ENRA Group Berhad | Annual Report 2022 126 NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2022 10. INVENTORIES (cONt’D) (a) Property development costs Cost Balance incurred Recognised Balance Group as at during the during as at 1.4.2021 year Transfer the year 31.3.2022 RM’000 RM’000 RM’000 RM’000 RM’000 Land held for development 18,657 9,550 (2,000) – 26,207 Development costs 2,955 5,905 2,000 (2,170) 8,690 21,612 15,455 – (2,170) 34,897 Cost Balance incurred Recognised Balance Group as at during the during as at 1.4.2020 year the year 31.3.2021 RM’000 RM’000 RM’000 RM’000 Land held for development 10,025 8,632 – 18,657 Development costs 2,090 2,262 (1,397) 2,955 12,115 10,894 (1,397) 21,612 (b) Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, first-out formula. The cost comprises all cost of purchases plus the cost of bringing the inventories to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. Cost of completed properties held for sale consists of cost associated with the acquisition of land, direct costs and appropriate proportions of common costs attributable for developing properties until completion. (c) A write down of inventories of RM241,000 (2021: RM68,000) of the Group was made during the financial year due to decline in net realisable values of certain completed properties. (d) Inventories of the Group amounting to RM7,862,000 (2021: RM1,639,000) have been expensed to the statements of profit or loss and other comprehensive income during the financial year. (e) Included in property held for sale are borrowing costs capitalised during the financial year of RM Nil (2021: RM940,000) at Nil % (2021: 10%) per annum. (f) As at the end of the reporting period, certain completed properties of the Group and the Company with a carrying amount of RM4,602,000 (2021: RM4,560,000) have been charged as securities for banking facilities granted to the Group and the Company as disclosed in Note 23(a) to the financial statements.
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