NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2025 20 RESERVES Group Company 2025 2024 2025 2024 $’000 $’000 $’000 $’000 Treasury shares (79,399) (79,399) (79,399) (79,399) Capital reserve 274,271 271,528 63,743 63,743 Fair value reserve 117,532 61,627 91,052 36,929 Hedging reserve (20,088) 3,216 (9,083) 6,096 Other reserves 23,520 21,702 – – Share option reserve 483 417 – – Foreign currency translation reserve (607,025) (573,581) – – Accumulated profits 7,960,817 7,440,419 5,117,508 5,141,089 7,670,111 7,145,929 5,183,821 5,168,458 The treasury shares comprise the cost of the Company’s shares held by the Group. At 31 December 2025, the reserve pertains to 13,499,600 of the Company’s shares held by the Group (2024: 13,499,600). The capital reserve comprises mainly: (a) negative goodwill on the consolidation of subsidiaries which arose prior to 1 January 2017 under the previous accounting standards adopted; (b) issue expenses; and (c) reserves arising from the Group’s acquisition of non-controlling interests in subsidiaries. The fair value reserve comprises the cumulative net change in the fair value of equity instruments designated at FVOCI. The hedging reserve comprises the effective portion of the cumulative net changes in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred (net of tax). Other reserves comprise mainly reserves set aside by certain subsidiaries in compliance with the relevant regulations in the People’s Republic of China and share of other reserves of associates and joint ventures. The share option reserve comprises share of cumulative value of employee services received for the issue of share options of a joint venture. The foreign currency translation reserve comprises mainly: (a) foreign exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from the presentation currency of the Company; (b) the gain or loss on financial instruments used to hedge the Group’s net investment in foreign operations that are determined to be effective hedges; and (c) exchange differences on monetary items which form part of the Group’s net investment in foreign operations, provided certain conditions are met. 168 | CITY DEVELOPMENTS LIMITED
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