nd As 33

Note:
This Ind AS shall apply to companies that hove issued ordinary shares to which Ind AS notified
under the Componies Act opply.

When an entity presents both consolidated financial stotements and separate financial
stotements prepared in accordance with Ind AS 10, Consolidated Financial Statememts, and
Ind AS 27, Separate Financial Statements, respectively, the disclosures required by this
Stondard shall be presented both in the consolidoted financiol stotements and seporate inancial
stotements.
The above mentioned provisions are given in short in the following table
Sr. No. Type of Financial statememts | Consolidated EPS Separate EPS
Conselidated Must disclese Don't disclose
Separate Don't disclose Must Dischse

EPS should be presented in the following headings:

i) Basic EPS for continuing operation
i) Basic EPS for Discontinuing Operation
Basis EPS for Total Business

MEASUREMENT OF BASIC EARNINGS PER SHARE

An entity shall calculate basic earmings per share for profit or loss attributoble to ordinary
eguity holders of the parent entity and, if presented, profit or loss from continuing operations
attributable to those eguity holders.

Thus, one can note two important points from the obove paragraph. Company is required to
calculate basic EPS for
. For eguity shareholders
2. For parent company

According to the oppendix to the Ind AS 33, for the purpose of calculating earnings per share
based on the consolidated financial statements, profit or loss attributoble to the parent entity
refers to profit or loss of the consolidated entity after adjusting for non-cotrolling interests.
ProfitLoss ottributed to Equity share holders ef Porent Entity
Weighted average number of Equity shares
 Numerator for Basic EPS
I. Profit/Loss under Consolidated Financial Statements
Profit/Loss attributable to equity holders of Parent co. (not considering earnings of Non-
Controlling interest)

2. Preference divided (with DDT) shall be deducted from PAT7, in case there are cumulative
preference shares then dvidend shall be deducted whether declared or not and in case of
non-cumulative preference share dividend shall be deducted only when it is declared. CAways
ossume cumulative if not specified in question)

3. Premium paid or settlement premium on early redemption/conversion on redemption of

preference shares and written off from security premium account or from other reserve
shall also be deducted from profit for the purpose of EPS.

4.Anu Income_er Fxae2ses which ik othenuise Leauired to tanstered to Profit and Less al
kautnat.actualu.recaaniscdin crai.andllass.alc.and transtenced.ca.cther.resenes.Ar.Miteu
aft fiem seuuitu LIRMiIm_Cke Prelizinanuese2.sthalase ke.considezed.utsike.calkuladi2
EPS

S. If preference shares are classified as Financial Liability under Amortised Cost Method (indAS
109), then for the purpose of caleulating Eamings attributable to Equity shareholders,
dividendlinterest shall be deducted as per Effective Rate of lnterest.
 Denominator for Basic EPS
.For the purpose of calculating basic earmings per share, the number of ordinary shares shall
be the weighted average number of ordinary shares outstanding during the period.

.The weighted average number of ordinary shares outstanding during the period is the umber
of ordinary shares outstonding at the beginning of the period, adjusted by the mumber of
ordinary shares bought bock or issued during the period multipied by a time-weighting
factor.

The time-weighting factor is the number of days that the shares are outstonding as a
proportion of the total number of days in the period; a reasonable approximation of the
weighted average is adequate in many circumstances.
 Deciding the date for issue of shares
Shares are usualy included in the weighted average number of shares from the dote
consideration is receivable (which is generally the date of their issue), for example:

The abovementioned provisions are summarised in the following table:

. No Nature of transaction Effective bate when

General Rule consideration is receivable
2
|Exchange for cash Cash is receivoble
3 Volumtary reinvestment of dividend Dividend are reinvested
4
Conversion of debt instrument Acerual of interest is stopped
S In lieu of interest / principol Accruol of interest is stopped
|Exchange of liobility Settlement Date
Consideration for acquisition of osset Acquisition is recognised in books
Rendering of services Services are rendered
9 Business combinations Acguisition date

10Mandatoryconvertible instrument Date of comtract

Contingently issuable shares Dhen all necessary conditions for
conversion are satisfied

Ordinary shares issued as part of the consideration transferred in a business

combination are included in the weighted average mumber of shares from the acquisition
date. This is because the acquirer incorporates into its statement of profit and loss
the ocguiree's profits and losses from that date.
 PARTLY PAID SHARE
Partly paid equityshares aretreated as a fraction of an equity share to the extent
that they were entitled to participate in dividends.
 BONUS ISSUE, SHARES SPLIT AND SHARES CONSOLIDATION
Ordinary shares moy be issued, or the number of ordinary shares outstanding may be reduced,
without a comesponding change in resources. Examples include:

Ca) a capitalisotion or bonus issue (sometimes refered to as a stock dividend);

(b) a bomus element in ony other issue, for example a bonus element in a rights issue to
existing shareholders;
(c)a share split; and
Cd) a reverse share split Cconsolidation of shares).

In above case where the number of shares changes without the change in the resources, the
date will be considered from the beginning of the earliest period presented, imespective of the
fact of actual copitalisation of the reserves
If there is no change in the resources then the date of change will not be relevant and opening
balance of the shares wil be adjusted with the new number of shares. However, if the event
is goimg to result in change in the total amount of copital, ie resources, then the effective
date need to be considered and accordingly the weighted number of shares need to be
calculated.
 COMPULSORILY CONVERTIBLE DEBENTURES OR PREFERENCE SHARES
Mandatory/Compulsorily Convertible instruments (convertible into Equity shares) are to be
considered while calculating Basic EPS ie. no. of promised shares on coversion of those
instruments shall be considered in the calculotion of weighted Avg. no. of shares from the

date of contract ie. from thedate of issueof suchinstruments.

However interest paid on such instruments shall be treated in the normal way and deducted
from Net Profit and Loss attributoble to ESH.

In the absence of any specific info, alwoys assume that convertible instruments are not
mandatory but Optional. Optional Convertible Instruments are not considered in the calculation
of Basic EPS but to be considered in Diluted EPs
 SHARES ISSUED UNDER BUSINESS COMBINATION
Equity sharesissued as partof the consideration under Business Combination ClndAS103)
shall be considered from Acquisition date of business while caleulating kweighted Avg.No. of
Shares
Acquisition datemeons the contract datei.e. the date on which NetAssets, NCI,
Consideration and Goodwill orefirst measured.
 RIGHT ISSUE OF SHARES
A rights issue usually includes a bonus element.
Treatment of Right Shares:
Following steps are opplied

Step Calculate TMP if not available. Such price is IV of shares

Fomala ThesiicalManket Pria)
[Fair Value (before right) x No. of share (pre-right)] + Right issue proceeds
Total shares post right
Step 2: Calculate paid-up part in Right issue
Paid u p Part = Profit Proceeds
Market
Priceas per Stepl
Step 31 Calculate Bonus part in Right
Bonus Right Share paid part as per Step 2
Step
Paid part should be adjusted from the date of receipts of amount.
Bonus part should be considered price beginning
Previous Year EPS will be readjusted because of Bonus elements.
 DILUTED EARNINGS PER SHARE
Dilution is a reduction in earnings per share or an increase in loss per share resulting from
the assumption that convertible instruments are converted, that options or warants are
exercised, or that ordinary shares are issued upon the satisfaction of specified conditions.

2. Anti-dilution is an increase in earmings per share or a reduction in loss per share resulting
from the assumption that convertible instrurnents are converted, that options or warrants
are exercised, or that ordinary shares are issued upon the satisfaction of specified conditions.

3. A potential equity share is financial instrument of other contract that entitles, or may
entitle, its holder to convert its holding in to equity shores.

Ckaplesofpatentialeguty sharesare:
debt instruments or preference shares, that are convertible into equity shares,
share warrants;
options including employee stock option plans under which employees of an
enterprise are entitled to receive equity shares as part of their remuneration and
other similar plans.
Shares that would be issued upon the satisfaction of conditions resuting from
contractual arrangements, such as the purchase of a business or other assets.
Share application money pending allotment if used in the business.
Partly paid Equity shares to the extent of unpaid amount (not entitled for
Dividend)

For the purpose of cal culating diluted earnings per share, the net profit or loss for the period
attributable to shareholders and the weighted average number of shares outstonding during
period should be adjusted for the effect of all dilutive potential eguity shares.

DILUTIVE OR NON DILUTIVE

Potential eguity shares should be treated as dilutive when, and only when their conversion to
eguity shores would decrease net profit per share from continuing ordinary operations.
Note l An enterprise uses net profit from continuing ordinary activities as "the control figure"
that is used to establish whether potential eguity shares are dilutive or anti-dilutive.
The net profit from continuing ordinary activities is the net profit from ordina ry activities after
deducting preference dividends and any attributable tax thereto and after excluding items
relating to discontinued operations.
Note 2: Potential equity shares are anti-dilutive when their conversion to equity shares would
increase earnings per share from continuing ordinary activities or decrease loss per share
from continuing ordinary activities.
The formula can be mathematically expressed as follows:

Profit/lLossattributed.to.Eguity share_holder when_diletive patential.shares are.converted

inteordinar shares
Weighted average number of eguity shares + Weighted average number of dilutive
potential ordinary shares

How to Calculated DEPS-Following calculation is reguired:

.Identify Potential Equity Shares first. (Whether any security which is pending
for coversion is outstanding and resources thereof have been used in the
business)

2. Identify Dilutive potential eguity shares by applying following steps:

Step1- Calulate Incremental EPS for every single potential eguity share

Step 2 Arrange 1EPS in Inereasing Order

Step 3 APply Test for dilution. Test each potentialequity share on BEPs
from continuing ordinary operations. If ratio EPS declines from preceding calculation
then it is called Diluted EPS and if ratio increases from previous calculation then it is

colled Anti Diluted EPSs

why we are following above steps:

To maximise the dilution of basic earnings per share, each issue or series of potential
ordinary shares is considered in sequence from the most dilutive to the least dilutive,
ie dilutive potential ordinary shares with the lowest 'earnings per incremental share'
are included in the diluted eanmings per shore colculation before those with a higher
earnings per incremental share. Options and warants are generally included first
because they do not affect the numerator of the calculatio.

Noter Anti Diluted EPS shall not be presented in the Stotement of P&L, in that case
Diluted EPS shall be equal to BEPS