{"url_path":"/sec/nwgl/10-k/2026/item-11","section_key":"item-11","section_title":"Item 11 **","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-04-27","source_url":"https://www.sec.gov/Archives/edgar/data/1948294/0001493152-26-019023-index.html","accession_number":"0001493152-26-019023","cik":"0001948294","ticker":"NWGL","issuer_name":"CL Workshop Group Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1948294/0001493152-26-019023-index.html","primary_entity_key":"0001948294","primary_entity_name":"CL Workshop Group Ltd"},"word_count":832,"has_tables":true,"body_markdown":"**ITEM\n11.**\n**QUANTITATIVE\nAND QUALITATIVE DISCLOSURES ABOUT RISK MANAGEMENT**\n\n \n\n**Risk\nmanagement overview**\n\n \n\nThe\nCompany has exposure to credit, liquidity and market risks from its use of financial instruments. This note provides information about\nthe Company’s exposure to each of these risks, the Company’s objectives, policies and processes for measuring and managing\nrisk. Further quantitative disclosures are included throughout these consolidated financial statements.\n\n \n\nCredit\nrisk\n\n \n\nCredit\nrisk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations\nand arises principally from the Company’s cash held with banks and other financial intermediaries.\n\n \n\nThe\ncarrying amount of the financial assets represents the maximum credit exposure which amounted to $5,476,025 and $7,722,459 as at December\n31, 2025 and 2024, respectively.\n\n \n\n69\n\n \n\n \n\nThe\nCompany has presumed a significant increase in credit risk from initial recognition when contractual payments are more than 60 days past\ndue. As a result, for low risk category, the loss allowance recognized during the period was limited to 12 months of expected credit\nlosses. For more than 60 days past due, the loss allowance recognized during the period was lifetime expected credit losses – not\ncredit-impaired. When there is evidence indicating the asset is credit-impaired, the loss allowance recognized during the period was\nlifetime expected credit losses – credit-impaired. Based on historical information, and adjusted for forward-looking expectations,\nthe Company recognized the expected credit losses on trade receivables of $893,848 and $167,177 as of December 31, 2025 and 2024, respectively.\n\n \n\nMarket\nrisk\n\n \n\nMarket\nrisk is the risk that changes in market conditions, such as commodity prices, foreign exchange rates, and interest rates will affect\nthe Company’s net income or the value of financial instruments. The objective of market risk management is to manage and control\nmarket risk exposures within acceptable limits while maximizing the Company’s returns.\n\n \n\nForeign\nexchange risk\n\n \n\nForeign\ncurrency exchange rate risk is the risk that the fair value of future cash flows will fluctuate as a result of changes in foreign exchange\nrates. The Company does not currently use foreign exchange contracts to hedge its exposure to currency rate risk as management has determined\nthat this risk is not significant at this point in time. As such, the Company’s financial position and financial results may be\nadversely affected by unfavorable fluctuations in currency exchange rates.\n\n \n\nThe\ncurrency exposure of financial assets and financial liabilities denominated in currencies other than the Group’s functional currencies\nare as follows:\n\n \n\n  \nAssets  \nLiabilities \n\n  \n\n**As of**\n\n**December 31,**\n\n**2025**\n  \n\n**As of**\n\n**December 31,**\n\n**2024**\n  \n\n**As of**\n\n**December 31,**\n\n**2025**\n  \n\n**As of**\n\n**December 31,**\n\n**2024**\n \n\n  \n   \n   \n   \n  \n\nHKD \n$933,919  \n$638,471  \n$3,959,501  \n$5,408,928 \n\nEUR \n 1,800,135  \n 3,253,699  \n 3,936,467  \n 6,668,340 \n\nCNY \n 199,339  \n 149,711  \n 471,019  \n 108,961 \n\nPEN \n 208,705  \n 839,614  \n 82,937  \n 659,893 \n\nMOP \n$552  \n$511  \n$-  \n$96,141 \n\n \n\nLiquidity\nrisk\n\n \n\nLiquidity\nrisk is the risk that the Company will encounter difficulty in meeting obligations associated with the financial liabilities. The Company’s\nfinancial liabilities consist of trade payables, other payables, bank and other borrowings, amounts due to an ultimate beneficial shareholder\nand convertible bonds as at December 31, 2025 and 2024, respectively. The Company had cash and bank balances of approximately $1.0 million\nand $3.0 million as at December 31, 2025 and 2024, respectively. The Company’s policy is to review liquidity resources and ensure\nthat sufficient funds are available to meet financial obligations as they become due. Further, the Company’s management is responsible\nfor ensuring funds exist and are readily accessible to support business opportunities as they arise.\n\n \n\nTrade\npayables and accrued liabilities consist of invoices payable to trade suppliers for administration and professional expenditures. The\nCompany processes invoices within a normal payment period. Trade payables have contractual maturities of less than 90 days.\n\n \n\nConcentration\nrisk\n\n \n\nThe\ntop five customers accounted for 71.4%, 67.1% and 71.2% of the Group’s sales for the years ended December 31, 2025, 2024 and 2023,\nrespectively. Accounts receivable from these customers were $2.0 million and $1.1 million as of December 31, 2025 and 2024, respectively.\n\n \n\nThere\nare the top five suppliers accounted for 50.9%, 42.0% and 64.1% of our total purchases, respectively, for the years ended December 31,\n2025, 2024 and 2023.\n\n \n\n70\n\n \n\n \n\nInterest\nrate risk\n\n \n\nThe\nGroup’s exposure to interest rate risk primarily relates to floating rate bank borrowings outstanding.\n\n \n\nIn\nrespect of the exposure to interest rate risk arising from floating rate non-derivative financial instruments held by our Group, such\nas cash, our Group is not exposed to significant interest rate risk as the interest rates of cash at bank are not expected to change\nsignificantly.\n\n \n\nInflation\nrisk\n\n \n\nInflationary\nfactors, such as increases in personnel and overhead costs, could impair our operating results. Although we do not believe that inflation\nhas had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have\nan adverse effect on our ability to maintain current levels of gross margin and operating expenses as a percentage of sales revenue if\nthe revenues do not increase with such increased costs."}