Annual Report - Bina Puri

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Notes to and Forming Part of the Financial Statements (Cont’d)1. SIGNIFICANT ACCOUNTING POLICIES (cont’d)(h) Property, plant and equipment (Cont’d)(ii)DepreciationFreehold land and capital work-in-progress are not depreciated. Leasehold buildings are amortised on thestraight line basis over the remaining lease periods of between 16 and 95 years. Depreciation is calculated towrite off the cost of other property, plant and equipment on the straight line basis to their residual valuesover their expected economic useful lives at the following annual rates:Freehold buildings 2%Quarry face development 12%Plant, machinery, moulds and factory equipment 10% - 50%Trucks and motor vehicles 12% - 20%Renovation, electrical installations and furniture and fittings 10% - 20%Office equipment 10%Capital work-in-progress will only be depreciated when the assets are ready for their intended use.The residual values, useful lives and depreciation method are reviewed at each financial year end to ensurethat the amount, method and period of depreciation are consistent with previous estimates and the expectedpattern of consumption of the future economic benefits embodied in the items of property, plant andequipment.(i)Leases(i)Finance Leases - Assets acquired under hire purchase agreementsAssets financed by hire purchase arrangements which transfer substantially all the risks and rewards ofownership to the Group, are capitalised as property, plant and equipment and the corresponding obligationsare treated as liabilities. On initial recognition, assets acquired by way of hire purchase are stated at an amountequal to the lower of their fair values and the present values of the minimum hire purchase payments at theinception of the hire purchase agreements.The property, plant and equipment capitalised are depreciated onthe same basis as owned assets.In calculating the present value of the minimum hire purchase payments, the discount rate is the interest rateimplicit in the hire purchase agreements, if this is practicable to determine, if not, the Group’s incrementalborrowing rates are used.(ii)Operating leasesThe Group as lesseeLease payments under operating lease are recognised as an expense on a straight-line basis over the leaseterm.The aggregate benefit of incentives provided by the lessors are, if any, recognised as a reduction of rentalexpense over the lease term on a straight-line basis.Land which normally has an indefinite economic life and held under a leasehold title to which the title is notexpected to pass to the Group at the end of the lease term is treated as an operating lease. Payments madeon entering into or acquiring a leasehold land that is treated as an operating lease are accounted for asprepaid lease payments.The Group’s leasehold land is amortised over the remaining lease periods of between 10 and 91 years inaccordance with the pattern of benefits provided.52 BINA PURI HOLDINGS BHDAnnual Report 2007
Notes to and Forming Part of the Financial Statements (Cont’d)1. SIGNIFICANT ACCOUNTING POLICIES (cont’d)(i)Leases (Cont’d)(ii)Operating leases (Cont’d)The Group as lessorAssets leased out under operating leases are presented on the balance sheet as investment properties. Rentalincome from operating leases is recognised on a straight line basis over the lease term. Initial direct costsincurred in entering into lease arrangements are included as part of the carrying value of the leased asset andrecognised on a straight line basis over the lease term.(j)Investment propertiesInvestment properties are properties which are held either to earn rentals or for capital appreciation or for bothand are measured initially at cost, including transaction costs. Subsequent to initial recognition, the investmentproperties are stated at fair value.The fair value, which is determined by the directors, is arrived at by referenceto market evidence of transaction prices for similar properties and reflects market conditions at the balance sheetdate. Gains or losses arising from changes in the fair value of the investment properties are recognised as incomeor expense in the income statement in the period in which they arise.A property interest under an operating lease is classified and accounted for as an investment property on aproperty-by-property basis when the Group holds it to earn rentals or for capital appreciation or for both.Anysuch property interest under an operating lease classified as an investment property is carried at fair value.An investment property is derecognised when either it has been disposed of or when the investment property ispermanently withdrawn from use and no future economic benefit is expected from its disposal.Any gains or losseson the retirement or disposal of an investment property are recognised in the income statement in the financialyear in which they arise.(k) Land held for property developmentLand held for property development consists of land where no development activities have been carried out orwhere development activities are not expected to be completed within the normal operating cycle. Such land isclassified under non-current assets and is stated at cost less accumulated impairment loss. The policy for therecognition and measurement of impairment loss is in accordance with Note 1(r).Land held for property development is reclassified as property development costs at the point when developmentactivities have commenced and where it can be demonstrated that the development activities can be completedwithin the normal operating cycle.(l)Expressway development expenditureExpressway development expenditure comprises development expenditure incurred by the Group in connectionwith highway concessions. Upon completion of the construction works of the expressway and commencement oftolling operations, the cumulative expenditure incurred is amortised to the income statement over the concessionperiod.(m) Other investmentsOther investments are stated at cost less any diminution in value of the investments.An allowance for diminutionin value is made if the directors are of the opinion that there is a decline in the value of such investments which isother than temporary.The diminution in value is charged to the income statement. On disposal of an investment,the difference between net disposal proceeds and its carrying amount is recognised in the income statement.BINA PURI HOLDINGS BHDAnnual Report 200753
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MISSION• To be a world class orga
Page 4: Notice of Annual General MeetingNOT
Page 7 and 8: Corporate InformationBOARD OF DIREC
Page 10 and 11: Profile of Directors (Cont’d)Henr
Page 12 and 13: Executive Chairman’sStatementDato
Page 14 and 15: Executive Chairman’s Statement (C
Page 16 and 17: Review of Operations (Cont’d)OVER
Page 18 and 19: Review of Operations (Cont’d)ONGO
Page 20 and 21: Group Financial Highlights2007 2006
Page 22 and 23: Calendar of Events 2007-2008 (Cont
Page 24 and 25: Audit Committee ReportMember of the
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Page 28 and 29: Corporate Governance Statement (Con
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Page 32 and 33: Internal Control StatementThe Malay
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Page 36 and 37: Directors’ ReportFor the year end
Page 38 and 39: Directors’ Report (Cont’d)DIREC
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Page 42 and 43: Balance Sheets31 December 2007Group
Page 44 and 45: Income StatementsFor the year ended
Page 46 and 47: Statement of Changes in EquityFor t
Page 48 and 49: Cash Flow Statements (Cont’d)Grou
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Notes to and Forming Part of the Fi
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Notes to and Forming Part of the Fi
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Statement by DirectorsIn the opinio
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Thirty Largest ShareholdersAs at 31
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List of Properties 31 December 2007
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Group Corporate DirectoryBINA PURI
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Annual Report - Bina Puri

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