NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2023 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 2023 2022 2023 2022 RM RM RM RM Purchases of property, plant and equipment 53,838,916 43,260,501 323,726 1,287,013 Leases (354,224) (975,683) (10,743) (30,150) Cash payments on purchases of property, plant and equipment 53,484,692 42,284,818 312,983 1,256,863 (c) As at the end of the reporting period, buildings of the Group and the Company with carrying amounts of RM13,548,032 (2022: RM13,675,036) and RM6,045,895 (2022: RM6,194,720) respectively have been charged to a bank for credit facilities as disclosed in Note 25. (d) During the financial year, impairment loss on property, plant and equipment of the Group of RM56,353 was recognised in other operating expenses due to decline in operation of a subsidiary of the Group. 108 GHL SYSTEMS BERHAD 199401007361 (293040-D)
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