GHL System Berhad Annual Report 2020

A N N U A L R E P O R T 2 0 2 0 13 MANAGEMENT DISCUSSION AND ANALYSIS CONT’D 2. DISCUSSION AND ANALYSIS OF THE FINANCIAL RESULTS AND CONDITIONS (Cont’d) 2.6 Liquidity and Capital Resources (Cont’d) (ii) An amount of RM17.2 million (2019 – RM26.8 million) was expended on capital expenditure which was mostly in respect of the Group’s purchases of EDC terminals. (iii) The Group repaid RM79.1 million of its bank borrowings and hire purchase payables in 2020 (2019 – RM84.7 million). The Group also drew-down fresh bank loans in 2020 of RM66.4 million (2019 – RM77.8 million). (iv) The Group increased its share capital by RM21.3 million (2019 – RM15.9 million) due to the special issue of 10.1 million (2019 – 10.1 million) shares pertaining to the Share Subscription Agreement (“SSA”) with Paysys Group Holdings Sdn. Bhd. and Rica Holdings (M) Sdn. Bhd. 2.7 Trends and Events The 2020 COVID-19 pandemic global impact had not spared on the economies of the ASEAN region where by governments imposed varying degrees of movement control and lockdown on its population. These movement control 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 noticeable trends during the year arising from movement control and social distancing measures imposed, resulted in a quicker shift towards online ecommerce and cashless transactions at physical stores. Online activities for ecommerce, work, as well as leisure activities grew as consumers were house bound due to the lockdown imposed. The second trend 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. By late 2020, as countries globally commenced deploying COVID-19 vaccines, sentiment and markets have begun to improve. As vaccination efforts globally accelerate, 2021 is seen to be a recovery year with expectations of the reopening of borders for trade, travel and tourism bodes well for the outlook for GHL as consumer spending and consumption is expected to improve. During 2020, many ASEAN government initiatives to minimise the impact of the pandemic involved aid which were channelled through e-payment means and this will help accelerate the various central bank’s ambitions to encourage faster adoptions of cashless usage and change in consumer behaviour.