(a)The issued share capital of NamPost Plc, a publicly listed company, at 31 March 2012 was N$10 million. Its shares are denominated at 25 cents each. Nkwazi Ltd‘ earnings attributable to its ordinary shareholders for the year ended 31 March 2012 were also N$10 million, giving an earnings per share of 25 cents

Year ended 31 March 2013

On 1st July 2012 Nam Post issued eight million ordinary shares at full market value. On 1st January 2013 a bonus issue of one new ordinary share for every four ordinary shares held was made. Earnings attributable to ordinary shareholders for the year ended 31st March 2013 were N$13800 000.

Year ended 31 March 2014

On 1st October 2013, NamPost made a rights issue of two new ordinary shares at a price of N$1.00 each for every five ordinary shares held. The offer was fully subscribed. The market price of NamPost ordinary shares immediately prior to the offer was N$ 2.40 each. Earnings attributable to ordinary shareholders for the year ended 31st March 2014 were N$19500 000

Required:

1. Calculate NamPost’ s earnings per share for the years ended 31st March 2013 and 2014 including comparative figures.(26)

2. On April 2014, NamPost issued N$ 20 million 8% convertible loan stock at par. The terms of conversion (on 1 April 2017) are that for every N$100 of loan stock, 50 ordinary shares will be at the option of loan stockholders. Alternatively, the loan stock will be redeemed at par for cash.

   Also on 1st April 2014 the directors of NamPost were awarded share options on 12 million ordinary shares exercisable from 1st April 2016 at N$1.50 per share. The average market value of NamPost ordinary shares for the year ended 31st March 2015 was N$2.50 each. The income tax rate is 30%

   Earnings attributable to ordinary shareholders for the year ended 31st March 2015 were N$25200 000. The share options have been correctly recorded in the income statement

   Required:
   Calculate NamPost Plc’s basic and diluted earnings per share for the year ended 31st March 2015 (Comparative figures are not required) (9)

   You may assume that both the convertible loan stock and the directors’ options are dilutive