102 YINSON HOLDINGS BERHAD Capital structure management The capital-intensive nature of our business means the Group may carry high leverage levels that, if not properly managed, could affect operational cash flows. Guided by our Group Corporate Tax Policy and financial risk management under our ERM framework, we strictly adhere to our financial covenants and debt servicing requirements. This ensures that our businesses operate optimally on a sound capital structure, which facilitates timely repayments throughout the contracted periods of our assets. • Project level: Focuses on equity sell-down, refinancing and re-leveraging to enhance cash flows and returns on ongoing investments, accelerating the deployment of returns into new projects. • Platform level: Utilises long-term equity structures such as perpetual securities and Sukuk Mudharabah to raise capital without diluting existing shareholding equity. • Corporate borrowings: Provides flexibility in funding equity requirements, with strong relationships with financing and funding partners enabling innovative deal structures. • Sustainability-linked financial instruments: Includes sustainability-linked sukuk, leveraging our leadership in sustainability and incentivising sustainable business management. • Alternative financing options: Actively explores and innovates with financing partners, including project-level preference shares, non-recourse project financing, junior loans and local currency financing. Capital strategies SUSTAINABILITY REVIEW Responsible tax management and governance Our Group Tax Strategy is aligned with our Core Values and Code of Conduct of Business Ethics, ensuring we meet all tax obligations responsibly and in full compliance with the regulations of the markets in which we operate. This approach supports national development in the countries where we operate and reflects our commitment to ESG and sustainability. Financial risk management Effective financial risk management is fundamental to sustaining Yinson’s long-term performance, particularly given the capital-intensive and project-financed nature of our business. Our approach is outlined in our ERM Policy Statement and Framework, which provides a structured and proactive system for identifying, assessing and mitigating financial risks. Through clear governance structures, defined risk limits and strong internal controls, we maintain financial stability while keeping credit, liquidity and market risks within low to medium levels. Cash flow and liquidity management We prioritise readily available cash to ensure we are well positioned to support future growth while remaining prepared for unforeseen circumstances, enabling us to maintain strong liquidity readiness. Several cash positions such as operational cash flows, financial capital exercises, and financing make up these funds, which are guided by the Group’s Corporate Treasury Policy. The policy guides our approach to capital management and managing liquidity while enhancing our risk management and supporting decision-making processes tied to our financial activities. To ensure and maintain cash that is readily accessible, the Group has developed a liquidity management strategy: • Ensuring an optimal mix of high-quality liquid investments and sufficient cash buffers to address unexpected cash outflows. • Maintaining 5-year cash flow projections to align longterm financial capital allocation with project capital expenditure requirements. • Utilising reasonable assumptions regarding ongoing operations and secured project financing, ensuring adequate liquidity for the next five years. • Conducting regular stress tests to evaluate cash flow vulnerability in challenging situations and implementing necessary action plans. In FY2026, Yinson undertook several capital raising and refinancing initiatives to support business growth and optimise our balance sheet, which are explained in detail in the Financial Review. Cash flows from investing and financing activities, Financial Review, pg 29 Many of our projects require substantial financing. Yinson closely monitors each project’s progress to ensure they become non-recourse to the Group once operational. Upon achieving operational readiness and backed by our strong track record of timely and quality delivery, Yinson’s corporate guarantees are released from the project financing loan. Thereafter, lenders are entitled to repayments solely from cash flows generated by the respective project. Strengthening sustainable financing credibility In September 2024, Yinson Renewables’ Green Financing Framework received an excellent SQS1 sustainability quality score from Moody’s, recognising its strong alignment with leading green financing principles and high standards of transparency and accountability. Since then, the framework has continued to support new green financing initiatives, such as the USD 59 million green loan secured for the Matarani Solar Project and underpins the expansion of Yinson Renewables’ growing portfolio of renewable energy assets. 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