ICICI Bank 2015 Annual Report Download - page 54

52 Annual Report 2014-2015
Directors’ Report
The Board at its Meeting held on April 27, 2015 approved a grant of approximately 34.50 million options for fiscal 2015 to
eligible employees and wholetime Directors of ICICI Group (options granted to wholetime Directors of ICICI Bank being
subject to RBI approval). Each option confers on the employee a right to apply for one equity share of face value of ` 2
of ICICI Bank at ` 308.25 which was closing price on the stock exchange which recorded the highest trading volume in
ICICI Bank shares on April 24, 2015. The grant price is calculated as per the SEBI guidelines. These options would vest
over a three year period, with 30%, 30%, and 40% 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 for options granted (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
upto 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.
Particulars of options granted by ICICI Bank upto April 27, 2015 are given below:
Options granted till April 27, 20151 (excluding options forfeited/lapsed) 364,018,995
Options forfeited/lapsed 57,741,030
Options exercised 183,528,245
Total number of options in force 180,490,750
Options vested 287,163,365
Number of shares allotted pursuant to exercise of options 183,528,245
Extinguishment or modification of options Nil
Amount realised by exercise of options (`) 12,006,254,611
1. Includes options granted to wholetime Directors of ICICI Bank subject to 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-Earnings per share was ` 19.13 in fiscal 2015 compared to basic EPS of ` 19.32. The Bank recognised a compensation
cost of ` 16.4 million in fiscal 2015 based on the intrinsic value of options. However, if the Bank had used the fair value
of options based on the binomial tree model, compensation cost in fiscal 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 fiscal 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 fiscal 2015 is ` 90.09 (March 31, 2014: ` 118.59).
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The Bank has undertaken various initiatives for energy conservation at its premises, further details are given under
Principle 6 of Section E of the Business Responsibility Report. The Bank has used information technology extensively in
its operations, for more details please refer the section on Information Technology under Business Overview.