Joy Bhd has been an established public listed company since 2015 that involved in manufacturing and distributing of aromatherapy products such as therapeutic grade essential oils, aromatherapy diffusers, aroma sticks, etc. Over the years, the company has made a few investments by acquiring some companies as subsidiaries and associates to strengthen its position in the market. The acquisitions of the subsidiaries and associates were as follows:

Investment in Rose Bhd
On 1 July 2018, Joy Bhd acquired 240 million ordinary shares of Rose Bhd at RM300 million when the retained profits and other equity components of Rose Bhd were RM109 million and RM45 million, respectively.
Subsequently, on 1 July 2019, Joy Bhd acquired another 30% of the ordinary shares of Rose Bhd for RM500 million and 20% of the preference shares of the company for RM70 million when the reserves of Rose Bhd were as follows:

Retained profit RM245 million
Asset revaluation reserve RM120 million
Other components of equity RM52 million

At the acquisition date, the fair value of the land and building of Rose Bhd was RM2.4 million and RM5.5 million more than their respective carrying value. No adjustment has been made in Rose Bhd accounts to incorporate these values. The remaining useful life of the building as at the date of acquisition was 25 years. As at that date, the fair value of the ordinary share of Rose Bhd was RM 2.10 each.

Investment in Haven Bhd
On 1 July 2020, Rose Bhd acquired 70% of the ordinary shares of Haven Bhd at RM420 million cash. The fair value of the ordinary shares of Haven Bhd as at that date was RM1.70 each. As at the acquisition date, Rose Bhd recognized an internally generated brand in Haven Bhd and valued it at RM15 million. It was determined that the brand has 10 years of useful life.
At the same date, Joy Bhd also acquired 10% of the ordinary shares of Haven Bhd at RM75 million. The acquisition was settled through issuance of 10 million units of ordinary shares of Joy Bhd at RM7.50 per share. This acquisition has not been recorded in any Joy Bhd’s account as at 30 June 2021.

Investment in Knight Bhd
Joy Bhd acquired 40% of the ordinary shares of Knight Bhd on 1 January 2021 at RM300 million. In May 2021, Joy Bhd sold goods costing RM10 million to Knight Bhd at an invoice price of RM12 million. Three-quarters of the goods were still in Knight Bhd’s store on 30 June 2021.
The following are the financial statements of Joy Bhd and its group for the financial year ended 30 June 2021:

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