NOTES TO FINANCIAL STATEMENTS
30 June 2015
Annual Report 2015
Karin Technology Holdings Limited
87
12. INVESTMENT PROPERTIES
Group
Note
2015
Carrying amount at beginning of financial year
23,480
23,295
Net gain/(loss) from a fair value adjustment
6
(202)
Exchange realignment
155
71
Carrying amount at end of financial year
23,433
Notes
:
(a)
The Group’s investment properties are commercial properties situated in Mainland China and are held under medium
term leases. They are leased to third parties under operating leases, further summary details of which are included in
note 30(a) to the financial statements.
(b)
The Group’s investment properties were revalued on 30 June 2015 by BMI Appraisals Limited, independent professionally
qualified valuers, using a direct comparison approach. Each year, the Group’s senior management decide which
external valuer to be appointed for the external valuations of the Group’s properties. Selection criteria include market
knowledge, independence and whether professional standards are maintained. The Group’s financial controller has on-
going discussions with the valuer on the valuation assumptions and valuation results when the valuation is performed.
Fair value hierarchy
At 30 June 2015, fair value measurements of all of the Group’s investment properties are using significant unobservable
inputs (Level 3) as defined in IFRS 13. During the year, there were no transfers of fair value measurements between Level
1 (quoted prices in active markets) and Level 2 (significant observable inputs) and no transfers into or out of Level 3.
Below is a summary of the valuation techniques used and the key inputs to the valuation of the Group’s investment
properties:
Valuation techniques
Significant
unobservable inputs
Input/range of input
(weighted average)
2015
Commercial properties
Direct comparison method
and income capitalisation
method
(i) Capitalisation rate (%)
4.2 to 4.7%
UP
(ii) Prevailing market
rents
RMB108 to
RMB140 per s.q.m
RMB122 to
3.# QFS T R N
(iii) Price per square metre
(s.q.m)
RMB20,000 to
RMB22,500 per
s.q.m
RMB20,000 to
RMB26,000 per s.q.m
