MKH Annual Report 2018

160 MKH Berhad Annual Report 2018 20. PROPERTY DEVELOPMENT COSTS (Cont’d) Included in the above are: (i) interest on borrowing capitalised for the financial year amounting to RM6,190,808 (2017: RM6,836,527); (ii) titles of freehold land amounting to RM8,644,397 (2017: RM8,734,375) which have been pledged with a financial institution for term loan facility granted to certain subsidiaries as disclosed in Note 28; (iii) titles of leasehold land amounting to RM62,643,600 (2017: RM116,905,077) which have been pledged with a financial institution for term loan facility granted to certain subsidiaries as disclosed in Note 28; and (iv) freehold and leasehold land amounting to RM254,221,979 (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. 21. INVENTORIES The Group 2018 2017 RM RM At cost: Raw materials 461,498 512,371 Work-in-progress 260,665 639,863 Finished goods 1,651,881 1,424,203 Food and beverages 30,762 43,047 Plantation consumables 6,324,812 6,231,775 Fertilizers 9,226,966 1,508,120 Crude palm oil and palm kernel 15,905,043 7,455,514 Completed development properties 227,673,203 134,970,018 261,534,830 152,784,911 At net realisable value: Completed development properties 12,050,000 400,000 273,584,830 153,184,911 During the financial year, the cost of inventories recognised as an expense in cost of sales of the Group is RM279,412,883 (2017: RM270,014,521). In the previous 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. Included in inventories of the Group is an amount of RM37,629,751 (2017: RM28,702,454) being entitlements of the landowner pursuant to Joint Venture Agreements to undertake a property development projects. FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2018 NOTES TO THE FINANCIAL STATEMENTS