Question 5: (10 marks) On 1 January 2018, X Ltd held 22,000 ordinary shares of Y Ltd, in which the total ordinary shares issued was 50,000. On top of the ordinary shares held, X Ltd had 5% convertible bonds issued by Y Ltd amounting to $100,000 and the conversion ratio is 200 ordinary shares for $1,000, which will be exercisable in 2 years. Except for the above mentioned convertible bonds, there are no other potential voting rights held by X Ltd and other parties. The market price of the ordinary share is traded at $23 and it is expected that there is a positive synergy effect between X Ltd and Y Ltd. However, X Ltd had made a wrong investment in China requiring huge amount of cash that the major bank now suspended its further banking facilities until the business turnaround within 2 years. Required: You are preparing the consolidated financial statement of X Ltd for the year ended 31 December 2018, based on all relevant information above, discuss the classification of Y Ltd from X Ltd's point of view (i.e. whether Y Ltd is a subsidiary or an associated company from X Ltd's point of view). (10 marks)