My EG Services Berhad Annual Report 2019

ANNUAL REPORT 2019 199 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2019 (CONT’D) FINANCIAL STATEMENTS 52. SIGNIFICANT EVENTS DURING THE FINANCIAL PERIOD (CONT’D) (e) On 17 December 2018, the Company’s joint venture company, MYEG Philippines together with I-Pay Commerce Ventures, Inc. had entered into a Memorandum of Agreement with National Bureau of Investigation (“NBI”) to implement the NBI’s Electronic Payment and Collection System (“EPCS”), including the installation and operation of the EPCS as well as other related services such as online registration, online appointment, online payment, and help desk/support capabilities. (f) On 20 December 2018, MYEG (BD) Ltd, a joint venture company has been incorporated for the purpose of engaging in the business of technology services and e-government services in Bangladesh in accordance with the terms and conditions of the Agreement. (g) On 5 March 2019, Malaysia Competition Commission (“MyCC”) has accepted the changes made by the Group to its online foreign worker renewal system via a letter dated 4 March 2019. As such, with the acceptance of the changes made, the daily penalty of RM7,500 which, up to the date of the acceptance amounted to RM9,644,700, have ceased with immediate effect. However, the appeal which the Group had filed to the Court of Appeal earlier on in regards to the penalty imposed by MyCC, will continue. Based on the solicitor’s letter dated 5 March 2020, the Group’s application to adduce fresh evidence to the Court of Appeal was dismissed on 4 February 2020. The hearing for the merits is now set on 13 August 2020. (h) On 4 April 2019, MYEGC entered into an Investment Agreement in relation to the subscription of 46,044 shares in Jingle Magic (Beijing) Technology Co., Ltd. for a total consideration of RMB10,000,000 (approximately RM6,100,000), which constitute approximately 3.03% of the total enlarged issued shares of Jingle Magic. (i) On 22 July 2019, MYEGIND entered into a share subscription agreement and shareholders’ agreement (“the Agreements”) in relation to the subscription of 3,333,333 ordinary shares in PT Cartenz for a total consideration of USD10,000,000 (approximately RM41,095,000). With the formalisation of the Agreements, the MOU entered on 26 November 2018 is deemed to be terminated. (j) On 20 November 2019, MYEG Philippines commenced its online services in partnership with Land Bank of the Philippines (“LANDBANK”), to bring added convenience to the people of the Philippines in transacting with the Philippines’ Government. The launch of the service is a realization of a partnership between MYEG Philippines and LANDBANK that entails the implementation and integration of MYEG Philippines’ Electronic Payment and Collection System by LANDBANK. 53. SIGNIFICANT EVENTS OCCURRING AFTER THE REPORTING PERIOD (a) The outbreak of Coronavirus Disease 2019 (COVID-19) in early 2020 has affected the business and economic environments of the Group. Measures taken by various government and private corporations to prevent the spread of the virus such as travel bans, closures of non-essential services, social distancing and home quarantine requirements may impact consumers’ spending pattern and the Group’s operations directly or indirectly. In addition, the outbreak of COVID-19 may also affect the recoverability of the Group’s trade receivables, other receivables and other financial assets that are subject to the expected credit loss assessment, the carrying amount of the investment properties held by the Group, carrying amounts of the Group’s property and equipment, right-of-use assets, goodwill and inventories in the future. Given the widespread nature of the outbreak and the unpredictability of future development of COVID-19, the Group is unable to quantify the potential financial impact of the COVID-19 outbreak on the Group’s 2020 financial statements reliably at this juncture. (b) On 13 January 2020, the Group’s associate company in Indonesia, PT Cartenz, has secured additional mandates from various provincial governments in the Republic of Indonesia, to roll-out its tax monitoring system to 30 more cities on a pilot basis, marking an expansion to the Tax Monitoring Programme that is actively underway in Jakarta (“the Projects”). The Projects’ tenure ranges from 1 year to 3 years and it is renewable upon expiry. The Projects have no fixed value as it is dependent on the number of installations to be undertaken by PT Cartenz in the future.