7 157 156 Notes to the Financial Statements Notes to the Financial Statements 3. PROPERTY, PLANT AND EQUIPMENT (CONTINUED) Motor vehicles RM’000 Company Cost At 1 April 2021/31 March 2022/1 April 2022/31 March 2023 495 Accumulated depreciation At 1 April 2021 485 Depreciation for the year 10 At 31 March 2022/1 April 2022/31 March 2023 495 Carrying amounts At 1 April 2021 10 At 31 March 2022/1 April 2022/31 March 2023 - 3.1 Capital work-in-progress Capital work-in-progress is in respect of the ongoing construction of buildings and installation of plant and machinery in certain subsidiaries. 3.2 Assets pledged to licensed banks Freehold land and buildings with carrying amount of RM830,000 (2022: RM830,000) and RM3,115,000 (2022: RM3,192,000) respectively are pledged to licensed banks as security for banking facilities granted to the Group (see Note 19.1). 3.3 Land in Indonesia Land in Indonesia which is regulated under Hak Guna Bangunan (“HGB”) can be renewed indefinitely with minimal cost if certain conditions are met. The Group assessed the conditions and concludes that the possibility of nonrenewal of the usage rights of the land is remote. Hence, the Group exercised significant judgement and concluded that the land is in substance a purchase of rights which meets the definition of property, plant and equipment regardless of whether the legal title transfers. 3.4 Impairment loss During the current financial year, the Group has carried out the impairment reassessment of certain property, plant and equipment of a subsidiary. As a result, the Group fully impaired the said asset with carrying amount of RM11,338,000 (2022: RM Nil) recognised the impairment as other expenses in profit or loss during the year. 3.5 Capitalised borrowing costs In the previous financial year, included in the additions to the property, plant and equipment of the Group are borrowing costs capitalised ranging from 2.20% - 4.67% per annum amounting to RM993,000. 4. RIGHT-OF-USE ASSETS Note Leasehold land RM’000 Land use rights RM’000 Plant and machinery RM’000 Motor vehicles RM’000 Buildings RM’000 Total RM’000 Group At 1 April 2021 297,328 18,217 47 903 159,289 475,784 Additions 8,042 - - 227 36,694 44,963 Transfer to assets held for sale 17 (6,836) (386) - - - (7,222) Depreciation (7,114) (442) (5) (560) (26,029) (34,150) Derecognition - - (42) - (2,459) (2,501) Disposal of a subsidiary 35.2 (1,609) - - - - (1,609) At 31 March 2022/ 1 April 2022 289,811 17,389 - 570 167,495 475,265 Additions 6,180 27 - 1,029 63,444 70,680 Transfer from property, plant and equipment 3 1,741 - - - - 1,741 Transfer from assets held for sale 17 6,836 386 - - - 7,222 Depreciation (6,279) (442) - (403) (31,195) (38,319) Remeasurement (10) - - (61) 6,826 6,755 Derecognition (780) - - (40) (1,980) (2,800) At 31 March 2023 297,499 17,360 - 1,095 204,590 520,544 The Group entities lease a number of retail stores, offices, hostels and warehouses that run between 1 to 15 years (2022: 3 to 15 years), with an option to renew the lease after that date. There is no extension or renewal option for motor vehicles. Leasehold land has an original unexpired lease period between 1 year and 914 years (2022: 1 year and 914 years). In the previous financial year, the Group negotiated rent concessions with its landlords for the buildings, warehouse premises, shopping mall outlets and office equipment leases as a result of the Covid-19 pandemic. The amount recognised in profit or loss for the reporting period to reflect changes in lease payments arising from rent concessions to which the Group has applied the practical expedient for Covid-19-Related Rent Concessions is RM3,629,000. The land use rights represent the location permit, plantation license and the cultivation right title over the plantation land of approximately 20,000 hectares in Indonesia. The approval for the land utilisation rights measuring 14,177 hectares was granted in 2010 for a period of 35 years. The cultivation right title is extendable under Indonesian Land Ordinance. Under the Indonesian regulations, approximately 20% of the land use rights have to be set aside for Plasma Scheme. This scheme is a programme where oil palm plantation owners/operators are required to participate in selected programmes to develop plantations to smallholders (herein referred to as plasma farmers) (see Note 10.2). Leasehold land with carrying amount of RM619,000 (2022: RM632,000) have been pledged to licensed banks as security for banking facilities granted to the Group (see Note 19.1). 4.1 Variable lease payments based on sales Some leases of retail stores contain variable lease payments that are based on sales that the Group entities make at the store. Variable rental payments for the year ended are as follows: Variable payments Estimated annual impact on rent of a 1% increase in sales 2023 RM’000 2022 RM’000 2023 RM’000 2022 RM’000 Leases with lease payments based on sales 1,571 1,894 1,387 178
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