Financial Statements Notes to the Financial Statements 4. LEASES The Group leases certain land and buildings, building space, offices, equipment and vehicles. The leases are between more than 1 year and 99 years and may have options to renew after expiry. Lease payments are renegotiated at the end of lease terms or periodically to reflect market rentals. (a) Right-of-use assets Group Note Land and buildings Equipment Motor vehicles Total RM’000 RM’000 RM’000 RM’000 At 1 January 2022 6,608,702 64,824 9,487 6,683,013 Acquisitions through business combinations – – 64 64 Additions 213,885 25,068 – 238,953 Modification/reassessment 100,156 (355) 104 99,905 Depreciation charge for the year (333,445) (24,459) (5,512) (363,416) Reversal of impairment loss 1,934 – – 1,934 Transfer to assets classified as held for sale 16 (264,314) (769) – (265,083) Hyperinflationary adjustments 6,607 99,904 (3,907) 102,604 Translation differences 184,443 2,613 – 187,056 At 31 December 2022/ 1 January 2023 6,517,968 166,826 236 6,685,030 Acquisitions through business combinations 37,496 – – 37,496 Disposal (38,938) – – (38,938) Additions 181,073 29,184 422 210,679 Modification/reassessment 155,923 346 88 156,357 Depreciation charge for the year (362,501) (23,389) (4,755) (390,645) Transfer to assets classified as held for sale – (668) – (668) Transfer from/(to) property, plant and equipment 3 12,701 2 (159) 12,544 Hyperinflationary adjustments (42,120) 95,994 4,595 58,469 Translation differences 383,535 5,207 – 388,742 At 31 December 2023 6,845,137 273,502 427 7,119,066 Extension options Some properties, equipment and motor vehicles leases contain extension options exercisable by the Group 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 changes in circumstances within its control. Significant judgements and assumptions in relation to lease 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 them 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. IHH Healthcare Berhad 160
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