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PAKISTANOILFIELDS LIMITED
NOTES TO AND FORMING
PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2020
1.
LEGAL STATUS AND OPERATIONS
Pakistan Oilfields Limited (the Company) is incorporated in Pakistan as a public limited company
and its shares are quoted on Pakistan Stock Exchange Limited. The registered office of the Company
is situated at Morgah, Rawalpindi. The Company is principally engaged in exploration, drilling
and production of crude oil and gas in Pakistan. Its activities also include marketing of liquefied
petroleum gas under the brand name POLGAS and transmission of petroleum. The Company is a
subsidiary of The Attock Oil Company Limited, UK and its ultimate parent is Coral Holding Limited.
Geographical location and addresses of all other business units of the Company have been disclosed
in note 44.
2.
STATEMENT OF COMPLIANCE
These are separate financial statements of the Company. These financial statements have been
prepared in accordance with the accounting and reporting standards as applicable in Pakistan. The
accounting and reporting standards applicable in Pakistan comprise of:
-
International Financial Reporting Standards (IFRS) issued by the International
Accounting Standards Board (IASB) as notified under the Companies Act, 2017; and
-
Provisions of and directives issued under the Companies Act, 2017.
Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRS, the
provisions of and directives issued under the Companies Act, 2017 have been followed.
3.
NEW AND AMENDED STANDARDS AND INTERPRETATIONS
- IFRS 16“Leases”has replaced IAS 17“Leases”, the former lease accounting standard, and has become
effective from annual accounting periods beginning on or after January 1, 2019. Under the new
standard, almost all leases which meet the criteria described in the standard will be recognized on
the statement of financial position with only exceptions of short term and low value leases. Under
IFRS 16, an asset (the right to use the leased item) is recognized along with corresponding financial
liability to pay rentals at the present value of future lease payments over the lease term, discounted
with the specific incremental borrowing rate.
The Company’s lease portfolio includes lease contracts which are extendable through mutual
agreement between counter parties or cancellable by both parties immediately or on a short notice.
Accordingly, the Company has concluded that where the lease term of contracts are short-term in
nature i.e. with a lease term of twelve months or less at the commencement date, right of use assets
is not recognized and payments made in respect of these leases are expensed in the statement of
profit or loss.
The Company has adopted IFRS 16 from July 1, 2019 using the modified retrospective approach and
the Company has assessed that the adoption of IFRS 16 does not have any material financial impact
on these financial statements.
In applying IFRS 16 for the first time, the Company has used the following practical expedient
permitted by the standard:
- The accounting for operating leases with a remaining lease term of less than 12 months as at July 1,
2019 as short-term leases