38 01 | ABOUT NEXG 02 | OUR LEADERSHIP 03| OUR PERSPECTIVE 04 | SUSTAINABILITY 05 | GOVERNANCE 06 | FINANCIAL STATEMENTS 07 | OTHER INFORMATION ANNUAL REPORT 2026 Management Discussion AND ANALYSIS The financial year ended 31 March 2026 (“FY2026”) was a significant year for NexG Berhad as the Group strengthened its position in Malaysia’s secure identity and digital trust ecosystem through major government contract awards, infrastructure expansion initiatives and continued investments in digital technologies. During the year, the Group secured several key contracts, including a RM1.73 billion six-year passport supply contract and a RM733 million MyKad-related contract from the Ministry of Home Affairs, as well as an 18-month extension for the foreign worker card programme and an additional RM12.2 million contract from the Road Transport Department (“JPJ”). These achievements reinforce NexG’s longstanding role in supporting Malaysia’s national identity infrastructure. Financially, NexG recorded revenue of RM348.2 million and net operating cash flow of RM95.0 million during the financial year. While the Group reported a net loss after tax of RM85.7 million, this was largely attributable to non-cash fair value losses on quoted investments amounting to RM111.9 million recognised during the year. Excluding these accounting adjustments, the Group’s underlying operating performance remained supported by recurring government-related projects, healthy gross margins and positive operating cash flows. As the Group moves into the next phase of growth, NexG remains focused on strengthening its secure identity infrastructure, digital trust capabilities and long-term value creation initiatives. Dear Valued Shareholders, FY2026 focused on operational execution, long-term contract expansion and strategic infrastructure development. The Group’s Secure Identity Solutions segment remained the core contributor to the business, continuing to support Malaysia’s public sector infrastructure through the supply of passports, MyKad, foreign worker cards and secure licensing solutions. The most significant development during the year was the award of the RM1.73 billion passport contract by the Ministry of Home Affairs, which substantially strengthened the Group’s long-term order book and revenue visibility. This was complemented by the RM733 million MyKad-related contract, further reinforcing NexG’s role within the country’s secure identity ecosystem. The Group also secured an 18-month extension for the foreign worker card programme and an additional RM12.2 million contract from JPJ, reflecting continued confidence from government agencies in NexG’s operational capabilities and delivery track record. In September 2025, the Group unveiled its proprietary private digital identity platform known as “MyNasional”, marking another milestone in NexG’s evolution into a broader digital ecosystem enabler. MyNasional integrates biometric electronic know-yourcustomer (“e-KYC”), artificial intelligence (“AI”) and digital identity verification technologies into a unified platform designed for government agencies, businesses and digitalisation initiatives. The platform is anchored by Innov8tif Holdings Sdn Bhd, formerly MyNasional eKYC Holdings Sdn Bhd, in which NexG holds a 51% equity interest. Overall, the operational progress achieved during FY2026 strengthens the Group’s long-term growth platform and positions NexG to participate more actively in future digital identity and national digitalisation initiatives. BUSINESS AND OPERATIONAL REVIEW Building on the Group’s operational achievements and strategic contract wins during FY2026, NexG Berhad continued to maintain a resilient financial position despite a challenging investment environment and significant non-cash fair value adjustments recognised during the financial year. The Group’s underlying operations remained supported by recurring government-related contracts, strong gross margins and healthy operating cash generation. In addition, the successful completion of capital raising exercises during the year further strengthened the Group’s balance sheet and liquidity position, providing flexibility to support future infrastructure expansion and strategic initiatives. FINANCIAL REVIEW
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