Page 104 - HRC_Annual_Report_2023

102 About HRC Value Creation Management Discussion Leadership
& Analysis

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023

2 SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (continued)
2.2 FOREIGN CURRENCIES (continued)
(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions or valuation where items are remeasured. Monetary assets and liabilities denominated
in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items
denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at
the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value
are translated using the exchange rates at the date when the fair value was determined. Foreign exchange gains
and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates
of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss as realised and
unrealised foreign exchange gain or losses respectively.
2.3 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost or valuation deemed as cost. The cost of an item of property, plant and
equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item
will flow to the Company and the cost of the item can be measured reliably. The cost of an item of property, plant and
equipment initially recognised includes its purchase price, import duties, non-refundable purchase taxes and any cost that
is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in
the intended manner. Cost also includes borrowing costs that are directly attributable to the acquisition, construction or
production of a qualifying asset (refer to accounting policy 2.16(b) on borrowing costs).
Subsequent to initial recognition, property, plant and equipment are measured at cost less accumulated depreciation and
accumulated impairment losses. When significant parts of property, plant and equipment are required to be replaced in
intervals, the Company recognises such parts as individual assets with specific useful lives. The carrying amount of any
component accounted for as a separate asset is derecognised when replaced.
Freehold land is not depreciated as it has an infinite life.
All other property, plant and equipment are depreciated on a straight-line basis to allocate the cost, or the revalued
amounts deemed as cost, to their residual values, over their estimated useful lives at the following annual rates:
Land improvements and buildings 2.5% - 10.0%
Plant, machinery and equipment 2.5% - 33.3%
Motor vehicles 20%
Depreciation on work-in-progress commences when the assets are ready for their intended use.
Plant, machinery and equipment comprise components of the refinery which are subject to different refurbishment cycles.
Residual values and useful lives of assets are reviewed, and adjusted if appropriate, at the end of each reporting period.
At the end of each reporting period, the Company assesses whether there is any indication of impairment. If such indicators
exist, the carrying amount of the asset is assessed and written down immediately to its recoverable amount. Refer to
accounting policy 2.7 on impairment of non-financial assets. An item of property, plant and equipment is derecognised
upon disposal or when no future economic benefits are expected from its use or disposal. Gains and losses on derecognition
of the asset are included in the profit or loss in the financial year the asset is derecognised.