Constance Hotels Services Limited | Annual Report 2025

205 ANNUAL REPORT 2025

Notes to the Financial Statements Year ended December 31, 2025

Notes to the Financial Statements Year ended December 31, 2025

18. EMPLOYEE BENEFIT LIABILITIES (CONT’D)

18. EMPLOYEE BENEFIT LIABILITIES (CONT’D)

(a) Defined pension benefits (cont’d)

(a) Defined pension benefits (cont’d)

(v)

The amounts recognised in profit or loss are as follows:

(ix) Sensitivity analysis on defined benefit obligations at end of the reporting date:

THE GROUP 2025

THE GROUP 2025

2024

2024

MUR’000

MUR’000

MUR'000

MUR'000

33,798

December 31, Decrease in discount rate (1% movement) Increase in discount rate (1% movement) Increase in future long term salary (1% movement) Decrease in future long term salary (1% movement)

Current service cost Scheme expenses

31,687

1,441 2,004

55,371 49,159 55,588 49,533

1,965 1,875

57,191 51,031 56,102 50,290

Cost of insuring risk benefits

22,253 59,496

Net interest expense

18,873 54,400

Total included in employee benefit expense

The current service cost, scheme expenses, cost of insuring risk benefits, net interest expenses for the year is included in administrative expenses in the statement of profit or loss.

An increase/decrease of 1% in other principal actuarial assumptions would not have a material impact on defined benefit obligations at the end of the reporting period.

The sensitivity above have been determined based on a method that extrapolates the impact on net defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The present value of the defined benefit obligation has been calculated using the projected unit credit method.

THE GROUP 2025

2024

MUR'000

MUR'000

22,612

Actual return on plan assets

16,775

The sensitivity analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

(vi) The amounts recognised in other comprehensive income are as follows:

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

THE GROUP 2025

(x) The defined benefit pension plan exposes the Group to actuarial risks, such as longevity risk, interest rate risk, market (investment) risk and salary risk.

2024

MUR'000

MUR'000

70,278

Liability experience gains

63,595

Longevity Risk

(32,931) 37,347 (6,709) 30,638

Actuarial losses arising from changes in financial assumptions

8,328

The liabilities disclosed are based on the mortality tables PA(92). Should the experience of the pension plans be less favourable than the standard mortality tables, the liabilities will increase.

Actuarial losses

71,923 (2,365) 69,558

Return on plan assets excluding interest income

Interest rate Risk

If the bond interest rate decreases, the liabilities would be calculated using a lower discount rate, and would therefore increase.

(vii) The assets of the plan are invested in the Deposit Administration Policy. The Deposit Administration Policy is a pooled insurance product for Group Pension Schemes, underwritten by Swan Life Ltd. It is a long-term investment Policy which aims to provide a smooth progression of returns from one year to the next without regular fluctuations associated with asset-linked investments such as Equity Funds. Moreover, the Deposit Administration Policy offers a minimum guaranteed return of 4% p.a.

Investment Risk

The present value of the liabilities of the plan are calculated using a discount rate. Should the returns on the assets of the plan be lower than the discount rate, a deficit will arise.

(viii) The principal actuarial assumptions used for the purposes of the actuarial valuations were:

Salary Risk

2025

2024

%

%

If salary increases are higher than assumed in our basis, the liabilities would increase giving rise to actuarial losses.

5.3-5.8

Discount rate

4.7-5.1

1.0

Future salary growth rate

1.0