Notes tothe financial statements For the financial year ended 31 December 2023 14. Property, plant and equipment (cont’d) Assets fully depreciated but still in use As at 31 December 2023, the costs of the Group’s property, plant and equipment that have been fully depreciated but still being in utilized amounted to Rp4,146.6 billion (2022: Rp3,804.5 billion), which mainly consist of buildings and improvements, plant and machinery, and heavy equipment, transportation equipment and vessels. Disposals of property, plant and equipment During the year ended 31 December 2023, the Group sold heavy equipment, transportation equipment and office equipment with a total net carrying amount of Rp9.6 billion (2022: Rp28.7 billion) for a cash consideration of Rp34.6 billion (2022: Rp30.3 billion). The net gains on these disposals were recognised as part of other operating income in the consolidated statement of comprehensive income. Capitalisation of borrowing costs During the year ended 31 December 2023, borrowing costs capitalised by certain subsidiaries to their immature bearer plants under cultivation, and building and machineries under constructions amounted to Rp42.6 billion (2022: Rp81.9 billion) based on capitalisation rates ranging from 5.44% to 8.69% (2022: 4.93% to 8.57%). Assets under insurance coverage As at 31 December 2023, the fixed assets are covered by insurance against losses from fire and other risks under a policy package with total coverage of Rp16,106.5 billion (2022: Rp15,624.3 billion and US$13.8 million). 15. Leases Group as a lessee The Group has lease contracts for various assets, including land, buildings and office equipment used in its operations. The Group is restricted from assigning and subleasing the leased assets. • Lease of buildings generally have lease terms of 2 years. • Office equipment generally have lease terms of 3 years. • Land use rights are in the form of HGB, HGU, HP, HPL and generally have lease terms from 5 to 40 years which will expire between 2024 to 2055 and can be renewed and/or extended. The Group’s bearer plants are planted and managed on the area which have obtained Rights to Cultivate (“Hak Guna Usaha” or “HGU”), or have obtained location permits and in the process of obtaining HGU. Extension and termination options The Group has several lease contracts that contain extension and termination options exercisable by the Group. Where practicable, the Group seeks to include extension and termination options in new leases to provide operational flexibility. The extension options held are exercisable only by the Group before the end of the non-cancellable contract period and not by the lessors. The termination options can be exercised by serving the required notice periods in the lease contract. 107 GROUP OVERVIEW OPERATION AND FINANCIAL REVIEW SUSTAINABILITY & GOVERNANCE FINANCIALS OTHER INFORMATION Annual Report 2023
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