CLIMATE ACTION INITIATIVES (CONT’D) Climate-related Disclosures (Cont’d) Based on the NGFS scenario analysis, the Group evaluated how potential climate transition pathways may influence its operations across different time horizons. The analysis indicates that carbon pricing policies are expected to increase progressively under both scenarios, although the pace and magnitude vary between the Net Zero 2050 and Below 2°C Scenario pathways. Time Horizon Definition Description Short-term Up to 2030 Reflects the Group’s current planning horizon, during which emerging carbon pricing developments, early regulatory changes, fuel cost exposure and initial investment decisions may begin to affect operations and financial planning. Long-term 2031–2050 Considers longer-term climate transition and physical risks aligned with global net-zero pathways and long-term climate scenarios. In the short term (up to 2030), carbon prices are expected to gradually increase as governments introduce or strengthen climate policies to encourage emission reductions. For Keyfield, this may result in moderate increases in fuel costs and operational expenditures, particularly for vessels reliant on fossil fuels such as Marine Gas Oil (“MGO”). During this period, the Group will focus on improving operational efficiency and exploring lower-emission technologies to mitigate potential cost impacts. To translate the NGFS scenario analysis into business implications, the Group assessed how the selected carbon price pathways could affect operating costs, investment planning and strategic positioning across the short and long term. As the FYE 2025 quantitative scenario analysis focused primarily on carbon pricing and interest rate pathways, the Group used the scenario outputs mainly to inform its assessment of transition risks, while physical risks were identified qualitatively based on the Group’s offshore and marine operating environment and supported by relevant Malaysian climate and disaster data. For this assessment, the Group adopted the following time horizons: short-term (2025–2030), which reflects the current business planning horizon during which emerging carbon-pricing policies, evolving disclosure expectations and early technology decisions may begin to affect the Group’s operations; and long-term (2031–2050), which reflects the period over which carbon costs, regulatory expectations, market shifts and physical climate pressures may become more pronounced. Malaysia has signalled the introduction of a carbon tax from 2026, while the Ministry of National Resources and Environmental Sustainability (“NRES”) has stated that the emissions trading system (“ETS”) implementation is set out under the 13th Malaysia Plan period of 2026 to 2030, supported by facility-level emissions reporting. For the purpose of this assessment, the Group has applied two time horizons: short-term (2025–2030) and long-term (2031–2050). These horizons reflect how Management currently assesses climate-related matters in line with the Group’s business planning cycle, operational decision-making and the longer-dated nature of climate-related risks and opportunities. To assess the potential financial implications of climate transition risks, the Group used selected NGFS carbon-price pathways as a scenario-based sensitivity analysis. Based on the Group’s FYE 2025 Scope 1 emissions of 11,378 tCO2e, the analysis indicates that, if comparable carbon-cost exposure was applied to the Group’s emissions profile, indicative cost exposure would be approximately USD0.19 million in 2025 and USD0.79 million in 2030 under the Below 2°C pathway, compared with approximately USD2.49 million in 2025 and USD6.51 million in 2030 under the Net Zero 2050 pathway. These figures are presented as illustrative transition-risk sensitivities to support Management’s understanding of potential exposure under different climate pathways and should not be interpreted as forecasts or confirmed tax liabilities. Against this backdrop, the Group identified climate-related risks and opportunities across transition and physical risk categories. In the short term, transition risks are expected to emerge mainly through higher operating costs, evolving customer and stakeholder expectations, and growing pressure to improve emissions performance. Over the longer term, the Group may face higher compliance costs, increased capital investment requirements, potential asset competitiveness risks, and new opportunities arising from the energy transition. 49 Annual Report 2025
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