Page 250 - Pakistan Oilfield Limited - Annual Report 2022

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PAKISTAN OILFIELDS LIMITED

Notes to and Forming Part of the -
Consolidated Financial Statements

For the year ended June 30, 2022

38.7 The major categories of plan assets as a percentage of total plan assets of defined pension and
gratuity plans are as follows:
2022 2021
Rupees ('000) %age Rupees ('000) %age
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.
38.8 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

38.9 Mortality was assumed to be 70% of the EFU(61-66) Table at valuations on both dates, June 30,
2021 and 2022.

38.10 The pension 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 Group appoints the trustees who are employees of the Group.
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 gratuity fund to reduce its
future contributions or can apply to the commissioner of Income Tax for a refund.

38.11 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.
Defined benefit obligation
1 percent 1 percent
increase decrease
Rupees ('000)
Discount rate (146,489) 172,720
Salary increase 57,610 (52,176)
Pension increase 115,058 (101,427)
If life expectancy increases by 1 year, the obligation increases by Rs 55,467 thousand.