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SUSTAINABILITY JOURNEY HOW WE ARE GOVERNED FINANCIAL STATEMENTS ADDITIONAL INFORMATION 297

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021

3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) Property, plant and equipment (continued)

All property, plant and equipment are depreciated on a straight line basis to write off the cost of each asset to their
residual values over their estimated useful lives as follows:
Principal annual rates used are summarised as follows:

Property, plant and equipment Estimated useful lives
Buildings 20 – 25 years
Plant and machinery 3 – 20 years
Furniture, fittings, equipment and motor vehicles 3 – 11 years
Bearer plants
- Oil palms 22 years, or the lease term if shorter
- Rubber trees 20 years, or the lease term if shorter
- Mango trees 25 years, or the lease term if shorter
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial
position date. The effects of any revision of the residual values and useful lives are included in profit or loss for the
financial year in which the changes arise.
Depreciation on property, plant and equipment ceases at the earlier of derecognition and classification as held for sale.
Depreciation on assets under construction commences when the assets are ready for their intended use.
Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in
“other operating income” in profit or loss.

At each statement of financial position date, the Group assess whether there is any indication of impairment. If such
an indication exists, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount. See significant accounting policies Note 3(k) on impairment of
non-financial assets.
(j) Inventories
Inventories which consist of raw materials, work-in-progress, finished goods, molasses and consumables are stated at
lower of cost and net realisable value.
Cost is determined on the weighted average cost basis. Raw material cost comprises the landed cost of goods
purchased and in the case of work-in-progress and finished goods, includes materials, direct labour, other direct charges
and an appropriate proportion of factory overheads. Consumables comprise the actual purchase costs.
Net realisable value is the estimated selling price in the ordinary course of business, less selling and distribution costs
and all other estimated cost to completion.