11. RIGHT-OF-USE ASSETS/(LEASE LIABILITIES) (continued) (c) Additions to right-of-use assets during the financial year Group 2023 2022 RM’000 RM’000 Buildings 101 124 (d) Depreciation charged during the financial year Group 2023 2022 RM’000 RM’000 Condominium 13 4 Leasehold land 589 498 Buildings 894 948 Motor vehicles 20 20 Total 1,516 1,470 (e) Extension options Some leases of buildings contain extension options up to 3 years, which are exercisable by the Group before the end of the non-cancellable contract period. Where practicable, 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 lessor. 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 circumstance within its control. As at 31 August 2023, there is no undiscounted potential future rental payments that are not included in the lease term. (f) The table below summarises the maturity profile of the lease liabilities of the Group at the end of the reporting period based on contractual undiscounted repayment obligations as follows: Group 2023 2022 RM’000 RM’000 On demand or within one year 384 448 One to five years 85 367 469 815 (g) Significant judgements and assumptions in relation to leases The Group assesses at lease commencement by applying significant judgement whether it is reasonably certain to exercise the extension options. Group entities consider all facts and circumstances including their past practice and any cost that will be incurred to change the asset if an option to extend is not taken, to help it determine the lease term. The Group also applied judgement and assumptions in determining the incremental borrowing rate of the respective leases. Group entities first determine the closest available borrowing rates before using significant judgement to determine the adjustments required to reflect the term, security, value or economic environment of the respective leases. The lease payments are discounted using the annual incremental borrowing rate of the Group in range of 2.99% to 5.17% (2022: 2.51% to 5.17%). ANNUAL REPORT 2023 SASBADI HOLDINGS BERHAD 111 Financial Statements (continued)
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