GHL System Berhad Annual Report 2020

106 G H L S y s t e m S B e r h a d 1 9 9 4 0 1 0 0 7 3 6 1 ( 2 9 3 0 4 0 - D ) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 CONT’D 12. PROPERTY, PLANT AND EQUIPMENT (cont‘d) (a) All items of property, plant and equipment (excluding right-of-use assets) are initially measured at cost. After initial recognition, property, plant and equipment (excluding right-of-use assets) 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 excluding right-of-use assets are as follows: Buildings 50 to 99 years Computer equipment 3 to 5 years EDC equipment 3 to 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) During the financial year, the Group and the Company made the following cash payments to purchase property, plant and equipment: Group Company 2020 2019 2020 2019 RM RM RM RM Purchase of property, plant and equipment 18,596,466 34,606,237 580,685 3,667,734 Leases (1,372,642) (7,825,974) (333,750) (37,238) Cash payments on purchases of property, plant and equipment 17,223,824 26,780,263 246,935 3,630,496 (c) As at the end of the reporting period, buildings with the carrying amount of RM8,491,973 (2019: RM8,845,706) have been charged to a bank for credit facilities to the Group as disclosed in Note 25 to the financial statements. (d) During the financial year, impairment loss on property, plant and equipment of the Group of RM3,827,865 (2019: RM506,938) was recognised due to technological obsolescent.