NTUC Income AR 2019

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 30. LEASES (CONTINUED) Extension options Some property leases contains extension options exercisable by the Group 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 events 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 undiscounted lease liability of $20,277,000. Leases as lessor The Group leases out retail and commercial space from their investment properties under non-cancellable operating leases. 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. Note 7 sets out information about the operating leases of investment property. The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date. 2019 – Operating leases under FRS 116 The Group $’000 Less than one year 67,524 One to two years 47,427 Two to three years 32,458 Three to four years 19,647 Four to five years 8,851 More than five years 5,437 Total 181,344 2018 – Operating leases under FRS 17 The Group $'000 Not later than one year 65,514 Between one and five years 76,355 Total 141,869 ANNUAL REPORT 2019 139