ICICI Bank 2008 Annual Report Download - page 33

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Towards a better life
On the basis of the recommendation of the Board Governance & Remuneration Committee, the Board at
its meeting held on April 26, 2008 approved a grant of approximately 5.6 million options for fiscal 2008
to eligible employees and wholetime Directors. Each option confers on the employee a right to apply for
one equity share of face value of Rs. 10 of ICICI Bank at Rs. 915.65, which was the last closing price on the
stock exchange, which recorded the highest trading volume in ICICI Bank shares on April 25, 2008.
Particulars of options granted by ICICI Bank upto April 26, 2008 are given below:
Options granted 50,918,4551
Options vested 27,227,624
Options exercised 23,726,081
Number of shares allotted pursuant to exercise of options 23,726,081
Options forfeited/lapsed 6,013,919
Extinguishment or modification of options Nil
Amount realised by exercise of options (Rs.) 4,498,141,120
Total number of options in force 21,178,4551
1. Includes 825,000 options granted to wholetime Directors for fiscal 2008, pending RBI approval.
Options granted by ICICI Bank to senior managerial personnel for fiscal 2008 are as follows: K. V. Kamath
– 270,000, Chanda D. Kochhar - 180,000, V. Vaidyanathan - 125,000, Madhabi Puri Buch – 125,000, Sonjoy
Chatterjee – 125,000, K. Ramkumar – 125,000, and Pravir Vohra – 125,000. No employee was granted
options during any one year equal to or exceeding 0.05% of the issued equity shares of ICICI Bank at the
time of the grant.
The diluted earnings per share (EPS) pursuant to issue of shares on exercise of options calculated in
accordance with AS-20 was Rs. 39.15 in fiscal 2008 against basic EPS of Rs. 39.39. Since the exercise
price of ICICI Bank’s options is the last closing price on the stock exchange, which recorded the highest
trading volume preceding the date of grant of options, there is no compensation cost in fiscal 2008 based
on the intrinsic value of options. However, if ICICI Bank had used the fair value of options based on the
Black-Scholes model, compensation cost in fiscal 2008 would have been higher by Rs. 1,259.9 million and
proforma profit after tax would have been Rs. 40.32 billion. On a proforma basis, ICICI Bank’s basic and
diluted 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 are:
Risk-free interest rate 7.12% – 8.11%
Expected life 2 – 6 years
Expected volatility 36.26% – 38.01%
Expected dividend yield 1.07%
In respect of options granted in fiscal 2008, the weighted average exercise price of the options and
the weighted average fair value of the options were Rs. 938.41 per option and Rs. 376.39 per option
respectively.
Annual Report 2007-2008 31
ICICI BANK_(Fin_Matter 1-64).ind31 31ICICI BANK_(Fin_Matter 1-64).ind31 31 6/20/08 5:03:06 PM6/20/08 5:03:06 PM