Notes To The Financial Statements (Cont’d) 31 March 2026 SECTION 05 : FINANCIAL STATEMENTS & OTHERS 170 Registration No: 92 199201005296 (236800 - T 29. INSURANCE AND FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The financial risk management objective of the Group is to optimise value creation for shareholders whilst minimising the potential adverse impact arising from fluctuations in interest rates and the unpredictability of the financial markets. The Group operates within an established risk management framework and clearly defined guidelines that are regularly reviewed by the Board of Directors and does not trade in derivative financial instruments. Financial risk management is carried out through risk review programmes, internal control systems, insurance programmes and adherence to the Group financial risk management policies. The Group is exposed mainly to insurance risk,credit risk, interest rate risk, liquidity and cash flow risk and foreign currency risk. Information on the management of the related exposures is detailed below. (i) Insurance risk Insurance risk refers to the risk of loss by the issuer arising from the uncertainty of the occurrence, timing and magnitude of insured events. The Group and the Company are exposed to insurance risk through the issuance of performance guarantee by the Company during the financial year to guarantee the due performance and obligations of Hexagon Energy Logistics Sdn. Bhd. (“HELSB”), an indirect wholly-owned subsidiary of the Company under the engineering contract with Petronas Carigali (M) Sdn. Bhd. (“PCM”) relating to construction, installation and commissioning of marine equipment. No such performance guarantee existed in the previous financial year The Group manages this risk through the engagement of reputable technical partners, regular monitoring of project progress and performance, and the implementation of appropriate mitigation measures to address identified project execution risks. As at the reporting date, the Directors are of the view that the likelihood of a claim being made under the performance guarantee is remote, as the project is progressing ahead of the contractual completion schedule. Accordingly, the Group and the Company do not have significant exposure to insurance risk arising from this performance guarantee. (ii) Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group's primary exposure to credit risk arises from its trade receivables and contract assets. The Group seeks to achieve sustainable revenue growth while managing and minimising exposure to credit risk. The Group uses ageing analyses to monitor the creditworthiness of new and existing customers on an ongoing basis to minimise its exposure to credit risk. The Group mitigates its credit risk arising from trade receivables from the sale of development properties by retaining legal title to the properties until the purchasers have fully settled the self-financed portion of the purchase consideration and an undertaking for end-financing has been obtained from the purchasers' financiers. At the end of the reporting period, the Group does not have any significant exposure to any individual customer or counterparty other than 99% (2025: 95%) of the Group’s trade receivables and contract assets as at reporting date were due from three (3) (2025: two (2)) major customers. The Group does not anticipate the carrying amount recorded at the reporting period to be significantly different from the values that would eventually be received. The Company’s exposure to credit risk arises principally from amounts due from subsidiaries and financial guarantee given to a financial institution for credit facility granted to a subsidiary. The Company monitors on an ongoing basis the results of the subsidiaries and repayments made by the subsidiaries.
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