c) Erickson Electricals is engaged in the design, manufacture and sale of a broad range of electrical and electronic products and systems. The following data flows the company's net income and income before exceptional items (as per IAS 1) for the past 20 years (in Shs. m) Page 2 of 4 Year Net Income Income before 1 2 3 4 201 237.7 273.3 300.1 302.9 349.2 401.1 408.9 467.2 528.8 5 6 7 8 9 19 Exceptional items 201 237.7 273.3 300.1 302.9 349.2 401.1 408.9 4672 528.8 Year Net Income Income before exceptional items 11 588.8 588.8 12 613.2 613.2 13 631.9 631.9 14 662.9 662.9 15 708.1 7081 16 788.5 9044 17 907.7 929.0 18 1018.5 1018.5 19 1121.9 1121.9 20 1228.6 1228.6 Erickson has achieved a consistent earnings growth over the past 40 years, Required: 1) From your observation (evaluation) of the figures given identity the strategy that the company has applied over the years to maintain its record of steady growth in earnings (2 marks) ii) Describe the extent to which the reported earnings reflect business activities excellent management and/or earnings management. (2 marks) ii) Describe how the earnings strategy is applied in good/bad years (2 marks) why iv) Identify (and explain) the years in which Erickson is likely to have built hidden reserves and the years in which it probably drew upon those hidden reserves. (5 marks) [Total: 25 marks]