The following are independent cases:

a) SPG Ltd, a supplier of sailing equipment, was incorporated 10 years ago and is 60 percent owned by GPS Ltd. SPG has been a very successful business, averaging annual profits of $500 000. However, during the past two years, the company has run into financial difficulties and has defaulted on its loan with its bank. Consequently, the bank has used the powers in the loan agreement to monitor the companys activities closely to obtain repayment of its debt. The company must now obtain the banks authorization for any expenditure over $5000 and no changes in operations of the company are permitted without the banks approval.

b) ZYX Pty Ltd is a family-run book publisher that has purposely refrained from using hightechnology equipment over the past five years as the directors (the L family) considered it to be a fad and a waste of the companys resources. As a result, the companys antiquated equipment has failed to produce quality material and has been very inefficient compared with ZYXs competitors. During the current year, the companys bankers took possession of the companys assets, converted all the debt into equity, and two directors of the bank were appointed to ZYXs board, which now totals four people. The bank is undecided on whether it should sell the companys assets, which have little recoverable value or inject further equity into the company, purchase more advanced equipment and attempt to trade on and sell the business as a going concern.

For each of the above independent situations, determine whether or not control exists and, if so, by which party (under IFRS 10). Discuss the reasons for your answers.