Dagang NeXchange Berhad Annual Report 2018

System Integration & Consultancy: Providing knowledge and solution for Accrual Accounting and Public Sector Shared Service Deliveries DNeX’s wholly owned subsidiary Dagang Net acquired 51% equity interest in Genaxis Group Sdn. Bhd. (“Genaxis”) for RM10 million, and this acquisition gives Dagang Net indirect equity interest of 60% in Innovation Associates Consulting Sdn. Bhd. (“IAC”). Genaxis is a firm that delivers training and consulting services in transformation initiatives, and has worked with various organisations and agencies including the RMCD, UEM and CIMB Berhad. IAC is a consulting firm with projects in public and private sectors. The company is currently the contractor for the Integrated Government Financial & Management System (“iGFMAS”) for a contract sum of RM380.2 million. IAC was awarded the maintenance contract for iGFMAS, named “Perkhidmatan Penyenggaraan Perkakasan, Peralatan Rangkaian dan Perisian iGFMAS”, worth RM59.4 million for one year, starting from 10 August 2018 to 9 August 2019. In 2018, consolidation of results from acquisition of Genaxis and IAC (collectively referred as Genaxis Group) has contributed 31% Group’s revenue and 48% net profits. System Integration & Consultancy: Marine Cable Installation, Repair and maintenance During the year, DNeX through subsidiary DNeX Telco Services Sdn. Bhd. ("DNeX Telco"), has commenced operations in marine telecommunications cable installation, repair and maintenance project in Indonesian and Philippines waters. The projects were awarded by Pt. Bina Nusantara Perkasa a limited liability company under the laws of Indonesia. Under the project, DNeX will be responsible for the design, construction and installation of about 700 kilometres of fibre optic installation for two lines namely Matanusa and SMPCS Patara as part of the Indonesia Global Gateway Cable System. DNeX is working with Kokusai Cable Ship Co Ltd of Japan in these projects. DNeX Telco recognised its first revenue in 2018 contributing 9% and 4% to Group’s revenue and net profits respectively. Moving forward, DNeX is excited to expand this service offering to other industries including oil & gas, and power. System Integration & Consultancy: Radio Frequency Identification Solutions (“RFID”) DNeX RFID Sdn. Bhd. (“DRFID”) completed the vehicle entry permit and road charges system ("VEP & RC") development and integration (referred to as CAPEX contract) using RFID technology for border crossing between Malaysia and Singapore. DRFID now maintains the said system until 2021 which yearly contract value is lower than CAPEX contract. DRFID also holds a subcontract to undertake encryption of RFID VEP Tags on foreign vehicles. Subsequent to the existing contracts. DNeX plans to focus on encryption of RFID VEP Tags for foreign vehicles and replicate the available system and business model to other Government and semi-Government agencies within Malaysia and ASEAN countries. DRFID is a 51% held subsidiary of DNeX with the remaining 49% held by TCSens Sdn. Bhd., a company involved in the development and integration of RFID technology. System Integration & Consultancy: Integrated Intelligent Infrastructure (I 3 ) solution provider DNeX specialises in full project management, from design and build right through to installation and commissioning of IT equipment in large nationwide ICT rollout, include the comprehensive online and on-site technical support technicians who are authorised and certified by multinational vendors and strategic partners. IT management and consultation approach emphasises a Standard Operation Procedure that includes designing, developing, improving, adopting and maintaining infrastructure to suit our client’s needs. System Integration & Consultancy: Cyber Security Services The Group’s Cyber Security Services, which is ISO/IEC 27001: 2013 Information Security Management System certified, continues to provide services to several financial institutions and agencies including Bank Negara Malaysia. In early 2018 DNeX signed an exclusive brand licensing agreement with EC-Council International Ltd to offer cyber security services in Malaysia. With this licensing deal, DNeX will offer holistic approach to cyber security of EC-Council and develop a cyber security framework that helps in identification, protection, detection, response, and recovery to cyber threats to clients in Malaysia. 12 Dagang NeXchange Berhad Annual Report 2018 Management Discussion & Analysis