Page 17 - 21. COMPILER QB - INDAS 33

[25,00,000 x 8% x (1 - 0.33) / 25,000] + [5,300 / 25,000] = 5.57

Here, we add back 5,300 also because if the loan stock is considered as ordinary shares, there will be no fair
value measurement and hence, no such loss needs to be recognized.

There will then be 135 extra shares in issue.
Therefore, the incremental EPS is 4 paise (ie. Rs. 5.57 / 135). As this incremental EPS is less than the basic

EPS at the continuing level, it will have the effect of reducing the basic EPS of 53 paise. Hence the
convertibles are dilutive.

2021 2020
Adjusted earnings Rs. Rs.
Profit for basic EPS 10,60,000 10,00,000

Add: Interest and other charges on earnings (2,00,000 + (1,50,000 +5,000)
saved as a result of the conversion 5,300) = 2,05,300 = 1,55,000
Less: Tax relief on interest portion (66,000) = (49,500) =

2,00,000 x 33% 1,50,000 x 33%
Adjusted earnings for equity 11,99,300 11,05,500

Adjusted number of shares
From the conversion terms, it is clear that the maximum number of shares issuable on conversion of Rs.

25,00,000 loan stock after the end of the financial year would be at the rate of 135 shares per Rs. 100

nominal (that is, 33,75,000 shares) = 25,00,000 x 135 / 100.
DEPS calculation 2021 2020
Number of equity shares for basic EPS 20,00,000 20,00,000

Maximum conversion at date of issue (33,75,000 × 9/12) - 25,31,250
Maximum conversion after balance sheet date 33,75,000 –

Adjusted shares 53,75,000 45,31,250
Adjusted earnings for equity 11,99,300 11,05,500
Diluted EPS (approx.) 22 paise 24 paise

Q13. (Dec 21)

From the following information you are asked to calculate (a) Basic and Diluted EPS of Duck Ltd and (b)

Diluted EPS of Swan Ltd:

Duck Ltd Swan Ltd
Amount (Rs) Amount (Rs)
Income from continuing operations 2,52,000 (1,80,000)
Loss from discontinued operations (4,20,000) 1,45,920
Net loss (1,68,000) 34,080
Weighted average Number of shares outstanding 80,000 96,000
Incremental common shares outstanding relating to stock 16,000 25,600
options
21. 16