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.
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