MANAGEMENT DISCUSSION AND ANALYSIS Revenue of the investment division in FY2021 was mainly derived from dividend and interest income received from other divisions. Both the Construction and M&T divisions recorded lower GP margins in FY2021, mainly due to their respective revenue streams had been significantly reduced during the year whilst they 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 generated by the Construction and M&T divisions were lower in FY2021. PD division recorded a lower GP margin in FY2021, due to lower profit margin products were sold during FY2021. Nevertheless, PD division generated higher gross profit in FY2021 on the back of higher revenue achieved. Financial Position Shareholders’ equity decreased from RM725.91 million as at 31 December 2020 to RM721.28 million as at 31 December 2021, attributable to the comprehensive loss attributable to owners of the Company of RM1.10 million and dividend paid of RM3.53 million during FY2021. Non-current assets increased from RM368.86 million as at 31 December 2020 to RM377.21 million as at 31 December 2021, mainly due to the increase in land held for development by RM42.79 million on completion of the acquisition of 2 parcels of commercial land for property development, partly offset by the decrease in property, plant and equipment (“PPE”) by RM35.18 million. The decrease in PPE was mainly due to depreciation of the PPE during FY2021. Current assets decreased from RM1.11 billion as at 31 December 2020 to RM0.95 billion as at 31 December 2021. This was mainly due to the combined effects of the following: (i) net decrease in inventories by RM45.62 million on delivery of finished goods to customers and sales of property stocks during FY2021; and (ii) net decrease in trade and other receivables and contract assets by RM132.21 million mainly attributable to lower business operation during FY2021. Current liabilities decreased from RM607.41 million as at 31 December 2020 to RM444.38 million as at 31 December 2021 mainly due to the combined effects of the following: (i) decrease in loans and borrowings by RM116.35 million, mainly due to lower utilization of working capital financing facilities, in line with lower business operation in FY2021; and (ii) decrease in trade and other payables and contract liabilities by RM40.59 million, mainly due to lower business operation in FY2021; and Non-current liabilities increased from RM135.27 million as at 31 December 2020 to RM151.01 million as at 31 December 2021 due to issuance of Sukuk during the year. Net gearing ratio as at 31 December 2021 was at a manageable level of 0.25 times. Cash Flow For FY2021, the Group registered net cash flows generated from operating activities of RM117.57 million. A small net cash flows of RM2.60 million was used in investing activities. Net cash flows used in financing activities of RM103.44 million was mainly attributable to repayment of loans and borrowings and hire purchase creditors aggregating RM740.77 million, partly offset by the drawdown of loans and borrowings of RM641.77 million. With the net cash inflow of RM11.53 million during FY2021, the Group’s cash and cash equivalents was RM45.62 million as at 31 December 2021. K imlun Corporat ion Berhad Regi s t rat ion No. 200901023978 (867077-X) 21
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