MISC Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS HIGHLIGHTS OF THE YEAR OUR BUSINESS OUR LEADERSHIP OUR PERFORMANCE OUR COMMITMENT TO SUSTAINABILITY OUR GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 50 TH ANNUAL GENERAL MEETING 297 MISC BERHAD ANNUAL REPORT 2018 296 19. OTHER FINANCIAL ASSETS AND FINANCIAL LIABILITIES (CONT'D.) (d) Finance lease receivables Finance lease receivables represent lease rental and interest receivable due from customers in relation to the lease of ships and offshore floating assets by the Group and the Corporation. Group Corporation 2018 RM'000 2017 RM'000 2018 RM'000 2017 RM'000 Minimum lease receivables: Not later than 1 year 2,299,800 1,866,938 150,518 - Later than 1 year and not later than 5 years 8,648,728 7,001,150 602,484 - Later than 5 years 14,060,204 12,334,024 1,049,595 - 25,008,732 21,202,112 1,802,597 - Less: Future finance income (7,304,786) (6,348,921) (645,019) - Less: Impairment (Note 22) (79,398) - (7,872) - Present value of finance lease assets 17,624,548 14,853,191 1,149,706 - Present value of finance lease receivables: Not later than 1 year 1,247,158 990,841 67,115 - Later than 1 year and not later than 5 years 1,356,888 4,195,431 72,629 - Later than 5 years 15,099,900 9,666,919 1,017,834 - 17,703,946 14,853,191 1,157,578 - Less: Impairment (Note 22) (79,398) - (7,872) - 17,624,548 14,853,191 1,149,706 - Analysed as: Due within 12 months (Note 22) 1,247,158 990,841 67,115 - Due after 12 months (Note 22) 16,377,390 13,862,350 1,082,591 - 17,624,548 14,853,191 1,149,706 - The effective interest rate of the Group's finance lease receivables is between 4.10% to 7.60% (2017: 4.75% to 6.52%). Included in minimum lease receivables are the estimated unguaranteed residual values of the leased assets of RM538,636,000 (2017: RM341,217,000). The effective interest rate of the Corporation's finance lease receivable is 7.60% (2017: Nil). Included in minimum lease receivable is the estimated unguaranteed residual value of the leased assets of RM33,018,000 (2017: RMNil). 19. OTHER FINANCIAL ASSETS AND FINANCIAL LIABILITIES (CONT'D.) (d) Finance lease receivables (cont'd.) In the current financial year, the Group and the Corporation recognised total finance lease receivables amounting to RM3,547,145,000 and RM1,149,902,000 respectively in relation to delivery of ships and offshore floating assets. In prior year, the total finance lease receivables recognised at Group was RM1,885,440,000 in relation to delivery of ships. 20. FINANCE LEASE ASSETS UNDER CONSTRUCTION The finance lease assets under construction relates to progress payments made in respect of ships under construction for which charter contracts classified as finance leases have been entered into with a lessee. The movement of the finance lease assets under constructions are as follows: Group and Corporation 2018 RM'000 2017 RM'000 At 1 January 688,489 1,417,983 Additions 1,006,206 1,254,966 Transfer to finance lease receivables (1,690,412) (1,885,440) Currency translation differences (4,283) (99,020) At 31 December - 688,489 Included in additions to the finance lease assets under constructions of the Group and the Corporation is finance costs capitalised during the year of RM1,728,000 (2017: RM9,689,000). 21. INVENTORIES Group Corporation 2018 RM'000 2017 RM'000 2018 RM'000 2017 RM'000 At cost Bunkers, lubricants and consumable stores 205,376 149,844 - 210 Spares 37,430 46,349 - 1,259 Raw materials 7,224 2,399 - - Work-in-progress * - - - 19,846 250,030 198,592 - 21,315 The cost of inventories recognised as cost of sales during the financial year of the Group and the Corporation were RM1,099,323,000 (2017: RM932,475,000) and RMNil (2017: RM68,819,000) respectively. * Work-in-progress in prior year relates to costs incurred to-date for an asset under construction that has been disposed to a subsidiary upon its completion.