Page 194 - Pakistan Oilfields Limited - Annual Report 2021

NOTES TO AND FORMING

PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2021

4.10 Staff retirement benefits

The Company and its subsidiary operates the following staff retirement benefits plans:

POL

POL operates the following staff retirement benefits plans:
(i) A pension plan for its management staff and a gratuity plan for its management and non-
management staff. The pension and gratuity plans are invested through approved trust funds.
Both are defined benefit final salary plans. The pension and gratuity plans are complementary
plans for management staff. Pension payable to management staff is reduced by an amount
determined by the actuary equivalent to amount paid by the gratuity fund. Management
staff hired after January 1, 2012 are only entitled to benefits under gratuity fund. Actuarial
valuations are conducted annually using the “Projected Unit Credit Method” and the latest
valuation was conducted as at June 30, 2021.

Actuarial gain and losses arising from experience adjustments and change in actuarial
assumptions are charged or credited to equity in other comprehensive income in the period
in which they arise.

Past service costs are recognized immediately in statement of profit or loss.

Since both are complementary plans, combined details and valuation for pension plan and
gratuity plan are given in note 39.

(ii) Separate approved contributory provident funds for management and non-management
employees for which contributions are made by the Company and the employee at the rate of
10% of basic salary.
CAPGAS

The subsidiary is operating a non funded gratuity plan for management and non-management
employees. The liability for gratuity plan is provided on the basis of actuarial valuation conducted as
at June 30, 2021 using the “Project Unit Credit Method”.

4.11 Trade and other payables

Liabilities for trade and other payables are carried at cost which is the fair value of the consideration
to be paid in future for goods and services received.
4.12 Contingent liabilities

A contingent liability is disclosed when the Group has a possible obligation as a result of past
events, whose existence will be confirmed only by the occurrence or non-occurrence, of one or
more uncertain future events not wholly within the control of the Group; or the Group has a present
legal or constructive obligation that arises from past events, but it is not probable that an outflow of
resources embodying economic benefits will be required to settle the obligation, or the amount of
the obligation cannot be measured with sufficient reliability.
4.13 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment
losses except for freehold land and capital work in progress, which are stated at cost.

192 PAKISTAN OILFIELDS LIMITED