Maxis Berhad | Annual Report 2012

Maxis Berhad // Annual Report 2012 163 FINANCIAL STATEMENTS CORPORATE GOVERNANCE ANALYSIS OF SHAREHOLDINGS OTHER INFORMATION ANNUAL GENERAL MEETING 32 RESERVES (CONTINUED) (c) Other reserves (continued) Share-based payments in relation to Share Cash flow Company Note the Listing options hedging Total RM’000 RM’000 RM’000 RM’000 2012 As at 1 January 2012 53,074 668 (208,649) (154,907) Net change in hedging: - fair value losses – – (6,864) (6,864) - reclassified to finance costs 11(b) – – 109,833 109,833 Share options granted – 2,427 – 2,427 Shares issued – (131) – (131) As at 31 December 2012 53,074 2,964 (105,680) (49,642) 2011 As at 1 January 2011 53,074 – (98,857) (45,783) Net change in hedging: - fair value losses – – (14,524) (14,524) - reclassified to finance costs 11(b) – – (95,268) (95,268) Share options granted – 668 – 668 As at 31 December 2011 53,074 668 (208,649) (154,907) The share-based payment reserve represents discount on shares issued to retail investors in relation to the Listing. The share options reserve comprises fair value share options granted less any shares issued under the ESOS. When share options are exercised, the proceeds received from the exercise of these share options together with the corresponding share options reserve, net of any directly attributable transactions costs are transferred to share capital (nominal value) and share premium. If the share options expire or lapse, the corresponding share options reserve attributable to these share options is transferred to retained earnings. The cash flow hedging reserve represents the deferred fair value losses relating to derivative financial instruments used to hedge certain borrowings of the Group and of the Company. The currency translation differences reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign entities. 33 FINANCIAL RISK MANAGEMENT The Group’s and the Company’s activities expose them to a variety of financial risks, including market risk (interest rate risk and foreign exchange risk), credit risk, liquidity risk and capital risk. The Group’s and the Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s and the Company’s financial performances. The Group and the Company use derivative financial instruments to hedge designated risk exposures of the underlying hedge items and do not enter into derivative financial instruments for speculative purposes.