ANNUAL REPORT 2023 We Build Awesome Digital Systems ANNUAL REPORT 2023
2 Notice of Annual General Meeting 6 Financial Highlights 8 Corporate Information 9 Board of Directors’ Profile 12 Key Senior Management Profile 14 Management Discussion and Analysis 17 Sustainability Statement 22 Corporate Governance Overview Statement 34 Audit Committee Report 36 Statement on Risk Management and Internal Control 39 Statement of Directors’ Responsibility 40 Additional Compliance Information 41 Financial Statements 123 List of Properties 124 Analysis of Shareholdings Form of Proxy TABLE OF CONTENTS Visit our website for more information www.excelforce.com.my
2 EXCEL FORCE MSC BERHAD NOTICE IS HEREBY GIVEN that the Twenty-First Annual General Meeting (“21st AGM”) of the Company will be conducted on a 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 Tuesday, 5 December 2023 at 9.30 a.m. or at any adjourment thereof, for the transaction of the following businesses: A G E N D A Ordinary Business 1. To receive the Audited Financial Statements for the financial period from 1 January 2022 to 30 June 2023 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 period from 1 January 2022 to 30 June 2023. 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) Wong Kok Chau Ordinary Resolution 2 b) Dato’ Sri Ismail Bin Ahmad Ordinary Resolution 3 4. To re-elect Datuk Wira Farhash Wafa Salvador who is retiring pursuant to Clause 114 of the Company’s Constitution and being eligible, has offered himself for re-election. Ordinary Resolution 4 5. To approve and ratify the payment of the Directors’ Fees paid to the Directors of the Company amounting to RM4,000.00 for the period from 1 January 2023 up to 30 June 2023. Ordinary Resolution 5 6. To approve the Directors’ fees amounting to RM624,000.00 for the period from the 21st AGM of the Company up to the Twenty-Second Annual General Meeting (“22nd AGM”) of the Company. Ordinary Resolution 6 7. To re-appoint Messrs. TGS TW PLT 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: - 8. 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”) and subject to the approvals of the relevant governmental/ regulatory authorities, the Directors be and are hereby empowered to issue shares in the capital of the Company from time to time 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 issued pursuant to this resolution does not exceed 10% of the total number of issued shares of the Company for the time being and that the Directors be and are hereby also empowered to obtain approval from the Bursa Malaysia Securities Berhad for the listing and quotation of the additional shares so issued and that such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company. Notice of Annual General Meeting
EXCEL FORCE MSC BERHAD 3 AND THAT in connection with the above, pursuant to Section 85(1) of the Act read together with Clause 61 of the Company’s Constitution, the shareholders of the Company by approving this resolution are deemed to have waived their pre-emptive rights over all new shares, options over or grants of new shares or any other convertible securities in the Company and/or any new shares to be issued pursuant to such options, grants or other convertible securities, such new shares when issued, to rank pari passu with the existing shares in the Company.” 9. 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 Malaysia Securities Berhad (“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 conclusion of the next AGM at which time it shall lapse unless by ordinary 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 they may deem necessary or expedient in order to implement, finalise and give full effect in relation thereto.” 10. To transact any other business of the Company for which due notice shall have been given. Notice of Annual General Meeting (Cont’d)
4 EXCEL FORCE MSC BERHAD NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT NOTICE IS ALSO HEREBY GIVEN THAT the Final Single-tier Dividend of 0.50 sen per ordinary share in respect of the financial period from 1 January 2022 to 30 June 2023, if approved by shareholders at the forthcoming AGM, will be payable on 5 January 2024 to the shareholders whose names appear in the Record of Depositors of the Company at the close of business on 21 December 2023. 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 21 December 2023 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. BY ORDER OF THE BOARD TAN TONG LANG (MAICSA 7045482/ SSM PC NO. 202208000250) THIEN LEE MEE (LS0010621 / SSM PC No. 201908002254) LOW VEN SIN (MAICSA 7076080 / SSM PC No. 202208000340) Company Secretaries W.P. Kuala Lumpur Date: 31 October 2023 NOTES: 1. The Audited Financial Statements laid at this meeting pursuant to Section 340(1)(a) of the Companies Act, 2016 are meant 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 a member appoints more 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 executed under its Common Seal or under the hand of its attorney of the corporation duly authorised. 5. For the purpose of determining a member who shall be entitled to attend the 21st AGM, the Company shall request Bursa Malaysia Depository Sdn Bhd to issue a Record of Depositors as at 28 November 2023. Only a depositor whose name appears on the Record of the Depositor as at 28 November 2023 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, Aldpro Corporate Services Sdn Bhd, B-21-1, Level 21, Tower B, Northpoint Mid Valley City, No. 1 Medan Syed Putra Utara, 59200 Kuala Lumpur, Wilayah Persekutuan not less than forty-eight (48) hours before the time set for holding the meeting or any adjournment thereof. Explanatory Notes : Item 1 of the Agenda - Audited Financial Statements for the financial period from 1 January 2022 to 30 June 2023 This item of the Agenda is for discussion purposes only, as Section 340(1)(a) of the Companies Act 2016 does not require the shareholders to formally approve the Audited Financial Statements. Therefore, this item will not be put forward for voting. Ordinary Resolutions 2 & 3: Re-election of Directors who retire by rotation pursuant to Clause 105 of the Company’s Constitution Clause 105 of the Company’s Constitution states that an election of Directors shall take place each year at the annual general meeting of the Company, where one-third of the Directors for the time being, or, if their number is not three (3) or a multiple of three (3), then the number nearest to one-third shall retire from office and be eligible for re-election, PROVIDED ALWAYS that Directors shall retire from office once at least in each three (3) years but shall be eligible for re-election. A retiring Director shall retain office until the close of meeting at which he retires. Wong Kok Chau and Dato’ Sri Ismail Bin Ahmad are standing for re-election as Directors of the Company and being eligible, have offered themselves for re-election. Notice of Annual General Meeting (Cont’d)
EXCEL FORCE MSC BERHAD 5 Notice of Annual General Meeting (Cont’d) For the purpose of determining the eligibility of the Directors to stand for re-election at the 21st AGM, the Nomination Committee has considered and recommended Wong Kok Chau and Dato’ Sri Ismail Bin Ahmad for re-election as Directors pursuant to Clause 105 of the Company’s Constitution. Ordinary Resolution 4: Re-election of Director who retires in accordance with Clause 114 of the Company’s Constitution Clause 114 of the Company’s Constitution states that the Directors shall have power at any time, and from time to time, to appoint any person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors, but the total number of Directors shall not at any time exceed the maximum number fixed in accordance with this Constitution. Any Director so appointed shall hold office only until the next following annual general meeting, and shall then be eligible for re-election but shall not be taken into account in determining the Directors who are to retire by rotation at that meeting. Datuk Wira Farhash Wafa Salvador is standing for re-election as Director of the Company and being eligible, has offered himself for re-election. For the purpose of determining the eligibility of the Director to stand for re-election at the 21st AGM, the Nomination Committee has considered and recommended Datuk Wira Farhash Wafa Salvador for re-election as Director pursuant to Clause 114 of the Company’s Constitution. Ordinary Resolution 5: Ratification of the payment of the Directors’ Fees The shareholders had on the Twentieth AGM (“20th AGM”) held on 9 June 2022, approved the payment of Directors’ fees payable to the Directors of the Company amounting to RM624,000 for the period from the 20th AGM of the Company up to the 21st AGM of the Company. However, in view of the change of financial year end of the Company, i.e. from 31 December 2022 to 30 June 2023, the new financial period under review of the Company is made up from 1 January 2022 to 30 June 2023 (18 months). Hence, the Company had paid an additional Directors’ Fees of RM4,000.00 which made up to RM628,000.00 to the Directors of the Company. This resolution is to facilitate the advance payment of to the Directors of the Company for the period from 1 January 2023 to 30 June 2023. Ordinary Resolution 8: Authority to allot and issue shares in general pursuant to Sections 75 and 76 of the Companies Act 2016 The proposed Ordinary Resolution 8 is the renewal of the mandate obtained from the members at the last Annual General Meeting held on 9 June 2022 (“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. Ordinary Resolution 9: Proposed Renewal of Share Buy-Back Authority 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 31 October 2023. 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.
6 EXCEL FORCE MSC BERHAD Five-Year Financial Highlights 31.12.2018 31.12.2019 31.12.2020 31.12.2021 18 months 30.6.2023 Financial Performance (RM’000) Turnover 22,939 22,963 31,386 37,289 43,380 Profit before Tax 7,935 8,290 14,175 16,886 16,354 Profit for the Year 6,657 6,471 10,766 12,320 11,784 PATANCI 6,657 6,471 10,766 12,320 12,119 Key Statement of Financial Position Data (RM’000) Cash and Bank Balances 29,813 22,789 22,853 32,356 31,171 Total Assets 58,723 101,433 102,390 110,300 107,146 Total Liabilities 11,521 4,965 11,637 10,596 10,250 Total Net Tangible Assets 36,112 85,151 78,821 87,529 81,464 Share Capital 20,998 89,303 89,303 81,176 81,176 Equity Attributable to the Owners of the Company 47,202 96,469 90,752 99,159 96,896 Share Information (sen) Basic Earnings Per Share1 1.61 1.38 1.91 2.20 2.17 Diluted Earnings Per Share2 1.07 1.38 1.91 2.20 2.17 Dividend Per Share 1.50 1.00 1.50 1.50 1.00 Financial Ratios Current Ratio (times) 3.17 10.84 6.11 6.95 7.31 Net Asset Per Share (RM) 0.11 0.17 0.15 0.18 0.17 Return on Equity (ROE) 14% 7% 12% 12% 13% Dividend Payout Ratio 93% 72% 79% 68% 46% 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/period. 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 the weighted 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. 4. The financial year end of the Group has been changed from 31 December to 30 June. As such, the current financial period will represent a longer period of eighteen (18) months from 1 January 2022 to 30 June 2023. There will be no comparative financial information available for the financial period ended 30 June 2023.
EXCEL FORCE MSC BERHAD 7 Five-Year Financial Highlights (Cont’d) 2018 2018 2018 2018 10,000 2,000 5,000 7,000 20,000 4,000 10,000 14,000 30,000 6,000 15,000 21,000 40,000 8,000 20,000 28,000 50,000 10,000 25,000 35,000 22,939 6,217 10,052 29,813 22,963 6,029 10,356 22,789 31,386 8,931 16,648 22,853 37,289 8,391 20,609 32,356 43,380 5,594 22,059 31,171 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2023 2023 2023 2023 Turnover (RM’000) Dividend Paid & Proposed (RM’000) EBITDA (RM’000) Cash & Cash Equivalent (RM’000) Group Segmental Revenue 2021 (RM’000) Group Segmental Revenue 2023 (RM’000) Application Solutions Application Services Provider Maintenance Services 24% 9% Application Solutions 23% Maintenance Services 6% 71% 67% 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.
8 EXCEL FORCE MSC BERHAD Corporate Information BOARD OF DIRECTORS Executive Chairman Datuk Wira Farhash Wafa Salvador (Appointed on 9 May 2023) Managing Director Mr Wong Kok Chau Executive Director Mr Eng Shao Hon Independent Non-Executive Directors Datuk Mat Noor bin Nawi Dato’ Sri Ismail bin Ahmad Ms Elisa Tan Mun-E 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 (LS0010621 / SSM PC No. 201908002254) Low Ven Sin (MAICSA 7076080 / SSM PC No. 202208000340) 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 B-21-1, Level 21, Tower B Northpoint Mid Valley City No. 1 Medan Syed Putra Utara 59200 Kuala Lumpur Wilayah Persekutuan Tel: 03-9770 2200 Fax: 03-9770 2239 Email: boardroom@boardroom.com.my 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 TGS TW PLT 202106000004 (LLP0026851-LCA) & AF002345 Chartered Accountants E-16-2B, Level 16, ICON Tower (East) No.1 , Jalan 1/68F, Jalan Tun Razak 50400 Kuala Lumpur Tel: 03-9771 4326 Fax: 03-9771 4327 REGISTRAR Aldpro Corporate Services Sdn Bhd B-21-1, Level 21, Tower B Northpoint Mid Valley City No. 1 Medan Syed Putra Utara 59200 Kuala Lumpur Wilayah Persekutuan Tel: 03-9770 2200 Fax: 03-9770 2239 Email: registrar@aldpro.com.my STOCK EXCHANGE LISTING Main Market of Bursa Malaysia Berhad Stock Name: EFORCE Stock Code: 0065 Sector: Technology WEBSITE www.excelforce.com.my
EXCEL FORCE MSC BERHAD 9 Board of Directors’ Profile DATUK WIRA FARHASH WAFA SALVADOR Executive Chairman | Male, Aged 41 Datuk Wira Farhash Wafa Salvador (“Datuk Wira Farhash”), a Malaysian, was appointed to the Board on 9 May 2023. Datuk Wira Farhash was graduate with professional qualification major in Executive Certificate in Public Leadership from Harvard Kennedy School, Harvard University, a masters holder major in Master Science in Finance from University of Portsmouth, United Kingdom and a degree holder major in Honours Degree of Bachelor of Arts in Business Administration from University of Portsmouth, United Kingdom. Datuk Wira Farhash brings with him over more than a decades worth of experience in the field of business, consultancy and advisory. In the business front, his illustrious career spans across a broad range of sectors which includes construction, technology, hotel, food & beverage. He is also a staunch advocate to promoting the development of the Small Medium Enterprise (“SME”) industry in the country. Moreover, Datuk Wira Farhash is a multi-talented innovator with five award-winning patents held across the world including the United States, United Kingdom, France, Germany, and China. As testament to his talents and invaluable contribution to the industry, he was named, amongst the many, Emerging Entrepreneur of the Year in 2020 by the Global Business Leadership Awards, Enterprising Entrepreneur of the Year in 2019 and Technopreneur of the Year in 2018 by SEBA, Malaysia Outstanding National Entrepreneur Bumiputra in Business in 2018, 100th most influential young entrepreneur in 2017 and Bumiputera Entrepreneur Startup Scheme Award by the Bumiputera Agenda Leadership Unit (TERAJU) in 2016. He is or had been a director and/or shareholder in at least ten (10) private companies which includes Swag Technologies Sdn Bhd, Salvador & Sons Sdn Bhd and Pacific Samudera Sdn Bhd. He was also an Independent Non-Executive Director of Bluemont Group Limited (now known as Southern Archipelago Limited) from 2014 to 2016, a Public Listed Company listed on the Mainboard of the Singapore Exchange (“SGX”). He presently sits in the Board of Advisory of Yayasan Usahawan Malaysia, a non-government organisation that thrives on the frontier of gathering, creating and developing sustainable companies with strong entrepreneurship traits. He is also a Group Executive Chairman of Apex Equity Holdings Berhad, a Non Independent and Non Executive Chairman of 7-Eleven Malaysia Holdings Berhad and a Director of Berjaya Construction Berhad. WONG KOK CHAU Managing Director | Male, Aged 54 Wong Kok Chau (“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 Global Management Accountant (CGMA) 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.
10 EXCEL FORCE MSC BERHAD Board of Directors’ Profile (Cont’d) ENG SHAO HON Executive Director | Male, Aged 48 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 from Microsoft 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 System was 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. DATUK MAT NOOR BIN NAWI Independent Non-Executive Director | Male, Aged 68 Datuk Mat Noor bin Nawi (“Datuk Mat Noor”), 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 position was 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 67 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 11 ELISA TAN MUN-E Independent Non-Executive Director | Female, Aged 40 Elisa Tan Mun-E, a Malaysian, was appointed to the Board of the Company on 1 December 2021. She graduated 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 rule as Talent Manager. Currently she was the Managing Director at Awesome Loungh Sdn Bhd. On 1 June 2023, she was appointed as Independent Non-Executive Director of MYTECH Group Berhad. 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 or potential conflict of interest with the Company or its subsidiaries. 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 period. Board of Directors’ Profile (Cont’d)
12 EXCEL FORCE MSC BERHAD Key Senior Management Profile The Management team is headed by the Managing Director, Mr. Wong Kok Chau. He is assisted by Mr. Eng Shao Hon and the following key senior management. GAN TECK BAN Head, Sales and Business Development | Male, Aged 57 Gan Teck Ban, a Malaysian, graduated with a Diploma in Computer Studies from Informatics Computer Centre in 1990. He obtained the MCSD certification from Microsoft 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. On 1 October 1997, he joined EForce as Senior Programmer. He was involved in a number of software and system developments. 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. WONG GUAN BOON Head, Customer Service | Male, Aged 48 Wong Guan Boon, a Malaysian, joined EForce on 22 February 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, System Design and Quality Assurance | Male, Aged 43 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 System Analyst, 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.
EXCEL FORCE MSC BERHAD 13 ALICIA CHAN SAU HSIA Head, Human Resources and Administration | Female, Aged 48 Alicia Chan Sau Hsia, a Malaysian, was appointed as the Manager of Human Resources and Administration on 1 March 2012. She graduated with a Bachelor of Management (Marketing) from the University of 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. LIEW KEAN FATT Head, Finance | Male, Aged 55 Liew Kean Fatt, a Malaysian, joined EForce on 15 May 2013 as Finance Manager. He completed his Chartered Accountancy qualification with the Association of Charted Certified Accountants (ACCA) and subsequently admitted as member of ACCA in 2000. He is a member of the Malaysian Institute of Accountants (MIA) and member of Chartered Taxation Institute of Malaysia (CTIM). Prior to joining EForce, he worked in various industries, including manufacturing, share broking house, trading and travel agency. He joined MBP Malaysia Sdn. Bhd. (MBP) in 1995, a wholly owned subsidiary of Sime Darby Berhad (SDB), a multinational company, involved in manufacturing of road construction product. Thereafter, he worked in another subsidiary of SDB, Sime Darby Travel Sdn Bhd (SDT) as Accounts Executive, upon completion of his ACCA qualification, he has promoted to Finance Manager position. In SDT, he was responsible for operation of finance department, prepare monthly financial report and variance analysis report. He was also involved in the preparation of consolidated financial statements, management budget and treasury management. Currently, he is the Head of Finance, his responsibilities include overseeing the operation of finance and accounts functions, preparation of financial reporting, quarterly interim financial report, annual report, risk management report and treasury management of the Group as well as ensuring compliance to the Main Market Listing Requirement of Bursa Malaysia Securities Berhad. Conflict of Interest None of the key senior management have any conflict of interest or potential conflict of interest with the Company or its subsidiaries. Conviction of Offences None of the key senior management has been convicted of any offences (other than ordinary traffic offences, if any) within the past five (5) years. Family Relationship None of the key senior management has family relationship with any Directors or major shareholders of the Company. Other directorship in public companies and listed issuers None of the key senior management hold any directorship in public companies and listed issuer. Key Senior Management Profile (Cont’d)
14 EXCEL FORCE MSC BERHAD Management Discussion and Analysis This Statement contains the Management’s discussion and analysis of the business operation and performance of the Group for the financial period ended 30 June 2023. It should be read in conjunction with the audited financial statements of the Group as set out in this Annual Report. BUSINESS REVIEW EForce is a leading information technology solution provider involved in the development, provision and maintenance of application and system solutions for the financial services industry, specifically the stockbroking companies and investment banks. EForce organises its business activities into three (3) segments. They are: 1. Application Solutions ("AS") for sales of software applications and products on outright purchase basis. 2. Maintenance Services ("MS") for provision of maintenance services. 3. Application Services Provider ("ASP") for 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), CyberBroker Middle Office, CyberBroker Back Office (including Custodian and Nominee System), StockBanking System (including Share Margin Financing System) and Fundamental Analysis System. EForce customers require 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. REVIEW OF FINANCIAL RESULTS The Group changed its financial year end from 31 December 2022 to 30 June 2023. As such this report covers 18 months period. The change is to avoid the calendar year end peak statutory audit period and for better resource allocation and planning. For the 18 months period to 30 June 2023, the Group recorded total revenue of RM43.4 million, mainly contributed by ASP segment. ASP was 67% of total revenue, which is lower than previous financial years. This is due to continuing headwinds faced by the stockbroking industry as seen in the declining daily average trading volume and value recorded by Bursa Malaysia in 2022 and 2023. Average Daily Value (ADV) (OMT) (RM mil) 1,105 1,545 898 965 2,369 3,545 1,964 2,068 1H 2022 2021 1H 2023 2022 ▼ 17.3% ADV ▼ 41.5% ADV 629 1,334 553 550 635 666 ADV – Foreign Institution Note: a) OMT – On Market Trades b) Retail ADV comprises local, foreign & PDTs ADV – Retail ADV – Domestic Institution 513 553 Source: https://bursa.listedcompany.com/financials.html The Group’s Profit before Tax (PBT) was RM16.4 million and Profit after Tax (PAT) was RM11.8 million. Despite cost inflationary pressure on our profit margin, the Group managed to achieved PAT of 27%. Total assets of the Group stood at RM107.2 million, lower by RM3.1 million from previous financial year. Total liabilities of the Group stood at RM10.2 million, lower by RM0.4 million compared to last audited financial year.
EXCEL FORCE MSC BERHAD 15 Management Discussion and Analysis (Cont’d) REVIEW OF OPERATIONS Even with the challenging business environment, we continue to invest in research and development for new applications, refresh our product line-up and enhance our solutions to meet evolving regulatory and business needs. Amongst the new solutions under development is next generation back-office suite and a new web-based trading platform. We have carefully explored, prototyped, and incorporated many designs ideas into attracting more Millennials and Gen Zs to consider stock investment as an alternative for long term wealth building. This is in line with Securities Commission Malaysia call for action in the capital market as only 7 per cent of investors in the stock market are under the age of 45 (Source: Star 7 August 2023). We are proud to launch our first advance charting application named Interactive X-Chart. X-Chart is designed by a seasoned technical chartist for technical charting community in Malaysia. We aim to capture a slice of the increasing use of technical analysis by investors to enter and exit the market. It is being progressively rolled out to our customers and users at large. The Group remains steadfast in investing in our people to strengthen our core capability and explore alternatives to create new income stream by leveraging on our domain knowledge and expertise. We are open to collaboration opportunities, with local and overseas partners, that will further solidify our leading position in Malaysia as an innovative technology solution provider. EForce continues to optimise and improve on resource utilisation, leverage on its deep domain and system knowledge to enhance efficiency in service delivery, troubleshooting and supporting our customers. The Group seeks to eliminate non-value adding activities in our application development process and improve time to market of new and enhanced applications. The business performance of the Group’s wholly owned subsidiary company, Insage MSC Sdn Bhd (“Insage”) continues to be positive. More public listed companies are outsourcing their investor relation webpages and corporate websites to Insage. The Group will continue to capitalize on these opportunities in Malaysia. Xifu Sdn Bhd (“Xifu”), a subsidiary of EForce providing a digital platform to connect investors on everything stock investment, rolled out our maiden mobile app in 1st half of 2022. We are implementing our strategic business plan, focus on growing our subscriber base and connecting with market influencers to create a robust and vibrant ecosystem for all stakeholders. The Group’s other subsidiary company, E2 Trade Sdn Bhd and Excel Force Solutions Sdn Bhd, are still dormant and not operational in FYE 2023. 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 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, availability 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, 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 update on changes in the broking business landscape to ensure our solutions remain current. The growing threats of cyber-attack to steal data for ransom 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 also works closely with customers security teams to periodically review our application and fix or eliminate any vulnerabilities found. The Group adopted a zero-tolerance stance on fraud, bribery and corruption in all forms. In 2020, an Anti-Bribery and AntiCorruption Framework (ABAC) was established, 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.
16 EXCEL FORCE MSC BERHAD Management Discussion and Analysis (Cont’d) KEY BUSINESS RISK AND MITIGATION STRATEGIES (CONT’D) To strengthen the adoption of corporate governance practices vis-à-vis the Malaysian Code on Corporate Governance (MCCG) 2021 and the Main Market Listing Requirements, the Group intends to conduct Corporate Governance Review in the new financial year for risks assessment and mitigation. This will include review of Anti-bribery Management System in accordance with the Corporate Integrity System Malaysia (CISM) Framework. The detail risk management and internal control are disclosed in Statement on Risk Management and Internal Control (SORMIC) on pages 36 to 38 in this annual report. The framework enables the Board to continuously identify, assess and manage risks that affects the Group. FORWARD LOOKING STATEMENT Macroeconomic situation remains challenging amidst geopolitical tension between US and China, the Russian-Ukraine war and now the Israeli-Hamas war. High inflation rate worldwide led central banks to adopt a higher for longer interest rate rise, negatively affecting stock trading sentiment and exchange performance. China’s lacklustre economic performance after the end of lock down and on-going solvency concern with major property developers continues to weigh down the stock market. As a globally connected trading nation, Malaysia is not immune to the effect of high inflation and interest rate on cost of living and foreign exchange rate. Government responses to help the rakyat puts further pressure on how it will reduce fiscal deficit, manage debt servicing and get debt to GDP ratio to a better state, while trying to encourage more foreign direct investments and promote more local investment and consumption. The government forecasts the economy will expand by 4 to 5 per cent in 2024. In the stockbroking industry, market intermediaries welcome the government’s recent reduction of stamp duty rate for shares traded on Bursa Malaysia. In addition, fractional share trading was announced by the government in the Madani Economy: Rakyat Empowerment Framework, though the implementation specifics are still being worked out. A continuing bright spot for the local stock exchange is the healthy pipeline of IPO companies listing (2022 – 35 companies, 1st half of 2023 – 16 companies). The financial industry landscape is evolving and changing rapidly. There are many asset choices now for investors to select and grow their wealth, achieve their financial goals. This is both a challenge and opportunity for stockbrokers to communicate their unique equity investment proposition. It will demand greater innovation and uniqueness in their product and service offering to attract and maintain the attention of investors, especially those of the Millennial and Gen Z cohorts. The Group is constantly engaged with our customers to understand their business needs, uncover new ways or ideas, and help them achieve their business objectives. EForce intends to focus on growing its revenue stream, optimise utilization of resources for productive gain and improve margin. 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, balancing between short- and long-term objectives. The Group is cautiously positive on our business performance in the new financial year 2024. Bursa Malaysia Average Daily Trading Volume and Value have recovered in July to September 2023 period and there is clarity on the focus and priority of the government on the economy, as announced in the recent Budget speech by the Prime Minister. 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. DIVIDEND The Group had declared total dividend of RM5.6 million or equivalent to 1.0 sen per ordinary share in FYE 2023. EForce proposed a final single tier dividend of 0.5 sen per ordinary share, subject to shareholders’ approval in the upcoming Twenty-First (21st) AGM to be held on 5 December 2023. The dividend payout ratio (including the proposed dividend) will be 46% of the Group’s profit or 1.0 sen per ordinary share for the current financial period. 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.
EXCEL FORCE MSC BERHAD 17 Sustainability Statement The Group recognizes business stability and growth is interlink with sustainability of the economy, natural environment, workplace and communities in which the Group operates. Hence, we are a responsible company committed to making 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 to embed sustainability into the Group and its business strategy, and ensures that adequate resources, procedures and processes are in place to manage sustainability matters. The information presented in this report is derived from fiscal year 2023 and includes the companies in the Group. The Sustainability Statement for EForce Group primarily focuses on operations and management of the economic, environmental and social sustainability. The Group is committed to operate its business in a responsible and sustainable manner and outlines the various practices embedded into Group’s processes with an intent of bringing value to its businesses, stakeholders and society in general. WORKPLACE The Group endeavors to provide a healthy, safe, secure and friendly workplace for employees, as they are our most valued asset. The Group continues to be vigilant in prevention of Covid-19 endemic by encouraging employees to maintain healthy personal hygiene habits, provide sanitary solutions to keep individual workspace clean, replaced and installed new air purifying machines located throughout the office with contract for regular service maintenance. The Group continues to uphold fair labour recruitment practices and encourage recruiters to source for more under-represented female candidates. EForce grants equal opportunities to all employees for leadership role. During the year, the Group reinforced its zero-tolerance approach to bullying, sexual harassment and unethical behaviour via communication in common area. Employees are encouraged to report ethical misconduct cases without being exposed or dismissed. Compensation and benefits paid to employees comply with all applicable laws, including minimum wage, overtime and legally mandated benefits. The Group does not impose wage deduction as a disciplinary measure. The Group ensures employees have life insurance coverage and are covered with outpatient treatment and hospitalisation insurance in the event of any medical emergencies. To ensure inclusive and equitable promotion of lifelong learning opportunities for all, the Group contributes monthly levy to Human Resources Development Fund. Managers and employees are encouraged to identify and undergo relevant job-related skills, education, conferences and motivational training. 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, skill 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. Record of total training hours and course title for the financial year under review No. Training Title No. of Hour(s) 1. MIA AccTech Conference 2022 16.00 2. Basic Fire Fighting and Emergency Response Plan 64.00 3. The New Leadership Paradigm and Breakthrough Results 80.00 4. Tax Planning with Latest Tax Changes for the New Economic Cycle 16.00 5. PMP Exam Preparatory 40.00 6. IR Law Conference 2023 32.00 7. Train the Trainer 40.00 8. Supervisory & People Management Skills 64.00 9. Microsoft Excel Advance Level 64.00 10. Positivity and Achieving Results at Workplace 32.00 11. Successful Negotiation 32.00 Total Training Hours 480.00
RkJQdWJsaXNoZXIy NDgzMzc=