2024 MSC Berhad ANNUAL REPORT INNOVATING THE FUTURE
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 18 Sustainability Statement 25 Corporate Governance Overview Statement 37 Audit Committee Report 40 Statement on Risk Management and Internal Control 44 Statement of Directors’ Responsibility 45 Additional Compliance Information 46 Financial Statements 124 List of Properties 125 Analysis of Shareholdings Form of Proxy TABLE OF CONTENTS ANNUAL REPORT 2024 INNOVATING THE FUTURE Visit our website for more information www.excelforce.com.my
2 MSC BERHAD NOTICE IS HEREBY GIVEN that the Twenty-Second Annual General Meeting (“22nd 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 Thursday, 5 December 2024 at 9.30 a.m. or at any adjournment 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 year ended 30 June 2024 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 30 June 2024. 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 approve the Directors’ fees amounting to RM624,000.00 for the period from the conclusion of the 22nd AGM of the Company up to the Twenty-Third Annual General Meeting (“23rd AGM”) of the Company. Ordinary Resolution 4 5. 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 5 Special Business To consider and if thought fit, to pass the following resolutions: - 6. Authority to allot and issue shares in general pursuant to Sections 75 and 76 of the Companies Act 2016 Ordinary Resolution 6 “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. 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.” Notice of Annual General Meeting
3 www.excelforce.com.my 7. Proposed Renewal of Share Buy-Back Authority for the Company to purchase its own shares (“Proposed Renewal of Share Buy-Back Authority”) Ordinary Resolution 7 “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 approval 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.” 8. 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 in respect of the financial year ended 30 June 2024, if approved by shareholders at the forthcoming AGM, will be payable on 7 January 2025 to the shareholders whose names appear in the Record of Depositors of the Company at the close of business on 23 December 2024. 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 23 December 2024 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 MSC BERHAD BY ORDER OF THE BOARD TAN TONG LANG (MAICSA 7045482/ SSM PC NO. 202208000250) LOW VEN SIN (MAICSA 7076080 / SSM PC NO. 202208000340) Company Secretaries W.P. Kuala Lumpur Date: 30 October 2024 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 22nd AGM, the Company shall request Bursa Malaysia Depository Sdn Bhd to issue a Record of Depositors as at 26 November 2024. Only a depositor whose name appears on the Record of the Depositor as at 26 November 2024 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 year ended 30 June 2024 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. Eng Shao Hon and Datuk Mat Noor Bin Nawi are standing for re-election as Directors of the Company and being eligible, have offered themselves for re-election. For the purpose of determining the eligibility of the Directors to stand for re-election at the 22nd AGM, the Nomination Committee has considered and recommended Eng Shao Hon and Datuk Mat Noor Bin Nawi for re-election as Directors pursuant to Clause 105 of the Company’s Constitution. Ordinary Resolution 6 : Authority to allot and issue shares in general pursuant to Sections 75 and 76 of the Companies Act 2016 The proposed Ordinary Resolution 6 is the renewal of the mandate obtained from the members at the last Annual General Meeting held on 5 December 2023 (“the Previous Mandate”). The Previous Mandate was not utilised and accordingly no proceeds were raised. The proposed resolution 6, 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. Notice of Annual General Meeting (cont’d)
5 www.excelforce.com.my Ordinary Resolution 7 : Proposed Renewal of Share Buy-Back Authority The proposed Ordinary Resolution 7 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 30 October 2024. 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 reelection. 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)
6 MSC BERHAD 31.12.2019 31.12.2020 31.12.2021 18 months 30.6.2023 12 months 30.6.2024 Financial Performance (RM’000) Turnover 22,963 31,386 37,289 43,380 29,020 Profit before Tax 8,290 14,175 16,886 16,354 11,281 Profit for the Year 6,471 10,766 12,320 11,784 8,282 PATANCI 6,471 10,766 12,320 12,119 8,282 Key Statement of Financial Position Data (RM’000) Cash and Bank Balances 22,789 22,853 32,356 31,171 21,004 Total Assets 101,433 102,390 110,300 107,146 148,093 Total Liabilities 4,965 11,637 10,596 10,250 19,961 Total Net Tangible Assets 85,151 78,821 87,529 81,434 106,699 Share Capital 89,303 89,303 81,176 81,176 98,094 Equity Attributable to the Owners of the Company 96,469 90,752 99,159 96,896 128,132 Share Information (sen) Basic Earnings Per Share1 1.38 1.91 2.20 2.17 1.44 Diluted Earnings Per Share2 1.38 1.91 2.20 2.17 1.44 Dividend Per Share 1.00 1.50 1.50 1.00 1.00 Financial Ratios Current Ratio (times) 10.84 6.11 6.95 7.31 7.70 Net Asset Per Share (RM) 0.17 0.15 0.18 0.17 0.21 Return on Equity (ROE) 7% 12% 12% 13% 6% Dividend Payout Ratio 72% 79% 68% 46% 71% 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 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 of the Group has been changed to 30 June. As a result, the previous period ended on 30 June 2023 comprised 18 months period, while the current financial year ending 30 June 2024 will revert to 12 months period . Five-Year Financial Highlights
7 www.excelforce.com.my 2019 2019 2019 2019 22,963 6,029 10,356 22,789 31,386 8,931 16,648 22,853 2020 2020 2020 2020 37,289 8,391 20,609 32,356 2021 2021 ■ Application Solution ■ Maintenance Services ■ Application Services Provider ■ Application Solution ■ Maintenance Services ■ Application Services Provider 2021 2021 43,380 5,594 22,059 31,171 2023 2023 2023 2023 29,020 6,099 15,524 21,004 2024 2024 2024 2024 Turnover (RM’000) Dividend Paid & Proposed (RM’000) EBITDA (RM’000) Cash & Cash Equivalent (RM’000) Group Segmental Revenue 2023 Group Segmental Revenue 2024 Notes: • Application Solutions ("AS') represent sales of software applications and products on an 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. Five-Year Financial Highlights (cont’d) 67% 24% 9% 70% 20% 10%
8 MSC BERHAD BOARD OF DIRECTORS Executive Chairman Datuk Wira Farhash Wafa Salvador 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) 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: 03-2201 7774 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: 03-2201 7774 Email: admin@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 Corporate Information
9 www.excelforce.com.my DATUK WIRA FARHASH WAFA SALVADOR Executive Chairman Male, Aged 42 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 awardwinning 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. He has attended all five (5) Board meetings held during the financial year ended 30 June 2024. Board of Directors’ Profile WONG KOK CHAU Managing Director Male, Aged 55 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. He has attended all five (5) Board meetings held during the financial year ended 30 June 2024.
10 MSC BERHAD ENG SHAO HON Executive Director Male, Aged 49 Eng Shao Hon (“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. He has attended all five (5) Board meetings held during the financial year ended 30 June 2024. Board of Directors’ Profile (cont’d) DATUK MAT NOOR BIN NAWI Independent Non-Executive Director Male, Aged 69 Datuk Mat Noor Bin Nawi (“Datuk Mat Noor”), a Malaysian, was appointed to the Board of the Company on 27 September 2019. He graduated with a Bachelor of Science (Resource Economics) from Universiti Putra Malaysia and Master of Science (Policy Economics) from University of lllinois, UrbanaChampaign, USA. Datuk Mat Noor 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 the 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 the Ministry of Finance (MOF) in October 2011. He was the Deputy Secretary General, Treasury (Investment) 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 and MX Global Sdn Bhd. He also sits on the Board of PDX.com Sdn Bhd, Cuscapi Berhad, Asiapac Oil & Gas Sdn Bhd, Megah Perkasa Security Services Sdn Bhd and Permodalan Kelantan Berhad. He is the Chairman of the Audit Committee and a member of the Remuneration Committee and Nomination Committee of EForce. He has attended all five (5) Board meetings held during the financial year ended 30 June 2024.
11 www.excelforce.com.my DATO’ SRI ISMAIL BIN AHMAD Independent Non-Executive Director Male, Aged 68 Dato’ Sri Ismail bin Ahmad, a Malaysian, was appointed to the Board of the Company on 1 July 2020. He graduated 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 Chairman of Nomination Committee and Remuneration Committee of EForce and a member of Audit Committee. He has attended all five (5) Board meetings held during the financial year ended 30 June 2024. Board of Directors’ Profile (cont’d) ELISA TAN MUN-E Independent Non-Executive Director Female, Aged 41 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 NonExecutive Director of MYTECH Group Berhad. She is a member of Audit Committee, Nomination Committee and Remuneration Committee of EForce. She has attended all five (5) Board meetings held during the financial year ended 30 June 2024. 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, including interest in any competing business that the person has with Excel Force MSC Berhad or its subsidiaries. 3. None of the Directors have been convicted for offences (other than traffic offences), if any, within the past five (5) years. 4. None of the Directors have any public sanction or penalty imposed by the relevant regulatory bodies during the financial year.
12 MSC BERHAD 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 58 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. CH’NG SWEE TIONG Head, Customer Service | Male, Aged 44 Ch’ng Swee Tiong, a Malaysian, joined EForce on 1 April 2011. He holds a degree in Business Information Systems. He began his career at Excel Force MSC Berhad as a System Engineer. During his tenure, he actively participated in technical discussions, provided system infrastructure diagrams, and led system implementations. He also played a key role in supporting daily operations, including performing system health checks, managing Disaster Recovery deployments, and offering technical support. He has gained valuable experience in both technical and system support while demonstrating exceptional dedication and capabilities. Over the years, he has excelled in several critical operational and management areas, gaining a deep understanding of our daily operations and customer needs. As the Head of Customer Service, he leads the customer service and support teams, working to enhance service quality while ensuring the smooth operation of both hardware and software systems. WONG BOON LEONG Head, System Design and Assurance | Male, Aged 44 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 19 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 Solution Design and Quality Assurance function. Key Senior Management Profile
13 www.excelforce.com.my ALICIA CHAN SAU HSIA Head, Human Resources and Administration | Female, Aged 49 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 56 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 multi-national 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, tax computation, management budget and treasury management. Currently, he is the Head of Finance, his responsibilities include overseeing the operation of finance and accounts functions, reviewing monthly management accounts, preparing 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. He is member of Risk Management Committee and Sustainability Committee. Conflict of Interest None of the key senior management have any conflict of interest or potential conflict of interest, including interest in any competing business that the person has with Excel Force MSC Berhad 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 and/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 MSC BERHAD This Statement contains the Group’s review and analysis of the business operation and performance for the financial year ended 30 June 2024. 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 stockbroking companies and investment banks. EForce organises its business activities into four (4) segments. They are: 1. Application Solutions (“AS”) for sales of software applications and product on an 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. 4. Others for investment holding and etc. 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 are accustomed to our reliable and stable solutions to fulfil their mission critical role as capital market intermediaries. Over the years, EForce earned and retained a solid reputation in consistently meeting, and at times, exceeding customers’ expectations. The Group adopts a collaborative approach with customers to continuously assess their evolving business needs and develop good quality and timely applications to fulfil them. REVIEW OF FINANCIAL RESULTS For the 12 months period to 30 June 2024, the Group achieved total revenue of RM29 million, mainly contributed by ASP segment, make up of 70% of total revenue. The Profit Before Tax (“PBT”) and Profit After Tax (“PAT”) were at RM11.28 million and RM8.28 million or 39% and 29% margin to revenue respectively. ASP revenue segment performance is predicated on the trading volume and value of Bursa Malaysia. There were 37 IPOs in the period under review and an increase in average daily value, particularly in 1st half of 2024, by 59% compared to end of 2023 (Source: Bursa Malaysia). Together with positive economic sentiments and expected interest rate movements in major economies, these have a positive effect on Bursa trading activities. Due to change in financial year, whereby the previous financial period was made up of 18 months period, there is no meaningful comparison that can be shared here. REVIEW OF OPERATIONS The Group’s business performance is supported by a cohesive and flexible operational management structure, quick to adapt to changing business needs and maintain focus and discipline to execute projects critical to our long-term growth. EForce continues to work closely with our customers and monitor emerging trends locally and globally to uncover opportunities for new applications and enhancements to our product line-up. To grow our competitive edge, in terms of introducing innovative product solutions and maintaining our agility in responding to customers’ needs, we diligently invested in research and development for new products, and in our people to expand and improve on their technical skillset and problem solving ability. The Group rolled out “Be Customer Centric and Be Right First Time” initiative to ensure we do the right things always and shorten time to market. Management Discussion and Analysis
15 www.excelforce.com.my Management Discussion and Analysis (cont’d) eForce One X-Chart on Xifu eForce EmPower Our customers have reacted positively and enthusiastically to these new offerings, and we are confident they will contribute significantly to our revenue stream in the years to come. The Group remains steadfast in investing in our people to strengthen our core capability and explore new technology to create new income stream. 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 our resource utilisation, leveraging on our 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. In the period under review, the Group launched 3 new products - next generation back-office suite named “eForce EmPower”, advanced charting tool named “eForce Interactive X-Chart” and new web-based trading platform named “eForce One”. eForce Interactive X-Chart is available for web subscription by the investing public under our “X-Chart on Xifu” brand name.
16 MSC BERHAD CORPORATE STRUCTURE REORGANISATION Corporate Structure as at 30 June 2024: Management Discussion and Analysis (cont’d) E2 Trade Sdn Bhd Universal Capital Co Ltd Excel Force Solutions Sdn Bhd Insage (MSC) Sdn Bhd Xifu Sdn Bhd 100% 100% 100% 28.6% 100% 100% Millapp Sdn Bhd The Group completed an internal re-organisation exercise in the period under review. The purpose of this re-organisation is to transfer all existing operating businesses into a fully owned subsidiary (E2 Trade Sdn Bhd or E2Trade), thereby turning the listed company (listco) into a holding company structure. Internal and external communications with various stakeholders, together with necessary legal and financial documentations have been successfully completed. The exercise was completed on 30 September 2023 and there is no impact to the group financial statements. E2 Trade Subsidiaries Review The business performance of Insage (MSC) Sdn Bhd (“Insage”) remains positive. Insage is a market leading provider of online investor relation websites and has amassed more than 12 years of Bursa quoted companies’ financial and corporate information. As there are many new listings on Bursa Malaysia and more public listed companies are outsourcing their investor relation webpages and corporate websites, Insage is in a strong position to capitalize on these opportunities. Xifu Sdn Bhd (“Xifu”) currently focuses on enhancing its mobile based social investing platform for its subscriber base. In the period under review, it continues to garner positive review and feedback, increasing number of user generated content and engaging with subscribers to encourage robust discussions on stock investment. During the year, Xifu successfully relaunched its web platform as “X-Chart on Xifu”, after integrating with eForce Interactive X-Chart application. The rate of subscription has been encouraging. Excel Force Solutions Sdn Bhd Review Excel Force Solutions Sdn Bhd (“EFS”) commenced business on 1 September 2023 and its principal activities consist of the development, provision and maintenance of computer software application solutions for the financial services industry. EFS has been granted Malaysia Digital Status company on 1 July 2022 by the Government of Malaysia. EFS is also awarded a 100% income tax exemption on statutory income for five years under the Income Tax (Exemption) Order (No.10) 2018 [P.U. (A) 389/2018], subject to approval on effective date of tax incentive. KEY BUSINESS RISK AND MITIGATION STRATEGIES Changes to government policies, banking and 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 appropriate 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 mitigates 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.
17 www.excelforce.com.my 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 has implemented the Anti-Bribery Management System (ABMS), the Anti-Bribery policy, code of conduct and ethic as published on our website. The ABMS was reviewed in the current period and recommendations made were implemented to ensure the adequacy and to strengthen the ABMS. The Group conducted awareness training to staff about ABMS. The detail risk management and internal control are disclosed in Statement on Risk Management and Internal Control (SORMIC) on pages 40 to 43 in this annual report. The framework enables the Board to continuously identify, assess and manage risks that affects the Group. FORWARD LOOKING STATEMENT Businesses today face several significant global challenges. Chief amongst them is economic uncertainty where inflation, interest rate, trade war and geopolitical tension converge that could potentially disrupt markets and supply chain, dampen consumer spending and lower company investment. Another significant challenge is to address the adverse impact of climate change, with companies under pressure to adopt sustainable practices, reduce carbon footprints, and act on environmental concerns. The rapid growth of artificial intelligence opens up many possibilities to positively transform businesses, and also great fear on the human cost from potential job losses and rise of artificial general intelligence. This is still a largely unregulated space. The rise of cyber-attacks and scams pose big risk to today’s heavily digitalized businesses, both in terms of ransom paid and time loss in recovery and dealing with the aftermath. As a globally connected trading nation, Malaysia is not immune to these global challenges and businesses will be affected in some form. In the Group’s market space, there are increased competition from local and foreign solution providers. Current and prospective customers are also looking to diversify their product and service offerings to improve revenue stream and stand out in a crowded field. The Group’s strategy is to work in step with our customers to be ahead of the competition and develop innovative solutions to address their business needs, in good quality and within time and budget. EForce will continue to strengthen our core products and roll out new applications and enhancements to keep our offering fresh and attuned with the times. 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 grow 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 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. 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. This presents great business opportunity for us leveraging on our 30 years of know-how in serving this market. The Group is cautiously positive on our business performance in the new financial year 2025. DIVIDEND The Group had declared and paid RM3.05 million dividends or 0.5 sen per share in the current financial year. EForce proposed a final single-tier dividend of 0.5 sen per ordinary share, subject to shareholders’ approval in the upcoming Twenty-Second (22nd) AGM to be held on 5 December 2024. The dividend payout ratio (including this proposed dividend) will be 71% of the Group’s profit or 1.0 sen per ordinary share for the current financial year. Total dividend paid for FYE 2024 was 1.0 sen. 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)
18 MSC BERHAD Sustainability is often defined as meeting the needs of the present without compromising the ability of future generations to meet their own needs (Brundtland Commission, 1987). In essence, sustainability is about ensuring our actions today do not deplete resources or damage the environment in a way that harms future generations. It involves a holistic approach that considers the interconnectedness of economic, social, and environmental factors. The Group recognizes the need to adopt sustainable practices within the Group and in interacting with external stakeholders – customers and the industry, suppliers and the upstream value chain, resource provider (people, technology, money), shareholders, government and regulators, economy, environment and community. The Group’s current business growth and future expansion predicated on a clear set of values and codes that governs our behavior and action to achieve sustainable outcome. The Group has formally established Sustainability Committee of the Management (“SCM”) to identify and develop actions to further embed sustainability practices within our business. SCM will update its activities to the Audit Committee and the Board of Directors (“the Board”) on a quarterly basis. The Board has oversight to embed sustainability into the Group and its business strategy, and ensures adequate resources, procedures and processes are in place to manage sustainability matters. This is part of the Group’s preparation to get ready for roll out of National Sustainability Reporting Framework as announced by the Securities Commission in September 2024. The information presented in this report is derived from fiscal year 2024 and includes the companies in the Group. The Sustainability Statement for the 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 the objective of bringing value to its’ businesses, stakeholders and society in general. WORKPLACE Health and Safety The Group consistently strives to provide a healthy, safe, secure and friendly workplace for employees. They are our most valued asset. The Group encourages employees to maintain a healthy and active lifestyle, and build camaraderie amongst management and employees through regular company sponsored sports activities. In addition, the Group subsidises annual health check-up cost of employees to ensure they take a proactive approach to manage their health and maintain good general well-being. The Group recently purchased an Automated External Defibrillator (“AED”) to increase our readiness in the unlikely event of sudden cardiac arrest emergency. The device is located in a common area accessible by everyone. With AED, lay persons can carry out the exceptional task of saving lives during critical moment, further assuring employees of our focus in safeguarding them. Other actions on ensuring a safe and secure working environment includes: I. Set policies and procedures to promote workplace health and safety and maintain zero accident/injury rate, II. Provide good office security (e.g. access control, CCTV surveillance, security guards etc.), III. Equip office premise with firefighting and fire prevention fitting and equipment (e.g. fire alarms, fire extinguisher, fireproof door, etc.), IV. Participate in periodic fire drill exercises conducted by building management. Labour practices and standards The Group continues to uphold fair labour practices and encourages recruiters to seek out under-represented female candidates whenever there are job vacancies. EForce adopts equal opportunity practices for management and line leadership roles. The Group has zero-tolerance towards bullying, sexual harassment and unethical behavior. There were no ethical misconduct cases reported in the period under review. 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 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. Sustainability Statement
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