I
annual report 2014
Notes to the Financial Statements
31 December 2014 (Cont’d)
88
14. RESERVES
Group
Company
2014
2013
2014
2013
Note
RMB’000
RMB’000
RMB’000
RMB’000
Non-distributable:
Statutory surplus reserve
(a)
35,034
29,463
–
–
Exchange translation reserve (b)
33,401
(17,626)
–
(8,691)
Merger deficit
(c)
(204,906)
(204,906)
–
–
Warrant reserve
(d)
47,685
25,151
47,685
25,151
Distributable:
Retained earnings
574,437
661,865
33,107
164,778
Treasury shares
(e)
(1)
(1)
(1)
(1)
485,650
493,946
80,791
181,237
(a)
Statutory surplus reserve
Pursuant to applicable PRC regulations, the subsidiaries of the Company incorporated in PRC are required
to allocate 10% of their net profit for the financial year (after offsetting prior financial year losses, if any) to the
statutory surplus reserve until it reaches 50% of their registered capital respectively. The transfer to the reserve
must be made before distribution of dividend to equity holders. The statutory surplus reserve can be utilised,
upon approval by the relevant authorities, to offset accumulated losses or to increase registered capital of
the respective subsidiaries, provided that the balance after such issue is not less than 25% of its registered
capital.
(b)
Exchange translation reserve
The exchange translation reserve represents exchange differences arising from Company’s investment in
foreign operation and monetary items which form part of the Group’s net investment in foreign operation.
(c)
Merger deficit
The merger deficit arose from the merger of XinYuanChan based on the difference between the amount
recorded as cost of merger, which comprised the share capital issued by the Company of USD30,000,000
(RMB204,915,000), and the nominal value of XinYuanChan’s share capital merged under the pooling of interest
method of accounting as follows:
Group
RMB’000
Cost of merger
204,915
Less: Share capital of XinYuanChan (HKD10,000)
(9)
Merger deficit
204,906
