Illustration 9 At 30 June 20x1, the issued share capital of an entity consisted of 1,500,000 ordinary shares of F1 each. On 1 October 20X1, the entity issued 71,250,000 of 8% convertible loan stock for cash at par. Each 7 100 nominal of the loan stock may be converted, at any time during the years ended 20X6 to 20X9, into the number of ordinary shares set out below: 30 June 20X6: 135 ordinary shares; 30 June 20X7: 130 ordinary shares; 30 June 20X8: 125 ordinary shares; and 30 June 20X9: 120 ordinary shares. If the loan stocks are not converted by 20X9, they would be redeemed at par. There are two different ways of assessing these instruments under Ind AS 32: the conversion option to convert to a number of shares which varies only with time, could be viewed as either an option to convert to a variable or a fixed number of shares and recognised as either a liability or equity respectively. This illustration assumes that the written equity conversion option is accounted for as a derivative ability and marked to market through profit or loss. The change in the options' fair value reported 120x2 and 20x3 amounted to losses of 72,500 and 7 2,650 respectively . It is assumed that There are no tax consequences arising from these losses. The profit before interest, fair value movements and taxation for the year ended 30 June 20X2 and 20X3 amounted to 825,000 and 895,000 respectively and relate wholly to continuing operations. The rate of tax for both periods is 33%. Calculate Basic and Diluted EPS