Statement of Principal Risks and Uncertainties continued

Risk and Impact Mitigation/Controls

7. Regulatory and compliance

Censure from government or regulators for non-compliance with laws and regulation. Failure of internal control process leads to financial losses.

Failure to respond to significant changes in legislation or regulations leaves the Company exposed to censure, or obsolete products or services within our portfolio.

Continued use of compliance and regulation by countries seeking to create barriers of entry for non-domestic suppliers of goods and services to protect domestic enterprises and in response to wider political disputes across the globe. Countries choosing to trade only with neighbouring countries or those deemed politically friendly (“friendshoring“).

8. Economic and political instability

Some governments around the world face domestic pressures to support localisation of goods and have put in place measures that may prevent access to their markets.

Governments and central banks in developed nations are now dealing with an inflationary risk that has not been prevalent in developed economies in recent memory. Policies to deal with these threats and the impact on pricing of raw materials, goods and services could have a detrimental effect on the Company.

Conflict continues within Ukraine which continues to distort world energy markets, which in turn leads to inflationary pressures within the markets for raw materials, which then affects pricing. This conflict may also see more proxy wars in other regions or significant cyberattacks on key infrastructure which could impact on core parts of our business and customer resilience.

China continues to try and exert more influence over global trade, which may lead to indirect confrontation with the US; this may lead to increased friction between the East and West and more pressure to consider the origins of goods within the supply chain, or cause breaks within the supply chain.

Parts of the world remain politically unstable, which may affect aspects of the business or impact on employees working or travelling in those areas.

The Group has policies and procedures in place to address compliance risk. We assess all relevant regulatory developments and review our internal processes, policies and training programmes to ensure that we both mitigate risks and meet evolving compliance requirements. Management across the business make the necessary changes to either control environments or product designs as necessary.

Group management receives assurance on regulatory compliance from all subsidiary management boards annually.

We work with both internal and external stakeholders to ensure they abide by our code of conduct and we complete due diligence over our key external stakeholders.

Management continues to monitor both the political and financial events in key markets, and adjust strategy accordingly.

Management constantly reviews the prevailing sanction regimes across the globe and ensures that the Company complies with all relevant sanctions.

Management teams keep a firm watch over input costs and adjust sales pricing as required.

Business continuity plans are in place should one of our facilities become unavailable for a prolonged period. Management teams work towards opening up new markets to diversify risk, and review our longer-term strategy to ensure we are not precluded from any key markets for our products and services.

Prior to travel by any employees in high-risk countries, they undertake risk assessments to manage, mitigate and, where possible, eliminate risks associated with political instability and/or terrorist activity.

Risk and Impact Mitigation/Controls

9. Safety

Some of our colleagues work within a high-risk industry and travel extensively across the globe.

Our products are used in the distribution of electricity which has its own inherent risks to both our employees and members of the public.

The Group has a health and safety policy, procedures and training in place across all sites. Health and safety experts are employed throughout the Group. Relevant employees are given personal protective equipment and other equipment appropriate for their particular environments. We have engineers that work on third party sites. They hold the requisite qualifications for the work they do in what can be a dangerous environment, and they undertake full risk assessments before starting work, and follow the relevant health and safety guidelines for their environments.

The Board receives and reviews regular health and safety reports from all businesses, with results from audits, near misses and accidents. Near misses and adverse events are monitored to ensure that we continue to improve the safety environment for all our stakeholders.

We continue to ensure our products comply with relevant safety requirements and provide a safe working environment for our employees, customers and the wider general public. We vet our subcontractors to ensure that they meet relevant health and safety requirements.

10. Supply chain

Recovery from Covid-19 and geopolitical pressures between the Eastern and Western powers could lead to further shocks in the global supply chain.

Some countries and businesses have yet to return to pre-Covid outputs. The economic outlook is also reducing capacity within the market, which may lead to disruption to or difficulties in sourcing raw materials and components at reasonable prices.

Both geopolitical and sustainability pressures may push businesses in certain jurisdictions to either onshore or “friendshore” supply chains to provide security of delivery and to decarbonise products.

The Group seeks ways to develop and extend its supplier base so as to reduce any overreliance on specific suppliers and to improve competitiveness.

The Group works closely with all suppliers to understand potential issues ahead of time to allow us to continue to produce goods our customers require.

Management continues to monitor the political situation across the globe and can invoke appropriate contingency plans if required.