Accounting EPS

. (b) Sohan has been recently hired in Zio Life Limited. Since he is facing difficulty in computation of EPS as per Ind AS 33, guide him by discussing the steps for the calculation of Basic EPS and Diluted EPS alongwith the necessary computations for EPS of Year 1. The following basic facts relate to Company Zio Life Limited. Net profit for Year 1 is 46,00,000. The number of ordinary shares outstanding on 1st April Year 1 is 30,00,000. The following facts are also relevant for Year 1. On 1st April, Zio Life Limited issues 20,00,000 three-year term convertible bonds for 1 each. Zio Life Limited has an option to settle the principal amount in ordinary shares (every 10 bonds are convertible into one ordinary share) or cash on settlement date The principal amount of the bonds is classified as an equity instrument and the interest is classified as a financial liability The interest expense relating to the liability component of the bonds is 1,800. The interest expense is tax-deductible. The applicable income tax rate is 40%. (7 Marks)