ICICI Bank 2012 Annual Report Download - page 35

Annual Report 2011-2012 33
which recorded the highest trading volume in ICICI Bank shares on April 26, 2012. These options would
vest over a four year period, with 20%, 20%, 30% and 30% respectively of the grant vesting in each
year commencing from the end of 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 (other than the grants approved by the Board at its Meeting
held on October 29, 2010 where the grant price was the average closing price of the ICICI Bank stock
on the stock exchange during the six months up to October 28, 2010) 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 disclosure is in line with the SEBI guidelines, as amended from time to time.
Particulars of options granted by ICICI Bank up to April 27, 2012 are given below:
Options granted till April 27, 20121 (excluding options forfeited/lapsed) 57,094,191
Options forfeited/lapsed 9,579,664
Options exercised 29,587,346
Total number of options in force 27,506,845
Options vested 44,627,833
Number of shares allotted pursuant to exercise of options 29,587,346
Extinguishment or modification of options Nil
Amount realised by exercise of options ( ` ) 7,185,295,195
1. Includes Options granted to wholetime Directors pending RBI approval
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 ` 55.95 in fiscal 2012 against basic EPS of ` 56.11. The Bank recognised a
compensation cost of ` 21.0 million in fiscal 2012 based on the intrinsic value of options. However, if
ICICI Bank had used the fair value of options based on binomial tree model, compensation cost in the
year ended March 31, 2012 would have been higher by ` 1,816.1 million and proforma profit after tax
would have been ` 62.83 billion. On a proforma basis, ICICI Bank’s basic and diluted earnings per share
would have been ` 54.52 and ` 54.37 respectively.
The key assumptions used to estimate the fair value of options granted during the year ended March
31, 2012 are given below:
Risk-free interest rate 7.99% to 9.07%
Expected life 6.35 to 6.98 years
Expected volatility 47.53% to 49.20%
Expected dividend yield 1.26% to 1.60%
The weighted average fair value of options granted during the year ended March 31, 2012 is ` 592.52
per option (March 31, 2011: ` 535.87).
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO, UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956.
The provisions of Section 217(1)(e) of the Companies Act, 1956 relating to conservation of energy and
technology absorption do not apply to the Bank. The Bank has, however, used information technology
extensively in its operations.