annual-report-FY2020

372 COMPANY OVERVIEW BOARD’S REPORT MANAGEMENT DISCUSSION AND ANALYSIS CORPORATE GOVERNANCE BUSINESS RESPONSIBILITY REPORT STANDALONE ACCOUNTS CONSOLIDATED ACCOUNTS 39. Employee Stock Option Plan The Company has allotted 55,24,219 Ordinary (Equity) Shares of Rs. 10 each, 10,00,000 Ordinary (Equity) Shares of Rs. 10 each, 1,73,53,034 Ordinary (Equity) Shares of Rs. 5 each, 19,11,628 Ordinary (Equity) Shares of Rs. 5 each and 52,00,000 Ordinary (Equity) Shares of Rs. 5 each in the years ended 31 st March, 2002, 31 st March, 2010, 31 st March, 2011, 31 st March 2014 and 31 st March, 2015 respectively to the Mahindra & Mahindra Employees’ Stock Option Trust set up by the Company. The Trust holds these shares for the benefit of the employees and issues them to the eligible employees as per the recommendations of the Compensation Committee. Options granted under Mahindra & Mahindra Limited Employees Stock Option Scheme - 2000 (“2000 Scheme”) vest in 4 equal instalments on the expiry of 12 months, 24 months, 36 months and 48 months from the date of grant. The options may be exercised on any day over a period of five years from the date of vesting. Number of vested options exercisable is subject to a minimum of 50 or number of options vested whichever is lower. Options granted under Mahindra & Mahindra Limited Employees Stock Option Scheme - 2010 (“2010 Scheme”) vest in i) 5 equal instalments on the expiry of 12 months, 24 months, 36 months, 48 months and 60 months from the date of grant or ii) 4 instalments bifurcated as 20% on the expiry of 18 months, 20% on the expiry of 30 months, 30% on the expiry of 42 months and 30% on the expiry of 54 months or iii) 3 instalments bifurcated as 33.33% on the expiry of 12 months, 33.33% on the expiry of 24 months and 33.34% on the expiry of 36 months. The options may be exercised on any day over a period of 5 years from the date of vesting. Number of vested options exercisable is subject to a minimum of 50 or number of options vested whichever is lower. Summary of stock options No. of stock options Weighted average exercise price (Rs.) Options outstanding on 1 st April, 2019.......................................................................... 63,51,833 4.18 Options granted during the year................................................................................... 20,54,575 5.00 Options forfeited/lapsed during the year...................................................................... 3,19,189 6.19 Options exercised during the year................................................................................. 14,52,547 3.62 Options outstanding on 31 st March, 2020...................................................................... 66,34,672 4.46 Options vested but not exercised on 31 st March, 2020................................................ 24,39,947 4.20 Average share price on the date of exercise of the options are as under Date of exercise Weighted average share price (Rs.) 24 th April 2019 to 13 th March, 2020.................................................................................................................................... 543.59 Information in respect of options outstanding as at 31 st March, 2020 Range of exercise price Number of options Weighted average remaining life Rs. 2.50.............................................................................................................................. 27,36,792 4.48 years Rs. 5.00.............................................................................................................................. 38,87,880 6.43 years Rs. 331.00.......................................................................................................................... 10,000 0.98 years The fair values of options granted during the year are as follows : Grant Date No of years vesting Fair value per options 7 th November, 2019.......................................................................................................... 5 years Rs. 531.26 7 th November, 2019.......................................................................................................... 3 years Rs. 538.85 The fair value has been calculated using the Black Scholes Options Pricing Model and the significant assumptions made in this regard are as follows : Grant dated 7 th Nov, 2019 (5 years vesting) 7 th Nov, 2019 (3 years vesting) Risk free interest rate (%)............................................................................................................................................... 6.29% 6.11% Expected life (in years). ................................................................................................................................................... 5.51 years 4.51 years Expected volatility (%)..................................................................................................................................................... 26.27% 26.00% Expected dividend yield (%). .......................................................................................................................................... 1.47% 1.47% Exercise Price (Rs.)............................................................................................................................................................ 5.00 5.00 Stock Price (Rs.)................................................................................................................................................................. 579.80 579.80