GHL System Berhad Annual Report 2018

G H L S y s t e m S B e r h a d ( 2 9 3 0 4 0 - D ) 94 NOT ES TO THE F I NANC I A L STAT EMENTS 3 1 D e c e m b e r 2 0 1 8 C O N T ’ D 12. 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 2018 2017 2018 2017 RM RM RM RM Motor vehicles 1,323,999 667,549 249,703 328,556 EDC equipment 24,906,155 4,248,417 - - 26,230,154 4,915,966 249,703 328,556 Details of the hire purchase arrangements are disclosed in Note 26 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 2018 2017 2018 2017 RM RM RM RM Purchases of property, plant and equipment 23,070,447 29,152,266 5,591,713 963,681 Financed by hire purchase arrangements (Note 25) (500,000) (350,000) - (350,000) Cash payments on purchases of property, plant and equipment 22,570,447 28,802,266 5,591,713 613,681 (d) As at the end of the reporting period, long term leasehold land and buildings with the carrying amount of RM9,732,950 (2017: RM6,613,700) have been charged to a bank for credit facilities to the Group as disclosed in Note 25 to the financial statements. (e) During the financial year, the Group reversed impairment losses of EDC equipment amounting to RM664,241 to the profit or loss subsequent to the disposal of these EDC equipment.