MAHINDRA & MAHINDRA LTD. | Integrated Annual Report 2021-22

256 COMPANY OVERVIEW BOARD’S REPORT MANAGEMENT DISCUSSION AND ANALYSIS CORPORATE GOVERNANCE BUSINESS RESPONSIBILITY REPORT STANDALONE ACCOUNTS CONSOLIDATED ACCOUNTS Particulars 2022 2021 One percentage point increase in attrition rate...................................................................................... (5.50) (8.63) One percentage point decrease in attrition rate..................................................................................... 6.13 9.72 One percentage point increase in medical inflation rate. ...................................................................... 4.85 6.64 One percentage point decrease in medical inflation rate. ..................................................................... (4.18) (5.61) viii Maturity profile of defined benefit obligation Upto 1 year.................................................................................................................................................. 164.39 144.44 1 to 5 years.................................................................................................................................................. 443.29 383.77 6 to 9 years.................................................................................................................................................. 380.68 350.66 10 years and above..................................................................................................................................... 1,096.40 922.52 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 2022 2021 i Net defined benefit obligation Defined benefit obligation........................................................................................................................ 3,004.62 2,866.01 Fair value of plan assets............................................................................................................................ 3,004.62 2,769.25 Surplus/(Deficit). ......................................................................................................................................... — (96.76) ii Actuarial assumptions Discount rate. ............................................................................................................................................ 6.95% 6.30% Average remaining tenure of investment portfolio (years).................................................................. 4.63 5.29 Guaranteed rate of returns...................................................................................................................... 8.10% 8.50% During the year the Company has recognised an obligation of Rs. Nil (2021: Rs. 66.61 crores) to fund the shortfall on account of interest rate guarantee. The Company has paid Rs. Nil (2021: 54.32) 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. 165.14 crores (2021: Rs. 165.38 crores) has been recognised in Profit or Loss under the head Employee Benefits Expense. 36. 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 or ii) 5 equal instalments on the expiry of 36 months, 48 months, 60 months, 72 months and 84 months or iii) 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 iv) 4 equal instalments on the expiry of 12 months, 24 months, 36 months and 48 months or v) 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 or 35. Employee Benefits (contd.) A. Details of defined benefit plans as per actuarial valuation are as below: (contd.) Rupees crores