KIM HENG OFFSHORE & MARINE HOLDINGS LIMITED
ANNUAL REPORT 2014
74
NOTES
TO THE FINANCIAL STATEMENTS
4
PROPERTY, PLANT AND EQUIPMENT (Cont’d)
The carrying amounts of property, plant and equipment of the Group as at the reporting date include
amounts totalling $7,229,000 in respect of machinery and equipment held under finance leases (2013:
$12,254,000).
As at the reporting date, property, plant and equipment amounting to $12,507,000 is pledged as
collaterals for secured term loans and bank overdrafts (2013: $13,201,000).
Furniture,
fittings, office
equipment and
computers
$’000
Company
Cost
At 1 January 2013 and 31 December 2013
–
Additions
6
At 31 December 2014
6
Accumulated depreciation
At 1 January 2013 and 31 December 2013
–
Depreciation charge during the year
(2)
At 31 December 2014
(2)
Carrying amounts
At 1 January 2013 and 31 December 2013
–
At 31 December 2014
4
Depreciation and impairment of property, plant and equipment
The cost of property, plant and equipment are depreciated on a straight-line basis over their estimated
useful lives. Management estimates the useful lives of these property, plant and equipment to be
ranging from 1 year to 30 years. The Group reviews annually the estimated useful lives of property,
plant and equipment based on factors that include asset utilisation, internal technical evaluation,
technological changes and anticipated use of the assets. It is possible that future results of
operations could be materially affected by changes in these estimates brought about by changes
in the factors mentioned. A reduction in the estimated useful lives of property, plant and equipment
would increase depreciation expense and decrease non-current assets.
The Group assesses the carrying amount of its property, plant and equipment against their
recoverable amounts at each reporting date to determine whether there is an indication of impairment.
The estimated recoverable amounts are based on valuation report obtained from an independent
valuer or market values, being the estimated amount for which property, plant and equipment could be
exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length
transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and
without compulsion. The recoverable amounts could change significantly as a result of changes in
market conditions and the assumptions used in determining the market value.
