59
Annual Report 2015
TEHO INTERNATIONAL INC LTD.
4 PROPERTY, PLANT AND EQUIPMENT (CONT’D)
The leasehold buildings are pledged as security for banking facilities (Note 15).
The depreciation expense is charged to profit or loss and included in other operating
expenses.
For each revalued class of property, plant and equipment, the carrying amount that would
have been recognised had the assets been carried under the cost model is as follows:
Group
2015
2014
$
$
Leasehold buildings:
Cost
12,685,713 8,885,513
Accumulated depreciation
(4,426,215) (4,294,555)
Net book value
8,259,498 4,590,958
Independent valuers were sourced to determine the fair values of the Group’s leasehold
properties at least once every three years based on the properties’ highest and best use.
As at 30 June 2014 and 2015, the fair values of the leasehold warehouses and leasehold
ramp-up factory unit were based on valuations carried out by an independent valuer.
As the purchase of the leasehold properties located at Vertex from third parties were
completed in June 2015, management considers the carrying values of the properties to
approximate their fair values as at 30 June 2015.
4 PROPERTY, PLANT AND EQUIPMENT (CONT’D)
Measurement of fair values
(i) Fair value hierarchy
The fair value measurement for the leasehold buildings has been categorised as Level
2 fair value based on the inputs to the valuation techniques used (see Note 2.4).
(ii) Level 2 fair value
A description of the valuation techniques and the significant other observable inputs
used in the fair value measurement are as follows:
Valuation technique for recurring fair
value measurements:
Comparison with market evidence of
recent transaction prices for similar
properties.
Significant observable inputs and range
(weighted average):
Price per square foot (psf):
$271 to $607 psf ($303) (2014: $263 to
$290 psf ($267))
Sensitivity on management’s estimates –
10% variation from estimate:
Increase/(Decrease) in price psf will
increase/(decrease) equity, net of tax, by
$2,954,800 (2014: $2,469,250).
NOTES TO THE
FINANCIAL STATEMENTS
Year ended 30 June 2015
