OUR BUSINESS MATTERS IMPACTING VALUE CREATION (cont’d) ABRUPT CHANGES IN GOVERNMENT POLICIES While MYEG is not solely dependent on revenue derived from its e-Government services, any abrupt changes in government policies i.e. a decision to not renew concessions or to delay implementation would impact all digital service providers. Besides business operations, any shifts in policy may also impact the development of the nation’s digital infrastructure and overall landscape. However, the present government has maintained a pro-digital approach, given how the digitisation of government services has played a key role in bridging the digital divide and improving the delivery of government services while reducing costs. This was notably evident during the COVID-19 pandemic period of FY2020FY2021. Capitals invested in the development of such services (be it prototypes or market ready offerings), would again be impacted. Risk and Opportunities Political factors are beyond the Group’s control. However, the value of what we provide transcends the politics of the day and is meant to serve stakeholders. Non-renewal of services may have some impact on business performance. However, this has been mitigated by the Group’s continued focus on developing its commercial services. More than 80% of the Group’s revenue is derived from its commercial services. The Group’s existing service quality levels meet and exceed set Key Performance Indicator (KPI) and as such, non-renewal is more driven by any sudden change rather than for non-performance reasons. Business Strategies Continued market and product diversification, especially the development of more commercial services across all geographic locations of operations (refer to Strategies to Sustain Value Creation Section). Material Capitals The Group’s ability to maintain its expansionary mode is sustained by the following business strengths and capitals: intellectual property, ongoing development and adoption of new technologies, growing and diverse customer base, a proven track record in e-Government and commercial services, strong stakeholder engagement and a robust financial position comprising growing revenue, earnings and cashflows. GLOBAL AND DOMESTIC MACROECONOMIC CONDITIONS POST THE PANDEMIC Post pandemic, the global and Malaysian economy were forecast to make a robust recovery as markets opened and economic activities returned to pre-pandemic levels. Malaysia’s GDP growth in FY2022 was recorded at a strong 8.7%. However, Malaysia continues to be affected by a rising US dollar and subsequently inflation. Consumer spending, though recovering, remains weak and the expected rebound in private sector consumption foreign investments is still below par. Present economic conditions may affect retail consumers consumption of services. However, the larger effect is on commercial entities i.e. companies choosing to defer or scale down business investment plans. 43
RkJQdWJsaXNoZXIy NDgzMzc=