GHL System Berhad Annual Report 2017

GHL SYSTEMS BERHAD 88 NOTES TO THE FINANCIAL STATEMENTS 31 December 2017 CONT’D 11. PROPERTY, PLANT AND EQUIPMENT (cont’d) (a) Property, plant and equipment are initially measured at cost. After initial recognition, property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated to write off the cost of the assets to their residual values on a straight line basis over their estimated useful lives. The estimated useful lives represent common life expectancies applied in the industry. The principal depreciation periods are as follows: Long term leasehold land 99 years Buildings 50 years Computer equipment 3 years EDC equipment 5 years Computer software 3 to 10 years Motor vehicles 5 years Furniture, fittings and office equipment 5 to 10 years Renovation 2 to 5 years (b) The carrying amounts of the property, plant and equipment of the Group and of the Company under hire purchase arrangements as at the end of the reporting period are as follows: Group Company 2017 2016 2017 2016 RM RM RM RM Motor vehicles 667,549 742,374 328,556 59,265 EDC equipment 4,248,417 1,476,251 - - 4,915,966 2,218,625 328,556 59,265 Details of the hire purchase arrangements are disclosed in Note 24 to the financial statements. (c) During the financial year, the Group and the Company made the following cash payments to purchase property, plant and equipment: Group Company 2017 2016 2017 2016 RM RM RM RM Purchases of property, plant and equipment 29,152,266 3,645,208 963,681 586,893 Financed by hire purchase arrangements (350,000) (446,500) (350,000) - Cash payments on purchases of property, plant and equipment 28,802,266 3,198,708 613,681 586,893 (d) As at the end of the reporting period, long term leasehold land and buildings with the carrying amount of RM6,613,700 (2016: RM7,035,561) have been charged to a bank for credit facilities to the Group as disclosed in Note 23 to the financial statements.