181 INTEGRATED ANNUAL REPORT 2025 ACCOUNTABILITY | NOTES TO THE FINANCIAL STATEMENTS 2. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) 2.11 Property, plant and equipment Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management. Cost also includes borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset. Refer to Note 2.13 for the accounting policy on borrowing costs. Depreciation of machinery and equipment is charged to profit or loss unless it is attributable to activities that are directly related to the construction of an asset or capitalised development activities. In such cases, depreciation is capitalised as part of the cost of the related asset or development project until the asset is ready for its intended use. The capitalised depreciation forms part of the carrying amount of the asset and is depreciated over its useful life, consistent with the Group’s policy on depreciation for similar assets. When significant parts of property, plant and equipment are required to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates them accordingly. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. The carrying amount of the replaced part is derecognised. All other repair and maintenance costs are recognised in profit or loss as incurred. The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met. Assets under construction-in-progress are not depreciated as these assets are not yet available for use. Depreciation is calculated on a straight-line basis to allocate the cost of each asset to their residual values over their estimated useful lives as follows: Motor vehicles 5 – 10 years Offshore Marine – OSVs 5 – 20 years Offshore Production – FPSOs 20 years Solar plant and machinery 25 - 30 years Other assets (comprise of electric vessel , office equipment, renovation, electrical installation, furniture and fittings and capital spares) 3 – 25 years An item of property, plant and equipment and any significant part is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the profit or loss when the asset is derecognised. Residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate. At the end of the reporting period, the Group assesses whether there is any indication of impairment. If such indications exist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. A write down is made if the carrying amount exceeds the recoverable amount. Refer to Note 2.19 for the accounting policy on impairment of non-financial assets.
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