69
Straco Corporation Limited • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS
12
Share capital (cont’d)
The target of the Board of Directors is for employees of the Group to hold up to 10% of the Company’s ordinary shares by 2024. Assuming that all
current outstanding share options vest and are exercised, present employees will hold approximately 3.1% of the Company’s share capital.
The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the
advantages and security afforded by a sound capital position. The Group’s target is to achieve a return on shareholders’ equity of between 10% and
15% (2013: 10% to 15%); in 2014 the return was 20.2% (2013: 21.2%).
From time to time, the Group purchases its own shares on the market under the mandate approved by the shareholders. The shares purchased are
held as treasury shares.
There were no changes in the Group’s approach to capital management during the year.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
13
Reserves
Group
Company
2014
2013
2014
2013
$
$
$
$
General reserve fund
12,281,692
12,208,457
–
–
Share option reserve
3,585,895
2,245,814
3,585,895
2,245,814
Foreign currency translation reserve
5,116,565
1,725,416
–
–
Treasury shares
(4,709,744)
(5,042,781)
(4,709,744)
(5,042,781)
Capital reserve
(266,747)
(206,416)
(266,747)
(206,416)
16,007,661
10,930,490
(1,390,596)
(3,003,383)
Movements in reserves for the Group are set out in the statements of changes in equity.
General reserve fund
The subsidiaries that are established in the PRC follow the accounting principles and relevant financial regulations of the PRC applicable to sino-foreign
joint venture enterprises in the preparation of the accounting records and statutory financial statements.
These subsidiaries are required by the articles of the joint ventures to appropriate to the general reserve part of their annual profits. The amount to be
allocated to this reserve is at the discretion of the board of directors of the joint ventures. Appropriation to the general reserve must be made before
distribution of dividends to investors.
