Shriram City Union Finance Limited - Karvy

Stock Options grantedSeries I:The 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 exerciseperiod) in years1.50 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 will exercise the options within six months from the date of vesting in view of the exerciseprice 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:(Rs. in lacs)As at March31, 2010As at March 31,2009Compensation cost pertaining to equity-settled employee share-basedpayment plan included above751.53 1,111.28Liability for employee stock options outstanding as at year end 2,882.26 2,990.73Deferred compensation cost 601.22 1,352.76F-74