directors - The Lion Group

The depreciation charge is allocated as follows:
63
The Group The Company
2005 2004 2005 2004
RM’000 RM’000 RM’000 RM’000
Income statements 132,621 152,851 3,139 2,949
Inventories (Note 24) 2,670 2,178 – –
Plantation development expenditure (Note 16) 325 433 – –
14. INVESTMENT PROPERTY
135,616 155,462 3,139 2,949
Investment property of the Group in 2004 represents a commercial shopping complex erected thereon belonging
to a subsidiary company which was disposed of during the financial year.
The Group
2004
RM’000
Freehold land and building – at valuation 189,000
Revaluation deficit (62,685)
126,315
Allowance for foreseeable loss on disposal of investment property (17,000)
The revaluation deficit in 2004 arose as a result of the following:
109,315
Revaluation Tax Effect
Reserve (Note 21) Total
RM’000 RM’000 RM’000
Revaluation exercise 9,500 500 10,000
Proposed disposal 50,051 2,634 52,685
59,551 3,134 62,685
The freehold land and building was revalued as of 31 March 2004 by the Directors based on valuation carried out
by Mr P’ng Soo Theng, a registered valuer of CH Williams Talhar & Wong Sdn Bhd using the “open market value”
basis. The deficit amounting to RM9,500,000 (net of tax effect of RM500,000) was debited to revaluation reserve
account.
As reported in the previous year’s financial statements, the Group proposed to dispose of its investment property.
The carrying amount of the investment property as of 30 June 2004 exceeded the estimated cash consideration
for the said proposed disposal. Accordingly, a further revaluation deficit of RM50,051,000 (net of tax effect of
RM2,634,000) was debited to revaluation reserve account to reverse the previous revaluation surplus and an
allowance for foreseeable loss on disposal of RM17,000,000 was charged to the income statement of the Group
in 2004.
The investment property of the Group was charged as security for borrowings, LICB Bonds and USD Debts (Notes
34 to 36).