2018 UEM Edgenta Annual Report

34. CAPITAL AND OTHER MERGER RESERVE The acquisitions of Opus Group Berhad (“Opus”) and Edgenta PROPEL Berhad in prior years, which was accounted for using the pooling of interest method, gave rise to the following: (a) Capital reserve This reserve represents the excess of issue price of the Company’s shares over the par value in accordance with Section 60(4)(a) of the Companies Act, 1965. This reserve had been partially set off against the merger deficit reserve in prior year for the purpose of presentation in the financial statements of the Group. (b) Other merger reserve This reserve represents the excess of fair value of the Company’s shares at the acquisition date over the issue price. This reserve had been fully set off against the merger deficit reserve for the purpose of presentation in the financial statements of the Group. 35. OTHER RESERVES Foreign currency Put option Statutory translation Other reserve reserve reserve reserve Total RM’000 RM’000 RM’000 RM’000 RM’000 (Note a) (Note b) (Note c) (Note d) Group At 1 January 2017 – 279 68,707 9,163 78,149 Foreign currency translation – – (76,317) – (76,317) Put option granted to non-controlling interests of a subsidiary (14,635) – – – (14,635) At 31 December 2017 (14,635) 279 (7,610) 9,163 (12,803) Foreign currency translation – – (457) – (457) Put option granted to non-controlling interests of a subsidiary 12,242 – – – 12,242 At 31 December 2018 (2,393) 279 (8,067) 9,163 (1,018) (a) Put option reserve This relates to the put option issued to the non-controlling interests over the shares of a subsidiary of the Group. For the purpose of presentation in the financial statements, the put option reserve is shown net of the related non-controlling interests at each reporting date as if it was acquired at that date. The unexercised put option will expire on 31 March 2022. (b) 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. (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) Other reserve Other reserve arose from the redemption of redeemable preference shares in the prior years by a subsidiary. Financial Review Stakeholder Information AGM Information 229 Governance Review of Sustainability Activities