MISC BERHAD INTEGRATED ANNUAL REPORT 2025 08 11 09 05 12 SEC 06 STRATEGIC REVIEW 10 07 13 01 02 03 04 78 www.miscgroup.com 79 www.miscgroup.com #deliveringProgress OUR RISKS AND MITIGATION STRATEGIES OUR RISKS AND MITIGATION STRATEGIES IMPACT MITIGATION STRATEGIES OPPORTUNITIES The Group’s skilled resources, disciplined execution and strong project governance allow for reliable delivery of complex, capital‑intensive projects. By strengthening delivery credibility through structured risk management, the Group reinforces partner confidence and maintains access to a high value pipeline of long-term projects where proven execution matters • Delays in project completion, resulting in deferred revenue recognition and disruption to cash flow timing • Cost overruns that erode project margins and reduce risk-adjusted returns • Quality deficiencies leading to rework, claims and increased costs • Potential imposition of liquidated damages by clients, eroding project returns • Weakened customer confidence, reducing the likelihood of repeat business • Implementation of a comprehensive project risk management framework covering risk assessments and execution of mitigation action plans throughout the project life cycle • Allocation of appropriate expertise and resources within the project management team to ensure effective and efficient project execution • Ongoing monitoring of project performance to enable early identification and mitigation of schedule, cost and quality risks PROJECT DELIVERY RISK R6 Inefficiencies in planning, execution or governance across shipbuilding, construction and asset conversion projects may affect the timely and effective delivery of key projects, impacting profitability, contractual obligations and stakeholder confidence RISK TREND Project delivery risks continue to be elevated but managed despite uncertainties arising from increased project scale, technical complexity and supply chain volatility. These dynamics increase execution fragility and the potential for schedule slippage, cost escalation and quality deficiencies Material Matters: M5 M6 M7 M9 M11 Key Capitals: SP1 Strategic Pillars: SP2 Operating Environment: E3 E4 E5 ASSET INTEGRITY AND PERFORMANCE RISK R5 The Group leverages on reliable service from its vessels and offshore assets through effective integrity management to build customer trust. Disciplined life-cycle management decisions help manage ageing risks, meet regulatory standards, and preserve asset value via contract renewals • Loss of revenue arising from vessel off-hire and downtime of floating assets • Reduced tradability of vessels and idle assets due to failure to meet performance standards and contractual requirements • Increased exposure to penalties, fines, detentions and reputational damage • Weaker customer confidence resulting from repeated performance issues or prolonged outages • Implementation of structured asset maintenance regimes and dry-docking specifications based on asset condition assessments • Continuous development of skilled and competent personnel to operate and maintain assets at optimal performance levels • Strict adherence to Health, Safety, Quality, Environment and Energy and Security Policy to ensure safe, reliable and compliant operations • Ongoing performance monitoring to support early intervention and minimise unplanned disruptions Asset integrity remains a persistent performance exposure as ageing fleets, tighter regulatory expectations and reliance on specialised OEM and contractor support increase the risk of degradation and asset reliability. For the Group, these dynamics heighten the potential for unplanned downtime and escalation into HSSE or regulatory events RISK TREND Degradation in asset integrity or performance may impair the safe and reliable operation of vessels and offshore assets, leading to unplanned downtime, HSSE escalation, regulatory intervention and financial or contractual impacts Material Matters: M5 M6 M7 M11 Key Capitals: E3 E4 E5 Operating Environment: SP3 SP3 SP1 Strategic Pillars:
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