98 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2022 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 2022 2021 2022 2021 RM RM RM RM Purchase of property, plant and equipment 43,260,501 46,244,986 1,287,013 208,659 Leases (975,683) (2,952,530) (30,150) - Cash payments on purchases of property, plant and equipment 42,284,818 43,292,456 1,256,863 208,659 (c) As at the end of the reporting period, buildings with the carrying amount of RM13,675,036 (2021: RM14,198,674) and RM6,194,720 (2021: RM6,343,545) have been charged to a bank for credit facilities to the Group and the Company respectively as disclosed in Note 25 to the financial statements. (d) In the previous financial year, impairment loss on property, plant and equipment of the Group of RM636,829 was recognised in other operating expenses due to technological obsolescence.
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