Page 163 - Pakistan Oilfields Limited - Annual Report 2021

NOTES TO AND FORMING

PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2021

(b) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with
financial liabilities.

The Company manages liquidity risk by maintaining sufficient cash and marketable securities. At
June 30, 2021, the Company had financial assets of Rs 55,501,160 thousand (2020: Rs 51,671,953
thousand).

The table below analyses the Company’s financial liabilities into relevant maturity groupings based
on the remaining period at the statement of financial position to the maturity date. The amounts
disclosed in the table are undiscounted cash flows which have been inflated using appropriate
inflation rate, where applicable.

Less than 1 year Between 1 to 5 Over 5 years
years

Rupees ('000)

At June 30, 2021

Long term deposits - 873,412 -
Trade and other payables 22,728,790 - -
Unclaimed dividend 244,495
At June 30, 2020

Long term deposits - 861,129 -
Trade and other payables 20,949,379 - -
Unclaimed dividend 214,307

(c) Market risk

(i) Currency risk

Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rates. Foreign exchange risk arises mainly from
future commercial transactions or receivables and payables that exist due to transactions in foreign
currencies.

The Company is exposed to currency risk arising from currency exposure with respect to the US
dollar. Currently foreign exchange risk is restricted to trade debts, bank balances, receivable from/
payable to joint operating partners, payable to suppliers.

Financial assets include Rs 55,054,842 thousand (2020: Rs 48,920,065 thousand) and financial
liabilities include Rs 688,637 thousand (2020: Rs 1,330,689 thousand) which are subject to currency
risk.

If exchange rates had been 10% lower/higher with all other variables held constant, profit after tax
for the year would have been Rs 3,805,634 thousand lower/higher (2020: Rs 3,331,256 thousand
higher/lower).

ANNUAL REPORT 2021 161