Glanbia plcAnnual Report 2011Financial statementswww.glanbia.com22. Other reservesCapitalreserve?'000Mergerreserve?'000Currencyreserve?'000Hedgingreserve?'000Availablefor salefinancialassetreserve?'000Ownshares?'000Sharebasedpaymentreserve?'000Total?'000(note a)(note b)(note c)(note d)(note e)(note f)(note g)Balance at 2 January 20102,825 113,148 380(14,601) 6,371(1,899)2,448 108,672Currency translation differences-- 20,169---- 20,169Revaluation of interest rate swaps- loss in year---(4,180)---(4,180)Foreign exchange contracts- gain in year--- 38--- 38Transfers to income statement:- Foreign exchange contracts- loss in year--- 743--- 743Foreign commodity contracts- gain in year---(202)---(202)- Interest rate swaps - loss in year--- 7,613--- 7,613Revaluation of forward commoditycontracts - loss in year---(76)---(76)Revaluation of available for salefinancial assets - loss in year----(5,381)--(5,381)Deferred tax on fair value movements--- 922 1,345-- 2,267Cost of share based payments------ 2,937 2,937Transfer on exercise, vesting orexpiry of share based payments----- 283(656)(373)Balance at 1 January 2011 2,825 113,148 20,549(9,743) 2,335(1,616) 4,729 132,227Currency translation differences-- 18,538---- 18,538Net investment hedge-- 230---- 230Revaluation of interest rate swaps- loss in year---(1,343)---(1,343)Foreign exchange contracts- loss in year---(146)---(146)Transfers to income statement:Foreign exchange contracts- gain in year---(38)---(38)Forward commodity contracts- loss in year--- 77--- 77Interest rate swaps- loss in year--- 4,876--- 4,876Revaluation of forward commodity contracts- gain in year--- 137--- 137Revaluation of available for sale financialassets - loss in year----(1,484)--(1,484)Deferred tax on fair value movements--- 928 286-- 1,214Cost of share based payments------ 2,388 2,388Transfer on exercise, vesting orexpiry of share based payments----- 917(1,974)(1,057)Purchase of own shares----(2,075)-(2,075)Balance at 31 December 20112,825 113,148 39,317(5,252) 1,137(2,774) 5,143 153,544

Glanbia plcAnnual Report 2011Financial statementswww.glanbia.comNote 22 (a): Capital reserve2011Company?'0002011Group?'0002010Company?'0002010Group?'000At the beginning and the end of the year 4,227 2,825 4,227 2,825The capital reserve comprises of a capital redemption reserve and a capital reserve which arose due to the re-nominalisationof the Company's share capital on conversion to the euro.2011?'0002010?'000Share premium - representing excess of fair value over nominal value of ordinary sharesissued in connection with the merger of Avonmore Foods plc and Waterford Foods plc 355,271 355,271Merger adjustment1(327,085)(327,085)Share premium and other reserves relating to nominal value of shares in Waterford Foods plc 84,962 84,962 113,148 113,148Note 22 (b): Merger reserve1 The merger adjustment represents the difference between the nominal value of the issued share capital of Waterford Foods plc and the fair value of the shares issued by Avonmore Foods plc (now named Glanbia plc) in 1997.Note 22 (c): Currency reserveThe currency reserve reflects the foreign exchange gains and losses that form part of the net investment in foreign operations.See note 32 - derivative financial instruments for further details. In addition, where Group companies have a functionalcurrency different from the presentation currency, their assets and liabilities are translated at the closing rate at the reportingdate, income and expenses in the income statement are translated at the average rate for the year and resulting exchangedifferences are taken to the currency reserve within equity.Note 22 (d): Hedging reserveThe hedging reserve reflects the effective portion of changes in the fair value of derivatives that are designated and qualify ascash flow hedges. Amounts accumulated in the hedging reserve are recycled to the income statement in the periods whenthe hedged item affects income or expense.Note 22 (e): Available for sale financial asset reserveUnrealised gains and losses arising from changes in the fair value of available for sale financial assets are recognised in theavailable for sale financial asset reserve. When such available for sale financial assets are sold or impaired, the accumulatedfair value adjustments are recycled to the income statement.Note 22 (f): Own sharesThe amount included as own shares relates to 740,576 (2010: 485,304) ordinary shares in Glanbia plc held by an EmployeeShare Trust which was established in May 2002 to operate in connection with the Company's Saving Related Share OptionScheme ('Sharesave Scheme'). The trustee of the Employee Share Trust is Halifax EES Trustees International Limited; aJersey based trustee services company.The shares included in the Employee Share Trust at 31 December 2011 cost ?2.8 million (2010: ?1.6 million) and had amarket value of ?3.4 million (2010: ?1.8 million). The dividend rights in respect of these shares have been waived, save 0.001pence per share.Shares purchased under the 2007 LTIP scheme and the 2008 LTIP scheme are deemed to be own shares in accordancewith IAS 32 - Financial Instruments: Presentation.Note 22 (g): Share based payment reserveThe share based payment reserve reflects charges relating to granting of both shares and options under the 2002 LTIP,2007 LTIP and 2008 LTIP schemes.2011Company?'0002011Group?'0002010Company?'0002010Group?'000At the beginning of the year 4,729 4,729 2,217 2,448Transfer of reserves between Group companies-- 231-Transfer on exercise, vesting or expiry of share based payments(1,974)(1,974)(656)(656)Cost of share based payments 2,388 2,388 2,937 2,937At the end of the year 5,143 5,143 4,729 4,729