7 171 170 Notes to the Financial Statements Notes to the Financial Statements 11. BIOLOGICAL ASSETS (CONTINUED) Biological assets carried at fair value less cost to sell comprise of layers, breeders, broilers, hatching eggs and fresh fruit bunches. The movement of the biological assets measured at fair value less cost to sell can be analysed as follows: 2023 RM’000 2022 RM’000 At 1 April 2022/2021 226,759 204,075 Additions 335,829 287,943 Depopulation/Livestock losses (294,669) (288,430) Changes in fair value recognised in profit or loss (19,220) 20,516 Effect of movements in exchange rates 1,666 2,655 At 31 March 250,365 226,759 An analysis of the estimates of physical quantities of the Group’s livestocks measured at fair value less cost to sell as at year end are as follows: Physical quantities Yearly output of agriculture produce 2023 heads 2022 heads 2023 2022 Livestock: - Layers 10.4 million 9.9 million 2.4 billion eggs 2.5 billion eggs - Breeders 0.5 million 0.4 million 49 million DOC* 42 million DOC* - Broilers 2.0 million 1.7 million 37 million kg 36 million kg * DOC: Day-old chick For fresh fruit bunches, total mature planted area amounted to 8,403 hectares (2022: 8,569 hectares). During the financial year, the Group has harvested approximately 140,472 MT (2022: 155,510 MT) of fresh fruit bunches. The estimates of physical quantities of biological assets and their yearly output of agriculture produce were based on experience and historical data. Valuation processes applied by the Group Aquaculture biological assets measured at cost: Aquaculture biological assets comprise of shrimps and fishes are measured at cost less any accumulated depreciation and any accumulated impairment losses due to the fair value at present conditions of these biological assets are unavailable and the valuation based on discounted cash flow method is considered to be clearly unreliable given the uncertainty with respect to external factors. Biological assets measured at fair value less cost to sell: Layers and breeders Management estimates and judgements are required in measuring the fair value of the layers and breeders. In deriving the fair value of layers and breeders using discounted cash flow model, the management’s estimation includes the expected number of eggs and day-old chicks produced, projected selling prices, discount rate, mortality rate, feed consumption rate, projected feed costs and other estimated costs over the remaining life of the layers and breeders. 11. BIOLOGICAL ASSETS (CONTINUED) Valuation processes applied by the Group (continued) Biological assets measured at fair value less cost to sell: (continued) Broilers The fair value is estimated by the management by reference to selling prices, less the estimated necessary feed and farm overhead cost to nurture the broilers to the point of sale. Hatching eggs The fair value is estimated by the management by reference to selling prices of day-old chick, less the estimated necessary hatching overhead cost to hatch the eggs. Fresh fruit bunches (“FFB”) The fair value is estimated by the management based on the present value of expected net cash flows from the produce growing on bearer plants. The expected net cash flows are estimated using expected output method and the estimated selling price of the produce growing on bearer plants. To arrive at the fair value, the management has considered the oil content of the unripe FFB 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 plants of up to 15 days prior to harvest was used for valuation purpose. Fair value information The Group has classified its livestock, hatching eggs and fresh fruit bunches measured at fair value within Level 3 of the fair value hierarchy. The following table shows the valuation techniques used in the determination of fair values within Level 3, as well as the significant unobservable inputs used in the valuation model.
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