Earning Per Share [IND AS 33]

EPS: It is to be calculated to know the earning available for each equity share.
𝑷𝒓𝒐𝒇𝒊𝒕 𝒂𝒗𝒂𝒊𝒍𝒂𝒃𝒍𝒆 𝒇𝒐𝒓 𝒆𝒒𝒖𝒊𝒕𝒚 𝒔𝒉𝒂𝒓𝒉𝒐𝒍𝒆𝒓𝒔
Basic EPS:
𝑾𝒆𝒊𝒈𝒉𝒕𝒆𝒅 𝒂𝒗𝒆𝒓𝒂𝒈𝒆 𝒏𝒐 𝒐𝒇 𝒆𝒒𝒖𝒊𝒕𝒚 𝒔𝒉𝒂𝒓𝒆𝒔

Diluted EPS: It is to be calculated when potential equity shares are in the capital structure of
the company e.g. Option, convertible debentures, convertible preference shares etc.
Q1: Calculate Basic EPS for both the Years
Particulars Amount
Profit attributable to ordinary equity holders of the parent entity 180
2016
Profit attributable to ordinary equity holders of the parent entity 600
2017
Ordinary share outstanding until 30th September 2017 200
Bonus Issue 1st October 2017:
2 Ordinary shares for each ordinary share outstanding on 30th
September,2017

Q2:
Particulars 2015 2016 2017
Profit attributable to ordinary equity holders 1,100 1,500 1,800
Shares outstanding before the right issue= 500 shares
Right Issue:
One new share to each five outstanding shares (100 new shares total)
Exercise price Rs.5.00
Date of right issue: 1st January,2016
Last date to exercise rights: 1st March,2016
Market Price of one ordinary share immediately before exercise on 1st March,2016: Rs.11
Reporting Date: 31st December
Calculate:
1. Theoretical Ex-rights Value per share
2. Adjustment Factor
3. Basic Earning per share.
Q3:
Profit attributable to ordinary equity holders of the parent entity for the year Rs12,00,000
2017
Weighted average number of ordinary shares outstanding during year 2017 5,00,000 shares
Average market price of one ordinary share during year 2017 Rs 20
Weighted average number of shares under option during year 2017 1,00,000 shares
Exercise price for share under option during year 2017 Rs15
Calculate Basic and Diluted Earnings Per share.

Q4:
Profit attributable to ordinary Equity holders of the parent entity Rs.1004
Ordinary shares outstanding 1000
Basic earnings per share Rs.1
Convertible bond 100
Each block of 10 bonds is convertible into three ordinary shares
Interest expense for the current year relating the liability component of
the convertible bonds Rs.10
Current and Deferred tax relating to that interest expenses Rs.4
Calculate Diluted Earning per Share

Q5: Calculate Basic EPS as per IND AS 33 from the following information:
Share Capital as on 1-4-2016, 1 lakh Equity shares of Rs.10 each.
Issue of right share for cash on 1/7/2016 in the ratio of 1 share for every 5 shares held.
Issue of Bonus Shares (excluding right shares) in the ratio of 1 share for every 5 shares.
Net Profit (before tax) for 2016-2017, Rs. 4 Lakh. Income Tax Rate is 40%.

Q6: Calculate Basic and Diluted earnings per share according to IND AS 33, from the
particulars given below:
Accounting year ending 31st December
Net Profit for year 2016 Rs.11,00,000
Net Profit for year 2017 Rs. 15,00,000
Number of shares outstanding prior to right issue 5,00,000 shares.
Right Issue:
1. Two new shares for each ten shares outstanding.
2. Right issue price Rs.15
3. Last date to exercise rights 1st March,2017.
Fair value of one equity shares immediately prior to exercise of rights on 01/03/17 Rs.21.
Q7: Compute Basic and Diluted earning per share vide IND AS 33 from the following
particulars:
Net Profit for the current year Rs.1,00,00,000
Number of Equity Shares Outstanding 50,00,000.
Number of 12% Convertible Debentures of Rs.100 each 1,00,000
Each Debentures is convertible into ten equity shares.
Tax Rate is 30%.

Q8: From the Following information compute earnings per share.

Net Profit for the year 2017 Rs.12,00,000.
Weighted average number of equity shares outstanding during year 2017 5,00,000 shares
Average fair value of one equity shares during the year 2017 Rs.20
Weighted average number of shares under option during the year 2017 1,00,000 shares.
Exercise price per share under option during the year 2017 Rs.15.

Q9: From the following information relating to X Ltd, calculate Diluted Earnings per share as
per IND AS 33:
Net Profit for the current year Rs.2,00,00,000
Number of Equity Shares outstanding 40,00,000
Basic Earnings Per Share Rs.5
Number of 11% convertible Debentures of Rs.100 each 50,000
Each Debentures is convertible into 8 equity shares.
Interest expense for the current year Rs.5,50,000
Tax Saving relating to interest expenses@30% Rs.1,65,000

Q 10: Calculate Basic and Diluted earnings per share with the following data:
1. Share Capital on 1/4/2017: 5,00,000 Equity shares of Rs.10 each.
2. Issue of Right Shares at par for Cash on 1/7/2017 in the ratio of 1 new share for every
5 shares held.
3. Issue of Bonus Shares on 1/10/2017 in the ratio of 1 new share for every five shares
(excluding Right shares) held.
4. Convertible Debentures on 1/4/2017
5. 10% Debentures of Rs.10,00,000 of R.s10 each
6. Net Profit after tax @30% for the year 2017-18 Rs.21,00,000.
Q11: Calculate the diluted earning per share from the following information:
Net Profit for the current year 85,50,000
No. of Equity Shares outstanding 20,00,000
No. of 8% Convertible Debentures of Rs.100 each issued during year 1,00,000
Each Debentures is convertible into 10 equity shares
Interest Expenses accrued for the current year 6,00,000
Tax Relating to Interest Expenses 30%

Q12: In April 2016, A Limited issued 18,00,000 Equity Shares of Rs.10 each, Rs.5 per share
was called upon that date which was paid by all the shareholders. The remaining Rs5 was
called upon 1/9/2016. All the shareholders (except on having 3,60,000 shares) paid the sum
in September 2016. The net profit for the year ended 31/3/2017 is Rs.33,00,000 lakhs after
dividend on preference shares and dividend distribution tax of Rs.6,60,000 lakhs. Compute
the Basic EPS for the year ended 31st March,2017 as per IND AS 33.

Q13: Compute Weighted average Number of Equity Shares in the following case.
1st April, 2016 Balance of Equity Shares 5,00,000 Shares
30th June,2016 Equity Shares issued for 1,00,000 Shares
Cash
15th January,2017 Equity Shares bought back 50,000 shares
31st March,2017 Balance of Equity Shares 5,50,000 shares

Q14: Following is the data for company XYZ in respect of number of equity shares during
the financial year 2016-2017. Find out the number of shares for the purpose of calculation of
basic EPS as per IND AS 33.
Sr No Date Particulars No of
shares
1 1/4/2016 Opening Balance of Outstanding Equity Shares 1,00,000
2 15/6/2016 Issue of Equity Shares 75,000
3 8/11/2016 Conversion of Convertible Preference Shares in 50,000
Equity
4 22/2/2017 Buy Back of Shares (20,000)
5 31/3/2017 Closing Balance of Outstanding Equity Shares 2,05,000

Q15: Moon Limited has ordinary share capital of Rs.15 million consisting of shares of Rs.10
each. Additional financing was provided following loans:
1. Rs.2 million 15% loan that could be converted into ordinary shares in three years’
time at the rate of one share per Rs. 20 of loan.
2. Rs. 3 million 12% loan that could be converted into ordinary shares in one year’s time
at the rate of one share per Rs.15 of Laon.
3. Earning for the year are Rs.2.5 million and applicable income tax rate is 35%.
Calculate Basic & Diluted EPS