MKH Annual Report 2017

20. PROPERTY DEVELOPMENT COSTS (continued) Included in the above are: (i) interest on borrowing capitalised for the financial year amounting to RM6,836,527 (2016: RM2,232,285); (ii) titles of freehold land amounting to RMNil (2016: RM8,995,229) which have been deposited with a financial institution for term loan and revolving credit facilities granted to certain subsidiaries as disclosed in Note 28; (iii) titles of freehold land amounting to RM8,734,375 (2016: RM18,285,715) which have been pledged with a financial institution for term loan facility granted to certain subsidiaries as disclosed in Note 28; (iv) titles of leasehold land amounting to RM116,905,077 (2016: RM37,330,196) which have been pledged with a financial institution for term loan facility granted to certain subsidiaries as disclosed in Note 28; and (v) freehold and leasehold land amounting to RM181,145,276 (2016: RM186,281,946) 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. 21. INVENTORIES The Group 2017 2016 RM RM At cost: Raw materials 512,371 574,415 Work-in-progress 639,863 457,949 Finished goods 1,424,203 1,244,561 Food and beverages 43,047 44,068 Plantation consumables 6,231,775 5,476,872 Fertilizers 1,508,120 7,271,831 Crude palm oil and palm kernel 7,455,514 8,669,973 Completed development properties 134,970,018 70,371,273 152,784,911 94,110,942 At net realisable value: Completed development properties 400,000 - 153,184,911 94,110,942 During the financial year, the cost of inventories recognised as an expense in cost of sales of the Group is RM270,014,521 (2016: RM250,776,409). During the financial year, the Group transferred completed inventories amounted to RM7,492,099 to investment properties as disclosed in Note 14 due to the change in management intention. Notes to the Financial Statements For the Financial Year ended 30 September 2017 158 MKH Berhad • Annual Report 2017