ICICI Bank 2014 Annual Report Download - page 41
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TheBoardatitsMeetingheldonApril25,2014approvedagrantofapproximately6.55millionoptionsfor
fiscal2014toeligibleemployeesandwholetimeDirectorsofICICIGroup(optionsgrantedtowholetime
DirectorsofICICIBankbeingsubjecttoRBIapproval).Eachoptionconfersontheemployeearightto
applyforoneequityshareoffacevalueof`10ofICICIBankat`1,299.55whichwasclosingpriceonthe
stockexchangewhichrecordedthehighesttradingvolumeinICICIBanksharesonApril23,2014,the
lasttradingdaybeforethedateoftheBoardMeeting.Theseoptionswouldvestoverathreeyearperiod,
with30%,30%,and40%respectivelyofthegrantvestingineachyearcommencingfromtheendof12
monthsfromthedateofgrant.Outofthetotaloptionsgranted,foragrantof50,000,50%oftheoptions
grantedwouldvestonApril30,2017andthebalancearescheduledtovestonApril30,2018.
Optionscanbeexercisedwithin10yearsfromthedateofgrantorfiveyearsfromthedateofvesting,
whicheverislater.Thepriceof theoptionsgrantedprior toJune30,2003istheclosingmarketprice
onthestockexchange,whichrecordedthehighesttradingvolumeonthedateofgrant.Thepricefor
optionsgrantedonorafterJune30,2003tillJuly21,2004isequaltotheaverageofthehighandlow
marketpriceoftheequitysharesinthetwoweekperiodprecedingthedateofgrantoftheoptions,on
thestockexchangewhichrecordedthehighesttradingvolumeduringthetwoweekperiod.Thepricefor
optionsgrantedonorafterJuly22,2004(otherthanthegrantsapprovedbytheBoardatitsMeetingheld
onOctober29,2010wherethegrantpricewastheaverageclosingpriceoftheICICIBankstockonthe
stockexchangeduringthesixmonthsuptoOctober28,2010)isequaltotheclosingpriceonthestock
exchangewhichrecordedthehighesttradingvolumeprecedingthedateofgrantofoptions.Theabove
disclosureisinlinewiththeSEBIguidelines,asamendedfromtimetotime.
ParticularsofoptionsgrantedbyICICIBankuptoApril25,2014aregivenbelow:
OptionsgrantedtillApril25,20141(excludingoptionsforfeited/lapsed) 66,386,252
Optionsforfeited/lapsed 11,229,853
Optionsexercised 31,958,326
Totalnumberofoptionsinforce 34,427,926
Optionsvested 49,356,153
Numberofsharesallottedpursuanttoexerciseofoptions 31,958,326
Extinguishmentormodificationofoptions Nil
Amountrealisedbyexerciseofoptions(`) 8,411,313,500
1. IncludesoptionsgrantedtowholetimedirectorsofICICIBankpendingRBIapproval.
Noemployeewasgrantedoptionsduringanyoneyearequaltoorexceeding0.05%oftheissuedequity
sharesofICICIBankatthetimeofthegrant.
Thediluted earnings per share(EPS) pursuant to issue ofshares on exercise of optionscalculated in
accordancewithAS-20was`84.65infiscal2014comparedtobasicEPSof`84.99.TheBankrecognised
acompensationcostof`20.9millioninfiscal2014basedontheintrinsicvalueofoptions.However,if
ICICIBankhadusedthefairvalueofoptionsbasedonthebinomialtreemodel,compensationcostin
fiscal2014wouldhavebeenhigherby`2,359.8millionandproformaprofitaftertaxwouldhavebeen
`95.74billion.Onaproformabasis,ICICIBank’sbasicanddilutedearningspersharewouldhavebeen
`82.95and`82.62respectively.
Thekeyassumptionsusedtoestimatethefairvalueofoptionsgrantedduringfiscal2014aregivenbelow.
Risk-freeinterestrate 7.60%to9.12%
Expectedlife 6.35years
Expectedvolatility 48.70%to48.96%
Expecteddividendyield 1.70%to1.96%
The weighted average fair value of options granted during fiscal 2014 is ` 592.94 (March 31, 2013:
`434.91).