Notes to the
for the year ended 31 December 2016
34. OTHER RESERVES (CONT’D.)
(a) Statutory reserve
In accordance with the United Arab Emirates (“UAE”) Commercial Companies Law, 10% of profit for each year from
a Limited Liability Company incorporated in the UAE is transferred to a legal reserve until such time as the reserve
equalled 50% of the paid-up capital. Faber L.L.C. (“FLLC”) has resolved to discontinue such annual transfers since
the reserve has equalled to 50% of its share capital. This reserve is not available for distribution except as stipulated
by UAE law.
(b) Share based payment reserve
In 2008, Opus JC, a subsidiary of the Company, established the Opus IC Employee Share Ownership Plan. The
Share Ownership Plan established a framework under which Opus IC could, from time to time, offer selected
employees the opportunity to acquire shares in Opus JC. The Share Ownership Plan was wound up during the
previous financial year.
(c) Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the
financial statements of foreign operations whose functional currencies are different from that of the Group’s
presentation currency. It is also used to record the exchange differences arising from monetary items which form
part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the
functional currency of the reporting entity or the foreign operation.
(d) Capital redemption reserve
Capital redemption reserve arises from the redemption of redeemable preference shares in the prior years by a
subsidiary in accordance with Section 61(5) of Companies Act, 1965.
35. RETAINED EARNINGS
The Company may distribute dividends out of its entire retained earnings under the single tier system.
36. OPERATING LEASE COMMITMENTS
The Group has entered into non-cancellable operating lease agreements for the use of premises and certain plant and
machineries. These leases have an average tenure of between 3 and 5 years with no renewal or purchase option
included in the contracts.
The Group also leases various plant and machinery under cancellable operating lease agreements. The Group is
required to give a six-month notice for the termination of those agreements.