Shriram City Union Finance Limited - Karvy

Stock Options grantedThe weighted average fair value of stock options granted was Rs.227.42. The Black Scholes model has been used forcomputing the weighted average fair value of options considering the following inputs:Yr 1 Yr 2 Yr 3 Yr 4Exercise Price (Rs.) 35.00 35.00 35.00 35.00Expected Volatility (%) 55.36 55.36 55.36 55.36Historical Volatility NA NA NA NALife of the options granted (Vesting and exercise period) inyears1.50 2.50 3.50 4.50Expected dividends per annum (Rs.) 3.00 3.00 3.00 3.00Average risk-free interest rate (%) 7.70 7.67 7.66 7.67Expected dividend rate (%) 0.84 0.84 0.84 0.84The expected volatility was determined based on historical volatility data equal to the NSE volatility rate of Bank Niftywhich is considered as a comparable peer group of the Company. To allow for the effects of early exercise it wasassumed that the employees would exercise the options within six months from the date of vesting in view of theexercise price being significantly lower than the market price.Effect of the employee share-based payment plans on the profit and loss account and on its financial position:As at March 312011(Rs. in lacs)As at March 31 2010Compensation cost pertaining to equity-settled employee share-basedpayment plan included above471.68 751.53Liability for employee stock options outstanding as at year end 2079.09 2882.26Deferred compensation cost 191.82 601.22F-61