DMIT_Annual_Report_2018_EN

N OTES TO THE C ONSOLIDATED F INANCIAL S TATEMENTS (Thousands of US dollars) Dar Al-Maal Al-Islami Trust 43 Collateral and other credit enhancements Collateral The Group employs a range of policies and practices to mitigate credit risk. The most traditional of these is the taking of security for funds advances, which is common practice. The Group implements guidelines on the acceptability of specific classes of collateral or credit risk mitigation. The fair value of the collateral held as at 31 December 2018 amounts to USD 3,608,111 (2017: USD 4,383,491). Loss allowance The following table explain the changes in the loss allowance between the beginning and the end of the annual period due to these factors: 2018 Stage 1 Stage 2 Stage 3 12-month ECL USD’000 Lifetime ECL USD’000 Lifetime ECL USD’000 Total USD’000 Amortised cost Cash and cash equivalents Loss allowance as at 1 January (119) - - (119) Loss allowance as at 31 December (119) - - (119) Investments in financing Loss allowance as at 1 January (103,198) (11,415) (311,526) (426,139) New financial assets originated 765 1,107 12,009 13,881 FX and other movements 2,437 199 54,492 57,128 Loss allowance as at 31 December (99,996) (10,109) (245,025) (355,130) Accounts and other financial assets (excluding derivative financial instruments) Loss allowance as at 1 January (656) - (63,747) (64,403) New financial assets originated (1,275) (17) (3,399) (4,691) FX and other movements - - 5,224 5,224 Loss allowance as at 31 December (1,931) (17) (61,922) (63,870) Held to maturity investments Loss allowance as at 1 January (19,185) - - (19,185) New financial assets originated (375) - - (375) Loss allowance as at 31 December (19,560) - - (19,560) Cash at Central Bank – statutory reserve Loss allowance as at 1 January (24) - - (24) Loss allowance as at 31 December (24) - - (24)