We present excerpts from the annual report of Marico Limited (earlier, Marico Industries Limited and even earlier, Bombay Oil Industries Limited) for the financial year ended March 31, 2003.

The highlights pertain to the financial performance of Marico Consolidated

In financial year 2003, Marico’s distribution to shareholders comprised the following:

• Bonus equity shares in the ratio of 1:1.
• Bonus Redeemable Preference Shares in the ratio of 1:1 on the enhanced equity capital of ₹290 million.

The company’s balance sheet schedule 1 had the following important information:

(a) Pass the necessary journal entries to account for the issue of bonus shares and bonus cumulative redeemable preference shares.

(b) Assuming redemption of the cumulative preference shares on October 1, 2005, list the necessary journal entries.

(c) When did the company come with a public issue at a share premium?

(d) Is providing such historical information (1994-2003) as part of the annual report a good practice? In which section/part of the annual report can such information be made available? Discuss.

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Year ended March 31st Sales and Services Profit before Interest and Tax (PBIT) Operating Profit before Tax Extraordinary/Exceptional items Profit before Tax (PBT) Profit after Tax (PAT) Cash Profits (PAT + Depreciation) Economic Value Added (Refer Management Discussion) Net Fixed Assets Investments Net Current Assets Miscellaneous Expenditure Total Capital Employed Equity Share Capital 1994 1995 2,364 2,833 2,486 207 364 140 149 64 81 48 167 7 150 252 191 191 118 150 90 270 22 1996 1997 1998 1999 4900 5,512 4,097 353 424 477 230 268 29 297 212 238 125 404 23 634 333 522 1,061 45 45 145 277 365 14 291 215 246 365 300 340 87 188 453 605 8 524 463 440 145 230 540 985 1,068 1,235 145 2000 6,497 458 440 408 501 375 357 458 427 435 546 426 (18) 145 233 Amount in million 2001 2002 2003 6,707 6,957 7,755 537 619 651 501 502 278 694 953 1,274 1,413 578 475 578 501 703 291 669 1,455 1,749 2,082 145 145 145 640 640 562 783 313 1,027 139 934 4 2,104 290