Question $2[30]$ Case Study: Zenith Manufacturing Ltd$.,$ a South African$-$based company, concluded its financial year on $31$ December $2023.$ The board of directors is preparing the financial statements, which are due for approval on $20$ March $2024.$ Several significant events and situations have arisen, creating uncertainty about how they should be accounted for under IAS $37$ Provisions, Contingent Liabilities and Contingent Assets and IAS $10$ Events after the Reporting Period. $1.$ Pending Litigation: In November $2023,$ a competitor filed a lawsuit against Zenith Manufacturing for alleged patent infringement, claiming damages of R$5$ million. As of $31$ December $2023,$ Zenith$$s legal counsel believes the claim is unlikely to succeed but acknowledges that legal fees will be incurred. $2.$ Product Recall: On $15$ January $2024,$ Zenith initiated a voluntary recall of one of its best$-$selling products due to safety concerns raised by customers. The issue was traced to products sold between October and December $2023.$ The estimated cost of the recall is R$2$ million. $3.$ Major Customer Bankruptcy: A significant customer, responsible for $15\%$ of Zenith's annual sales, declared bankruptcy on $5$ February $2024.$ The customer owed Zenith R$1\mathrm{.}2$ million as of $31$ December $2023.4.$ Natural Disaster: On $10$ January $2024,$ severe flooding damaged one of Zenith$$s warehouses, leading to an estimated loss of R$3$ million in inventory. The company was not insured against flood damage. $5.$ Dividends Declared: On $18$ February $2024,$ the board declared dividends amounting to R$4$ million based on the strong performance of the previous financial year. Required: Critically analyse how each of the above events and situations should be treated in Zenith Manufacturing Ltd$.$s financial statements for the year ended $31$ December $2023,$ in accordance with IAS $37$ and IAS $10.$ For each scenario $($a$)$ Identify whether the event is an adjusting or non$-$adjusting event after the reporting period as per IAS $10.(10)($b$)$ Determine whether a provision should be recognised, a contingent liability disclosed, or no action is required under IAS $37.(10)($c$)$ Justify your answers with appropriate references to IAS $37$ and IAS $10,$ and explain the implications for the company$$s financial statements, including any required disclosures. $(10)$