2019 UEM Edgenta Annual Report

237 UEM EDGENTA AT A GLANCE MESSAGE FROM OUR LEADERSHIP STRATEGIC FOCUS OPERATIONAL REVIEW SUSTAINABILITY EFFORTS CORPORATE GOVERNANCE INTRODUCTION FINANCIAL REVIEW ADDITIONAL INFORMATION Notes to the Financial Statements For the year ended 31 December 2019 UEM Edgenta Berhad Annual Report 2019 37. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES The Group has lease contracts for leasehold land, office premises and motor vehicles used in its operations. Leases of premises generally have lease terms between 2 and 15 years, while motor vehicles have lease terms between 2 to 3 years. The Group has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio 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 also has leases with lease terms of 12 months or less and leases of office equipment with low value. The Group applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these leases. Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year: Leasehold land RM’000 Office premises RM’000 Motor vehicles RM’000 Total RM’000 Group As at 1 January 2019 5,941 32,024 115 38,080 Additions - 4,604 728 5,332 Depreciation (Note 7) (112) (9,605) (333) (10,050) Disposal of a subsidiary (842) - - (842) Derecognition - (1,659) - (1,659) Foreign exchange differences - 76 - 76 As at 31 December 2019 4,987 25,440 510 30,937 Leasehold land RM’000 Office premises RM’000 Total RM’000 Company As at 1 January 2019 3,065 28,686 31,751 Additions - 2,737 2,737 Depreciation (Note 7) (34) (8,317) (8,351) As at 31 December 2019 3,031 23,106 26,137 As at 31 December 2019, leasehold land with an aggregate carrying value of RM2.0 million are pledged as securities for banking facilities (Note 29(d)).