FGV Audited Financial Statements 2019

194 FGV HOLDINGS BERHAD NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 48 LAND LEASE AGREEMENT (“LLA”) LIABILITY (CONTINUED) The key assumptions used to compute the fair value of the LLA liability are as follows: (i) Discount rate 9.47% (2018: 9.47%) based on discount rates applied by relevant comparable companies (ii) CPO price RM2,450/MT (2018: RM2,250/MT to RM2,586/MT) (iii) PK price RM1,800/MT to RM1,850/MT (2018: RM1,600/MT to RM1,875/MT) (iv) Average FFB Yield 18.1 MT/ha to 26.8 MT/ha (2018: 17.8 MT/ha to 27.1 MT/ha) (v) Mature estate cost RM2,795 per hectare to RM3,368 per hectare (2018: RM3,079 per hectare to RM3,650 per hectare) (vi) Immature estate cost RM4,175 per hectare to RM4,889 per hectare (2018: RM3,993 per hectare to RM4,331 per hectare) (vii) Lease term Extension of lease term to 99 years (2018: 99 years) will be obtained for all land in the plantation estates The sensitivity of the LLA liability to changes in key assumptions is as follows: Key assumptions Change in assumption Impact on LLA liability (i) Discount rate Increase by 0.5% Decrease by RM234.1 million Decrease by 0.5% Increase by RM261.8 million (ii) CPO price Increase by RM200 per metric tonne Increase by RM321.7 million Decrease by RM200 per metric tonne Decrease by RM346.0 million (iii) PK price Increase/decrease by RM100 per metric tonne Increase/decrease by RM41.0 million (iv) Improvement/reduction in FFB yield Increase/decrease by 1% Increase/decrease by RM37.8 million (v) Mature estate cost Increase/decrease by 5% Decrease/increase by RM106.5 million (vi) Immature estate cost Increase/decrease by 5% Decrease/increase by RM23.3 million