The basic EPS calculation starts with adjusted basic earnings over basic WASO, weighted average shares outstanding. What is adjusted basic earnings? Well, it's your earnings after paying out net income due to NCI, non-controlling interests or minority interests and after paying preference dividends. And what's basic WASO? Well, that's your number of shares held by the company's shareholders but time weighted for changes in the share counts. Let's see them in more detail.

First of all, we start with the earnings and the first question we've got is do we use the reported net income or do we use normalized net income? Well, let's have a think about some costs that have gone in here. Maybe there've been some non-core costs that our company has had to incur. Maybe they've had some costs due to some non-core operations. Maybe they ended up leasing out some of their property. They may have had some non-controlled costs as well. Maybe we own 20% of a company and unfortunately, that's been making losses. That's another cost to us. And lastly, we've had some non-recurring costs. Maybe there's been a one-off corporate restructuring this year. Well, all of these are costs and they'll all be deducted before getting to reported net income. That reported net income, it's what's used for reported basic EPS and reported diluted EPS. However, if I'm going to be using normalized basic and diluted EPS, then I might not want to include all of those costs. I might want to work out what the underlying net income is for the company. Those non-core costs, yeah, I'd say that's okay. They impact the shareholders in the long term. Yeah, gotta include them. Those non-controlled costs, exactly the same thing. They happen this year. They'll happen next year, we'll include them. But the non-recurring item, the corporate restructuring, that was a one-off. If I'm trying to appraise the company this year and going forward, I don't want to include that one-off costs. So we'll get rid of that one-off costs, and instead, my normalized net income will thus increase, I'll add back that cost. That's what we use for normalized basic EPS and normalized diluted EPS. Now I've got my normalized net income, I now want to adjust it to get to my adjusted earnings. And the first thing we need to do is subtract net income attributable to the NCI. NCI, non-controlling interests are shareholders in a subsidiary of ours. So maybe we own 80% of the company. We get 80% of that subsidiary's net income but 20% should be given away to someone else so we have to give that away first. Next, we have to pay preference share dividends. But be careful. This is only if the preference shares aren't treated as equity. Sometimes, especially under IFRS, they can be treated as debt items and the preference share, instead of being a dividend, is an interest expense and it will already have been taken out getting to normalized net income at the top. That then gets us to adjusted basic earnings that can be paid out to parent common shareholders.

Now we move on to the basic number of shares. You start with your shares outstanding at the beginning of the year. One way to get your shares outstanding is the issued shares minus treasury shares. You then need to add on any shares issued or repurchased in the year. So let's imagine at the beginning of the year we had 100 shares and then midway through the year, we issued 12 shares. That means for half the year, we had a 100. The second half of the year, we had 112. On average, we had 106. So you adjust for the timing during the year to get your basic WASO or your weighted average shares outstanding.