FGV Audited Financial Statements 2019

175 01 S E C T I O N NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 AUDITED FINANCIAL STATEMENTS 2019 34 BIOLOGICAL ASSETS Group Net book value Oil Palm 2019 RM’000 2018 RM’000 At 1 January 42,446 54,338 Transfer to inventory (42,446) (54,338) Fair value changes 45,764 42,446 Foreign exchange movement 2 - At 31 December 45,766 42,446 Oil Palm Oil palm represents the fresh fruit bunches (“FFB”) of up to 15 days prior to harvest for use in the Group’s palm product operations. During the financial year ended 31 December 2019, the Group harvested approximately 4,447,188 metric tonnes (“MT”) of FFB (2018: 4,210,173 MT). The quantity of unharvested FFB of the Group as at 31 December 2019 included in the fair valuation of FFB was 106,791 MT (2018: 161,716 MT). In arriving at the fair value, the Group adopted the income approach which considers the net present value of all directly attributable cash inflows, cash outflows and imputed contributory asset charges where no actual cash flows associated with the use of assets essential to the agricultural activity. Changes to the assumed prices of the FFB and tonnage included in the valuation will have a direct effect on the reported valuation. The Groups biological assets computation is a Level 3 fair value estimation. If the selling prices of FFB or tonnage changed by 10%, the Group’s fair value of FFB would have increased or decreased by approximately RM6.03 million (2018: RM6.31 million).