Nature of leasing activities ( in the capacity of lessee) The Group leases 22 properties in Mauritius, 2 properties in Rodrigues and 1 property in Kenya. For 17 properties it is customary for the lease contracts to provide for payments to increase each year by inflation. For the remaining 5 properties the lease payments are reset periodically to market rates. Administrative buildings are leased for the operations of the Group’s activities. During the year the Group terminated the leasing of 2 properties in Mauritius. Variable lease payments The percentages in the table below reflect the current proportions of 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 reporting date of lease payments that are variable. Sensitivity Number of Lease Contracts Variable payments % GROUP Sep-23 MUR m Sep-22 MUR m Sep-23 MUR m Sep-22 MUR m Sep-23 MUR m Sep-22 MUR m Property leases with payments linked to inflation 9.6 9.8 17 16 93% 93% Property leases with periodic uplifts to market rentals 0.7 0.7 5 6 7% 7% 10.3 10.5 22 22 100% 100% Sensitivity Number of Lease Contracts Variable payments % COMPANY Sep-23 MUR m Sep-22 MUR m Sep-23 MUR m Sep-22 MUR m Sep-23 MUR m Sep-22 MUR m Property leases with payments linked to inflation 9.6 9.8 17 16 81% 76% Property leases with periodic uplifts to market rentals 0.7 0.7 4 5 19% 24% 10.3 10.5 21 21 100% 100% Extension and termination options Extension and termination options are included in a number of property 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. 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 are only included in the lease term if the lease is reasonably certain to be extended. For leases of administrative buildings the following factors are normally the most relevant: If there are significant penalties to terminate, the Group is typically reasonably certain not to terminate. If any leasehold improvements are expected to have a significant remaining value, the Group is typically reasonably certain to extend. Otherwise, the Group considers other factors including historical lease durations and the costs and business disruption required to replace the leased asset. As at 30 September 2023, no potential future cash outflows in respect of termination and extension of lease has been recognised. The lease term is reassessed if an option is actually exercised or the Group becomes obliged to 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. During the current financial year, there is no financial effect of revising lease terms to reflect the effect of exercising extension. 173 OUR YEAR AT A GLANCE OUR PEOPLE GOVERNANCE FINANCIAL STATEMENTS
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