179 ANNUAL REPORT 2023 MST GOLF GROUP BERHAD Registration No: 199301009307 (264044-M) 41 4. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (CONT’D) Lease liabilities (cont’d) The lease liabilities bear interests ranging from 5.50% to 7.91% (2022: 5.50% to 6.90%) per annum. Interest rates are fixed at the inception of the lease liabilities arrangements. The maturity analysis of lease liabilities is disclosed in Note 31 to the financial statements. The following are the amounts recognised in profit or loss:- Group 2023 2022 RM’000 RM’000 Depreciation of right-of-use assets 13,153 8,835 Interest expense on lease liabilities 3,065 2,095 Expenses relating to short term leases 2,569 1,554 Rent concession - (70) Gain on lease termination (138) - Loss on lease modifications - 104 Total amount recognised in profit or loss 18,649 12,518 The Group had total cash outflow for lease liabilities payment of RM18,729,000 (2022: RM11,651,000). Material accounting policy information (a) Lease and non-lease components At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease and non-lease component on the basis of their relative stand-alone prices. However, for leases of properties in which the Group is a lessee, it has elected not to separate non-lease components and will instead account for the lease and non-lease components as a single lease component. (b) Recognition exemption The Group has elected not to recognise right-of-use assets and lease liabilities for shortterm leases that have a lease term of 12 months or less and leases of low-value assets. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. It assesses the lease classification of a sublease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sublease as an operating lease.
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