annual-report-FY2021

264 COMPANY OVERVIEW BOARD’S REPORT MANAGEMENT DISCUSSION AND ANALYSIS CORPORATE GOVERNANCE BUSINESS RESPONSIBILITY REPORT STANDALONE ACCOUNTS CONSOLIDATED ACCOUNTS Particulars 2021 2020 One percentage point decrease in attrition rate..................................................................................... 9.71 6.76 One percentage point increase in medical inflation rate. ...................................................................... 6.64 4.32 One percentage point decrease in medical inflation rate. ..................................................................... (5.61) (3.66) viii Maturity profile of defined benefit obligation Within 1 year............................................................................................................................................... 141.94 140.97 Between 2 and 5 years............................................................................................................................... 374.05 360.29 Between 6 and 9 years............................................................................................................................... 350.66 339.69 10 years and above..................................................................................................................................... 906.48 857.77 The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. B. Trust-managed Provident fund: Rupees crores Particulars 2021 2020 i Net defined benefit obligation Defined benefit obligation........................................................................................................................ 2,866.01 2,582.80 Fair value of plan assets............................................................................................................................ 2,769.25 2,503.74 Surplus/(Deficit). ......................................................................................................................................... (96.76) (79.06) ii Actuarial assumptions Discount rate. ............................................................................................................................................ 6.30% 6.85% Average remaining tenure of investment portfolio (years).................................................................. 5.29 5.39 Guaranteed rate of return. ...................................................................................................................... 8.50% 8.50% The Company has recognised an obligation of Rs. 66.61 crores (2020 : Rs. 79.06 crores) to fund the shortfall on account of interest rate guarantee through OCI. During the year the Company has paid Rs. 54.32 crores (2020 : Nil) to the Provident Fund Trust in respect of previous year shortfall. The plan assets have been primarily invested in government securities and corporate bonds. The Company’s contribution to Provident Fund and Superannuation fund aggregating Rs. 154.41 crores (2020 : Rs. 147.43 crores) has been recognised in Profit or Loss under the head Employee Benefits Expense. 32. 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 (“M&M ESOP 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 equal instalments on the expiry of 12 months, 24 months and 36 months. or iv) 2 equal instalments on the expiry of 12 months and 24 months. The exercise period of above options range from 1 year to 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. 31. Employee Benefits (contd.) A. Details of defined benefit plans as per actuarial valuation are as below: (contd.)