MSM Malaysia Holdings Berhad Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 21 LOANS DUE FROM SUBSIDIARIES (CONTINUED) (e) Maximum exposure to credit risk The following table contains an analysis of the credit risk exposure of the subsidiaries for which an ECL allowance is recognised. Their gross carrying amounts disclosed below also represents the Group’s maximum exposure to credit risk on these assets: Basis for recognition of Estimated gross Carrying amount Group internal Expected expected credit carrying amount Loss (net of loss credit rating credit loss loss provision at default allowance allowance) RM’000 RM’000 RM’000 2019 Performing - 12 months ECL 1,023,087 - 1,023,087 Under performing 1.1% Lifetime ECL 37,030 (419) 36,611 2018 Performing - 12 months ECL 26,181 - 26,181 Under performing 3.0% Lifetime ECL 1,090,517 (32,709) 1,057,808 22 LEASE RECEIVABLES Company 31.12.2019 31.12.2018 1.1.2018 RM’000 RM’000 RM’000 (Restated) (Restated) Effects of adoption of MFRS 16 (Note 41): Not later than 1 year 2,167 1,796 1,056 Later than 1 year 84,972 86,072 86,800 87,139 87,868 87,856 The leased asset is in respect of a piece of leasehold land acquired for the construction of a sugar refinery which the Company leases to a subsidiary of the Company. The Company and its subsidiary had agreed that the total investment recovery cost of RM87,346,451 as at 30 April 2016, which is the commencement date of the lease agreement for the said land, will be recovered by the subsidiary over a period of 59 years. Accordingly, the Company has transferred the net book value of the leasehold land amounting to RM87,346,451 as at 30 April 2016 from property plant and equipment to lease receivables. MSM Malaysia Holdings Berhad | Annual Report 2019 186