MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL REVIEW Group Revenue and Profitability Revenue recorded in FY2021 was RM691.09 million, which was RM103.62 million (13.0%) lower compared to the revenue recorded in YTD 2020. The lower revenue achieved in FY2021 was attributable to lower revenue achieved by the construction division and the manufacturing and trading (“M&T”) division. Gross profit margin (“GP Margin”) of 7.25% in FY2021, was lower compared to 9.38% recorded in FY2020. This was mainly due to the construction and M&T revenue had reduced significantly during FY2021 whilst the Group continued to incur substantially the same amount of fixed and recurring expenses such as depreciation, payroll and rental expenses. In line with the lower revenue and GP Margin achieved, gross profit of RM50.11 million recorded in FY2021 was RM24.43 million (32.8%) lower compared to FY2020. Other income of RM8.13 million in FY2021 approximated the amount recorded in FY2020. Other income mainly comprised of gains on disposal of machineries and scrap materials and bad debts recovered. Selling and administrative expenses (“S&M”) of RM41.77 million in FY2021, was RM6.12 million (12.8%) lower compared to FY2020. Higher S&M were recorded in FY2020 due to the write down of land held for development of RM7.32 million. Finance costs of RM14.83 million in FY2021 was RM3.63 million (19.7%) lower compared to FY2020 mainly due to the absence of unwinding of discount on payables. The effective tax rate for FY2021 was higher than the statutory rate applicable to the Group as certain expenses were disallowed for tax deduction under tax regulations, and potential deferred tax benefits in relation to interest expenses were not recognised on prudent basis. Due to the variances in gross profit, other income and expenses as explained above, profit after tax recorded in FY2021 decreased by RM8.67 million (109.2%) compared to FY2020. The Group recorded loss after tax of RM0.73 million in FY2021. K imlun Corporat ion Berhad Regi s t rat ion No. 200901023978 (867077-X) 19
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