REGISTRATION NO. 200001003034 (505639-K)
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 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-Second Annual General Meeting Proxy Form WHAT’S INSIDE OVERVIEW About This Report Corporate Information Group Corporate Profile Group Corporate Structure Awards and Accolades Key Milestones PERFORMANCE Financial Highlights Statement of Value Added Distribution and Simplified Financial Statement Share Price Performance Investor Relations Management Discussion and Analysis LEADERSHIP Board of Directors’ Profiles Key Senior Management’s Profiles OUR BUSINESS Our Business Model At Work Matters Impacting Value Creation Risks and Opportunities Strategies to Sustain Value Creation Our Capitals Group Business Strengths Value Creation Model SUSTAINABILITY STATEMENT Overview FY2022 Sustainability Highlights and Achievements UNSDG Sustainability Governance Stakeholder Engagement Materiality Matters 02 06 08 10 12 13 14 16 17 18 19 29 36 39 42 46 48 55 56 58 60 61 62 66 75 77 111 116 133 136 139 144 144 145 149 151 152 155 160 248 250 251 254 255
INTRODUCTION MY E.G. Services Berhad (“MYEG” or the “Company”) and its subsidiaries (the “Group”) presents its Integrated Annual Report for the financial year ended 31 December 2022 (“FY2022”). The content of the Integrated Annual Report 2022 (“IAR2022”) has been developed in accordance with the Integrated Reporting (“<IR>”) Framework based on the Principles-based Framework comprising the six Capitals, seven Guiding Principles and eight Content Elements. The objective of this IAR2022 is to present readers with a comprehensive yet concise narrative of MYEG’s journey of value creation for the financial year. This includes financial and non-financial values for the Group and its stakeholders. ABOUT THIS REPORT z Financial z Manufactured z Intellectual z Human z Social z Natural z Strategic focus and future orientation z Connectivity of information z Concise z Reliability and completeness z Consistency and comparability z Materiality z Stakeholder relationships z Organisational overview and external environment z Governance z Business model z Risks and opportunities z Strategy and resources allocation z Performance z Outlook z Basis of preparation and presentation 6 Capitals 7 Guiding Principles 8 Content Elements MYEG, in its years of <IR> adoption, has looked to progressively strengthen its disclosures based on the Principlesbased Framework towards providing readers, notably providers of financial and other capitals, with a more comprehensive, connected and concise narrative that relays the Group’s journey of value creation in FY2022. Environmental, social and governance (“ESG”) matters that impact enterprise value creation Risks and opportunities Multi-Capital Lens Integrated Annual Report 2022 Significant capital dependencies Business strategies to sustain value creation Stakeholders influence and impact In essence, the goal of <IR> is to provide readers with a multi-capital narrative on how MYEG has not just delivered financial performance but is also prepared to sustain value creation through its business model over the short, medium and long-term perspectives. Hence, the IAR2022, delves not only into business and operational performance but also includes financial and non-financial values for the Group and its stakeholders. 02
OVERVIEW ABOUT THIS REPORT (cont’d) BASIS OF REPORT PREPARATION In driving integrated thinking, which is the basis of IAR2022, a strategy workshop was conducted on 27 September 2022 involving key Heads of Departments from Risk, Strategy, Operations, Finance, Human Resources and Corporate Affairs and Communications. In addition, a comprehensive briefing session was held for the Board of Directors (“Board”) to provide them with a high-level understanding of <IR>, MYEG’s progress in its adoption of <IR> and areas for improvement based on a conducted gap analysis (conducted using the Principles-based Framework). The briefing was also leveraged as a question and answer session with the facilitator, a certified <IR> training provider, providing clarification to questions posed by the Board. The objective of the workshop was to solicit strategic perspectives of the various key personnel towards obtaining strategic information (based on the Principlesbased Framework) for the development of the IAR2022 report content. The workshop included an introduction on what is <IR>, its benefits and importance in the context of present day corporate reporting, the required components as well as a gap analysis of IAR2022 and subsequently, strategies on gap closure. Information and findings garnered from the workshop have been used to develop the strategy section of IAR2022 and are also used (where relevant) for other narratives such as the Management Discussion and Analysis, Sustainability Statement and Corporate Governance Overview Statement. All content presented in IAR2022 has been reviewed and approved by the Management of MYEG prior to publication. MATERIALITY Adopting a multi-capital lens, MYEG has taken into account the following considerations in the determination of information deemed material for inclusion in IAR2022: r Matters that can / will impact enterprise value creation across a multi-capital perspective. These include financial and non-financial matters, including ESG perspectives. r Matters that affect stakeholders. r Matters that impact the business model and access / availability to capitals. r Matters that impact future plans and prospects Matters that can / will impact value creation Matters that affect stakeholders Matters that impact the business model and access / availability to capitals Matters that impact future plans and prospects Any trend, development or incident that can significantly impact MYEG’s ability to generate / sustain financial values such as revenue, earnings and cashflow, appreciation of assets, as well as non-financial values including values for stakeholders. Any trend, development or incident that can affect the wellbeing and satisfaction of stakeholders. These may be existential matters such as climate change or matters specific to MYEG and its business operations such as contributions to community and talent development, contribution to the nationbuilding and digital society agenda and so forth. Any trend, development or incident that would hinder MYEG’s access to key resources required to drive the business model. Any trend, development or incident that may in the future, impact MYEG’s business model and its ability to sustain financial and non-financial value creation. In addition, the Group has also applied an additional material lens from an ESG perspective, which pertains to matters that have a significant impact on the environment and society, but have little to no impact on enterprise value creation. Performance disclosures related to such identified material topics are provided in the Sustainability Statement of IAR2022. 03
HOW TO READ THIS REPORT While readers may opt to read IAR2022 using their own discretion, the following sequence is recommended in gaining a more complete understanding of IAR2022: ABOUT THIS REPORT (cont’d) APPLIED FRAMEWORKS The IAR2022 report draws from / has been developed in accordance with the following reporting frameworks: r Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) r Integrated Reporting Principles-based Framework of the International Integrated Reporting Council (“IIRC”) r Bursa Malaysia Sustainability Reporting Guide, 2nd Edition 2018 r FTSE4Good Index Disclosures (“FTSE Russell’s ESG Data Model”) r Malaysia Code on Corporate Governance (“MCCG”) r Companies Act 2016 (“Act”) r Malaysian Financial Reporting Standards (“MFRS”) r International Financial Reporting Standards (“IFRS”) r ISO 31000 Risk Management Standard implemented in 2013 Group Corporate Profile Provides introductory infomation on MYEG, its business operations, organisational strucuture towards enabling readers to develop an understanding of the Group’s business. Our Business Model At Work How does MYEG’s business model function and how does the Group create value. Matters Impacting Value Creation Factors Impacting MYEG’s value creation capability, the emerging risks from these factors as well as opportunities Risk and Opportunities MYEG’s identified risks, potential impacts as well as linkage to material topics, as well as opportunities. References to how the Group mitigates these risks are also provided. Strategies To Sustain Value Creation MYEG’s strategic responses to addressing matters impacting value creation. This includes business and operational strategies, capital dependencies and resource allocation. Our Capitals Specific information on what are MYEG’s significant capitals that are required for the successful operation of the business model. Value Creation Model A summary depiction of MYEG’s value creation model providing information on specific inputs as well as business processes and the creation of specific outputs and outcomes for FY2022. HOW TO READ THIS REPORT 04
OVERVIEW ABOUT THIS REPORT (cont’d) SCOPE & BOUNDARY IAR2022 covers the business operations, activities, processes and employees of the Group where relevant. Beyond financial information, information presented is intended to show how MYEG creates value over the short, medium and long-term horizons. Our scope is also bound by our present capacity to collate reliable, meaningful and accurate information. Therefore, disclosure is limited to the Group’s domestic operations unless stated otherwise. With the growth and expansion of our international operations and the maturity of data collection systems, we seek to include data from international operations in future reports. REPORTING PERIOD IAR2022 covers the reporting period of 1 January 2022 to 31 December 2022, also known as FY2022. The reporting period is consistent with the audited financial year of the Group. ONLINE VERSION This report can be downloaded from https://www.myeg.com.my/investor-relations/reports-presentations and Bursa Securities’ website. FORWARD LOOKING STATEMENTS This report contains information on MYEG’s 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 statements 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 position for FY2022. Non-financial performance data has not been audited but the Group’s Senior Management has judged it as a true and fair view of all material matters as well as the disclosure of our top line strategic plans for the short, medium and longterm so as not to place MYEG at a competitive disadvantage. FEEDBACK Feedback on this report and the issues covered can be channelled to our 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 this balanced and comprehensive Annual Report is based on good governance practices and guided by IIRC’s <IR> Framework. 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. 05
CORPORATE INFORMATION Dato’ Dr Norraesah Binti Haji Mohamad Executive Chairman Seated on the armchair: From Left to Right: Datuk Mohd Jimmy Wong Bin Abdullah Non-Independent Non-Executive Director Dato’ Sri Mohd Mokhtar Bin Mohd Shariff Independent Non-Executive Director Wong Thean Soon Group Managing Director Wong Kok Chau Independent Non-Executive Director Dato’ Mohd Jeffrey Bin Joakim Independent Non-Executive Director Mohaini Binti Mohd Yusof Independent Non-Executive Director Board Directors 06
OVERVIEW CORPORATE INFORMATION (cont’d) Remuneration Committee Dato’ Sri Mohd Mokhtar Bin Mohd Shariff Chairman Wong Kok Chau Member Dato’ Mohd Jeffrey Bin Joakim Member Nomination Committee Mohaini Binti Mohd Yusof Chairman Datuk Mohd Jimmy Wong Bin Abdullah Member Dato’ Sri Mohd Mokhtar Bin Mohd Shariff Member Audit Committee Wong Kok Chau Chairman Datuk Mohd Jimmy Wong Bin Abdullah Member Mohaini Binti Mohd Yusof Member Employees’ Share Option Scheme Committee Wong Kok Chau Chairman Wong Thean Soon Member Risk Management Committee Dato’ Mohd Jeffrey Bin Joakim Chairman Mohaini Binti Mohd Yusof Member Wong Kok Chau Member Company Secretaries Tai Yit Chan (MAICSA 7009143) (SSM PC No. 202008001023) Tan Ai Ning (MAICSA 7015852) (SSM PC No. 202008000067) Corporate Head Office Level 43A, MYEG Tower, Empire City No. 8, Jalan Damansara, PJU 8 47820 Petaling Jaya Selangor, Malaysia Tel : 03-7664 8000 Fax : 03-7664 8008 Email : investors@myeg.com.my Website : www.myeg.com.my Registered Office 12th Floor, Menara Symphony No. 5, Jalan Prof. Khoo Kay Kim Seksyen 13 46200 Petaling Jaya Selangor, Malaysia Tel : 03-7890 4800 Fax : 03-7890 4650 Auditors TGS TW PLT (202106000004 (LLP0026851-LCA) & AF 002345) E-5-4, Megan Avenue 1 189, Jalan Tun Razak 50400 Kuala Lumpur Tel : 03-9771 4326 Fax : 03-9771 4327 Share Registrar Boardroom Share Registrars Sdn Bhd 11th Floor, Menara Symphony No. 5, Jalan Prof. Khoo Kay Kim Seksyen 13 46200 Petaling Jaya Selangor, Malaysia Tel : 03-7890 4700 Fax : 03-7890 4670 Principal Bankers Ambank (M) Berhad CIMB Bank Berhad Malayan Banking Berhad Public Bank Berhad RHB Bank Berhad HSBC Bank Malaysia Berhad Stock Exchange Listing Main Market of Bursa Securities Stock Name : MYEG Stock Code : 0138 07
GROUP CORPORATE PROFILE The Group is Malaysia’s leading digital services provider. Essentially, MYEG brings together a wide range of government (concession) and commercial services under a single digital platform. MYEG is entrusted by the Malaysian Government (“Government”) to provide vital services on behalf of key government partners such as the Road Transport Department (“JPJ”), Immigration Department (“JIM”), Royal Malaysian Police (“PDRM”), National Registration Department (“JPN”), the Ministry of Health (“KKM”) and more. In addition, the Group also provides a wide range of commercial-based services. In doing so, MYEG enables the public to easily and quickly access various government and commercial services affordably and provides a complete digital solution. 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 WHAT WE DO Provider of digital e-Goverment and commercial services as well as various other technologically enabled products and solutions. 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? 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 BreFence Go COVID-19 Breath Test System (“BreFence Go”) z Blockchain-based insurance NFT product Covinsure z Blockchain Identity, Verifiable Credentials and Blockchainbased Agreement Signing z Competent Driving Licenses (“CDL”) renewal z COVID-19 related health screenings z CRIF Bizinsight Services z DBKL license renewal for Premise License, Composite License and Premise Signboard z Driver’s theory test z Foreign worker accommodation z Foreign worker insurance z Foreign worker recruitment & placement z Insolvency search z Insurance and renewal of driver’s license z MyAssist 24/7 roadside assistance z MYDATA-SSM Services z MYEG Lock-Earn Wallet for digital assets holdings z MyMotor transactional portal z MySafeTravel digital health pass for inbound travellers z MySafeQuarantine (“MySafeQ”) hotel quarantine 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 Zetrix TradeFi supply chain financing solution 08
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 MYEG’s successful business model has been rolled out across Asia with the Group having expanded its presence overseas to countries such as Bangladesh, China, Indonesia and the Philippines. With the appointment of its subsidiary namely Zetrix appointed by the China Academy of Information and Communications Technology (“CAICT”) as the first international supernode of China’s Xinghuo Blockchain Infrastructure and Facility (“Xinghuo BIF”) network, MYEG has effectively expanded its presence into China. The CAICT is a scientific research institute under China’s Ministry of Industry and Information Technology. OUR SERVICES IN INTERNATIONAL MARKETS CHINA PHILIPPINES MALAYSIA INDIA SRI LANKA SINGAPORE Bay of Bengal MYANMAR LAOS THAILAND CAMBODIA EAST TIMOR ARABIAN SEA BRUNEI VIETNAM z National Bureau of Investigation (“NBI”) clearance renewal and delivery z MYEG-Landbank Linkbiz e-Payments z Electronic business permits and licenses for local government units z Real-time Value-Added Tax (“VAT”) monitoring system z MYEG insurance portal z COVID-19 testing services z Contact tracing mobile applications i.e. MyEGuard 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 09
MY E.G. Services Berhad Development and implementation of the e-Government services project and the provision of other related services for the e-Government services project and investment holding. Gale Vector Sdn. Bhd. Provision of software solutions and maintenance service and other ancillary services. MY E.G. Commerce Sdn. Bhd. Provision of auto insurance intermediary services. MY EG Management Services Sdn. Bhd. Provision of 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. MY E.G. Integrated Networks Sdn. Bhd. Provision of software and hardware solutions and related services. MY EG Sdn. Bhd. Development and implementation of the e-Government services project and 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 vehicle inspection, repairs and breakdown assistance, sale of removable motor vehicle spare parts, motor vehicle breakdown assistance, and provision of membership in relation thereto. NFT Capital Sdn. Bhd. Investment holding. MY EG Lodging Sdn. Bhd. Build, own and operate hostels for foreign workers. NFT Creative Sdn. Bhd. Engaged in 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. Build, own and operate hostels for foreign workers. 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. 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% 49% 40% 100% 100% 100% 100% 100% 100% 55% 100% 100% 100% 80% 100% 90% 40% 100% 100% 100% 100% 100% 100% GROUP CORPORATE STRUCTURE 10
OVERVIEW MY E.G. Capital Sdn. Bhd. Investment holding. MY EG Ad Networks Sdn. Bhd. Provision 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. Provision of financing, leasing or hire purchase services, credit granting activities and money lending services. Dinamik Koridor Sdn. Bhd. Investment holding. MY EG E-Settlement Sdn. Bhd. Provision 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 solutions. MY EG Islamic Finance Sdn. Bhd. Provision of Islamic financing, leasing and other Islamic credit granting activities. Car X Services Sdn. Bhd. To operate and manage of automotive classifieds web portal and other value added services for the automotive classifieds web portal. Picasso Media Sdn. Bhd. Advertising. 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. 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. Electronic commerce. Buy Now Asia Sdn. Bhd. E-commerce service provider, online purchase and redemption, merchant and 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. Provision of all kind of 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% 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. Investment holding. 40% GROUP CORPORATE STRUCTURE (cont’d) 11
AWARDS AND ACCOLADES September 2022 MYEG named Outstanding Company in Malaysia for Software/Internet Services by Asiamoney October 2022 MYEG’s Sustainability Financing Framework assigned a “Gold” Impact Assessment by MARC Ratings December 2022 FTSE4Good Index Score rose to 3.7 (from 3.4 in 2021) 12
OVERVIEW 2022 February 2023 z Zetrix was chosen by the Chinese government as a component of its government-togovernment (“G2G”) programme. Initiated by China’s Ministry of Science and Technology (“MOST”), Malaysia (via University Malaya (“UM”) is one of the 14 countries participating in the programme. March 2023 z Signed a partnership agreement with East Logistic-Link Co. Ltd, a wholly-owned agency of the General Administration of Customs of the People’s Republic of China (“GACC”), to jointly provide a full suite of cross-border trade facilitation services that include certificates of origin on the Zetrix blockchain platform. 2023 KEY MILESTONES March 2022 z Launched Global (“NFT”) Marketplace known as NFT Pangolin. April 2022 z Zetrix Blockchain launched its mainnet. z Zetrix now powers the minting of NFTs on global marketplace NFT Pangolin. May 2022 z Zetrix launched an NFT-based insurance product known as Covinsure. June 2022 z I-Pay MYEG Philippines Inc. (‘’MYEG Philippines’’) partnered with TIEZA to expand digital channels and make payment of travel taxes easy. July 2022 z Zetrix and Xinghuo BIF jointly introduced Web3 services such as Blockchain-based Identifiers (“BID”) / Verifiable Credentials (“VC”) and Blockchain-based E-signing services to international markets to enable cross-border business with China on the blockchain. z MYEG Philippines partnered with the DOH-MMCHD to provide a more efficient online payment system for DOH transactions. October 2022 z Zetrix partnered with AmBank (M) Berhad to launch the pilot for its cross-border trade financing solution, Zetrix TradeFi. October 2022 (cont’d) z Entered into a Memorandum of Understanding (“MOU”) with MIMOS Technology Solutions Sdn Bhd (“MIMOS”) to jointly develop and operate the national Layer-1 public blockchain. z Zetrix and MIMOS blockchain technology will be used as components of the Malaysia Blockchain Infrastructure (“MBI”). z Proposed the establishment of an Islamic Medium-Term Notes (Sukuk Wakalah) programme of up to RM1.0 billion. The programme provides the flexibility for MYEG to issue Sukuk Wakalah in compliance with amongst others, Green/ Social/Sustainability/Sustainable and Responsible Investment (“SRI”) Sukuk guidelines, frameworks, standards or principles issued by the SC, the ASEAN Capital Markets Forum and the International Capital Market Association. z MYEG’s Sustainability Financing Framework assigned a “Gold” Impact Assessment by MARC Ratings. z MYEG Philippines Inc. and the Philippine Health Insurance Corp. (PhilHealth) partnered up to enable micro-employers, small business owners and entrepreneurs to remit their employees’ health insurance contributions online with the addition of GCash, Maya, and credit/debit cards as payment options on its Electronic Payment Remittance System (EPRS). November 2022 z Inked a four-year collaboration agreement with the Institute of Industrial Internet and Internet of Things of the CAICT, which allows it to own and operate the Xinghuo International Supernode that will provide connectivity from China to the rest of the world. z Proposed Sukuk Wakalah programme of up to RM1.0 billion assigned a final rating of AA-IS, with a stable outlook, by MARC Ratings. December 2022 z Declared the Group’s commitment to reach Net Zero emissions by 2050. z Proposed to distribute 84,000,000 ordinary shares in Agmo Holdings Berhad (“Agmo”), representing the entire 25.8% equity interest in Agmo to entitled shareholders of MYEG in two separate tranches by way of a dividend-in-specie. 13
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) 11.9% 5-year CAGR(4) 14.6% 5-year CAGR(4) 27.7% 5-year CAGR(4) 24.1% (RM’000) 651,107 721,877 371,215 562,270 593,578 530,463 FY2020 FY2021 FY2017 FP2018(1) (15 months) (15 months) FP2019(2) FY2022 FY2020 FY2021 FY2017 FP2018(1) (15 months) (15 months) FP2019(2) FY2022 FY2020 FY2021 FY2017 FP2018(1) (15 months) (15 months) FP2019(2) FY2022 FY2020 FY2021 FY2017 FP2018(1) (15 months) (15 months) FP2019(2) FY2022 FY2020 FY2021 FY2017 FP2018(1) (15 months) (15 months) FP2019(2) FY2022 FY2020 FY2021 FY2017 FP2018(1) (15 months) (15 months) FP2019(2) FY2022 7.3(5) 7.7(3)(5) 9.8(5) 13.2(5) 16.2 16.6 2.8(5) 1.8(3)(5) 4.3(5) 3.8(5) 4.3 5.4 1,883,604 2,539,677 1,875,977 1,416,735 1,030,030 884,251(3) 863,773 1,547,063 1,149,222 712,932 567,945(3) 553,404 315,940 398,662 128,952(3) 303,090 268,656 201,511 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. (3) Net of impairment made for capital expenditure (“CAPEX”) and receivables related to the abolishment of the Goods and Services Tax (“GST”) regime. FINANCIAL HIGHLIGHTS (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. 14
PERFORMANCE GROUP INCOME STATEMENTS As at 30 June/30 Sep/31 Dec (RM’000) FY2017 FP2018 (1) FP2019 (2) FY2020 FY2021 FY2022 Revenue 371,215 562,270 593,578 530,463 721,877 651,107 EBITDA(4) 226,431 168,599 (3) 355,237 312,593 377,890 475,636 Profit Before Tax (“PBT”) 201,478 128,473 (3) 306,939 268,958 320,683 404,367 Net Profit 200,048 125,970 (3) 302,156 267,194 316,705 400,402 Net Profit Attributable to Owners of the Company 201,511 128,952 (3) 303,090 268,656 315,940 398,662 Total Comprehensive Income 200,048 125,671 (3) 302,194 267,176 316,704 400,416 GROUP BALANCE SHEETS As at 30 June/30 Sep/31 Dec (RM’000) FY2017 FP2018 (1) FP2019 (2) FY2020 FY2021 FY2022 Total Non-Current Assets 414,616 526,109 (3) 705,207 866,174 1,234,237 1,690,098 Total Current Assets 449,157 358,142 (3) 324,823 550,561 649,367 849,579 TOTAL ASSETS 863,773 884,251 (3) 1,030,030 1,416,735 1,883,604 2,539,677 Financed By: Share Capital 360,630 360,630 360,630 634,262 854,895 904,077 Treasury Shares - (52,804) (144,743) (61,652) (12,364) (36,642) Other Reserves 6,700 6,401 6,439 6,421 6,420 6,434 Retained Profits 186,074 253,718 (3) 490,606 570,191 698,112 1,002,108 Shareholders’ Equity 553,404 567,945 (3) 712,932 1,149,222 1,547,063 1,875,977 Minority Interests (1,463) (4,043) (4,937) (6,399) (5,614) (3,874) Total Equity 551,941 563,902 707,995 1,142,823 1,541,449 1,872,103 Total Non-Current Liabilities 116,262 96,960 138,738 125,124 101,397 331,017 Total Current Liabilities 195,570 223,389 183,297 148,788 240,758 336,467 TOTAL EQUITY AND LIABILITIES 863,773 884,251 1,030,030 1,416,735 1,883,604 2,539,677 Financial Analysis FY2017 FP2018 (1) FP2019 (2) FY2020 FY2021 FY2022 Revenue Growth 31.8% 51.5% 5.6% (10.6%) (6) 36.1% (9.8%) PBT Growth 40.7% (36.2%) 138.9% (12.4%) (6) 19.2% 26.1% Net Profit Growth 40.4% (37.0%) 139.9% (11.6%) (6) 18.5% 26.4% EBITDA Margin 61.0% 30.0% 59.8% 59.0% 52.3% 73.1% PBT Margin 54.3% 22.8% 51.7% 50.7% 44.4% 62.1% Net Profit Margin 53.8% 22.4% 50.9% 50.6% 43.9% 61.5% Return on Average Equity 42.0% 22.6% 47.5% 29.0% 23.5% 23.4% Return on Average Total Assets 25.2% 14.4% 31.6% 22.0% 19.1% 18.0% Net Tangible Assets Per Share (Sen) 7.3 (5) 7.7 (3)(5) 9.8 (5) 13.8 (5) 16.2 16.6 Net Earnings Per Share (Sen) 2.8 (5) 1.8 (3)(5) 4.3 (5) 3.8 (5) 4.3 5.4 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. (3) Net of impairments made for CAPEX and receivables related to the abolishment of the GST regime. FINANCIAL HIGHLIGHTS (cont’d) (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. 15
STATEMENT OF VALUE ADDED DISTRIBUTION AND SIMPLIFIED FINANCIAL STATEMENT Beyond direct financial values such as revenues and earnings, MYEG also generates indirect economic values which benefit stakeholders: Simplified Statement of Total Assets FY2022 Statement of Value Added Distribution FY2022 (RM million) Total Liabilities and Shareholders’ Equity FY2022 Property and Equipment: RM330.01 million Share Capital: RM904.08 million Trade Receivables: RM334.86 million Retained Profits: RM1.00 billion Cash and Cash Equivalents: RM76.42 million Borrowings: RM443.06 million Financing Receivables: RM288.93 million Trade Payables: RM106.41 million Revenue 200 100 0 300 400 500 600 700 800 Operating Expenses 651.11 287.48 16
PERFORMANCE SHARE PRICE PERFORMANCE Share Price Performance for the period of 3 January 2022 to 31 March 2023: z High (4 January 2022): RM1.09 z Low (13 February 2023): RM0.605 z Closing Price as at 31 March 2023: RM0.77 z Market capitalisation as at 31 March 2023: RM5.72 billion z Market capitalisation as at 31 December 2022: RM6.51 billion 0 0.2 0.4 0.6 0.8 1 1.2 Close - 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 Volume 17
INVESTOR RELATIONS MYEG continues to actively engage its investors and the investor community as part of its approach to stakeholder communications. The objective of such engagements, which are held throughout the financial year, is to provide timely and accurate information on the Group’s financial and operational performance. In doing so, MYEG is able to ensure shareholders and investors as well as research houses and analysts have a fair and accurate view of the Group and its prospects. These engagements consisted of engagements deemed mandatory by the regulator, Bursa Securities as well as communications above and beyond regulatory requirements. These included quarterly announcements on financial performance, announcements on 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 and / or Senior Management and more. Increasingly, MYEG has also been including ESG-related data and information in its briefings / engagements with investors. This is due to the growing interest from the community and their strengthened mandate to prioritise ESG performance and disclosures as part of their criteria when evaluating / assessing companies. Such announcements are made available on the Bursa Securities site and also on the Investor Relations section of the Group’s website. All information is made available on the Group’s website, including past announcements and information. An email address is provided for anyone who wishes to submit queries or seek further clarification. All enquiries are responded to on a timely basis. Other methods of engagement include: z One-on-one and group meetings and conference calls with institutional and retail investors and shareholders, the Minority Shareholder Watch Group (MSWG) and potential investors; z Engagement with investment and research houses, market analysts and other key stakeholders from the investment and financial community; and z Participation in investment-related conferences and roadshows in global financial centres hosted by leading local and international investment banks. The aforementioned engagement sessions are held either virtually or physically in compliance with all prevailing health and safety regulations. 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. 18
PERFORMANCE MANAGEMENT DISCUSSION AND ANALYSIS REVIEWING THE MACRO-OPERATING ENVIRONMENT Global and domestic economies and societies have largely begun to return to normal after reeling from the profound effects of the COVID-19 pandemic which began in late FY2019, thanks to strong inoculation rates in FY2021 and early FY2022. However, the continued Eastern European conflict has resulted in supply chain disruptions and increased commodity prices, which subsequently impacted Malaysia’s business landscape. While these volatile situations may have risked restricting Malaysia’s growth prospects in FY2022, nevertheless, Malaysia’s diverse economic structure, strong fundamentals, good recovery momentum and its reopening of all economic sectors as it entered the endemic phase of the COVID-19 pandemic on 1 April 2022 have helped the country achieve a positive gross domestic product (“GDP”) growth. The country registered GDP growth of 8.7% in FY2022, representing a 22-year high and a strong improvement over FY2021’s 3.1% GDP growth. MYEG IN FY2022 Domestic growth was on the uptrend due to a strong economic performance in the fourth quarter of 2022 where domestic demand continued to be driven by private consumption supported by better labour market prospects and business confidence that remains positive. Amidst these operating and economic conditions, MYEG remained resilient by relying on its strong business fundamentals, while maintaining business and operational excellence in key business divisions. As MYEG entered FY2022 remaining cognisant of uncertainties, the Group ensured that it was always ready to constructively respond to any unexpected changes by pivoting its product offerings to ensure they are always fresh and relevant.The Group did not allow uncertainties to distract the growth trajectory of MYEG in FY2022 and remained committed to current and future growth objectives as well as invested in key projects to be brought to market such as blockchain-related services. This allowed the Group to consistently grow to achieve a strong earnings performance in FY2022, which was a new record for the Group, while consistently recording several accomplishments. MYEG’s strong business fundamentals continue to primarily come from its robust business model that enables agile responses to everchanging market forces. This has buoyed MYEG’s consistent progress in realising the organisation’s vision and mission while sustaining the creation of financial and non-financial values. The Group’s value creation abilities have always served a pivotal role in supporting stakeholders ranging from the government, to the business community and to ordinary citizens, and in the past couple of years, this has materialised in the form of pandemic-related healthcare services, which helped the nation combat the COVID-19 virus while keeping society healthy and safe. For the first quarter of FY2022, focus was still placed on healthcare services as they continued to drive activity during this early period of the reporting year. However, as Malaysia entered the endemic phase of the COVID-19 pandemic situation in April 2022, and with all economic sectors subsequently began removing restrictions and rapidly reopening, focus on the healthcare services began to congruently lessen, understandably so. This return to normal pre-pandemic market dynamics managed to offset the decreased spotlight on the Group’s healthcare services as other services that may have slowed down during the pandemic were revitalised once more as the broader economy began to gradually open up. These other services that returned to normal operating conditions included the e-service centres, which provide, among other things, services encompassing all aspects of the driving theory test under the driver’s licensing course. 19
MYEG’s nascent entrance into the blockchain landscape began to bear fruit in FY2022. Various blockchain-based services began operations and the Group started to see its blockchain initiatives generate some revenue, which augurs well for the coming years. MYEG’s blockchain pivot proves that its business model’s focus on innovative technology and speed-to-market is a calculated foresight that takes into account the needs of the nation and the public. This ensures MYEG remains competitive, future-proof and responsive to its stakeholders and its user markets. More information on the Group’s developed services can be found in the Our Business and Strategy section of this Annual Report. Ultimately, MYEG’s inherently strong business model, expertise as a leading digital services provider in various regions, and its commitment to trailblazing new solutions in line with market trends fundamentally drives the organisation to constantly scope out and develop various partnerships and services to meet and exceed the needs of the market. More details on MYEG’s FY2022 business and operational highlights can be found in the Highlights and Achievements section of this Management Discussion and Analysis. FINANCIAL PERFORMANCE For FY2022, MYEG recorded a revenue of RM651.11 million in FY2022 compared with RM721.88 million in the previous financial year, while profit after tax (“PAT”) reached RM400.40 million, a 26.4% increase from the previous year (FY2021: RM316.71 million). The decline in revenue largely reflected the lower demand for healthcare-related services such as quarantine services during the year as COVID-19 related standard operating procedures were progressively removed following the country’s transition into endemicity. Nevertheless, this was mitigated by increased contributions from the provision of other products and services, including existing concession and concession related services, partly as a result of the resumption of full operations of MYEG’s e-service centres located nationwide and other commercial services, such as foreign worker job matching. With the completion and launch of the Group’s Zetrix layer-1 blockchain platform, the Group also saw maiden revenue contributions from the sale of Zetrix tokens in FY2022. The increases recorded in the aforementioned product and service offerings underpinned the rise in PAT to a new record high, notwithstanding the tapering of the contribution from healthcare. A one-off recognition of fair value gains in the Group’s investment in Agmo following its initial public offering and listing on Bursa Securities also boosted earnings for the year. The recent acceleration of digitalisation spurred by the COVID-19 pandemic has seen consumers and businesses continue to prefer making digital transactions due to convenience and accessibility. Thus, the Group continued to benefit from this broad shift to the online space, as evidenced by the ongoing robust demand for the Group’s existing concession and commercial services such as online renewal of motorcar road tax and insurance, motorcycle road tax and insurance, and Competent Driving Licenses, as well as online renewal of foreign worker permits and insurance, among others. Thus, MYEG has managed to successfully capitalise on the strong uptake by consumers of online transaction channels and this, coupled with the introduction and contribution of blockchain solutions, has enabled the Group to deliver a healthy financial performance in FY2022. CORPORATE EXERCISES MYEG’s share placement exercises have been successfully carried out, drawing robust investor demand. The following corporate proposals were a key aspect of capital provision for MYEG’s business activities in FY2022: Pursuant to a private placement exercise carried out in FY2021 involving the proposed issuance of 300,000,000 MYEG shares, the first tranche was completed on 29 October 2021 following the listing and quotation of 210,000,000 new MYEG shares. MANAGEMENT DISCUSSION AND ANALYSIS (cont’d) 20
PERFORMANCE Bursa Securities had on 29 April 2022, resolved to grant MYEG an extension of time of 6 months to 25 October 2022 to complete the implementation of the issuance of the remaining unissued 90,000,000 MYEG shares of the private placement. The extension of the private placement exercise lapsed on 25 October 2022, marking the completion of the exercise. Details on utilisation of proceeds raised from the placement is set out in the Additional Compliance Information section of this Annual Report. SUKUK WAKALAH PROGRAMME On 17 October 2022, MYEG proposed to establish a Sukuk Wakalah Programme, a perpetual programme which allows for the issuance of Sukuk Wakalah from time to time, provided that the aggregate outstanding nominal value of Sukuk Wakalah does not exceed RM1 billion at any point in time. The Sukuk Wakalah Programme has been assigned a rating of AAIS with a ‘Stable’ outlook by MARC Ratings Berhad. The Sukuk Wakalah Programme also provides flexibility for MYEG to issue Sukuk Wakalah in compliance with amongst others, Green / Social / Sustainability SRI Sukuk guidelines, frameworks, standards or principles issued by the Securities Commission Malaysia, the ASEAN Capital Markets Forum (“ACMF”) and the International Capital Market Association (“ICMA”). MYEG’s Sustainability Financing Framework has been assigned a “Gold” Impact Assessment by MARCH Ratings Berhad. The proceeds raised from the issuance of Sukuk Wakalah under the Sukuk Wakalah Programme shall be utilised for foreign worker hostels and blockchain projects, as per the Sustainability Financing Framework. DIVIDEND RETURNS TO SHAREHOLDERS The Board had proposed a final dividend of 1.03 sen per ordinary share (FY2021: 1.03 sen based on the share capital of 3,671,929,737 ordinary shares) for FY2021, for which the shareholders had approved at the 21st annual general meeting (“AGM”) held on 23 June 2022. The final dividend is eligible for the dividend reinvestment plan (“DRP”), which allows MYEG’s shareholders, if they wish, to reinvest all or parts of their dividend proceeds in return for new MYEG shares. The final dividend, which amounted to RM76,070,854 based on MYEG’s total number of issued share of 7,408,616,642 MYEG shares (excluding 34,595,400 treasury shares), was paid on 21 September 2022. For the DRP, a total of 68,954,436 new MYEG shares were issued at the price of RM0.715 per MYEG share, which amounted to RM49,302,422. On 29 August 2022, the Board declared a first interim single tier dividend of 0.25 sen per MYEG share for FY2022 (FY2021: 0.25 sen), which was paid on 25 November 2022 to shareholders registered at the closed business date on 27 October 2022. The Board has proposed the declaration of a final dividend of 1.17 sen per ordinary share (FY2021: 1.03 sen) for the shareholders’ approval at the forthcoming AGM. The total dividend declared for FY2022 would thus amount to 1.42 sen per MYEG share, representing a payout ratio of approximately 30%. Meanwhile, in another effort to reward shareholders, MYEG had in December 2022, proposed to distribute 84,000,000 ordinary shares in Agmo, representing the entire 25.8% equity interest in Agmo held through MY E.G. Capital Sdn Bhd (“MYEG Capital”), a wholly-owned subsidiary of the Company, to entitled shareholders of the Group in two separate tranches by way of a dividend-in-specie. The proposed distribution was approved by shareholders at an extraordinary general meeting held on 19 January 2023, following which the distribution of 69,724,752 Agmo shares, representing approximately 21.5% equity interest in Agmo to entitled shareholders under the first tranche was completed on 10 March 2023. The remaining shares in Agmo held by MYEG shall be distributed to entitled shareholders under the second tranche on a date to be determined later. MANAGEMENT DISCUSSION AND ANALYSIS (cont’d) 21
CAPITAL AND OPERATIONAL EXPENDITURE Capital expenditure (“CAPEX”) management was important in maintaining the pursuit of key growth opportunities, with management continuing to observe prudence in handling CAPEX for the financial year. The strategy remains focused on balancing investments to unlock further business growth and expansion, while also remaining cognisant of the importance of rewarding shareholders and conserving adequate capital for current needs. Efforts to manage and ensure efficiency of operational expenditure (“OPEX”) were also prioritised. In FY2022, MYEG recorded CAPEX of RM533.53 million, 90.4% higher year-on-year (FY2021: RM280.23 million), while OPEX stood at RM287.48 million, 27.6% lower year-on-year (FY2021: RM397.29 million). CAPEX and OPEX incurred in FY2022 were for the following: CAPEX OPEX Development of technology including blockchain platform and related applications; Medical equipment; e-Government services related modules; Office and IT equipment; and Foreign workers hostel. Personnel-related expenses and OPEX; Advertising and promotion expenses; Maintenance and OPEX for MYEG’s building (“MYEG Tower”); and Depreciation and amortisation charges. ASSETS AND LIABILITIES, CASH AND BANK BORROWINGS The Group’s assets continued to outweigh its liabilities. Both current and non-current assets contributed to an increase in MYEG’s total asset position at RM2.54 billion, 34.8% higher year-on-year (FY2021: RM1.88 billion). Property and equipment had increased by 9.7% to RM330.01 million (FY2021: RM300.72 million). Trade receivables also increased by 15.2% to RM334.86 million (FY2021: RM290.78 million). Development costs more than doubled to RM762.68 million (FY2021: RM322.52 million). The Group’s cash and bank balances as at 31 December 2022 decreased 23.1% to RM56.68 million (FY2021: RM73.70mil). While the year saw increased cash generated from operations and fund raising exercises, the Group also intensified capital deployed for future business growth opportunities in areas such as blockchain. MYEG continued to possess sufficient cash to meet working capital requirements. MYEG’s total borrowings consisting of current and non-current secured loans arising from term loans, as well as unsecured loans comprising revolving credit, was higher at RM443.06 million for FY2022 (FY2021: RM160.55 million). MYEG continued to maintain a healthy debt-to-equity ratio of 0.22 times (FY2021: 0.05 times). HIGHLIGHTS AND ACHIEVEMENTS The lifting of travel restrictions and labour migration in FY2022 served to further strengthen MYEG’s immigrationrelated services such as the foreign worker job matching service. The recruitment business saw solid demand, given that many employers resumed hiring foreign workers again to fill urgent vacancies following the reopening of borders. The MyStay foreign worker accommodation programme in FY2022 saw existing facilities in Selangor and Melaka continue to achieve full occupancy rate. Notably, further progress was made in the purchase of land as well as in the submission and securing of requisite approvals from the relevant authorities for the upcoming development projects. MANAGEMENT DISCUSSION AND ANALYSIS (cont’d) 22
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