Integrated Report 2020

INTEGRATED REPORT 2020 CIM FINANCIAL SERVICES LTD Explanatory Notes 30 SEPTEMBER 2020 25. POST-EMPLOYMENT BENEFIT LIABILITIES (CONT’D) GROUP Sep-20 MUR m Sep-19 MUR m (a) Pension benefits (cont’d) (iii) Movements in the defined benefit obligations over the year are as follows: At 1 October 46.6 34.4 Current service cost 1.9 1.4 Past service cost - 1.0 Interest expense 2.8 2.1 Other benefits paid - (0.1) Liability experience loss 3.9 1.0 Liability loss due to change in financial assumptions 43.8 6.8 At 30 September 99.0 46.6 (iv) Movements in the fair value of plan assets over the year are as follows: At 1 October 45.5 41.6 Interest income 2.8 2.6 Employer contribution 1.9 1.6 Benefits paid - (0.1) Return on plan assets excluding interest income (3.0) (0.2) At 30 September 47.2 45.5 (v) Sensitivity analysis on defined benefit obligation at end of year Increase due to 1% decrease in discount rate 33.6 20.6 Decrease due to 1% increase in discount rate 26.5 16.5 GROUP Sep-20 % Sep-19 % (vi) Allocation of plan assets at end of year: Equity - local quoted 25 20 Equity - overseas quoted 29 36 Debt - local unquoted 7 7 Debt - overseas quoted 27 26 Property - local 2 2 Cash and other 10 9 100 100 The above sensitivity analysis has been carried out by recalculating the present value of obligation at the end of the period after increasing or decreasing the discount rate while leaving all other assumptions unchanged. The results are particularly sensitive to a change in the discount rate due to the nature of the liabilities being the difference between a minimum defined benefit liability and the projected defined contribution liabilities, the latter being MUR48.7m as at 30 September 2020. Any similar variation in the other assumptions would have shown smaller variations in the defined benefit obligation. 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. The defined benefit pension plan exposes the Group to actuarial risks such as longevity risk, currency risk, interest rate risk and market risk. (vii) Future cashflows - The funding policy is to pay contributions to an external legal entity at the rate recommended by the entity’s actuaries. - Expected employer contributions to post-employment benefit plans for the year ending 30 September 2021 are MUR2.7m. - The average duration of the defined benefit obligations ranges between 3 years and 12 years. 134