NOTES TO THE FINANCIAL STATEMENTS Cont’d 4. Right-of-use assets Group Land Buildings Plant, machinery, office equipment, and motor vehicles Multi-fuel cogeneration facility Total RM’000 RM’000 RM’000 RM’000 RM’000 At 1 January 2021 286,107 15,488 47,872 186,838 536,305 Additions - 9,011 1,796 - 10,807 Depreciation (9,066) (8,869) (6,019) (9,171) (33,125) Derecognition * (7,518) (134) (230) - (7,882) Disposals - - (106) - (106) Transfer to property, plant and equipment (Note 3) - - (2,819) - (2,819) Transfer to investment properties (Note 5) (11,994) - - - (11,994) Effect of movements in exchange rates 11,437 (57) 34 (3,495) 7,919 At 31 December 2021/ 1 January 2022 268,966 15,439 40,528 174,172 499,105 Additions 11,655 12,278 30,431 10,062 64,426 Depreciation (5,860) (8,838) (6,241) (9,616) (30,555) Derecognition * - (492) (399) - (891) Disposals - - (61) - (61) Transfer to property, plant and equipment (Note 3) - - (1,771) - (1,771) Effect of movements in exchange rates (5,968) 45 (696) (2,150) (8,769) At 31 December 2022 268,793 18,432 61,791 172,468 521,484 * Derecognition of the right-of-use assets was a result of early termination of certain lease arrangements. The Group leases a number of properties, machinery and facility that run between 1 year and 25 years and in some cases, with an option to renew the lease after that date. 4.1 Extension options Some leases of buildings contain extension options exercisable by the Group up to one year before the end of the non-cancellable contract period. Where applicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options held are exercisable only by the Group and not by the lessors. The Group assesses at lease commencement whether it is reasonably certain to exercise the extension options. The Group reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant change in circumstances within its control. The extension options of all leases are currently included in the lease term as the Group assessed that it is reasonably certain to exercise the extension options, which is supported by the high historical rate of extensions exercised by the Group. Hence, as at 31 December 2022 and 31 December 2021, there were no potential future lease payments not included in lease liabilities. ANNUAL REPORT 2022 238
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