MKH Annual Report 2019

181 M K H B e r h a d 19. PROPERTY DEVELOPMENT COSTS (CONT’D) The Group 2019 2018 RM RM Development costs At beginning of year 374,024,725 531,191,372 Additions 378,982,524 398,290,689 Reclassify from freehold land 18,392,560 - Transfer from prepayments  (Note 18 (j) (ii)) - 5,627,536 Transfer from land held for property  development (Note 16) 51,604,717 21,981,744 Transfer to inventories (13,937,380) (162,543,802) Adjustment on completion of projects (215,941,375) (420,522,814) At end of year 593,125,771 374,024,725 Total land and development costs 956,148,799 764,057,632 Less: Costs recognised as an    expense in profit or loss At beginning of year 297,343,435 395,341,528 Additions (Note 5) 510,596,216 431,829,074 Adjustment on completion of projects (268,530,461) (529,827,167) At end of year 539,409,190 297,343,435 416,739,609 466,714,197 Included in the above are: (i) interest on borrowing capitalised for the financial year amounting to RMNil (30.9.2018: RM6,190,808; 1.10.2017: RM6,836,527); (ii) titles of freehold land amounting to RM14,831,054 (30.9.2018: RM8,644,397; 1.10.2017: RM8,734,375) which have been pledged with a financial institution for term loan facility granted to certain subsidiaries as disclosed in Note 29; (iii) titles of leasehold land amounting to RM62,643,600 (30.9.2018: RM62,643,600; 1.10.2017: RM116,905,077) which have been pledged with a financial institution for term loan facility granted to certain subsidiaries as disclosed in Note 29; and (iv) freehold and leasehold land amounting to RM224,348,703 (30.9.2018: RM254,221,979; 1.10.2017: RM181,145,276) represent entitlements of the landowners pursuant to joint venture and joint land development agreements to undertake property development projects. The titles to the development land will be transferred from landowners to the property purchasers. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2019