MKH Annual Report 2018

20 MKH Berhad Annual Report 2018 MANAGEMENT DISCUSSION AND ANALYSIS REPORT LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents of the Group decreased by RM41.6 million during the year (FY2017: RM22.7 million), which was culminated from the following cashflow activities:- For FY2018, we recorded an improvement in cashflows from operating activities following the handing over vacant possession of six (6) projects coupled with lower interest and tax payments. The cashflow used in investing activities was also reduced with lower upfront development expenditure incurred in land held for property development and the completion of disposal of non-current assets classified as held for sale amounting to RM11.1 million. Significant cash outflows was recorded for financing activities following the higher net repayment of bank borrowings totalling RM92.2 million in FY2018 (FY2017: RM51.6 million). The repayment of the said borrowings was partly funded from the proceeds of the warrants exercised amounting to approximately RM36.7 million, and the subscription of shares in subsidiaries totalling RM22.6 million by business associates. The Group had also purchased 4,038,600 of its own shares through its share buy-back programme amounting to RM5.4 million (including transaction costs). The Group's capital resources comprise primarily of cashflows generated from operating activities, cash and cash equivalents, term deposits, fixed income funds and available lines of credit. As at 30 September 2018, the Group's net gearing improved to 0.29 times (FY2017: 0.34 times), largely due to the above mentioned as well as prudent cashflow management. The Group continues to maintain a prudent approach towards managing its capital resources to ensure adequacy in meeting operational requirements and capital expenditure from time to time. Net cash generated 2018 2017 Changes from/ (used in) RM'000 RM'000 (%) Operating activities 97,082 57,895 67.7 Investing activities (66,291) (104,149) 36.4 Financing activities (72,423) 23,530 (407.8) Increase/ (Decrease) in cash and cash equivalents (41,632) (22,724) (83.2) Ripe fresh fruit bunches ready for harvest Show unit of Kajang 2 Precinct 2 Phase 3 (Midori) and 4 (Hiroki) double-storey terrace was completed for customer viewing during the launching ceremony in November 2017