DESTINI Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS 3. Significant Accounting Policies (Cont’d) (d) Property, plant and equipment (Cont’d) (iii) Depreciation Depreciation is recognised in the profit or loss on straight line basis to write off the cost or valuation of each asset to its residual value over its estimated useful life. Freehold land is not depreciated. Leased assets are depreciated over the shorter of the lease terms and their useful lives. Property, plant and equipment under construction are not depreciated until the assets are ready for its intended use. Property, plant and equipment are depreciated based on the estimated useful lives of the assets as follows: Buildings 33-50 years Leasehold properties and industrial land Over the remaining lease periods Furniture and fittings 1 - 10 years Office equipment 5 - 10 years Yard infrastructure, machinery and equipment 1 - 10 years Motor vehicles 3 - 5 years Renovation 1 - 10 years Computers and software 3 - 5 years The residual values, useful lives and depreciation method are reviewed at each reporting period end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the property, plant and equipment. (e) Leases Policy applicable from 1 January 2019 (i) As lessee The Group and the Company recognise a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or site on which it is located, less any lease incentives received. The ROU asset is subsequently measured at cost less any accumulated depreciation, any accumulated impairment loss and, if applicable, adjusted for any remeasurement of lease liabilities. The right-of-use asset is depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of the ROU assets are determined on the same basis as those of property, plant and equipment as follows: Buildings 50 years or over the lease term, if shorter Leasehold land and properties Over the remaining lease period Land use rights Over the remaining lease period Warehouse, office and apartments 1 - 6 years Machinery and equipment 1 - 20 years Motor vehicles 1 - 10 years FINANCIAL STATEMENTS 06 ANNUAL REPORT 2019 117