NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2024 (CURRENCY – SINGAPORE DOLLARS UNLESS OTHERWISE STATED) E4 Borrowings (continued) (d) Lease liabilities (continued) (i) Real estate leases (continued) Estimates and judgement: Extension options – Lease terms Extension option is included in the lease term if the lease is reasonably certain to be extended. In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise the extension option. The leases for office buildings contain extension periods, for which the related lease payments had not been included in lease liabilities as the Group is not reasonably certain to exercise these extension options. The Group negotiates extension options to optimise operational flexibility in terms of managing the assets used in the Group’s operations. The majority of the extension options are exercisable by the Group and not by the lessor. 2024 Group Lease liabilities recognised (discounted) Potential future lease payments not included in lease liabilities (discounted) $’000 $’000 Office buildings 57,007 77,278 2023 Group Lease liabilities recognised (discounted) Potential future lease payments not included in lease liabilities (discounted) $’000 $’000 Office buildings 62,293 87,560 (ii) Other leases The Group leases vehicles and equipment, with lease terms of 3 years to 5 years. In some cases, the Group has options to purchase the assets at the end of the contract term. The Group monitors the use of these vehicles and equipment and reassesses the estimated amount payable under the residual value guarantees at the reporting date to remeasure lease liabilities and right-of-use assets. The Group also leases IT equipment and machinery. These leases are short-term and/or leases of low-value items. The Group has elected not to recognise right-of-use assets and lease liabilities for these leases. 226 ST ENGINEERING | ANNUAL REPORT 2024
RkJQdWJsaXNoZXIy ODIwNTc=