continued - The Lion Group

28. RESERVES (continued)
The nature and purpose of each category of reserves are as follows:
(a) Asset Revaluation Reserve
The asset revaluation reserve is used to record increases in the fair value of property, plant and equipment
and decreases to the extent that such decrease relates to an increase on the same asset previously recognised
in equity.
(b) Capital Reserve
Capital reserve comprises mainly share of post acquisition reserves of associates and profits recorded by a
subsidiary of the Company which was incorporated to manage the Ringgit Malaysia debts.
(c) Share Option Reserve
The share option reserve represents the equity-settled share options granted to employees. This reserve is
made up of the cumulative value of services received from employees recorded on grant of share options,
net of the amount reclassified to share premium and capital reserve for options exercised and lapsed.
(d) 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.
(e) Equity Component of RCSLS
This reserve represents the fair value of the equity component of RCSLS, net of deferred tax liabilities, as
determined on the date of issue.
(f) Warrant Reserve
Warrant reserve is pertaining to the issuance of 36,734,534 warrants as consideration for the conditional
take-over offer of the remaining ordinary shares of RM1.00 each in ACB (“ACB Share”) on the basis of one
new warrant of the Company (“LCB Warrant”) for every ten ACB Shares held.
The details of LCB Warrants are as follows:
(i) Each warrant entitles its registered holder to subscribe for one new LCB Share at the subscription
price of RM1.00. The LCB Warrants may be exercised at any time commencing from 21 April 2009
but not later than 20 April 2019 (both dates inclusive).
(ii) The new LCB Shares to be issued pursuant to the exercise of the LCB Warrant will upon allotment and
issue, rank pari passu in all respects with the then existing issued and paid-up LCB Shares, save that
they will not be entitled to any dividend, right, allotment and/or other distribution, the entitlement
date of which is on or before the new LCB Shares are credited into the securities account of the
holder maintained with Bursa Malaysia Depository Sdn Bhd (“Bursa Depository”).
(iii) No LCB Warrants were converted into new LCB Shares during the financial year. As of the balance
sheet date, the total number of warrants which remained unexercised amounted to 36,734,534
warrants. Any warrant which has not been exercised at the date of maturity will lapse and cease to
be valid for any purpose.
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