The directors present the strategic report for the year ended 31 March 2025.

The principal activities of TDK UK Limited (‘the Company’) during the year remained the same as in previous years, namely providing sales research, technical marketing and administrative services to the parent company, TDK Europe GmbH, which is part of the TDK Group of companies, ultimately owned by TDK Corporation of Japan. Revenue was derived by the Company in return for facilitating sales of TDK passive components by the parent in the territory administered by the Company.

The Company operates within the passive electronic components industry, servicing the UK and Irish manufacturing segments of Automotive, Industrial, ICT (Information, Communication & Technology) through both Direct and Distribution channels. Due to the global nature of business, many of the customers for TDK products also export their manufactured goods to the rest of the world. Accordingly, the sale of passive components in the UK and Ireland is also affected by macro-economic factors such as demand in other areas of the world.

The Company receives its revenue in return for supporting the parent company in making sales in the Company’s territory, or where designs are made in the UK, but goods are sold elsewhere in the world; therefore, there are relatively few risks other than factors which affect the parent entity’s sales. The passive electronic components market is mature, TDK’s products continue to be innovative, are well regarded and are used in a wide spectrum of consumer and industrial oriented manufactured goods. The wide application possibilities reduce reliance upon any individual market sectors, but sales volatility does manifest during rapid growth or recessionary periods in the local or global economy. Demand in the local territory and the revenues of the Company are therefore dependent upon fluctuations in the wider economy and any factors affecting the manufacturing output or capacity of the customer base. Beyond normal business decisions such as new product manufacture or relocations of production facilities to or from the territory, factors such as disruptions to raw material supplies or transportation of components across a global supply chain, for example due to pandemics or military conflicts will, to varying degrees, also have an influence either directly or indirectly to TDK production facilities or those of the UK and Ireland customer base.

Higher inflation and interest rates are negative influences for both supply and demand i.e. potentially increasing production costs and decreasing consumer disposable income. This usually affects consumer demand, particularly for higher priced goods containing passive components. In such markets, if there are significant falls in the sales within the Company’s territory, it is able to adjust discretionary spending, such as business travel, marketing, personnel performance related bonuses etc., should that become necessary, to remain profitable.

In the year under review a drop in consumer confidence and cost of living issues manifested in some price erosion and lower volume purchase of certain goods containing passive components. This market cooling, which had begun in the 2HY of 2023/24, continued at a mild rate throughout 2024/25, mostly in the European market, however the wider global market remained quite strong. This contraction had been anticipated by the Company, and the targets were set to reflect lower ‘Onshore’ activity but higher ‘Offshore’ (sales in areas outside the territory, made by other TDK entities in other territories, but facilitated by design work undertaken by the Company locally).

The market picture was a little mixed, with Industrial Drives and the Distribution sectors lethargic, due in part to overstocking in the supply chain, however there were strong sales in the Automotive and ICT sectors, especially in Offshore. By the end of the year, i.e. March 31st, 2025, despite the tough market conditions, the Company successfully assisted the parent entity in achieving 98% of the budgeted territorial sales target. The Company itself, by careful resource management, and despite three reductions in interest rates affecting earnings on cash positive balances, was able to improve the year-on-year profit after tax by 5.5%.

Overall, the performance of the Company during the year under review was considered satisfactory and the financial results were in line with the positive expectations of the directors.

For the year ending March 2026, the general market conditions are not significantly altered, although overstocking for both raw materials and finished goods throughout the industry does appear to be over.

Local territorial sales have been above target for the 1HY, especially in Industrial sectors. Both Automotive and Distribution are below target, leading the Onshore end of year forecast to be c5% below the prior year. However the trend of very strong Offshore sales continues, and this area is expected to significantly improve upon the prior year by c11% and exceed the budget target by c6%. Accordingly, the Company anticipates that the year will, once again, be successful and profitable even though the profit after tax will be lower than the prior year. This is due mostly to a forecast c35% reduction in interest earnings (lower interest rates) on lower cash positive balances (large dividend paid March 2025.)

Looking ahead to the next year i.e. ending March 2027, the Onshore market conditions are not expected to significantly improve, for example, due to a lack of significant forward orders for the Automotive market which is beset by price inflation, damp demand for electric and hybrid vehicles, tariffs and production relocations. By contrast Offshore is very encouraging and the Company is expecting that certain large projects it was involved with from a design-in perspective will switch to volume production in the 2HY, leading to a significant increase in sales.

The market for passive components is critical, not only for existing product technologies but especially future demand for AI, greener energy transformations and communication connectivity. As such, the Company is well-placed within all these technologies, and the directors are optimistic for future trading.

Revenue for the Company was £3,156k i.e. approximately 12.0% higher than the previous year (2024: £2,816k), reflecting higher gross margin to cover a 12.0% (£321k ) increase in operating costs totalling £2,977k (2024: £2,656k). The profit before tax, bolstered by £62k in net interest earnings on positive cash pooling amounts (2024: £66k), was £241k (2024: £226k). Profit after tax was £173k i.e.5.5% higher than prior year (2024: £164k).

By order of the board

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

TDK UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Bridge House, Brants Bridge, Berkshire, RG12 9BG, Bracknell.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £'000s.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The Company's business activities, together with the factors likely to affect its future development, financial risk management objectives, details of its exposure to liquidity and cash flow risks truehave been considered. The Company has, in the opinion of the directors, sufficient financial resources to manage its financial risks successfully for the foreseeable future, being at least 12 months from the date of approval of the financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Turnover represents the amounts (excluding value added tax) derived from commissions earned from TDK Europe GmbH, for sales research, technical marketing and administrative services.

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses. Such cost includes costs directly attributable to making the asset capable of operating as intended.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more, tax, with the following exception:

Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See Tangible Fixed Assets note for the carrying amount of the assets, and note 1.6 for the depreciation policies for each class of assets.

The average monthly number of persons (including directors) employed by the company during the year was:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2024 - 2).

The fair value of trade and other receivables is estimated as the present value of future cash flows.

The fair value of trade and other payables is estimated as the present value of future cash flows.

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

There are no unused tax losses or unused tax credits.

The net deferred tax liability expected to reverse in the year ended 31 March 2026 is £1k. This primarily relates to the reversal of timing differences on capital allowances.

There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006.

The auditor's report is unqualified and includes the following:

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 March 2025 and of its profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

The company moved to new office premises in June 2015.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

The remuneration of key management personnel is as follows.

The company is 100% owned by TDK Europe GmbH, a company incorporated in Germany. The ultimate parent company of TDK Europe GmbH is TDK Corporation, a company incorporated in Japan.

The company's results are included in the consolidated financial statements of TDK Corporation, which are available on the internet site: https://www.tdk.com/en/ir/ir_library/financial/index.htm, by request on https:/www2.tdk.com/tdk_ir_inquiry/form.php or by writing to:

TDK Corporation

Investor Relations

IR&SR Group

Nihonbashi Takashimaya Mitsui Building

2-5-1 Nihonbashi

Chuo-ku
Tokyo
103-6128
Japan