ENRA Group Berhad Annual Report 2020

ENRA Group Berhad - Annual Report 2020 87 NOTES TO THE FINANCIAL STATEMENTS 31 March 2020 5. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (Cont’d) The Group and the Company as lessee (Cont’d) e. At the end of the financial year, the Group and the Company had total cash outflow for leases of RM28,594,000 and RM416,000 (2019: RM29,086,000 and RM545,000) respectively. f. The Group and the Company leases several lease contracts that include extension and termination options. These are used to maximise operational flexibility in terms of managing the assets used in the Group’s and the Company’s operations. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised. As at 31 March 2020, there is no undiscounted potential future rental payment that is not included in the lease term. The Group as a lessor The Group has entered into non-cancellable lease agreements on certain asset for terms of four years and renewable at the end of the lease period. The monthly rental consists of a fixed base rent. Future minimum rentals receivable under agreement at the reporting date are as follows: Group 2020 RM’000 2019 RM’000 Less than one (1) year 35,098 33,309 One (1) to two (2) years 35,098 33,309 Two (2) to three (3) years 2,404 33,309 Three (3) to four (4) years - 2,094 72,600 102,021 6. INVESTMENT IN A JOINT VENTURE On 5 June 2017, ENRA Engineering & Construction Sdn. Bhd. (“EEC”), a wholly-owned subsidiary of the Company and Emrail Sdn. Bhd. had entered into a Shareholders Agreement to jointly establish a company to collaborate on providing total engineering solutions and services, civil works, rolling stock, project and asset management and maintenance services for rail and track transportation projects in Malaysia. Subsequently, ENRA Emrail Sdn. Bhd. (“EEM”) was established on 28 August 2017 with an issued and paid-up share capital of RM100 ordinary shares. EEC holds 51% of the shareholdings of EEM.