Wah Seong Corporation Berhad Annual Report 2018

21 AMOUNTS OWING BY/(TO) JOINT VENTURES (a) Amounts owing by joint ventures Group Company 2018 2017 2018 2017 RM’000 RM’000 RM’000 RM’000 Trade accounts 1,784 1,678 - - Interest bearing loan 53,082 51,872 - - Advances 605 2,292 - 23 55,471 55,842 - 23 Less: Allowance for impairment loss - (425) - - 55,471 55,417 - 23 The Group’s effective interest rate of interest bearing loans as at 31 December 2018 is between 3.26% to 3.75% (2017: 3.26% to 3.75%) per annum. The loans and advances are unsecured and recoverable on demand. The movements in the allowance for impairment loss on the Group’s amounts owing by joint ventures during the financial year are as follows: Group 2018 2017 RM’000 RM’000 At 1 January 425 454 Written off (421) - Effect of exchange rate changes (4) (29) At 31 December - 425 There is no impairment of amounts owing by joint ventures as the rate of default and expected loss rate is low. The Group’s amounts owing by joint ventures exposure to foreign currency (a currency which is other than the functional currency of the Group entities) risk, based on carrying amounts as at the end of the financial year, were: Group 2018 2017 RM’000 RM’000 - United States Dollar 32,496 33,380 - China Renminbi - 1,080 32,496 34,460 As at 31 December 2017, the Company’s amounts owing by a joint venture is non-trade in nature, unsecured, interest free and recoverable on demand. The Company has no exposure to foreign currency risk for the amounts owing by a joint venture. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 ANNUAL REPORT 2018 149