My EG Services Berhad Annual Report 2020

MY E.G. SERVICES BERHAD Regisration No. 200001003034 (505639-K) 230 NOTES TO THE FINANCIAL STATEMENTS For The Financial Year Ended 31 December 2020 (CONT’D) 48. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (CONT’D) (b) On 13 January 2020, the Group’s associate company in Indonesia, PT Cartenz, 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 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. (c) On 28 April 2020, the Company’s joint venture, MYEG Philippines launched a contact tracing and digital health profiling smartphone application known as MyEGuard and commenced pilot implementations for cities in Philippines. The roll-out of MyEGuard will enable authorities to carry out contact tracing to contain the COVID-19 pandemic. (d) On 21 May 2020, the Company received an official notification from the Government to continue with the provision of the E-Government Services (including the provision of the electronic delivery of vehicle registration, driver and vehicle licensing, and payment of summon services) until 30 June 2020. On 22 May 2020, the Company also received an official notification from the Government to continue with the provision of the Immigration Related Services (including the provision of online renewal of temporary employment pass for foreign workers or “Pas Lawatan Kerja Sementara”) for the Immigration Department of Malaysia until further notice. On 1 July 2020, the Company received a notification letter from the Ministry of Home Affairs to extend Immigration Related Services for a period of 3 years from 23 May 2020 to 22 May 2023. On 4 December 2020, the Company also received a letter dated 3 December 2020 from the Ministry of Transport to extend the E-Government Services for a period of 3 years from 23 May 2020 to 22 May 2023. Revenue generated from the ‘concession based services’ and ‘commercial based - concession related services’ for the 12 month period up to December 2020 contributed 18% of the Group’s overall revenue (15 month period up to December 2019 - 19%). (e) On 5 June 2020, PT Cartenz Tekno Lab, a wholly-owned subsidiary of PT Cartenz, an associate company of MYEG, entered into a Memorandum of Understanding (“MOU”) with Jakarta Smart City Management Unit to provide and implement a contact tracing application for the province of Jakarta to manage the spread of the COVID-19 virus. (f) On 10 June 2020, MYEGC, a wholly-owned subsidiary of the Company, entered into a SSA and PCOA with MAL for the purchase of 118,000,000 ordinary shares of S5 Holdings Inc. (“S5”), representing 10% of the issued and paid-up share capital of S5 by MYEGC from MAL for a total consideration of RM90 million, to be satisfied partly by cash consideration of RM75 million and the balance sum of RM15 million to be satisfied by the allotment and issuance of 12,500,000 new ordinary shares (at RM1.20 per share) in the Company (“Consideration Shares”) to MAL. The completion of the SSA is conditional on:- (i) the Company obtaining approval of Bursa Malaysia Securities Berhad (“Bursa Securities”) for the listing of and quotation for the 12,500,000 new ordinary shares (at RM1.20 per share) in the Company, representing 0.36% of the existing total issued and paid-up share capital of the Company (excluding treasury shares); and (ii) MYEGC and/or the Company conducting or cause to be conducted a due diligence on S5 Group to the satisfaction of MYEGC and/or the Company. On 11 June 2020, the application for the listing of and quotation for the Consideration Shares, which is to be issued pursuant to the Proposed Acquisition, has been submitted to Bursa Securities.