2. New or revised IFRS standards, amendments and interpretations

Certain IFRS standards and interpretations were revised or introduced. The relevant one for the Group is:

IFRS 16 Leases: The new standard replaces the existing guidance on leases, including IAS 17 and IFRIC 4. It requires lessees to recognize all leases and the associated contractual rights and obligations in the statement of financial position. For each lease, the lessee recognizes a right-of-use asset for the right to use the underlying leased asset and a lease liability reflecting future lease payments. Optionally, short-term leases (maximum term of 12 months) and leases of low value may be exempted from balance sheet recognition. Depreciation of the right-of-use asset and interest on the lease liability must be recognized in the consolidated statement of income for all not-exempted leases.

The Group applied the modified retrospective method as the transition method. IFRS 16 is not applied to low value assets and short-term leases. Lease payments for these types of contracts continue to be recognized as operating expenses. Leases with a lease term ending in less than 12 months from 1 January 2019 are not recognized as leases under IFRS 16 and are accounted for as if they are short-term leases. The Group also applied the practical expedient not to reassess the existing finance lease contracts under IAS 17. The payments of lease liabilities under IFRS 16 are presented as financing cash outflows. Precious Woods is not a lessor and also subleases do not occur within the Group. The weighted average incremental borrowing rate for lease liabilities initially recognized as of 1 January 2019 was 7.6 %.

The reconciliation to the opening balance for the lease liabilities as at 1 January 2019 is as follows: