Datasonic Group Berhad Annual Report 2019

1. OVERVIEWOF BUSINESS ANDOPERATIONS (CONT’D) 1.4 Our Objectives and Strategies (Cont’d) • While seeking out investment and business opportunities that will maximise shareholder returns , the Group will continue to drive operational efficiencies either by forging strategic partnerships with world class players to help accelerate our product development cycle and/or to expand the portfolio of our products & solutions; and • Protect our intellectual properties (“IP”) by patenting our in-house developed solutions in both the local and international markets. 2. REVIEWOF FINANCIAL RESULTS FY16 RM’mil FY17 RM’mil FY18 RM’mil FY19 RM’mil REVENUE 241.310 318.353 258.601 219.559 COST OF SALES (112.429) (180.522) (113.865) (100.569) GROSS PROFIT 128.881 137.831 144.736 118.990 OTHER INCOME 1.387 1.020 5.331 1.094 130.268 138.851 150.067 120.084 ADMINISTRATIVE EXPENSES (59.955) (60.191) (71.795) (71.498) 70.313 78.660 78.272 48.586 FINANCE COSTS (5.213) (6.792) (7.931) (8.112) PROFIT BEFORE TAXATION 65.100 71.868 70.341 40.474 INCOME TAX EXPENSE (2.208) (9.368) (3.220) (4.039) PROFIT AFTER TAXATION 62.892 62.500 67.121 36.435 2.1 Revenue Year-on-year, our revenue of RM219.559 million recorded in the current financial year ended 31 March 2019 (“FY19”) was RM39.042million lower than theRM258.601million recorded in the previous financial year ended 31March 2018 (“FY18”). The Group’s revenuewas lower mainly due to lower deliveries of the MyKad to Jabatan Pendaftaran Negara (“JPN”) in FY19. 2.2 Cost of Sales In line with lower delivery of the MyKad, the Group’s cost of sales had also reduced by 11.7% (RM13.296 million) from RM113.865 million in FY18 to RM100.569 million in FY19. 2.3 Other income Other Income of RM1.094 million for FY19 was RM4.237 million lower than RM5.331 million for FY18 due mainly to the following one-off transactions recorded in FY18: • the write back of impairment loss of trade receivables of RM2.087million upon subsequent collection in the second quarter of FY18; and • foreigncurrencygainonrefundreceived fromasupplierofRM1.397million in linewiththestrengthened foreign currency over time in the second quarter of FY18. Management Discussion & Analysis (Cont’d) DATASONIC GROUP BERHAD (Company No. 809759-X) ANNUAL REPORT 2019 23