Integrated Report 2024 Full Speed Ahead: UNLOCKING VALUE, DRIVING GROWTH Technology Energy Information Technology
SCOPE & BOUNDARY This Report holistically covers the primary activities of our business clusters, key support areas and subsidiaries within both our Malaysian and international operations. In addition to financial reporting, this Report provides comprehensive analysis of our non-financial performance, opportunities, risks and outcomes associated with our key stakeholders that significantly impact our ability to generate value. REPORTING FRAMEWORKS This Report is prepared with reference to the following recognised standards and guidelines: • Main Market Listing Requirement (“MMLR”) by Bursa Malaysia Securities Berhad (“Bursa Malaysia”) • Malaysian Code of Corporate Governance (“MCCG”) by Securities Commission Malaysia • Corporate Governance Guide (4th Edition) issued by Bursa Malaysia • Malaysian Financial Reporting Standards (“MFRS”) • The Companies Act (“CA”) 2016 • International Financial Reporting Standards (“IFRS”) • International Integrated Reporting Framework by IFRS Foundation The disclosures of our sustainability statement, contained within this Report, are guided by: ▪ Bursa Malaysia’s Sustainability Reporting Guide (3rd Edition) ▪ Global Reporting Initiative (“GRI”) Universal Standards 2021 ▪ United Nations Sustainable Development Goals (“UN SDGs”) ▪ FTSE4Good Bursa Malaysia Index’s Environmental, Social and Governance (“ESG”) Indicators ▪ Greenhouse Gas Protocol Corporate Accounting and Reporting Standard (“GHG Protocol”) COMBINED ASSURANCE STATEMENT We employ a coordinated assurance model to assess and assure various aspects of the business operations including elements of external reporting. These assurances are provided by the Management and the Board, Internal Audit and independent external service providers. FORWARD-LOOKING STATEMENTS This report includes forward-looking statements and forecasts concerning our future performance, prospects and business strategies. These are based on current expectations and reasonable assumptions, which are subject to change due to various factors beyond our control. Consequently, actual results may differ materially from those anticipated in these statements. We caution readers against placing undue reliance as they inherently involve uncertainties and contingencies. MATERIALITY The key topics disclosed in this Report are determined via an established, three-step materiality determination process, whereby the input of internal and external stakeholders is considered, leading to the formulation of material matters, which are defined as issues that impact on our performance as a business and the assessments of our business by our stakeholders. These material matters, and our actions therein, are presented and consistently referenced throughout this Report. DAGANG NeXCHANGE BERHAD INTEGRATED REPORT (“IR”) 2024 THIS INTEGRATED REPORT 2024 (“IR 2024” OR “THIS REPORT”) IS A DETAILED ACCOUNT OF DAGANG NeXCHANGE BERHAD’S (“DNeX” OR “THE GROUP”) STRATEGIES, INITIATIVES AND PERFORMANCE DURING THE 12 MONTHS FROM 1 JANUARY 2024 TO 31 DECEMBER 2024 (“FY2024”) AND AIMS TO ELUCIDATE OUR HOLISTIC AND PURPOSEFUL APPROACH TO CREATING VALUE FOR OUR BUSINESS AND STAKEHOLDERS OVER THE SHORT, MEDIUM AND LONG TERM. About This Report
FEEDBACK We value your input and strive to continuously improve our reporting practices. Feedback on this Report can be emailed to communications@dnex.com.my. BOARD RESPONSIBILITY STATEMENT The Board acknowledges its responsibility to ensure the integrity of this Report which, in its opinion, provides a fair and balanced account of the Group’s performance during FY2024. The Board further certifies that this Report has been prepared in accordance with Bursa Malaysia’s MMLR. This Report was approved by the Board of Directors, and signed on its behalf by: Tan Sri Dato’ Sri Haji Syed Zainal Abidin Bin Syed Mohamed Tahir Non-Independent Non-Executive Chairman Faizal Sham Bin Abu Mansor Group Chief Executive Officer PRIORITISED UN SDGs This report aligns with the following UN SDGs as part of our commitment to sustainable development and creating positive social, environmental and economic impacts: Energy Technology Information Technology (“IT”) CAPITALS KEY RISKS Environmental, Social and Governance Cybersecurity and Data Privacy Human Capital Management and Talent Retention STRATEGIC THRUSTS Portfolio Diversification Human Capital Development Customer Centricity Financial Prudence STAKEHOLDERS Employees Business Partners and Suppliers Customers Shareholders and Investment Community Media Society and Communities Government and Regulators Financial Capital Human Capital Manufactured Capital Social and Relationship Capital Natural Capital Intellectual Capital NAVIGATION ICON Governance and Excellence MATERIAL MATTERS GHG Emissions M1 Resource Management M3 Energy Management M2 Ecological Impact M4 Workforce Management M5 Employee Health and Safety M6 Product Quality and Safety M7 Community Relations M8 Business Ethics M9 Business Model Resilience M10 Data Privacy and Security M11 Supply Chain Management M12 Availability of Financial Resources Global Geopolitical Stability
54th Full Speed Ahead: UNLOCKING VALUE, DRIVING GROWTH The cover design of Dagang NeXchange Berhad’s Integrated Report 2024 embodies the tagline "Full Speed Ahead: Unlocking Value, Driving Growth." The bold red quotation mark at the top symbolises dialogue, progress, and the sharing of visionary ideas, reflecting the Group’s leadership in driving conversations that spark innovation and growth. The striking red tone conveys energy, passion, and determination, consistent with the Group’s commitment to transformation across Technology, Energy, and Information Technology sectors. Set against a clean white background, the design also reinforces transparency, trust, and a focused strategic direction. Sector icons at the bottom provide a subtle yet clear reminder of the Group’s diversified business pillars. Overall, the cover presents Dagang NeXchange Berhad as a bold, forward-looking organisation dedicated to unlocking value and sustaining growth for all stakeholders. ANNUAL GENERAL MEETING The Summit 2, Level M1, The Vertical, Connexion Conference & Event Centre Bangsar South City, No. 8, Jalan Kerinchi 59200 Kuala Lumpur Thursday, 26 June 2025 10.00 a.m.
Contents ABOUT THIS REPORT LEADERSHIP INSIGHTS 04 Chairman’s Statement 06 Group Chief Executive Officer’s Statement OVERVIEW OF DAGANG NeXCHANGE BERHAD 10 Who We Are, Vision, Mission, Shared Values 11 2024 Key Highlights • Financial Highlights • Business Highlights • Sustainability Highlights 14 What Differentiates Us: Our Strengths 15 Our Presence 16 Group Corporate Structure 17 What We Do: Core Business VALUE CREATION @ DNeX 18 Our Approach To Value Creation 20 Our Value Creating Business Model 22 Value We Create MANAGEMENT DISCUSSION AND ANALYSIS A. Strategic Review 29 Operating Environment and Market Conditions 30 Strategic Direction 32 Enterprise Risk Management Framework 33 Key Risk Themes in FY2024 B. Performance Review 34 Group Financial Performance 35 5-Year Financial Summary 36 5-Year Financial Highlights 37 Simplified Group Statements of Financial Position 38 Group Quarterly Performance 39 Financial Calendar 40 Investor Relations C. Business Review 42 Technology 46 Energy 50 Information Technology LEADERSHIP 56 Corporate Information 58 Board at a Glance 59 Board of Directors’ Profile 67 Profile of Senior Management SUSTAINABILITY STATEMENT 70 About This Statement 71 Sustainability Governance 72 Materiality 73 The DNeX Sustainability Framework 74 Sustainability Bursa Performance GOVERNANCE 76 Chairman’s Corporate Governance Overview 77 Corporate Governance Overview Statement 94 Additional Compliance Information 98 Statement on Risk Management and Internal Control 106 Audit Committee Report FINANCIAL STATEMENTS 110 Statement of Directors’ Responsibility 111 Directors’ Report 120 Statement of Financial Position 122 Statements of Profit or Loss and Other Comprehensive Income 123 Statements of Changes in Equity 126 Statements of Cash Flows 128 Notes to the Financial Statements 206 Statement by Directors 206 Statutory Declaration 207 Independent Auditors’ Report SHAREHOLDERS’ INFORMATION 212 Analysis of Shareholdings 215 List of Properties 216 Group Corporate Directory 218 Notice of 54th Annual General Meeting 223 Administrative Guide for the 54th Annual General Meeting Form of Proxy Scan to learn more about DNeX
4 Leadership Insights DAGANG NeXCHANGE BERHAD Integrated Report 2024 Steering Through a Complex Operating Landscape FY2024 was marked by varying degrees of pressure across our core business divisions. In the Technology Business Segment, global semiconductor uncertainties and arbitration proceedings introduced near-term volatility, though encouraging demand trends began to emerge, particularly in artificial intelligence (“AI”) and data-driven applications. In the Energy Business Segment, the operating landscape grew more complex with regulatory shifts in the United Kingdom prompting a reassessment of investment exposure and a strategic rebalancing towards Malaysian oil assets. The IT Business Segment, while less exposed to external shocks, continued to evolve as it advanced beyond government-centric workstreams into private-sector digitalisation. Throughout these challenges, the Group demonstrated composure, adaptability and a readiness to recalibrate where necessary. I commend the leadership team for navigating these headwinds with a view not just towards resolution, but towards repositioning DNeX for future growth. The steady recovery in our semiconductor business, the strategic shift in our Energy portfolio and the expansion of digital services all reflect a purposeful response to evolving market demands. Preparing for Organisational Realignment FY2024 saw a pivotal leadership transition, with Faizal Sham Abu Mansor assuming the role of Group CEO, following my tenure as Executive Chairman. This evolution underscores our dedication to fostering growth and innovation. Faizal's fresh perspectives and strategic vision instil confidence in me, and I anticipate continued value creation for our stakeholders under his leadership. I am committed to supporting him in this new chapter. Looking ahead, we are taking deliberate steps to enhance how the Group operates, starting with the planned consolidation of our core business segments. This strategic realignment, which will commence in FY2025, is designed to improve operational cohesion, optimise resource allocation and unlock new efficiencies across the organisation. It is timely and necessary to support the next phase of DNeX’s growth. A key part of this transformation includes the establishment of an Executive Committee at the holding company level. This leadership structure will enable stronger cross-functional collaboration and clearer decisionmaking pathways, ensuring that business execution aligns more closely with strategic intent. These developments reflect our commitment to refining internal structures, not in isolation but in support of building a more agile, accountable and performance-driven organisation. Enabling Responsible Innovation We are also encouraged by the increasing use of AI, automation and data-driven tools across the Group. These capabilities are beginning to unlock tangible benefits in operational efficiency, risk mitigation and strategic decision-making. By enabling faster insights, better forecasting and more informed responses to changing market conditions, these tools are helping the Group operate with greater agility and precision. As these technologies mature, they will become integral to how we scale, adapt and lead in increasingly complex environments. As we move further into this digital frontier, we remain mindful of our responsibility to use technology thoughtfully and ethically. Transparency, data security and governance will continue to guide our adoption of digital solutions, ensuring that innovation supports - not compromises - stakeholder trust. Chairman’s Statement Dear Shareholders, It is my privilege to address you as we reflect on Dagang NeXchange Berhad’s (“DNeX” or “the Group”) journey through a year defined by complexity, resilience and forward recalibration. The financial year ended 31 December 2024 (“FY2024”) challenged us on multiple fronts: macroeconomic uncertainty, regulatory shifts and sector-specific pressures, all of which tested the strength of our foundation. Yet, it also marked a period where we took deliberate steps to reassess priorities, refine our focus and chart a clearer course for the future. As we look back, what stands out is not only how the Group adapted to a changing environment, but how it began laying the groundwork for long-term transformation. The year was, in many ways, a turning point, one that demanded both resolve and strategic clarity from everyone across the organisation.
5 Leadership Insights DAGANG NeXCHANGE BERHAD Integrated Report 2024 Commitment to Sustainability Our commitment to sustainability remains a cornerstone of our strategic vision. We have made significant strides since embarking on our sustainability journey in 2021. However, we recognise that true leadership demands continuous improvement and a more focused, ambitious approach. In FY2025, we are increasing our efforts, placing a heightened emphasis on environmental stewardship and social responsibility across our operations and supply chains. We are actively working to strengthen our Environmental, Social, and Governance (“ESG”) performance, with the aspiration of meeting globally recognised sustainability benchmarks, most notably inclusion in the FTSE4Good Bursa Malaysia Index. To achieve our sustainability goals, we are committed to a multi-faceted approach. This includes enhancing our policies to ensure they are robust, comprehensive, and aligned with global best practices. We will also focus on deepening stakeholder engagement by fostering transparent and meaningful dialogue to better understand and address their needs. Crucially, we are dedicated to embedding sustainability into each aspect of our operations, integrating sustainable practices into our core business strategies and day-today activities. This holistic strategy will drive meaningful advancements and ensure lasting value for all our stakeholders. Through these focused initiatives, we are determined to drive meaningful advancements and deliver lasting value for our business, our stakeholders, and the communities we serve. We believe that by acting responsibly and sustainably, we not only contribute to a better future but also strengthen our long-term resilience and create enduring value. Positioning for Long-Term Value Creation FY2024 may have been a year of recalibration, but it was also one of preparation. In confronting near term pressures, the Group also began laying the groundwork for deeper structural change, one guided by a clear ambition to become a more integrated, resilient and future-ready organisation. These early moves signal a shift in how DNeX is positioning itself to compete and create value over the long term. From an oversight perspective, we remain actively engaged in supporting these priorities, not just in governance but also in ensuring the right frameworks are in place to enable disciplined execution. We will continue to guide the organisation with clarity, foster transparency across leadership layers and ensure that key decisions are anchored in long-term value creation for all stakeholders. At the same time, I would like to express my personal appreciation to everyone who contributed to the Group’s efforts this past year. Our employees, partners, regulators and shareholders have each played a role in sustaining our momentum through a period of challenges. To our people especially, thank you for showing resilience, adaptability and unwavering commitment, even as conditions remained fluid and demanding. Your dedication has been the backbone of our progress, and it is this collective strength that will continue to propel DNeX forward as we move into the next phase of our journey. As we step into FY2025, I am confident that we are entering a new chapter with the right foundation, a capable leadership team and a shared vision for what DNeX can become. Together, we will continue to unlock potential, pursue sustainable progress and deliver value in ways that endure. Tan Sri Dato' Sri Haji Syed Zainal Abidin Syed Mohamed Tahir Non-Independent Non-Executive Chairman Tan Sri Dato' Sri Haji Syed Zainal Abidin Syed Mohamed Tahir Non-Independent Non-Executive Chairman CHAIRMAN’S STATEMENT
6 Leadership Insights DAGANG NeXCHANGE BERHAD Integrated Report 2024 Staying Agile in a Shifting Landscape The past year brought its share of challenges, but we remained focused on navigating uncertainties and positioning DNeX for long-term success. Our semiconductor business under the Technology Business Segment demonstrated resilience despite legal and operational complexities. The arbitration proceedings at SilTerra introduced some uncertainties, but with continued engagement, we now have clarity and room to renegotiate key aspects. At the same time, the rising demand for artificial intelligence (“AI”), cloud computing and data-incentive applications is accelerating the need for advanced semiconductor technology. This trend directly benefits SilTerra, strengthening our position in the semiconductor industry and unlocking new opportunities for growth in an increasingly digital world. Meanwhile, in our Energy Business Segment, the oil and gas business in the United Kingdom faced pressure from regulatory changes, including an increase in the Energy Profit Levy (“EPL”) and the removal of investment allowances, both of which affected financial performance and investment decisions. These regulatory shifts, combined with operational challenges such as shutdowns and contamination issues, further impacted our performance. In response, we have taken a strategic step to rebalance our focus towards Malaysian oil fields, particularly the Abu Cluster, where we have greater control and operational stability. Recognising the importance of diversifying our revenue streams, we strategically expanded our IT Business Segment beyond its traditional government-driven business model into private-sector digital transformation. This shift enhances our resilience and positions us for sustainable growth in an evolving digital economy. As demand for cloud computing and AI-driven solutions continues to rise, we partnered with Google Cloud and formed a joint venture with Gamuda in 2024 to seize these opportunities. These collaborations have strengthened our sovereign cloud capabilities and further cemented our role in Malaysia’s digital transformation landscape. “We strategically expanded our IT Business Segment beyond its traditional governmentdriven business model into private-sector digital transformation” Group Chief Executive Officer’s Statement Dear Shareholders, It is an honour to address you for the first time as the Group Chief Executive Officer (“GCEO”) of Dagang NeXchange Berhad (“DNeX” or “the Group”). Stepping into this role at a pivotal moment, I have inherited a well-established conglomerate with a strong foundation in Technology, Energy and Information Technology (“IT”). The Group is in a transition phase, an evolution towards something even greater. My role is to build upon DNeX’s strengths, unlock new opportunities and drive DNeX toward the next stage of growth and excellence.
7 Leadership Insights DAGANG NeXCHANGE BERHAD Integrated Report 2024 Group Performance Overview* DNeX recorded RM1.2 billion in revenue for the financial year ended 31 December 2024 (“FY2024”), primarily driven by the Technology Business Segment, which contributed RM629.8 million (54%) followed by the Energy Business Segment at RM319.0 million (27%) and the IT Business Segment at RM225.2 million (19%). Despite revenue growth of RM11.2 million, gross profit declined from RM263.4 million in FY2023 to RM220.9 million in FY2024, mainly due to higher operational costs and external market pressures affecting profitability across the divisions. Business Segment Performance Review The Technology Business Segment saw a turnaround, posting a gross profit of RM37.4 million (FY2023: gross loss of RM6.7 million), an improvement of RM44.1 million. This was largely driven by higher wafer shipments, particularly in emerging technology products, which improved the product mix. Increased wafer output and pricing stability also helped offset higher production costs and arbitration-related expenses. In the Energy Business Segment, gross profit fell to RM100.4 million (FY2023: RM184.7 million) due to increased operating expenses per barrel driven by extended maintenance shutdowns and oil contamination issues in the gas system. The production volume was negatively affected by the prolonged shut down which impacted both revenue and profitability. The IT Business Segment (excluding Telco division) recorded an increase of RM20.6 million in gross profit to RM85.6 million (FY2023: RM65.0 million). Growth was supported by stronger revenue from trade facilitation services, continued technology consulting work for Malaysia’s public sector and the completion of key milestones in a largescale government IT infrastructure project. Meanwhile, the Telco division recorded RM2.5 million gross loss in FY2024 (FY2023: RM20.3 million gross profit) in line with the Group’s divestment strategy. * Note : Comparison based on 12 months in FY2024 to 12 months in FY2023 (January to December). Building a More Agile, Efficient and Future-Ready DNeX In FY2025, DNeX will focus on consolidating its three major business segments to create a more streamlined and cohesive organisation. This strategic realignment will enhance internal governance, financial oversight and operational efficiency, ensuring that leadership structures and business execution evolve in tandem with the Group’s growth ambitions. By integrating key functions more effectively, this consolidation will drive stronger synergies, optimise resource allocation and unlock economies of scale - enabling greater operational efficiency, cost reductions and a stronger competitive position. As part of this consolidation, we have formalised an Executive Committee (“EXCO”) at DNeX, the holding company. This structured leadership framework will play a key role in aligning strategies, improving coordination and fostering a more cohesive operational structure. Bringing together key functional leaders in finance, human resources, strategy, IT and legal, along with the CEOs of each business segment, EXCO will strengthen governance while enabling crossFaizal Sham Abu Mansor Group Chief Executive Officer GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT
8 Leadership Insights DAGANG NeXCHANGE BERHAD Integrated Report 2024 segment synergies. The diverse expertise of its members will also provide valuable insights to strengthen leadership decision-making, ensuring well-rounded governance and reducing reliance on a single leadership figure. Additionally, as part of this strategic leadership refinement, the function of the Group Chief Financial Officer (“GCFO”) will be expanded to enhance financial governance, optimise capital management and improve funding strategies, providing greater financial flexibility to support the Group’s evolving needs. SPEED is a core philosophy I am introducing at DNeX to drive efficiency, agility and precision across the Group. At its foundation, S – Shareholders and D – Dividends represent our priority and desired outcome, while P – Processes, E – Efficiency and E – Excellence define how we achieve it through our teams and employees. By optimising operations and fostering a results-driven culture, we are committed to delivering sustained value with agility and discipline. This philosophy is especially relevant to our businesses, where speed is a critical success factor, whether in achieving faster chip performance in semiconductor manufacturing or enhancing operational agility in oil and gas production. Embedding SPEED into our execution will sharpen our focus and drive impactful business outcomes. To further enhance governance and operational efficiency, we are leveraging AI-driven tools and big data analytics to automate key processes, improve decision-making and optimise cost structures. The establishment of the AI Centre of Excellence, complementing our existing Big Data Centre of Excellence, to accelerate our adoption of AI technologies, will enable workforce upskilling and the integration of AI-powered solutions across our business divisions. Upskilling our people in emerging technologies is our priority especially with our partnership with leading technology partners in such areas as cloud platform, AI frameworks, machine learning, deep learning, and data analysis. At the heart of our transformation includes also the development and delivery of AI-powered tools and platforms, leveraging on cloud services to provide cutting-edge solutions tailored to both government agencies and new enterprise customers, thus positioning DNeX as a thought leader in AI-driven transformation. By embedding large language models (“LLMs”) and other AI technologies into our technology stacks, DNeX is enhancing its existing products and services while creating flexible, scalable, and innovative solutions for new markets locally and internationally. Strategic Priorities for Our Business Segments As part of our growth strategy, we are forging bilateral engagements with key international markets, including China, France and New Zealand, to unlock new trade and technology opportunities. These partnerships will create avenues for digital transformation, trade facilitation and cross-border collaborations, strengthening our position in high-growth sectors. Additionally, with Malaysia assuming the ASEAN Chairmanship in 2025, we aim to capitalise on regional growth by positioning DNeX as a strategic partner in advancing digital and industrial initiatives across Southeast Asia. At the same time, we are driving targeted growth within our core business divisions - Technology, Energy and IT - by leveraging these strategic partnerships and strengthening our industry foothold. RM1.17 billion REVENUE RM168.80 million EBITDA -RM89.64 million LOSS AFTER TAX GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT
9 Leadership Insights DAGANG NeXCHANGE BERHAD Integrated Report 2024 GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT Technology The Malaysian government is driving efforts to elevate the country’s semiconductor industry, transitioning from chip manufacturing to high-value chip design. We see this as a vital opportunity and, in FY2025 and beyond, we are positioning SilTerra to play a central role in realising this ambition. With over 20 years of experience as one of Malaysia’s leading homegrown semiconductor foundries, SilTerra is uniquely equipped to capitalise on this shift. Moving forward, we will accelerate investments to enhance its CMOS wafer fabrication capabilities and expand its advanced process technologies to meet the increasing demand for AI-driven chips and high-performance semiconductor solutions. Additionally, we are strengthening SilTerra’s role in the global semiconductor supply chain by advancing process technologies, ensuring its long-term competitiveness in an evolving market. Through these initiatives, we aim to secure SilTerra’s leadership position and drive sustainable growth in Malaysia’s semiconductor sector. Energy As we move forward, we will continue to monetise our energy portfolio by prioritising Malaysian oil assets, with a key focus on increasing output from Abu Cluster reactivation. At the same time, we are actively exploring potential investments in regional energy assets to strengthen long-term sustainability while mitigating exposure to external market risks. While we continue current operations and pre-development in the United Kingdom, timing and future investment decisions will be guided by regulatory developments and profitability metrics, ensuring a balanced and risk-managed approach that aligns with our strategic growth objectives. IT We are accelerating our AI-driven transformation by integrating cloud computing, big data analytics, Internet of Things (“IoT”) and blockchain to enhance business intelligence and optimise digital services. Beyond trade facilitation and the National Single Window (“NSW”) for Trade Facilitation services, we are expanding our capabilities to position DNeX as a leader in AI-enabled sovereign cloud, smart port and city solutions and enterprise digital consulting. A key enabler of this expansion is our joint venture with Gamuda, which strengthens our expertise in AI-powered automation, security and cloud-based infrastructure. By embedding these advanced technologies into our digital ecosystem, we are reinforcing DNeX’s role as a provider of AI-driven platforms and a key player in Malaysia’s digital transformation. As we look ahead, I want to express my deepest gratitude to our employees, partners and shareholders who continue to believe in DNeX’s vision. The past year has tested our resilience, but it has also reaffirmed our ability to adapt, innovate and push forward. With a bold strategy, a capable leadership team and an unwavering commitment to excellence, we are entering an exciting new chapter – one where we will turn challenges into opportunities and build a stronger, more dynamic DNeX. Together, we will continue making progress, unlocking new possibilities and delivering lasting value for all our stakeholders. Acknowledgements I would like to express my sincere gratitude to the Board of Directors, management, and the entire DNeX workforce for their unwavering guidance, support, and dedication throughout this transformative period. Their collective effort is crucial as we implement strategic changes to unlock the full potential of our diverse business segments. My appreciation extends to our shareholders, customers, government agencies, business partners, and all stakeholders for their continued trust and support. Your faith in our vision for the future is invaluable. I assure all stakeholders that DNeX is firmly committed to achieving long-term stability and sustainable growth through our ongoing transformation into a highperforming organisation. We recognise that challenges are integral to any success story, and our ability to learn and reinvent ourselves will define our future. I am confident that a strengthened and more resilient DNeX will emerge from this period of reinvention. Faizal Sham Abu Mansor Group Chief Executive Officer "We are forging bilateral engagements with key international markets, including China, France and New Zealand, to unlock new trade and technology opportunities”
10 DAGANG NeXCHANGE BERHAD Integrated Report 2024 WHO WE ARE Dagang NeXchange Berhad (“DNeX”) is a Malaysiabased investment holding company with core businesses in Technology, Energy, and Information Technology (“IT”). Established in 1970, DNeX operates through specialised subsidiaries, each offering tailored solutions and infrastructure led by industry experts. In Technology, DNeX runs a semiconductor foundry. In Energy, it is engaged in upstream exploration and production in the UK and Malaysia, along with equipment supply and maintenance. In IT, the company provides eServices for trade facilitation, technology consulting, and systems integration. We are also moving towards providing solutions integrating cloud computing, big data, IoT, AI-enabled sovereign cloud, and blockchain. VISION To be a leading multinational corporation that is trusted for its worldclass services and expertise. MISSION We are vibrant talents who are committed to deliver business innovation that creates value for stakeholders. We relentlessly drive to achieve our goals, constantly strive for excellence through collaborative efforts and focus on delivering impactful results. (We Play to Win) We maintain a strong sense of responsibility, ensure accountability in all endeavours, and seek win-win solutions through continuous learning and dedicated efforts. (We Achieve Results with Care) We embrace innovation and encourage creative thinking and agile responses to challenges, always exploring new ideas and approaches. (We Strive to be Innovative) We uphold ethical standards, integrity, and transparency, and create a conducive and safe working environment while never compromising on our values. (We Do the Right Thing) DRIVEN ADAPTABLE RESPONSIBLE ETHICAL
FINANCIAL HIGHLIGHTS RM1,174.02 mil REVENUE 11 Overview of Dagang NeXchange Berhad DAGANG NeXCHANGE BERHAD Integrated Report 2024 2024 Key Highlights (2023 : RM1,912.93 million) RM168.80 mil EBITDA (2023 : RM439.90 million) -RM89.64 mil LOSS AFTER TAX (2023 : -RM190.79 million) RM4,214.30 mil TOTAL ASSETS (2023 : RM4,641.89 million) RM1,130.45 mil SHARE CAPITAL (2023 : RM1,017.40 million) -1.51 sen NET LOSS PER SHARE (2023: -3.80 sen) Note: 2024 : 12 months period 1 January 2024 - 31 December 2024 2023 : 18 months period 1 July 2022 - 31 December 2023
BUSINESS HIGHLIGHTS 12 Overview of Dagang NeXchange Berhad DAGANG NeXCHANGE BERHAD Integrated Report 2024 2024 KEY HIGHLIGHTS 23 DECEMBER 2024 Dagang Net Technologies Sdn Bhd, a wholly owned subsidiary of Dagang NeXchange Berhad (“DNeX”), announced a partnership with CONEX SAS to streamline EU trade compliance for Malaysian exporters. This collaboration aims to assist exporters in fulfilling the EU’s Import Control System 2 (“ICS2”) requirements, which mandate pre-notification of goods to Customs authorities before shipment to the EU. 10 DECEMBER 2024 Dagang NeXchange Berhad (“DNeX”) and Gamuda Berhad (“Gamuda”), through their wholly-owned subsidiaries, respectively – DNeX Solutions Sdn Bhd (“DNeX Solutions”) and Gamuda Technologies Sdn Bhd (“Gamuda Technologies”) entered a joint venture to provide novel air-gapped Google Distributed Cloud Services (“GDC Services”) to the public and private sectors in Malaysia. 30 SEPTEMBER 2024 Dagang NeXchange Berhad (“DNeX”) and Google Cloud announced a multi-year agreement to deliver next-generation sovereign cloud services in Malaysia. This strategic partnership addresses the country’s growing demand for cloud solutions that meet strict data residency, security, and privacy requirements, particularly within regulated industries like public services, financial services, healthcare, and energy. 28 AUGUST 2024 Dagang NeXchange Berhad’s (“DNeX”), through wholly owned subsidiary company Dagang Net Technologies Sdn Bhd, received a contract extension from the Government of Malaysia for the National Single Window (“NSW”) for Trade Facilitation. 26 JULY 2024 Dagang NeXchange Berhad’s (“DNeX”), through subsidiary Ping Petroleum Sdn Bhd (“PPSB”), signed a new Production Sharing Contract (“PSC”) Small Field Asset (“SFA”) Cluster PSC with Petroliam Nasional Berhad (“PETRONAS”). 25 JUNE 2024 Dagang NeXchange Berhad (“DNeX”), through wholly owned subsidiary Dagang Net Technologies Sdn Bhd (“Dagang Net”), successfully completed the implementation of Saudi Arabia’s Makkah Route initiative across six airports in three countries. 2 MAY 2024 Dagang Net Technologies Sdn Bhd (“Dagang Net”), a wholly owned subsidiary of Dagang NeXchange Berhad (“DNeX”), has been appraised at Maturity Level 3 of the CMMI Institute’s Capability Maturity Model Integration (CMMI)® Version 3.0 for its Technology and Human Resource functions.
SUSTAINABILITY HIGHLIGHTS ZERO INCIDENTS, 13 Overview of Dagang NeXchange Berhad DAGANG NeXCHANGE BERHAD Integrated Report 2024 2024 KEY HIGHLIGHTS LEGAL NOTICES OR COMPLAINTS RELATED TO: CORRUPTION; ANTI-COMPETITIVE, ANTI-TRUST AND/OR MONOPOLISTIC BEHAVIOUR; BREACHES OF CUSTOMER DATA PRIVACY. MAINTAINED DIVERTED 56% OF SOLID WASTE FROM LANDFILL. DELIVERED RM320,634.89 FOR 50 BENEFICIARIES THROUGH CSR ACTIVITIES AND ZAKAT CONTRIBUTIONS. EXPANDED SCOPE 3 EMISSIONS REPORTING TO CONTAIN 2 CATEGORIES: BUSINESS TRAVEL EMPLOYEE COMMUTING
14 Overview of Dagang NeXchange Berhad DAGANG NeXCHANGE BERHAD Integrated Report 2024 What Differentiates Us: Innovating Businesses, Growing Together DNeX prides itself on its ability to offer effective, workable, and commercially realistic solutions to exceed customers’ requirements. Its reputation for pragmatic services results from the company’s emphasis on understanding customers’ objectives, priorities, and needs. An essential element of this is the close working relationship the company fosters with customers, where it places a premium on understanding customers’ commercial strategies and goals, and how they defend their competitive edge. Domestic and Regional Expertise DNeX’s technology-driven experience, track record and problem-solving skills in diverse industries extend to projects not only in Malaysia but internationally as well. Quality Assurance To ensure consistent quality of service standards, DNeX emphasises on standard operating procedures in its workflow. The company also goes to great lengths to preserve data and confidentiality to safeguard customers’ interests. Depth of Technology DNeX leverages the technological expertise of its highly qualified teams of certified professionals, backed by their vast experience in providing added value in delivering the best solutions and services for customers. Holistic and Integrated Approach DNeX has extensive experience in engaging, consulting, and advising end-users across the spectrum of projects to devise workable and realistic solutions for customers. 01 03 04 05 02 OUR STRENGTHS
15 Overview of Dagang NeXchange Berhad DAGANG NeXCHANGE BERHAD Integrated Report 2024 Our Presence Office Locations Cyberjaya Johor Bahru Kemaman Kuala Lumpur Kuching Kulim Labuan Penang Penampang Shah Alam MALAYSIA Kota Kinabalu Aberdeen UNITED KINGDOM Jakarta INDONESIA Hsin-Chu TAIWAN Beijing CHINA 11Malaysia 1United Kingdom 1Taiwan 1China 1Indonesia 15 Total
16 Overview of Dagang NeXchange Berhad DAGANG NeXCHANGE BERHAD Integrated Report 2024 DAGANG NeXCHANGE BERHAD 100.0% DNeX SEMICONDUCTOR SDN BHD 100.0% SILTERRA CAPITAL BERHAD 100.0% SILTERRA SALES & MARKETING SDN BHD 100.0% PEMBINAAN WAFERFAB SDN BHD 60.00% SILTERRA MALAYSIA SDN BHD TECHNOLOGY 100.0% SILTERRA SALES & MARKETING (L) LTD 100.0% SILTERRA USA, INC. 100.0% FORWARD ENERGY GENERATION LTD 100.0% DNeX ENERGY SDN BHD 100.0% OGPC SDN BHD 100.0% OGPC O & G SDN BHD ENERGY 100.0% PING ENERGY MARKETING LIMITED 100.0% PING PETROLEUM UK PLC 100.0% PING PETROLEUM SDN BHD 90.00% PING PETROLEUM LIMITED 100.0% DNeX DRILLING TECH AND OILFIELD SERVICES SDN BHD 100.0% DAGANG NET TECHNOLOGIES SDN BHD 100.0% DNeX SOLUTIONS SDN BHD 51.00% DNeX RFID SDN BHD 99.00% PT DAGANG NET INDONESIA 100.0% DNeX VMS SDN BHD 100.0% SEALNET SDN BHD 98.68% GENAXIS GROUP SDN BHD 51.00% GLOBAL eCOMMERCE LIMITED 100.0% GLOBAL MARKET eCOMMERCE SDN BHD 55.0% IMIZU SDN BHD 48.78% PT DAGANG SAMUDERA HUTAMA 95.00% PT DNeX TELCO INDONESIA INFORMATION TECHNOLOGY 100.0% DNeX CAPITAL SDN BHD 100.0% DNeX MENA SDN BHD 71.67% INNOVATION ASSOCIATES CONSULTING SDN BHD 51.00% DNeX TELCO SERVICES SDN BHD 100.0% DNeX (BEIJING) TECHNOLOGY CO. LTD. 50.00% GAMUDA DNeX CLOUD SDN BHD Group Corporate Structure
What We Do : Core Business 17 Overview of Dagang NeXchange Berhad DAGANG NeXCHANGE BERHAD Integrated Report 2024 TECHNOLOGY SilTerra Malaysia Sdn Bhd (“SilTerra”) is a 60% owned subsidiary of DNeX. It was founded in 1995 to provide a compact technological foundation for the country to become a developed nation, as well as a catalyst for influencing and developing breakthroughs in a variety of fields. Originally known as Wafer Technology Malaysia Sdn Bhd, the company has undergone several transformations including a rebranding to SilTerra in 1999 and an acquisition by DNeX and Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (Limited Partnership) (“CGP Fund”) in 2021. SilTerra is a global semiconductor foundry, specialising in Complementary Metal Oxide Semiconductor (“CMOS”) production technologies for advanced logic, mixed signal, radio frequency, and high voltage applications. SilTerra has expanded into more advanced technology fields, such as Silicon Photonics, Biophotonics, Microelectromechanical System (“MEMS”) on CMOS, Galium Nitride (“GaN”), BCD, and Discrete Power - sometimes known as “More-Than-Moore” technologies. ENERGY Upstream Exploration & Production Ping Petroleum Limited (“Ping”) specialises in late-life oil and gas properties, with an emphasis on brownfield redevelopment of producing fields. Ping devotes its efforts towards preserving energy supply and exploring possibilities that help respond to rising demand of energy by acquiring important production assets in a fiscally transparent location. With a strong emphasis on continuous improvement, the company advocates extending the life cycle of its oil and gas assets to optimise return on investment. It continues to seek new strategic partnerships as well as further acquisitions towards building an attractive portfolio of exploration and production assets. Equipment Supply & Maintenance The company, through OGPC Sdn Bhd (“OGPC”), provides end-to-end solutions to the oil and gas value chain – from engineering design project management, field services, and after sales support with its team of committed personnel covering repair and maintenance scope. The company services various industries in oil and gas, refining, petrochemicals, power, utilities, and manufacturing. As an oil and gas integrated service company, OGPC represents numerous world leading OEMs and has gained a strong brand image and industry recognition. INFORMATION TECHNOLOGY (“IT”) At DNeX IT, we provide a comprehensive suite of industry-leading solutions from Dagang Net Technologies Sdn Bhd (“Dagang Net”), Innovation Associates Consulting Sdn Bhd (“IAC”), and DNeX Solutions Sdn Bhd (“DNeX Solutions”), backed by a proven track record of successful engagements across diverse sectors. Our commitment is to deliver innovative, scalable, and effective IT solutions that are custom designed to address the unique needs of clients’ businesses. Our offerings include: 1. B2G and B2B We specialise in providing eServices for Business-toGovernment (“B2G”) and Business-to-Business (“B2B”) segment including trade facilitation. 2. Enterprise Resource Planning (“ERP”) We provide powerful ERP tools, including solutions from trusted partners like SAP, designed to drive operational efficiency and accelerate business growth. 3. Air-Gapped GDC Services We offer novel air-gapped Google Distributed Cloud (“GDC”) Services, a sovereign cloud solution that offers customers the highest regulatory requirements, access to Google Cloud’s leading Artificial Intelligence (“AI”) and cloud technologies in a secure, fully isolated, on-premise environment. 4. IT Project Management and Infrastructure Consulting We offer comprehensive supply management, covering everything from procurement and delivery to installation, testing, and commissioning of IT hardware and solutions, ensuring seamless integration and flawless execution every step of the way. 5. AI-Driven Technology Clients can harness the potential of AI to enhance operational efficiency, improve decisionmaking, and streamline processes with our state-of-theart AI solutions.
18 Value Creation @ DNeX DAGANG NeXCHANGE BERHAD Integrated Report 2024 Our Approach to Value Creation We consistently monitor our operating environment across geopolitical, macroeconomic, and industry dimensions to identify and analyse key trends and factors that may influence our business. This ongoing analysis helps us stay agile and responsive to evolving conditions. Evaluating Our Business Landscape STAKEHOLDERS Employees Business Partners and Suppliers Customers Shareholders and Investment Community Society and Communities Government and Regulators Media Building on key trends, we identify risks and opportunities that are most relevant to our business. All identified risks undergo evaluation through our comprehensive risk management processes, which are designed to proactively mitigate potential negative impacts and maximise opportunities for growth. Identifying Key Risks & Opportunities KEY RISKS Environmental, Social and Governance Cybersecurity and Data Privacy Human Capital Management and Talent Retention Availability of Financial Resources Global Geopolitical Stability ASSESSING OUR CONTEXT Our material matters are those issues that have the potential to impact our ability to create long-term value and achieve our strategic objectives over in the short, medium, and long term. To ensure we effectively identify and address these key issues, we conduct comprehensive materiality assessments on a regular basis. As part of this process, we actively engage with stakeholders on a range of shortlisted topics. This enables us to prioritise our material matters, resulting in the list presented below: Identifying Our Material Matters MATERIAL MATTERS GHG Emissions M1 Resource Management M3 Energy Management M2 Ecological Impact M4 Workforce Management M5 Employee Health and Safety M6 Product Quality and Safety M7 Community Relations M8 Business Ethics M9 Business Model Resilience M10 Data Privacy and Security M11 Supply Chain Management M12 IDENTIFYING & PRIORITISING OUR MATERIAL ISSUES
19 Value Creation @ DNeX DAGANG NeXCHANGE BERHAD Integrated Report 2024 Our five key strategic thrusts outline the transformations required to establish leadership across our three business sectors. Guided by our material matters, risk assessments, and stakeholder insights, we craft strategies that drive progress in these areas, advancing us toward the achievement of our long-term objectives. Formulating Business Strategies STRATEGIC THRUSTS Portfolio Diversification Human Capital Development Customer Centricity Financial Prudence Governance and Excellence We leverage the six capitals framework in shaping our strategies, enabling us to optimise our existing resources and drive greater efficiencies across our operations. Allocating Our Capitals CAPITALS Financial Capital Human Capital Manufactured Capital Social and Relationship Capital Natural Capital Intellectual Capital We actively manage our operations and their impacts to maximise positive outcomes while minimising any negative effects. This approach ensures we generate and sustain value for all our stakeholders, aligning our business model with long-term success. Business Model Energy Technology Information Technology (“IT”) DEVELOPING AND IMPLEMENTING STRATEGIES Our ultimate goal is to create long-term, shared value through our business activities. To ensure alignment with our STRATEGIES and KEY STRATEGIC THRUSTS, we measure our performance using Key Performance Indicators (“KPIs”) that reflect our progress and outcomes. CREATING VALUE VALUE, FOR US, ENTAILS: Meeting stakeholder goals Providing sustained growth in total returns for investors and funders Being a preferred business partner for vendors and suppliers Being recognised as a responsible community partner EMBEDDING ESG ACROSS OUR BUSINESS Our business activities, strategies, and decision-making are deeply informed by a consideration of our impacts on people, communities, the national economy, and the environment. By integrating Environmental, Social, and Governance (“ESG”) principles into our operations, we aim to strengthen our business and enhance our reputation as a responsible and sustainable organisation. OUR APPROACH TO VALUE CREATION
20 Value Creation @ DNeX DAGANG NeXCHANGE BERHAD Integrated Report 2024 HUMAN CAPITAL VISION MISSION To be a leading multinational corporation that is trusted for its world-class services and expertise. We are vibrant talents who are committed to deliver business innovation that creates value for stakeholders. Key Input FINANCIAL CAPITAL INTELLECTUAL CAPITAL SOCIAL & RELATIONSHIP CAPITAL NATURAL CAPITAL MANUFACTURED CAPITAL Resources used Business Activities • Share capital: RM1,130.45 million • Total assets: RM4,214.30 million • Shareholders’ funds: RM1,789.61 million • Total borrowings: RM133.32 million • An experienced and diverse Leadership Team and a strong Board • An Innovative, Driven, Customer Centric, High Performance and Ethical Culture • Strong in Compliance and Governance • Market-Leading Innovative digital products, services and client value propositions • Omni-Channel Technology allowing seamless and multiple customer touch points • Responsible Procurement from diverse supply chain with a focus on localisation • Focused and Commited corporate social investment • Constructive Engagement with Government and regulators • Utilisation of natural resources including water, energy and other resources efficiently in operations • Investment in R&D and emerging technologies • Proven expertise in optimising low-cost oil and gas production • Leading provider of IT and Trade Facilitation solutions INFORMATION TECHNOLOGY ENERGY TECHNOLOGY SUPPORTED BY ROBUST GOVERNANCE FRAMEWORK STRATEGIC PRIORITIES Portfolio Diversification Human Capital Development Customer Centricity Financial Prudence Governance and Excellence MATERIAL MATTERS GHG Emissions M1 Resource Management M3 Energy Management M2 Ecological Impact M4 Workforce Management M5 Employee Health and Safety M6 Product Quality and Safety M7 Community Relations M8 Business Ethics M9 Business Model Resilience M10 Data Privacy and Security M11 Supply Chain Management M12 KEY RISKS SUSTAINABILITY PILLARS Environmental, Social and Governance Cybersecurity and Data Privacy Human Capital Management and Talent Retention Availability of Financial Resources Global Geopolitical Stability Ensuring business sustainability Economic Ensuring no harm to our people and environment Environment Nurturing people and developing talent Social Our Value Creating Business Model
21 Value Creation @ DNeX DAGANG NeXCHANGE BERHAD Integrated Report 2024 • Net Asset Per Share: RM0.63 (2023 : RM0.69) • Share Price: RM0.41 (2023 : RM0.40) • Retained Earnings: RM562.52 million (2023 : RM643.86 million) • Total Assets: RM4,214.30 million (2023 : RM4,641.89 million) • Joint development of programmable silicon photonics processor chips between SilTerra and IIT Madras • Expansion of new assets in Malaysia • Appraised at Maturity Level 3 of the CMMI Institute’s Capability Maturity Model Integration (CMMI)® Version 3.0 for Technology and Human Resource functions • Cash Payments to Employees & Other Expenses: RM137.88 million (2023 : RM260.42 million) • Direct and Indirect Tax and Zakat Contributions: RM24.79 million (2023 : RM90.45 million) • Paid to Suppliers/Vendors: RM876.11 million (2023 : RM1,062.40 million) • Expanded Scope 3 emissions reporting to contain 2 categories: Business Travel and Employee Commuting • Diverted 56% of solid waste from landfill • Maintained zero incidents, legal notices or complaints related to Corruption; Anti-competitive, anti-trust and/or monopolistic behaviour; breaches of customer data privacy CORE VALUES Outcomes • Investment in IT infrastructure: RM2.70 million (2023 : RM9.06 million) • Capital Expenditure: RM211.71 million (2023 : RM809.18 million) Outputs Stakeholders UN SDGs Trade-Offs TECHNOLOGY Investing in emerging technologies such as MEMS and Silicon Photonics ENERGY Lifted volume 614,613 bbls INFORMATION TECHNOLOGY Exchange of Trade Data Electronically Digitalisation of Customer Processes Our ongoing expansion efforts will place pressure on our Financial Capital through capex spending but will empower long-term gains to our Manufactured and Social & Relationship Capitals. We are actively expanding our existing IT capabilities into new sectors, leveraging our Human Capital and driving gains in Intellectual Capital that will serve our long-term transformation objectives. The strength of our Human Capital depends on our ability to attract and retain top talent, which is affected by our financial strength (Financial Capital), the opportunities we can provide in global sectors and markets (Intellectual Capital) and our leadership in ESG (Natural Capital). We operate in fast-evolving markets, and retaining the competitiveness of our manufacturing and technological capabilities will require consistent financial investment (Financial Capital) and employee upskilling (Human Capital). Through our commitment to and action on community development and environmental protection, we strive to burnish our reputation as a responsible organisation, opening the door to global growth opportunities that enhance our Financial Capital. Achieving our sustainability goals will require consistent, focused efforts in upskilling our workforce (Human Capital), decarbonising our production processes (Natural Capital) and building our network of strategic partnerships (Social & Relationship Capital). 2024 : 12 months period 1 January 2024 - 31 December 2024 2023 : 18 months period 1 July 2022 - 31 December 2023 Consequently, the comparative figures for the statements of profit or loss and other comprehensive income, statements of changes in equity, statements of cash flows and their related notes are not comparable DRIVEN ADAPTABLE RESPONSIBLE ETHICAL Notes: FINANCIAL CAPITAL INTELLECTUAL CAPITAL HUMAN CAPITAL MANUFACTURED CAPITAL SOCIAL & RELATIONSHIP CAPITAL NATURAL CAPITAL OUR VALUE CREATING BUSINESS MODEL
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