Notes To The Financial Statements 31 March 2024 (Cont’d) 123 FINANCIAL STATEMENTS & OTHERS 4. PROPERTY, PLANT AND EQUIPMENT (CONT’D) (a) All items of property, plant and equipment are initially measured at cost. After initial recognition, property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. (b) Depreciation is calculated to write off the costs of the assets to their residual values on a straight line basis over their estimated useful lives. The principal depreciation rates and period are as follows: Furniture, fittings, renovation and office equipment 10% - 33.33% Computer hardware and software 20% - 33.33% Marine equipment 7% - 8% Plant and machinery 10% Capital work in progress represents dry docking for vessel. Capital work in progress is not depreciated until such time when the asset is available for use. (c) Impairment assessment The Group assesses impairment of assets whenever the events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, i.e. the carrying amount of the asset is more than the recoverable amount. Recoverable amount was based on the higher of fair value less cost of disposal (“FVLCD”) or value in use (“VIU”), and determined at the CGU of each asset. During the financial year, the management have re-assessed the recoverable amount of the marine equipment and related plant and machinery in the Energy Logistics operating segment caused by change in its operating arrangement. Recoverable amount was determined based on the VIU of these marine equipments. The recoverable amount of the property, plant and equipment of the Energy Logistics operating segment are as follows: RM’000 Recoverable amount Vessel, including attached plant and machinery and capital work in progress 59,963 Buoy 11,856 71,819 The estimated VIU is determined using a pre-tax discount rate of 7% (2023: 8%) and based on the assumption that the revenue will be generated from tanker time chartering operation with ultimate disposal at the end of the charter period. The daily charter rate used in the assessment is based on extrapolation of the current market rate. Based on the above impairment assessment, an impairment loss of RM519,000 has been recognised during the financial year. (d) As at the end of the reporting period, certain marine equipment, plant and machinery and capital work in progress of the Group with a carrying amount of RM59,887,000 has been charged as securities for financing facilities granted to the company’s subsidiary as disclosed in Note 20(b) to the financial statements.
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