My EG Services Berhad Annual Report 2019

MY E.G. SERVICES BERHAD [Registration No. 200001003034 (505639-K)] 158 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2019 (CONT’D) 20. AMOUNT OWING BY SUBSIDIARIES The non-trade balances represent unsecured interest-free advances and payment made on behalf. The amount owing is to be settled in cash. 21. AMOUNT OWING BY AN ASSOCIATE The Group The Company 31.12.2019 30.9.2018 31.12.2019 30.9.2018 RM’000 RM’000 RM’000 RM’000 Amount owing by: - trade 65,450 65,450 42,750 42,750 - non-trade 30,006 30,000 30,000 30,000 95,456 95,450 72,750 72,750 Less: Allowance for impairment losses (95,450) (95,450) (72,750) (72,750) 6 - - - The trade balance relates to the development work for the online tax monitoring project (“the Project”) and is repayable upon the commencement of the said project. On 3 December 2014, the Company received a revised letter of award under the service tax regime to develop the Project. Nevertheless, the Goods and Services Tax (“GST”) was implemented on 1 April 2015 and the service tax regime was replaced by the GST regime whereby the Project has been varied. Accordingly, the Project was being reviewed to cater for certain requirements and enhancements following the implementation of GST. A technical committee together with a steering committee have been established by the relevant authorities for this purpose. The amendments to the relevant Act for the purpose of the implementation of the Project have been completed and came into effect from 1 January 2017. An internal trial run was carried out to ensure any further technical issues in relation to the Project are resolved prior to commercialisation in the near future. Effective 1 June 2018, it was announced by the Ministry of Finance (“MOF”) that a zero-rated GST will be imposed. Subsequent to this announcement, the GST regime has been abolished and replaced by the Sales and Services Tax (“SST”). Hence, the Project has been temporarily suspended. Accordingly, full impairment on the amount owing by the associate has been provided in the last financial period. 22. AMOUNT OWING BY JOINT VENTURES The non-trade balances represent unsecured interest-free advances and payment made on behalf. The amount owing is to be settled in cash. 23. FIXED DEPOSITS WITH LICENSED BANKS (a) The fixed deposits with licensed banks of the Group and the Company at the end of the reporting period bore effective interest rates ranging from 2.65% to 3.35% (2018 - 2.90% to 6.51%) per annum and 3.10% to 3.35% (2018 - 3.17% to 6.51%) per annum respectively. The fixed deposits have maturity periods ranging from 1 to 12 (2018 - 1 to 12) months and 12 (2018 - 12) months for the Group and the Company respectively. (b) Included in the fixed deposits with licensed banks of the Group and the Company at the end of the reporting period were amounts of RM12,240,016 and RM7,688,096 (2018 - RM9,843,000 and RM7,218,808) respectively which have been pledged to licensed banks as security for banking facilities granted to the Group and the Company.