2011 - Li & Fung Limited

NOTES TO THE ACCOUNTS (CONTINUED)
26 RESERVES (CONTINUED)
(b) THE COMPANY (CONTINUED)
NOTES:
(i) Capital reserve represents amount set aside from the profit of certain overseas subsidiaries of the Group in accordance with the local statutory
requirements.
(ii) The contributed surplus account of the Company represents:
(1) The difference between the nominal value of the Company’s shares issued in exchange for the issued ordinary shares of Li & Fung (B.V.I.) Limited
and the value of net assets of the underlying subsidiaries acquired as at 2 June 1992 amounting to US$14,232,000. At Group level, the amount is
reclassified into its components of reserves of the underlying subsidiaries.
(2) The difference between the issue price and the nominal value of the Company’s shares issued in connection with the acquisition of Colby in 2000
amounting to US$249,957,000. At Group level, the amount is set off against goodwill arising from the acquisition.
(iii) The Company issued shares for acquisitions of CGroup and Regatta in 2007. These Shares were held by escrow agents and valued at the respective
agreed upon issue price. During the year, certain portions of these shares amounted to approximately US$14,882,000 were released to the vendors
as the settlement of deferred considerations. At the balance sheet date, the remaining shares held by the escrow agent amounted to approximately
US$8,503,000 were deducted from total equity. The total amount of deferred consideration for the acquisition of CGroup had been finalized.
Accordingly, the remaining shares held by the escrow agent for CGroup of approximately US$6,739,000 were considered as treasury shares of the
Company as of 31 December 2011.
126 LI & FUNG LIMITED | ANNUAL REPORT 2011