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14. EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”) (CONTINUED)(a)Performance-Based ESOS (continued)CompanyAt At 31 Fair valueExercise 1 January December at grantprice 2009 Granted Adjusted Exercised Lapsed 2009 date (RM)Axiata sharesTranche 1 1.81 — 4,141,250 (143,100) — — 3,998,150 0.54Tranche 2 1.81 — 4,141,250 (143,100) — — 3,998,150 0.57— 8,282,500 (286,200) — — 7,996,300The fair value of the Performance-Based ESOS granted in which FRS 2 applies, were determined using the BlackScholes Valuation model. The significant inputs in the model are as follows:Axiata OptionsTranche 1-2Exercise priceRM1.81Option expected term– Tranche 1 5 years– Tranche 2 5.5 yearsWeighted average share price at grant dateRM1.81Expected dividend yield 1%Risk free interest rates (Yield of Malaysian Government securities) 3.0% – 3.7%Expected volatility* 31.3%* The volatility rate of the Company’s options was derived after considering the pattern and level of historicalvolatility of entities in the same industry since the Company did not have sufficient information on historicalvolatility as it was only listed on the Bursa Securities on 28 April 2008.Annual Report 2009 • 211