REPORTING CONTEXT ABOUT US OUR OPERATING CONTEXT OUR PERFORMANCE OUR LEADERSHIP GOVERNANCE OUR FINANCIAL STATEMENTS SHAREHOLDERS' CORNER (j) Expected credit losses of long-term receivables The measurement of impaired losses of financial assets requires judgements, in particular, the estimation of the amount and timing of future cash flows when determining impaired losses and the assessment of a significant increase in credit risk. The estimations are driven by a number of factors, changes in which can result in different levels of allowances. The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future. Refer to Note 10 for more details. (k) Leases - Estimating the incremental borrowing rate The Group and the Company cannot readily determine the interest rate implicit in the lease therefore, it uses its incremental borrowing rate (“IBR”) to measure lease liabilities. The IBR is the rate of interest that the Group and the Company would have to pay to borrow over a similar term and with a similar security the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group and the Company ‘would have to pay’ which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Group and the Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entityspecific estimates. The IBR used to estimate the lease liability ranges from 1.8% to 8% for the Group and 4.1% to 8% for the Company. Refer to Note 19 for more details. 4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (continued) 4.1 Critical accounting estimates and assumptions (continued) 5. PROPERTY, PLANT AND EQUIPMENT (a) Cost or valuation THE GROUP 2022 Freehold land and yard MUR '000 Freehold buildings MUR '000 Plant and machinery MUR '000 Motor vehicles MUR '000 Furniture, computer, office, and other equipment MUR '000 Containers MUR '000 Total MUR '000 At 1 July 2021 1 235 275 1 238 664 3 089 232 289 657 918 366 333 957 7 105 151 *Additions 3 891 35 224 58 247 11 894 49 014 148 677 306 947 Disposals – (4 412) (13 057) (2 586) (13 075) (12 681) (45 811) Revaluation adjustment 131 549 152 078 – – – – 283 627 Exchange differences (5 002) (44 349) (49 149) (63) (7 580) – (106 143) At 30 JUNE 2022 1 365 713 1 377 205 3 085 273 298 902 946 725 469 953 7 543 771 DEPRECIATION At 1 July 2021 14 133 411 195 1 652 086 145 223 642 471 134 727 2 999 835 Charge for the year 7 166 54 293 130 847 25 388 68 670 78 242 364 606 Disposals – (4 412) (13 053) (2 410) (10 000) (12 513) (42 388) Revaluation adjustment (21 142) (97 585) – – – – (118 727) Exchange differences – (29 904) (34 619) (63) (4 434) – (69 020) At 30 JUNE 2022 157 333 587 1 735 261 168 138 696 707 200 456 3 134 306 NET BOOK VALUE At 30 JUNE 2022 1 365 556 1 043 618 1 350 012 130 764 250 018 269 497 4 409 465 Capital expenditure in progress 1 318 9 950 64 346 – 26 111 13 161 114 886 TOTAL PROPERTY PLANT AND EQUIPMENT 1 366 874 1 054 568 1 414 358 130 764 276 129 282 658 4 524 351 * Additions include an amount of MUR 55.6m (2021: MUR 159.0m) transferred from capital expenditure in progress to property, plant and equipment for the Group. Total cash outflow consist of additions of MUR 307m (2021: MUR 392m) and capital expenditure in progress of MUR 100m (2021: MUR 42m) for the Group. NOTES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 159 158 Phoenix Beverages Limited Integrated Report 2022 Phoenix Beverages Limited Integrated Report 2022
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