Happy Ltd has recently made some strategic investments. The finance director is concerned that he might be required to consolidate some of these investments. Details of the investment relationships are as follows: (a) Happy Ltd has a 25% interest in the issued share capital of Bliss Pty Ltd which is a company involved in the same industry as Happy Ltd. The remaining 75% of the shares are held by Bliss Pty Ltd's founding shareholders Mr and Mrs Free. Mr and Mrs Free are unfamiliar with the industry and so have given Happy Ltd four out of the six seats available on the board of directors. Happy Ltd takes the lead on all decisions but the business is closely monitored by Mr and Mrs Free who hold the other two board positions. (b) Happy Ltd has provided a substantial loan to Joy Pty Ltd but owns no shares in it. Due to the current economic climate, Joy Pty Ltd has experienced significant trading problems and failed to make its regular payments under the loan agreement. Happy Ltd has become concerned about the recoverability of the loan and has reached an agreement with the management of Joy Pty Ltd that Happy Ltd's executives will take control of the company's finances for a period of five years. An executive of Happy Ltd has been given control of Joy Pty Ltd's chequebook and authorises all cash payments. Happy Ltd has not gained any seats on Joy Pty Ltd's board of directors, which is still dominated by Joy Pty Ltd's shareholders. (c) Happy Ltd owns 50% of A Pty Ltd with the other 50% being owned by B Pty Ltd. Both companies have equal voting rights and an equal share of seats on the board of directors. By agreement with B Pty Ltd, Happy Ltd supplies the finance to the company on normal commercial terms. The loan is fully secured against the assets of the company. B Pty Ltd provides the management and entrepreneurial flair to A Pty Ltd. Under the agreement, B Pty Ltd receives a management fee in respect of the net profits of A Pty Ltd after allowing for interest payments on the Happy Ltd loan. In periods of no profits, the interest payments will still be met, but B Pty Ltd will not receive a management fee. Required: In accordance with relevant accounting standards, advise Happy Ltd's finance director in relation to the above investments whether the elements of 'control' exist and whether Happy Ltd is required to consolidate the relevant entity. Give reasons for your advice.