FGV Audited Financial Statements 2020

48 LAND LEASE AGREEMENT (“LLA”) LIABILITY (CONTINUED) Movement in LLA liability is as follows: Group 2020 RM’000 2019 RM’000 At 1 January 4,316,146 4,328,008 Fair value changes charged to profit or loss (Note 11) 158,490 236,821 Repayment during the financial year (260,812) (248,683) At 31 December 4,213,824 4,316,146 Fair value of the LLA liability has been measured using a discounted cash flow calculation using cash flow projections based on financial budgets approved by the Directors covering 91 years. The key assumptions used to compute the fair value of the LLA liability are as follows: (i) Discount rate 9.47% (2019: 9.47%) based on discount rates applied by relevant comparable companies (ii) CPO price RM2,450/MT to RM2,809/MT (2019: RM2,809/MT) (iii) PK price RM1,500/MT to RM1,800/MT (2019: RM1,800/MT to RM1,850/MT) (iv) Average FFB Yield 16.3 MT/ha to 26.6 MT/ha (2019: 18.1 MT/ha to 26.8 MT/ha) (v) Mature estate cost RM2,761 per hectare to RM3,566 per hectare (2019: RM2,795 per hectare to RM3,368 per hectare) (vi) Immature estate cost RM4,499 per hectare to RM4,949 per hectare (2019: RM4,175 per hectare to RM4,889 per hectare) (vii) Lease term Extension of lease term to 99 years (2019: 99 years) will be obtained for all land in the plantation estates 169 Notes to the Financial Statements For The Financial Year Ended 31 December 2020 Audited Financial Statements 2020