3. PROPERTY, PLANT AND EQUIPMENT (continued) Securities As at 31 December 2023, property, plant and equipment of the Group with carrying amounts of RM2,533,273,000 (2022: of RM2,085,246,000) were charged to licensed financial institutions for credit facilities and term loans granted to the Group. Borrowing costs In 2023, the Group capitalised borrowing costs at 7.05% (2022: 5.06%), amounting to RM5,874,000 (2022: RM26,131,000). Impairment loss The Group recognised the following material impairment loss: 2022 Parkway Shanghai Hospital (“PSH”), a part of the China healthcare services operating segment, was planned to be operational in 2022. However, its construction and preparation for opening was longer than expected and was hampered by the COVID-19 pandemic. The Group performed an assessment of the recoverable amount of PSH’s property, plant and equipment, using the value in use approach, and determined it to be lower than the carrying amount. The value in use calculations applied a discounted cash flow model using cash flow projections based on the approved financial budgets for 2022 and 10 years business plans with a perpetual terminal value. PSH’s operations was assumed to ramp up to reach a steady-state revenue growth of 20% year-on-year and EBITDA margins of about 20%. A pre-tax discount rate of 14.7% and perpetual growth rate of 3% was used to estimate the terminal value. Accordingly, in 2022, an impairment loss of RM353,000,000 was recognised in ‘depreciation and impairment of property, plant and equipment’ in the statement of profit or loss. Annual Report 2023 159
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