During the year ended 30 June 2020, Starhub Ltd acquired the following investments in shares issued by other companies:

M3 Ltd	$480 000 (42% of issued capital)
Republic Ltd	$680 000 (35% of issued capital)

Starhub Ltd is unsure how to account for these investments and asked you for some professional advice.

Specifically, Starhub Ltd is concerned that it may need to prepare consolidated financial statements under AASB 10. The company provided the following information about the two investee companies:

M3 Ltd

• The remaining shares in M3 Ltd are owned by: o two sisters who hold 10% of shares respectively and o a diverse group of investors who each hold a small parcel of shares.

• Historically, only a small number of the shareholders attend the general meetings or question the actions of the directors.

• Starhub Ltd has nominated three new directors and expects that they will be appointed at the next annual general meeting. The current board of directors has five members, out of which three are retiring at the next annual general meeting.

  Republic Ltd

• The remaining shares in Republic Ltd are owned by: o M3 Ltd which owns 20% of the shares, o Pontes Ltd which owns 20% of the shares and o a diverse group of investors who each own a small parcel of shares.

• The shareholders take a keen interest in the running of the company and attend all meetings.

• Two of the other shareholders, including M3 Ltd, already have representatives on the board of directors who have indicated their intention of nominating for re-election.

QUESTION:

Advise Starhub Ltd as to whether, under AASB 10, it controls M3 Ltd and/or Republic Ltd. Support your conclusion.