Annual Report - Bina Puri

Notes to and Forming Part of the Financial Statements (Cont’d)5. INVESTMENT PROPERTIES (Cont’d)The Group has developed certain criteria based on FRS 140 in making judgement whether a property qualified as aninvestment property. Investment property is a property held to earn rentals or for capital appreciation of for both. Inmaking judgement, the Group considers whether a property generates cash flows largely independent of other assetsheld by the Group. Owner-occupied properties generate cash flows that are attributable not only to the properties, butalso other assets and in the production and supply of goods and services. Judgement is also made on an individualproperty basis to determine whether ancillary services are so significant that the property does not qualify as aninvestment property.The fair value of the investment properties at the end of the financial year was determined by thedirectors based on various studies conducted which reasonably reflect market conditions of similar properties at thebalance sheet date.6. INVESTMENTS IN SUBSIDIARIES2007 2006RM’000 RM’000Unquoted shares- at cost 40,918 40,829- at valuation 4,264 4,26445,182 45,093Less:Allowance for diminution in value 4,444 4,47440,738 40,619The unquoted shares stated at valuation were revalued by the directors in 1994 based on the value of the underlyingnet tangible assets of the subsidiary concerned.The 1994 valuation was a one-off exercise. It is not the Group’s policy to carry out regular revaluations of itsinvestments in subsidiaries, and accordingly, the carrying amount of the revalued investment has been retained on thebasis of this one-off revaluation as surrogate cost.The subsidiaries, all of which are incorporated in Malaysia except where indicated, are as follows:Gross equityinterestSubsidiaries of the Company 2007 2006 Principal activities% %Bina Puri Sdn Bhd 100 100 Contractor of earthworks, building and roadconstructionAksi Bina Puri Sdn Bhd 70 70 Property developerMaskimi Sdn Bhd 100 100 Investment holding and contractors ofearthworks, building and road constructionBina Puri Plantation Sdn Bhd 100 100 Inactive*Bina Puri Infrastructure Pte Ltd 100 100 Contractor of road construction(Incorporated in India)KL-Kuala Selangor Expressway Berhad 60 60 Builder of an expresswayBINA PURI HOLDINGS BHDAnnual Report 200767