ASSIGNMENT QUESTION GEM Bhd has decided to invest RM1,000,000 by purchasing shares in either A Bhd or B Bhd. GEM Bhd purchases raw materials from both A Bhd and B Bhd. The following information is available: A Bhd RM B Bhd RM Issued capital, fully paid Ordinary Shares RM1 each 1,900,000 2,300,000 9% Debentures 1,100,000 850,000 Accumulated Reserves as at 31 December 20x7 1,400,000 1,100,000 Current Assets 2.800,000 1,800,000 Current Liabilities 700,000 900,000 Total spending on Research and Development over 2,000,000 90,000 the last three years Net profits for: 20x4 600,000 700,000 20x5 750,000 100,000 20x6 850,000 900,000 20x7 900,000 800,000 Amount owed by GEM Bhd at 31 December 20x7 to 650,000 150,000 Current market value per share of Ordinary Shares Proportion of GEM Bhd annual consumption of raw material purchased from 1.10 0.85 45% 10% Required: Based on the above information, explain which company's shares should be purchased from each of the following perspectives. a. To gain a controlling interest ie. more than 50% of equity shareholding [4 marks] b To safeguard the regular supply of raw materials [4 marks]