KML S.A.O. G is a well-established company. The company had in issue 10 million ordinary shares of OMR 0.500 each. Apart from equity shares the company also had in issue 50,000 12% Redeemable Preference Shares with a par value of OMR 2 per share fully paid. But in the recent years it has been experiencing financial losses continuously which were OMR 350,000, 400,000 and 200,000 during the years 2015, 2016 and 2017 respectively due to low demand for its products. Asset values of the company also fell substantially resulting in impairment of the Assets resulting in exhaustion of its entire retained earnings. The balance of the retained earnings as on 31 December 2014 was RO 120,000 In the years 2018 and 2019, the company made a comeback and started to earn profits. The profits after tax in the year 2018 was OMR 150,000 and year 2019 was OMR 280,000 respectively. The board of directors decided not to pay the dividends for the years 2018 and 2019 instead of having profits. This means the shareholders did not receive any dividend consistently for 5 years. The shareholders are not satisfied with the decision of the board of directors. Shareholders are of the opinion that they have the right to receive dividend when the company is earning profits. Investing their hard-earned money to reap benefits from the company has become a disappointment for them. The Omani Commercial Law states that dividend will not be paid if the company sustains a loss which has not been fully extinguished. Considering the situation given above for the company you are required to answer the following a. Do you think the shareholders can take any legal action against the board of directors for not paying the dividends out of profits in the year 2018 and 2019? Is board of directors' decision justifiable? Explain. Support your answer with necessary figures (2 marks - Min 100 words) b. Is there any impact on the Redeemable Preference share dividend due to the losses of the company? Justify your answer with suitable explanation. (1 mark - Min 50 words) c. Prepare a statement of Retained earnings for the year ended 2018 & 2019. (2 marks)