NDCS AND TRANSITION PRESSURES ACROSS THE BUSINESSES Under the NDCs reference case, pledged policies gradually shape energy costs, purchasing requirements and customer investment. The effect on Destini would vary by contract and market. Energy and operating expenditure Fuel prices, electricity tariffs and component costs are the main channels through which climate policy could reach our cost base. Purchased electricity makes up 81.9% of our reported emissions, but that share is not a measure of financial exposure; actual cost effects depend on tariffs, consumption and how much can be recovered through contracts. Mobility and energy services Transition-related investment by customers could lift demand for rail and energy engineering services. Turning that demand into revenue depends on our technical capability, customer procurement cycles and successful delivery – and equipment and training costs may arise before new contracts generate income. Aviation and marine activities Changes in aviation and marine fuels, equipment and asset specifications could alter maintenance requirements. Existing fleets will still need servicing as new technologies emerge, so keeping our technical capability current is key to the durability of these customer relationships. Procurement and contract pricing Higher component or service prices erode margins where customer contracts limit immediate cost recovery. Procurement timing, contract terms and access to alternative sources determine the size of that effect, which varies across our Malaysian and overseas businesses. TESTING EARLIER AND LATER TRANSITION Earlier and delayed transitions pose different challenges for investment planning, technical skills and pricing commitments. Net Zero 2050 A faster transition could bring forward customer demand for emissions data, new specifications and lower-carbon technology. Our exposure would depend on the pace of change in each market: energy and mobility could see new opportunities, while aviation and marine services adapt to evolving technical requirements. Investment ahead of customer demand Training, technical qualifications and new equipment may be needed before related contracts generate revenue. The gap between that spending and customer demand will drive our cash requirements and the return on investment. Delayed Transition In this pathway, policy action stays limited until 2030 and then tightens sharply. For a business that delivers work through supplier arrangements and customer contracts, a compressed adjustment window could open a gap between agreed prices and later input costs, and require technical capability to change faster. Timing matters: the same cumulative change has a very different cash-flow effect when costs arrive abruptly rather than gradually. Fragmented World Fragmented World assumes divergent climate policies across markets. Techno Fibre, Vanguarde and Malaysian businesses that source from overseas could face differing specifications, input costs and lead times, making coordination across suppliers and locations increasingly important to continuity. ENVIRONMENTAL STEWARDSHIP SUSTAINABILITY DESTINI BERHAD 57 ANNUAL REPORT 2026
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