NOTES TO THE FINANCIAL STATEMENTS
17. LEASES (i) As lessee
17. LEASES
NOTES TO THE FINANCIAL STATEMENTS
17. LEASES (cont’d) (i) As lessee (cont’d)
Right-of-use assets (cont’d)
Office premise
Company RM’000
Cost
As at 1 July 2021/ As at 30 June 2022 1,365
Accumulated depreciation
As at 1 July 2021 (151)
Depreciation charged for the year (Note 9) (455)
At 30 June 2022 (606)
Net carrying amount
At 30 June 2022 759
Cost
At 1 January 2020 -
Additions 1,365
At 30 June 2021 1,365
Accumulated depreciation
As at 1 January 2020 -
Depreciation charged for the period (Note 9) (151)
At 30 June 2021 (151)
Net carrying amount
At 30 June 2021 1,214
During the previous period, the Company had entered into a new lease agreement for the rental of office floor.
The lease term is for a period of 3 years.
17. LEASES (cont’d) (i) As lessee (cont’d)
Lease liabilities
Land Office
premises Equipment premise Total
Group RM’000 RM’000 RM’000 RM’000
At 1 July 2021 2,102 46 1,235 3,383
Additions - 1,709 - 1,709
Finance costs 91 29 42 162
Deconsolidation of a subsidiary (Note 40) - (1,408) - (1,408)
Repayments of lease liabilities (628) (260) (416) (1,304)
Repayments of finance costs (91) (29) (42) (162)
At 30 June 2022 1,474 87 819 2,380
At 1 January 2020 2,988 134 - 3,122
Additions - - 1,365 1,365
Finance costs 194 3 17 214
Repayments of lease liabilities (886) (88) (130) (1,104)
Repayments of finance costs (194) (3) (17) (214)
At 30 June 2021 2,102 46 1,235 3,383
There were no lease liabilities in relation to one of the bottling plants amounting to RM625,000 (2021: RM715,000) which were paid upfront for 15 years.
The maturity analysis of the lease liabilities is presented below:
Land Office
Group premises Equipment premise Total
2022 RM’000 RM’000 RM’000 RM’000
Year 1 719 48 495 1,262
Year 2 719 40 354 1,113
Year 3 120 - - 120
1,558 88 849 2,495
Less: unearned interest (84) (1) (30) (115)
1,474 87 819 2,380
2021
Year 1 719 46 457 1,222
Year 2 719 - 495 1,214
Year 3 719 - 354 1,073
Year 4 120 - - 120
2,277 46 1,306 3,629
Less: unearned interest (175) - (71) (246)
2,102 46 1,235 3,383
NOTES TO THE FINANCIAL STATEMENTS
17. LEASES (cont’d) (i) As lessee (cont’d)
Lease liabilities (cont’d)
The maturity analysis of the lease liabilities is presented below (cont’d):
Land Office
Group premises Equipment premise Total
2022 RM’000 RM’000 RM’000 RM’000
Less than one year 660 46 471 1,177
Between 1 year and 5 years 814 41 348 1,203
1,474 87 819 2,380
2021
Less than one year 627 46 415 1,088
Between 1 year and 5 years 1,475 - 820 2,295
2,102 46 1,235 3,383
Amounts recognised in profit or loss are as follows:
1.7.2021 to 1.1.2020 to 30.6.2022 30.6.2021
Group (12 months) (18 months)
Leases under MFRS 16 RM’000 RM’000
Depreciation expense on right-of-use assets 1,388 1,227
Interest expense on lease liabilities 162 214
Expense relating to leases of low value assets 136 237
Amounts recognised in the statements of cash flows are as follows:
1.7.2021 to 1.1.2020 to 30.6.2022 30.6.2021 (12 months) (18 months)
Group RM’000 RM’000
Total cash outflow for leases 1,466 1,318
17. LEASES (cont’d) (i) As lessee (cont’d)
Extension options
Some property leases contain extension options exercisable by the Group up to one year before the end of the non-cancellable contract period. Where practicable, 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 date 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.
The Group has estimated that the potential future lease payments, should it exercise the extension option, would result in an increase in lease liabilities of RM2,131,000 (2021: RM2,131,000).
Office premise
2022 2021
Company RM’000 RM’000
At beginning of year/period 1,235 -
Additions - 1,365
Finance costs (Note 8) 42 17
Repayments of finance cost (42) (17)
Repayments of lease liabilities (415) (130)
At end of year/period 820 1,235
The maturity analysis of the lease liabilities is presented below:
Office premise
2022 2021
Company RM’000 RM’000
Year 1 495 457
Year 2 354 495
Year 3 - 354
849 1,306
Less: unearned interest (29) (71)
820 1,235
Less than one year 471 415
Between 1 year and 3 years 349 820
820 1,235
Amounts recognised in profit or loss are as follows:
1.7.2021 to 1.1.2020 to 30.6.2022 30.6.2021
Company (12 months) (18 months)
Leases under MFRS 16 RM’000 RM’000
Depreciation expense on right-of-use assets 455 151
Interest expense on lease liabilities 42 17
NOTES TO THE FINANCIAL STATEMENTS
17. LEASES (cont’d) (i) As lessee (cont’d)
Extension options (cont’d)
Amounts recognised in the statements of cash flows are as follows:
1.7.2021 to 1.1.2020 to 30.6.2022 30.6.2021 (12 months) (18 months)
Company RM’000 RM’000
Total cash outflow for leases 457 147
(ii) As lessor
Finance lease receivables
The following table sets out a maturity analysis of lease receivables, showing the undiscounted lease payments to be received after the end of the reporting period.
2022 2021
RM’000 RM’000 Amounts receivable under finance leases:
Year 1 452 452
Year 2 452 452
Year 3 70 452
Year 4 3 70
Year 5 - 3
Undiscounted lease receivables 977 1,429
Unguaranteed residual values 647 647
1,624 2,076
Less: Unearned finance lease income (474) (767)
Present value of lease payment receivables 1,150 1,309
Net investment in the lease 1,150 1,309
Undiscounted lease receivables analysed as:
Recoverable within 12 months 452 452
Recoverable after 12 months 525 977
977 1,429
Net investment in the lease analysed as:
Recoverable within 12 months 194 164
Recoverable after 12 months 956 1,145
1,150 1,309
17. LEASES (cont’d) (ii) As lessor (cont’d)
Finance lease receivables (cont’d)
The following table presents the movements in the net investment in lease receivables:
Group
2022 2021
RM’000 RM’000
At beginning of year/period 1,309 1,692
Additions during the year/period - 90
Finance lease income recognised (Note 5) 314 471
Repayments of finance lease receivables (473) (659)
Reduction in unguaranteed residual value (Note 9) - (285)
At end of year/period 1,150 1,309
The Group entered into a business arrangement for the supply of liquefied petroleum gas (‘LPG’) via bulk tank system with the average term of 5 years.
The LPG is to be delivered and stored in the bulk tank system located at customers’ location. The Group has classified this as part of finance lease considering that physical access to the bulk tank system is controlled by the customer. Generally, these lease contracts do not include extension or early termination options.
The Group estimates the loss allowance on finance lease receivables at the end of the reporting period at an amount equal to lifetime ECL. None of the finance lease receivables at the end of the reporting period is past due and taking into account the historical default experience and the future prospects of the industries in which the lessees operate.
There has been no change in the estimation techniques or significant assumptions made during the current financial year in assessing the loss allowance for finance lease receivables.
Operating lease
The Group has entered into commercial property leases on its properties. The Group has classified these leases as operating leases, because they do not transfer substantially all of the risks and rewards incidental to the ownership of the assets. These leases have an average tenure of between one and three years.
Rental income recognised in profit or loss of the Group for the current financial year/period are as follows:
Group
1.7.2021 to 1.1.2020 to 30.6.2022 30.6.2021 (12 months) (18 months) RM’000 RM’000 Rental income
- Investment properties (Note 16) 1,778 3,123
- Tower infrastructure 755 522
2,533 3,645
The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received after the end of the reporting period.
NOTES TO THE FINANCIAL STATEMENTS
17. LEASES (cont’d) (ii) As lessor (cont’d)
Operating lease (cont’d)
Future minimum lease receivable under non-cancellable operating leases at the end of the reporting period are as follows:
Group
2022 2021
RM’000 RM’000
Less than one year 1,616 1,608
Between one and five years 557 2,065
2,173 3,673