Page 181 - Pakistan Oilfield Limited - Annual Report 2022

178 179
Annual Report 2022

34.3 FINANCIAL RISK MANAGEMENT
34.3.1 Financial risk factors

The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and
market risk (including currency risk, interest rates risk and price risk). The Company’s overall risk
management policy focuses on the unpredictability of financial markets and seeks to minimize
potential adverse effects on the Company’s financial performance.
(a) Credit risk
Credit risk represents the risk that one party to a financial instrument will cause financial loss for the
other party by failing to discharge an obligation.

As of June 30, 2022, trade debts of Rs 740,525 thousand (2021: Rs 1,564,171 thousand) were past
due but not impaired. The ageing analysis of these trade receivables is as follows:

2022 2021
Rupees ('000)
Related parties

Up to 3 months 3,126 267,117
3 to 6 months 9,708 275,148
6 to 12 months 95,400 85,057
Above 12 months - 27,905
108,234 655,227
Others
Up to 3 months 73,559 811,169
3 to 6 months 69,459 4,952
6 to 12 months 453,388 69,669
Above 12 months 35,885 23,154
632,291 908,944

740,525 1,564,171
(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, 2022, the Company had financial assets of Rs 78,472,350 thousand (2021: Rs 55,501,160
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.