set out above;

• appropriate treatment of vesting of awards in the context

ofa change of control;

• appropriate adjustments to awards in the event of

variations to the Company’s share capital;

• treatment, size and grant of awards in a recruitment

context; and

• the application, scope, weighting and targets for

performance measures and performance conditions.

Although it is not possible to give an exhaustive list of

Committee discretions, the exercise of any such discretion

and the rationale underpinning their use would be provided,

incontext, as part of the Remuneration Committee report.

Malus and clawback

Payments and awards under the APBP, VCP and DRSP

(as well as awards already made under the legacy DPSP

scheme) are subject to malus and clawback provisions,

which can be applied to both vested and unvested awards.

Circumstances in which malus and clawback may be applied

include a material misstatement of the Group’s consolidated

financial statements, fraud or gross misconduct on the part

of the award holder, an error in calculating the award vesting

outcome, material reputational damage and corporate failure.

In respect of the APBP, the provisions apply for up to two

years following payment. In respect of VCP, DRSP and the

legacy DPSP awards the provisions apply remain subject

to the provisions throughout the vesting and holding period

(where applicable).

Participants in all plans will be required to acknowledge their

understanding of the withholding and recovery provisions

as a pre-condition to participation in order to help ensure

that the provisions would be enforceable should the

circumstances arise.

Pay for performance

The following charts provide an estimate of the potential future rewards for the Group Chief Executive and Group Chief

Finance Officer, and the potential split between different elements of pay, under four different performance scenarios: “fixed”,

“on-target”, “maximum” and “maximum including share price appreciation” using the following assumptions:

Committee member Salary Pension Benefits Maximum APBP Share of VCP pool

Neil Johnson £200,000

n/a n/a n/a 35%

Steve Blair £479,980 5% of salary £31,214 150% of salary 35%

Mark Fryer £300,000 5% of salary £16,815 125% of salary 25%

1 Applicable salary from 1 October 2025.

2 As explained further on page 93, in line with shareholder sentiment, VCP participants were awarded a total of 110 units in March 2026, thereby

marginally increasing their individual share of the VCP pool from that as set out on page 80.

As an Executive Director, Neil Johnson, Group Chair, is not entitled to participate in the DRSP nor in any bonus scheme.

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Dialight plc Annual Report and Accounts 2026

The “minimum” scenario reflects base salary, pension and

benefits (i.e. fixed remuneration), which are the only elements

of the remuneration package not linked to performance.

The “on-target” scenario reflects fixed remuneration as

above, plus APBP payout of 50% of maximum. No value

is shown for the VCP since nothing is earned unless TSR

is 110%.

The “maximum” scenario reflects fixed remuneration plus

APBP payout of 100% of maximum. No value is shown for

the VCP since nothing is earned unless there is a significant

increase in share price.

The “maximum including share price appreciation” scenario

isbased on a share price of 400p.

Minimum

On-target

Maximum including

share price appreciation

Maximum

0 400 800 1,200 1,600 2,000

£200k

100%

27% 73%

£730k

Group Chair

Fixed

APBP

VCP

Key

A C

Minimum

On-target

Maximum including

share price appreciation

Maximum

0 400 800 1,200 1,600 2,000

£535k

£895k

£1,255k

100%A

60%A

43%A

30%A

B C40% 30%

£1,785k

Group CEO

57%

40%

Fixed

APBP

VCP

Key

Minimum

On-target

Maximum including

share price appreciation

Maximum

0 400 800 1,200 1,600 2,000

£519k

£707k

100%

64%

47%

31% 34% 35%

£1,086k

Group CFO

53%

36%

Fixed

APBP

VCP

Key

B C

£332k

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Dialight plc Annual Report and Accounts 2026

Remuneration Committee report continued

Recruitment policy

In cases of appointing a new Executive Director from outside the Group, the Committee may make use of all the existing

components of remuneration as follows:

Component Approach

Base salary Executive Directors will receive a base salary, which will be determined by reference to relevant market

data, experience and skills of the individual, internal relativities and their current basic salary.

Where new appointees have initial basic salaries set below market, any shortfall may be managed with

phased increases over a period of two to three years subject to the individual’s development in the role.

Benefits New appointees will be eligible to receive benefits in line with the current policy, benefits provided to the

wider workforce in the same location plus (if applicable) expatriation allowances or benefits and any

necessary expenses relating to an Executive Director’s relocation.

Pension New appointees will be eligible to participate in one of the Company’s defined contribution plans,

orreceive a cash supplement or local equivalent on the same basis as the majority of employees in the

relevant jurisdiction.

APBP The scheme, as described in the 2024 Policy table, will apply to new appointees, with the relevant

maximum typically being pro-rated to reflect the proportion of employment over the year. Where

applicable, targets for the individual strategic element will be tailored to each Executive Director.

VCP Awards may be made within the overall pool size and dilution limits described in the 2024 Policy table.

Therefore, any awards to new hires will need to be funded by via unallocated units and/or awards forfeited

by leavers.

DRSP New appointees may be granted restricted share awards under the DRSP on the same terms as other

Executive Directors, as described in the 2024 Policy table. The normal limit of 62.5% of salary will apply,

save in exceptional circumstances where up to 75% of salary may be awarded. If the individual is granted

an award under the VCP, it is likely that DRSP awards (other than to buy-out awards forfeited as described

below) will be reduced or delayed until a future year.

In determining appropriate remuneration, the Committee will take into consideration all relevant factors (including quantum,

nature of remuneration and the jurisdiction from which the candidate was recruited) to ensure that arrangements are in the best

interests of both Dialight and shareholders.

In addition to the remuneration structure outlined, the

Committee may, in certain circumstances, choose to make

an award in respect of a new appointment to “buy-out”

remuneration forfeited on leaving a previous employer on

a like-for-like basis. If the Committee determines that it is

appropriate to do so it will apply the following approach.

The fair value of these buy-out incentives will be calculated

taking into account: the proportion of the performance period

completed on the date of the Executive Director’s cessation

of employment; the performance conditions attached to

the vesting of these incentives; the likelihood of them being

satisfied; and, any other terms and conditions having a

material effect on their value (“lapsed fair value”).

The Committee may then grant up to the same fair value

as the lapsed fair value where possible under the Group’s

incentive plans (subject to the limits under these plans).

The Committee, however, also retains the discretion to

provide the lapsed fair value under specific arrangements

inrelation to the recruitment of the particular individual within

the constraints set out in the Listing Rules.

The approach to the recruitment of internal candidates would

be similar but the Committee would continue to honour

existing contractual commitments prior to any promotion.

For the avoidance of doubt, this would not extend to pension

arrangements which, as outlined, would be aligned with the

majority of employees in the relevant jurisdiction.

For NEDs, the Committee and the Group would seek to pay

fees in line with the Company’s existing Policy. A base fee

in line with the prevailing fee schedule would be payable

for Board membership, with additional fees payable for

acting as Senior Independent Director and/or as Chair of

aBoard Committee.

Service contracts

Executive Directors’ service contracts, including

arrangements for early termination, are carefully considered

by the Committee. Executive Directors’ service contracts

contain provisions that require up to 12 months’ notice of

termination on either side. Such contracts do not contain any

provisions for payments outside the scope of those contained

in the contract. Executive Director service contracts are

available to view at the Company’s registered office.

NEDs have specific terms of engagement provided in

formal letters of appointment, which contain three-month

notice periods that are mutual. The NEDs are appointed

for a three-year term, subject to annual re-election by the

shareholders at the Company’s AGM.

The Group Chair’s contract complies with 2024 Policy

and isterminable by the Company or the Director on

threemonths’ notice.

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Notice periods

The Executive Directors’ service contracts provide for

different notice periods in the event of termination. The Chief

Executive Officer’s contract requires up to 12 months’ notice,

whilst the Chief Financial Officer’s contract requires up to six

months’ notice. Both contracts may be terminated with or

without cause and require the applicable notice period to be

given by either party.

Both Steve Blair’s and Mark Fryer‘s contracts provide

for pay in lieu of notice, but do not contain any additional

compensation provisions, nor do they contain liquidated

damages clauses.

If a contract is to be terminated, the Committee will determine

such mitigation as it considers fair and reasonable in

each case. In determining any compensation, it will take

into account the best practice provisions of the Code and

published guidance from recognised institutional investor

bodies and will take legal advice on the Group’s liability to

pay compensation and the appropriate amount.

The Committee periodically considers what compensation

commitments the Executive Directors’ contracts would entail

in the event of early termination. There are no contractual

arrangements that would guarantee a pension with limited or

no abatement on severance or early retirement.

The Committee will exercise discretion in making appropriate

payments in the context of outplacement, settling legal

claims or potential legal claims by a departing Executive

Director, including any other amounts reasonably due to

the Executive Director, for example, to meet the legal fees

incurred in connection with the termination of employment,

where the Group wishes to enter into a settlement agreement

and the individual must seek independent legal advice.

The table below summarises how the awards under the

APBP, DRSP and VCP are typically treated in specific

circumstances, with the final treatment remaining subject

tothe Committee’s discretion within the plan rules.

Annual bonus

Cash In the event of an Executive Director leaving Dialight before the end of a bonus year or prior to

the payment of a bonus, the Committee has discretion to allow them to be paid a portion of

bonus relative to their point of leaving. This will be highly contingent on the manner of the

Executive Director’s departure – specifically payment would only be made if they are classified

as a “good leaver” pursuant to the rules of the APBP as well as business performance.

Deferred shares For good leavers, deferred bonus shares will normally be retained by the participant and will

be released in full following completion of the applicable deferral period. For other leavers,

deferred bonus shares will lapse.

DRSP

Leavers before the end of the

performance or vesting period

In most circumstances, awards will lapse. If the Executive Director is classed as a “good

leaver”, outstanding DRSP shares would typically be pro-rated for the proportion of the

vesting or performance period served and released, subject to applicable conditions, at the

normal vesting date. The Committee has flexibility to allow awards to vest earlier than above

when an individual leaves; however, the default position will be for awards not to be released

early except in compassionate circumstances.

Leavers after the end of the

performance or vesting period

Any awards in a holding period will normally be released following completion of the

holdingperiod.

VCP

In most circumstances, awards will lapse. If the Executive Director is classed as a “good

leaver” and has served for at least 24 months of the plan (i.e. until 31 March 2026) they will

remain eligible to receive their awards on the original timetable subject to pro-rating for time.

The Committee will have discretion to vest awards on cessation or to disapply pro-rating

subject to the overall pool size of 7.5% and the dilution limit of 3%.

Awards forfeited by leavers would remain in the pool for grants to be made to new joiners orto

individuals whose roles change significantly. The value of awards lapsing due to leavers would

not be shared among existing participants.

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For the purpose of the information outlined, “good leaver”

is defined as a participant ceasing to be employed by the

Group by reason of death, disability, ill health, redundancy,

retirement with agreement of the Company or any other

reason that the Committee determines in its absolute

discretion. As noted, should the Executive Director leave the

Company in any other circumstances, outstanding awards

would typically lapse.

The Committee also retains discretion in the event of a

change of control to release awards under the DRSP. It is

usual in this situation that awards would be pro-rated for time.

In relation to the APBP, the scheme rules allow the Committee

to determine that all deferred share elements of the bonus

awards will vest on a change of control and may be exercised

within such period as the Committee shall specify.

VCP awards would vest immediately on a change of control

before the completion of either performance period,

withvalue creation measured by reference to the offer price

and no pro-rating for time given that the plan is based on

value creation above a hurdle rather than expressed as an

award of shares.

The Committee is also mindful that it is conceivable that

ashareholder-agreed corporate event could occur prior to

any vesting of the VCP and at a level below the VCP hurdle

but where the Committee believes that material progress

had been made, at that time, towards the improvement in

financial performance envisaged under the VCP. In those

circumstances the Committee would consult with major

shareholders with a view to agreeing an equitable treatment

of VCP participants, taking into account the performance

ofthe share price and time elapsed.

External appointments

It is the Group’s policy that, except in extraordinary

circumstances, Executive Directors should only accept one

appointment with a third party as a non-executive director.

Any such appointment is subject to prior Board approval

and consideration will be given to potential conflicts of

interest with the Group and the time demands of the external

appointment. The Executive Director concerned is entitled

toretain any fees from such a non-executive directorship.

Employment conditions elsewhere in the Group

When considering any changes to the remuneration of the

Executive Directors, the Committee takes into account

any changes to employees’ salaries across the Group.

The Committee did not expressly seek the views of

employees when drawing up the 2024 Policy but does carry

out an annual review of employees’ salaries across the Group

and the Board is regularly updated on employee matters.

Shareholder views

The Committee maintains a regular dialogue with its major

shareholders and monitors trends and developments in

corporate governance and market practice to ensure that the

structure of Executive Director remuneration under the new

Remuneration Policy is appropriate.

Remuneration Committee report continued

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2026 annual report on remuneration

The remuneration data reported in this section is expressed in pound sterling, notwithstanding the use of US dollar elsewhere

in the Annual Report and Accounts. This approach has been adopted to facilitate comparability with prior year disclosures and

reflects the currency in which the vast majority of Directors are paid.

Single figure of total remuneration (audited information)

The following tables provide details of the Directors’ remuneration for the year ended 31 March 2026 and for the year ended

31 March 2025. In each case, figures are before deductions for income tax and National Insurance contributions.

2026 Directors’ pay

Salary/

fees

£000

Benefits

£000

Pension

£000

Sub-total

fixed

£000

Bonus

£000

DRSP

£000

Sub-total

variable

£000

Total

remuneration

£000

Executive Directors:

Neil Johnson

225 – – 225 – – – 225

Steve Blair 476 31 24 531 432 – 432 963

Mark Fryer

298 16 18 332 225 – 225 557

NEDs:

Nigel Lingwood 73 – – 73 – – – 73

Lynn Brubaker 73 – – 73 – – – 73

John Lincoln 51 – – 51 – – – 51

1 Neil Johnson was appointed as Executive Group Chair on 20 March 2025 having previously been Non-Executive Chair.

2 Mark Fryer served as Interim Group Chief Financial Officer from 6 January 2025 to 30 April 2025. He started his permanent role on

1 May 2025.

3 “Benefits” does not include expenses incurred in the ordinary course of business.

4 Steve Blair and Mark Fryer are paid an allowance in lieu of a pension of 5% of salary. These amounts are reported within pensions for

purposes of clarity.

5 Under the terms of the APBP, a maximum of 50% of the maximum bonus payout can be paid in cash with the balance settled in shares in

the Company. Accordingly, Steve Blair’s bonus will be settled in July 2026 via a cash payment of £359,985 and shares worth £71,997 and

Mark Fryer’s bonus will be settled in July 2026 via a cash payment of £187,500 and shares worth £37,500. Under the terms of the APBP,

half of these shares vest after two years with the balance vesting after three years, subject to continued employment with the Group.

2025 Directors’ pay

Salary/fees

£000

Benefits

£000

Pension

£000

Sub-total

fixed

£000

Bonus

£000

DPSP

£000

Sub-total

variable

£000

Total

remuneration

£000

Executive Directors:

Neil Johnson 250 – – 250 – – – 250

Steve Blair (restated)

466 28 23 517 302 – 302 819

Mark Fryer (restated)

67 – 3 70 41 – 41 111

Carolyn Zhang

195 29 7 231 – – – 231

NEDs:

Nigel Lingwood

135 – – 135 – – – 135

Lynn Brubaker 72 – – 72 – – – 72

John Lincoln 33 – – 33 – – – 33

6 Amounts for Steve Blair and Mark Fryer in the prior year are shown as restated in respect of bonus amounts payable of £301,646 and £41,250,

respectively, which were earned (and fully accrued) in the year ended 31 March 2025 but which were paid in cash in July 2025.

7 Carolyn Zhang stepped down as a Director on 11 November 2024 and thereafter received a total of £157,000 as pay in lieu of contractual

notice and £24,000 in respect of accrued but untaken holiday. See page 94 for further details.

8 Nigel Lingwood was paid enhanced fees between 1 October 2024 and 28 February 2025 in recognition of his expanded workload as a NED

following the departure of Carolyn Zhang and prior to the appointment of Mark Fryer.

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2026 annual report on remuneration continued

Additional disclosures

(audited information)

Executive Directors’ benefits

Executive Directors other than the Group Chair receive

benefits comprising primarily a car allowance, life insurance

and private medical insurance.

Pensions

The figure includes the amount of Company pension

contributions to Executive Directors during the year.

Steve Blair and Mark Fryer each received a cash allowance

of 5% of their base salary in lieu of a pension contribution.

The Group Chair is not eligible for pension benefits.

APBP

Following adoption of the 2024 Policy, the APBP for

Executive Directors operates in accordance with the

framework set out in the Remuneration Committee report on

pages 75 to 88. The maximum bonus opportunity is 150% of

base salary for the Group Chief Executive Officer and 125%

of base salary for the Group Chief Financial Officer, payable

ina combination of cash and, for performance above target,

shares. The Group Chair is not eligible to participate

in the APBP.

The 2026 Executive Director APBP was based on

three elements:

Measure Weighting Outcome

Revenue 40% –

Net bank debt 30% 30%

Underlying operating profit 30% 30%

The performance ranges for each of the performance targets

were as follows.

Measure Threshold Target Maximum Actual

Revenue $174.0m $178.0m $185.0m $166.9m

Net bank debt $17.5m $16.5m $15.5m $1.9m

Underlying

operating profit $6.0m $8.0m $10.0m $10.3m

As set out above, the net bank debt and underlying operating

profit performance elements met the maximum targets and,

therefore, the following bonuses will be awarded to Steve

Blair and Mark Fryer in July 2026.

Executive Director

Bonus

achieved

(60% of max)

Amount

payable in

cash (50%)

Amount

payable in

shares (10%)

Steve Blair £431,982 £359,985 £71,997

Mark Fryer £225,000 £187,500 £37,500

Under the 2024 Policy, any bonus paid in excess of 50% of

the total bonus achievable should be paid in shares. Half of

the shares vest after two years, with the balance vesting after

three years, subject to continued employment with the Group.

As this threshold has been met, 50% of the total bonus

achievable will be paid in cash, with the remaining 10% of

the total bonus achievable paid in shares.

DRSP awards (audited information)

Under the 2024 Policy, share-based awards for Executive

Directors in respect of the years ended 31 March 2026 and

2025 were replaced with VCP awards. There are no DRSP

awards currently held by any Directors or former Directors.

Neil Johnson will not be eligible to participate in any future

DRSP grants, however, Steve Blair and Mark Fryer will be

eligible to receive DRSP awards in the year ending

31 March 2027. Read more on page 96.

EBT

The EBT currently holds 413,706 shares in the Company.

It is the Group’s intention to use shares currently held in

the EBT to satisfy awards made so far under the DRSP.

Dividends arising on the shares held in the EBT are waived

on the recommendation of the Company.

Funding of future awards under the share incentive plans

It is the Group’s current intention to satisfy any future

requirements of its share incentive plans in a method best

suited to the interests of the Company, either by acquiring

shares in the market, utilising shares held as treasury

shares or issuing new shares. Where the awards are satisfied

by newly issued shares or treasury shares, the Company

will comply with the dilution limits as set out in the relevant

plan rules.

CEO pay – pay ratio methodology

The table on page 91 presents the ratio of the CEO’s

remuneration to that of the Group’s UK workforce for 2026.

These ratios have been calculated using “Option A” of the

methodologies set out in the relevant regulations, which the

Company considers to be the most statistically robust and

appropriate approach.

The disclosure is shown alongside the comparable, indicative,

full-time equivalent total remuneration of employees at the

25th percentile, median, and 75th percentile of the Group’s

UK workforce. Wherever possible, employee remuneration

has been based on actual pay and benefits received over the

12 monthly payroll periods within the financial year.

Given the relatively small size of the Group’s UK workforce,

certain adjustments have been made to ensure the figures are

not distorted. Where a role remained in place but was held by

more than one individual during the year, remuneration has

been calculated on a pro-rata basis across those individuals.

Where roles were either introduced or discontinued during

the year, remuneration has been annualised to provide

aconsistent basis for comparison.

It should also be noted that the majority of the Group’s

employees, including all manufacturing operations, are based

outside the UK and, therefore, fall outside the scope of these

reporting requirements.

As has been previously reported, the 2024 ratio reflects

ablended outcome for the period from 15 February 2024

to 31 March 2024, during which Steve Blair was in post at

a lower rate of pay than his predecessor, Fariyal Khanbabi.

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Ratios for earlier years were influenced by temporary adjustments made in response to the Covid-19 pandemic, including

changes to variable pay and salary review timing.

CEO pay ratio

Method

2026

Option A

2025

Option A

2024

Option A

2022

Option A

2021

Option A

2020

Option A

2019

Option A

75th percentile pay ratio 5.0:1 3.1:1 5.8:1 3.7:1 3.6:1 5.6:1 5.3:1

Median pay ratio 10.1:1 6.1:1 8.7:1 6.3:1 6.0:1 7.7:1 8.4:1

25th percentile pay ratio 18.4:1 12.3:1 10.8:1 8.2:1 8.3:1 11.7:1 10.8:1

Director pay – percentage change in the remuneration of the Directors

The table below shows the percentage change in salary/fees, benefits and bonuses for each Director for the years ended

31 March 2026 and 31 March 2025, compared with the average change for Dialight plc UK employees. The percentage changes

are calculated based on reported amounts per the single figure of remuneration table on page 89. Prior year figures include the

impact of a 15-month reporting period to 31 March 2024. The primary benefits provided to employees are life insurance and

private medical insurance. There have been no changes to the level of benefits offered to Group employees.

2026 % change 2025 % change

Method Salary/fees Benefits Bonus Salary/fees Benefits Bonus

Executive Directors:

Neil Johnson

(10.0)% n/a n/a 15.2% n/a n/a

Steve Blair

2.1% 10.7% 43.0% 323.6% 833.3% n/a

Mark Fryer

344.8% n/a 448.8% n/a n/a n/a

NEDs:

Nigel Lingwood

(45.9)% n/a n/a 87.5% n/a n/a

Lynn Brubaker

1.4% n/a n/a 46.9% n/a n/a

John Lincoln

54.5% n/a n/a n/a n/a n/a

Average Dialight plc UK employee

3.0% n/a n/a 3.0% n/a n/a

1 Neil Johnson’s salary reduced from £250,000 to £200,000 on 1 October 2025. The prior year increase reflects his appointment as Director on

17 May 2023.

2 Steve Blair’s salary and benefits increases in the prior year reflect his appointment as Group Chief Executive Officer on 15 February 2024.

His per annum salary increased by 3.0% on 1 July 2025 to £479,980 from £466,000.

3 Mark Fryer became the permanent Group Chief Financial Officer on 1 May 2025 having previously been in role on an interim basis from

6 January 2025. His salary and bonus increases in 2026 reflect this full-year effect.

4 Nigel Lingwood’s fee increase in 2025 and subsequent decrease in 2026 reflects his enhanced fee in the prior year in recognition of his

expanded workload as a NED following the departure of Carolyn Zhang in November 2024.

5 Lynn Brubaker’s fee increase in the prior year reflects her appointments as Chair of the Remuneration Committee and WENED on 1 July 2023.

6 John Lincoln joined the Group on 1 August 2024. His fee increase in 2026 reflects this full-year effect.

7 Average employee pay includes full and part-time employee data. This figure is calculated in line with the statutory requirements and is based

on employees of the parent company only and excludes the Executive Directors and NEDs.

Relative importance of spend on pay

The following table shows the total amount paid by the Group to its employees (excluding severance costs) for the year ended

31 March 2026 and 2025 relative to the total amount of distributions in each year.

2026 2025 % change

Employees (number) 1,173 1,425 (17.7)%

Employee remuneration costs

£23.1m £33.6m (31.3)%

Distributions to shareholders – – n/a

Underlying operating profit $10.3m $4.2m 145.2%

1 Employee remuneration costs of £23.1m (2025: £33.6m) for the year ended 31 March 2026 are based on wages and salaries of $31.0m

(2025:$42.9m) as set out in Note 8 to the consolidated financial statements based on an average exchange rate of 0.7461:£ for the year ended

31 March 2026 (2025: 0.7840:£).

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2026 annual report on remuneration continued

Performance graph and table

The graph below sets out the Company’s TSR performance over the past 10 years relative to the FTSE 250 Mid Index

(excludinginvestment trusts), the FTSE SmallCap Index (excluding investment trusts) and the FTSE All Share Electronic

&Electrical Equipment Index, indices of which Dialight has been a constituent during the year.

Mar 18 Mar 19 Mar 20 Mar 21 Mar 22 Mar 25 Mar 26Mar 24Mar 23Mar 17Mar 16

300

250

200

150

100

Dialight

FTSE SmallCap Index (exd. investment trusts)

FTSE 250 Index (exd. investment trusts)

FTSE All Share Electronics & Electronical Equipment Index

Source: Datastream

Total CEO remuneration

The table below sets out the “single figure” of total remuneration of the CEO over the past 10 years.

2017 2018 2019 2020 2021 2022

2023/2024

(12-month

comparator) 2024 2025 2026

M Sutsko M Rapp

M Rapp

F Khanbabi

F Khanbabi F Khanbabi

F Khanbabi

S Blair

F Khanbabi

S Blair

S Blair S Blair

Total

remuneration

(£’000) £602 £605 £573 £447 £911 £507 £531 £850 £819 £963

Bonus

outcome (%

of maximum) – – – – 62.5% – – – 43% 60%

PSP vesting

outcome (%

of maximum) – – – – – – – – n/a n/a

1 M Rapp to 9 August 2019, F Khanbabi from 10 August 2019.

2 F Khanbabi as Interim CEO to 4 March 2020 and as permanent CEO from 5 March 2020.

3 2023/24 was a 15-month reporting period. The actual CEO “single figure” data for the 15-month period is shown in the right-hand column –

with a 12-month comparator shown in the adjacent column.

4 F Khanbabi to 15 February 2024 and S Blair from 15 February 2024.

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VCP awards made in 2026

VCPs were awarded to Neil Johnson, Steve Blair and Mark Fryer as set out below. In accordance with the plan rules,

participants are eligible for a share in a pool of excess shareholder value created over three and four-year performance periods

ending 31 March 2027 and 31 March 2028. The total pool is calculated as 7.5% of value created through share price growth,

plus dividends in excess of 350p per share.

Each performance period accounts for 50% of the total award. Participants receive units in the value pool, which convert to

shares or nil-cost options upon vesting. Vested shares (net of tax) must be retained for five years from the date the performance

period commenced (1 April 2024), i.e. until 31 March 2029.

Awards are capped at 3% of the Company’s shares in issue. No awards have been granted under the DRSP since the inception

of the VCP, however, Steve Blair and Mark Fryer will be eligible for DRSP awards the year to 31 March 2027, with vesting in

the year to 31 March 2030. There are no good leaver provisions during the first 24 months of the VCP. Both the Group Chair

and the Group Chief Executive Officer acquired £150,000 of Dialight shares by 31 March 2025 in order to have qualified for

VCP payouts.

Under the plan rules, the maximum number of units that may be granted is 1,000, with no individual participant able to receive

more than 350 units in total. In line with shareholder sentiment, in March 2026, the Committee agreed to award Neil Johnson

and Steve Blair an additional 15 units each, bringing their respective holdings to the maximum permitted level of 350 units.

Mark Fryer was awarded a further 80 units, taking his total holding under the plan to 250 units, reflecting his length of time in

the plan. A balance of 50 units remains unallocated, and no further VCP awards are currently anticipated.

Director

Award

type

Grant

date

Performance

period

Number of

units awarded

Aggregate

number of

units awarded

Aggregate %

of VCP pool

Nature of

interest Outcome

Neil Johnson VCP 19 March

2025

1 April 2024–

31 March 2027 167

350 35%

Nil-cost

options

Pending

VCP 19 March

2025

1 April 2024–

31 March 2028 168

Nil-cost

options

Pending

VCP 24 March

2026

1 April 2024–

31 March 2027 8

Nil-cost

options

Pending

VCP 24 March

2026

1 April 2024–

31 March 2028 7

Nil-cost

options

Pending

Steve Blair VCP 19 March

2025

1 April 2024–

31 March 2027 167

350 35%

Nil-cost

options

Pending

VCP 19 March

2025

1 April 2024–

31 March 2028 168

Nil-cost

options

Pending

VCP 24 March

2026

1 April 2024–

31 March 2027 8

Nil-cost

options

Pending

VCP 24 March

2026

1 April 2024–

31 March 2028 7

Nil-cost

options

Pending

Mark Fryer VCP 3 July

2025

1 April 2024–

31 March 2027 85

250 25%

Nil-cost

options

Pending

VCP 3 July

2025

1 April 2024–

31 March 2028 85

Nil-cost

options

Pending

VCP 24 March

2026

1 April 2024–

31 March 2027 40

Nil-cost

options

Pending

VCP 24 March

2026

1 April 2024–

31 March 2028 40

Nil-cost

options

Pending

A three-month average opening and closing share price will be used to measure value creation for the pool. At the end of each

performance period, units will be converted into an award of shares/nil cost options with participants required to hold onto their

vested shares after any sales required to settle tax and withholdings on vesting for a period of five years from grant, in line with

the provisions of the Code and market best practice. To avoid excessive payouts and shareholder dilution, the total value of the

pool for all participants will be capped at 3% of shares in issue. If the aggregate value of the pool exceeds this cap, then awards

will be scaled-back pro-rata on the same basis for all participants. The implication is that the slope of the payout curve reduces

once the share price exceeds 583p.

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Payments to former Directors or for loss of office (audited information)

Fariyal Khanbabi

Fariyal Khanbabi resigned as a Director on 15 February 2024. She left Dialight on 18 May 2024. Between 15 February 2024

and 18 May 2024, she was paid contractual salary and benefits in the ordinary course. On 15 July 2025, a termination payment

was made to her alongside a payment for accrued and untaken holiday. In addition, the Group contributed towards legal fees.

See table below for further details. All DPSP and DRSP awards lapsed on exit. No bonus was paid in respect of the year ended

31 March 2024 and she did not retain any rights in any share scheme.

£000

Holiday pay 4

Termination payment 115

Legal fees 96

Total 215

Carolyn Zhang

Carolyn Zhang resigned as a Director on 11 November 2024. She was paid $200,000 in lieu of notice in 13 bi-weekly instalments

of $15,000, together with a payment of $30,000 for accrued and untaken holiday. No other exit or other termination payments

were made to her. The final four instalments totalling $60,000 (equivalent to £46,654) were paid in the year ended 31 March 2026

(having been fully accrued at 31 March 2025).

2026 annual report on remuneration continued

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Implementation of the Remuneration Policy for 2027

Executive Director salaries, pensions and benefits for 2027

The 2024 Policy was approved by shareholders at the 2024 AGM in September 2024. Remuneration for the year ended

31 March 2026 complied with the 2024 Policy.

Following a review by the Committee, Steve Blair will receive an increase in his base salary of 4.2%, bringing his salary to

£500,000 per annum. Mark Fryer will receive an increase of 3.3%, bringing his salary to £310,000 per annum. Both increases

willbe effective from 1 July 2026.

In determining these increases, the Committee considered individual performance, experience and ongoing contribution to the

delivery of the Group’s strategy, alongside external market benchmarks. The increases are aligned with those awarded to the

wider workforce, where salary reviews are applied on a performance-related basis, typically ranging from 0% to 5%, with an

average increase of 3%.

Steve Blair and Mark Fryer will continue to receive 5% of their base salary (paid in cash) in lieu of pension contributions.

Other benefits received comprise a car allowance, life insurance equivalent to five times base salary and private

medical insurance.

Group Chair fee for 2027

Following a review by the Committee, the fee for the Group Chair will be increased by 3%, effective from 1 July 2026. In determining

this adjustment, the Committee took into account the time commitment and responsibilities of the role, as well as market positioning

and ensured that the increase is aligned with the average salary increases awarded to the wider workforce.

NED fees for 2027

The fees for NEDs are set by the Board, with individual Directors recusing themselves from any discussion relating to their

own performance and remuneration. Following review, the base fee for the NEDs was increased by 3.0% effective from 1 July

2026, in line with the increase applied to the Group Chair and consistent with the average salary increases awarded to the

wider workforce.

The fees with effect from 1 July 2026 are summarised in the table below.

From 1 July 2026 From 1 July 2025

Group Chair fee £206,000 £250,000

NED basic fee £54,371 £52,788

Supplementary fees to NEDs covering additional Board duties

Senior Independent Director £10,300 £10,300

Audit Committee Chair £10,300 £10,300

Remuneration Committee Chair £10,300 £10,300

WENED £10,300 £10,300

1 The Group Chair’s fee reduced from £250,000 to £200,000 on 1 October 2025.

APBP for 2027

During the year to 31 March 2027, the Committee intends to grant bonuses with a maximum opportunity of 150% of salary for

the Group Chief Executive Officer and 125% of salary for the Group Chief Financial Officer.

The 2027 APBP for the Executive Directors will operate in line with the 2024 Policy with the Remuneration Committee continuing

to set appropriately stretching targets across the following three performance metrics. These metrics have been selected as

the key drivers of the Group’s strategic focus on improving underlying performance, restoring financial strength and delivering

sustainable growth in shareholder value. No portion of the bonus is allocated to individual performance objectives to reflect the

primacy of these three-performance metrics.

Metric Weighting

Revenue 40%

Underlying operating profit 30%

Working capital as % of revenue 30%

Any bonus payable in excess of target performance (50% of the bonus opportunity) will be paid in shares. Of such shares,

50%will vest after two years from award date and 50% after three years from award date. Any shares vesting will have to be

retained until such time as the recipient meets the applicable shareholding guidelines.

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Implementation of the Remuneration Policy for 2027 continued

DRSP awards for 2027

Steve Blair and Mark Fryer will be eligible for DRSP awards in the year to 31 March 2027. The DRSP provides for an award up

to a normal limit of 62.5% of base salary, with an overall limit of 75.0% of base salary to recognise exceptional performance.

It is the Committee’s intention to utilise up to the exceptional maximum for the Executive Directors in recognition of the significant

achievement of their work on the ongoing transformation of the business. Further details on the DRSP can be found on page 81.

Executive Directors’ shareholding guidelines

Executive Directors are required (under the 2024 Policy) to accumulate and maintain a holding of Company shares equivalent in

value to 200% of base salary and are required to retain (net of tax) all APBP, DRSP and VCP share vestings until the guidelines

have been met. All shares in the Company, whether purchased on the open market or received through vestings and/or

exercises under the various Dialight share plans, are included in the relevant calculation. The Company share price used to

value a holding for the purposes of the guidelines will be the higher of: (a) the prevailing price on the date that the holding is

valued (on the last working day of the relevant financial year); and (b) the acquisition price (i.e. the price on the date on which

theshares were acquired/awards vested).

The Committee is aware of the significance of Executive Directors having a personal holding of shares in the Company (to align

management’s interests with those of the shareholders) and acted to further strengthen the shareholding guidelines under the

terms of the 2024 Policy. Steve Blair only assumed his Executive Director role in February 2024 and Mark Fryer only took up his

permanent Executive Director role on 1 May 2025. Accordingly, the Committee recognises that both Executive Directors will

take time to build up their shareholdings. The holdings of shares in the Company at 31 March 2026 by the Executive (and NEDs)

are shown below.

Total shareholding of Directors (audited information)

The table below shows the holdings of shares in the Company at 31 March 2026 by each of the Directors.

Beneficially held shares

Director 2026 2025

Steve Blair

104,114 88,483

Mark Fryer

20,586 –

Neil Johnson 111,753 97,393

Lynn Brubaker 25,157 25,157

Nigel Lingwood 11,289 11,289

John Lincoln – –

1 Some of these shares may be held through nominees.

2 As noted above, both Steve Blair and Mark Fryer are required to build up a shareholding equivalent in value to 200% of their base salary within

five years of their appointment.

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Directors’ service agreements and letters of appointment

The dates on which the Directors’ initial service agreements/letters of appointment commenced and the expiry dates

at31 March 2026 are as follows.

Director Commencement date

Expiry date of current employment/service agreement or

letter of appointment

Steve Blair 15 February 2024 Contract is terminable by the Company or the Director

on12-months’ notice.

Mark Fryer 1 May 2025 Contract is terminable by the Company or the Director

onsix-months’ notice.

Neil Johnson 19 March 2025 Contract is terminable by the Company or the Director

onthree-months’ notice.

Lynn Brubaker 1 July 2023 Letter of appointment was for an initial term of three years

(ending on 30 June 2026). Lynn will be standing for re-election

at the 2026 AGM; it is intended that her engagement will be

extended for a further three-year term.

Nigel Lingwood 1 November 2022 Letter of appointment was for an initial term of three years

(ending on 31 October 2025). Further to Nigel’s re-election

atthe 2025 AGM, his appointment was extended for a further

three-year term (ending on 31 October 2028).

John Lincoln 1 August 2024 Letter of appointment was for an initial term of three years

(ending on 31 July 2027).

Approval

This Remuneration Committee report was approved by the Board of Directors on 22 June 2026 and signed on its behalf by

the Chair ofthe Remuneration Committee.

Lynn Brubaker

Chair of the Remuneration Committee

22 June 2026

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Dialight plc Annual Report and Accounts 2026

Directors’ report

Introduction

The Directors present their Annual Report and the audited

consolidated financial statements of Dialight plc for the year

ended 31 March 2026.

The Directors’ report should be read in conjunction with

the Strategic Report on pages 1 to 40 and the Corporate

Governance Report on pages 41 to 101.

Together, these reports provide shareholders with a balanced

and comprehensive assessment of the Group’s position and

performance during the year.

For the purposes of compliance with DTR R(2) and DTR

4.1.8 R, the required content of the management report

can be found in the Strategic Report and these regulatory

disclosures, including the sections of the Annual Report and

Accounts incorporated by reference.

Activities

The principal activity of the Group during the year continued

to be the design, manufacture and supply of industrial

LED lighting solutions. Dialight plc is a holding company.

Our businesses by sector and their activities are set out on

pages 161 and 162.

Results and dividends

The Group’s results for the year are set out in the

consolidated statement of profit or loss on page 117.

The Board is not proposing any final dividend payment for the

year ended 31 March 2026 (2025: $nil). The Group maintains

a clear capital allocation discipline and remains committed

to returning excess funds to shareholders over time,

whether through future dividends and/or share repurchase

programmes, as appropriate.

The Company has established an EBT in respect of which all

employees of the Group, including Executive Directors, are

potential beneficiaries.

At 31 March 2026, the EBT held 413,706 shares in the

Company (2025: 417,307 shares). It is expected that the EBT

will acquire additional shares in the year to 31 March 2027

in anticipation of future vestings under the 2023 DRSP.

It is anticipated that the EBT will waive any dividend rights

attaching to shares held in the EBT. The Trustees retain

the voting rights over the shares held in the EBT and may

exercise these independently of the interests of the Company.

Share capital and capital structure

Details of the share capital, together with details of the

movements in the share capital during the year, are shown in

Note 11 to the Company financial statements. The Company

has one class of ordinary share which carries no entitlement

to fixed income. Each share carries the right to one vote

at general meetings of the Company. There are no other

classes of share capital. There are no specific restrictions

on the size of a holding nor on the transfer of shares, both of

which are governed by the general provisions of the Articles

and prevailing legislation. No person has any special rights

of control over the Company’s share capital and all issued

shares are fully paid.

In March 2026, the Company purchased 16,080 of its own

ordinary shares to satisfy the vesting of employee awards

granted in 2023 under the DRSP, pursuant to the authority

granted at the 2025 AGM.

Rights and obligations of ordinary shares

Holders of ordinary shares are entitled to attend and speak

at general meetings of the Company and to appoint one or

more proxies or, if the holder of shares is a corporation, one

or more corporate representatives. On a show of hands,

each holder of ordinary shares who (being an individual) is

present in person or (being a corporation) is present by a duly

appointed corporate representative, not themselves being a

member, shall have one vote, as shall proxies (unless they are

appointed by more than one holder, in which case they may

vote both for and against the resolution in accordance with

the holders’ instructions).

On a poll, every holder of ordinary shares present in person

or by proxy shall have one vote for every share of which they

are the holder. Electronic and paper proxy appointments and

voting instructions must be received not later than 48 hours

before the meeting. A holder of ordinary shares can lose the

entitlement to vote at general meetings where that holder has

been served with a disclosure notice and has failed to provide

the Company with information concerning interests held

in those shares. Except as set out above and as permitted

under applicable statutes, there are no limitations on voting

rights of holders of a given percentage, number of votes or

deadlines for exercising voting rights.

Restrictions on transfer of shares

There are no specific restrictions on the transfer of the

Company’s shares, although the Articles contain provisions

whereby Directors may refuse to register a transfer of a

certificated share which is not fully paid. There are no other

restrictions on the transfer of ordinary shares in the Company

except certain restrictions which may, from time to time,

be imposed by laws and regulations (for example, insider

trading laws). The Directors are not aware of any agreements

between holders of the Company’s shares that may result in

restrictions on the transfer of securities or on voting rights.

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Dialight plc Annual Report and Accounts 2026

Substantial interests in shares

At 22 June 2026, the Company had been notified, in accordance with DTR chapter five, of the following voting rights

asashareholder of the Company.

Shareholder Shareholding

Voting rights %

Odyssean Investment Trust plc 9,000,000 22.27

Schroders plc 5,621,340 13.91

Sterling Strategic Value Fund S.A., SICAV-RAIF 4,019,465 9.95

Blackmoor Investment Partners 2,020,590 5.00

Generation Investment Management LLP – –

Employee share plans

Details of employee share plans are set out in Note 26 to the consolidated financial statements. The Group currently has in

place three share plans: the 2023 DRSP, the APBP and the 2024 VCP. Further details of these share plans are provided in the

Remuneration Committee report.

Directors’ indemnities

Qualifying third-party indemnity provisions (as defined by

section 234 of the Companies Act 2006) were in force in

the reporting period for the benefit of the Directors of the

Company and the Directors of certain subsidiaries of the

Company in relation to certain losses and liabilities which

they may incur (or have incurred), in connection with their

duties, powers and/or office. The Group also maintains

directors’ and officers’ liability insurance which gives

appropriate cover for legal action brought against any

Directors of the Company and/or its subsidiaries.

Essential contracts and change of control

The Directors are not aware of there being any significant

agreements that contain any material change of control

provisions to which the Company is a party.

Allotment authority

Under the Companies Act 2006, the Directors may only

allot shares where authorised to do so by shareholders.

Accordingly, an ordinary resolution will be proposed at the

2026 AGM which, if passed, will authorise the Directors to

allot and issue new shares up to an aggregate nominal value

in line with Investment Association guidelines.

This authority is intended to provide the Directors with

appropriate flexibility to act in the best interests of

shareholders should suitable opportunities arise to issue

new shares.

Directors

The Directors of the Company during the year and at the date

of this report, and their biographies, are set out on pages 50

and 51. Their interests in the ordinary shares of the Company

are disclosed on page 96.

Appointment and replacement

ofDirectors

The appointment and replacement of Directors are governed

by the Company’s Articles, the Code, the Companies Act

2006 and related legislation.

Directors may be appointed by ordinary resolution of

the shareholders at a general meeting or by the Board.

Any Director appointed by the Board shall hold office

until the next AGM and shall then be eligible, subject to

Board recommendation, for election by shareholders at

that meeting.

In accordance with provision 18 of the Code, all Directors will

stand for election or re-election at the 2026 AGM, subject to

any retirements and being eligible.

A Director may be removed from office in accordance

with the provisions of the Companies Act 2006 and the

Company’s Articles. The Articles may be amended by special

resolution of the shareholders.

Powers of Directors

The powers of Directors are described in the Articles and

in the matters reserved for the Board, copies of which are

available on the Group’s website at: www.dialight.com/ir,

and are summarised in the Corporate Governance report

on page 52.

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Dialight plc Annual Report and Accounts 2026

The Companies Act 2006 also requires that, if the Company

issues new shares for cash or sells any treasury shares, it

must first offer them to existing shareholders in proportion to

their current holdings. At the 2026 AGM, a special resolution

will be proposed which, if passed, will authorise the

Directors to issue a limited number of shares for cash

and/or sell treasury shares without offering them to

shareholders first. The authority is for an aggregate nominal

amount of up to 10% of the issued share capital of the

Company as at the relevant date set out in the notice of the

2026 AGM, of which 5% of the issued share capital can only

be issued for the purposes of financing an acquisition or

other capital investment. While the Company believes that it

is entirely appropriate (not least for administrative purposes),

and in line with good corporate practice, to seek the

allotments that will be set out in the notes accompanying the

resolutions to be considered at the 2026 AGM (the “Notes”),

the Company has again provided additional assurance, in

the Notes, for shareholders with regard to the circumstances

under which such powers may be exercised.

Political donations

The Group has not made any political donations during the

year, nor does it intend to make any in the future.

Post-balance sheet events

There have been no significant events since the balance

sheet date, other than in respect of the multi-currency

RCF with HSBC, which was replaced with a new £15.0m

multi-currency RCF on 22 April 2026. See Note 23 to the

consolidated financial statements for further details.

Going concern

The Group’s going concern statement can be found on

page 38.

Viability statement

The Board assessed the prospects of the Group over a

three-year period and the viability statement is set out on

page 40.

Auditor

Each of the Directors in office at the date of approval of this

Annual Report and Accounts confirms that:

• so far as the Director is aware, there is no relevant audit

information of which the Group’s auditor is unaware; and

• the Director has taken all the steps that they ought to have

taken as a Director in order to make themselves aware

of any relevant audit information and to establish that the

Group’s auditor is aware of that information.

This confirmation is given and should be interpreted in

accordance with the provisions of section 418 of the

Companies Act 2006. The Board is recommending to

shareholders the re-appointment of Grant Thornton as

auditor of the Company and a resolution authorising the

Directors to set its remuneration will be proposed at

the forthcoming AGM. Grant Thornton was first appointed

as the Company’s auditor in 2023, following a competitive

tender exercise in 2022.

Shareholder consultation

In its 2025 AGM results announcement, released on

2 September 2025, the Company noted that Resolution 11

(political donations) and Resolution 12 (authority to allot

shares) received just over 20% of votes against (with 73.41%

and 73.86%, respectively, being cast in favour). In line

with the requirements of the Code, the Company engaged

with shareholders who voted against the resolutions to

better understand their views. An update was included

in the Group’s interim results announcement published

on 11 November 2025. Feedback received indicated that

opposition to the resolutions was primarily driven by

institutional voting policies, rather than concerns relating

to the Board or the performance of the Group. The Board

remains committed to ongoing shareholder engagement

and will continue to enhance transparency and disclosure

relating to these resolutions in the 2026 Notice of Annual

General Meeting.

AGM

The Company’s AGM will be held on Tuesday 1 September

2026, 9.30 am at the offices of Investec Bank plc,

30 Gresham Street, London EC2V 7QP. The Notice of

Meeting, together with an explanation of the proposed

resolutions, is enclosed with this Annual Report and

Accounts and is also available on the Group’s website at:

www.dialight.com/ir.

By order of the Board.

Laura Walker

Company Secretary

22 June 2026

Directors’ report continued

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Dialight plc Annual Report and Accounts 2026

Directors’ responsibility statement

Directors are responsible for preparing the Annual Report

(including the Directors’ Report, the Strategic Report,

the Directors’ Remuneration Report and the Corporate

Governance Statement) and the financial statements of

the Group and the parent company, in accordance with

applicable law and regulations.

Company law requires the Directors to prepare Group and

parent company financial statements for each financial year.

Under the law they are required to prepare the Group financial

statements in accordance with UK-adopted international

accounting standards and applicable law and have elected

to prepare the parent company financial statements in

accordance with UK accounting standards and applicable

law, including FRS 102 (the Financial Reporting Standard

applicable in the UK and Republic of Ireland).

Directors must be satisfied that the financial statements

give a true and fair view of the state of affairs of the Group

and parent company and of the Group’s profit or loss for

that period.

In preparing each of the Group and parent company financial

statements, the Directors are required to:

• select suitable accounting policies and to then apply

themconsistently;

• make judgements and accounting estimates that are

reasonable, relevant, reliable, and prudent;

• for the Group financial statements, state whether they have

been prepared in accordance with the UK-adopted

international accounting standards;

• for the parent company financial statements, state whether

applicable UK accounting standards have been followed,

subject to any material departures disclosed and explained

in the parent company financial statements;

• assess the Group and parent company’s ability to continue

as a going concern, disclosing, as applicable, matters

related to going concern; and

• use the going concern basis of accounting unless they

either intend to liquidate the Group or the parent company

or to cease operations or have no realistic alternative but

todo so.

The Directors are responsible for keeping adequate

accounting records that are sufficient to show and explain the

Group and parent company’s transactions and disclose with

reasonable accuracy at any time the financial position ofthe

Group and parent company and enable them to ensure that

its financial statements comply with the Companies Act 2006.

They are responsible for such internal control as they

determine is necessary to enable the preparation of financial

statements that are free from material misstatement,

whether due to fraud or error, and have general responsibility

for taking such steps as are reasonably open to them to

safeguard the assets of the Group and to prevent and detect

fraud and other irregularities.

The Directors are responsible for preparing the Annual

Report and Accounts in accordance with applicable law

and regulations.

The Directors consider the Annual Report and Accounts,

taken as a whole, provides the information necessary to

assess the Group’s performance, business model and

strategy and is fair, balanced and understandable.

The Directors are responsible for the maintenance and

integrity of the corporate and financial information included

on the Group’s website (www.dialight.com), on which this

Annual Report and Accounts are published. Legislation in

the UK governing the preparation and publication of financial

statements may differ from legislation in other jurisdictions.

Responsibility statement of the Directors

in respect of the annual financial report

Each of the Directors, whose names and functions are listed

in the Corporate Governance report on pages 50 and 51,

confirm to the best of their knowledge:

• the financial statements, prepared in accordance with the

applicable set of accounting standards, give a true and fair

view of the assets, liabilities, financial position and profit or

loss of the Company and the undertakings included in the

consolidation taken as a whole;

• the Strategic Report includes a fair review of the

development and performance of the business and the

position of the Company and the undertakings included

in the consolidation taken as a whole, together with a

description of the principal risks and uncertainties that

they face; and

• the Annual Report and financial statements, taken as a

whole, are fair, balanced and understandable and provide

the information necessary for shareholders to assess the

Group’s position and performance, business model

and strategy.

On behalf of the Board.

Steve Blair

Group Chief Executive Officer

22 June 2026

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101

Dialight plc Annual Report and Accounts 2026

FINANCIAL

STATEMENTS

Independent auditor’s report to the

members of Dialight plc 103

Consolidated statement of profit or loss 117

Consolidated statement of comprehensive income 118

Consolidated statement of financial position 119

Consolidated statement of changes in equity 120

Consolidated statement of cash flows 121

Notes to the consolidated financial statements 122

Company balance sheet 163

Company statement of changes in equity 164

Notes to the Company financial statements 165

In this section

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Dialight plc Annual Report and Accounts 2026

Independent auditor’s report to the members of Dialight plc

for the year ended 31 March 2026

Our opinion on the financial statements is unmodified

We have audited the financial statements of Dialight plc (the “parent company”) and its subsidiaries (the “Group”) for the

year ended 31 March 2026, which comprise the Consolidated statement of profit or loss, the Consolidated statement

of comprehensive income, the Consolidated statement of financial position, the Consolidated statement of changes in

equity, the Consolidated statement of cash flows, the Notes to the Consolidated financial statements, including material

accounting policy information, the Company balance sheet, the Company statement of changes in equity and the Notes

to the Company financial statements, including accounting policies. The financial reporting framework that has been

applied in the preparation of the Group financial statements is applicable law and UK-adopted international accounting

standards. The financial reporting framework that has been applied in the preparation of the parent company financial

statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102

The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted

Accounting Practice).

In our opinion:

• the financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs

as at 31 March 2026 and of the Group’s profit for the year then ended;

• the Group financial statements have been properly prepared in accordance with UK-adopted international

accounting standards;

• the parent company financial statements have been properly prepared in accordance with United Kingdom

Generally Accepted Accounting Practice; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.

Our responsibilities under those standards are further described in the “Auditor’s responsibilities for the audit of the financial

statements” section of our report. We are independent of the Group and the parent company in accordance with the ethical

requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied

to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We are responsible for concluding on the appropriateness of the Directors’ 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 and the parent company’s ability to continue as a going concern. If we conclude that a material

uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such

disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the

date of our report. However, future events or conditions may cause the Group or the parent company to cease to continue as a

going concern.

Our evaluation of the Directors’ assessment of the Group’s and the parent company’s ability to continue to adopt the going

concern basis of accounting included obtaining management’s going concern assessment, severe but plausible downside

case, and reverse stress test, covering the period to 30 June 2027,and performing the following procedures:

• obtaining management’s forecasts and performing arithmetical and model integrity checks on management’s model and

forecast cash flows;

• obtaining an understanding of the key controls over management’s going concern assessment, including those over

the inputs;

• challenging the key assumptions including revenue growth, gross margin improvement and cost initiatives;

• obtaining management’s downside scenarios (including management’s severe but plausible downside case and reverse

stress test) which reflect management’s assessment of uncertainties. We evaluated the assumptions during the forecast

period under each of these scenarios;

• assessing the accuracy of management’s historic forecasting by comparing management’s forecasts to actual results

fortheprevious two financial years and considering the impact on the plausibility of the going concern forecast;

• evaluating post year end trading performance against forecast to assess consistency of assumptions;

• evaluating management’s assessment of covenant compliance during the year with reference to submitted covenant

compliance certificates;

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Independent auditor’s report to the members of Dialight plc continued

for the year ended 31 March 2026

Conclusions relating to going concern (continued)

• evaluating the completeness and accuracy of the Directors’ assessment by assessing the disclosure against information

available in the public domain or otherwise, including reading Board minutes, and making inquiries of management,

thefinance team, legal counsel and the Board of Directors;

• obtaining and reviewing executed financing agreements post year-end and assessing the impact of the refinancing and

revised covenants on the going concern assessment;

• inquiring whether management and those charged with governance are aware of events or conditions beyond the period of

management’s assessment that may cast significant doubt on the entity’s ability to continue as a going concern; and

• evaluating the adequacy of the disclosures in the financial statements in respect of going concern.

In our evaluation of the Directors’ conclusions, we considered the inherent risks associated with the Group’s and the parent

company’s business model including effects arising from macro-economic uncertainties such as the crisis in the Middle East

and continued uncertainty around global tariffs, we assessed and challenged the reasonableness of estimates made by the

Directors and the related disclosures and analysed how those risks might affect the Group’s and the parent company’s financial

resources or ability to continue operations over the going concern period.

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.

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 parent company’s ability to continue as a going

concern for a period of at least 12 months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections

of this report.

Our approach to the audit

Overview of our audit approach

Overall materiality:

Group: $1.17m, which represents 0.7% of the Group’s total revenue.

Parent company: £0.34m, which represents 1.00% of the parent

company’s total assets prior to reversal of impairment.

Materiality

Key audit

matters

Scoping

Key audit matters were identified as:

• valuation of inventory (obsolescence) (same as previous year); and

• valuation of investment and intercompany loans (parent company)

(same as previous year).

Our auditor’s report for the year ended 31 March 2025 included one

key audit matter that has not been reported as a key audit matter in

ourcurrent year’s report:

• going concern (Group and parent company) is not considered a key

audit matter following the improvement in trading performance and

therenewal of borrowing facilities.

We have performed an audit of financial information using component

material (full scope audit) on two components and audit of one or more

account balance, classes of transactions or disclosures (specific audit

procedures) on a further two components. We performed analytical

procedures at Group level (analytical procedures) on the remaining

components of the Group.

Our work performed over components covered 84% of the Group’s

revenue, 86% of the Group’s total assets, and 75% of the Group’s

absolute profitbefore tax.

The nature of work performed on components has changed compared

to the prior year due to changes in the composition of the Group.

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Key audit matters

Key audit matters are those matters that, in our professional

judgement, were of most significance in our audit of the

financial statements of the current period and include the

most significant assessed risks of material misstatement

(whether or not due to fraud) that we identified. These matters

included those that had the greatest effect on: the overall

audit strategy; the allocation of resources in the audit; and

directing the efforts of the engagement team. These matters

were addressed in the context of our audit of the financial

statements as a whole, and in forming our opinion thereon,

and we do not provide a separate opinion on these matters.

Description

Disclosures

Audit response

Our results

KAM

Potential

financial

statement

impact

Extent of management judgement

High

Low

Low High

Going concern

Inventory provision –

valuation and allocation

Valuation of parent

company investment

andintercompany loans

Management

override of controls

Accuracy of inventory

overhead absorption

Valuation of Lighting CGU

Accuracy and valuation

ofdefined benefit pension

scheme liabilities

Revenue – unusual

transactions from data

analytics – occurrence

In the graph below, we have presented the key audit matters and significant risks relevant to the audit. This is not a complete list

of all risks identified by our audit.

B A

Key audit matter (“KAM”)

Significant risk

Key

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Independent auditor’s report to the members of Dialight plc continued

for the year ended 31 March 2026

Key audit matters (continued)

Key audit matter – Group How our scope addressed the matter – Group

Inventory provision – valuation and allocation

We identified the inventory provision as one of the most

significant assessed risks of material misstatement due to

fraud and error.

The Group operates in an industry whereby development in

product technology may result in inventory becoming slow

moving or obsolete. Levels of older or longer dated inventory

may indicate an element of slow moving or obsolete inventory

that requires a provision.

We identified a risk of fraud that management could generate

improved results through provision manipulation or make

inappropriate judgements which could cause the provision to

be materially inappropriate.

We also identified a risk of error as the underlying provision

computation involves management judgement to determine

the level of provisioning required.

At 31 March 2026, the Group held $32.3m (2025: $52.5m) of

gross inventory on its balance sheet of which $2.3m (2025:

$5.9m) related to slow moving or obsolete inventory which is

provided for as it is not expected to be saleable.

In responding to the key audit matter, we performed the

following audit procedures:

• gaining an understanding of the Group’s processes and

controls with respect to inventory as part of our overall

understanding of the entity and business process;

• assessing management’s accounting policy to understand

whether it is in line with corresponding IFRS standards and

that no indicators of management bias are apparent;

• obtaining management’s provision calculation and testing

themathematical accuracy;

• assessing and challenging management’s evaluation

of old and obsolete inventory, and the assumptions

underpinning this;

• assessing the underlying data used in management’s

assessment, including obtaining a sample of purchase

order information for the inventory held, and performing a

recalculation based on management’s methodology; and

• assessing the disclosures made in the financial statements

for completeness and accuracy in line with the accounting

standards and the Group’s accounting policies.

Relevant disclosures in the Annual Report and Accounts

• Financial statements: Note 2(c) Estimates, Note 4 Material

accounting policies, Note 18 Inventories.

• Audit Committee report: Key judgements and financial

reporting matters.

Our results

We have not identified any material misstatements with respect

to managements’ inventory provisioning.

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Key audit matter – Parent company How our scope addressed the matter – Parent company

Valuation of parent company investment and

intercompany loans

We identified valuation of parent company investments and

intercompany loans as one of the most significant assessed

risks of material misstatement due to error. This is due to

the high degree of estimation uncertainty in determining

therecoverable amount of these balances.

Investments in subsidiaries of £10.6 million (2025: £9.9m

million) and intercompany loans to subsidiaries £31.9m

(2025: £27.1m) are reported in the parent company

balancesheet at cost less provision for impairment.

Investments and intercompany loans are tested for

impairment if impairment indicators exist. If such indicators

exist, the recoverable amounts of the investments in

subsidiaries are estimated in order to determine the extent

of the impairment loss, if any. Any such impairment loss is

recognised in the income statement.

Conversely, should the conditions leading to the previous

impairment improve, the impairments made can be reversed.

Due to a change in business model within 2026,

management’s assessment identified an impairment reversal

for the investment in Dialight Europe Limited and the loan with

Dialight Penang Sdn. Bhd. As a result, management have

recognised an impairment reversal of £15.4m arising from,

aprevious impairment for loans to subsidiaries of £5.5mand

a debt write off against amounts due from subsidiaries of

£9.9m.

In responding to the key audit matter, we performed the

following audit procedures:

• gaining an understanding of the Group’s processes and

controls with respect to the impairment assessment

as part of our overall understanding of the entity and

business process;

• evaluating management’s assessment of whether there were

any other indicators of impairment;

• assessing and challenging management’s impairment review,

including determining whether appropriate costs and cash

flows are included, and that these appropriately factor in

the current economic climate, and corroborate medium and

long-term growth assumptions to relevant evidence, such as

external market data;

• using an auditor’s internal valuation expert to independently

determine a weighted average cost of capital (“WACC”),

to assess whether the WACC used by management,

asdetermined by their expert, is appropriate;

• evaluating historical forecasting accuracy by comparing

results achieved in prior years to initial forecasts;

• performing sensitivity analysis on the key assumptions,

including the forecasted cash flows, the long-term growth

rates and discount rates and assessing the impact on the

value-in-use calculation;

• assessing and challenging management’s assessment of

the expected bad debt provision against amounts owed

byGroup undertakings;

• assessing and evaluating the value of the impairment

reversals made by management, and whether those reversals

made were appropriate; and

• assessing the disclosures made in the financial statements

for completeness and accuracy in line with the accounting

standards and the Group and parent company’s

accounting policies.

Relevant disclosures in the Annual Report and Accounts

• Company financial statements: Note 3 Critical

accounting judgements and key sources of estimation

uncertainty, Note 5 Investments, Note 8 Debtors.

Our results

We did not identify any material misstatement to impairment of

both investments and intercompany loans.

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for the year ended 31 March 2026

Our application of materiality

We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified

misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion

inthe auditor’s report.

Materiality was determined as follows:

Materiality measure Group Parent company

Materiality for financial

statements as a whole

We define materiality as the magnitude of misstatement in the financial statements that,

individually or in the aggregate, could reasonably be expected to influence the economic

decisions of the users of these financial statements. We use materiality in determining the

nature, timing and extent of our audit work.

Materiality threshold $1.17m (2025: $1.26m), which represents

0.7%of the Group’s total revenue.

£0.34m (2025: £0.58m), which represents

1.00% of the parent company’s total assets

prior to impairment reversal.

Significant judgements

made by auditor in

determining materiality

In determining materiality, we made the

following significant judgements:

• Total revenue was considered to be the

most appropriate benchmark because

this is a key performance indicator used

by the Directors to report on the financial

performance of the Group and has been

less volatile than reported profit or loss in

recent years; and

• The measurement of 0.7% of revenue

is, in our view, appropriate given user

expectations and industry benchmarking

and results in a materiality which is

considered sufficient to identify any

material misstatements.

Materiality for the current year is lower than

the level that we determined for the year

ended 31 March 2025 to reflect a reduction

inthe Group’s total revenue.

In determining materiality, we made the

following significant judgements:

• total assets prior to impairment reversal

was considered to be the most appropriate

benchmark for the parent company because,

in our view, itis reflective of the financial

position of the parent company given the

nature of its operations;and

• the measurement of 1.0% of total assets

prior to impairment reversal is, inour view,

appropriate given user expectations and

industry benchmarking and results in a

materiality which is considered sufficient to

identify any material misstatements.

Materiality for the current year is lower than

the level that we determined for the year

ended 31 March 2025 to reflect a change in

benchmark percentage for the normalisation

ofassets for the reversal of impairments.

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Materiality measure Group Parent company

Performance materiality

used to drive the extent of

our testing

We set performance materiality at an amount less than materiality for the financial statements

as a whole to reduce to an appropriately low level the probability that the aggregate of

uncorrected and undetected misstatements exceeds materiality for the financial statements

asa whole.

Performance

materiality threshold

$0.82m (2025: $0.82m), which is 70%

(2025: 65%) of financial statement materiality.

The range of component performance

materialities used across the Group was

$0.57m to $0.77m.

£0.24m (2025: £0.38m), which is 70%

(2025: 65%) of financial statement materiality.

Significant judgements made

by auditor in determining

performance materiality

In determining performance materiality,

weconsidered the following factors:

• our previous experience of the Group;

• our assessment of prior year adjustments;

and

• our risk assessment – we considered the

control deficiencies identified in prior years,

and the potential impact of these on the

current period when performing our risk

assessment procedures.

In determining component performance

materiality, we made the following

significant judgements:

• extent of disaggregation of financial

information across components, including

the relative risk and size of a component to

the Group.

For each component in scope for our

Group audit, we allocated a performance

materiality that is less than our overall

Groupperformance materiality.

In determining performance materiality,

weconsidered the following factors:

• our previous experience with the

parent company;

• our assessment of prior year adjustments;

and

• our risk assessment – we considered the

control deficiencies identified in prior years,

and the potential impact of these on the

current period when performing our risk

assessment procedures.

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for the year ended 31 March 2026

Materiality measure Group Parent company

Specific materiality We determine specific materiality for one or more particular classes of transactions, account

balances or disclosures for which misstatements of lesser amounts than materiality for the

financial statements as a whole could reasonably be expected to influence the economic

decisions of users taken on the basis of the financial statements.

Specific materiality We determined a lower level of specific

materiality for the following areas:

• disclosure of Director’s remuneration; and

• disclosure of identified related party

transactions outside of the normal course

of business.

We determined a lower level of specific

materiality for the following areas:

• disclosure of Director’s remuneration; and

• disclosure of identified related party

transactions outside of the normal course

of business.

Communication of

misstatements to the

Audit Committee

We determine a threshold for reporting unadjusted differences to the audit committee.

Threshold

for communication

$60,000 (2025: $60,000), which represents

5% of financial statement materiality,

and misstatements below that threshold

that, in our view, warrant reporting on

qualitative grounds.

£20,000 (2025: £30,000), which represents

5% of financial statement materiality, and

misstatements below that threshold that, in our

view, warrant reporting on qualitative grounds.

Our application of materiality (continued)

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Benchmark $166.9m

FSM $1.17m

Key

Overall materiality – Group

Total assets £51.0m

FSM £0.34m

Key

Overall materiality – Parent company

FSM

$1.17m

0.7%

$0.82m

RoPM

$0.77m

to $0.57m

TfC

$0.06m

FSM

£0.34m,

0.65%

£0.24m

TfC

£0.02m

The graph below illustrates how performance materiality and the range of component performance materiality interacts with our

overall materiality and the threshold for communication to the Audit Committee.

FSM: Financial statement materiality, PM: Performance materiality, RoPM: range of performance materiality at five components,

TfC: Threshold for communication to the Audit Committee.

An overview of the scope of our audit

We performed a risk-based audit that requires an understanding of the Group’s and the parent company’s business and in

particular matters related to:

Understanding the Group, its components, their environments, and its system of internal control including

common controls

The Group engagement team obtained an understanding of the Group and its components, their environment, and its system

of internal control, including the nature and extent of common controls and centralised activities relevant to financial reporting,

andassessed the risks of material misstatement at the Group level.

Identifying components at which to perform audit procedures

The Group engagement team have determined the components at which to perform further audit procedures, by considering

the following:

• components in scope for further audit procedures due to individually including a risk of material misstatement to the Group

financial statements due to the component’s nature or circumstances.

• components in scope for further audit procedures due to the nature and size of assets, liabilities and transactions at the

component (being of financial significance to one or more scoped items that it is required to be in scope).

• components in scope for further audit procedures to obtain sufficient appropriate audit evidence for significant classes

oftransactions, account balances and disclosures, or for unpredictability.

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for the year ended 31 March 2026

An overview of the scope of our audit (continued)

Type of work to be performed on financial information of parent company and other components (including how it

addressed the key audit matters)

In order to address the audit risks identified during our planning procedures, the Group engagement team determined the

following procedures were necessary:

• full-scope audits on the financial statements of two components, being Dialight Corporation (US) and Dialight plc (parent

company). These full-scope audits include all of our work on the key audit matters described above. These two components

contributed 86% of the Group revenue and 75% of the Group absolute profit before taxation;

• specific scope procedures were performed on two further components, Dialight Penang Sdn. Bhd. and Dialight Europe

Limited. This was in order to obtain sufficient appropriate audit evidence in respect of the financial statement line items to

beconsidered of financial significance; and

• we performed analytical procedures at Group level over the remaining eight components.

Performance of our audit

In total, revenue coverage of full-scope audit and specified audit procedures equated to 84% of Group revenue, 86% of the

Group’s total assets, and 75% of the Group’s absolute profit before taxation.

Further audit procedures performed on components subject to specific scope procedures may not have included testing of all

significant account balances of such components, but further audit procedures were performed on specific accounts with that

component that we, the Group auditor, considered had the potential for the greatest impact on the Group financials statements

either due to risk, size or coverage.

The components within the scope of further audit procedures accounted for the following percentages of the Group’s results,

including the key audit matters identified:

Audit approach

Number of

components

% coverage of

total assets

% coverage of

revenue

% coverage of

profit before tax

(on absolute

basis)

Full-scope audit 2

(2025: 2)

86%

(2025: 74%)

84%

(2025: 85%)

75%

(2025: 86%)

Specific scope audit 2

(2025: 3)

12%

(2025: 14%)

nil%

(2025: nil%)

nil%

(2025: nil%)

Analytical procedures 8

(2025: 7)

(2025: 12%)

16%

(2025: 15%)

25%

(2025: 14%)

Total 12 (2025: 12) 100% 100% 100%

Communications with component auditors

The specific scope audit of Dialight Penang Sdn. Bhd. (Malaysia) was performed by Grant Thornton Malaysia.

Grant Thornton Mexico performed specific procedures on the inventory, taxation and payroll balances within the Dialight

Corporation component.

Each of the overseas teams were issued with detailed Group audit instructions. These instructions highlighted the risks that

needed to be addressed through the audit procedures and specified the information that we required to be reported to the

Group auditor.

Throughout the audit, the Group auditor held detailed discussions with the component auditors and performed remote reviews

of the work performed, also arranging update calls on the progress of the fieldwork and attending the component audit

clearance meetings with component management. Working papers were prepared by the Group auditor to summarise their

review of component auditor files. A site visit to the Dialight Corporation component was also performed by the Group auditor.

Changes in approach from previous period

The subsidiary in Australia, Dialight ILS Australia Pty Limited, has been removed from specific scope procedures in the current

year, as it does not include a specific risk of material misstatement to the Group as a whole and sufficient coverage was

obtained from our work on other components.

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Other information

The other information comprises the information included in the Annual Report and Accounts, other than the financial

statements and our auditor’s report thereon. The Directors are responsible for the other information contained within the Annual

Report and Accounts. Our opinion on the financial statements does not cover the other information and, except to the extent

otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially

inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially

misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine

whether there is a material misstatement in the financial statements themselves. If, based on the work we have performed,

weconclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Our opinions on other matters prescribed by the Companies Act 2006 are unmodified

In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance

withthe Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Strategic Report and the Directors’ report for the financial year for which the financial

statements are prepared is consistent with the financial statements and those reports have been prepared in

accordance with applicable legal requirements;

• the information about internal control and risk management systems in relation to financial reporting processes and

about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Rules and Transparency

Rules sourcebook made by the Financial Conduct Authority (the FCA Rules), is consistent with the financial statements

and has been prepared in accordance with applicable legal requirements; and

• information about the company’s corporate governance code and practices and about its administrative, management

and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.

Matters on which we are required to report under the Companies Act 2006

In the light of the knowledge and understanding of the Group and the parent company and their environment obtained in the

course of the audit, we have not identified material misstatements in:

• the Strategic Report or the Directors’ report; or

• the information about internal control and risk management systems in relation to financial reporting processes and about

share capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report

to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been

received from branches not visited by us; or

• the parent company financial statements and the part of the Directors’ remuneration report to be audited are not in agreement

with the accounting records and returns; or

• certain disclosures of Directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit; or

• a corporate governance statement has not been prepared by the parent company.

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for the year ended 31 March 2026

Corporate Governance Statement

We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate

Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified

for our review by the Listing Rules.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate

Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:

• the Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any

material uncertainties identified as set out on pages 38 and 39;

• the Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment covers and why the

period is appropriate as set out on pages 38 and 39;

• the Directors’ statement on whether they have a reasonable expectation that the Group will be able to continue in operation

and meets its liabilities as set out on pages 38 and 39;

• the Directors’ statement on fair, balanced and understandable as set out on page 101;

• the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks as set out on pages

31 to 33;

• the section of the Annual Report and Accounts that describes the review of the effectiveness of risk management and internal

control systems as set out on pages 29 and 30; and

• the section describing the work of the Audit Committee as set out on pages 70 to 74.

Responsibilities of Directors

As explained more fully in the Directors’ responsibilities statement set out on page 101, the Directors are responsible for the

preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as

the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement,

whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group’s and the parent company’s ability

to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis

of accounting unless the Directors either intend to liquidate the Group or the parent company or to cease operations, or have no

realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance

is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a

material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could

reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures

are capable of detecting irregularities, including fraud, is detailed below:

• we obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and the parent

company and determined that the most significant are applicable law, UK-adopted international accounting standards (for the

Group), United Kingdom Generally Accepted Accounting Practice (for the parent company), pension legislation, and relevant

tax regulations;

• we corroborated our understanding of the legal and regulatory framework applicable to the Group and the parent company

by discussing relevant frameworks with Group management and component management, obtaining correspondence with

relevant parties and reviewing Board minutes;

• our assessment of the Group and parent company’s compliance with these laws and regulations was integrated into our

procedures on the related financial statement items. We obtained an understanding of the Group’s and parent company’s

systems and processes for monitoring compliance, tested key controls, and evaluated the effectiveness of the Group’s and

parent company’s compliance programme. We also evaluated relevant documentation and obtained representations from

management regarding their compliance with these laws and regulations;

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• we made enquiries of management and the Board of Directors to determine if they were aware of any instances of non-compliance

with laws and regulations and whether they had any knowledge of actual, suspected or alleged fraud and corroborated this

with our review of the Board minutes;

• we assessed the susceptibility of the Group’s and the parent company’s financial statements to material misstatement,

including how fraud might occur, by evaluating management’s incentives and opportunities for manipulation of the financial

statements. This included the evaluation of the risk of management override of controls. We determined that the principal

risks were in relation to:

– journal entries that were posted by infrequent users, journals that reclassified costs within the consolidated statement of

comprehensive income to distort the underlying operating profit measure;

– material post-close journal entries;

– revenue transactions which fall outside of the expected transaction flow;

– potential management bias in determining accounting estimates, especially in relation to the valuation of intangible and

tangible assets, the accuracy of absorbed overheads in inventory, and the valuation of the inventory provision; and

– transactions with related parties outside of the normal course of business.

• audit procedures performed by the engagement team included:

– enquiring of management, the finance team and the Board of Directors about the risks of fraud at the Group and the parent

company and the controls implemented to address those risks. Assessing the design and implementation of controls

relevant to the audit that management has in place to prevent and detect fraud, including updating our understanding of the

internal controls over journal entries, including those related to the posting of entries used to record non-recurring, unusual

transactions or other non-routine adjustments;

– identifying and testing journal entries, with selection based on risk profiling;

– running specific keyword searches (including to related parties and of those previously connected to related entities)

over the journal entry population to identify descriptions that could indicate fraudulent activity or management override

of controls;

– assessing the disclosures within the Annual Report and Accounts, including principal and emerging risks; and

– challenging assumptions and judgements made by management in its significant accounting estimates.

• these audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or

error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from

error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error,

as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed

non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely

we would become aware of it;

• as part of the engagement partner’s assessment of the engagement team’s collective competence and capabilities,

theyconsidered the team’s understanding of, and practical experience with, audit engagements of a similar nature and

complexity through appropriate training and participation. They also evaluated the team’s knowledge of the industry in which

the parent company and the Group operate, as well as the team’s understanding of the legal and regulatory requirements

specific to the Group and the parent company;

• we communicated relevant laws and regulations and potential fraud risks to all engagement team members, including internal

specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit;

• in assessing the potential risks of material misstatement, we obtained an understanding of:

– the entity’s operations, including the nature of its revenue sources, products and services and of its objectives and

strategies to understand the classes of transactions, account balances, expected financial statement disclosures and

business risks that may result in risks of material misstatement;

– the applicable statutory provisions;

– the rules and interpretative guidance issued by the Financial Conduct Authority; and

– the entity’s control environment, including the policies and procedures implemented to comply with the requirements of

its regulator, including the adequacy of the training to inform staff of the relevant legislation, rules and other regulations

of the regulator, the adequacy of procedures for authorisation of transactions, internal review procedures over the

entity’s compliance with regulatory requirements, the authority of, and resources available to the compliance officer

andprocedures to ensure that possible breaches of requirements are appropriately investigated and reported.

• for components at which audit procedures were performed, we requested component auditors to report to us for

any instances of non-compliance with laws and regulations that gave rise to a material misstatement of the Group

financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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Independent auditor’s report to the members of Dialight plc continued

for the year ended 31 March 2026

Other matters which we are required to address

We were appointed by the Board on 19 June 2023 to audit the financial statements for the year ending 31 March 2024. Our total

uninterrupted period of engagement is three years, covering the years ended 31 March 2024 to 31 March 2026.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the parent company and we

remain independent of the Group and the parent company in conducting our audit.

Our audit opinion is consistent with the additional report to the Audit Committee.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies

Act2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are

required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept

or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this

report, orfor the opinions we have formed.

Mark Overfield BSc FCA

Senior Statutory Auditor

for and on behalf of Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

Leeds

22 June 2026

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Consolidated statement of profit or loss

for the year ended 31 March 2026

		2026	2025
	Note	$m	$m
Revenue	5	166.9	183.5
Cost of sales		(101.8)	(117.0)
Gross profit		65.1	66.5
Other operating income	6	2.9	–
Distribution costs		(25.7)	(29.0)
Administrative expenses		(35.5)	(52.8)
Impairment losses on financial assets	24	(0.7)	(2.1)
Reversal of impairment losses on financial assets	24	0.2	–
(Loss)/gain on disposal of business		(0.1)	5.8
Operating profit/(loss)	5	6.2	(11.6)
Underlying EBITDA 1 before net impairment losses on financial assets		20.3	15.0
Net impairment losses on financial assets	24	(0.5)	(2.1)
Underlying EBITDA 1		19.8	12.9
Depreciation and amortisation 2		(9.5)	(8.7)
Underlying operating profit	5	10.3	4.2
Non-underlying items	7	(4.0)	(21.6)
(Loss)/gain on disposal of business		(0.1)	5.8
Operating profit/(loss)	5	6.2	(11.6)
Net finance expense	9	(2.4)	(2.5)
Profit/(loss) before tax		3.8	(14.1)
Taxation (expense)/credit	10	(3.3)	0.5
Profit/(loss) for the year		0.5	(13.6)
Profit/(loss) for the year attributable to:
Equity owners of the Company		0.4	(13.8)
Non-controlling interests		0.1	0.2
Profit/(loss) for the year		0.5	(13.6)
Earnings/(loss) per share
Basic (cents)	12	1.0	(34.7)
Diluted (cents)	12	1.0	(34.7)

1 Underlying EBITDA is defined as operating profit or loss stated before non-underlying items, gain or loss on disposal of business,

net finance expense, taxation, depreciation (including right-of-use assets) and amortisation (including impairment) of intangible assets.

See Note 28 to the consolidated financial statements for further details.

2 Depreciation and amortisation for the year ended 31 March 2026 includes an underlying impairment charge of $1 .5m (2025: $0. 1m) in respect

of intangible assets. The prior year amount also includes a loss on disposal of property, plant and equipment of $0. 3m.

All results arise from continuing operations.

The accompanying Notes on pages 122 to 162 form an integral part of these consolidated financial statements.

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Consolidated statement of comprehensive income

for the year ended 31 March 2026

		2026	2025
	Note	$m	$m
Profit/(loss) for the year		0.5	(13.6)
Other comprehensive (loss)/income:
Items that may be reclassified subsequently to profit and loss
Exchange differences on translation of foreign operations		(0.2)	(0.1)
		(0.2)	(0.1)
Items that will not be reclassified subsequently to profit and loss
Remeasurement of defined benefit pension schemes	17	(1.6)	(4.0)
Deferred tax on remeasurement of defined benefit pension schemes	16	0.2	1.0
		(1.4)	(3.0)
Other comprehensive loss for the year, net of tax		(1.6)	(3.1)
Total comprehensive loss for the year		(1.1)	(16.7)
Attributable to:
Equity owners of the Company		(1.2)	(16.9)
Non-controlling interests		0.1	0.2
Total comprehensive loss for the year		(1.1)	(16.7)

The accompanying Notes on pages 122 to 162 form an integral part of these consolidated financial statements.

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Consolidated statement of financial position

at 31 March 2026

		2026	2025
	Note	$m	$m
Assets
Property, plant and equipment	13	12.3	13.5
Right-of-use assets	14	7.3	9.0
Intangible assets	15	7.6	9.0
Deferred tax assets	16	7.7	8.5
Employee benefit assets	17	0.7	2.2
Other receivables	19	0.7	0.5
Total non-current assets		36.3	42.7
Inventories	18	30.0	46.6
Trade and other receivables	19	27.8	34.3
Current tax assets		0.1	0.4
Cash and cash equivalents	20	7.1	7.9
Total current assets		65.0	89.2
Total assets		101.3	131.9
Liabilities
Trade and other payables	21	(32.3)	(40.1)
Provisions	22	(1.4)	(2.4)
Current tax liabilities		(0.2)	(0.5)
Lease liabilities	14	(2.7)	(2.5)
Total current liabilities		(36.6)	(45.5)
Trade and other payables	21	–	(3.8)
Provisions	22	(2.3)	(2.1)
Employee benefit liabilities	17	(0.7)	–
Borrowings	23	(9.0)	(25.7)
Lease liabilities	14	(5.6)	(7.5)
Total non-current liabilities		(17.6)	(39.1)
Total liabilities		(54.2)	(84.6)
Net assets		47.1	47.3
Equity
Issued share capital	25	1.2	1.2
Share premium	25	13.0	13.0
Merger reserve	25	1.0	1.0
Other reserves	25	15.1	15.4
Retained earnings		16.3	16.3
Equity attributable to equity owners of the Company		46.6	46.9
Non-controlling interests		0.5	0.4
Total equity		47.1	47.3

The accompanying Notes on pages 122 to 162 form an integral part of these consolidated financial statements.

These consolidated financial statements on pages 117 to 162 were approved by the Board of Directors on 22 June 2026 and

were signed on its behalf by:

Steve Blair Mark Fryer

Group Chief Executive Officer Group Chief Financial Officer

Registered number: 02486024

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Consolidated statement of changes in equity

for the year ended 31 March 2026

					Other reserves
	Issued				Capital				Non-
	share	Share	Merger	Translation	redemption	Own	Retained		controlling	Total
	capital	premium	reserve	reserve	reserve	shares	earnings	Total	interests	equity
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
At 1 April 2024	1.2	13.0	1.0	12.6	4.3	(1.2)	32.8	63.7	0.2	63.9
Loss for the year	–	–	–	–	–	–	(13.8)	(13.8)	0.2	(13.6)
Other comprehensive loss:
Exchange differences
on translation of foreign
operations	–	–	–	(0.1)	–	–	–	(0.1)	–	(0.1)
Remeasurement of defined
benefit pension schemes, netof taxes	–	–	–	–	–	–	(3.0)	(3.0)	–	(3.0)
Total other comprehensive loss	–	–	–	(0.1)	–	–	(3.0)	(3.1)	–	(3.1)
Total comprehensive
(loss)/income for the year	–	–	–	(0.1)	–	–	(16.8)	(16.9)	0.2	(16.7)
Transactions with owners:
Share-based payments	–	–	–	–	–	–	0.3	0.3	–	0.3
Purchase of own shares	–	–	–	–	–	(0.2)	–	(0.2)	–	(0.2)
Total transactions
with owners	–	–	–	–	–	(0.2)	0.3	0.1	–	0.1
At 31 March 2025	1.2	13.0	1.0	12.5	4.3	(1.4)	16.3	46.9	0.4	47.3
Profit for the year	–	–	–	–	–	–	0.4	0.4	0.1	0.5
Other comprehensive loss:
Exchange differences
on translation of foreign
operations	–	–	–	(0.2)	–	–	–	(0.2)	–	(0.2)
Remeasurement of defined
benefit pension schemes, net of taxes	–	–	–	–	–	–	(1.4)	(1.4)	–	(1.4)
Total other comprehensive
loss	–	–	–	(0.2)	–	–	(1.4)	(1.6)	–	(1.6)
Total comprehensive (loss)/
income for the year	–	–	–	(0.2)	–	–	(1.0)	(1.2)	0.1	(1.1)
Transactions with owners:
Share-based payments	–	–	–	–	–	–	1.0	1.0	–	1.0
Purchase of own shares	–	–	–	–	–	(0.1)	–	(0.1)	–	(0.1)
Total transactions with owners	–	–	–	–	–	(0.1)	1.0	0.9	–	0.9
At 31 March 2026	1.2	13.0	1.0	12.3	4.3	(1.5)	16.3	46.6	0.5	47.1

The accompanying Notes on pages 122 to 162 form an integral part of these consolidated financial statements.

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Consolidated statement of cash flows

for the year ended 31 March 2026

		2026	2025
	Note	$m	$m
Operating activities
Profit/(loss) for the year		0.5	(13.6)
Adjustments for:
Net finance expense	9	2.4	2.5
Taxation expense/(credit)	10	3.3	(0.5)
Sanmina liability	7	–	11.3
Loss/(gain) on disposal of business		0.1	(5.8)
Share-based payments	26	1.0	0.3
Defined benefit pension scheme administrative costs	17	1.2	0.2
Depreciation of property, plant and equipment	13	3.1	3.2
Loss on disposal of property, plant and equipment		–	0.3
Depreciation of right-of-use assets	14	2.6	2.5
Amortisation of intangible assets	15	2.3	2.6
Net impairment losses on financial assets	24	0.5	2.1
Impairment losses on property, plant and equipment	13	0.7	–
Impairment losses on intangible assets	15	1.6	0.2
Operating cash flow before movements in working capital		19.3	5.3
Decrease in inventories		17.1	2.6
Decrease in trade and other receivables		5.2	1.9
(Decrease)/increase in trade and other payables		(4.9)	2.2
(Decrease)/increase in provisions		(0.8)	1.1
Pension contributions paid	17	(0.5)	(0.7)
Cash generated by operations		35.4	12.4
Income taxes paid		(2.2)	(1.7)
Interest paid 1		(1.9)	(2.8)
Net cash generated from operating activities		31.3	7.9
Investing activities
Proceeds on disposal of business		0.5	5.2
Purchase of property, plant and equipment	13	(2.2)	(4.3)
Additions to intangible assets	15	(2.6)	(3.7)
Net cash used in investing activities		(4.3)	(2.8)
Financing activities
Drawdown of bank facility	23	3.9	3.0
Repayment of bank facility	23	(20.8)	(5.2)
Payment of Sanmina liability	21	(7.7)	(4.0)
Purchase of own shares	25	(0.1)	(0.2)
Repayment of lease liabilities 2	14	(2.5)	(2.3)
Net cash used in financing activities		(27.2)	(8.7)
Net decrease in cash and cash equivalents		(0.2)	(3.6)
Cash and cash equivalents at the beginning of the year	20	7.9	11.5
Effects of foreign exchange rates		(0.6)	–
Cash and cash equivalents at the end of the year	20	7.1	7.9

1 Interest paid includes interest paid on lease liabilities.

2 Repayment of lease liabilities only relates to the principal portion paid on lease liabilities.

The accompanying Notes on pages 122 to 162 form an integral part of these consolidated financial statements.

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Notes to the consolidated financial statements

for the year ended 31 March 2026

1. Reporting entity

Dialight plc (the “Company”) and its subsidiaries (together referred to as the “Group”) provides sustainable, energy efficient

and intelligent LED lighting technologies, helping our customers drive towards a net zero economy. Its primary market is

North America, with smaller operations in Europe, the Middle East and Africa (“EMEA”), Australia and the rest of the world.

The Company is listed on the London Stock Exchange and is incorporated in the United Kingdom, registered and domiciled

in England and Wales under registration number 02486024. Its registered office is at 60 Petty France, London SW1H 9EU,

England.

2. Basis of preparation

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with UK-adopted International Accounting Standards.

The consolidated financial statements are presented in US dollars and all values are rounded to the nearest tenth of a million

dollars, except where otherwise indicated.

The Company has elected to prepare its parent company financial statements under FRS 102 The Financial Reporting Standard

applicable in the UK and Republic of Ireland. The Company’s financial statements are presented in pound sterling which is the

Company’s functional currency as that is the currency of the primary economic environment in which the Company operates

and all values are rounded to the nearest tenth of a million pounds, except where otherwise indicated.

(b) Basis of preparation

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 1 to 40. The financial position of the Group, its cash flows, liquidity position and

borrowing facilities are discussed in the Chief Financial Officer’s review on pages 34 to 37.

The Directors’ assessment of the viability of the Group is set out in the viability statement on page 40. In addition, Note 24

includes the Group’s objectives, policies and processes for managing its capital, its financial risk management objectives,

details of its financial instruments and hedging activities and its exposures to credit risk and liquidity risk.

Net bank debt has decreased to $1.9m at 31 March 2026 (2025: $17.8m) comprising borrowings of $9.0m (2025: $25.7m) with

cash and cash equivalents of $7.1m (2025: $7.9m). Further details of borrowings are included in Note 23.

At 31 March 2026, the Group’s bank facility comprised an RCF of $28.8m from HSBC. The facility was extended to 21 July 2027

on the same terms as the original agreement on 5 June 2025. As set out in Note 23, on 22 April 2026, the Group entered into

a new £15.0m (equivalent to approximately $20.0m) RCF agreement with HSBC with an initial maturity date of 22 April 2029.

The new agreement with HSBC also includes an uncommitted accordion of £10.0m (equivalent to approximately $13.5m).

The decrease in the size of the Group’s committed bank facility aligns with the Group’s liquidity needs and has no adverse

impact on the Group’s viability.

Both the old and new RCF facilities were/are subject to quarterly covenants encompassing maximum leverage and minimum

interest cover. The financial covenants of the new facility require a leverage ratio maximum target of less than 2.5 times adjusted

EBITDA (the old facility was 3.0 times) and an interest cover minimum target of 4.0 times adjusted EBITDA (the same as the

old facility). The covenants under the old facility were met for all four quarters of the year. At 31 March 2026, there was $16.2m

of headroom on the leverage covenant and $11.1m on the interest cover covenant. See Note 23 to the consolidated financial

statements for further details on the Group’s banking covenants. The following going concern assessment has been carried out

based on the new facility.

In assessing the going concern assumptions, the Directors have prepared three main scenarios over the going concern period

which the Directors have assessed as a period of at least 12 months from the date of authorisation of these consolidated

financial statements to 30 June 2027, being:

• the base case;

• a severe but plausible downside case in relation to revenue and margin (the “downside case”); and

• a reverse stress test (break-even assessment).

Various upside scenarios also exist, but those result in positive outcomes and have not been included here given the focus

of the Directors and the Group’s auditor is on the risk to the going concern basis of preparation to the consolidated financial

statements. Nonetheless, the Directors consider these upside scenarios as realistic outcomes and continue to drive the Group’s

performance and other activities to seek to achieve those positive results.

The downside scenarios reflect the risk of lower-than-expected organic revenue growth in core Lighting markets, lower gross

margins than forecast and cost savings not being realised to the full extent forecasted.

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Base case

The base case is derived from the Board-approved Budget for the year to 31 March 2027 together with growth assumptions for

the quarter to 30 June 2027, which assume that the margin will improve over the going concern period through various Group

initiatives. The base case is driven by sales price increase, margin approval on sales, SKU reduction and workforce optimisation.

In this scenario, the Directors consider that the Group will continue to operate within its available committed facilities of £15.0m

(per the new bank facility) with sufficient headroom and covenant compliance throughout the forecast period.

The key assumptions in the base case include:

• net revenue for the year to 31 March 2027 is forecast to grow by 2.9% compared to the year ended 31 March 2026 (8.4%

excluding Traffic and Rail). This is driven by a combination of factors including increasing benefits from strategic relationships,

price increases and continued growth in Signals & Components;

• gross margin improvement due to the sales price increases, normalisation of freight costs and right-sizing of the workforce

in the production sites. The various initiatives are expected to deliver a year-on-year gross profit margin improvement of 4.8%

in the year to 31 March 2027 and a further marginal increase in the quarter to 30 June 2027; and

• operating costs are expected to be 34.0% of revenue in the year to 31 March 2027 and 32.7% in the quarter to 30 June 2027.

Severe but plausible downside case (the “downside case”)

The key assumptions in this case are:

• year to 31 March 2027: reduction of Budget revenue of 10.0% across Lighting, Obstruction, OE and Vehicle;

• quarter to 30 June 2027: no growth in revenue;

• year to 31 March 2027: further margin reduction of 2.0%/$3.0m across materials, labour and overheads with a similar

reduction (pro rated) in the quarter to 30 June 2027; and

• no mitigating actions are assumed apart from the removal of a bonus provision for the year to 31 March 2027 and the quarter

to 30 June 2027.

Reverse stress test (break-even assessment)

The key assumptions in this case are:

• year to 31 March 2027: reduction of Budget revenue by 16.7% across Lighting, Obstruction, OE and Vehicle;

• quarter to 30 June 2027: no growth in revenue;

• year to 31 March 2027: further margin reduction of 2.0%/$3.0m across materials, labour and overheads with a similar

reduction (pro rated) in the quarter to 30 June 2027; and

• no mitigating actions are assumed apart from the removal of a bonus provision for year to 31 March 2027 and the quarter

to 30 June 2027.

As indicated above, the downside case and reverse stress testing scenarios do not consider any mitigating actions apart from

the removal of a bonus provision. In all these scenarios, the Group has a series of controllable mitigating actions that can be

taken swiftly, including various temporary and permanent cost and cash-saving measures.

In the base case and downside case scenarios, the Group is not forecast to breach any covenants in the going concern period.

The Directors have considered the circumstances that would be needed to breach at least one covenant – a reverse stress test.

This indicates that a 16.7% fall in revenue from 2027 without any controllable mitigating actions being taken (apart from the

removal of a bonus provision) would trigger a breach of the leverage covenant in the fourth quarter of the year to 31 March 2027.

The likelihood of this circumstance is considered remote and management could take substantial mitigating actions, such as

taking various cost-cutting measures. Therefore, the Directors consider it remains appropriate to continue to adopt the going

concern basis in the preparation of these consolidated financial statements. Furthermore, the Directors have assessed whether

there are any material uncertainties that may cast significant doubt on the Group’s ability to continue as a going concern and,

unlike in prior periods, have concluded that none are present.

Uncertain tax treatments

The Group operates in certain jurisdictions that are unstable or have changing political conditions, giving rise to occasional

uncertainty over the tax treatment of items of income and expense. In addition, from time to time certain tax positions taken

by the Group are challenged by the relevant tax authorities, which carry a financial risk as to the final outcome. The Directors

have considered the potential impact arising from these uncertainties and risks on the Group’s tax assets and liabilities,

both recognised and unrecognised, and believe that they are not material to these consolidated financial statements.

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2. Basis of preparation (continued)

The preparation of these consolidated financial statements requires management to make judgements, estimates and

assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and

expenses. These judgements, estimates and assumptions are based on historical experience and other factors that are believed

to be reasonable under the circumstances. Actual results may differ from these estimates. The areas that require the most use

of management judgement and estimation are set out below.

Significant judgements

Development and patent costs

The Group capitalises development and patent costs provided they meet all the recognition criteria as set out in IAS 38

Intangible Assets. Costs are only capitalised when management applies judgement that is satisfied as to the ultimate

commercial viability of the projects based on a review of the relevant business case. The capitalised costs are amortised over

the expected useful economic life, which is determined based on the reasonable commercial prospects of the product and a

comparison to similar products being sold by the Group.

The Group has $7.5m (2025: $8.6m) of development and patent costs that relate to the current product portfolio and new

products expected to launch over the next one to two years. A review of the carrying value of development and patent costs

was carried out at 31 March 2026 resulting in an impairment charge of $1.5m (2025: $0.1m) being recorded within underlying

operating profit and $0.1m (2025: $0.1m) being recorded within non-underlying items.

All of the Group’s development projects are within the Lighting CGU and are tested for impairment at the CGU

level. However, management also performs a review of each individual project to see if there are any indications of

specific impairment.

The Directors have considered the reversal of impairments recognised in prior periods and determined that there were no

material indicators to support a reversal of prior impairments.

Deferred tax assets

The Group must determine the extent to which deferred tax assets can be recognised. This determination is based on an

assessment of the probability that future taxable income will be available, against which the deductible temporary differences

and tax loss carry-forwards can be utilised. In addition, significant judgement is required in assessing the impact of any legal

or economic limits or uncertainties in various tax jurisdictions.

At 31 March 2026, the Group has recognised a net deferred tax asset of $7.7m (2025: $8.5m). Of this balance, $6.3m (2025:

$6.4m) arises in the US. An analysis of this balance is set out in Note 16 to the consolidated financial statements. The Group

considers it highly probable that sufficient future taxable profits will arise in the US based on both the earnings history and the

future forecasted profits. In addition, the Group is satisfied that the losses will unwind in the same period as the forecasted

taxable profits.

All other jurisdictions

The remaining $1.4m (2025: $2.1m) of the recognised net deferred tax asset arises in the Group’s non-US subsidiaries in

various geographical locations and is analysed in Note 16 to the consolidated financial statements. The Group considers it

highly probable that sufficient future taxable profits will arise in the these jurisdictions based on both the earnings history and

the future forecasted profits. In addition, the Group is satisfied that the losses will unwind in the same period as the forecasted

taxable profits.

Non-underlying items

The Group incurs costs and earns income that is non-underlying in nature or that, in the Directors’ judgement, needs to be

disclosed separately by virtue of its size and incidence in order for users of the consolidated financial statements to assess

the underlying performance of the business. Judgement is required in determining whether an item should be classified

as non-underlying or included within the underlying results. Refer to Note 7 to the consolidated financial statements for

further information.

Estimates

Inventory provision

The total value of the inventory provision for all categories of inventory over which judgement has been exercised was $2.3m

(2025: $5.9m) which represents 7.1% (2025: 11.2%) of the gross inventory value. Details of the inventory provision are set out in

Note 18 to the consolidated financial statements.

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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Inventory provision: raw materials and sub-assemblies

The Group’s policy is that all raw material and sub-assembly inventory that is over two years old at the balance sheet date

is provided for in full. This basis for estimate reduces estimation subjectivity, while allowing for the adverse impact from

component shortages that have led to high inventory levels and some components being held for longer than expected.

Two years has been assessed to be appropriate as the components have a long shelf life, continue to be used in production

and reflects the product demand mix between project and MRO.

The value of the inventory provision for raw materials and sub-assemblies at 31 March 2026 was $0.4m (2025: $4.4m).

If all raw material and sub-assembly inventory over 18 months old at the balance sheet date was to be provided for, the inventory

provision for these categories would be $0.8m (an increase of $0.4m). Alternatively, if all raw material and sub-assembly inventory

over three years old at the balance sheet date was only to be provided for, the inventory provision for these categories would be

$0.2m (a decrease of $0.2m).

Inventory provision: finished goods

The review of finished goods inventory was based on all finished goods over one year old. Inventory on hand was compared to

historical sales data, current sales orders (also referred to as backlog), sales order pipeline and whether the product had been

recently launched. Management judgement was then applied to determine whether there was a reasonable probability that the

inventory would be sold, with a provision being required for any inventory that failed this assessment. Management believes that

any reasonably possible change in the assumption would not cause any significant change in the provision estimate for finished

goods. The value of the inventory provision for finished goods at 31 March 2026 was $1.9m (2025: $1.5m).

Impairment losses and reversal of impairment losses on financial assets

Expected credit losses on financial assets contain a number of measurement uncertainties relating to management’s view

of the expected future cash flows receivable from financial assets due from customers and the inherent creditworthiness of

those customers. Judgement is based on the Group’s past experience as well as taking into consideration current market and

economic conditions, and any factors relating to a specific customer or sale. Changes in judgements and assumptions could

result in a material adjustment to those estimates in future reporting periods. The value of the expected credit loss (“ECL”)

provision at 31 March 2026 was $2.4m (2025: $2.1m).

3. Changes in significant accounting policies

The Group has adopted the following amendments during the year with no significant impact:

• Lack of Exchangeability (Amendments to IAS 21).

The following standards, amendments and interpretations have been issued but are not yet effective. Where already endorsed

by the UK Endorsement Board (“UKEB”), these changes will be adopted on the effective dates noted. Where not yet endorsed

by the UKEB, the adoption date is less certain:

• Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7),

effective 2027 financial year;

• Annual Improvements to IFRS Accounting Standards – Volume 11, effective 2027 financial year;

• Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7), effective 2027 financial year;

• IFRS 18 Presentation and Disclosure in Financial Statements (“IFRS 18”), effective 2028 financial year;

• IFRS 19 Subsidiaries without Public Accountability: Disclosures, effective 2028 financial year;

• Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21), effective 2028 financial year (not yet

endorsed by UKEB); and

• Disclosures about Uncertainties in the Financial Statements – Illustrative Examples 38 (IAS 36, IFRS 18, IAS 1, IAS 37, IAS 8,

IFRS 7), no effective date.

Except for IFRS 18, the adoption of these standards, amendments and improvements is not expected to have a material impact

on the Group’s financial statements. IFRS 18 is effective for annual reporting periods beginning on or after 1 January 2027

and also applies to comparative information. IFRS 18 will replace IAS 1 Presentation of Financial Statements and will have a

pervasive impact on the presentation and disclosure of the consolidated financial statements, particularly in the consolidated

statement of profit or loss and disclosure requirements for management-defined performance measures (“MPMs”) within the

consolidated financial statements.

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4. Material accounting policies

The accounting policies set out below have been applied consistently to both years presented in these consolidated financial

statements and have been applied consistently by Group entities.

Basis of consolidation

These consolidated financial statements comprise the financial statements of the Company and its subsidiaries at 31 March

2026. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee

and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if,

and only if, the Group has (a) power over the investee; (b) exposure, or rights, to variable returns from the investee; and (c) ability

to use its power to affect those returns. The Group reassesses whether or not it controls an investee if facts and circumstances

indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the

Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income

and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from

the date the Group gains control until the date the Group ceases to control the subsidiary.

Business disposals

The results of businesses disposed of during the year are included in the consolidated statement of profit or loss up to

the effective date of disposal. When control of a business ceases, the difference between the sale proceeds (fair value

of consideration) and the carrying value of the net assets at that date is recognised as a gain or loss on disposal in the

consolidated statement of profit or loss. Any exchange differences previously recognised in equity are reclassified to the

consolidated statement of profit or loss.

Intercompany transactions

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated on

consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the

asset transferred.

Accounting policies

Accounting policies, as applied to subsidiaries, have been changed where necessary to ensure consistency with the policies

adopted by the Group.

Revenue recognition

The Group’s revenue is derived from the single performance obligation to transfer lighting products. The Group has concluded

that it is the principal in its revenue arrangements.

Revenue represents the transaction price of the sales of goods, net of value added tax and other sales taxes, rebates and

discounts and after eliminating intercompany sales.

Revenue is recognised when the Group satisfies its performance obligation when control of the goods transfers to the

customer, which is generally on shipment or delivery depending on the contractual delivery terms, at an amount reflecting the

consideration the Group expects to be entitled to. At this point, a receivable is recognised as the Group has an unconditional

right to consideration and only the passage of time is required before payment becomes due.

Freight services arranged by the Group are not considered a separate performance obligation and the associated costs

are recognised within cost of sales. Warranty is not a separable performance obligation so has no impact on revenue

recognition. The Group’s warranty provisions are assurance-type obligations and are accounted for under IAS 37 Provisions,

Contingent Liabilities and Contingent Assets.

The transaction price is the contractual price with the customer adjusted for rebates and discounts. Rebates and discounts are

estimated using historical data and experience with the customer. Revenue is recognised to the extent that it is highly probable

that a significant reversal will not occur.

The Group does not have any contracts where the period between the transfer of the promised goods or services to the customer

and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for

the time value of money.

A refund liability is recognised for expected rebate discounts payable to customers in relation to sales made until the end of the

reporting period.

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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Non-underlying items

Non-underlying items form part of the Group’s APMs, the accounting policy for which is described on page 132. The Group

incurs costs and earns income that is non-underlying in nature or that, in the Directors’ judgement, needs to be disclosed

separately by virtue of its size and incidence in order for users of the consolidated financial statements to assess the underlying

performance of the business.

The judgemental aspect of non-underlying items is referred to in Note 2c to the consolidated financial statements and further

details of the Group’s non-underlying items are set out in Note 7 to the consolidated financial statements.

Foreign currency translation

Functional and presentation currency

These consolidated financial statements are presented in US dollars to provide greater transparency of the Group’s performance

for investors and other stakeholders, and to reduce exchange rate volatility in reported figures. The functional currency of the

Company is considered to be pound sterling because that is the currency of the primary economic environment in which the

Company operates.

Foreign operations

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s overseas operations,

including fair value adjustments arising on consolidation, are translated using exchange rates ruling at the balance sheet date.

Foreign currency transactions and balances

Income and expense items of overseas operations are translated at average exchange rates for the period. The resulting

exchange differences are recognised as a separate component of equity within the Group’s translation reserve. Such translation

differences are recognised in the consolidated statement of profit or loss in the period in which the foreign operation is

disposed of. Foreign currency transactions are accounted for at the exchange rate ruling at the date of the transaction.

Gains and losses resulting from the settlement of such transactions and from the translation of monetary and non-monetary

assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of profit or loss.

Share-based payments

As set out in Note 26, the Group operates three equity-settled share-based payment plans: the DRSP, the VCP and the APBP.

The fair value of the employee services received in exchange for the grant of shares, options or units is recognised as an

expense over the vesting period. The total amount to be expensed over the vesting period is determined by reference to the

fair value of shares, options or units granted. Except where the failure to vest is as a result of not meeting a market condition,

at each balance sheet date the Group revises its estimates of the number of shares or options that are expected to vest

and recognises the impact of the revision on original estimates, if any, in the consolidated statement of profit or loss, with a

corresponding adjustment to equity.

Fair value of DRSP

The fair value of these grants is measured using the five-day weighted average prior to grant, taking into account the terms

and conditions upon which the grants were made. The amount recognised as an expense is only adjusted to reflect forfeitures

resulting from failures to meet non-market conditions. These share awards are based on a three-year service condition.

Fair value of VCP

Awards under the VCP have two independent three and four-year performance measurement periods. Each period determines

50% of the award. A three-month average opening and closing share price will be used to measure value creation for the

pool. Awards are granted as a number of units in the pool. The fair value is measured at the grant date using the Monte Carlo

valuation model and is spread over the performance period during which the participants become unconditionally entitled to

the award.

Fair value of APBP

The fair value of these grants is measured at the date of grant, taking into account the terms and conditions upon which the

grants were made. The amount recognised as an expense is only adjusted to reflect forfeitures resulting from failures to meet

non-market conditions. These share awards are based solely on service conditions: 50% vest after two years with the other

50% vesting after three years. At 31 March 2026, there were no outstanding awards under this plan.

Net finance expense

The Group’s net finance expense comprises interest received on short-term deposits, interest income/expense on defined

benefit pension assets/liabilities, interest expense on bank borrowings, non-utilisation fees on bank borrowings, interest

expense on lease liabilities and unwind of discount on the Sanmina settlement.

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4. Material accounting policies (continued)

Income tax

Income tax on profit or loss comprises current and deferred tax. Income tax is recognised in the consolidated statement of

profit or loss except to the extent that it relates to items recognised directly in equity.

Current tax

Current tax is the tax expected to be payable on taxable income, using tax rates enacted, or substantively enacted, by the

reporting date, together with any adjustment to tax payable in respect of prior years.

Taxable profit differs from profit as reported in the consolidated statement of profit or loss because it excludes items of income

or expense that are taxable or deductible in other years and it further excludes items that are not taxable or deductible.

Deferred tax

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements

and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet

liability method.

Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to

the extent that it is probable that taxable profits will be available, against which temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no

longer probable that sufficient taxable profits will be available to allow all, or part of, the assets to be recovered. Deferred tax

is calculated using tax rates that are enacted, or substantively enacted, at the balance sheet date. Deferred tax is charged or

credited to profit and loss, except when it relates to items charged or credited directly to equity, in which case the deferred

tax is also dealt with in equity. Deferred tax is determined using tax rates (and laws) that have been enacted, or substantially

enacted, by the balance sheet date and are expected to apply when the deferred tax assets are released or the deferred tax

liability is settled.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current

tax liabilities and when they relate to income taxes levied by the same taxation authority, and the Group intends to settle

its current tax assets and liabilities on a net basis. Additional income taxes that arise from the distribution of dividends are

recognised at the same time as the liability to pay the related dividend is recognised.

Non-controlling interests

Non-controlling interests (“NCI”) in subsidiaries are recognised at the acquisition date fair value or the proportional share of

net assets. They are reported within equity in the consolidated statement of financial position, separate from parent equity,

with profit/loss and comprehensive income allocated between NCI and equity owners.

Operating segments

Operating segments are reported in a manner consistent with the internal reporting to the Group Chief Executive Officer,

who has been identified as the chief operating decision maker.

Property, plant and equipment

All items of property, plant and equipment are stated at cost less accumulated depreciation and impairment charges.

Subsequent costs are included in the asset carrying amount or recognised as a separate asset, as appropriate, only when it is

probable that future economic benefits associated with the item will flow to the Group and the cost can be measured reliably.

All other repair and maintenance costs are charged to the consolidated statement of profit or loss, as incurred.

The Group charges depreciation to the consolidated statement of profit or loss on a straight-line basis over the estimated useful

economic life of each item sufficient to reduce it to its estimated residual value. Land is not depreciated. Estimated useful

economic lives are as follows:

Buildings	up to 30 years
Plant, equipment and vehicles	3 to 10 years

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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Intangible assets

Research and development costs

Expenditure on research activities undertaken with the prospect of gaining new scientific or technical knowledge and

understanding is immediately recognised in the consolidated statement of profit or loss as an expense.

Development expenditure is capitalised only if the expenditure can be measured reliably, the product and process is technically

and commercially viable, future economic benefits are probable and the Group intends (and has sufficient resources) to

complete the development and to use or sell the asset. Costs are only capitalised once the initial research phase has been

completed and the business case for development has been approved by the Directors. The expenditure capitalised includes

direct cost of material, direct labour and directly attributable overheads. Other development expenditure is recognised in the

consolidated statement of profit or loss as an expense as incurred. Capitalised development expenditure is stated at cost less

accumulated amortisation and impairment charges.

Patents and software licences

The Group acquires intangible assets in the ordinary course of business, typically in the form of patents and software licences.

Intangible assets with finite useful economic lives that are recognised by the Group are measured at cost less accumulated

amortisation and impairment charges.

Amortisation

Amortisation is charged to the consolidated statement of profit or loss on a straight-line basis over the estimated useful

economic lives of intangible assets from the date that they are available for use. The estimated useful economic lives are

as follows:

Development costs:
Product upgrades	3 years
New products	4 years
Control and technology-related products	5 years
Patents	3 to 5 years
Software	3 years

Leases

A lease is an agreement whereby the lessor conveys to the lessee, in return for a payment or a series of payments, the right to use

a specific asset for an agreed period. The Group recognises assets and liabilities arising from a lease at the commencement date

of the lease, which is the date the underlying asset is available for use.

Lessee accounting

Right-of-use assets

The Group has property leases in the US, Mexico, UK, Australia and Malaysia. The Mexican and Malaysian leases are for

industrial premises with the remaining leases being for office buildings.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The Group initially records

right-of-use assets at an amount equal to the present value of the lease payments adjusted for any lease payments made at,

or before, the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove

the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

A right-of-use asset is subsequently measured at cost less any accumulated depreciation and impairment charges and

adjusted for subsequent remeasurement of lease liabilities.

Right-of-use assets are depreciated using the straight-line method over the shorter of the estimated useful economic life and

the lease term.

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4. Material accounting policies (continued)

Lease liabilities

A lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,

discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing

rate (“IBR”). The Group operates in multiple economic environments so the IBR that applies will vary from lease to lease.

Lease payments include fixed payments, including in-substance fixed payments, and variable lease payments that depend on

an index or a rate, less any lease incentives receivable.

Variable lease payments that do not depend on an index or a rate are recognised as an expense in the period in which the event

or condition that triggers the payment occurs.

Lease payments are allocated between principal and finance expense. The finance expense is charged to the consolidated

statement of profit or loss over the lease term so as to produce a constant periodic rate of interest on the remaining balance of

the liability for each period.

The carrying amount of lease liabilities is remeasured when there is a change in future lease payments due to a change in the

lease term, a change in the in-substance fixed lease payments or a change in the assessment of whether to purchase the

underlying asset.

At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration

in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property,

the Group has elected not to separate non-lease components and accounts for the lease and non-lease components as a

single lease component.

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to leases that have a lease term of 12 months or less from the

commencement date and do not contain a purchase option.

It also applies the low-value asset recognition exemption to groups of underlying leases considered uniformly low value.

The Group expenses lease payments on short-term leases and leases of low-value assets as incurred.

Lessor accounting

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately.

It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with

reference to the underlying asset. The Group classifies the sub-lease as an operating lease when the lease does not transfer

substantially all the risks and rewards incidental to ownership of the right-of-use asset. If the lease does transfer substantially all

risks and rewards, it is classified as a finance lease. The Group recognises lease payments received under operating leases as

income on a straight-line basis over the lease term.

Impairment of non-current assets

The Group reviews the carrying amounts of property, plant, equipment, right-of-use assets and intangible assets at each reporting

date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount

is estimated. For non-current assets that have indefinite lives or that are not yet available for use, the Group does this at least annually.

An impairment charge is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. A CGU is

the smallest identifiable asset group that generates cash flows that are largely independent from other assets and groups.

Impairment charges recognised in respect of CGUs are allocated so as to reduce the carrying amount of the assets in the CGU

on a pro-rata basis. Impairment charges are recognised in the consolidated statement of profit or loss.

Calculation of recoverable amount

The recoverable amount of an asset or CGU is the greater of its value-in-use and its fair value less costs to sell. In assessing

value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects

current market assessments of the time value of money and the risks specific to the asset. Right-of-use assets are included in

the carrying value of the CGU, while lease liabilities are excluded (as are associated lease payments from the estimate of future

cash flows).

Reversals of impairment

Any impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior

periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment

charge is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss

is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been

determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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Inventories

Inventories are stated at the lower of cost and net realisable value. Cost includes all expenses directly attributable to the

manufacturing process as well as suitable portions of related production overheads, based on normal operating capacity.

The amount of fixed overhead allocated to each unit of production is not increased as a consequence of abnormally low

production or idle plant. Unallocated overheads are recognised as an expense in the period in which they are incurred.

Costs of ordinarily interchangeable items are assigned using the first-in, first-out cost formula. Net realisable value is the

estimated selling price in the ordinary course of business less any directly attributable selling expenses. When calculating

inventory provisions, the Directors consider the nature and condition of the inventory, as well as taking into consideration market

developments, changes in strategy or business model, regulatory and technology evolvement, and analyses of historical and

projected usage with regard to quantities held.

Financial assets and liabilities

The Group recognises financial assets and liabilities when it becomes a party to the contractual provision of the relevant

financial instrument.

Trade and other receivables (excluding prepayments)

The Group records trade and other receivables initially at fair value and subsequently at amortised cost. This generally

results in recognition at nominal value less an ECL provision, which is recognised based on management’s expectation

of losses in regards to whether or not a specific impairment trigger has occurred. The Group has applied the simplified

approach as permitted by IFRS 9 Financial Instruments (“IFRS 9”). The ECL model considers the Group’s historical credit loss,

factors specific to each receivable, the current economic environment and expected changes in future forecasts.

When appropriate, the Group records an allowance for expected lifetime losses (as permitted under the simplified approach).

Fully provided balances are not written-off until the Group has decided to cease enforcement activity.

See Note 24 to the consolidated financial statements for further details.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and short-term deposits. Short-term deposits are those deposits with a

maturity of three months or less, held for the purpose of meeting short-term cash commitments, that are readily convertible

to a known amount of cash and subject to an insignificant risk of changes in value. In terms of cash payments, the Group

derecognises cash and cash equivalents on the value date.

Trade and other payables (excluding statutory non-financial liabilities)

Trade and other payables are initially recorded at fair value and are then subsequently stated at amortised cost.

Bank borrowings

The Group records bank borrowings initially at fair value, which equals the proceeds received, net of direct issue costs,

and subsequently at amortised cost. The Group accounts for finance charges, including premiums payable on settlement

or redemption and direct issue costs, using the effective interest rate method.

Measurement of fair values

The Group has an established control framework, appropriate for the size and complexity of the Group, with respect to the

measurement of fair values. When measuring the fair value of an asset or liability, the Group uses market observable data as

far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation

techniques as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or

indirectly; and

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value

hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest

level input that is significant to the entire measurement.

Employee benefits

The Group’s employee benefit arrangements comprise defined contribution pension schemes and defined benefit

pension schemes.

Defined contribution pension schemes

Obligations for contributions to defined contribution pension schemes are recognised as an expense in the consolidated

statement of profit or loss as incurred.

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4. Material accounting policies (continued)

Defined benefit pension schemes

The Group’s net asset or liability in respect of defined benefit pension schemes is calculated separately for each scheme by

estimating the amount of future benefit that employees have earned for their service in prior periods, discounting that amount

and deducting the fair value of any plan assets.

The calculation is performed by an independent qualified actuary using the projected unit credit method. In accordance with

IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction, any pension

surplus can be recognised as an asset on the balance sheet, limited to the present value of economic benefits available in

the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of

economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit asset or liability, which comprise gains and losses resulting from IAS 19 accounting,

the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest) are recognised

immediately in OCI.

The Group determines the net interest income or expense on the net defined benefit asset or liability for the year by applying the

discount rate used to measure the defined benefit obligation at the beginning of the year to the then net defined benefit asset

or liability, taking into account any changes in the net defined benefit asset or liability during the year as a result of contributions

and benefits paid. Net interest income or expense and other expenses related to defined benefit plans (comprising the cost of

benefits earned by members and benefit improvements granted to members during the year) are recognised in the consolidated

statement of profit or loss.

When the benefits of a plan are changed, or when a plan is curtailed, the resulting change in benefit that relates to past

service, or the gain or loss on curtailment, is recognised immediately in the consolidated statement of profit or loss. The Group

recognises gains and losses on the settlement of a defined benefit scheme when the settlement occurs.

Deficit reduction arrangements

When pension scheme Trustees purchase an insurance policy that matches the cash flows of some, or all of, the scheme’s

liabilities, with the insurance policy held as an asset of the scheme (together a “buy-in”), the Group recognises any gains/losses

in other comprehensive income provided that the transaction is not linked to a subsequent “buy-out” (where pension scheme

Trustees convert a buy-in policy into individual member policies, where each member becomes a policyholder of the insurer).

At the point of the buy-out, under IAS 19 the assets and liabilities are extinguished and any gain or loss is recognised in the

consolidated statement of profit or loss.

Provisions

A provision is recognised in the consolidated statement of financial position when the Group has a present legal or constructive

obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the

obligation. A warranty provision is made for the expected costs of future warranty claims relating to past product sales.

This provision is estimated based on historical trends for returns, product-specific warranty terms, internal knowledge of

product performance characteristics and the expected costs of remedying warranty-returned products. All other provisions

(including for lease dilapidations) are based on management’s best estimate of a probable expected outcome.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in share

premium as a deduction from the proceeds.

Own shares held by the EBT

Company shares held by the EBT are held at the consideration paid. It has been concluded that the Company controls the EBT

and, consequently, the EBT has been incorporated into the consolidated financial statements. Purchases of shares made by the

EBT are shown in the statement of changes in equity as own shares.

APMs

The Group uses APMs which are not defined or specified under IFRS and may not be comparable with similarly titled measures

used by other companies. These APMs represent additional measures in assessing performance and for reporting both

internally and to shareholders and other external users. The Group believes that the presentation of these APMs provides useful

supplemental information which, when viewed in conjunction with IFRS financial information, provides readers with a more

meaningful understanding of the underlying financial and operating performance of the Group. None of these APMs should be

considered as an alternative to financial measures drawn up in accordance with IFRS.

A full reconciliation for each APM from underlying through to statutory results is shown in Note 28 to the consolidated

financial statements.

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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5. Operating segments

The Group has two reportable operating segments.

These segments have been identified based on the internal information that is supplied regularly to the Group’s chief operating

decision maker for the purposes of assessing performance and allocating resources. The chief operating decision maker is

considered to be the Group Chief Executive Officer.

The two reportable operating segments are:

• Lighting: develops, manufactures and supplies highly-efficient LED lighting solutions for hazardous and industrial

applications in which lighting performance is critical and includes anti-collision obstruction lighting; and

• Signals & Components: develops, manufactures and supplies status indication components for electronics OEMs,

together with niche industrial and automotive electronic components and highly efficient LED signalling solutions for the traffic

and signals markets. The Group’s Traffic business activity ceased on 31 October 2025.

There is no inter-segment revenue and there are no individual customers that represent more than 10% of revenue.

All revenue relates to the sale of goods. Segment gross profit is revenue less the costs of materials, labour, production and

freight that are directly attributable to a segment. Central & Unallocated overheads comprise operations management plus

corporate costs, which include share-based payments.

Segmental assets and liabilities are not reported internally and are, therefore, not presented below.

Reportable segments

			Signals &	Central &
		Lighting	Components	Unallocated	Total
2026	Note	$m	$m	$m	$m
Revenue		122.1	44.8	–	166.9
Gross profit		49.8	15.3	–	65.1
Underlying overheads		(38.7)	(6.9)	(9.2)	(54.8)
Underlying operating profit/(loss)		11.1	8.4	(9.2)	10.3
Non-underlying items	7	–	0.4	(4.4)	(4.0)
Loss on disposal of business		–	(0.1)	–	(0.1)
Operating profit/(loss)		11.1	8.7	(13.6)	6.2
Net finance expense	9	–	–	(2.4)	(2.4)
Profit/(loss) before tax		11.1	8.7	(16.0)	3.8
Taxation expense	10	–	–	(3.3)	(3.3)
Profit/(loss) after tax		11.1	8.7	(19.3)	0.5

			Signals &	Central &
		Lighting	Components	Unallocated	Total
2025	Note	$m	$m	$m	$m
Revenue		138.0	45.5	–	183.5
Underlying gross profit		54.1	11.2	–	65.3
Underlying overheads		(41.2)	(7.9)	(12.0)	(61.1)
Underlying operating profit/(loss)		12.9	3.3	(12.0)	4.2
Non-underlying items	7	(18.6)	0.9	(3.9)	(21.6)
Gain on disposal of business		–	5.8	–	5.8
Operating (loss)/profit		(5.7)	10.0	(15.9)	(11.6)
Net finance expense	9	–	–	(2.5)	(2.5)
(Loss)/profit before tax		(5.7)	10.0	(18.4)	(14.1)
Taxation credit	10	–	–	0.5	0.5
(Loss)/profit after tax		(5.7)	10.0	(17.9)	(13.6)

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5. Operating segments (continued)

Other segmental data

		2026				2025
		Signals &	Central &			Signals &	Central &
	Lighting	Components	Unallocated	Total	Lighting	Components	Unallocated	Total
Other segmental data	$m	$m	$m	$m	$m	$m	$m	$m
Cost of inventories recognised
as an expense	(37.3)	(16.9)	–	(54.2)	(47.9)	(19.3)	–	(67.2)
Personnel expenses 1	(29.1)	(8.0)	(4.0)	(41.1)	(36.4)	(11.0)	(3.3)	(50.7)
Depreciation of property, plant
and equipment	(2.3)	(0.8)	–	(3.1)	(2.4)	(0.8)	–	(3.2)
Depreciation of right-of-use assets	(1.9)	(0.7)	–	(2.6)	(1.9)	(0.6)	–	(2.5)
Amortisation of intangible assets	(2.3)	–	–	(2.3)	(2.6)	–	–	(2.6)
Impairment of property, plant
and equipment	(0.6)	(0.1)	–	(0.7)	–	–	–	–
Impairment of intangible assets	(1.2)	(0.4)	–	(1.6)	(0.1)	(0.1)	–	(0.2)

1 Personnel expenses for the current year include $3.2m (2025: $1.0m) of severance costs. Consequently, the prior year comparatives have

been restated so as to match the current year’s presentation.

Geographical segments

Revenue by geographical market

Lighting and Signals & Components segments are managed on a worldwide basis but operate in three principal geographic

areas: North America, EMEA and the rest of the world. The following table provides an analysis of the Group’s revenue by

geographical market, irrespective of the origin of the goods. All revenue relates to the sale of goods.

	2026	2025
	$m	$m
North America	139.9	155.3
EMEA	10.1	10.7
Rest of the world 1	16.9	17.5
Total	166.9	183.5

1 Includes $10.9m in respect of Australia for the year ended 31 March 2026 (2025: $11.5m).

Non-current assets

by geography

	2026	2025
	$m	$m
North America	21.7	25.5
EMEA	0.6	0.4
Rest of the world	5.6	6.1
Total	27.9	32.0

1 As required by IFRS, non-current assets at 31 March 2026 exclude deferred tax assets and employee benefit assets totalling $8.4m (2025:

$10.7m).

6. Other operating income

In May and September 2025, the Group received two ERCs totalling $2.9m in respect of claims filed in 2023. An ERC is a

US refundable tax credit for certain eligible businesses that had employees and were affected during the Covid-19 pandemic.

Accordingly, in the year ended 31 March 2026, the Group has recorded $2.9m as other operating income in the consolidated

statement of profit or loss. As set out in Note 7, given the size and one-off nature of this item it has been treated as

non-underlying.

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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7. Non-underlying items

The Group incurs cost and earns income that is non-underlying in nature or that, in the Directors’ judgement, needs to be

separately disclosed by virtue of its size and incidence in order for users of the consolidated financial statements to assess the

underlying performance of the Group.

The table below presents the components of non-underlying items recognised in the consolidated statement of profit or loss.

All costs are recognised within administrative expenses unless otherwise stated.

	2026	2025 2
	$m	$m
ERCs 1	2.9	–
Transformation Plan	(4.4)	(4.1)
Defined benefit pension scheme administrative costs	(1.3)	–
Sanmina litigation costs	(0.2)	(17.8)
Other non-underlying costs	(1.0)	(0.6)
Business disposal income	–	0.9
Total non-underlying items	(4.0)	(21.6)

1 ERCs have been recorded within other operating income for the year ended 31 March 2026.

2 For the year ended 31 March 2025, a credit of $1.2m was recognised within cost of sales (see Note 28) and a $22.8m charge was recognised

within administrative expenses.

ERCs

As explained in Note 6, in the year ended 31 March 2026, the Group received ERCs which are one-off in nature as no more

claims will follow.

Transformation Plan

During the year ended 31 March 2026, costs of $4.4m (2025: $4.1m) have been incurred relating to the Transformation Plan.

Implementation of the plan was completed in the current year. The multi-year Transformation Plan has been a material,

infrequent programme and has not been considered to be part of the underlying performance of the business. The costs

incurred in both the current and prior year relate to resetting and realigning the Group’s cost base, including severance costs of

$3.2m (2025: $1.0m), consulting costs and related legal and professional fees. The current year amount includes an impairment

charge of $0.7m in respect of property, plant and equipment relating to the forthcoming closure of the Roxboro, North

Carolina facility.

Defined benefit pension scheme administrative costs

During the year, legal and professional fees have been incurred by the Main Scheme as part of the completion steps of the

buy-out process. These IAS 19 administrative costs of $1.0m plus other non-IAS 19 costs of $0.3m related to the Executive

Scheme’s buy-out have been treated as non-underlying costs in the consolidated statement of profit or loss. See Note 17 for

further buy-out details. On 22 May 2026, the Directors served winding-up notices to the respective Trustees of both schemes

with effect from 23 June 2026.

Sanmina litigation costs

On 31 March 2025, the Group settled its long-standing litigation with Sanmina for $12.0m to be paid by instalments.

This required payment of $4.0m on 31 March 2025 and eight quarterly payments of $1.0m per quarter with the final payment

due on 27 March 2027. On 9 October 2025, the Group agreed an accelerated payment plan with Sanmina whereby a final

payment of $5.7m was made on 19 December 2025, representing a $0.3m saving versus the $6.0m that would otherwise

have been paid over the six remaining quarters to 31 March 2027. With the final payment of $5.7m, the Stipulation agreement

between the parties was satisfied and both parties have taken steps to legally set aside the US and English court judgments,

meaning any potential financial liabilities have been fully extinguished.

During the year ended 31 March 2026, final legal expenses of $0.2m have been incurred relating to the case. The charge for the

year ended 31 March 2025 comprises an $11.3m discounted expense for the settlement together with $5.6m of legal expenses

and $0.9m of irrecoverable amounts.

Other non-underlying costs

Other non-underlying costs of $1.0m (2025: $0.6m) are one-off costs associated with writing-off aged inventory which falls

outside the Group’s inventory provision accounting policy and, as such, have been recognised through non-underlying to

enable full comparability of the Group’s financial performance with previous periods.

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7. Non-underlying items (continued)

Business disposal income

The current year amount includes an impairment charge of $0.1m in respect of intangible assets (see Note 15) offset by a net

credit of $0.1m. Business disposal income of $0.9m in the prior year related to the disposal of the Traffic business in July 2024

and comprised a credit of $2.1m in respect of a release of inventory excess and obsolescence provision offset by an onerous

contract provision of $0.9m in relation to the Leotek contract and other charges of $0.3m.

Cash flow related to non-underlying items

The ERCs of $2.9m were received in cash in the year ended 31 March 2026. Offsetting this, the Group has paid $4.7m in relation

to non-underlying costs in the year ended 31 March 2026 (2025: $10.2m) including the settlement of legal costs relating to

Sanmina and severances which were unpaid at 31 March 2025. Therefore, net non-underlying cash paid in the current year is

$1.8m which excludes the two quarterly Sanmina payments and the final settlement payment which total $7.7m.

8. Personnel expenses

			(restated 1 )
		2026	2025
	Note	$m	$m
Wages and salaries		31.0	42.9
Severance costs		3.2	1.0
Social security costs		3.7	5.5
Equity-settled share-based payment transactions	26	1.0	0.3
Contributions to defined contribution plans		1.0	1.0
Charge for defined benefit pension schemes	17	1.2	–
Total personnel expenses		41.1	50.7

1 Personnel expenses for the current year of $41.1m (2025: $50.7m) include $3.2m (2025: $1.0m) of severance costs which have been

recognised through non-underlying items. The prior year comparatives have been restated so as to match the current year’s presentation.

The average number of employees by geographical location was:

	2026	2025
	Number	Number
North America	1,002	1,254
Rest of the world	171	171
Total average number of employees	1,173	1,425

The Group employed an average of 737 direct staff (2025: 875) and 436 indirect staff (2025: 550).

The Directors are considered to be the Group’s key management personnel. Key management personnel compensation

comprised the following:

		(restated 1 )
	2026	2025
	$m	$m
Short-term employee benefits	2.6	2.1
Termination benefits	0.2	0.2
Share-based payments	0.1	–
Total	2.9	2.3

1 Short-term employee benefits for the year ended 31 March 2025 have been restated from $1.4m to include annual bonuses earned of $0.4m

and a revision to the translation of underlying pound sterling amounts to US dollars of $0.3m. Prior year share-based payments have also

been restated from $0.3m to $nil to reflect the VCP charge of less than $0.1m.

Refer to page 94 for details of payments to former directors for loss of office.

The aggregate of remuneration of the highest-paid Director was $1.3m (2025: $1.0m as restated). There were no amounts

receivable under long-term incentive schemes in the current or prior year and there were no pension contributions in the current

or prior year. During the year, the highest paid Director was awarded 15 units (2025: 335 units) under the VCP.

As set out on page 90, there are no Directors (2025: nil) accruing benefits under money purchase pension schemes and there

are no Directors (2025: nil) who have received shares or exercised share options under long-term incentive schemes.

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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9. Net finance expense

		2026	2025
	Notes	$m	$m
Net interest income on defined benefit pension schemes	17	0.1	0.3
Interest expense on borrowings		(1.6)	(2.2)
Interest expense on lease liabilities	14	(0.5)	(0.6)
Unwinding of Sanmina settlement	21, 24	(0.4)	–
Net finance expense		(2.4)	(2.5)

10. Taxation

Tax recognised in the consolidated statement of profit or loss

		2026	2025
	Note	$m	$m
Current tax expense
Current year		(1.4)	(1.2)
Adjustment in respect of prior years		(0.8)	–
Total current tax expense		(2.2)	(1.2)
Deferred tax (expense)/credit
Origination and reversal of temporary differences		(1.2)	1.1
Adjustment in respect of prior years		–	0.3
Impact of change in tax laws and rates		0.1	0.3
Total deferred tax (expense)/credit	16	(1.1)	1.7
Total tax (expense)/credit		(3.3)	0.5

Reconciliation of effective tax rate

		2026		2025
	%	$m	%	$m
Profit/(loss) for the year after tax		0.5		(13.6)
Total tax expense/(credit)		3.3		(0.5)
Profit/(loss) before tax		3.8		(14.1)
Income tax using the UK corporation rate of 25.0% (2025: 25.0%)	25.0	(1.0)	25.0	3.5
Effect of higher taxes on overseas earnings	2.7	(0.1)	(7.8)	(1.1)
Change in tax laws and rates	(2.0)	0.1	2.1	0.3
Expenses not deductible for tax purposes	5.9	(0.2)	–	–
Current year losses for which no deferred tax is recognised	34.0	(1.3)	(17.7)	(2.5)
Adjustment in respect of prior years	21.1	(0.8)	2.1	0.3
Research and development credits	(2.6)	0.1	0.7	0.1
Foreign taxes incurred	(2.6)	0.1	–	–
Other	5.3	(0.2)	(0.7)	(0.1)
Total	86.8	(3.3)	3.5	0.5

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10. Taxation (continued)

The standard tax rate for the Group in the year is 25.0% (2025: 25.0%) and based on a profit before tax of $3.8m (2025: loss

before tax of $14.1m) this would generate a tax expense of $1.0m (2025: tax credit of $3.5m). The actual tax expense in the year

is $3.3m (2025: tax credit of $0.5m).

The Group’s effective tax rate for the year is 86.8% (2025: 3.5%) which is significantly higher than the standard tax rate as a

result of the following major adjustments:

• unrecognised losses in the European Lighting business and the Company resulting in $1.3m (2025: $2.5m) of tax losses not

being recognised in the year; and

• adjustments in respect of prior year taxes of $1.3m in Malaysia and $0.5m in the US, offset by $1.0m in Mexico.

Current tax

Current tax is calculated with reference to the profit or loss of the Company and its subsidiaries in their respective countries

of operation. Set out below are details in respect of the significant jurisdictions where the Group operates and the factors that

influenced the current and deferred taxation in those jurisdictions.

UK and US corporate tax rates

As set out above, the Group’s UK companies are subject to a corporate tax rate of 25.0% (2025: 25.0%). The majority of the

Group’s profits arise in the US where the corporation tax rate is 23.0%, comprising 21.0% federal tax and 2.0% state tax

(2025: 23.0%, comprising 21.0% federal tax and 2.0% state tax).

Deferred tax recognised directly in equity

	2026	2025
	$m	$m
Deferred tax credit on remeasurement of defined benefit pension schemes	0.2	1.0

11. Other operating expenses

The operating profit/(loss) for the year is stated after charging:

		2026	2025
	Note	$m	$m
Research and development costs:
Expensed as incurred		3.9	3.4
Amortisation and impairment of capitalised development costs	15	2.7	1.5
Total research and development costs		6.6	4.9
Depreciation of property, plant and equipment	13	3.1	3.2
Depreciation of right-of-use assets	14	2.6	2.5
Amortisation of intangible assets (excluding development costs)	15	0.9	1.1
Impairment losses on property, plant and equipment	13	0.7	–
Impairment losses on intangible assets (excluding development costs)	15	0.3	0.2
Net impairment losses on financial assets	24	0.5	2.1
Cost of inventories recognised as an expense	18	54.2	67.2
Personnel expenses	8	41.1	50.7

Impairment losses on property, plant and equipment during the year of $0.7m have been recorded within non-underlying items

as has $0.1m (2025: $0.1m) of the $1.6m (2025: $0.2m) impairment losses on intangible assets.

Auditor’s remuneration

The Group paid the following amounts to its auditors, Grant Thornton, and its member firms in respect of the audit of the financial

statements. In the year, the Group incurred $26,000 (2025: $25,000) of fees from Grant Thornton in respect of non-audit services.

	2026	2025
	$m	$m
Audit of these financial statements	1.1	1.1
Audit of financial statements of subsidiaries pursuant to legislation	0.1	0.1
Total	1.2	1.2

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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12. Earnings per share

Basic earnings per share

	2026	2025
Profit/(loss) for the year attributable to equity owners ($m)	0.4	(13.8)
Weighted average number of shares (000s)	39,961	39,786
Basic earnings/(loss) per share (cents)	1.0	(34.7)

Basic earnings per share is calculated by dividing the profit or loss for the year attributable to equity owners by the weighted

average number of ordinary shares in issue during the year. The calculation of the weighted average number of ordinary shares

excludes the shares held by the EBT which are treated as cancelled. There have been no transactions involving ordinary shares

or potential ordinary shares between the reporting date and the date of authorisation of these consolidated financial statements.

Diluted earnings per share

Diluted earnings per share is calculated after adjusting the weighted average number of ordinary shares in issue during the

year to assume conversion of all potentially dilutive shares. The calculation of the weighted average number of ordinary shares

excludes the shares held by the EBT.

Where a loss has been recognised the same number of shares is used in both the basic and diluted loss per share calculation

as there is no dilutive effect when the Group is in a loss-making position. This was the case for the prior year, meaning that the

number of shares that would have been used in the diluted earnings per share calculation for the year ended 31 March 2025

was 40,845,498.

	2026	2025
Profit/(loss) for the year attributable to equity owners ($m)	0.4	(13.8)
Weighted average number of shares for basic earnings per share (000s)	39,961	39,786
Effect of dilution:
Employee share awards (000s)	668	–
Weighted average number of shares for diluted earnings per share (000s)	40,629	39,786
Diluted earnings/(loss) per share (cents)	1.0	(34.7)

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13. Property, plant and equipment

			Plant,
		Land and	equipment
		buildings	and vehicles	Total
	Note	$m	$m	$m
Cost
At 1 April 2024		5.4	68.1	73.5
Additions		–	4.3	4.3
Disposals		(0.1)	(8.4)	(8.5)
Foreign exchange		–	0.5	0.5
At 31 March 2025		5.3	64.5	69.8
Additions		0.2	1.9	2.1
Disposals		–	(0.3)	(0.3)
Transfer between categories		0.4	(0.4)	–
At 31 March 2026		5.9	65.7	71.6
Depreciation and impairment
At 1 April 2024		(4.2)	(56.6)	(60.8)
Depreciation		(0.2)	(3.0)	(3.2)
Disposals		0.1	8.1	8.2
Foreign exchange		–	(0.5)	(0.5)
At 31 March 2025		(4.3)	(52.0)	(56.3)
Depreciation		(0.1)	(3.0)	(3.1)
Impairment	7	(0.5)	(0.2)	(0.7)
Disposals		–	0.3	0.3
Transfer between categories		(0.4)	0.4	–
Foreign exchange		0.1	0.4	0.5
At 31 March 2026		(5.2)	(54.1)	(59.3)
Net book value
At 31 March 2026		0.7	11.6	12.3
At 31 March 2025		1.0	12.5	13.5
At 31 March 2024		1.2	11.5	12.7

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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14. Leases

Group as lessee

The Group leases various industrial premises and office buildings. These leases typically run for a period of one to five years,

with various options to renew the leases after that date. Lease terms are negotiated on an individual basis and contain a wide

range of different terms and conditions. Lease payments are renegotiated dependent on the lease terms to reflect market

rentals. The Group’s right-of-use assets and lease liabilities associated with these leases are set out below.

Right-of-use assets

	Industrial premises
	and office buildings	Total
	$m	$m
Cost
At 1 April 2024	17.7	17.7
Additions (including modifications)	2.6	2.6
Disposals (including modifications)	(1.8)	(1.8)
Foreign exchange	0.2	0.2
At 31 March 2025	18.7	18.7
Additions (including modifications)	0.6	0.6
Foreign exchange	0.3	0.3
At 31 March 2026	19.6	19.6
Depreciation and impairment
At 1 April 2024	(8.9)	(8.9)
Depreciation	(2.5)	(2.5)
Disposals	1.8	1.8
Foreign exchange	(0.1)	(0.1)
At 31 March 2025	(9.7)	(9.7)
Depreciation	(2.6)	(2.6)
At 31 March 2026	(12.3)	(12.3)
Net book value
At 31 March 2026	7.3	7.3
At 31 March 2025	9.0	9.0
At 31 March 2024	8.8	8.8

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14. Leases (continued)

Lease liabilities

		Industrial premises
		and office buildings	Total
	Note	$m	$m
At 1 April 2024		10.1	10.1
Interest expense	9	0.6	0.6
Repayment of lease liabilities		(2.9)	(2.9)
Additions		2.1	2.1
Foreign exchange		0.1	0.1
At 31 March 2025		10.0	10.0
Interest expense	9	0.5	0.5
Repayment of lease liabilities		(3.0)	(3.0)
Additions		0.6	0.6
Foreign exchange		0.2	0.2
At 31 March 2026		8.3	8.3

Certain lease agreements provide for additional rent payments that are based on fixed percentage changes and/or changes

in local price indices. The lease agreements do not impose any covenants, but leased assets may not be used as security for

borrowing purposes.

Extension options are included in a number of the Group’s property leases. These terms are used to maximise operational

flexibility in terms of managing contracts. The majority of extension options held are exercisable only by the Group and not by

the respective lessor. In determining the lease term, the Directors consider all facts and circumstances that create an economic

incentive to exercise an extension option. Extension options are only included in the lease term if the lease is reasonably certain

to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances

occurs which affects this assessment and is within the control of the Group as a lessee.

The Group also leases IT and other equipment with contract terms of less than one year and/or are low value. Consequently,

the Group considers these to be short-term leases and/or of low-value items. As permitted by IFRS, the Group has elected not

to recognise right-of-use assets and lease liabilities for these leases.

Amounts recognised in consolidated statement of profit or loss

		2026	2025
	Note	$m	$m
Depreciation charge on right-of-use assets		2.6	2.5
Interest expense on lease liabilities	9	0.5	0.6
Expense relating to short-term leases		–	0.1
Expense relating to leases of low-value items		–	–
Total		3.1	3.2

Amounts recognised in consolidated statement of cash flows

	2026	2025
	$m	$m
Repayment of lease liabilities	2.5	2.3
Payment of interest expense on lease liabilities	0.5	0.6
Payments relating to short-term leases	–	0.1
Payments relating to leases of low-value items	–	–
Total	3.0	3.0

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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Group as lessor

The Group has a lease of an office that was entered into during 2019 and which it is also sub-letting. The Group has classified

this sub-lease as an operating lease because it does not transfer substantially all of the risks and rewards incidental to the

ownership of the asset. The head lease expires in 2029 and the sub-lease expires in 2026. The sub-lessor has the option to

renew the lease at its sole discretion. The lessee does not have an option to purchase property at the expiry of the lease period.

Rental income recognised by the Group during the year ended 31 March 2026 was $0.4m (2025: $0.4m).

Minimum rentals receivable in respect of operating leases

	2026	2025
	$m	$m
Less than one year	0.3	0.4
One to two years	–	0.3
Two to three years	–	–
Total	0.3	0.7

15. Intangible assets

	Development
	costs	Patents	Software	Goodwill	Total
	$m	$m	$m	$m	$m
Cost
At 1 April 2024	25.2	15.8	8.1	16.4	65.5
Additions	2.8	0.8	0.1	–	3.7
Disposals	(2.8)	(11.9)	(2.6)	–	(17.3)
At 31 March 2025	25.2	4.7	5.6	16.4	51.9
Additions	2.1	0.5	–	–	2.6
Disposals	(12.2)	(1.8)	–	–	(14.0)
Foreign exchange	(0.1)	–	–	–	(0.1)
At 31 March 2026	15.0	3.4	5.6	16.4	40.4
Amortisation and impairment
At 1 April 2024	(19.4)	(14.2)	(7.4)	(16.4)	(57.4)
Amortisation	(1.5)	(0.9)	(0.2)	–	(2.6)
Impairment	–	(0.2)	–	–	(0.2)
Disposals	2.8	11.9	2.6	–	17.3
Transfers	0.1	0.1	(0.2)	–	–
At 31 March 2025	(18.0)	(3.3)	(5.2)	(16.4)	(42.9)
Amortisation	(1.4)	(0.6)	(0.3)	–	(2.3)
Impairment	(1.3)	(0.3)	–	–	(1.6)
Disposals	12.2	1.8	–	–	14.0
At 31 March 2026	(8.5)	(2.4)	(5.5)	(16.4)	(32.8)
Net book value
At 31 March 2026	6.5	1.0	0.1	–	7.6
At 31 March 2025	7.2	1.4	0.4	–	9.0
At 31 March 2024	5.8	1.6	0.7	–	8.1

Included within the impairment losses on patents of $0.3m for the year ended 31 March 2026 is $0.1m which has been treated

as non-underlying (see Note 7).

Amortisation and impairment for the year is included within administrative expenses in the consolidated statement of profit

or loss. The carrying value of development costs not yet available for use and, therefore, for which amortisation has not yet

commenced is $5.2m (2025: $5.8m). All development costs are allocated to the Lighting CGU.

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15. Intangible assets (continued)

CGU impairment

The Group has two CGUs, Lighting and Signals & Components, which are the smallest identifiable independent groups of

assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

Where assets and costs are shared between the two CGUs, a reasonable apportionment of these is made for the purpose

of the impairment calculation.

The Directors have assessed whether any indicators of impairment over the CGUs are present. In addition, intangible assets

not yet available for use are assessed for impairment.

The Directors have considered whether there are any indicators of impairment over both the Lighting and Signals &

Components CGUs and determined that there was an indicator of potential impairment within the Lighting CGU due to

performance against budget. Consequently, an impairment assessment was performed. For the year ended 31 March 2026,

this assessment identified that the recoverable amount of the Lighting segment based on value-in-use was $69.7m

(2025: $55.6m). On this basis, headroom at 31 March 2026 was $27.5m and, as a result, no impairment charge has been

recorded in the current year. Similarly, no impairment charge was recorded in the prior year.

The basis of the recoverable amount is the value-in-use using management’s latest five-year forecast at 31 March 2026.

This forecast reflects the growth opportunities inherent in the business in the medium term, including the revenue and gross

margin stemming from the implementation of the Transformation Plan. The long-term growth rate for the valuation into

perpetuity has been determined as the average of consumer price index (“CPI”) rates for the countries in which the CGU

operates, predicted for the next five years.

The Directors have also performed a sensitivity analysis for the Lighting CGU impairment assessment by adjusting

management’s five-year forecast. The sensitivity analysis assumes a decrease in revenue for the year ending 31 March 2027 of

10.0% on the base case, no subsequent revenue growth to 31 March 2031 and cost mitigations of $11.5m (including no bonus

payments made). This reasonably possible change reduces headroom but not to the extent that results in an impairment.

The pre-tax discount rate is based on the Group’s weighted average cost of capital, which reflects current market

assessments of a number of factors that impact on the time value of money and any risk specific to the Group. The rate

includes management’s assessment of a normal level of debt-to-equity ratio within similar companies in the Group’s sector.

The costs of the parent company (“stewardship costs”) have been allocated to each CGU as they provide necessary support to

the CGUs to generate cash inflows. These costs have been allocated on the same allocation basis as the administration costs.

The key assumptions used in the value-in-use calculation are set out below:

	2026	2025
Discount rate (pre-tax)	14.5%	17.9%
Terminal growth rate	2.0%	2.0%
Next financial year’s growth rate	7.0%	–
Annual five-year revenue growth rate for Lighting segment (after next financial year)	4.0%	5.0%
Annual five-year gross margin improvement	5.0%	6.0%
Stewardship allocation	80.0%	80.0%

Intangible asset impairment

In addition to the above impairment assessment over the Lighting CGU, at 31 March 2026, certain intangible assets

(specifically development costs and patents) relating to specific projects were identified as showing indications of impairment.

Consequently, in the current year, an impairment charge of $1.5m (2025: $0.1m) has been recognised in respect of individual

projects which are paused and assessed as not being fully recoverable. The intangible assets relating to the individual projects

in question have been fully impaired. The $1.5m impairment charge has been recorded within underlying costs.

In addition, an impairment charge of $0.1m (2025: $0.1m) has been recognised in respect of patents relating to the sold

Traffic business (within the Signals & Components segment) and has been treated as non-underlying, as noted above.

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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16. Deferred tax

Recognised deferred tax assets and liabilities

	Assets		Liabilities		Net
	2026	2025	2026	2025	2026	2025
	$m	$m	$m	$m	$m	$m
Property, plant and equipment	–	–	(0.2)	(0.6)	(0.2)	(0.6)
Intangible assets	–	0.4	(1.1)	–	(1.2)	0.4
Employee benefits	1.1	0.2	–	–	1.1	0.2
Provisions	2.3	5.0	–	–	2.4	5.0
Right-of-use assets	–	–	(1.6)	(2.0)	(1.6)	(2.0)
Lease liabilities	1.9	2.3	–	–	1.9	2.3
Restricted interest	1.9	1.1	–	–	1.9	1.1
Losses and other items	3.4	2.1	–	–	3.4	2.1
Total	10.6	11.1	(2.9)	(2.6)	7.7	8.5

Movements in temporary differences during the year

	Property,				Right-			Losses
	plant and	Intangible	Employee		of-use	Lease	Restricted	and other
	equipment	assets	benefits	Provisions	assets	liabilities	interest	items	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m
At 1 April 2024	(0.5)	0.7	(1.0)	3.4	(2.0)	2.4	0.8	2.0	5.8
Recognised in income	(0.1)	(0.3)	0.2	1.6	–	(0.1)	0.3	0.1	1.7
Recognised in equity	–	–	1.0	–	–	–	–	–	1.0
At 31 March 2025	(0.6)	0.4	0.2	5.0	(2.0)	2.3	1.1	2.1	8.5
Recognised in income	0.4	(1.6)	0.7	(2.7)	0.4	(0.4)	0.8	1.3	(1.1)
Recognised in equity	–	–	0.2	–	–	–	–	–	0.2
Foreign exchange	–	–	–	0.1	–	–	–	–	0.1
At 31 March 2026	(0.2)	(1.2)	1.1	2.4	(1.6)	1.9	1.9	3.4	7.7

At 31 March 2026, the Group has recognised a net deferred tax asset of $7.7m (2025: $8.5m) which is analysed between that

which arises in the US and all other Group jurisdictions as follows:

	2026		2025
		All other		All other
	US	jurisdictions	US	jurisdictions
	$m	$m	$m	$m
Property, plant and equipment	(0.5)	0.3	(0.7)	0.1
Intangible assets	(1.2)	–	0.4	–
Employee benefits	0.4	0.7	0.4	(0.2)
Provisions	2.4	–	4.0	1.0
Right-of-use assets and lease liabilities	0.1	0.2	(0.1)	0.4
Restricted interest	1.9	–	1.1	–
Losses and other items	3.2	0.2	1.3	0.8
Total	6.3	1.4	6.4	2.1

As set out in Note 2c, the Group considers it highly probable that sufficient future taxable profits will arise in its US and non-US

subsidiaries based on both the earnings history and the future forecasted profits. In addition, the Group is satisfied that the

losses will unwind in the same period as the forecasted taxable profits.

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16. Deferred tax (continued)

Provisions

The Group has recognised a $2.4m (2025: $5.0m) deferred tax asset on various provisions that arise primarily in the US.

$0.3m (2025: $1.4m) relates to inventory provisions, $0.9m (2025: $0.9m) relates to expected loss provisions, $0.6m (2025: $0.6m)

relates to warranty provisions, $0.4m (2025: $nil) relates to research and development provisions and $0.2m (2025: $0.4m) relates

to uniform capitalisation adjustments arising in the US. In the prior year, $1.7m related to the Sanmina legal dispute which the

Group settled in full in the current year (see Note 21 for further details).

Losses and other items

Of the $3.4m (2025: $2.1m) deferred tax asset relating to losses and other items, $0.2m (2025: $0.3m) arises in the UK and has

been recognised to offset a deferred tax liability arising on employee benefits in that territory. No losses over and above the

offset of the deferred tax liability have been recognised in the UK as the Group does not consider that sufficient taxable profits

will arise against which further losses can be recognised. The remaining deferred tax asset of $3.2m at 31 March 2026 arises in

respect of carried forward unused tax losses in the US. The remaining prior year amount of $1.8m included $1.0m related to the

US and $0.2m and $0.5m related to Singapore and Malaysia, respectively.

Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items because it is not probable that future taxable

profit will be available against which the Group can use the benefits.

	2026		2025
	Gross	Tax	Gross	Tax
	amount	effect	amount	effect
	$m	$m	$m	$m
Deductible temporary differences	2.4	0.6	0.8	0.2
Tax losses	67.5	17.0	61.1	15.4
Total	69.9	17.6	61.9	15.6

Tax losses carried forward

At 31 March 2026, the Group has $67.5m (2025: $61.1m) of tax losses for which no deferred tax assets were recognised which

never expire. Accordingly, at 31 March 2026, the Group has unrecognised deferred tax assets of $17.0m (2025: $15.4m) which

are not expected to be recognised in the near future.

In accordance with IAS 12 Income Taxes, the Directors have determined that the recoverability of deferred tax assets is not

supportable in excess of deferred tax liabilities based on the Group’s current five-year forecasts.

An analysis of the Group’s gross tax losses by entity is set out below:

	2026	2025
Entity	$m	$m
Dialight plc	28.5	24.0
Dialight Europe Limited	37.2	35.1
Dialight GmbH	1.8	2.0
Total	67.5	61.1

These gross tax losses are available to offset against the future profits of the entities and are not subject to expiration.

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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17. Employee benefits

The Group makes contributions to the cost of running two closed defined benefit schemes to provide benefits for employees

and former employees upon retirement. These are the Executive Scheme and the Main Scheme. The plans expose the Group to

actuarial risks, such as longevity risk, interest rate risk and investment risk. Both plans are administered by discrete funds (the

“Funds”) that are legally separate from the Group and managed by Trustees that are independent individuals. The Trustees of

the plans are required by law to act in the best interests of the plan participants and are responsible for setting certain policies

(e.g. investment) of the Funds.

On an IAS 19 basis, at 31 March 2026, the schemes are in balance (2025: $2.2m asset) on an aggregate basis with the

consolidated statement of financial position showing employee benefit assets of $0.7m and employee benefit liabilities of

$0.7m. In the current year, the Group incurred administrative costs of $1.2m (2025: $0.2m), of which $1.0m has been treated

as a non-underlying charge, and an IAS 19 loss of $1.6m (2025: $4.0m) which has been recognised through OCI. Net interest

income on defined benefit pension schemes for the current year was $0.1m (2025: $0.3m) with other movements of $0.5m in

the current year (2025: $0.7m).

The Group is required to agree a schedule of contributions with the Trustees of the Funds following a valuation, which must be

carried out at least once every three years. The last actuarial valuations were completed as at 5 April 2022. The next valuations

(which are as at 5 April 2025) must be completed within the 15-month statutory deadline of 5 July 2026 unless a wind-up is

triggered prior to the deadline. On 22 May 2026, the Directors served winding-up notices to the respective Trustees of both

schemes with effect from 23 June 2026. There is no effect on recognition of the net defined benefit surplus as a result of the

asset ceiling.

Executive Scheme

The Executive Scheme purchased a bulk annuity policy covering the majority of its liabilities on 5 August 2025 with an insurer

(a buy-in). The premium paid was £1.8m with the calculated value of the scheme’s liabilities also being £1.8m, resulting in

no buy-in gain or loss. The Trustee of the scheme and its advisers are working on various data cleanse steps which are not

expected to be completed until early 2027 with wind-up work expected to be completed by early 2028. These stages are

standard for all buy-out/wind-up processes and are necessary to ensure members receive the correct benefits and that

both the Company and Trustee are properly discharged of their obligations. Until this work has been completed, the Trustee

of the scheme will not be in a position to move from a buy-in to a buy-out (where the bulk annuity policy is converted into a

series of individual policies which are then assigned to members). In light of this, the buy-in has been viewed as an investment

transaction, with the impact recognised through OCI. The weighted average duration of this scheme’s defined benefit liabilities

is six years (2025: seven years).

Main Scheme

The Main Scheme completed its buy-in transaction with an insurer on 4 July 2024. At this date, the calculated value of the

Main Scheme’s liabilities was £13.2m (using assumptions appropriate for IAS 19). The premium paid was £16.1m, resulting in

an IAS 19 loss due to the buy-in in the prior year of £2.9m or $3.7m. The Trustees of the scheme and their advisers are working

on various steps to cleanse the scheme membership data and complete calculations in respect of the impact of the GMP

equalisation. These steps are not expected to be completed for current and former members until early 2027 with wind-up

work expected to be completed by early 2028. These stages are standard for all buy-out/wind-up processes and are necessary

to ensure members receive the correct benefits and that both the Company and Trustees are properly discharged of their

obligations. Until this work has been completed, the Trustees of the scheme will not be in a position to move from a buy-in to

a buy-out (where the bulk annuity policy is converted into a series of individual policies which are then assigned to members).

In light of this, at the outset the 2024 buy-in was viewed as an investment transaction, with the impact recognised through OCI

in 2025. The weighted average duration of this scheme’s defined benefit liabilities is eight years (2025: nine years).

During the current year, legal and professional fees have been incurred by the scheme as part of the completion steps outlined

above. Under IAS 19, these administrative costs of $1.2m have been recorded in the consolidated statement of profit or loss,

with $1.0m being presented by the Directors as a non-underlying item (see Note 7 to the consolidated financial statements).

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17. Employee benefits (continued)

Reconciliation of opening to closing balances

The following table shows a reconciliation from the opening balances to the closing balances for the Group’s defined benefit

pension schemes.

		Fair value of plan assets		Defined benefit liabilities	Net balance
	2026	2025	2026	2025	2026	2025
	$m	$m	$m	$m	$m	$m
At 1 April	20.9	25.6	(18.7)	(20.2)	2.2	5.4
Recognised in profit or loss
Administrative costs	(1.2)	(0.2)	–	–	(1.2)	(0.2)
Interest income/(cost)	1.1	1.2	(1.0)	(0.9)	0.1	0.3
Total profit or loss	(0.1)	1.0	(1.0)	(0.9)	(1.1)	0.1
Recognised in OCI
IAS 19 (loss)/gain arising from:
– changes in financial assumptions	–	–	(0.8)	1.2	(0.8)	1.2
– other experience items	–	–	(0.6)	0.2	(0.6)	0.2
– return on plan assets excluding
interest income	(0.2)	(5.4)	–	–	(0.2)	(5.4)
Total OCI	(0.2)	(5.4)	(1.4)	1.4	(1.6)	(4.0)
Other Contributions paid by the employer	0.5	0.7	–	–	0.5	0.7
Benefits paid	(2.4)	(1.5)	2.4	1.5	–	–
Total other	(1.9)	(0.8)	2.4	1.5	0.5	0.7
Foreign exchange	0.5	0.5	(0.5)	(0.5)	–	–
At 31 March	19.2	20.9	(19.2)	(18.7)	–	2.2
Presented in the consolidated statement of financial position as:
Employee benefit assets					0.7	2.2
Employee benefit liabilities					(0.7)	–

The closing assets/(liabilities) of each plan are analysed as follows:

	2026	2025
	$m	$m
Executive Scheme	0.7	0.9
Main Scheme	(0.7)	1.3
Total	–	2.2

The Group’s plan assets consist of the following:

	2026	2025
	$m	$m
Bonds and gilts (class 2)	0.1	3.5
Insured annuities	18.3	16.0
Cash	0.8	1.4
Total	19.2	20.9

All equity securities and government bonds have quoted prices in active markets.

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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IAS 19 assumptions

The principal assumptions at the balance sheet date are:

	2026	2025
	%	%
Discount rate	4.9	5.3
Future pension increases	2.7	3.2
Inflation: retail price index (“RPI”)	2.8	3.3
Inflation: CPI	2.3	2.7

Assumptions regarding future mortality have been based on published statistics and mortality tables.

The current longevities underlying the values of the defined benefit liabilities at the reporting date were as follows:

	Executive Scheme		Main Scheme
	2026	2025	2026	2025
	Years	Years	Years	Years
Life expectancy at age 65 for current pensioners
Males	88.1	88.1	85.1	85.1
Females	89.8	89.7	88.4	88.4
Life expectancy at age 65 for current members aged 45
Males	89.1	89.0	86.1	86.0
Females	90.8	90.8	89.5	89.5

Sensitivity analysis

Potential changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would

have affected the defined benefit obligation by the amounts shown below:

	Executive Scheme		Main Scheme
	2026	2025	2026	2025
	$m	$m	$m	$m
Discount rate – increase by 0.5%	(0.1)	(0.1)	(0.6)	(0.6)
Discount rate – decrease by 0.5%	0.1	0.1	0.6	0.7
Rate of inflation – increase by 0.5%	0.1	0.1	0.4	0.4
Rate of inflation – decrease by 0.5%	(0.1)	(0.1)	(0.4)	(0.4)
Assumed life expectancy at age 65 – increase by one year	0.1	0.1	0.9	0.8

The present value of the defined benefit liabilities has been calculated with the same method as the defined benefit liabilities

recognised in the consolidated statement of financial position. The sensitivity analyses are based on a change in one assumption,

while not changing all other assumptions. This analysis may not be representative of the actual change in the defined benefit

liabilities as it is unlikely the change in any of the assumptions would occur in isolation of one another as some of the assumptions

are correlated. Based on the sensitivity analysis, the Directors do not consider the actuarial assumptions to be a major source of

estimation uncertainty.

Consideration of Virgin Media Court case

The Trustees of the pension schemes are aware of the court case involving Virgin Media and the resulting judgment which

has potentially wide-ranging implications as it voids changes to contracted-out schemes that were made without a section 37

certificate under the Pension Scheme Act 1993. The judgment in this case was upheld by the Court of Appeal in July 2024.

The Trustee of the Executive Scheme is still in the process of reviewing the relevant deeds. Until that review has been

completed, the Group will not be in a position to quantify the impact of the Virgin Media case on the Executive Scheme.

For the year ended 31 March 2026, no adjustment has been made to the liabilities of this scheme for potential prior scheme

amendments which may be affected by this ruling.

As set out in last year’s Annual Report and Accounts, the Trustees of the Main Scheme have already carried out a review of

the relevant deeds and concluded that these complied with the requirements of section 37 of the Pension Schemes Act 1993.

The Group is, therefore, comfortable that the Virgin Media case will not lead to additional liabilities relating to the Main Scheme

that need to be recognised in the consolidated financial statements.

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18. Inventories

	2026	2025
	$m	$m
Raw materials and consumables	11.8	20.0
Work in progress	7.8	10.7
Finished goods	10.4	15.7
	30.0	46.4
Spare parts	–	0.2
Total	30.0	46.6

In the year ended 31 March 2026, inventories to the value of $54.2m (2025: $67.2m) were recognised as an expense.

The inventory provision at 31 March 2026 was $2.3m (2025: $5.9m), which represents 7.1% of gross inventory (2025: 11.2%).

The provision has decreased from 31 March 2025 by $3.6m due to the utilisation of the provision of $4.7m offset by additions

of $1.1m.

At 31 March 2026, management’s best estimate of the amount of inventory that will not be used within the next 12 months is

$2.0m (2025: $8.5m).

As described in Note 2(c), the Group provides in full for raw and sub-assembly inventory that is over two years old at the

balance sheet date. The review of finished goods inventory is based on all inventory over one year old (see Note 2(c) for

further details).

See Note 23 for details of fixed and floating charges which includes the value of inventory in material Group companies.

19. Trade and other receivables

Amounts falling due within one year

		2026	2025
	Note	$m	$m
Gross trade receivables		27.5	30.7
ECL provision	24	(2.4)	(2.1)
Net trade receivables		25.1	28.6
Other receivables		0.7	3.1
Prepayments		2.0	2.6
Total		27.8	34.3

The Group’s exposure to credit and currency risks and impairment losses related to trade and other receivables is disclosed in

Note 24 to the consolidated financial statements.

See Note 23 to the consolidated financial statements for details of fixed and floating charges which includes the value of

receivables in material Group companies.

Amounts falling due in more than one year

	2026	2025
	$m	$m
Other receivables	0.7	0.5

Non-current other receivables relate to deposits on leasehold properties at 31 March 2026 and at 31 March 2025.

20. Cash and cash equivalents

	2026	2025
	$m	$m
Cash at bank available on demand	6.3	7.9
Cash equivalents: short-term deposits	0.8	–
Total cash and cash equivalents	7.1	7.9

Cash at bank generally earns interest at rates based on the applicable daily bank deposit rate. Cash equivalents generally

comprise bank deposits placed overnight which earn interest at a short-term deposit rate.

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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21. Trade and other payables

Amounts payable within one year

	2026	2025
	$m	$m
Trade payables	13.3	18.9
Other taxes and social security	0.9	3.0
Sanmina liability	–	3.5
Other payables and accrued expenses	18.1	14.7
Total	32.3	40.1

Amounts payable after more than one year

	2026	2025
	$m	$m
Sanmina liability	–	3.8

The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 24.

Trade payables represent amounts owed to suppliers for goods or services purchased on credit and relate primarily to raw

materials and other inventory purchases. Other payables and accrued expenses mainly relate to goods-in-transit and other

professional fees. Other taxes and social security of $0.9m at 31 March 2026 (2025: $3.0m) are statutory non-financial liabilities.

Sanmina liability

On 31 March 2025, the Group settled its long-standing litigation with Sanmina for $12.0m. In March 2025, a payment of $4.0m

was made, leaving a gross amount of $8.0m payable via eight quarterly payments of $1.0m per quarter with the final payment

due on 27 March 2027. This liability was discounted at 8.0% per annum in accordance with IFRS as the liability was to be settled

over a period of two years and, therefore, financing was deemed to be an integral component. Consequently, at 31 March 2025

a discounted liability of $7.3m was recognised, split between current and non-current liabilities.

During the current year, following two quarterly payments of $1.0m in June and September, the Group agreed an accelerated

payment plan with Sanmina whereby a final payment of $5.7m was made to Sanmina, representing a $0.3m cash saving versus

the $6.0m that would otherwise have been paid over the six remaining quarters to 31 March 2027. The unwinding of the discount

on the Sanmina liability was $0.4m for the year ended 31 March 2026 (see Note 9 to the consolidated financial statements).

With the final payment made, the stipulation agreement between the parties was satisfied with both parties subsequently

taking steps to legally set aside the US and English court judgments, meaning the Group’s potential financial liabilities were

fully extinguished.

22. Provisions

		Lease	Onerous
	Warranty	dilapidations	contract	Total
	$m	$m	$m	$m
At 1 April 2025	2.9	0.7	0.9	4.5
Recognised	1.5	0.1	–	1.6
Utilised	(1.2)	–	(0.9)	(2.1)
Released	(0.3)	–	–	(0.3)
At 31 March 2026	2.9	0.8	–	3.7
Presented in the consolidated statement of financial position as:
Current	1.4	–	–	1.4
Non-current	1.5	0.8	–	2.3

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22. Provisions (continued)

Warranty

The warranty provision relates to sales made over the past nine years. The warranty provision has been estimated based on

historical warranty data with similar products. The Group expects to settle the majority of the liability over the next two to

three years.

Lease dilapidations

The lease dilapidations provision represents the Group’s estimated liability to restore various leased properties to their original

condition upon lease expiry, as mandated by the respective lease contracts. The expected outflow is expected to occur over

the next two to five years.

Onerous contract

The onerous contract provision related to the Leotek contract as part of the sale of the Traffic business.

23. Borrowings

Bank facility at 31 March 2026 and 2025

At 31 March 2026 and 2025, the Group’s bank facility with HSBC comprised a multi-currency RCF of $28.8m. At 31 March 2026,

$9.0m was drawn (2025: $25.7m). The facility was extended on 5 June 2025 to 21 July 2027 on the same terms as the original

agreement. As set out below, the Group entered into a new RCF agreement with HSBC after the reporting period.

	2026	2025
	$m	$m
At 1 April	25.7	27.9
Drawdown	3.9	3.0
Repayment	(20.8)	(5.2)
Foreign exchange	0.2	–
At 31 March	9.0	25.7

Interest was based on the sterling overnight index average (“SONIA”) rate or the secured overnight financing rate (“SOFR”),

depending on the tranche of debt, plus a margin which varies depending on the Group’s leverage ratio. The indicative interest

rate for the year ended 31 March 2026 is 7.23% (2025: 7.33%).

The Group’s bank facility included security for HSBC by way of fixed and floating charges over all the material companies in

the Group that generate greater than 5% of the turnover, operating profit or net assets of the Group. This was registered at

Companies House on 21 July 2022.

The RCF was subject to quarterly covenants encompassing maximum leverage and minimum interest cover. In the year ended

31 March 2026, the covenants have been complied with and the outstanding borrowings of $9.0m have been classified as a

non-current liability at 31 March 2026 in line with the facility expiring in July 2027 (as at the reporting date).

The banking covenants were as follows:

Ratio	Calculation	Covenant
Leverage ratio	Net bank debt/Adjusted EBITDA	<3.0x
Interest cover	Adjusted EBITDA/Net interest expense	>4.0x

New RCF agreement with HSBC

On 22 April 2026, the Group entered into a new RCF agreement with HSBC with the following key features:

• £15.0m (equivalent to approximately $20.0m) multi-currency RCF with an uncommitted accordion of £10.0m (equivalent to

approximately $13.5m);

• initial maturity date of 22 April 2029 with two one-year extension options exercised at the lender’s discretion;

• subject to quarterly covenants encompassing maximum leverage of 2.5 times and minimum interest cover of 4.0 times;

• interest is based on SONIA, SOFR or euro interbank offered rate (“EURIBOR”), depending on the tranche of debt; and

• security for HSBC by way of fixed and floating charges over all the material companies in the Group. In respect of the UK

entities, this was registered at Companies House on 27 April 2026.

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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Reconciliation of liabilities arising from financing activities

The changes in the Group’s liabilities arising from financing activities can be classified as follows:

			Lease	Sanmina
		Borrowings	liabilities	liability	Total
	Note	$m	$m	$m	$m
At 1 April 2024		27.9	10.1	–	38.0
Cash flows:
Proceeds		3.0	–	–	3.0
Repayments		(5.2)	(2.3)	(4.0)	(11.5)
Non-cash movements:
Additions		–	2.1	11.3	13.4
Foreign exchange		–	0.1	–	0.1
At 31 March 2025		25.7	10.0	7.3	43.0
Cash flows:
Proceeds		3.9	–	–	3.9
Repayments		(20.8)	(2.5)	(7.7)	(31.0)
Non-cash movements:
Additions		–	0.6	–	0.6
Unwind of Sanmina settlement	9	–	–	0.4	0.4
Foreign exchange		0.2	0.2	–	0.4
At 31 March 2026		9.0	8.3	–	17.3

24. Financial risk management

The Group has exposure to credit risk, market risk and liquidity risk from its use of financial instruments.

This Note presents information about the Group’s exposure to each of the above risks and the Group’s objectives, policies and

processes for measuring and managing risk. Further quantitative disclosures are included throughout these consolidated

financial statements.

The Directors have overall responsibility for the establishment and oversight of the Group’s risk management framework.

The Group’s risk policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and

controls and to monitor risks and adherence to limits.

The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and

procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

Credit risk

Trade and other receivables

Credit risk is the risk of financial loss if a customer fails to meet its contractual obligations by not paying the receivables due.

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group does not

have any major customer concentration which reduces risk of significant default.

The Group has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Each new customer is

analysed individually for creditworthiness before the Group’s standard payment conditions and terms are offered. The Group’s

review includes external ratings when available and, in some cases, bank references. Credit limits are set for customers.

Customers who do not meet the benchmark creditworthiness may transact with the Group only on a prepayment basis.

The Group has established an ECL provision for impairment that represents its estimate of expected future losses in respect

of trade and other receivables. Impairment losses are determined taking into account customer-specific circumstances and

financial position, together with Group information about general payment trends and economic factors.

As set out in Note 4, the Group uses the ECL model (and applies the simplified approach) for calculating impairment of

financial assets. The trade receivables balance that follows is shown net of the ECL provision. The Group provides against

trade receivables based on an ECL model, calculated from the probability of default for the remaining life of the asset. The ECL

assessment in respect of financial assets contains a number of measurement uncertainties relating to the Directors’ view

of the expected future cash flows receivable from financial assets due from customers and the inherent creditworthiness of

those customers.

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24. Financial risk management (continued)

Judgement is based on the Group’s past experience as well as taking into consideration current market and economic

conditions, and any factors relating to a specific customer or sale. Changes in judgements and assumptions could result

in a material adjustment to those estimates in future reporting periods.

Exposure to credit risk

The ageing of trade receivables at the reporting date was:

	2026		2025
	Gross		Gross
	carrying	ECL	carrying	ECL
	amount	provision	amount	provision
	$m	$m	$m	$m
Not past due	22.1	–	23.9	–
Past due 0–30 days	2.3	–	3.0	–
Past due 31–120 days	0.7	–	3.5	(1.8)
Past 121+ days	2.4	(2.4)	0.3	(0.3)
Total	27.5	(2.4)	30.7	(2.1)

The ECL provision in respect of trade receivables is used to record forecast impairment losses unless the Group is satisfied

that no recovery of the amount owing is possible, at which point the amount considered irrecoverable is written off against the

financial asset directly.

Current and non-current other receivables (excluding prepayments) of $1.4m (2025: $3.6m) have been assessed for credit

loss. No impairment charge has been recognised in the current year (2025: $nil) on the basis that the probability of default and

subsequent loss given default are not material.

A reconciliation of the ECL provision is set out below:

	2026	2025
	$m	$m
At 1 April	(2.1)	–
Recognised	(0.7)	(2.1)
Reversed	0.2	–
Utilised	0.2	–
At 31 March	(2.4)	(2.1)

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Group’s

revenue. The objective of market risk management is to manage and control market risk exposures within acceptable

parameters, while optimising the return.

Interest rate risk

The Group’s policy is to accept exposure to interest rate risk on the Group’s borrowings. At 31 March 2026, interest is based

on SONIA or SOFR, depending on the tranche of debt, plus a margin which varies depending on the Group’s leverage ratio.

Further details of the Group’s borrowings are set out in Note 23.

Foreign currency risk

Exposure to currency risk arises in the normal course of the Group’s business.

The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than each

subsidiary’s functional currency. The currencies giving rise to this risk are primarily the Canadian dollar and the euro.

Where possible, the Group uses natural hedging within the Group to hedge the majority of its foreign currency risk.

Natural hedging is the mechanism whereby the cash inflows in a particular currency are matched to the cash outflows in

that currency at the same business or a different Group company. Foreign exchange contracts may be taken out to manage

exposures that are not mitigated through natural hedging, although the Group had no foreign exchange contracts in place at

the balance sheet date.

In respect of other monetary assets and liabilities held in currencies other than each subsidiary’s functional currency, the Group

ensures that the net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates where

necessary to address short-term imbalances.

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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The functional currency of the Company is pound sterling. The Company holds monetary assets and liabilities in US dollars and,

as such, has exposure to foreign currency risk. See Note 6 to the Company financial statements.

The Group’s exposure to foreign currency risk was as follows:

	2026		2025 (restated 1 )
	Canadian		Canadian
	dollar	Euro	dollar	Euro
	$m	$m	$m	$m
Trade and other receivables	3.1	0.7	2.9	1.3
Cash and cash equivalents	0.3	0.2	0.4	0.4
Trade and other payables	–	(0.3)	–	(0.2)
Total	3.4	0.6	3.3	1.5

1 The Group is exposed to foreign currency risk on balances that are denominated in a currency other than each subsidiary’s functional

currency. Consequently, prior year numbers are presented as restated to match the current year’s presentation.

The following significant exchange rates (versus the US dollar) applied during the year:

	2026	2025
Average for the year:
Australian dollar	1.5136	1.5336
Canadian dollar	1.3815	1.3911
Euro	0.8626	0.9318
Malaysian ringgit	4.1619	4.5053
Mexican peso	18.5041	19.1539
Pound sterling	0.7461	0.7840

	2026	2025
At balance sheet date:
Australian dollar	1.4545	1.5857
Canadian dollar	1.3892	1.4293
Euro	0.8686	0.9273
Malaysian ringgit	3.9672	4.4297
Mexican peso	18.1052	20.2480
Pound sterling	0.7543	0.7733

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities

that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as

possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,

without incurring unacceptable losses or risking damage to the Group’s reputation.

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24. Financial risk management (continued)

Exposure to liquidity risk

For non-derivative financial liabilities, the Group’s exposure relates principally to trade and other payables and borrowings.

Trade and other payables arise in the normal course of business and there are no unusual or onerous terms and conditions.

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the

impact of netting agreements:

				Due	Due	Due
				between	between	between
	Carrying	Contractual	Due within	2 months	1 and 2	2 and 5	Due after
	amount	cash flow	2 months	and 1 year	years	years	5 years
2026	$m	$m	$m	$m	$m	$m	$m
Non-derivative financial liabilities:
Trade and other payables and accrued expenses	(31.4)	(31.4)	(18.6)	(12.8)	–	–	–
Borrowings	(9.0)	(9.0)	–	–	(9.0)	–	–
Lease liabilities	(8.3)	(9.0)	(0.5)	(2.6)	(3.1)	(2.1)	(0.7)
Total	(48.7)	(49.4)	(19.1)	(15.4)	(12.1)	(2.1)	(0.7)

				Due between	Due between	Due between
	Carrying	Contractual	Due within	2 months	1 and 2	2 and 5	Due after
	amount	cash flow	2 months	and 1 year	years	years	5 years
2025	$m	$m	$m	$m	$m	$m	$m
Non-derivative financial liabilities:
Trade and other payables and accrued expenses (restated 1 )	(33.6)	(33.6)	(19.1)	(14.5)	–	–	–
Sanmina liability	(7.3)	(8.0)	–	(4.0)	(4.0)	–	–
Borrowings	(25.7)	(25.7)	–	–	(25.7)	–	–
Lease liabilities	(10.0)	(11.2)	(0.5)	(2.5)	(2.8)	(5.3)	(0.1)
Total (restated 1 )	(76.6)	(78.5)	(19.6)	(21.0)	(32.5)	(5.3)	(0.1)

1 Non-derivative financial liabilities for the current year include $18.3m (2025: $14.7m) of other payables and accrued expenses (see Note 21).

Consequently, the prior year comparatives have been restated so as to match the current year’s presentation and to also present all amounts

due within two months and one year so as to be consistent with the face of the consolidated statement of financial position.

Capital management

The Board’s policy is to maintain a strong capital base in order to maintain investor, creditor and market confidence and to

sustain future development of the business. The Board considers consolidated total equity as capital, which at 31 March 2026

was $47.1m (2025: $47.3m).

The Directors are not proposing a final dividend for the year ended 31 March 2026. The Group has a clear capital

allocation discipline and is committed to returning any excess funds to our shareholders via either a future dividend

or a share repurchase.

Sensitivity analysis

In managing interest rate and currency risks the Group aims to reduce the impact of short-term fluctuations on the Group’s

earnings. Over the longer term, however, permanent changes, in particular in foreign exchange rates, would have an impact on

equity value and consolidation earnings.

At 31 March 2026, it is estimated that a change of 5% in the value of the pound sterling and the euro against the US dollar would

impact operating profit for the year ended 31 March 2026 by approximately $0.3m (2025: $0.4m).

At 31 March 2026, it is estimated that a 1% increase/decrease in SONIA or SOFR would lead to the Group’s annual net finance

expense to increase/decrease by approximately $0.1m (2025: $0.3m increase/decrease).

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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Fair values versus carrying amounts

The fair values of financial assets and liabilities, together with the carrying amounts, shown in the consolidated statement of

financial position are as follows:

	2026		2025
	Carrying		Carrying
	amount	Fair value	amount	Fair value
	$m	$m	$m	$m
Financial assets
Cash and cash equivalents	7.1	7.1	7.9	7.9
Loans and receivables
Trade and other receivables	26.5	26.5	31.7	31.7
Total financial assets	33.6	33.6	39.6	39.6
Financial liabilities
Trade and other payables and accrued expenses	(31.4)	(31.4)	(33.6)	(33.6)
Sanmina liability	–	–	(7.3)	(7.3)
Borrowings	(9.0)	(9.0)	(25.7)	(25.7)
Lease liabilities	(8.3)	(8.3)	(10.0)	(10.0)
Total financial liabilities	(48.7)	(48.7)	(76.6)	(76.6)

Details of the major methods and assumptions used in estimating the fair values of financial instruments reflected in the table

are set out in Note 4 to the consolidated financial statements on page 131.

25. Capital and reserves

Issued share capital

	2026		2025
		Value		Value
	Number	$m	Number	$m
Authorised
Ordinary shares of 1.89p each Issued and fully paid	40,406,483	1.2	40,202,936	1.2
At 1 April	40,202,936	1.2	40,027,281	1.2
Ordinary shares issued	203,547	–	175,655	–
At 31 March	40,406,483	1.2	40,202,936	1.2

At 31 March 2026 and 31 March 2025, the Company had ordinary shares only with each share carrying one vote each.

On 10 April 2025 and 18 March 2026, respectively, the Company issued 2,520 and 201,027 ordinary shares with a nominal value

of 1.89p each. On 24 March 2025, the Company issued 175,655 ordinary shares with a nominal value of 1.89p each.

Share premium

There have been no changes to the share premium in either year presented, with the balance at 31 March 2026 being

$13.0m (2025: $13.0m).

Merger reserve

On acquiring Lumidrives Limited in 2006, the Company issued ordinary shares as part of the consideration. Merger relief

was taken in accordance with Section 131 of the Companies Act 1985 and hence $1.0m was credited to the merger reserve.

There have been no changes to the merger reserve in either year presented, with the balance at 31 March 2026 being

$1.0m (2025: $1.0m).

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25. Capital and reserves (continued)

Other reserves

The Group’s other reserves comprise the translation reserve, the capital redemption reserve and own shares. The aggregate of

these reserves at 31 March 2026 is $15.1m (2025: $15.4m). The following sets out further details of these reserves:

Translation reserve

The translation reserve comprises all foreign exchange differences from 1 January 2004 arising from the translation of the

financial statements of the Company’s overseas subsidiaries. At 31 March 2026, this reserve totalled $12.3m (2025: $12.5m).

Capital redemption reserve

The capital redemption reserve comprises the nominal value of “B” preference shares redeemed since the capital reorganisation

in 2005. There have been no changes to the capital redemption reserve in either year presented, with the balance at 31 March

2026 being $4.3m (2025: $4.3m).

Own shares

Own shares represent shares in the Company that are held by an independent EBT and include treasury shares. Own shares

are held to settle share options in the future. At 31 March 2026, the EBT held 413,706 own shares (2025: 417,307 own shares).

In the year ended 31 March 2026, the EBT purchased 16,080 shares (2025: 69,281 shares) on the open market for

$0.1m (2025: $0.2m), was allotted 184,947 shares (2025: 175,655 shares) and used 204,628 shares to settle share options

(2025: 219,444 shares). At 31 March 2026, this reserve totalled a debit balance of $1.5m (2025: $1.4m).

Dividends

No dividends were declared or paid in the current or the prior year. No dividends were proposed by the Directors after the

balance sheet date and there are no income tax consequences for the Company.

26. Share-based payments

The Group’s charge for the year ended 31 March 2026 in the consolidated statement of profit or loss for equity-settled

share-based payments schemes was $1.0m (2025: $0.3m). The Group had the following principal equity-settled share-based

payment plans in place during the year:

DRSP: The DRSP provides a simple and transparent long-term incentive plan to help ensure alignment between the interests

of shareholders and those of certain senior managers within the Group. DRSP awards may be structured as conditional shares

or nil-cost options. All vested awards under this plan are subject to a two-year post-vesting exercise window. There are no

DRSP awards currently held by any current or former Directors. Further details of the plan are set out on page 81. The plan was

approved and adopted by the Company at the AGM held on 16 May 2023.

VCP: The VCP is intended to deliver significant rewards to participants if there is a substantial increase in shareholder value with

no payout below a stretching hurdle, as noted below. Further details of the plan are set out on page 80. The plan was approved

and adopted by the Company at the AGM held on 23 September 2024.

APBP: The APBP incentivises the achievement of annual objectives, which support the short-term performance goals of the

Group. Further details of the plan are set out on page 79. At 31 March 2026 and 2025, there were no outstanding awards under

this plan. The plan was approved and adopted by the Company at the AGM held on 24 March 2022.

Further details of the DRSP, VCP and APBP are included in the Remuneration Committee report on pages 79 to 81.

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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DRSP

Awards under the DRSP were made during the year to certain employees of the Group. The awards for the current year and all

previous awards as set out below were based solely on service conditions. The vesting period for all awards is three years.

			Number				Number
			of awards				of awards
			outstanding				outstanding
	Fair value		at 1 April				at 31 March
Date of award	per share	Maturity date	2025	Granted	Exercised	Forfeited	2026
5 April 2021	£2.57	5 April 2024	26,017	–	(26,017)	–	–
5 April 2022	£3.49	5 April 2025	175,655	–	(175,655)	–	–
5 April 2023	£2.03	5 April 2026	347,989	–	–	(44,667)	303,322
13 August 2024	£1.78	13 August 2027	510,208	–	–	(124,435)	385,773
6 August 2025	£1.96	6 August 2028	–	423,485	–	(91,149)	332,336
Total			1,059,869	423,485	(201,672)	(260,251)	1,021,431

The awards made between 2022 and 2025 were valued using the five-day weighted average share price prior to the award date.

The share-based payment charge for the year in respect of the DRSP was $0.9m (2025: $0.3m).

VCP

During the year, the Group awarded 280 units under the VCP to Steve Blair (Group Chief Executive Officer), Neil Johnson (Group

Chair) and Mark Fryer (Group Chief Financial Officer). Awards made in the previous year were to Steve Blair and Neil Johnson.

The awards made during the current year are on the same terms as the previous year’s awards. VCP awards are based solely on

performance conditions. Further details are set out below and on page 80.

				Number of units		Number of units
				outstanding		outstanding
	Fair value			at 1 April		at 31 March
Date of award	per share	Maturity date	Vesting period	2025	Granted	2026
19 March 2025	£89.81	31 March 2027	3 years	335	–	335
19 March 2025	£196.61	31 March 2028	4 years	335	–	335
3 July 2025	£380.31	31 March 2027	3 years	–	85	85
3 July 2025	£622.39	31 March 2028	4 years	–	85	85
24 March 2026	£685.60	31 March 2027	3 years	–	56	56
24 March 2026	£1,191.37	31 March 2028	4 years	–	54	54
Total				670	280	950

In accordance with the plan rules, participants are eligible for a share in a pool of excess shareholder value created over three

and four-year performance periods. Vested shares (net of tax) must be retained for five years from the date of grant. The 2026

and 2025 VCP awards have been valued using a Monte Carlo simulation to estimate the grant date fair value.

The share-based payment charge for the year in respect of the VCP was $0.1m (2025: $nil).

27. Capital commitments

Capital commitments at the balance sheet date for which no provision has been made in the accounts were:

	2026	2025
	$m	$m
Contracted capital commitments	0.6	2.3

Capital commitments at 31 March 2026 relate to tooling for new parts, factory improvements and IT infrastructure

enhancements.

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28. APMs

The Group uses APMs which are not defined or specified under IFRS and may not be comparable with similarly titled measures

used by other companies. These APMs represent additional measures in assessing performance and for reporting both

internally and to shareholders and other external users. The Group believes that the presentation of these APMs provides useful

supplemental information which, when viewed in conjunction with IFRS financial information, provides readers with a more

meaningful understanding of the underlying financial and operating performance of the Group. None of these APMs should be

considered as an alternative to financial measures drawn up in accordance with IFRS.

		2026	2025
	Note	$m	$m
Gross profit		65.1	66.5
Non-underlying items (see below)	7	–	(1.2)
Underlying gross profit	5	65.1	65.3
Operating profit/(loss)	5	6.2	(11.6)
Non-underlying items	7	4.0	21.6
Loss/(gain) on disposal of business		0.1	(5.8)
Depreciation of property, plant and equipment		3.1	3.2
Loss on disposal of property, plant and equipment		–	0.3
Depreciation of right-of-use assets		2.6	2.5
Amortisation of intangible assets	15	2.3	2.6
Impairment of intangible assets		1.5	0.1
Underlying EBITDA		19.8	12.9
Operating profit/(loss)	5	6.2	(11.6)
Non-underlying items	7	4.0	21.6
Loss/(gain) on disposal of business		0.1	(5.8)
Underlying operating profit	5	10.3	4.2
Cash generated by operations		35.4	12.4
Cash impact of non-underlying items	7	1.8	10.2
Lease payments (including interest paid)		(3.0)	(2.9)
Underlying operating cash flow		34.2	19.7

As explained in Note 7, the Group incurs costs and earns income that is not considered to be reflective of the underlying

performance of the business. In the assessment of performance of the business units of the Group, management examines

underlying performance, which removes the impact of non-underlying costs and income.

Non-underling items for the year ended 31 March 2026 of $4.0m (2025: $21.6m) are analysed and explained in Note 7 to the

consolidated financial statements. The prior year amount of $21.6m is stated net of a credit of $1.2m which was excluded from

underlying gross profit of $65.3m. This credit related to the release of an inventory excess and obsolescence provision of $2.1m

less an onerous contract provision of $0.9m in relation to the Leotek contract. All other non-underlying costs of $22.8m are

analysed in Note 7 to the consolidated financial statements.

Net bank debt

Net bank debt is defined as total Group borrowings (excluding lease liabilities recognised under IFRS 16 and, in the prior year,

the Sanmina liability) less cash and cash equivalents. At 31 March 2026, the Group’s net bank debt of $1.9m (2025: $17.8m)

consisted of borrowings of $9.0m (2025: $25.7m) less cash and cash equivalents of $7.1m (2025: $7.9m).

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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29. Related parties

The ultimate parent company of the Group is Dialight plc. Transactions between the Company and its subsidiaries have been

eliminated on consolidation.

Transactions with key management personnel

Only the Directors are considered to be the Group’s key management personnel and transactions with them are disclosed in

Note 8. Directors of the Company and their immediate relatives control less than 1% of the Company.

Other related party transactions

During the prior year, the Group, via the Company, leased a property for a former director in which she lived with her son and

his partner. The lease ended in May 2024.

30. Group entities

Subsidiary undertakings

Details of the Group’s subsidiary undertakings at 31 March 2026 are provided below. Unless otherwise indicated, all of the

below subsidiary undertakings are owned through intermediate holding companies. All of the below subsidiary undertakings

have been consolidated in the consolidated financial statements under the acquisition method of accounting.

	Percentage
Name	owned	Registered office				Principal activity
Trading companies
Dialight Corporation	100%	1501		Route, 34 South Farmingdale,		Design, assembly and sale of Lighting
		NJ		07727,	United States	and Signals & Components products
Dialight Europe Limited †	100%	60 Petty France, London, SW1H 9EU,				Sale of Lighting products
		United Kingdom
Dialight GmbH	100%	Maximilianstraße 54, 80538 München,				Sale of Lighting products
				Germany
Dialight ILS Australia Pty	87. 5%	Spectrum L2, 100 Railway Road,				Sale of Lighting products
Limited		Subiaco, WA, 6008, Australia
Dialight Asia Pte. Ltd.	75%	56 Kallang Pudding Road, #09-08, HH@				Sale of Lighting products
		Kallang,		349328,	Singapore
Dialight Penang Sdn. Bhd.	100%	No.	14	78B,	Lorong Perusahaan Maju 8,	Assembly and sale of Lighting and
		Kawasan Perusahaan, Perai, 13600 Perai				Signals & Components products
				Penang, Malaysia
Dialight de México, S. de R.L.	100%	Calle Lirios S/N Colona Pacheco				Assembly and sale of Lighting and
de C.V.				Ensenada, Baja California, Mexico		Signals & Components products
Dialight Latin America, S. de		Calle Lirios S/N Colona Pacheco				Sale of Lighting and Signals &
R.L. de C.V.	100%			Ensenada, Baja California, Mexico		Components products
Other companies
Belling Lee Limited †	100%	60 Petty France, London, SW1H 9EU,				Intermediary holding company
		United Kingdom
Roxboro Overseas Limited †	100%	60 Petty France, London, SW1H 9EU,				Intermediary holding company
		United Kingdom
The Roxboro Trust Company	100%	60 Petty France, London, SW1H 9EU,				Dormant company
Limited †		United Kingdom
The Roxboro UK Pension	50%	60 Petty France, London, SW1H 9EU,				Corporate pension fund Trustee
Trustee Limited		United Kingdom
Roxboro Holdings Inc.	100%	Trust Centre, 1209 Orange Street City of			The Corporation Trust Co. Corporation	Intermediary holding company
					Wilmington, County of New Castle DE,
		United States

† Investment directly held by Dialight plc.

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30. Group entities (continued)

The entities listed below are exempt from the requirements of the Companies Act 2006 relating to the audit of financial

statements for the year ended 31 March 2026 under section 479A. Dialight plc has given a parental guarantee for all entities

listed below under section 479C of the Companies Act 2006.

Name	Registered number
Dialight Europe Limited	00186538
Belling Lee Limited	02534149
Roxboro Overseas Limited	02534146

31. Events after the reporting period

New RCF agreement with HSBC

On 22 April 2026, the Group entered into a new RCF agreement with HSBC with the following key features:

• £15.0m (equivalent to approximately $20.0m) multi-currency RCF with an uncommitted accordion of £10.0m (equivalent to

approximately $13.5m);

• initial maturity date of 22 April 2029 with two one-year extension options exercised at the lender’s discretion;

• subject to quarterly covenants encompassing maximum leverage of 2.5 times and minimum interest cover of 4.0 times;

• interest is based on SONIA, SOFR or EURIBOR, depending on the tranche of debt; and

• security for HSBC by way of fixed and floating charges over all the material companies in the Group. In respect of the UK

entities, this was registered at Companies House on 27 April 2026.

Notes to the consolidated financial statements continued

for the year ended 31 March 2026

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Company balance sheet

at 31 March 2026

Note

2026

£m

2025

£m

Fixed assets

Intangible assets 4 – 0.1

Investments 5 42.5 37.0

42.5 37.1

Current assets

Debtors 8 7.8 14.8

Cash and cash equivalents 0.7 0.3

8.5 15.1

Creditors: amounts falling due within one year 9 (2.2) (4.3)

Net current assets 6.3 10.8

Total assets less current liabilities 48.8 47.9

Creditors: amounts falling due after more than one year 10 (6.8) (19.9)

Net assets 42.0 28.0

Capital and reserves

Issued share capital 11 0.7 0.7

Share premium 12 10.7 10.7

Capital redemption reserve 12 2.2 2.2

Other reserves 12 6.8 6.1

Profit and loss account 21.6 8.3

Equity shareholders’ funds 42.0 28.0

The Company’s profit for the year was £13.5m (2025: loss of £23.0m), reflecting impairment reversals of £15.4m (2025: charge

of £17.6m) in respect of loans to, and amounts due from, subsidiary undertakings as a result of certain Group businesses now

being profitable (see Notes 3, 5 and 8 to the Company financial statements for further details).

As permitted by Section 408 of the Companies Act 2006, a separate profit and loss account for the Company has not

been presented.

The accompanying Notes on pages 165 to 173 form part of these financial statements.

These financial statements were approved by the Board of Directors on 22 June 2026 and were signed on its behalf by:

Steve Blair Mark Fryer

Group Chief Executive Officer Group Chief Financial Officer

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Company statement of changes in equity

for the year ended 31 March 2026

Other reserves

Issued

capital

£m

premium

£m

Capital

redemption

reserve

£m

Capital

contribution

reserve

£m

Own

£m

Profit

and loss

account

£m

Total

equity

£m

At 1 April 2024 0.7 10.7 2.2 6.7 (0.8) 31.3 50.8

Loss for the year – – – – – (23.0) (23.0)

Total comprehensive loss for the year – – – – – (23.0) (23.0)

Transactions with owners recorded directly

inequity:

Share-based payments – – – 0.3 – – 0.3

Purchase of own shares – – – – (0.1) – (0.1)

Total transactions with owners – – – 0.3 (0.1) – 0.2

At 31 March 2025 0.7 10.7 2.2 7.0 (0.9) 8.3 28.0

Profit for the year – – – – – 13.5 13.5

Other comprehensive loss:

Remeasurement of defined benefit pension scheme – – – – – (0.2) (0.2)

Total other comprehensive loss – – – – – (0.2) (0.2)

Total comprehensive profit for the year – – – – – 13.3 13.3

Transactions with owners, recorded directly

inequity:

Share-based payments – – – 0.7 – – 0.7

Total transactions with owners – – – 0.7 – – 0.7

At 31 March 2026 0.7 10.7 2.2 7.7 (0.9) 21.6 42.0

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Notes to the Company financial statements

for the year ended 31 March 2026

1. General information

Dialight plc (the “Company”) is incorporated in the United Kingdom under the Companies Act 2006. The address of the

registered office is 60 Petty France, London SW1H 9EU, United Kingdom.

The Company is a holding company that manages the other trading and non-trading subsidiaries of the Dialight Group.

2. Accounting policies

Basis of preparation

These financial statements have been prepared in accordance with Financial Reporting Standard (“FRS”) 102 The Financial

Reporting Standard applicable in the UK and Republic of Ireland (“FRS 102”).

Under Section 408 of the Companies Act 2006, the Company is exempt from the requirement to present its own profit and

loss account.

In these financial statements, the Company is considered to be a qualifying entity (for the purposes of this FRS) and has applied

the exemptions available under FRS 102 in respect of the following disclosures:

• cash flow statement and related Notes; and

• key management personnel compensation.

As the consolidated financial statements of the Group include the equivalent disclosures, the Company has also taken the

exemptions under FRS 102 available in respect of the following disclosures:

• certain disclosures required by FRS 102.26 Share-based Payments; and

• certain disclosures required by FRS 102.11 Basic Financial Instruments and FRS 102.12 Other Financial Instrument Issues in

respect of financial instruments not falling within the fair value accounting rules of paragraph 36(4) of Schedule 1.

These financial statements are presented in pound sterling which is the Company’s functional currency as that is the currency

of the primary economic environment in which the Company operates. All values are rounded to the nearest tenth of a million

pounds, except where otherwise indicated.

These financial statements have been prepared on a going concern basis (see Note 2b) of the consolidated financial statements

for further details and, other than pensions and share-based payments, they have been prepared under the historical

cost convention.

The accounting policies set out below have, unless otherwise stated, been applied consistently to both years presented in these

financial statements.

Intangible assets

Intangible assets that have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment

losses. Amortisation is recognised in profit and loss on a straight-line basis over their estimated useful lives from the date that

they are available for use.

Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the

instrument. Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements

entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after

deducting all of its liabilities.

Financial assets and liabilities

All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those

financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the

transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement

constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future

payments discounted at a market rate of interest for a similar debt instrument.

The Company’s debt instruments are subsequently measured at amortised cost using the effective interest method.

Debt instruments that are classified as payable or receivable within one year on initial recognition, and which meet the above

conditions, are measured at the undiscounted amount of the cash or other consideration expected to be paid or received,

net of impairment.

Investments in subsidiaries

Investments in subsidiaries are measured at cost less impairment. For investments in subsidiaries acquired for consideration,

including the issue of shares qualifying for merger relief, cost is measured by reference to the nominal value of the shares issued plus

the fair value of other consideration. Any premium is ignored. See Note 5 to the Company financial statements for further details.

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2. Accounting policies (continued)

Loans to subsidiaries

Loans to subsidiaries are generally recorded as fixed assets at amortised cost using the effective interest method. See Note 5

to the Company financial statements for further details.

Impairment of assets

Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is

objective evidence of impairment, an impairment loss is recognised in profit or loss.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has

decreased or no longer exists. An impairment charge is reversed if there has been a change in the estimates used to determine

the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed

the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had

been recognised.

Taxation

Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the

tax rates and laws that have been enacted, or substantively enacted, by the balance sheet date. Deferred tax is recognised in

respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events

that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance

sheet date. Timing differences are differences between the Company’s taxable profits and its results as stated in the financial

statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are

recognised in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that, on the basis of all available evidence,

it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the

underlying timing differences can be deducted.

Pensions

The Company operates both defined benefit and defined contribution plans. The assets of all arrangements are held separately

from the assets of the Company in independently administered funds. The amount charged against profits in respect of defined

contribution arrangements is the contributions payable to those arrangements in the accounting period.

For the defined benefit arrangements, the assets are measured at market values. The liabilities are measured using the

projected unit credit method, discounted at the current rate of return of a high-quality corporate bond appropriate to the term

and currency of the liability.

The defined benefit scheme surplus or deficit is recognised in full and presented on the face of the balance sheet.

The calculation is performed by an independent qualified actuary using the projected unit credit method. In accordance with

IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction, the pension

surplus can be recognised as an asset on the balance sheet, limited to the present value of economic benefits available in the

form of any future refunds from the plan or reductions in future contributions to the plan.

Other long-term employee benefits are measured at the present value of the benefit obligation at the reporting date.

The Group recognises a liability in respect of the best estimate of bonus payable where contractually obliged to or where past

practice has created a constructive obligation.

Foreign currencies

Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and

liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at

that date.

Exchange differences are recognised in profit or loss in the year in which they arise.

Leases

Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on

such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line

basis over the lease term.

Equity instruments

Equity instruments issued by the Company are recorded at the fair value of cash or other resources received or receivable,

netof direct issue costs.

Notes to the Company financial statements continued

for the year ended 31 March 2026

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Share-based payments

The Company grants to its employees rights to the equity instruments of Dialight plc. The fair value of awards granted is

recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and

spread over the period during which the employees become unconditionally entitled to receive the awards. The fair value of the

awards granted is measured using a pricing model, taking into account the terms and conditions upon which the awards were

granted. The amount recognised as an expense is adjusted to reflect the actual value of share awards that vest except where

forfeiture is only due to share prices not achieving the threshold for vesting. Where the Company grants awards over its own

shares to employees of its subsidiaries, it recognises an increase in the cost of investment in its subsidiaries equivalent to the

equity-settled share-based payment charge recognised in its subsidiaries’ financial statements with the corresponding credit

being recognised directly in equity.

Dividends received

Dividends receivable from subsidiaries are recognised when either received in cash or applied to reduce a creditor balance with

a subsidiary.

Own shares

In accordance with FRS 102 9.33 to 9.37, the results of the EBT have been incorporated into the Company’s financial

statements. Purchases of shares by the EBT are, therefore, held as own shares in the statement of changes in equity.

3. Critical accounting judgements and keys sources of estimation uncertainty

In the application of the Company’s accounting policies, which are described in Note 2 to the Company financial statements,

the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities

that are not readily apparent from other sources.

The estimates and associated assumptions are based on historical experience and other factors that are considered to be

relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing

basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only

that year, or in the year of the revision and future years if the revision affects both current and future years.

Significant judgements

The Directors have concluded that there are no key judgements that have a significant risk of resulting in a material adjustment

to the carrying amounts of assets and liabilities within the next financial year.

Estimates

Impairment of investments in subsidiaries and loans to subsidiaries

The Directors perform an annual impairment assessment of the Company’s investments in subsidiaries and loans to

subsidiaries by performing a review for indicators of impairment by assessing the performance of the subsidiaries against

qualitative and quantitative factors. If any of these factors are present, a detailed impairment review is undertaken. A detailed

impairment assessment is performed by assessing the subsidiary’s value-in-use, which requires management to make a

number of estimates. The calculations use five-year discounted cash flow projections based on financial budgets approved by

management. Equally, impairment losses recognised in prior periods are assessed at each reporting date for any indications

that the loss has decreased or no longer exists.

Investments in subsidiaries

No impairment charges or reversal of prior period impairments were recognised in the year ended 31 March 2026 (2025: charge

of £2.0m). See Note 5 to the Company financial statements for further details.

Loans to subsidiaries

As set out in Note 5 to the Company financial statements, a £5.5m impairment reversal has been recognised in the year ended

31 March 2026 (2025: charge of £5.6m).

Recoverability of amounts due from subsidiary undertakings

The Directors assess whether amounts due from subsidiary undertakings are recoverable based on the trading results and cash

generation of Group companies. Amounts due are deemed impaired if subsidiaries do not generate sufficient cash to enable

repayment of such balances. Equally, impairment losses recognised in prior periods are assessed at each reporting date for any

indications that the loss has decreased or no longer exists.

Consequently, an impairment reversal of £9.9m has been recognised in the current year (2025: impairment charge of £10.0m).

See Note 8 to the Company financial statements for further details.

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4. Intangible assets

Software

£m

Cost

At 1 April 2025 0.2

Additions –

At 31 March 2026 0.2

Amortisation and impairment

At 1 April 2025 (0.1)

Amortisation (0.1)

At 31 March 2026 (0.2)

Net book value

At 31 March 2026 –

At 31 March 2025 0.1

5. Investments

Investments in

subsidiaries

£m

Loans to

subsidiaries

£m

Total

£m

Cost

At 1 April 2025 23.3 32.7 56.0

Share-based payments 0.7 – 0.7

Foreign exchange – (0.8) (0.8)

At 31 March 2026 24.0 31.9 55.9

Impairment

At 1 April 2025 (13.4) (5.6) (19.0)

Reversal of impairment – 5.5 5.5

Foreign exchange – 0.1 0.1

At 31 March 2026 (13.4) – (13.4)

Net book value

At 31 March 2026 10.6 31.9 42.5

At 31 March 2025 9.9 27.1 37.0

Investments in subsidiaries

In accordance with Section 26 of FRS 102, the cost of investment is increased to reflect the cost of share options awarded to

employees of the Company’s subsidiaries. A full list of subsidiaries of the Company is provided in Note 30 to the consolidated

financial statements.

The Directors have assessed the Company’s £10.6m investment in Roxboro Overseas Limited for impairment at 31 March 2026

and concluded there were no indicators of impairment. On the same date, the Directors considered the reversal of impairments

recognised in prior periods and determined that there were no material indicators to support a reversal of prior impairments.

The Directors assessed the investments in subsidiaries for impairment at 31 March 2025 and concluded there were indicators

of impairment in the investment held in Dialight Europe Limited. A discounted cash flow was prepared which led to a full £2.0m

impairment of this investment in the prior year.

Notes to the Company financial statements continued

for the year ended 31 March 2026

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Loans to subsidiaries

At 31 March 2026 and 2025, the Company’s loans to subsidiaries at cost represent a $35.0m (worth £26.4m at the rate ruling at

the balance sheet date) loan to Dialight Corporation and a $7.3m (worth £5.5m at the rate ruling at the balance sheet date) loan

to Dialight Penang Sdn. Bhd. (“Dialight Penang”).

Dialight Corporation

The Directors have assessed the Company’s £26.4m loan to Dialight Corporation for impairment at 31 March 2026 and 2025

and concluded there were no indicators of impairment.

Dialight Penang

At 31 March 2025, an impairment assessment was performed on this loan with the balance of £5.6m being impaired in full on

the basis that the counterparty was loss-making and not generating sufficient operating cash flows to permit material loan

repayments. At 31 March 2026, this impairment loss has been assessed for any indications that the loss has decreased or no

longer exists. The forecast profits and operating cash flows underpinning this assessment showed a significant increase on the

prior year and were sufficient for the Directors to determine that the impairment loss can be fully reversed, resulting in a credit

of £5.5m being recorded in the profit and loss account.

During the year ended 31 March 2025, £5.8m of amounts due from Dialight Penang were reclassified from amounts owed

by subsidiary undertakings within current assets to loans to subsidiaries within investments. This was on the basis that

it was no longer the intention of the Company to recall this loan, and it is intended for use on a continuing basis in the

Company’s activities.

6. Financial risk management

The Company has exposure to market risk (specifically foreign currency risk) and liquidity risk from its use of

financial instruments.

The overall framework for managing risk and the interest rate risk that affects the Company is discussed in Note 24 to the

consolidated financial statements.

All carrying values are considered to be fair values.

A sensitivity analysis has been carried out in Note 24 to the consolidated financial statements, and is considered to not be

materially different for the results of the Company only.

Foreign currency risk

The Company holds monetary assets and liabilities in currencies other than pound sterling.

The majority of these relate to intercompany balances which provide a natural hedge elsewhere in the Group.

The Company’s exposure to foreign currency risk is as follows:

Note

2026

US dollar

£m

2025 (restated)

US dollar

£m

Loans to subsidiaries 5 31.9 27.1

Amounts owed by subsidiary undertakings 2.5 13.5

Bank loans – (18.9)

Total 34.4 21.7

The exchange rates applied during the year are disclosed in Note 24 to the consolidated financial statements.

Liquidity risk

The Company’s exposure to liquidity risk relates to its bank loans. This is discussed in Note 24 to the consolidated

financial statements.

7. Share-based payments

Share-based payments are described in full in Note 26 to the consolidated financial statements. There are no awards

outstanding under the APBP at 31 March 2026 and 2025.

DRSP and VCP

Disclosures relating to the DRSP and VCP relating to employees and Directors of the Company are set out in the

Remuneration Committee report on page 80 and in Note 26 to the consolidated financial statements which also provides details

on assumptions and inputs used in the calculation of share-based payment amounts.

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8. Debtors

Note

2026

£m

2025

£m

Amounts falling due within one year

Amounts owed by subsidiary undertakings 6.8 12.4

Other debtors 0.5 1.7

7.3 14.1

Amounts falling due after more than one year

Defined benefit pension asset 13 0.5 0.7

7.8 14.8

An impairment provision reversal against amounts owed by subsidiary undertakings of £9.9m has been recognised in the

current year in respect of Dialight Europe Limited and Dialight Penang (2025: impairment charge of £10.0m).

During the year ended 31 March 2025, the Company reclassified a receivable of £5.8m due from Dialight Penang Sdn.

Bhd.from amounts owed by subsidiary undertakings within current assets to loans to subsidiaries within investments. This was

on the basis that it was no longer the intention of the Company to recall this loan, and it is intended for use on a continuing basis

in the Company’s activities.

9. Creditors: amounts falling due within one year

2026

£m

2025

£m

Amounts owed to subsidiary undertakings 0.4 0.3

Accruals 1.0 1.3

Other creditors 0.8 2.7

Total 2.2 4.3

10. Creditors: amounts falling after more than one year

2026

£m

2025

£m

Bank loans 6.8 19.9

Bank loans at 31 March 2026 and 2025

At 31 March 2026 and 2025, the Group’s bank facility with HSBC (of which the Company is an obligor) comprised an RCF of

$28.8m (equivalent to approximately £21.5m). At 31 March 2026, £6.8m was drawn (2025: £19.9m). The facility was extended on

5 June 2025 to 21 July 2027 on the same terms as the original agreement. As set out below, the Company entered into a new

RCF agreement with HSBC after the reporting period.

2026

£m

2025

£m

At 1 April 19.9 22.1

Drawdown 3.0 2.4

Repayment (15.4) (4.1)

Foreign exchange (0.7) (0.5)

At 31 March 6.8 19.9

Interest was based on the SONIA rate or SOFR, depending on the tranche of debt, plus a margin which varies depending on the

Group’s leverage ratio. The indicative interest rate for the year ended 31 March 2026 is 7.23% (2025: 7.33%).

The Group’s bank facility included security for HSBC by way of fixed and floating charges over all the material companies in

the Group that generate greater than 5% of the turnover, operating profit or net assets of the Group. This was registered at

Companies House on 21 July 2022.

The RCF was subject to quarterly covenants encompassing maximum leverage and minimum interest cover. In the year

ended 31 March 2026, the covenants have been complied with and the outstanding bank loans of £6.8m have been classified

as a creditor falling due after more than one year at 31 March 2026 in line with the facility expiring in July 2027 (as at the

reporting date).

Notes to the Company financial statements continued

for the year ended 31 March 2026

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The banking covenants were as follows:

Ratio Calculation Covenant

Leverage ratio Net bank debt/Adjusted EBITDA <3.0x

Interest cover Adjusted EBITDA/Net interest expense >4.0x

New RCF agreement with HSBC

On 22 April 2026, the Company entered into a new RCF agreement with HSBC with the following key features:

• £15.0m multi-currency RCF with an uncommitted accordion of £10.0m;

• initial maturity date of 22 April 2029 with two one-year extension options exercised at the lender’s discretion;

• subject to quarterly covenants encompassing maximum leverage of 2.5 times and minimum interest cover of 4.0 times;

• interest is based on SONIA, SOFR or EURIBOR, depending on the tranche of debt; and

• security for HSBC by way of fixed and floating charges over all the material companies in the Group. In respect of the UK

entities, this was registered at Companies House on 27 April 2026.

11. Called up share capital

2026 2025

Number

Value

£m Number

Value

£m

Authorised

Ordinary shares of 1.89p each 40,406,483 0.7 40,202,936 0.7

Issued and fully paid

At 1 April 40,202,936 0.7 40,027,281 0.7

Ordinary shares issued 203,547 – 175,655 –

At 31 March 40,406,483 0.7 40,202,936 0.7

At 31 March 2026 and 31 March 2025, the Company had ordinary shares only with each share carrying one vote each.

On 10 April 2025 and 18 March 2026, respectively, the Company issued 2,520 and 201,027 ordinary shares with a nominal

value of 1.89p each. On 24 March 2025, a total of 175,655 new ordinary shares of 1.89p each in the capital of the Company

were issued.

12. Capital and reserves

Share premium

There have been no changes to the share premium account in either year presented, with the balance at 31 March 2026 being

£10.7m (2025: £10.7m).

Capital redemption reserve

The capital redemption reserve comprises the nominal value of “B” preference shares redeemed since the capital

reorganisation in 2005. There have been no changes to the capital redemption reserve in either year presented, with the balance

at 31 March 2026 being £2.2m (2025: £2.2m).

Other reserves

The Company’s other reserves comprise the capital contribution reserve and own shares. The aggregate of these reserves at

31 March 2026 is £6.8m (2025: £6.1m). The following sets out further details of these reserves:

Capital contribution reserve

The capital contribution reserve represents amounts recognised in equity in respect of share-based payment arrangements

under which equity instruments of the Company are granted to employees of subsidiary undertakings. At 31 March 2026,

thisreserve totalled £7.7m (2025: £7.0m).

Own shares

Own shares represent shares in the Company that are held by an independent EBT and include treasury shares.

Own shares are held to settle share options in the future. At 31 March 2026, the EBT held 413,706 own shares (2025: 417,307

own shares). In the year ended 31 March 2026, the EBT purchased 16,080 shares (2025: 69,281 shares) on the open market

for $0.1m (2025: $0.2m), was allotted 184,947 (2025: 175,655 shares) and used 204,628 shares to settle share options

(2025: 219,444 shares). At 31 March 2026, this reserve totalled a debit balance of £0.9m (2025: £0.9m).

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12. Capital and reserves (continued)

Dividends

No dividends were declared or paid in the current or the prior year. No dividends were proposed by the Directors after the

balance sheet date and there are no income tax consequences for the Company.

13. Pensions

The Company operates a defined contribution scheme and a defined benefit pension scheme (the Executive Scheme).

The Executive Scheme provides benefits based on final salary and length of service on leaving. The Executive Scheme is closed

to new members.

The following disclosures exclude any allowance for the defined contribution scheme operated by the Company.

The Executive Scheme is subject to the statutory funding objective (“SFO”) under the Pensions Act 2004.

An actuarial valuation of the Executive Scheme is carried out at least once every three years to determine whether the

SFO is met.

As part of the process, the Company must agree with the Trustee of the Executive Scheme the contributions to be paid to

address any shortfall against the SFO.

The Company is required to agree a schedule of contributions with the Trustee of the Executive Scheme following a valuation,

which must be carried out at least once every three years, with the latest valuation as at 5 April 2022.

The recognised assets and liabilities for the Executive Scheme are as follows:

2026

£m

2025

£m

Fair value of plan assets 2.3 2.6

Present value of defined benefit liabilities (1.8) (1.9)

Recognised asset for the Executive Scheme 0.5 0.7

Movements in fair value of plan assets are set out below:

2026

£m

2025

£m

At 1 April 2.6 2.5

Interest income on assets 0.1 0.1

Employer contributions – 0.2

Benefits paid (0.2) (0.1)

Return on plan assets less interest (0.2) (0.1)

At 31 March 2.3 2.6

Plan assets consist of the following:

2026

£m

2025

£m

Insured annuities 1.8 –

Cash 0.5 –

Bonds – 2.6

Total 2.3 2.6

The assets do not include any investments in shares of the Company.

Movements in the present value of defined benefit liabilities are set out below:

2026

£m

2025

£m

At 1 April (1.9) (2.0)

Interest expense on defined benefit liabilities (0.1) (0.1)

Benefits paid 0.2 0.1

Changes in financial assumptions – 0.1

At 31 March (1.8) (1.9)

Notes to the Company financial statements continued

for the year ended 31 March 2026

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Dialight plc Annual Report and Accounts 2026

The total income/(expense) recognised in the profit and loss account is as follows:

2026

£m

2025

£m

Interest income on defined benefit assets 0.1 0.1

Interest expense on defined benefit liabilities (0.1) (0.1)

Total recognised in the profit and loss account – –

Actuarial assumptions

The principal assumptions at the balance sheet date are:

2026

2025

Discount rate 4.9 5.3

Future pension increases 2.7 3.2

Inflation: RPI 2.8 3.3

Inflation: CPI 2.3 2.7

Weighted average life expectancy to determine benefit obligations

2026

Years

2025

Years

Male life expectancy:

Retiring at age 65 now 88.1 88.1

Retiring at age 65 in 20 years 89.1 89.0

Female life expectancy:

Retiring at age 65 now 89.8 89.7

Retiring at age 65 in 20 years 90.8 90.8

For its UK pension arrangements the Company has, for the purpose of calculating its liabilities at 31 March 2026, used

self-administered pension scheme S3NMAL mortality tables based on year of birth (as published by the Institute and Faculty

of Actuaries).

14. Employee expenses

2026

£m

2025

£m

Wages and salaries 2.6 2.4

Severance costs 0.4 0.5

Social security costs 0.4 0.3

Equity-settled share-based payment transactions 0.2 –

Charge for defined benefit schemes 0.2 –

Contributions to defined contribution schemes – 0.1

Total employee expenses 3.8 3.3

The average number of employees during the year was 10 (2025: 13). Further details on Directors’ remuneration are included in

the Remuneration Committee report on pages 75 to 88.

15. Events after the end of the reporting period

New RCF agreement with HSBC

On 22 April 2026, the Company entered into a new RCF agreement with HSBC with the following key features:

• £15.0m multi-currency RCF with an uncommitted accordion of £10.0m;

• initial maturity date of 22 April 2029 with two one-year extension options exercised at the lender’s discretion;

• subject to quarterly covenants encompassing maximum leverage of 2.5 times and minimum interest cover of 4.0 times;

• interest is based on SONIA, SOFR or EURIBOR, depending on the tranche of debt; and

• security for HSBC by way of fixed and floating charges over all the material companies in the Group. In respect of UK entities,

this was registered at Companies House on 27 April 2026.

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Dialight plc Annual Report and Accounts 2026

Directory and shareholder information

Dialight plc

Registered office:

60 Petty France

London SW1H 9EU

Company registered in England and Wales

Company number: 02486024

Company Secretary

Laura Walker

Contact details

Email (Company Secretary):

dsecretary@dialight.com

Email (investor relations): ir@dialight.com

Website

Shareholders are encouraged to visit our website, www.dialight.com, which contains information about Dialight. Any information

on, or linked from, the website is not incorporated by reference into the Annual Report and Accounts unless expressly stated in

this Annual Report and Accounts. There is a section designed specifically for investors at: www.dialight.com/ir/, which includes

detailed coverage of Dialight’s share price and our financial results, historical reporting, announcements and other governance

information. Investors can register for news alerts by email at: www.dialight.com/ir/reports-news/email-alerts/. You can also

review this year’s Annual Report and Accounts. Our share price is also available on the London Stock Exchange’s website:

www.londonstockexchange.com.

Electronic communications

The carbon footprint and cost saving from electronic communications rather than hard copy printing can be very considerable.

We strongly encourage all Dialight shareholders to move to electronic communications. The process to elect for electronic

communications is very simple. To receive notification to your email address or in hard copy, whenever shareholder documents

are available on the Company’s website, please register online by visiting our Registrar’s website, www.shareview.co.uk,

and complete your details.

Registrars and shares

Address

Equiniti, Highdown House, Yeoman Way, Worthing, West Sussex BN99 3HH.

Telephone

Equiniti’s Shareholder Contact Centre can be contacted by telephone on +44 (0) 371 384 2495 between 8.30am and 5.30pm

Monday to Friday, excluding bank holidays.

Web

You can also access details of your shareholding and a range of other shareholder services by registering at:

www.shareview.co.uk.

Dealing service

Equiniti offers “Shareview Dealing” – a service which allows you to sell your Dialight plc shares or add to your holding if you

are a UK resident. You can deal in your shares on the internet or by telephone. For more information about this service and for

details of their rates, log onto www.shareview.co.uk/dealing or telephone +44 (0) 345 603 7037 between 8.30am and 4.30pm,

Monday to Friday. If you wish to deal, you will need your account/shareholder reference number, which appears on your share

certificate. Alternatively, if you hold a share certificate, you can also use any bank, building society or stockbroker offering

share dealing facilities to buy or sell shares. If you are in any doubt about buying or selling shares, you should seek professional

financial advice.

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Dialight plc Annual Report and Accounts 2026

Financial advisers

Investec Bank plc

30 Gresham Street

London EC2V 7QP

Auditors

Grant Thornton UK LLP

No. 1 Whitehall Riverside

Leeds LS1 4BN

Legal advisers

Osborne Clarke LLP

One London Wall

Barbican

London EC2Y 5EB

Principal bankers

HSBC Bank plc

West London Corporate Centre

1 Beadon Road

London W6 0EA

Financial calendar

AGM: Tuesday 1 September 2026.

Any amendments to the financial calendar will be notified on the Group’s website (www.dialight.com).

Forward-looking statements

Certain sections of this Annual Report and Accounts contain forward-looking statements that are subject to risk factors

associated with, amongst other things, the economic and business circumstances occurring from time to time in the countries

and sectors in which the Company and its subsidiaries and associates operate. It is believed that the expectations reflected in

the Annual Report are reasonable, but they may be affected by a wide range of variables which could cause actual results to

differ materially from those currently anticipated.

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Dialight plc Annual Report and Accounts 2026

Notes

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Dialight plc Annual Report and Accounts 2026

Designed and producedby:

Radley Yeldar | www.ry.com

Dialight plc

60 Petty France

London SW1H 9EU

+44 (0) 203 058 3525

ir@dialight.com

www.dialight.com

Registered in England and Wales

Company number: 2486024