7 FINANCIAL STATEMENTS 341 31. OTHER RESERVES (CONTD.) (a) Statutory reserve This reserve is maintained by the subsidiaries in Kingdom of Saudi Arabia. In accordance with the Regulation for Companies in the Kingdom of Saudi Arabia, companies are required to transfer 10% of the net income for the year to a statutory reserve until it equals to 50% of its share capital. The reserve is not available for distribution to the shareholders of the companies. (b) 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. (c) Other reserve Other reserve arose from the redemption of redeemable preference shares in prior years by a subsidiary. 32. RETIREMENT BENEFIT OBLIGATIONS Retirement benefit obligations recognised by the Group is analysed into: Group 2025 RM’000 2024 RM’000 Current 330 229 Non-current 430 718 760 947 The Group operates an unfunded, defined benefit Retirement Scheme (“the Scheme”) for its eligible employees. The Scheme is closed to new employees. Under the Scheme, eligible employees are entitled to retirement benefits on attainment of the retirement age of 60 (2024: 60), on medical incapacity or on death. The present value of defined benefit obligation was based on the actuarial valuation report by independent actuaries dated 9 January 2023. The details of the net employee benefits liability are as follows: Group 2025 RM’000 2024 RM’000 Present value of the defined benefit obligations (“PVDBO”) At 1 January 947 1,161 Defined retirement benefit obligations (165) (118) Contributions paid (22) (96) At 31 December 760 947
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