EXCEL FORCE MSC BERHAD Annual Report 2018

10 EXCEL FORCE MSC BERHAD (570777-X) ANNUAL REPORT 2018 Total assets of the Group stood at RM58.7 million an increase of RM4.3 million mainly due to higher cash and bank balance derived from proceed from disposal of office premise in Plaza 33. Total liabilities of the Group was recorded at RM11.5 million, higher by RM4 million mainly due to recognition of progress billing from the purchase of commercial space announced to Bursa stock exchange on 16 November 2018. REVIEW OF OPERATIONS 2018 continued to be a challenging year for brokers business amidst lack of growth catalyst to advance the local stock market. Hence, customers closely monitor their cost base and are selective in their IT spending. Their priority focus was on projects that improved user experience, increased back office efficiencies and that achieved lower operational cost. Through enhancements of EForce’s share trading systems, the Group helped fulfill customers’ needs and expectations. EForce is mindful of its own cost base in this tough business environment. As such, EForce has taken steps to improve the way people communicate and coordinate amongst the various functions to implement projects on time, within budget and quality standard. There are positive results from the changes made. EForce intends to continue optimizing the use of its resources, leverage on its deep domain and system knowledge, eliminate non-value adding steps in software development process to reduce time to market of new and enhanced applications. The business performance of the Group’s subsidiary company - Insage MSC Sdn Bhd continues to improve. There is increasing demand for outsourcing of listed companies’ investor relation webpages and corporate websites. The Group is poised to capitalize on these opportunities. 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 and formulate responses to changes. The Group operates in a very competitive business environment with local and overseas competitors present. The pace of technology advancement and its introduction to the market place is growing. As such, the Group’s application solutions face obsolescence risk. This risk could be magnified if the Group is slow in product innovation and development, leading to loss in market share. In order to manage and mitigate these risks, the Group vigilantly monitors technological and market development, and acquires new capability to keep solutions current and updated. EForce continuously provide training and exposure to employees on new technology. The Group has on-going projects in product development pipelines to meet the emerging trends in the market place. The growing threats of cyber-attack to steal data and deny genuine user access to systems requires timely and effective counter-measures. The Group ensures it keeps track of latest cybersecurity trends and development, and periodically review its system security settings to strengthen cyber-defenses. With the evolving changes in listing requirement rules, legislative acts, implementation of new taxes and so on, keeping updated on compliance requirements is mandatory. The Group has implemented necessary control and monitoring system to mitigate non-compliance risks. The detail risk management and internal control are disclosed in Statement on Risk Management and Internal Control (SORMIC) on pages 35 to 37 in this annual report. The framework enables the Board to continuously identify, assess and manage risks that affects the respective business segments within the Group. Management Discussion And Analysis (cont’d)