EXCEL FORCE MSC BERHAD Annual Report 2017

10 EXCEL FORCE MSC BERHAD (570777-X) ANNUAL REPORT 2017 The financial highlights of the Group are shown on pages 5 and 6. REVIEW OF OPERATION In 2017, EForce customers business performed well on the back of improved market sentiments at Bursa Malaysia (“Bursa”). Higher trades were recorded which boosted customer’s business volume. EForce benefited from an increase in ASP business segment revenue, and an uptick in customers’ requests for system enhancement to improve user experience and increase work efficiency. EForce had also implemented a number of Bursa mandated system enhancements to support their initiatives on growing the stock market. Amongst the changes were launch of Leading Entrepreneur Accelerator Platform (LEAP) Market for SMEs and sophisticated investors, launch of Real Estate Investment Trust (REIT) Index, and new trading features to enhance flexibility in trading strategies. On 31 March 2017, Insage (MSC) Sdn. Bhd. (“Insage”) became a wholly-owned subsidiary of EForce with the acquisition of the remaining 40% shareholding. The management managed to reduce Insage operating expenditure and improve profit margin. In December 2017, EForce subscribed to additional shares in Insage to address the capital deficiency issue. On 1 August 2017, EForce signed a Memorandum of Understanding with UK based Aquis Exchange Ltd (“Aquis”), with the intent to enter into a software delivery, support and operations agreement in the area of designing and building infrastructure and software, and customised training to support operationalization. Aquis is an exchange services group, which operates a pan-European cash equities trading exchange (under Aquis Exchange) and develops and licenses exchange software to third parties (under Aquis Technologies). Aquis is authorised and regulated by the UK Financial Conduct Authority to operate a Multilateral Trading Facility. KEY BUSINESS RISK AND MITIGATION STRATEGIES EForce’s income is derived from the stockbroking sector of the financial services industry. Changes to government policies, banking regulations, securities regulations and stockbroking rules have an impact to EForce’s business and operational performance. The Group continuously monitors trends in regulatory development, and through consistent engagements with brokers, regulators and relevant governmental agencies, the Group can better anticipate and formulate responses to changes. The Group embraces the use of digital technology solutions to solve customers’ business problems. As the speed of technological change increases, the risk of current solutions becoming obsolete is an ever present danger. To manage and mitigate this issue, the Group continues to invest in its people and explore new technology to keep our solutions current, more efficient, effective and relevant to the customers’ needs. The risk of cyber-attack (malware, phishing, distributed denial of services or DDoS, etc.) with the intent to steal data and deny genuine user access are growing menaces. The Group ensures it keeps abreast with the latest in cybersecurity trends and development, and periodically review its system security settings to strengthen its cyber-defenses. The detail risk management and internal control are disclosed in Statement on Risk Management and Internal Control (SORMIC) on page 34 to 36 in this annual report. The framework enables the Board to continuously identify, assess and manage risks that affects the respective business segments within the Group. Management Discussion And Analysis (cont’d)