The following steps should be taken:
Whether the Articles permit capitalization of profits;
Whether the company had a sufficient number of unissued shares for allotment as bonus shares;
Inspect the Minute book of shareholders for the resolution authorizing declaration of the Bonus and Director’s Minute for the resolution appropriating profits for being applied in payment of shares to be allotted to shareholders as bonus shares;
Trace the allotment of shares as per particulars contained in the Allotment Book or sheets in to the register or Members;
Confirm that all the statutory requirements relevant to the issue of shares have been complied with;
Ensure the Security Exchange Board Guidelines relating to issue of bonus shares have been complied with.