KUB Malaysia Berhad Annual Report 2021

21. INVENTORIES Group 30.6.2021 31.12.2019 RM’000 RM’000 Raw materials 3,158 2,796 Finished goods 738 1,489 Consumables 340 536 4,236 4,821 Cost of inventories recognised as an expense during the period/year were RM495,444,000 (31.12.2019: RM356,805,000). The cost of inventories recognised as an expense includes RM97,000 (31.12.2019: RM632,000) in respect of write-down of inventories to net realisable value. 22. BIOLOGICAL ASSETS Group 30.6.2021 31.12.2019 RM’000 RM’000 As at 1 January 1,274 724 Gain from changes in fair value (Note 9) 1,160 550 Transferred to non-current assets held for sale (Note 13) (778) - Disposal of a subsidiary (Note 18(d)(iii)) (599) - As at 30 June/31 December 1,057 1,274 The Group’s biological assets consist of fresh fruit bunches (‘FFB’). Each FFB takes approximately 6 months from pollination to reach maximum oil content to be ready for harvesting. During the period ended 30 June 2021, the Group harvested 140,558 tonnes of FFB (31.12.2019: 106,012 tonnes). The quantity of unharvested FFB of the Group as at 30 June 2021 included in the fair valuation of FFB was 1,868 tonnes (31.12.2019: 3,630 tonnes). In determining the fair values of unharvested FFB, the management has considered the oil content of the unripe FFB from the week after pollination to the week prior to harvest and derived the assumption that the net cash flows to be generated from FFB prior to more than 15 days to harvest is negligible. Therefore, quantity of unripe FFB on bearer plant of up to 15 days prior to harvest was used for valuation purpose. The value of the unripe FFB was estimated to be approximately 80% of the ripe FFB, based on actual oil extraction rate and kernel extraction rate of the unripe FFB from the laboratory tests. Costs to sell include harvesting cost and transport. FFB valuation have been classified as level 3 in the fair value hierarchy. The fair value of FFB is determined using a discounted cash flow model with reference to the market value of crude palm oil at the date of harvest, adjusted for extraction rates, transportation and other costs to sell at the point of harvest. Changes to the assumed prices of the FFB and tonnage included in the valuation will have a direct effect on the reported valuation. 111 ANNUAL REPORT 2021 FINANCIAL STATEMENTS