FGV Annual Report 2015

323 WHO WE ARE & WHAT WE DO OUR STRATEGIC INTENT & PERFORMANCE HOWWE ARE GOVERNED CREATING SUSTAINABLE VALUE OUR NUMBERS ADDITIONAL INFORMATION DETAILS OF THE ANNUAL GENERAL MEETING Notes to the Financial Statements For The Financial Year Ended 31 December 2015 ADDRESSING OUR RISKS & OPPORTUNITIES Felda Global Ventures Holdings Berhad Annual Integrated Report 2015 46 LAND LEASE AGREEMENT (“LLA”) LIABILITY (CONTINUED) (vi) Clarification Letter (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 RM248,370,000 (2014: RM248,464,000) per annum together with 15% (2014: 15%) of yearly plantation operating profit attributable to the land. 2015 2014 RM’000 RM’000 Non-current 4,312,277 4,309,308 Current 314,918 371,521 4,627,195 4,680,829 Movement in LLA liability is as follows: At 1 January 4,680,829 4,844,390 Fair value changes charged to profit or loss (Note 9) 224,861 115,240 Repayment during the financial year (278,495) (336,401) Additional land acquired during the financial year - 57,600 At 31 December 4,627,195 4,680,829 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 95 years. The key assumptions used to compute the fair value of the LLA liability are as follows: (i) Implied discount rate 9.47% (2014: 9.47%) based on discount rates applied by relevant comparable companies (ii) CPO price RM2,170/MT to RM2,630/MT (2014: RM2,450/MT to RM2,630/MT) (iii) FFB price RM450/MT to RM550/MT (2014: RM509/MT to RM550/MT) (iv) Average FFB Yield (MT/ha) 19.2/MT to 27.3/MT (2014: 19.1/MT to 27.3/MT) (v) Estate replanting fixed cost • Matured – RM2,580 (2014: RM2,580) per hectare based on a 25 year cycle for oil palm • Immature – RM6,436 (2014: RM6,346) per hectare based on a 25 year cycle for oil palm (vi) Lease term Extension of lease term to 99 years (2014: 99 years) will be obtained for all land in the plantation estates