On 1 April 2020, Avon Ltd acquired 60% of the equity share capital of Savoi at 9.6 million. Below are the summarised draft financial statements of both companies.

Avon and Savoi

Statements of Profit or Loss

For the year ended 31 March 2021

	$'000	$'000
Revenue	85,000	42,000
Cost of sales	(63,000)	(32,000)
Gross profit	22,000	10,000
Distribution costs	(2,000)	(2,000)
Administrative expenses	(6,000)	(3,200)
Finance costs	(300)	(400)
Profit before tax	13,700	4,400
Income tax expense	(4,700)	(1,400)
Profit for the year	9,000	3,000

Avon and Savoi

Statements of Financial Position

As at 31 March 2021

Assets	$'000	$'000
Non-current assets
Property, plant and equipment	40,600	12,600
Investment	9,600	2,000
Current assets	16,000	6,600
Total assets	66,200	21,200
Equity and liabilities
Equity shares of $1 each	10,000	4,000
Retained earnings	35,400	6,500
	45,400	10,500
Non-current liabilities
10% loan notes	12,600	6,000
Current liabilities	8,200	4,700
Total equity and liabilities	66,200	21,200

The following information is relevant.

(i) At the date of acquisition, the fair values of Savoi's property plant and equipment had a fair value of $2 million in excess of its carrying amount. It had a remaining life of five years at that date (straight-line depreciation is used). Savoi has not adjusted the carrying amount of its property plant and equipment.

(ii) Sales from Savoi to Avon in the post-acquisition period were $8 million. Savoi made a mark-up on cost of 40% on these sales. Avon had sold $5.2 million (at cost to Avon) of these goods by 31 March 2021.

(iii) Savoi's trade receivables at 31 March 2021 include $600,000 due from Avon.

(iv) Avon has a policy of accounting for any non-controlling interest at full fair value. The fair value of the non-controlling interest in Savoi at the date of acquisition was estimated to be $5.9 million.

(v) Consolidated goodwill was not impaired at 31 March 2021.

Required

(a) Prepare the consolidated statement of profit or loss for for the year ended 31 March 2021 2020. (10 marks)

(b) Prepare the consolidated statement of financial position as at 31 March 2021.