Annual Reports & Accounts 2011

30 Merger reserve

	2011 USD’000		2010 USD’000
Nominal value of shares of the Company	18,654		18,654
Share capital of LEL	(82	)	(82	)
Merger reserve on acquisition of LEL	18,572		18,572
Purchase consideration relating to acquisition of Inspec	4,000		4,000
Share capital of Inspec	(150	)	(150	)
Merger reserve on acquisition of Inspec	3,850		3,850
Total	22,422		22,422

On 11 September 2006, LEL acquired 100% of the legal and beneficial ownership of Inspec from LHL for a consideration of USD 4m. This acquisition has been accounted for using the uniting of interests method and the difference between the purchase consideration (USD 4m) and the share capital of Inspec (USD 150,000) has been recorded in the Merger reserve.

On 25 September 2006, the Company entered into a share for share exchange agreement with LEL and LHL under which it acquired 100% of the 49,003 shares of LEL from LHL in consideration for the issue to LHL of 200,000,000 shares of the Company. This acquisition has been accounted for using the uniting of interests method and the difference between the nominal value of shares issued by the Company (USD 18,654,000) and the nominal value of LEL shares acquired (USD 82,000) has been recorded in the Merger reserve.