105
HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2014
NOTES TO THE
FINANCIAL STATEMENTS
for the financial year ended 31 December 2014
27.
OTHER RESERVES (CONT’D)
(a)
Capital reserve (cont’d)
The net proceeds received from the issue of the convertible loan were split into the liability
element and equity component, representing the fair value of the embedded option to convert
the liability into equity of the Group and the Company. Accordingly, $101,000 was credited
to capital reserve in the financial year ended 30 September 2006.
OCBC exercised its option to convert the entire convertible loan of $10 million into 31,171,147
new ordinary shares of the Company during the financial year ended 30 September 2007.
In accordance with the terms of the revised convertible loan agreement, the Company was
entitled to a certain percentage of share of profits earned by OCBC from the sale of these
conversion shares, net of certain expenses.
Subsequently OCBC sold the shares and a sum of $2,426,000 was received by the Company
as its share from the net profit earned by OCBC on the disposal of the conversion shares.
The Company has recorded the consideration received as capital reserve.
(b)
Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign 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. Movement in this
account is set out in the consolidated statement of changes in equity.
(c)
Fair value reserve
Fair value reserve represents the cumulative fair value changes, net of tax, of available for
sale financial assets until they are disposed of or impaired.
(d)
Premium paid on acquisition of non-controlling interest
Premium paid on acquisition of non-controlling interest was recognised on the difference
between the consideration and the carrying value of the additional interest in subsidiary
acquired without a change in control.
