5. PROPERTY, PLANT AND EQUIPMENT (continued) (a) All items of property, plant and equipment are initially recognised at cost. After initial recognition, property, plant and equipment are stated at cost (other than the properties comprising condominiums and leasehold land and buildings which are revalued every 4 to 5 years and at shorter intervals whenever the fair value of the revalued assets is expected to differ materially from their carrying value), less accumulated depreciation and any accumulated impairment losses. Additions subsequent to the date of valuation are stated at cost until the next revaluation exercise. Surpluses arising from revaluation are dealt with in the revaluation reserve account. Any deficit arising is offset against the revaluation reserve to the extent of a previous increase for the same property. In all other cases, a decrease in carrying amount is charged to profit or loss. Depreciation is calculated to write off the cost of the assets to their residual values. Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. Right-of-use assets are depreciated on a straight-line basis over the earlier of their estimated useful lives or the end of the lease term. The estimated useful lives represent common life expectancies applied in the industry. The principal depreciation periods are as follows: Property, plant and equipment Motor vehicles 5 years Office equipment, furniture and fittings 10 years Renovation 10 years Computers 3 to 5 years Right-of-use assets under property, plant and equipment Condominiums 50 years Leasehold land 60 to 99 years Buildings 50 years Leased warehouse and residential properties (included in Buildings) 2 to 4 years Motor vehicles 5 years (b) During the financial year, the Group made the following cash payments to purchase property, plant and equipment: Group 2023 2022 RM’000 RM’000 Purchase of property, plant and equipment 1,943 494 Leases (101) (124) Financed by hire purchase (641) - Cash payments to purchase property, plant and equipment 1,201 370 (c) Right-of-use assets acquired under leasing arrangements are presented together with the owned assets of the same class. Details of such leased assets are disclosed under Note 11 to the financial statements. (d) Certain land and buildings of the Group with carrying amounts of RM38,137,000 (2022: RM32,745,000) were charged to banks as security for banking facilities granted to the Group (Note 18). ANNUAL REPORT 2023 SASBADI HOLDINGS BERHAD 96 Financial Statements (continued)
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