NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2022 (cont’d) 6. Right-of-use asset (CONT’D) Office buildings Premises Total RM’000 RM’000 RM’000 Company (cont’d) Accumulated depreciation At 1 January 2021 674 104 778 Charge for the financial year 8 522 530 Expiration of lease contract (682) - (682) At 31 December 2021 - 626 626 Charge for the financial year - 284 284 At 31 December 2021 - 910 910 Carrying amount At 31 December 2022 - 24 24 At 31 December 2021 - 308 308 (a) The Group leases 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. 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. (b) The Group also has leases with lease terms of 12 months or less and leases of premises with low value. 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 has applied the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these leases. 190
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