Information Regarding Employees Stock Schemes pursuant to ESOP Regulations Sl. No. Particulars ESOP Scheme 2001 ESOP 1 Date of shareholders approval February 27, 2001 September 06, 2005 2 Total number of options approved under the scheme 31,680,000 18,734,552 3 Vesting requirements 1-5 years 1-5 years 4 Exercise / Pricing formula 29,015,686@11.25 1,760,000@0.45 4,380,000@35.00 142,530@0.00 5,541,862@5.00 40,000@60.00 25,000@110.50 Exercise Price not less than the par value of the Equity Share and not more than the prescribed under Chapter VII of SEBI (Issue of Capital and Disclosure Requirements) Regulation, 2009 on Grant Date 5 Maximum term of options granted 7 years from the grant date 7 years from the grant date 6 Source of shares Primary Secondary 7 Variation in terms of ESOPs NIL NIL 8 Difference between the employees compensation cost NIL NIL based on intrinsic value of the stock and the fair value for the year and its impact on profits and on EPS of the Company. 9 movement during the year: options outstanding at the beginning of the 390,000 3,329,093 period options granted during the year NIL 1,575,618 options forfeited / lapsed during the year 10,365 1,424,741 options vested during the year 39,635 210,580 options exercised during the year 75,000 953,684 shares arising as a result of exercise of options Money realised by exercise of options if scheme is implemented directly by the Company* NIL NIL Loan repaid by the Trust during the year from exercise ` 103,945,436 received options outstanding at the end of the year 304,635 2,526,286 options exercisable at the end of the year 29,635 1,025,283 10 a) ` 11.25; ` 0.45; ` 35; ` 200.37 ` 0; ` 5; ` 60; ` 110.5 b) fair value NA; NA; NA; NA; ` 268.20; ` 84.43; ` 357.63 ` 196.93 11 Name of the employee and designation to whom options was granted at ` 5 per option No of options granted No of options granted i) Mr. Gopal Vittal (MD & CEO - India & South Asia) NIL 131,480 ii) Mr. Sundar Rajan R (Group General Counsel) NIL 35,858 iii) Mr. Arvind Chopra (Group Director - Internal NIL 35,858 Assurance) iv) Mr. Deven Khanna (Director - CMD s Office) NIL 31,077 v) Mr. Srikanth Balachandran (Global CHRO) NIL 30,599 vi) Mr. Harjeet Kohli (Group Treasurer) NIL 26,894 vii) Mr. Ajai Puri (Director - Market Operations) NIL 28,816 viii) Mr. Raghunath Mandava (Director - Customer NIL 26,254 Experience) ix) Mr. Nilanjan Roy (Global CFO) NIL 25,746
Sl. No. Particulars ESOP Scheme 2001 ESOP x) Ms. Harmeen Mehta (Global CIO) NIL 23,906 xi) Mr. Srini Gopalan (Director - Consumer Business) NIL 23,667 xii) Mr. Moti Gyamlani (Director - Supply Chain) NIL 21,813 xiii) Mr. Sarang Kanade (Director - Customer NIL 18,753 Experience) xiv) Mr. Shashi Arora (Director - DTH) NIL 14,986 xv) Mr. Ajay Chitkara (Director - Global Voice & Data NIL 14,615 Business) xvi) Mr. Abhay Savargaonkar (Director Networks NIL 14,344 & CTO) xvii) Mr. Ravi Parkash Gandhi (Chief Regulatory NIL 12,825 Officer) xviii) Mr. Manish Prakash (Director - Enterprise NIL 10,041 & Government) xix) Mr. Sameer Chugh (Director - Legal) NIL 8,606 xx) Mr. Raza Khan (Head - Corporate NIL 3,927 Communications) xxi) Ms. Sucheta Mahapatra (Head - Business Strategy & Support) NIL 3,921 12 Method and significant assumptions used to estimate the fair values of options including the following information: a) i) the weighted- values of share ii) the weighted- iii) expected volatility iv) expected option life v) expected dividends vi) the risk-free interest rate and any other inputs to the model b) the method used and the assumptions made to incorporate the effects of expected early exercise; c) how expected volatility was determined, including an explanation of the extent to which expected volatility was based on historical volatility; and d) whether and how any other features of the option grant were incorporated into the measurement of fair value, such as a market condition. 13 Diluted earning per share (EPS) as per Accounting Standard 20 * Since ESOP Scheme is implemented through trust, the same is Black Scholes / Lattice Valuation Model / Monte Carlo Simulation ` 411.7 ` 5 27.45% 48 to 60 months 44% (Dividend yield of 0.54%) 7.79% p.a to 7.83% p.a (The Government securities curve yields are considered as on valuation date). The volatility of the options is based on the historical volatility of the share since the respective entity s equity shares became publicly traded. The expected life of the share option is based on historical data and current expectation and not necessarily indicative of exercise pattern that may occur. Both the ESOP schemes viz. ESOP Scheme 2001 and ESOP are in complinace with the SEBI (ESOP Regulations). Disclosure in notes to accounts is as prescribed under Guidance Note issued by ICAI. To calculate the employee compensation cost, the Company has used the Fair Market Value for the valuation of ESOPs. The options granted to the senior managerial personnel under both the schemes are subject to adjustments as per the terms of respective ESOPs Scheme /. Other than the employee stated in point no. II (i), no other employee was granted stock options exceeding 5% of the total options granted during the year. No employee was granted stock options exceeding 1% of the issued capital during the year.
Employee Stock Compensation (i) Pursuant to the shareholders resolutions dated February 27, 2001 and September 25, 2001, the Company introduced the Bharti Tele-Ventures Employees Stock Option (hereinafter called the Old Scheme ) under which the Company decided to grant, from time to time, options to the employees of the Company and its subsidiaries. The grant of options to the employees under the Old Scheme is on the basis of their performance and other eligibility criteria. (ii) On August 31, 2001 and September 28, 2001, the Company issued a total of 1,440,000 (face value ` 10 each) equity shares at a of ` 565 per equity share ( 2,880,000 equity shares post split of one equity share of ` 10 each into 2 equity shares of ` 5 each) to the Trust. The Company issued bonus shares in the ratio of 10 equity shares for every one equity share held as at September 30, 2001, as a result of which the total number of shares allotted to the trust increased to 15,840,000 (face value ` 10 each) equity shares (31,680,000 equity shares post share split of one equity share of ` 10 each into 2 equity shares of ` 5 each). (iii) Pursuant to the shareholders resolution dated September 6, 2005, the Company announced a new Employee Stock Option Scheme (hereinafter called the New Scheme ) under which the maximum quantum of options was determined at 9,367,276 (face value ` 10 each) options to be granted to the employees from time to time on the basis of their performance and other eligibility criteria. (18,734,552 equity shares post share split of one equity share of ` 10 each into 2 equity shares of ` 5 each) (iv) The following table provides an overview of all existing share option plans of the Company: Scheme Year of issuance of plan Vesting period Contractual term As of March 31, 2016 As of March 31, 2015 Share options granted exercise Share options granted exercise Equity settled s Scheme I 2001 * 2002 1-4 7 30,893 21.25 30,893 21.25 Scheme I 2004 * 2004 1-4 7 4,380 35.00 4,380 35.00 Scheme I Superpot * 2004 1-3 7 143-143 - Scheme I 2006 2006 1-5 7 5,489 5.48 5,489 5.48 2005 * 2005 1-4 7 11,260 237.06 11,260 237.06 2008 & Annual 2008 1-3 7 8,817 352.13 8,817 352.13 Grant (AGP) Share (PSP) 2009 3-4 7 1,691 5.00 1,691 5.00 2009 Special ESOP & Restricted Share 2010 1-5 7 3,615 5.00 3,615 5.00 Units (RSU) Long Term Incentive (LTI) 2011 1-3 7 433 5.00 433 5.00 LTI 2012 1-3 7 1,649 5.00 1,649 5.00 LTI 2015 1-3 7 1,576 5.00 - - Cash settled s Unit (PUP) 2013 Unit (PUP) 2014 Unit (PUP) 2015 * Contractual term has expired Unit (PUP) 2013 Unit (PUP) 2014 Unit (PUP) 2015 2013 1-3 3 2,283-2,283-2014 1-5 3-5 4,017-4,006-2015 1-3 3 7 - - -
(v) The following table exhibits the net compensation expenses arising from share based payment transaction: Particulars Expenses arising from equity-settled share-based payment transactions Expenses arising from Cash-settled share-based payment transactions Year ended March 31, 2016 (` Millions) Year ended March 31, 2015 204 (6) 360 555 564 549 (vi) The total carrying value of cash settled share based compensation liability is `697 Mn and ` 658 as of March 31, 2016 and March 31, 2015, respectively. (vii) The information concerning stock options granted, exercised, forfeited and outstanding at the year-end is as follows: Particulars As of March 31, 2016 As of March 31, 2015 Equity Settled s Scheme I - 2006 Outstanding at beginning of year 390 5.00 539 6.74 Granted - - 225 5.00 Exercised (75) 5.00 (98) 14.38 Forfeited / Expired (10) 5.00 (276) 5.00 Outstanding at end of year 305 5.00 390 5.00 Exercisable at end of year 30 5.00 65 5.00-2005 Outstanding at beginning of year - - 1,008 436.06 Exercised - - - - Forfeited / Expired - - (1,008) 436.06 Outstanding at end of year - - - - - 2008 & AGP Outstanding at beginning of year 2,534 355.45 3,439 354.54 Exercised (686) 334.89 (173) 327.20 Forfeited / Expired (1,209) 342.24 (732) 357.85 Outstanding at end of year 639 402.50 2,534 355.45 Exercisable at end of year 639 402.50 2,534 355.45 - PSP 2009 Outstanding at beginning of year 83 5.00 242 5.00 Exercised (22) 5.00 (159) 5.00 Forfeited / Expired (8) 5.00-5.00 Outstanding at end of year 53 5.00 83 5.00 Exercisable at end of year 53 5.00 83 5.00 - Special ESOP & RSU Outstanding at beginning of year 189 5.00 408 5.00 Exercised (44) 5.00 (178) 5.00
Particulars As of March 31, 2016 As of March 31, 2015 Forfeited / Expired (19) 5.00 (41) 5.00 Outstanding at end of year 126 5.00 189 5.00 Exercisable at end of year 126 5.00 189 5.00 - LTI (2011, 2012 & 2015) Outstanding at beginning of year 523 5.00 1,072 5.00 Granted 1,576 5.00 67 5.00 Exercised (201) 5.00 (356) 5.00 Forfeited / Expired (189) 5.00 (260) 5.00 Outstanding at end of year 1,709 5.00 523 5.00 Exercisable at end of year 208 5.00 230 5.00 Cash Settled PUP 2013 Outstanding at beginning of year 962-1,978 - Granted - - 116 - Exercised (381) - (589) - Forfeited / Expired (208) - (542) - Outstanding at end of year 373-962 - PUP 2014 shares under option: Outstanding at beginning of year 3,839 - - - Granted 11-4,006 - Exercised (441) - - - Forfeited / Expired (671) - (167) - Outstanding at end of year 2,738-3,839 - PUP 2015 shares under option: Outstanding at beginning of year - - - - Granted 7 - - - Exercised - - - - Forfeited / Expired - - - - Outstanding at end of year 7 - - -
(viii) The following table summarises information about options exercised and granted during the year and about options outstanding and their remaining contractual life: March 2016 Outstanding as of March 31, 2016 Exercise remaining contractual life Granted during the year ended March 31, 2016 Wtd Avg Fair Value Excercised during the year ended March 31, 2016 share Equity settled s 2006 305 5.00 5.00 - - 75 350.45 2008 & AGP 639 402.50 0.25 - - 686 397.45 PSP 2009 53 5.00 0.69 - - 22 367.51 Special ESOP & 126 5.00 1.20 - - 44 319.66 RSU LTI (2011, 1,709 5.00 5.98 1,576 398.32 201 348.28 2012 & 2015) Cash settled s PUP 2013 373-0.37 - - 381 417.90 PUP 2014 2,738-2.05 11 373.40 441 423.32 PUP 2015 7-2.35 7 342.44 - - March 2015 Outstanding as of March 31, 2015 Exercise remaining contractual life Granted during the year ended March 31, 2015 Wtd Avg Fair Value Excercised during the year ended March 31, 2015 share Equity settled s 2006 390 5.00 to 5.86 225 361.19 98 371.70 110.50 2008 & AGP 2,534 295.00 0.63 - - 173 383.30 to 402.50 PSP 2009 83 5.00 1.87 - - 159 352.26 Special ESOP & 189 5.00 2.26 - - 178 350.09 RSU LTI (2011 & 523 5.00 4.27 67 291.63 356 368.36 2012) Cash settled s PUP 2013 962 1.37 116 378.92 589 354.24 PUP 2014 3,839-2.89 4,006 389.59 - -
(ix) The fair value of the options granted was estimated on the date of grant using the Black- Scholes / Monte Carlo Lattice valuation model with the following assumptions: (` Millions) Particulars Year ended March Year ended March 31, 2016 31, 2015 Risk free interest rates 6.86% to 7.83% 7.64% to 8.65% Expected life 4 to 60 months 11 to 72 months Volatility 26.63% to 27.45% 27.36% to 30.73% Dividend yield 0.54% to 0.63% 0.46% to 0.48% Wtd share on measurement date 350.9 to 411.7 373.7 to 393.9 Wtd on measurement date 0 to 5 0 to 5 The volatility of the options is based on the historical volatility of the share since the Company s equity shares became publicly traded. (x) Bharti Infratel Limited (BIL) has given stock options to certain employees of the Company and the corresponding compensation cost is borne by BIL.