ICICI Bank 2008 Annual Report Download - page 147

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earnings per share would have been Rs. 38.19 and Rs. 37.96 respectively. The key assumptions used to estimate the fair
value of options granted during the year ended March 31, 2008 are given below.
Risk-free interest rate ............................................................................................... 7.12% to 8.11 %
Expected life ............................................................................................................ 2 to 6 years
Expected volatility .................................................................................................... 36.26% to 38.01 %
Expected dividend yield ........................................................................................... 1.07%
The weighted average fair value of options granted during the year ended March 31, 2008 is Rs. 376.39.
A summary of the status of the Bank’s stock option plan is given below.
Rupees, except number of options
Stock options outstanding
Year ended March 31, 2008 Year ended March 31, 2007
Particulars Number of
options
Weighted
average
exercise price
Number of
options
Weighted
average
exercise price
Outstanding at the beginning of the year ................. 13,187,783 442.50 17,362,584 262.60
Add: Granted during the year ................................... 4,956,300 938.41 6,439,900 582.26
Less: Lapsed during the year ................................... 1,037,218 582.51 1,127,650 422.81
Exercised during the year1 ........................................ 1,468,713 379.34 9,487,051 210.47
Outstanding at the end of the year ........................... 15,638,152 596.32 13,187,783 442.50
Options exercisable .................................................. 3,272,292 411.89 326,259 225.80
1. Excludes options exercised by employees in respect of which equity shares are pending allotment.
A summary of stock options outstanding as on March 31, 2008 is given below.
Range of exercise price
(Rupees per share)
Number of shares arising
out of options
(Number of shares)
Weighted average
exercise price
(Rupees)
Weighted average
remaining contractual life
(Number of years)
105-299 164,951 151.20 3.75
300-599 10,641,216 448.87 7.32
600-999 4,745,985 932.63 9.08
1,000-1,399 86,000 1,135.27 9.68
The options were exercised regularly throughout the year and weighted average share price as per NSE price volume data
during the year ended March 31, 2008 was Rs.1,044.02 (March 31, 2007: Rs. 750.58).
The Finance Act 2007 introduced Fringe Benefit Tax (“FBT”) on employee stock options. The FBT liability crystallises on the
date of exercise of stock options by employees and is computed based on the difference between fair market value of the
equity shares on the date of vesting and the exercise price. As per the ESOS scheme, FBT of Rs. 226.7 million has been
recovered from the employees on 1,468,713 stock options exercised during the year ended March 31, 2008.
ICICI Prudential Life Insurance Company Limited has formulated five ESOS schemes, namely “Founder option I”, “FY 2004-
05 scheme”, “FY 2005-06 scheme”, ”FY 2006-07 scheme” and “Founder option II”.
For ICICI Prudential Life Insurance Company Limited there is no compensation cost in the year ended March 31, 2008 based
on intrinsic value of options. If the entity had used the fair value of options based on the Black-Scholes model, compensation
cost for the year ended March 31, 2008 would have been higher by Rs. 135.3 million. The key assumptions used to estimate
the fair value of options are given below.
Risk-free interest rate ..................................................................................................... 6.87%-8.00%
Expected life .................................................................................................................. 3 to 5 years
Expected volatility .......................................................................................................... 28.65%
Expected dividend yield ................................................................................................. 1.50%
forming part of the Consolidated Accounts (Contd.)
schedules
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