Constance Hotels Services Limited | Annual Report 2025

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187 ANNUAL REPORT 2025

Notes to the Financial Statements Year ended December 31, 2025

6. RIGHT-OF-USE ASSETS (CONT’D)

(b) Variable lease payments

LEASE LIABILITIES

Land and buildings MUR’000

Plant and machinery MUR’000

Total

The percentages in the table below reflect the lease payments that are either fixed or variable. The sensitivity reflects the impact on the carrying amount of lease liabilities and right-of-use assets if there was an uplift of 5% on the balance sheet date to lease payments that are variable.

MUR’000

THE GROUP At January 1, 2024

4,476,644

23,371

4,500,015

Additions

203,796 36,970

6,775

210,571 36,970

31 December 2025

Lease

Fixed

Variable payments

Remeasurement (*)

- -

contracts Number

payments

Sensitivity

Derecognition of lease Interest expenses Lease payments Exchange differences At December 31, 2024

(1,212,893) 297,967 (391,730) 183,138 3,593,892

(1,212,893) 299,393 (398,149) 183,138 3,619,045

% ± MUR’000

1,426

6 4

38.4%

76,443

Property leases with payments linked to inflation

(6,419)

60.0%

Property leases with fixed payments

1.20%

1,011

Vehicle leases with payments linked to bank rate

25,153

0.4%

Vehicle leases with fixed payments

60.4%

39.6%

77,454

Current

163,117

4,988

168,105

Non current

3,430,775 3,593,892

20,165 25,153

3,450,940 3,619,045

31 December 2024

Lease

Fixed

Variable

contracts Number

payments

Sensitivity

% ± MUR’000

LEASE LIABILITIES

6 4

38.8%

77,452

Property leases with payments linked to inflation

59.6%

Property leases with fixed payments

The following are the amounts recognised in profit or loss

1.0%

1,064

Vehicle leases with payments linked to bank rate

0.6%

Vehicle leases with fixed payments

THE GROUP

THE COMPANY

60.2%

39.8%

78,516

2025

2024

2025

2024

MUR'000 253,662 275,488 529,150

MUR'000

- - -

Depreciation expense of right-of-use assets Interest expense on lease liabilities Total amount recognised in profit or loss

278,370 299,393 577,763

- - -

Extension and termination options are included in a number of property and equipment leases across the Group. These are used to maximise operational flexibility in terms of managing the assets used in the Group’s operations. The majority of extension and termination options held are exercisable only by the Group and not by the respective lessor.

* The Group remeasured its lease liability : (i) In the financial years 2025 and 2024 to reflect the change in future lease repayments resulting from a change in index used to determine those payments. (ii) In financial year 2025 to reflect the change in lease term following an extension provided by the lessor for 49 years. ** During the year, the Group obtained an extension of its lease period for another 49 years amounting to USD 5 million. This represents direct cost to obtain the extension. *** The land and buildings include leasehold payments which are incremental costs incurred to obtain the lease facilities and hence has been capitalised as part of the right of use assets. Refer to Note 3.1 for undiscounted lease liabilities.

(d) Lease term

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and that is within the control of the lessee.

The effective interest rates at the end of reporting date were from 6.0% to 12.0% (2024: 5.6% to 12.0%) for the Group.

(a) Nature of leasing activities (in the capacity as lessee)

The Group leases a number of properties in the jurisdiction from which it operates. In some jurisdictions it is customary for lease contracts to provide for payments to increase each year by inflation or and in others to be reset periodically to market rental rates. In some jurisdictions property leases the periodic rent is fixed over the lease term.

(e) Lease payments

The total cash outflows for leases in 2025 was MUR 396.9 million (2024: MUR 398.1 million) for the Group and Nil (2024: Nil) for the Company.

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