NOTICE OF ANNUAL GENERAL MEETING
statisTICS OF SHAREHOLDINGs
FINANCIAL CONteNts
CORPORATE GOVERNANCE REPORT
73
Navigating Challenges • EMBRACING DIVERSITY | ANNUAL REPORT 2015
Notes to the financial statements
4 Property, plant and equipment (Cont’d)
Assets under construction mainly relate to construction of a building at the Group’s yard located at 48 Penjuru
Road.
The carrying amounts of property, plant and equipment of the Group as at the reporting date include amounts
totalling $17,213,000 in respect of machinery and equipment held under finance leases (2014: $7,229,000).
As at the reporting date, property, plant and equipment amounting to $17,678,000 is pledged as collaterals for
secured term loans and bank overdrafts (2014: $12,507,000).
Furniture,
fittings, office
equipment and
computers
$’000
Company
Cost
At 1 January 2014
–
Additions
6
At 31 December 2014 and 2015
6
Accumulated depreciation
At 1 January 2014
–
Depreciation charge for the year
2
At 31 December 2014
2
Depreciation charge for the year
2
At 31 December 2015
4
Carrying amounts
At 1 January 2014
–
At 31 December 2014
4
At 31 December 2015
2
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 22 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 reports 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.
