123 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2021 CONT’D 16. INVESTMENTS IN SUBSIDIARIES (Cont’d) (f) Acquisition of a subsidiary during the financial year ended 31 December 2020 In the previous financial year, GHL Asia Pacific Limited had subscribed for 103,995 ordinary shares in GHL Philippines Financing Services for a consideration of RM835,101. GHL Philippines Financing Services became a wholly-owned indirect subsidiary of the Company. (g) In the previous financial year, the Group recognised share options granted under shares options scheme of RM287,229 in profit or loss, out of which an amount of RM179,661 was in respect of employees of subsidiaries. At Company level, the amount of RM179,661 was recorded as an increase in investments in subsidiaries with a corresponding credit to equity as disclosed in Note 23(d) to the financial statements. (h) Movement in equity loan is as follows: Company 2021 2020 RM RM Balance as at 1 January 103,050,344 97,632,613 Reclassification of balance from amount owing by subsidiaries to equity loan 32,869,086 19,417,731 Capitalised as investment in subsidiary - (5,000,000) Set off with declaration of dividends - (9,000,000) 135,919,430 103,050,344 Accumulated impairment losses (11,307,397) (1,343,782) Balance as at 31 December 124,612,033 101,706,562 During the financial year, the Company increased its equity loan via capitalisation of non-trade amount owing by subsidiaries as disclosed in Note 20(f) to the financial statements. In the previous financial year, the Company increased its equity investment in GHL ePayments Sdn. Bhd. by subscribing 5,000,000 new ordinary shares amounting to RM5,000,000 via capitalisation of equity loan previously granted to GHL ePayments Sdn. Bhd.. (i) The Group reviews the investments in subsidiaries for impairment when there is an indication of impairment. The recoverable amounts of the investments in subsidiaries are assessed by reference to the fair value less cost to sell of the underlying assets or the value in use of the respective subsidiaries. The value in use is the net present value of the projected future cash flows derived from the business operations of the respective subsidiaries discounted at an appropriate pre-tax discount rate. For such discounted cash flow method, it involves the use of estimated future results and a set of assumptions to support their income and cash flows. Significant judgements and estimates had also been used to determine the key assumptions applied to the cash flow projections, which includes the projected earnings before interest and tax margins, growth rates, and the appropriate pre-tax discount rates used for each of the subsidiary. Impairment losses are made when the carrying amount of the investment in subsidiaries exceed its recoverable amount.
RkJQdWJsaXNoZXIy NDgzMzc=