Page 216 - Pakistan Oilfields Limited - Annual Report 2021

NOTES TO AND FORMING

PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2021

17.4 The carrying value of investment in National Refinery Limited at June 30, 2021 is net of impairment
loss of Rs 3,808,877 thousand (2020: Rs 5,434,289 thousand). The Group has assessed the recoverable
amount of the investment in National Refinery Limited based on higher of the value-in-use (VIU) and
fair value (level 1 in the fair value hierarchy - quoted market price as at June 30, 2021). VIU is based
on a valuation analysis carried out by an external investment advisor engaged by the Company. VIU
of Rs 492 per share has been assessed on discounted cash flow based valuation methodology which
assumes an average gross profit margin of 3.80% (2020: 3.43%), terminal growth rate of 4% (2020:
3%) and capital asset pricing model based discount rate of 20.05% (2020: 18.20%).
17.5 Based on a valuation analysis carried out by the management, the recoverable amount of investment
in Attock Petroleum Limited exceeds its carrying amount. The recoverable amount has been
estimated based on a value in use calculation. These calculations have been made on discounted
cash flow based valuation methodology which assumes an average gross profit margin of 4.46%
(2020:3.60%), a terminal growth rate of 4.0% (2020: 4.0%) and a capital asset pricing model based
discount rate of 16.51% (2020: 15.43%).
2021 2020
Rupees ('000)

18. LONG TERM LOANS AND ADVANCES, CONSIDERED GOOD

Long term loans and advances to employees 58,285 51,511
Less: Amount due within twelve months, shown
under current loans and advances - note 22 21,139 24,788
37,146 26,723
18.1 Loans and advances to employees are for general purpose and for house rent advance which are
recoverable in up to 60 and 36 equal monthly installments respectively and are secured by an
amount due to the employee against provident fund. These loans and advances are interest free.
These do not include any amount receivable from the Chief Executive and Directors. These loans
have not been discounted, as the impact is considered insignificant.

2021 2020
Rupees ('000)
19. STORES AND SPARES

Stores and spares - note 19.1 5,299,071 5,077,887
Less: Provision for slow moving items - note 19.2 639,575 579,503
4,659,496 4,498,384

19.1 Stores and spares include:

Share in joint operations operated by the Group 627,650 573,332
Share in joint operations operated by others
(assets not in possession of the Group) 1,670,815 1,703,562
2,298,465 2,276,894

214 PAKISTAN OILFIELDS LIMITED