GOVERNANCE Corporate Governance Overview Corporate Governance Statement Audit Committee Report Risk Management and Internal Control Statement FINANCIAL STATEMENTS Directors’ Report Statement by Directors Statutory Declaration Independent Auditors’ Report Statements of Financial Position Statements of Profit or Loss and Other Comprehensive Income Statements of Changes in Equity Statements of Cash Flows Notes to the Financial Statements ADDITIONAL INFORMATION Additional Compliance Information Directors’ Responsibility Statement Analysis of Shareholdings List of Properties ANNUAL GENERAL MEETING Notice of the Twenty-Third Annual General Meeting Proxy Form WHAT’S INSIDE OVERVIEW About This Report Corporate Information Group Corporate Profile Group Corporate Structure Key Milestones Awards and Accolades PERFORMANCE Highlights of Financial Performance Statement of Value Added Distribution and Simplified Financial Statement Share Price Performance and Investor Relations Management Discussion and Analysis LEADERSHIP Board of Directors’ Profile Key Senior Management’s Profile OUR BUSINESS AND STRATEGY Our Business Model At Work Matters Impacting Value Creation Risk and Mitigation Strategies to Sustain Value Creation Value Creation Model SUSTAINABILITY STATEMENT Sustainability Overview FY2023 Highlights and Achievements UNSDG Sustainability Governance Stakeholder Engagement Materiality Matters Sustainability Performance Report 02 06 08 10 12 13 14 16 17 19 29 36 39 42 47 49 52 54 55 56 61 72 74 125 126 132 150 154 157 163 163 164 169 171 172 175 182 261 262 263 266 267 ANNUAL REPORT 2023
ABOUT THIS REPORT INTRODUCTION MY E.G. Services Berhad (“MYEG” or the “Company”) and its subsidiaries (the “Group”) presents its Integrated Annual Report (“IAR”) for the financial year (“FY”) ended 31 December 2023 (“FY2023”) (“IAR2023”). Contents for MYEG’s IAR2023 has been developed in accordance to the principles based framework of Integrated Reporting as well as other reporting frameworks as follows: r Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) r Malaysia Financial Reporting Standards (“MFRS”) r International Financial Reporting Standards (“IFRS”) r Bursa Malaysia Sustainability Reporting Guide, 3rd Edition (“SRG3”) r Task Force for Climate-Related Financial Disclosures (“TCFD”) r FTSE4Good Index Disclosures (“FTSE Russell’s ESG Data Model”) r Malaysian Code of Corporate Governance (“MCCG”) r Companies Act 2016 (“Act”) r ISO 31000 Risk Management Standard implemented in 2013 The usage of the Integrated Reporting framework is towards enabling MYEG to ultimately adopt IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Disclosure (“S1”) and IFRS Climate Related Disclosures (“S2”). In essence, the focus of MYEG is to present meaningful disclosures that meet the information needs of diverse stakeholders and providers of capital. 02 MY E.G. SERVICES BERHAD Registration No. 200001003034 (505639-K)
OVERVIEW ABOUT THIS REPORT (cont’d) Sustainability information tailored to audience needs Investor focused general-purpose financial reporting Other corporate reporting (multi-stakeholder focus) Financial statements Sustainability-related financial disclosures GAAP-agnotic integrated reporting Accounting Sustainability Through its integrated reporting approach, MYEG intends to provide comprehensive disclosures on material information that extend beyond past financial performance, but to also present narratives on matters that erode, sustain and enhance value creation over the short, medium and long-term perspectives. Risks and opportunities Significant capital dependencies Stakeholders influence and impact Business strategies to sustain value creation ESG matters that impact enterprise value creation Integrated Annual Report 2023 ANNUAL REPORT 2023 03
ABOUT THIS REPORT (cont’d) BASIS OF REPORT PREPARATION AND CONTENT DETERMINATION MYEG has drawn from the following in determining content for inclusion in IAR2023: MYEG Considers the Following for IAR2023’s Content Disclosures Driven by Regulatory Requirements Material ESG Disclosures from an Impact Materiality Perspective Material ESG Disclosures from a Financial Materiality Perspective Information Explaining The Group’s Business Model Forward Looking Information Other Useful Information Specifically, in reference to the flow of content, the sequencing and focus on Integrated Reporting Content Elements were driven based on a strategic approach developed during a previous Integrated Reporting Strategy Workshop as well as material disclosure requirements based on the following IFRS Accounting Standards’ principle: Information is material if omitting, misstating or obscuring it could reasonably be expected to influence investor decisions. Progressively adopting a double materiality approach, IAR2023 looks to identify significant material topics that would impact financial value creation and the associated risks and opportunities for each topic. Disclosures on environmental, social and governance (“ESG”) material from an impact materiality perspective are also provided in the Sustainability Statement presented in IAR2023. IAR2023 has been reviewed and approved by the Management and Board of Directors of MYEG (“Board”) prior to publication. No assurance has been undertaken with regard to Integrated Reporting. Internal assurance shall be progressively adopted in subsequent years’ reporting. IAR2023 REPORTING SCOPE & BOUNDARY SCOPE IAR2023 provides disclosures pertaining to the business operations, activities, processes, employees and where relevant the supply chain of the Group. In addition, the following GRI reporting principles have also been applied in determining report content: stakeholder inclusiveness, sustainability context, completeness of information, balance, comparability, accuracy, timeliness, reliability and clarity. IAR2023 provides disclosures for the financial period of FY2023, which is the period commencing from 1 January 2023 to 31 December 2023. BOUNDARY An equitation scope is applied whereby all operating entities of which MYEG has a majority equity stake have been included in the report. In essence, the listed entity and all subsidiaries in which MYEG holds a majority ownership position of 51% or more. 04 MY E.G. SERVICES BERHAD Registration No. 200001003034 (505639-K)
OVERVIEW ABOUT THIS REPORT (cont’d) REPORT DISTRIBUTION AND AVAILABILITY IAR2023 is available for download in PDF format via the following link: https://www.myeg.com.my/investor-relations/reports-presentations (see “Reports & Presentations” tab). IAR2023 is also available for download on Bursa Malaysia’s website. FORWARD LOOKING STATEMENTS This report contains information on MYEG and the Group strategic priorities, anticipated risks and opportunities, industry outlook and the Group’s prospects. All information herewith was collated based on reasonable assumptions using existing forecast models and present market conditions, which may change due to a wide range of factors that are beyond the Group’s control. As such, all forward looking statements are not conclusive. Actual plans and results may differ from those expressed in this report. Forward looking statements do not serve as guarantees of future operational or financial results or any other kind of outcome. Such have not been reviewed or audited by an external auditor. ASSURANCE Financial data disclosed has been audited by Messrs TGS TW PLT and based on their findings, present a true and fair view of the Group’s fiscal position for FY2023. Non-financial information has been assessed and reviewed internally by the Group’s Senior Management and it is of their view that all narratives, disclosures and data presented have been internally verified by respective data owners for accuracy and veracity Furthermore, the assessment process includes verifying the data collection process, including verification of data sources such as the point of origin of all collected data and information, the treatment of said data and information i.e. whether it was processed, aggregated or analysed or represented, or was presented in raw form for publication in IAR2023, and importantly if the data and information remained accurate as it was channelled across the dissemination process. It is the Management’s view that the non-financial data and information presented in IAR2023 are to the best knowledge of Management to be accurate and present a fair view of the Group. FEEDBACK Feedback on this report and the issues covered can be channelled to the Investor Relations unit at (Tel) +603 - 7664 8000 or via e-mail to investors@myeg.com.my. DIRECTORS’ STATEMENT OF RESPONSIBILITY The Board acknowledges that IAR2023 has been developed based on good governance practices and guided by the aforementioned reporting frameworks. The Board also provides assurance that the financial statements audited by Messrs TGS TW PLT were prepared in accordance with the relevant standards and frameworks, including the MFRS and IFRS. ANNUAL REPORT 2023 05
CORPORATE INFORMATION 06 MY E.G. SERVICES BERHAD Registration No. 200001003034 (505639-K)
OVERVIEW CORPORATE INFORMATION (cont’d) ANNUAL REPORT 2023 07
GROUP CORPORATE PROFILE BUSINESS MODEL Harnessing inherent and external technological capabilities to create in-demand solutions that bring services and offerings closer to customers and meet present and evolving market needs. WHOM WE SERVE Federal, state and municipal governments, regulatory bodies and agencies, economic and industrial sectors, commercial businesses and the general public. FINANCIAL AND STAKEHOLDER VALUES CREATED Competitive propositions that deliver convenience, ease of access, protection assurance, development of technology, innovation, affordability and ultimately customer satisfaction. WHO WE ARE? WHAT WE DO Provider of digital e-Government and commercial services as well as various other technologically enabled products and solutions. OUR SERVICES IN MALAYSIA z Payment of compound / summons / assessment z Assessment and payment of zakat z Auto financing z Auto insurance z BELI e-Mart z Blockchain-based insurance NFT product Covinsure z Blockchain Identity, Verifiable Credentials and Blockchainbased Agreement Signing z Competent Driving Licenses (“CDL”) renewal z CRIF Bizinsight Services z Driver’s theory test z Foreign worker insurance z Foreign worker recruitment & placement z Insolvency search z Renewal of driver’s license z MyAssist 24/7 roadside assistance z MYDATA-SSM Services z MyStay foreign worker accommodation services z One-stop portal for managing workforce z Online media z Payment solution services z Payroll management z Personal and business financing z Remittance z Renewal of foreign worker’s permit z Renewal of road tax z Renew Now, Pay Later scheme for road tax and motor insurance z Vehicle ownership transfer z Zetrix Layer - 1 blockchain z ZTradeFi supply chain financing solution z MYEG Drive Testing System z ZTrade - China Customs clearance processing z ZeFi - Zetrix Staking z Zetrix-Xinghuo Multi-Chain Wallet The Group is Malaysia’s leading digital services provider. Commencing operations in 2000, the Group continues to be at the forefront of enabling the digitalisation of a wide range of government and commercial services in the most secure, efficient and accessible manner through its electronic platform. Entrusted by regional governments to provide vital services of national and international importance, MYEG is actively working today with the likes of the Road Transport Department (“JPJ”) and the Immigration Department (“JIM”) in Malaysia, the National Bureau of Investigation (“NBI”) and the Bureau of Internal Revenue in the Philippines, as well as the General Administration of Customs of the People’s Republic of China (“GACC”) and China Academy of Information and Communications Technology (“CAICT”) in China, among others. In addition, the Group also provides a myriad of consumer / commercial-based services. In doing so, MYEG enables easy and seamless access to various government and commercial services affordably and provides a complete digital solution. Technology has always formed the basis of all MYEG’s endeavours since inception. In recent times, the Group has positioned itself as a leader in the region’s Web3 revolution through the development and deployment of real-world decentralised applications on its proprietary Zetrix Layer-1 blockchain. Please refer to our Business Model section for specific information on how MYEG delivers digital government and commercial services and the specific values (outputs and outcomes generated) through the business model. 08 MY E.G. SERVICES BERHAD Registration No. 200001003034 (505639-K)
OVERVIEW Penang Malacca Terengganu Kedah Sarawak Sabah Selangor Kuala Lumpur Negeri Sembilan Johore S k M l K d h Pahang Kelantan Perlis Perak GROUP CORPORATE PROFILE (cont’d) GOING BEYOND MALAYSIA The Group’s successful business model has been rolled out across Asia with the Group having expanded its presence regionally, particularly to the Philippines, Hong Kong and China. The elevation of the Group’s Zetrix blockchain to having the status of being the first international supernode of China’s Xinghuo Blockchain Infrastructure and Facility (“Xinghuo BIF”) network as part of a broader Web3 collaboration with the CAICT, a scientific research institute under China’s Ministry of Industry and Information Technology, has paved the way for MYEG to play a pioneering role in introducing game-changing decentralised applications that aim to revolutionise cross-border trade and credentials verification and catalyse the blockchain space as a whole in the region. OUR SERVICES IN INTERNATIONAL MARKETS CHINA PHILIPPINES MALAYSIA INDIA SRI LANKA SINGAPORE Bay of Bengal MYANMAR LAOS THAILAND CAMBODIA EAST TIMOR BRUNEI VIETNAM z NBI clearance renewal and delivery z MYEG-Landbank Linkbiz e-Payments z Electronic business permits and licenses for local government units z MYEG insurance portal z COVID-19 testing services z Online payment of income taxes to the Bureau of Internal Revenue (“BIR”) z Online payment of fees to the Philippine Economic Zone Authority (“PEZA”) z PhilHealth Voluntary Members Payment z Tourism Infrastructure and Enterprise Zone Authority (“TIEZA”) Online Travel Tax Services System (“OTTSS”) z Online Payments for Health-Metro Manila Center for Health Development (“DOH-MMCHD”) z Subic Bay Metropolitan Authority (“SBMA”) Electronic Billing and Payment System (“eBPS”) z Covinsure z Securities and Exchange Commission registration and fee payment z Social Security System online payment z ZTrade - China Customs clearance processing z Zetrix Layer-1 blockchain z ZCert - Verificable Credentials z Zidentity - E-signing service z Zetrix-Xinghuo Multi-Chain Wallet z ZTradeFi - supply chain financing ANNUAL REPORT 2023 09
GROUP CORPORATE STRUCTURE MY E.G. Services Berhad Development and implementation of the electronic Government services project, provision of other related services for the electronic Government services project, provision of information technology solutions and services, and investment holding. Gale Vector Sdn. Bhd. Provision of software solutions and maintenance services. MY E.G. Commerce Sdn. Bhd. Principally engaged in the business of providing auto insurance intermediary services and other related ancillary services. MY EG Management Services Sdn. Bhd. Provide management and consultancy services. MY E.G. Digital ID Sdn. Bhd. Development and implementation of distributed ledger technology and solutions for digital identification services. MYEG Philippines, Inc. (formerly known as I-Pay MYEG Philippines Inc) Development and Implementation of e-Government services projects and provision of other related services including payment services in the Republic of the Philippines. Zetrix Fintech Sdn. Bhd. Provision of digital solutions and ancillary services as well as investment holding company. MY E.G. Integrated Networks Sdn. Bhd. Provision of software and hardware solutions and related services. MY EG Sdn. Bhd. Principally engaged in the business of development and implementation of the electronic Government services project and the provision of other related services. MYEG Trade Sdn. Bhd. Trading of motor vehicles, rental of motor vehicles, and provision of ancillary services. NFT Capital (Labuan) Co., Ltd. Investment holding. MYEG Auto Assist Sdn. Bhd. Provision of motor vehicles inspection, maintenance and repair of motor vehicles, motor vehicles breakdown assistance with towing services, sale of removable motor vehicle spare parts, and provision of membership in relation thereto. NFT Capital Sdn. Bhd. Activities of holding companies. MY EG Lodging Sdn. Bhd. Build, own and operate hostels for foreign workers. NFT Creative Sdn. Bhd. To carry on the business of providing solutions and technical services and support related to applications and software development. MYEG TwoCar Sdn. Bhd. Provision of undertaking the registration and transfer of motor vehicle ownership business segment, providing complementary services arising from new and used car dealers and ancillary services. MYEG FWA (Tanjong Langsat) Sdn. Bhd. Property investments and provision of workers accommodation services. MY EG Lodging (Muar) Sdn. Bhd. Property investments and provision of workers accommodation services. MY EG Lodging (NC) Sdn. Bhd. Property investments and provision of workers accommodation services MY EG International Sdn. Bhd. Undertaking investments and joint ventures in foreign countries. MY EG (Indonesia) Sdn. Bhd. Investment holding. PT MYEG Services Indonesia Build, own and operate a digital platform for commercial services. MYEG (BD) Ltd. Engaging in the business of technology services and e-Government services in Bangladesh. Zetrix SG Pte. Ltd. Investment holdings. MY EG (Philippines) Sdn. Bhd. Investment holding. MY EG (Thailand) Sdn. Bhd. Investment holding. Zetrix Ltd. Investment holding. Zetrix Tech Development (Shanghai) Co., Ltd. Provision of all kinds of technology services, development, consulting, technology transfer, trading of computer hardware and software and other related activities. Zetrix Foundation To act as a holding company for all of its intellectual property and investment holding. MY EG (Bangladesh) Sdn. Bhd. Investment holding. 100% 100% 100% 100% 40% 49% 40% 100% 100% 100% 100% 100% 100% 65% 100% 100% 100% 100% 80% 100% 100% 49% 40% 100% 100% 100% 100% 100% 100% 100% MY EG (Thailand) Co., Ltd. Engage in diverse business activities including but not limited to property management, financial services, construction, transportation, hospitality, healthcare, entertainment, retail, consulting, trading of various goods and commodities, provision of services, technology development and governmental/e-governmental system services. 10 MY E.G. SERVICES BERHAD Registration No. 200001003034 (505639-K)
OVERVIEW GROUP CORPORATE STRUCTURE (cont’d) MY E.G. Capital Sdn. Bhd. Investment holding. MY EG Ad Networks Sdn. Bhd. Providing of advertising and marketing services. MY E.G. Alternative Payment Services Sdn. Bhd Providing and operating an electronic payment and remittance platforms for the issuance, transfer, clearance and settlement of electronic money and all ancillary products and services related to it. MY EG Finance Technologies Sdn. Bhd. Financial leasing activities and other credit granting activities and money lending services. MY EG E-Settlement Sdn. Bhd. Providing of software solutions and maintenance services. Agensi Perkerjaan MY EG Jobs Sdn. Bhd. To carry on business as private employment agency to recruit and place a worker to another employer. PayMe Sdn. Bhd. Provision of human resource management and payroll services. MY EG Islamic Finance Sdn. Bhd. Provision of Islamic financing, leasing and other Islamic credit granting activities. Car X Services Sdn. Bhd. Principally engaged in the business of operating and managing automotive classified web portals; other value added services for automotive classified web portals. Picasso Media Sdn. Bhd. Provision of diversified media solutions and related professional services. Hurr TV Sdn. Bhd. Build, own and operate an online TV channel and e-commerce platform. NFT Pangolin Technologies Sdn. Bhd. Development and provision of computer services, other information technology services and investment holding. Beli Mart Sdn. Bhd. To build, develop, own, and operate e-commerce platform. Essential Reviews Sdn. Bhd. Provision of digital platform for reviews and news on restaurants and food and beverage businesses, with advertising or marketing possibilities of related brands. CardBiz Holding Sdn. Bhd. Investment holding. MUCA Wellness Sdn. Bhd. General merchants, importers,exporters, distributors and manufacturers cosmetics, skin care products, healthcare products and pharmaceuticals. Buy Now Asia Sdn. Bhd. E-commerce service provider, online purchase and redemption, merchant,marketing services and other related activities. CardBiz Solutions Sdn. Bhd. Engaged in the business as an information and communication technologies software solution provider that provide software and system customisation for the clients. Providing turnkey solution including supplying of networking, tele-communication, computer software and hardware related products. CardBiz Technologies Sdn. Bhd. Trading of computer hardware, software, printer, accessories, peripherals, equipment and electronic products. CardBiz Payment Services Sdn. Bhd. Information technology, credit card terminal rental and other related activities. CardBiz eServices Sdn. Bhd. Engaged in the business of providing infrastructure for hosting, data processing services and related activities. 100% 100% 100% 100% Dinamik Koridor Sdn. Bhd. Activities of holding companies. 33% 100% 100% 100% 100% 55% 60% 60% 100% 51% 100% 67% 55% 100% 100% 100% 100% 100% MYdigitalcoin Sdn. Bhd. Provision of payment solutions and related services. MYEG Medical Services Sdn. Bhd. To market medical products and services including health screening solutions and management services. Zetrix Sdn. Bhd. Development and provision of distributed ledger technology and solutions related products and services. MYEG Pharma Sdn. Bhd. Manufacturing, trading, export and import, and distribution of medical devices and equipment and related ancillary services. MYEG Vac Sdn. Bhd. To market medical products and services. 100% 100% 56% 100% 51% MY AdMarket Sdn. Bhd. Activities of holding companies. 40% ANNUAL REPORT 2023 11
KEY MILESTONES December Ź Zetrix announced the launch of Digital Credentials, marking the commercialisation of the collaboration announced on 18th September 2023 between Malaysia’s MY E.G. Services Berhad and China’s state-owned Guangxi Beitou IT Innovation Technology Investment Group Co., Ltd. (“Beitou”), the IT arm of Guangxi Beibu Gulf Investment Group listed as one of China’s Top 500 enterprises. Ź MYEG’s subsidiary, MY EG Lodging (NC) Sdn. Bhd. officially signed a lease agreement with the Penang Development Corporation (“PDC”) to commence work on a workers’ village and related facilities at Batu Kawan, Penang. November Ź Zetrix updated its native wallet application, enabling seamless digital asset connectivity between three major blockchains: Zetrix, Ethereum (“ETH”) and XingHuo International. Ź Zetrix announced the commencement of a pilot project to offer supply chain financing products in conjunction with Chinese banks for international importers and exporters, starting with the Bank of China, and in partnership with Dixchain, a national level high-tech enterprise in China that integrates financial technology and financial services. Ź Received a letter from the Road Transport Department of Malaysia to proceed with the implementation of the pilot phase for MYEG Drive Testing System. October Ź Summer Capital Limited, a leading investment management and advisory firm with a presence in Hong Kong and Southeast Asia, announced its intention to host nodes on Zetrix. Ź Zetrix launched an Initial Exchange Offering (“IEO”) on cryptocurrency exchange Coinstore from 18-26 Oct 2023, followed by the subsequent listing of its tokens on Coinstore, MEXC and BitForex. Ź MYEG received a letter of acceptance from the Ministry of Home Affairs to extend the Immigration Related Services for a period of two years. Ź MYEG and wholly-owned subsidiary MY EG Sdn. Bhd. each received a letter from the Road Transport Department of Malaysia to confirm their appointment as collection agents for the provision of vehicle registration services, driver and vehicle licensing and electronic payment of summon services for a period of three years. September Ź Entered into a collaboration with China’s state-owned Guangxi Beitou IT Innovation Technology Investment Group Co., Ltd. to leverage on the Zetrix blockchain to offer crossborder credentials verification services, paving the way for the digitalisation of vital documents, including major government-issued identity credentials. August Ź Voted Malaysia’s Best Company in the Software & Internet Services category in Asiamoney’s Asia’s Outstanding Companies Poll. July Ź Together with its Philippinesincorporated companies, signed agreements for a collaboration with Philippines Bureau of Customs (“BOC”) and with Cargo Data Exchange Center Inc. (“CDEC”) to adopt the digital solution known as ZTrade, which is a first of its kind Web3 + Artificial Intelligence (AI) link between China and its trading partners that runs on Zetrix layer-1 blockchain platform. Ź Received a notification letter from the Ministry of Home Affairs to confirm that the Ministry of Finance has approved for MYEG to be appointed as the collection agent for the Government revenue and to extend its role as the provider of online services for the Immigration Department of Malaysia. June Ź Announced the expansion of research collaboration with CAICT along with Universiti Malaya to include the development of Artificial Intelligence (“AI”) technology under the existing intergovernmental research collaboration. Ź Entered into a non-binding Memorandum of Understanding (“MOU”) with Oyika Green Technologies Sdn. Bhd. in relation to a collaboration on the use of electric motorcycles and placement of battery swapping stations at designated locations for a trial period. May Ź MYEG Philippines launched its payment processing service for the Securities and Exchange Commission (“SEC”), enabling the public to make payments across more than 90,000 channels, online and offline. Ź Zetrix announced the successful live deployment of the Xinghuo International Supernode, along with the introduction of Xinghuo BIF naming services namely Xinghuo Beta Name System (“BNS”) and Xinghuo Digital Identity Service (“DIS”), which are fully compliant with W3C International Standards. April Ź MY EG Lodging Sdn. Bhd., a sub-subsidiary of MYEG, received a letter of acceptance from Penang Development Corporation (“PDC”) in relation to the tender to set up a workers village and related facilities at Batu Kawan Industrial Park 3 (“BKIP 3”), Mukim 14, Bukit Tambun, Seberang Perai Selatan, Pulau Pinang. March Ź Signed a partnership agreement with East Logistic-Link Co., Ltd., a wholly-owned agency of the General Administration of GACC, to jointly provide a full suite of cross-border trade facilitation services that include certificates of origin on the Zetrix blockchain platform. February Ź Zetrix signed collaboration with Universiti Malaya (“UM”) and CAICT on a cross-border blockchain implementation research on XinghuoZetrix, which would lead to commercialisation. 2023 12 MY E.G. SERVICES BERHAD Registration No. 200001003034 (505639-K)
OVERVIEW AWARDS AND ACCOLADES August 2023 i. Voted Malaysia’s Best Company in the Software & Internet Services category in Asiamoney’s Asia’s Outstanding Companies Poll. November 2023 FTSE4Good Score - FTSE ESG rating improved to an overall score of 3.8 March Ź Zetrix global accelerator programme opened for registration with the aim to discover and support the most promising Web3 startup worldwide. Ź MY E.G. Capital Sdn. Bhd. announced acquisition of strategic interest in Heitech Padu Berhad. Ź MyAssist, in collaboration with Direct Lending, announced a Shariahcompliant Buy Now Pay Later scheme for automotive services. February Ź MYEG announced that Zetrix and Web3Labs Hong Kong launched the Zetrix Global Accelerator Programme to incubate and nurture promising Web3 startups from all over the world with ecosystem support from Hong Kong’s progressive Virtual Assets ecosystem. Ź The Group entered into an MOU with Sarawak Digital Economy Corporation Berhad (“SDEC”) in relation to a collaboration to provide Electronic Government Services in Sarawak. Ź MYEG Philippines and Social Security Systems (“SSS”) entered into a partnership to enhance the payment experience for SSS members, enabling them to enjoy hassle-free and efficient online payment of loans and contributions through www.myeg. ph. In addition, members will be able to effortlessly generate their Payment Reference Number on the same platform. January Ź MYEG announced a strategic collaboration between Zetrix, Web3Labs Hong Kong, and Summer Capital to propel Hong Kong’s Web3 ambitions and establish Zetrix as the preferred blockchain infrastructure for Hong Kong government-aligned applications. 2024 ANNUAL REPORT 2023 13
14 MY E.G. SERVICES BERHAD Registration No. 200001003034 (505639-K) Revenue Shareholders’ Equity (RM’000) Net Earnings Per Share (Sen) Total Assets (RM’000) Net Profit Attributable to Owners of the Company (RM’000) Net Tangible Assets Per Share (Sen) 5-year CAGR(4) 30.5% 5-year CAGR(4) 6.6% 5-year CAGR(4) 31.2% 5-year CAGR(4) 29.5% (RM’000) FY2021 FY2022 FY2020 FP2018(1) (15 months) (15 months) FP2019(2) FY2023 ) 774,261 651,107 562,270 593,578 530,463 721,877 2,204,088 1,875,977 567,945(3) 712,932 1,149,222 1,547,063 6.6 5.4 1.8(3)(5) 4.3(5) 3.8(5) 4.3 487,648 398,662 128,952(3) 303,090 268,656 315,940 1, 1, 1, 2, 3,217,778 2,539,677 884,251(3) 1,030,030 1,416,735 1,883,604 3 4 5 6 1 4 13.1 16.6 7.7(3)(5) 9.8(5) 13.2(5) 16.2 FY2021 FY2022 FY2020 FP2018(1) (15 months) (15 months) FP2019(2) FY2023 FY2021 FY2022 FY2020 FP2018(1) (15 months) (15 months) FP2019(2) FY2023 FY2021 FY2022 FY2020 FP2018(1) (15 months) (15 months) FP2019(2) FY2023 FY2021 FY2022 FY2020 FP2018(1) (15 months) (15 months) FP2019(2) FY2023 FY2021 FY2022 FY2020 FP2018(1) (15 months) (15 months) FP2019(2) FY2023 Notes:- (1) MYEG had on 13 June 2018 changed its financial year (“FY”) end from 30 June to 30 September. The financial period (“FP”) 2018 was made up of results for 15 months covering the period from 1 July 2017 to 30 September 2018. (2) MYEG had on 27 September 2019 changed its financial year end from 30 September to 31 December. The FP2019 was made up of results for 15 months covering the period from 1 October 2018 to 31 December 2019. HIGHLIGHTS OF FINANCIAL PERFORMANCE (3) Net of impairment made for capital expenditure and receivables related to the abolishment of the Goods and Services Tax regime. (4) CAGR = Compounded Annual Growth Rate. (5) The comparative figures for net tangible assets per share and net earnings per share have been restated to reflect the adjustment arising from the bonus issue completed during FY2021.
ANNUAL REPORT 2023 15 GROUP INCOME STATEMENTS As at 30 June/30 Sep/31 Dec (RM’000) FY2018 (1) FP2019 (2) FP2020 FY2021 FY2022 FY2023 Revenue 562,270 593,578 530,463 721,877 651,107 774,261 EBITDA (3) 168,599 (3) 355,237 312,593 377,890 475,636 592,700 Profit Before Tax (“PBT”) 128,473 (3) 306,939 268,958 320,683 404,367 489,405 Net Profit 125,970 (3) 302,156 267,194 316,705 400,402 486,839 Net Profit Attributable to Owners of the Company 128,952 (3) 303,090 268,656 315,940 398,662 487,648 Total Comprehensive Income 125,671 (3) 302,194 267,176 316,704 400,416 479,802 GROUP BALANCE SHEETS As at 30 June/30 Sep/31 Dec (RM’000) FY2018 (1) FP2019 (2) FP2020 FY2021 FY2022 FY2023 Total Non-Current Assets 526,109 (3) 705,207 866,174 1,234,237 1,690,098 2,069,768 Total Current Assets 358,142 (3) 324,823 550,561 649,367 849,579 1,148,010 TOTAL ASSETS 884,251 (3) 1,030,030 1,416,735 1,883,604 2,539,677 3,217,778 Financed By: Share Capital 360,630 360,630 634,262 854,895 904,077 962,017 Treasury Shares (52,804) (144,743) (61,652) (12,364) (36,642) (81,258) Other Reserves 6,401 6,439 6,421 6,420 6,434 (671) Retained Profits 253,718 (3) 490,606 570,191 698,112 1,002,108 1,324,000 Shareholders’ Equity 567,945 (3) 712,932 1,149,222 1,547,063 1,875,977 2,204,088 Minority Interests (4,043) (4,937) (6,399) (5,614) (3,874) (3,802) Total Equity 563,902 707,995 1,142,823 1,541,449 1,872,103 2,200,286 Total Non-Current Liabilities 96,960 138,738 125,124 101,397 331,017 731,028 Total Current Liabilities 223,389 183,297 148,788 240,758 336,467 286,464 TOTAL EQUITY AND LIABILITIES 884,251 1,030,030 1,416,735 1,883,604 2,539,677 3,217,778 Financial Analysis FY2018 (1) FP2019 (2) FP2020 FY2021 FY2022 FY2023 Revenue Growth 51.5% 5.6% (10.6%) (6) 36.1% (9.8%) 18.9% PBT Growth (36.2%) 138.9% (12.4%) (6) 19.2% 26.1% 21.0% Net Profit Growth (37.0%) 139.9% (11.6%) (6) 18.5% 26.4% 21.6% EBITDA Margin 30.0% 59.8% 59.0% 52.3% 73.1% 76.6% PBT Margin 22.8% 51.7% 50.7% 44.4% 62.1% 63.2% Net Profit Margin 22.4% 50.9% 50.6% 43.9% 61.5% 62.9% Return on Average Equity 22.6% 47.5% 29.0% 23.5% 23.4% 23.9% Return on Average Total Assets 14.4% 31.6% 22.0% 19.1% 18.0% 16.9% Net Tangible Assets Per Share (Sen) 7.7 (3)(5) 9.8 (5) 13.8 (5) 16.2 16.6 13.1 Net Earnings Per Share (Sen) 1.8 (3)(5) 4.3 (5) 3.8 (5) 4.3 5.4 6.6 Notes:- (1) MYEG had on 13 June 2018 changed its financial year end from 30 June to 30 September. The FP2018 was made up of results for 15 months covering the period from 1 July 2017 to 30 September 2018. (2) MYEG had on 27 September 2019 changed its financial year end from 30 September to 31 December. The FP2019 was made up of results for 15 months covering the period from 1 October 2018 to 31 December 2019. HIGHLIGHTS OF FINANCIAL PERFORMANCE (cont’d) (3) Net of impairments made for capital expenditure and receivables related to the abolishment of the Goods and Services Tax regime. (4) EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization. (5) The comparative figures for net tangible assets per share and net earnings per share have been restated to reflect the adjustment arising from the bonus issue completed during FY2021. (6) Growth rate is negative due to FY2020 being a 12-month period against a 15-month period for FP2019. PERFORMANCE
16 MY E.G. SERVICES BERHAD Registration No. 200001003034 (505639-K) STATEMENT OF VALUE ADDED DISTRIBUTION AND SIMPLIFIED FINANCIAL STATEMENT Property, Plant and Equipment RM304.44 million Trade Receivables RM341.03 million Cash and Cash Equivalents RM84.14 million Financing Receivables RM251.59 million Simplified Statement of Total Assets FY2023 Statement of Value Added Distribution FY2023 (RM million) Share Capital RM962.02 million Retained Profits RM1.32 billion Borrowings RM846.66 million Trade Payables RM50.84 million Total Liabilities and Shareholders’ Equity FY2023 Beyond direct financial values such as revenues and earnings, MYEG also generates indirect economic values which benefit stakeholders: Revenue Operating Expenses 0 100 200 300 400 500 600 700 800 774.26 250.64 B d di fi i l l h d i MYEG l i di i l hi h
ANNUAL REPORT 2023 17 Share Price Performance for the period of 3 January 2023 to 1 April 2024: z High (3 February 2023): RM0.955 z Low (13 February 2023): RM0.605 z Closing Price as at 1 April 2024: RM0.785 z Market capitalisation as at 1 April 2024: RM5.93 billion z Market capitalisation as at 31 December 2023: RM6.16 billion 0 0.2 0.4 0.6 0.8 1 1.2 1/3/2024 2/2/2024 2/1/2024 1/12/2023 1/11/2023 1/9/2023 1/8/2023 3/7/2023 1/6/2023 2/5/2023 1/4/2024 3/4/2023 1/3/2023 2/2/2023 3/1/2023 2/10/2023 Close 1/3/2024 2/2/2024 2/1/2024 1/12/2023 1/11/2023 1/9/2023 1/8/2023 3/7/2023 1/6/2023 2/5/2023 1/4/2024 3/4/2023 1/3/2023 2/2/2023 3/1/2023 2/10/2023 SHARE PRICE PERFORMANCE AND INVESTOR RELATIONS - 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 PERFORMANCE
18 MY E.G. SERVICES BERHAD Registration No. 200001003034 (505639-K) MYEG continues to prioritise its engagement with investors and other related stakeholders, which is reflected in its continued communication and engagement activities undertaken throughout FY2023. Investor relations remains a core aspect of the Group’s overall approach to stakeholder management and engagement. Investor relations engagement comprises mandatory or stipulated communication and activities such as timely announcement of material information to regulators and ensuring equal and fair access to any material information. These include information pertaining to material changes or developments pertaining to the Group such as renewal of concession contracts or acquisition of new projects / contracts, business expansion locally or overseas, change in Board directors and / or Senior Management and more. The Group also publishes quarterly announcements of financial results and the MYEG integrated annual report. All announcements as well as the integrated annual report are made available on the Bursa Malaysia site and also on the Investor Relations section of the Group’s website. This includes past announcements and financial information from previous financial years. However, beyond compliance requirements, investor relations also encompasses strategic engagement such as briefing with research houses, investor analysts, media relations, participation in roadshows, industry engagements and more. The objective of such engagements, which are held throughout the financial year, is for MYEG to convey relevant information to stakeholders, towards developing a more strategic and complete perspective of the Group’s operations, its financial and business performance, its risks and opportunities as well as outlook and prospects over the short, medium and long-term perspective. A key highlight on the investment calendar is the Group’s annual general meeting (“AGM”). AGMs are held virtually, thus ensuring they are highly accessible and convenient for all interested shareholders to attend. In the previous AGM, held in respect of FY2022, the Chairman of the AGM, who was the Chairman of the Board was elected by the floor and she proceeded to encourage shareholders to seek clarification and ask questions of all matters raised during the AGM. Opportunities were provided to shareholders to raise queries and both the Board and Senior Management personnel were in attendance to respond to all pertinent questions raised. Investor Relations Contact Feedback or queries can be channelled to our Investor Relations unit at (Tel) +603-7664 8000 or via e-mail to investors@myeg.com.my. We always welcome open dialogue with the investment community. SHARE PRICE PERFORMANCE AND INVESTOR RELATIONS (cont’d) MYEG i i i i i i h i d h l d k h ld hi h i fl d i i
ANNUAL REPORT 2023 19 REVIEWING THE MACRO-OPERATING ENVIRONMENT Looking back at 2023, the term most commonly-used by economists to characterise the year that transpired was ‘resilience’. The world economy indeed proved resilient in maintaining a positive trajectory despite challenges that persisted in the background, such as geopolitical tensions amidst the outbreak of conflict in the Middle East and the lingering Russia-Ukraine war as well as unprecedented monetary tightening to combat inflation. Nevertheless, economists pointed out that, on the whole, economic growth was generally subdued and uneven in 2023, with divergent fortunes seen for different sectors and regions, leading influential organisations like the International Monetary Fund to describe the global economy at one point as one that was “limping along, not sprinting”. In Malaysia, the economy was also defined by resilience in 2023 amid the uncertain global landscape. Overall GDP growth came in at 3.7% for the year. On the domestic front, the continued recovery in economic activity and labour market conditions supported growth in 2023 while the growth performance was reinforced by a resilient external position. The current account surplus for the year was sustained at 1.2% of GDP, with the country’s external debt position declining. Headline inflation moderated to 2.5% while among other key economic indicators, the unemployment rate declined to pre-pandemic levels while the labour force participation rate reached a historic high in 2023. MYEG IN FY2023 Economic performance aside, one trend that has continued to accelerate worldwide is that of digital transformation. Malaysia and the rest of the Asian region are no exception. As public and private sector players rapidly adopt digital solutions to stay ahead of the competitive curve, MYEG has successfully capitalised on multiple opportunities to meet growing market needs for innovative solutions of real-world commercial value. Through its wide range of product and service offerings, the Group’s comprehensive system and deep-rooted presence in the regional e-Government domain continued to advance in 2023. Beyond e-Government, MYEG also continued to expand its reach into other commercial segments, not only at home but also further ashore to other markets across the region. Through its Layer-1 blockchain platform Zetrix, now having reached its two-year mark since the launch of its mainnet in April 2022, MYEG has redoubled efforts into building and commercialising innovative Web3 services that offer use cases of genuine utility for all levels of society. Since the inception of Zetrix, several pioneering decentralised applications have already been implemented to help to revolutionise the way governments, businesses and individuals connect domestically and across borders. With the successful integration of Zetrix with China’s national Xinghuo BIF blockchain infrastructure and the stream of new Web3 innovations that are being deployed regularly on the platform, MYEG has taken a proactive approach in adapting to fast-changing market needs and in aligning itself with the global digital transformation agenda. The Group’s financial performance in 2023, with earnings reaching a new record high, not only reflects the good progress in the acceptance and adoption of its blockchain offerings, but is also a sign of what is to come in future years even as MYEG continues to lead the way as an early mover in the region’s Web3 revolution, leveraging on Zetrix’s distinctive recognition as the International Supernode of China’s Xinghuo blockchain as well as a fundamental component of Malaysia’s national blockchain infrastructure. From the perspectives of the governments and service providers, they stand to reap the benefits of reducing costs, increasing efficiency and enhancing transparency through effective inclusiveness of adopting blockchain solutions. MYEG is in a strategic position to partner with any jurisdiction to pave the way for a more transparent, efficient, secure, and trustworthy service delivery and commercial environment. The Group remains steadfast in pursuing the evolution of its business model from an e-government services provider to offering cross-border next-generation applications, leveraging on its blockchain technology capability. More details on MYEG’s FY2023 business and operational highlights can be found in the Highlights and Achievements section of this Management Discussion and Analysis. MANAGEMENT DISCUSSION AND ANALYSIS PERFORMANCE
20 MY E.G. SERVICES BERHAD Registration No. 200001003034 (505639-K) FINANCIAL PERFORMANCE For FY2023, MYEG delivered another record year, with revenue reaching a new high of RM774.26 million compared with RM651.11 million in the previous financial year, while profit after tax (“PAT”) reached a record RM486.84 million, a 21.59% increase from the previous year (FY2022: RM400.40 million). The increases in Revenue and PAT were primarily attributable to contribution from newly launched services from the Zetrix blockchain platform; contribution from the sale of Zetrix tokens as well as from the Initial Exchange Offering of Zetrix tokens on three major global digital asset exchanges; contribution from the existing concession and commercial services; and an increase in foreign worker job matching service due to the uplifting of a freeze on foreign worker recruitment. The stronger PAT was recorded notwithstanding the higher base effect arising from a one-off recognition of fair value gain in investments from the listing of Agmo Holdings Berhad in FY2022. Should the one-off recognition of fair value gains be excluded from consideration, PAT would have shown an even sharper increase in FY2023 over the previous year. With the growing interest in digitalisation and the transformative potential of blockchain, MYEG has benefitted directly as it experienced a strong reception of the IEO of Zetrix and the interests generated among renowned partners around the region to jointly carry out new Web3 projects. In meeting the prevailing and emerging challenges to make cross-border trade and delivery of government and commercial services more efficient, secure and hassle-free, MYEG has been at the forefront in reaping the potential of deploying cutting-edge technologies like blockchain, given its position as a leading global Web3 player. Together with the organic growth from the existing services, Zetrix is set to drive the Group’s next phase of earnings expansion, as evidenced by the uptrend in its financial position registered for FY2023. SUKUK WAKALAH PROGRAMME MYEG raised an additional RM425 million in FY2023, bringing the total raised through the Sukuk Wakalah Programme to RM575 million. MARC Ratings has affirmed its rating of AA-IS with a stable outlook for MYEG’s Islamic MediumTerm Notes (“IMTN”) Programme of up to RM1.0 billion in nominal value. The proceeds raised from the Sukuk Wakalah Programme shall be utilised for foreign worker hostels and blockchain projects, as per the Sustainability Financing Framework. DIVIDEND DISTRIBUTION TO SHAREHOLDERS For the financial year ended 31 December 2022, the Board had declared a final dividend of 1.17 sen per ordinary share (FY2021: 1.03 sen per ordinary share), for which the shareholders had subsequently approved at the 22nd Annual General Meeting held on 22 June 2023. The said final dividend is eligible for the dividend reinvestment plan (“DRP”), which provides MYEG shareholders with the option to reinvest their dividends in new MYEG Shares, in lieu of receiving cash. The final dividend, which amounted to RM86,643,787, was paid on 20 September 2023. Under the DRP, a total of 81,110,688 new ordinary shares were issued at the price of RM0.715 per MYEG share which amounted to RM57,940,559. On 21 August 2023, the Board declared a first Interim Single Tier Dividend of 0.25 sen per ordinary share for FY2023 (FY2022: 0.25 sen), which was paid on 17 November 2023 to shareholders registered at the closed business date on 18 October 2023. The Board has proposed the declaration of a final dividend of 1.68 sen per ordinary share for FY2023 (FY2022: 1.17 sen) for the shareholders’ approval at the forthcoming AGM. The total dividend declared for FY2023 would thus amount to 1.93 sen per MYEG share (FY2022: 1.42 sen), representing a payout ratio of approximately 30%. Separately, in another effort to reward shareholders, MYEG had on 10 March 2023 completed the distribution of the first tranche of the Dividend-in-Specie, consisting of 69,750,000 Agmo Shares, following the distribution of 69,724,752 Agmo Shares to entitled shareholders with the remaining 25,248 Agmo Shares arising from fractional entitlements to be retained by MY E.G. Capital Sdn. Bhd. (“MYEG Capital”), a wholly-owned subsidiary of MYEG as other investments. MANAGEMENT DISCUSSION AND ANALYSIS (cont’d)
ANNUAL REPORT 2023 21 The distribution of the second and final tranche of the Dividend-in-Specie amounting to 14,275,248 Agmo Shares, which consists of the remaining 25,248 Agmo Shares subsequent to the first tranche of Dividend-in-Specie and the release from moratorium of an additional 14,250,000 Agmo Shares, was completed on 27 September 2023 following the distribution of 14,255,806 Agmo Shares to entitled shareholders, with the remaining 19,442 Agmo Shares arising from fractional entitlements to be retained by MYEG Capital as other investments. CAPITAL AND OPERATIONAL EXPENDITURE It is crucial for companies to ensure they are always well-prepared to respond to changes in the business environment and to seize emerging opportunities that offer promising growth prospects by bringing disruptive solutions to the marketplace. For digital service providers like MYEG this means investing in the key elements needed to stay one step ahead, including in the development of software and technological capabilities as well as purchase of hardware and other physical assets. As such, MYEG has placed significant consideration towards finding optimal balance in its capital expenditure (“CAPEX”). The strategy remains focused on unlocking further business growth and expansion, while also remaining cognisant of the importance of rewarding shareholders and conserving adequate capital for immediate needs. Efforts to manage and ensure efficiency of operational expenditure (“OPEX”) were also prioritised. In FY2023, MYEG recorded CAPEX of RM474.12 million, 11.14% lower year-on-year (FY2022: RM533.53 million), while OPEX stood at RM250.64 million, 12.8% lower year-on-year (FY2022: RM287.48 million). The CAPEX and OPEX recorded in FY2023 were for the following areas: CAPEX OPEX Ź Development of technology including blockchain platform and related applications; Ź e-Government services related modules; Ź Office and IT equipment; and Ź Foreign workers hostel. Ź Personnel-related expenses and OPEX; Ź Advertising and promotion expenses; Ź Maintenance and OPEX for MYEG’s building (“MYEG Tower”); and Ź Depreciation and amortisation charges. MYEG management will continue to closely monitor these important levers to ensure prudence in handling the CAPEX for the upcoming financial years. ASSETS AND LIABILITIES, CASH AND BANK BORROWINGS MYEG’s balance sheet remained resilient, with total cash and bank balances as at 31 December 2023 improving by 7.11% to RM84.14 million. This is an improvement from its previous year’s position (FY2022: RM76.42 million), reflecting an improved liquidity position. This has allowed the Group to access potential investment opportunities and better navigate market challenges. Total borrowings from term loans, IMTN, block discounting and revolving credits were manageable despite recording a higher figure at RM846.66 million for FY2023 (FY2022: RM443.06 million). MYEG maintains a manageable debt-toequity ratio of 0.38 times (FY2022: 0.22 times). On total assets, both current and non-current assets contributed to an increase in MYEG’s total assets position at RM3.22 billion, 26.77% higher year-on-year (FY2022: RM2.54 billion). Property, plant and equipment was 7.75% lower than a year ago at RM304.44 million (FY2022: RM330.01 million). Trade receivables also increased by 1.84% to RM341.03 million (FY2022: RM334.86 million). Development costs registered a significant increase to RM1.21 billion (FY2022: RM762.68 million). The Group is on track to further expand its business growth, particularly in the blockchain segment, supported by its strong cashflow position. The Group could further leverage on external borrowings if required, given its steady debt equity ratio. MANAGEMENT DISCUSSION AND ANALYSIS (cont’d) PERFORMANCE
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