Datasonic Group Berhad Annual Report 2020

4.3 Reputational Risks fromNegative Media Coverage During the year, negativemedia coverage, as well as changes in the current political scenario had affected public’s confidenceonDatasonic. As our revenues andorders aremainlyderived fromgovernment projects, the negative effects of “bad press/media” had affected public sentiments and/or influenced themovement of our share prices. To reduce the negative effects of reputational risks, or image and brand damages, our risk mitigation strategies include: • Effective board oversight; • Riskmanagement processwhich integrates risk intobusiness planning and settingof strategy to foster a more strategic view of undertaking risk; and • StrategicCommunications for enhancement of public relationsand/or investor relationsmanagement of the Company’s image and/or brand building. 4.4 Litigation Risk In reference to the Suit between Percetakan Keselamatan Nasional Sdn Bhd (“PKN”) and Datasonic Technologies Sdn Bhd (“DTSB”), PKN continues to decline our counter offer price during negotiation. Tomitigatethisrisk,wewillcontinuetopursuesettlementnegotiationsoutofCourt(ifpossible),andwillseek professional legal advice (if necessary). Note: For further details pertaining to the above Suit, kindly refer to the announcements made by the Company in respect of theKuala LumpurHighCourt SuitNo.WA-22NCVC-486-07/2018PKNvs. DTSB and/or the disclosure in Section 3.5 of this Management Discussion & Analysis (“MD&A”). 4.5 Impacts of the COVID-19 Pandemic One of the issueswhichdominates the activities of every organization, company or government around the world since it first surfaced in December 2019 is the novel Coronavirus Disease (“COVID-19”) outbreak, whichhas spread fromChina to the rest of theworld, leavingapathof disruption&desolation in itsonslaught that is still advancing today. The World Health Organization (“WHO”) on March 11, 2020, has declared the COVID-19 outbreak a global pandemic due mainly to concerns over the alarming levels of spread and severity, as well as the alarming levels of inaction to contain the virus. Even so, the number of reported cases in Malaysia remained relatively low until a large spike in cases in March 2020, which resulted in theGovernment ofMalaysia to announce various phases of theMovement Control Orders (“MCO”) since 18 March 2020. TheCOVID-19pandemic is expected tohavean impact on theGroup’s operations, duemainly to restrictions in production, trade and consumption, and international travel bans. Nonetheless, at Datasonic, our first priority has been to protect the wellbeing of our employees and their families. Ever since we were informed about the spread of COVID-19, we have activated our business continuity plan, proactively implemented a range of precautionarymeasures, fromsanitation and cleaning protocols, toworkplace distancing, and allowing our employees towork fromhome.We aimto protect our staff and their families while making sure that we continue to offer excellent customer service. Thanks to their resilience, we are able as much as possible to continue providing services and support as usual amid this crisis. Management Discussion & Analysis (Cont’d) DATASONIC GROUP BERHAD I ANNUAL REPORT 2020 (Registration No. 200801008472 (809759-X)) 31