SEIT # SDCL Efficiency Income Trust plc (formerly SDCL Energy Efficiency Income Trust plc) Annual Report and Audited Financial Statements for the year ended 31 March 2026 --- # About ## Company Structure SDCL Efficiency Income Trust plc (the 'Company' or 'SEIT', formerly known as SDCL Energy Efficiency Income Trust plc or SEEIT) is a FTSE 250 company focused exclusively on energy efficiency. The Company is a closed-ended investment company incorporated in England and Wales that was admitted to the Official List and to trading on the London Stock Exchange's Main Market on 11 December 2018, with the objective to generate an attractive total return for investors, comprising stable dividend income and capital preservation, with the opportunity for capital growth. SEIT is an Article 9 Fund under the EU's Sustainable Finance Disclosure Regulation ('SFDR'), with the sustainable investment objective of climate change mitigation through investments in energy efficiency projects. The Company was established to provide shareholders with access to energy efficiency infrastructure investments and has a portfolio comprising investments in projects across North America, Europe, the UK and Asia. The Company has an independent Board of Directors and has appointed SDCL as Investment Manager ('SDCL' or the 'Investment Manager') to manage the portfolio of investments on its behalf. Following the financial year end, on 9 April 2026, the Board announced its plan to pursue a sale of the portfolio and a wind-down of the Company, subject to shareholder approval, and published a shareholder circular on 16 June 2026 (the 'Shareholder Circular'), proposing amendments to the investment policy to facilitate the realisation of the Company's assets and the return of capital to shareholders. It should be noted that when referring to 'investments' made by the Company, the Company makes its investments via its sole direct subsidiary and main investment vehicle, SEEIT Holdco Limited ('SEEIT Holdco' or 'Holdco'), and the investment portfolio is held at Holdco level. The Company holds no other investments. References to 'portfolio basis$^{1}$' includes the impact if SEEIT Holdco were to be consolidated. The revolving credit facility ('RCF') referred to in this document is held at Holdco level and the Company itself does not hold any external debt. The Investment Manager manages Holdco on a day-to-day basis as well as its direct and indirect subsidiaries and the existing investments that Holdco has directly or indirectly invested in. Holdco typically invests in project companies, most of which provide energy efficiency solutions to counterparties through long-term contracts with a fixed lifespan. A project company, and by implication the portfolio of investments, may have a limited lifetime over which it provides target returns to Holdco and ultimately the Company. These project companies are structured so that they can be sold in an active secondary market for energy efficiency assets. ![img-0.jpeg](img-0.jpeg) ![img-1.jpeg](img-1.jpeg) --- 1 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc # Contents ## Introduction | Purpose | 2 | | --- | --- | | Highlights of the year to 31 March 2026 | 3 | | Chair's Statement | 4 | ## Strategic Report: The Company and Portfolio Review ### Strategy | The Team | 8 | | --- | --- | | Investment Manager: Markets and Outlook | 9 | | Business Model | 12 | ### Performance | Company Key Performance Indicators | 13 | | --- | --- | | Portfolio: Key Updates | 14 | | Financial Review and Valuation Update | 31 | | Portfolio Diversification | 38 | | Environmental, Social and Governance ('ESG') Update | 39 | | ESG Committee Chair's Introduction | 40 | | SEIT Sustainability Framework | 42 | | SEIT's ESG Management Process | 49 | | SEIT 2026 Climate Change Report | 50 | | Risk Management Framework | 56 | | Viability Statement | 60 | | Stakeholders and Section 172 | 61 | ## Governance | Investment Policy and Approach | 65 | | --- | --- | | Board of Directors | 66 | | Corporate Governance Statement | 68 | | Nomination Committee Report | 77 | | Audit and Risk Committee Report | 79 | | Directors' Remuneration Report | 84 | | Report of the Directors | 90 | | Statement of Directors' Responsibilities | 95 | ## Financial Statements | Independent Auditor's Report | 97 | | --- | --- | | Statement of Comprehensive Income | 104 | | Statement of Financial Position | 105 | | Statement of Changes in Shareholders' Equity | 106 | | Statement of Cash Flows | 107 | | Notes to the Financial Statements | 108 | | Appendix A | 126 | ## Additional Information | Company Information | 128 | | --- | --- | | Key Company Data | 129 | | Sustainable Finance Disclosure Regulation ('SFDR') | 130 | | Glossary | 138 | | Glossary of Financial Alternative Performance Measures ('APMs') | 140 | INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ![img-2.jpeg](img-2.jpeg) RED-Rochester --- 2 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Purpose # Supporting the energy transition through efficiency ### SDCL Efficiency Income Trust plc **SEIT is a FTSE 250 investment company with a dedicated sustainable objective — mitigating climate change by investing in energy efficiency projects.** Following the March 2026 year end, the Board announced its intention to pursue a sale of the portfolio and wind-down of the Company, subject to shareholder approval. A circular has been published proposing a revised investment objective and policy to enable this. The portfolio itself continues to deliver against the structural drivers set out below. Subject to shareholder approval of the wind-down, the Company's focus will now be on optimising returns to shareholders in an efficient and effective manner, and supporting an orderly transition of ownership of the portfolio assets while stewarding asset performance and protecting value. SEIT's investment objective has been to generate an attractive total return for investors, comprising stable dividend income and capital preservation, with the opportunity for capital growth. Its diversified portfolio of projects is supported by long-term contracts with high-quality counterparties, providing predictable cash flows. Since its IPO in 2018, SEIT expanded from £100 million invested in the UK to £1.5 billion across ten countries in Europe, North America and Asia, encompassing buildings, industrial facilities and transport assets. ### Why is energy efficiency so important? Energy efficiency is one of the largest, fastest and most cost-effective ways to cut greenhouse gas emissions, improve productivity, drive sustainable growth and enhance energy security. Energy generation and use account for over 75% of global emissions², yet most primary energy is wasted in generation, distribution and consumption. The Rocky Mountain Institute ('RMI') estimates that nearly two-thirds of primary energy, such as coal and crude oil, is lost before becoming useful, representing over $4.5 trillion or 5% of global GDP³. More than 60% of energy used for power generation is lost in conversion⁴, a further 5% in transmission and distribution, and up to 35% in inefficient end use. According to the International Energy Agency ('IEA'), efficiency measures could deliver over 30% of required emissions reductions by 2030⁵. No credible net-zero pathway can succeed without them. Energy efficiency means achieving more with less, producing the same or greater economic output while consuming less energy. SEIT's portfolio is strategically focused on projects that enhance the efficient generation and supply of energy or reduce its waste. In doing so, it has contributed to sustainability goals while generating stable and growing dividend income and a focus on opportunities for NAV growth. SEIT's portfolio of energy efficiency projects can be broadly split into two categories: ![img-3.jpeg](img-3.jpeg) Energy generators **4,950,573MWh** energy generated in the year ended 31 December 2025 Energy savers **351,205MWh** energy saved in the year ended 31 December 2025 These structural drivers of demand for efficient and decentralised energy support the long-term relevance of the portfolio under any ownership structure. 1. Consists of c.£0.8 billion of NAV and c.£0.7 billion of debt. 2. World Resources Institute. 3. Rocky Mountain Institute (2024), The Incredible Inefficiency of the Fossil Energy System, 4 June. Available at: https://rmi.org/the-incredible-inefficiency-of-the-fossil-energy-system/. 4. Energy loss refers to the 'rejected energy' referenced in the Lawrence Livermore National Laboratory Sankey energy flow diagrams, the most recent of which was published on 2023 energy data. These energy flow diagrams represent the flow of primary energy to use in residential, commercial, industrial and transportation sectors, demonstrating how energy is 'rejected' during different parts of the energy generation, transmission and use process. 5. IEA, Energy Efficiency Tracking. --- 3 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Highlights of the year to 31 March 2026 # Contracted cash flows and earnings 77.8p Net asset value ("NAV") per share 31 March 2025: 90.6p 30 September 2025: 87.6p £84m¹ Investment cash inflow from the portfolio down 13% on a portfolio basis 31 March 2025: £97m 4.8p Aggregate dividends per share paid 31 March 2025: 6.32p 1.0x Dividend cash cover for three dividends paid in the twelve months ended 31 March 2026 31 March 2025: 1.0x for four dividends paid £91m Portfolio EBITDA (2025 calendar year) 2024 calendar year: c.£86m £87m Loss before tax (including £119m of unrealised losses from valuation) 31 March 2025: £70m profit £1,078m Portfolio Valuation 31 March 2025: £1,197m 30 September 2025: £1,172m £109m² Disposals From ON Energy and the post-year-end portfolio disposal 872,838 tCO₂e Scope 4 emissions from the Company's portfolio in Y/E 2025 Y/E 2024: 1,000,791 tCO₂e Alternative Performance Measure: See Glossary of Financial Alternative Performance Measures for further details on APMs used throughout this report. 1. Excludes disposal proceeds and refinancing receipts but includes return of capital from certain projects including Onyx 2. Total transaction enterprise values including £4 million earnout and gross of all fees and permitted leakage. --- 4 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Chair's Statement ![img-4.jpeg](img-4.jpeg) **Our focus is clear: to protect value, realise the strength of the portfolio and return capital to shareholders in an orderly and efficient manner.** **Tony Roper** Chair 1. Calculated on 1 June 2026, using the 31 March 2026 share price at the close of trading of 41.5 pence. 2. Based on the calendar year to 31 December 2025 as the largest assets have fiscal year ends falling on 31 December. Whilst the Company's underlying portfolio of investments has performed broadly in line with agreed budgets in the year, it has been another disappointing year overall for the Company. Our share price discount to NAV per share has persisted; we delivered a further negative total return based on a share price of -1.95% and the Company exceeded the gearing limit set out in its investment policy, as we reported in December. As I noted in the Company's interim results in December, the Board and the Investment Manager have been actively considering options to find an alternative solution to the status quo that delivers value to all shareholders. This has included developing an alternative solution with the Investment Manager to help improve the share price discount to NAV following the Interims, the Board has also been heavily engaged with the Investment Manager in managing capital allocation tightly. The disposal flagged in the interims was signed and announced on 20 March 2026, with the portfolio sale to Kyotherm. As announced in June 2025, the Company negotiated a revised fee arrangement with the Investment Manager which took effect from 1 October 2025. The fee is based on the average of NAV and market capitalisation and the Company had six months' benefit of this lower fee in the year. ### Portfolio Performance As I have noted, the portfolio continued to perform in line with expectations through the year, delivering an aggregate EBITDA of c.£91 million, up from c.£86 million in the prior year. Whilst there was growth in underlying earnings, aggregate cash receipts were c.£84 million in the year, down from c.£97 million in the prior year. This was due to debt requirements in some of the underlying investments and reinvestment of cash generated in underlying investments. Portfolio performance is discussed in more detail in the Investment Manager's Report and the Portfolio Review sections later in this document. ### Valuation and NAV Movement SEIT's NAV per share at 31 March 2026 was 77.8 pence, representing a decline of approximately 14% (12.8 pence per share) over the year. As in prior periods, valuations are prepared by the Investment Manager using consistent methodologies and processes and using assumptions based on current market conditions. The decline in NAV in the year was a function of (i) lower valuations generally; (ii) lower assumptions around rate of growth and development timing at Onyx and RED-Rochester; (iii) greater regulatory and policy uncertainty, mainly at Oliva, Driva and Primary Energy; and (iv) the capital constraints that the Company currently has, limiting its ability to continue to invest. There is more disclosure in the Strategic Report. Market evidence suggests there are fewer transactions happening and private markets are taking more prudent views on valuing growth platforms than when markets were more buoyant. Whilst the decline in valuation is in line with the discount achieved on the portfolio sale to Kyotherm, it is not certain this can be extrapolated to the remaining portfolio as each investment has different characteristics, capital requirements and revenue drivers. ### Capital Allocation and Gearing During the year, the Board's capital allocation priorities remained clear: reduce gearing, improve portfolio liquidity and deliver shareholder value. In this context, the disposal to Kyotherm of a diversified portfolio of operational and yielding assets (at an enterprise value up to c.£105 million, including a potential earnout of up to c.£4 million) was a tangible step towards reducing gearing, albeit executed at a discount of approximately 9% to its 30 September 2025 carrying value. The sale process took longer than anticipated and illustrated the time and resources required to make disposals (as the transaction comprised eleven separate disposals) at an acceptable valuation in the current market environment. --- 5 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Chair's Statement continued ### Capital Allocation and Gearing continued As I noted in the Company's Interim Report published on 8 December 2025, the Company had exceeded the 65% (of NAV) gearing limit set out in our investment policy, although there was no covenant breach on any debt facility. This led to a formal instruction being issued to the Investment Manager to prioritise disciplined cash management, restricting any further investments unless reviewed by the Board and putting the focus on achieving the disposal in a timely manner. We also reported that some cash inflows from underlying investments were a return of capital (as opposed to income), and this was particularly the case at Onyx. With the disposal now complete and using the 31 March 2026 NAV, the total gearing (as a percentage of NAV) is c.75%. This remains above the current Investment Policy limit of 65% and so prevents the Company from making any follow-on investment. Some of the Company's portfolio companies require ongoing investment and failure to do so will negatively impact their valuation. Whilst Onyx is the most material in this respect, some investment is needed for certain investments such as RED-Rochester and Zood, together with some small existing capital commitments on certain investments, an example of which is Huntsman. This issue was one consideration which led to the Board's decision to announce the wind-down. ### Share Price Discount As I note above, the persistent and material discount at which SEIT's shares have traded to prevailing net asset value has remained a central concern for the Board. Most UK alternative asset trusts have traded at discounts, reflecting an environment that has been shaped by interest rates, sentiment, liquidity and capital availability. SEIT's discount has been higher than the peer average in the last year. The Board is acutely aware of the frustration this has caused, particularly for longer-standing shareholders, and it was another consideration in our decision to announce the managed wind-down proposal. ### Shareholder Engagement and Strategic Review Following the interim results and during Q1 this year, the Board made themselves available for individual meetings with a number of shareholders. Those discussions were constructive, open and valuable in informing the Board's deliberations. In all, I held over 20 shareholder meetings in the year. The Board has been active in ensuring disciplined capital management and, as noted in the Company's announcement of 9 April 2026, has explored a range of options, including an option to become an integrated operating company with internalised management to improve medium to longer-term value prospects for shareholders as an energy services platform. This was discussed in detail with larger shareholders in early April 2026, and the conclusion was there was unlikely to be sufficient support to achieve the 75% vote in favour required if put formally to shareholders. A number of shareholders also expressed a desire for liquidity rather than improved prospects of medium to longer-term value creation. In light of this response and the Company's ongoing material share price discount to NAV, the Board concluded it was in the best interests of shareholders to pursue a managed wind-down, sell the portfolio of investments and return cash to shareholders. A shareholder circular (the 'Shareholder Circular') was published on 16 June 2026 and the General Meeting will be held on 10 July 2026 to approve the necessary amendments to the Company's investment policy and the Articles. ### Sale of the Investments and Managed Wind-Down As I have explained above, the Board has concluded that pursuing a sale of the portfolio and a managed wind-down is currently in the best interests of shareholders as a whole. The Board believes that this provides shareholders with a clearer path to a return of capital, notwithstanding the execution challenges of achieving this objective in a timely fashion in the current market environment. The Board remains open to proposals for any, or all, of the assets of the Company's portfolio and will continue to assess all options to achieve a successful outcome in a timely manner. As the portfolio has a number of different types of investments, finding the right purchasers who have similar cost of capital and risk appetites will be key. The Board has retained the infrastructure team at Jefferies to provide independent advice and resources. Should entities connected to the Investment Manager make offers to acquire certain investments, appropriate procedures are in place to manage any conflicts and ensure all potential bidders are treated equally and fairly. ### Dividends and Balance Sheet Priorities During the year to 31 March 2026, the Company paid three interim dividends totalling 4.8 pence per share. Normally, the Company would declare a fourth interim dividend to be paid at the end of June, but in light of reduced cash inflows from the portfolio in the second half of the year due mainly to reduced receipts from Onyx and the continuing capital-constrained position the Company finds itself in, the Board reluctantly concluded that it was not appropriate to declare a fourth interim dividend. Whilst the Board considered declaring a reduced interim dividend reflecting the lower second half cash inflow, in light of the wind down, the Board considered it more appropriate to prioritise balance sheet strength and value preservation, in particular reducing debt. Once the RCF has been significantly reduced, the Board will reconsider its position on paying interim dividends if circumstances allow. This decision, which was not easy to take, aligns with the decision set out in the Shareholder Circular to suspend future dividends (other than as necessary to maintain investment trust status). Clearly, the aim of the managed wind-down is to reduce drawings under the Company's RCF significantly and then return cash to shareholders as disposals are made. The Board may use interim dividends as a method of achieving this in future, together with other methods such as share buybacks and/or B shares. --- 6 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Chair's Statement continued ## Forthcoming General Meeting on 10 July 2026 Details of the proposed changes to effect the managed wind-down are set out in the Shareholder Circular. These included a revised investment policy and proposed changes to the Company's Articles. As stated in that document, the Board recommends shareholders support all resolutions, since in light of the Company's current material share price discount, and gearing levels above Investment Policy limits, the status quo is not sustainable. ## Governance and Forthcoming AGM During the year, we welcomed Rosemary Boot to the Board as part of the Board's succession planning. She is an experienced non-executive director of alternative asset investment trusts and has M&A experience, together with experience of a managed wind-down. At the Company's AGM in September 2025, all resolutions were passed. The next AGM is currently scheduled for September and a separate notice convening the AGM will be sent to shareholders and published on the Company's website in due course. As part of board succession and moving into a wind-down, Chris Knowles has indicated he does not intend to stand for re-election at the forthcoming AGM. On behalf of the Board, I wish to thank Chris for his contribution to the Company since the launch in 2018. ## Closing Remarks The Board is acutely aware of the reduction in the share price in recent years, and we recognise the frustration and uncertainty this has caused. Having listened carefully to shareholders' views, and having considered a wide range of options, we believe that pursuing a managed wind-down is the best course of action to deliver value and provide shareholders with a clearer path to liquidity. Both a portfolio sale and individual investment disposals are now being evaluated and progressed. There will be challenges in achieving a successful outcome in the current market environment, and if a whole portfolio disposal is not achievable, the wind-down is likely to take a number of years. The Board will continue to engage closely with shareholders as these plans evolve and will keep them updated on the progress of the wind-down process. Tony Roper Chair --- 7 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Strategic Report Strategic Report: The Company and Portfolio Review Strategy | The Team | 8 | | --- | --- | | Investment Manager: Markets and Outlook | 9 | | Business Model | 12 | Performance | Company Key Performance Indicators | 13 | | --- | --- | | Portfolio: Key Updates | 14 | | Financial Review and Valuation Update | 31 | | Portfolio Diversification | 38 | | Environmental, Social and Governance ("ESG") Update | 39 | | ESG Committee Chair's Introduction | 40 | | SEIT Sustainability Framework | 42 | | SEIT's ESG Management Process | 49 | | SEIT 2026 Climate Change Report | 50 | | Risk Management Framework | 56 | | Viability Statement | 60 | | Stakeholders and Section 172 | 61 | Oliva ![img-5.jpeg](img-5.jpeg) --- 8 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # The Team Strategy # Sustainable Development Capital LLP Sustainable Development Capital LLP ("SDCL") is an independent investment firm with a proven track record of investment in energy efficiency and decentralised energy generation projects in the UK, Europe, North America and Asia. SDCL was established in 2007 and has a team of over 40 professionals across offices in London, Dublin and New York. # Meet the Investment Manager Jonathan Maxwell SDCL CEO & Founder ![img-6.jpeg](img-6.jpeg) Jonathan is CEO and Founder of SDCL. He is Chair of the Investment Committee for SEIT and has overall responsibility for SDCL's investment activities. Jonathan has 30 years' experience in international finance, infrastructure and private equity and has launched energy efficiency project investment funds in the UK, Ireland, Singapore and New York. He has advised and invested on behalf of a number of national governments as well as a wide range of institutional investors. Prior to establishing SDCL, Jonathan was at HSBC Infrastructure and managed the IPO of the HSBC Infrastructure Company, the first Main Market, London Stock Exchange listed infrastructure fund, which now has an enterprise value of over £3 billion. Jonathan has a degree in Modern History from Oxford University. Purvi Sapre SDCL Group CIO ![img-7.jpeg](img-7.jpeg) Purvi is the Group CIO and is a member of the Investment Committee for SEIT. Purvi has over 15 years' experience in Europe, North America and emerging markets investing on behalf of debt, equity and impact investment funds. Purvi has transacted and managed assets across a number of renewable energy technologies including solar, wind, energy efficiency and waste to energy. Purvi holds a Master's in Chemical Engineering with Environmental Technology and has CIMA and IMC qualifications. Eugene Kinghorn SDCL Group CFO ![img-8.jpeg](img-8.jpeg) Eugene is the Group CFO and has overall responsibility for SDCL's finance function, covering corporate activities and various funds, including SEIT. He is a member of the Investment Committee for SEIT. Eugene has over 15 years of experience in financial and portfolio management, with particular focus on private equity and listed infrastructure investment management. He is responsible for portfolio and investment management of SEIT. Eugene holds a Bachelor's in Accounting from Stellenbosch University and is a Fellow of ACCA. Tamsin Jordan Director, Fund Management ![img-9.jpeg](img-9.jpeg) Tamsin is Director of SEIT Fund Management and Investor Relations, responsible for stakeholder management and strategy. Tamsin joined with over 15 years' experience in alternative investments, most recently advising clients on strategic investor relations across private equity, venture, private credit, real estate, long/short equity and impact investing strategies. Prior to this, Tamsin was responsible for investor relations and communications for investment trusts and a private equity portfolio; she also spent almost a decade at a leading global hedge fund specialising in long/short equity. Tamsin holds a Bachelor's in International Relations from the University of Sussex after attending the United World College of the Atlantic in South Wales. Ben Griffiths MD, Fund Management ![img-10.jpeg](img-10.jpeg) Ben is Managing Director of SEIT Fund Management and is responsible for the technical, financial and operational performance of its investments. He is a member of the Investment Committee for SEIT. Ben has over 15 years' experience in the investment and renewable energy industries. Prior to SDCL, Ben led the portfolio management of a c.£300 million separately managed account, managing a range of technologies and sitting on the boards of several investment companies. Ben is a Chartered Engineer, with a Master's in Mechanical Engineering and an MBA degree from the University of Northampton. --- 9 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Investment Manager: Markets and Outlook Strategy # Strategic Relevance of the Portfolio Remains Intact “If volatility becomes the baseline condition, resilience becomes the premium.” Jonathan Maxwell SDCL CEO and Founder Energy security has re-emerged as a material driver of macroeconomic and market outcomes. Recent geopolitical disruption has made visible how quickly a supply shock can propagate through energy prices, logistics and industrial inputs, with effects that reach households, corporates and government budgets well beyond the point of origin. Global conflicts such as in Europe and the Middle East impact energy markets, interest rates, inflation and international trade, creating uncertainty in economic markets and society more broadly. In many respects, the significance lies less in the immediate headline moves and more in the longer-term conditions that become “locked in”. For example, the repricing of risk, persistent adjustments in insurance and hedging, and a shift in procurement and capital planning towards redundancy, resilience and cost certainty. For energy importing economies, this highlights an important distinction. Replacing one supplier with another can change the form of exposure, but it does not remove the underlying vulnerability where imports are priced by events outside domestic control. The most enduring response therefore tends to be structural, investing in systems that reduce dependency and shorten the distance between where energy is produced and where it is used. Against that backdrop, the strategic relevance of the Company’s portfolio remains intact. The portfolio comprises assets and platforms that improve efficiency and reliability at the point of use and help customers manage cost volatility through long-duration arrangements and operational optimisation. These attributes have become more valuable in a world where resilience is increasingly priced and purchased. While these structural tailwinds continue to underpin demand for the Company’s underlying proposition over the medium term, they have not insulated the Company from a highly challenging environment for UK-listed investment trusts. In particular, a persistent discount to net asset value across the sector has constrained capital flexibility and, alongside a higher-for-longer cost of capital, has weighed on investor sentiment and the valuation environment. In parallel, transaction markets have remained difficult, with a weaker M&A backdrop affecting asset sale processes and, in some cases, limiting the ability to execute disposals on acceptable terms. As the Company moves to an asset realisation phase, the Board and the Investment Manager are focused on protecting and maximising value through the clear articulation of each asset’s fundamentals to prospective counterparties and continued asset stewardship. The objective is to deliver the best possible outcomes for shareholders; that objective is supported by positioning the portfolio around its core proposition – efficient, decentralised and resilient energy infrastructure – which reduces the need to import, transport, hedge, insure, burn or waste energy. # Performance and Valuation Supported by broadly resilient operational performance, the portfolio generated £91 million EBITDA, up from £86 million the previous year, measured to 31 December 2025, which corresponds to the fiscal year of the majority of the underlying portfolio companies. Project-level cash flows were predominantly contracted and counterparty payment performance was good. Notwithstanding this operational performance, the Company’s NAV declined by c.14% from 31 March 2025 and c.11% from 30 September 2025. The NAV movement reflected a reassessment of forward-looking assumptions in those parts of the portfolio whose value depends on future construction, development and growth – activities that, under the Company’s existing investment policy and capital availability, is unable to fund itself. These assumption changes do not reflect general deterioration in the underlying operational performance of the assets. They also do not constrain a future owner with the capital to deliver on the same growth opportunities where they remain attractive. Valuation movements during the year also reflected greater uncertainty around fiscal and regulatory support mechanisms in certain jurisdictions. In addition, lower assumed regulatory compensation in specific assets was reflected beyond the current legislative horizon. These factors were partially offset by supportive commodity price movements and continued progress on selected projects (for example, at Driva, where new Energy-as-a-Service projects reached operation during the year and the Södertörn pipeline project was completed in early 2026), while underlying operational performance across the portfolio remained broadly resilient. Further detail on asset-level performance and valuation movements is set out in the Portfolio Review. 1 Excluding the portfolio of assets sold to Kyotherm in April 2026, the pro-forma EBITDA for December 2024 and 2025 would have been £76 million and £72 million respectively. --- 10 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Investment Manager: Markets and Outlook continued ## Strategic Conclusion During the year, the Company's share price continued to trade at a material and increased discount to net asset value, despite the operational resilience and growth potential of the underlying portfolio. As noted in the Chair's Statement, the Board and the Investment Manager considered a variety of options to address the persistent discount and engaged with a number of the Company's largest shareholders to explore their views on a potential strategic alternative to address the discount and create a credible path to value creation. Following these discussions, it became clear that a significant portion of the shareholder base placed greater weight on near-term liquidity than medium-term value creation and that the proposal would not secure the 75% vote at an EGM required to implement it. In light of this feedback, the Board concluded that, subject to shareholder approval, it is currently in the best interests of shareholders, as a whole, to pursue a sale of the portfolio and a wind-down of the Company. ## The Proposed Approach Below summarises the Board's proposed approach; full details are contained in the circular published on 16 June 2026 (the 'Circular'). The Board and the Investment Manager intend to pursue a sale of the portfolio as the preferred route, reflecting the potential for greater speed and value realisation. If a full portfolio sale is not achievable on acceptable terms, the portfolio would instead be realised on an asset-by-asset or grouped basis, with the timing and sequencing of disposals managed to balance value preservation with the timely return of capital to shareholders. The pace and sequencing of disposals will be influenced by asset readiness, operational performance, buyer demand and prevailing conditions in the transaction market. ## Distributions and Cash Returns In this context, the Company's distribution profile will evolve during the realisation process. While the portfolio continues to generate cash flows, regular dividends will be suspended until the RCF has been significantly repaid. The Board will consider the most appropriate balance of dividend payments or other returns of capital as assets are realised, debt is repaid and proceeds are distributed to shareholders. The timing and quantum of such returns will depend on disposal activity, the Company's balance sheet position and applicable financing and regulatory constraints. The Company will continue to pay dividends as necessary to maintain investment trust status. ## Asset Realisation Strategy In April 2026, the Company completed the disposal of a diversified portfolio of operational assets, providing useful price referencing and supporting modest deleveraging. Further detail can be found in the Portfolio: Key Updates section on page 14. However, the current environment for asset realisations remains challenging, characterised by wide variation in buyer valuations, reduced market liquidity and a more selective buyer universe. ## Value Protection and Cost Discipline The Board and the Investment Manager will be focused on disciplined execution, with continued active management to protect exit values. This is expected to include targeted investment in existing assets, to maintain operational resilience and protect value, ensuring assets remain safe ready. As set out in the Shareholder Circular, any investment will be undertaken only with Board approval and will include strict cost discipline throughout the realisation process, recognising that costs directly impact the value ultimately returned to shareholders. No investments will be made in new assets. The Board and the Investment Manager are in discussions as to the appropriate amendments to be made to the investment management agreement, to take account of the arrangements required during the course of the wind-down. ## Capital Structure and Gearing As at 31 March 2026, the Company had a combination of Holdco-level financing facilities and project-level debt across the portfolio. Consolidated gearing at year end increased to 83.1% of NAV (45.4% of Enterprise Value), primarily due to the NAV reduction. There were no further debt drawings since October 2025. The Company exceeded the Investment Policy 65% of NAV gearing limit as reported in the Interim Report and Accounts published in December 2025. Following the post-year-end disposal, £45 million of the proceeds were applied to reduce drawings under the Company's revolving credit facility, supporting a reduction in leverage and bringing consolidated pro-forma gearing to 74.5% of NAV (42.7% of Enterprise Value). The Shareholder Circular has set out a proposed amendment to the Company's gearing strategy. Borrowing at the Company level would be capped, while asset-level financing limits would be set according to the requirements of each investment. All financing decisions would require prior Board approval to ensure appropriate oversight. --- 11 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Investment Manager: Markets and Outlook continued Strategy ## Investment Objective and Investment Policy Amendments In order to support the wind-down strategy, the Board has proposed a revised investment objective and investment policy, as set out in the Circular. If approved in the upcoming General Meeting, the Company's updated investment objective will be to realise all assets in the Company's portfolio in an orderly manner, which seeks to achieve a balance between returning cash promptly to shareholders and maximising value. The revised investment policy is intended to ensure that the Company has the flexibility required to manage and realise the portfolio in a manner consistent with its revised objective. Shareholders are encouraged to read the Circular in full for a comprehensive description of the proposed changes and the resolutions to be considered. ## Principal Risks and Uncertainties The Company's principal risks and uncertainties are described in detail in the Risk Management Framework section of this Annual Report. In the context of the proposed wind-down, the Board has particular regard to risks associated with: - realisation timing and pricing in a challenging market; - operational continuity, including management teams' retention, and counterparty performance during sale processes; - liquidity, refinancing and covenant management; - regulatory and policy change; - execution and resourcing; and - conflicts of interest, managed through governance safeguards. ## Outlook The Board and the Investment Manager are focused on the execution of the proposed sale of the portfolio and wind-down, prioritising orderly realisation and value protection. The Board believes the portfolio's operational resilience and predominantly contracted asset base provide a sound foundation for value realisation over time. Given the inherent uncertainty in timing and pricing outcomes, the Board does not make commitments as to the pace of asset realisations or the timing and quantum of capital returns. In the absence of a full portfolio sale, it is likely that the process will take a number of years. --- 12 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Business Model Strategy In the announcement made after the year end, the Board stated its intention to pursue a sale of the portfolio and a wind-down of the Company. In this context, and subject to shareholder approval, the Company's business model is now focused on the active management and realisation of its existing portfolio of energy efficiency investments, seeking to maximise value for shareholders through timely disposals and ongoing portfolio management, rather than the origination of new investments. | What We Do | How Value is Managed | Outcomes | | --- | --- | --- | | **SEIT's investment objective has been to generate an attractive total return for investors comprising stable dividend income and capital preservation, with the opportunity for capital growth.** Subject to shareholder approval, the new investment objective will be to realise all assets in the Company's portfolio in an orderly manner, which seeks to achieve a balance between returning cash promptly to shareholders and maximising value. SEIT has been delivering its existing investment objective through its diversified portfolio of energy efficiency projects with suitable counterparties. The contracts governing these energy efficiency projects entitle SEIT to receive predominantly long-term cash flows once the energy efficiency projects are operational. | **1** **Own** A diversified portfolio of operational and contracted energy efficiency assets, generating long-duration cash flows from high-quality counterparties across the UK, North America and Europe. **2** **Realise** Orderly realisation through bilateral or competitive processes as appropriate, in line with the proposed revised investment policy as per the Shareholder Circular. **3** **Steward** Active portfolio management to protect value; selective capital deployment on accretive projects already underway; by exception and with Board approval further investment in accretive projects if needed to maintain value; cost management; constructive engagement with counterparties, lenders and prospective acquirers. | Under a potential wind-down scenario, outcomes are expected to be delivered through a combination of asset realisations, some contractual cash flows and cash returns to shareholders as capital or dividends. Active and orderly asset disposals focused on realising value, reducing leverage, managing risk and returning cash to shareholders. See Portfolio Summary on page 15 for further details. | ## Underpinned by: ### SEIT's strong ESG credentials Read more in the Environmental, Social and Governance section on pages 39 to 55. ### Responsible risk management Read more about our risks and mitigation in the Risk Management Framework section on pages 56 to 59. ### Robust corporate governance Read more in the Governance Report on pages 64 to 95. The role of the Board in terms of decision-making and oversight will be strengthened to deliver the proposed wind-down. --- 13 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Company Key Performance Indicators Performance In this section, the Company sets out its financial and operational key performance indicators ('KPIs') used to track the performance of the Company over time against its current objectives. The Board believes that the KPIs detailed below provide shareholders with sufficient information to assess how effectively the Company has performed against those objectives. KPIs under a wind-down scenario are likely to change. ## Financial KPIs ![img-11.jpeg](img-11.jpeg) ### Net asset value ('NAV') per share (APM) (pence) NAVAPM divided by number of shares outstanding as at 31 March NAVAPM declined during the period, primarily reflecting a recalibration of forward-looking assumptions on growth and development cash flows, together with asset-specific valuation adjustments. Underlying operational performance across the portfolio remained broadly resilient. ![img-12.jpeg](img-12.jpeg) ### Share price (pence) Closing share price as at 31 March The share price continued to trade at a material discount to net asset value, reflecting continued limited demand across the UK-listed alternative investment trust sector and uncertainty around the Company's strategic position. The dislocation between share price and the underlying operational performance of the portfolio was a key driver of the Board's subsequent decision to pursue an orderly realisation. ![img-13.jpeg](img-13.jpeg) ### Dividends per share (pence) Aggregate dividendsAPM declared per share in respect of the financial year Aggregate dividends per share declared were lower than the prior year, reflecting the declaration of three interim dividends during the year (four in the year ended March 2025) and restrictions on cash payments from investments. ![img-14.jpeg](img-14.jpeg) ### Weighted average contracted investment life (years) Weighted average number of years of contracted revenue remaining in investment contracts (excludes all re-contracting assumptions) At 14.9 years, the weighted average contracted life of the portfolio continues to support long-duration, predominantly contracted cash flow generation. ![img-15.jpeg](img-15.jpeg) ### Dividend cash cover (APM) (x) Net investment cash inflowAPM divided by dividends paid to shareholders during the year Dividend cash cover of 1.0x achieved for each year, supporting the aim of providing cash cover for interim dividends paid. Net investment cash inflows excludes disposal proceeds and refinancing receipts but includes return of capital from certain projects including Onyx. ![img-16.jpeg](img-16.jpeg) ### Total return on NAV basis (APM) in the year (%) NAV growth and dividends paid per share in the year Total return on a NAVAPM basis was negative for the year, driven primarily by the decline in NAV, partially offset by dividends paid. ![img-17.jpeg](img-17.jpeg) ### Ongoing charges ratio (APM) (%) Annualised ongoing charges (i.e. excluding investment costs and other irregular costs) divided by the average published NAVAPM, calculated in accordance with AIC guidelines The ratio has reduced over the year, primarily due to the reduced management fees reflected in the amended Investment Management Agreement. ![img-18.jpeg](img-18.jpeg) ### Largest five investments as a % of gross asset value ('GAV (APM)') (%) Total value of five largest individual investments divided by the sum of all investments held in the portfolio plus cash, calculated at year end Good portfolio diversification was maintained in both financial years. --- 14 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Portfolio: Key Updates ## Portfolio Performance During the year, SEIT's investments continued to generate underlying cash flows, supported by predominantly long-term contractual revenues and active asset management. Operational performance across the portfolio as a whole met expectations, with cash generation reflecting the fundamentally stable characteristics of the assets. During the year, the portfolio delivered: c.£91m 2025 calendar year Aggregate portfolio EBITDA¹ (2024: c.£86m) 1. Based on the calendar year to 31 December 2025, using unaudited numbers for all the largest assets and a combination of unaudited numbers and management calculations for entities that have fiscal year ends not falling on 31 December. Cash generated at the larger portfolio companies was applied principally to: (i) servicing and amortisation of project-level debt; (ii) capital expenditure on accretive projects already in progress (and for Onyx in the pipeline); and (iii) working capital support for contracted delivery to customers. Underlying EBITDA of these larger portfolio companies was c.£72 million (2024: £73 million) and their cash generation profile remained consistent with stable underlying operational performance. Cash inflow from the portfolio consists of cash receipts by SEIT from underlying long-term contracts at project level and includes both regular receipts of dividends and interest and capital receipts. Capital receipts came from Onyx in the year where the acceleration of investment returns to SEIT is due to the nature of the Commercial & Industrial solar projects' financing structure. Tax equity is received at mechanical completion and repays the construction funding. During the year, the capital distributions contributed approximately £40 million to cash inflows. Once through to their operational stage, these assets at Onyx deliver long-term stable cash flow. This capital allocation approach reflects active stewardship of the asset base through a period of constrained capital markets. The substance of the approach is straightforward: cash is deployed where it most directly supports operational delivery, potential leverage reduction and protection of long-term value. Capital that was deployed during the year was focused on existing portfolio assets, with reinvestment directed towards value preservation, contractual delivery and long-term asset sustainability, while capital that has been retained at asset level enhanced financial resilience across the portfolio during a period of restricted access to external capital. ## Portfolio Cash Generation and Allocation The chart below illustrates how cash generated by the portfolio during the year was allocated. Capital retained at asset level reflects disciplined allocation in response to market conditions and funding constraints, supporting long-term value creation and risk management. ![img-19.jpeg](img-19.jpeg) ## Portfolio Exits and Deleveraging In September 2025, the ON Energy holding was sold for c.£6 million, which completed at an 18.75% premium to its last reported carrying value. In April 2026, SEIT completed the sale of a diversified portfolio of operational energy efficiency assets to Kyotherm for a total Enterprise Value of up to approximately £105 million, reflecting a sale price of around 9% below carrying value at 30 September 2025. The portfolio included the Company's interests in Capshare, Future Energy Solutions (asset portfolios), Sparkfund, Moy Park Biomass, Tallaght Hospital, Baseload, Lycra, SEIPL, Northeastern US CHP, CPP Biomass, Supermarket Solar UK and GET Solutions. Net cash proceeds from Kyotherm at completion, after taking account of permitted leakage and tax retentions were approximately £84 million, of which £45 million was used to reduce drawings under the revolving credit facility. The remainder of proceeds were primarily used for a combination of working capital payments and retained on the balance sheet. A potential additional earn-out of up to £4 million² may be received over the next three to five years, subject to performance conditions. Following the disposal, the portfolio is more streamlined, with increased focus on commercial and industrial customers and district energy solutions. 1. Primary Energy, RED-Rochester, Onyx, Oliva and Driva. 2. (c.£2 million of which is recognised in the 31 March Portfolio Valuation³). --- 15 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Portfolio: Key Updates continued ### Operational Performance The portfolio companies described in this section constitute the five largest groups of investment projects that are diversified across North America and Europe, consisting of 26 individual projects making up c.84% of SEIT's total portfolio by value. A detailed summary of these investments and their performance during the year is outlined on the following pages. The Manager's expectations for EBITDA$^{MM}$ during the period as well as the actual EBITDA$^{MM}$ have been provided below, along with the key technical performance indicators for each. Please note, as in previous reports, the operational measures and management budgets are produced and monitored in line with the calendar year. | **1** Oliva Spanish Cogeneration Spain No. of projects: 9 | **2** Driva Stockholm, Sweden No. of projects: 1 | **3** Primary Energy Indiana, US No. of projects: 5 | | --- | --- | --- | | **4** Onyx Renewable Partners Over 14 states in the US No. of projects: 8 | **5** RED-Rochester Rochester, NY No. of projects: 1 | | ![img-20.jpeg](img-20.jpeg) The projects in the table below delivered a combined EBITDA of £72 million, generally in line with like-for-like budgets of £74 million for the period$^{1}$ | | Project equity value at 31 March 2026 | Project-level debt at 31 March 2026 | Technical KPI 2025 | EBITDA 2025 (local currency, millions) | Δ from budget EBITDA (%) 2025 | | --- | --- | --- | --- | --- | --- | | **1** Oliva Spanish Cogeneration | c.€89m | nil | 1,198,496MWh produced^{2} | EUR 9.5 | (4%) | | **2** Driva | c.SEK 1,120m | SEK 682m | 88% green gas | SEK 83.7 | 14% | | **3** Primary Energy | c.$291m | c.$149m | 173.5MW average net production | USD 37.7 | 2% | | **4** Onyx Renewable Partners | c.$367m | c.$262m | 145,115MWh produced^{3} | USD 16.7^{4} | (20%) | | **5** RED-Rochester | c.$320m | c.$98m | 7m MMBtus delivered | USD 20.9 | (4%) | 1. These figures use the FX rate as at 31 December 2025. 2. Oliva MWh produced includes both electrical and thermal MWhs 3. Onyx reported MWh is for the fully operational portfolios in Onyx (total of five). 4. Onyx EBITDA$^{MM}$ is for the fully operational portfolios of assets (total of five) and does not include portfolios still partly under construction (total of three). The project equity value of the fully operational portfolios included here is $128 million. For a more comprehensive understanding of these investments, please see the following sections: Financial Review and Valuation Movements, Principal Risks, Risk Management Framework and Note 3 in the financial statements which provide further details. EBITDA data shown in the Portfolio Summary here and on the following pages is as at 31 December 2025. All other data provided is at 31 March 2026 unless otherwise stated. --- 16 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Portfolio: Key Updates continued # RED-Rochester One of the largest commercial district energy systems in North America 20,875 EBITDA ($'000) Y/E December 2025¹ Y/E December 2024²: 15,353 6,983,000 MMBtus² delivered to customers Y/E December 2025¹ Y/E December 2024²: 6,580,000 # Investment Highlights | Investment type | Direct equity (100%) | | --- | --- | | Acquisition date | May 2021 | | Asset location | Rochester, NY USA | | No. of projects | 1 | | Project equity value and as a percentage of SEIT's GAV^{MM} | c.$320 million (c.£243 million) (c.22%) | | Project-level debt | c.$98 million | | Capacity | 155MW | | Technology | 17 on-site services, primarily process/heating steam, electricity and process/space-conditioning cooling | | Forecast project life remaining | c.40 years | | Lifecycle stage | Operational | | Counterparties/offtakers | Over 120, including Eastman Kodak, Ortho, LiDestri and Amazon | | O&M | RED-Rochester staff | | Fuel supply | Natural gas and purchased electricity supplied from Rochester Gas and Energy Corporation | 1. Unaudited figures. 2. Million British thermal units. # Investment Overview RED-Rochester operates one of the largest commercial district energy systems in North America, providing regulated utility services to over 120 customers within Eastman Business Park ("EBP") in Rochester, New York. The asset supplies critical services such as steam, chilled water, electricity and industrial wastewater treatment under long-term agreements with diversified industrial clients. The asset's revenues remain underpinned by inflation-linked contracts with stable, creditworthy customers, including Eastman Kodak, LiDestri and Amazon. RED-Rochester is a cornerstone of SEIT's North American portfolio, offering a combination of contracted cash flows and long-term growth potential through asset optimisation and business development. # RED-Rochester Revenues and Cost Model The project is underpinned by predominantly long-term contracted cash flows with positive inflation correlation. RED-Rochester has contracts with over 120 commercial and industrial customers on fixed terms under an approved tariff structure. Customers typically sign a 20-year contract with no break clauses. Contract extensions are assumed in the March 2026 Portfolio Valuation$^{MM}$. Revenues are split as follows: i. fixed charge: c.40% of revenues are generated from fixed fees paid, unrelated to demand or services procured; ii. capacity-based charge: c.41% of revenues are from a pre-determined tariff, based on the cost of delivery of each service used and the customer's associated demand; and iii. overheads: c.9% of revenues are from a fixed mark-up for each customer on the total utility bill. Probability-weighted future cash flows are also assumed from growth opportunities, including accretive capital enhancements such as the Cogeneration plant ("Cogen") plant described in the coming pages, which is expected to further increase revenues as additional capacity is sold. --- 17 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Portfolio: Key Updates continued ## Business Updates and Accretive Projects RED-Rochester delivered a broadly stable operational performance during the year, with EBITDA marginally under budget and c.35% up from the prior year. Performance benefited from a combination of resilient customer demand and continued focus on operational discipline, offsetting the challenges presented by a more uncertain industrial backdrop. The asset recorded no lost time incidents during 2025, reflecting sustained focus and improvement in health and safety performance and governance. During the year, the transition to a fully in-house management model was completed. This represented a significant milestone in the evolution of the platform. The change has enhanced cost control, accountability and responsiveness, and has contributed to improvements in underlying EBITDA performance relative to prior periods. Accretive capital projects progressed well, with completed and commissioned investments enhancing operational flexibility, efficiency and long-term optionality across the system, with the highlight being the new Cogen project reaching commercial operations in May 2025. These initiatives continue to focus on incremental improvements to reliability, efficiency and capacity utilisation, strengthening RED-Rochester's position as a critical energy services provider within Eastman Business Park. Business development activity within the park continued throughout the year. Operational performance was supported by new customers joining the park and expansion activity from existing users. A new customer joining the park is Air Water Gas Solutions (AWGS), who commenced construction of their facility during the year, expected to become operational during late 2026. In addition, the relationship with LiDestri expanded in 2026 through further capital deployment and progression of additional development phases within the park, further underpinning contracted demand. Beyond these developments, a number of other opportunities are progressing within the park, including projects announced publicly during the year, such as Reju (a textile recycler), and a wider pipeline of prospective customers, including datacentre and industrial users to support continued utilisation and long-term growth. Glencore is conducting a market study to assess future options for the site it acquired from the Li-Cycle bankruptcy. RED-Rochester continues to actively pursue all alternative uses for the available infrastructure and capacity. ## Capital Structure RED-Rochester is financed through a project-level debt facility (with no recourse to or guarantees from the Company) which includes customary financial covenants, with compliance monitored on an ongoing basis. Compliance with covenants has become tighter than normal, largely due to the delayed customer load of Glencore; however, performance during the year supported a little covenant headroom. Going forward, available flexibility is influenced by both cash flow timing and the structure of the existing facility. Incremental capital deployment remains focused on disciplined, efficiency-led investment from self-generated cash flows rather than expansionary capex. The Investment Manager continues to work with advisers and lenders to assess options for refinancing later in 2026, with any debt refinancing intended to be used to optimise the capital structure. The valuation has been carried out on an unlevered basis, however it assumes a refinancing in 2027 at the legal maturity of the loan. It does not assume any value uplift therefrom. The existing facilities remain in compliance with their covenants and are expected to continue to do so. ## Outlook Near-term priorities for RED-Rochester remain centred on maintaining stable operational performance, embedding the benefits of the in-house management transition and continuing to strengthen health and safety practices. Focus will also remain on active customer engagement and execution of a few existing approved capital projects. Growth is expected to be driven by incremental customer additions and expansions within Eastman Business Park. While several customer opportunities are advancing, uncertainty remains and outcomes will be dependent on customer timing, customer agreements, capital availability and broader market conditions. --- 18 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Portfolio: Key Updates continued Performance ### Investment Risks and Mitigants | Risk type and description | Mitigation | | --- | --- | | **Operational:** Demand volatility resulting in lower-than-expected variable revenues, including sensitivity to weather conditions and customer operating patterns. | Demand across RED-Rochester remains relatively diversified, with services provided to over 120 customers across Eastman Business Park, limiting exposure to individual customer demand volatility. While weather-related demand variability remains a feature of the portfolio, operational efficiency initiatives and improved cost discipline have supported margin stability. Management continues to actively market available capacity within the park and pursue new customer opportunities to broaden the demand base. | | **Development:** Challenges attracting new industrial tenants to Eastman Business Park, limiting future growth in customer demand and revenues. | RED-Rochester continues to work closely with landowners and stakeholders within Eastman Business Park to improve the attractiveness of available sites, including making parcels development ready and improving site preparation. Marketing efforts are increasingly targeted towards energy-intensive and infrastructure-compatible users, supported by engagement with external commercial real estate advisers. All potential new tenant opportunities are assessed and probability weighted based on progress and execution risk. | | **Credit:** Default or distress of individual customers, including cessation of operations, leading to reduced revenues or bad debt. | Credit risk is mitigated through diversification across a large and varied customer base. New customers are subject to credit assessment, and ongoing engagement with major tenants enables early identification of financial stress. In addition, the fixed charge element of the tariff structure is joint and several across customers, reducing RED-Rochester's exposure to individual defaults. | | **Counterparty concentration:** Delay or cancellation of large, anticipated growth projects (e.g. Li-Cycle/Glencore), resulting in lower-than-expected EBITDA and delayed capital deployment. | Management has taken action to reduce reliance on any single growth project by broadening the development pipeline and pursuing alternative uses for available capacity. Following Li-Cycle's bankruptcy, engagement with potential replacement users and alternative demand sources is ongoing (including Glencore who acquired Li-Cycle's assets). Any value ascribed to uncertain projects is heavily discounted and will remain so until contractual visibility improves. | | Risk type and description | Mitigation | | --- | --- | | **Regulatory:** Potential adverse impact from the development of the New York Cap-and-Invest programme ('NYCI'), including additional compliance costs. | Rulemaking remains ongoing, with implementation delayed until later in 2026. RED-Rochester continues to engage with regulators and legislators, alongside key stakeholders at Eastman Business Park, to advocate for appropriate sector classification. No assumptions have been made regarding the final structure or cost impact of the programme. | | **Financing:** Refinancing risk and restricted financial flexibility due to covenant constraints, potentially limiting capital deployment and distributions. | The Investment Manager continues to work with advisers and lenders to evaluate refinancing options. Capital deployment is focused on existing approved low risk and efficiency-enhancing investments, with limited distributions pending refinancing. Covenant compliance is monitored closely at both asset and portfolio level. | ![img-21.jpeg](img-21.jpeg) --- 19 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Portfolio: Key Updates continued # Onyx Renewable Partners (“Onyx”) Commercial and industrial solar and storage platform in the USA # Investment Highlights | **Investment type** | Direct equity (100% of operational assets; 100% development platform) | | --- | --- | | **Acquisition date** | February 2021 original; June 2023 purchase of remaining 50% JV interest in development platform | | **Asset location** | Currently operational in over 14 states in the USA | | **No. of portfolios** | 8 | | **Project equity value and as a percentage of SEIT’s GAV^{MM}** | c.$367 million (c.£278 million) SM III, Janus II, CTAZ, Obsidian I and Obsidian II operational portfolios (c.10.6%) GAF, Nova I and Nova II construction/late-stage development portfolios (c.12.9%) Onyx – Development platform (c.3.3%) | | **Project-level debt** | c.$262 million | | **Capacity^{5}** | 209MW operational across all portfolios | | **Technology** | Solar and battery storage | | **Forecast project life remaining** | c.34 years | | **Lifecycle stage** | Development, construction, operational | | **Counterparties/offtakers** | Over 100 across operational and construction sites | | **O&M** | Various | | **Fuel supply** | N/A | 1. Unaudited figures. 2. Reported EBITDA is generated by the fully operational portfolios in Onyx (total of five) and does not include the portfolios still partly under construction (total of three). 3. Projects that have become operational during 2025. 4. Reported MWh is for the fully operational portfolios in Onyx (total of five). 5. Capacity of sites that have reached the commercial operations date (“COD”) across all portfolios as of 31 March 2026. 16,689$^{2}$ EBITDA ($'000) Y/E December 2025$^{1}$ Y/E December 2024$^{1}$: 11,222 145,115 MWh produced$^{4}$ Y/E December 2025$^{1}$ Y/E December 2024$^{1}$: 132,901 103$^{3}$ New projects at COD (MW) Y/E December 2025$^{1}$ Y/E December 2024$^{1}$: 30 92% Performance ratio Y/E December 2025$^{1}$ Y/E December 2024$^{1}$: 92% # Investment Overview Onyx Renewables is a distributed solar and storage platform operating across the United States, delivering clean energy solutions for commercial, industrial and municipal customers. The platform focuses on behind-the-meter and on-site solar installations, supported by long-term power purchase agreements with high-quality counterparties. As one of SEIT’s core US holdings, Onyx plays a key role in generating long-term, contracted cash flows in a market where demand for distributed energy is growing rapidly. The platform represents inherited optionality for an acquirer with the capital to convert the broader existing development pipeline into operational assets over time, with platform revenues accruing in parallel. # Onyx Portfolio Revenues and Cost Model The portfolio of projects consists of operational, construction and development projects and makes up c.84% of the investment’s value. The portfolio of projects has the following revenue structure once it is operational: Power purchase agreements (“PPAs”): c.93% of asset revenues are generated from delivery of electrical power to contracted end users. PPAs have fixed indexation and are typically 20 years in length (the Onyx portfolio PPA duration has a weighted average of c.18 years). Solar renewable energy credits (“SRECs”): c.7% of asset revenues are generated from SRECs that are awarded within state-specific regulatory structures that provide marketable credits for each MWh of renewable energy generated. The valuation assumes that the current construction and development-stage projects within this portfolio will become operational within a defined time frame. --- 20 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Portfolio: Key Updates continued Performance ## Onyx Developer Revenues and Cost Model The Onyx development platform makes up c.16% of the total Onyx value and has the following revenue structure: - asset management fees: c.52% fees charged by Onyx for managing operational portfolios; - EPC development margin: c.33%, achieved on commercial operation date for delivery of certain assets; and - asset sales: c.15%, based on the net proceeds from the future sale of assets developed in the pipeline. ## Business Updates and Accretive Projects Onyx continued to make progress during the year as its portfolio of operational, construction and development assets evolved. The operational portfolio delivered electricity production broadly in line with expectations, with performance ratios reflecting a combination of normalised operating conditions and ongoing management actions to address site-specific issues. The operational assets contributed EBITDA of approximately $16,689 ($'000) during the year, with performance weighted towards portfolios that were fully operational for the majority of calendar year 2025. Across the development portfolio, activity remained robust against a backdrop of US policy and market change. During calendar year 2025, Onyx delivered the following milestones: - 93MW of projects achieving Mechanical Completion ('MC'), representing the highest annual volume to date; - 177MW of installed capacity in operation at year end; - 57MW of projects reaching notice to proceed ('NTP'); and - 50MW of new power purchase agreements ('PPAs') signed. PPA signings were below the initial target for the year, reflecting Onyx's decision to prioritise risk-adjusted returns over contracted volume in response to US administration policy changes that impacted customer decision-making and affected PPA pricing. These milestones underpin visibility on future conversion of the pipeline into operational assets, although the timing of cash flow generation continues to be sensitive to permitting, interconnection and construction sequencing. During the year, management actions were taken to improve delivery pace, operational resilience, data oversight and cost control. Onyx strengthened its internal capability by increasing in-house engineering expertise, reducing design residency times and accelerating project progression through the development and construction phases. The asset management platform was further enhanced to support operational assets, with a focus on performance monitoring and customer service. In parallel, Onyx continued to invest in data and analytics capability, including the use of AI-enabled tools, Power BI and enhanced operational dashboards, to improve decision-making, identify underperformance at an early stage and support cost discipline across the portfolio. ## Capital Structure Onyx's operational portfolios are financed through project-level debt facilities. These facilities are nonrecourse to SEIT and are structured at individual portfolio level, with covenants linked to project cash flows. Additional borrowings are available through Onyx's corporate-level construction credit facilities, which sit outside the project-level financing structures, with aggregate debt outstanding of approximately $262 million at 31 March 2026. The corporate-level credit facility was successfully refinanced with Apterra, with its capacity being upsized to $260 million, in June 2025. This facility includes the Tax Equity Bridge Lending utilised during the year. As the development pipeline continues to convert into construction and operational projects, Onyx has ongoing financing requirements to support development and construction activity. These needs are currently met through a combination of existing corporate-level facilities, equity funding (through reinvestment of operational cash flows) and tax equity structures. As mentioned above, due to policy changes made by the US administration to remove Investment Tax Credits, Onyx is currently progressing work to put in place new contract structures that will adapt to these changing market conditions to allow for suitable project contractual and financial structuring to ensure competitive customer economics as well as shareholder returns. The Investment Manager and Onyx's management team keep debt capacity under constant review. Any incremental debt utilised would be deployed selectively, primarily to bridge construction, smooth capital deployment and optimise returns on assets as they transition into operation. The ability to utilise further debt capacity is important in order to protect value, which is the context behind the proposal in the Shareholder Circular to amend the gearing limits in the investment policy. In parallel, alternative capital structures continue to be evaluated, reflecting the capital-intensive nature of the platform, the Company's current gearing constraints and the evolving policy environment in the US market. ## Outlook Looking ahead, Onyx is expected to continue transitioning projects from development and construction into operation, progressively increasing the proportion of the portfolio generating stable, contracted cash flows. As additional assets reach commercial operation, the contribution to Group-level EBITDA is expected to increase, although the precise timing remains subject to execution, interconnection and permitting outcomes. Given the return profile of pipeline projects and the pipeline's contribution to the overall value of Onyx, development activity is expected to continue against a backdrop of capital requirements, ongoing policy uncertainty, supply chain constraints and heightened scrutiny of project economics. Onyx is adapting its origination and contract structures to reflect these conditions, prioritising returns, counterparty quality and capital efficiency over absolute volume growth. --- 21 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Portfolio: Key Updates continued ![Information icon]() Performance ## Outlook continued Strategic options remain under consideration to manage the capital intensity of the platform while maximising long-term value. These include alternative funding structures, potential partnership arrangements and selective capital recycling, with the objective of balancing growth, resilience and value protection, and realisation for shareholders. ## Investment Risks and Mitigants | Risk type and description | Mitigation | | --- | --- | | **Financing:** Significant capital requirements to fund pipeline development and construction, with limited availability of efficient third-party capital, including as a result of the Company's current gearing limits, potentially constraining growth or returns. | The Investment Manager and Onyx continue to assess a range of capital structure options, including potential co-investment arrangements and selective asset level financing. Capital deployment remains disciplined, with development paced in line with funding availability and market conditions. Alternative funding options are considered alongside equity to manage capital intensity and portfolio risk. Additionally, the proposed changes to the Investment Policy would allow the Board to approve investment that supports and enhances value (to avoid value destruction). | | **Operational:** Near-term delays in the development pipeline achieving expected commercial operations dates ('COD'), reducing revenue and cash flow, particularly where valuations assume timely conversion of projects from development to operation. | Onyx continues to improve on the pace of delivery and reliability of project delivery through their bespoke project management tool. During the year, initiatives introduced include improved origination screening, earlier supply chain engagement, streamlined design processes and enhanced quality management across development and construction. | | **Operational:** Underperformance of operational projects relative to expected output or availability, resulting in reduced cash generation. | Onyx continues to embed a portfolio-wide quality and operational management framework. This includes enhanced construction quality controls, the use of tier one equipment with market standard warranties and standardised operating and maintenance procedures. Preferred contractors and OEM-approved repair processes are used across sites, with performance monitored through improved data and analytics tools. | **Operational:** Supply chain disruption, interconnection delays and cost escalation during development and construction, impacting project economics and delivery timelines. Project pricing incorporates contingencies reflective of Onyx's experience and prevailing market conditions at the time of PPA execution. Onyx continues to standardise components across projects to enable bulk procurement and reduce exposure to individual supplier delays. Design decisions are pushed earlier in the development cycle to support advance ordering of long lead items. Improvements to project management systems have materially reduced average delivery times compared with earlier years. **Regulatory/policy:** Increases in import tariffs on components sourced outside the US, leading to higher capital costs and pressure on project returns. Most projects expected to achieve mechanical completion during 2025 had components and EPC contracts secured prior to tariff implementation, limiting near-term exposure. Onyx continues to monitor tariff developments and adapt procurement strategies accordingly on an ongoing basis. While higher tariffs introduce cost pressure, Onyx's offerings may remain attractive to commercial and industrial customers seeking energy cost mitigation in a higher cost operating environment. **Development/market:** Changes in policy (including the end of ITCs), market conditions or customer behaviour adversely affecting PPA pricing, structure or willingness to contract, reducing pipeline conversion rates. Onyx adjusts its origination and contract structures to reflect prevailing market and policy conditions, prioritising returns and risk allocation over absolute volume. Projects are only progressed where pricing supports acceptable risk-adjusted returns, and no value is attributed to projects without sufficient contractual visibility. In addition, management has actively refined the pipeline to reduce exposure to projects where capital availability and risk-adjusted returns were less certain, including removing community solar and stepping down parts of the C&I pipeline. ![img-22.jpeg](img-22.jpeg) --- 22 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Portfolio: Key Updates continued Performance # Primary Energy Portfolio of on-site energy recycling, cogeneration and process efficiency projects, servicing the largest blast furnace in the United States steel industry ### Investment Highlights | **Investment type** | Direct equity (100% in four projects; 50% in PCI Associates) | | --- | --- | | **Acquisition date** | December 2019 (50%), December 2020 (15%), September 2021 (35%) | | **Asset location** | Indiana, USA | | **No. of projects** | 5 | | **Project equity value and as a percentage of SEIT's GAV^{MM}** | c.$291 million (c.£28 million) Consisting of: Primary – Cokenergy (c.10%) Primary – North Lake (c.5%) Primary – Portside (c.3%) Primary – PCI Associates (c.2%) Primary – Ironside (0%) | | **Project-level debt** | c.$149 million | | **Capacity** | 298MW | | **Technology** | On-site cogeneration, waste heat recovery process efficiency | | **Forecast project life remaining** | c.30 years | | **Lifecycle stage** | Operational | | **Counterparties/offtakers** | Cleveland Cliffs ('CC'), US Steel ('USS') | | **O&M** | Primary Energy, CC, USS | | **Fuel supply** | Waste gases from CC; natural gas supplied via CC and USS | 37,709 EBITDA ($'000) Y/E December 2025$^{1}$ Y/E December 2024$^{1}$: 38,908 174 Average net production (MW) Y/E December 2025$^{1}$ Y/E December 2024$^{1}$: 184 ### Investment Overview Primary Energy has continued to serve as an anchor holding for SEIT, delivering stable financial returns while supporting decarbonisation within a hard to abate industry. Primary Energy provides energy efficiency solutions to two US steel mills through three energy recycling projects, one natural gas-fired CHP and a 50% interest in an industrial process efficiency project. These projects have long-term contracts with the two steel mills, Cleveland Cliffs ('CC') and the United States Steel Corporation ('USS'), providing stable offtake and a diversified suite of heat recovery and power generation solutions. Primary Energy delivers positive financial returns while supporting the decarbonisation of the steel industry. ### Primary Energy Revenues and Cost Model Approximately 75% of Primary Energy's revenues are derived from energy services to CC's Blast Furnace ('BF') #7 at Indiana Harbor Works ('IH'), the largest and most economically competitive furnace facility of its kind in North America. Remaining revenues are largely derived from the Portside Project, which services USS BF #14. ![img-23.jpeg](img-23.jpeg) 1. Unaudited figures. --- 23 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Portfolio: Key Updates continued ## Primary Energy Revenues and Cost Model continued Primary Energy's revenues are split in the following way between the different projects: - Cokenergy (c.53% of revenues): the project receives waste gas and converts it to power and steam to sell to CC's BF #7 through a long-term PPA that is index linked. The revenues are protected from demand fluctuations through a true-up mechanism; - North Lake (c.17% of revenues): the project receives waste gas and converts it into power and steam and sells it back to BF #7 through a long-term PPA, which is index linked. The revenues are protected from demand fluctuations through a true-up mechanism; - PCI (c.7% of revenues): the project is 50% owned with CC; the asset pulverises metallurgical coal injected into IH BF #7 for steel production. Revenues are demand-based; - Portside (c.16% of revenues): the project's revenues are generated through the sale of heat, power and softened water through a long-term PPA with USS. Revenues are capacity-based; - Renewable Energy Certificates ("RECs") (c.5% of revenues): the RECs are generated by Cokenergy and North Lake and are sold in the open market; and - Ironside (c.1% of revenues): the project receives revenues under an interim agreement with CC to provide operational services following the idling of BF#4 in 2022. ## Business Updates and Accretive Projects Primary Energy delivered EBITDA of $37.7 million for the year (2024: $38.9 million), in line with budget and a resilient outcome given customer concentration and the operating environment. Performance varied between individual assets, reflecting differences in operational availability, customer demand and the timing of planned maintenance, with stronger performance on some assets offsetting weaker performance elsewhere. Progress continued on accretive projects during the year, including the Variable Frequency Drive ("VFD") project, commissioning of which is expected in 2026. The project was impacted by import tariffs implemented by the US administration during 2025, resulting in additional capital cost, albeit this could be reversed in the future following a US Supreme Court ruling (no assumptions have been included in the valuation in respect of any such recovery). In parallel, Primary Energy continued to advance other accretive initiatives across the platform. By way of example, an application was submitted at the end of Q3 2025 to increase the volume of eligible Renewable Energy Certificates ("RECs") at Cokenergy, by including energy exported to Cleveland Cliffs in the form of steam. This application is currently awaiting final approval from the Public Utilities Commission of Ohio and is expected to be determined during 2026. During Q3 2025, the PCI contract was successfully renewed for an additional five-year term (with a further two-year optional extension), with a positive outcome achieved securing similar terms. This again demonstrates Primary Energy's strong links with its customers and track record in relation to contract renewals. The business also remains engaged with existing customers on further energy efficiency opportunities. During Q1 2026, Primary Energy commenced an engineering study with a customer on a potential new cogeneration project that would utilise blast furnace gas to generate steam and electricity. While not requiring capital from SEIT, the project continues to progress through the engineering phase and, if executed, would further deepen customer relationships while delivering new contracted cash flows. ## Capital Structure Primary Energy is financed through a combination of a fully drawn term loan and revolving credit facilities at project level, with no recourse to or guarantees from SEIT. These facilities are fully serviced by the operational cash flow profile of the underlying assets. Covenant compliance is monitored regularly, with performance during the year supporting continued availability of a revolving credit facility with available capacity, within existing terms. ## Outlook Looking ahead, the focus for the coming year will be on completing the commissioning of existing approved accretive projects, progressing projects currently under engineering review and continuing to secure additional revenue streams from existing assets. These include zero or low-capex projects such as the increased volume of eligible RECs, subject to the anticipated regulatory approval and the Ohio compliance REC regime being extended during 2026. The platform remains exposed to a concentrated group of large industrial counterparties; however, these customers continue to operate at scale and play a critical role in the US industrial landscape. Industrial demand conditions are expected to remain supportive, underpinned by the essential nature of the services provided. The credit quality of project cash flows was improved during the year when Nippon Steel successfully acquired US Steel and committed substantial follow-on investment over the coming years. Over the medium term, Primary Energy is expected to continue supporting stable, contracted cash flows within the portfolio. Long-term contracts, high asset criticality and an ongoing programme of energy efficiency enhancements provide a strong foundation for resilience and value preservation. --- 24 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Portfolio: Key Updates continued ### Investment Risks and Mitigants | Risk type and description | Mitigation | Risk type and description | Mitigation | | --- | --- | --- | --- | | **Operational:** Forecasts assume successful recontracting of existing customer contracts, with a risk that renewal terms are achieved below forecast levels or on altered commercial structures. | Primary Energy assets provide critical energy services to two of the most significant and profitable blast furnace operations in North America, delivering material cost savings and emissions benefits. Given the incumbent nature of the assets and their integration into customer operations, alternative energy solutions are unlikely to replicate the same economic and operational advantages. The successful renegotiation of the Cokenergy contract in 2024 and the PCI contract in 2025 provide relevant reference points. The North Lake contract is scheduled for renewal in 2027, with early engagement with the customer having commenced. | **Development:** Delays or cost overruns on energy efficiency upgrades or new cogeneration projects could defer expected returns or reduce project economics. | Projects are progressed on a phased basis, with engineering studies and regulatory approvals required before capital commitment. The VFD project, while delayed due to weather and tariff impacts, remains expected to complete commissioning in mid-2026, with potential recovery of a portion of incremental costs subject to tariff appeals. Development projects are only advanced where commercial terms are supported by customer engagement and technical validation. | | **Credit:** Exposure to subinvestment grade counterparties may result in delayed payments, contract disruption or default. | During 2025, US Steel improved to investment grade credit status, following its acquisition by Nippon Steel. Cleveland Cliffs is currently rated below investment grade; however, the blast furnaces supported by Primary Energy are among the most strategically important and economically viable facilities in the US steel market. These assets are central to domestic steel production, and in the event of financial distress at a corporate level, continued operation or transfer to alternative owners is considered likely. Contract structures and ongoing engagement support early identification of potential stress. | **Regulatory:** Delays or adverse outcomes in regulatory approvals could affect REC revenues. | An application to expand eligible RECs at Cokenergy was submitted in Q3 2025 and remains under review by the Public Utilities Commission of Ohio. Engagement with regulators continues, and no value has been ascribed to the outcome until formal approval is received. If approved, increased REC eligibility could enhance revenues from existing operations without requiring incremental capital investment. However, there is also the possibility that the Ohio REC system is not extended past 2026. To prepare for that possibility, the management team are looking to identify alternative markets in which the existing and any additional RECs could be monetised. | | **Technology/transition:** Advances in alternative low carbon steelmaking technologies may reduce demand for pulverised coal injection ('PCI'), potentially affecting revenues over time. | The Investment Manager and Primary Energy continue to work closely with customers to assess the role of best available technologies across each site. Where appropriate, assets are capable of being adapted to incorporate alternative fuels, efficiency upgrades or revised operating configurations. Any transition is expected to be evolutionary rather than abrupt, allowing time for adaptation and capital planning, further demonstrated by the contract renewal of PCI during 2025. | **Concentration:** Concentration of revenues from a small number of industrial counterparties exposes the platform to idiosyncratic operational or strategic decisions by those customers. | While customer concentration is inherent to the business model, the assets serve long life, capital intensive industrial processes where continuity of energy supply is critical. Long-term contracts, high switching costs and deep operational integration mitigate concentration risk. Engagement is focused on maintaining long-term alignment with customer investment and decarbonisation strategies. | --- 25 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Portfolio: Key Updates continued Performance # Oliva Spanish Cogeneration (“Oliva”) Portfolio of on-site waste recycling, on-site generation and process efficiency projects supporting the olive oil industry in Spain ### Investment Highlights | **Investment type** | Direct equity (100% owned, apart from Celvi which is 90% owned with 10% owned by the offtaker) | | --- | --- | | **Acquisition date** | November 2019 | | **Asset location** | Andalucía, Spain | | **No. of projects** | 9 | | **Project equity value and as a percentage of SEIT’s GAV^{MM}** | c.€89 million (c.€78 million) Consisting of: Oliva – Celinares (c.1% of GAV^{MM}) Oliva – Colinares (c.1%) Oliva – Cepuente (c.1%) Oliva – Cepalo (c.<1%) Oliva – Sedebisa (c.1%) Oliva – Bipuge (c.1%) Oliva – La Roda (c.1%) Oliva – Celvi (c.<1%) Oliva – Biolinares (c.<1%) | | **Project-level debt** | €nil | | **Capacity** | 125MW | | **Technology** | On-site cogeneration, biomass, oil extraction | | **Forecast project life remaining** | Various, up to c.17 years | | **Lifecycle stage** | Operational | | **Counterparties/offtakers** | Olive oil co-operatives, San Miguel Arcángel, Acesur, Spanish Government | | **O&M** | Sacyr | | **Fuel supply** | Natural gas, biomass, waste olive cake | 9,535 EBITDA (€'000) Y/E December 2025 Y/E December 2024: 13,800 1,198,496 MWh produced² Y/E December 2025 Y/E December 2024: 1,176,664 ### Investment Overview Based in Spain, Oliva is a portfolio of five operational sites, including five natural gas combined heat and power (“CHP”) plants and two biomass plants that convert olive production waste into electricity and heat, as well as two olive oil plants that produce Orujo olive oil and stones. It is strategically co-located within a major olive-growing region and sells power to the grid, alongside diversified revenue streams from olive-based products. Oliva’s exposure to European and global commodity pricing for gas, electricity and olive oil requires agile and proactive management, which is delivered through the specialised in-house management team. ### Oliva Revenues and Cost Model Oliva’s revenues are split as follows: - Régimen Retributivo Específico (“RoRi”): c.43% of revenues on average. The RoRi is a regulatory payment from the government paid to CHP and biomass assets and adjusted to account for changes in revenues received by the assets, namely sale of electricity, and operating costs, namely natural gas and EU Allowance emission certificates for the cogeneration. This results in more stabilised cash flows and EBITDA over the long term. The assets receive the RoRi for the remainder of their asset lives, ranging from 2029 to 2035. - Electricity sales: on average c.38% of revenue comes from electricity sales produced by the biomass and CHP plants, which is predominantly sold to the grid, as the heat is used on site. While the revenues are linked to market pricing, this is effectively hedged through the RoRi and the management team’s hedging policy. - Oil sales: c.14% of revenues on average come from the product of the pomace processing, namely the production of Orujo oil, which Oliva sells through short-term contracts in the market. The price of the oil is inherently linked to the cost of the olive biomass, providing a partial hedge against this fuel supply cost. 1. Unaudited figures. 2. MWh produced includes both electrical and thermal MWhs. --- 26 SEIT Annual Report 2025 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Portfolio: Key Updates continued ![Information icon]() Performance ## Business Updates and Accretive Projects Oliva delivered EBITDA of €9.5 million for the year (2024: €13.8 million). The year-on-year reduction was somewhat greater than budgeted and reflects the interaction of commodity price movements, hedging outcomes and the timing of regulatory adjustments under the RoRi framework. The RoRi mechanism continues to dampen long-run exposure to commodity price volatility, although in any given period the timing of the RoRi adjustment relative to commodity moves can produce material year-on-year fluctuations in reported EBITDA. During the year, management continued to take active steps to manage energy market volatility across the portfolio. Hedging strategies were used selectively to mitigate exposure to input costs, while operational flexibility was maintained through active management of plant operating schedules, including strategic stoppages where market conditions were unfavourable. In addition, Oliva entered the ancillary services markets in 2025, enabling the portfolio to generate revenue during periods of strategic stoppage by providing capacity to the grid, which improved overall resilience of cash flows. Alongside day-to-day operational management, a number of accretive initiatives were assessed during the year. A number of early-stage diversification options are under review, including potential battery energy storage solutions ('BESS'), further optimisation of olive oil-related activities, alternative use cases for the existing thermal infrastructure and biogas generation. These initiatives remain evaluative in nature, with no assumptions made regarding execution or value contribution. ## Capital Structure The Oliva portfolio is ungeared at project level, with no external debt in place – a feature that provides material flexibility in setting an appropriate capital structure for the asset, in the future. ## Outlook In the near term, priorities for Oliva will focus on continued operational discipline, effective management of commodity price exposure and maintaining compliance with the evolving regulatory environment. The team will also continue to optimise participation in energy markets where this supports more stable cash generation without increasing risk. Looking further ahead, Oliva continues to review its long-term positioning as subsidy schemes mature. A structured strategic review is underway to assess options for the portfolio beyond the current regulatory period, including evaluation of asset life, diversification opportunities and alternative operating configurations, which identify a range of strategic options for the asset beyond the current subsidy period. The valuation does not ascribe value to these options at this stage. Revised regulatory clarity has improved visibility over cash flows and reduced uncertainty relative to prior years. While exposure to commodity markets remains a feature of the portfolio, the interaction between regulatory mechanisms, market participation and active management continues to provide cash flows with long-term potential. ![img-24.jpeg](img-24.jpeg) --- 27 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Portfolio: Key Updates continued Performance ## Investment Risks and Mitigants | Risk type and description | Mitigation | | --- | --- | | **Regulatory:** Increases and volatility in the cost of EU Emissions Trading System ('ETS') certificates and possible reductions in the number of free allowances could impact operating costs and near-term cash flows. | While EU ETS prices have shown volatility in recent years, the majority of ETS costs are reimbursed over the medium term through the RoRi mechanism, which has benefited from structural improvements during the year. Exposure to short-term gas price movements is further managed through Oliva's hedging policy, which is designed to reduce volatility rather than optimise absolute pricing outcomes. | | **Regulatory:** Delays in the calculation or payment of RoRi reimbursements by the Spanish Government may result in short-term cash flow pressure and uncertainty. | Material updates to the RoRi framework during prior years have included more frequent updates and closer alignment with energy market pricing. While payment timing risk has not been fully eliminated, there is improved regulatory clarity than in the past, reducing uncertainty and supporting more stable cash flow expectations. | | **Regulatory:** Potential new regulations on olive oil specifications could affect processing requirements, product marketability and demand. | Management remains actively engaged with industry associations and peers to inform the development of proposed specifications. Initial requirements are now in force, which Oliva is currently capable of complying with. In parallel, the business continues to review alternative uses and markets for olive oil products to preserve optionality should regulatory requirements evolve, with stringent limits likely in the future. | | **Climate:** Extreme weather conditions, particularly drought in Andalucía, may reduce olive harvesting volumes, impacting biomass feedstock supply and the operations of offtakers. | The Oliva management team continues to retain in-house procurement expertise, strengthening relationships across the local supply chain. This enables more active sourcing, improved procurement planning and greater flexibility in response to short-term supply constraints. While climate variability remains a structural risk, active management helps mitigate near-term impacts. | | **Operational:** Volatility in commodity and energy markets may affect revenues and margins, particularly during periods of operational curtailment. | Operational flexibility, including strategic stoppages and participation in ancillary service markets (introduced during 2025), allows Oliva to generate revenue during periods when base dispatch is uneconomic. Hedging and active operating decisions support an element of margin stability, while regulatory mechanisms continue to buffer full exposure to market volatility. | | Risk type and description | Mitigation | | --- | --- | | **Health and safety:** Inadequate health and safety practices could lead to incidents, regulatory breaches or operational disruption. | The Investment Manager and the Oliva management team have increased monitoring, review and audit activity focused on the O&M contractor. Enhanced oversight ensures compliance with contractual, regulatory and best practice standards, with continuous improvement reviewed at senior management level. | ![img-25.jpeg](img-25.jpeg) --- 28 SEIT Annual Report 2025 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Portfolio: Key Updates continued Performance # Driva Green gas distribution and supply for the city of Stockholm ### Investment Highlights | Investment type | Direct equity | | --- | --- | | Acquisition date | October 2020 | | Asset location | Stockholm, Sweden | | No. of projects | 1 | | Project equity value and as a percentage of SEIT's GAV^{MM} | c.SEK 1,120 million (c.£89 million) (c.8%) | | Project-level debt | c.SEK 682 million | | Capacity | Distributing approximately 220GWh/year of gas | | Technology | Green gas distribution | | Forecast project life remaining | c.19 years and terminal value | | Lifecycle stage | Operational | | Counterparties/offtakers | Various, including c.47,000 residential customers and c.750 commercial and industrial customers | | O&M | Driva | | Fuel supply | Biokraft, Gasum, Others | 83.7 EBITDA (SEK million) Y/E December 2025 Y/E December 2024: 73.3 88% % of green gas Y/E December 2025 Y/E December 2024: 92% ### Investment Overview Driva operates Stockholm's biogas distribution network – an urban grid powered predominantly by biogas. Serving c.50,000 residential and commercial customers, it plays a critical role in the city's low-carbon energy mix. The biogas supplied through the network is sourced from municipal waste streams generated from around the city, creating a model for local circular economy infrastructure, as well as other biogas sourced around Sweden and Europe. Driva's customer base includes residential users connected to the city's biogas grid, as well as commercial clients in sectors such as food & beverage and industrial that use biogas for heating and process energy. ### Driva Revenues and Cost Model The investment's revenues consist of: - fixed tariff (c.53% of revenues): annual fixed fee to the regulated grid from end users, which is not related to consumption and is generally reviewed annually; and - variable fee (c.47% of revenues): fees paid for the supply of gas which are related to consumption. Tariffs and prices are generally reviewed annually, or more frequently if required, and are predominantly based on gas costs and a margin. ![img-26.jpeg](img-26.jpeg) 1. Unaudited figures. --- 25 SEIT Annual Report 2025 | SEICL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Portfolio: Key Updates continued Performance ## Business Updates and Accretive Projects Driva delivered strong operational performance during the year, with EBITDA ahead of the prior year, reflecting predictable demand across the core gas distribution network and continued operational discipline. Performance benefited from improved cost control and a supportive regulatory environment, alongside early contributions from new service lines developed as part of the company's strategic repositioning. The proportion of green gas in the network was 88% in 2025 (2024: 92%), reflecting movements in supply mix during the year, while the overall network remained powered predominantly by biogas. During the year, Driva continued to evolve beyond its traditional role as a gas distribution business, expanding into a broader Energy-as-a-Service ('EaaS') offering. These initiatives are designed to diversify revenues, deepen customer relationships and position the platform for long-term relevance in a decarbonising urban energy system. During calendar year 2025, the following EaaS projects reached operation: - the successful launch of a Biogas-as-a-Service ('BaaS') project at Arvid Nordqvist in the first half of 2025, enabling biogas to be used in the roasting of coffee beans; - ten Charger-as-a-Service ('CaaS') sites reaching operation, of which eight were associated with bus depots; - one new Solar-as-a-Service ('SaaS') project achieving operations early in the year; and - 14 Heating-as-a-Service ('HaaS') projects becoming operational during the year. Alongside the delivery of new service lines, investment continued in the core network and supporting infrastructure. The Södertörn pipeline project was completed in early Q1 2026, comprising the construction of new grid infrastructure and commissioning of existing pipelines between Gladökvarn, Skogås and Sköndal. This investment extends the distribution network, connects a new large customer and supports the development of new demand for biogas in the area. Operational efficiency initiatives also progressed during the year. The Driva team continues to actively manage and reduce gas leakage through enhanced monitoring and targeted management of grid pressures across the distribution network, supporting both environmental performance and operating efficiency. The Driva team also continues to implement a robust hedging policy and identify long-term supply contracts in order to protect its customers and the company from any volatility in the energy market. ## Capital Structure Driva is financed through project-level debt facilities (with no recourse to or guarantees from the Company), structured to reflect the regulated nature of the core distribution business and its predictable cash flow profile. Covenants are monitored closely with forecasts confirming expected future covenant compliance. ## Outlook In the near term, Driva's focus will be on continuing to scale new service lines while maintaining the stability and reliability of the core distribution network. Management attention remains on operational performance, effective capital investment and delivery of recently commissioned EaaS projects. Demand is expected to remain resilient, supported by the essential nature of the distribution network and continued interest in low-carbon energy solutions. The management of customer churn, particularly within the traditional gas customer base, remains an area of focus, alongside active engagement with regulators as the policy framework continues to evolve. Over the medium term, Driva is expected to strengthen its position as a diversified, low-carbon urban energy infrastructure platform, combining regulated network revenues with a growing portfolio of service-based offerings. This diversification is intended to support resilient, long-term cash flows while aligning the business with Sweden's broader energy transition objectives. ![img-27.jpeg](img-27.jpeg) --- 20 SEIT Annual Report 2025 | SEICL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Portfolio: Key Updates continued ![Information icon]() Performance ### Investment Risks and Mitigants | Risk type and description | Mitigation | | --- | --- | | **Operational:** Higher than expected customer churn, resulting in a reduction in connected customers and lower revenues. | Management continues to implement a focused customer retention strategy aimed at improving customer experience and service reliability. While churn reduced during the year, it remains an inherent risk given the maturity of certain customer segments. Development of Energy as a Service ('EaaS') offerings, including charging, heating and biogas solutions, supports diversification of revenues and reduces reliance on the traditional customer base, helping to mitigate both the drivers and impact of churn. | | **Operational:** Lower than expected revenues from transport and restaurant customer segments. | As the electrification of Stockholm's bus network progresses, management continues to adapt the offering by expanding into adjacent transport products, including Charging as a Service and biogas supply for marine transport. In the restaurant segment, sales capability and product offerings continue to evolve to broaden the addressable market and support customer acquisition and retention. | | **Regulatory:** Periodic regulatory updates may result in revenues being lower than expected. | This remains a cyclical feature of the regulated framework which follows a three-year review process. Driva actively engages with regulators, both directly and through industry co-ordination with other transmission system operators ('TSOs'). | | **Commodity:** Volatility in biogas procurement costs may increase operating costs. | Driva continues to implement a hedging strategy designed to reduce exposure to short-term energy market volatility. Identifying and executing medium to long-term supply contracts also supports a stable gas cost basis. Customer contract structures and pricing mechanisms enable cost movements to be passed through to customers over time, limiting margin exposure while maintaining competitiveness. | | **Regulatory/ESG:** New EU regulations on methane emissions may impose additional compliance obligations or costs. | Driva currently operates within applicable regulations and has established monitoring and operational controls across the network. Nonetheless, Driva continues proactive steps to develop decarbonisation plans, including ongoing investment in leakage monitoring and pressure management. | ![img-28.jpeg](img-28.jpeg) --- 31 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Financial Review and Valuation Update Performance ## Key Information as at 31 March 2026 £87m¹ Loss before tax (March 2025: Profit before tax £70m) (8.1)p EPS (March 2025: 6.4p) £84m Investment cash inflow (March 2025: £97m) £1,078m Portfolio value (March 2025: £1,197m) ## Financial Performance For the year to 31 March 2026, the Company is reporting a loss before tax of £87 million (March 2025: profit before tax of £70 million). The year-on-year impact was specifically due to unrealised valuation losses in the year to 31 March 2026 of £119 million, reflecting the net impact of unwinding the prevailing discount rate applied to the portfolio and specific downward adjustment at portfolio and asset level. This (unrealised) valuation movement primarily reflected a reassessment of forward-looking assumptions in those parts of the portfolio whose value depends on future construction, development and growth. These are activities that, under the Company's existing investment policy and capital availability, the Company is increasingly unlikely to fund itself. These assumptions changes do not reflect deterioration in the overall underlying operational performance of the portfolio, which remained resilient during the year. ## Portfolio Cash Generation to Cover Dividends The cash inflow from the portfolio was £84 million, a decrease of c.13% from the comparative period (March 2025: £97 million) due to reinvestment of cash generated and debt restrictions in some of the underlying investments. After allowing for Company-level costs of £31 million (March 2025: £28 million), this enabled the Company to cover three cash dividends of £52 million paid in the year by 1.0x (March 2025: four paid, £68 million). Investment cash inflow consists of cash receipts by SEIT from underlying long-term contracts at project level and includes both regular receipts of dividends, interest and capital receipts. Capital receipts came from Onyx in the year where the acceleration of investment returns to SEIT is due to the nature of the C&I solar projects' financing structure. Tax equity is received at mechanical completion and repays the construction funding. These contributions from Onyx are therefore directly linked to continued investment and reinvestment. Due to the Company's considerable capital constraints during the latter half of the year, distributions from Onyx have been meaningfully reduced. Once operational, the Onyx assets will deliver long-term stable cash flows. ## Dividend cash cover¹⁹ᵐ twelve-month period to March 2026 ![img-29.jpeg](img-29.jpeg) 2. Excludes disposal proceeds, refinancing receipts and operational cash generated at Onyx and Zood which has been retained at asset levels. Includes return of capital (£40 million) from Onyx. 1. Includes unrealised losses from valuation of £119 million --- 32 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Financial Review and Valuation Update continued Performance ## Analysis of Movement in NAV As of 31 March 2026, the NAV per share™ is 77.8 pence. The Investment Manager assesses the impact of the following components on valuations since 31 March 2025: - loss per share in the year was (8.1) pence, which was made up of Portfolio Valuation™ movements of: (5.7) pence (consisting of 0.3 pence of macro changes and (6.0) pence of portfolio movements), net FX increase of 0.3 pence and Company expenses of (2.7) pence; and - dividends paid during the year were 4.8 pence. ![img-30.jpeg](img-30.jpeg) --- 33 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Financial Review and Valuation Update continued ## Portfolio Basis NAV ![img-31.jpeg](img-31.jpeg) ## March 2026: Portfolio Valuation ### Approach The Investment Manager is responsible for carrying out the fair market valuation of SEIT's portfolio of investments (the 'Portfolio Valuation'™), which is presented to the Directors for their consideration and approval. Portfolio Valuation™ are carried out on a six-monthly basis, at 31 March and 30 September each year. The Portfolio Valuation™ is the key component in determining the Company's NAV™. NAV is not always a reliable reflection of net realisable proceeds under a wind-down scenario. The Company has a single investment in a directly and wholly owned holding company, SEIT Holdco. It recognises this investment at fair value. To derive the fair value of SEIT Holdco, the Company determines the fair value of investments held directly or indirectly by Holdco (the 'Portfolio Valuation'™) and adjusts for any other assets and liabilities. The valuation methodology applied by Holdco to determine the fair value of its investments is materially unchanged from the Company's IPO and has been applied consistently in each subsequent valuation. See Note 4 for further details on the valuation methodology and approach. A reconciliation between the Portfolio Valuation™ at 31 March 2026 and investment at fair value shown in the financial statements is given in Note 11. For the Portfolio Valuation™ at 31 March 2026, the Directors commissioned a third-party valuation expert to provide an assessment of the appropriate discount rate range for the largest investment exposures representing approximately 75% of the Portfolio Valuation™ at 31 March 2026) in order to support the valuation prepared by the Investment Manager. The discount rates used for the valuations of predominantly all the investments prepared by the Investment Manager was within the ranges advised by the third-party valuation expert. ### Movements in Portfolio Valuation The Portfolio Valuation™ as at 31 March 2026 is £1,078 million, compared with £1,197 million as at 31 March 2025. After allowing for investments made of £54 million and cash receipts from investments of £101 million and disposals of £6 million, the Rebased Portfolio Valuation™ is £1,144 million. Adjusting for changes in macroeconomic assumptions (£3 million), foreign exchange movements (£(8) million, excluding the effect of hedging) this resulted in a portfolio movement of £61 million. Further information on key investments and potential future valuation movements can be found in Note 3. --- 34 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Financial Review and Valuation Update continued ## Valuation Movements A breakdown of the movement in the Portfolio Valuation$^{1}$ in the year is illustrated in the following chart and set out in the table below. ![img-32.jpeg](img-32.jpeg) 1. This includes cash received from refinancing proceeds at 2008$^{1}$ --- 35 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Financial Review and Valuation Update continued Performance ## i Changes in macroeconomic assumptions – impact of £3 million: – Inflation assumptions: - consistent with previous years. The approach to all geographies is to apply three-year near-term bridge to the relevant long-term inflation assumption; - 2026 expectations are marginally increased in both the US and UK, based on latest inflation curves; and - long-term inflation assumptions remain the same as applied to the March 2025 valuation. – Tax rate assumptions: - no changes to corporation tax rate assumptions during the period; and - the Company benefits from meeting certain withholding tax relief criteria for distributions from US assets due to its status as a listed company. The Company also benefits from group relief in the UK that allows offsetting of intra-group tax gains and losses. ## ii Changes in foreign exchange rates – impact of £(8) million (before hedging): - Investment portfolio decreased by c£8 million during the year from movements in foreign exchange rates, driven by the movement of GBP against the US dollar, euro, Singapore dollar and Swedish krona since 31 March 2025 or since new investments were made in the year. - This reflects only the movement in underlying investment values and does not account for the offsetting effect of foreign exchange hedging that SEIT Holdco applies outside of the Portfolio Valuation$^{MM}$. - SEIT Holdco experienced an aggregate gain of £12 million due to foreign exchange hedging. - Overall foreign exchange movements did not have a significant impact on NAV$^{MM}$ during the year, resulting in a net gain of c£4 million from foreign exchange movement, staying within expected outcomes of the existing hedging strategy. ## iii Portfolio movements – impact of (£61) million: - Portfolio weighted average discount rate ('WADR') of 9.5% levered (March 2025: 9.6%). - The WADR is considered a reasonable proxy for the return that could be generated by the portfolio over time, all other factors remaining equal. – This refers to the balance of valuation movements in the period, excluding (i) to (ii) above, which provided a net downwards movement of £67 million. The portfolio movements reflect in aggregate: - the net present value of the cash flows unwinding over the year at the average prevailing portfolio discount rate; and - the Portfolio Valuation$^{MM}$ as at 31 March 2026, and by implication the return achieved over the period, includes a number of key estimates and judgements of future cash flows expected from different investments. In addition, specific adjustments to future cash flows were required for events during the period that affected the actual outcome from certain investments. - The key factors that have had a material impact on the 31 March 2026 Portfolio Valuation$^{MM}$ are listed below; these have had a value impact of 1% or higher on the Company's NAV$^{MM}$. Additional information and sensitivities are disclosed in the critical estimates and judgements section of Note 3. ## Oliva Spanish Cogeneration - Regulatory (Ro) update / EU ETS II: The start of EU ETS II and the first early 2026 Ro updates for the year implied materially lower CO$_{2}$ compensation than previously assumed. The assumption was applied over the remaining regulatory life of the affected assets with no mitigation assumed, which resulted in a negative impact of c.£25 million. ## Onyx - To reflect increased pressure in recent months on the willingness of the market to ascribe value to future pipeline, material adjustments were made to forward-looking development and construction outcomes, particularly: - to reflect capital constraints and post-2027 tax credit profile, the community solar pipeline was removed entirely (previously assuming 425MW of deployment between 2027 and 2031), resulting in a negative impact on valuation of c.£30 million; and - reduced C&I deployment assumptions: The C&I pipeline was stepped down over the medium term due to capital constraints (and recognising that a tail of sites may be uneconomic without tax credits), resulting in a negative impact on valuation of c.£15 million. --- 36 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Financial Review and Valuation Update continued Performance ## iii Portfolio movements – impact of (£61) million: continued RED-Rochester – Glencore load forecast re-assessment or alternative utilisation of available capacity: - the prior valuation assumed a 100% probability of the Glencore (previously owned by Li-Cycle) facility coming online – over time and on a ramp-up basis (offset by a discount rate risk premium applied to indicate higher risk of achieving cash flow levels targeted). Given delayed progress in the last six months to complete the Glencore facility and link it up with the RED-Rochester supply, the valuation approach taken was to significantly reduce the probability of future cash flows, offset by removing the discount rate risk premium, resulting in a net negative impact of c.£35 million; and - timing delays to full loads and infrastructure revenues: The ramp-up to full loads was deferred by six months to mid-2028 (previously assumed to resume when construction restarts), creating a further c.£8 million negative impact. – Business development pipeline updates: In early 2026, a new client, Reju, signed a land agreement with Kodak. Based on expected loads from the new client, adjusted for anticipated commencement and applying a significant haircut to the probability of achieving full revenues, the net positive impact on the Portfolio Valuation$^{a}$ as at 31 March 2026 is c.£17 million. ### Primary Energy – RECs: Primary's ability to continue selling compliance Renewable Energy Certificates ('RECs') depends on legislation being extended by the end of 2026; otherwise it would revert to lower-priced voluntary RECs. The valuation retains a significant discount rate risk premium but the assumed forecast REC pricing beyond 2026 has been heavily reduced to reflect legislation renewal risk is higher than at the previous valuation date, leaving residual exposure to where voluntary REC prices settle. Overall, the negative valuation impact is c.£20 million. ### Weighted average discount rate at 31 March 2026 (compared to 31 March 2025) | Levered/unlevered | UK | US | Europe/Asia | Combined | | --- | --- | --- | --- | --- | | **Levered** | | | | | | 2026 | 9.6% | 9.6% | 8.8% | 9.5% | | 2025 | 9.1% | 9.9% | 8.8% | 9.6% | | **Unlevered** | | | | | | 2026 | 9.4% | 8.6% | 7.7% | 8.5% | | 2025 | 9.1% | 8.7% | 7.8% | 8.5% | ### Breakdown of discount rate (unlevered) at 31 March 2026 (compared to 31 March 2025) | | UK | US | Europe | Combined | | --- | --- | --- | --- | --- | | **Weighted average risk-free rate** | | | | | | 2026 | 5.3% | 4.6% | 3.3% | 4.4% | | 2025 | 5.0% | 4.4% | 3.2% | 4.2% | | **Risk premium** | | | | | | 2026 | 4.1% | 4.0% | 4.4% | 4.1% | | 2025 | 4.1% | 4.2% | 4.7% | 4.3% | | **Weighted average discount rate (unlevered)** | | | | | | 2026 | 9.4% | 8.6% | 7.7% | 8.5% | | 2025 | 9.1% | 8.7% | 7.8% | 8.5% | The weighted average discount rate on a unlevered basis as at 31 March 2026 was 8.5%. The year-on-year movement reflects an increase in overall discount rates which has been offset by a material equal reduction due to portfolio weighting changes where less value is ascribed to investments with higher discount rates, as well as reflecting valuation movement in cashflow assumptions. The levered discount rate year-on-year is also a function of portfolio weighting changes and a reduction in assumed required leverage in future years. The post year end disposal has not had a material impact on weighted average discount rates. ### Short-Term Debt The Company, via Holdco, has a £240 million RCF in place until March 2028. The Company intends for this to be short-term finance, repayable through surplus distributions from the portfolio, and investment disposals. As at 31 March 2026, the RCF balance was £233 million and at the date of this report, has been reduced to c.£190 million using disposal proceeds received in April 2026. Repayment of the RCF is a priority for disposal proceeds. --- 37 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Financial Review and Valuation Update continued ### Consolidated Gearing $^{APM}$ Position | | Debt at 31 March 26 (GBP) | Debt as a % of EV^{1} | Debt as a % of NAV^{APM} | | --- | --- | --- | --- | | Primary Energy (USA) | 113m | 7.3% | | | RED-Rochester (USA) | 74m | 4.8% | | | Onyx (USA) | 199m | 12.9% | | | Driva (formerly Värtan Gas) (Sweden) | 54m | 3.5% | | | Capshare (Portugal) | 11m | 0.7% | | | Zood (UK) | 18m | 1.1% | | | Structural gearing | 469m | 30.3% | 55.5% | | Revolving Credit Facility | 233m | 15.1% | 27.6% | | Aggregate gearing | 702m | 45.4% | 83.1% | Since 31 March 2026, overall gearing$^{APM}$ levels have decreased by c.£70 million to c.75% of NAV following the asset disposals completed in April 2026 and further project level debt amortisation. 1. Enterprise Value consists of c.£0.8 billion of NAV and c.£0.7 billion of debt. ### Ongoing Charges $^{APM}$ The portfolio's ongoing charges ratio$^{APM}$, in accordance with AIC guidance, is 1.05% (March 2025: 1.16%). Overall operating costs have remained in line with 2025 other than a reduction in management fees; the increase is reflective of the reduction in average published NAV. The ongoing charges percentage has been calculated on a Portfolio basis to take into consideration the expenses of the Company and Holdco. | | March 2026 | March 2025 | | --- | --- | --- | | Expenses – Management fees | £7.6 million | £8.7 million | | Expenses – Other | £2.6 million | £2.7 million | | Average NAV | £967.2 million | £983.0 million | | Ongoing charges % | 1.05% | 1.16% | --- 38 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Portfolio Diversification Performance The information presented below summarises the portfolio of the Company across different metrics, using the Company's gross asset value$^{APM}$ as at 31 March 2026 (and using 31 March 2025 for comparison). ## Portfolio by... ### Geography | as at March 2026 | 2025 ![img-33.jpeg](img-33.jpeg) ### Technology | as at March 2026 | 2025 ![img-34.jpeg](img-34.jpeg) ### Portfolio projects | as at March 2026 | 2025 ![img-35.jpeg](img-35.jpeg) ### Investment stage | as at March 2026 | 2025 ![img-36.jpeg](img-36.jpeg) --- 39 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Environmental, Social and Governance ("ESG") Update | Environmental, Social and Governance ("ESG") Update | 39 | | --- | --- | | ESG Committee Chair's Introduction | 40 | | SEIT Sustainability Framework | 42 | | SEIT's ESG Management Process | 49 | | SEIT 2026 Climate Change Report | 50 | | Risk Management Framework | 56 | 872,838 tCO₂e Scope 4 Emissions Avoided¹,²,⁵ in Y/E 2025 1,000,791 tCO₂e in Y/E 2024 351,205MWh Energy Saved³,⁴ in Y/E 2025 364,495MWh in Y/E 2024 1. Scope 4 emissions refer to the reduction in GHG emissions achieved by a project compared to a relevant counterfactual as to how the customer would receive the energy service, in the absence of said project. 2. Based on an analysis of 100% of the portfolio by value as at 31 March 2026. 3. Based on an analysis of 100% of the portfolio by value as at 31 March 2026. 4. Energy savings refer to the electrical and thermal energy not consumed at the point of use due to a SEIT investment. 5. The decline in avoided emissions (Scope 4) and energy savings relative to 2024 reflects the continued reduction in grid carbon intensities across the jurisdictions in which the portfolio is invested - lowering the counterfactual against, which savings are measured - together with portfolio exits during the period and changes in asset-level operations. Onyx --- 40 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Environmental, Social and Governance (“ESG”) Update ![Information icon]() Performance ![img-37.jpeg](img-37.jpeg) **“These dynamics have reinforced the importance of resilient, locally generated, and efficiently used energy, strengthening the commercial case for energy efficiency and decentralised generation.”** **Helen Clarkson OBE** Chair of the ESG Committee ## ESG Committee Chair’s Introduction Over the year ended 31 March 2026, the Company maintained its focus on energy efficiency and decentralised energy generation, continuing to engage with its existing portfolio to identify and implement measures that support its sustainability profile and long-term resilience. Since our last update, the sustainability-related regulatory landscape has fragmented further across our core jurisdictions, while demand for secure, reliable, efficiently used energy has continued to grow, further reinforcing the relevance of SEIT’s portfolio companies. In that context, reducing wasted energy is not simply a sustainability ambition; it is also a financial and strategic imperative. The Board’s post year-end announcement of a proposed wind-down has implications for the Company’s future strategic direction, including the context in which sustainability is considered. That said, the focus of this ESG update is the financial year to 31 March 2026. From a sustainability perspective, the past year has been defined by volatility in the broader market across two fronts: geopolitical and economic pressures driving higher demand for energy, and an increasingly inconsistent regulatory and voluntary framework environment. In energy markets, prices and inflationary pressures have remained elevated across the jurisdictions in which SEIT is invested. Ongoing geopolitical conflict, first in Ukraine and now in the Middle East, has kept energy security at the top of policy and corporate agendas, while the rapid scaling of artificial intelligence has emerged as a new source of energy demand. Together, these dynamics have reinforced the importance of resilient, locally generated, and efficiently used energy, strengthening the commercial case for energy efficiency and decentralised generation. The sustainability frameworks that shape how investors and corporates report and act have evolved in parallel — and in places, less consistently. Across both mandatory regulation and voluntary commitments, the dynamics flagged in last year’s update have intensified, with the picture growing more uneven across SEIT’s core jurisdictions: --- 41 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Environmental, Social and Governance (“ESG”) Update continued Performance - United States: federal climate regulation has continued its retreat since the last ESG Update. The One Big Beautiful Bill Act (“OBBBA”), signed in July 2025, accelerated the phase-out of clean energy tax credits introduced under the Inflation Reduction Act (“IRA”). At the same time, the Environmental Protection Agency (“EPA”) finalised the rescission of the 2009 Endangerment Finding, the legal foundation for regulating GHG emissions, while the Securities and Exchange Commission withdrew its defence of the climate-related disclosure rule whose uncertainty we noted in last year’s report. Post financial year end, this retreat has accelerated further: the EPA’s rescission of the Endangerment Finding took effect in April 2026 and is now subject to litigation expected to reach the Supreme Court, and the SEC issued a proposed rule in May 2026 to rescind the climate-related disclosure regime in its entirety. - European Union: the Omnibus I Directive, finalised in early 2026, narrowed the scope of the Corporate Sustainability Reporting Directive (“CSRD”) significantly and exempted listed small and medium-sized enterprises from mandatory reporting altogether. Separately, the European Commission published its long-anticipated review of the Sustainable Finance Disclosure Regulation (“SFDR”), proposing three new product categories – Sustainable, Transition and ESG Basics – each subject to a minimum investment threshold and to mandatory exclusions. - United Kingdom: HM Treasury confirmed in July 2025 that it would no longer pursue a UK Green Taxonomy. The Government has now adopted UK Sustainability Reporting Standards (“UK SRS”), which are based on the ISSB framework, and the FCA is consulting on replacing its existing TCFD-aligned Listing Rules disclosures with mandatory UK SRS reporting for certain listed issuers for accounting periods beginning on or after 1 January 2027. Separately, the Government has tabled legislation to set a legally binding target to reduce UK greenhouse gas emissions by 87% by 2040. Taken together, these changes point to a regulatory environment that is recalibrating in different directions and at different speeds, a pattern repeated in the voluntary coalitions that have historically underpinned investor climate commitments. For example, the Net-Zero Banking Alliance ceased operations in October 2025, while the Net Zero Asset Managers initiative, of which SDCL has been a signatory since 2022, relaunched in February 2026 with a revised commitment statement that removes the 2050 alignment requirement. Despite this fragmentation, demand for the energy services provided by SEIT’s portfolio companies has not diminished. The Board and Investment Manager continue to support the existing portfolio and see a strong commercial rationale for the energy-efficiency solutions it provides. In a market shaped by volatility and shifting regulatory signals, that focus continues to provide strategic clarity. ## Reinforcing Our Sustainability Priorities Through Engagement The dynamics described above have reinforced our sustainability priorities. In last year’s ESG Update, we described a shift in our approach to sustainability, specifically from monitoring portfolio performance to helping to manage outcomes. Over the financial year, the Company continued to advance that shift, focusing on what is genuinely material to the financial performance and long-term resilience of our existing portfolio companies. The Investment Manager has therefore continued to engage with the existing portfolio, refining asset action plans for the largest businesses based on responses to the asset management questionnaire and concentrating dialogue on the topics most relevant to long-term value. This engagement included, but was not limited to, decarbonisation and energy efficiency at the asset level, supply chain risk where commercially material, and policies and governance at the corporate level. Environmental performance data continued to be gathered, refined and reviewed, while sustainability was more deeply embedded in the governance structures of our portfolio companies. ## Looking Ahead As noted at the outset of this update, the Company is now expecting to wind down and return value to shareholders. Nevertheless, the Board and Investment Manager remain committed to incorporating sustainability considerations appropriately as is dictated by SEIT’s Sustainability Framework. The focus will remain on those matters most relevant to portfolio performance, asset resilience and the protection of shareholder value, within the context of the Company’s evolving circumstances. The pages that follow set out the Company’s sustainability work over the year, organised by the five principles of the SEIT Sustainability Framework, and concluded by the SEIT Climate Report. --- 42 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Environmental, Social and Governance (“ESG”) Update continued # SEIT Sustainability Framework¹ ![img-38.jpeg](img-38.jpeg) 1. Further details of the SEIT Sustainability Framework are outlined in SEIT’s Responsible Investment Policy, which can be found on SEIT’s website. --- 43 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Environmental, Social and Governance (“ESG”) Update continued Performance Principle 1: # Champion Energy Efficiency Conventional Energy System: Energy is lost through generation, transmission and distribution, and at the point of use ![img-39.jpeg](img-39.jpeg) SEIT’s Efficient and Decentralised Energy System: SEIT addresses energy loss across the conventional system through two strategies – decentralised generation (‘energy generators’) and efficiency upgrades (‘energy savers’) – with impact measured through three KPIs: energy generated, energy saved, and Scope 4 emissions avoided. Energy Generators: On-site, behind-the-meter generators avoid T&D losses and can reduce centralised generation waste Total energy generated Y/E 2025 4,950,573MWh Y/E 2024: 5,339,972MWh¹ Energy Savers: More efficient equipment reduces energy demand at the point of use Energy saved Y/E 2025 351,205MWh Y/E 2024: 364,495MWh¹ Total Scope 4 emissions avoided¹: Y/E 2025 872,838 tCO₂e Y/E 2024: 1,000,791 tCO₂e¹ Combined carbon benefit of energy generated and energy saved SEIT remains dedicated to the first ESG Principle in the Framework, which highlights SEIT’s ongoing commitment to advocating for the role of energy efficiency in the global energy transition and to dedicating its portfolio towards projects which reduce energy waste. As illustrated in the diagram, energy is lost at three distinct stages of conventional energy systems: during generation, as heat or waste in centralised power plants; through transmission and distribution, as electricity travels across the grid; and at the point of use, where inefficient equipment consumes more energy than is needed. SEIT’s investments address all three sources of loss through two complementary strategies: 1) decentralised generation (‘energy generators’); and 2) energy efficiency upgrades (‘energy savers’). SEIT’s impact through both energy generator and energy saver investments is measured through three KPIs: energy generated, energy saved, and Scope 4 emissions avoided. An updated list of the energy-efficiency and decarbonisation initiatives being progressed across the portfolio is set out in the table that follows Principle 2. Energy efficiency retrofits remain the largest category, reflecting both their financial relevance and environmental impact. 1. The decline in avoided emissions (Scope 4) and energy savings relative to 2024 reflects the continued reduction in grid carbon intensities across the jurisdictions in which the portfolio is invested – lowering the counterfactual against which savings are measured – together with portfolio exits during the period and changes in asset-level operations. --- 44 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Environmental, Social and Governance (“ESG”) Update continued Performance Principle 2: # Deliver Net-Zero Energy SEIT remains focused on supporting affordable, scalable, lower-carbon energy solutions for customers, and on decarbonising the existing energy assets in which it invests. Over the year, SDCL’s sustainability team and portfolio management team engaged with the Company’s highest-emitting portfolio companies to highlight the importance of decarbonisation, begin to identify and formalise net-zero ambitions, and work through the practical feasibility of specific decarbonisation levers. This engagement has been deliberately asset-specific, reflecting the different starting points, technical complexity, and emissions profiles across the portfolio. Common themes from the year include short-term target setting, feasibility studies on specific decarbonisation levers, and engagement of specialist third-party consultants. For example: - **Driva** has identified a realistic short-term target aligned with the Global Methane Pledge and approved the capex required to meet the target. - **RED-Rochester** has a decarbonisation study underway with a specialist third-party consultant, with energy efficiency findings due in the first half of the year and longer-term findings expected later in the year. Alongside this target-setting engagement, the Company has continued to identify and evaluate projects within the existing portfolio that could decarbonise operations while increasing long-term value. The climate initiatives being progressed across the portfolio fall into three main categories: 1. **Energy Efficiency Retrofit:** initiatives that increase the energy efficiency of a portfolio company, resulting in energy savings and therefore carbon savings. 2. **Low-Carbon Energy Generation:** initiatives that result in the generation of low-carbon energy from renewable or waste sources. 3. **Fuel Supply Decarbonisation:** initiatives that decrease the carbon intensity of the fuel used to produce energy. ![img-40.jpeg](img-40.jpeg) Capshare --- 45 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Environmental, Social and Governance (“ESG”) Update continued Performance ## Principle 2: ### Deliver Net-Zero Energy continued Examples of the climate initiatives being progressed across the portfolio during the year are set out in the table below. | Portfolio company | Initiative | Description | Impact | Status | | --- | --- | --- | --- | --- | | RED-Rochester | **Energy Efficiency Retrofit:** Kings Landing air compressor upgrade | Upgrade of air compressor systems at Kings Landing to reduce parasitic load and lower ongoing energy consumption at site. | Expected to deliver meaningful energy and cost savings once operational. | Approved for implementation (new). | | Primary Energy | **Energy Efficiency Retrofit:** Variable frequency drive upgrade | Installation of variable frequency drives and new fan motors to reduce continuous parasitic electrical load from induced draft fans on generation processes. | Reduction in energy waste equivalent to c.2.5MW, saving c.$1,500,000 per year. | Targeting completion by end of Q2 2026 (existing). | | Primary Energy | **Energy Efficiency Retrofit:** Boiler feedwater heating valve | Installation of a control valve on the steam turbine extraction line to reduce excess feedwater heating, freeing steam for additional electrical generation. | Increases electrical generation by c.0.7MW with revenues of c.$400k per year. | Installed; pending full commissioning (existing). | | Oliva | CHP cooling capacity | Installation of additional cooling capacity on the CHP system at Linares. This will increase the cooling capacity and allow for greater and more efficient CHP operations, particular during the warm summer months. | Improves cooling efficiency of the system and enables higher on-site generation. | Approved in 2025. Installation began in Q2 2026. | | Oliva | **Fuel Supply Decarbonisation:** Biogas power purchase agreement | Progressive transition to lower-carbon fuel through partial replacement of natural gas with biogas under a power purchase agreement signed during the year. | Initial volumes expected to be modest, with impact dependent on pricing and availability. | Purchasing commenced Q1 2026 (existing). | | Driva | **Low-Carbon Energy Generation:** Expansion of Energy-as-a-Service (“EaaS”) offerings | Expansion of heating-, cooling-, and EV charging-as-a-service offerings, extending efficient, low-carbon energy solutions to additional customers. | 14 HaaS and eight CaaS units installed by Q4 2025. | Ongoing (existing but expanded). | | Driva | **Low-Carbon Energy Generation:** Biogas-as-a-Service (“BaaS”) expansion – Södertörn pipeline | Completion of the Södertörn biogas distribution pipeline, ready to support delivery of low-carbon gas to customers. | Enables distribution of biogas as a substitute for natural gas to existing customers. | Installation completed end of 2025; in use from Q1 2026 (new). | | Driva | Dynamic pressure control | Installation of automatic grid monitoring and pressure regulation equipment in four grid areas (representing approximately 60% of grid leakage), which allows grid pressure to be automatically reduced during periods of lower demand, thereby reducing leakage. | Reduction is leakage of gas from the grid. | Field testing commenced Q1 2026 (new). | Together, these climate initiatives reflect a mix of existing projects’ continuing implementation and new projects identified during the year, supporting SEIT’s broader commitments under both Principle 1 and Principle 2. The Investment Manager will continue to engage with the portfolio on decarbonisation plans, projects and targets, with a particular focus on the highest-emitting assets where these are most relevant to long-term resilience and value. --- 46 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Environmental, Social and Governance (“ESG”) Update continued Performance Principle 2: ## Deliver Net-Zero Energy continued ### Case Study: Decarbonising Methane at Driva Driva operates the Stockholm gas network, serving approximately 50,000 residential and commercial customers. Since SEIT’s acquisition, the share of biogas in the network has increased materially, displacing fossil natural gas and reducing the fossil carbon intensity of the fuel mix. Given this reduced fossil intensity, SDCL and Driva undertook a targeted assessment of the asset’s emissions profile to identify further decarbonisation opportunities. This confirmed that fugitive methane emissions from the network remain the primary source of operational emissions. Building on this GHG emissions profile analysis, SDCL engaged with the Driva team to align on the scope of the decarbonisation target, material emissions categories, and baseline years. Driva assigned a dedicated team member to lead the decarbonisation workstream and began integrating progress into board-level discussions. Driva subsequently conducted a feasibility study on the key decarbonisation levers available – most notably methane leakage reduction through the ongoing pipeline re-lining programme, which has delivered a 65% reduction in fugitive emissions since 2007 and a 21% reduction since 2020. In parallel, Driva has been proactively reducing leakage during 2025 by trialling adjustments to grid pressure across different sections of the distribution network. This yielded positive results and supported a decision to install dynamic pressure control systems, in addition to existing leakage monitoring, across four areas. The control system will automatically adjust pressure in response to demand, reducing leakage during lower-demand periods. This forms part of a broader shift towards more automated, data-driven management of the network, alongside the continuation of established infrastructure upgrades. Based on this programme of measures, Driva has identified a credible pathway to achieve a 2030 methane reduction target aligned with the Global Methane Pledge. This reflects an asset-specific approach to decarbonisation, combining established engineering solutions with increasingly automated and data-led optimisation. ![img-41.jpeg](img-41.jpeg) --- 47 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Environmental, Social and Governance (“ESG”) Update continued Performance Principle 3: # Promote Sustainable Supply Chains Building on last year’s work to formalise SDCL’s human rights policy and Supplier Code of Conduct, SEIT undertook a qualitative review of social risks across the value chains of its largest portfolio companies. The exercise was conducted with input from SDCL’s asset management, portfolio management, and sustainability teams, and reflects a gradual shift in approach – from monitoring supplier policy coverage at the portfolio level, to engaging more directly with each asset on specific risks and mitigations. Each risk was assessed on both an inherent and residual basis, with any material items added to the relevant asset’s risk register for ongoing oversight at quarterly Board meetings. | Risk theme | Findings | Mitigation | | --- | --- | --- | | Health & safety | Workplace incidents identified at certain sites, with elevated inherent risk in some operations. | Active engagement with operating partners to strengthen safety culture; residual risk reduced through new health and safety initiatives. | | Incident reporting & whistleblowing | Some assets had unclear or informal incident tracking and grievance processes. | Tracking and reporting strengthened during 2025; ongoing engagement to refine prevention strategies. | | Supplier oversight in higher-risk regions | Potential human rights exposure tied to sourcing of materials (e.g. solar panel components) from elevated-risk regions. | New or refined supplier codes of conduct introduced; engagement ongoing to formalise due diligence and, in some cases, publish public policy. | Because risks vary by asset, SDCL’s engagement is shaped by what is most relevant for each portfolio company. The Investment Manager will continue to assist with and monitor progress of mitigation actions for residual supply chain risks. Principle 4: # Support Our Communities Alongside efforts to deliver efficient, low-carbon energy, SEIT continues to engage with portfolio companies to monitor the initiatives they have in place to support their employees and the communities around them. Most companies in the portfolio have established community-focused policies and initiatives, which the Investment Manager continues to monitor and assist with where relevant. # Minimum Standard Policies During the year, SEIT engaged with portfolio companies to assess coverage of minimum standard policies, including those relating to diversity and inclusion, health and safety, anti-bribery and corruption, grievance and complaints handling, and whistleblower protection. Coverage across each of these areas remained high, with continued year-on-year improvement in several categories. # Employee and Community Engagement Across the portfolio, portfolio companies continued to launch or expand a range of initiatives focused on employee wellbeing and local community support. These initiatives reflect the wide variety of contexts in which portfolio companies operate but share a common emphasis on employee wellbeing and community impact. Examples include: - employee wellness programmes; - early careers and internship programmes; - charitable fundraising and donation drives; and - workplace health challenges and engagement campaigns. # Policies and Governance There were no reported incidents of discrimination at investee companies during the year, and no violations of the UN Global Compact principles or OECD guidelines for multinational enterprises. --- 48 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Environmental, Social and Governance (“ESG”) Update continued Performance ## Principle 5: ### Match Best Practice The first four Principles of the Framework focus on SEIT’s specific ESG-related goals. The fifth Principle acknowledges the broader sustainability frameworks, regulations and voluntary commitments that the Company aims to align with, reflecting that best practice means staying aligned with evolving standards and frameworks. | Framework | Type | | --- | --- | | EU Sustainable Finance Disclosures Regulation (“SFDR”) | Disclosure regulation – Mandatory | | Streamlined Energy and Carbon Reporting (“SECR”) | Disclosure regulation – Mandatory | | Task Force on Climate-related Financial Disclosures (“TCFD”) | Disclosure framework – Voluntary for SEIT/SDCL | | UK Sustainability Reporting Standards (“UK SRS”) | Disclosure framework | | UN Principles for Responsible Investment (“UN PRI”) | SDCL Framework Commitment – Voluntary | | Glasgow Financial Alliance for Net Zero (“GFANZ”) | SDCL Net-Zero Commitment – Voluntary | These commitments range from minimum standard policies, through detailed disclosure requirements, to the ongoing monitoring of specific KPIs. During the year, the Investment Manager continued to work closely with the Board to monitor emerging regulations and ensure SEIT remains aligned with evolving best practice. ### UK Sustainability Reporting Standards (“UK SRS”) The UK Government has endorsed the ISSB disclosure standards as the basis for the new UK SRS, comprising S1 (financially material sustainability-related risks and opportunities) and S2 (financially material climate-related risks and opportunities). Neither SDCL nor SEIT is immediately in-scope of UK SRS. The FCA is expected to apply UK SRS to listed companies with effect from 1 January 2027, although investment trusts are not currently in scope. The Investment Manager and Board are nonetheless monitoring UK SRS developments and will reassess whether voluntary alignment is appropriate as the regulatory picture becomes clearer. ## ESG Asset Management KPI 2025 Score Card The table below summarises performance against the sustainability KPIs tracked across the five Principles of SEIT’s Sustainability Framework. | Sustainability Framework | KPI | Y/E 2024 response | Y/E 2025 response | | --- | --- | --- | --- | | **Principle 1 – Champion Energy Efficiency** | Energy saved | 364,495MWh | 351,205MWh | | | Scope 4 emissions (carbon saved) | 1,000,791 tCO_{2}e | 872,838 tCO_{2}e | | | Total energy generated | 5,339,972MWh | 4,950,573MWh | | **Principle 2 – Deliver Net-Zero Energy** | Renewable electricity generated | 387,366MWh | 436,053MWh | | | Renewable heat generated | 422,908MWh | 262,310MWh | | | Total Scope 1 & 2 emissions | 735,167 tCO_{2}e | 734,573 tCO_{2}e | | **Principle 3 – Promote Sustainable Supply Chains** | % of portfolio companies with a supplier code of conduct against unsafe working conditions, precarious work, child labour and forced labour | 96% | 100%^{1} | | **Principle 4 – Support Our Communities** | % of companies with D&I policies | 96% | 100%^{1} | | | Number of incidents of discrimination reported in investee companies | 0 incidents | 0 incidents^{1} | | **Principle 5 – Match Best Practice** | % of portfolio companies covered by a health & safety policy | 100% | 100%^{1} | | | % of portfolio by value with violations of UN Global Compact principles and OECD guidelines for multinational enterprises | 0% | 0%^{1} | | | % of the portfolio covered by codes of conduct relating to anti-bribery and corruption | 96% | 100%^{1} | | | % of portfolio covered by a grievance/complaints handling mechanism or process | 96% | 100%^{1} | | | % of companies covered by a policy to protect whistleblowers | 95% | 95%^{1} | 1. Out of 94% of portfolio companies by portfolio value as at 31 March 2025 that responded to the survey. --- 49 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Environmental, Social and Governance (“ESG”) Update continued Performance ## SEIT’s ESG Management Process SEIT’s approach to sustainability is built around two connected pieces: a Sustainability Framework, which defines what the Company is trying to achieve, and an ESG Management Process, which translates those ambitions into practice. The five Principles above together form the Sustainability Framework, defining SEIT’s sustainability priorities and providing the lens through which the Investment Manager evaluates and manages investments. The ESG Management Process is the operational backbone that implements the Framework across the investment lifecycle, integrating sustainability considerations into three core stages: - Investment due diligence – go/no-go review, initial and detailed due diligence, with ESG findings incorporated into Investment Committee papers. - Asset management – environmental performance surveys, annual ESG surveys, and ongoing engagement with portfolio companies. - Reporting – results reporting, regulatory disclosures, marketing and investor materials, and investor due diligence questionnaires. The Investment Manager runs the day-to-day activities of the ESG Management Process, while SEIT’s ESG Committee oversees its overall effectiveness and any material findings that arise. ![img-42.jpeg](img-42.jpeg) --- 50 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Environmental, Social and Governance (“ESG”) Update continued ![Information icon]() Performance ![img-43.jpeg](img-43.jpeg) # SEIT 2026 Climate Change Report ## Introduction The SEIT 2026 Climate Change Report (“Climate Report”), set out in the following section, provides an update on the steps the Company is taking to identify and address climate-related risks and opportunities. While SEIT is not legally in-scope of the FCA’s mandatory TCFD rule, the TCFD’s four pillars – Governance, Strategy, Risk Management, and Metrics & Targets – are a useful structure for identifying, managing and disclosing climate risks and opportunities. Further, SEIT is committed to aligning with reporting requirements and best practices as they evolve, including the transition to the UK Sustainability Reporting Standards (“UK SRS”). During the year, the Investment Manager continued to build, on behalf of SEIT, on the foundations set out in the SEIT 2025 Climate Report, with engagement and governance both deepening over the course of the year. Engagement with portfolio companies remained a central theme, with the Investment Manager working closely with management teams on the climate-related risks and opportunities most relevant to each asset, including the energy efficiency and decarbonisation initiatives described earlier in this report. > Engagement with portfolio companies remained a central theme, with the Investment Manager working closely with management teams on the climate-related risks and opportunities most relevant to each asset,” Anjali Berdia SDCL Sustainability Manager --- 51 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Environmental, Social and Governance (“ESG”) Update continued ## Governance ### SEIT Board’s Oversight Responsibilities of Climate-Related Risks and Opportunities Oversight and management of climate-related issues are incorporated into the Company’s existing governance structure and Risk Management Framework. The Board remains responsible for the Company’s overall strategic direction, including the oversight of climate risks and opportunities. The Board receives management information regarding climate risks and opportunities on a regular basis, allowing for climate matters to inform the wider strategic direction of SEIT. #### SEIT ESG Committee The SEIT ESG Committee is a Board Committee and has been delegated responsibilities from the SEIT Board relating to the implementation and monitoring of the Company’s Sustainability Framework. The SEIT ESG Committee considers climate risks and opportunities as they overlap with implementation of the ESG Management Process and Sustainability Framework. The ESG Committee reports its findings to the SEIT Board as relevant. #### SEIT Audit and Risk Committee (“ARC”) The SEIT ARC, another Board Committee, has been designated responsibility for climate risk and oversight by the SEIT Board. The Committee evaluates how identified climate risks integrate into SEIT’s broader risk and control frameworks. The ARC reviews climate risks at a portfolio level quarterly as part of its risk review and, on an annual basis, receives an in-depth climate risk review at the asset level. The asset-level risk review forms the basis of this report. The ARC reports its findings to the SEIT Board as relevant. ### SDCL’s Role in Managing and Assessing Climate-Related Risks and Opportunities #### SDCL’s Investment Committee (“IC”) for SEIT The IC is responsible for reviewing all new investments, ongoing portfolio company updates, and the climate risk reports delivered to the ARC. Responsibility and oversight of climate risk identification and mitigation at SEIT portfolio companies sits at the SEIT IC in advance of the ARC and Board. Climate risks are escalated by the IC through the ARC. #### Sustainability Subcommittee of SDCL’s Management Committee The Investment Manager’s Sustainability Committee oversees the Investment Manager’s ESG Management Process, which incorporates identification and mitigation of climate-related risks. ### Climate Risk Working Group Following on from the previous reporting year, SDCL’s Climate Risk Working Group continued to support the Investment Manager through the entire asset lifecycle. The Group encompasses members of the Sustainability Team and Portfolio Management Team and met during the year to assess, review and update the climate-related risks and mitigation actions identified during the last reporting year. ![img-44.jpeg](img-44.jpeg) --- 52 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Environmental, Social and Governance (“ESG”) Update continued Performance ## Strategy ### Identifying Climate-Related Risks The Investment Manager holds the initial responsibility for identifying and assessing both physical and transition climate-related risks. This assessment is carried out once per material investment as a part of the due diligence process. Each material investment is then reviewed on a yearly basis during the annual climate risk review process, for reassessment of risk impacts and likelihoods, accounting for changes occurring during the year, and the identification of newly materialised risks. Physical climate risks are identified and assessed using a physical climate modelling platform and updated based on realised weather-related risks occurring at the portfolio company level. Transition climate risks are determined through horizon scanning across the four thematic transition categories of policy and legal risk, technological risk, market risk and reputational risk. Climate transition risks are further highlighted based on engagement with portfolio companies and realised risks that occur. ### Climate risk assessments To assess physical climate risks, the Investment Manager had conducted scenario analysis under two Representative Concentration Pathways (“RCP”) scenarios (RCP 8.5 and RCP 2.6) over three time periods (2020, 2021–2030, and 2031–2050). Scenario analysis stress testing was not re-evaluated over the year, with the Investment Manager focusing on analysing climate-related risk through a Portfolio Valuation™ lens. In short, the RCP 2.6 pathway emphasised stronger transition risk and weaker physical risk, with RCP 8.5 displaying the inverse. The Investment Manager notes that the RCP framework has since been superseded by the IPCC’s Shared Socioeconomic Pathways (“SSP”) framework, and intends to update its scenario analysis accordingly in future reporting periods. ### Climate Risks Overview #### Climate risk changes for the 2025 calendar year Climate-related risks increased at two SEIT assets during the period, driven by newly identified risks and risks that materialised – including transition risks tied to tax credit sunset deadlines and regulatory changes, as well as physical risks such as wildfire-driven feedstock loss and potential new efficiency regulations affecting biomass operations. Across the remainder of the portfolio, the net impact of climate-related risks declined slightly, as successful mitigation strategies offset the introduction of some new and elevated risks. As a result, SEIT’s portfolio-level climate-related risk profile has remained broadly consistent with the previous period. ### SEIT’s Material Climate-Related Risk Profile The table below provides a high-level summary of the material physical and transition risks that could impact the investments within the Company. | Risk type | Key risks | Mitigation | | --- | --- | --- | | **Transition risks** | Reduction or removal of tax credits and incentives; reduced demand for higher-carbon energy and gas solutions; changing market competitiveness from the energy transition. | Monitor policy and market developments; explore alternative financing structures and lower-carbon service offerings; engage customers on evolving transition needs; incorporate downside scenarios into business planning. | | **Physical risks** | Extreme heat, drought and flooding disrupting feedstock supply; milder winters reducing demand for heating-related services; acute extreme weather events damaging assets and supply chains. | Diversify feedstock sourcing and assess alternative suppliers; monitor shifting demand patterns and explore service diversification; embed extreme weather considerations into operational planning, insurance coverage, and maintenance strategies. | ### Impact on Businesses, Strategy and Financial Planning The Company’s strategy remains centred on supporting the low-carbon transition through its portfolio of energy efficiency and related energy infrastructure assets. However, SEIT recognises that certain assets face heightened climate risks, both physical and transition, that could alter operational and financial trajectories. SDCL has decided not to conduct climate-related stress testing this year, as the hypothetical outputs did not drive significant decision-making last year. Instead, the Investment Manager has focused on identifying and articulating the climate-related risks that are impacting portfolio company valuations today, grounding the analysis in real financial outcomes. The Company has made significant progress in incorporating the impacts of climate-related risks into a business context, specifically in determining how climate risks are likely to be incorporated into SEIT’s valuation. While not all identified risks are projected to have a material impact on SEIT’s valuation, the following table indicates a summary of the material portfolio area, the associated climate-related risk, and how the risk impacts value considerations. --- 53 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Environmental, Social and Governance (“ESG”) Update continued Performance ## Impact on Businesses, Strategy and Financial Planning continued | Portfolio area | Key climate-related risk | Impact of risk on valuation considerations | | --- | --- | --- | | **Biomass and thermal energy infrastructure** | **Physical risk** – Extreme heat, drought, flooding and climate-driven feedstock disruption | Discount rate premiums have been considered to reflect the potential financial impacts associated with physical climate risks, including drought-related operational pressures. | | | **Transition risk** – Renewable market increase | Potential changes to operational runtime assumptions arising from increased renewable penetration and changing electricity market competitiveness may be incorporated into future budgeting and valuation assumptions. | | **Distributed energy, renewable infrastructure, and industrial energy infrastructure** | **Transition risk** – Regulatory framework change | Discount rate sensitivities have been considered in response to uncertainty surrounding the continuation or renewal of regulatory support and incentive frameworks. | | | **Transition risk** – Industrial higher-carbon technology | Additional risk premiums may be applied to reflect long-term contract uncertainty and evolving transition-related market risks beyond current contractual arrangements. | | **Energy services and gas-related infrastructure** | **Transition risk** – Decreased gas demand due to electrification | Long-term customer churn and utilisation assumptions have been updated in line with changing market conditions and revised budget expectations. | | **Solar energy services** | **Transition risk** – Changes to tax equity credits (ITCs) | A valuation adjustment has been recognised to reflect the withdrawal of ITCs from 2028 onwards and the resulting change in cashflow structure. Residual risk remains linked to financing and gearing, as the absence of upfront tax equity increases capital requirements and leaves valuation dependent on successfully revising gearing constraints (subject to shareholder approval). | ## Risk Management As discussed throughout the Climate Report, identification and analysis of climate risks facing the portfolio is critical both to appropriately determining the financial impacts of said risks and then to mitigating them. As previously discussed, select climate risks have been reflected in SEIT’s valuation through adjustments to discount rates and, if appropriate, cash flows. Although not all climate risks identified in scenario analysis have been directly reflected in the Portfolio Valuation$^{SM}$, the Investment Manager continues to monitor these risks and assess whether and when their financial implications should be reflected. ### Integration into Overall Risk Framework Climate-related risks and opportunities are integrated across all components of the Company’s Risk Management Framework and thus follow the same monitoring, managing and governance structure as other types of risk. Climate-specific risks have also been integrated into the risk registers of portfolio companies which are reviewed on a quarterly basis by the portfolio company’s board. **Enterprise-wide coverage:** Climate risks feed into SEIT’s consolidated risk universe and are rated using the same probability-impact matrix as financial, operational and ESG risks. **Escalation and capital linkage:** Any climate risk rated “high” or above must be reviewed at the next ARC meeting. If relevant, materialised climate-related risks will be raised to the Board off-cycle. **Risk appetite:** Within climate change risk, the Company has a low appetite for physical risks and a medium appetite for transition risk, as the Company is looking to benefit from the transition to a low-carbon economy and take advantage of new technologies and policies to enhance investment returns. **Risk management policies:** The Company documents its procedures relating to climate issues in its Responsible Investment Policy and in its Risk Management Policy. --- 54 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Environmental, Social and Governance (“ESG”) Update continued Performance ## Metrics and Targets ### Climate-Related Metrics SEIT reports on a variety of climate-related metrics from an asset-level perspective. This includes carbon and energy savings, renewable and non-renewable energy generated (through electricity and heat), and Scope 1, 2, and 3 GHG emissions. SEIT’s TCFD reporting structure aligns to a calendar year reporting basis, rather than a financial year reporting structure. This has been decided to align with SDCL’s (the Investment Manager) overall asset management data gathering and reporting timelines. The climate-related metrics are calculated using guidance from the Greenhouse Gas Protocol and the UK SECR legislation, with oversight from dedicated external consultants. The data is collected individually from the portfolio companies on a quarterly basis for optimised accuracy and collated by an external consultant based on actual energy usage and generation. The data is then reviewed by the external consultant and the Investment Manager. The energy and emissions performance data disclosed is for the period 1 January 2025 to 31 December 2025, and energy and emissions performance data from 1 January 2024 to 31 December 2024 have also been provided for reference. Emissions and energy performance changes between the periods are largely contingent on shifts in the portfolio makeup and scale. The Company monitors its energy performance data to track progress against its sustainability indicators, namely Scope 4 emissions (carbon savings) and energy savings. This data is used to inform the sustainability indicators for SEIT’s SFDR reporting. Furthermore, the Company tracks the relevant GHG emissions of assets to monitor its environmental impact and will inform the degree of risk associated with an accelerated net-zero transition on a project-by-project basis. ### Metrics Methodology: The dedicated external consultancy engages directly with each portfolio company through a structured quarterly workflow. This process involves: - direct engagement: They work with primary contacts at each investment to issue standardised data collection templates. This engagement begins post-investment, with the external consultancy developing methodology reports for each portfolio company to explain how their impact and emissions KPIs are calculated and disclosed; - operational reporting: They develop a report for each portfolio company based on their specific site-level operations, gathering granular data on energy inputs (e.g. natural gas, biomass, grid electricity) and outputs (e.g. electricity, heating, cooling); and - validation: The consultancy reviews all submitted data for consistency against historical values and budget expectations, investigating any significant discrepancies before consolidating the information into SEIT’s central ESG database. The calculation approach in each case follows several key principles to maintain a consistent approach. The principles are: - where possible, SEIT prioritises actual metered data (utility meters or submeters) over estimated figures to ensure reporting reflects real-world, ongoing performance; - use publicly available emissions factors from government sources specific to the project location; - standardisation of the calculation of carbon savings by comparing actual operational performance against a clear counterfactual scenario relevant to each project; - where a project was commissioned or purchased by the Company midway through the reporting period, only the portion of the period after commissioning or purchase date should be recognised; and - where the Company owns less than 100% of a project, the total project savings should be reduced pro-rata with the ownership percentage. --- 55 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Environmental, Social and Governance (“ESG”) Update continued ## Data Methodology Updates SEIT’s carbon reporting has continued to evolve over the past few years, standardising the methodology used and updating the underlying intensity metrics annually as they evolve. In 2025, SDCL continued to develop our Scope 3 methodology in line with the GHG Protocol. An in-depth review identified the categories most material to the SEIT portfolio – given that SEIT’s investments are predominantly energy-generating assets, reporting focuses on material operational categories. These changes were communicated to the respective management teams, along with guidance on the additional information required, with higher Scope 3 emissions attributable to that methodology evolution. On carbon intensity, grid carbon factors continue to decline across all SEIT jurisdictions – for example, since 2019, Spain’s grid intensity has reduced by 48%. As the grid counterfactual lowers, the avoided emissions attributable to our assets decline in step, even where the underlying assets continue to perform as expected. ## Portfolio Scope 4 emissions and energy savings | Scope 4 emissions/carbon savings^{1} (tCO_{2}e) | | Energy savings^{2} (MWh) | | | --- | --- | --- | --- | | 1 Jan 25 to 31 Dec 25 | 1 Jan 24 to 31 Dec 24 | 1 Jan 25 to 31 Dec 25 | 1 Jan 24 to 31 Dec 24 | | 872,838 | 1,000,791^{3} | 351,205 | 364,495 | ## Portfolio energy generation | Renewable electricity generated (MWh) | | Renewable heat generated (MWh) | | Non-renewable electricity generated (MWh) | | Non-renewable heat generated (MWh) | | | --- | --- | --- | --- | --- | --- | --- | --- | | 1 Jan 25 to 31 Dec 25 | 1 Jan 24 to 31 Dec 24 | 1 Jan 25 to 31 Dec 25 | 1 Jan 24 to 31 Dec 24 | 1 Jan 25 to 31 Dec 25 | 1 Jan 24 to 31 Dec 24 | 1 Jan 25 to 31 Dec 25 | 1 Jan 24 to 31 Dec 24 | | 436,053 | 387,366 | 262,310 | 422,908 | 2,448,212 | 2,513,164 | 1,803,997 | 1,778,730 | 1. Scope 4 emissions refer to the reduction in GHG emissions achieved by a project compared to a relevant counterfactual, i.e. how the customer would receive the energy services in the absence of said project. 2. Energy savings refer to the electrical and thermal energy not consumed at the point of use due to a SEIT investment. 3. The decline in avoided emissions (Scope 4) and energy savings relative to 2024 reflects the continued reduction in grid carbon intensities across the jurisdictions in which the portfolio is invested – lowering the counterfactual against which savings are measured – together with portfolio exits during the period and changes in asset-level operations. 4. Direct emissions from owned or controlled sources. Mainly fuel usage for energy generation. 5. Indirect emissions arising from the purchase of electricity, steam, heating and cooling for its own use, often generated off site. ## Portfolio GHG emissions | Scope 1^{4} (tCO_{2}e) | | Scope 2^{5} (tCO_{2}e) | | Scope 3^{6} (tCO_{2}e) | | | --- | --- | --- | --- | --- | --- | | 1 Jan 25 to 31 Dec 25 | 1 Jan 24 to 31 Dec 24 | 1 Jan 25 to 31 Dec 25 | 1 Jan 24 to 31 Dec 24 | 1 Jan 25 to 31 Dec 25 | 1 Jan 24 to 31 Dec 24 | | 729,973 | 724,458 | 4,600 | 10,708 | 449,555 | 316,280 | ## Portfolio carbon intensity indicators | Weighted Average Carbon Intensity^{7} (tCO_{2}e/£m value) | | Carbon footprint^{8} (tCO_{2}e/£m value) | | | --- | --- | --- | --- | | 2025 | 2024 | 2025 | 2024 | | 8,260 | 6,488 | 682 | 667 | ## Climate-Related Targets In 2024, the Investment Manager committed to GFANZ’s Net Zero Asset Managers initiative (“NZAM”), reaffirming its relationship with the Alliance. The Investment Manager is also committed to the following targets as set by the Net Zero Investment Framework (“NZIF”) which may be outlined as follows: ### Portfolio coverage targets: Aims for 100% of the Company’s financed emissions in material sectors to be considered net zero, aligned to net zero or aligning to net zero by 2030. Aims for 100% of the Company’s financed emissions in material sectors to be considered net zero or aligned to net zero by 2040. ### Engagement threshold target: Aims for 100% of the Company’s financed emissions in material sectors to be subject to direct or collective engagement and stewardship actions by 2030. 6. All other indirect emissions that occur in a company’s value chain. Different categories of Scope 3 are collected, but the material emissions for the SEIT portfolio are the energy-related emissions (fuel usage where the investment has no control or ownership over the fuel purchase). 7. Weighted Average Carbon Intensity: The portfolio’s exposure to carbon-intensive companies, expressed in tCO$_{2}$e/£m value. The KPI compares an investment’s Scope 1 and 2 emissions, normalised by ownership, with its portfolio value. 8. Carbon footprint by value: Total carbon emissions for the portfolio normalised by the ownership of the asset, expressed in tCO$_{2}$e/£m value. The KPI compares the investment’s Scope 1 and 2 emissions, normalised by ownership, with the entire portfolio value. --- 56 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Risk Management Framework Performance ## Risk Management Framework The Company operates within a robust Risk Management Framework designed to address all aspects of its activities. The framework provides structured systems and processes for the identification, assessment and management of risks across the Company's operations and investment portfolio. Responsibility for the ongoing implementation and maintenance of the framework remains with the Investment Manager, acting as a key service provider. The Board retains responsibility for defining the Company's risk appetite, seeking to maintain an appropriate balance between prudent risk management and the delivery of long-term shareholder value. Oversight of the framework, including risk tolerances, is delegated to the Audit and Risk Committee ("ARC"), which meets at least quarterly. The Committee is responsible for assessing risks against established tolerance levels and for reviewing the effectiveness of the Company's internal controls, financial systems and wider risk management arrangements. To support this oversight, the Investment Manager continues to provide regular risk management reporting to the Committee. These reports include updates to the Company's risk register, with each risk assessed and rated, together with details of key mitigants and controls. Ongoing dialogue is maintained between the ARC and the Investment Manager to monitor emerging risks and determine appropriate response strategies. The Company also continues to engage external advisers where specialist expertise is required. The framework also extends to the oversight of key service providers, including the Investment Manager. The Investment Manager maintains a dedicated risk management function supported by appropriate systems and controls, which the Company relies upon as part of its overall risk governance approach. ![img-45.jpeg](img-45.jpeg) In light of the Board's intention to sell the portfolio assets and wind down the Company and noting the additional governance measures included in the Shareholder Circular, the Risk Management Framework will remain broadly unchanged. However, the principal risks are expected to evolve and details of these have been set out in the "Wind-down context and evolution of the risk framework" section below. The following details relate primarily to the reporting year to 31 March 2026. ### Risk strategy The risk strategy of the Company is set by the Board, with input from the Investment Manager. In determining the identity of the risks to the Company, how these risks should be managed, implementing appropriate controls and setting appropriate risk appetites, the Company demonstrates how the principal risks to the business have been mitigated. ### Risk appetite Each risk within the Company's Risk Management Framework is set a risk appetite, the level of risk that the Company is willing and able to tolerate. These risks are managed against predetermined thresholds in order to ensure the appropriate level of risks is maintained throughout the Company and aligns to the Company's strategy. ### Risk management policies The Company's risk management policies outline the procedures that effectively identify, monitor and manage all applicable risks. ### Risk governance The Company's risk management strategy permeates through the Company and effective corporate governance structure. The ARC is accountable for the oversight of the Company's risk profile and receives quarterly reports pertaining to the top risks, associated controls and agreed risk appetites. ### Risk management process The Company's risk management process is continuous and central to the framework. It includes: ![img-46.jpeg](img-46.jpeg) --- 57 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Risk Management Framework continued ## Principal Risks The Company has identified a set of principal risks that impact its operations and investment portfolio, as detailed in the accompanying risk table. These risks are subject to continuous monitoring by the Investment Manager and are regularly reviewed by the Board and the ARC to ensure appropriate oversight and response. While the nature of these risks has remained broadly consistent with the prior year, new risks have materialised in response to changing external and internal conditions. The Company recognises that these principal risks may have either a direct effect on its operations or an indirect effect through their impact on the underlying portfolio of investments. It is expected that the core risk categories identified will remain relevant over the reporting period as modified for the anticipated wind-down (see below). However, the Investment Manager and the ARC maintain a proactive approach to identifying and evaluating emerging risks to ensure the Company develops timely and appropriate mitigation strategies. The table below sets out the Company's principal risks, including a description of the nature of each risk, the potential impact and the key controls and mitigation measures in place. Top risks are highlighted. | Risk type | Risk description | Mitigation | | --- | --- | --- | | **Share price discount risk** Risk change ↑ Increase | The Company's shares have been trading at a sustained discount to net asset value (NAV) per share, reflecting wider macro-economic factors, constrained liquidity, and investor sentiment. **Potential impact** – Diminished shareholder returns. – Reputational damage. – Challenges in raising new equity capital. | – The Board actively monitors the share price discount and could implement share buy-backs. – Strategic sale of assets. – Strategic evaluation of all options to address discount. – Continued transparent communication of asset performance and valuation drivers. | | Risk type | Risk description | Mitigation | | --- | --- | --- | | **Reputational, regulatory and governance** Risk change ↑ Increase | The Company is currently exceeding the gearing limit set out in its Investment Policy, giving rise to a risk of non-compliance with applicable regulatory requirements, governance standards, and stated investment policy. **Potential impact** – Restricted capital flexibility. – Limits ability to fund growth initiatives. – Reduces strategic options. | – Active deleveraging through disposals (e.g. recent asset disposal) to reduce RCF. – Focus on maximising free cash flow and restricting incremental investment. | | **Liquidity risk** Risk change ↑ Increase | The Company is exposed to liquidity risk through the covenants in its RCF, and its ability to meet financial obligations as they fall due may be constrained. **Potential impact** – Inability to return cash to shareholders. – Inability to fund operating expenses or fund commitments. | – Robust cashflow forecasting and scenario-based stress testing to monitor liquidity headroom. – Focus on maximising free cash flow and restricting incremental investment. – Targeted asset disposals to release liquidity while preserving portfolio value. – Reducing dividend distributions. | | **Market regulatory** Risk change ↑ Increase | The Company is exposed to global regulatory and policy risk, particularly in the United States, where policy changes may impact portfolio cash flows, asset valuations, and the execution of its investment strategy. **Potential impact** – Increased operational costs. – Reduced customer demand due to new regulation. – Loss of funding/tax breaks. | – The underlying portfolio management teams and Investment Manager continue to actively monitor portfolio exposure to policy developments and track regulatory and political changes. – Use of contractual protections, including inflation linkage and pass-through mechanisms where available. | | **Performance risk** Risk change ↑ Increase | The Company is exposed to the risk of NAV underperformance driven by a weakening macroeconomic environment and asset operational challenges, impacting overall returns. **Potential impact** – Company fails to deliver on target returns and dividends. – Shareholder dissatisfaction and reduced investor appetite. | – Regular review and calibration of valuation assumptions, including discount rates and growth expectations. – Focus on contracted, inflation-linked revenues to support resilience of underlying cash flows. | --- 58 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Risk Management Framework continued | Risk type | Risk description | Mitigation | | --- | --- | --- | | **Macroeconomic** Risk change 🔑 **Increase** | The Company is exposed to macroeconomic risk, as portfolio valuations depend on key assumptions such as inflation, discount rates, and fluctuations in energy and gas prices. Increased volatility or divergence from these assumptions may adversely affect net asset value (NAV). **Potential impact** – Increased discount rates lowering asset value. – Increase in inflation increasing operating costs. – Higher gas prices could lead to lower profitability. – Lower asset values could lead to breach of financial covenants in RCF. | – The Investment Manager uses a series of tools including hedging strategies, fixed rate financing and sensitivity testing in order to minimise adverse impact to the Company. | | **Climate risk** Risk change 🔒 **Same** | Risk of adverse impacts from climate change on operations and asset valuations. **Potential impact** – Physical risks: Damage to assets or supply chain disruption. – Transition risks: Policy, technology and behavioural shifts. | – Climate risk analysis integrated within the Risk Management Framework. – Further details available in the annual Climate Change Report on pages 50 to 55. | | **Operational risk** Risk change 🔒 **Same** | Risk of failure in operational processes, systems or controls that may disrupt Company operations and adversely affect financial performance and investor returns. **Potential impact** – Loss of key personnel, affecting investment decision making. – Cybersecurity incidents at the administrator, Investment Manager or portfolio companies impairing operations. | – Active Board oversight of SDCL's performance, resourcing and capability. – Long-term incentive structures and sufficient team depth to support retention and effective succession planning within the Investment Manager. – Regular testing of the Investment Manager's and administrator's business continuity arrangements to ensure operational resilience and minimise disruption; also oversight of portfolio companies' operational resilience. | | Risk type | Risk description | Mitigation | | --- | --- | --- | | **Counterparty risk (offtaker credit risk)** Risk change 🔒 **Same** | Risk that a contracted counterparty fails to meet payment obligations. **Potential impact** – Loss of asset revenue. – Poor contract renewals affecting future earnings. | – Detailed due diligence on counterparties. – Ongoing monitoring of credit ratings. – Contractual protections and diversification strategies. | | **Counterparty risk (contractor risk/ O&M providers)** Risk change 🔒 **Same** | Risk of underperformance or non-delivery by operational contractors. **Potential impact** – Delays in asset commissioning. – Increased costs to restore operational status. | – Due diligence on all contractors. – Contractual flexibility to substitute underperforming parties. | ## Climate-Related Risks The SEIT Climate Report on pages 50 to 55 details climate-related risks, including how the Company integrates climate change considerations into its broader Risk Management Framework. This includes the assessment, analysis and management of climate-related factors throughout the investment lifecycle – from initial appraisal and due diligence through to ongoing asset management. --- 59 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Risk Management Framework continued ### Wind-Down Context and Evolution of the Risk Framework The Board believes that the proposed managed wind-down will help to alleviate a number of the principal risks identified above. In particular: - **Share price discount** – by providing shareholders with a clearer path to liquidity and capital return, rather than relying on a future market re-rating. - **Liquidity risk** – by reducing gearing, repaying drawings under the RCF and strengthening the balance sheet, thereby improving financial resilience. - **Performance (Investment and capital allocation risk)** – by reducing the risk of value erosion through a change in investment policy, refocusing the Company on disciplined realisation rather than further deployment. Furthermore, the Board recognises that the nature and relative weighting of the principal risks facing the Company are expected to evolve as the proposed wind-down progresses. While the underlying operational risk profile of the portfolio will remain relevant throughout the realisation process, the primary focus will increasingly shift towards the timing and pricing of asset disposals, the preservation of value, liquidity and covenant management and the efficient return of capital to shareholders. The wind-down process itself also introduces a number of transition risks including execution risk, stakeholder alignment and market conditions at the point of disposal which the Board and Investment Manager will continue to monitor and manage closely. | Risk type | Risk description | Mitigation | | --- | --- | --- | | Asset value realisation | Risk that assets are not realised in a timely fashion at values consistent with carrying values due to market conditions, buyer demand or execution timing. **Potential impact** – Reduced proceeds. – Lower returns to shareholders. – Extended wind-down period. | – Active Board oversight of disposal strategy. – Use of experienced advisers. – Flexible sequencing of asset sales. – Maintaining assets in sale-ready condition. | | Stakeholder alignment | Risk that interests of key stakeholders (shareholders, portfolio company management, lenders, counterparties) become misaligned during the wind-down period. **Potential impact** – Undesired shareholder outcomes. – Operational disruption. – Reduced asset performance. – Delays or value leakage in disposals. | – Clear communication of strategy. – Appropriate incentive structures. – Active engagement with lenders and counterparties. – Continued asset-level oversight to maintain performance. | | Conflicts of interest | Risk of misalignment where the Investment Manager manages assets through disposal while its role evolves during the wind-down. **Potential impact** – Sub-optimal decision-making. – Erosion of shareholder value. – Governance concerns. | – Strengthened governance and Board oversight. – Proposed amendment to Investment Management Agreement to ensure alignment. – Use of independent third-party advisers. – Formal identification and management of conflicts. | --- 60 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Viability Statement Performance ## Viability Assessment Period The Directors have assessed the prospects of the Company over a three-year period to 31 March 2029. The Directors consider this to be an appropriate period because it is aligned with the Board's proposed strategic direction, following the year end, to pursue a realisation of the portfolio and a wind-down of the Company, subject to shareholder approval. ### Assessment process In making this statement, the Directors considered the resilience of the Company, including: - the Company's current financial position and liquidity profile; - the principal risks and uncertainties (including those relating to liquidity, refinancing/covenant management, regulation and climate); and - the effectiveness of mitigating actions and management flexibilities available under severe but plausible downside scenarios. The three-year review considers the Company's cash flow and other key financial ratios over the period with the Company continuing under its existing arrangements, pending the outcome of the shareholder meeting to approve the proposed wind-down, with a separate wind-down scenario also considered as described below. It assumes no further disposals and that only the minimum dividends required to maintain investment trust status are paid to shareholders. The three-year review also makes certain assumptions about the normal level of expenditure likely to occur and considers the impact on the financing facilities of the Company. Whilst the financial statements have been prepared on a going concern basis, there is a material uncertainty in respect of the proposed managed wind-down of the Company and the related shareholder approvals required to implement it. The Board reviewed the Company's cash flow forecast and considered the impact on its liquidity, financing arrangements and covenant compliance over the review period. The Audit and Risk Committee ("ARC") reviewed and challenged the scenario analysis prepared by the Investment Manager, including the potential impact of severe but plausible downside scenarios on projected cash flows, covenant compliance, liquidity headroom, and the Company's ability to meet its liabilities as they fall due. Considering the liquidity of the portfolio, the recent disposal and associated repayment of the RCF, the available covenant headroom and the largely fixed overheads which comprise a small percentage of net assets, the Board has concluded that the Company would be able to meet its ongoing operating costs and liabilities as they fall due over the review period. Without further disposals, the directors note that total portfolio gearing$^{SM}$ is expected to remain above the current investment policy limit. ### Confirmation of viability Based on the analysis undertaken, and having taken into account the Company's current position, the principal risks and uncertainties and the results of the scenario analysis described above, the Directors confirm that they have a reasonable expectation that the Company will be able to continue to operate and meet its liabilities as they fall due over the period to 31 March 2029, including while pursuing a realisation of the portfolio and wind-down, subject to shareholder approval and to legal, regulatory and financing constraints. Should a full portfolio realisation occur earlier in the review period, the Company would return capital to shareholders and the Company would be liquidated in a shorter time period. On behalf of the Board ### Tony Roper Chair --- 61 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Stakeholders and Section 172 Performance ## Section 172: Promoting the Success of the Company The Directors consider, both individually and together, that they have fulfilled their duties under Section 172 of the Companies Act 2006 to act in good faith and to promote the success of the Company for the benefit of shareholders and stakeholders as a whole, having regard to the stakeholders and matters set out in Section 172 of the UK Companies Act 2006 ('Companies Act') in the decisions taken during the year, as set out in the table below: Following the year end, on 9 April 2026, the Company announced that following a careful assessment of all actionable options available to achieve the objective of delivering shareholder value, the Board had agreed to pursue a managed wind-down of the Company's investment portfolio, subject to shareholder approval. In the context of a managed wind-down process, the Board considers that promoting the success of the Company includes maximising value for shareholders through the effective and orderly realisation of the Company's assets, and maintaining appropriate standards of governance, oversight and stakeholder engagement. | Section 172(1) | Description | | --- | --- | | **(a) the likely consequences of any decision in the long term** | During the year under review, the Board believes it acted in good faith, protecting shareholders' interests and to achieving its wider objectives for the benefit of its shareholders as a whole, having had regard to wider stakeholders and the other matters set out in Section 172 of the Companies Act. See the rest of this section for the Board's decisions, on approving dividends, and the oversight and monitoring of the Investment Manager's activities in relation to risk and portfolio management for the Company. | | **(b) the interests of the Company's employees** | As a closed-ended investment company, the Company does not have any direct employees. During the year, the interests of employees in portfolio companies were considered by the Investment Manager when making decisions for the Company's benefit, such as promoting positive health and safety cultures and other ESG initiatives (further details can be found in the ESG Update on pages 39 to 55). | | **(c) the need to foster the Company's business relationships with suppliers, customers and others** | The Company's approach is described under 'Stakeholders' below. | | Section 172(1) | Description | | --- | --- | | **(d) the impact of the Company's operations on the community and the environment** | The Board places a high value on the monitoring of ESG issues and sets the overall strategy for ESG matters related to the Company. The Board provides oversight for the managing of climate-related risks for the portfolio by the Investment Manager, including transparent disclosure of these risks, and reviews mitigating actions taken by the Investment Manager to reduce or eliminate them where possible. A description of the Company's Responsible Investment Policy is available on the Company's website and further detail on climate-related risks is set out in the ESG Update on pages 39 to 55 and the Risk Management Framework on pages 56 to 59. Further details of matters discussed and agreed by Directors during the year are described in the ESG Update on pages 39 to 55. | | **(e) the desirability of the Company maintaining a reputation for high standards of business conduct** | The Board's approach is described under 'Stakeholders' below. For further information please also see the ESG Update on pages 39 to 55. | | **(f) the need to act fairly between members of the Company** | The Board's approach is described under 'Stakeholders' below. For further information please also see the Corporate Governance Statement on pages 68 to 76. | The issues, factors and stakeholders the Directors consider relevant in complying with Section 172(1) (a) to (f) are described in detail below. The Investment Manager provides updates to the Board at quarterly meetings on the above items, including the rationale behind investment/investment management decisions, its relationships with the Company's shareholders and key stakeholders and the Company's reputation in the broader market. This is further supported by reports from several advisers such as the Company's broker and financial PR consultant. Further, the Companies (Miscellaneous Reporting) Regulations 2018 require Directors to explain how they have discharged their duties under Section 172(1) of the Companies Act 2006 in promoting the success of their companies for the benefit of 'members as a whole'. The Board's approach is described under 'Stakeholders' below. --- 62 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Stakeholders and Section 172 continued ## Stakeholders The Board challenges the Investment Manager to balance the interests and concerns of all stakeholders effectively to ensure continuing positive stakeholder engagement. The Company is committed to maintaining good and regular communications and building positive relationships with all stakeholders. To achieve this, the Company, either directly or via the Investment Manager, interacts with a variety of stakeholders relevant to its success. The Company seeks to achieve the correct balance between engagement and communication, whilst working within the limitations of what can be disclosed to the various stakeholders, maintaining confidentiality of market and/or commercially sensitive information. The Company has identified the following key stakeholders: - shareholders; - the Investment Manager; - the Company's key service providers; - the Company's investment business partners (including host counterparties); and - lenders at project level and corporate level. | Stakeholders | Why they are important | Engagement | | --- | --- | --- | | **Shareholders** | As the Company is an investment trust listed on the London Stock Exchange and a constituent of the FTSE 250 index, its shareholders are also its main stakeholders. Continued shareholder support and engagement are critical to the existence of the Company and to the delivery of the long-term strategy. | The Company currently has over 300 shareholders. The Company continued to engage, directly or via the Investment Manager, with shareholders in the year through an increased number of shareholder meetings, market announcements, presentations and various written materials, available on the Company's website. At every Board meeting, the Directors received updates on share trading activity, share price performance, shareholder feedback and any mention of the Company in the press. The Board consulted and discussed with its larger shareholders in detail regarding the strategic direction of the Company, which included an option to become an integrated operating company with internalised management to improve medium to longer term value prospects for shareholders as an energy services platform. Following those discussions, and taking into consideration the views of its shareholders and the Company's objective of delivering shareholder value, the Board agreed that it was in the best interests of its shareholders, to pursue a managed wind-down of the Company's investment portfolio. The Company will continue to engage actively with shareholders. | | Stakeholders | Why they are important | Engagement | | --- | --- | --- | | **The Investment Manager** | The Investment Manager's performance is critical for the Company to deliver its investment strategy and meet its objectives. | Constructive engagement with the Investment Manager is important to ensure that the expectations of shareholders are being met and that the Board is aware of any challenges to the investment strategy or management of the Company's portfolio of investments. The Board conducts both an ongoing and an annual review of the Investment Manager's performance and terms of engagement, and provides feedback after such reviews. The most recent annual review took place in March 2026 and written feedback was given to the Investment Manager. The Board and the Investment Manager maintain an open and ongoing dialogue on key issues facing the Company with a view to ensuring that key decisions relating to, inter alia, potential investments and disposals, portfolio performance and the Company's investment strategy are aligned with achieving long-term value for shareholders. During the year, as a result of the numerous challenges faced by the Company, in addition to the quarterly scheduled Board meetings, the Board and the Investment Manager held frequent important meetings. | | **Key service providers** | The Company has a number of other key service providers, each of which provides a vital service to the Company and ultimately to its shareholders. The Company's key service providers are the Administrator and Company Secretary, Auditor, Corporate Broker, Depositary and Registrar. | During the year, the Company conducted a review of the terms of all key service provider engagements along with their fee levels to ensure an appropriate level of support was being provided to the Company. The Directors provided specific feedback to key service providers with the aim of ensuring the Company receives an appropriate service. The Company seeks to ensure a two-way engagement between the Board and key service providers on service delivery expectations and feedback on important issues experienced by service providers. | --- 63 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Stakeholders and Section 172 continued Performance | Stakeholders | Why they are important | Engagement | | --- | --- | --- | | **Investment business partners (including host counterparties)** | The Company has various business partners including, crucially, via Holdco, the counterparty hosts to whom the Company's investments are providing critical energy services, as well as sub-contractors who provide key services to individual or groups of portfolio companies. Such services include operations and maintenance, technical asset management and EPC construction that are considered vital to the success of the investments. | The Investment Manager undertakes a review of the contracting terms of all counterparties to ensure they are fair and appropriate. The Directors received an update on actions during the year for the Investment Manager to seek to maintain long-term collaborative partnerships with these counterparties to ensure relationship stability and that the Company's investment return targets are achieved. | | **Lenders at project level and corporate level** | The availability of funding and liquidity are crucial elements in ensuring the Company's ability to execute against attractive investment opportunities as they arise. | Considering the importance of available funding, the Company aims to demonstrate to its lenders, through regular reporting and dialogue, that it is a well-managed business and, in particular, that the Investment Manager is focused on providing regular and careful management of risk within the investment portfolio and the Company as a whole. | The Directors' overarching duty is to promote the success of the Company for the benefit of shareholders, with due consideration of other stakeholders' interests. The Company seeks to maintain high standards of business conduct and corporate governance and to ensure, via the Investment Manager, that appropriate oversight, control and suitable policies are in place to guarantee stakeholders are treated fairly. The Board seeks to ensure the alignment of its purpose, values and strategy with this culture of openness, debate and integrity through ongoing dialogue and engagement with its key stakeholders. The Board aims to achieve a supportive business culture combined with constructive challenge, and to provide a regular flow of information to shareholders and relevant information as required to other key stakeholders. Both the Board, which comprises 40% male and 60% female members, and the Investment Manager support equal opportunities for recruitment and when managing existing employees – regardless of age, race, gender, disability or personal beliefs and preferences. Although the Company has no direct employees, it is committed to respecting human rights in its broader relationships and its portfolio companies. The Company does not tolerate corruption, fraud, bribes, human rights violations or environmental misuse. The Company aims to maintain standards of business integrity, a commitment to truth and fair dealing, and a commitment to complying with all applicable laws and regulations. The Company has several policies and procedures in place to assist with maintaining a culture of good governance, including those relating to diversity, anti-bribery – including the acceptance of gifts and hospitality – fraud, tax evasion, conflicts of interest, whistleblowing and Directors' dealings in the Company's shares. The Board assesses and monitors compliance with these policies regularly through Board meetings and the annual evaluation process. The Board seeks to appoint the most appropriate service providers for the Company's needs and evaluates their services on a regular basis. The Board considers the culture of the Investment Manager and other service providers through regular reporting and by receiving regular presentations, as well as through ad hoc interactions. The Strategic Report has been approved by the Board of Directors. On behalf of the Board Tony Roper Chair --- 64 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Governance ## Governance | Investment Policy and Approach | 65 | | --- | --- | | Board of Directors | 66 | | Corporate Governance Statement | 68 | | Nomination Committee Report | 77 | | Audit and Risk Committee Report | 79 | | Directors' Remuneration Report | 84 | | Report of the Directors | 90 | | Statement of Directors' Responsibilities | 95 | Primary Energy --- 65 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Investment Policy and Approach Following the year end, on 9 April 2026, the Board announced its intention to pursue a wind-down of the Company, subject to shareholder approval. A shareholder circular was published on 16 June 2026 proposing amendments to the investment policy to permit the realisation of the Company's assets and the return of cash to shareholders. The investment objective and policy set out below reflect the position of the Company as at 31 March 2026. ## Investment Objective The Company's investment objective is to generate an attractive total return for investors comprising stable dividend income and capital preservation, with the opportunity for capital growth. ## Summary of the Investment Policy - The Company seeks to achieve its investment objective by investing principally in a diversified portfolio of investments with high-quality, private and public sector counterparties. The contracts governing these investments typically entitle the Company, on the whole, to receive stable and predictable cash flows. The Company's returns are derived from contractual payments by counterparties in respect of each relevant investment. - Whilst the Company invests predominantly in operational investments, the Company may, under certain circumstances, invest while such investments are in a construction or development phase. In addition, the Company may, to a limited extent, invest in developers, operators or managers of energy efficiency infrastructure investments. - In respect of the investment portfolio, the Company seeks to diversify its subcontracting exposure by contracting, where commercially practicable, with a range of different engineers, manufacturers or other service providers. - Investments may be acquired individually or as a portfolio. The Company may also invest jointly with a co-investor. The Company aims to achieve diversification by investing in a range of different energy efficiency technologies and contracting with a wide range of counterparties. - Though the Company initially focused its attention on investing in the UK, over time the Company has expanded to invest in projects in Europe, North America and the Asia-Pacific region. - In pursuing its investment policy, the Company will seek to target sustainable investments, for example by making investments that contribute to GHG emission reductions. ## Gearing The Company maintains a conservative level of aggregate gearing$^{MM}$ in the interests of capital efficiency, to enhance income returns, long-term capital growth and capital flexibility. The Company's target medium-term gearing$^{MM}$ is 35% of net asset value ('NAV')$^{MM}$, calculated at the time of borrowing ('structural gearing$^{MM}$'). The Company may also enter borrowing facilities on a short-term basis to finance acquisitions ('acquisition finance'), provided that the aggregate consolidated borrowing of the Company and the investment portfolio, including any structural gearing$^{MM}$, shall not exceed 65% of NAV$^{MM}$, calculated at the time of borrowing$^{1}$. The Company intends to repay any acquisition finance with the proceeds from capital raisings and/or capital recycling in the short to medium term. Structural gearing$^{MM}$ and acquisition finance are employed either at the level of the Company, at the level of the relevant investment or at the level of any intermediate wholly owned subsidiary of the Company. Structural gearing$^{MM}$ and acquisition finance primarily comprise bank borrowings, though small overdraft facilities may be used for flexibility in corporate transactions. ## Use of Derivatives The Company may use derivatives for efficient portfolio management but not for investment purposes. In particular, the Company may engage in full or partial interest rate hedging or otherwise seek to mitigate the risk of interest rate increases and full or partial foreign exchange hedging to mitigate the risk of currency inflation. The Company does not typically enter into hedging contracts and other derivative contracts directly but may do so via its subsidiaries when they are available in a timely manner and on acceptable terms. The Company reserves the right to terminate any hedging arrangement in its absolute discretion. ## Cash Management Whilst it is the intention of the Company to be fully or near fully invested in normal market conditions, the Company may hold cash on deposit and invest in cash-equivalent investments, which could include short-term investments in money market type funds and tradeable debt securities. For further details please see the Company website: https://www.seitplc.com/. 1. As reported in December 2025 the Company is currently above the 65% total gearing limit as set out in the current Investment Policy. --- 66 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Board of Directors As at the date of this Annual Report, the Board consists of five Directors who have complementary and relevant skills and backgrounds. The Directors are of the opinion that the Board as a whole has an appropriate balance of skills, experience and diversity. Independent Non-Executive Chair ![img-47.jpeg](img-47.jpeg) Independent Non-Executive Director ![img-48.jpeg](img-48.jpeg) N Appointed: 12 October 2018 Tony started his career as a structural engineer with Ove Arup and Partners in 1983. In 1994 he joined John Laing plc to review and make equity investments in infrastructure projects both in the UK and abroad and then in 2006 he joined HSBC Specialist Investments to be the fund manager for HSBC Infrastructure Company Limited (now HICL Infrastructure plc). In 2011, Tony was part of the senior management team that bought HSBC Specialist Investments from HSBC, renaming it InfraRed Capital Partners. Tony was a managing partner and a senior member of the infrastructure management team at InfraRed Capital Partners until June 2018, during which time he oversaw the successful launch of The Renewables Infrastructure Group on the London Stock Exchange. Tony is the chair of abrdn European Logistics Income plc and a non-executive director of Foresight Solar Fund Limited. Tony has a master's degree in Engineering from the University of Cambridge. Appointed: 1 August 2025 Rosemary has a background in mergers and acquisitions, starting her career with 16 years at UBS Warburg, following which she spent ten years as Group Finance Director of The Carbon Trust. Rosemary then held senior executive positions including at Circle Housing and as Chief Financial Officer of Future Cities Catapult. Rosemary's knowledge of the wider low carbon technology sector has been built up over 20 years. Rosemary is an experienced non-executive director of alternative asset investment trusts, having served on the boards of Care REIT plc and Triple Point Energy Transition Trust plc as senior independent director. Other recent non-executive roles have included Southern Water, Nido Living and trustee of Green Alliance. She is currently a non-executive director of Urban&Civic plc, the UK master developer, where she chairs the Sustainability and Health and Safety Committee, and she is a co-founder and non-executive director of Chapter Zero Limited. Rosemary has an undergraduate degree in Natural Sciences from the University of Cambridge. Key to committees: ![A small icon of a document with a red and blue mark inside.]() Audit and Risk Committee Chair ![M]() Management Engagement Committee Chair ![D]() Nomination Committee Chair ![L]() Remuneration Committee Chair ![E]() ESG Committee Chair --- 67 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Board of Directors continued Independent Non-Executive Director ![img-49.jpeg](img-49.jpeg) **E** **M** **Appointed:** 12 October 2018 Helen joined Climate Group in March 2017 as Chief Executive Officer. Climate Group is an international non-profit organisation with a mission to drive climate action, fast. Climate Group builds networks of leading governments and businesses working on issues such as renewable electricity and zero carbon steel, to shape markets and policy. Helen also sits on the board of the We Mean Business Coalition. Prior to joining the Climate Group, Helen worked at Forum for the Future where she founded the organisation's US office. At Forum, Helen led work with large US corporations such as Target, Walmart, Nike, Gap and Levi Strauss & Co. to solve complex sustainability challenges. Helen joined Forum from Médecins Sans Frontières where she worked on humanitarian missions across a number of conflict zones. Helen qualified as a Chartered Accountant with Deloitte and has an undergraduate degree from the University of Cambridge, and a master's degree from the University of London. In 2022 Helen was awarded an OBE for services to the climate. Senior Independent Non-Executive Director ![img-50.jpeg](img-50.jpeg) **R** **Appointed:** 12 October 2018 Chris has over 40 years' experience in projects, infrastructure and environmental finance and economics. He has spent the majority of his career to date at the European Investment Bank ('EIB'), heading its infrastructure and environmental investment funds business from 2005 to 2017. In this capacity, he had pan-European responsibility for a diverse portfolio of activities, including equity funds for infrastructure and clean energy, energy efficiency, carbon finance, natural capital and structured finance. Chris also serves as a NED on a number of private equity and debt funds pursuing ESG and impact strategies in Europe, Latin America, Africa and Asia. He is a member of various advisory committees, including that for the Climate Bond Initiative and the Organisation for Economic Co-operation and Development ('OECD') Centre for Green Finance & Investment. Chris holds degrees in Economics and Management from the University of Durham. Independent Non-Executive Director ![img-51.jpeg](img-51.jpeg) **A** **Appointed:** 1 January 2022 Sarika is an experienced business leader in a mixture of public and private organisations and has worked as a senior corporate finance professional at Zeus Caps (a principal investment and advisory platform focused on infrastructure and related sectors operating in India, Europe and the Middle East). She was the National Head of Technology at Grant Thornton. She was the director of Innovation and all business sectors at the London Development Agency, attracting and supporting businesses in London. Sarika is the chair of abrdn Equity Investment Trust plc and is a non-executive director of Templeton Emerging Markets Investment Trust PLC. Sarika is the Chair of Action for Children. She has held various board positions at Foresight Forestry Fund, Sequoia Economic Infrastructure Fund, Smithson, The Office for Nuclear Regulation, The Gambling Commission, Imperial Healthcare NHS Trust, University of Greenwich, etc. Sarika is a Chartered Accountant, a Chartered Marketer and a double graduate in Law and Commerce. **Key to committees:** ![A] Audit and Risk Committee Chair ![M] Management Engagement Committee Chair ![U] Nomination Committee Chair ![E] Remuneration Committee Chair ![L] ESG Committee Chair --- 68 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Corporate Governance Statement ## This Corporate Governance Statement forms part of the Directors' Report The Company is a member of the Association of Investment Companies (the 'AIC') and the Board recognises the importance of a sound corporate governance culture that meets the requirements of the Financial Conduct Authority (the 'FCA') and the 2024 AIC Code of Corporate Governance (the 'AIC Code'). The Board of Directors has considered the Principles and Provisions of the AIC Code which addresses the Principles and Provisions set out in the UK Corporate Governance Code (the 'UK Code'), as well as setting out additional provisions on issues that are of specific relevance to the Company. The Board considers that reporting against the Principles and Provisions of the AIC Code, which has been endorsed by the FRC, provides more relevant information to shareholders. The AIC Code can be found at www.theaic.co.uk and the UK Code can be found at www.frc.org.uk. The AIC Code includes an explanation of how the AIC Code adapts the Principles and Provisions set out in the UK Code to make them relevant for investment companies. Set out below are the full details of how the Company has applied the Principles of the AIC Code: | AIC Code | Principle | Compliance statement | | --- | --- | --- | | A | A successful company is led by an effective Board, whose role is to promote the long-term sustainable success of the Company, generating value for shareholders and contributing to wider society. The Board should ensure that the necessary resources, policies and practices are in place for the Company to meet its objectives and measure performance against them. | The Board is subject to an annual evaluation, the results of which indicate that the Board performs effectively as a whole. As part of the evaluation process, the Board identifies areas in which they could further improve, and performance in these areas is monitored throughout the year and at the point of the next annual evaluation. Further information on the Board evaluation process can be found in the Nomination Committee Report on pages 77 and 78. The Directors regularly consider the Company's financial position in the context of its business model, the balance sheet, cash flow projections, availability of funding and the Company's contractual commitments. Following the Board's announcement of its intention to pursue a managed wind-down (subject to shareholder approval), the Board considers that its role in promoting the success of the Company includes stewardship of the wind-down process, risk management, and balancing timeliness of returns with maximising value for shareholders. | | AIC Code | Principle | Compliance statement | | --- | --- | --- | | B | The Board should establish the Company's purpose, values and strategy, and satisfy itself that these and its culture are aligned. All Directors must act with integrity, lead by example and promote the desired culture. | During the year, the Company's investment objective has been to generate an attractive total return for investors comprising stable dividend income and capital preservation, with the opportunity for capital growth. Following the proposal for the managed wind-down, the Board will give consideration as to how best to ensure the Company is able to continue operating its ordinary activities, whilst ensuring that it can deliver shareholder value through disposals and ultimately a full liquidation of the Company's portfolio. The Board seeks to ensure the alignment of its purpose, values and strategy with a culture of openness, debate and integrity through ongoing dialogue and engagement with its stakeholders. The Directors aim to achieve a supportive business culture combined with constructive challenge and to provide a regular flow of information to shareholders and other stakeholders. | | C | Governance reporting should focus on Board decisions and their outcomes in the context of the Company's strategy and objectives. Where the Board reports on departures from the AIC Code's provisions, it should provide a clear explanation. | The Board regularly reviews the Company's strategy and objectives and decisions taken by the Board and their potential outcomes are reflected throughout this annual report. | | D | In order for the Company to meet its responsibilities to shareholders and stakeholders, the Board should ensure effective engagement with, and encourage participation from, these parties. | The Company describes its key stakeholders, the reason they are important, how it seeks to gain an understanding of their interests and how the Board engages with them, whether directly or via the Investment Manager, on pages 61 to 63 Stakeholders and Section 172. | | F | The Chair leads the Board and is responsible for its overall effectiveness in directing the Company. They should demonstrate objective judgement throughout their tenure and promote a culture of openness and debate. In addition, the Chair facilitates constructive Board relations and the effective contribution of all Non-Executive Directors, and ensures that Directors receive accurate, timely and clear information. | The role and responsibilities of the Chair are described in the Corporate Governance Statement on pages 68 to 76. The Company recognises that the Chair leads the Board and is responsible for its overall effectiveness in directing the affairs of the Company. The annual evaluation of the Board's effectiveness considers the performance of the Chair, and whether they have performed their role effectively. The Directors have concluded that the Chair has fulfilled his role and performed well to support effective functioning of the Board as evidenced in the internal Board evaluation that took place during the latter part of the financial year. | --- 69 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Corporate Governance Statement continued | AIC Code | Principle | Compliance statement | AIC Code | Principle | Compliance statement | | --- | --- | --- | --- | --- | --- | | G | The Board should consist of an appropriate combination of Directors (and, in particular, independent Non-Executive Directors) such that no one individual or small group of individuals dominates the Board's decision making. | During the year under review, the Board consisted only of Non-Executive Directors and all of the Directors are deemed to be independent of the Investment Manager. In the Board's opinion, each Director continues to provide constructive challenge and robust scrutiny of matters that come before the Board. The Board also considers the composition of the Board as well as longer-term succession plans. The Board was satisfied that the Board's current composition is adequate to appropriately discharge its duties. In light of the proposal for a managed wind-down, composition and longer-term succession plans will continue to be monitored. | K | The Board and its Committees should have a combination of skills, experience and knowledge. Consideration should be given to the length of service of the Board as a whole and membership regularly refreshed. | The Nomination Committee, which comprises the whole Board, is responsible for identifying and recommending to the Board the appointment of new Directors. The Nomination Committee reviews, at least annually, the key skills and experience of each Director and the skills matrix is reviewed periodically to ensure that the Board has an appropriate mix of skills and experience, particularly when considering longer-term succession plans. | | H | Non-Executive Directors should have sufficient time to meet their Board responsibilities. They should provide constructive challenge, strategic guidance, offer specialist advice and hold third-party service providers to account. | The Board considers the required time commitment annually and, during the year under review, the Board concluded that all Directors continued to devote sufficient time to the business of the Company. Through their contributions in meetings, as well as outside of the usual meeting cycle, the Directors share their experience and guidance with, as well as constructively challenge, the Investment Manager. The Management Engagement Committee annually assesses the performance of all material third-party service providers. | L | Annual evaluation of the Board should consider its performance, composition, diversity and how effectively members work together to achieve objectives. Individual evaluation should demonstrate whether each Director continues to contribute effectively. | The Directors are aware that they need to monitor and improve Board performance and recognise that this can be achieved through regular Board evaluation, which provides a valuable feedback mechanism for improving Board effectiveness. In line with the AIC Code, the Board has agreed that an external Board evaluation will be carried out every three years and, in the intervening years, evaluations will be carried out by means of questionnaires and interviews. For the year ended 31 March 2026, the Company carried out an internal Board evaluation via a questionnaire provided to each Director. Following completion of the Board evaluation, the Board was satisfied that the Board, Chair and Directors were suitably qualified to perform their duties. Further details of the results of the Board evaluation process can be found in the Nomination Committee Report on pages 77 and 78. | | I | The Board, supported by the Company Secretary, should ensure that it has the policies, processes, information, time and resources it needs in order to function effectively and efficiently. | The Board's responsibilities are set out in the schedule of matters reserved for the Board and certain responsibilities are delegated to its Committees, so that it can operate effectively and efficiently. All Board policies were reviewed and, where appropriate, updated during the year. They continue to be reviewed on a regular basis. Directors are also provided with any relevant information and have access to the Company Secretary and independent advisers, if required. | M | The Board should establish formal and transparent policies and procedures to ensure the independence and effectiveness of external audit functions and satisfy itself on the integrity of financial and narrative statements. | The Audit and Risk Committee supports the Board in fulfilling its oversight responsibilities by reviewing the performance of the independent auditor, audit quality and the auditor's objectivity and independence. The Audit and Risk Committee also reviews the integrity and content of the financial statements, including the ongoing viability of the Company. More details can be found in the Audit and Risk Committee Report on pages 79 to 83. | | J | Appointments to the Board should be subject to a formal, rigorous and transparent procedure, and an effective succession plan should be maintained. Both appointments and succession plans should be based on merit and objective criteria and, within this context, should promote diversity, inclusion and equal opportunity. | The Company is committed to ensuring that any vacancies arising are filled by suitably qualified candidates. The Board has adopted a Diversity Policy, which acknowledges the benefits of greater diversity, and remains committed to ensuring that the Company's Directors bring a wide range of skills, knowledge, experience, backgrounds and perspectives to the Board. Appointments of new Directors to the Board follow a structured and transparent process as described further below. The Company's policy on the tenure of Directors also helps guide long-term succession plans and recognises the need and value of progressive refreshing of the Board. Both policies are described in more detail below. | N | The Board should present a fair, balanced and understandable assessment of the Company's position and prospects. | The Audit and Risk Committee supports the Board in assessing that the Company's Annual Report presents a fair, balanced and understandable assessment of the Company's position and prospects. Please refer to the Audit and Risk Committee Report on pages 79 to 83 for further information. | --- 70 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Corporate Governance Statement continued | AIC Code | Principle | Compliance statement | AIC Code | Principle | Compliance statement | | --- | --- | --- | --- | --- | --- | | O | The Board should establish and maintain an effective risk management and internal control framework, and determine the nature and extent of the principal risks the Company is willing to take in order to achieve its long-term strategic objectives. | The Company is subject to various risks in pursuing its objectives and, in order to effectively assess and manage risk, appropriate controls and policies are in place, which are regularly reviewed and assessed by the Audit and Risk Committee. These are detailed in the Risk Management Framework on pages 56 to 59, in the Audit and Risk Committee Report on pages 79 to 83 and in Note 13 to the financial statements on pages 121 to 123. The Directors confirm they have carried out a robust assessment of the emerging and principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. See the Risk Management Framework on pages 56 to 59 for further details. The work of the Audit and Risk Committee supports the Board through its independent oversight of the financial reporting process – including the financial statements, the system of internal control and management of risk. The appointment and ongoing review of the quality of the work and independence of the Company's external auditor is described in the Audit and Risk Committee Report on pages 79 to 83. The Directors have assessed the prospects of the Company over a three-year period to 31 March 2029. The Directors have determined that a viability statement for a three-year period is appropriate as this is aligned with the Board's decision, following the year end, to pursue a realisation of the portfolio and wind-down of the Company, subject to shareholder approval, and reflects the balance between providing a meaningful forward looking assessment and the inherent uncertainty in forecasting realisation timing and pricing beyond that horizon. See page 60 for further details on the Viability Statement. | Q | A formal and transparent procedure for developing a policy for remuneration should be established. No Director should be involved in deciding their own remuneration outcome. | The Board has established a separate Remuneration Committee, which, as the Company has no employees and the Board is comprised wholly of Non-Executive Directors, is comprised of all the Directors. Directors' remuneration is determined by the Committee, at its discretion within an aggregate ceiling as set out in the Company's Articles of Association. Each Director obtains from voting on their own individual remuneration. The details of the Remuneration Policy and Directors' fees can be found in the Directors' Remuneration Report on pages 84 to 89. The terms and conditions of the Directors' appointments are set out in their letters of appointment, which are available for inspection on request at the registered office of the Company. | | P | Remuneration policies and practices should be designed to support strategy and promote long-term sustainable success. | The Directors are all non-executive and independent of the Investment Manager. They receive fees and no component of any Director's remuneration is subject to performance factors. Whilst there is no requirement under the Company's Articles of Association or letters of appointment for Directors to hold shares in the Company, details of Directors' shareholdings are set out in the Directors' Remuneration Report on pages 84 to 89. | R | Directors should exercise independent judgement and discretion when authorising remuneration outcomes, taking account of Company and individual performance, and wider circumstances. | The process of reviewing the Directors' fees is described in the Directors' Remuneration Report on pages 84 to 89, although because there are no performance-related elements of the remuneration, there is very little scope for the exercise of discretion or judgement. | Principle E of the UK Code relates to the treatment of employees and so is generally not applicable to companies under the AIC Code if, as in the case of the Company, there are no employees. ### The Board of Directors The Directors of the Company who were in office during the year and up to the date of signing the financial statements are listed in the Board of Directors' section on pages 66 and 67. ### Board Independence The Board consists of five independent Non-Executive Directors, who were considered independent of the Investment Manager at the time of their appointment. The independence of the Directors is reviewed as part of the annual evaluation process and, in line with the guidelines of the AIC Code, the Directors continue to be considered independent in character and judgement. All the Directors are entirely independent of the Investment Manager. --- 71 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Corporate Governance Statement continued ## Appointment of New Directors Any appointments to the Board are subject to a formal, rigorous and transparent process. Responsibilities of the Nomination Committee include satisfying itself that there is succession planning in place for Directors to ensure continued refreshment of the Board and its Committees; determining membership of the Board's Committees in conjunction with the respective Committee Chairs for approval by the Board; and identifying and nominating, for the approval of the Board, candidates to fill Board vacancies as and when they arise. As part of the appointment process, the Nomination Committee will: - evaluate the current balance of skills, knowledge and experience on the Board; - draw up a description of the role, including the capabilities required, and use an external search consultancy, if considered necessary and appropriate, in the search for candidates; - ensure that appointments are made based on merit and after assessing candidates by means of objective criteria, including, but not limited to, the Board's Diversity Policy; and - determine the terms and conditions of the appointment of Non-Executive Directors, including setting out clearly what is expected of them in terms of time, commitment, committee service and involvement outside of Board meetings. ## Induction Process New appointees to the Board are provided with a full induction programme. The programme is based on the Corporate Governance Institute UK & Ireland's 'Induction of Directors' guidance note, adapted to the requirements of the Company. It is designed to: i. build an understanding of the nature of the Company, its business and its markets; ii. build an understanding of the Company's main relationships; and iii. ensure an understanding of the framework within which the Board operates. The programme covers the Company's investment strategy, policies and practices. The Directors are also given key information on the Company's regulatory and statutory requirements as they arise; information on the role of the Board, including matters reserved for its decision and the terms of reference for the Board Committees; the Company's corporate governance practices and procedures; and the latest financial information. Incoming Directors are also afforded the opportunity to meet early on with the current Non-Executive Directors, key personnel from the Investment Manager and other key service providers, including the independent auditor, the Company Secretary and Administrator, and the Corporate Broker. ## Terms of Appointment The terms of appointment of the Directors are formalised in letters of appointment, copies of which are available for inspection at the Company's registered office. None of the Directors have a contract of service with the Company nor has there been any other contract or arrangement between the Company and any Director at any time during the year. During the year, following the appointment of Rosemary Boot on a three-month notice period, the Company aligned the notice provisions of all Directors in order to ensure consistency of contractual terms and support orderly succession planning. ## Re-Election The Articles of Association provide that each of the Directors shall retire at each AGM. Chris Knowles has signified his intention to step down as a Director at the forthcoming AGM. All the remaining Directors intend to retire at the forthcoming AGM and will offer themselves for re-election. As set out further below, the Board carries out an annual review of each Director individually and the Board as a whole. The Board believes that the balance of skills, gender, experience and knowledge of the current Board provides for a sound base from which the interests of investors will be served to a high standard. The Board recommends the re-election of all Directors standing for re-election at the forthcoming AGM. ## Board Responsibilities Under the leadership of the Chair, the Board is responsible for the effective stewardship of the Company's affairs, including strategy, corporate governance, risk assessment and overall investment policy. ## Role and Responsibilities of the Chair The Chair leads the Board and is responsible for its overall effectiveness in directing the Company. Key aspects of the Chair's role and responsibilities include: - demonstrating objective judgement throughout their tenure; - promoting a culture of openness and debate; - facilitating constructive Board relations and the effective contribution of all Non-Executive Directors; - working with the Company Secretary to ensure that all Directors receive accurate and timely information so that they can discharge their duties; - ensuring that the Board as a whole has a clear understanding of the views of shareholders; and - acting on the results of the annual evaluation of the performance of the Board, its Committees and individual Directors by recognising the strengths and addressing any weaknesses of the Board. The Chair, Tony Roper, met the independence criteria upon appointment and has continued to meet this condition throughout his term of service. --- 72 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Corporate Governance Statement continued ## Role and Responsibilities of the Senior Independent Director The key elements of the Senior Independent Director's role include: - acting as a sounding board for the Chair of the Board, providing the Chair with support in the delivery of their objectives; - leading the evaluation of the Chair on behalf of the other Directors as part of the annual evaluation process; - in the event of any major difference of opinion on the direction of the Company, acting as an intermediary between the Chair, other Directors and the Investment Manager; and - acting as a conduit for views of shareholders in the event that the usual channels are not available or not suitable in the circumstances. Chris Knowles was appointed as Senior Independent Director at IPO. The responsibilities of the Chair and Senior Independent Director are available on the Company's website. ## Delegation of Responsibilities The Board has delegated the following areas of responsibility to a number of service providers, each engaged under separate contracts: ### Company Secretary and Administrator JTC (UK) Limited is the appointed Company Secretary and Administrator to the Company, providing company secretarial, fund accounting and administration services. Day-to-day administration has been delegated to JTC (UK) Limited as the Company Secretary and Administrator. The Board has access to the Company Secretary to advise on all governance and day-to-day administrative matters. The Company Secretary is also responsible to the Board for ensuring that all the Company's continued statutory obligations are met. ### Investment Manager The management of the Company's portfolio is delegated to the Investment Manager, Sustainable Development Capital LLP. The Investment Manager currently has full discretion, within agreed parameters, to make investments in accordance with the Company's investment policy and has responsibility for financial administration and investor relations. In addition, they advise the Board in its decisions in relation to capital raisings and the payment of dividends, amongst other matters. Among the specific tasks of the Investment Manager are the overall financial management of the Company and existing portfolio as a whole, including the deployment of capital; management of the SEIT Group's debt facilities and hedging arrangements; the disposal of assets; operating the Risk Management Framework, preparing the semi-annual valuations, the statutory accounts, the management accounts and business plans; presenting results and information to shareholders; co-ordinating the activities of some corporate service providers to the Company; and providing general advice to the Board. Members of the Investment Manager are also appointed as Directors of SEIT's project companies and/or intermediate holding companies. As part of their role in managing the portfolio, those Directors attend board meetings of these companies and make appropriate decisions. Material decisions are referred back to the Investment Manager's Investment Committee for consideration. The Company's Board is involved in agreeing key matters relevant to the Company's strategy, policies or overall performance, both on an ad hoc basis, where required, and during formal reporting sessions, including all matters outside of the Investment Manager's delegated authority. The Board and the Investment Manager are in discussions as to the appropriate amendments to be made to the investment management agreement, to take account of the arrangements required during the course of the wind-down. ### Share Premium Account On 21 November 2023, following approval by the Court, the Company cancelled £300 million of its share premium account, of which £236 million remain. At the Company's General Meeting, a resolution will be proposed authorising the Company to cancel approximately £757 million of the amount standing to the credit of the Company's share premium account as at 31 March 2026. The distributable reserves arising on the cancellation would be available to support tender offers, B share schemes or other mechanisms for the return of capital to shareholders during the wind-down. The distributable reserves of approximately £236 million would be available, if appropriate, to fund returns of cash to shareholders during the wind-down. ### Board Tenure Policy The Board's policy regarding tenure of service of the Directors, including its Chair, is that any decisions regarding tenure should balance the benefits of continuity and knowledge and the orderly transition of responsibilities through succession plans for the retirement and appointment of Directors against the need to periodically refresh the Board's composition to maintain an appropriate mix of the required skills, experience, diversity and length of service. Annually, as part of the Board's self-evaluation and succession planning process, the Board carefully considers the independence of each Director. Historically it has not been envisaged that any Board member will continue on the Board past nine years, except where required by Company circumstances at that time and then only for a limited period, to be agreed by the Board as a whole, taking into account their independence and the need to balance this against the benefits of maintaining continuity, knowledge and experience. However, following the Company's announced intention to pursue a managed wind-down, this will be reconsidered as wind-down plans are developed. --- 73 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Corporate Governance Statement continued ## Culture The culture of the Board is considered as part of the annual performance evaluation process that is undertaken by each Director. The culture of the Company's service providers, including their policies, practices and behaviour, is considered by the Board as a whole during the annual review of the performance and continuing appointment of all service providers. Further information on the Company's culture and values and engagement with its service providers and other stakeholders is set out in Stakeholders and Section 172 on pages 61 to 63. ## Diversity Diversity, including, but not limited to, gender, ethnicity, professional and industry-specific knowledge, is an important consideration in ensuring that the Board and its Committees have the right balance of skills, experience, independence and knowledge necessary to discharge their responsibilities. The right blend of perspectives is critical to ensuring an effective Board and a successful Company. The Board has adopted a Diversity Policy and considers that its composition, with respect to the balance of skills, ethnicity and cultural diversity, gender, experience and knowledge, coupled with a mixed length of service, provides for a sound base from which the interests of shareholders will be served to a high standard. As at the date of this report, the Board of Directors comprised five independent Non-Executive Directors, two male and three female (being 60% female representation). The Company supports the recommendations of the FTSE Women Leaders Review, which has set a voluntary target of 40% for women to be represented on boards and in leadership of FTSE 350 companies. The Company also supports the Parker Review's recommendations to increase ethnic and cultural diversity on boards, including its target for FTSE 250 boards to have at least one director from an ethnic minority background by December 2024; develop a pipeline of candidates planning for succession through mentoring and sponsoring, and enhancing transparency and disclosure to record and track progress against the objectives. The Company meets the recommendations and targets of these reviews as at 31 March 2026. In accordance with UK Listing Rule 6.6.6R(9), the Company is required to include a statement in its annual financial report setting out whether it has met the following targets on Board diversity as at 31 March 2026: - a. at least 40% of individuals on the Board are women; - b. at least one of the senior Board positions (defined by the FCA as either the Chair, SID, CEO or CFO) is held by a woman; and - c. at least one individual on the Board is from a minority ethnic background. The following tables set out the composition of the Board as at 31 March 2026 which remains the same at the date of this report. This information is based on voluntary self-declaration made by the Directors. ## Table for reporting on gender identity or sex | | Number of Board members | Percentage of the Board | Number of senior positions on the Board (SID and Chair) | | --- | --- | --- | --- | | Men | 2 | 40% | 2 | | Women | 3 | 60% | — | ## Table for reporting on ethnic background | | Number of Board members | Percentage of the Board | Number of senior positions on the Board (SID and Chair) | | --- | --- | --- | --- | | White British or other White (including minority-white groups) | 4 | 80% | 2 | | Asian/Asian British | 1 | 20% | — | As at 31 March 2026, the Board meets the criteria of target a) as 60% of the Board are women, and target c) as one Board member is from a minority ethnic background. With regard to target b) the Company does not have Executive Directors and therefore does not have a CEO or CFO, and therefore none of the senior Board positions, as defined by the FCA, are held by a woman. However, the Board considers the role of the Audit and Risk Committee Chair to be a senior Board position given the nature of the Company as an investment trust. That role is the second highest remunerated position on the Board, reflecting the importance of the position and the time commitments it commands, and is held by a woman. Therefore, under this interpretation, the Board considers that at least one of the senior Board positions is held by a woman. ## Matters Reserved for the Board The Directors have adopted a formal schedule of matters specifically reserved for their approval. The Directors have overall responsibility for the Company's business activities in accordance with the Company's Articles of Association and investment policy. The Board has delegated certain functions to its Committees as described further below, and retains the right to vary the delegation from time to time. Reserved matters for the Board's approval include: - capital raising activities; - declaring interim dividends and recommending final dividends to shareholders; - reviewing the performance and appointments of key service providers; - setting terms of reference for the Board and relevant Board Committees; and - monitoring the constitution and efficiency of the Board and its Committees and key governance aspects such as general meetings and shareholder circulars. --- 74 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Corporate Governance Statement continued ## Committees of the Board The Board has five Committees to assist with its operations: the Audit and Risk Committee, the Remuneration Committee, the Nomination Committee, the Management Engagement Committee and the ESG Committee. The delegated responsibilities of each Board Committee are clearly defined in formal terms of reference, which are available on the Company's website. The Company Secretary acts as secretary to each Committee. No persons other than the Committee members are entitled to attend Committee meetings unless formally invited by the respective Committee. Memberships of the Board Committees as at 31 March 2026 are as follows: | | Audit and Risk Committee | Remuneration Committee | Nomination Committee | Management Engagement Committee | ESG Committee | | --- | --- | --- | --- | --- | --- | | Chair | Sarika Patel | Chris Knowles | Tony Roper | Helen Clarkson | Helen Clarkson | | Members | Rosemary Boot Helen Clarkson Chris Knowles Tony Roper | Rosemary Boot Helen Clarkson Sarika Patel Tony Roper | Rosemary Boot Helen Clarkson Chris Knowles Sarika Patel | Rosemary Boot Chris Knowles Sarika Patel Tony Roper | Chris Knowles | ## Audit and Risk Committee The Board considers that the members of the Audit and Risk Committee have the requisite skills and experience to fulfil the responsibilities of the Committee. The Chair of the Audit and Risk Committee is a chartered accountant and has significant recent and relevant financial experience. The Audit and Risk Committee has direct access to the Company's independent auditor and provides a forum through which the independent auditor reports to the Board. Representatives of the independent auditor attend meetings of the Audit and Risk Committee at least twice per year. Further details about the Audit and Risk Committee and its activities during the year under review are set out in the Audit and Risk Committee Report on pages 79 to 83. ## Remuneration Committee The Remuneration Committee meets at least once per year and deals with matters of Directors' remuneration. In particular, the Remuneration Committee reviews and makes recommendations to the Board regarding the ongoing appropriateness and relevance of the Remuneration Policy. Directors' annual fee levels and also considers the need to appoint independent professional external remuneration consultants. Further details about the Remuneration Committee and remuneration matters are set out in the Directors' Remuneration Report on pages 84 to 89. ## Nomination Committee The Nomination Committee meets at least once per year to consider Board succession planning and recruitment and to conduct the annual Board evaluation exercise. Further details about the Nomination Committee and its activities during the year under review are set out in the Nomination Committee Report on pages 77 and 78. ## Management Engagement Committee The Management Engagement Committee meets at least once per year to assess the performance of the Investment Manager and the Company's other key third-party service providers. This annual review process includes two-way feedback, which provides the Board with an opportunity to understand the views, experiences and any issues encountered by service providers during the year. In addition, the Management Engagement Committee is actively involved in reviewing the contractual relationships of the Investment Manager and the Company's other key third-party service providers and ensuring the contractual terms remain aligned with the objectives of the Company and the interests of shareholders. --- 75 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Corporate Governance Statement continued ## Committees of the Board continued ### Management Engagement Committee continued Following the Committee's assessment of the Investment Manager, and based on its performance, the continued appointment of the Investment Manager is considered to be in the interests of shareholders as a whole, and it was recommended that SDCL continue as Investment Manager. ### ESG Committee The ESG Committee meets at least twice a year to discuss the Company's approach to ESG. Further details about the ESG Committee and its activities during the year under review are set out in the ESG Committee Report on pages 40 and 41. Further details on the Company's approach to ESG can be found in the ESG Update on pages 39 to 55. ### Meetings The Board is scheduled to meet at least four times per year and between these formal meetings there is regular contact with the Investment Manager, the Administrator, the Company Secretary and the Corporate Broker. The Directors are kept fully informed of investment and financial controls, and other matters that are relevant to the business of the Company that should be brought to the attention of the Directors. The agenda for all Board meetings are circulated to the Board in advance of the meeting as part of the Board papers. The Directors consider agenda items and may request any agenda items to be added that they consider appropriate for Board discussion. Each Director is required to inform the Board of any potential or actual conflicts of interest prior to Board discussions. Board meetings include a review of investment performance and associated matters such as health and safety, marketing, investor relations, risk management, gearing$^{1}$, general administration and compliance, peer group information and industry issues. The number of scheduled Board and Board Committee meetings held during the year and the attendance of the individual Directors is shown below: | | Scheduled Board meetings | Audit and Risk Committee | Remuneration Committee | Nomination Committee | Management Engagement Committee | ESG Committee | | --- | --- | --- | --- | --- | --- | --- | | No. of meetings held | 4 | 4 | 1 | 1 | 2 | 2 | | Tony Roper^{1} | 4 | 4 | 1 | 1 | 2 | N/A | | Rosemary Boot^{1,2} | 3 | 3 | 1 | 1 | 1 | N/A | | Helen Clarkson | 4 | 4 | 1 | 1 | 2 | 2 | | Chris Knowles | 4 | 4 | 1 | 1 | 2 | 2 | | Sarika Patel^{1} | 4 | 4 | 1 | 1 | 2 | N/A | 1. Tony Roper, Rosemary Boot and Sarika Patel are not members of the ESG Committee and therefore are not required to attend meetings. 2. Rosemary Boot was appointed on 1 August 2025 and has attended all meetings since her appointment. During the year ended 31 March 2026, the Board and its Committees held numerous ad-hoc meetings dealing with strategic matters. Noted below are details of those ad-hoc meetings that were minuted: | | Board | Audit and Risk Committee | Remuneration Committee | Nomination Committee | Management Engagement Committee | ESG Committee | | --- | --- | --- | --- | --- | --- | --- | | No. of meetings held | 22 | 5 | 0 | 3 | 0 | 0 | These meetings were attended by those Directors available. --- 76 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Corporate Governance Statement continued ## Insurance and Indemnity Provisions Directors' and Officers' liability insurance cover is in place in respect of the Directors. The Company's Articles of Association provide, subject to the provisions of UK legislation, an indemnity for Directors in respect of costs which they may incur relating to the defence of any proceedings brought against them arising out of their positions as Directors, in which they are acquitted, or judgement is given in their favour by the Court. Except for such indemnity provisions in the Company's Articles of Association and in the Directors' letters of appointment, there are no qualifying third-party indemnity provisions in force. The Board has agreed arrangements whereby Directors may take independent professional advice in the furtherance of their duties. ## Conflicts of Interests It is the responsibility of each individual Director to avoid an unauthorised conflict of interest situation arising. All Directors must inform the Board as soon as they become aware of the possibility of an interest that conflicts, or might possibly conflict, with the interests of the Company. A register of conflicts is maintained by the Company Secretary and regularly reviewed by the Board to ensure that any authorised conflicts remain appropriate. The Directors are required to confirm at Board meetings whether there has been any change to their position. The Board has adopted a policy that records all gifts and hospitality in excess of £50 accepted by the Directors from the Company's service providers and other relevant third parties. ## Reporting on Stakeholder Engagement The Company sets out how it interacts and engages with its stakeholders on pages 61 to 63, Stakeholders and Section 172. The stakeholder relationships identified provide the foundation for the Company's sustainability, which in return provides benefits to all parties. Both the Board and the Investment Manager value the importance of maintaining a high standard of business conduct and stakeholder engagement in order to ensure a positive impact on the environment in which the Company operates. ## Relations with Shareholders The Company welcomes the views of its shareholders, placing great importance on communication with them. Senior members of the Investment Manager make themselves available to meet with shareholders and key sector analysts, and feedback from these meetings is provided to the Board. The Directors also make themselves available to engage with shareholders and offer meetings annually as part of good governance to those shareholders who wish to meet them. The Board is kept fully informed of all relevant market commentary on the Company by the Company's Financial PR consultant, and also receives relevant updates from the Investment Manager and the Corporate Broker. The Company reports formally to shareholders twice per year through its interim and annual financial statements. Further details on shareholder engagement are included on pages 61 to 63 Stakeholders and Section 172. The results of the AGM are announced by the Company promptly after the meeting and are also published on the Company's website. Additionally, in line with the Company's commitment to shareholder communication, notices and information are disseminated to shareholders through the Company's website. The Registrar and Company Secretary are responsible for monitoring shareholder votes at all general meetings. The Company is committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. In the event that there are substantial votes against any resolution at an AGM, the Company will consider what, if any, actions it intends to take going forward. ## 2025 AGM The 2025 AGM of the Company was held on 3 September 2025. Resolutions 1 to 12 were proposed as ordinary resolutions. Resolutions 13 to 15 were proposed as special resolutions as follows: - to approve the purchase of the Company's own shares; - to authorise the disapplication of statutory pre-emption rights; and - to approve that a general meeting may be convened on not less than 14 clear days' notice. Each of the resolutions proposed at the AGM were passed by way of a poll with a significant majority. ## 2026 AGM The next AGM of the Company is currently scheduled to be held in September 2026. A separate notice convening the AGM will be sent to shareholders and expected to be published on the Company's website in July 2026 and will include an explanation of the items of business to be considered at the AGM. ## 2026 General Meeting Following the Company's announcement on 9 April 2026, a GM has been convened to be held on Friday 10 July 2026 at 12.00 noon at the offices of Sustainable Development Capital LLP, One, Great Cumberland Place, Floor 8, London, W1H 7AL, where resolutions to approve the adoption of the wind-down investment objective and policy in substitution of the existing investment objective and policy; subject to court approval, cancellation of the share premium account and; subject to the adoption of the Wind-Down Investment Objective and Policy, amendment of the Articles of Association of the Company to delete the requirement for a Continuation Vote, will be proposed. --- 77 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Nomination Committee Report ![img-52.jpeg](img-52.jpeg) **Tony Roper** Chair of the Nomination Committee ## Nomination Committee The Nomination Committee is chaired by Tony Roper and the membership of the Nomination Committee comprises all Directors of the Company, given that they are all independent and non-executive. Tony Roper, as Chair of the Board, will not Chair the Committee in the event that it is dealing with his successor. During the year, the Nomination Committee held four meetings. The Nomination Committee operates within clearly defined terms of reference, which are available on the Company's website. ## Function of the Nomination Committee The principal duties of the Nomination Committee are to: - regularly review the structure, size and composition required of the Board and make recommendations to the Board with regard to any changes (including skills, knowledge and experience in accordance with Principle K of the AIC Code); - give full consideration to succession planning for Directors, taking into account the challenges and opportunities facing the Company, and to oversee the development of a diverse pipeline for succession; - be responsible for identifying and nominating, for the approval of the Board, candidates to fill Board vacancies as and when they arise; and - oversee a formal and rigorous annual evaluation of the performance of the Board, its Committees, the Chair and individual Directors. ## Matters Reviewed in the Year ### Succession planning The Nomination Committee annually reviews its effectiveness, composition and long-term succession planning. This process takes into consideration the balance of skills, knowledge, experience, independence and diversity of the Board, to ensure any new appointments complement or address any gaps in these areas. During the year, the Nomination Committee had no immediate concerns regarding the independence or tenure of the Board as the longest-serving Directors have been in office for less than eight years, having been appointed in October 2018, which was less than the nine years that could, as noted in the AIC Code, impair a non-executive director's independence. Notwithstanding this, the Nomination Committee has been developing succession plans. Following the resignation of Emma Griffin at the 2024 AGM, at its meeting in March 2025, the Nomination Committee reviewed the composition of the Board and, although it was satisfied that the Board's composition remained appropriate to properly discharge its duties, recommended to the Board that, in order to support the Company's succession plans, at least one additional Non-Executive Director should be appointed. The Board agreed with the recommendation and the Nomination Committee carried out a competitive tender process to engage an executive search consultant to assist with this recruitment. As a result of that process, the Committee recommended the engagement of Cornforth Consulting Ltd ("Cornforth Consulting"), which was subsequently approved by the Board. Neither the Directors nor the Company are connected with Cornforth Consulting. Following an extensive recruitment process, the Committee recommended the appointment of Rosemary Boot, which was approved by the Board. Chris Knowles has notified the Board of his intention not to seek re-election as an Independent Non-Executive Director of the Company at the forthcoming AGM. Further details can be found on page 90 of the Directors' Report. The Company has decided that, due to the current size of the Board, there is no intention to appoint an additional Non-Executive Director at the present time. The Committee will continue to keep the composition of the Board under review, taking into account the Company's stated intention to pursue a managed wind-down and will reconsider the Board requirements as the wind-down plans are further developed and implemented. --- 78 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Nomination Committee Report continued ## Matters Reviewed in the Year continued ### Board performance evaluation The Board recognises the importance of the recommendations of the AIC Code in respect of evaluating the performance of the Board as a whole, the Committees of the Board and individual Directors. With respect to the year ended 31 March 2026, having carried out an external evaluation the prior year, the Board carried out an internal performance evaluation via questionnaires, which were circulated to the Directors for their completion. The evaluation covered a range of areas including, but not limited to: Board and Committee relationships, composition, effectiveness, leadership, roles, activities, development, and engagement with, and impact on, various stakeholder groups. The evaluation also explored other items including culture and the Board processes for developing strategy, dealing with investments and managing risk. The evaluation process was led by the Chair and was designed to assess the strengths and independence of the Board and the performance of its Committees, the Chair and individual Directors. The Board evaluation questionnaires were also intended to analyse the focus and appropriateness of Board meetings. The evaluation of the Chair was carried out by the other Directors of the Company and led by the Senior Independent Director. The results of the Board evaluation process were reviewed and discussed by both the Nomination Committee and the Board. The independence of each Director was considered and each has been confirmed as being independent of the Company and the Investment Manager. Overall, the evaluation was positive and indicated a high level of satisfaction with the operation of the Board. It also demonstrated that the Board operated effectively and showed the necessary commitment to the effective fulfilment of their duties. The evaluation also highlighted a small number of improvements which primarily related to improving communications when there were activities not involving all Directors. ### Terms of reference The Nomination Committee reviewed its terms of reference in March 2026 to ensure that it was still operating effectively and in line with its delegated duties and responsibilities. ### Tony Roper Chair of the Nomination Committee --- 79 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Audit and Risk Committee Report ![img-53.jpeg](img-53.jpeg) Sarika Patel Chair of the Audit and Risk Committee The Audit and Risk Committee is chaired by Sarika Patel and the membership of the Audit and Risk Committee comprises all Directors of the Company, all of whom are independent and non-executive. The Board is satisfied that the Audit and Risk Committee is properly constituted. Tony Roper is a member of the Audit and Risk Committee, notwithstanding his appointment as Chair of the Board, given his independence at the time of his appointment and throughout his service. The Board believes that his extensive experience in dealing with matters such as valuation and risk management is relevant to the Audit and Risk Committee. The Audit and Risk Committee operates within clearly defined terms of reference, which are available on the Company's website. It is also the formal forum through which the independent auditor reports to the Board of Directors. The Committee met nine times during the year. The terms of reference are reviewed annually. The Audit and Risk Committee last reviewed its terms of reference in March 2026 and is satisfied that it is still operating effectively. The main functions of the Audit and Risk Committee are: - considering and understanding the key risks of misstatement of the financial statements and formulating an appropriate plan to review and address these and agreeing with the Investment Manager its processes to manage these risk areas; - reviewing the appropriateness of the Company's accounting policies; - reviewing the valuation of the Company's investment portfolio prepared by the Investment Manager, and making a recommendation to the Board on the valuation; - making recommendations to the Board, for approval at the Company's Annual General Meeting, relating to the appointment, reappointment and removal of the Company's independent auditor; - agreeing with the independent auditor the external audit plan, including discussing with the independent auditor the key risk areas within the financial statements; - reviewing and recommending to the Board, for approval, the audit, audit-related and non-audit fees payable to the independent auditor or their affiliated firms overseas and the terms of their engagement; - reviewing the scope, results, cost-effectiveness, independence and objectivity of the independent auditor, as well as reviewing the effectiveness of the external audit process and making any recommendations to the Board for improvement of the audit process; - reviewing and recommending for approval the viability and going concern statements and reviewing the work prepared by the Investment Manager in support of these statements; - monitoring the current and emerging risk exposures on behalf of the Board and challenging the actions taken to mitigate against such risks, taking into account scenario analysis; - assessing, and recommending to the Board for approval, the contents of the half-year and annual financial statements and reviewing the independent auditor's report on these, including consideration as to whether the financial statements are overall fair, balanced and understandable; - reviewing the appropriateness of the Company's accounting policies; - overseeing the adequacy and effectiveness of the internal control and risk management systems; - considering, and recommending to the Board for approval, recommendations to changes in the Company's Risk Management Policy and Treasury Policy; - reviewing the Company's risk framework, appetite and overall risk management approach; - considering any report or information received in respect of whistleblowing; - reviewing the arrangements for its contractors and external third parties to raise concerns about possible wrongdoing; - reviewing the Company's procedures for detecting fraud and the systems and controls for the prevention of bribery; and - reporting to the Board on how it has discharged its duties. 1. The Audit and Risk Committee had four scheduled meetings and five ad-hoc meetings during the reporting period and received five valuation updates from the Investment Manager during these meetings. --- 80 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Audit and Risk Committee Report continued The Committee is responsible for monitoring the integrity of the financial statements of the Company. The Committee oversaw actions to ensure compliance with the audit. The Committee has also overseen actions taken to ensure compliance with the 'Audit Committees and the External Audit: Minimum Standard'. The Audit and Risk Committee meets the independent auditor regularly and as required. It discusses the scope of annual audit work and audit findings with the independent auditor. The independent auditor attends the Audit and Risk Committee meetings at which the annual and interim financial statements are considered. The Audit and Risk Committee also meets with the independent auditor without representatives of the Investment Manager and Administrator being present. The Audit and Risk Committee has direct access to the independent auditor and to key senior staff of the Investment Manager. It reports its findings and recommendations to the Board, which retains the ultimate responsibility for the financial statements of the Company. ### Significant Activities in the Year During the year, the Audit and Risk Committee's discussions have been broad, ranging and focused on, but not limited to: - – agreeing the audit plan and fees with the independent auditor in respect of the review of the half-yearly report for the six months ended 30 September 2025 and the statutory audit of the Annual Report for the year ended 31 March 2026, including the principal areas of focus; - – receiving and discussing with the independent auditor their report on the results of the review of the half-yearly financial statements and the year-end audit; - – meeting independently with the external auditor; - – reviewing and challenging information received from the Investment Manager recommending the rationale for preparing the financial statements on a going concern basis, including a viability statement. This was discussed with the independent auditor prior to concluding that the recommendation be made by the Audit and Risk Committee that the Board approve the adoption of the financial statements on a going concern basis and their approval of the viability statement; - – reviewing and challenging the valuation and its valuation process, together with the independent auditor; - – reviewing and recommending to the Board the continued application of IFRS 10 investment entity, which is considered a key judgement for the Company's accounting policies; - – reviewing the Company's annual and half-yearly financial statements and recommending these to the Board for approval; - – reviewing climate change risks and discussing with the Investment Manager their current actions outlined to mitigate future climate change risk impact; - – conducting a review of the risk management systems of the Company and its third-party service providers, and introducing further enhancement to the system; - – reviewing the Investment Manager's ongoing programme of stress scenarios aimed at understanding the impact on the Company of plausible downside scenarios; - – reviewing the Company's Risk Management Policy and Treasury Policy; - – reviewing reports of internal controls of key advisers and gaining assurance from the Investment Manager and Administrator on these; - – approving interim non-audit fees; and - – evaluating the performance of the auditor, further details of which are contained in this report. In addition to formal Audit and Risk Committee meetings during the year, the Audit and Risk Committee has had regular contact and meetings with the Investment Manager, the Administrator and the independent auditor. ### Key Issues Considered for Financial Statements After discussion with the Investment Manager and the independent auditor, the Audit and Risk Committee determined that the key risks of misstatement of the Company's financial statements related to the valuation of the Company's investment in SEIT Holdco and in turn the valuation of the underlying investments held via SEIT Holdco. ### Valuation of Investments As outlined in Note 11 to the financial statements, the total carrying value of the investment portfolio at fair value at 31 March 2026 was £1,078 million (31 March 2025: £1,197 million). Market quotations are not available for these financial assets, and therefore their valuation is undertaken predominantly using a discounted cash flow methodology, or a similar method to determine the fair value of an investment. This requires a number of material estimates to be made, as further explained in Note 3 to the financial statements. The valuation process and methodology was discussed by the Audit and Risk Committee with the Investment Manager at the time of the interim review, in March 2026, prior to the year-end valuation process, and again post year end in May 2026 and June 2026 as part of the year-end sign-off process. The Investment Manager carries out a valuation semi-annually and provides a detailed valuation report to the Company. The Audit and Risk Committee reported to the Board on the challenges it made to the valuation and the outcome of discussions with the Investment Manager and independent auditor on the valuation, particularly in relation to key judgements. The Audit and Risk Committee met with the independent auditor when it reviewed and agreed the independent auditor's Group audit plan, and also at the conclusion of the audit of the financial statements, focusing much of its discussion on the valuation process and the outcome of the audit of the valuation. --- 81 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Audit and Risk Committee Report continued ## Valuation of Investments continued The Company engaged independent experts to provide an assessment of a reasonable range of discount rates for the largest investment exposures representing approx. 75% of the Portfolio Valuation$^{MM}$, in order to support the valuation prepared by the Investment Manager as at 31 March 2026. The Audit and Risk Committee was satisfied that this report supported the valuation prepared by the Investment Manager of the portfolio as at 31 March 2026. ## Valuation of investments – key forecast assumptions The Audit and Risk Committee considered in detail those assumptions that are subject to judgement and may have a material impact on the valuation. The key assumptions are: ### Valuation discount rates The vast majority of the underlying investments are valued using a discounted cash flow valuation and certain investments were held at cost as the most accurate reflection of their fair value. The discount rates adopted to determine the valuation are selected by the Investment Manager and recommended to the Audit and Risk Committee. These discount rates are applied to the expected future cash flows for each investment's financial forecasts to arrive at a discounted cash flow valuation which is, in turn, sensitive to the discount rate selected. The Investment Manager is experienced in the valuation of these investments and adopts discount rates which reflect their understanding of the current market. It is noted, however, that the judgement required is subjective and there are a range of discount rates which could be applied. The discount rate assumptions and the sensitivity of the valuation of the investments to this discount rate are set out in the Financial Review and Valuation Update on pages 31 to 37 and Note 4 on pages 116 and 117. The Audit and Risk Committee discussed with the Investment Manager the process adopted to arrive at the selected valuation discount rates. These discount rates were cross-checked against an independent review of valuation discount rates by the independent valuation expert, and the Audit and Risk Committee satisfied itself that the rates applied were appropriate. The independent auditor discussed with the Audit and Risk Committee the results of its review and audit of the valuation, including its consideration of the Company's underlying cash flow projections, the economic assumptions and discount rates. ## Macroeconomic assumptions Macroeconomic assumptions include inflation, foreign exchange and tax rate assumptions. The Investment Manager's assumptions in this area are set out and explained in the Financial Review and Valuation Update on pages 31 to 37. The Audit and Risk Committee reviewed and discussed the methodology by which the Investment Manager derived the assumptions and agreed its appropriateness. ## Key Risks Considered The Company's key risks are set out in more detail in the Risk Management Framework on pages 56 to 59. The Audit and Risk Committee actively provides risk management oversight, and reviews and challenges on a regular basis the risk updates provided by the Investment Manager. During the year, these risks and reviews included: ## Counterparty and credit risk - reviewing the dynamic levels of risk associated with the counterparties associated with the Company's investments; - reviewing stress tests assessing the impact of material counterparty defaults; - assessing the Investment Manager's feedback on mitigants available to the Company; and - monitoring compliance with the Company's Treasury Policy in relation to exposures to deposit takers. ## Operations and business interruption risk - receiving updates from the Investment Manager on the risks specific to each asset and the potential impact of these risks on the valuation of the Company's portfolio as a whole; and - receiving and challenging regular formal and informal updates from the Investment Manager on the level of business interruption or potential for business interruption at the operational level of the investments, particularly focusing on identifiable event risks. ## Covenant compliance and liquidity risk - Monitoring actions being taken by the Investment Manager to reduce gearing and ensure liquidity, including the portfolio disposal that completed after the year end. --- 82 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Audit and Risk Committee Report continued ## Key Risks Considered continued ### Macroeconomic and market risk - reviewing the impact of global volatility in inflation, including the sensitivity of the valuations of the Company's underlying investments to changes in inflation in the near, medium and long term; - reviewing the impact of the Ukraine and Middle East conflicts and the emerging risk of larger-scale conflict as well as seeking assurance on compliance with sanctions; - reviewing the impact of potential global rises in corporation taxes, including the sensitivity of the valuations of the Company's underlying investments to potential changes not yet enacted, discussing potential mitigants available to the Company and agreeing reviews to be undertaken by the Investment Manager; - reviewing the impact on the portfolio of a period of recessionary environment in the key jurisdictions in which the Company operates; and - Considering the impact of increased policy uncertainty (including tariffs) and regulatory complexity in a number of markets, including the US and Spain. ### Internal Controls and Risk Management The Audit and Risk Committee is responsible for reviewing and monitoring the effectiveness of the Company's internal control systems and risk management systems on which it is reliant. The Board has considered the need for an internal audit function, and it has decided that the systems and procedures employed by the Investment Manager and the Administrator, including their own internal review processes and processes in place in relation to the Company, provide sufficient assurance that a sound system of internal control, which safeguards the Company's assets, is maintained. An internal audit function specific to the Company is therefore considered unnecessary at this time; however, the Board is keeping this under regular review and focuses on identifying any areas where internal control improvements can be made. The Audit and Risk Committee recognises that these control systems can only be designed to manage rather than eliminate the risk of failure to achieve business objectives. It is understood that they provide reasonable, but not absolute, assurance against material misstatement or loss, and rely on the operating controls established by the Company's Administrator and the Investment Manager. The Audit and Risk Committee assesses the effectiveness of the internal controls, internal financial controls and risk management systems on a continuing basis and receives regular reports on these systems. The Audit and Risk Committee believes that the Company's internal controls and processes are satisfactory, and that appropriate systems are in place. The Board, supported by the Audit and Risk Committee, is reviewing its approach to internal controls and related disclosures ahead of the implementation of Provision 34 of the AIC Code. The new requirements will apply to accounting periods commencing after January 2026 and in the context of the Company will be applicable for the financial year 1 April 2026 to 31 March 2027. ### Appointment of the Independent Auditor PricewaterhouseCoopers LLP ("PwC") was appointed as independent auditor for the SEIT Group at the IPO of the Company in December 2018. The objectivity of the independent auditor is reviewed by the Audit and Risk Committee, which also reviews the terms under which the independent auditor may be appointed to perform non-audit services. The Audit and Risk Committee reviews the scope and results of the audit, its cost-effectiveness and the independence and objectivity of the independent auditor, with particular regard to any non-audit work that the independent auditor may undertake and the level of non-audit fees. In order to safeguard auditor independence and objectivity, the Audit and Risk Committee ensures that any other advisory and/or consulting services provided by the independent auditor do not conflict with its statutory audit responsibilities. The Committee has implemented a non-audit services policy that is reviewed annually by the Committee and is consistent with the FRC Revised Ethical Standards published in 2024. Non-audit services generally only cover reviews of interim financial statements and capital raising work. The independent auditor may not undertake any work for the Company in respect of the preparation of the financial statements, preparation of valuations used in financial statements, provision of investment advice, taking management decisions or advocacy work in adversarial situations. The total proposed fees for audit services amounted to £0.6 million for the year ended 31 March 2026, and £0.2 million related to the audit of its direct subsidiary, SEIT Holdco, and some of the SEIT Group's intermediate and project subsidiaries. Non-audit fees amounted to £87,500 for the year ended 31 March 2026 due to the interim review of the Company's half-yearly financial statements. Having reviewed the key non-audit engagements with assurance firms, including the timeline of committed schemes of work, the Audit and Risk Committee is comfortable that the Company is operating in accordance with the FRC Ethical Standard for Auditors. Notwithstanding such non-audit services, the Audit and Risk Committee considers PwC to be independent of the Company and that the provision of such non-audit services is not a threat to the objectivity and independence of the conduct of the audit. To fulfil its responsibility regarding the independence of the independent auditor, the Audit and Risk Committee considered: - a report from the independent auditor describing their arrangements to identify, report and manage any potential independence threats; and - the extent of non-audit services provided by the independent auditor. --- 83 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Audit and Risk Committee Report continued ## Appointment of the Independent Auditor continued To assess the effectiveness of the external audit process, the Audit and Risk Committee reviewed: - the independent auditor's fulfilment of the agreed audit plan and variations from it; - the evaluations from the Investment Manager and Administrator on the performance of the independent auditor's team; and - all reports highlighting any significant issues that arose during the course of the audit. The Audit and Risk Committee is satisfied with PwC's effectiveness and independence as auditor, having considered the degree of diligence and professional scepticism demonstrated by the firm. As such, the Audit and Risk Committee has not considered it necessary during this period to conduct a tender process for the appointment of its independent auditor for the year ended 31 March 2026. Resolutions to reappoint PwC and authorise the Board to determine the auditor's remuneration will be proposed at the forthcoming Annual General Meeting. This is the eighth audit conducted by PwC and the seventh full year of operation of the Company and, in accordance with the FRC's guidance, the audit will be tendered within ten years of the auditor's initial appointment. The current lead audit partner, Richard French, was appointed during the year ended 31 March 2025. As part of the annual report process, the Audit and Risk Committee conducted a formal review of the effectiveness of PwC. This included obtaining feedback from the Investment Manager, the Company Secretary and Administrator, without the auditor present, as well as from the auditor themselves. Following this review, the Audit and Risk Committee concluded they were comfortable with the performance of the auditor and recommended their continued appointment to the Board. ## Whistleblowing The Company has a Whistleblowing Policy which details how the Board, staff of the Company's key advisers and project companies may, in confidence, raise any concerns. The Whistleblowing Policy is reviewed annually. Sarika Patel Chair of the Audit and Risk Committee --- 84 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Directors' Remuneration Report ![img-54.jpeg](img-54.jpeg) **Christopher Knowles** Chair of the Remuneration Committee Chris Knowles is Chair of the Remuneration Committee. The membership of the Remuneration Committee comprises all Directors of the Company, all of whom are independent and non-executive. The Board is satisfied that the Committee is properly constituted. Tony Roper, the Company's Chair, is a member of the Remuneration Committee given his independence at the time of his appointment and throughout his service. The Board presents the Directors' Remuneration Report for the year ended 31 March 2026, which is made up of two sections: the Annual Report on Remuneration and the Directors' Remuneration Policy report. ### Annual Report on Remuneration The Remuneration Committee's main functions include: - agreeing the policy for the remuneration of the Directors and reviewing and proposing changes to the Company's Remuneration Policy; - reviewing and considering ad hoc fees to the Directors in relation to duties undertaken over and above routine business; and - appointing independent professional external remuneration consultants, as may be required from time to time. The Remuneration Committee met once during the year and operates within clearly defined terms of reference, which are available on the Company's website. The Committee last reviewed its terms of reference in March 2026 to ensure that it remained appropriate. The key activities during the year included: - discussing the proposed Remuneration Policy for the Annual Report for the year ended 31 March 2026; - discussing and agreeing the level of Directors' annual remuneration to be recommended to the Board for the next financial year; and - discussing the increased workload during the year as a result of the various projects that were under review. This included a proposal for transferring the Company's listing from an investment trust to a vertically integrated operating company and a strengthened leadership team to scale the business and drive operational performance which, following consultation with shareholders in April 2026, was not taken forward. These activities are described further below. Regulation requires the Company's independent auditor to audit certain disclosures provided. Where disclosures have been audited, they are indicated as such. The auditor's opinion is included in their report on pages 97 to 103. ### Statement of the Chair of the Remuneration Committee The Committee assists the Board in developing a fair and transparent framework for setting the levels of Directors' remuneration while having regard to the Company's financial position and performance, remuneration in other companies of comparable scale and complexity and market statistics generally. It also reviews the ongoing appropriateness and relevance of the Directors' Remuneration Policy. No Director is involved in determining their own remuneration. The Board may determine that additional remuneration may be paid, from time to time, to any one or more Directors in the event such Director or Directors are requested by the Board to perform extra or special services on behalf of the Company. Where the Company requires the Directors to work on specific corporate actions, such as the raising of further equity, an additional fee will be determined, on each occasion, by the Committee and recommended to the Board. --- 85 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Directors' Remuneration Report continued ### Directors' Remuneration Review and Review of Directors' Fees for the Year to 31 March 2027 During the year, the Committee undertook an analysis on Directors' remuneration, giving consideration to the expectations on the time commitment of the Directors and peer group analysis. Following careful consideration, the Remuneration Committee recommended an inflation-linked fee increase for the year to 31 March 2027, as set out below: - the annual fee paid to the Company's Chair be increased to £85,000 in the financial year ending 31 March 2027 (2026: £82,500); - the annual fee paid to the Company's Audit and Risk Committee Chair will be increased to £68,000 in the financial year ending 31 March 2027 (2026: £66,000); - the annual base fee paid to the independent Non-Executive Directors, as well as the Senior Independent Director and Chair of the Management Engagement Committee respectively, will be increased to £56,750 (2026: £55,000); and - the cap on the aggregate annual Directors' base remuneration remains at £400,000 (2026: £400,000). Separately, the Committee considered the materially increased workload undertaken by the Directors from September 2024 to date. This was due to the substantial additional time commitment required in connection with numerous meetings involving the Investment Manager, its advisers and shareholders to consider a range of strategic matters, including gearing, disposals and the potential internalisation of the Company. An analysis was made of the nature and number of Board meetings (considering only those attended by the Company Secretary) on a quarterly basis from Q1 2024 to Q1 2026. This shows a clear substantial increase in the number of ad hoc meetings and the time required that prevailed from Q4 2024 onwards. Prior to Q4 2024, the Board typically held two to three meetings per quarter, totalling approximately seven hours. From Q4 2024 onwards, this rose to an average of 6.2 meetings per quarter, totalling 14 hours. Of the 37 ad hoc meetings held during the period from Q4 2024 to Q1 2026, 18 were convened to discuss the asset disposals, alternative strategic options and gearing. These numbers only consider meetings attended by the Company Secretary and exclude the time required to read and prepare the papers supporting those meetings. Having taken these factors into account, the Committee concluded that it was appropriate to approve an additional fee of £10,000 per Director in recognition of the work undertaken in relation to these matters. The Board agreed that this additional fee would be paid in June 2026. ### Directors' Remuneration for the Year Ended 31 March 2026 (audited) The table below sets out the Directors' remuneration for the year ended 31 March 2026 or, if appropriate, from the date of appointment: | | | Fees for the year ended 31 March 2026 Total £'000^{1} | Fees for the year ended 31 March 2025 Total £'000 | | --- | --- | --- | --- | | Tony Roper | Chair | 82.5 | 76.0 | | Rosemary Boot^{1} | Independent Non-Executive Director | 36.7 | N/A | | Helen Clarkson | Management Engagement Committee Chair | 55.0 | 55.0 | | Emma Griffin^{2} | Remuneration Committee Chair | N/A | 23.73 | | Chris Knowles | Senior Independent Director and Remuneration Committee Chair | 55.0 | 55.0 | | Sarika Patel | Audit and Risk Committee Chair | 66.0 | 61.0 | | **Total** | | **295.2** | **270.7** | 1. Rosemary Boot was appointed on 1 August 2025 and her fee for the year ended 31 March 2026 of £55,000 is reflected on a pro-rata basis from that date. 2. Emma Griffin stepped down from the Board at the 2024 AGM held on 4 September 2024 and her fees were paid pro rata to reflect this. The Directors' remuneration for the year ended 31 March 2026, detailed in the table above, is inclusive of the increases in the Directors' fees noted in the Directors' Remuneration Report approved by the shareholders at the AGM held on 3 September 2025. The Directors are also entitled to be paid all reasonable expenses properly incurred by them in connection with the performance of their duties. These expenses include those associated with AGMs, Board or Committee meetings and legal fees. During the year, such expenses were de minimis and were in line with the Directors' Expenses Policy. --- 86 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Directors' Remuneration Report continued ### Annual Percentage Change in the Directors' Remuneration The annual percentage change in remuneration in respect of the financial years prior to the current year in respect of each Director's role is detailed in the table below. The annual percentage change is calculated based on the aggregate annual base Directors' remuneration plus any additional fees, where applicable, for additional corporate work or acting in the role as either Chair of the Company, Senior Independent Director or as the Chair of a Board Committee. | Director | Role | Date appointed | 2021-2022 | 2022-2023 | 2023-2024 | 2024-2025 | 2025-2026 | | --- | --- | --- | --- | --- | --- | --- | --- | | Tony Roper | Chair | 12 October 2018 | 30.0% | 3.1% | — | 9.35% | 8.55% | | Rosemary Boot^{1} | Independent Non-Executive Director | 1 August 2025 | — | — | — | — | — | | Helen Clarkson^{2} | Management Engagement Committee Chair | 12 October 2018 | 25.0% | (6.0)%^{1} | 4.0% | 6.80% | 0% | | Emma Griffin^{3} | Remuneration Committee Chair | 21 October 2020 | 17.5% | 4.3% | — | (54.98)% | — | | Chris Knowles | Senior Independent Director | 12 October 2018 | 17.5% | 4.3% | — | 6.80% | 0% | | Sarika Patel^{4} | Audit and Risk Committee Chair | 1 January 2022 | N/A | —^{3} | — | 11.93% | 8.20% | 1. Rosemary Boot was appointed on 1 August 2025. 2. Helen Clarkson was the Audit and Risk Committee Chair for the period from 1 April 2021 to 1 January 2022, although received fees consistent with remuneration of the Audit and Risk Committee Chair up to 31 March 2022 to ensure an orderly handover to Sarika Patel. 3. Emma Griffin stepped down from the Board at the 2024 AGM held on 4 September 2024 and her fees were paid pro rata to reflect this. 4. Sarika Patel was appointed as a Non-Executive Director and Audit and Risk Committee Chair on 1 January 2022, and fees were paid pro rata for the year ended 31 March 2022 accordingly. If Sarika had been a Non-Executive Director and the Audit and Risk Committee Chair for the full year to 31 March 2022, the annual percentage change in her remuneration for the year to 31 March 2023 would be 4.0%. ### Relative Importance of Spend on Pay The table below sets out the total remuneration paid to the Directors in comparison to total aggregate amount of dividends paid to the Company's shareholders for the year ended 31 March 2026: | | Year to 31 March 2026 £'000 | Year to 31 March 2025 £'000 | % change | | --- | --- | --- | --- | | Directors' remuneration | 295.2^{1} | 270.7^{2} | 9.05% | | Dividends paid to shareholders | 51,666 | 68,381 | 22.44% | 1. Rosemary Boot was appointed on 1 August 2025 and her fee for the year ended 31 March 2026 of £55,000 is reflected on a pro-rata basis from that date. 2. Emma Griffin stepped down from the Board on 4 September 2024 and this figure includes her pro-rata fees. --- 87 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Directors' Remuneration Report continued ### Company Performance ![img-55.jpeg](img-55.jpeg) The graph above highlights the comparative total shareholder return ('TSR') for an investment in the Company from inception to 31 March 2026 compared with an investment in the FTSE 250 index over the same period. The Company is a member of the FTSE 250 and All-Share Index, hence they have been selected for this graph. The Board is responsible for the Company's investment strategy and performance, although day-to-day management of the Company's affairs, including the management of the Company's portfolio, has been delegated to the Investment Manager. An explanation of the performance of the Company is given in the Financial Review and Valuation Update on pages 31 to 37. ### Directors' Interests in the Company (audited) As at 31 March 2026, the interests of the Directors and any Persons Closely Associated ('PCAs'), as defined in Article 3(1)(26) of the UK Market Abuse Regulation ('MAR'), in the ordinary shares of the Company are set out in the table below: | | Ordinary shares of £0.01 each held at 31 March 2026 | Ordinary shares of £0.01 each held at 31 March 2025 | | --- | --- | --- | | Tony Roper | 198,500 | 198,500 | | Rosemary Boot^{1} | — | N/A | | Helen Clarkson | 20,000 | 20,000 | | Emma Griffin^{2} | N/A | 20,509 | | Chris Knowles^{3} | 126,000 | 126,000 | | Sarika Patel | 30,000 | 30,000 | | **Total** | **374,500** | **395,009** | 1. Rosemary Boot was appointed on 1 August 2025. 2. Emma Griffin stepped down from the Board at the 2024 AGM held on 4 September 2024. 3. Chris Knowles' spouse, whom under MAR is his PCA, holds 49,000 ordinary shares in the Company and these are included in the figure shown in the above table. There have been no changes to any of the above holdings between 31 March 2026 and the date of this report. None of the Directors or any of their PCAs had a material interest in the Company's transactions, arrangements or agreements during the year. As at the date of this report, Jonathan Maxwell, CEO and Founder of the Investment Manager, holds 240,000 ordinary shares. Jonathan Maxwell is considered to be a Person Discharging Managerial Responsibilities ('PDMR') by both the Board of Directors and Investment Manager. There have been no changes in the year in respect of each of the Directors as notifiable to the Company in accordance with DTR 3.1.2. --- 88 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Directors' Remuneration Report continued ### Statement of Voting at AGM on the Annual Report An advisory vote adopting the Directors' Remuneration Report for the year ended 31 March 2025 was approved by shareholders at the AGM held on 3 September 2025. The votes cast were as follows: | | Directors' Remuneration Report (AGM 2025) | Remuneration Policy (AGM 2025) | | --- | --- | --- | | Votes for | 480,469,286 | 480,218,759 | | % | 99.69 | 99.66 | | Votes against | 1,477,115 | 1,640,370 | | % | 0.31 | 0.34 | | Total votes cast | 481,946,401 | 481,859,129 | | Votes withheld | 319,844 | 407,116 | A resolution to approve this Directors' Remuneration Report in respect of the year ended 31 March 2026 will be proposed at the forthcoming AGM. ### Remuneration Policy This Remuneration Policy provides details of the Remuneration Policy for the Directors of the Company. All Directors are independent and non-executive, appointed under the terms of letters of appointment, and none of the Directors has a service contract. The Company has no employees. This Remuneration Policy was approved by shareholders at the AGM of the Company held on 3 September 2025 and is also available on request at the Company's registered office. The Company follows the recommendation of the AIC Code that Non-Executive Directors' remuneration should reflect the time commitment and responsibilities of the role. The Board's policy is that the remuneration of Non-Executive Directors should reflect the experience of the Board as a whole and be determined with reference to comparable organisations and appointments. The fees of the Non-Executive Directors are determined within the limits set out in the Company's Articles of Association and Directors' remuneration is determined by the Remuneration Committee, at its discretion within the current aggregate limit of £400,000, as set out in the Company's Articles of Association. There are no performance conditions attached to the remuneration of the Directors as the Board does not consider such arrangements or benefits necessary or appropriate for Non-Executive Directors. The Company is committed to ongoing shareholder dialogue and any views expressed by shareholders on the fees being paid to Directors would be taken into consideration by the Board when reviewing the Directors' Remuneration Policy and in the annual review of Directors' fees. Under the Directors' letter of appointment, there is no notice period. All Directors of the Company receive an annual fee appropriate for their responsibilities and time commitment but no other incentive programme or performance-related emoluments. As such, there are: - no service contracts with the Company; - no long-term incentive schemes; - no options or similar performance incentives; and - no payments for loss of office unless approved by shareholder resolution. The Directors' remuneration shall: - reflect the responsibility, experience, time commitment and position of each Director on the Board; - allow the Chair and the Audit and Risk Committee Chair to be remunerated in excess of any potential remaining Board members to reflect their increased roles of responsibility and accountability; - be paid quarterly in arrears; - include remuneration for additional, specific corporate work, which shall be carefully considered and only become due and payable on completion of that work; and - be reviewed annually and, at least every three years, by an independent professional external remuneration consultant with experience of investment companies and their fee structures. ### Remuneration Policy Approval During the year, following the appointment of Rosemary Boot on a three-month notice period, the Company proposed to align the notice period provisions for all Directors to three months in order to ensure consistency of contractual terms and support orderly succession planning. Under the Directors' Remuneration Policy, shareholder approval is required every three years and the next scheduled vote was due to take place at the 2028 AGM. However, in light of the proposed change to the notice period applicable to all Directors, the Board has determined that it is appropriate to submit the Remuneration Policy for shareholder approval at the forthcoming AGM. --- 89 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Directors' Remuneration Report continued ### Remuneration Policy Approval continued The table below sets out the Directors' base level remuneration for the year ending 31 March 2027, proposed via Remuneration Committee recommendation and accepted by the Board. #### Proposed Base Directors' Fees to be Paid for the Year Ending 31 March 2027: | | | Proposed base fees to be paid for the year ending 31 March 2027 Total £'000 | Base fees paid for the year ended 31 March 2026 Total £'000 | | --- | --- | --- | --- | | Tony Roper | Chair | 85.0 | 82.5 | | Rosemary Boot^{1} | Independent Non-Executive Director | 56.8 | 36.7 | | Helen Clarkson | Management Engagement Committee Chair | 56.8 | 55.0 | | Chris Knowles | Senior Independent Director and Remuneration Committee Chair | 56.8 | 55.0 | | Sarika Patel | Audit and Risk Committee Chair | 68.0 | 66.0 | | **Total** | | **323.4** | **295.2** | 1. Rosemary Boot was appointed to the Board on 1 August 2025 and her fee for the year ended 31 March 2026 of £55,000 is reflected on a pro-rata basis from that date. The Board also considered the availability of each Director, taking into account their other commitments, and concluded that each Director made adequate time available for the appropriate discharge of the Company's affairs. Each Director abstains from voting on their own individual remuneration. ### Christopher Knowles Chair of the Remuneration Committee --- 90 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Report of the Directors The Directors are pleased to present the Annual Report of the Company for the year ended 31 March 2026. In accordance with the Companies Act 2006 (as amended), the UK Listing Rules and the Disclosure Guidance and Transparency Rules, the Corporate Governance Statement, the Directors' Remuneration Report, the Audit and Risk Committee Report, the Nomination Committee Report and the Statement of Directors' Responsibilities should be read in conjunction with one another and the Strategic Report. As permitted by legislation, some of the matters normally included in the Directors' Report have instead been included in the Strategic Report, as the Board considers them to be of strategic importance. Therefore, a review of the business of the Company, recent events and outlook can be found in the Strategic Report: The Company and Portfolio Review on pages 8 to 38. Information regarding Environmental, Social and Governance matters can be found in the Strategic Report: ESG and Risk on pages 39 to 55. ## Name Change On 21 May 2025, the Company changed its name from SDCL Energy Efficiency Income Trust plc to SDCL Efficiency Income Trust plc. ## Corporate Governance The Company's Corporate Governance Statement is set out in the Corporate Governance Statement on pages 68 to 76 and forms part of this report. Details regarding independent professional advice and insurance are set out in the Corporate Governance Statement on pages 68 to 76. ## Principal Activity The Company is a closed-ended UK investment trust that invests in energy efficiency infrastructure projects. Further details can be found in the Strategic Report on pages 8 to 63. On 9 April 2026, the Company announced that following a careful assessment of all actionable options available to achieve the objective of delivering shareholder value, the Board had agreed to pursue a managed wind-down of the Company's investment portfolio. ## Investment Trust Company Status The Company has been approved as an investment trust under Sections 1158/1159 of the Corporation Tax Act 2010. The Company has continued to meet relevant eligibility conditions and ongoing requirements as an investment trust, in particular that the Company must not retain more than 15% of its eligible investment income. The Directors are of the opinion that the Company continues to conduct its affairs as an Approved Investment Trust under the Investment Trust (Approved Company) (Tax) Regulations 2011, and will continue to pay required dividends to ensure it maintains this status. ## Non-Mainstream Pooled Investments As a UK investment trust, the Company's shares are excluded from the restrictions in the FCA Rules on the marketing of non-mainstream pooled investments ('NMPIs') to 'ordinary retail clients' and the Company is accordingly not considered to be an NMPI. The Company currently conducts its affairs, and intends to continue to do so for the foreseeable future, in order that its shares can be recommended by a financial adviser to ordinary retail investors in accordance with the FCA Rules on NMPIs. As an equity security admitted to listing on the premium listing segment of the Official List of the FCA and to trading on the Main Market of the London Stock Exchange, the ordinary shares of the Company are expected to qualify as a readily realisable security. Accordingly, it will not be either a (i) speculative illiquid security; (ii) a non-mass market investment; or (iii) a restricted mass market investment. ## Directors The Directors in office at the date of this report and their biographical details are shown on pages 66 and 67. Chris Knowles has notified the Board of his intention not to seek re-election as an Independent Non-Executive Director of the Company at the forthcoming AGM in September 2026. The Company has decided that, due to the current size of the Board, there is no intention to appoint an additional Non-Executive Director at the present time. Details of the Directors' terms of appointment can be found in the Corporate Governance Statement on pages 68 to 76. The beneficial interest of the Directors and their connected persons in the ordinary shares of the Company are set out in the Directors' Remuneration Report on pages 84 to 89. ## The Investment Manager The Company and the Investment Manager entered into an Investment Management Agreement pursuant to which the Investment Manager has been given responsibility, subject to the overall supervision of the Board, for active discretionary investment management of the investment portfolio in accordance with the Company's investment objective and policy. The Investment Manager is authorised and regulated as an alternative investment fund manager ('AIFM') by the FCA and, as such, is subject to the FCA rules in the conduct of its investment business. --- 91 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Report of the Directors continued ## The Investment Manager continued As the entity appointed and responsible for risk management and portfolio management, the Investment Manager is the Company's AIFM. The Investment Manager has full discretion under the Investment Management Agreement to make investments in accordance with the Company's investment policy. This discretion is, however, subject to: i. the Board's ability to give instructions to the Investment Manager from time to time; and ii. the requirement of the Board to approve certain investments where the Investment Manager has a conflict of interest in accordance with the terms of the Investment Management Agreement. The Investment Manager also has responsibility for financial administration and investor relations, advising the Company and its Group in relation to the strategic management of the investment portfolio, advising the Company in relation to any significant investments or disposals and monitoring the Company's funding requirements. The Board keeps the performance of the Investment Manager under continual review. Further information on the SDCL Group can be found on the website: https://www.sdclgroup.com/. ## Articles of Association The Company's Articles of Association set out its internal regulations and cover the rights of the shareholders, the appointment of Directors and the conduct of the Board and general meetings. The Articles of Association may be amended by the shareholders of the Company by special resolution (requiring a majority of at least 75% of the persons voting on the relevant resolution). Certain amendments are proposed in the Shareholder Circular dated 16 June 2026. ## AIFM Requirements AIFM Directive ("AIFMD") requirements have continued to apply since 1 January 2021, through existing transposed rules replicating EU AIFM Directive (2011/611/EU), within the rules of the UK's FCA. AIFMD requirements impose detailed and prescriptive obligations on fund managers, including prescriptive rules on measuring and capping leverage, the treatment of investors, liquidity management, the use of depositaries and cover for professional liability risks. The AIFMD requirements further impose conditions on the marketing of entities such as the Company to investors in the UK. ## Independent Auditor and Disclosure of Information PricewaterhouseCoopers LLP has expressed its willingness to continue in office as independent auditor of the Company, and resolutions for its reappointment and to authorise the Audit and Risk Committee to determine its remuneration will be proposed at the forthcoming AGM. Further information about the Company's independent auditor, including tenure, can be found in the Audit and Risk Committee Report on page 79 to 83. ## Financial Risk Management The principal risks and uncertainties facing the Company are set out in the Risk Management Framework. Information about the Company's financial risks and policies for managing these risks are set out in Note 13 to the financial statements on pages 121 to 123. ## Foreign Account Tax Compliance Act ("FATCA") and the OECD Common Reporting Standards ("CRS") The Board, in conjunction with the Company's service providers and advisers, will ensure the Company's compliance with FATCA and CRS requirements are to the extent relevant to the Company. ## Share Capital As at 31 March 2026 and 24 June 2026, being the last practicable date prior to the publication of this Annual Report, the issued share capital of the Company was 1,108,709,053 ordinary shares, with 23,289,495 shares held in treasury, thereby leaving a total voting rights figure of 1,085,419,558. Details of movements in share capital during the year are shown in Note 12 to the financial statements. The Company has one class of ordinary shares which carry no rights to fixed income and have no restrictions attached to them. Shareholders are entitled to all dividends paid by the Company and, on a winding up, provided the Company has satisfied all of its liabilities, the shareholders are entitled to all of the surplus assets of the Company. Shareholders are entitled to attend and vote at all general meetings of the Company and, on a poll, to one vote for each ordinary share held. ## Treasury Shares The Companies Act allows companies to hold shares acquired by way of market purchase as treasury shares, rather than having to cancel them. This gives the Company the ability to re-issue ordinary shares quickly and cost effectively, thereby improving liquidity and providing the Company with additional flexibility in the management of its capital base. Ordinary shares will not be sold from treasury at a price less than the (cum income) NAVMM per existing ordinary share at the time of their sale. As at 31 March 2026, the Company held 23,390,505 ordinary shares in treasury which is unchanged as at the date of this Annual Report. --- 92 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Report of the Directors continued ### Share Repurchases and Discount Management The Company may seek to address any significant discount to NAV$^{MM}$ at which its ordinary shares may be trading by purchasing its own ordinary shares in the market on an ad hoc basis. During the year, the Company did not purchase any shares. At the AGM held on 3 September 2025, the Company was granted the authority to purchase up to 10% of the Company's ordinary share capital in issue at the date that the AGM notice was published, amounting to 108,541,955 ordinary shares. The maximum price (exclusive of expenses) which may be paid for an ordinary share must not be more than the higher of: - 5% above the average of the mid-market values of the ordinary shares for the five business days before the purchase is made; or - the higher of the price of the last independent trade and the highest current independent bid for the ordinary shares. Ordinary shares will be repurchased only at prices below the prevailing NAV$^{MM}$ per ordinary share, which should have the effect of increasing the NAV$^{MM}$ per ordinary share for remaining shareholders. It is intended that a renewal of the authority to make market purchases will be sought from shareholders at each AGM of the Company and authority for the Company to purchase up to 162,689,250 ordinary shares (subject to a maximum of 14.99% of the ordinary shares in issue, excluding those shares held in treasury, at the date of the AGM) will be sought at the forthcoming AGM. Purchases of ordinary shares will be made within guidelines established from time to time by the Board. Any purchase of ordinary shares would be made only out of the available cash resources of the Company. Ordinary shares purchased by the Company would be cancelled. Purchases of ordinary shares may be made only in accordance with the Companies Act, the UK Listing Rules and the Disclosure Guidance and Transparency Rules. Investors should note that the repurchase of ordinary shares is entirely at the discretion of the Board and no expectation or reliance should be placed on such discretion being exercised on any one or more occasions or as to the proportion of ordinary shares that may be repurchased. ### Significant Voting Rights As at 31 March 2026, the Company is aware or had been informed of the following notifiable interests in the voting rights of the Company, in accordance with Disclosure Guidance and Transparency Rule 5.1.2: | | Number of ordinary shares held | % of voting rights | | --- | --- | --- | | General Atlantic Partners | 175,266,055 | 16.15 | | Saba Capital Management, L.P. | 153,793,846 | 14.17 | | Hargreaves Lansdown | 63,908,183 | 5.89 | | Rathbones | 53,319,975 | 4.91 | | BlackRock, Inc. | 52,282,931 | 4.82 | | Jefferies Financial Group Inc | 51,847,669 | 4.77 | | Evelyn Partners | 42,883,568 | 3.95 | | BNY Investments Newton | 38,157,931 | 3.52 | | Interactive Investor | 37,521,322 | 3.46 | | BMO Capital Markets | 36,319,938 | 3.35 | The Company has been informed of the following changes to notifiable interests between 31 March 2026 and 24 June 2026, being the last practicable date prior to the publication of this Annual Report: | | Number of ordinary shares held | % of voting rights | | --- | --- | --- | | Saba Capital Management, L.P. | 250,124,554 | 23.05 | | Jefferies Financial Group Inc | 131,644,985 | 12.13 | ### Dividends to Shareholders The Company's policy has been to pay interim dividends on a quarterly basis, so typically there is no final dividend payable. The Company announced three dividends during the year and the Chair noted in the Shareholder Circular that the Company will not announce a fourth this year. The total aggregate interim dividends attributable to shareholders for the year amounted to £51.7 million (2025: £68.4 million). --- 93 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Report of the Directors continued ## Dividends to Shareholders continued Details of the interim dividends paid during the year under review are noted in the table below: | Dividend | Year ended | Dividend per share | Aggregate dividend paid £m | | --- | --- | --- | --- | | Fourth interim dividend | 31 March 2025 | 1.58p | 17.1 | | First interim dividend | 31 March 2026 | 1.59p | 17.3 | | Second interim dividend | 31 March 2026 | 1.59p | 17.3 | ## Going Concern The Directors have considered the following current matters alongside the regular cash flow and business activities in assessing that it is appropriate to prepare the financial statements on a going concern basis: ## Managed Wind-Down Proposals and Proposed Revised Investment Policy - On 9 April 2026, the Board announced its intention to propose a managed wind-down of the Company, involving the realisation of the Company's assets and the return of cash to shareholders over time. A General Meeting ('GM') has been convened for 10 July 2026 at which shareholders will be asked to approve the Company's managed wind-down and revised investment policy required to facilitate the wind-down, together with associated changes to the Articles and the cancellation of the share premium account. - The proposed changes include a material amendment to the investment policy in order to ensure the Company is able to take such actions as may be necessary to preserve and maximise realisable value through the wind-down process. In particular, the changes proposed include matters relating to gearing limits and portfolio concentration/exposure limits. - The Directors note that announced intention to pursue a managed wind-down, subject to shareholder approval, does not imply an intention to liquidate the Company immediately or a cessation of operations. If a managed wind-down is approved by shareholders, the detailed implementation plan would need to be further clarified and agreed, and the going concern assessment has therefore been prepared on the basis of the Company continuing under its existing arrangements pending the outcome of the GM, with a separate asset realisation scenario also considered as described below. - While the Board remains open to engaging with prospective counterparties in respect of all assets, including on a whole portfolio basis, a successful whole portfolio sale (if achievable) could materially accelerate the realisation timetable and could potentially be executed within the next six to twelve months. By contrast, a managed wind-down delivered through staged asset disposals is expected to run over a considerably longer period of around three to four years, recognising that the timetable and specific actions may change as plans develop and will depend on market conditions, asset readiness and applicable legal, regulatory and financing constraints. ## Continuation Vote A continuation vote is currently scheduled to be put to shareholders at the Company's 2026 Annual General Meeting ('AGM') in accordance with the Articles of Association. However, as part of the approval of the managed wind-down at the GM expected in July 2026, the Board expects the Articles will be amended as proposed and the requirement for the vote will be removed. ## Macroeconomic and Geopolitical Considerations The Board and the Investment Manager have performed an assessment of the current exposure to rising interest rates/inflation and global government policies and regulations, and their impact on operations and forecast cash flows. Higher interest rates have the potential to increase financing costs across the portfolio, impact the valuation of assets through changes in discount rates, and place pressure on counterparties where there is exposure to refinancing risk. However, the majority of the Company's investments benefit from long-term contracted revenues, with a proportion of income streams either directly or indirectly linked to inflation, providing a degree of protection against rising price levels. In addition, the Company's financing arrangements and those within the portfolio are actively monitored and, where possible, structured to mitigate exposure to short-term interest rate volatility. The Directors have also considered the ongoing conflicts in Ukraine, Russia and the Middle East and the potential impact on the Company's and the portfolio companies' operations. The Investment Manager has considered any restrictions imposed by relevant sanctions and their impact on the portfolio companies and has concluded there are no direct material implications. ## Regular Cash Flow and Business Activity In assessing whether the Company is a going concern for a period of at least twelve months from the approval of the Annual Report, the Directors have reviewed cash flow forecasts to 30 September 2027, considering both a base case and a severe but plausible downside scenario. Under each case the financial covenants were tested to show sufficient headroom over the assessment period. Under the base case, reflecting the Investment Manager's expectations of portfolio performance, the forecast incorporates the impact of the recent disposal and associated repayment of the RCF, resulting in increased headroom within the relevant financial covenants. This base case does not assume further asset disposals beyond those already completed and assumes no further dividends are paid during the assessment period ending 30 September 2027. The severe but plausible downside case assumes a 10% reduction in net income, reflecting the principal risks associated with macroeconomic conditions. Under this scenario, the Company continues to maintain sufficient liquidity to meet its obligations, supported by mitigating actions within the Investment Manager's control, including adjusting discretionary cash outflows and managing costs. The assessment does not assume the availability of further drawings under the RCF. --- 94 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Report of the Directors continued ## Regular Cash Flow and Business Activity continued The Directors have also separately assessed an asset realisation scenario, reflecting the implementation of the proposed managed wind-down, which similarly demonstrates appropriate liquidity and continued headroom against financial covenants. As at 31 March 2026, the Directors note that the Company is in a net current liability position of £0.6 million. The Company's net assets were £844.5 million (31 March 2025: £983.6 million), including cash balances of £1.2 million (31 March 2025: £0.9 million). Further amounts of cash are held by the Company's direct and indirect subsidiaries (including Holdco, which has c.£0.6 million (31 March 2025: c.£7.0 million) at the year end), which are sufficient to meet current obligations as they fall due. The major cash outflows of the Company are interest on debt at Holdco and to further investment in assets (of which the vast majority are discretionary). The Company's sole direct subsidiary, Holdco, has a £240 million RCF (with no committed repayments in the assessment period) that has adequate headroom in its covenants that have been tested for historic and forward interest cover and loan-to-value limits. As at 31 March 2026, £233 million (31 March 2025: £234 million) of the RCF was drawn down. At the date of this report the RCF is drawn at £190 million with limited headroom due to RCF covenant restrictions. Separate from the RCF covenants, the Directors note that total portfolio gearing™ is expected to remain above the current investment policy limit during the going concern period, other than in the asset realisation scenario. ## Conclusion and Material Uncertainty Related to Going Concern The Directors are satisfied that the Company has sufficient resources to continue in operation for the foreseeable future, being a period of not less than twelve months from the date of approval of the annual financial statements, and that it is appropriate to prepare the financial statements on a going concern basis. The Directors have concluded that the Company should continue to adopt the going concern basis in preparing these financial statements. However, given (i) that the managed wind-down and the associated policy changes are subject to shareholder approval at a GM to be held after publication of this Annual Report which is outside the control of the Directors, (ii) the potential for a full portfolio realisation, return of capital to shareholders and subsequent liquidation of the Company within a shorter period of time compared to an orderly managed wind-down delivered through staged asset disposals and (iii) the scheduled continuation vote at the September 2026 AGM which is outside the control of the Directors, a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Company were unable to continue as a going concern. ## Directors' Responsibilities Pursuant to Section 172 of the Companies Act 2006 The Directors fulfilled their duties under Section 172 of the Companies Act 2006 to act in good faith and to promote the success of the Company for the benefit of shareholders as a whole. See pages 61 to 63 Stakeholders and Section 172 for further details. ## Employees and Officers of the Company The Company does not have any employees and therefore employee policies are not required. The Directors of the Company who were in office during the year and up to the date of signing the financial statements are listed in the Board of Directors on pages 66 and 67. ## Greenhouse Gas Emissions Information about the Company's greenhouse gas emissions are set out in the SEIT 2026 Climate Change Report on pages 50 to 55. ## Political Donations The Company made no political donations during the year (2025: nil). ## Anti-Bribery, Tax Evasion and Fraud The Company does not tolerate bribery, corruption, fraud or the criminal facilitation of tax evasion. It also works to make sure its business partners share this commitment. The Company is committed to compliance with the Economic Crime and Corporate Transparency Act 2023, including the corporate offences of failure to prevent fraud and criminal facilitation of tax evasion, and to ensuring that the Company, its subsidiaries, partners, agents and anyone contracted to it, including the Company's Investment Manager and key service providers complies with the requirements of the UK Bribery Act 2010, or equivalent legislation in other jurisdictions. The Company's Anti-Bribery, Fraud, Corruption and Tax Evasion Policy is published on the Company's website. These statements are reviewed annually by the Board. ## Requirements of the UK Listing Rules UK Listing Rule 14.3.24 requires the Company to include certain information in a single identifiable section of the Annual Report or a cross-reference table indicating where the information is set out. The Directors confirm that there are no matters requiring disclosure in relation to UK Listing Rule 14.3.24. The Report was approved by the Board on 24 June 2026 and signed on its behalf by: Tony Roper Chair --- 95 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Statement of Directors' Responsibilities ## Statement of Directors' Responsibilities in Respect of the Financial Statements The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation. Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have prepared the financial statements in accordance with UK-adopted International Accounting Standards. Under company law, Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the loss of the Company for that period. In preparing the financial statements, the Directors are required to: - select suitable accounting policies and then apply them consistently; - state whether applicable UK-adopted International Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements accounts; - make judgements and accounting estimates that are reasonable and prudent; and - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006. The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. ## Directors' Confirmations The Directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy. Each of the Directors, whose names and functions are listed in the Board of Directors on pages 66 and 67, confirm that, to the best of their knowledge: - the Company financial statements, which have been prepared in accordance with UK-adopted International Accounting Standards, give a true and fair view of the assets, liabilities, financial position and result of the Company; and - the Strategic Report: Portfolio Review includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces. In the case of each Director in office at the date the Directors' Report is approved: - so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware; and - they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information. **The Annual Report and financial statements were approved by the Board on 24 June 2026 and the above responsibility statement was signed on its behalf by:** Tony Roper Chair --- 96 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Financial Statements ## Financial Statements | Independent Auditor's Report | 97 | | --- | --- | | Statement of Comprehensive Income | 104 | | Statement of Financial Position | 105 | | Statement of Changes in Shareholders' Equity | 106 | | Statement of Cash Flows | 107 | | Notes to the Financial Statements | 108 | | Appendix A | 126 | ## Additional unaudited Information | Company Information | 128 | | --- | --- | | Key Company Data | 129 | | Sustainable Finance Disclosure Regulation ('SFDR') | 130 | | Glossary | 138 | | Glossary of Financial Alternative Performance Measures ('APMs') | 140 | ![img-56.jpeg](img-56.jpeg) Onyx --- 97 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Independent Auditor's Report to the members of SDCL Efficiency Income Trust plc (formerly SDCL Energy Efficiency Income Trust plc) ## Report on the audit of the financial statements ### Opinion In our opinion, SDCL Efficiency Income Trust plc (formerly SDCL Energy Efficiency Income Trust plc)'s financial statements: - give a true and fair view of the state of the company's affairs as at 31 March 2026 and of its loss and cash flows for the year then ended; - have been properly prepared in accordance with UK-adopted international accounting standards; and - have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements, included within the Annual Report and Audited Financial Statements (the 'Annual Report'), which comprise: - the Statement of Financial Position as at 31 March 2026; - the Statement of Comprehensive Income for the year then ended; - the Statement of Changes in Shareholders' Equity for the year then ended; - the Statement of Cash Flows for the year then ended; and - the notes to the financial statements, comprising material accounting policy information and other explanatory information. Our opinion is consistent with our reporting to the Audit and Risk Committee. ### Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) ('ISAs (UK)') and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. ### Independence We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC's Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC's Ethical Standard were not provided. Other than those disclosed in the notes to the financial statements, we have provided no non-audit services to the company or its controlled undertakings in the period under audit. ### Material uncertainty related to going concern In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note 2 to the financial statements concerning the company's ability to continue as a going concern. As described in note 2, the Board announced on 9 April 2026 its intention to propose a managed wind-down of the company, involving the orderly realisation of assets and return of capital to shareholders over time, which is subject to shareholder approval at a General Meeting to be held after publication of these financial statements. The timing and outcome of this process, including the potential for a whole portfolio realisation which could significantly accelerate the realisation timetable compared to an orderly managed wind-down delivered through staged asset disposals, are uncertain. In addition, a continuation vote is required to be put to shareholders at the Annual General Meeting expected to be held in September 2026 in accordance with the company's Articles of Association. While the directors expect that the Articles may be amended following the proposed approval of the managed wind-down proposals, this is also subject to shareholder approval and therefore cannot be assumed at the date of approval of these financial statements. The directors do not have control over the outcome of these shareholder votes. These conditions, along with the other matters explained in note 2 to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the company were unable to continue as a going concern. --- 98 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Independent Auditor's Report continued to the members of SDCL Efficiency Income Trust plc (formerly SDCL Energy Efficiency Income Trust plc) ## Report on the audit of the financial statements continued ### Material uncertainty related to going concern continued In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the company's ability to continue to adopt the going concern basis of accounting included: - Testing the mathematical integrity of the cash flow forecasts and the models and reconciled these to Board approved budgets; - Challenging management on the appropriateness of key assumptions, including whether all capital commitments to the investment companies had been appropriately reflected in management's models and considering their reasonableness in the context of other supporting evidence gained from our audit work and reasonableness of the forecast dividend receipts from the portfolio; - Reviewing the SEIT Holdco Limited's ('Holdco') debt agreements to confirm the terms and conditions, including covenants. The covenants were consistent with those used in management's going concern assessment; - Agreeing all cash balances held by the company and Holdco as at 31 March 2026 to appropriate third-party evidence. This supported the directors' conclusion that sufficient liquidity headroom remained throughout the assessment period, without further drawdowns from the available financing facilities; - Testing the mathematical accuracy of the calculations for covenants applicable to Holdco, and confirming based on management's calculations that covenant compliance remained throughout the assessment period; and - Considering the severe but plausible downside scenario to assess the viability of the company in such circumstances. This included an assessment of the company's ability to repay its liabilities as they fall due and the Holdco's ability to meet its debt covenants. In relation to the directors' reporting on how they have applied the AIC Corporate Governance Code, other than the material uncertainty identified in note 2 to the financial statements, we have nothing material to add or draw attention to in relation to the directors' statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting, or in respect of the directors' identification in the financial statements of any other material uncertainties to the company's ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. ## Our audit approach ### Overview #### Audit scope - The company invests in a diversified portfolio of efficiency projects through an intermediate holding company named SEIT Holdco Limited. We performed an audit of the company including its investment in SEIT Holdco Limited. - All of our audit work was conducted in the UK by the company audit team. #### Key audit matters - Material uncertainty related to going concern - Valuation of investment at fair value through profit or loss #### Materiality - Overall materiality: £8.5m (2025: £9.8m) based on approximately 1% of total assets. - Performance materiality: £6.3m (2025: £7.4m). #### The scope of our audit As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. #### Key audit matters Key audit matters are those matters that, in the auditors' professional judgement, were of most significance in the 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) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to going concern, described in the Material uncertainty related to going concern section above, we determined the matters described below to be the key audit matters to be communicated in our report. This is not a complete list of all risks identified by our audit. --- 99 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Independent Auditor's Report continued to the members of SDCL Efficiency Income Trust plc (formerly SDCL Energy Efficiency Income Trust plc) ## Report on the audit of the financial statements continued ### Our audit approach continued #### Key audit matters continued Material uncertainty related to going concern is a new key audit matter this year. Otherwise, the key audit matters below are consistent with last year. #### Key audit matter #### Valuation of Investment at fair value through profit or loss The company has £845 million of investments recorded at fair value and these are significant in the context of the overall balance sheet of the company. See note 11 for details. The company invests through a holding company which in turn holds debt and equity interests in project companies (the "underlying investment portfolio") which are not listed and therefore are not actively traded. The fair value of the underlying investment portfolio has principally been valued on a discounted cash flow basis, which necessitates significant estimates in respect of the forecasted cash flows and discount rates applied. The directors also engaged external valuations experts to support them with determining the fair value of some investments. The directors' assessment of those fair values involves estimates about the future results of the underlying businesses, in particular around future revenues and discount rates applied to future cash flow forecasts. Based on the historical performance of investments and best estimates of future assumptions, the directors believe that these fair values are reasonable. #### How our audit addressed the key audit matter We planned our audit to critically assess management's assumptions and the investment valuation model in which they are applied; We have evaluated the design and implementation of relevant controls over the preparation of the portfolio valuation. However, we have not relied on controls as substantive procedures are determined to be more effective for this audit; We assessed the reasonableness of key assumptions made by management in the applicable valuation models; We tested the mathematical accuracy of a sample of the valuation models; We performed detailed testing over the significant inputs in a sample of investment valuation models. The testing entailed obtaining appropriate supporting documentation and audit evidence over the significant inputs and challenging management to justify the estimates made; #### Key audit matter Determining the valuation methodology and the inputs and assumptions within the valuation is subjective and complex particularly given the current macroeconomic conditions. There is also growing scrutiny on the valuation of investments given the potential impacts of climate change. This, combined with the significance of the unlisted investments balance in the statement of financial position, meant that this was a key audit matter for our current year audit. #### How our audit addressed the key audit matter We specifically considered management's assessment of the impact of climate change on the fair valuation of investments and tailored our audit approach to respond to the audit risks identified. In particular, we: - challenged management on how the impact of climate commitments made by the company would impact the assumptions within the discounted cash flows prepared by management that are used in the valuation of investment at fair value through profit or loss; - evaluated whether the impact of both physical and transition risks arising due to climate risk had been appropriately considered and included in the valuation; and, - with assistance from our internal valuation experts for certain assets, evaluated the appropriateness of the key assumptions used by management to model the impact of climate risk, including the reasonableness of adjustments to the future cash flows and the discount rates where applicable. We used our internal valuation experts in the United Kingdom, Sweden and Spain to provide audit support in reviewing and concluding on the fair valuation of certain investments in the underlying investment portfolio. They (a) assessed the appropriateness of the valuation methodology and approach and (b) assessed the appropriateness of the discounted cash flow valuation models, including comparing the discount rate and certain other key assumptions against those used by comparable market participants, where appropriate, and/or other macroeconomic data and (c) assessed the overall reasonableness of the investment valuation. In addition, we have assessed the competence and objectivity of management's experts and engaged with our valuation experts where necessary to read the independent third-party reports that management have obtained to support the valuation of certain assets within the portfolio. We confirmed that they have been prepared using an appropriate methodology and that the management's expert challenged key estimates and judgements; and considered the company's share price discount to its net assets value. As a result of our testing, we have obtained sufficient audit evidence to conclude that the overall valuation of the portfolio as a whole as at 31 March 2026 is materially reasonable and that there are appropriate disclosures within the annual report in relation to estimates and judgements relevant to the valuation. --- 100 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Independent Auditor's Report continued to the members of SDCL Efficiency Income Trust plc (formerly SDCL Energy Efficiency Income Trust plc) ## Report on the audit of the financial statements continued ### Our audit approach continued #### How we tailored the audit scope We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the company, the accounting processes and controls, and the industry in which it operates. As part of designing our audit approach, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. #### The impact of climate risk on our audit As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk on the financial statements and the fair valuation of investments in particular. In addition to enquiries with management, we also understood the governance processes in place by the company to assess climate risk and read the additional reporting made by the entity within the 'SEIT 2026 Climate Change Report' on page 50 of Annual Report, particularly focusing on the section where the company sets out its climate related risks. We challenged the completeness of management's climate risk assessment by reading external reporting made by management. We challenged the consistency of management's assessment with internal climate plans and board minutes and considered the information published by the management on the entity's website and communications for details of climate related impacts. Management have made a commitment to the Glasgow Financial Alliance for Net Zero (GFANZ) which aligns them to accelerate the transition to a net zero economy. As part of its commitment to GFANZ, and specifically the Net Zero Asset Managers Initiative, management is developing a net zero strategy for the company. This commitment does not directly impact financial reporting, as management has not yet developed a pathway to deliver this commitment and will only be able to model the impact once the pathway is developed. Using our knowledge of the business and with assistance from our internal valuation experts we evaluated management's risk assessment and adjustments to the financial statements and resulting disclosures, where significant. We considered the Valuation of investment at fair value through profit or loss to potentially be impacted by climate risk and consequently we focused our audit work in this area. Where climate risk relates to a key audit matter our audit response is given in the key audit matters section of our audit report. We also considered the consistency of the disclosures in relation to climate change within the Annual Report with the financial statements and our knowledge obtained from our audit. Our procedures did not identify any further material impact in the context of our audit of the financial statements as a whole, or our key audit matters for the year ended 31 March 2026. #### Materiality The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: | Overall company materiality | £8.5m (2025: £9.8m). | | --- | --- | | How we determined it | approximately 1% of total assets | | Rationale for benchmark applied | We believe that total assets is the most appropriate benchmark because this is the key metric of interest to investors and is a generally accepted measure used for companies in this industry. | We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2025: 75%) of overall materiality, amounting to £6.3m (2025: £7.4m) for the company financial statements. In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment and aggregation risk and the effectiveness of controls – and concluded that an amount at the upper end of our normal range was appropriate. We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above £0.4m (2025: £0.5m) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons. --- 101 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Independent Auditor's Report continued to the members of SDCL Efficiency Income Trust plc (formerly SDCL Energy Efficiency Income Trust plc) ## Report on the audit of the financial statements continued ### Reporting on other information The other information comprises all of the information in the Annual Report other than the financial statements and our auditors' report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. 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 based on these responsibilities. With respect to the Strategic report and Report of the Directors, we also considered whether the disclosures required by the UK Companies Act 2006 have been included. Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below. ### Strategic report and Report of the Directors In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Report of the Directors for the year ended 31 March 2026 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements. In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic report and Report of the Directors. ### Directors' Remuneration In our opinion, the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006. ## Corporate governance statement The Listing Rules require us to review the directors' statements in relation to going concern, longer-term viability and that part of the corporate governance statement relating to the company's compliance with the provisions of the AIC Corporate Governance Code specified for our review. Our additional responsibilities with respect to the corporate governance statement as other information are described in the Reporting on other information section of this report. 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 and our knowledge obtained during the audit, and, except for the matters reported in the section headed 'Material uncertainty related to going concern', we have nothing material to add or draw attention to in relation to: - The directors' confirmation that they have carried out a robust assessment of the emerging and principal risks; - The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an explanation of how these are being managed or mitigated; - The directors' statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in preparing them, and their identification of any material uncertainties to the company's ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements; - The directors' explanation as to their assessment of the company's prospects, the period this assessment covers and why the period is appropriate; and - The directors' statement as to whether they have a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions. Our review of the directors' statement regarding the longer-term viability of the company was substantially less in scope than an audit and only consisted of making inquiries and considering the directors' process supporting their statement; checking that the statement is in alignment with the relevant provisions of the AIC Corporate Governance Code; and considering whether the statement is consistent with the financial statements and our knowledge and understanding of the company and its environment obtained in the course of the audit. --- 102 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Independent Auditor's Report continued to the members of SDCL Efficiency Income Trust plc (formerly SDCL Energy Efficiency Income Trust plc) ## Report on the audit of the financial statements continued ### Corporate governance statement continued In addition, 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 and our knowledge obtained during the audit: - The directors' statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the information necessary for the members to assess the company's position, performance, business model and strategy; - The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and - The section of the Annual Report describing the work of the Audit and Risk Committee. We have nothing to report in respect of our responsibility to report when the directors' statement relating to the company's compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by the auditors. ## Responsibilities for the financial statements and the audit ### Responsibilities of the directors for the financial statements As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also 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. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. ### Auditors' 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 auditors' 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. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to the Companies Act 2006 and UK Tax legislation, including section 1158 of the Corporation Tax Act 2010 and the regulations made thereunder, and we considered the extent to which non-compliance might have a material effect on the financial statements. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of overrule of controls), and determined that the principal risks were related to the valuation of investment and posting inappropriate journal entries to achieve desired financial results. Audit procedures performed by the engagement team included: - Inquiries of management relating to known or suspected instances of non-compliance with laws and regulations and fraud; - Evaluation of design and implementation of management's controls designed to prevent and detect irregularities. However, we have not relied on controls as substantive procedures are determined to be more effective for this audit; - Reviewing the minutes of meetings of the Board and its committees; - Challenging the assumptions and judgments made by management in their significant accounting estimates relating to the valuation of investments; and - Identifying and testing journal entries, in particular certain journal entries posted with unusual account combinations. There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected. A further description of our responsibilities for the audit of the financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report. --- 103 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Independent Auditor's Report continued to the members of SDCL Efficiency Income Trust plc (formerly SDCL Energy Efficiency Income Trust plc) ## Report on the audit of the financial statements continued ### Responsibilities for the financial statements and the audit continued #### Use of this report This report, including the opinions, has been prepared for and only for the company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. #### Other required reporting ##### Companies Act 2006 exception reporting Under the Companies Act 2006 we are required to report to you if, in our opinion: - we have not obtained all the information and explanations we require for our audit; or - adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or - certain disclosures of directors' remuneration specified by law are not made; or - the financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns. We have no exceptions to report arising from this responsibility. #### Appointment We were first appointed by the company for the financial year ended 31 March 2019. Our uninterrupted engagement covers eight financial years. #### Other matter The company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to include these financial statements in an annual financial report prepared under the structured digital format required by DTR 4.1.15R – 4.1.18R and filed on the National Storage Mechanism of the Financial Conduct Authority. This auditors' report provides no assurance over whether the structured digital format annual financial report has been prepared in accordance with those requirements. Richard French (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors Watford 24 June 2026 --- 104 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Statement of Comprehensive Income For the year ended 31 March 2026 | | Note | For the year ended 31 March 2026 £'millions | For the year ended 31 March 2025 £'millions | | --- | --- | --- | --- | | Investment (loss)/income | 5 | (76.5) | 81.2 | | **Total operating (loss)/income** | | **(76.5)** | **81.2** | | Fund expenses | 6 | (10.9) | (11.1) | | **(Loss)/profit for the year before tax** | | **(87.4)** | **70.1** | | Tax on (loss)/profit | 7 | — | — | | **(Loss)/profit for the year** | | **(87.4)** | **70.1** | | **Total comprehensive (loss)/income for the year** | | **(87.4)** | **70.1** | | **Attributable to:** | | | | | **Equity holders of the Company** | | **(87.4)** | **70.1** | | (Loss)/earnings per ordinary share (pence) | 8 | (8.1) | 6.4 | The accompanying Notes are an integral part of these financial statements. All items in the above statement derive from continuing operations. --- 105 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Statement of Financial Position As at 31 March 2026 | | Note | 31 March 2026 £'millions | 31 March 2025 £'millions | | --- | --- | --- | --- | | **Non-current assets** | | | | | Investment at fair value through profit or loss | 11 | 845.1 | 984.2 | | | | **845.1** | **984.2** | | **Current assets** | | | | | Trade and other receivables | | 0.2 | 0.3 | | Cash and cash equivalents | | 1.2 | 0.9 | | | | **1.4** | **1.2** | | **Current liabilities** | | | | | Trade and other payables | | (2.0) | (1.8) | | **Net current liabilities** | | **(0.6)** | **(0.6)** | | **Net assets** | | **844.5** | **983.6** | | **Capital and reserves** | | | | | Share capital | 12 | 11.1 | 11.1 | | Share premium | 12 | 756.8 | 756.8 | | Other distributable reserves | 12 | 219.2 | 270.9 | | Accumulated losses | | (142.6) | (55.2) | | **Total equity** | | **844.5** | **983.6** | | **Net assets per share^{ATM} (pence)** | 10 | **77.8** | **90.6** | The accompanying Notes are an integral part of these financial statements. The financial statements on pages 104 to 127 were approved by the Board of Directors on 24 June 2026 and signed on its behalf by: Christopher Knowles Director Company number: 11620959 Tony Roper Director --- 106 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Statement of Changes in Shareholders' Equity For the year ended 31 March 2026 | | Note | Share capital £'millions | Share premium £'millions | Other distributable reserves £'millions | Accumulated losses £'millions | Total equity £'millions | | --- | --- | --- | --- | --- | --- | --- | | **Balance at 1 April 2025** | | 11.1 | 756.8 | 270.9 | (55.2) | 983.6 | | Dividends paid | 9 | — | — | (51.7) | — | (51.7) | | Total comprehensive loss for the year | | — | — | — | (87.4) | (87.4) | | **Balance at 31 March 2026** | | **11.1** | **756.8** | **219.2** | **(142.6)** | **844.5** | | | Note | Share capital £'millions | Share premium £'millions | Other distributable reserves £'millions | Accumulated losses £'millions | Total equity £'millions | | --- | --- | --- | --- | --- | --- | --- | | **Balance at 1 April 2024** | | 11.1 | 756.8 | 339.3 | (125.3) | 981.9 | | Dividends paid | 9 | — | — | (68.4) | — | (68.4) | | Total comprehensive income for the year | | — | — | — | 70.1 | 70.1 | | **Balance at 31 March 2025** | | **11.1** | **756.8** | **270.9** | **(55.2)** | **983.6** | The accompanying Notes are an integral part of these financial statements. --- 107 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Statement of Cash Flows For the year ended 31 March 2026 | | Note | For the year ended 31 March 2026 £'millions | For the year ended 31 March 2025 £'millions | | --- | --- | --- | --- | | **Cash flows from operating activities** | | | | | (Loss)/profit for the year before tax | | (87.4) | 70.1 | | Adjustments for: | | | | | Loss/(gain) on investment at fair value through profit or loss | 5 | 136.1 | (7.3) | | Loan interest income | 5 | (3.1) | (3.9) | | **Operating cash flows before movements in working capital** | | **45.6** | **58.9** | | **Changes in working capital** | | | | | Decrease/(increase) in trade and other receivables | | 0.1 | (0.1) | | Increase/(decrease) in trade and other payables | | 0.2 | (0.8) | | **Net cash generated from operating activities** | | **45.9** | **58.0** | | **Cash flows from investing activities** | | | | | Additional investment in Holdco | 11 | — | (7.0) | | Loan principal repayment received | 11 | 3.0 | 13.9 | | Loan interest income received | | 3.1 | 3.9 | | **Net cash generated from investing activities** | | **6.1** | **10.8** | | **Cash flows from financing activities** | | | | | Dividends paid | 9 | (51.7) | (68.4) | | **Net cash used in financing activities** | | **(51.7)** | **(68.4)** | | Net movement during the year | | 0.3 | 0.4 | | Cash and cash equivalents at the beginning of the year | 2 | 0.9 | 0.5 | | **Cash and cash equivalents at the end of the year** | 2 | **1.2** | **0.9** | The accompanying Notes are an integral part of these financial statements. --- 108 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Notes to the Financial Statements For the year ended 31 March 2026 ## 1. General Information SDCL Efficiency Income Trust plc (the 'Company') (formerly SDCL Energy Efficiency Income Trust plc) is a public company limited by shares, incorporated on 12 October 2018 and registered and domiciled in England, United Kingdom, under number 11620959 pursuant to the Companies Act 2006. The Company's registered office and principal place of business is The Scalpel, 18th Floor, 52 Lime Street, London, EC3M 7AF. The Company's ordinary shares were first admitted to the premium segment of the UK Listing Authority's Official List and to trading on the Main Market of the London Stock Exchange under the ticker SEIT on 11 December 2018. The Company's current objective is to generate an attractive total return for investors comprising stable dividend income and capital preservation, with the opportunity for capital growth through the acquiring and realising of a diverse portfolio of energy efficiency infrastructure projects. Following the announcement of the managed wind-down, a revised objective and investment policy will be implemented in the following period (subject to shareholder approval). The Company makes its investments through its principal holding company and sole direct subsidiary, SEIT Holdco Limited ('Holdco'), and intermediate holding companies (together referred to as the 'Group'), which are directly owned by the Holdco. The Company controls the investment policy of each of the Holdco and its intermediate holding companies in order to ensure that each will act in a manner consistent with the investment policy of the Company. The Company has appointed Sustainable Development Capital LLP as its Investment Manager (the 'Investment Manager') pursuant to the Investment Management Agreement dated 22 November 2018 and amended on 20 June 2025. The Investment Manager is registered in England and Wales under number OC330266 pursuant to the Companies Act 2006. The Investment Manager is regulated by the FCA, number 471124. The financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Company operates. All values are rounded to the nearest million (£ million), except otherwise indicated. ## 2. Material Accounting Policy Information ### a) Basis of accounting The financial statements of the Company have been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006, as applicable to companies reporting under those standards. The financial statements are prepared under the historical cost convention, except for certain investments and financial instruments measured at fair value through profit or loss. Fair value is the price that would be received on sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis. The principal accounting policies adopted are set out below and consistently applied, subject to changes in accordance with any amendments in IFRS. ### (1) New standards and amendments to existing standards effective 1 April 2025 There are no new standards, amendments to standards or interpretations that are effective for annual periods beginning on 1 April 2025 that have a material effect on the financial statements of the Company. ### (2) New standards, amendments and interpretations effective after 1 April 2026 and have not been early adopted The following standards have been issued but are effective for annual periods beginning after 1 April 2026 and have not been adopted early: - IFRS 18 Presentation and Disclosures in Financial Statements – effective from 1 January 2027. IFRS 18 will not impact the recognition or measurement of items in the financial statements, but it might change what an entity reports as its operating profit or loss; - IFRS 7 – Amendments regarding the classification and measurement of financial instruments – effective from 1 January 2026; - IFRS 9 – Amendments regarding the classification and measurement of financial instruments – effective from 1 January 2026; and - IAS 21 – Amendments regarding the translation into a hyperinflationary presentation currency – effective from 1 January 2027. None of the above are expected to have a material effect on the financial statements of the Company. --- 109 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Notes to the Financial Statements continued For the year ended 31 March 2026 ## 2. Material Accounting Policy Information continued ### b) IFRS 10 – basis of consolidation and investment entities exemption The Company applies IFRS 10 Consolidated Financial Statements. As in the previous year, the Directors have concluded that in accordance with IFRS 10, the Company has re-evaluated the below criteria and continues to meet the definition of an investment entity. The financial statements therefore comprise the results of the Company only and no subsidiaries are consolidated on a line-by-line basis. The Company invests its investable cash into Holdco when a targeted investment has been approved by the Investment Manager's Investment Committee. The sole objective of the Holdco is to enter into several energy efficiency projects, via individual corporate entities. The Holdco issues equity and loans to finance the projects. Holdco also incurs overheads and borrowings on behalf of the Group. Under IFRS 10, investment entities are required to hold subsidiaries at fair value through profit or loss rather than consolidate them. There are three key conditions to be met by the Company for it to meet the definition of an investment entity. For each reporting period, the Directors assess whether the Company continues to meet these conditions: - (i) the Company has obtained funds for the purpose of providing investors with investment management services; - (ii) the business purpose of the Company, which was communicated directly to investors, is investing solely for risk-adjusted returns (including having an exit strategy for investments); and - (iii) the performance of substantially all investments is measured and evaluated on a fair value basis. The Company is an investment company, providing investors exposure to a diversified portfolio of energy efficiency infrastructure projects that are managed for investment purposes. During the year ended 31 March 2026, the Company, via Holdco, made additional investments but primarily into existing investments. The Directors assessed that there was no fundamental change to the Company and its portfolio of investment that would cause the Company not to satisfy the conditions of an investment entity under IFRS 10. As a result, the Company continues to apply the investment entity conditions under IFRS 10 to its financial statements. ### c) Going concern The Directors have considered the following current matters alongside the regular cash flow and business activities in assessing that it is appropriate to prepare the financial statements on a going concern basis: #### Managed wind-down proposals and proposed revised Investment Policy - On 9 April 2026, the Board announced its intention to propose a managed wind-down of the Company, involving the realisation of the Company's assets and the return of cash to shareholders over time. A General Meeting ('GM') has been convened for 10 July at which shareholders will be asked to approve the Company's managed wind-down and the revised Investment Policy required to facilitate the wind-down, together with associated changes to the Articles and the cancellation of the share premium account. - The proposed changes include a material amendment to the Investment Policy in order to ensure the Company is able to take such actions as may be necessary to preserve and maximise realisable value through the wind-down process. In particular, the changes proposed include matters relating to gearing limits and portfolio concentration/exposure limits. - The Directors note that announced intention to pursue a managed wind-down, subject to shareholder approval, does not imply an intention to liquidate the Company immediately or a cessation of operations. If a managed wind-down is approved by shareholders, the detailed implementation plan would need to be further clarified and agreed by the Board, and the going concern assessment has therefore been prepared on the basis of the Company continuing under its existing arrangements pending the outcome of the GM, with a separate asset realisation scenario also considered as described below. - While the Board remains open to engaging with prospective counterparties in respect of all assets, including on a whole portfolio basis, a successful whole portfolio sale (if achievable) could materially accelerate the realisation timetable and could potentially be executed within the next six to twelve months. By contrast, a managed wind-down delivered through staged asset disposals is expected to run over a considerably longer period of around three to four years, recognising that the timetable and specific actions may change as plans develop and will depend on market conditions, asset readiness and applicable legal, regulatory and financing constraints #### Continuation vote A continuation vote is currently scheduled to be put to shareholders at the Company's 2026 Annual General Meeting ('AGM') in accordance with the Articles of Association. However, as part of the approval of the managed wind-down at the GM expected in July 2026, the Board expects the Articles will be amended as proposed and the requirement for the vote will be removed. --- 110 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Notes to the Financial Statements continued For the year ended 31 March 2026 ## 2. Material Accounting Policy Information continued ### c) Going concern continued #### Macroeconomic and geopolitical considerations The Board and the Investment Manager have performed an assessment of the current exposure to rising interest rates/inflation and global government policies and regulations, and their impact on operations and forecast cash flows. Higher interest rates have the potential to increase financing costs across the portfolio, impact the valuation of assets through changes in discount rates, and place pressure on counterparties where there is exposure to refinancing risk. However, the majority of the Company's investments benefit from long-term contracted revenues, with a proportion of income streams either directly or indirectly linked to inflation, providing a degree of protection against rising price levels. In addition, the Company's financing arrangements and those within the portfolio are actively monitored and, where possible, structured to mitigate exposure to short-term interest rate volatility. The Directors have also considered the ongoing conflicts in Ukraine, Russia and the Middle East and the potential impact on the Company's and the portfolio companies' operations. The Investment Manager has considered any restrictions imposed by relevant sanctions and their impact on the portfolio companies and has concluded there are no direct material implications. #### Regular cash flow and business activity In assessing whether the Company is a going concern for a period of at least twelve months from the approval of the Annual Report, the Directors have reviewed cash flow forecasts to 30 September 2027, considering both a base case and a severe but plausible downside scenario. Under each case the financial covenants were tested to show sufficient headroom over the assessment period. Under the base case, reflecting the Investment Manager's expectations of portfolio performance, the forecast incorporates the impact of the recent disposal and associated repayment of the RCF, resulting in increased headroom within the relevant financial covenants. This base case does not assume further asset disposals beyond those already completed and assumes no further dividends are paid during the assessment period ending 30 September 2027. On this basis, the Company is expected to generate sufficient cash flows to meet its liabilities as they fall due. The severe but plausible downside case assumes a 10% reduction in net income, reflecting the principal risks associated with macroeconomic conditions. Under this scenario, the Company continues to maintain sufficient liquidity to meet its obligations, supported by mitigating actions within the Investment Manager's control, including adjusting discretionary cash outflows and managing costs. The assessment does not assume the availability of further drawings under the RCF. The Directors have also separately assessed an asset realisation scenario, reflecting the implementation of the proposed managed wind-down, which similarly demonstrates appropriate liquidity and continued headroom against financial covenants. As at 31 March 2026 the Directors note that the Company is in a net current liability position of £0.4 million. The Company's net assets were £844 million (31 March 2025: £983.6 million), including cash balances of £1.2 million (31 March 2025: £0.9 million). Further amounts of cash are held by the Company's direct and indirect subsidiaries (including Holdco, which has c.£0.6 million (31 March 2025: c.£ 7.0 million) at the year-end), which are sufficient to meet current obligations as they fall due. The major cash outflows of the Company are interest on debt at Holdco and further investment in assets (of which the vast majority are discretionary). The Company's sole direct subsidiary, Holdco, has £240 million RCF (with no committed repayments in the assessment period) that has adequate headroom in its covenants that have been tested for historic and forward interest cover and loan-to-value limits. As at 31 March 2026, £233 million (31 March 2025: £234 million) of the RCF was drawn down. At the date of this report the RCF is drawn at £190m with limited headroom due to RCF covenant restrictions. Separate from the RCF covenants, the directors note that total portfolio gearing $^{AM}$ is expected to remain above the current Investment Policy limit during the going concern period, other than in the asset realisation scenario. #### Conclusion and material uncertainty related to going concern The Directors are satisfied that the Company has sufficient resources to continue in operation for the foreseeable future, being a period of not less than twelve months from the date of approval of the annual financial statements, and that it is appropriate to prepare the financial statements on a going concern basis. The Directors have concluded that the Company should continue to adopt the going concern basis in preparing these financial statements. However, given (i) that the managed wind-down and the associated Policy Changes are subject to shareholder approval at a GM to be held after publication of this Annual Report and Audited Financial Statements which is outside the control of the Directors, (ii) the potential for a full portfolio realisation, return of capital to shareholders and subsequent liquidation of the Company within a shorter period of time compared to an managed wind-down delivered through staged asset disposals and (iii) the scheduled continuation vote at the September 2026 AGM which is outside the control of the Directors, a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the company were unable to continue as a going concern. --- 111 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Notes to the Financial Statements continued For the year ended 31 March 2026 ## 2. Material Accounting Policy Information continued ### d) Segmental reporting The Chief Operating Decision Maker ('CODM'), being the Board of Directors, is of the opinion that the Company is engaged in a single segment of business, being investment in energy efficiency projects to generate investment returns whilst preserving capital. The financial information used by the CODM to manage the Company presents the business as a single segment. ### e) Foreign currency translation #### Foreign currency and presentation currency Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates, the Company's functional currency. The financial statements are presented in pounds sterling which is the Company's functional and presentation currency. #### Transactions and balances Foreign currency transactions are translated into pounds sterling using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income. ### f) Income Dividend income and investment income (including loan interest income) from financial assets at fair value through profit or loss is recognised in the Statement of Comprehensive Income within investment income when the Company's right to receive payments is established. Fair value gains on financial assets at fair value through profit or loss are recognised in the Statement of Comprehensive Income at each valuation point. Loan interest income is accounted for on an accrual basis using the effective interest method. ### g) Dividends payable Dividends to the Company's shareholders are recognised when they become legally payable. In the case of interim dividends, this is when they are paid. In the case of final dividends, this is when they are approved by the shareholders at the AGM. ### h) Fund expenses All expenses including investment management fees, transaction costs and Non-Executive Directors' fees are accounted for on an accrual basis. ### i) Acquisition costs Acquisition costs are expensed to the Statement of Comprehensive Income as they are incurred. ### j) Taxation The Company is approved as an Investment Trust Company ('ITC') under sections 1158 and 1159 of the Corporation Taxes Act 2010 and Part 2 Chapter 1 Statutory Instrument 2011/2999 for accounting periods commencing on or after 25 May 2018. The approval is subject to the Company continuing to meet the eligibility conditions of the Corporations Tax Act 2010 and the Statutory Instrument 2011/2999. The Company intends to ensure that it complies with the ITC regulations on an ongoing basis and regularly monitors the conditions required to maintain ITC status. Current tax is the expected tax payable on any taxable income for the period, using tax rates that have been enacted or substantively enacted at the date of the Statement of Financial Position and end of the relevant period. The rate is currently 25%. The Company may use taxable losses from within the Group to relieve taxable profits in the Company and also income streams part of the dividends paid into interest payments to achieve tax efficiency for the Company. The increase in the headline rate of corporation tax does impact on the valuation of the Company's investments. ### k) Cash and cash equivalents Cash and cash equivalents include deposits held at call with banks and other short-term deposits with original maturities of three months or less. Cash is spread across two banks including a money market fund managed by JP Morgan. It is a highly liquid investment and readily convertible to a known amount of cash. There is no expected credit loss as the bank institutions have credit ratings of at least BBB+ and all cash is held at call from the banks. --- 112 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Notes to the Financial Statements continued For the year ended 31 March 2026 ## 2. Material Accounting Policy Information continued ### l) Financial instruments Financial assets and financial liabilities are recognised in the Company's Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognised when the contractual rights to the cash flows from the instrument expire or the asset is transferred and the transfer qualifies for derecognition in accordance with IFRS 9 Financial Instruments. Investments are recognised when the Company has control of the asset. Control is assessed considering the purpose and design of the investments including any options to acquire the investments where these options are substantive. The options are assessed for factors including the exercise price and the incentives for exercise. The Company classifies its financial assets in the following measurement categories: - those to be measured subsequently at fair value through profit or loss; and At initial recognition, the Company measures all investments at its transaction price net of transaction costs that are directly attributable to the acquisition of the financial asset. The Company subsequently measures all investments at fair value and changes in the fair value are recognised as gains/(losses) on investments at fair value through profit or loss within investment income. Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expired. ### m) Trade and other receivables Trade and other receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Those include VAT receivable and other receivables which are intercompany balances due from subsidiaries. Receivables are initially recognised at fair value. They are subsequently measured at amortised cost, less any expected credit loss. The Company has assessed IFRS 9's expected credit loss model and does not consider that there is a material impact on these financial statements. ### n) Trade and other payables Trade and other payables include accruals and other payables and initially are recognised at fair value and subsequently measured at amortised cost using the effective interest method. ### o) Share capital and share premium The Company's ordinary shares are not redeemable and are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction in equity and are charged from the share premium account. The costs incurred in relation to the IPO and subsequent fundraisings of the Company were charged from the share premium account. ### p) Treasury shares The Company recognises the purchase of its own equity instruments in treasury shares, which are deducted from retained earnings. No gain or loss is recognised in the Statement of Comprehensive Income on the purchase, sale, issue or cancellation of the Company's own equity instruments. --- 113 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Notes to the Financial Statements continued For the year ended 31 March 2026 ## 3. Critical Accounting Estimates and Judgements The preparation of financial statements in accordance with IFRS requires the Directors to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the year. Actual results could differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period or in the period and future periods if the revision affects both current and future periods. ### Judgements #### Investment entity As disclosed in Note 2, the Directors have concluded that the Company continues to meet the definition of an investment entity as defined in IFRS 10. This conclusion involved a degree of judgement and assessment as to whether the Company met the criteria outlined in the accounting standards. ### Estimates #### Investment valuations The key area where estimates may be significant to the financial statements is the valuation of the Company's sole direct subsidiary, Holdco, which in turns holds investments in a portfolio that are held at fair value (the 'Portfolio Valuation$^{MM}$'). See Note 11 for calculation. IFRS 13 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Board of Directors has appointed the Investment Manager to produce the Portfolio Valuation$^{MM}$ at 31 March 2026, which includes estimates of future cash flows that have the potential to have a material effect on the measurement of fair value. The key estimates made include: #### Discount rate The weighted average unlevered discount rate (post tax) applied in the 31 March 2026 valuation was 8.5% (31 March 2025: 8.5%) and 9.5% on a levered basis (31 March 2025: 9.6%). The discount rate is considered one of the most unobservable inputs through which an increase or decrease would have a material impact on the fair value of investment at fair value through profit or loss. An appropriate discount rate is applied to each underlying asset. The range of discount rates applied and its sensitivity to movements in discount rates is shown in Note 4. #### Macroeconomic assumptions Further estimates have been made on the key macroeconomic assumptions that are likely to have a material effect on the measurement of fair value, being inflation, corporation tax and foreign exchange, which are further described in Note 4. #### Investment-specific cash flow assumptions and sensitivities The below highlights several key investment-specific estimates made for the Portfolio Valuation$^{MM}$ at 31 March 2026. The valuation includes an assumption of applying group relief in future years. If the group relief cannot be applied with no mitigation the investment at fair value through profit or loss at 31 March 2026 could be reduced by between an estimated £5 million and £10 million. **Primary Energy** – An estimate has been made in determining the future demand for generation by the offtaker in the PCI asset. If the demand assumed were 25% lower than estimated, the investment at fair value through profit or loss at 31 March 2026 could be reduced by between an estimated £5 million and £15 million, assuming no other mitigants are available. An estimate has also been made in relation to the future value of Renewable Energy Certificates ('RECs') generated by Primary Energy. The valuation assumes that the current REC legislation is extended to allow the continued sale of compliance RECs. There remains uncertainty as to whether the REC regime in its current form will continue beyond 2026. In the 31 March 2026 valuation, the Investment Manager retained a discount rate premium for REC-related uncertainty and reduced forecast REC pricing beyond 2026, reflecting the risk that, absent legislative extension, only lower-priced voluntary RECs may be available causing a decrease in the investment at fair value through profit or loss of estimated £15 million. If REC prices were to reduce to a 90% level, this would result in a reduction in the investment at fair value through profit or loss of between an estimated £5 million and £15 million. An estimate has also been made for the Portside recontracting increase. The estimated increase in Portside's recontracting rate in 2028 has been retained at 17%. Should management be unsuccessful in negotiating this increase, the investment at fair value through profit or loss at 31 March 2026 could be reduced by between an estimated £1 million and £10 million. The Manager has reduced the medium-term production levels at Cokenergy to reflect a downturn in host demand. Should production levels take three years longer to recover to historic levels than forecast, the impact to the investment at fair value through profit or loss at 31 March 2026 could be reduced by between an estimated £1m and £10m. --- 114 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Notes to the Financial Statements continued For the year ended 31 March 2026 ## 3. Critical Accounting Estimates and Judgements continued ### Estimates continued #### Investment-specific cash flow assumptions and sensitivities continued **RED-Rochester** – Estimates have been included in relation to the timing and level of future customer demand at Eastman Business Park, including demand associated with the site previously developed by Li-Cycle and now owned by Glencore, together with the timing of associated infrastructure revenues. The 31 March 2026 valuation reflects increased uncertainty over the timing and level of future demand from that site. In response, the valuation applies a materially lower probability weighting to those future cash flows than in the prior year, partially offset by the removal of a discount rate premium previously applied to reflect uncertainty. Given the increased uncertainty over timing and level of future energy demand from the Glencore site, management has recognised a reduction in likely revenues which resulted in a reduction to the Investment at fair value through profit or loss at 31 March 2026 of an estimated £35 million. A permanent loss of that expected customer demand, with no replacement and no other mitigating factors other than some limited grid sale, would result in a further reduction to the Investment at fair value through profit or loss of between an estimated £5 million and £15 million. However, if the assumed ramp-up in those loads were delayed by a further 12 months with no grid sales assumed, the decrease in the Investment at fair value through profit or loss is estimated at between £1 million and £10 million. Should a full replacement of the assumed Glencore/Li-Cycle energy demand be secured by the end of calendar year 2026, this would result in an increase of between an estimated £30 million and £40 million in the Investment at fair value through profit or loss. In addition, estimates have been included, based on projected growth of earnings in the RED-Rochester business, that a gain share pay-out will be made to the external asset management team tasked with delivering the growth within the next five years, linked to the investment increasing its profitability. **Driva** – The future cash flows for Driva include assumptions that customer numbers will decline at a rate lower than the historic average decline and that the business will continue to develop new revenue streams in transport and Energy-as-a-Service activities. These assumptions reflect management's view of likely future performance, taking account of the business's repositioning and diversification initiatives. If the historic three years average rate of customer decline were applied for the next five years and no growth in transport or related service revenues were achieved over the next ten years, the Investment at fair value through profit or loss at 31 March 2026 could be reduced by between £1 million and £10 million, assuming no other mitigants are available. **Oliva** – Estimates have been made in relation to future regulatory compensation under the Spanish remuneration framework and the level of CO$_{2}$ compensation from 2026 as EU ETS II begins. The first updates to the remuneration parameters for 2026 indicate a continuation of a blend of free emissions allowances and compensation within the regulated regime. Pairing this output with 2025 levels of free emissions allowances results in materially lower CO$_{2}$ compensation than previously assumed. This assumption resulted in a negative valuation impact at 31 March 2026 of £20 million. If the future regulatory regime does not reflect the current assumptions as adopted in 2026, this could result in the Investment at fair value through profit or loss at 31 March 2026 being reduced by between £1 million and £10 million, assuming no other mitigants are available. **Onyx** – An estimate has been made in relation to the future development, construction and operating profile of the Onyx platform, including assumptions for the conversion of development pipeline into operational assets, future power purchase agreement pricing and the level of capital available to support that pipeline. The 31 March 2026 valuation reflects a reduction in future pipeline assumptions, including the removal of the community solar pipeline and a step-down in certain commercial and industrial deployment assumptions, to reflect current capital constraints and the post-2027 tax credit environment. If development pipeline deployment were reduced by 25% from 2026 to 2031, this would result in a reduction to the Investment at fair value through profit or loss of between an estimated £25 million and £35 million, assuming no other mitigants are available. A 5% increase or decrease in PPA pricing on portfolios constructed from 2026 onwards would result in an increase or decrease of between an estimated £10 million and £20 million to the Investment at fair value through profit or loss at 31 March 2026. The valuation is dependent on sufficient liquidity being available to continue supporting deployment of the Onyx pipeline. If such capacity were not available, this could constrain future deployment and reduce the Investment at fair value through profit or loss by between an estimated £65 million and £75 million. An estimate has also been made in relation to operating and maintenance costs for the uncontracted development pipeline. If the assumed O&M cost for that pipeline were to revert from $13.50 per kW per year to up to $19 per kW per year, this could reduce the Investment at fair value through profit or loss of between an estimated £10 million and £20 million. --- 115 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Notes to the Financial Statements continued For the year ended 31 March 2026 ## 4. Financial Instruments ### Valuation methodology The Company has a single investment wholly owned holding company (Holdco). It recognises this investment at fair value. To derive the fair value of Holdco, the Company determines the fair value of investment held directly or indirectly by Holdco and adjusts for any other assets and liabilities. See Note 11 for a reconciliation of this fair value. The valuation methodology applied by Holdco to determine the fair value of its investments is described below and is consistent with the methodology described in the March 2025 Annual Report. The Directors have satisfied themselves as to the methodology used and the discount rates and key assumptions applied in producing the valuations. All investments are at fair value through profit or loss. For non-market traded investments (being all the investments in the current portfolio), the valuation is based on a discounted cash flow methodology and adjusted in accordance with the IPEV ("International Private Equity and Venture Capital") valuation guidelines where appropriate to comply with IFRS 13 and IFRS 9, given the special nature of infrastructure investments. Where an investment is traded in an open market, a market quote is used, during the year none traded. Certain investments may be held at cost if in the early part of a construction phase, however this will still be supported by a discounted cash flow analysis or similar method to determine fair value. The Investment Manager exercises its judgement in assessing the expected future cash flows from each investment based on the project's expected life and the financial models produced for each project company and adjusts the cash flows where necessary to take into account key external macroeconomic assumptions and specific operating assumptions. Assumptions for future cash flows may include successful recontracting and project life extensions, as well as cash flow linked to assumptions made on growth rates and further business development opportunities within existing projects. The fair value for each investment is then derived from the application of an appropriate market discount rate (on an unlevered basis) to reflect the perceived risk to the investment's future cash flows and the relevant year-end foreign currency exchange rate to give the present value of those cash flows. Where relevant, project-level debt balances are then netted off to arrive at the valuation for each investment. The discount rate takes into account risks associated with the financing of an investment such as investment risks (e.g. liquidity, currency risks, market appetite), any risks to the investment's earnings (e.g. predictability and covenant of the income) and a thorough assessment of counterparty credit risk, all of which may be differentiated by the phase of the investment. ### Valuation methodology continued Specific risks related to each asset that can be attributed to climate-related risks are assessed and, where required, adjustments are made to expected future cash flows or reflected in the asset-specific discount rate that is applied. The Investment Manager uses its judgement in arriving at the appropriate discount rate. This is based on its knowledge of the market, taking into account intelligence gained from its bidding activities, discussions with financial advisers in the appropriate market and publicly available information on relevant transactions. ### Fair value measurement by level IFRS 13 requires disclosure of fair value measurement by level. Fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety which are described as follows: - Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date; - Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and - Level 3 inputs are unobservable inputs for the asset or liability. | Investment at fair value through profit or loss | Level 1 £'millions | Level 2 £'millions | Level 3 £'millions | | --- | --- | --- | --- | | **31 March 2026** | — | — | **845.1** | | 31 March 2025 | — | — | 984.2 | The Company's indirect investments have been classified as Level 3 as the investments are not traded and contain unobservable inputs. As the fair value of the Company's equity and loan investments in the Holdco is ultimately determined by the underlying fair values of the SPV investments or debt schedules, the Company's sensitivity analysis of reasonably possible alternative input assumptions is the same across all its investments. The reconciliation of Level 3 fair value is disclosed in Note 11. --- 116 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Notes to the Financial Statements continued For the year ended 31 March 2026 ### 4. Financial Instruments continued #### Valuation assumptions | | | 31 March 2026 | 31 March 2025 | | --- | --- | --- | --- | | Inflation rates | UK (RPI) | 3.1% remaining at 3.1% by 2027, 3.0% p.a. long term | 3.3% declining to 3.1% by 2026, 3.0% p.a. long term | | | UK (CPI) | 2.6% declining to 2.1% by 2027, 2.0% p.a. long term | 2.5% increasing to 2.7% by 2026, 2.0% p.a. long term | | | Spain (CPI) | 2.5% declining to 2.0% by 2027, 2.0% p.a. long term | 2.2% declining to 2.0% by 2026, 2.0% p.a. long term | | | Sweden (CPI) | 0.8% increasing to 1.7% by 2027, 2.0% p.a. long term | 1.7% increasing to 1.8% by 2026, 2.0% p.a. long term | | | Singapore (CPI) | 1.5% increasing to 1.7% by 2027, 2.0% p.a. long term | 2.1% declining to 1.9% by 2026, 2.0% p.a. long term | | | Ireland (CPI) | N/A | 1.8% increasing to 2.0% by 2026, 2.0% p.a. long term | | | USA (CPI) | 2.7% declining to 2.4% by 2027, 2.0% p.a. long term | 2.6% declining to 2.4% by 2026, 2.0% p.a. long term | | Tax rates | UK | 25% | 25% | | | Spain | 25% | 25% | | | Sweden | 20.6% | 20.6% | | | Singapore | 17% | 17% | | | Ireland | 12.5% | 12.5% | | | USA | 21% federal & 3% to 9% states rates | 21% federal & 3% to 9% states rates | | Foreign exchange rates | EUR/GBP | 0.87 | 0.84 | | | SEK/GBP | 0.08 | 0.08 | | | SGD/GBP | 0.59 | 0.58 | | | USD/GBP | 0.76 | 0.78 | #### Discount rates The discount rates used for valuing the investments in the portfolio are as follows: | | 31 March 2026 | 31 March 2025 | | --- | --- | --- | | Weighted average discount rate (on unlevered basis) | 8.5% | 8.5% | | Weighted average discount rate (on levered basis) | 9.5% | 9.6% | | Unlevered discount rates | 6.17% to 17.50% | 5.15% to 11.40% | --- 117 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Notes to the Financial Statements continued For the year ended 31 March 2026 ### 4. Financial Instruments continued #### Sensitivities The sensitivities below show the effect on net asset value $^{AM}$ of assuming a different range for each key input assumption, in each case applying a range that is considered to be a reasonable and plausible outcome for the market in which the Company has invested. #### Discount rates A change to the weighted average levered discount rate by plus or minus 0.5% has the following effect on the net assets. | Discount rate | NAV/share ^{AM} impact | -0.5% change | Net asset value ^{AM} | +0.5% change | NAV/share ^{AM} impact | | --- | --- | --- | --- | --- | --- | | **31 March 2026** | **5.5p** | **£59.5m** | **£844.5m** | **£(54.4)m** | **(5.0p)** | | 31 March 2025 | 6.3p | £68.4m | £983.6m | £(60.6)m | (5.6)p | #### Inflation rates The Portfolio Valuation $^{AM}$ assumes long-term inflation as indicated above in the UK, USA, Spain, Singapore, Portugal and Sweden. A change in inflation rate by plus or minus 1.0%, when applied to unlevered cash flows, has the following effect on the net assets, with all other variables held constant. | Inflation rate | NAV/share ^{AM} impact | -1% change | Net asset value ^{AM} | +1% change | NAV/share ^{AM} impact | | --- | --- | --- | --- | --- | --- | | **31 March 2026** | **(4.1p)** | **£(44.4)m** | **£844.5m** | **£54.9m** | **5.1p** | | 31 March 2025 | (4.6)p | £(50.0)m | £983.6m | £59.8m | 5.5p | #### Corporation tax rates The Portfolio Valuation $^{AM}$ assumes tax rates based on the jurisdiction. A change in the corporate tax rate by plus or minus 5%, when applied to the unlevered cash flows, has the following effect on the net assets, with all other variables held constant. | Corporation tax rate | NAV/share ^{AM} impact | -5% change | Net asset value ^{AM} | +5% change | NAV/share ^{AM} impact | | --- | --- | --- | --- | --- | --- | | **31 March 2026** | **3.0p** | **£32.3m** | **£844.5m** | **£(32.6)m** | **(3.0p)** | | 31 March 2025 | 3.0p | £32.2m | £983.6m | £(34.1)m | (3.1)p | #### Foreign exchange rates The Portfolio Valuation $^{AM}$ assumes foreign exchange rates based on the relevant foreign exchange rates against GBP at the reporting date. A change in the foreign exchange rate by plus or minus 10% (GBP against euro, Swedish krona, Singapore dollar and US dollar) has the following effect on the NAV$^{AM}$, with all other variables held constant. The effect is shown after the effect of current level of hedging which reduces the impact of foreign exchange movements on the Company's net assets. | Foreign exchange rate | NAV/share ^{AM} impact | -10% change | Net asset value ^{AM} | +10% change | NAV/share ^{AM} impact | | --- | --- | --- | --- | --- | --- | | **31 March 2026** | **0.9p** | **£10.0m** | **£844.5m** | **£(10.0)m** | **(0.9p)** | | 31 March 2025 | 1.2p | £11.1m | £983.6m | £(10.9)m | (1.0)p | --- 118 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Notes to the Financial Statements continued For the year ended 31 March 2026 ### 5. Investment (Loss)/Income | | Year ended 31 March 2026 £'millions | Year ended 31 March 2025 £'millions | | --- | --- | --- | | Dividend income | 56.5 | 70.0 | | (Loss)/gain on investment at fair value through profit or loss (Note 11) | (136.1) | 7.3 | | Loan interest income | 3.1 | 3.9 | | **Investment (loss)/income** | **(76.5)** | **81.2** | Interest income is in respect of coupon-bearing loan notes issued to the Company by Holdco (Note 15). The loan notes accrue interest at 6%, are unsecured and repayable in full on 18 April 2039. Loan interest income is recognised in the Statement of Comprehensive Income on an accrual basis. The (loss)/gain on investment is unrealised. ### 6. Fund Expenses | | Year ended 31 March 2026 £'millions | Year ended 31 March 2025 £'millions | | --- | --- | --- | | Investment management fees (Note 15) | 7.6 | 8.7 | | Non-Executive Directors' fees (Note 16) | 0.3 | 0.3 | | Other expenses | 2.3 | 1.4 | | Fees to the Company's independent auditor | | | | – for the audit of the statutory financial statements | 0.6 | 0.6 | | – for non-audit-related services | 0.1 | 0.1 | | **Fund expenses** | **10.9** | **11.1** | As at 31 March 2026, the Company had no employees (31 March 2025: nil). The Company confirms that it has no key management personnel, apart from the Directors disclosed in Directors' Remuneration Report on pages 84 to 89 of the Annual Report. There is no other compensation apart from those disclosed. ### 7. Tax on (Loss)/Profit The tax for the year shown in the Statement of Comprehensive Income is as follows. | | Year ended 31 March 2026 £'millions | Year ended 31 March 2025 £'millions | | --- | --- | --- | | (Loss)/profit for the year before taxation | (87.4) | 70.1 | | (Loss)/profit for the year multiplied by the standard rate of corporation tax of 25% (31 March 2025: 25%) | (21.9) | 17.5 | | Fair value movements (not subject to taxation) | 34.0 | (1.8) | | Dividends received (not subject to taxation) | (14.1) | (17.5) | | Surrendering of tax losses to unconsolidated subsidiaries | 2.0 | 1.8 | | **Total tax charge** | **—** | **—** | No deferred tax was recognised in the periods due to none arising. ### 8. (Loss)/Earnings per Ordinary Share | | Year ended 31 March 2026 | Year ended 31 March 2025 | | --- | --- | --- | | (Loss)/earnings for the year (£'millions) | (87.4) | 70.1 | | Weighted average number of ordinary shares ('000) | 1,085,420 | 1,085,420 | | **(Loss)/earnings per ordinary share (pence)** | **(8.1)** | **6.4** | There is no dilutive element during the current or prior financial year, or subsequent to the financial year. --- 119 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Notes to the Financial Statements continued For the year ended 31 March 2026 ### 9. Dividends | | Year ended 31 March 2026 £'millions | Year ended 31 March 2025 £'millions | | --- | --- | --- | | Amounts recognised as distributions to equity holders during the year: | | | | Fourth quarterly interim dividend for the year ended 31 March 2024 of 1.56 pence per share | — | 16.9 | | First quarterly interim dividend for the year ended 31 March 2025 of 1.58 pence per share | — | 17.2 | | Second quarterly interim dividend for the year ended 31 March 2025 of 1.58 pence per share | — | 17.2 | | Third quarterly interim dividend for the year ended 31 March 2025 of 1.58 pence per share | — | 17.1 | | Fourth quarterly interim dividend for the year ended 31 March 2025 of 1.58 pence per share | 17.1 | — | | First interim dividend for the year ended 31 March 2026 of 1.59 pence per share | 17.3 | — | | Second interim dividend for the year ended 31 March 2026 of 1.59 pence per share | 17.3 | — | | **Total dividends** | **51.7** | **68.4** | All dividends have been paid out of distributable reserves. The Company declared a third interim dividend of 1.59 pence per share, totalling £17.3 million, for the year ended 31 March 2026. The dividend was paid on 13 May 2026. The Company will not declare a final dividend for the year ended 31 March 2026. ### 10. Net Assets per Share $^{APM}$ | | 31 March 2026 | 31 March 2025 | | --- | --- | --- | | Shareholders' equity (£'millions) | 844.5 | 983.6 | | Number of ordinary shares ('000) | 1,085,420 | 1,085,420 | | **Net assets per ordinary share (pence)** | **77.8** | **90.6** | ### 11. Investment at Fair Value Through Profit or Loss The Company recognises the investment in Holdco, its single directly owned holding company, at fair value. Holdco's fair value includes the fair value of each of the individual project companies and holding companies in which the Holdco holds a direct or an indirect investment, along with the working capital and debt of Holdco. | | 31 March 2026 £'millions | 31 March 2025 £'millions | | --- | --- | --- | | Brought forward investment at fair value through profit or loss | 984.2 | 983.8 | | Equity investments in the year | — | 7.0 | | Loan principal repaid in the year | (3.0) | (13.9) | | Movement in fair value | (136.1) | 7.3 | | **Closing investment at fair value through profit or loss** | **845.1** | **984.2** | Movement in fair value is recognised through investment income in the Statement of Comprehensive Income (see Note 5). Of the closing investment at fair value through profit and loss balance, £48.3 million (31 March 2025: £51 million) relates to loan investment (also see Note 5) and £796.8 million (31 March 2025: £933 million) relates to equity investment. A reconciliation between the Portfolio Valuation $^{APM}$, being the valuation of the investment portfolio held by Holdco, and the investment at fair value through profit or loss per the Statement of Financial Position is provided below. The principal differences are the balances in Holdco for cash and working capital. | | 31 March 2026 £'millions | 31 March 2025 £'millions | | --- | --- | --- | | Portfolio Valuation^{APM} (see Financial Review and Valuation Update for details) | 1,078.4 | 1,196.5 | | Holdco cash | 0.6 | 7.0 | | Holdco intercompany debt | 48.3 | 51.4 | | Holdco RCF | (233.1) | (233.6) | | Holdco net working capital | (49.1) | (37.1) | | **Investment at fair value per Statement of Financial Position** | **845.1** | **984.2** | --- 120 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Notes to the Financial Statements continued For the year ended 31 March 2026 ### 11. Investment at Fair Value Through Profit or Loss continued #### Investments by the Company During the year ended 31 March 2026, the Company invested £nil (31 March 2025: £7 million) into Holdco for new portfolio investments and to fund acquisition costs. Acquisition costs are expensed to the income statement at Holdco as they occur. #### Portfolio investments via Holdco During the year ended 31 March 2026, Holdco invested c.£53.8 million (31 March 2025: £171.5 million) in portfolio investments (of which included a £48.6m investment into Onyx). ### 12. Share Capital and Share Premium | | 31 March 2026 '000 | 31 March 2025 '000 | | --- | --- | --- | | Opening shares in issue | 1,085,420 | 1,085,420 | | Share buyback during the year | — | — | | Total shares in issue | 1,085,420 | 1,085,420 | | Shares held in treasury | 23,289 | 23,289 | | **Total shares authorised** | **1,108,709** | **1,108,709** | --- 121 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Notes to the Financial Statements continued For the year ended 31 March 2026 ### 12. Share Capital and Share Premium continued | Share capital | 31 March 2026 £'millions | 31 March 2025 £'millions | | --- | --- | --- | | Balance at the beginning of the year | 11.1 | 11.1 | | **Balance at the end of the year** | **11.1** | **11.1** | | Share premium | 31 March 2026 £'millions | 31 March 2025 £'millions | | Balance at the beginning of the year | 756.8 | 756.8 | | **Balance at the end of the year** | **756.8** | **756.8** | | Other distributable reserves | 31 March 2026 £'millions | 31 March 2025 £'millions | | Balance at the beginning of the year | 270.9 | 339.3 | | Dividends paid | (51.7) | (68.4) | | **Balance at the end of the year** | **219.2** | **270.9** | On 3 April 2023, the Company announced the commencement of a share buyback programme. All repurchased shares are held in treasury. The Company currently has one class of ordinary share in issue. All the holders of the £0.01 ordinary shares, which total 1,085,419,558 (31 March 2025: 1,085,419,558) and are fully paid (31 March 2025: fully paid), are entitled to receive dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company. Other distributable reserves of £97 million were created through the cancellation of the share premium account on 12 March 2019. On 24 November 2023, the Company cancelled a further £300 million of its share premium, creating additional distributable reserves. This amount is capable of being applied in any manner in which the Company's profits available for distribution, as determined in accordance with the Companies Act 2006, are able to be applied. Other distributable reserves and retained earnings are detailed in the Statement of Changes in Shareholders' Equity. ### 13. Financial Risk Management #### Financial risk management objectives The objective of the Company's financial risk is to manage and control risk exposure of the underlying investment portfolio held by Holdco. The Board is responsible for overseeing the management of financial risks; however, the review and management of financial risks is delegated to the Investment Manager. The Investment Manager monitors and manages the financial risks relating to the operations of the Company through internal procedures and policies designed to identify, monitor and manage the financial risks to which the Company is exposed. These risks include market risk (including price risk, currency risk and interest rate risk), credit risk and liquidity risk. #### Price risk The value of the investments directly and indirectly held by the Company is affected by the discount rate applied to the expected future cash flows and as such may vary with movements in interest rates, inflation, power prices, market prices host demand for energy services and competition for these assets. The Company is exposed to inflation and energy and gas price risks which could raise costs and decrease profitability. This is managed through shorter-term hedging, long-term contractual risk sharing and stress testing. #### Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company receives loan interest, loan principal and dividends from its single investment, Holdco, in sterling. However, the Company is indirectly exposed to currency risk through its Holdco as its investments include non-sterling investments held in euro, US dollar, Singapore dollar and Swedish krona. The Company monitors its foreign exchange rate exposures using its near-term and long-term cash flow forecasts. Its policy is to use foreign exchange hedging (via Holdco) to provide protection to the level of sterling distributions that the Company aims to pay over the medium term, where considered appropriate. This may involve the use of forward exchange. --- 122 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Notes to the Financial Statements continued For the year ended 31 March 2026 ## 13. Financial Risk Management continued ### Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company, via Holdco, invests indirectly in loans in project companies, usually with fixed interest rate coupons. Where floating rate debt is owned, the primary risk is that the portfolio's cash flow will be subject to variation depending on changes to base interest rates. The portfolio's cash flows are continually monitored and reforecasted to analyse the cash flow returns from investments. The Company's policy is to ensure that interest rates are sufficiently hedged, when entering into material medium/long-term borrowings, to protect the Company and portfolio companies' net interest margins from significant fluctuations in interest rates. This may include engaging in interest rate swaps or other rate derivative contracts at the subsidiary level under direction of the Company. The Company's financial assets and financial liabilities are at a predetermined interest rate; as a result, the Company is subject to limited exposure to risk due to fluctuations in the prevailing levels of market interest rates. ### Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company through a reduction in future expected cash receipts. The key counterparties are the project companies in which the Company makes indirect investments via Holdco. The projects companies' near-term cash flows forecasts are used to monitor the timing of cash receipts from project counterparties and are reviewed regularly to demonstrate the projects' ability to pay interest and dividends when they fall due. The Company does not have any significant credit risk exposure to any single counterparty in relation to trade and other receivables. Ongoing credit evaluation is performed on the financial condition of accounts receivable. As at 31 March 2026, there were no receivables considered impaired (31 March 2025: £nil). At an investment level, the credit risk relating to significant counterparties is reviewed on a regular basis and potential adjustments to the discount rate are considered to recognise changes to these risks where applicable. The Company maintains its cash and cash equivalents across various banks to diversify credit risk. These are subject to the Company's credit monitoring policies including the monitoring of the credit ratings issued by recognised credit rating agencies. The Company's cash and deposits are held with counterparties that meet strict investment rating criteria per the Company's Treasury Policy. The Company is at risk of credit loss on its loans, receivables, cash and deposits. Underlying investments are held by Holdco at fair value using discounted cash flows. Receivables are primarily intercompany and taxation. While cash and cash equivalents are subject to the impairment requirements of IFRS 9, there was no identified credit loss. The Company's maximum exposure to credit risk over financial assets is the carrying value of those assets in the Statement of Financial Position. ### Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Board of Directors has established an appropriate liquidity Risk Management Framework for the management of the Company's funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves by monitoring forecast and actual cash flows and by matching the maturity profiles of assets and liabilities. Risk is spread by holding cash at three separate banking institutions and the Company also ensures that Holdco has sufficient banking facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Unconsolidated project companies are subject to contractual agreements that may impose temporary restrictions on their ability to distribute cash. --- 123 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Notes to the Financial Statements continued For the year ended 31 March 2026 ### 13. Financial Risk Management continued #### Liquidity risk continued The table below shows the maturity of the Company's financial assets and liabilities. The amounts disclosed are contractual, undiscounted cash flows and may differ from the actual cash flows received or paid in the future as a result of early repayments. Balances due within twelve months equal their carrying balances as the impact of discounting is not significant. | As at 31 March 2026 | Up to 3 months £'millions | Between 3 and 12 months £'millions | Between 1 and 5 years £'millions | Total £'millions | | --- | --- | --- | --- | --- | | **Assets** | | | | | | Cash and cash equivalents | 1.2 | — | — | 1.2 | | Trade and other receivables | 0.2 | — | — | 0.2 | | **Liabilities** | | | | | | Trade and other payables | (2.0) | — | — | (2.0) | | **Total** | **(0.6)** | **—** | **—** | **(0.6)** | | As at 31 March 2025 | Up to 3 months £'millions | Between 3 and 12 months £'millions | Between 1 and 5 years £'millions | Total £'millions | | --- | --- | --- | --- | --- | | **Assets** | | | | | | Cash and cash equivalents | 0.9 | — | — | 0.9 | | Trade and other receivables | 0.3 | — | — | 0.3 | | **Liabilities** | | | | | | Trade and other payables | (1.8) | — | — | (1.8) | | **Total** | **(0.6)** | **—** | **—** | **(0.6)** | #### Capital management The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders. In accordance with the Company's investment policy, the Company's principal use of cash (including the proceeds of the IPO) has been to fund investments via Holdco as well as ongoing operational expenses. The Board, with the assistance of the Investment Manager, monitors and reviews the broad structure of the Company's capital on an ongoing basis. The capital structure of the Company consists entirely of equity (comprising issued capital, other distributable reserves and retained earnings). Whilst the Company itself is not subject to externally imposed capital requirements, Holdco, as borrower under the RCF, is subject to certain financial covenants. --- 124 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Notes to the Financial Statements continued For the year ended 31 March 2026 ## 14. Related Undertakings The following table shows the Company's single direct subsidiary (Holdco). Appendix A lists the Company's indirect subsidiaries through Holdco. | Investment | Country of incorporation & place of business | Shareholding at 31 March 2026 | Shareholding at 31 March 2025 | | --- | --- | --- | --- | | SEIT Holdco Limited | United Kingdom | 100% | 100% | ## 15. Related Parties The Company and Sustainable Development Capital LLP (the 'Investment Manager') have entered into the Investment Management Agreement pursuant to which the Investment Manager has been given responsibility, subject to the overall supervision of the Board, for active discretionary investment management of the Company's portfolio in accordance with the Company's investment objective and policy. As the entity appointed to be responsible for risk management and portfolio management, the Investment Manager is the Company's AIFM. The Investment Manager has full discretion under the Investment Management Agreement to make investments in accordance with the Company's investment policy from time to time. This discretion is, however, subject to: (i) the Board's ability to give instructions to the Investment Manager from time to time; and (ii) the requirement of the Board to approve certain investments where the Investment Manager has a conflict of interest in accordance with the terms of the Investment Management Agreement. The Investment Manager also has responsibility for financial administration and investor relations, advising the Company and its Group in relation to the strategic management of the portfolio, advising the Company in relation to any significant acquisitions or investments and monitoring the Company's funding requirements. During the year, an amendment to the Investment Management Agreement was agreed which updated the calculation of the management fee. This change was effective from 1 October 2025. Under the terms of the previous Investment Management Agreement, the Investment Manager will be entitled to a fee calculated at the rate of: - 0.9% per annum of the adjusted NAV$^{MM}$ in respect of the net asset value$^{MM}$ of up to, and including, £750 million; and - 0.8% per annum of the adjusted NAV$^{MM}$ in respect of the net asset value$^{MM}$ in excess of £750 million. The management fee is calculated using an adjusted NAV which is the latest published NAV$^{MM}$ at the relevant time, less uncommitted cash and adjusted on a daily basis for new acquisitions, new cash committed to investments, disposals and changes in amounts of debt drawn. Under the terms of the amended Investment Management Agreement, the Investment Manager is entitled to a fee calculated at the rate of: - 50% of 0.9% per annum of the adjusted NAV$^{MM}$ in respect of the net asset value$^{MM}$ of up to, and including, £750 million; - 50% of the lesser of 0.9% per annum of the adjusted NAV$^{MM}$ in respect of the net asset value$^{MM}$ of up to, and including, £750 million and 0.9% per annum of the average market capitalisation; - 50% of 0.8% per annum of the adjusted NAV$^{MM}$ in respect of the net asset value$^{MM}$ in excess of £750 million; and - 50% of the lesser of 0.8% per annum of the adjusted NAV$^{MM}$ in respect of the net asset value$^{MM}$ in excess of £750 million and 0.8% per annum of the average market capitalisation. The management fee is calculated using an adjusted NAV$^{MM}$ which is the latest published NAV$^{MM}$ at the relevant time, less uncommitted cash and adjusted on a daily basis for new acquisitions, new cash committed to investments, disposals and changes in amounts of debt drawn as well as a discounted market capitalisation value based on the average closing share price for the month. The management fee accrues monthly and is invoiced monthly in arrears. During the year ended 31 March 2026, management fees of £7.6 million (31 March 2025: £8.7 million) were incurred, of which £0.5 million (31 March 2025: £0.7 million) was payable at the year end. During the year ended 31 March 2026, £nil (31 March 2025: £7.0 million) of funding was provided by the Company to the Holdco for investment acquisitions and the repayment of the RCF utilised by Holdco. No coupon-bearing loan notes were issued during the year ended 31 March 2026 (31 March 2025: £nil). During the year ended 31 March 2026, Holdco had settled coupon-bearing loan notes of £3.0 million (31 March 2025: £13.9 million), in the year to 31 March 2026, £3.1 million interest had accrued on the loan notes (31 March 2025: £3.9 million) of which £nil is outstanding at the year end (31 March 2025: £nil). ## 16. Key Management Personnel Transactions The Directors of the Company, who are considered to be key management, received fees for their services. Their fees were £0.3 million (disclosed as Non-Executive Directors' fees in Note 6) in the year (31 March 2025: £0.3 million), which included £295,167 for Director salaries (31 March 2025: £270,571), £22,756 for national insurance contributions (31 March 2025: £24,276) and £6,977 for the reimbursement of expenses (31 March 2025: £14,994). --- 125 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Notes to the Financial Statements continued For the year ended 31 March 2026 ## 17. Guarantees and Other Commitments The Company is the guarantor of the RCF between Holdco and Investec Bank plc. The Company's wholly owned subsidiary, Holdco, holds a revolving credit facility ('RCF') amounting to £240 million. During the prior year, the RCF was refinanced, from £180 million to £240 million, and extended to March 2028 with the option for two one-year extensions subject to lender approval. ## 18. Events After the Reporting Period The Directors have evaluated subsequent events from the date of the financial statements through to the date the financial statements were available to be issued. In April 2026, SEIT completed the sale of a diversified portfolio of operational energy efficiency assets to Kyotherm for a total enterprise value of up to approximately £105 million, reflecting a sale price around 9% below carrying value at 30 September 2025. The carrying value at 31 March 2026 in the portfolio valuation was equal to the agreed sale price. The portfolio included the Company's interests in Capshare Future Energy Solutions (asset portfolios), Sparkfund, Moy Park Biomass, Tallaght Hospital, Baseload, Lycra, SEEIPL, Northeastern US CHP, CPP Biomass, Supermarket Solar UK and GET Solutions. Net cash proceeds from Kyotherm at completion, after taking account of permitted leakage and tax retentions were approximately £84 million, of which £45 million was used to reduce drawings under the revolving credit facility. In April 2026, the Board unanimously concluded that it is currently in the best interests of its shareholders, as a whole, to pursue a managed wind-down of the Company's investment portfolio. The Board will give consideration as to how best to ensure the Company is able to continue operating its ordinary activities, whilst ensuring that it can deliver shareholder value through disposals and ultimately a full liquidation of the Company's portfolio. Details of the proposed changes to effect the managed wind-down are set out in the Shareholder Circular published on 16 June. These included a revised Investment Policy, proposed changes to the Company's Articles and Investment Managers agreement. Between April and June 2026, the Company made a further investment of c.£1.2 million in SEIT US Lighting Holdings LLC (FES), via Holdco. --- 126 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Notes to the Financial Statements continued For the year ended 31 March 2026 ### Appendix A #### List of SEIT plc's Indirect Subsidiaries The following table shows the Company's indirect subsidiaries and related undertakings. As the Company applies IFRS 10 and investment entities (Amendments to IFRS 10) (see Note 2), these entities have not been consolidated in the preparation of these financial statements: | Investment | Country of incorporation & place of business | Shareholding at 31 March 2026 | | --- | --- | --- | | EECO Biomass No. 1 Limited | United Kingdom | 100% | | EECO Data Centres No. 1 Limited | United Kingdom | 100% | | EECO Wilton No. 1 Limited | United Kingdom | 100% | | SEIT UK 1 Limited | United Kingdom | 100% | | Combined Heat and Power Investments Limited | United Kingdom | 100% | | SEIT Asia Limited | United Kingdom | 100% | | SEIT Europe 2 Limited | United Kingdom | 100% | | SDCL Solar Edge Limited | United Kingdom | 100% | | Zood Infrastructure Holdco Limited | United Kingdom | 100% | | Zood Infrastructure Limited | United Kingdom | 100% | | SEIT Europe Limited | United Kingdom | 100% | | SEIT US TWO Limited | United Kingdom | 100% | | SEIT Magma Limited | United Kingdom | 100% | | SEIT Bloc Limited | United Kingdom | 100% | | SEIT CPP Limited | United Kingdom | 100% | | SIAF Energia S.A | United Kingdom | 80% | | Iceotope Technologies Limited | United Kingdom | 3% | | Iceotope Liquid Cooling Limited | United Kingdom | 3% | | KUL Sistem Limited | United Kingdom | 3% | | SEIT US Limited | USA | 100% | | SDCL TG COGEN LLC | USA | 71% | | COGEN ONE LLC | USA | 71% | | COGEN TWO LLC | USA | 71% | | Investment | Country of incorporation & place of business | Shareholding at 31 March 2026 | | --- | --- | --- | | SEIT CAPITAL LLC | USA | 100% | | SEIT CAPITAL II LLC | USA | 100% | | SEIT PE 1 LLC | USA | 100% | | SEIT PE 2 LLC | USA | 100% | | PERC Midco LLC | USA | 100% | | PERC Holdings 2 LLC | USA | 100% | | Primary Energy Recycling Corporation | USA | 100% | | Primary Energy Recycling Holdings LLC | USA | 100% | | Primary Energy Operations LLC | USA | 100% | | Cokenergy LLC | USA | 100% | | North Lake Energy LLC | USA | 100% | | Portside Energy LLC | USA | 100% | | Ironside Energy LLC | USA | 100% | | Harbor Coal LLC | USA | 100% | | PCI Associates | USA | 50% | | SEIT Red Holdco LLC | USA | 100% | | SEIT District Energy LLC | USA | 100% | | Recycled Energy Development LLC | USA | 100% | | RED-Rochester LLC | USA | 100% | | SEIT Hemisphere Holdco LLC | USA | 100% | | SEIT Hemisphere I LLC | USA | 100% | | SEIT Hemisphere II LLC | USA | 100% | | SEIT Hemisphere III LLC | USA | 100% | | Iceotope Technologies US Inc | USA | 3% | | SEIT US Lighting Holdings LLC | USA | 100% | | SEIT US Lighting LLC | USA | 100% | | SEIT TT LLC | USA | 100% | | Turntide Technologies Inc | USA | 1% | --- 127 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Notes to the Financial Statements continued For the year ended 31 March 2026 ### Appendix A continued #### List of SEIT plc's Indirect Subsidiaries continued | Investment | Country of incorporation & place of business | Shareholding at 31 March 2026 | | --- | --- | --- | | SEEIT BTB LLC | USA | 100% | | SEEIT Net Zero LLC | USA | 100% | | EE CO Ireland Hospitals TUH Limited | Ireland | 100% | | SEEIPL 4 Pte Ltd | Singapore | 100% | | SEEIPL 1 Pte Ltd | Singapore | 100% | | Shire Oak Green Asia Portfolio 2 Pte Ltd | Singapore | 100% | | Walworth Invest S.L. | Spain | 100% | | SEEIT Oliva, S.A. | Spain | 100% | | SEEIT GAS S.L. | Spain | 100% | | Compañía Orujera de Linares, S.L. | Spain | 100% | | Bioeléctrica de Linares, S.L. | Spain | 100% | | Compañía Energética de Linares S.L. | Spain | 100% | | Compañía Energética Pata de Mulo S.L. | Spain | 100% | | Compañía Energética Puente del Obispo | Spain | 100% | | Compañía Energética de La Roda, S.L. | Spain | 100% | | Biomasas de Puente Genil, S.L. | Spain | 100% | | Secaderos de Biomasa, S.L. | Spain | 100% | | Compañía Energética Las Villas, S.L. | Spain | 90% | | SEEIT EUROPE 2 SWEDEN Holding AB | Sweden | 100% | | Värtan Gas Stockholm AB | Sweden | 100% | | Driva Gas Sweden AB | Sweden | 100% | | Driva Energy AB (formerly Värtan Gas AB) | Sweden | 100% | | Driva Stockholm AB (formerly Gasnätet Stockholm AB) | Sweden | 100% | | Investment | Country of incorporation & place of business | Shareholding at 31 March 2026 | | --- | --- | --- | | Stockholm Gas AB | Sweden | 100% | | Baseload Capital Sweden AB | Sweden | 100% | | SOGA Uranus Company Limited | Vietnam | 100% | | SOGA Mercury Company Limited | Vietnam | 100% | | SOGA Triton Company Limited | Vietnam | 100% | All related undertakings that have a place of business in the United Kingdom are registered in the United Kingdom and their principal place of business and registered office is The Scalpel, 18th Floor, 52 Lime Street, London, EC3M 7AF. All related undertakings that have a place of business in the US are registered in Delaware, US, and their registered office is 1209 Orange Street, Wilmington, Delaware, US, with their principal place of business in 1120 Avenue of the Americas, New York, New York 10036, US. All related undertakings that have a place of business in Spain have their principal place of business and registered office in Calle Príncipe de Vergara 112, Planta Cuarta, 28002 Madrid, Spain. All related undertakings that have a place of business in Ireland have their principal place of business and registered office in 55 Merrion Square South, Dublin, D02 YD65. All related undertakings that have a place of business in Singapore have their principal place of business and registered office in 6 Eu Tong Sen Street #11-09, The Central, Singapore 059817. All related undertakings that have a place of business in Sweden have their principal place of business and registered office in RÅSUNDAVÄGEN 12, 16967 Solna, Stockholm County, Sweden. --- 128 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Company Information (unaudited) Directors Tony Roper (Chair) Helen Clarkson Christopher Knowles Sarika Patel Rosemary Boot (Appointed 1 August 2025) Registered Office The Scalpel, 18th Floor 52 Lime Street London EC3M 7AF Company Secretary and Administrator JTC (UK) Limited The Scalpel, 18th Floor 52 Lime Street London EC3M 7AF Sponsor, Broker and Placing Agent Jefferies International Limited 100 Bishopsgate London EC2N 4JL Legal Adviser Herbert Smith Freehills LLP Exchange House Primrose Street London EC2A 2EG Depository Indos Financial The Scalpel, 18th Floor 52 Lime Street London EC3M 7AF Investment Manager Sustainable Development Capital LLP One, Great Cumberland Place London W1H 7AL Independent Auditor PricewaterhouseCoopers LLP 40 Clarendon Road Watford Hertfordshire WD17 1JJ Public Relations TB Cardew 29 Lincoln's Inn Fields London WC2A 3EG Registrar Computershare Investor Services plc The Pavilions Bridgwater Road Bristol BS13 8AE Bankers RBS International 440 Strand London WC2R 0QS --- 129 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Key Company Data (Unaudited) | Company name | SDCL Efficiency Income Trust plc (formerly SDCL Energy Efficiency Income Trust plc) | Management fees | Under the terms of the amended Investment Management Agreement, the Investment Manager will be entitled to a fee calculated at the rate of: | | --- | --- | --- | --- | | Registered address | The Scalpel, 18th Floor 52 Lime Street London EC3M 7AF | | – 50% of 0.9% per annum of the adjusted NAV^{AM} in respect of the net asset value^{AM} of up to, and including, £750 million; | | Listing | London Stock Exchange – Premium Listing | | – 50% of the lesser of 0.9% per annum of the adjusted NAV^{AM} in respect of the net asset value^{AM} of up to, and including, £750 million and 0.9% per annum of the average market capitalisation; | | Ticker symbol | SEIT | | – 50% of 0.8% per annum of the adjusted NAV^{AM} in respect of the net asset value^{AM} in excess of £750 million; and | | SEDOL | BGHVZM4 | | – 50% of the lesser of 0.8% per annum of the adjusted NAV^{AM} in respect of the net asset value^{AM} in excess of £750 million and 0.8% per annum of the average market capitalisation. | | Index inclusion | FTSE All-Share, FTSE 250 | | | | Company year end | 31 March | | | | Dividend payments | Quarterly | | | | Investment Manager | Sustainable Development Capital LLP | | | | Company Secretary & Administrator | JTC (UK) Limited | | | | Shareholders' funds | £0.8 billion as at 31 March 2026 (31 March 2025: £1.0 billion) | ISA, PEP and SIPP status | The ordinary shares are eligible for inclusion in PEPs and ISAs (subject to applicable subscription limits), provided that they have been acquired by purchase in the market, and they are permissible assets for SIPPs. | | Market capitalisation | £0.5 billion as at 31 March 2026 (31 March 2025: £0.5 billion) | Website | www.seitplc.com | --- 130 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Sustainable Finance Disclosure Regulation (“SFDR”) (Unaudited) Periodic disclosure for the financial products referred to in Article 9, paragraphs 1 to 4a, of Regulation (EU) 2019/2088 and Article 5, first paragraph, of Regulation (EU) 2020/852 **Sustainable investment** means an investment in an economic activity that contributes to an environmental or social objective, provided that the investment does not significantly harm any environmental or social objective and that the investee companies follow good governance practices. The **EU Taxonomy** is a classification system laid down in Regulation (EU) 2020/852, establishing a list of **environmentally sustainable economic activities**. That Regulation does not lay down a list of socially sustainable economic activities. Sustainable investments with an environmental objective might be aligned with the Taxonomy or not. Product name: SDCL Efficiency Income Trust plc Legal entity identifier: 213800ZPSC7XUVD3NL94 ## Sustainable investment objective Did this financial product have a sustainable investment objective? ☐ Yes ☐ No ✕ It made **sustainable investments with an environmental objective**: 100% - ☐ in economic activities that qualify as environmentally sustainable under the EU Taxonomy - ✕ in economic activities that do not qualify as environmentally sustainable under the EU Taxonomy ☐ It **promoted Environmental/Social (E/S) characteristics** and while it did not have as its objective a sustainable investment, it had a proportion of ___% of sustainable investments - ☐ with an environmental objective in economic activities that qualify as environmentally sustainable under the EU Taxonomy - ☐ with an environmental objective in economic activities that do not qualify as environmentally sustainable under the EU Taxonomy - ☐ with a social objective ☐ It made **sustainable investments with a social objective**: 0% ☐ It promoted E/S characteristics, but **did not make any sustainable investments** --- 131 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Sustainable Finance Disclosure Regulation (“SFDR”) (Unaudited) continued ### To what extent was the sustainable investment objective of this financial product met? **Sustainability indicators** measure how the environmental or social characteristics promoted by the financial product are attained. #### How did the sustainability indicators perform? The sustainable investment objective of SEIT is climate change mitigation through investments in energy efficiency projects. The sustainability indicators used to measure attainment of the sustainable investment objective has historically been carbon saved (measured in tCO₂e) and amounts of electrical and thermal energy saved (measured in kWh) during the financial period. The sustainability impact indicators for the period are as follows: **872,838** tCO₂e saved across the portfolio in the calendar year 2025. **351,205** MWh electrical and thermal energy saved in the calendar year 2025. A note on methodologies: as highlighted in the last two SFDR disclosures, 100% of the Company’s investments fall into its definition of an energy efficiency project, which is critical to the Company’s definition of a sustainable investment. Carbon saving and energy saving methodologies have been standardised across the portfolio, highlighting that a few investments do not currently contribute to the sustainability indicator of carbon savings under those calculation methodologies, in part reflecting the reduction of local electrical grid carbon intensities over time. Specifically, c.3.7% of the Company’s portfolio by value as at 31 March 2026 does not contribute to carbon savings when measured against the average carbon intensity of the local electrical grid. c.2.4% of these investments are, however, integrated components of broader energy-generating systems that deliver services to industrial off-takers and contribute to circular economy outcomes through the utilisation waste biomass. They cannot be considered in isolation from the wider systems in which they sit, and their continued operation supports the energy efficiency and resource recovery profile of those systems as a whole. The remaining 1.3% of that 4% are in small and efficient energy generating centers who have marginal emissions in comparison to an increasingly decarbonising grid. A further investment, representing c.23% of the portfolio by value, does not contribute to carbon savings when compared to the local electrical grid under the standardised methodology, but does result in carbon and energy savings when considering the energy efficiency retrofits pursued over the past few years. This outcome is methodology-specific: while the Company applies a consistent counterfactual across the portfolio for comparability and transparency, the services this asset provides as a district energy system are not straightforwardly replicable in the grid-based counterfactual used. The asset delivers integrated heating, cooling, and power services that a grid comparison does not fully capture. Regardless of the specific calculation outcomes, the Company continues to consider all investments in its portfolio to be energy efficiency projects. Transparency on these methodological nuances is nonetheless important: local electrical grids have become progressively greener since several of these investments were originated, and the Company continually reviews and adjusts its counterfactuals to reflect evolving grid conditions. The Investment Manager remains committed to decarbonising these projects over time in line with its overall net zero commitment. The Company will continue to assess these investments on an ongoing basis, monitoring both their performance against the Company’s sustainability indicators and the broader market and grid conditions in which they operate. Where methodological outcomes, regulatory developments, or asset-level performance warrant further attention, the Investment Manager will escalate as appropriate to ensure that decisions are made transparently and in the best long-term interests of the Company’s stakeholders. --- 132 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Sustainable Finance Disclosure Regulation (“SFDR”) (Unaudited) continued To what extent was the sustainable investment objective of this financial product met? continued ### ...and compared to previous periods? All sustainability indicators have decreased during the calendar year 2025 compared to the calendar year 2024. **1,000,791** tCO$_{2}$e saved across the portfolio in the calendar year 2024 **364,495** MWh electrical and thermal energy saved in the calendar year 2024 Carbon savings in the calendar year 2025 decreased in comparison to 2024 predominately due to electricity grids continuously becoming greener than their alternatives, as well as some changes in operations at existing portfolio companies and an exit of On.Energy, which also contributed to the difference in energy savings. **Principal adverse impacts** are the most significant negative impacts of investment decisions on sustainability factors relating to environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters. ### How did the sustainable investments not cause significant harm to any sustainable investment objective? The Company ensures that its sustainable investments do not cause significant harm to any sustainable investment objectives through its ESG Management Process, which incorporates ESG considerations into investment due diligence and asset management. Potential investments are carefully assessed during due diligence through multiple stages, including a go/no go review, initial due diligence review and detailed due diligence review. All mandatory and additional principle adverse impact indicators (“PAI indicators”) are assessed as part of the completion of this process. Each PAI indicator has an associated risk threshold to determine next steps and confirm the investment does no significant harm. Post-investment, SDCL’s asset management and ESG teams monitor the operations, policies and business conduct of an investment through bi-annual and annual questionnaires to make sure it is not doing significant harm and is performing in line with the Company’s ESG minimum standards. ### How were the indicators for adverse impacts on sustainability factors taken into account? The Investment Manager uses the PAI indicators to confirm that the Company’s asset companies do no significant harm. When a potential investment opportunity is assessed, the ESG questionnaire has specific questions covering mandatory PAI indicators and the relevant climate and social indicators to uncover any potential red flags that would cause significant harm to any other sustainable investment objectives. The PAI indicators are then monitored annually through an ESG questionnaire that asks specific questions based around said indicators. ### Were sustainable investments aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights? The Company avoids investing in projects that are in breach of the ILO standards, UNGPs, UNGC or OECD Guidelines for Multinational Enterprises. The Investment Manager actively considers alignment of potential investments with the OECD Guidelines and UNGPs through the ESG due diligence process and investment decision and during the asset management phase. The Company is committed to aligning with its Sustainability Framework, as set out in the ESG Update section of its Annual Report. --- 133 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Sustainable Finance Disclosure Regulation (“SFDR”) (Unaudited) continued ### How did this financial product consider principal adverse impacts on sustainability factors? As disclosed above, the Fund takes indicators for principal adverse impacts into account as part of the do no significant harm process. However, as the Fund’s AIFM does not consider principal adverse impacts at entity level under (Article 4 SFDR), the Fund does not consider principal adverse impacts at product level for the purposes of Article 7 SFDR. ### What were the top investments of this financial product? The list includes the investments constituting the **greatest proportion of investments** of the financial product during the reference period which is: 31 March 2025 – 31 March 2026 | Large investments | Sector | % assets | Country | | --- | --- | --- | --- | | RED-Rochester | Energy | 22 | US | | Primary Energy – Cokenergy | Energy | 10 | US | | Onyx – Nova II | Energy | 7 | US | | Driva | Energy | 8 | Sweden | ### What was the proportion of sustainability-related investments? **Asset allocation** describes the share of investments in specific assets. #### What was the asset allocation? 100% of the Company’s assets are sustainable, with the environmental objective of climate change mitigation through investments in energy efficiency projects, as defined by the Company’s investment policy. ![img-57.jpeg](img-57.jpeg) #### #1 Sustainable covers sustainable investments with environmental or social objectives #### #2 Not sustainable includes investments which do not qualify as sustainable investments. --- 134 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Sustainable Finance Disclosure Regulation (“SFDR”) (Unaudited) continued ## What was the proportion of sustainability-related investments? continued In which economic sectors were the investments made? All of the Company’s investments fall into the “energy” sector. ## To what extent were sustainable investments with an environmental objective aligned with the EU Taxonomy? Taxonomy-aligned activities are expressed as a share of: - turnover reflects the “greenness” of investee companies today; - capital expenditure (“CapEx”) shows the green investments made by investee companies, relevant for a transition to a green economy; and - operational expenditure (“OpEx”) reflects the green operational activities of investee companies. To comply with the EU Taxonomy, the criteria for fossil gas include limitations on emissions and switching to renewable power or low-carbon fuels by the end of 2035. For nuclear energy, the criteria include comprehensive safety and waste management rules. Currently, 0% of the Company’s assets are EU Taxonomy aligned, which may change subject to ongoing assessment. SEIT meets Article 9 requirements via the SFDR “Sustainable Investment” definition (measured by carbon savings/energy efficiency), which is the primary KPI for SEIT’s investors. Did the financial product invest in fossil gas and/or nuclear energy-related activities that comply with the EU Taxonomy? ☐ Yes ☐ in fossil gas ☐ in nuclear energy ☒ No 1. Fossil gas and/or nuclear-related activities will only comply with the EU Taxonomy where they contribute to limiting climate change (“climate change mitigation”) and do not significantly harm any EU Taxonomy objectives – see explanatory note in the left hand margin. The full criteria for fossil gas and nuclear energy economic activities that comply with the EU Taxonomy are laid down in Commission Delegated Regulation (EU) 2022/1214. --- 135 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Sustainable Finance Disclosure Regulation (“SFDR”) (Unaudited) continued To what extent were sustainable investments with an environmental objective aligned with the EU Taxonomy? continued ● Did the financial product invest in fossil gas and/or nuclear energy-related activities that comply with the EU Taxonomy? continued The graphs below show in green the percentage of investments that were aligned with the EU Taxonomy. As there is no appropriate methodology to determine the Taxonomy alignment of sovereign bonds¹ the first graph shows the Taxonomy alignment in relation to all the investments of the financial product including sovereign bonds, while the second graph shows the Taxonomy alignment only in relation to the investments of the financial product other than sovereign bonds. 1. Taxonomy alignment of investments including sovereign bonds¹ ![img-58.jpeg](img-58.jpeg) 1. For the purpose of these graphs, “sovereign bonds” consist of all sovereign exposures. 2. Taxonomy alignment of investments excluding sovereign bonds¹ ![img-59.jpeg](img-59.jpeg) This graph represents 100% of the total investments. **Enabling activities** directly enable other activities to make a substantial contribution to an environmental objective. **Transitional activities** are activities for which low-carbon alternatives are not yet available and among others have greenhouse gas emission levels corresponding to the best performance. ● What was the share of investments made in transitional and enabling activities? 0% ● How did the percentage of investments that were aligned with the EU Taxonomy compare with previous reference periods? N/A In both calendar year 2024 and 2025, while 100% of the investments made were considered sustainable, 0% were reported as Taxonomy-aligned. --- 136 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Sustainable Finance Disclosure Regulation (“SFDR”) (Unaudited) continued ### What was the share of sustainable investments with an environmental objective not aligned with the EU Taxonomy? These are sustainable investments with an environmental objective that **do not take into account** the criteria for environmentally sustainable economic activities under Regulation (EU) 2020/852. 100% – the sustainable investments made by the Fund all have an environmental objective and are reported as 0% Taxonomy aligned. ### What was the share of socially sustainable investments? 0% – the Company does not make socially sustainable investments. ### What investments were included under “#2 Not sustainable”, what was their purpose and were there any minimum environmental or social safeguards? N/A – the Company allocated 100% of assets to sustainable investments. Other assets of the Company are limited to cash held on deposit and cash equivalent investments, which may include short-term investments in money market type funds and tradeable debt securities. ### What actions have been taken to attain the sustainable investment objective during the reference period? As laid out in its pre-contractual disclosure and pursuant to the Company’s investment policy, save for any investment in cash and cash equivalents, the Company principally invests in energy efficiency projects, the objective of which are to achieve one or more of the following: a reduction in energy consumption, a reduction of greenhouse gas emissions or an increase in the supply of renewable energy. The sustainable objective achieved by the Company’s investments is climate change mitigation, as all the investments must contribute to one or more of the above criteria. During the period, the Company attained its sustainable investment objective by growing its portfolio of energy efficiency projects, both by expanding upon its current projects and adding new projects that add further diversification through new technologies and companies. During the period, SEIT invested £53.8 million into the organic opportunities within the portfolio. Most of this investment was into Onyx, which provides on-site solar and storage for commercial and industrial buildings across the US. The growth of the Onyx portfolio has led to increased carbon savings and renewable energy generation, strongly aligning to the sustainable investment objective of climate change mitigation. SEIT has engaged with the assets within its portfolio to increase the activities within these investments that contribute to energy efficiency initiatives and improve standing asset-level efficiency. More details of these investments and their sustainability characteristics are detailed in the Company’s Annual Report, the Investment Manager’s Report on pages 8 to 63. --- 137 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Sustainable Finance Disclosure Regulation (“SFDR”) (Unaudited) continued ### How did this financial product perform compared to the reference benchmark? **Reference benchmarks** are indexes to measure whether the financial product attains the environmental or social characteristics that they promote. The Company does not use a reference benchmark to assess ESG performance. How did the reference benchmark differ from a broad market index? N/A How did this financial product perform with regard to the sustainability indicators to determine the alignment of the reference benchmark with the sustainable investment objective? N/A How did this financial product perform compared with the reference benchmark? N/A How did this financial product perform compared with the broad market index? N/A --- 138 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION # Glossary (Unaudited) AIC the Association of Investment Companies AIFM an alternative investment fund manager, within the meaning of the AIFM Directive AIFM Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No. 1060/2009 and (EU) No. 1095/2010; the Commission Delegated Regulation (EU) No. 231/2013 of 19 December 2012 supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision Board the Board of Directors of the Company, who have overall responsibility for the Company CHP combined heating and power Company SDCL Efficiency Income Trust plc (formerly SDCL Energy Efficiency Income Trust plc) is a limited liability company incorporated under the Act in England and Wales on 12 October 2018 with registered number 11620959, whose registered office is at 6th Floor, 125 London Wall, London, EC2Y 5AS Company SPV a Project SPV owned by the Company or one of its affiliates through which investments are made Contractual payments the payments by the counterparty to the Company or relevant Project SPV under the contractual arrangements governing an energy efficiency project, whether such payments take the form of a service charge, a fee, a loan repayment or other forms of payments as may be appropriate from time to time Counterparty the host, beneficiary or procurer of the energy efficiency project with whom the Company has entered into the energy efficiency project, either directly or indirectly through the use of one or more Project SPVs Decentralised energy that is produced close to where it will be used, rather than at a large, centralised plant elsewhere, delivered through a centralised grid infrastructure Energy efficiency using less energy to provide the same level of energy. Efficient energy use is achieved primarily through implementation of a more efficient technology or process Energy efficiency equipment the equipment that is installed at or near the premises of a counterparty or a site directly associated with an energy efficiency project, including, but not limited to, solar, storage, CHP units, heat pumps, HVAC units, lighting equipment, motors, controls, biomass boilers and steam raising boilers (including IP steam processors) and green fuels for use in the built environment or transport produced at or near the point of use or via a distribution network Energy efficiency project a project, the objective of which is to achieve one or more of the following criteria: - reduce energy consumed and/or related GHG emissions arising from the existing and/or future supply, transmission, distribution or consumption of energy; - reduce its Scope 1 GHG emissions (direct GHG emissions occur from sources that are owned or controlled by the Company) and Scope 2 GHG emissions (electricity indirect GHG emissions from the generation of purchased, or generated on site, electricity consumed by the Company) as defined by the GHG Protocol, directly and/or in conjunction with offsets that may be used to deliver additional net emissions reduction benefits; - increase the supply of renewable energy generated on the premises of a counterparty or generated at a site directly associated with the premises of a counterparty; - reduce emissions and energy consumption in non-domestic sectors, which include: - all forms of energy supply, conversion, distribution or transmission not originating within a private domestic dwelling, including district heating systems and CHP systems; - demand for energy in non-domestic buildings including commercially owned or used property and public sector owned buildings; - demand for energy in industrial and light manufacturing plant and machinery, operations and logistics; - demand for energy in the transport sector; and - through the deployment of energy efficiency measures in public and private infrastructure, such as in utilities (including the installation of smart metering equipment) and street lighting; or - otherwise satisfy, in the Investment Manager's reasonable opinion, any other criteria or measurement of energy efficiency in an industry or sector, or by using energy efficiency technologies that are compatible with the Company's investment objective and policy Energy efficiency technology technologies deployed to achieve an improvement in energy efficiency EPC Engineering, procurement and construction GHG greenhouse gases Holdco is SEIT Holdco Limited, the Company's single wholly owned subsidiary HVAC heating, ventilation and air conditioning Investment Manager Sustainable Development Capital LLP a limited liability partnership incorporated in England and Wales under the Limited Liability Partnership Act 2000 with registered number OC330266 --- 139 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Glossary (Unaudited) continued ### Investment portfolio is the portfolio of energy efficiency investments held by the Company via its single wholly owned subsidiary, SEIT Holdco Limited ### ISA individual savings account ### kWh kilowatt hours used or generated per hour ### Lighting equipment energy efficient lighting used in connection with an energy efficiency project, including, but not limited to, LEDs and associated fittings ### MWh megawatt hours used or generated per hour ### NAV$^{ATM}$ net asset value ### Ordinary shares an ordinary share of £0.01 in the capital of the Company issued and designated as 'ordinary shares' of such class (denominated in such currency) as the Directors may determine in accordance with the Articles and having such rights and being subject to such restrictions as are contained in the Articles ### O&M contractors operations and maintenance contractors, the contractor appointed by the Company or the relevant Project SPV to perform maintenance obligations in relation to the relevant energy efficiency projects ### PEP personal equity plan ### Portfolio Valuation$^{ATM}$ the Investment Manager is responsible for carrying out the fair market valuation of the SEIT Group's portfolio of investments ### RAB regulated asset base ### RCF is the revolving credit facility of Holdco, used by SEIT for capital efficiency in making new investments ### RoRi the 'Return on Operations' incentive payment and the 'Return on Investment' incentive payment under Spain's Royal Decree-Law 9/2013 under which qualifying energy generation assets are compensated, in the medium to long term, for fluctuations in revenues and costs against an established base case ### SDCL Group the Investment Manager and the SDCL Affiliates ### SEIT Holdco Seit Holdco Limited ### SEIT the Company ### SIPP self-invested personal pension ### SPVs special purpose vehicles ### WACC weighted average cost of capital --- 140 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Glossary of Financial Alternative Performance Measures (“APMs”) (Unaudited) The Company uses APMs to provide shareholders and stakeholders with information it deems relevant to understand and assess the Company’s historic performance and its ability to deliver on the stated investment objective. | Measure | Calculation | Why the Company uses the APM | 31 March 2026 | 31 March 2025 (comparison) | Reconciliation/cross reference | | --- | --- | --- | --- | --- | --- | | Aggregate dividends | The sum of the dividend declared in the period: September 2025: 1.59p December 2025: 1.59p March 2026: 1.59p | Provides a useful metric to evaluate the investment performance year on year | 4.77p per share | 6.32p per share | Referred to in Highlights of the year to 31 March 2026 on page 3 | | Cash cover | Operational cash inflow from investments into Holdco less fund expenses in the Company and Holdco, divided by dividends paid to shareholders | Provides a metric for the level of cash generated, enabling the Company to pay dividends to shareholders | 1.0x | 1.0x | Net cash inflow from portfolio (£53.7m) divided by dividends paid in the Statement of Changes in Equity (£51.7m) | | EBITDA | Earnings before interest, taxes, depreciation and amortisation | Provides shareholders with a metric that reflects the performance of the business | £(87.4)m | £70.1m | Referred to in the Chair’s Statement on pages 4 to 6 | | Free cash flows | Unencumbered cash at project level after operating costs but before debt | Provides shareholders with useful insight into cash cover | N/A | £130.2m | Referred to in the Financial Review and Valuation Update on page 31 | | Gearing | Consolidated outstanding debt at Holdco (RCF: £233m) and Project level (structural gearing: £469m) totalling £702m, divided by NAV at the year end (£844.5m) | To indicate the Company’s direct and indirect exposure to debt obligation | 83% | 64% | Referred to in the Chair’s Statement on pages 4 to 6 and the Investment Manager’s Report on pages 8 to 11 | | Gross asset value (“GAV”) | The value of all assets of the Company, being the sum of all investments held in the Portfolio together with any Cash and Cash Equivalents, determined in accordance with the Company’s valuation policy and in accordance with applicable accounting standards and the Company’s constitution | It provides a metric that allows for useful analysis of underlying portfolio exposures | £1,089.5m | £1,220.7m | Statement of Financial Position shows non-current assets and current assets | --- 141 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Glossary of Financial Alternative Performance Measures (“APMs”) (Unaudited) continued | Measure | Calculation | Why the Company uses the APM | 31 March 2026 | 31 March 2025 (comparison) | Reconciliation/cross reference | | --- | --- | --- | --- | --- | --- | | Investment cash inflow from the portfolio | Cash received from the portfolio investments at Holdco during the period (after debt repayments at project level) | This provides shareholders with a metric that allows for tracking the Company's performance year on year | 84.3m | £97.3m | Referred to in the Financial Review and Valuation Update on pages 31 to 37 | | NAV per share | NAV (£844.5m) divided by total shares in issue, 1,085.4m, at the balance sheet date | This provides shareholders with a metric that allows for tracking the Company's performance year on year | 77.8p | 90.6p | NAV per share shown in the Statement of Financial Position on page 105 | | Net asset value ('NAV') | Net assets attributable to ordinary shares by deducting gross liabilities (£2.0m) from gross assets (£846.5m) | It provides a metric that allows for useful comparison to similar companies and that allows for useful year-on-year comparisons of the Company | £844.5m | £983.6m | NAV is shown in the Statement of Financial Position on page 105 | | Ongoing charges ratio | In accordance with AIC guidance, defined as annualised ongoing charges on portfolio basis (i.e. excluding investment costs and other non-recurring items), £10.2m divided by the average published undiluted net asset value in the year of £967.2m | Used as a metric in the investment company industry to compare cost-effectiveness | 1.05% | 1.16% | Discussed in Financial Review and Valuation Update on pages 31 to 37 Reconciliation of expenses used in ongoing charges calculation £m | | | | | | | Fund expenses (income statement) 10.9 | | | | | | | Less Company expenses excluded from definition of ongoing charges (0.9) | | | | | | | Add Holdco expenses included in definition of ongoing charges 0.2 | | | | | | | A Total annualised ongoing expenses 10.2 | | | | | | | B Average NAV (includes March 25 and Sept 25) 967.2 | | | | | | | Ongoing charges (A/B) 1.05% | | Net cash inflow from portfolio | Cash inflow from investments net of operating and finance costs | Used in dividend cash cover calculation | £53.7m | £69.2m | Referred to in the Financial Review and Valuation Update on pages 31 to 37 | --- 142 SEIT Annual Report 2026 | SDCL Efficiency Income Trust plc INTRODUCTION STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION ## Glossary of Financial Alternative Performance Measures (“APMs”) (Unaudited) continued | Measure | Calculation | Why the Company uses the APM | 31 March 2026 | 31 March 2025 (comparison) | Reconciliation/cross reference | | --- | --- | --- | --- | --- | --- | | Portfolio basis | Portfolio basis includes Holdco (the Company’s only direct subsidiary) if it were to be consolidated | To give transparency into the Company’s capacity for investment, distributions and gearing levels | N/A | N/A | Referred to in the Highlights page 3 and in the Financial Review and Valuation Update on pages 31 to 37 | | Portfolio Valuation | The fair value of all investments in aggregate that are held directly or indirectly by Holdco | It provides relevant information of the value of the underlying investments held indirectly by the Company from which it is ultimately expected to derive its future revenues | £1,078m | £1,197m | Reconciliation provided in the Financial Review and Valuation Update on pages 31 to 37 | | Rebased valuation (portfolio basis) | Portfolio Valuation brought forward, plus new investments (including transaction costs) during the period less cash from investments | Used to derive the fair value movement of the portfolio | £1,144.1m | £1,104.9m | Referred to in the Financial Review and Valuation Update on pages 31 to 37 | | Total return on NAV basis | Interim dividends paid and movement in NAV per share over the course of the relevant period, divided by opening NAV Dividends paid in the year: 4.8p NAV growth in the year: (12.8)p Opening NAV: 90.6p | This provides shareholders with a metric that allows for tracking the Company’s performance since IPO | (8.9)% | 7.1% | Referred to in the Highlights section on page 3 and in the Financial Review and Valuation Update on pages 31 to 37 | --- SEIT SDCL Efficiency Income Trust plc The Scalpel, 18th Floor 52 Lime Street London EC3M 7AF www.seitplc.com