KT Ltd acquired 90% of the ordinary shares of Sh. 10 par value, in SB Ltd. on 1 January 2000 when SB Ltd. had revenue reserves of Sh.1, 500 million.
SB Ltd acquired 160 million ordinary shares of Sh.10 par value, in AZ Ltd. on 1 January 2001 when AZ Ltd. had revenue reserves of Sh.500 million.
The financial statements of the three companies for the year ended 31 December 2003 are provided below:

Additional Information:
1) On 31 December 2002, SB Ltd. held stock bought from KT Ltd. for Sh. 120 million and on which KT Ltd. had made a profit of 33% on cost.
2) In the year ended 31 December 2003, KT Ltd. made sales of Sh. 400 million to SB Ltd. at a profit of 20% on selling price. One-quarter of the goods purchased by SB Ltd. from KT Ltd. in the year remained unsold as at 31 December 2003.
3) All the three companies paid the interim dividends on 15 June 2003. No company has accrued its share of proposed dividend from either its subsidiary or associate company.
4) On 30 September 2003. KT Ltd. sold 1200 million ordinary shares held in SB Ltd. for Sh. 2,510 million.
5) Fair values of tangibles assets were not materially different from their book values on the date KT Ltd. acquired its control of SB Ltd. and on the date SB Ltd. acquired its holding in AZ Ltd.

Required:
(a) Consolidated profit and loss account for the year ended 31 December 2003.
(b) Consolidated balance sheet as at 31 December 2003.
 

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Profit and loss accounts for the year ended 31 December 2003 KT LTD. Sh. million 7,200 5,400 1,800 108 1908 740 1,168 420 748 Sales Cost of sales Gross profit Dividends received Expenses Profit before tax Tax Profit after tax Profit on disposal of shares Interim dividends paid Final dividends proposed Retained profit Balance sheets as at 31 December 2003 Assets: Investment in: SB Ltd AZ Ltd. Fixed assets Goodwill Current assets Equity and liabilities: Ordinary share capital Share premium Revenue reserves Bank loans Current liabilities 110 858 200 300 _500 358 KT Ltd. Sh. Million 8,400 15,500 4,400 28.300 10,000 4,000 3,800 17,800 8,000 2,500 28.300 SB LTD. Sh. million 4,700 3.760 940 40 980 390 590 230 360 360 120 120 240 120 SB Ltd. Sh. Million 3,500 9,700 2,800 16.000 6,000 2,500 2,720 11,220 3,000 1,780 16.000 AZ LTD. Sh. million 2,450 1,715 735 735 295 440 176 264 264 100 100 200 64 AL Ltd. Sh. Million 6,500 500 1,700 8.700 4,000 2,500 1,354 7,854 846 8.700 Profit and loss accounts for the year ended 31 December 2003 KT LTD. Sh. million 7,200 5,400 1,800 108 1908 740 1,168 420 748 Sales Cost of sales Gross profit Dividends received Expenses Profit before tax Tax Profit after tax Profit on disposal of shares Interim dividends paid Final dividends proposed Retained profit Balance sheets as at 31 December 2003 Assets: Investment in: SB Ltd AZ Ltd. Fixed assets Goodwill Current assets Equity and liabilities: Ordinary share capital Share premium Revenue reserves Bank loans Current liabilities 110 858 200 300 _500 358 KT Ltd. Sh. Million 8,400 15,500 4,400 28.300 10,000 4,000 3,800 17,800 8,000 2,500 28.300 SB LTD. Sh. million 4,700 3.760 940 40 980 390 590 230 360 360 120 120 240 120 SB Ltd. Sh. Million 3,500 9,700 2,800 16.000 6,000 2,500 2,720 11,220 3,000 1,780 16.000 AZ LTD. Sh. million 2,450 1,715 735 735 295 440 176 264 264 100 100 200 64 AL Ltd. Sh. Million 6,500 500 1,700 8.700 4,000 2,500 1,354 7,854 846 8.700