KENANGA ANNUAL REPORT 2019

217 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2019 28. RESERVES Group Bank Note 2019 RM’000 2018 RM’000 2019 RM’000 2018 RM’000 Non-distributable: Capital reserve 88,938 88,938 153,863 153,863 Fair value reserve (a) 6,488 (4,120) 10,505 2,175 Exchange reserve (b) 17,789 18,783 - - Regulatory reserve (c) 25,444 25,488 25,444 25,488 ESS reserve 4,560 2,588 4,560 2,588 143,219 131,677 194,372 184,114 Distributable: Retained profits 531,811 509,888 532,338 513,675 675,030 641,565 726,710 697,789 The nature and purpose of each category of reserves are as follows: (a) Fair value reserve is in respect of unrealised fair value gains and losses on financial investments at FVOCI, net of tax. (b) The exchange reserve represents foreign exchange differences arising from the translation of the financial statements of the associated company. (c) Regulatory reserve is maintained in addition to the impairment allowance for non-impaired credit exposures that has been assessed and recognised in accordance with MFRS in compliance with BNM requirements. 29. OPERATING REVENUE Revenue of the Bank comprises all types of revenue derived from brokerage, lending, treasury, investment and trading and other banking activities undertaken by the Bank. Revenue of the Group comprises all types of revenue derived from brokerage, lending, treasury, investment, trading and investment management and other banking activities undertaken by the Group.