Integrated Report 2020

INTEGRATED REPORT 2020 CIM FINANCIAL SERVICES LTD GROUP Sep-20 MUR m Sep-19 MUR m (c) Other retirement benefits (cont’d) (iii) Movements in liability recognised in Statements of Financial Position: At 1 October 55.6 46.7 Current service cost 4.9 4.8 Past service cost - (0.2) Interest expense 3.2 2.9 Other benefits paid (1.1) - Liability experience loss 1.6 3.7 Liability loss due to change in demographic assumptions (22.9) - Liability loss due to change in financial assumptions 20.7 (2.3) At 30 September 62.0 55.6 (iv) Sensitivity Analysis on defined benefit obligation at end of period Increase due to 1% decrease in discount rate 19.1 10.6 Decrease due to 1% increase in discount rate 15.2 9.0 GROUP Sep-20 Sep-19 (vi) Principal actuarial assumptions at end of year: Discount rate 2.7% 5.9% Future salary increases 2.2% 4.0% Future pension increases 0.0% 0-1.1% Average retirement age (ARA) 65 60 Average life expectancy for: - Male at ARA 15.9 years 19.5 years - Female at ARA 20 years 24.2 years (d) Contribution to the defined contribution plans amounted to MUR12.0m (2019: MUR14.0m). Explanatory Notes 30 SEPTEMBER 2020 25. POST-EMPLOYMENT BENEFIT LIABILITIES (CONT’D) 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. 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. In relation to the residual retirement gratuities, the results are particularly sensitive to a change in the discount rate due to the nature of liabilities being the difference between the pure retirement gratuities under the Employment Rights Act 2008 and the deductions allowable, being five times the annual pension provided and half the lump sum received by the member at retirement from the pension fund with reference to the Company’s share of contributions. The latter’s amount is MUR77.1m as at 30 September 2020. (v) Future cashflows - The funding policy is to pay benefits out of the Group’s cashflow as and when due. - Expected employer contributions to post-employment benefit plans for the year ending 30 September 2021 are MUR0.5m. - The weighted average duration of the defined benefit obligations ranges between 1 year and 24 years. 138