ICICI Bank 2015 Annual Report Download - page 215

forming part of the Consolidated Accounts (Contd.)
Schedules
213Annual Report 2014-2015
Consolidated Financial Statements
3. Employee Stock Option Scheme (ESOS)
In terms of the ESOS, as amended, the maximum number of options granted to any eligible employee in a financial
year shall not exceed 0.05% of the issued equity shares of the Bank at the time of grant of the options and aggregate
of all such options granted to the eligible employees shall not exceed 10% of the aggregate number of the issued
equity shares of the Bank on the date(s) of the grant of options. Under the stock option scheme, eligible employees
are entitled to apply for equity shares. Options vest in a graded manner over a four-year period, with 20%, 20%, 30%
and 30% of the grants vesting in each year, commencing from the end of 12 months from the date of grant. Options
granted in April, 2009 vest in a graded manner over a five-year period with 20%, 20%, 30% and 30% of grant vesting
each year, commencing from the end of 24 months from the date of grant. Options granted in September, 2011 vest
in a graded manner over a five-year period with 15%, 20%, 20% and 45% of grant vesting each year, commencing
from the end of 24 months from the date of the grant. Options granted after April, 2014 vest in a graded manner over a
three-year period with 30%, 30%, and 40% of the grant vesting in each year, commencing from the end of 12 months
from the date of grant. Out of the total options granted, for a grant of 50,000, 50% of the options granted would vest on
April 30, 2017 and the balance are scheduled to vest on April 30, 2018. The options can be exercised within 10 years
from the date of grant or five years from the date of vesting, whichever is later. The exercise price of Bank’s options
was the last closing price on the stock exchange, which recorded highest trading volume preceding the date of grant
of options. Hence, there was no compensation cost based on intrinsic value of options.
In February 2011, the Bank granted 15,175,000 options to eligible employees and whole-time Directors of the Bank and
certain of its subsidiaries at an exercise price of ` 193.40. Of these options granted, 50% vested on April 30, 2014 and
the balance 50% would vest on April 30, 2015. The options can be exercised within 10 years from the date of grant or
five years from the date of vesting, whichever is later. Based on intrinsic value of options, compensation cost of ` 16.4
million was recognised during the year ended March 31, 2015 (March 31, 2014: ` 20.9 million).
If the Bank had used the fair value of options based on binomial tree model, compensation cost in the year ended
March 31, 2015 would have been higher by ` 2,819.5 million and proforma profit after tax would have been ` 108.93
billion. On a proforma basis, the Bank’s basic and diluted earnings per share would have been ` 18.83 and ` 18.65
respectively. The key assumptions used to estimate the fair value of options granted during the year ended March 31,
2015 are given below.
Risk-free interest rate 8.36% to 9.10%
Expected life 2.85 to 5.87 years
Expected volatility 31.55% to 47.57%
Expected dividend yield 1.43% to 1.77%
The weighted average fair value of options granted during the year ended March 31, 2015 is ` 90.09 (March 31, 2014:
` 118.59).
The following table sets forth, for the periods indicated, the summary of the status of the Bank’s stock option plan.
` except number of options
Particulars
Stock options outstanding
Year ended March 31, 2015 Year ended March 31, 2014
Number
of options
Weighted average
exercise price
Number
of options
Weighted average
exercise price
Outstanding at the beginning of the year 140,521,765 183.74 129,902,265 171.04
Add: Granted during the year 32,375,500 259.96 22,098,250 235.43
Less: Lapsed during the year, net of re-issuance 1,382,765 235.40 4,451,050 192.33
Less: Exercised during the year 23,080,800 150.66 7,027,700 106.11
Outstanding at the end of the year 148,433,700 205.02 140,521,765 183.74
Options Exercisable 75,938,800 180.80 73,041,715 166.70