PRG Holdings Berhad Annual Report 2017

• Annual Report 2017 129 19. RESERVES Group Company 2017 2016 2017 2016 Note RM’000 RM’000 RM’000 RM’000 Non-distributable: Share premium (a) - 1,404 - 1,404 Warrants reserve (b) 3,851 4,022 3,851 4,022 Exchange translation reserve (c) (3,081) 26 - - 770 5,452 3,851 5,426 Distributable: Retained earnings 57,367 43,982 60,128 26,027 58,137 49,434 63,979 31,453 (a) Share premium Group and Company 2017 2016 Note RM’000 RM’000 Balance as at 1 January 1,404 68 Transfer to share capital pursuant to Companies Act 2016 18(e) (1,404) - Arising from issuance of new ordinary shares pursuant to exercise of warrants - 1,336 Balance as at 31 December - 1,404 (b) Warrants reserve Warrants reserve arose from a renounceable rights issue of 54,320,100 new ordinary shares of RM0.50 each together with 54,320,100 free new detachable warrants in the previous financial year. The fair value of RM0.08 per Warrant is determined using the Black Scholes pricing model based on the following key assumptions: Share price RM0.73 per Share Exercise price RM0.75 per Warrant Tenure 5 years Interest rate 4.25% Expected volatility of the Company’s share price 16.23% In the previous financial year, the Company undertook a share split exercise involving the subdivision of every one (1) existing Warrant with an exercise price of RM0.75 each into two (2) Warrants with an exercise price of RM0.375 each. Consequently, the fair value had been adjusted to RM0.04 per Warrant. (c) Exchange translation reserve The exchange translation reserve is used to record foreign currency 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. N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 3 1 D E C E M B E R 2 0 1 7 ( C O N T ’ D )