3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (i) Property, plant and equipment (continued) All property, plant and equipment are depreciated on a straight line basis to write off the cost of each asset to their residual values over their estimated useful lives as follows: Principal annual rates used are summarised as follows: Property, plant and equipment Estimated useful lives Buildings 20 – 25 years Plant and machinery 3 – 20 years Furniture, fittings, equipment and motor vehicles 3 – 11 years Bearer plants - Oil palms 22 years, or the lease term if shorter - Rubber trees 20 years, or the lease term if shorter - Mango trees 25 years, or the lease term if shorter The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date. The effects of any revision of the residual values and useful lives are included in profit or loss for the financial year in which the changes arise. Depreciation on property, plant and equipment ceases at the earlier of derecognition and classification as held for sale. Depreciation on assets under construction commences when the assets are ready for their intended use. Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in “other operating income” in profit or loss. At each statement of financial position date, the Group assess whether there is any indication of impairment. If such an indication exists, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. See significant accounting policies Note 3(k) on impairment of non-financial assets. (j) Inventories Inventories which consist of raw materials, work-in-progress, finished goods, molasses and consumables are stated at lower of cost and net realisable value. Cost is determined on the weighted average cost basis. Raw material cost comprises the landed cost of goods purchased and in the case of work-in-progress and finished goods, includes materials, direct labour, other direct charges and an appropriate proportion of factory overheads. Consumables comprise the actual purchase costs. Net realisable value is the estimated selling price in the ordinary course of business, less selling and distribution costs and all other estimated cost to completion. NOTESTOTHE FINANCIAL STATEMENTS FORTHE FINANCIALYEAR ENDED 31 DECEMBER 2021 SUSTAINABILITY JOURNEY HOWWE ARE GOVERNED FINANCIAL STATEMENTS ADDITIONAL INFORMATION 297
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