Page 185 - Pakistan Oilfield Limited - Annual Report 2022

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Annual Report 2022

35.6 The major categories of plan assets as a percentage of total plan assets of defined pension and
gratuity plan are as follows:
2022 2021
Rupees ('000) % Rupees ('000) %
Unquoted:
Government bonds 4,992 - 5,356 -
Cash and cash equivalents 1,821,160 100 1,672,599 100
1,826,152 100 1,677,955 100
The funds have no investment in the Company's own securities.

35.7 Principal actuarial assumptions
The principal assumptions used in the actuarial valuation are as follows:

2022 2021
% %
Discount rate 13 10
Expected rate of salary increase 12 8.75
Expected rate of pension increase 6.75 4
35.8 Mortality was assumed to be 70% of the EFU(61-66) Table at valuations on both dates, June 30, 2021
and 2022.
35.9 The pension and gratuity plans are defined benefits final salary plans and both plans are invested
through approved trust funds. The trustees of the funds are responsible for plan administration
and investment. The Company appoints the trustees who are employees of the Company.

The plans expose the Company to various actuarial risks: investment risk and salary risk from both
plans and longevity risk from the pension plan.

The asset ceiling does not apply. The Company can use the surplus in the pension and gratuity fund
to reduce its future contributions or can apply to the Commissioner of Income Tax for a refund.

35.10 Sensitivity analysis
The calculation of the defined benefit obligation is sensitive to assumptions set out above. The
following table summarizes how the impact on the defined benefit obligation at the end of
the reporting period would have increased / (decreased) as a result of a change in respective
assumptions by one percent.