Wah Seong Corporation Berhad Annual Report 2021 165 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 17 AMOUNTS OWING BY/(TO) SUBSIDIARIES (CONTINUED) (a) Amounts owing by subsidiaries (continued) The effective interest rate of interest bearing loans as at 31 December 2021 ranges between 2.42% to 5.58% (2020: 4.00% to 6.83%) per annum. The loans and advances are denominated in Ringgit Malaysia and are recoverable on demand. In the financial year ended 31 December 2020, an amount owing by a subsidiary amounting to RM65,000,000 was capitalised as investment in subsidiary. The movements in the Company’s allowance for impairment loss of amount owing by subsidiaries during the financial year are as follows: Company 2021 2020 RM’000 RM’000 At 1 January - 43,106 Impairment loss recognised 232 69,208 Bad debts written off - (110,752) Effect of exchange rate changes - (1,562) At 31 December 232 - During the financial year ended 31 December 2021, the amounts owing by subsidiaries are considered performing except for certain interest bearing loans and interest free advances owing by a subsidiary of RM232,000 which is deemed not performing. Hence, RM232,000 was impaired during the financial year. In the previous financial year ended 31 December 2020, the amounts owing by subsidiaries were considered performing except for certain interest bearing loans and interest free advances owing by a subsidiary of RM110,752,000 which was deemed not performing, of which RM41,544,000 was impaired in prior years and RM69,208,000 was further impaired in the previous financial year ended 31 December 2020. Hence, the total amount of RM110,752,000 was subsequently written off during the previous financial year. (b) Amounts owing to subsidiaries Company 2021 2020 RM’000 RM’000 Interest bearing loans (unsecured) 24,258 14,258 Non-trade accounts 4,890 2,958 29,148 17,216 The effective interest rate of interest bearing loans as at 31 December 2021 ranges between 2.11% to 4.08% (2020: 4.08% to 4.46%) per annum. The loans are denominated in Ringgit Malaysia and are repayable on demand. Non-trade accounts are denominated in Ringgit Malaysia, unsecured, interest free and repayable on demand.
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