annual-report-FY2021

337 MAHINDRA & MAHINDRA LTD. INTEGRATED ANNUAL REPORT 2020-21 Rupees crores Particulars 2021 2020 6 Actuarial Assumptions and sensitivity a Actuarial assumptions Discount rate (%). ........................................................................................................................................ 0.45 - 6.91 0.36 - 6.90 Attrition rate (%). ........................................................................................................................................ 1.54 - 37 1.57 - 52.00 Cost inflation (%). ........................................................................................................................................ 7.00 - 9.00 7.00 - 9.00 Cost inflation includes an estimate of medical inflation and future salary increases taking in to account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. b Quantitative sensitivity analysis for impact of significant assumptions on defined benefit obligation are as below: Assumptions One percentage point increase in discount rate....................................................................................... (168.54) (372.33) One percentage point decrease in discount rate ..................................................................................... 177.82 408.93 One percentage point increase in salary growth rate.............................................................................. 142.37 366.68 One percentage point decrease in salary growth rate............................................................................. (128.81) (327.77) One percentage point increase in attrition rate. ...................................................................................... (37.80) (67.68) One percentage point decrease in attrition rate. ..................................................................................... 38.27 59.20 One percentage point increase in medical inflation rate . ...................................................................... 7.75 5.13 One percentage point decrease in medical inflation rate . ..................................................................... (6.46) (4.24) 7 Maturity profile of defined benefit obligation Time periods Within 1 year...................................................................................................................................................... 196.40 241.13 2 - 5 year............................................................................................................................................................. 596.51 979.75 Between 6 and 9 years...................................................................................................................................... 543.44 1,262.36 10 years and above............................................................................................................................................ 1,142.24 2,962.36 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. Group’s contribution (in respect of companies where applicable) for Provident Fund and Superannuation Fund aggregating Rs. 347.70 crores (2020: Rs. 392.84 crores) has been recognised in the Profit or Loss under the head ‘Employee Benefits Expense’. 31. Employee Benefits (contd.)