notes to the financial statements
for the financial year ended 31 December 2014 (Continued)
5 PREPAID LEASE PAYMENTS (CONTINUED)
The title deeds to certain leasehold land of the Group stated at a total carrying amount of approximately RM41,330,700 (2013: RM41,330,600) have yet to be issued by
the relevant authorities.
Included in prepaid lease payments at the financial year end is the concession right to cultivate oil palm and oil palm related activities on an approximately 470,000
hectares demarcated land that lies between province of Cuvetta and Sangha which is carried at approximately RM86,002,600 (2013: RM82,433,200).
This concession agreement was entered between Atama Plantation Sarl, a subsidiary of the Group, and the Government of the Republic of Congo, principally for the
establishment of the cultivation of oil palm crops and oil palm related development activities on 18 May 2009. The concession has a term of 30 years and may be
extended for another 30 years at the request of Atama Plantation Sarl.
The concession right has an unamortised lease period of 54 (2013: 55) years as at financial year end.
6 BIOLOGICAL ASSETS
Group
2014
2013
Note
RM’000
RM’000
At 1 January
17,738
-
Acquisition of assets (Note 43(b))
-
6,554
Additions
2,735
9,944
Write-offs
(356)
-
Transfer to property, plant and equipment
4
(250)
-
Effect of exchange rate changes
(1,122)
1,240
At 31 December
18,745
17,738
Biological assets, include expenditure incurred on land clearing, planting, fertilising and other associated costs incurred to upkeep of the crops to maturity are
capitalised at cost as biological assets carrying amount. On maturity, the matured plantations are stated at fair value less estimated point-of-sale costs, with any
resultant gain or loss recognised in the profit or loss. In general, oil palm tree are considered mature by 36 months after the initial field planting. Point-of-sale costs
include all costs that would be necessary to sell the assets.
Improvements costs for cultivating oil palm plantations and oil palm related activities and its ancillary development are capitalised at cost less accumulated
amortisation and any accumulated impairment losses.
As at 31 December 2014, the Group has 571 (2013: 500) hectares of oil palm plantations and there was no palm tree that has been matured.
93
Wah Seong Corporation Berhad • Annual Report 2014
