Page 246 - Pakistan Oilfield Limited - Annual Report 2022

244
PAKISTAN OILFIELDS LIMITED

Notes to and Forming Part of the -
Consolidated Financial Statements

For the year ended June 30, 2022

37.3 FINANCIAL RISK MANAGEMENT
37.3.1 Financial risk factors

The Group’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 Group’s overall risk management
policy focuses on the unpredictability of financial markets and seeks to minimize potential adverse
effects on the Group’s financial performance.
(a) Credit risk
Credit risk represents the risk that one party to a financial instrument will cause a 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)

Due from 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

Due from 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 Group manages liquidity risk by maintaining sufficient cash and marketable securities. At June
30, 2022, the Group had financial assets of Rs 78,677,008 thousand (2021: Rs 55,768,973 thousand).