KUB Malaysia Berhad Annual Report 2021

16. INVESTMENT PROPERTIES (cont’d) Freehold buildings Company RM’000 Cost As at 1 January 2019/31 December 2019 3,664 Accumulated depreciation As at 1 January 2019 293 Depreciation for the year (Note 9) 73 As at 31 December 2019 366 Net carrying amount 3,298 Fair value 5,770 The following were recognised in profit or loss in respect of investment properties: Group Company 1.1.2020 to 1.1.2019 to 1.1.2020 to 1.1.2019 to 30.6.2021 31.12.2019 30.6.2021 31.12.2019 (18 months) (12 months) (18 months) (12 months) RM’000 RM’000 RM’000 RM’000 Rental income 3,123 2,312 585 700 Direct operating expenses 2,528 1,791 104 71 Valuation of investment properties Group Company 1.1.2020 to 1.1.2019 to 1.1.2020 to 1.1.2019 to 30.6.2021 31.12.2019 30.6.2021 31.12.2019 (18 months) (12 months) (18 months) (12 months) RM’000 RM’000 RM’000 RM’000 Fair value measurement using significant unobservable inputs (Level 3) Fair value of investment properties 32,940 28,500 24,650 5,770 Fair value of the investment properties was arrived at by relying on the work of independent firm of valuers, determined using open-market value based on active market prices involving identical or similar property and location adjusted, if necessary, for any difference in the nature, site facilities, size and shapes, accessibility, infrastructures available, improvements made on the site, rental income, occupancy rate, operating costs and condition of the specific assets. Investment properties pledged as security Freehold buildings of the Group and the Company with net carrying amount of RM6,294,000 and RM14,389,000 (31.12.2019: RM4,315,000 and RM3,298,000) respectively, are pledged as security for borrowings as disclosed in Note 27. NOTES TO THE FINANCIAL STATEMENTS 98 KUB MALAYSIA BERHAD