Page 136 - S P Setia Annual Report 2016
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134   S P Setia Berhad Group
                Annual Report 2016




          Notes To The Financial Statements

          For The Financial Year Ended 31 December 2016

          3.    INVESTMENT PROPERTIES (CONT’D.)
              The Group’s investment properties at a net carrying amount of RM781,372,000 (2015: RM565,269,000) have been charged to banks to
              secure the borrowings referred to in Note 23 below.
              Included under the Group’s investment properties is borrowing costs of RM21,326,000 (2015: RM21,071,000) incurred during the
              financial year/period.
              The fair values of the investment properties of the Group were assessed based on reference to open market value of properties in the
              vicinity. The fair value of the investment properties as at 31 December 2016 was substantially arrived at via valuation performed by
              certified external valuers based on the following valuation techniques depending on the location and types of properties.

              (i)   The market comparison approach uses prices and other relevant information generated by market transactions involving identical
                   or comparable assets and liabilities.

              (ii)   The comparison/cost method of valuation entails separate valuations of the land and buildings to arrive at the market value of
                   the subject property. The land is valued by reference to transactions of similar lands in surrounding with appropriate adjustments
                   made for differences in the relevant characteristics of the land. Completed buildings are valued by reference to the current
                   estimates on constructional costs to erect equivalent buildings, taking into consideration of similar accommodation in terms of
                   size, construction, finishes contractors’ overheads, fees and profits. Appropriate adjustments are then made for the factors of
                   obsolescence and existing physical condition of the building.

              The fair value of investment properties under construction amounting to RM488,494,000 (2015: RM273,299,000) cannot be reliably
              and separately determined until the construction is completed or the fair value becomes reliably determinable, whichever is earlier.


          4.    LAND HELD FOR PROPERTY DEVELOPMENT

                                                                   Freehold     Leasehold   Development
                                                                      land          land    expenditure         Total
               Group                                               RM’000         RM’000        RM’000        RM’000

               2016

               Cost
               At 1.1.2016                                        2,709,054      385,672      2,209,604     5,304,330
               Additions                                            44,946        136,726       639,595       821,267
               Reclass from investment property (see Note 3)         8,210             -         12,222        20,432
               Transfer to property development costs (see Note 12)  (263,217)    (75,151)     (335,582)     (673,950)
               Reclass from property, plant & equipment (see Note 2)     -             -         15,039        15,039
               Transfer from other receivables                      20,579        40,000        28,780         89,359
               Exchange differences                                  1,583         2,491          (913)         3,161
               At 31.12.2016                                      2,521,155      489,738      2,568,745     5,579,638

               2015

               Cost
               At 1.11.2014                                       2,848,060       382,192     2,029,912      5,260,164
               Additions                                            116,621            -        409,104       525,725
               Reclass from investment property (see Note 3)             -             -           837           837
               Transfer to property development costs (see Note 12)  (255,627)     (1,849)     (232,607)     (490,083)
               Exchange differences                                      -         5,329          2,358         7,687
               At 31.12.2015                                      2,709,054       385,672     2,209,604     5,304,330
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