44. SUBSEQUENT EVENT On 14 January 2022, the Company announced that it has become an affected listed issuer pursuant to Paragraph 8.04 and Paragraph 2.1 (a) of Practice Note 17 (“PN17”) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Malaysia”). As an affected listed issuer, the Company is required to submit a regularisation plan to address the PN17 status within 12 months from 14 January 2022 to the relevant authorities for approval. The management of the Company is currently in the process of formulating a regularisation plan. 45. COVID-19 PANDEMIC The world was affected by the COVID-19 pandemic, resulting in an economic recovery slowdown and adversely impacting various businesses specifically the tourism and hospitality industries. Year 2021 was even more challenging than Year 2020 for the Group, given that international flight operations were disrupted for the full year, as opposed to just the second to fourth quarters previously. However, the situation picked up towards year end when the effects of mass vaccination began to be evident. Along with a decline in COVID-19 infections, travel lanes started to emerge followed by the gradual opening of domestic and, to a slight extent, international borders. The Group reported a net loss of RM3,721 million for the financial year ended 31 December 2021 compared to a net loss of RM5,888 million from the previous year and the current liabilities exceeded its current assets by RM6,754 million (2020: RM5,902 million) as at 31 December 2021. In addition, the Group also reported a shareholders’ deficit of RM3,382 million (2020: RM1,214 million). The Company reported a net loss of RM64 million (2020: RM262 million) for the financial year ended 31 December 2021. “Arising from the COVID-19 pandemic, the Group and the Company have implemented several measures related to fundraising, revision of business plans in conjunction with the ease of travel restrictions and continuous efforts to enforce cost control measures. These efforts are on-going as the Group and the Company continue to seek support from their vendors and business partners to address its cash flow requirements. The following measures had been taken, with further additional efforts to be taken: (a) Funding The Group has undertaken several funding initiatives including restructuring and renegotiation of leases, private placements, issuance of RCUIDS, disposal and divestment of investments and assets and bank and lessors financing amounted to approximately RM3 billion. The Group is also currently in various stages of discussions with lenders and investors for debt and equity fundraising amounting to approximately RM1.5 billion. (b) Working Capital Management As at 31 December 2021, the Group had completed restructuring of total 81 aircraft leases and currently in discussion with its lessors to further negotiate the restructuring of the remaining leases to waive the lease rentals in arrears as well as reducing future lease rates with a corresponding longer lease term where necessary. The lease rentals deferred as at 31 December 2021 is disclosed in Note 29 to the financial statements. During the financial year, the Group has significantly reduced its cash burn rate through various cost containment and optimisation exercises including: – Right sizing of manpower and salary cuts for management, staff and directors; – Reskilling, upskilling and moving operational manpower across functions within our ecosystem of online travel and lifestyle business during the downturn in travel; and – Negotiation of deferrals with vendors, service providers, suppliers and other business partners. F I N A N C I A L S T A T E M E N T S A N N U A L R E P O R T 2 0 2 1 3 1 3
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