UEM EDGENTA BERHAD ANNUAL REPORT 2021 1 2 3 4 5 6 7 277 276 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 34. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES The Group has lease contracts for leasehold land, office premises and motor vehicles used in its operations. Leases of premises generally have lease terms between 2 and 15 years, while motor vehicles have lease terms between 2 to 3 years. The Group has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Group’s business needs. Management exercises judgement in determining whether these extension and termination options are reasonably certain to be exercised. The Group also has leases with lease terms of 12 months or less and leases of office equipment with low value. The Group applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these leases. Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year: Leasehold land RM’000 Office premises RM’000 Motor vehicles RM’000 Total RM’000 Group As at 1 January 2021 4,818 35,736 273 40,827 Additions - 9,219 338 9,557 Depreciation (Note 7) (120) (10,244) (519) (10,883) Derecognition - (2,287) - (2,287) Foreign exchange differences - 67 - 67 As at 31 December 2021 4,698 32,491 92 37,281 As at 1 January 2020 4,987 25,440 510 30,937 Additions - 41,915 44 41,959 Depreciation (Note 7) (169) (10,877) (281) (11,327) Derecognition - (20,616) - (20,616) Foreign exchange differences - (126) - (126) As at 31 December 2020 4,818 35,736 273 40,827 34. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (CONTD.) Leasehold land RM’000 Office premises RM’000 Total RM’000 Company As at 1 January 2021 2,997 30,964 33,961 Additions - 6,856 6,856 Derecognition - (2,287) (2,287) Depreciation (Note 7) (34) (7,090) (7,124) As at 31 December 2021 2,963 28,443 31,406 As at 1 January 2020 3,031 23,106 26,137 Additions - 35,472 35,472 Derecognition - (20,603) (20,603) Depreciation (Note 7) (34) (7,011) (7,045) As at 31 December 2020 2,997 30,964 33,961 As at 31 December 2021, leasehold land with an aggregate carrying value of RM1.9 million (2020: RM2.0 million) are pledged as securities for banking facilities (Note 27(d)). Set out below are the carrying amounts of lease liabilities and the movements during the year: Group Company 2021 RM’000 2020 RM’000 2021 RM’000 2020 RM’000 As at 1 January 37,575 30,277 31,557 23,553 Additions 9,557 39,046 6,856 35,599 Accretion of interest (Note 6) 1,541 1,744 1,212 1,292 Amount billed (12,768) (12,423) (7,852) (7,806) Derecognition (2,378) (21,094) (2,378) (21,081) Foreign exchange differences 92 25 - - As at 31 December 33,619 37,575 29,395 31,557 Disclosed as: - Current 8,599 9,807 6,818 6,030 - Non-current 25,020 27,768 22,577 25,527 33,619 37,575 29,395 31,557 During the year, lease liability and interest paid by the Group and the Company amounted to RM7.3 million (2020: RM5.9 million) and RM5.8 million (2020: RM4 million) respectively.
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