FGV Annual Report 2017

FELDA GLOBAL VENTURES HOLDINGS BERHAD FINANCIAL STATEMENTS 288 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 45 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% (2016: 9.47%) based on discount rates applied by relevant comparable companies (ii) CPO price RM2,500/MT to RM2,600/MT (2016: RM2,450/MT to RM2,700/MT) (iii) PK price RM1,752/MT to RM2,300/MT (2016 : RM1,752/MT to RM2,900/MT) (iv) Average FFB Yield 17.3 MT/ha to 27.1 MT/ha (2016: 16.9 MT/ha to 27.1 MT/ha) (v) Mature estate cost RM3,127 per hectare to RM3,565 per hectare (2016: RM3,028 per hectare to RM3,565 per hectare) (vi) Immature estate cost RM3,782 per hectare to RM4,268 per hectare (2016: RM3,782 per hectare to RM4,175 per hectare) (vii) Lease term Extension of lease term to 99 years (2016: 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 0.5% Decrease by RM240.2 million Increase by RM149.8 million (ii) CPO price Increase by RM100 per metric tonne Decrease by RM100 per metric tonne Increase by RM151.9 million Decrease by RM156.3 million (iii) PK price Increase/decrease by RM100 per metric tonne Increase/decrease by RM39.6 million (iv) Improvement/reduction in FFB yield Increase/decrease by 1% Increase/decrease by RM32.1 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 RM23.2 million