- Calculate comparative basic earnings per share (BEPS) for Fzer Group Berhad for the years ended 31 December 2019 and 2020.
(5 Marks)
- Prepare a table of earnings per incremental share (EPIS) for all potential ordinary share (POS) for the year ended 31 December 2020. Indicate whether each POS is dilutive or anti- dilutive.
Ezer Group Berhad is a leading pharmaceutical company in Malaysia. In recent year, Ezer Group Berhad has experienced rapid expansion as the demand for its product development in COVID-19 PRIMA vaccine has successfully undergoing stage-3 trials and soon will be mass produced world- wide. Partial Statement of Financial Positions of Ezer Group Berhad as at 31 December were as follows: 2019 RM'000 2018 RM000 100,000 Share Capital 10%, Cumulative convertible preference shares, 10,000,000 units issued and fully paid Ordinary share, 40,000,000 units issued and fully paid 100,000 200,000 200,000 Reserves Retained earnings 380,000 280,000 Other reserves 10,000 30,000 Total Equities 690,000 610,000 Long term debt 8%, Convertible loan stock 100,000 Total Liabilities and Stockholder's Equities 790,000 610,000 Additional information: 1. Net income for the year ended 31 December 2019 and 2020 were RM40,000,000 and RM60,000,000 respectively. 2. On 1 April 2020, the board of directors of Ezer Group authorised the exercise of bonus issues for all existing shares on the ratio of 1 for 1. 3. The 10% cumulative, convertible preference shares were issued on 1 January 2018. Each preference share is convertible into FIVE (5) ordinary shares. On 1 July 2020, 1,000,000 units of convertible preference shares were converted into ordinary shares.
4. The 8% convertible loan stock was issued on 1 January 2019. Each RM1,000 of the loan stock is convertible into 250 ordinary shares. On 1 October 2020, THIRTY PERCENT (30%) of the 8%, convertible loan stock was converted to ordinary shares. 5. Ezer Group Berhad approved an employee share option scheme (ESOS) on 1 January 2017 with an exercise price of RMS per share for all key executive directors of the company as follows: 12 BKAR 3043 FINANCIAL ACCOUNTING AND REPORTING IV Name of directors Dato' Kamal Dato' Rahim Dato' Ali Units at 1 Jan 2020 500,000 500,000 1,600,000 Units granted 0 0 0 Units exercised 0 0 600,000 Unit lapse 0 0 0 Units at 31 Dec 2020 500,000 500,000 1,000,000 Only 600,000 units of the ESOS has been exercised on 1 November 2020. The average market price of the shares for the year 2020 was RM10 while the share price on 31 December 2019 was RM11. 6. The corporate tax rate was constant for both years at 24%.
