FGV Annual Report 2012

73 F i n a n c i a l S t a t e m e n t s 2 0 1 2 P e n y a t a K e w a n g a n 21 INVESTMENT IN SUBSIDIARIES (continued) (c) Acquisition of plantation estates (continued) (ix) The LLA was deemed to be effective from 1 January 2012 pursuant to the contractual arrangements of the LLA and the effects of LLA to the reorganisation reserve are as follows: RM’000 Reorganisation reserve at 1 January 2012 prior to the effects of the LLA 2,347,742 Effects of the LLA: – LLA liability (5,842,694) – Amounts due to a significant shareholder (54,690) – Deferred tax assets 1,460,673 (4,436,711) Reorganisation reserve at 1 January 2012, as restated (2,088,969) (x) The LLA is deemed to be effective from 1 January 2012 pursuant to the contractual arrangements of the LLA and the effects are as follows: RM’000 LLA liability 5,842,694 Amounts due to a significant shareholder 54,690 Deferred tax assets (1,460,673) Adjustment to reorganisation reserve 4,436,711 (d) Incorporation, accretion and dilution of interest in subsidiaries in the previous financial year ^ In February 2011, the Board of Directors of the Company approved a proposed corporate reorganisation scheme to restructure and to list the Sugar business of the Group on the Main Market of Bursa Malaysia Securities Berhad. The corporate reorganisation includes the following: (i) On 28 March 2011, a subsidiary of the Company, Felda Global Ventures Sugar Sdn Bhd (“FGVS”) disposed a 20% equity interest of Malayan Sugar Manufacturing Company Berhad (“MSM”) to Koperasi Permodalan Felda Malaysia Berhad (“KPF”) for a cash consideration of RM269,090,000. The disposal of the 20% equity interest in MSM resulted in a dilution of equity interest in MSM from 100% to 80% in the Group and is regarded as a transaction with non-controlling interest. The gain of RM80,525,000 arising from the dilution of equity interest has been recognised in retained earnings of the Group. (ii) Incorporation of MSM Malaysia Holdings Berhad (“MSMH”) on 10 March 2011 to be the listing vehicle.