Datasonic Group Berhad Annual Report 2020

DATASONIC GROUP BERHAD I ANNUAL REPORT 2020 (Registration No. 200801008472 (809759-X)) 198 Notes to the Financial Statements for the financial year ended 31 March 2020 (Cont’d) 51. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (cont’d) (c) On 31 January 2020, Datasonic Technologies Sdn. Bhd. (“DTSB”), a wholly-owned subsidiary of the Company, received and accepted the Letter of Change of Scope (“LOCS”) dated 23 January 2020 from Kementerian Dalam Negeri (“KDN”) in respect of the supply of the Malaysian Passport Chips for a period of five (5) years or 12.5 million of Passport Chips (“Contract”) commencing from 1 December 2016 to 30 November 2021 with no change to the contract sum of RM318,750,000. The details of the LOCS are as follows:- (i) The new scope of works for the maintenance services of hardware and software for the Autogate and Chips and the maintenance services for equipment and application of Public Key Infrastructure and Public Key Directory, amounting to RM38,250,000, commenced with effect from 10 May 2019 and valid until 30 November 2021. (ii) The maintenance services of hardware and software for theAutogate and Chips and the maintenance services for equipment and application of Public Key Infrastructure and Public Key Directory were previously awarded to another company under 2 different contracts and which had expired and now awarded to DTSB consolidated into the Passport Chips Contract. (iii) The demand of theMalaysian Passports dropped fromaverage of 2.5million per year to approximately 2.2 million per year since the abolishment of the 2-year validity passport option in 2015. Therefore, the reduction of number of chips from 12.5 million to 11 million for the 5-year Contract from 1 November 2016 to 30 November 2021 will not affect the financial performance of the Company as the demand of passports for the contract period of 5 years is approximately 11 million now rather than 12.5 million. (iv) The new scope of works amounting to RM38,250,000 with effect from 10 May 2019 until 30 November 2021 will contribute positively towards the future earnings and net assets per share of Datasonic Group for the financial year ending 31 March 2020 and the financial years thereafter. (d) On 3 February 2020, Datasonic Technologies Sdn. Bhd. (“DTSB”), a wholly-owned subsidiary of the Company, won an open tender participated by 18 companies on 21 October 2019 for the supply, deliver, installation, testing, integration, commissioning and technical support of equipment, software and application for 16 units of foreigner e-gate with facial recognition system at the Malaysia-Singapore entry/exit point to the Immigration Department of Malaysia (“Contract”) for a period of twelve (12) months commencing from 15 February 2020 to 14 February 2021 for a contract sum of RM6,973,125.91. DTSB received and accepted the Letter of Award from KDN for the above Contracts. (e) The outbreak of COVID-19 in early 2020 has affected the business and economic environments of the Group. The governments and various private corporations have taken different measures to prevent the spread of the virus such as travel bans, quarantines, closures of non-essential services, social distancing and home quarantine requirements which impacted consumers’ spending pattern and the Group’s operations directly or indirectly. Given the widespread nature of the outbreak and the unpredictability of future development of COVID-19, the Group is unable to quantify the potential financial impact of the COVID-19 pandemic on the Group’s 2021 financial statements reliably at this juncture.