206 NOTES TO THE FINANCIAL STATEMENTS ʹˢ˥ ˧˛˘ Ѓˡ˔ˡ˖˜˔˟ ˬ˘˔˥ ˘ˡ˗˘˗ ʦʤ ʷ˘˖˘ˠ˕˘˥ ʥʣʥʧ (cont’d) 5. RIGHT-OF-USE ASSETS (CONT’D) (a) The Group and the Company lease various office properties, equipment and motor vehicles of which the leasing activities are summarised below: i. Office buildings The Group has leased a number of office buildings between 1 year and 3 years. ii. Premises The Group has leased a number of sites, warehouses and retail shops between 1 year and 3 years. The Group is not allowed to sublease the warehouses and retail shops. The Company has leased a number of retail shops between 1 year to 3 years. iii. Motor vehicles The Group has leased its motor vehicles under hire purchase arrangements. The leases are secured by the leased assets. The Group has an option to purchase the asset at the expiry of the lease period at an insignificant amount. iv. Office and communication equipment The Group has leased its office and communication equipment under hire purchase arrangements. The leases are secured by the leased assets. The Group has an option to purchase the asset at the expiry of the lease period at an insignificant amount. v. Leasehold land The Group has leased several leasehold lands over the lease term. vi. Capital work-in-progress The Group has construction in progress for a leasehold land. (b) The Group and the Company also have short-term leases with lease terms of 12 months or less and leases of assets with low value at less than RM20,000 each when purchase new. Leases included extension and termination options. These options are negotiated by management to provide flexibility in managing the portfolio of leased asset 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 and the Company have applied the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these leases. (c) Leasehold land and building of the Group amounted to RM8,191,000 (2023: RM8,373,000) has been pledged to a licensed bank as security for banking facilities granted to the Group as disclosed in Note 26 to the financial statements. (d) Material accounting policy information ROU assets are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation of ROU assets are recognised in the profit or loss on straight-line method from the commencement date to the earlier of the end of the useful life of the ROU assets or the end of the lease term. ROU assets under capital work-in-progress are not depreciated until the assets are ready for its intended use. The estimated useful lives of the ROU assets are determined on the same basis as those of property, plant and equipment as follow: Office buildings 2% Premises Over the lease term Office and communication equipment 10 - 12% Motor vehicles 20% Leasehold land Over the remaining period of the lease
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