Notes on the consolidated financial statements
Reconciliation of outstanding share options
The number of options granted during the year remains same as at the end of the year. There were no options exercisable during the year.
As permitted by the Guidance Note on accounting for Employee Share - based Payment, issued by the Institute of Chartered Accountants
of India, the Company has elected to account for stock options based on their intrinsic value (i.e., the excess of fair market value of the
underlying share over the exercise price) at the grant date rather than fair value at that date. Had the compensation cost for employee stock
options been determined on the basis of the fair value method as described in the said Guidance Note, the Company’s net profit after tax
would have been lower by 0.44 crores (previous year NIL), and basic earnings per share would have been 29.50 (previous year 21.80) and
diluted earnings per share would have been 29.46 (previous year 21.80).
For purposes of the above proforma disclosures, the fair values are measured based on the Black-Scholes-Merton formula. Expected
volatility, an input in this formula, is estimated by considering historic average share price volatility. The inputs used in the measurement
of grant-date fair values are as follows:
Name of Scheme
Employee Stock Option Plan 2015
Vesting conditions
22,900 options 24 months after the grant date (‘First vesting’)
45,800 options 36 months after the grant date (‘Second vesting’)
68,700 options 48 months after the grant date (‘Third vesting’)
91,600 options 60 months after the grant date (‘Fourth vesting’)
Exercise period
Stock options can be exercised within a period of 8 years from grant date.
Number of share options
2,29,000
Exercise Price
`
850/-
Remaining Life as on 31.03.2016
4.50 years
Particulars of Scheme
(
`
in crores)
Particulars
31 March 2016
Options vested Options to be
vested
Number of options
-
229,000
Fair value on grant date
-
850
Share price at grant date
-
918.10
Exercise price
-
850.00
Expected volatility
-
27.63%
Expected life
-
4.5 years
Expected dividends
-
0.40%
Expected Attrition rate
-
3.00%
Risk-free interest rate (based on government bonds)
-
7.30%
153
Annual Report 2015-16
(
`
in crores)
For the year ended
31 March 2016
Expense recognised in employee benefits
0.17
Share based payment expense
