BIMB Integrated Annual Report 2017

16. INVESTMENT PROPERTIES (CONTINUED) LEASEHOLD FREEHOLD FREEHOLD LAND AND LAND BUILDING BUILDING TOTAL GROUP RM’000 RM’000 RM’000 RM’000 Depreciation At 1 January 2016 – 225 429 654 Depreciation for the year – 45 179 224 Exchange difference – – 10 10 At 31 December 2016/1 January 2017 – 270 618 888 Depreciation for the year – 45 74 119 Reclassified to property and equipment – – (253) (253) Exchange difference – – (17) (17) At 31 December 2017 – 315 422 737 Carrying amounts At 1 January 2016 1,897 2,028 10,337 14,262 At 31 December 2016 1,897 1,983 10,246 14,126 At 31 December 2017 1,897 1,938 7,033 10,868 Investment properties comprise a number of commercial properties that are leased to third parties. Each of the leases contains an initial non-cancellable period of 3 years. Subsequent renewals are negotiated with the lessee and on average renewal periods of 3 years. Fair value of the Group’s investment properties are categorised as follows: LEVEL 1 LEVEL 2 LEVEL 3 TOTAL RM’000 RM’000 RM’000 RM’000 2017 Freehold land and buildings – – 2,560 2,560 Leasehold land and buildings – – 10,120 10,120 – – 12,680 12,680 2016 Freehold land and buildings – – 2,490 2,490 Leasehold land and buildings – – 14,295 14,295 – – 16,785 16,785 The following are amounts arising from investment properties that have been recognised in profit or loss during the financial year: GROUP 2017 2016 RM’000 RM’000 Rental income (net of direct operating expenses) 4,956 4,753 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 211 Overview Value Creation Accountability Financial Statements Sustainability Performance Data Shareholders Information 21 st AGM Information Management Discussion & Analysis