GHL System Berhad Annual Report 2020

127 a n n u a l r e p o r t 2 0 2 0 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 CONT’D 16. INVESTMENTS IN SUBSIDIARIES (cont’d) (i) During the financial year, the Group recognised share options granted under shares options scheme of RM287,229 (2019: RM1,518,227) in profit or loss, out of which an amount of RM179,661 (2019: RM951,112) in the financial year are in respect of employees of subsidiaries. At Company level, the amount of RM179,661 (2019: RM951,112) in the financial year are recorded as an increase in investments in subsidiaries with a corresponding credit to equity as disclosed in Note 23(d) to the financial statements. (j) Movement in equity loan is as follows: Group 2020 2019 RM RM At 1 January 97,632,613 61,042,181 Addition 19,417,731 36,590,432 Capitalised as investment in subsidiary (5,000,000) - Set off with declaration of dividends (9,000,000) - 103,050,344 97,632,613 Accumulated impairment loss (1,343,782) (1,323,761) At 31 December 101,706,562 96,308,852 During the financial year, the Company increases 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.. (k) 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. (l) The reconciliation of movement in the impairment loss are as follow: Company 2020 2019 RM RM At 1 January 17,080,108 15,738,248 Charge for the financial year 23,455 1,341,860 At 31 December 17,103,563 17,080,108