Year ended 31 December 2012
53
Bank 2012
2011 Unissued number
of ordinary shares under outstanding
options Weighted
average exercise
price Unissued number
of ordinary shares under outstanding
options Weighted
average exercise
price
Balance at 1 January 4,810,649
11.57 9,419,150
12.66 Movements during the year:
- Exercised 1,518,839
11.92 1,305,541
11.55 - Forfeited Expired
866,789 11.87
3,302,960 14.54
Balance at 31 December 2,425,021
11.23 4,810,649
11.57 Additional information:
Outstanding options exercisable at 31 December 2,425,021
11.23 4,810,649
11.57 Weighted average remaining contractual life of
options outstanding at 31 December
1.04 years 1.44 years
Range of exercise price of options outstanding at 31 December
8.84 to 12.81 8.84 to 12.81
In 2012, 1,518,839 options 2011: 1,305,541 were exercised at their contractual exercise prices for the Bank. During the year, the corresponding weighted average market price of DBSH
’s shares was 14.06 2011: 13.94.
40.3 DBSH Share Plan
Under the DBSH Share Plan the Share Plan, DBSH ’s
ordinary shares may be granted to Group executives who hold such rank as may be determined by the
Committee appointed to administer the Share Plan from time to time. The awards could be performance-
based andor time-based. Where time-based awards are granted, they will only
vest after the satisfactory completion of time-based service conditions. Participants are awarded shares
of DBSH, their equivalent cash value or a combination of both as part of their deferred bonus
at the discretion of the Committee. A time-based award comprises two elements, namely,
the main award and
the “retention” award previously known as “kicker” award. The shares comprised in the
“retention” award constitute twenty percent of the shares comprised in the main award. Effective 2010,
the deferral period for unvested shares was extended from a 3-year period to a 4-year period showing a
more prudent risk management arrangement. Under the new vesting schedule, thirty-three percent of the
shares comprised in the main award will vest two years after the date of grant. A further thirty-three percent of
the shares comprised in the main award will vest three years after the date of grant. The remainder thirty-four
percent of the shares comprised in the main award,
together with the shares comprised in the “retention” award, will vest four years after the date of grant. For
time-based awards, the fair value of the shares awarded are computed based on the market price of
the ordinary shares at the time of the award and is amortised through the income statement over the
vesting period. At each balance sheet date, the Group revises its estimates of the number of shares expected
to vest based on non-market vesting conditions and the corresponding adjustments are made to the
income statement. The following table sets out the outstanding awards at the
end of each reporting period and the movement during the year:
The Group Number of shares
2012 2011
Balance at 1 January 11,595,571
9,444,365 Granted
6,002,356 5,319,354
Vested 3,500,581
2,932,204 Forfeited
455,221 235,944
Balance at 31 December 13,642,125
11,595,571
The weighted average fair value of the shares granted during the year is 14.09 2011: 14.40.
Bank Number of shares
2012 2011
Balance at 1 January 9,974,850
8,093,410 Granted
4,663,460 4,529,238
Vested 2,866,767
2,485,174 Forfeited Others
780,186 162,624
Balance at 31 December 10,991,357
9,974,850
The weighted average fair value of the shares granted during the year is 14.09 2011: 14.38.
Share based expenses are recognised as employee benefits, with the corresponding amount recharged by
the ultimate holding company. Therefore, the share based compensation reserve has a nil balance.
40.4 DBSH Employee Share Plan The DBSH Employee Share Plan the ESP caters to
all employees of the Group who are not eligible to participate in the DBSH Share Option Plan, the DBSH
Share Plan or other equivalent plans. Under the ESP, eligible employees are awarded ordinary
shares of DBSH, their equivalent cash value or a combination of both at the discretion of the Committee,
when time-based conditions are met. The ESP awards are granted at the absolute discretion of the
Compensation and Management Development Committee.
Time-based awards were granted in the current and previous financial years. The time-based awards will
only vest after the satisfactory completion of time- based service conditions. Similar to the DBSH Share
Year ended 31 December 2012
54
Plan, effective from the 2010 grant, shares will vest at thirty-three percent two years after the date of grant. A
further thirty-three percent will vest three years after the date of grant and the remainder thirty-four percent
four years after the date of grant. In specific cases
where the award form part of an employee’s annual performance remuneration, an additional
“retention” award which constitute 20 of the shares given in the
main award will be granted. The shares in the retention award will vest four years after the date of grant. The
fair value of the shares awarded are computed based on the market price of the ordinary shares at the time
of the award and is amortised through the income statement over the vesting period. At each balance
sheet date, the Group revises its estimates of the number of shares expected to vest based on non-
market vesting conditions and the corresponding adjustments are made to the income statement.
The following table sets out the outstanding awards at the end of each reporting period and the movement
during the year:
The Group Number of shares
2012 2011
Balance at 1 January 846,050
575,426 Granted
639,213 526,400
Vested 171,934
154,009 Forfeited
80,403 101,767
Balance at 31 December 1,232,926
846,050
The weighted average fair value of the shares granted during the year is 14.10 2011: 14.48.
Bank Number of shares
2012 2011
Balance at 1 January 465,400
299,598 Granted
332,778 300,600
Vested 77,730
79,404 Forfeited Others
89,442 55,394
Balance at 31 December 631,006
465,400
The weighted average fair value of the shares granted during the year is 14.10 2011: 14.48.
Share based expenses are recognised as employee benefits, with the corresponding amount recharged by the
ultimate holding company. Therefore, the share based compensation reserve has a nil balance.
41 Related Party Transactions
41.1 Transactions between the Bank and its subsidiaries, including consolidated special purpose entities, which are related parties of the Bank, have been eliminated on consolidation and are disclosed in Notes 41.4 to 41.6.
41.2 During the financial year, the Group had banking transactions with related parties, consisting of associates, joint
ventures and key management personnel of the Group. These included the taking of deposits and extension of credit card and other loan facilities. These transactions were made in the ordinary course of business and carried
out at arms-length commercial terms, and are not material.
In addition, key management personnel received remuneration for services rendered during the financial year. Non-cash benefits including performance shares were also granted.
41.3 Total compensation and fees to key management personnel
a
are as follows:
The Group Bank
In millions 2012
2011 2012
2011
Short-term benefits
b
39 37
30 31
Share-based payments
c
16 14
14 14
Total 55
51 44
45 Of which: Bank Directors’ remuneration
and fees 8
6 8
6
a Includes Bank Directors and members of the Management Committee who have authority and responsibility in planning the activities and
direction of the Group. The composition and number of Directors and Management Committee members may differ from year to year b Includes cash bonus based on amount accrued during the year, to be paid in the following year
c Share-based payments are expensed over the vesting period in accordance with FRS102
41.4 Income received and expenses paid to related parties
Bank In millions
2012 2011
Income received from:
-Subsidiaries
134 168
-Associatesjoint ventures 100
37 Total
234 205
Expenses paid to:
-Subsidiaries
173 134
-Special purpose entities -
2 -Associatesjoint ventures
4 4
Total
177 140
55
41.5 Amounts due to and from related parties
