FINANCIAL REPORT (cont.) Notes to the Financial Statements (cont.)
8. LEASES The Group is lessee to numerous office leases, motor vehicle leases and construction equipment loans. All office leases have fixed annual rent increases. Motor vehicle leases and equipment loans do not have repayment increases, with instalments being fixed over the term of the lease. The average lease term for office leases is 3.9 years. The average lease term for motor vehicles and other equipment is 4.4 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than security interests in the leased assets that are held by the lessor. Leased asset may not be used as security for borrowing purposes. This note provides information for leases where the Group is a lessee. Amounts recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income includes the following amounts relating to leases: 2023 $’000 2022 $’000 Depreciation Charge for Right of Use Assets 1,236 656 Total Depreciation Charge for Right of Use Assets 1,236 656 Other cost relating to leases Interest expense on lease liabilities (included in Finance Costs) 338 106 Expenses relating to leases of low value assets - 24 Expenses relating to variable lease payments not included in the measurement of the lease liabilities - 74 Total costs relating to leases 338 204 Amounts recognised in the Consolidated Statement of Financial Position includes the following amounts relating to leases:
Total $’000
Property
Other
Right of use assets Gross amount Opening balance, 1 July 2021
1,342
2,172
3,514
Reallocation
-
-
-
Additions
73
1,790 3,962 2,426 (705) 5,683
1,863 5,377 3,105 (705) 7,777
Balance as at 30 June 2022
1,415
Additions Disposal
679
-
Balance as at 30 June 2023 Accumulated depreciation Opening balance, 1 July 2021
2,094
378 188 294 860
602
980
Reallocation
(121)
67
Depreciation expense
362 843
656
Balance as at 30 June 2022
1,703 (114) 1,236 2,825
Disposals
-
(114)
Depreciation expense
398
838
Balance as at 30 June 2023
1,258
1,567
Net book value As at 30 June 2022 As at 30 June 2023
555 837
3,119 4,116
3,674 4,952
Annual Report 2023 72
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