11 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2021 2. DISCUSSION AND ANALYSIS OF THE FINANCIAL RESULTS AND CONDITIONS (Cont’d) 2.6 Liquidity and Capital Resources (Cont’d) (ii) An amount of RM43.3 million (2020 – RM17.2 million) was expended on capital expenditure which was mostly in respect of the Group’s purchases of EDC terminals. (iii) The Group repaid RM36.7 million of its bank borrowings and hire purchase payables in 2021 (2020 – RM79.1 million). The Group also drew-down fresh bank loans in 2021 of RM60.7 million (2020 – RM66.4 million) for working capital purposes. 2.7 Trends and Events The 2021 COVID-19 pandemic global impact continued to be felt by the economies of the ASEAN region whereby the respective governments imposed varying degrees of movement control and lockdown on its population to contain the spread of the pandemic. These movement controls adversely impacted the economies of the countries we operate in and GHL’s operations. The level of movement control in Malaysia, Philippines, Thailand and Indonesia varied in its severity and implementations and the resulting the rate of recovery. Two trends could be observed arising from the movement control and social distancing measures imposed, which resulted in a quicker shift towards online ecommerce and cashless transactions at physical stores. Online activities for ecommerce as well as leisure activities grew as consumers were house bound due to the lockdown imposed. The second trend was noticed when restrictions were eased, consumers would opt to pay using cashless means to avoid handling physical cash as part of the measures to minimise COVID-19 risks. Both trends are favourable to our operations as consumer behaviour in faster adoption of cashless payments bodes well for our group’s TPA strategy. 2021 saw the peak of COVID-19 positive cases in ASEAN which resulted in more lockdown days compared to 2020 but fortunately, the vaccination effort by various governments also grew in 2021. As vaccination efforts globally increases, including the deployment of booster vaccine shots, many observers opined that the pandemic will soon reach its endemic stage. This will result in more relaxed restrictions and expectations of the reopening of borders for trade, travel and tourism bodes well for the outlook for GHL as consumer spending and consumption are expected to improve in the coming months. During 2021, many ASEAN government and their respective central bank initiatives saw the announcements of cross border recognition of their respective national QR codes which is expected to accelerate and encourage faster adoption of cashless usage and change in consumer behaviour, especially when borders reopen and travel resumes. MANAGEMENT DISCUSSION AND ANALYSIS CONT’D
RkJQdWJsaXNoZXIy NDgzMzc=