AwanBiru Technology Berhad - Annual Report 2021

Strong Cash Position We have embarked on and made substantial progress in our rationalisation plan to monetise non-core assets and reduce operating cost since 2019. This is evident by disposals of non- core assets and loss-making operations which has improved our overall cash flow. In November 2020, we concluded the disposal of our entire equity interest in PESB which was making a loss. In addition to a private placement of RM14.2 million in June 2020, we have also completed the fund-raising exercise from placement of shares and rights issue of shares, raising a gross amount of RM63.2 million. We had announced in February 2021 the disposal of our office building in Cyberjaya for RM24.2 million, and once completed, this disposal will result in an annual cash savings of RM2.0 million plus surplus cash of approximately RM6.6 million from the sale which will be channelled as working capital for our continuing operations. Recently in August 2021, we have also completed the sale of our 51% equity interest in loss making Prestariang O&G Sdn. Bhd. (“ POGSB ”). We achieved a positive net operating cash flow of RM6.3million for the financial year ended 30 June 2021 despite significant payments for trade payables due to the expiry of the MLA by intensifying our efforts on collection of trade receivables. Rebuilding Revenue Base with More Products and Service Offerings In February 2021, our wholly owned subsidiary PSSB was appointed by Google as their exclusive Managed Service Provider (“ MSP ”) to the Government of Malaysia in relation to their empanelment by the Malaysian Administrative Modernisation and Management Planning Unit (“ MAMPU ”) to support government agencies with Google Cloud Platform and Google Workspace. This appointment involves Infrastructure as a Service (“ IaaS ”), Platform as a Service (“ PaaS ”), Software as a Service (“ SaaS ”) and Anything as a Service (“ XaaS ”) for three years until 2023. At the beginning of July 2021, PSSB secured a RM22.8 million contract from the Ministry of Education to supply G-Suite Enterprise for Education SaaS to public schools in Malaysia for a 3-year term contract. This shows the increase in acceptance of our products and services by our customers as they move towards the Cloud in their digital adoption. Notwithstanding, the expiry of the Master Licensing Agreement (“ MLA ”) with the Government of Malaysia, along with the discontinuation by Microsoft of PSSB’s membership in the Microsoft Partner Network which came to an end on 31 January 2021, the appointment of PSSB by Google as their exclusive MSP to the Government of Malaysia is a significant step forward for the Group into cloud based services. We see demand from customers for our new and wider range of Cloud-based services growing at an accelerated pace. We have laid the groundwork in terms of our capability, financial reserves from the recent corporate exercise and partnerships with leading global technology players like Google, SAP, Adobe, and others to access products and services to tap the vast opportunities in digitalising Malaysia. On this premise, our Board is of the view that our Group is in good position to capitalise on the task of meeting the market requirement for technology and talent services to spearhead our business growth. One key and innovative project for our talent division, this financial year is the Selangor Kerjaya Programme. This was a collaboration between Menteri Besar Selangor (incorporated) and Awantec to develop and implement the Selangor Kerjaya Programme that was set to provide upskilling, reskilling and job placement for 10,000 job seeking Malaysians. The Selangor Kerjaya Programme is a key state program in which PSSB plays pivotal roles in providing training and job placements for job seekers, while in the same time enabling Selangor state government with analytics and intelligence that will give the state a strategic advantage to improve employment opportunities of its residents in the future. Management Discussion & Analysis Awantec | Key Messages 20 Annual Report 2021