93 On 7 March 2012, the Company completed an offering of 3,000,000 previously unissued ordinary shares at £0.10 per share to its employee benefit  trust (“Trust”) at a price of €0.80 per share, to make such shares available for the exercise of stock option rights that had previously been granted to  employees. The amount of authorized shares at 31 December 2012 was 104,311,860 (2011: 104,311,860) with a par value of £0.10 per share, of which  68,068,930 (2011: 65,068,930) shares were issued and outstanding.  Dialog’s stock is issued in the form of registered shares. All shares are fully paid.  The account comprises additional paid-in capital in connection with the issue of shares. With an amount of US$36,579,000 the increase in 2012 mainly  relates to the conversion rights of the convertible bond which was launched in 2012 as described in note 18 and which were treated as equity  instruments in accordance with IAS 32. 19. Shareholders’ equity and other reserves  Capital increase  Ordinary shares  Amount of shares US$000 At 1 January 2011/2012  65,068,930 12,380 Issued on 7 March 2012  3,000,000 472 At 31 December 2012  68,068,930 12,852 Additional paid-in capital  Retained earnings  Other reserves  Currency translation reserve  Cash flow hedge reserve  Retained earnings comprise losses and non-distributed earnings of consolidated Group companies. The currency translation reserve is used to record exchange differences arising from the translation of the financial statements of subsidiaries and  branches whose functional currency is not the US$. At 31 December 2012 and 2011, the negative currency translation reserve was US$1,964,000  and US$1,879,000 respectively.  The cash flow hedge reserve is used to record the portion of the gain or loss on a hedging instrument that is determined to be a highly effective cash  flow hedge. At 31 December 2012 the positive cash flow hedge reserve was US$1,537,000 compared to a negative cash flow hedge reserve of US$- 6,372,000 at 31 December 2011. Please refer to note 25 for the amounts reclassified from other comprehensive income and recognized in profit and  loss statement.  The related tax effects allocated to each component of other reserves for the years ended 31 December 2012 and 2011 are as follows:  2012 2011 Pre-tax US$000 Tax effect US$000 Net US$000 Pre-tax  US$000  Tax effect US$000 Net US$000 Currency translation adjustment  (322) 237 (85) (92) (70) (162) Hedges  8,871 (962) 7,909 (6,825) 384 (6,441) Other comprehensive income (loss)  8,549 (725) 7,824 (6,917) 314 (6,603)