Annual Report - AWB Limited

Notes to and forming part of the financial statements for the year ended 30 September 2008 AWB LIMITEDConsolidatedAWB Limited2008 2007 2008 2007$’000 $’000 $’000 $’00020. Reserves and Retained Profits(a) ReservesUnderwriting loss reserve 15,000 15,000 15,000 15,000Legal reserve 3,262 1,154 - -Foreign currency translation reserve (15,533) (32,053) - -Share plan reserve 8,983 5,593 8,983 5,593Available for sale revaluation reserve 2,311 9,948 810 4,73114,023 (358) 24,793 25,324Movement in legal reserve:Balance at the beginning of the year 1,154 899 - -Transfer from retained profits 2,108 255 - -Balance at the end of the year 3,262 1,154 - -Movement in foreign currency translation reserve:Balance at the beginning of the year (32,053) (12,657) - -Net translation adjustment 16,520 (19,396) - -Balance at the end of the year (15,533) (32,053) - -Movement in share plan reserve:Balance at the beginning of the year 5,593 4,670 5,593 4,670Share based payments and employee share issue 3,390 923 3,390 923Balance at the end of the year 8,983 5,593 8,983 5,593Movement in available for sale revaluation reserve:Balance at the beginning of the year 9,948 4,195 4,731 2,273Transfer to profit - gain realised on sale (6,561) - (3,592) -Unrealised gains/(losses) on revaluation of assets (1,076) 5,753 (329) 2,458Balance at the end of the year 2,311 9,948 810 4,731Nature and purpose of reservesUnderwriting loss reserveThe underwriting loss reserve was established to set aside a portion of retained profits in recognition of the underwriting risk contained withincertain financial products offered by AWB.Foreign currency translation reserveThe foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements andresults of foreign subsidiaries, joint ventures and associates.Legal ReserveAccording to the Swiss Federal Code of Obligations and the AWB (Geneva) SA’s articles of incorporation, 5% of the net profit of each year is to beappropriated to the general legal reserve until this is equivalent to 20% of the Company’s share capital. In addition, an amount equal to 10% ofsuch part of any dividend, which may be declared or paid in excess of a 5% dividend, is required to be transferred to the general legal reserve.The general legal reserve up to 50% of the share capital is not available for distribution.Performance rights reserveThe performance rights reserve is used to record the cost of equity settled transactions over the period in which performance conditions arefulfilled in relation to the Performance Rights Plan and the Employee Share Plan.Available for sale revaluation reserveGains or losses arising on the revaluation of available for sale assets are recorded in the available for sale revaluation reserve.www.awb.com.au 85