Sasbadi Annual Report 2018

ANNUAL REPORT 2018 FINANCIAL STATEMENTS 97 4. Investment properties Group Buildings RM’000 Cost At 1 September 2016/31 August 2017/1 September 2017/ 31 August 2018 2,640 Accumulated depreciation At 1 September 2016 3 Charge for the year 53 At 31 August 2017/1 September 2017 56 Charge for the year 52 At 31 August 2018 108 Carrying amounts At 1 September 2016 2,637 At 31 August 2017/1 September 2017 2,584 At 31 August 2018 2,532 Investment properties comprise of commercial buildings that are leased to third parties. Each of the lease contains an initial non-cancellable period of 3 years. Subsequent renewals are negotiated with the lessees with an average renewal period of 2 years. No contingent rents are charged. The investment properties of the Group are charged to banks as security for banking facilities granted to the Group (see Note 12). The following are recognised in profit or loss in respect of investment properties: Group 2018 2017 RM’000 RM’000 Rental income 105 104 Direct operating expenses (74) (94) Fair value information Fair value of the investment properties are categorised as follows: Group 2018 2017 Level 3 Level 3 RM’000 RM’000 Commercial buildings 2,680 2,640