10 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2021 2. DISCUSSION AND ANALYSIS OF THE FINANCIAL RESULTS AND CONDITIONS (Cont’d) 2.4 Profit attributable to Equity Holders of the group The profit attributable to equity holders of the Group recovered to RM28.2 million, a 107.8% growth YoY. Fully diluted earnings per ordinary share for the year amounted to 2.47sen, an improvement of 46.2% YoY. The performance in 2021 still reflected the COVID-19 challenges which resulted in governments introducing lockdowns and movement controls to contain the spread of the pandemic. 2.5 Annuity versus Non-Annuity Revenue Annuity vs Non-Annuity Revenue (RM’ million) 2020 43.3 291.2 Annuity Non-Annuity 52.2 334.5 360.2 308.0 2021 87.1% 12.9% 85.5% 14.5% Total The annuity-based revenue component within the group’s total revenue remains high at 85.5% and this compared to 87.1% achieved in FY2020 due to higher hardware and software sales recognised in 2021 compared to FY2020. Although annuity-based revenue was lower in percentage terms, in absolute terms, it was higher due to higher recurring TPA transactions captured. The group’s strategy is to grow the TPA and other businesses that have a strong recurring annuity-based revenue and at the same time to continue to support our main bank customers with their future hardware and software needs. As TPA recovery gathers momentum in all geographical markets, we expect the annuity revenues to remain strong and recover in FY 2022. 2.6 Liquidity and Capital Resources As at 31 December 2021, the Group’s Net Cash Position (Note 1)amounted to RM121.8 million (31 December 2020 – RM117.7 million). There are further funds placed in fixed income fund with financial institution included in Other Investments amounting to RM101.6 million (31 December 2020 – RM64.8 million). (Note 1 – Defined as Total Cash and Bank Balances less all Bank Borrowings and Lease Liabilities) The key items that impacted the Group’s cashflow in 2021 were as follow: - (i) Net cash generated from operating activities increased to RM88.6 million (2020 – RM44.3 million), mainly due to an increase in working capital requirements of RM59.3 million from an increase in trade and others payables (RM23.1 million), increase in advance receipts for contract liabilities (RM6.7 million), a decrease in inventories (RM19.4 million) and decrease in trade and other receivables (RM10.5 million), and decrease in operating profit before working capital changes of RM13.3 million, and also a slight increase in movement of tax and interest of RM1.8 million. MANAGEMENT DISCUSSION AND ANALYSIS CONT’D
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