MKH Annual Report 2017

26. PROVISIONS (continued) (a) Post-employment benefit obligations(continued) The defined benefit obligation expenses were determined based on actuarial valuations prepared by an independent actuary using the projected unit credit method. Principal assumptions at reporting date are as follows: The Group 2017 2016 Discount rate 7.5% 8.00% - 9.80% Future salary increase 10% 10% Mortality rate 100%TMI3 100% TMI3 Resignation rate 4% - 9% until 4% - 9% until age of 30 - 32 age of 30 - 32 then decrease then decrease linearly to 0% linearly to 0% at age of 55 at age of 55 Disability 5% of 5% of mortality rate mortality rate Normal retirement age 55 55 - 60 Sensitivity analysis The sensitivity analysis below has been determined based on reasonably possible changes in the discount rate and future salary increase occurring at the reporting date, while holding all other assumptions constant. The Group Increase/(Decrease) in profit 2017 2016 RM RM Discount rate increase by 1% 1,260,891 1,174,820 Discount rate decrease by 1% (1,507,646) (1,416,722) Future salary increase by 1% (1,472,743) (1,384,724) Future salary decrease by 1% 1,258,670 1,173,397 The sensitivity analysis presented above has been determined using deterministic method and 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. At 30 September 2017, the weighted-average duration of the defined benefit obligation was 17.95 to 21.90 years (2016: 16.62 to 26.74 years). Notes to the Financial Statements For the Financial Year ended 30 September 2017 165 MKH Berhad • Annual Report 2017