Datasonic Group Berhad Annual Report 2019

Management Discussion & Analysis (Cont’d) 4. RISKS RELATING TOOUR BUSINESS AND INDUSTRY (CONT’D) 2. Credit Risk Poor collections from our major customers may result in insufficient funds to meet our working capital requirements. Additionally, the Group’s cash flow requirements have increased due mainly to our plan to invest in human capital and R&D, capital expenditure for project management, expansion of our manufacturing/production activities and/or venture into new businesses (both locally and overseas). This has resulted inhigher dependency for contract financing. Tomitigate the impact, theGroupwill continuously monitor the extent of its credit risk to an acceptable level. 3. Competition with other market players Competition is inevitable, especially from other market players. To mitigate this risk, we will continue to embark on our core competencies and strategies to deliver highest level of services at competitive costs i.e. to provide cheaper and better integrated system and solutions to maximise the value and returns to our existing customers. This is intended to build our customers’ confidence based on core competencies to improve on public delivery services besides enabling Datasonic to achieve greater market penetration through expansion of our portfolio to include other government ministries or agencies as well as non- governmental sectors in Malaysia, as well as expansion of our business overseas. 5. FORWARD-LOOKING STATEMENT The management has continuously negotiated for better competitive pricing for purchases of the required materials and services from suppliers coupled with the prevalent cost control initiatives implemented in the administration of the group’s operations. As at 31 March 2019, the order book was in the vicinity of RM743 million which would have a positive impact on revenue generation in future operations. Wewill continuetostrive forgrowthandgeneratenewrevenuestreams fromtheprovisionof our securityrelated ICT solutions locally, regionally and globally. We are confident on the future of the Group and we are committed to creating and delivering value for money security related ICT solutions to our customers, shareholders and stakeholders, thereby contributing towards achieving the Group’s vision and mission. The prospects for growth are expected to be satisfactory in the financial year ending 31 March 2020, barring any unforeseen circumstances. DATASONIC GROUP BERHAD (Company No. 809759-X) ANNUAL REPORT 2019 31