GHL System Berhad Annual Report 2023

MANAGEMENT DISCUSSION AND ANALYSIS CONT’D 3.0 PERFORMANCE BY BUSINESS SEGMENT AND GEOGRAPHY (Cont’d) 3.2 Performance by Geographical Location (Cont’d) The Philippines experienced a YoY revenue growth of 18.2% in revenue, amounting to RM66.1 million (2022: RM55.9 million). This growth was powered by improved TPA performance but tempered by lower rental revenue from Shared Services. The Solution Services segment contributed to the overall growth through increased software sales. In 2023, Thailand showed a significant growth in revenue, recording a YoY increase of 30.0% to RM36.8 million (2022: RM28.3 million). This improvement was attributed to enhanced performance in its TPA and Solution Services segments. The TPA segment in Thailand improved YoY, benefiting from higher local consumption and the return of tourism. Thailand experienced a decline in the Shared Services segment due to one-time hardware sales in 2022, which was not replicated in 2023. Other geographies contributed revenue of RM1.9 million (2022: RM1.3 million) to the Group’s total revenue for the year. As at end of December 2023, the Group’s payment touchpoints across the region was at approximately 480,000 points, a 14.5% growth YoY, while TPA touchpoints grew 12.8% to approximately 199,000 points. This large merchant touchpoint base has enabled the Group to process RM28.9 billion in payment transactions (10.1% YoY growth). Revenue by Country (RM million) 324.9 355.6 410.4 460.4 55.9 66.1 28.3 36.8 1.3 1.9 Malaysia Philippines 0.0 100.0 200.0 300.0 400.0 500.0 Thailand Others Group 2022 2023 4.0 KNOWN RISKS In the ordinary course of its operations, the Group is exposed to the following risks: 4.1 Merchant Performance Risk The Group currently contracts directly with merchants across two business models: (a) Direct Acquirer with Payment Schemes; and (b) Payment facilitator with financial institutions. In the event a merchant defaults in his obligations to the consumer for any particular sale, the consumer has the right to “chargeback” the transaction resulting in the sale amount to be refunded to consumer. The acquirer/payment facilitator would then have the right to recover the amount of the transaction from the merchant. The Group could potentially incur a loss if the merchant is no longer in business or is unable to reimburse the Group for the chargeback. The Group has, over the past years, invested significantly to develop and put in place, risk management policies, systems, practices, along with experienced risk managers to monitor merchant performance risk. The Group also implemented specific rules and other forms of controls in order to monitor and manage performance risks. These strict controls and Standard Operating Procedures (“SOP”) have effectively mitigated merchant performance risk, and as of the date of this report, there was negligible exposure arising from this risk. Industry fraud trends are regularly monitored for early detection and effective management of risk exposure. 13 ANNUAL REPORT 2023

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