The existence of significant influence by an investor is usually evidenced by one or more of the following factors, in accordance with IAS 28:

1. Representation on the Board of Directors:
   Significant influence is likely when the investor has one or more seats on the board of directors or equivalent governing body of the investee. This allows the investor to participate in key decisions regarding the financial and operating policies of the investee.
2. Participation in Policy-Making Processes:
   The ability to participate in decisions about dividends, operational strategies, budgets, or capital expenditures indicates significant influence. This involvement in decision-making is a strong indicator of influence over the investee’s activities.
3. Material Transactions Between the Investor and Investee:
   Frequent or significant business transactions between the investor and the investee, such as sales or purchases of goods and services, demonstrate a relationship that supports significant influence.
4. Interchange of Managerial Personnel:
   When an investor has the ability to appoint or influence the appointment of key management personnel within the investee, it shows that the investor has significant influence over operational decisions.
5. Provision of Essential Technical Information:
   If the investor provides critical technical knowledge or expertise to the investee, this indicates that the investor has a role in shaping operational or strategic decisions, reflecting significant influence.

(Marks evenly spread = 5 marks)