155 AUDITED FINANCIAL STATEMENTS 2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 47 LAND LEASE AGREEMENT (“LLA”) LIABILITY (CONTINUED) The leased land consists of planted oil palm and rubber areas. Based on the agreed leased area, the annual fixed lease amount payable is estimated to be RM243,552,000 (2020: RM243,673,000) per annum together with 15% (2020: 15%) of yearly plantation operating profit attributable to the land. Group 2021 2020 RM’000 RM’000 Non-current 3,314,874 3,881,584 Current 489,916 332,240 3,804,790 4,213,824 Movement in LLA liability is as follows: Group 2021 2020 RM’000 RM’000 At 1 January 4,213,824 4,316,146 Fair value changes charged to profit or loss (Note 11) 3,984 158,490 Repayment during the financial year (413,018) (260,812) At 31 December 3,804,790 4,213,824 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 90 years. The key assumptions used to compute the fair value of the LLA liability are as follows: (i) Discount rate 9.47% (2020: 9.47%) based on discount rates applied by relevant comparable companies (ii) CPO price RM2,450/MT to RM4,200/MT (2020: RM2,450/MT to RM2,809/MT) (iii) PK price RM1,500/MT to RM2,645/MT (2020: RM1,500/MT to RM1,800/MT) (iv) Average FFB Yield 16.9 MT/ha to 21.8 MT/ha (2020: 16.3 MT/ha to 26.6 MT/ha) (v) Mature estate cost RM3,304 per hectare to RM4,365 per hectare (2020: RM2,761 per hectare to RM3,566 per hectare) (vi) Immature estate cost RM4,575 per hectare to RM5,402 per hectare (2020: RM4,499 per hectare to RM4,949 per hectare) (vii) Lease term Extension of lease term to 99 years (2020: 99 years) will be obtained for all land in the plantation estates
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