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NOTES TO AND FORMING
PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2020
244
PAKISTAN OILFIELDS LIMITED
The asset ceiling does not apply. The Group 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.
40.11
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
reportingperiodwould have increased/ (decreased) as a result of a change in respective assumptions
by one percent.
Defined benefit obligation
1 percent
increase
1 percent
decrease
Rupees ('000)
Discount rate
(125,641)
149,052
Salary increase
44,023
(39,517)
Pension increase
105,694
(92,594)
If life expectancy increases by 1 year, the obligation increases by Rs 48,492 thousand.
The impact of changes in financial assumptions has been determined by revaluation of the
obligations on different rates. The impact of increase in longevity has been calculated on the
aggregate for each class of employees.
40.12
The weighted average number of the defined benefit obligation is given below:
Plan Duration
Pension
Gratuity
Years
June 30, 2020
11.2
5.9
June 30, 2019
11.2
6.3
40.13
The Group contributes to the pension and gratuity funds on the advice of the fund's actuary. The
contributions are equal to the current service cost with adjustment for any deficit.
Projected payments
Pension
Gratuity
Rupees ('000)
Contributions FY 2020
23,315
-
Benefit payments:
FY 2021
91,460
88,994
FY 2022
93,626
30,266
FY 2023
97,339
33,189
FY 2024
98,329
24,768
FY 2025
100,578
34,368
FY 2026-30
542,242
198,608