WE BUILD AWESOME DIGITAL SYSTEMS ANNUAL REPORT 2021 www.excelforce.com.my
2 Notice of Annual General Meeting 5 Financial Highlights 7 Corporate Information 8 Management Discussion and Analysis 12 Sustainability Statement 16 Board of Directors’ Profile 20 Key Senior Management Profile 22 Corporate Governance Overview Statement 35 Audit Committee Report 37 Statement on Risk Management and Internal Control 40 Additional Compliance Information OUR VISION To be an innovative and high value adding software solution provider Visit our website for more information www.excelforce.com.my OUR MISSION We continuously strive to increase our technology know-howand capabilities, deepen our domain knowledge & optimise the use of our resources to produce high quality applications and services that expand our market reach, grow our revenue & sustain our profitability Table of Contents 41 Financial Statements Directors’ Report Statement by Directors Statutory Declaration Independent Auditors’ Report Statements of Financial Position Statements of Profit or Loss and Other Comprehensive Income Statements of Changes in Equity Statements of Cash Flows Notes to the Financial Statements 114 List of Properties 115 Analysis of Shareholdings Form of Proxy EXCEL FORCE MSC BERHAD
2 EXCEL FORCE MSC BERHAD NOTICE IS HEREBY GIVEN that the Twentieth Annual General Meeting (“20th AGM”) of the Company will be conducted on a fully virtual basis through live streaming and Remote Participation and Voting (“RPV”) Facilities from the Broadcast venue at Level 43A, MYEG Tower, Empire City, No.8, Jalan Damansara, PJU 8, 47820 Petaling Jaya, Selangor Darul Ehsan on Thursday, 9 June 2022 at 9.30 a.m. or at any adjournment thereof for the following purposes:- A G E N D A Ordinary Business 1. To receive the Audited Financial Statements for the financial year ended 31 December 2021 together with the Reports of the Directors and Auditors thereon. Please refer to Note 1 2. To approve the payment of a final single-tier dividend of 0.50 sen per ordinary share for the financial year ended 31 December 2021. Ordinary Resolution 1 3. To re-elect the following Directors who are retiring by rotation pursuant to Clause 105 of the Company’s Constitution and being eligible, have offered themselves for re-election:- a) Eng Shao Hon Ordinary Resolution 2 b) Datuk Mat Noor bin Nawi Ordinary Resolution 3 4. To re-elect the following Directors who are retiring pursuant to Clause 114 of the Company’s Constitution and being eligible, have offered themselves for re-election. a) Tan Sri Dato' Dr Muhammad Rais Bin Abdul Karim Ordinary Resolution 4 b) Elisa Tan Mun-E Ordinary Resolution 5 5. To approve the Directors’ fees amounting to RM624,000.00 for the period from the 20th AGM of the Company up to the 21st AGM of the Company. Ordinary Resolution 6 6. To re-appoint Messrs UHY as Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration. Ordinary Resolution 7 Special Business To consider and if thought fit, to pass the following resolutions: - 7. Authority to allot and issue shares in general pursuant to Sections 75 and 76 of the Companies Act, 2016 Ordinary Resolution 8 “THAT pursuant to Sections 75 and 76 of the Companies Act, 2016 (“the Act”), the Constitution of the Company, the Main Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities”), Additional Temporary Relief Measures to Listed Corporations for Covid-19, issued by Bursa Securities on 16 April 2020 and its subsequent letter dated 23 December 2021 on the extension of implementation of the twenty percentum(20%)GeneralMandateandsubject to theapprovalsof therelevantgovernmental/ regulatory authorities, the Directors be and are hereby authorised and empowered pursuant to Sections 75 and 76 of the Act, to issue and allot shares in the Company, at any time to such persons and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion deem fit, provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed 20% of the total number of issued shares of the Company (excluding treasury shares) at any point in time (“20% General Mandate”); AND THAT the Directors be and are hereby also empowered to obtain approval from the Bursa Securities for the listing and quotation of the additional shares so issued pursuant to the 20% General Mandate on Bursa Securities which would be utilised before 31 December 2022 and thereafter, the 10% general mandate will be reinstated; AND THAT such authority shall continue to be in force until the conclusion of the next AGM of the Company.” Notice of Annual General Meeting
EXCEL FORCE MSC BERHAD 3 8. Proposed Renewal of authority for the Company to purchase its own shares (“Proposed Renewal of Share Buy-Back Authority”) Ordinary Resolution 9 “THAT subject to the Act, the provisions of the Constitution of the Company, the Main Market Listing Requirements (“Listing Requirements”) of Bursa Securities and the approvals of all relevant governmental and/or regulatory authorities, the Company be and is hereby authorised, to the fullest extent permitted by law, to purchase such amount of ordinary shares in the Company as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the interest of the Company provided that:- i) the aggregate number of shares purchased or held as treasury shares does not exceed 10% of the total number of issued and paid-up shares of the Company as quoted on Bursa Securities as at the point of purchase; ii) the maximum fund to be allocated by the Company for the purpose of purchasing the shares be backed by an equivalent amount of retained profits; and iii) the Directors of the Company may decide either to retain the shares purchased as treasury shares, or cancel the shares, or retain part of the shares so purchased as treasury shares and cancel the remainder, or resell the shares, or transfer the shares or distribute the shares as dividends; AND THAT the authority conferred by this resolution will commence after the passing of this ordinary resolution and will continue to be in force until: i) the conclusionof thenext AGMatwhich time it shall lapseunlessbyordinary resolution passed at the meeting, the authority is renewed, either unconditionally or subject to conditions; or ii) the expiration of the period within which the next AGM of the Company is required by law to be held; or iii) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general meeting; whichever occurs first. AND THAT the Directors of the Company be and are hereby authorised to take all such steps as are necessary or expedient to implement or to effect the purchase(s) of the shares with full power to assent to any condition, modification, variation and/or amendment as may be imposed by the relevant authorities and to take all such steps as theymay deemnecessary or expedient in order to implement, finalise and give full effect in relation thereto.” 9. To transact any other business of the Company for which due notice shall have been given. NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT NOTICE IS ALSO HEREBY GIVEN THAT the Final Single-tier Dividend of 0.50 sen per ordinary share under the single-tier system in respect of the financial year ended 31 December 2021, if approved by shareholders at the forthcoming AGM, will be payable on 14 July 2022 to the shareholders whose names appear in the Record of Depositors of the Company at the close of business on 24 June 2022. A Depositor shall qualify for entitlement only in respect of: a) shares transferred to the Depositor’s Securities Account before 4.30 p.m. on 24 June 2022 in respect of transfer; and b) shares bought on Bursa Malaysia Securities Berhad on a cum-entitlement basis according to the Rules of Bursa Malaysia Securities Berhad. Notice of Annual General Meeting (cont’d)
4 EXCEL FORCE MSC BERHAD BY ORDER OF THE BOARD TAN TONG LANG (MAICSA 7045482/ SSM PC NO. 202208000250) THIEN LEE MEE (LS0009760 / SSM PC No. 201908002254) Company Secretaries Selangor Darul Ehsan Date: 29 April 2022 NOTES: 1. The Audited Financial Statements laid at thismeeting pursuant to Section 340(1)(a) of the Companies Act, 2016 aremeant for discussion only. It does not require shareholders’ approval, and therefore, it shall not be put forward for voting. 2. A member entitled to attend and vote at this meeting is entitled to appoint a proxy/proxies to attend and vote instead of him. A proxy may but need not be a member of the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting. 3. Where amember appointsmore than one proxy, the appointment shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy. 4. The Form of Proxy, in the case of an individual, shall be signed by the appointer or his attorney, and in the case of a corporation, shall be executedunder its Common Seal or under the handof its attorneyof the corporationdulyauthorised. 5. For the purpose of determining a member who shall be entitled to attend the 20th AGM, the Company shall request Bursa Malaysia Depository Sdn Bhd to issue a Record of Depositors as at 2 June 2022. Only a depositor whose name appears on the Record of the Depositor as at 2 June 2022 shall be entitled to attend the said meeting or appoint proxies to attend and/or vote on his/her behalf. 6. To be valid, the proxy form duly completed and signed must be deposited at the Share Registrar’s Office, at 11th Floor, Menara Symphony, No. 5 Jalan Prof. Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor not less than forty-eight (48) hours before the time set for holding the meeting or any adjournment thereof. Explanatory Notes to Special Business: 1. The proposed Ordinary Resolution 8 is the renewal of themandate obtained from themembers at the last Annual General Meeting held on 10 June 2021 (“the Previous Mandate”). The Previous Mandate was not utilised and accordingly no proceeds were raised. The proposed resolution 8, if passed, will provide flexibility to the Directors to undertake fund raising activities, including but not limited to placement of shares for the funding of the Company’s future investments projects, working capital and/or acquisitions, by the issuance of shares in the Company to such persons at any time, as the Directors may deem fit, without having to convene a general meeting. This authority, unless revoked or varied by the Company in a general meeting will expire at the conclusion of next Annual General Meeting of the Company. 2. The proposed Ordinary Resolution 9 if passed, will allow the Directors of the Company to exercise the power of the Company to purchase not more than ten percent (10%) of the total number of issued shares of the Company at any time within the time period stipulated in the Listing Requirements. This authority, unless revoked or varied by the Company at a general meeting, shall continue to be in full force until the conclusion of the next AGM of the Company. Further details are set out in the Statement to Shareholders dated 29 April 2022. STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING No notice of nomination has been received to date from any member nominating any individual for election as a Director at the AGM of the Company. There is therefore no individual standing for election as Director, save for the above Directors who are standing for re-election. Further details of Directors standing for re-election as Directors are set out in their respective profiles which appear in the Board of Directors’ Profile of this Annual Report and the details of their interests in the securities of the Company are disclosed in the Analysis of Shareholdings of this Annual Report. Please refer to Explanatory Note 1 for information relating to general mandate for issue of securities. Notice of Annual General Meeting (cont’d)
EXCEL FORCE MSC BERHAD 5 Five-Year Financial Highlights 2017 2018 2019 2020 2021 Financial Performance (RM’000) Turnover 22,918 22,939 22,963 31,386 37,312 Profit before Tax 8,112 7,935 8,290 14,175 16,886 Profit for the Year 6,323 6,657 6,471 10,766 12,180 PATANCI 6,323 6,657 6,471 10,766 12,180 Key Statement of Financial Position Data (RM’000) Cash and Bank Balances 21,542 29,813 22,789 22,853 32,356 Total Assets 54,446 58,723 101,433 102,390 110,300 Total Liabilities 7,874 11,521 4,965 9,530 8,630 Total Net Tangible Assets 36,141 36,112 85,151 80,928 89,496 Share Capital 20,743 20,998 89,303 89,303 81,176 Equity Attributable to the Owners of the Company 46,572 47,202 96,469 92,859 101,125 Share Information (sen) Basic Earnings Per Share1 1.53 1.61 1.38 1.91 2.18 Diluted Earnings Per Share2 1.13 1.07 1.38 1.91 2.18 Dividend Per Share 2.50 1.50 1.00 1.50 1.50 Financial Ratios Current Ratio (times) 5.95 3.17 10.84 6.11 6.95 Net Asset Per Share (RM) 0.11 0.11 0.17 0.15 0.18 Return on Equity (ROE) 14% 14% 7% 12% 12% Dividend Payout Ratio 163% 93% 72% 79% 69% Notes: 1. Earnings per share (“EPS”) is computed by dividing the PATANCI by the weighted average number of ordinary shares in issue during the financial year. PATANCI represents Profit after Tax and Non-Controlling Interests, being profit attributable to equity holders of the Company. 2. The diluted earnings per ordinary share is computed by dividing the PATANCI by theweighted average number of ordinary shares in issue during the financial year adjusted for the dilutive effects of all potential ordinary shares in issued at the end of the reporting period. 3. ROE is calculated by dividing the PATANCI by the equity attributable to equity holders of the Company.
6 EXCEL FORCE MSC BERHAD Five-Year Financial Highlights (cont’d) 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 22,918 5,172 10,579 21,542 22,939 6,217 10,052 29,813 22,963 6,029 10,356 22,789 31,386 16,648 22,853 37,312 8,391 8,391 20,609 32,356 Turnover (RM’000) Dividend Paid & Proposed (RM’000) Group Segmental Revenue 2020 (RM’000) EBITDA (RM’000) Cash & Cash Equivalent (RM’000) Group Segmental Revenue 2021 (RM’000) Application Solutions Application Services Provider Maintenance Services 82% 12% 6% Application Solutions 23% Maintenance Services 6% 71% Application Services Provider Notes: • Application Solutions ("AS') represent sales of software applications and products on outright purchase basis. • Application Services Provider ("ASP') represents provision of application services on monthly recurring fixed and variable charges. • Maintenance Services represent provision of maintenance services. • EBITDA represents Earnings before Interest, Taxation, Depreciation and Amortisation.
EXCEL FORCE MSC BERHAD 7 Corporate Information BOARD OF DIRECTORS Independent Non-Executive Chairman Tan Sri Dato’ Dr Muhammad Rais bin Abdul Karim (Appointed on 1 October 2021) Managing Director Mr Wong Kok Chau Executive Directors Mr Gan Teck Ban Mr Eng Shao Hon Independent Non-Executive Directors Datuk Mat Noor bin Nawi Dato’ Sri Ismail bin Ahmad Ms Elisa Tan Mun-E (Appointed on 1 December 2021) AUDIT COMMITTEE Chairman Datuk Mat Noor bin Nawi Members Dato’ Sri Ismail bin Ahmad Ms Elisa Tan Mun-E REMUNERATION COMMITTEE Chairman Dato’ Sri Ismail bin Ahmad Members Datuk Mat Noor bin Nawi Ms Elisa Tan Mun-E NOMINATION COMMITTEE Chairman Dato’ Sri Ismail bin Ahmad Members Datuk Mat Noor bin Nawi Ms Elisa Tan Mun-E COMPANY SECRETARIES Tan Tong Lang (MAICSA 7045482 / SSM PC No. 202208000250) Thien Lee Mee (LS0009760 / SSM PC No. 201908002254) BUSINESS OFFICE Level 31, MYEG Tower, Empire City No. 8, Jalan Damansara, PJU 8 47820 Petaling Jaya Selangor Darul Ehsan Tel: 03-7735 2288 (Hunting line) Fax: 03-7735 2289 REGISTERED OFFICE Level 5, Block B, Dataran PHB Saujana Resort, Section U2 40150 Shah Alam Selangor Darul Ehsan Tel: 03-7890 0638 Fax: 03-7890 1032 SOLICITORS Cheong Wai Meng & Van Buerle No. 30, 2nd Floor, Jalan USJ 10/1 47620 Subang Jaya Selangor Darul Ehsan Tel: 03-5638 7621 Fax: 03-5638 2313 PRINCIPAL BANKER Hong Leong Bank Berhad AUDITORS UHY (AF 1411) Suite 11.05, Level 11 The Gardens South Tower Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur Tel: 03-2279 3088 Fax: 03-2279 3099 REGISTRAR Boardroom Share Registrars Sdn Bhd 11th Floor, Menara Symphony No. 5, Jalan Prof. Khoo Kay Kim Seksyen 13 46200 Petaling Jaya Selangor Darul Ehsan Tel: 03-7890 4700 Fax: 03-7890 4670 STOCK EXCHANGE LISTING Main Market of Bursa Malaysia Berhad Stock Name: EFORCE Stock Code: 0065 Sector: Technology WEBSITE www.excelforce.com.my
8 EXCEL FORCE MSC BERHAD Management Discussion and Analysis The year 2021 started with great optimism as mass vaccination against Covid-19 kicked off in US, Europe, China and developing countries including Malaysia. According to the Ministry of Health, 22.8mil individuals or 97.6% of adult population in the country and 87.5% of adolescent population aged between 12 and 17, totalling 2.7mil individuals have completed their Covid-19 vaccination by the end of 2021. This unprecedented rapid roll out of vaccination program enabled the government to gradually ease movement restrictions and reopen the economy. Despite the emergence of the Omicron variant of Covid-19 virus, Malaysia’s GDP performance in 2021 showed improvement, with an increase of 3.1% compared to a contraction of 5.6% in 2020 (Ministry of Finance). The pandemic has taken a toll on the economy, with uneven pace of recovery across the industries. Fortunately, the financial services industry, and specifically the stockbroking sector had weathered the pandemic turbulence well. The Malaysian stock market trading activities remained strong in 2021, after a record breaking 2020. Bursa Malaysia ended the year with Average Daily Trading Value of RM3.545bil (2020: RM4.21bil, 2019: RM1.93bil), with retail trades continue to show strong momentum in 2021. 63% or about 2/3 of new individual CDS accounts opened in 2021 were by millennial investors (age 26-45 years old), a boost to future growth potential of Bursa Malaysia. As Malaysia’s leading information technology provider of complete share trading system solutions to stockbroking companies and investment banks, Excel Force MSC Berhad (“EForce” or “the Group”) benefited from the robust performance of its customers and the local stock market. BUSINESS OVERVIEW EForce organises its business activities into three (3) segments. They are: 1 APPLICATION SOLUTIONS (“AS”) Sales of software applications and product on outright purchase basis. 2 MAINTENANCE SERVICES (“MS”) Provision of maintenance services. 3 APPLICATION SERVICES PROVIDER (“ASP”) Provision of application services on monthly recurring fixed and variable charges. The Group's products include CyberBroker Front Office (for client-server, web and mobile-based stock trading system), CyberBrokerMiddleOffice, CyberBrokerBackOffice (including Custodian and Nominee System), StockBanking System (including Share Margin Financing System) and Fundamental Analysis System. EForce customers demand reliable and stable solutions to fulfil their mission critical role as capital market intermediaries. Over the years, EForce has earned a solid reputation in consistently meeting, and at times, exceeding customers' expectations. The Group collaborates closely with customers to continuously assess their evolving business needs and develop good quality applications to fulfil them. FINANCIAL PERFORMANCE The Group achieved a record revenue of RM37.3 million in FYE 2021, an increase of RM5.9 million or 19% compared to the previous financial year. The increase was mainly in AS segment, frommore system enhancement and technology refresh works. 2021 – RM2.7 million Profit Before Tax (PBT) 2020 – 16,886 14,175 19% 2021 – RM5.9 million Revenue 2020 – 37,312 31,386 19% Profit before tax (PBT) was also a record at RM16.9 million, higher by RM2.7 million or 19% compared to last financial year. Profit after tax (PAT) for FYE 2021 stood at RM12.2 million, an increase of RM1.4 million or 13% compare to last financial year. Total assets of the Group stood at RM110.3 million, increase of RM7.9 million from last year. Total liabilities of the Group stood at RM8.6 million, lower by RM0.9 million compared to previous financial year.
EXCEL FORCE MSC BERHAD 9 Jan 21 Feb 21 Mar 21 Apr 21 May 21 Jun 21 Jul 21 Aug 21 Sep 21 Oct 21 Nov 21 Dec 21 Jan 22 Feb 22 40,000 30,000 20,000 10,000 0 Oct 21 Nov 21 Dec 21 Jan 22 Feb 22 100,000 75,000 50,000 25,000 0 TOTAL MONTHLY USERS PAGE VIEWS XIFU'S Website Traction 08 OPERATIONAL HIGHLIGHTS EForce continues to strengthen its market leadership position and brand credibility as a trusted partner to stockbroking companies and investment banks. The Group continues to invest in research and development to enhance existing products and develop new products. By capitalising on new and emerging trends and technology, the Group is constantly building a steady pipeline of product and service offerings to grow our revenue stream. The Group adopted a partnership approach to collaborate with customers to understand their needs, and design the right solutions that fit their requirements cost effectively. To safeguard the health and safety of our employees during the pandemic, the Group implemented hybrid work arrangement and leveraged on technology for remote working. Fortunately, there was no impact to quality of our service delivery and the change was transparent to customers. As of today, the Group’s employees achieved full vaccination status. To ensure good cost management for margin growth, EForce optimises utilisation of its resources, leverages on its deep domain and system knowledge for efficiency gain in service delivery and troubleshooting. The Group seeks to eliminate non-value adding activities in our application development process and improve time to market of new and enhanced applications. BUSINESS HIGHLIGHTS EForce strengthened its core business in share trading solution through various enhancements to its trading platforms and technology upgrade of hardware and operating systems. This has further improved system reliability and stability, andminimise potential unscheduled downtime when stock market is open. EForce is also actively engaged with customers to ensure its systems and solutions meet the requirements of Bank Negara Malaysia’s (“BNM”) Risk Management in Technology (RMiT) guidelines. This is an on-going process of consultation and implementation. Insage MSC Sdn Bhd (“Insage”), a wholly-owned subsidiary company of the Group, is a leading outsourcing provider for Bursa Malaysia listed companies’ investor relation webpages and corporate websites. Insage continues to contribute positively to the Group, and its customer base now includes companies listed in Singapore and Australia. Insage will continue to seek out opportunities in Malaysia and overseas market for growth. The Group’s newest subsidiary company, Xifu Sdn Bhd (“Xifu”), has been building and expanding its service offering to Bursa Malaysia’s equity investors. Xifu is an investment platformto connect and actively engage investors/shareholders and corporates through creative media content creation and provision of full stack structured financial data services. Through web and mobile app platform, Xifu provides relevant market analytics and corporate access to investors/shareholders. Management Discussion and Analysis (cont’d)
10 EXCEL FORCE MSC BERHAD XIFU Mobile App We are currently ranked in the top 10-20 in terms of grossing for Apple's iOS and Android play store High engagement rate with users, 10 minutes per user per day Next day retention rate statistics of 25% shows stickiness We soft launched our app in February 2022 and we've received good users responses and engagement from it. It'll be on a freemium model going forward. 05 KEY BUSINESS RISK AND MITIGATION STRATEGIES Changes to government policies, banking regulations, securities regulations and stockbroking rules have an impact to EForce's business and operational performance. The Group 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 provides training and exposure to our employees on relevant technology development, and regular updates on evolving broking business landscape to ensure the Group’s solutions remain current. The growing threats of cyber-attack to steal data and deny genuine user access to systems requires timely and effective countermeasures. To mitigate this risk, the Group tracks the latest cybersecurity trends and development, and periodically review its system security settings to strengthen cyber-defences. The Group has updated and adopted a comprehensive set of IT Policy, including Cyber Security Policy to ensure a high standard of performance. Management Discussion and Analysis (cont’d) Live active stock monitoring Innovative external margin financing Marketplace for webinars Live algo driven trading signals Portfolio analytics Crypto trading Customised news/bursa/ fundamanetal analysis Live webinars/opinions/videos Live prices Current Features Coming Features 11
EXCEL FORCE MSC BERHAD 11 KEY BUSINESS RISK AND MITIGATION STRATEGIES (CONT’D) The Group adopted a zero-tolerance stance on fraud, bribery and corruption in all forms. The Anti-Bribery and Anti-Corruption Framework (ABAC) with policy, code of conduct and ethic clearly articulated and published on our website. The Framework laid out the process and procedures to deal with bribery and corruption risks, and incorporated them into our existing operational workflows. Further details of risk management and internal control are in Statement on Risk Management and Internal Control (SORMIC) on pages 37 to 39 in this annual report. The framework enables the Board to continuously identify, assess and manage risks that affects the Group. OUR OUTLOOK Most high and middle income countries are transitioning to endemic management of COVID-19. While the global economy continues to recover, the risks of high energy cost, rising food prices, increasing inflationary pressure, on-going supply chain disruptions, interest rates increase and military conflict in Ukraine threaten to upend the nascent recovery. Economic recovery in Malaysia is gathering momentum amid the reopening of the economy and international borders. With better COVID-19 management and higher vaccination rates, BNM expects less disruption to domestic economic activity and spending. Malaysia will also continue to benefit from the expansion in global demand. For 2022, BNM projects Malaysia’s GDP to grow between 5.3% and 6.3%. As Malaysians rebuild their savings after surviving the pandemic, they will re-focus to grow their wealth through investment. There are many asset choices now for investors to achieve their financial goals. To better compete in this evolving investment landscape, stockbrokers are innovating faster and creating uniqueness in their product and service offering to attract and retain customers. The Group is in constant contact with our current and prospective customers to understand and discover their needs, and help them achieve their business objectives. EForce intends to grow its revenue stream, optimise utilization of resources for productive gain and improvemargin. The Group regularly reviews its resource allocation to ensure our people are concentrating their time and effort on the right activities and get them done right first time. The Group will look out for good business opportunities with attractive valuation to invest in. The Group is also open to collaborate with potential partners in Malaysia and overseas to explore new business segments that leverages on the Group's technological capability and know-how in mission critical business environment. Overall, EForce is positive on our business prospect, excluding any unforeseen developments globally or in Malaysia. DIVIDEND The Group had declared and paid RM5.6 million dividends in FYE 2021, totalling 1.0 sen per ordinary share. EForce proposed a final single-tier dividend of 0.5 sen per ordinary share, subject to shareholders’ approval in the upcoming Twentieth (20th) AGM to be held on 9 June 2022. The dividend payout ratio (including the proposed dividend) will be 69% of the Group’s profit for the current financial year. EForce has no dividend distribution policy as management is of the view that adequate resources must be maintained within the Group for working capital and future expansion needs of the Group. Factors that may influence dividend pay-out includes profitability of the Group, the availability of cash balance, adequacy of reserve and economic situation. Management Discussion and Analysis (cont’d)
12 EXCEL FORCE MSC BERHAD Sustainability Statement The Group recognises that stability and growth of its business is interlink with the sustainability of the economy, the natural environment, workplace and the communities in which the Group operates. Hence, we are committed to being a responsible company and make a positive contribution to society and the environment. Sustainability is part of our key business priority. We continue to address on-going challenges, interact with our stakeholders to understand their views and keep abreast with latest legislative and regulation updates. The Board of Directors (“Board”) has oversight on embedding sustainability into the Group and its business strategy, and ensures that adequate resources, procedures and processes are in place to manage sustainability matters. WORKPLACE The Group endeavors to provide a healthy, safe, secure and friendly workplace for employees, as they are our most valuable asset. The Group has strategies to recruit, develop and retain its talent pool necessary to support the growth of our business. EForce strives to level up our employees' competency, skills and knowledge through structured and unstructured training. The training programs equip our employees with key skills and capabilities to support their career growth within the Group. The Employees Handbook provides guiding principles on the standards of ethics and professional conduct expected of our employees. Compensation and benefits paid to employees comply with all applicable laws, including minimumwage, overtime and legally mandated benefits. The Group does not impose wage deduction as a disciplinary measure. The Group ensures employees have life and medical insurance with hospitalisation coverage. To foster a cohesive and effective workforce, the Group organises various festive and birthday celebrations as well as sports activities. The objective is to encourage interaction and relationship building amongst employees. Under the Group’s terms of employment, employees are free to leave anytime after serving due and reasonable notice of termination. Foreign hires have work permits and they have free access to their passport at all times. The Group has zero tolerance towards harsh and inhumane treatment including sexual harassment, sexual abuse, mental or physical coercion or verbal abuse of employees. The Group has a clear and defined policies and procedures to address the aforesaid matters, with multiple communication channel, including whistleblowing directly to the Board. Workplace Diversity EForce understands that each individual is unique, and recognises each individual differences. We embrace diversity in the workplace on race, ethnicity, gender, age, physical abilities, religious beliefs, etc. This melting pot of people promotes a more conducive, innovative and productive workplace. We respect each person for who they are and the capabilities they bring on joining EForce. The following is breakdown of our workforce: Director 20-30 3 18 11 Senior Management 31-40 5 Managerial 41-50 11 Senior Executive 51-60 15 Executive/Non-Executive 42 Number of Employee by Levels Number of Employee by Age & Gender Headcount by Gender Male 65.8% Female 34.2% 19 7 6 1 3 11
EXCEL FORCE MSC BERHAD 13 COMMUNITY The Group uses its expertise and resources to support the communities in which it operate, focusing on supporting people in need, collaborating with local charities and organisations. As part of our on-going CSR engagement, the Group focus on the theme of “Education, Technology and Children”. On 1 July 2021, the Group donated 30 units of pre-owned HP laptops (3 years old) to a primary school, SJK (C) Pandamaran B, for their computer class program. We hope the donated equipment will enable to school to enhance technology knowledge and skill sets of its teachers and students. The HP laptops were handed over by our Executive Director, Mr Gan Teck Ban (second from the right) to the Headmistress of SJK(C) Pandamaran B, Madam Lim Yeat Ngo (third from the left). EForce opted to make monetary donation to following needy community due to difficulty in conducting in person CSR during the pandemic: Name of organisation Principle activity Fasting month contribution to PPR Lembah Subang Provide foods and beverage to PPR Lembah Subang residents. The Malaysian Islamic Virtue Organization (PERKIM) Negeri Sembilan branch Giving, providing, administering and carrying out Islamic lessons and education through all media. Carrying out all virtuous work including giving assistance, charity, scholarships and philanthropy to those who are worthy and carrying out other charities for the sick and poor. The National Cancer Society of Malaysia NCSM is the first not-for-profit cancerorganisation inMalaysia that provides education, care and support services for people affected by cancer. Yayasan ChowKit Yayasan Chow Kit is a local NGO connecting volunteers and corporates to community projects and community needs. Women’s Aid Organisation WAO provide free shelter, counselling, and crisis support to women and children who experience violence so they can heal and thrive. Spastic Children’s Association of Selangor and Federal Territory (SCAS & FT) SCAS & FT is a one-stop centre for a complete range of services for persons with Cerebral Palsy. Children are admitted as young as possible, or as soon as they are diagnosed with cerebral palsy. There is no exit age and services are FREE OF CHARGE. Shelter Home for Children This is a registered welfare organisation for abused, abandoned, neglected or at-risk children. Sustainability Statement (cont’d)
14 EXCEL FORCE MSC BERHAD MARKETPLACE The Group believes it is important to maintain a good level of communication and understanding with internal and external stakeholders, necessary for good corporate governance, and protect its reputable and sustainable business entity. The Group conducts stakeholder engagement to identify key stakeholders for the Group. This engagement evaluates the level of influence and dependence, whether directly and indirectly towards the Group. A summary of the stakeholders groups, the sustainability topics and the type of engagement with frequency are shown in the following table. List of stakeholder Sustainable topic Type of Engagement Frequency Customers • Regular meeting with customers • Provide stable, cost effective and reliable solution • Sustain good rapport for mutually beneficial relationship • Regular interactions with decision makers, influencers and users within the customer • Regular operation reviews/ meetings • On-going • On-going Suppliers • Ensure products are reliable, high quality and cost effective • Ensure after sales service is available, including emergency support • Forge strategic partnership • Regular meetings and correspondences • Get updates on latest product offering • Supplier evaluation and rating • On-going • On-going • Annually Employees • Health and safety • Communication and engagement • Working condition and welfare • Career development and training • Performance review • Operation in compliance with applicable laws and standard operating procedures • Social event with employees • Training and development • Formal department/town hall meeting • Appraisal and performance review • On-going • On-going • On-going • Annually Shareholders • Conduct Annual General Meeting (AGM) • Setup investor relations (IR) website for ease of communication • Business performance • Operation in compliance with applicable laws and regulations • Annual Report • Interim financial report • Corporate website and investor relationship channel • Regular meetings and correspondence • Annually • Quarterly • On-going • On-going Local community • Engaged with local NGO • Undertake community service to assist under-privileged children • Environment protection • Participation in local community and activities • Sponsorship or donation • On-going • On-going Media • Timely and accurate information • Press release • As required Sustainability Statement (cont’d)
EXCEL FORCE MSC BERHAD 15 ENVIRONMENT The Group is taking initiative to combat climate change and address its impact. The Group’s key focus area is to ensure its resources (people, equipment, materials) are optimally and efficiently used. When the right work is done and is done right first time, wastages are avoided, e.g. waiting, defect rectification, over processing, unnecessary redundancies, unrequired travel, etc. A positive consequent of this conscious effort is lower energy consumption and lower carbon footprint for the Group contributes to achieving Malaysia’s climate goal under United Nations Sustainable Development Goals. The Group also applies the concept of 3R (Reduce-Recycle-Reuse) and encourages responsible environment protection among employees and stakeholders, e.g. maximise use of electronic documentation instead of printing and photocopying to reduce paper usage, repair instead of replace furniture and fittings, etc. To ensure a safe and healthy working environment, the Group: I. Set policies and procedures to promote workplace health and safety, particularly for Covid-19 pandemic, and reduce accident/injury rates that could affect work performance; II. Ensures office is secured at all times (e.g. access control, CCTV surveillance, security guards etc.); III. Ensures office premises is equipped with relevant fire-fighting and fire prevention fitting and equipment (e.g. fire alarms, fire extinguisher, fire proof door, etc.); and IV. Participates in periodic fire drill exercises conducted by building management. Sustainability Statement (cont’d)
16 EXCEL FORCE MSC BERHAD Board of Directors’ Profile TAN SRI DATO’ DR MUHAMMAD RAIS BIN ABDUL KARIM Independent Non-Executive Chairman | Male, Aged 76 Tan Sri Dato’ Dr. Muhammad Rais bin Abdul Karim, a Malaysian, was appointed to the Board on 1 October 2021. He was graduate with a Bachelor of Art from University of Malaya, a Master in Public Administration from University of Southern California, USA and a Ph.D in Economic and Social Development Studies from University of Pittsburgh, USA. He has vast knowledge and working experience in the government of Malaysia. He was the assistant Director to Mageran, Public Service Department and Ministry of Health, Deputy Director General of General Service Department, Director General of Malaysian Administrative Modernisation and Management Planning Unit (MAMPU) of Prime Minister’s Department. Vice Chansellor of University Pendidikan Sultan Idris. He was appointed to the Royal Commission to enhance the Operations and Management of the Royal Malaysian Police Force (PDRM). He was a Chairman of Malaysian Qualifications Agency (MQA) and Goodyear Malaysia Berhad. He was a Director in MY E.G. Services Berhad from 2008 to 2021. Currently he is the Chairman of PERKIM Negeri Sembilan Branch. He did not hold any directorship in public companies and listed issuer. WONG KOK CHAU Managing Director | Male, Aged 53 Wong Kok Chau, a Malaysian, was appointed to the Board on 24 November 2016 and re-designated as Managing Director on 1 July 2020. He is a member of the Chartered Institute of Management Accountants (CIMA) and the Malaysian Institute of Accountants (MIA). He started his career with Ernst & Young providing corporate advisory services to business investors. Next, he joined a French based fast-moving consumer goods, BIC, as their Regional Controller for Asia. Kok Chau was a member of the Asian growth strategy execution team. He was subsequently recruited by Kepner-Tregoe (KT), a US-based training and consulting company as Financial Controller for Asia Pacific. His responsibility included financial and management reporting, treasury, costing, logistic and administration, and managed a team of back office support resources across 6 countries. Midway in his career with KT, he switched role to be a full time Consultant. He was a key resource in margin improvement and strategy formulation consulting projects, assuming the role of analyst and process consultant. He managed a regional inside sale team, responsible for selling training services and identifying consulting opportunities. He left KT to establish his own business in Singapore. A Davids & Company (ADC) is a productivity improvement consulting company, focus on increasing the thinking capability of people to solve problems and get the right things done right first time. Amongst the projects he implemented were formulating business direction of a global facilities management company and improving cross functional team communication and coordination of a regional telco. In EForce, he is responsible to formulate and execute strategic projects for business growth, increase operational efficiency, improve service delivery quality and business development. On 9 July 2018, Kok Chau was appointed as an independent and non-executive director of MY E.G. Services Berhad. He is also Chairman of the Audit Committee, Chairman of Employees’ Share Option Scheme Committee, and a member of the Risk Management and Remuneration Committee of MY E.G. Services Berhad.
EXCEL FORCE MSC BERHAD 17 Board of Directors’ Profile (cont’d) ENG SHAO HON Executive Director | Male, Aged 47 Eng Shao Hon, a Malaysian, was appointed to the Board on 2 January 2013. He graduated with a Bachelor Degree in Electrical and Electronic Engineering from Universiti Teknologi Malaysia in 1999. He is a Microsoft Certified Solutions Developer, holding a MCSD certification fromMicrosoft Corporation in 2003. Shao Hon started his career in 1999 with Motorola Malaysia as Research & Development (R&D) Software Engineer. He was responsible for the design and development of software for new telecommunication products. Two years later, he joined EForce as a Senior Software Engineer and subsequently, he was transferred to R&D department to assist in the development of the CyberBroker suite of solutions. He was the solution designer and key person in the development of StockBanking System, where his knowledge and expertise in Share Margin Financing Systemwas applied. He did not hold any directorship in public companies and listed issuer. Presently, he is the Chief Technology Officer responsible for research and development function in EForce. GAN TECK BAN Executive Director | Male, Aged 56 Gan Teck Ban, a Malaysian, was appointed to the Board on 2 January 2013. He graduated with a Diploma in Computer Studies from Informatics Computer Centre in 1990. He obtained the MCSD certification fromMicrosoft Corporation in 2003. He began his career with Wise Industries Sdn. Bhd., a rubber glove manufacturer as an Information Technology Supervisor where he was responsible for the maintenance of office computer hardware. Thereafter, he joined Rapid Computer Centre Sdn. Bhd., a company involved in development of educational software, as Software Specialist, and was later promoted to Technical Specialist. His responsibilities include managing a software team, project planning and management. In 1997, he joined EForce as Senior Programmer. He was involved in a number of software and system developments. He did not hold any directorship in public companies and listed issuer. In 2005, he was promoted as Customer Service Manager. His responsibilities included managing a support team, liaise with various departments for resource planning and project implementation in EForce. He is now Head of Sales and Business Development, responsible for formulating marketing plan, product and proposal presentation, secure new business and maintain good relationship with customers.
18 EXCEL FORCE MSC BERHAD Board of Directors’ Profile (cont’d) DATUK MAT NOOR BIN NAWI Independent Non-Executive Director | Male, Aged 67 Datuk Mat Noor bin Nawi, a Malaysian, was appointed to the Board of the Company on 27 September 2019. He is a graduate with a Bachelor of Science (Resource Economics) from University Putra Malaysia and Master of Science (Policy Economics) from University of lllinois, Urbana-Champaign, USA. Datuk Mat Noor bin Nawi had served with the Government of Malaysia for over 30 years where he started his career in the Malaysian civil service in 1981 as an Agriculture Economist at the Federal Agriculture Marketing Authority (FAMA) before joining Economic Planning Unit (EPU), Prime Minister’s Department in 1983. He had since continued to serve the EPU in various capacities and his last positionwas the Deputy Director General I, EPU, prior to joining Ministry of Finance (MOF) in October 2011. He was the Deputy Secretary General, Treasury (Systems & Controls) in MOF and later became the Deputy Secretary General, Treasury (Policy) at the MOF, a position he held since 16 November 2012. He then retired from the Malaysian civil service on 6 June 2015. On 1 October 2015, Datuk Mat Noor was appointed as Chairman of Export-Import Bank of Malaysia Berhad (EXIM Bank) and retired on 31 September 2018. Currently, he is the Chairman of Carrier International Sdn Bhd. He also sits on the Board of PDX. com Sdn Bhd, Cuscapi Berhad and Megah Perkasa Security Services Sdn Bhd. He is the Chairman of the Audit Committee and a member of the Remuneration Committee and Nomination Committee of EForce. DATO’ SRI ISMAIL BIN AHMAD Independent Non-Executive Director | Male, Aged 66 Dato’ Sri Ismail Bin Ahmad, a Malaysian, was appointed to the Board of the Company on 1 July 2020. He is a graduate with Bachelor of Science (Agriculture), Universiti Putra Malaysia and Masters of Business Administration, University of Hull, United Kingdom. He started his career as a diplomatic and administrative officer. He has more than 35 years of experience in public service, in 1991 he work as Assistant Secretary for Economic Planning Unit, in 1988 he is Deputy Registrar for National Institute of Public Service (INTAN), in 2006 he is the Senior Director of Ministry of Domestic Trade, Co-operation and Consumer Affairs and in 2013 he is the Director General of Road & Transport Department. He did not hold any directorship in public companies and listed issuer. He is a member of Audit Committee, Chairman of Nomination Committee and Remuneration Committee of EForce.
EXCEL FORCE MSC BERHAD 19 ELISA TAN MUN-E Independent Non-Executive Director | Female, Aged 39 Elisa Tan Mun-E, a Malaysian, was appointed to the Board of the Company on 1 December 2021. She graduate from The One Academy with Diploma in Graphic Designer. She has vast working experience in private sector. In 2006, she worked as Assistant Designer at White Fairy Sdn Bhd. In 2012, she was the Business Development Executive at Megastonic Sdn Bhd. In 2013, she was a Director at Beyond Entity Sdn Bhd and subsequently taken additional role as Talent Manager. Currently she was the Managing Director at Awesome Lounge Sdn Bhd. She did not hold any directorship in public companies and listed issuer. She is a member of Audit Committee, Nomination Committee and Remuneration Committee of EForce. Other information in respect of all Directors 1. Save as disclosed above, none of the Directors have any family relationship with any director and/or major shareholder of the Company. 2. None of the Directors have any conflict of interest with the Company. 3. None of the Directors have been convicted for offences other than traffic offences, if any, within the past 5 years. 4. None of the Directors have any public sanction or penalty imposed by the relevant regulatory bodies during the financial year. Board of Directors’ Profile (cont’d)
20 EXCEL FORCE MSC BERHAD Key Senior Management Profile The Management team is headed by the Managing Director, Mr. Wong Kok Chau. He is assisted byMr. Eng Shao Hon, Mr. Gan Teck Ban and the following key senior management. WONG GUAN BOON Head, Customer Service | Male, Aged 47 Wong Guan Boon, a Malaysian, joined EForce in 1999. He holds an Advance Diploma in Computer Engineering. He started his career as a Hardware Engineer with Excel Force Sdn Bhd and experience in technical support and marketing role. He was also involved in a number of sales and implementation of EForce’s products including Internet stock trading system, Equities Back Office System, Trader Information System, Professional Trading Platform - BTX, Public Display System and StockBanking systems to customers in Malaysia, Indonesia, Singapore, Thailand and Vietnam. Currently, he is the Head of Customer Service, responsible to oversee the customer service and support team, task to improve customer support service level and monitor functionalities of hardware and software. WONG BOON LEONG Head, SystemDesign and Quality Assurance | Male, Aged 42 Wong Boon Leong, a Malaysian, joined EForce on 23 August 2005 as a Software Developer. He graduated with Bachelor of Information Systems Engineering degree from Universiti Tunku Abdul Rahman. He is also a Project Management Professional (PMP) certified practitioner. Throughout his 17 years with EForce, he has held various positions such as SystemAnalyst, Project Manager and Head of System Design. He has vast overseas and local projects experience, engaging with our clients from stock trading, banking and insurance industries. Boon Leong helps them to fulfill not just their business needs but gain competitive advantages by leveraging on IT systems and products. Currently he is responsible for system design and quality assurance function. ALICIA CHAN SAU HSIA Head, Human Resources and Administration | Female, Aged 47 Alicia Chan Sau Hsia, a Malaysian, was appointed as the Manager of Human Resources and Administration in 2012. She graduatedwith a Bachelor ofManagement (Marketing) fromtheUniversityof South Australia. She also obtained professional certificate in Human Resources Management. Prior to joining EForce, she was attached to several large corporations with operational roles in retail, service and human resources management. She has more than 15 years of experience in human resources and administration with over 10 years of experience at managerial level. She is experienced in recruitment, compensation and benefits, training and development, payroll management and in initiating Corporate Social Responsibility. Currently as Head of Human Resources and Administration, she is responsible in formulating and implementing human resources strategy and productivity, aligning them to the organisation’s aspirations and objectives. She also assists in creating balance amongst people, work environment and performance.
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