Page 137 - S P Setia Annual Report 2016

 

 

 

 

 

Page 137 - S P Setia Annual Report 2016
P. 137

S P Setia Berhad Group                                                                                135
          Annual Report 2016




                                                                               Notes To The Financial Statements

                                                                                  For The Financial Year Ended 31 December 2016

          4.    LAND HELD FOR PROPERTY DEVELOPMENT (CONT’D.)

              Included in additions are borrowing costs and development rights of RM74,455,000 and RM168,487,000 (2015: RM82,888,000 and
              RM171,231,000) respectively incurred during the financial year/period.

              Land held for property development of the Group included above with a carrying amount of RM2,447,479,000 (2015: RM2,357,135,000)
              have been charged to banks to partially secure the borrowings referred to in Note 23 below.


          5.    INTANGIBLE ASSET - RIGHT TO OPERATE SPICE

                                                                                                     Group
                                                                                                  2016          2015
                                                                                                RM’000        RM’000

               Cost/Net carrying amount
               At beginning of the year/period                                                    7,215         6,628
               Additions                                                                         4,418           587
               At end of the year/period                                                         11,633         7,215


              The Group has entered into a BOT agreement with Majlis Perbandaran Pulau Pinang (“MPPP”) to construct the subterranean Penang
              International Convention & Exhibition Centre (“SPICE”) and complementary retail/food and beverage outlets/offices. The terms of
              the arrangement also require the Group to improve and refurbish the existing Penang International Sports Arena indoor stadium and
              aquatic centre.

              The terms of the arrangement allow the Group to operate SPICE for up to a period of thirty years (“Concession Period”) soon after the
              completion of construction. Upon expiry of the concession arrangement, subject to the agreement between the Group and MPPP, the
              Group may be able to operate SPICE for two further terms, consisting of a period of not less than fifteen years each.

              The BOT agreement also grants the Group the right to additional density for the Group’s development project within the island of
              Pulau Pinang. Such development rights are limited to 1,500 residential units. The development rights are only exercisable during the
              Concession Period and any right not exercised by the end of the Concession Period shall lapse.


         6.   INVESTMENTS IN ASSOCIATED COMPANIES


                                                                        Group                      Company
                                                                      2016          2015          2016          2015
                                                                   RM’000         RM’000        RM’000        RM’000
               Unquoted ordinary shares, at cost                     2,272          2,272          900           900
               Capital contribution to an associated company, at cost  94,721      94,721        94,721        94,721
               Group’s share of post-acquisition profits less losses   8,499       3,622             -             -
               Group’s share of non-distributable reserves           17,753       20,974             -             -
               Impairment losses                                     (1,372)       (1,372)           -             -
                                                                   121,873        120,217        95,621        95,621
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