Annual Report - Ahli United Bank

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Annual Report - Ahli United Bank

Notes to theConsolidated Financial Statements (Contd.)20 SHARE CAPITAL (continued)(h) Upon conversion of the remaining outstanding Class B Preference Shares, the resultant ordinary shares totalling to 52.7 million shares,including the effect of ordinary bonus share issues to 31 December 2009 will rank pari-passu with the ordinary shares in issue.21 RESERVESa) Share premiumThe share premium arising on the issue of ordinary and preference shares is not distributable except in such circumstances asstipulated in the Bahrain Commercial Companies Law.b) Capital reserveAs required by the Bahrain Commercial Companies Law, any profit on the sale of treasury stock is transferred to a capital reserve.The reserve is not distributable except in such circumstances as stipulated in the Bahrain Commercial Companies Law.c) Statutory reserveAs required by the Bahrain Commercial Companies Law and the Bank’s Articles of Association, 10% of the net profit is transferred toa statutory reserve on an annual basis. The Bank may resolve to discontinue such transfers when the reserve totals 50% of the paidup capital. The reserve is not distributable except in such circumstances as stipulated in the Bahrain Commercial Companies Law.d) Property revaluation reserveThe revaluation reserve arising on revaluation of freehold land is not distributable except in such circumstances as stipulated inthe Bahrain Commercial Companies Law.e) Foreign exchange translation reserveIt comprises of translation effects arising on consolidation of subsidiaries, non-monetary equity investments and investments inassociates.f) Available-for-sale reserveThis reserve represents changes in the fair values of available-for-sale investments.g) Cash flow hedge reserveIt represents the effective portion of gain or loss on the Group’s cash flow hedging instruments.h) Employee share purchase plan reserveThe Group operates an employees’ share purchase plan (ESPP) for certain eligible employees through the issuance of Non-Cumulative Fully Convertible Class B Preference Shares. The difference between the issue price and the fair value of the shares atthe grant date is amortised over the vesting period in the consolidated statement of income with a corresponding effect to ESPPreserve under consolidated statement of changes in equity. Upon conversion of these shares, the fair value reserve is transferredto share premium.76 AUB Annual Report 2009

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