Company: EGG
Filing Date: 2025-03-04
Form Type: DRS/A
Source: 0001493152-25-008991
Chunk: 92

Company: ENIGMATIG LTD
Filing Date: 2025-03-04
Form: DRS/A
Chunk 92
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 Qualitative Disclosure about Market Risk

Concentration of credit risk

We maintain cash with banks in Singapore, Hong Kong and mainland China. Should any bank holding cash become insolvent, or if we are otherwise unable to withdraw funds, we would lose the cash with that bank; however, we have not experienced any losses in such accounts and believes it is not exposed to any significant risks on our cash in bank accounts. In Singapore, a depositor has up to S$100,000 insured by Singapore Deposit Insurance Corporation (“SDIC”). A digital asset maintained with a licensed financial institution in Singapore is safeguarded in accordance with the requirements under the Payment Services Act 2019. In Hong Kong, a deposit has up to HK$500,000 insured by Hong Kong Deposit Protection Board. In mainland China, a deposit had up to RMB500,000 governed by Deposit Insurance Regulations.

Financial instruments that potentially expose us to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. We have designed our credit policies with an objective to minimize our exposure to credit risk. Our accounts receivable is short term in nature and the associated risk is minimal. We conduct credit evaluations on its clients and generally do not require collateral or other security. We periodically evaluate the creditworthiness of the existing clients in determining the allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific clients.

Client concentration risk

For the year ended September 30, 2024, three major clients accounted for 27.7%, 20.1% and 11.4%, respectively, of our total corporate services income. As of September 30, 2023, three major clients accounted for 30.9%, 23.8% and 15.3%, respectively, of our total corporate services income. As of September 30, 2022, two major clients accounted for 33.0% and 13.3%, respectively, of our total corporate services income.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of our financial instruments will fluctuate because of changes in market interest rates. Our exposure to interest rate risk arises mainly from our interest-bearing financial liabilities. We periodically review our liabilities and monitors interest rate fluctuations to ensure that the exposure to interest rate risk is within acceptable levels. The interest-bearing financial liabilities are usually at fixed interest rates except for money market loans, bank overdrafts and floating interest rate loans. We do not utilize