MKH Annual Report 2018

137 MKH Berhad Annual Report 2018 12. BIOLOGICAL ASSETS The Group 2018 2017 RM RM At cost: At beginning of year 284,975,508 304,826,120 Additions 5,670,585 5,693,703 Amortisation for the financial year (14,977,744) (16,719,899) Written o (1,130,667) (4,775,926) E ect of movements in exchange rate (31,220,286) (4,048,490) At end of year 243,317,396 284,975,508 Biological assets represent the plantation development expenditure for oil palm in Indonesia. Expenses capitalised during the financial year include the following: The Group 2018 2017 RM RM Depreciation of property, plant and equipment 302,144 357,633 Interest capitalised 940,699 1,459,308 Personnel expenses: Wages, salaries and others 831,284 788,621 The interest on borrowing for the financial year is capitalised at rates ranging from 5.30% to 5.40% (2017: 4.35% to 5.20%) per annum. The biological assets have been pledged as security for credit facilities granted to certain subsidiaries as disclosed in Note 28. 13. PREPAID LEASE PAYMENTS The Group 2018 2017 RM RM At beginning of year 45,724,238 47,256,429 Transfer from prepayments (Note 19 (j) (i)) 1,290,188 - Amortisation for the financial year (1,509,763) (1,530,438) E ect of movements in exchange rate (828,909) (1,753) At end of year 44,675,754 45,724,238 The above is short-term leasehold land with remaining unexpired lease period of less than 50 years. The short-term leasehold land of RM40,251,790 (2017: RM42,156,888) is pledged as security for credit facilities granted to the Group as disclosed in Note 28. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2018