Page 63 - JTC-Annual Report-2025-Eng

JTC Logistics Transportation & Stevedoring Company K.S.C.P
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2025
(All amounts are in Kuwaiti Dinars)

Group as a lessee
The Group assesses whether a contract is or contains a lease, at inception of the contract. The
Group recognizes a right-of-use asset and a corresponding lease liability with respect to all
lease arrangements in which it is the lessee.
(i) Right-of-use assets
The Group recognizes right of use assets at the commencement date of the lease (i.e.,
the date the underlying asset is available for use). Right of use assets are measured at
cost, less any accumulated amortization and impairment losses, and adjusted for any
re-measurement of lease liabilities, The cost of right of use assets includes the amount
of lease liabilities recognized, initial direct costs incurred, and lease payments made at or
before the commencement date less any lease incentives received..
Unless the Group is reasonably certain to obtain ownership of the leased asset at the end
of the lease term, the recognized right of use assets are depreciated on a straight-line
basis over the shorter of its estimated useful life and the lease term.
Right of use assets are subject to impairment. Amortization is computed on a straight-
line basis over the estimated lease term of right-of-use assets as follows:

Assets category Years

Lands 3

Buildings 3

(ii) Lease liabilities
At the commencement date of the lease, the Group recognizes lease liabilities measured
at the present value of lease payments to be made over the lease term. The lease payments
include fixed payments (including in-substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees.
The lease payments also include the exercise price of a purchase option reasonably
certain to be exercised by the Group and payments of penalties for terminating a lease,
if the lease term reflects the Group exercising the option to terminate. The variable lease
payments that do not depend on an index or a rate are recognized as expense in the
period on which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses the incremental
borrowing rate at the lease commencement date if the interest rate implicit in the lease
is not readily determinable. After the commencement date, the amount of lease liabilities
is increased to reflect the accretion of profit and reduced for the lease payments made. In
addition, the carrying amount of lease liabilities is remeasured if there is a modification, a
change in the lease term, a change in the in-substance fixed lease payments or a change
in the assessment to purchase the underlying asset.

(iii) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases
of property and equipment (i.e., those leases that have a lease term of 12 months or less

61 JTC LogisTiCs TransporTaTion & sTevedoring Company K.s.C.p.