Polly Limited (Polly) is in negotiation with Sandy Group (Sandy) to acquire 100% of the share capital of Steve Company (Steve). Steve is currently wholly-owned by Sandy and operates a business in the toy industry (as defined in IFRS 3 Business Combinations).

Legal completion of the transaction (i.e. transfer of legal title to the shares in Steve and payment of the consideration) is subject to approval by both Pollys shareholders and the Competition Authority of the jurisdiction in which these companies are located.

Polly and Sandy has entered into an agreement that:

- commits both parties to legal completion subject to obtaining the required approvals

- commits both parties to use best endeavors to obtain these approvals

- specifies the purchase price of the shares, subject to adjustment for working capital movements between the agreement date and the legal completion date

- specifies that the following decisions and actions can be undertaken by Sandy only with the consent of Polly between the agreement date and the legal completion date:

- changes in the management of Steve Company

- dividend payments

- amendments to the Constitution of Steve Company

- new customer contracts or charges in excess of a specified value

- ceasing any product lines or starting a new product line, and

- changes to employees and directors remuneration in excess of 5%.

Required:

1. Explain the difference between protective rights and substantive rights, please give an example of a protective right. (80 to 100 words)

2. Does Polly obtain control over Steve on the date of this agreement (or only on the legal completion date)? (130 to 160 words)