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segments have remained relatively
stable and are comparable to last
year. Likewise, we expect their
activity and performance in this
current year will be sustained at
FYE2019 levels.
During the year under review,
the Company had announced
that its wholly-owned subsidiary
Percetakan Keselamatan Nasional
Sdn. Bhd. (“PKN”), had commenced
legal action against Datasonic
Technologies Sdn. Bhd. (“DTSB”) at
the Kuala Lumpur High Court. The
claim is for a sum of RM24,975,000
(excluding interest and cost) being
the amount due and owing by
DTSB to PKN for the 1.5 million
Malaysian passport booklets which
were supplied by PKN to DTSB. The
matter is currently pending trial.
The suit however is not expected
to have any material impact on the
financial and operational position
of the Group.
We have continued to maintain
discipline in CAPEX spending.
The division spent RM2.38 million
on CAPEX compared to RM1.28
million last year, which are largely
restricted to assets needed to
meet or maintain the division’s
operational requirements.
We have also enhanced our
technical support functions and
have developed the capabilities in a
high-quality way. We are pleased to
report that during the year, PKN’s
Technical Support Department
has secured the ISO 9001:2015
Quality Management Systems
and ISO 27001:2013 Information
Security Management System
accreditations, affirming the
division’s commitment to provide
customers with the best security
measures for data sharing and
storage. PKN had also increased
the size of its technical support
team as it continues to strengthen
its aftermarket service offerings
to customers in several towns in
Sabah and Sarawak.
While the division’s financial
and liquidity profiles remain
sound, we recognise that given
the highly competitive nature of
our markets, immediate focus
must be given to certain priority
areas that can support future
value-creating opportunities. The
first is to protect and maintain
our niche markets. The second
is to drive cost efficiency and
effectiveness with which we
operate and go to market. We have
established a scalable platform,
but we acknowledge that we
need to become more agile and
collaborative. Towards this end,
we have and will continue to place
emphasis on strategic partnerships,
both local and foreign, centred on
innovative and technology-driven
solutions that can enhance our
competitiveness. Add to that, our
teams continue to remain focused
on proactively matching our cost
structures to the realities of the
top-line pressures we face in the
market. The third is to work to
secure the capabilities we need so
that we can respond to the rapid
technological advancements we are
seeing and to have the ability to
deploy new products and services
through existing channels and meet
our customers’ changing needs. We
need to do all this while continuing
to deliver improvements in safety,
compliance and conduct and in
operational excellence across the
division, which, as noted above,
we have already started with our
technical support teams.
Prospects
The division’s activities are
expected to remain subdued in
the near term as we project that
there could be further pressures
on pricing and volumes. As
highlighted above, the aim for the
current financial year is to protect
and maintain our niche markets,
improve our product offerings
and delivery of differentiated
services. We believe that the
anticipated continued strength
in the transport and confidential
documents subsegments together
with benefits from the division’s
continued focus on sustainable
cost reduction and productivity
improvement initiatives will render
the division in good stead to
capitalize on any eventual upturn in
our key markets.
performance
review
39