amount of borrowing costs eligible for capitalisation is 5.3% (2022: 5.2%). NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 225 6 RIGHT-OF-USE ('ROU') ASSETS Accounting Policy A lease is a contract, or part of a contract, whereby the lessor conveys to the lessee the right to control the use of an identified asset for a period of time in exchange for consideration. T o assess whether a contract conveys the right to control the use of an identified asset, the Group and the Company assess whether: • The contract involves the use of an identified asset - this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier (‘lessor’)has a substantive substitution right, then the asset is not identified; • The customer (‘lessee’) has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and • The customer (‘lessee’) has the right to direct the use of the asset. In rare cases where the decision about how and for what purpose the asset is used is predetermined, the customer (‘lessee’) has the right to direct the use of the asset if either the customer (‘lessee’) has the right to operate the asset; or the customer designed the asset in a way that predetermines how and for what purpose it will be used. The Group and the Company as lessees The Group and the Company lease various buildings, plant and machinery, furniture and fittings, office equipment and motor vehicles. These leases have tenures between 1 and 25 years. Lease terms are generally negotiated on an individual basis. As for leasehold land, the remaining period of the respective leases ranges from 4 to 99 years. (i) Initial recognition The Group and the Company recognise a ROU asset and a lease liability for all leases conveying the right to control the use of an identified asset for a period of time. The ROU assets recognised by the Group and the Company are