FGV Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 223 01 02 05 03 07 06 04 08 09 ANNUAL INTEGRATED REPORT 2018 EXAMINED OUR NUMBERS 19 PROPERTY, PLANT AND EQUIPMENT (CONTINUED) Significant impairment of property, plant and equipment (continued) Financial year ended 31 December 2018 (continued) (b) Asian Plantations Limited ( “ APL ” ) (continued) The key assumptions used in the valuation are as follows: (continued) (i) CPO and PK price CPO and PK is determined based on the forecast provided by the Group’s trading arm subsidiary, based on historical results and industry trend. (ii) Cost of production and FFB yield The cost of production and FFB yield are based on forecast provided by the Group’s upstream operations management, based on this Group’s approved budget, historical results and industry trend. (iii) Discount rate The post-tax discount rate used reflects specific industry risks relating to the palm plantation operations including consideration of comparison with comparable peer companies in Malaysia. Other than as disclosed below, there is no reasonably possible change in any of the above key assumptions, which would cause the carrying value of the CGU to exceed its recoverable amount. Key assumptions Sensitivity FVLCTS change RM’000 Discount rate Increase by 0.5% (8,300) Decrease by 0.5% 8,500 CPO price Increase by RM100/MT 21,900 Decrease by RM100/MT (22,000) PK price Increase by RM100/MT 5,500 Decrease by RM100/MT (5,600) Change in yield Increase by 0.5MT/ ha 11,000 Decrease by 0.5MT/ ha (10,600) Cost of production Increase by 5% (16,200) Decrease by 5% 14,800 The above sensitivity analysis is based on the assumptions while holding all other assumptions constant.