ESR AR 2019 EN

Notes to the Consolidated Financial Statements 31 December 2019 225 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ESR Annual Report 2019 44. RESERVES (continued) (b) The Company (continued) Share premium Share option reserve Exchange fluctuation reserve Accumulated losses Investment reserve (non-recycling) Total USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 As at 1 January 2018 972,735 12,345 494 (101,472) – 884,102 Loss for the year – – – (43,378) – (43,378) Change in fair value of financial assets at fair value through other comprehensive income – – – – 6,607 6,607 Share of other comprehensive loss of joint ventures – – (8,798) – – (8,798) Total comprehensive loss for the year – – (8,798) (43,378) 6,607 (45,569) Issue of shares 370,959 (10,161) – – – 360,798 Transferred from financial liabilities 26,704 – – – – 26,704 Profit attributable to holders of perpetual capital securities – – – (8,192) – (8,192) Equity-settled share option arrangement – 23,157 – – – 23,157 As at 31 December 2018 1,370,398 25,341 (8,304) (153,042) 6,607 1,241,000 45. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Group’s principal financial instruments comprise bank and other borrowings, financial liabilities included in trade and other payables, cash and bank balances, trade receivables, financial assets included in prepayments, other receivables and other assets, financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income, and financial assets included in other non-current assets. The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various financial assets such as trade receivables, cash and short-term deposits, which arose directly from its operations. The main risks faced by the Group are interest rate risk, foreign currency risk, credit risk, liquidity risk and equity price risk. The Group does not hold or issue derivative financial instruments either for hedging or for trading purposes. The directors reviews and agrees policies for managing each of the risks. Interest rate risk The Group’s exposure to the risk of changes in interest rates relates primarily to its interest- bearing bank and other borrowings. The Group does not use derivative financial instruments to manage its interest rate risk. The interest rates and terms of repayments of the borrowings are disclosed in note 26.