MKH Annual Report 2017

19. RECEIVABLES, DEPOSITS AND PREPAYMENTS (continued) (g) Included in other receivables of the Group are: (continued) (iii) an amount of RMNil (2016: RM42,350) being derivative financial assets on fair value of commodity forward contracts. The Group uses commodity forward contracts to manage the exposure the adverse price movements in crude palm oil commodities. The fair values of these components have been determined based on published market prices or quoted prices from reputable financial institutions. The Group recognised total fair value gain of RMNil (2016: RM42,350) arising from changes in fair value of derivative financial instruments. The method and assumption applied in determining the fair value of derivative is disclosed in Note 41. The movement of allowance account used to record the impairment of other receivables is as follows: The Group The Company 2017 2016 2017 2016 RM RM RM RM At beginning of year 607,247 3,691,676 47,930 55,955 Additions 2,000 190,992 - - No longer required (58,483) (63,621) (4,200) (8,025) Written off - (3,211,800) - - At end of year 550,764 607,247 43,730 47,930 The impaired other receivables at the reporting date relate to debtors that have defaulted on payment. These receivables are not secured by any collateral or credit enhancements. (h) The joint venture deposits are paid to landowners in respect of Joint Venture Agreements (“Agreements”) whereby the Group is responsible to implement and undertake the overall development projects on the land owned by the third parties upon fulfilment of the terms and conditions as stipulated in the Agreements. In the previous financial year, the Group reclassified joint venture deposits amounted to RM22,701,000 to land held for property development upon fulfilment of terms and conditions stipulated in the agreement as disclosed in Note 17. (i) Included in other deposits of the Group is RM13,440,271 (2016: RM9,935,659) paid to the relevant authorities for property development projects. (j) Included in prepayments of the Group are: (i) RM1,290,188 (2016: RM1,576,144) paid for the acquisition of land in Indonesia; (ii) RM28,612,485 (2016: RM6,959,695) preliminary costs incurred in respect of future property development projects. In the previous financial year, the Group reclassified certain prepayments pertaining to joint venture projects amounted to RM3,543,398 to property development costs upon fulfilment of terms and conditions as stipulated in the agreement as disclosed in Note 20; (iii) an amount of RMNil (2016: RM5,338,776) being redemption of bridging loan; and (iv) an amount of RM12,669,284 (2016: RM10,740,800) paid to Trustee accounts for joint development of infrastructure projects with other developers. Notes to the Financial Statements For the Financial Year ended 30 September 2017 156 MKH Berhad • Annual Report 2017