EXCEL FORCE MSC BERHAD Annual Report 2020

EXCEL FORCE MSC BERHAD - ANNUAL REPORT 2020 10 MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D) REVIEW OF OPERATIONS After the World Health Organisation declared Covid-19 a pandemic in March 2020, the Malaysian government imposed Movement Control Orders (MCO) in its’ various forms and regulations to contain the spread of the virus. Like other organisations, the Group had to immediately adapt our operational flow to the new normal of social distancing, minimise face-to-face contacts and employed greater use of technology like video conferencing apps for business continuity. To ensure the health and safety of our employees, customers and suppliers, the Group shut its office for over 4 months in 2020, with all employees working from home (WFH). When MCO restrictions were eased, we continued to be on high alert and allowed only 50% of total workforce in office at any one time. New standard operating procedures were rapidly rolled out to monitor, track and mitigate any potential infection amongst our employees. Fortunately, our customers did not encounter any severe and prolonged service disruption as we adapt to the new environment. We remotely supported our customers to increase system capacity and perform technology refresh of servers and hardware, to meet a huge surge in retail trading participation. We continued to innovate and develop new products and services amidst the pandemic business volatility. The Group collaborated with a broker to develop the industry’s first fully digital non face-to-face account opening and on-boarding process for direct account. The objective is to shorten the lead time from application submission to trading for investors as this was a severe business constraint for many brokers in 2020. The Group had also secured new business for web and mobile share trading platform. This will go live in 2021 and contribute positively to our revenue stream then. We have also secured a new contract to implement the latest generation of our mobile trading system for a customer, also expected to go live in 2021. EForce continues to focus on innovating and enhancing its product and service offerings to meet customers’ needs, and further strengthen its leading position in Malaysia in their area. The Group closely monitors its cost base. EForce continues to optimise and improve on its resource utilisation, leverage on its deep domain and system knowledge to enhance efficiency in service delivery and troubleshooting. The Group seeks to eliminate non-value adding activities in our application development process and improve time to market new and enhanced applications. The business performance of the Group’s subsidiary company, Insage (MSC) Sdn Bhd continues to improve. There is more demand for outsourcing of public listed companies’ investor relation webpages and corporate websites. The Group will continue to capitalise on these opportunities in Malaysia and is concurrently identifying expansion opportunities in overseas market. The Group incorporated a wholly owned subsidiary company, Xifu Sdn Bhd (“Xifu”) in quarter 3 2020. Xifu is a social media platform connecting smart investors to exchange opinion and share ideas across multi asset class and multi product. Xifu has both proprietary and user generated content to meet the information and decision making needs of a new generation of investors The Group’s other subsidiary company, E2 Trade Sdn Bhd, is still dormant and not operational in FYE 2020. KEY BUSINESS RISK AND MITIGATION STRATEGIES Changes to government policies, banking regulations, securities regulations and stockbroking rules impact EForce's business and operational performance. The Group continuously monitors trends in regulatory development, and through regular engagements with brokers, regulators and relevant governmental agencies, the Group can better anticipate risks and formulate responses to changes. The Group’s business operation is highly dependent on the stability and reliability of our application solutions, data centre, network infrastructure and equipment. EForce mitigates the operational and system risk through pre-trading system health check, close monitoring of equipment resource use for preventive actions, regular back up procedures to ensure business continuity, review and fine tune our applications for performance improvement. Keeping abreast and updated on technology advancement is critical to ensure timely and effective maintenance of our application solutions, and provide quick response to customers when issues arise. EForce mitigate this risk by providing training and exposure to our employees on relevant technology development, and also update on changes in the broking business landscape to ensure our solutions remain current.

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