ICICI Bank 2009 Annual Report Download - page 29

27Annual Report 2008-2009
The Power of Belief
COMPLIANCE CERTIFICATE OF THE AUDITORS
ICICI Bank has annexed to this report, a certificate obtained from the statutory auditors, B S R & Co., Chartered
Accountants, regarding compliance of conditions of Corporate Governance as stipulated in Clause 49 of the
listing agreement.
EMPLOYEE STOCK OPTION SCHEME
In fiscal 2000, ICICI Bank instituted an Employee Stock Option Scheme (ESOS) to enable the employees and Directors of
ICICI Bank and its subsidiaries. As per the ESOS as amended from time to time, the maximum number of options granted
to any employee/Director in a year is limited to 0.05% of ICICI Bank’s issued equity shares at the time of the grant, and the
aggregate of all such options is limited to 5% of ICICI Bank’s issued equity shares on the date of the grant (equivalent to
55.7 million shares at April 25, 2009).
Options granted for fiscal 2003 and earlier years vest in a graded manner over a three-year period, with 20%,
30% and 50% of the grants vesting in each year, commencing not earlier than 12 months from the date of grant.
Options granted for fiscal 2004 to 2008 vest in a graded manner over a four-year period, with 20%, 20%, 30% and
30% of the grants vesting in each year, commencing not earlier than 12 months from the date of grant.
Options can be exercised within 10 years from the date of grant or five years from the date of vesting, whichever
is later. The price of the options granted prior to June 30, 2003 is the closing market price on the stock exchange,
which recorded the highest trading volume on the date of grant. The price for options granted on or after
June 30, 2003 till July 21, 2004 is equal to the average of the high and low market price of the equity shares in the
two week period preceding the date of grant of the options, on the stock exchange which recorded the highest
trading volume during the two week period. The price for options granted on or after July 22, 2004 is equal to
the closing price on the stock exchange which recorded the highest trading volume preceding the date of grant
of options. The above pricing is in line with the SEBI guidelines, as amended from time to time.
On the basis of the recommendation of the Board Governance & Remuneration Committee, the Board at its
Meeting held on April 25, 2009 approved a grant of approximately 1.7 million options for fiscal 2009 to eligible
employees. 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. 434.10, which was the closing price on the stock exchange, which recorded the highest trading
volume in ICICI Bank shares on April 24, 2009. These options would vest over a five year period, with 20%, 20%,
30% and 30% respectively of the grant vesting each year commencing from the end of the second year from the
date of the grant. No options have been granted to wholetime Directors for fiscal 2009.
Particulars of options granted by ICICI Bank upto April 25, 2009 are given below:
Options granted 52,668,955
Options vested 32,068,304
Options exercised 24,271,617
Number of shares allotted pursuant to exercise of options 24,271,617
Options forfeited/lapsed 7,718,099
Extinguishment or modification of options Nil
Amount realised by exercise of options (Rs.) 4,682,588,988
Total number of options in force 20,679,239
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. 33.70 in fiscal 2009 against basic EPS of Rs. 33.76. 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 2009 based on the intrinsic value of options.