Note 1 – Alpha’s investment in Beta
On 1 April 2012, Alpha acquired 90 million shares in Beta by means of a share exchange. The terms of the business combination were as follows:

– Alpha issued eight shares for every nine shares acquired in Beta. On 1 April 2012, the market value of an Alpha share was $2·80.

– Alpha will make a further cash payment to the former shareholders of Beta on 30 June 2015. This payment will be based on the adjusted profits of Beta for the three-year period to 31 March 2015. On 1 April 2012, the fair value of this additional payment was estimated at $25 million. This estimate had increased to $28 million by 31 March 2013 due to changes in circumstances since the date of acquisition.

– Neither component of the investment in Beta has been recorded in the draft financial statements of Alpha presented above.

It is the group policy to value the non-controlling interest in subsidiaries at the date of acquisition at fair value. The market value of an equity share in Beta at 1 April 2012 can be used for this purpose. On 1 April 2012, the market value of a Beta share was $2·60.

On 1 April 2012, the individual financial statements of Beta showed the following reserves balances:

– Retained earnings $86 million. 
– Other components of equity $2·4 million.

The directors of Alpha carried out a fair value exercise to measure the identifiable assets and liabilities of Beta at 1 April 2012. The following matters emerged:

– Property having a carrying value of $140 million (depreciable component $80 million) had an estimated market value of $160 million (depreciable component $92 million). The estimated future economic life of the depreciable component at 1 April 2012 was 16 years and this estimate remains valid.

– Plant and equipment having a carrying value of $111 million had an estimated market value of $120 million. The estimated future economic life of the plant and equipment at 1 April 2012 was three years and this estimate remains valid. Beta has not disposed of any of this plant and equipment since 1 April 2012.

– Intangible assets with an estimated market value of $8 million had not been recognised in the individual financial statements of Beta. The estimated future economic lives of these intangible assets at 1 April 2012 was four years.

– The fair value adjustments have not been reflected in the individual financial statements of Beta. In the consolidated financial statements, the fair value adjustments will be  regarded as temporary differences for the purposes of computing deferred tax. The rate of deferred tax to apply to temporary differences is 20%.

No impairment of the goodwill on acquisition of Beta has occurred since 1 April 2012.

Note 2 – Alpha’s investment in Gamma
On 1 April 2012, Alpha acquired 40 million shares in Gamma for a cash payment of $1·85 per share and debited $74 million to investments in its own statement of financial position. This enabled Alpha to exercise significant influence over Gamma but not to control Gamma. In its own financial statements, Alpha treated the investment in Gamma as a financial asset and made an election to measure it at fair value through other comprehensive income.

On 1 April 2012, the individual financial statements of Gamma showed the following reserves balances:

– Retained earnings $66 million.
– Other components of equity $1·2 million.

On 1 April 2012, there were no material differences between the carrying values of the net assets of Gamma in the individual financial statements and the fair values of those net assets.

On 31 March 2013, the fair value of Alpha’s investment in Gamma was estimated at $78·5 million and this is the balance recorded in Alpha’s individual financial statements. On 31 March 2013, Alpha credited $4·5 million to other components of equity. No deferred tax was recognised when making this entry.

In the consolidated financial statements you can ignore deferred tax when measuring the investment in Gamma.

Note 3 – Investments by Beta and Gamma 
These investments are financial assets that are measured at fair value through other comprehensive income and have been correctly treated by Beta and Gamma. The other components of equity of Beta and Gamma relate entirely to these investments.

Note 4 – Inter-company sale of inventories 
The inventories of Beta and Gamma at 31 March 2013 included components produced by Alpha. The selling price of the components included in the inventories of Beta was $14 million. The selling price of the components included in the inventories of Gamma was $12 million. Alpha applied a mark-up of one-third of its production cost in arriving at the sales price of these components. You can ignore deferred tax when making any adjustments due to the information in this note.

Note 5 – Trade receivables and payables  
The trade receivables of Alpha included $9 million receivable from Beta and $7·5 million receivable from Gamma in respect of the purchase of components (see Note 4). The trade payables of Beta and Gamma included equivalent amounts payable to Alpha.

Note 6 – Share based payment  
On 1 April 2011, Alpha granted share options to senior executives that are due to vest on 31 March 2014. The maximum number of options that can vest is 10 million. However, there are vesting conditions that are service conditions. Each option allows the holder to purchase a share in Alpha for $2·50. Further details are as follows:

On 31 March 2012, the directors of Alpha correctly credited other components of equity and debited profit or loss with $1,104,000 in respect of these share options. No entries have been made in the financial statements since then in respect of the options.

Ignore any deferred tax implications of the granting of these share options.

Note 7 – Provision 
On 1 October 2011, Alpha entered into a 10-year lease of office premises at an annual rental of $20 million. This lease was correctly classified as an operating lease and the rentals appropriately charged to profit or loss.

On 1 October 2011, Alpha began carrying out alterations to the premises. These alterations were completed on 31 March 2012 at a total cost of $18 million. Alpha included $18 million in its property, plant and equipment at 31 March 2012 and charged depreciation in the current year based on a 9½ year useful economic life.

The terms of the lease require Alpha to vacate the premises on 30 September 2021 and leave them in the same condition as they were on 1 October 2011. The directors estimate that this will require restoration expenditure of $14,250,000 on 30 September 2021. Accordingly, the directors recognised a provision of $1,500,000 ($14,250,000/9·5) at 31 March 2013. The directors debited $1,500,000 to profit or loss when recognising this provision.

A relevant discount rate to use in any discounting calculations is 8% per annum. The present value of $1 payable in 9½ years at this discount rate is 48 cents.

Note 8 – Long-term borrowings  
The long-term borrowings of Alpha include $20 million that was received from a consortium of banks on 1 April 2012. The loan does not carry any interest but $30·6 million is repayable on 31 March 2017. Alpha incurred incremental costs of $1 million in arranging the loan which were charged to profit or loss in the year ended 31 March 2013. The effective annual rate of interest applicable to this loan is 10%.

Required: 
Prepare the consolidated statement of financial position of Alpha at 31 March 2013. Note: You should show all workings to the nearest $’000.