On 1 October 2019, Cara acquired 80 % of Sams equity shares by means of a share exchange of two new shares in Cara for every five acquired shares in Sam. In addition, Cara issued to the shareholders of Sam a $100 10% loan note for every 2,000 shares it acquired in Sam. Cara has not recorded any of the purchase consideration, although it does have other 10% loan notes already in issue. The market value of Caras shares at 1 October 2019 was $2 each.

The summarised statements of financial position of the two companies as at 31 March 2020 are:

	Cara	Sam
	$000	$000
Assets
Non-current assets
Property, Plant and equipment	47,400	25,500
Financial asset: equity investments (notes (i) and (iv))	7,500	3,200
	54,900	28,700
Current assets
Inventory (note (ii))	20,400	8,400
Trade receivables (note (iii))	14,800	9,000
Bank	2,100	0
Total assets	37,300	17,400
	92,200	46,100
Equities and Liabilities
Equity
Equity shares of $1 each	40,000	20,000
Retained earnings/(losses)-at 1 April 2019	19,200	(4,000)
-for year ended 31 March	7,400	8,000
	66,600	24,000
Non-current liabilities
10% loan notes	8,000	0
Current liabilities
Trade payables (note (iii))	17,600	13,000
Bank overdraft	0	9,100
	25,600	22,100
	92,200	46,100

The following information is relevant:

(i) At the date of acquisition, Sam produced a draft statement of profit or loss which showed it had made a net loss after tax of $2 million at that date. Cara accepted this figure as the basis for calculating the pre- and post-acquisition split of Sams profit for the year ended 31 March 2020.

Also at the date of acquisition, Cara conducted a fair value exercise on Sams net assets which were equal to their carrying amounts (including Sams financial asset equity investments) with the exception of an item of plant which had a fair value of $3 million below its carrying amount. The plant had a remaining economic life of three years at 1 October 2019.

Caras policy is to value the non-controlling interest at fair value at the date of acquisition. For this purpose, a share price for Sam of $120 each is representative of the fair value of the shares held by the non-controlling interest.

(ii) Each month since acquisition, Caras sales to Sam were consistently $46 million. Cara had marked these up by 15% on cost. Sam had one months supply ($46 million) of these goods in inventory at 31 March 2020. Caras normal mark-up (to third party customers) is 40%

.(iii) Sam s current account balance with Cara at 31 March 2020 was $28 million, which did not agree with Caras equivalent receivable due to a payment of $900,000 made by Sam on 28 March 2020, which was not received by Cara until 3 April 2020.

(iv) The financial asset equity investments of Cara and Sam are carried at their fair values as at 1 April 2019. As at 31 March 2020, these had fair values of $71 million and $39 million respectively.

(v) There were no impairment losses within the group during the year ended 31 March 2020.

Required:

1. Prepare the consolidated statement of financial position for the Cara Group as at 31 March 2020.

Explain brief how a company may exercise control of another company other than through majority ownership of shares