Annexure II 5

OIL AND GAS DEVELOPMENT COMPANY LIMITED Annexure II
STATEMENT OF FINANCIAL POSITION CS04-08 (PSX/LSE/SECP)

AS AT 30 JUNE 2021 September 28, 2021
30 June 30 June 01 July 30 June 30 June 01 July
2021 2020 2019 2021 2020 2019
Restated Restated Restated Restated
--------------------------------------------------------------------------------------------------(Rupees
Note '000)--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-----------------------------------------------
SHARE CAPITAL AND RESERVES NON CURRENT ASSETS
Share capital 5 43,009,284 43,009,284 43,009,284 Property, plant and equipment 13 95,745,594 100,740,773 100,942,511
Development and production assets 14 100,415,134 101,449,010 91,958,684
Reserves 6 18,824,000 17,269,580 14,614,483 Exploration and evaluation assets 15 16,732,676 16,420,604 15,216,824
212,893,404 218,610,387 208,118,019
Unappropriated profit 707,810,761 650,285,112 588,591,228 Long term investments 16 45,525,871 61,217,831 22,895,586
769,644,045 710,563,976 646,214,995 Long term loans 17 8,783,849 8,468,690 8,085,201
Long term prepayments 861,430 783,536 868,036
Lease receivables 18 37,259,605 44,821,590 45,626,052
305,324,159 333,902,034 285,592,894
NON CURRENT LIABILITIES CURRENT ASSETS
Deferred taxation 7 27,667,937 34,866,398 33,924,500 Stores, spare parts and loose tools 19 19,169,273 18,726,550 18,751,790
Deferred employee benefits 8 28,010,167 26,531,023 22,154,000 Stock in trade 404,339 472,505 446,645
Provision for decommissioning cost 9 28,992,057 27,654,493 22,862,587 Trade debts 20 358,821,853 307,563,536 231,941,980
84,670,161 89,051,914 78,941,087 Loans and advances 21 15,916,922 13,322,160 9,669,299
CURRENT LIABILITIES Deposits and short term prepayments 22 1,262,865 1,313,370 1,329,883
Trade and other payables 10 72,357,460 63,589,152 46,736,547 Other receivables 23 822,149 575,305 7,762,428
Unpaid dividend 11 29,112,645 25,557,624 22,951,943 Income tax - advance 24 45,751,659 37,118,984 20,027,510
Unclaimed dividend 209,503 210,970 213,785 Current portion of long term investments 16.2 122,465,116 95,115,426 113,770,186
101,679,608 89,357,746 69,902,275 Current portion of lease receivables 18 22,253,115 16,360,220 10,469,597
TOTAL LIABILITIES 186,349,769 178,409,660 148,843,362 Other financial assets 25 56,358,320 47,661,241 74,726,436
Cash and bank balances 26 7,444,044 16,842,305 20,569,709
650,669,655 555,071,602 509,465,463
955,993,814 888,973,636 795,058,357 955,993,814 888,973,636 795,058,357
CONTINGENCIES AND COMMITMENTS 12
The annexed notes 1 to 49 form an integral part of these financial statements.
Chief Financial Officer Chief Executive Director

OIL AND GAS DEVELOPMENT COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
2021 2020
Restated
--------------------------------------------------------------------------------------------------(Rupees '000)----------------
Profit for the year 91,534,424 100,937,893
Other comprehensive income/ (loss) for the year
Items that will not be reclassified to profit or loss:

Remeasurement gain/ (loss) on employee retirement benefit plans 3,117,169 (15,609,921)
Current tax (charge)/ credit related to remeasurement gain/
(loss) on employee retirement benefit plans (1,596,374) 8,048,475
Share of other comprehensive income of the associate - net of
taxation 2,184 3,801
1,522,979 (7,557,645)
Total comprehensive income for the year 93,057,403 93,380,248
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STATEMENT OF CHANGES IN EQUITY
Reserves
Capital reserves Other reserves
Share of
Share of capital Share of self
undistributed Unappropriated
Share capital Self redemption insurance Total equity
Capital percentage return profit
insurance reserve fund in reserve in
reserve reserve in
reserve associated associated
associated
company company
company
---------------------------------------------------------------------------------------------(Rupees '000)---------------------------------------------------------------------------------------------
Balance as at 01 July 2019 as previously reported 43,009,284 836,000 11,020,000 2,118,000 520,000 120,483 567,741,481 625,365,248
Impact of adoption of IFRS 16 on certain agreements previously exempted - Note 3.1 - - - - - - 20,849,747 20,849,747
Balance as at 1 July 2019 - restated 43,009,284 836,000 11,020,000 2,118,000 520,000 120,483 588,591,228 646,214,995
Total comprehensive income for the year- restated
Profit for the year- restated - - - - - - 100,937,893 100,937,893
Other comprehensive loss for the year - - - - - - (7,557,645) (7,557,645)
Total comprehensive income for the year- restated - - - - - - 93,380,248 93,380,248
Transfer to self insurance reserve - - 2,480,476 - - - (2,480,476) -
Charge to self insurance reserve - - (476) - - - 476 -
Transfer from undistributed percentage return reserve by an associated company - - - - - (24,903) 24,903 -
Transfer to self insurance reserve by an associated company - - - - 200,000 - (200,000) -
Transactions with owners of the Company

Distributions
Final dividend 2019: Rs 2.50 per share - - - - - - (10,752,321) (10,752,321)
First interim dividend 2020: Rs 2.50 per share - - - - - - (10,752,321) (10,752,321)
Second interim dividend 2020: Rs 1.75 per share - - - - - - (7,526,625) (7,526,625)
Total distributions to owners of the Company - - - - - - (29,031,267) (29,031,267)
Balance as at 30 June 2020- restated 43,009,284 836,000 13,500,000 2,118,000 720,000 95,580 650,285,112 710,563,976
Balance as at 1 July 2020 - restated 43,009,284 836,000 13,500,000 2,118,000 720,000 95,580 650,285,112 710,563,976
Total comprehensive income for the year

Profit for the year - - - - - - 91,534,424 91,534,424
Other comprehensive income for the year - - - - - - 1,522,979 1,522,979
Total comprehensive income for the year - - - - - - 93,057,403 93,057,403
Transfer to self insurance reserve - - 1,461,064 - - - (1,461,064) -

Charge to self insurance reserve - - (11,064) - - - 11,064 -
Transfer from undistributed percentage return reserve by an associated company - - - - - (95,580) 95,580 -
Transfer to self insurance reserve by an associated company - - - - 200,000 - (200,000) -
Transactions with owners of the Company

Distributions
Final dividend 2020: Rs 2.50 per share - - - - - - (10,752,321) (10,752,321)
First interim dividend 2021: Rs 2.00 per share - - - - - - (8,601,857) (8,601,857)
Second interim dividend 2021: Rs 1.60 per share - - - - - - (6,881,485) (6,881,485)
Third interim dividend 2021: Rs 1.80 per share - - - - - - (7,741,671) (7,741,671)
Total distributions to owners of the Company - - - - - - (33,977,334) (33,977,334)
Balance as at 30 June 2021 43,009,284 836,000 14,950,000 2,118,000 920,000 - 707,810,761 769,644,045

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STATEMENT OF CASH FLOWS
2021 2020
Restated
--------------------------------------------------------------------------------------------------(Rupees
Note '000)--------------------------------------------------
Cash flows from operating activities
Profit before taxation 128,986,345 144,361,628
Adjustments for:
Depreciation 10,013,432 10,552,028
Amortization of development and production assets 17,864,645 17,247,061
Royalty 27,422,366 27,626,096
Workers' profit participation fund 6,788,755 7,597,981
Provision for employee benefits 6,246,406 5,313,779
(Reversal)/ charge of provision for decommissioning cost - (480,019)
Unwinding of discount on provision for decommissioning cost 2,199,467 3,007,255
Reversal due to change in decommissioning cost estimates (1,019,391) (44,432)
Interest income on investments and bank deposits (10,726,476) (18,343,450)
Interest income on lease (7,627,527) (7,917,810)
Un-realized gain on investments at fair value through profit or loss (86,765) (8,263)
Exchange loss/ (gain) on lease 2,211,109 (4,148,536)
Exchange loss/ (gain) on foreign currency investment and deposit accounts 4,010,528 (1,726,720)
Dividend income from NIT units (5,857) (7,037)
Gain on disposal of property, plant and equipment (25,032) (58,878)
(Reversal)/ provision for slow moving, obsolete and in transit stores (93,283) 503,367
Provision for doubtful claims 691 -
Share of profit in associate (6,288,982) (6,062,575)
Stores inventory written off 27,956 26,482
179,898,387 177,437,957
Changes in:
Stores, spare parts and loose tools (377,396) (504,609)
Stock in trade 68,166 (25,860)
Trade debts (51,258,317) (75,621,556)
Deposits and short term prepayments 50,505 16,513
Advances and other receivables (3,157,456) (4,199,592)
Trade and other payables (334,355) 9,085,108
Cash generated from operations 124,889,534 106,187,961
Royalty paid (16,915,850) (25,979,217)

Employee benefits paid (3,343,338) (3,763,371)
Long term prepayments (77,894) 84,500
Decommissioning cost paid (129,266) (143,978)
Payment to workers' profit participation fund-net (9,240,211) (9,294,706)
Income taxes paid (54,879,431) (51,524,836)
(84,585,990) (90,621,608)
Net cash generated from operating activities 40,303,544 15,566,353
Cash flows from investing activities

Capital expenditure (19,153,546) (33,470,292)
Interest received 6,201,210 11,116,349
Lease payments received 2,611,615 2,112,046
Dividends received 1,805,012 163,622
Encashment of investments 1,833,441 10,170,987
Purchase of investments - (11,833,441)
Proceeds from disposal of property, plant and equipment 45,085 75,195
Net cash used in investing activities (6,657,183) (21,665,534)
Cash flows from financing activities

Dividends paid (30,423,780) (26,428,401)
Net cash used in financing activities (30,423,780) (26,428,401)
Net increase/ (decrease) in cash and cash equivalents 3,222,581 (32,527,582)

Cash and cash equivalents at beginning of the year 64,248,291 95,049,153
Effect of movements in exchange rate on cash and cash equivalents (4,010,528) 1,726,720
Cash and cash equivalents at end of the year 38 63,460,344 64,248,291
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NOTES TO THE FINANCIAL STATEMENTS
1 LEGAL STATUS AND OPERATIONS
Oil and Gas Development Company Limited (OGDCL), 'the Company', was incorporated on 23 October 1997 under the Companies
Ordinance, 1984 (now the Companies Act, 2017). The Company was established to undertake exploration and development of oil
and gas resources, including production and sale of oil and gas and related activities formerly carried on by Oil and Gas
Development Corporation, which was established in 1961. The registered office of the Company is located at OGDCL House, Plot
No. 3, F-6/G-6, Blue Area, Islamabad, Pakistan. The shares of the Company are quoted on Pakistan Stock Exchange Limited. The
Global Depository Shares (1GDS = 10 ordinary shares of the Company) of the Company are listed on the London Stock Exchange.
Geographical location of all other business units of the Company have been disclosed in note 44.
2 BASIS OF PREPARATION
2.1 STATEMENT OF COMPLIANCE
These financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan.
The accounting and reporting standards as applicable in Pakistan comprise of:
- International Financial Reporting Standards (IFRS Standards) 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 Standards, the provisions of and
directives issued under the Companies Act, 2017 have been followed.
2.2 BASIS OF MEASUREMENT
These financial statements have been prepared on the historical cost convention except for certain items as disclosed in the relevant
accounting policies below.
2.3 ADOPTION OF NEW ACCOUNTING STANDARDS
The Company adopted IFRS 16 'Leases' in its financial statements for the year ended 30 June 2020 except for its gas sales
agreements with Uch Power (Private) Limited (UPL) and Uch II Power (Private) Limited (UCH-II) for which temporary exemption
was granted to the Company by the Security of Exchange Commission of Pakistan (SECP) till 30 September 2020. During the year,
the Company has adopted IFRS-16 in respect of its gas sale agreements with UPL and UCH-II. Further, the Company has adopted
the guidance "Accounting of Gas Infrastructure Development Cess (GIDC)" issued by the Institute of Chartered Accountants of
Pakistan (ICAP) during the year. For details of adoption, refer note 3.1 to these financial statements.
2.4 FUNCTIONAL AND PRESENTATION CURRENCY
These financial statements are presented in Pakistan Rupee (PKR/ Rupees) which is the Company’s functional currency.
2.5 ACCOUNTING ESTIMATES
The preparation of these financial statements in conformity with the approved accounting standards requires management to make
judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis of making judgment about carrying value of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which estimates are revised if the revision affects only that year, or in the year of the revision and any future year affected.
Page 6
In the process of applying the Company's accounting policies, the management has made the following estimates, assumptions and
judgments which are relevant to these financial statements:
2.5.1 Property, plant and equipment
The Company reviews the useful lives and residual values of property, plant and equipment on the reporting date. Any change in the
estimates in future years might affect the carrying amounts of the respective items of property, plant and equipment with a
corresponding effect on the depreciation charge and impairment.
2.5.2 Exploration and evaluation expenditure
The Company’s accounting policy for exploration and evaluation expenditure results in certain items of expenditure being capitalized
for an area of interest where it is considered likely to be recoverable by future exploration or sale or where the activities have not
reached a stage which permits a reasonable assessment of the existence of reserves. This policy requires management to make certain
estimates and assumptions as to future events and circumstances, in particular whether an economically viable extraction operation
can be established. Any such estimates and assumptions may change as new information becomes available. If, after having
capitalized the expenditure under the policy, a judgment is made that recovery of the expenditure is unlikely, the relevant capitalized
amount is written off in profit or loss.
2.5.3 Estimation of oil and natural gas reserves for amortization of development and production assets
Oil and gas reserves are an important element in calculation of amortization charge and for impairment testing of development and
production assets of the Company. Estimates of oil and natural gas reserves are inherently imprecise, require the application of
judgement and are subject to future revision. Oil and gas reserves are estimated by an independent expert with reference to available
reservoir and well information, including production and pressure trends for producing reservoirs and, in some cases, subject to
definitional limits, to similar data from other producing reservoirs. The reserve estimates are subject to revision, either upward or
downward, based on new information, such as from development drilling and production activities or from changes in economic
factors, including product prices, contract terms or development plans. Changes in estimates of reserves, affects the amount of
amortization recorded in the financial statements for development and production assets.
During the year, the Company revised its estimates of reserves based on report from independent consultant hired for this purpose.
The change has been accounted for prospectively, in accordance with the requirements of IAS 8 ‘Accounting Policies, Changes in
Accounting Estimates and Errors’. The impacts of change on the current year are given below. It is impracticable to estimate the
effect of this change in accounting estimates in future periods.
Following line items would have been effected had there been no change in estimates:
Rupees in million
Amortization charge would have been lower by 1,883

Development and production assets would have been higher by 1,883
Deferred tax liability and deferred tax expense would have been higher by 580
Total comprehensive income for the year would have been higher by 1,209
2.5.4 Impairment of development and production assets and related property, plant and equipment
Development and production activities commence after project sanctioning by the appropriate level of management. Judgment is
applied by the management in determining when a project is economically viable. In exercising this judgment, management is
required to make certain estimates and assumptions similar to those described above for capitalized exploration and evaluation
expenditure. Any such estimates and assumptions may change as new information becomes available. If, after having commenced
development activity, a judgment is made that a development and production asset is impaired, the appropriate amount is written off
in profit or loss.
The Company assess at the end of each reporting period whether there is any indication that an asset may be impaired. Where
indications of impairment are identified, an impairment test is performed by the Company based on the estimte of the recoverable
value of that asset and/ or Cash Generating Unit (CGU). The calculation of recoverable value of development and production assets
and related property, plant and equipment requires management to make significant estimates and judgements, such as estimation of
volume of oil and gas recoverable reserves, future oil and gas prices, costs and discount rate.
It is reasonably possible that a change in these assumptions may require a material adjustment to the carrying value of development
and production assets and related property plant and equipment. The Company monitors internal and external indicators of
impairment relating to its assets.
Page 7
value of that asset and/ or Cash Generating Unit (CGU). The calculation of recoverable value of development and production assets
and related property, plant and equipment requires management to make significant estimates and judgements, such as estimation of
volume of oil and gas recoverable reserves, future oil and gas prices, costs and discount rate.
OIL AND
It isGAS DEVELOPMENT
reasonably possible thatCOMPANY LIMITED
a change in these assumptions may require a material adjustment to the carrying value of development
NOTESand
TO THE FINANCIAL
production STATEMENTS
assets and related property plant and equipment. The Company monitors internal and external indicators of
FOR THE YEAR ENDED
impairment 30its
relating to JUNE 2021
assets.
2.5.5 Provision for decommissioning cost
Provision is recognized for the future decommissioning and restoration cost of oil and gas wells, production facilities and pipelines at
the end of their useful lives and involves estimates related to future expected cost, discount rate and timing. Estimates of the amount
of provision recognized are based on current legal and constructive requirements, technology and price levels. Provision is based on
the best estimates, however, the actual outflows can differ from estimated cash outflows due to changes in laws, regulations, public
expectations, technology, prices and conditions, and can take place many years in the future. The estimated timing of
decommissioning may change due to certain factors, such as reserve life, a decision to terminate operations or change in legislation.
The carrying amount of provision is reviewed annually and adjusted to take account of such changes.
During the year, the Company revised its estimates of decommissioning cost, reserve life, discount and inflation rates. This has been
treated as change in accounting estimates, applied prospectively, in accordance with IFRIC Interpretation-1 "Changes in Existing
Decommissioning, Restoration and Similar Liabilities". The impacts of change on the current year are given below. It is
impracticable to estimate the effect of this change in accounting estimates in future periods.
Following line items would have been effected had there been no change in estimates:
Rupees in million
Provision for decommissioning cost would have been higher by 1,262

Property, plant and equipment would have been higher by 784
Development and production assets would have been lower by (542)
Operating expenses would have been higher by 1,019
Total comprehensive income would have been lower by 1,043
2.5.6 Employee benefits
Defined benefit plans are provided for regular/contractual employees of the Company. The employees pension and gratuity plan are
structured as separate legal entities managed by trustees. The Company recognizes deferred liability for post retirement medical
benefits and accumulating compensated absences. These calculations require assumptions to be made of future outcomes, the
principal ones being in respect of increases in future remuneration and pension benefit levels, medical benefit rate and the discount
rate used to convert future cash flows to current values. The assumptions used vary for the different plans as they are determined by
independent actuaries annually.
Pension or service cost primarily represents the increase in actuarial present value of the obligation for benefits earned on employees
service during the year and the interest on the net liability/(asset) in respect of employee's service in previous years. Calculations are
sensitive to changes in the underlying assumptions.
2.5.7 Taxation
There are transactions and calculation related to tax for which the ultimate tax outcome is uncertain as these matters are being
contested at various legal forums. In determining tax provision, the Company takes into account the current income tax laws and
decisions taken by appellate authorities. The current tax payable or receivable is the best estimate of the tax amount expected to be
paid or received that reflects uncertainty related to income taxes, if any. Instances where the Company's view differs from the view
taken by the income tax department at the assessment stage and the Company considers that its view on items of material nature is in
accordance with law, the amounts are disclosed as contingent liabilities unless the possibility of any outflow is remote. Where the
final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current
and deferred tax balances in the year in which such determination is made.
2.5.8 Stores, spare parts and loose tools
The Company reviews the stores, spares and loose tools for possible write downs/ provisions on an annual basis. Any change in the
estimates in future years might affect the carrying amounts of the respective items of stores and spares with a corresponding affect on
the provision.
Page 8
2.5.9 Measurement of the expected credit loss allowance
The measurement of the expected credit loss (“ECL”) allowance for financial assets requires the use of complex models and
significant assumptions about future economic conditions and credit behaviour (e.g. the likelihood of counter parties defaulting and
the resulting losses).
Elements of the ECL models that are considered accounting judgments and estimates include:
- Development of ECL models, including the various formulas and choice of inputs
- Determining the criteria if there has been a significant increase in credit risk and so allowances for financial assets
should be measured on a lifetime ECL basis and the qualitative assessment;
- The segmentation of financial assets when their ECL is assessed on a collective basis;
- Determination of associations between macroeconomic scenarios and, economic inputs, and their effect on Probability
of Default (PDs), Exposure At Default (EADs) and Loss Given Default (LGDs); and
- Selection of forward-looking macroeconomic scenarios and their probability weightings, to derive the economic inputs
into the ECL models.
2.5.10 Provision against financial assets not subject to ECL model
As referred to note 2.6.2, the Securities and Exchange Commission of Pakistan (SECP) has deferred applicability of ECL model in
respect of financial assets due directly/ ultimately from Government of Pakistan (GoP) till 30 June 2022. Accordingly, the Company
reviews the recoverability of its trade debts, lease receivables and investments that are due directly/ ultimately from GoP to assess
whether there is any objective evidence of impairment as per requirements of IAS 39 'Financial Instruments: Recognition and
Measurement' at each reporting date.
The Company has overdue receivables on account of inter-corporate circular debt. These overdue balances are receivable from oil
refineries, gas supply and power companies. The Government of Pakistan (GoP) is committed, hence continuously pursuing for
satisfactory settlement of inter-corporate circular debt issue. However, the progress is slower than expected resulting in accumulation
of Company's debts. Inter-corporate circular debt in Pakistan arises due to delayed payments in the energy sector supply chain; GoP
either directly or through its direct/indirect ownership of entities within energy sector supply chain is at the core of circular debt
issue. The Central Power Purchase Agency (CPPA), a government owned entity, is sole power purchaser for the Country and the
circular debt is a shortfall of payments primarily at the CPPA, however, in case of gas distribution and transmission companies the
shortfall also occurs because of a delay in receipts of subsidies from the GoP for supply of gas to certain domestic/industrial
consumers.
Settlement of the Company's receivables is slower than the contractual terms primarily because circular debt is a macro economic
level issue in Pakistan and its level at any given time is dependent on policies and/or priorities of the GoP, the level of subsidies
offered by GoP to certain domestic and industrial consumers, exchange rate fluctuations, global crude oil prices and certain other
systemic issues within energy sector (tariffs, losses, non/ delayed recoveries).
The Company's assessment of objective evidence of impairment with respect to over due amounts on account of inter-corporate
circular debt takes into account commitment made by the GoP, contractual rights to receive compensation for delayed payments and
plans of the GoP to address the issue of inter-corporate circular debt.
The Company has contractual right and is entitled to charge interest if payments from customers delayed beyond credit terms,
however, the Company recognizes interest, if any, on delayed payments from customers on investments and lease arrangements only
to the extent that it is highly probable that a significant reversal in the amount of income recognized will not occur when the
uncertainty associated with the interest is subsequently resolved, which is when the interest on delayed payments is received by the
Company.
2.5.11 Leases
The Company assesses whether a contract is or contains a lease at inception of the contract. This assessment involves the exercise of
judgment to determine if the control of an identified asset has been passed between the parties. Control exists if substantially all of
the economic benefits from the use of the asset are transferred to the lessee and the lessee has the ability to direct its use for a period
of time. Further, the Company assesses the lease term as the non-cancellable lease term in line with lease contract together with the
period for which the Company has extension options which the Company is reasonably certain to exercise and the periods for which
the Company has termination options which the Company is not reasonably certain to exercise. For contracts that contain a lease
component, the Company allocates the consideration in the contract to each lease component on the basis of it's relative stand-alone
prices. Further, judgement is made whether the lease transfers substantially all of the risks and rewards incidental to ownership of the
underline asset to classify the lease as a finance or operating lease.
Page 9
the economic benefits from the use of the asset are transferred to the lessee and the lessee has the ability to direct its use for a period
of time. Further, the Company assesses the lease term as the non-cancellable lease term in line with lease contract together with the
period for which the Company has extension options which the Company is reasonably certain to exercise and the periods for which
the Company has termination options which the Company is not reasonably certain to exercise. For contracts that contain a lease
component, the Company allocates the consideration in the contract to each lease component on the basis of it's relative stand-alone
prices.
FOR THE YEARFurther,
ENDEDjudgement
30 JUNEis made
2021whether the lease transfers substantially all of the risks and rewards incidental to ownership of the
underline asset to classify the lease as a finance or operating lease.
2.6 NEW AND AMENDED STANDARDS AND INTERPRETATIONS
2.6.1 The following International Financial Reporting Standards (IFRS Standards), interpretations and the amendments as notified under
Companies Act, 2017 are effective for accounting periods beginning from the dates specified below:
- Amendment to IFRS 3 ‘Business Combinations’ (effective for annual periods beginning on or after 1 January 2022). Minor
amendments were made to update references to the Conceptual Framework for Financial Reporting and add an exception for
the recognition of liabilities and contingent liabilities within the scope of IAS 37 'Provisions, Contingent Liabilities and
Contingent Assets' and IFRIC 21 'Levies'. The amendment also confirms that contingent assets should not be recognised at the
acquisition date. The amendments are not likely to have impact on Company's financial statements.
- Amendment to IFRS 4 ‘Insurance Contracts’. The fix expiry date for the exemption in IFRS 4 from applying IFRS 9 for an
entity choosing to apply the deferral approach is now 01 January 2023. The amendments are not likely to have impact on
Company's financial statements.
- Amendments to IAS 1 'Presentation of Financial Statements' - Classification of liabilities as current or non-current (effective
for the annual periods beginning on or after 1 January 2023). These amendments in the standard have been added to further
clarify when a liability is classified as current. The standard also amends the aspect of classification of liability as non-current
by requiring the assessment of the entity’s right at the end of the reporting period to defer the settlement of liability for at least
twelve months after the reporting period. An entity shall apply those amendments retrospectively in accordance with IAS 8.
The Company is currently assessing the impact on its financial statements.
- Amendments to IAS 16 'Property, Plant and Equipment' Proceeds before Intended Use (effective for annual periods beginning
on or after 1 January 2022). These amendments clarify that sales proceeds and cost of items produced while bringing an item
of property, plant and equipment to the location and condition necessary for it to be capable of operating in the manner
intended by management e.g. when testing etc., are recognized in profit or loss in accordance with applicable Standards. The
entity measures the cost of those items applying the measurement requirements of IAS 2. The standard also removes the
requirement of deducting the net sales proceeds from cost of testing. An entity shall apply those amendments retrospectively,
but only to items of property, plant and equipment that are brought to the location and condition necessary for them to be
capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the
financial statements in which the entity first applies the amendments. The amendments are not likely to have impact on
- Amendments to IAS 37 'Provisions, Contingent Liabilities and Contingent Assets' Onerous Contracts – Cost of Fulfilling a
Contract (effective for annual periods beginning on or after 1 January 2022). It amends IAS 1 by mainly adding paragraphs
which clarifies what comprise the cost of fulfilling a contract, cost of fulfilling a contract is relevant when determining
whether a contract is onerous. An entity is required to apply the amendments to contracts for which it has not yet fulfilled all
its obligations at the beginning of the annual reporting period in which it first applies the amendments (the date of initial
application). Restatement of comparative information is not required, instead the amendments require an entity to recognize
the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings or
other component of equity, as appropriate, at the date of initial application. The amendments are not likely to have impact on
- Amendments to IFRS 9 'Financial Instruments, IAS 39 'Financial Instruments: Recognition and Measurement', IFRS 7
'Financial Instruments: Disclosures', IFRS 4 ‘Insurance Contracts’ and IFRS 16 ‘Leases’ Interest Rate Benchmark Reform –
Phase 2 (applicable for annual financial periods beginning on or after 1 January 2021, with earlier application permitted). The
amendments introduce a practical expedient to account for modifications of financial assets or financial liabilities if a change
results directly from IBOR reform and occurs on an ‘economically equivalent’ basis. In these cases, changes will be accounted
for by updating the effective interest rate. A similar practical expedient will apply under IFRS 16 for lessees when accounting
for lease modifications required by IBOR reform. The amendments also allow a series of exemptions from the regular, strict
rules around hedge accounting for hedging relationships directly affected by the interest rate benchmark reforms and shall be
applied retrospectively. Hedging relationships previously discontinued solely because of changes resulting from the reform
will be reinstated if certain conditions are met. The amendments are not likely to have impact on Company's financial
statements.
Page 10
statements.

- Amendments to IFRS 16 'Leases' COVID-19-Related Rent Concessions – the International Accounting Standards Board (the
Board) has issued amendments to IFRS 16 (the amendments) to provide practical relief for lessees in accounting for rent
concessions. The amendments were effective for periods beginning on or after 1 June 2020, with earlier application permitted.
Under the standard’s previous requirements, lessees assess whether rent concessions are lease modifications and, if so, apply
the specific guidance on accounting for lease modifications. This generally involves remeasuring the lease liability using the
revised lease payments and a revised discount rate. In light of the effects of the COVID-19 pandemic, and the fact that many
lessees were applying the standard for the first time in their financial statements, the Board provided an optional practical
expedient for lessees. Under the practical expedient, lessees were not required to assess whether eligible rent concessions are
lease modifications, and instead were permitted to account for them as if they were not lease modifications. The amendment
had no impact on Company's financial statements.
The practical expedient introduced in the 2020 amendments only applied to rent concessions for which any reduction in lease
payments affected payments originally due on or before 30 June 2021. In light of persistence of economic challenges posed by
the COVID-19 pandemic, the Board has extended the practical expedient for COVID-19 related rent concessions by one year
i.e. permitting lessees to apply it to rent concessions for which any reduction in lease payments affects only payments
originally due on or before 30 June 2022. Rent concessions are eligible for the practical expedient if they occur as a direct
consequence of the COVID-19 pandemic and if all the following criteria are met:
- the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the
consideration for the lease immediately preceding the change;
- any reduction in lease payments affects only payments originally due on or before 30 June 2022; and
- there is no substantive change to the other terms and conditions of the lease.
The amendments are not likely to have impact on Company's financial statements.
- Amendments to IAS 1 'Presentation of Financial Statements' and IFRS Practice Statement 2-Disclosure of Accounting
Policies (effective for annual reporting periods beginning on or after 1 January 2023 with earlier application permitted)–the
Board has issued amendments on the application of materiality to disclosure of accounting policies and to help companies
provide useful accounting policy disclosures. The key amendments to IAS 1 include:
- requiring companies to disclose their material accounting policies rather than their significant accounting policies;
- clarifying that accounting policies related to immaterial transactions, other events or conditions are themselves immaterial
and as such need not be disclosed; and
- clarifying that not all accounting policies that relate to material transactions, other events or conditions are themselves
material to a company’s financial statements.
The Board also amended IFRS Practice Statement 2 to include guidance and two additional examples on the application of
materiality to accounting policy disclosures. The Company is currently assessing the impact on its financial statements.
Amendments to IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’-Definition of Accounting
Estimates – The amendments introduce a new definition for accounting estimates clarifying that they are monetary amounts in
the financial statements that are subject to measurement uncertainty. The amendments also clarify the relationship between
accounting policies and accounting estimates by specifying that a company develops an accounting estimate to achieve the
objective set out by an accounting policy. The amendments are effective for periods beginning on or after 1 January 2023, and
will apply prospectively to changes in accounting estimates and changes in accounting policies occurring on or after the
beginning of the first annual reporting period in which the company applies the amendments. The Company is currently
assessing the impact on its financial statements.
Amendments to IAS 12 ‘Income Taxes’-Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(effective for annual reporting periods beginning on or after 1 January 2023 with earlier application permitted) – The
amendments narrow the scope of the initial recognition exemption (IRE) so that it does not apply to transactions that give rise
to equal and offsetting temporary differences. As a result, companies will need to recognise a deferred tax asset and a deferred
tax liability for temporary differences arising on initial recognition of a lease and a decommissioning provision. For leases and
decommissioning liabilities, the associated deferred tax asset and liabilities will need to be recognised from the beginning of
the earliest comparative period presented, with any cumulative effect recognised as an adjustment to retained earnings or other
components of equity at that date. The Company is currently assessing the impact on its financial statements.
Page 11
- The following annual improvements to IFRS standards 2018-2020 are effective for annual reporting periods beginning on or
after 1 January 2022.
IFRS 1 – The amendment permits a subsidiary that applies paragraph D16(a) of IFRS 1 to measure cumulative translation
differences using the amounts reported by its parent, based on the parent’s date of transition to IFRSs, refer note
2.6.3.
IFRS 9 – The amendment clarifies that an entity includes only fees paid or received between the entity (the borrower) and
the lender, including fees paid or received by either the entity or the lender on the other’s behalf, when it applies
the ‘10 per cent’ test in paragraph B3.3.6 of IFRS 9 in assessing whether to derecognize a financial liability.
IFRS 16 – The amendment partially amends Illustrative Example 13 accompanying IFRS 16 by excluding the illustration
of reimbursement of leasehold improvements by the lessor. The objective of the amendment is to resolve any
potential confusion that might arise in lease incentives.
IAS 41 – The amendment removes the requirement in paragraph 22 of IAS 41 for entities to exclude taxation cash flows
when measuring the fair value of a biological asset using a present value technique.
The above mentioned amendments are not likely to have an impact on Company's financial statements.
2.6.2 SECP through S.R.O. 985 (I)/2019 dated 02 September 2019 has notified that in respect of companies holding financial assets due
from the Government of Pakistan (GoP), the requirements contained in IFRS 9 with respect to application of Expected Credit Loss
(ECL) method shall not be applicable till 30 June 2021, provided that such companies shall follow relevant requirements of IAS 39
'Financial Instruments: Recognition and Measurement' in respect of above referred financial assets during the exemption period.
Under the said S.R.O, the disclosure of the impacts of ECL was not required. Further, subsequent to year ended 30 June 2021, SECP
through S.R.O 1177(I)/2021 dated 13 September 2021 extended the exemption period till 30 June 2022. Earlier to the aforesaid
S.R.O. dated 02 September 2019, SECP in a press release dated 22 August 2019 communicated that IFRS 9 needs to be looked into
from Pakistan perspective where phenomenon that circular debt need to be given due consideration. It was noted that concerns
expressed by companies regarding practical limitations in determining ECL on debts due from government, due to uncertain cash
recovery patterns of circular debt, carry weight. Public information regarding expected settlement of circular debt by GoP in coming
years may result in subsequent reversals of impairment losses recognized in 2019. Further, SECP vide letter No. EMD/IACC/9/2009-
174 dated 05 September 2019 has clarified to the Company that financial assets due from GoP include those that are directly due
from GoP and that are ultimately due from GoP in consequence of the circular debt. In accordance with the exemption granted by
SECP, ECL has not been recognised in respect of financial assets due directly /ultimately from GoP which includes trade debts and
lease receivables amounting to Rs 358,150 million (2020: Rs 306,649 million) and Rs 59,513 million (2020: Rs 61,182 million)
respectively on account of inter-corporate circular debts and principal and interest due on Term Finance Certificates (TFCs)
outstanding from Power Holding Limited (PHL), formerly Power Holding (Private) Limited amounting to Rs 82,000 million (2020:
Rs 82,000 million) and Rs 50,715 million (2020: Rs 42,986 million) respectively.
2.6.3 Other than the aforesaid standards, interpretations and amendments, the International Accounting Standards Board (IASB) has also
issued the following standards which have not been notified locally by the Securities and Exchange Commission of Pakistan (SECP)
as at 30 June 2021:
- IFRS 1 – First Time Adoption of International Financial Reporting Standards

- IFRS 17 – Insurance Contracts
2.6.4 The following interpretations / IFRS issued by IASB have been waived off by SECP:
- IFRIC 12 – Service Concession Arrangements

- IFRS 2 – Share based payment in respect of Benazir Employees' Stock Option Scheme. Also refer note 45 to the financial
statements.
Page 12
3 CHANGE IN ACCOUNTING POLICIES
3.1 ADOPTION OF IFRS-16 'LEASES' IN RESPECT OF GAS SALE AGREEMENTS WITH UPL AND UCH-II
The Company has gas sale agreements with Uch Power (Private) Limited (UPL) and Uch-II Power (Private) Limited (Uch-II).
These contractual arrangements with UPL and Uch-II were previously classified as a lease under IFRIC 4 “Determining
whether an Arrangement Contains a Lease”. However, due to exemption from the Securities and Exchange Commission of
Pakistan (SECP), these were not accounted for as a lease in prior years.
IFRS 16 'Leases' became applicable from 01 July 2019 and replaced existing leasing guidance, including IAS 17 'Leases',
IFRIC 4 'Determining whether an Arrangement contains a Lease', SIC-15 'Operating Leases- Incentives' and SIC-27' Evaluating
the Substance of Transactions Involving the Legal Form of a Lease'. The Company adopted IFRS 16 'Leases' in its financial
statements for the year ended 30 June 2020 except for its gas sales agreements with UPL and Uch-II for which temporary
exemption was granted to the Company by SECP till 30 September 2020. The Company has reassessed its gas sale agreements
with UPL and Uch-II under the requirements of IFRS 16 and concluded that these agreements contain lease as previously
assessed under IFRIC 4. Accordingly, the impacts of adoption of IFRS 16 on the gas sales agreements with UPL and Uch-II
have been retrospectively accounted for in these financial statements and comparative information has been restated.
The assessment involved Judgement whether the arrangements with UPL and Uch-II contains lease under the requirements of
IFRs 16. It has been assessed that there was an identified asset, the power companies obtain substantially all of the economic
benefits from the assets and have the right to direct how and for what purpose the asset is used throughout the period of use.
The Company has assessed the lease as finance lease as the period of lease covers substantially all of the useful life of the
assets and the Company will recover significantly all of the investment in the asset from the lessee. The Company has
derecognised the underlying asset and recognised a receivable at an amount equal to the net investment in a lease. Net
investment in a lease is measured at an amount equal to the sum of the present value of lease payments from lessee discounted
at interest rate implicit in the lease. The difference between the gross lease receivable and the present value of the lease
receivable is unearned finance income. Lease income is recognized over the term of the lease so as to reflect a constant periodic
rate of return.
A third statement of financial position as at 01 July 2019 has also been presented in accordance with the requirement of IAS -1
" Presentation of Financial Statements". The effects of the restatement are summarized in note 3.3 below:
3.2 ACCOUNTING GUIDANCE ISSUED BY ICAP RELATING TO GAS INFRASTRUCTURE DEVELOPMENT CESS
(GIDC)
As a result of events and developments occurred during the year including orders and judgements of the Honourable Supreme
Court of Pakistan, the Institute of Chartered Accountants of Pakistan (ICAP) has issued a guidance "Accounting of Gas
Infrastructure Development Cess (GIDC)" (the Guidance) through Circular no. 1/2021 dated 21 January 2021. In light of the
said guidance, gas companies should consider the timing of recognition of liabilities (with a corresponding assets), where the
obligation of the gas companies is to pay the collected amounts to Federal Government on receipt basis. Liability for such
amounts should be recognized at the time of receipt of GIDC from gas consumers and not at the time of billing to the gas
consumers.
Under the laws and regulations governing GIDC, the Company is responsible to invoice the same to the customers and deposit
the collected amounts to the GoP on receipt from customers. Accordingly, the Company has recorded liability for GIDC in the
financial statements to the extent received from customers but not deposited with the GoP. Further, GIDC billed to customers
has been excluded from gross sales in the notes to the financial statements.
The Guidance has been applied retrospectively and the comparative information has been restated, which has not affected
current period or prior years' net sales, profit, equity and cash flows. In accordance with requirements of IAS 1 "Presentation of
Financial Statements", a third statement of financial position as of 01 July 2019 has also been presented. The effects of the
restatement are summarized in note 3.3 below:
Page 13
3.3 The following tables present the impacts of restatements as explained in note 3.1 & 3.2 above:
Without the
IFRS-16 GIDC
impact of note As presented
(Note 3.1) (Note 3.2)
3.1 and 3.2
--------------------------------------------------------------------------------------------------(Rupees '000)--------------------------------------------------------
Statement of financial position
30 June 2021
Non-current assets
Property, plant and equipment 109,618,590 (13,872,996) - 95,745,594
Lease receivables - 37,259,605 - 37,259,605
Current assets
Trade debts 379,838,746 (16,778,800) (4,238,093) 358,821,853
Current portion of lease receivables - 22,253,115 - 22,253,115
Non-current liabilities
Deferred taxation 18,784,259 8,883,678 - 27,667,937
Current liabilities
Trade and other payables 75,152,506 1,443,047 (4,238,093) 72,357,460
Share capital and reserves
Unappropriated Profit 689,276,562 18,534,199 - 707,810,761
As previously IFRS-16 GIDC

Restated
reported (Note 3.1) (Note 3.2)
--------------------------------------------------------------------------------------------------(Rupees '000)--------------------------------------------------------
30 June 2020
Non-current assets
Current assets
Trade debts 325,620,971 (11,357,860) (6,699,575) 307,563,536
Current liabilities

01 July 2019
Non-current assets
Current assets
Trade debts 242,731,940 (6,406,534) (4,383,426) 231,941,980
Current liabilities

Page 14
30 June 2021 -
30 June 2020 -
without the IFRS-16 GIDC 31 June 2021 - IFRS-16 GIDC 30 June 2020 -
as previously
impact of note 3.1 (Note 3.1) (Note 3.2) as presented (Note 3.1) (Note 3.2) restated
reported
and 3.2
--------------------------------------------------------------------------------------------------(Rupees
--------------------------------------------------------------------------------------------------(Rupees
'000)-------------------------------------------------------------------------------------------------- '000)------------------------------------------------
Statement of profit or loss
Sales - net 251,610,001 (12,506,448) - 239,103,553 244,856,754 (11,931,511) - 232,925,243
Operating expenses 71,918,782 (1,741,388) - 70,177,394 66,560,465 (1,230,138) - 65,330,327
Finance and other income 8,562,555 5,416,418 - 13,978,973 21,749,789 12,066,346 - 33,816,135
Workers' profit participation fund 7,056,187 (267,432) - 6,788,755 7,529,732 68,249 - 7,597,981
Taxation 39,361,361 (1,909,440) - 37,451,921 42,983,233 440,502 - 43,423,735
Profit for the year 94,706,194 (3,171,770) - 91,534,424 100,081,671 856,222 - 100,937,893
Earnings per share - basic and diluted (Rupees) 22.02 (0.74) - 21.28 23.27 0.20 - 23.47
Statements of cash flows
Cash flows from operating activities
Profit before taxation 134,067,555 (5,081,210) - 128,986,345 143,064,904 1,296,724 - 144,361,628
Adjustments for:
Depreciation 11,754,820 (1,741,388) - 10,013,432 11,782,166 (1,230,138) - 10,552,028

Workers' profit participation fund 7,056,187 (267,432) - 6,788,755 7,529,732 68,249 - 7,597,981
Exchange loss/ (gain) on lease - 2,211,109 - 2,211,109 - (4,148,536) - (4,148,536)
Interest income on lease - (7,627,527) - (7,627,527) - (7,917,810) - (7,917,810)
Changes in:
Trade debts (54,217,775) 5,420,940 (2,461,482) (51,258,317) (82,889,031) 4,951,326 2,316,149 (75,621,556)
Trade and other payables (2,795,837) - 2,461,482 (334,355) 11,401,257 - (2,316,149) 9,085,108
Net cash generated from operating activities 47,389,052 (7,085,508) - 40,303,544 22,546,538 (6,980,185) - 15,566,353
Cash flows from investing activities
Interest received 1,727,317 4,473,893 - 6,201,210 6,248,210 4,868,139 - 11,116,349

Lease payments received - 2,611,615 - 2,611,615 - 2,112,046 - 2,112,046
Net cash used in investing activities (13,742,691) 7,085,508 - (6,657,183) (28,645,719) 6,980,185 - (21,665,534)
Page 15
4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these
financial statements, and have been applied consistently by the Company except for the changes as
disclosed in note 3 to these financial statements:
4.1 EMPLOYEE BENEFITS
Salaries, wages and benefits are accrued in the period in which the associated services are rendered by
employees of the Company. The accounting policy for pension, gratuity, post retirement medical benefits
and accumulating compensated absences is described below:
4.1.1 Pension, gratuity, post retirement medical benefits and accumulating compensated absences
The Company operates an approved funded pension scheme under an independent trust for its permanent
employees regularized before 1 January 2016, as a defined benefit plan. The employees regularized from 1
January 2016 and onwards will be entitled to gratuity, a defined benefit plan and provident benefit, a
defined contributory plan instead of pension benefit. In contributory provident fund, the Company shall
match the contribution by employees upto one basic salary annually. The contractual employees of the
Company are also entitled to gratuity. The Company has also created a separate fund under an independent
trust for its gratuity scheme.
The Company also provides post retirement medical benefits to its permanent employees in service prior to
28 April 2004 and their families as a defined benefit plan.
The Company also has a policy whereby its regular/contractual officers and regular staff are eligible to
encash accumulated leave balance at the time of retirement in case of officers and at the time of retirement
or during the service in case of regular staff.
The liability recognized in the statement of financial position in respect of defined benefit plans is the
present value of the defined benefit obligations at the reporting date less the fair value of plan assets. The
defined benefits obligations are calculated annually by independent actuary using the Project Unit Credit
(PUC) method. The latest actuarial valuations were carried out as of 30 June 2021.
The Company's obligation in respect of defined benefit plans is calculated separately for each plan by
estimating the present value of the future benefit that employees have earned in return for their service in
the current and prior periods; that benefit is discounted to determine its present value.
The interest element of the defined benefit cost represents the change in present value of scheme obligations
resulting from the passage of time, and is determined by applying the discount rate to the net defined benefit
liability/(asset). This cost is included in employee benefit expense in the statement of profit or loss.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are
credited or charged in other comprehensive income in the year in which they arise.
Past service costs are recognized immediately in profit or loss.
Page 16
4.2 TAXATION
Taxation for the year comprises current and deferred tax. Taxation is recognized in profit or loss except to
the extent that it relates to items recognized outside profit or loss (whether in other comprehensive income
or directly in equity), if any, in which case the tax amounts are recognized outside profit or loss.
4.2.1 Current tax
Provision for current taxation is based on taxable income at the current rate of tax after taking into account
applicable tax credits, rebates and exemptions available, if any, adjusted for payments to GoP for payments
on account of royalty and any adjustment to tax payable in respect of previous years.
4.2.2 Deferred tax
Deferred tax is accounted for using the balance sheet liability method in respect of all taxable temporary
differences arising from differences between the carrying amount of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities
are recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible
temporary differences to the extent that it is probable that taxable profits will be available against which the
deductible temporary differences, unused tax losses and tax credits can be utilized. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realized.
Deferred tax is not recognized for the temporary differences arising from the initial recognition of assets or
liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable
profit or loss, and differences relating to investments in associates and interest in joint arrangements to the
extent that it is probable that they will not reverse in a foreseeable future and the investor/joint operator is
able to control the timing of the reversal of the temporary difference. In addition, deferred tax is not
recognized for taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax has been calculated at the tax rate of 30.78% (2020: 31.55%) after taking into account
depletion allowance and set offs, where available, in respect of royalty payment to the Government of
Pakistan. The tax rate is reviewed annually.
4.2.3 Offsetting
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax
assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either
to settle on a net basis, or to realize the asset and settle the liability simultaneously.
4.3 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment
losses, if any except for freehold land and capital work in progress, which are stated at cost less impairment
loss, if any. Cost in relation to property, plant and equipment comprises acquisition and other directly
attributable costs and decommissioning cost as referred in the note 4.5.4 to the financial statements. The
cost of self constructed assets includes the cost of materials, direct labour and any other costs directly
attributable to bringing the assets to working condition for their intended use. Software that is integral to the
functionality of the related equipment is capitalized as part of that equipment.
Page 17
attributable to bringing the assets to working condition for their intended use. Software that is integral to the
functionality of the related equipment is capitalized as part of that equipment.
Depreciation is provided on straight line method at rates specified in note 13 to the financial statements so
as to write off the cost of property, plant and equipment over their estimated useful life. Depreciation on
additions to property, plant and equipment is charged from the month in which property, plant and
equipment is available for intended use while no depreciation is charged for the month in which property,
plant and equipment is disposed off.
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount
of the item if it is probable that the future economic benefits embodied within the part will flow to the
Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized.
The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the
proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized net
within “other income” in the statement of profit or loss.
Capital work in progress is stated at cost less accumulated impairment losses, if any, and is transferred to
the respective item of property, plant and equipment when available for intended use.
4.4 LEASES
The Company assesses whether a contract is or contains a lease at the inception of the contract and whether
the contract conveys the right to control the use of an underlying asset for a period of time in exchange for
consideration.
4.4.1 As a Lessee
Leases are recognized as a lease liability and a corresponding Right of Use (“ROU”) asset at the date on
which the leased asset is available for use by the Company. Liabilities and assets arising from a lease are
initially measured on a present value basis. Lease liabilities are measured at the present value of the
remaining lease payments, discounted using the Company's estimated incremental borrowing rate when the
rate implicit in the lease is not readily available. The corresponding ROU assets are measured at the amount
equal to the lease liability.
The lease liability is remeasured when there is a change in the future lease payments arising from a change
in an index or rate, if there is a change in the amount expected to be payable under a residual value
guarantee or if there is a change in the assessment of whether the Company will exercise a purchase,
extension or termination option that is within the control of the Company.
The ROU asset, initially measured at an amount equal to the corresponding lease liability, is depreciated on
a straight-line basis, over the shorter of the estimated useful life of the asset or the lease term. The ROU
asset may be adjusted for certain re-measurements of the lease liability and impairment losses.
Lease payments are allocated between the lease liability and finance costs.
Leases that have terms of less than twelve months or leases on which the underlying asset is of low value
are recognized as an expense in the statement of profit or loss when incurred.
Page 18
4.4.2 As a Lessor
As a lessor, the Company determines at lease inception whether each lease is a finance lease or an operating
lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers
substantially all of the risks and rewards incidental to ownership of the underlying asset to the lessee.
Finance lease
Leases where the Company transfers substantially all of the risks and rewards incidental to the ownership of
an asset to the lessee are classified as finance leases.
The Company derecognises the underlying asset and recognises a receivable at an amount equal to the net
investment in a finance lease. Net investment in a finance lease is measured at an amount equal to the sum
of the present value of lease payments from lessee including any unguaranteed residual value of the
underlying asset. Initial direct costs are also included in the initial measurement of the net investment.
Variable lease payments that depend on an index are not included in the measurement of net investment in
lease and are recognized as revenue for the year.
The difference between the gross receivable and the present value of the receivable is recognised as
unearned finance income. Lease income is recognised over the term of the lease using the net investment
method so as to reflect a constant periodic rate of return.
Operating lease
The Company classifies a lease as an operating lease if the lease does not transfer substantially all the risks
and rewards incidental to ownership of an underlying asset to the lessee.
The Company recognises lease payments received under operating lease as lease income on a straight-line
basis over the lease term.
If an arrangement contains lease and non-lease components, the Company allocates the consideration in the
contract to the lease and non-lease components based on the stand-alone selling prices in accordance with
the principles in IFRS 15.
4.5 OIL AND GAS ASSETS
The Company applies the “Successful efforts” method of accounting for Exploration and Evaluation (E&E)
costs.
4.5.1 Pre license costs
Costs incurred prior to having obtained the legal rights to explore an area are charged directly to profit or
loss as they are incurred.
4.5.2 Exploration and evaluation assets
Under the successful efforts method of accounting, all property acquisitions, exploratory/evaluation drilling
costs are initially capitalized as intangible E&E assets in well, field or specific exploration cost centres as
appropriate, pending determination.
Page 19
Under the successful efforts method of accounting, all property acquisitions, exploratory/evaluation drilling
costs are initially capitalized as intangible E&E assets in well, field or specific exploration cost centres as
appropriate,
OIL AND pending determination.
GAS DEVELOPMENT COMPANY LIMITED
Costs directly associated with an exploratory well are capitalized as an intangible asset until the drilling of
the well is completed and results have been evaluated. Major costs include employee benefits, material,
chemical, fuel, well services and rig operational costs. All other exploration costs including cost of
technical studies, seismic acquisition and data processing, geological and geophysical activities are charged
in the statement of profit or loss as exploration and prospecting expenditure.
Tangible assets used in E&E activities, include the Company’s vehicles, drilling rigs, seismic equipment
and other property, plant and equipment used by the Company’s exploration function and are classified as
property, plant and equipment. However, to the extent that such a tangible asset is consumed in developing
an intangible E&E asset, the amount reflecting that consumption is recorded as part of the cost of the
intangible asset. Such intangible costs include directly attributable overheads, including the depreciation of
property, plant and equipment utilized in E&E activities, together with the cost of other materials consumed
during the exploration and evaluation phases.
Intangible E&E assets relating to each exploration license/field are carried forward, until the existence or
otherwise of commercial reserves have been determined subject to certain limitations including review for
indications of impairment. If commercial reserves have been discovered, the carrying value after any
impairment loss of the relevant E&E assets is then reclassified as development and production assets and if
commercial reserves are not found, the capitalized costs are written off as dry and abandoned wells and are
charged to profit or loss.
E&E assets are not amortized prior to the conclusion of appraisal activities.
4.5.3 Development and production assets
Development and production assets are accumulated on a field by field basis and represent the cost of
developing the discovered commercial reserves and bringing them into production, together with the
capitalized E&E expenditures incurred in finding commercial reserves transferred from intangible E&E
assets as outlined in accounting policy 4.5.2 above. The cost of development and production assets also
includes the cost of acquisition of such assets, directly attributable overheads, and the cost of recognizing
provisions for future site restoration and decommissioning.
Expenditure carried within each field is amortized from the commencement of production on a unit of
production basis, over the estimated useful life of the field determined by reference to proved reserves, on a
field by field basis. Changes in the estimates of commercial reserves or future field development costs are
dealt with prospectively. Amortization is charged to profit or loss.
4.5.4 Decommissioning cost
The activities of the Company normally give rise to obligations for site restoration. Restoration activities
may include abandonment and removal of wells, facility decommissioning and dismantling, removal or
treatment of waste materials, land rehabilitation, and site restoration.
Liabilities for decommissioning cost are recognized when the Company has an obligation for site
restoration, and when a reliable estimate of that liability can be made. The Company makes provision in full
for the decommissioning cost on the declaration of commercial discovery of the reserves, to fulfil the
obligation of site restoration and rehabilitation. The obligations for oil and natural gas production or
transportation facilities, are required on construction or installation. An obligation for decommissioning
may also crystallize during the period of operation of a well/ facility through a change in legislation or
through a decision to terminate operations. The amount recognized is the estimated cost of
decommissioning, discounted to its net present value and the expected outflow of economic resources to
settle this obligation is up to next thirty years.
Page 20
may also crystallize during the period of operation of a well/ facility through a change in legislation or
through a decision to terminate operations. The amount recognized is the estimated cost of
decommissioning, discounted to its net present value and the expected outflow of economic resources to
settle this obligation is up to next thirty years.
Decommissioning cost, as appropriate, relating to producing or shut-in fields / fields in development is

capitalized to the cost of development and production assets and property, plant and equipment as the case
may be. The recognized amount of decommissioning cost is subsequently amortized/depreciated as part of
the capital cost of the development and production assets and property, plant and equipment. At the time of
decommissioning of the field, any differences arising from settlement of the provision are recognized in
statement of profit or loss.
While the provision is based on the best estimate of future costs and the economic life of the fields, there is
uncertainty regarding both the amount and timing of incurring these costs. The Company reviews the
decommissioning provision at the reporting date. Any change in the present value of the estimated
expenditure is dealt with prospectively and reflected as an adjustment to the provision and a corresponding
adjustment to property, plant and equipment and development and production assets. If a decrease in a
provision is greater than the carrying value of asset, the excess is recognized in statement of profit or loss.
The unwinding of the discount on the decommissioning provision is recognized as finance cost in the
4.6 IMPAIRMENT OF NON FINANCIAL ASSETS
At each reporting date, the Company reviews the carrying amount of its non financial assets to determine
whether there is any indication of impairment. If any such indication exists, then the assets recoverable
amount is estimated.
E&E assets are assessed for impairment when facts and circumstances indicate that carrying amount may
exceed the recoverable amount of E&E assets. Such indicators include, the point at which a determination is
made that as to whether or not commercial reserves exist, the period for which the Company has right to
explore has expired or will expire in the near future and is not expected to be renewed, substantive
expenditure on further exploration and evaluation activities is not planned or budgeted and any other event
that may give rise to indication that E&E assets are impaired.
Impairment test of development and production assets and related property, plant and equipment is
performed whenever events and circumstances arising during the development and production phase
indicate that carrying amount of the development and production assets may exceed its recoverable amount.
Such circumstances depend on the interaction of a number of variables, such as the recoverable quantities
of hydrocarbons, the production profile of the hydrocarbons, the cost of the development of the
infrastructure necessary to recover the hydrocarbons, the production costs, the contractual duration of the
production field and the net selling price of the hydrocarbons produced.
For impairment testing, assets are grouped together into the smallest group of assets that generate cash
inflows largely independent of other assets or CGUs. The CGU applied for impairment test purpose is
generally field by field basis, except that a number of fields may be grouped as a single cash generating unit
where the cash flows of each field are inter-dependent.
The carrying value is compared against expected recoverable amount of an asset or CGU, generally by
reference to the future net cash flows expected to be derived from such assets. An impairment loss is
recognized if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses
are recognized in profit or loss. The impairment loss is allocated to the assets in CGU on a prorata basis.
Where conditions giving rise to impairment subsequently reverse, the effect of the impairment charge is
also reversed as a credit in profit or loss to the extent that the asset's carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortization, if no impairment
loss had been recognized.
Page 21
Where conditions giving rise to impairment subsequently reverse, the effect of the impairment charge is
also reversed as a credit in profit or loss to the extent that the asset's carrying amount does not exceed the
carrying
OIL AND amount that would COMPANY
GAS DEVELOPMENT have been determined,
LIMITEDnet of depreciation or amortization, if no impairment
loss had been recognized.
4.7 INVESTMENTS IN ASSOCIATED COMPANIES
An associate is an entity over which the Company has significant influence and that is neither a subsidiary
nor an interest in a joint venture. Significant influence is the power to participate in the financial and
operating policy decisions of the investee but is not control or joint control over those policies.
The results, assets and liabilities of the associate have been incorporated in these financial statements using
the equity method of accounting. Under the equity method, investments in associates are initially
recognized at cost adjusted thereafter to recognize the Company's share of the post-acquisition profits or
losses of the associate in profit or loss and the Company's share of movements in other comprehensive
income of the associate in other comprehensive income. Dividends received or receivable from the
associate is recognized as a reduction in the carrying amount of the investment. Losses of an associate in
excess of Company's interest in that associate are recognized only to the extent that the Company has
incurred legal or constructive obligation or made payment on behalf of the associate. The carrying amount
of equity-accounted investment is tested for impairment in accordance with the policy described in note 4.6.
4.8 STORES, SPARE PARTS AND LOOSE TOOLS
Stores, spare parts and loose tools are valued at the lower of cost and net realizable value less allowance for
slow moving, obsolete and in transit items. Cost is determined on the moving average basis and comprises
cost of purchases and other costs incurred in bringing the inventories to their present location and condition.
Net realizable value signifies the estimated selling price in the ordinary course of business less costs
necessarily to be incurred in order to make a sale.
Materials in transit are stated at cost comprising invoice value and other charges paid thereon.
4.9 STOCK IN TRADE
Stock in trade is valued at the lower of production cost and net realizable value. Net realizable value
signifies the estimated selling price in the ordinary course of business less net estimated cost of production
and selling expenses.
4.10 INTANGIBLES
An intangible asset is recognized if it is probable that future economic benefits that are attributable to the
asset will flow to the Company and that the cost of such asset can also be measured reliably. Intangible
assets having definite useful life are stated at cost less accumulated amortization and are amortized based on
the pattern in which the assets' economic benefits are consumed. Intangible assets which have indefinite
useful life are not amortized and tested for impairment annually, if any.
4.11 REVENUE RECOGNITION
Revenue from contracts with customers is recognized when or as the Company satisfies a performance
obligation by transferring a promised good or service to a customer. Revenue associated with the sale of
crude oil, gas and liquefied petroleum gas is recognized at transaction price that is allocated to that
performance obligation. Revenue from contracts with customers is recognized when or as the Company
satisfies a performance obligation by transferring a promised good or service to a customer. A good or
service is transferred when the customer obtains control of that good or service. The transfer of control of
crude oil, gas and liquefied petroleum gas coincides with title passing to the customer and the customer
taking physical possession. The Company principally satisfies its performance obligations at a point in time
and recognizes revenue relating to the performance.
Page 22
crude oil, gas and liquefied petroleum gas coincides with title passing to the customer and the customer
taking physical possession. The Company principally satisfies its performance obligations at a point in time
and recognizes revenue relating to the performance.
Revenue is measured at the transaction price, net of government levies. Transaction prices of crude oil and
gas are specified in relevant agreements and / or as notified by the government authorities based on
agreements with customers, relevant applicable petroleum policy, decision of ECC of the Cabinet or
Petroleum Concession Agreements. Prices of liquefied petroleum gas are approved by the appropriate
authority within the Company. Effect of adjustments, if any, arising from revision in sale prices is reflected
as and when the prices are finalized with the customers and/or approved by the GoP.
Billings are generally raised by the end of each month which are payable within 30 to 45 days in accordance
with the contractual arrangement with customers. Amounts billed or received prior to being earned, are
deferred and recognized as advances from customers. The Company based on its assessment has not
identified a significant financing component in its current contracts with customers because payment terms
of 30 to 45 days are explicitly specified and delay in settlement of invoices does not result in a significant
financing component.
The Company collects signature bonus/ contract renewal fee from its customers of liquefied petroleum gas
at the time of signing of contracts against the allocation of fixed quantities to be supplied over the contract
term. Accordingly performance obligation in case of signature bonus / contract renewal fee is satisfied over
time and the Company recognizes signature bonus/ contract renewal fee over the term of contract.
The Company has contractual right and is entitled to charge interest if payments from customers delayed
beyond credit terms, however, the Company recognizes interest, if any, on delayed payments from
customers, on investments and lease arrangements only to the extent that it is highly probable that a
significant reversal in the amount of income recognized will not occur when the uncertainty associated with
the interest is subsequently resolved, which is when the interest on delayed payments is received by the
Company.
4.12 FINANCE INCOME AND EXPENSE
Finance income comprises interest income on funds invested, delayed payments from customers, on
investments and lease arrangements, dividend income, exchange gain and changes in the fair value of
financial assets at fair value through profit or loss. Interest income of financial assets at amortized cost is
calculated using the effective interest method and is recognized in statement of profit or loss. Interest
income is calculated by applying the effective interest rate to gross carrying amount of a financial asset
except for financial assets that subsequently become credit impaired. For credit impaired financial assets,
the effective interest rate is applied to the net carrying amount of the financial assets. Dividend income is
recognized when the right to receive the payment is established. Foreign currency gains and losses are
reported on a net basis.
Finance cost comprises interest expense on borrowings (if any), unwinding of the discount on provisions
and bank charges. Mark up, interest and other charges on borrowings are charged to profit or loss in the
period in which they are incurred.
4.13 JOINT OPERATIONS
Investments in joint arrangements are classified as either joint operations or joint ventures depending on
contractual rights and obligations of the parties to the arrangement. The Company has assessed the nature of
its arrangements and determined them to be joint operations.
The Company has recognized its share of assets, liabilities, revenues and expenses jointly held or incurred
under the joint operations on the basis of latest available audited financial statements of the joint operations
and where applicable, the cost statements received from the operator of the joint operation, for the
intervening period up to the statement of financial position date. The difference, if any, between the cost
statements and audited financial statements is accounted for in the next accounting year.
Page 23
under the joint operations on the basis of latest available audited financial statements of the joint operations
and where applicable, the cost statements received from the operator of the joint operation, for the
intervening
OIL AND period up to the COMPANY
GAS DEVELOPMENT statement of LIMITED
financial position date. The difference, if any, between the cost
NOTES TO THE FINANCIAL STATEMENTSis accounted for in the next accounting year.
statements and audited financial statements
4.14 FOREIGN CURRENCIES
Transactions in foreign currencies are recorded at the rates of exchange ruling on the date of the transaction.
All monetary assets and liabilities denominated in foreign currencies are translated into PKR at the rate of
exchange ruling on the statement of financial position date and exchange differences, if any, are credited/
charged to statement of profit or loss for the year.
4.15 FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognized in the statement of financial position when the
Company becomes a party to the contractual provisions of the instrument. All the financial assets are
derecognized at the time when the Company loses control of the contractual rights that comprise the
financial assets. All financial liabilities are derecognized at the time when they are extinguished that is,
when the obligation specified in the contract is discharged, cancelled, or expired. Any gains or losses on de-
recognition of the financial assets and financial liabilities are taken to the statement of profit or loss.
4.15.1 Classification of financial assets
The Company classifies its financial assets in the following measurement categories:
- fair value through profit or loss (FVTPL);

- fair value through other comprehensive income (FVTOCI); and
- at amortised cost
The Company determines the classification of financial assets at initial recognition. the classification of
instruments is driven by the Company's business model for managing the financial assets and their
contractual cash flow characteristics. The Company reclassifies its debt investment when and only when its
business model for managing those instruments changes.
Financial assets that meet the following conditions are subsequently measured at amortised cost:
- the financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
Financial assets that meet the following conditions are subsequently measured at FVTOCI:
- the financial asset is held within a business model whose objective is achieved by both
collecting contractual cash flows and selling the financial assets; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
By default, all other financial assets are subsequently measured at FVTPL.
4.15.2 Classification of financial liabilities
The Company classifies its financial liabilities in the following categories:
- at fair value through profit or loss (FVTPL); and

- financial liabilities at amortized cost
Page 24
Financial liabilities are measured at amortised cost, unless they are required to be measured at FVTPL (such
as instruments held for trading or derivatives) or the Company has opted to measure them at FVTPL.
4.15.3 Initial recognition
The financial assets are initially recognized at fair value with the exception of trade debts which do not
contain a significant financing component and the Company has applied the practical expedient to measure
them at the transaction price, plus, in case of a financial asset not at FVTPL, transaction costs. Transaction
cost of financial assets carried at FVTPL are expensed in statement of profit or loss. All financial liabilities
are initially measured at fair value and in the case of loans and borrowings (if any) and payables, net of
directly attributable transaction costs.
4.15.4 Subsequent measurement
Financial assets (other than equity instruments) and liabilities
- at amortised cost
Subsequent to the initial recognition, these are measured at effective interest rate method and subject to
impairment. Gains and losses are recognized in profit or loss when the asset/ liability is derecognized/ or
modified or the assets is impaired.
- at FVTPL
Subsequent to the initial recognition, these are carried in the statement of financial position at fair value
with net changes in fair value recognized in the statement of profit or loss.
Financial assets (other than equity instruments) at FVTOCI
Subsequent changes in the carrying amount are taken through OCI, except for the recognition of
impairment gains or losses, interest income and foreign exchange gains and losses which are recognized in
Financial assets- equity instruments
The Company subsequently measure all equity instruments at fair value. Where the Company's management
has elected to present fair value gain and loss on equity investments in OCI, there is no subsequent
reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
4.15.5 Impairment of financial assets
The Company recognizes loss allowance for ECL on financial assets measured at amortised cost except for
financial assets due directly / ultimately from GoP which includes certain trade debts, lease receivables and
investment in Term Finance Certificates (TFCs) issued by PHL in respect of which applicability of ECL
model is deferred by SECP as explained in note 2.6.2. For trade debts other than trade debts on which ECL
model is not applicable as per aforesaid notification of SECP, the Company applies IFRS 9 simplified
approach to measure the expected credit losses (loss allowance) which uses a life time expected allowance.
The Company uses General 3-stage approach for loans and advances, deposits, long term loans, long term
investments other than TFCs on which ECL model is not applicable as per aforesaid notification of SECP,
other receivables, other financial assets and cash and bank balances i.e. to measure ECL through loss
allowance at an amount equal to 12-month ECL if credit risk on a financial instruments has not increased
significantly since initial recognition.
Page 25
investments other than TFCs on which ECL model is not applicable as per aforesaid notification of SECP,
other receivables, other financial assets and cash and bank balances i.e. to measure ECL through loss
allowance at an amount equal to 12-month ECL if credit risk on a financial instruments has not increased
significantly since initial recognition.
Life time ECLs are the ECLs that results from all possible default events over the expected life of a
financial instrument. 12 months' ECL are portion of ECL that result from default events that are possible
within 12 months after the reporting date.
ECLs are a probability weighted estimate of credit losses. Credit losses are measured as the present value of
all cash shortfalls i.e. the difference between cash flows due to the entity in accordance with the contract
and cash flows that the Company expects to receive.
The gross carrying amount of a financial asset is written off when the Company has no reasonable
expectation of recovering a financial asset in its entirety or a portion thereof.
In respect of financial assets due directly /ultimately from GoP, on which ECL model is not applicable as
per the aforesaid notification of SECP, the financial asset is assessed at each reporting date to determine
whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if
objective evidence indicates that one or more events have had a negative effect on the estimated future cash
flows of that asset. Individually significant financial assets are tested for impairment on an individual basis.
The remaining financial assets are assessed collectively in groups that share similar credit risk
characteristics.
4.15.6 Derecognition
- Financial assets
The Company derecognizes financial assets only when the contractual rights to cash flows from the
financial assets expire or when it transfers the financial assets and substantially all the associated risks and
rewards of ownership to another entity. On derecognition of a financial asset measured at amortised cost,
the difference between the asset's carrying value and the sum of the consideration received and receivable is
recognized in profit or loss. In addition, on derecognition of an investment in a debt instrument classified as
FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is
reclassified to profit or loss. In contrast, on derecognition of an investment in equity instrument which the
Company has elected on initial recognition to measure at FVTOCI, the cumulative gain or loss previously
accumulated is not reclassified to profit or loss.
- Financial liabilities
The Company derecognizes financial liabilities only when its obligations specified in the contracts are
discharged, cancelled or expired. The difference between the carrying amount of the financial liability
derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities
assumed, is recognized in the statement of profit or loss.
4.15.7 Offsetting of financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount is reported in the statement of financial position
if the Company has legally enforceable right to set-off the recognized amounts and the Company intends to
settle on a net basis or realize the asset and settle the liability simultaneously.
4.16 PROVISIONS AND CONTINGENT LIABILITIES
A provision is recognised in the statement of financial position when the Company has a present, legal or
constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of such
obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax discount
rate that reflects current market assessment of time value of money and risk specific to the liability.
Page 26
constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of such
obligation.
OIL AND Provisions are determined
GAS DEVELOPMENT COMPANY by discounting
LIMITED the expected future cash flows at a pre-tax discount
NOTES TO THE FINANCIAL STATEMENTSof time value of money and risk specific to the liability.
rate that reflects current market assessment
A contingent liability is disclosed when the Company has a possible obligation as a result of past events,
whose existence will be confirmed only by the occurrence or non-occurrence, of one or more uncertain
future events not wholly within the control of the Company; or the Company has a present legal or
constructive obligation that arises from past events, but it is not probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, or the amount of the obligation
cannot be measured with sufficient reliability.
4.17 CASH AND CASH EQUIVALENTS
Cash and cash equivalents for the purpose of cash flow statement comprise cash in hand and at bank and
includes short term highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of change in value.
4.18 DIVIDEND
Dividend distribution to shareholders is accounted for in the period in which it is declared, unpaid /
unclaimed dividend is recognized as a liability.
4.19 SELF INSURANCE SCHEME
The Company is following a policy to set aside reserve for self insurance of rigs, wells, plants, pipelines,
buildings, inventory, vehicles, workmen compensation, terrorism and losses of petroleum products in transit
and is keeping such reserve invested in specified investments.
4.20 OPERATING SEGMENTS
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources
and assessing performance of the operating segments, has been identified as the Board of Directors that
makes strategic decisions. The management has determined that the Company has a single reportable
segment as the Board of Directors views the Company’s operations as one reportable segment.
4.21 TRADE AND OTHER PAYABLES
These amounts represent liabilities for goods and services provided to the Company prior to the end of
financial year which are unpaid. Trade and other payables are presented as current liability unless payment
is not due within twelve (12) months after the reporting period. They are recognized initially at their fair
value and subsequently measured at amortized cost using the effective interest method.
Page 27
5 SHARE CAPITAL
Authorized share capital
2021 2020 2021 2020

------(Number of shares)---------
--------------------------------------------------------------------------------------------------(Rupees '000)-----------------
5,000,000,000 5,000,000,000 Ordinary shares of Rs 10 each 50,000,000 50,000,000
Issued, subscribed and paid up capital
1,075,232,100 1,075,232,100 Ordinary shares of Rs 10 each issued for consideration 10,752,321 10,752,321
other than cash (note 5.1)
3,225,696,300 3,225,696,300 Ordinary shares of Rs 10 each issued as fully paid bonus 32,256,963 32,256,963
shares
4,300,928,400 4,300,928,400 43,009,284 43,009,284
5.1 In consideration for all the properties, rights, assets, obligations and liabilities of Oil and Gas Development Corporation vested
in the Company, 1,075,232,100 ordinary fully paid shares of Rs 10 each were issued to the Government of Pakistan (GoP) on 23
October 1997. Currently, GoP holds 74.97% (2020: 74.97%) paid up capital of the Company.
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)------------------
6 RESERVES
Capital reserves:
Capital reserve 6.1 836,000 836,000

Self insurance reserve 6.2 14,950,000 13,500,000
Capital redemption reserve fund - associated company 6.3 2,118,000 2,118,000
Self insurance reserve - associated company 6.4 920,000 720,000
Other reserves:
Undistributed percentage return reserve - associated company 6.5 - 95,580

18,824,000 17,269,580
6.1 This represents bonus shares issued by former wholly owned subsidiary - Pirkoh Gas Company (Private) Limited (PGCL) prior
to merger. Accordingly, the reserve is not available for distribution to shareholders.
6.2 The Company has set aside a specific capital reserve for self insurance of rigs, buildings, wells, plants, pipelines, workmen
compensation, inventory, terrorism, vehicle repair and losses for petroleum products in transit. Refer note 16.2.1 for investments
against this reserve. Accordingly, the reserve is not available for distribution to shareholders.
6.3 This represents statutory reserve created by the associated company for redemption of redeemable preference shares in the form
of cash to the preference shareholders.
6.4 This represents a specific capital reserve set aside by the associated company for self insurance of assets which have not been
insured for uninsured risks and for deductibles against insurance claims.
6.5 This represents Company's share of profit set aside by the associated company from distributable profits related to undistributed
percentage return reserve from which dividend was appropriated and paid during the year.
Page 28
2021 2020
Restated
--------------------------------------------------------------------------------------------------(Rupees '000)-----------------
7 DEFERRED TAXATION
The balance of deferred tax is in respect of following temporary differences:
Accelerated depreciation on property, plant and equipment 9,128,561 9,408,033
Expenditure of prospecting, exploration and evaluation and development and
production assets 146,526 4,220,725
Provision for decommissioning cost (146,696) (196,191)
Lease receivable 13,153,922 15,719,456
Long term investment in associate 3,457,935 2,784,134
Provision for doubtful debts, claims and advances (113,017) (113,977)
Provision for slow moving and obsolete stores (1,066,482) (1,122,781)
Unrealised exchange gain - net 3,107,188 4,166,999
27,667,937 34,866,398
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-----------------
8 DEFERRED EMPLOYEE BENEFITS
Post retirement medical benefits 8.1 20,045,424 19,144,871

Accumulating compensated absences 8.2 7,964,743 7,386,152
28,010,167 26,531,023
8.1 Post retirement medical benefits
Movement in the present value of defined benefit obligation is as follows:
Present value of defined benefit obligation at beginning of the year 19,144,871 17,261,231
Current service cost 164,628 551,271
Interest cost 1,741,808 2,423,556
Past service cost - (1,146,809)
Benefits paid (629,028) (507,639)
Remeasurement (gain)/ loss recognized in other comprehensive income (376,855) 563,261
Present value of defined benefit obligation at end of the year 20,045,424 19,144,871
Movement in liability recognized in the statement of financial position is as follows:

Opening liability 19,144,871 17,261,231
Expense for the year 1,906,436 1,828,018
Benefits paid (629,028) (507,639)
Remeasurement (gain)/ loss recognized in other comprehensive income (376,855) 563,261
Closing liability 20,045,424 19,144,871
Expense recognized is as follows:
Interest cost 1,741,808 2,423,556
Past service cost - (1,146,809)
1,906,436 1,828,018
The expense is recognized in the following:
Operating expenses - profit or loss 1,017,064 1,003,915
General and administration expenses - profit or loss 261,354 246,782
Technical services 628,018 577,321
1,906,436 1,828,018
2021 2020
Significant actuarial assumptions used were as follows:
Discount rate per annum 10.00% 9.25%
Medical inflation rate per annum - retired/ in service 10.00% 9.25%
Mortality rate Adjusted SLIC 2001-2005
Withdrawal rate Low Low
Weighted average duration of the obligation 10.09 years 10.46 years
Page 29
The calculation of the defined benefit obligation is sensitive to assumptions set out above. The Company faces longevity,
discount rate fluctuation and withdrawal risk on account of medical benefits as explained in note 10.4. 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:
Impact on defined benefit obligation
Change in Increase in Decrease in
assumption assumption assumption
------------------------(Rupees '000)-----------------
Discount 1% (2,715,373) 3,379,813
Medical indexation 1% 2,741,539 (2,305,596)
Withdrawal 10% (533) 533
1 year 1 year set

setback forward
------------------------(Rupees '000)-----------------
Mortality 942,706 (847,996)
The expected medical expense for the next financial year is Rs 2,216.082 million.
2021 2020
--------------------------------------------------------------------------------------------------(Rupees '000)-----------------
8.2 Accumulating compensated absences
Charge for the year - net 3,245,511 4,012,638
Payments made during the year (2,666,920) (1,519,255)
The discount rate of 10% per annum (2020: 9.25%) and salary increase rate of 10% per annum (2020: 9.25%) were assumed.
The mortality rate, withdrawal rate and weighted average duration of the obligation is assumed same as disclosed in note 8.1
above. The Company faces longevity, discount rate fluctuation, withdrawal and salary increase risk on account of compensated
absences plan as explained in note 10.4.
2021 2020
--------------------------------------------------------------------------------------------------(Rupees '000)-----------------
Operating expenses - profit or loss 1,829,952 2,198,857
Technical services 1,016,614 1,291,703
3,245,511 4,012,638
The expected accumulating compensated expense for the next financial year is Rs 1,206.255 million.
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-----------------
9 PROVISION FOR DECOMMISSIONING COST
Balance at beginning of the year 27,654,493 22,862,587

Provision during the year 528,908 523,222
Decommissioning cost incurred during the year (129,266) (143,978)
Reversal in respect of fields decommissioned during the year - (480,019)
28,054,135 22,761,812
Revision due to change in estimates (1,261,545) 1,885,426
Unwinding of discount on provision for decommissioning cost 32 2,199,467 3,007,255
Balance at end of the year 28,992,057 27,654,493
2021 2020
Significant financial assumptions used were as follows:
Discount rate per annum 8.61% ~ 10.54% 7.82% ~ 10.51%
Inflation rate per annum 7.87% 7.58%
Page 30
2021 2020
Restated
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-----------------
10 TRADE AND OTHER PAYABLES
Creditors 1,157,086 670,392
Accrued liabilities 13,358,536 17,145,383
Payable to partners of joint operations 10.1 7,515,704 7,977,718
Retention money payable 5,725,852 6,133,678
Royalty payable to the Government of Pakistan 16,349,028 5,842,512
Excise duty payable 195,272 203,835
General sales tax payable 1,307,195 1,461,153
Gas Infrastructure Development Cess (GIDC) payable 10.2 - 175,276
Petroleum levy payable 124,915 116,808
Withholding tax payable 654,860 306,959
Trade deposits 10.3 159,164 117,164
Workers' profit participation fund - net 6,788,755 9,240,211
Employees' pension trust 10.4 9,146,862 8,157,458
Gratuity fund 10.5 180,536 122,337
Provident fund 69,775 -
Advances from customers 3,838,475 2,621,375
Other payables 10.6 5,785,445 3,296,893
72,357,460 63,589,152
10.1 This includes payable to related parties amounting to Rs 5,154 million (2020: Rs 3,100 million) as per relevant Petroleum
Concession Agreement (PCA).
10.2 GIDC amounting to Rs 4,238 million (2020: Rs 6,700 million) is recoverable from customers and payable to the GoP. These
financial statements do not reflect the said amount since under the provisions of the GIDC laws and regulations, the Company is
required to pay the said amount as and when the same is collected from customers. The GIDC has been presented as payable to
the extent that it is received from customers but not deposited with the GoP. Also refer note 3.2.
During the year, the Supreme Court of Pakistan has decided the matter of GIDC and ordered gas consumers to pay GIDC arrears
in instalments. The fertilizer companies have obtained stay against recovery from the Sindh High Court, where the matter is
subjudice.
10.3 The entire amount is utilisable for purpose of the Company's business.
2021 2020
--------------------------------------------------------------------------------------------------(Rupees '000)-----------------
10.4 Employees' pension trust
The amount recognized in the statement of financial position is as follows:

Present value of defined benefit obligation 106,062,965 101,837,507
Fair value of plan assets (96,916,103) (93,680,049)
Liability at end of the year 9,146,862 8,157,458
The movement in the present value of defined benefit obligation is as follows:

Current service cost 2,855,803 2,778,192
Interest cost 9,032,174 10,998,287
Benefits paid (8,384,766) (6,308,271)
Remeasurement loss recognized in other comprehensive income 722,247 14,034,204
Page 31
2021 2020
--------------------------------------------------------------------------------------------------(Rupees '000)-----------------
The movement in the fair value of plan assets is as follows:
Fair value of plan assets at beginning of the year 93,680,049 87,685,460
Expected return on plan assets 8,277,612 12,132,685
Contributions 53 1,220,643
Benefits paid (8,384,766) (6,308,271)
Remeasurement gain/ (loss) recognized in other comprehensive income 3,343,155 (1,050,468)
Fair value of plan assets at end of the year 96,916,103 93,680,049
The movement in liability/ (asset) recognized in the statement of financial position is as

follows:
Opening liability/ (asset) 8,157,458 (7,350,365)
Expense for the year 3,610,365 1,643,794
Remeasurement (gain)/ loss recognized in other comprehensive income (2,620,908) 15,084,672
Payments to the fund during the year (53) (1,220,643)
Closing liability 9,146,862 8,157,458

Current service cost 2,855,803 2,778,192
Net interest cost/ (income) 754,562 (1,134,398)
3,610,365 1,643,794
Remeasurement (gain)/ loss recognized in other comprehensive income:
Remeasurement loss on defined benefit obligation 722,247 14,034,204
Remeasurement (gain)/ loss on plan assets (3,343,155) 1,050,468
(2,620,908) 15,084,672
Plan assets comprise:
2021 2020
Quoted Unquoted Total Quoted Unquoted Total
--------------------------------------------------------------------------------------------------(Rupees '000)----------------------------------------------------
Regular income certificates - 73,946,487 73,946,487 - 73,921,920 73,921,920
Mutual funds 1,702,238 - 1,702,238 1,280,614 - 1,280,614
Term deposit receipts - 18,076,726 18,076,726 - 15,860,423 15,860,423
Cash and bank balances - 3,190,653 3,190,653 - 2,617,092 2,617,092
1,702,238 95,213,866 96,916,104 1,280,614 92,399,435 93,680,049
Quoted plan assets comprise of 1.76% (2020: 1.37%) of total plan assets.
Funds covered were invested within limits specified by regulations governing investment of approved retirement funds in
Pakistan. The funds have no investment in the Company's own securities.
The pension plan is a defined benefit final salary plan invested through approved trust fund. The fund is governed under Trusts
Act. Trust Deed and Rules of Fund, Companies Act, 2017, the Income Tax Ordinance, 2001 and the Income Tax Rules, 2002.
The trustees of the fund which are appointed by the Company are responsible for plan administration and investment. All
trustees are employees of the Company.
The Company faces the following risks on account of defined benefit plan:
Investment Risks - The risk arises when the actual performance of the investments is lower than expectation and thus creating a
shortfall in the funding objectives. The risk is mitigated by closely monitoring the performance of investment. The investment in
mutual funds is subject to adverse fluctuation as a result of change in prices.
Longevity Risks - The risk arises when the actual lifetime of retirees is longer than expectation. This risk is measured at the plan
level over the entire retiree population.
Salary Increase Risk - The most common type of retirement benefit is one where the benefit is linked with final salary. The risk
arises when the actual increases are higher than expectation and impacts the liability accordingly.
Page 32
Longevity Risks - The risk arises when the actual lifetime of retirees is longer than expectation. This risk is measured at the plan
level over the entire retiree population.
Salary Increase Risk - The most common type of retirement benefit is one where the benefit is linked with final salary. The risk
arises when the actual increases are higher than expectation and impacts the liability accordingly.
Withdrawal Risk - The risk of actual withdrawals varying with the actuarial assumptions can impose a risk to the benefit
obligation. The movement of the liability can go either way.
Discount rate fluctuation - The plan liabilities are calculated using a discount rate set with reference to market yield on
government bonds. A decrease in discount rate will increase the plan liabilities, however, this will be partially offset by an
increase in the value of asset plan bond holdings in case of funded plans.
2021 2020
--------------------------------------------------------------------------------------------------(Rupees '000)-----------------
Operating expenses - profit or loss 1,909,027 877,538
Technical services 1,037,508 456,530
3,610,365 1,643,794
Actual return on plan assets 11,620,767 11,082,217

2021 2020
Discount rate per annum 10.00% 9.25%
Salary increase rate per annum 10.00% 9.25%
Expected rate of return on plan assets per annum 10.00% 9.25%
Pension indexation rate per annum 5.75% 5.00%
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:

------------------------(Rupees '000)------------------------
Discount 1% (9,118,415) 10,900,266
Salary increase 1% 449,173 (230,912)
Pension indexation 1% 7,615,249 (6,531,053)
Withdrawal 10% (4,985) 4,994
1 year 1 year set

setback forward
------------------------(Rupees '000)-----------------
Mortality 1,936,098 (1,773,111)
The Company expects to make a contribution of Rs 12,888 million (2020: Rs 11,767) to the employees' pension trust during the
next financial year and the expected expense for the next year amounts to Rs 3,741 million.
Page 33
2021 2020
--------------------------------------------------------------------------------------------------(Rupees '000)-----------------
10.5 Gratuity fund
The amount recognized in the statement of financial position is as follows:

Present value of defined benefit obligation 882,970 675,171
Fair value of plan assets (702,434) (552,834)
Liability at end of the year 180,536 122,337
The movement in the present value of defined benefit obligation is as follows:

Present value of defined benefit obligation at beginning of the year 675,171 462,452
Interest cost 60,597 61,646
Benefits paid (40,132) (15,250)
Remeasurement gain recognized in other comprehensive income (56,303) (21,429)
Present value of defined benefit obligation at end of the year 882,970 675,171
The movement in the fair value of plan assets is as follows:

Fair value of plan assets at beginning of the year 552,834 -
Expected return on plan assets 79,292 35,667
Contributions 47,337 515,834
Benefits paid (40,132) (15,250)
Remeasurement gain recognized in other comprehensive income 63,103 16,583
Fair value of plan assets at end of the year 702,434 552,834
The movement in liability recognized in the statement of financial position is as follows:

Opening liability 122,337 462,452
Expense for the year 224,942 213,731
Remeasurement gain recognized in other comprehensive income during the year (119,406) (38,012)
Payments to the fund during the year (47,337) (515,834)
Closing liability 180,536 122,337

Net interest (income)/ cost (18,695) 25,979
224,942 213,731
Remeasurement gain recognized in other comprehensive income:
Remeasurement gain on defined benefit obligation 56,303 21,429
Remeasurement gain on plan assets 63,103 16,583
119,406 38,012
2021 2020
Discount rate 10.00% 9.25%
Salary increase rate 10.00% 9.25%
The calculation of the defined benefit obligation is sensitive to assumptions set out above. The following table summarizes how
Page 34


------------------------(Rupees '000)------------------------
Discount 1% (133,781) 165,214
Salary increase 1% 128,721 (109,977)
Withdrawal 10% 1,018 (1,027)
1 year 1 year set

setback forward
------------------------(Rupees '000)-----------------
Mortality (986) 979
The Company expects to make a contribution of Rs 405.968 million to the employees' Gratuity fund during the next financial
year and expected expense for the next year amounts to Rs 225.432 million.
Plan assets comprise:

2021 2020
Quoted Unquoted Total Quoted Unquoted Total
--------------------------------------------------------------------------------------------------(Rupees '000)----------------------------------------------------
Term deposit receipts - 684,493 684,493 - 543,199 543,199
Cash and bank balances - 17,941 17,941 - 9,635 9,635
- 702,434 702,434 - 552,834 552,834
Funds covered were invested within limits specified by regulations governing investment of approved retirement funds in
Pakistan. The funds have no investment in the Company's own securities.
The gratuity plan is a defined benefit final salary plan invested through approved trust fund. The fund is governed under Trusts
Act, 1882, Trust Deed and Rules of Fund, Companies Act, 2017, The Income Tax Ordinance, 2001 and the Income Tax Rules,
2002. The trustees of the fund are responsible to plan administration and investment. The Company appoints the trustees. All
trustees are employees of the Company.
The Company offers a defined post-employment gratuity benefits to contractual and regular employees. The gratuity fund is
governed under OGDCL employees gratuity fund rules, 2019. Responsibility for governance of plan, including investment
decisions and contribution schedule lie with Board of Trustees of the Fund.
The Company faces the investment, longevity, salary increase, withdrawal and discount rate fluctuation risks on account of
gratuity plan as explained in note 10.4.
2021 2020
--------------------------------------------------------------------------------------------------(Rupees '000)-----------------
Operating expenses - profit or loss 119,848 121,796

224,942 213,731
10.6 This includes an amount of Rs 5,038 million (2020: Rs 2,562 million) received from customers on account of additional revenue
and related sales tax due to enhanced gas price incentive as explained in note 27.3.
Page 35
This includes an amount of Rs 5,038 million (2020: Rs 2,562 million) received from customers on account of additional revenue
and related sales tax due to enhanced gas price incentive as explained in note 27.3.

11 UNPAID DIVIDEND
This includes an amount of Rs 28,441 million (2020: Rs 25,027 million) payable to OGDCL Employees' Empowerment Trust
(OEET). The payment of dividend has been withheld since GoP is considering to revamp Benazir Employees' Stock Option
Scheme (BESOS) as communicated to the Company by Privatization Commission of Pakistan (PCP). PCP vide letter no. F. No.
13(4)12/PC/BESOS/OGDCL dated 15 May 2018 informed that the matter of BESOS, as a scheme, is pending adjudication
before the Honorable Supreme Court of Pakistan, hence status quo may be maintained till final decision of Honorable Supreme
Court of Pakistan.
The Finance Division, GoP vide letter no. F. No. 2(39)BIU-I/2018-19 dated 15 April 2019 advised the Company to deposit the
GoP share of dividend including interest, if any, lying in OEET account(s) or any other reserve/ account till date in the Federal
Consolidated Fund pursuant to decision of the Federal Cabinet in its meeting held on 09 April 2019. Furthermore, PCP vide
letter no. 1(1)PC/BESOS/F&A/2019 dated 08 May 2019, requested the Company not to remit any amounts on the account of
BESOS in view of the decision of the Federal Cabinet. Based on the legal advice, OEET submitted its response to Petroleum
Division on 05 August 2019 that the matter is pending adjudication before the Honourable Supreme Court of Pakistan, the
transfer would commit breach of fiduciary duties of the trustees and therefore the directions to be kindly recalled.
The Ministry of Energy, GoP, vide letter no. U.O. No. 8(9)/ 2014/D-III/BESOS, dated 27 December 2019 requested the
Company to transfer Federal Government's share of dividend money to PCP on immediate basis as per the direction of Finance
Division, GoP. OEET submitted its response vide letter no. OEET-127/2019 dated 30 December 2019 that in order to proceed
further with the direction given above, it is requested that PCP withdraw the above mentioned letter no. F.
No.13(4)12/PC/BESOS/OGDCL dated 15 May 2018 and all previous letters related to maintaining status quo in respect of this
matter.
During the year, the Finance Division, GoP vide letter No. F. 2(39)-NTR/2020-F dated 19 November 2020 directed the
Company to deposit all the accrued BESOS principal amount along with interest earned thereon till date in the Federal
Consolidated Fund in light of the Honourable Supreme Court of Pakistan's short order dated 22 October 2020. OEET submitted
its response to the Ministry of Energy, GoP on 17 December 2020 that there is no guidance or clarity on any issue in the short
order and in these circumstances, it would be prudent and appropriate to await the detailed reasons for the short order, which are
yet to be released by the Honourable Supreme Court of Pakistan, prior to taking any action in pursuance of the directives of
Finance Division, GoP. PCP vide letter no.F.No. 1(20PC/BESOS(WIND-up)/2019 dated 30 December 2020, inform that fund
maintained by PCP has closed since December 2020, therefore, the amounts retained on account of Employees Empowerment
Fund be directly deposited in the Federal Consolidated Fund maintained by Finance Division.
Page 36
12 CONTINGENCIES AND COMMITMENTS
12.1 Contingencies
12.1.1 Claims against the Company not acknowledged as debts amounted to Rs 739.690 million at year end (2020: Rs 1,262.824 million). Details of the major legal proceedings disclosed as contingencies are as follows:
2021 2020
Parties involved Date of Court, agency or authority Facts of the case and relief sought --------------------------(Rupees '000)------------------
institution of where proceedings are pending
the case
Commissioner Inland Revenue (CIR) 25-Oct-18 Islamabad High Court Alleged default surcharge and penalty on short payment of sales tax for the period of 1999-2000 to 515,967 515,967
2007-08, in respect of Uch gas field. Islamabad High court passed judgment against OGDCL. OGDCL
filed a Civil Petition for Leave to Appeal (CPLA) in Supreme Court against the judgment. The Supreme
Court vide order dated 25 October 2018 set-aside the order of Islamabad High Court and referred it
back to Islamabad High Court for determination in accordance with law which is still pending.
Management believes that case will be decided in favour of company.
M/s Sprint Oil and Gas Service Pakistan 18-Mar-19 Islamabad High Court OGDCL withheld sales tax on services provided by M/s Sprint Oil and Gas Services Pakistan (Sprint). - 123,020
Sprint filed a petition claiming that it is the responsibility of OGDCL to bear the tax and that Sprint
should be paid the amount in full, as per contract. Islamabad High Court vide order dated 01 March
2019 accepted the petition that services provided by Sprint were taxable and consequently the liability
to pay sales tax was on the Company. The Company filed an intra court appeal on 18 March 2019.
During the year the case is decided in favour of the Company.
Subtotal 515,967 638,987

Other immaterial cases 223,723 623,837
Total 739,690 1,262,824
Page 37
12.1.2 During the year ended 30 June 2019, Attock Refinery Limited (ARL) filed a writ petition against the
Company before Islamabad High Court on 17 December 2018 and has disputed and withheld amounts
invoiced to it on account of adjustment of premium or discount as announced by Saudi Aramco for deliveries
to Asian customers/ destinations under the sale agreement signed on 13 March 2018. The Islamabad High
Court vide order dated 16 January 2019 granted interim relief to ARL until next hearing. During the year, the
Islamabad High Court vide order dated 09 June 2021 clarified that there is no injunctive order regarding
supplies of crude oil made after 2018, and ARL paid an amount of Rs 1,108 million subsequent to year ended
30 June 2021 against the invoices pertaining to period after signing of sale agreement. Accordingly, the
amount withheld and disputed by ARL amounts to Rs 1,333 million (2020: Rs 2,246 million). Further, ARL
has also contested and claimed the amounts already paid in this respect during the period 2007 to 2012
amounting to Rs 562 million (2020: Rs 562 million). The Company believes that the debit notes/ invoices
have been raised in accordance with the sale agreements signed with GoP and no provision is required in this
respect.
12.1.3 Oil and Gas Regulatory Authority (OGRA) vide its decision dated 22 June 2018 decided that LPG producers,
in public or private sector, cannot charge signature bonus in compliance with LPG Policy 2016. The
Company has challenged this decision in Islamabad High Court on 23 July 2018. Signature bonus recognized
as income by the Company after decision of OGRA amounts to Rs 1,276.311 million (2020: Rs 833.111
million). Management believes that the matter will be decided in favour of the Company. Also refer note
29.1.
12.1.4 Certain banks have issued guarantees on behalf of the Company in ordinary course of business aggregating Rs
1.281 million (2020: Rs 1.281 million), refer note 26.1 to the financial statements.
12.1.5 For contingencies related to tax matters, refer note 24.1 to 24.3 and note 33.2.
12.1.6 For contingencies related to sales tax and federal excise duty, refer note 21.3 and 21.4.
12.1.7 For matter relating to conversion of certain blocks to Petroleum Policy 2012, refer note 27.3.
12.1.8 The Company's share of associate's unavailed credit facilities issued by various banks to the associate in the
ordinary course of business amounts to Rs 2,699.94 million (2020: Rs 798.08 million).
12.2 Commitments
12.2.1 Commitments outstanding at the year end amounted to Rs 41,972.846 million (2020: Rs 42,430.417 million).
These include amounts aggregating to Rs 21,365.516 million (2020: Rs 24,360.796 million) representing the
Company's share in the minimum work commitments under Petroleum Concession Agreements.
12.2.2 Letters of credit issued by various banks on behalf of the Company in ordinary course of the business,
outstanding at year end amounted to Rs 6,374.588 million (2020: Rs 4,899.632 million).
12.2.3 The Company's share of associate commitments at year end is as follows:
2021 2020
------------------------(Rupees '000)------------------------
Capital expenditure:
Share in joint operations 2,195,085 3,871,108
Others 3,525,540 1,180,036
5,720,625 5,051,144
Page 38
13 PROPERTY, PLANT AND EQUIPMENT

(Rupees '000)
Buildings, Buildings,
Office and Capital
offices and offices and Office and Furniture Decom- Stores held for
Freehold Leasehold Plant and technical work in
Description roads on roads on Rigs Pipelines domestic and Vehicles missioning capital Total
land land machinery data progress
freehold leasehold equipment fixtures cost expenditure
computers (Note 13.4)
land land
Cost
Balance as at 1 July 2019 264,326 54,039 4,598,366 7,473,280 171,197,968 5,105,257 20,957,344 1,325,567 2,252,974 222,837 5,346,082 2,142,503 2,340,751 4,676,317 227,957,611
Impact of adoption of IFRS 16 - - - (959,316) (22,770,312) - (9,495,685) - - - - (313,344) - - (33,538,657)
Balance as at 1 July 2019 - restated 264,326 54,039 4,598,366 6,513,964 148,427,656 5,105,257 11,461,659 1,325,567 2,252,974 222,837 5,346,082 1,829,159 2,340,751 4,676,317 194,418,954
Additions during the year 90 - 97,784 164,914 5,207,960 263,254 1,048,613 16,274 59,863 2,569 127,402 84,430 2,929,500 2,895,354 12,898,007
Revision due to change in estimate - - - - (159,268) - (3,204) - - - - 656,358 - - 493,886
Disposals/transfers during the year - - - - (18,502) (11,799) - (3,355) (61,632) (128) (173,390) - (1,690,278) (419,352) (2,378,436)
Adjustments during the year - - - 959,316 (959,316) - - - - - - - - - -
Balance as at 30 June 2020- restated 264,416 54,039 4,696,150 7,638,194 152,498,530 5,356,712 12,507,068 1,338,486 2,251,205 225,278 5,300,094 2,569,947 3,579,973 7,152,319 205,432,411
Balance as at 1 July 2020-restated 264,416 54,039 4,696,150 7,638,194 152,498,530 5,356,712 12,507,068 1,338,486 2,251,205 225,278 5,300,094 2,569,947 3,579,973 7,152,319 205,432,411
Additions during the year - - 33,804 760,205 5,886,772 106,420 669,025 82,188 293,467 5,957 136,324 42,938 2,561,332 2,630,622 13,209,054
Revision due to change in estimate - - (5,424) (8,661) (225,419) - (13,333) - - - - (531,453) - - (784,290)
Disposals/transfers during the year - - - - (32,888) (18,802) (7,801) (6,018) (80,924) - (71,319) - (3,976,922) (2,455,414) (6,650,088)
Adjustments during the year - - - - - - - - - - - - - - -
Balance as at 30 June 2021 264,416 54,039 4,724,530 8,389,738 158,126,995 5,444,330 13,154,959 1,414,656 2,463,748 231,235 5,365,099 2,081,432 2,164,383 7,327,527 211,207,087
Depreciation
Balance as at 1 July 2019 - 54,036 2,786,476 2,797,903 77,088,005 3,264,452 14,155,923 1,057,715 2,111,063 134,578 5,001,436 1,295,991 - 87,954 109,835,532
Impact of adoption of IFRS 16 - - - - (8,257,868) - (8,122,923) - - - - (313,344) - - (16,694,135)
Balance as at 1 July 2019- restated - 54,036 2,786,476 2,797,903 68,830,137 3,264,452 6,033,000 1,057,715 2,111,063 134,578 5,001,436 982,647 - 87,954 93,141,397
Charge for the year- restated - - 205,661 629,604 8,608,200 406,144 924,537 90,282 87,190 14,312 165,945 335,817 - (8) 11,467,684
On disposals - - - - (18,423) (11,793) - (3,193) (60,628) (125) (158,327) - - - (252,489)
Adjustments during the year - - - 294,190 (294,190) - - - - - - - - - -
Balance as at 30 June 2020- restated - 54,036 2,992,137 3,721,697 77,125,724 3,658,803 6,957,537 1,144,804 2,137,625 148,765 5,009,054 1,318,464 - 87,946 104,356,592
Balance as at 1 July 2020-restated - 54,036 2,992,137 3,721,697 77,125,724 3,658,803 6,957,537 1,144,804 2,137,625 148,765 5,009,054 1,318,464 - 87,946 104,356,592
Charge for the year - - 177,442 62,293 8,383,609 403,030 1,295,600 85,484 117,620 15,305 129,451 298,337 - (618) 10,967,553
On disposals - - - - (32,845) (18,792) (7,799) (5,807) (79,157) - (53,298) - - - (197,698)
Adjustments during the year - - - - - - - - - - - - - - -
Balance as at 30 June 2021 - 54,036 3,169,579 3,783,990 85,476,488 4,043,041 8,245,338 1,224,481 2,176,088 164,070 5,085,207 1,616,801 - 87,328 115,126,447
Impairment
Balance as at 1 July 2019 - - 61,204 128,386 143,717 - 333 - - - 1,079 327 - - 335,046
Charge for the year - - - - - - - - - - - - - - -
Balance as at 30 June 2020- restated - - 61,204 128,386 143,717 - 333 - - - 1,079 327 - - 335,046
Balance as at 1 July 2020 - - 61,204 128,386 143,717 - 333 - - - 1,079 327 - - 335,046
Charge for the year - - - - - - - - - - - - - - -
Balance as at 30 June 2021 - - 61,204 128,386 143,717 - 333 - - - 1,079 327 - - 335,046
Carrying amount - 30 June 2020 -restated 264,416 3 1,642,809 3,788,111 75,229,089 1,697,909 5,549,198 193,682 113,580 76,513 289,961 1,251,156 3,579,973 7,064,373 100,740,773
Carrying amount - 30 June 2021 264,416 3 1,493,747 4,477,362 72,506,790 1,401,289 4,909,288 190,175 287,660 67,165 278,813 464,304 2,164,383 7,240,199 95,745,594
Rates of depreciation (%) - 3.3~4 2.5~8 2.5~8 4~20 10 10 15 33.33 10 20 2.5~10 - -
Page 39
13.1 Particulars of Company's significant immovable property including location and area of land are as follows:
Particulars of land and buildings Field/ Location District Area of land in

Acres
Dakhni plant residential colony Dakhni Attock 65.58
Dakhni (expansion of plant) Dakhni Attock 7.04
Sadqal road Sadqal Attock 1.33
I-9 workshop/ store/ OGTI Islamabad Base store I-9 Islamabad 10.91
Head office Head office blue area Islamabad 0.73
Masood Mansion F-8 Markaz Islamabad 0.33
Plot Kuri road Islamabad 10.00
Plant residential colony Nandpur Multan 21.54
Plant residential colony Dhodhak plant Taunsa 381.82
Dhodak colony Samajabad Multan 31.92
Kot Adu logistic base Kot Adu Taunsa 29.74
Regional office Quetta (Mastung) Quetta 40.99
Filling point Tando Alam Hyderabad 20.28
Officers residential colony Tando Alam Hyderabad 11.02
Plant residential colony Bobi Sanghar 46.00
Plant residential colony Qadirpur Ghotki 389.63
Uch pipeline Uch Dera Bugti 107.30
Mela to Naspha flow line Mela Karak 15.84
Rajian well-1 Rajian Chakwal 0.71
Tabular yard Korangi Karachi 2.53
Base store/ workshop Korangi Karachi 15.60
Medical center Korangi Karachi 0.15
Lodge , D-35 Clifton Karachi 0.20
Computer center Fateh Jang Attock 0.50
Security check post Nashpa plant Karak 14.99
Base Store Khadejee Karachi 61.00
Base Store Chak Naurang Chakwal 2.46
Dhuliyan guest house Pindi Gheb Attock 0.25
Page 40
13.2 Cost and accumulated depreciation as at 30 June 2021 include Rs 57,755 million (2020: Rs 57,031 million) and Rs 44,272 million
(2020: Rs 40,450 million) respectively being the Company's share in property, plant and equipment relating to joint operations
operated by other working interest owners and are not in possession and control of the Company.
Operator wise breakup is summarised below:

2021 2020 2021 2020
Cost Accumulated depreciation

--------------------------------------------------------------------------------------------------(Rupees '000)------------------------------------
Pakistan Petroleum Limited 10,418,584 10,192,056 4,873,218 4,277,681
Eni Pakistan Limited 21,812,212 21,702,111 19,818,955 18,337,304
Pakistan Oilfields Limited 832,264 823,106 826,421 821,280
United Energy Pakistan Limited 2,941,347 2,904,477 2,909,699 2,862,815
Spud Energy Pty Limited 121,652 119,176 120,781 118,957
Ocean Pakistan Limited 352,243 338,972 322,842 298,938
MOL Pakistan Oil and Gas B.V. 15,151,579 14,946,092 9,849,586 9,200,729
OMV (Pakistan) Exploration 6,029,425 5,910,703 5,459,216 4,441,826
Petroleum Exploration (Pvt) Limited 95,554 94,704 91,513 90,460
57,754,860 57,031,397 44,272,231 40,449,990
2021 2020
Restated
--------------------------------------------------------------------------------------------------(Rupees
Note '000)------------------
13.3 The depreciation charge has been allocated to:
Operating expenses - profit or loss 28 9,805,115 10,381,264

General and administration expenses - profit or loss 31 208,317 170,764
10,967,553 11,467,684
2021 2020
--------------------------------------------------------------------------------------------------(Rupees '000)------------------
13.4 Capital work in progress
Production facilities and other civil works in progress:
Wholly owned 478,486 465,414
Joint operations 1,516,470 3,072,601
1,994,956 3,538,015
Construction cost of field offices and various bases/offices owned by the
169,427 41,958
Company
2,164,383 3,579,973
13.5 Details of property, plant and equipment sold:
Cost Book Sale Gain/ (loss)
value proceeds
--------------------------------------------------------------------------------------------------(Rupees '000)------------------------------------
Vehicles sold to following in-service/retiring employees as
per Company's policy:
Dr. Naseem Ahmad 3,547 2,601 2,601 -

Mr. Munsif Hussain Channa 3,183 2,334 2,334 -
Mr. Zahid Abbas 3,183 2,388 2,388 -
Mr. Masood Nabi 2,720 1,360 1,360 -
Mr. Khan Alam 2,399 1,280 1,280 -
Mr. Ihsanullah Khan 2,331 1,554 1,554 -
Mr. Abid Tufail 2,331 1,477 1,477 -
Page 41
Cost Book Sale Gain/ (loss)

value proceeds
--------------------------------------------------------------------------------------------------(Rupees '000)------------------------------------
Vehicles sold to following in-service/retiring employees as
per Company's policy: Continued
Dr. Syed Ahmed Nadeem 2,224 742 742 -

Mr. Muhammad Younis Mako 1,974 1,020 1,020 -
Mr. Muhammad Asif Khan 1,807 693 693 -
Mr. Liaqat Ali Farooq 1,807 392 392 -
Mr. Hamid Raza 1,802 1 180 179
Mr. Munawar Ali Khan 1,802 1 180 179
Mr. Manzoor Ahmed 1,784 595 595 -
Mr. Iftikhar Abassi 1,772 1 177 176
Mr. Shahid Waqar Malik 1,772 1 177 176
Dr. Mubashar Ayaz 1,772 1 177 176
Mr. Muhammad Ajaz Sarwar 1,772 1 177 176
Mr. Jamal Nasir 1,772 1 177 176
Mr. Muhammad Akram Qureshi 1,772 60 177 117
Mr. Mohammad Irfanullah 1,772 1 177 176
Mr. Abdur-raziq Khattak 1,772 1 177 176
Mr. Muhammad Yousaf 1,772 90 177 88
Mr. Mohammad Haider 1,745 1,251 1,251 -
Mr. Muhammad Akram 1,053 1 105 104
Mr. Muhammad Saleem 1,053 1 105 104
Mr. Habibullah Chohan 1,053 1 105 104
Mr. Abdul Karim Sheikh 1,053 1 105 104
Mr. Muhammad Iqbal Khan 1,053 1 105 104
Mr. Ajmal Hussain Shah 1,034 70 103 34
Mr. Suhail Atta Chaudhry 1,034 1 103 102
Mr. Hafeez Ur Rehman 1,034 1 103 102
Mr. Mahmood Nadeem 1,034 1 103 102
Mr. Ghulam Mustafa Tabassum 1,034 18 103 85
Mr. Mukhtar Ahmad Sajid 1,034 1 103 102
Mr. Munawar Ali 1,034 1 103 102
Mr. Taj Muhammad 1,034 1 103 102
Mr. Ghulam Abbas 1,034 1 103 102
Mr. Abdul Waheed 1,034 1 103 102
Mr. Jaffer Hussain 1,034 1 103 102
Mr. Muhammad Ali Khan 1,034 70 103 34
68,258 18,018 21,410 3,392
Computers/ mobile phones, with individual book value not
exceeding Rs 500,000, sold to employees as per Company's
policy 20,974 1,507 3,025 1,517
Items of property, plant and equipment with individual book

value not exceeding Rs 500,000 sold through public auction 128,519 527 20,650 20,123
30 June 2021 217,751 20,053 45,085 25,032

30 June 2020 268,806 16,317 75,195 58,878
Page 42
14 DEVELOPMENT AND PRODUCTION ASSETS

(Rupees '000)
Producing fields Shut-in fields/ fields in Stores held for
Wells in Decom-
development and
Description Wholly Joint Wholly Joint progress Sub total missioning Total
production
owned operations owned operations (Note 14.1) cost
activities
Cost
Balance as at 1 July 2019 89,585,427 135,517,941 6,591,190 24,646,363 - 6,147,180 262,488,101 6,515,418 269,003,519
Adjustment (4,871,314) 966,166 4,871,314 (966,166) - - - - -
Additions during the year - - - - 2,412,807 15,636,918 18,049,725 438,792 18,488,517
Transfers in/(out) during the year 3,525,065 12,438,500 879,609 74,499 - (16,917,673) - - -
Transfer from exploration and evaluation assets during the year - 369,803 - 6,443,095 - - 6,812,898 - 6,812,898
Revision due to change in estimate (1,667) (20,180) - - - - (21,847) 1,457,819 1,435,972
Fields decommissioned/ surrendered during the year (3,395,866) - - - - - (3,395,866) (143,235) (3,539,101)
Balance as at 30 June 2020 84,841,645 149,272,230 12,342,113 30,197,791 2,412,807 4,866,425 283,933,011 8,268,794 292,201,805
Balance as at 1 July 2020 84,841,645 149,272,230 12,342,113 30,197,791 2,412,807 4,866,425 283,933,011 8,268,794 292,201,805
Adjustment 1,424,236 2,063,841 (1,424,236) (2,063,841) - - - - -
Additions during the year - - - - 1,725,613 5,600,675 7,326,288 485,970 7,812,258
Transfers in/(out) during the year 1,250,947 3,379,013 1,538,423 151,949 (879,431) (6,320,332) (879,431) - (879,431)
Transfer from exploration and evaluation assets during the year - 395,514 4,166,507 4,793,785 - - 9,355,806 - 9,355,806
Revision due to change in estimate (375,456) (60,191) - (3,388) - - (439,035) 981,171 542,136
Fields decommissioned/ surrendered during the year - - - - - - - - -
Balance as at 30 June 2021 87,141,372 155,050,407 16,622,807 33,076,296 3,258,989 4,146,768 299,296,639 9,735,935 309,032,574
Amortization
Balance as at 1 July 2019 66,184,384 98,774,733 700,240 2,477,617 - - 168,136,974 3,060,334 171,197,308
Adjustment (3,813,078) (660,734) 3,813,078 660,734 - - - - -
Fields decommissioned/ surrendered during the year (3,029,549) - - - - - (3,029,549) (117,288) (3,146,837)
Charge for the year 5,491,349 10,734,254 - - - - 16,225,603 1,021,458 17,247,061
Balance as at 30 June 2020 64,833,106 108,848,253 4,513,318 3,138,351 - - 181,333,028 3,964,504 185,297,532
Balance as at 1 July 2020 64,833,106 108,848,253 4,513,318 3,138,351 - - 181,333,028 3,964,504 185,297,532
Adjustment 87,415 (565,279) (87,415) 565,279 - - - - -
Charge for the year 4,797,850 12,416,212 - - - - 17,214,062 650,583 17,864,645
Balance as at 30 June 2021 69,718,371 120,699,186 4,425,903 3,703,630 - - 198,547,090 4,615,087 203,162,177
Impairment
Balance as at 1 July 2019 1,691,534 1,004,360 966,035 1,920,296 - - 5,582,225 265,302 5,847,527
Adjustment - - - - - - - - -
Fields decommissioned/ surrendered during the year (366,317) - - - - - (366,317) (25,947) (392,264)
Charge for the year - - - - - - - - -
Balance as at 30 June 2020 1,325,217 1,004,360 966,035 1,920,296 - - 5,215,908 239,355 5,455,263
Balance as at 1 July 2020 1,325,217 1,004,360 966,035 1,920,296 - - 5,215,908 239,355 5,455,263
Adjustment - - - - - - - - -
Charge for the year - - - - - - - - -
Balance as at 30 June 2021 1,325,217 1,004,360 966,035 1,920,296 - - 5,215,908 239,355 5,455,263
Carrying amount - 30 June 2020 18,683,322 39,419,617 6,862,760 25,139,144 2,412,807 4,866,425 97,384,075 4,064,935 101,449,010
Carrying amount - 30 June 2021 16,097,784 33,346,861 11,230,869 27,452,370 3,258,989 4,146,768 95,533,641 4,881,493 100,415,134
2021 2020
--------------------------------------------------------------------------------------------------(Rupees '000)-----------------------------------------------------------------------
14.1 Wells in progress at year end represent:
Wholly owned 3,684,327 2,847,848

Joint operations 462,441 2,018,577
4,146,768 4,866,425
Page 43
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-------------------
15 EXPLORATION AND EVALUATION ASSETS

Additions during the year 18,524,889 17,408,312
34,224,231 32,538,204
Cost of dry and abandoned wells during the year 30 (8,372,663) (10,025,964)
Cost of wells transferred to development and production assets during the year (9,355,806) (6,812,898)
(17,728,469) (16,838,862)
16,495,762 15,699,342
Stores held for exploration and evaluation activities 236,914 721,262
15.1 Liabilities, other assets and expenditure incurred on exploration and evaluation activities are:
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-------------------
Liabilities related to exploration and evaluation 1,562,697 2,118,804
Exploration and prospecting expenditure 30 17,366,187 18,213,438
16 LONG TERM INVESTMENTS
Investment in related party - associate, quoted 16.1 23,126,401 18,634,390

Investments at amortised cost 16.2 22,399,470 42,583,441
45,525,871 61,217,831
16.1 Investment in related party - associate, quoted
Mari Petroleum Company Limited (MPCL)

Cost of investment (26,680,500 (30 June 2020: 26,680,500) fully paid
ordinary shares of Rs 10 each including 19,330,500 (30 June 2020: 73,500 73,500
19,330,500) bonus shares)
Post acquisition profits brought forward 18,560,890 12,651,099
18,634,390 12,724,599
Share of profit for the year - net of taxation 6,288,982 6,062,575
Share of other comprehensive income of the associate - net of taxation 2,184 3,801
Dividend received (1,799,155) (156,585)
4,492,011 5,909,791
23,126,401 18,634,390
16.1.1 MPCL is a listed company incorporated in Pakistan and is principally engaged in exploration, production and sale of
hydrocarbons. The Company has 20% (2020: 20%) holding in the associate. The market value of the investment in
associate as of the year end is Rs 40,671 million (2020: Rs 32,994 million). At the year end 222,337 bonus shares (2020:
222,337) have not been issued by MPCL due to pending resolution of issue relating to withholding tax on issuance of
bonus shares.
16.1.2 The tables below provides summarized financial statements for the associate. The information disclosed reflects the
amounts presented in the annual audited financial statements of the associate for the year ended 30 June 2021 (2020: year
ended 30 June 2020) and not the Company's share of those amounts. In light of Guidance " Accounting of GIDC issued by
ICAP through circular no. 1/2021 dated 21 January 2021, MPCL has retrospectively restated prior year financial statements
which has not effected current or prior years' net sales, profit, equity and cashflows.
Page 44
amounts presented in the annual audited financial statements of the associate for the year ended 30 June 2021 (2020: year
ended 30 June 2020) and not the Company's share of those amounts. In light of Guidance " Accounting of GIDC issued by
ICAP through circular no. 1/2021 dated 21 January 2021, MPCL has retrospectively restated prior year financial statements
OIL AND
which
GAShas
DEVELOPMENT
not effected current
COMPANY
or prior years'
LIMITED
net sales, profit, equity and cashflows.
2021 2020
Restated
--------------------------------------------------------------------------------------------------(Rupees '000)-------------------
Summarized statement of financial position
Current assets 85,462,500 83,979,544
Non-current assets 64,923,633 42,165,189
Current liabilities (23,680,845) (22,653,488)
Non-current liabilities (11,171,723) (10,342,139)
Net assets 115,533,565 93,149,106
Reconciliation to carrying amounts:

Opening net assets 93,149,106 63,606,729
Dividends paid (9,071,370) (789,500)
Closing net assets 115,533,565 93,149,106
Company's percentage shareholding in the associate 20% 20%
Company's share in carrying value of net assets 23,106,713 18,629,821
Others 19,688 4,569
Carrying amount of investment 23,126,401 18,634,390
Summarized statement of comprehensive income
Revenue for the year - gross 82,692,664 81,603,884

Profit for the year 31,444,909 30,312,873
Other comprehensive income for the year 10,920 19,004
Previously, gas price mechanism for Mari field of MPCL was governed by Mari Wellhead Gas Pricing Agreement ("the
Agreement") dated 22 December 1985, between the President of Islamic Republic of Pakistan and MPCL. Effective 01 July
2014, the agreement was replaced with revised Agreement dated 29 July 2015 ("Revised Agreement 2015") in line with the
Economic Coordination Committee (ECC) decision, whereby the wellhead gas pricing formula was replace with a crude oil
price linked formula, which provides the discounted wellhead gas price. The Revised Agreement 2015 provided dividend
distribution to be continued for ten (10) years upto 30 June 2024 in line with the previous cost plus formula, according to
which the shareholders were entitled to a minimum return of 30 % per annum, net of all taxes, on shareholders' funds, to be
escalated in the event of increase in the MPCL's gas or equivalent oil production beyond the level of 425 MMSCFD at the
rate of 1%, net of all taxes, on shareholder's funds for each additional 20 MMSCFD of gas or equivalent oil produced,
prorated for part there off on an annual basis, subject to a maximum of 45% per annum.
Effective 01 July 2020, dividend distribution cap has been removed vide ECC decision in the meeting held on 03 February
2021, which has also been ratified by the Federal Cabinet on 09 February 2021. Accordingly, the Company is allowed to
distribute dividend in accordance with the provisions of Companies Act 2017 and rules made thereunder, without any lower
or upper limit as mentioned above. Subsequently, an amendment agreement to Revised Agreement 2015 has been executed
between the Government of Pakistan and MPCL on 17 April 2021, giving effect to ECC decision.
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-------------------
16.2 Investments at amortised cost
Term Deposit Receipts (TDRs) 16.2.1 12,149,470 12,713,049

Investment in Term Finance Certificates (TFCs) 16.2.2 132,715,116 124,985,818
144,864,586 137,698,867
Less: Current portion shown under current assets
Term Deposit Receipts (TDRs) - (879,608)
Term Finance Certificates (TFCs) (122,465,116) (94,235,818)
16.2.3 (122,465,116) (95,115,426)
22,399,470 42,583,441
Page 45
16.2.1 This represents investments in local currency TDRs and includes interest amounting to Rs 2,149.41 million carrying
effective interest rate of 14% (2020: 13.10% to 14% ) per annum have maturities of five (5) years. These investments are
earmarked against self insurance reserve as explained in note 6.2 to the financial statements.
16.2.2 This represents investment in Privately Placed TFCs amounting to Rs 82,000 million. In 2013, the Government of Pakistan
(GoP), for partial resolution of circular debt issue prevailing in the energy sector, approved issuance of TFCs amounting to
Rs 82,000 million by PHL, which is government owned entity and a related party. These TFCs were subscribed by the
Company in order to settle its overdue receivables from oil refineries and gas companies.
As per original terms of investor agreement between the Company and PHL, TFCs were for a period of seven (7) years
including grace period of three (3) years carrying interest rate of KIBOR + 1%, payable semi-annually. The principal
portion of these TFCs was to be paid in eight (8) equal instalments starting from 42nd month of date of transaction.
National Bank of Pakistan executed the transaction on 10 September 2012 as Trustee. These TFCs are secured by
Sovereign Guarantee of GoP, covering the principal, mark-up, and/or any other amount becoming due for payment in
respect of investment in TFCs.
On 23 October 2017, PHL communicated to the Company that a proposal was submitted by the Ministry of Energy (Power
Division) to Economic Coordination Committee (ECC) of the Cabinet for extension in the tenure of TFCs of Rs 82,000
million from seven (7) years to ten (10) years including extension in grace period from three (3) years to six (6) years. The
ECC of the Cabinet considered and approved the proposal of Ministry of Energy (Power Division) subject to the condition
that a revised term sheet, based on above, with the Company shall be agreed by PHL. PHL requested the Company to
prepare revised term sheet for onward submission to Finance division of GoP for approval. During the year ended 30 June
2020, the Board of Directors resolved that management may take further steps for the extension of investor agreement with
PHL for a further period of three (3) years. Currently, management is in discussion with PHL for signing the revised term
sheet with PHL as per the terms approved by ECC. As at 30 June 2021, the classification of principal balance of TFCs is
based expected realization as per the revised term sheet to be signed with PHL. As per the revised terms, principal
repayment amounting to Rs 51,250 million (2020: Rs 30,750 million) was past due as at 30 June 2021. Further, interest due
as of 30 June 2021 was Rs 50,715 million (2020: Rs 42,986 million) of which Rs 48,517 million (2020: Rs 39,561 million)
was past due. The Company considers the principal and interest to be fully recoverable as these are backed by Sovereign
Guarantee of GoP. Adjustments, if any, will be made after the execution of extention in the investor agreement. As
disclosed in note 2.6.2, SECP has deferred the applicability of ECL model till 30 June 2022 on financial assets due
directly/ ultimately from GoP in consequence of the circular debt.
16.2.3 Current portion includes Rs Nil (2020: Rs 879.608 million) and Rs 50,715 million (2020: Rs 42,986 million) representing
accrued mark-up on TDRs and TFCs respectively.
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-------------------
17 LONG TERM LOANS
Long term loans:
Secured 17.1 8,783,849 8,468,690
Unsecured - -
8,783,849 8,468,690
17.1 Long term loans - secured
Considered good:
Loans to employees 17.1.1 10,637,889 10,195,571
Current portion shown under loans and advances 21 (1,854,040) (1,726,881)
8,783,849 8,468,690
17.1.1 Movement of carrying amount of loans to executives and other employees:

Disbursements 2,358,559 2,309,897
Repayments (1,916,241) (1,727,672)
Page 46
17.1.2 The loans are granted to the employees of the Company in accordance with the Company's service rules. House building
and conveyance loans are for maximum period of 15 and 5 years respectively. These loans are secured against the
underlying assets. Included in these are loans of Rs 9,673.097 million (2020: Rs 9,162.872 million) which carry no interest.
The balance amount carries an effective interest rate of 12.20% (2020: 11.53%) per annum. Interest free loans to employees
have not been discounted as required by IFRS 9 "Financial Instruments" as its effect is immaterial.
17.1.3 Loans to employees include an amount of Rs 66.621 million (2020: Rs 56.673 million) receivable from key management
personnel. Maximum aggregate amount outstanding at any time during the year was Rs 88.258 million (2020: Rs 88.904
million).
18 LEASE RECEIVEABLES
Net investment in lease has been recognized on gas sale agreements with power companies i.e. UPL and Uch-II as follows:
2021 2020
Restated
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-------------------
Net investment in lease 18.1 59,512,720 61,181,810

Less: Current portion of net investment in lease 18.2 (22,253,115) (16,360,220)
37,259,605 44,821,590
18.1 Movement during the year in net investment in lease:

Balance at the beginning of the year 61,181,810 56,095,649
Interest income 7,627,527 7,917,810
Exchange (loss)/ gain (2,211,109) 4,148,536
Interest income received during the year (4,473,893) (4,868,139)
Principal repayments during the year (2,611,615) (2,112,046)
Balance at the end of the year 59,512,720 61,181,810
18.2 Current portion of net investment in lease includes amounts billed to customers of Rs 16,779 million (2020: Rs 11,358
million) out of which Rs 15,320 million (2020: Rs 9,934 million) is overdue on account of inter-corporate circular debt. As
disclosed in note 2.6.2, SECP has deferred the applicability of ECL model till 30 June 2022 on debts due directly/
ultimately from GoP in consequence of the circular debt. The amount is considered to be fully recoverable as the GoP is
committed, hence continuously pursuing for satisfactory settlement of inter-corporate circular debt issue. The Company has
contractual right and is entitled to charge interest if lease payments are delayed beyond agreed payment terms, however the
same is recognized when received by the Company as per accounting policy disclosed in note 4.11.
18.3 Income relating to variable lease payments that depend on an index not included in the measurement of net investment in
lease amounts to Rs 8,463 million till 30 June 2021, of which Rs 4,927 million (2020: Rs 379 million) has been recorded in
revenue for the year.
18.4 Following is the maturity analysis of lease receivables, showing the undiscounted lease payments to be received after the
reporting date:
2021 2020
Restated
--------------------------------------------------------------------------------------------------(Rupees '000)-------------------
Less than one year 28,831,833 24,080,573
One to two years 12,053,032 12,722,713
Two to three years 6,956,699 12,722,713
Three to four years 5,257,921 7,286,495
Four to five years 5,257,921 5,474,422
Beyond year 5 67,038,487 75,273,300
Total undiscounted lease receivable - Gross investment in lease 125,395,893 137,560,216
Unearned finance income (65,883,173) (76,378,406)
Net investment in lease 59,512,720 61,181,810
Page 47
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-------------------
19 STORES, SPARE PARTS AND LOOSE TOOLS
Stores, spare parts and loose tools 21,891,511 20,006,902
Stores and spare parts in transit 742,505 2,278,382
22,634,016 22,285,284
Provision for slow moving, obsolete and in transit stores 19.1 (3,464,743) (3,558,734)
19,169,273 18,726,550
19.1 Movement of provision for slow moving, obsolete and in transit stores

(Reversal)/ provision for the year (93,283) 503,367
Provision written back during the year (708) -
2021 2020
Restated
--------------------------------------------------------------------------------------------------(Rupees '000)-------------------
20 TRADE DEBTS
Un-secured, considered good 358,821,853 307,563,536
Un-secured, considered doubtful 101,113 101,113
358,922,966 307,664,649
Provision for doubtful debts (101,113) (101,113)
358,821,853 307,563,536
20.1 Trade debts include overdue amount of Rs 303,853 million (2020: Rs 262,459 million) on account of Inter-corporate
circular debt, receivable from oil refineries and gas companies out of which Rs 141,486 million (2020: Rs 130,536 million)
and Rs 114,861 million (2020: Rs 106,625 million) is overdue from related parties, Sui Southern Gas Company Limited
and Sui Northern Gas Pipeline Limited respectively. The Government of Pakistan (GoP) is committed, hence continuously
pursuing for satisfactory settlement of Inter-corporate circular debt issue, however, the progress is slower than expected
resulting in accumulation of Company's trade debts. The Company considers this amount to be fully recoverable because
the Government of Pakistan has been assuming the responsibility to settle the Inter-corporate circular debt in the energy
sector. The Company recognizes interest/ surcharge, if any, on delayed payments from customers only to the extent that it is
highly probable that a significant reversal in the amount of income recognized will not occur when the uncertainty
associated with the interest/ surcharge is subsequently resolved, which is when the interest/ surcharge on delayed payments
is received by the Company. As disclosed in note 2.6.2 to these financial statements, SECP has deferred the applicability of
ECL model till 30 June 2022 on financial assets due directly/ ultimately from GoP in consequence of the circular debt.
20.2 Total amount due from related parties as on 30 June 2021 is Rs 284,171 million (2020: Rs 265,080 million) and maximum
amount due at the end of any month during the year was Rs 284,171 million (2020: Rs 265,080 million). For party wise
details refer note 40.
20.3 For aging of amount due from related parties, refer note 37.1.3.
20.4 As detailed in note 3.3, trade debts have been adjusted for GIDC receivable from the customers.
Page 48
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-------------------
21 LOANS AND ADVANCES
Advances considered good:

Suppliers and contractors 539,200 273,357
Sales tax 21.3 & 21.4 3,806,263 3,568,552
Adhoc salaries and festival advance 951,129 989,470
Others 39,117 45,880
5,335,709 4,877,259
Receivable from partners in joint operations 21.1 & 21.2 8,727,173 6,718,200
Current portion of long term loans - secured 17.1 1,854,040 1,726,881
15,916,922 13,322,340
Advances considered doubtful 187,655 187,655
16,104,577 13,509,995
Provision for doubtful advances (187,655) (187,655)
Loans and advances written off - (180)
15,916,922 13,322,160
21.1 Total amount due from related party and associated companies as partner in joint operations in accordance with terms of
related Petroleum Concession Agreement (PCA) in relation to operational activities of the Concessions as on 30 June 2021
is Rs 6,937 million (2020: Rs 4,813 million) and maximum amount due at the end of any month during the year was Rs
4,813 million (2020: Rs 4,813 million). For name wise details refer note 40.
21.2 For aging of amount due from related parties, refer note 37.1.3.
21.3 This includes an amount of Rs 3,180 million (2020: Rs 3,180 million) paid under protest to Federal Board of Revenue
(FBR) on account of sales tax demand raised in respect of capacity invoices from Uch gas field for the period July 2004 to
March 2011. Based on Sales Tax General Order (STGO) 1 of 2000 dated 24 January 2000, the matter was argued before
various appellate forums, however, the Supreme Court of Pakistan finally decided the issue against the Company on 15
April 2013. The FBR granted time relaxation to the Company for issuance of debit note for an amount of Rs 750 million
for the period April 2011 to May 2012, accounted for as trade debt. Uch Power Limited (UPL) challenged the grant of time
relaxation to the Company by FBR before Islamabad High Court. On 27 December 2013, the Honorable Court decided the
matter in favor of the Company. In light of the Islamabad High Court decision, the Company has applied to FBR for
obtaining condonation of time limit for issuing debit notes to UPL/revision of sales tax returns for the remaining amount of
Rs 3,180 million for the period July 2004 to March 2011 and currently the matter is pending with FBR.
UPL filed an intra court appeal against the decision of the Islamabad High Court (IHC). IHC through its order dated 17
November 2016 dismissed the intra court appeal in favour of the Company. In January 2017, UPL filed Civil Petition for
Leave to Appeal (CPLA) against the Company and others, before the Honorable Supreme Court of Pakistan against the
decision of IHC, which is currently pending. FBR has linked the disposal of OGDCL's condonation request with the
outcome of UPL's aforementioned CPLA. The Company and its legal advisors are confident that CPLA of UPL before
Honorable Supreme Court of Pakistan will be decided in favour of the Company and required condonations will be
obtained and the amount will be recovered from UPL. Accordingly no provision in this respect has been made in these
financial statements.
21.4 This also includes recoveries of Rs 317 million (2020: Rs 317 million) made by the tax department during the year ended
30 June 2016, against Sales Tax and Federal Excise Duty (FED) demand of Rs 6,708 million (2020: Rs 7,113 million)
relating to periods July 2012 to June 2014. The Honourable Appellate Tribunal Inland Revenue (ATIR) has accepted the
Company's appeals and annulled the demands passed by the tax authorities being void ab-initio and without jurisdiction.
The Commissioner Inland Revenue (CIR) has filed sales tax reference before Islamabad High Court (IHC) against
judgment of ATIR on 09 February 2018. These demands were raised by tax authorities due to difference between
computation of sales/ production reported by the Company in its sales tax returns and sales/ production based on other
sources of data. During the year additional demand of Rs 9,668 million relating to periods 2017-18 and 2018-19 were
raised on the same issue by the tax department, against which the Company filed appeals before Commissioner Inland
Revenue (Appeals) (CIRA) on 29 June 2021 which are pending adjudication. The Company believes that these demands
were raised without legal validity and will be decided by IHC and CIRA in favor of the Company as previously decided by
ATIR in favour of the Company.
Page 49
computation of sales/ production reported by the Company in its sales tax returns and sales/ production based on other
sources of data. During the year additional demand of Rs 9,668 million relating to periods 2017-18 and 2018-19 were
raised on the same issue by the tax department, against which the Company filed appeals before Commissioner Inland
Revenue
OIL AND (Appeals) (CIRA) COMPANY
GAS DEVELOPMENT on 29 June 2021 which are pending adjudication. The Company believes that these demands
LIMITED
were raised without legal validity and will be decided by IHC and CIRA in favor of the Company as previously decided by
ATIR in favour of the Company.
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-------------------
22 DEPOSITS AND SHORT TERM PREPAYMENTS
Security deposits 30,062 29,287

Short term prepayments 1,232,803 1,284,083
1,262,865 1,313,370
23 OTHER RECEIVABLES
Development surcharge 80,666 80,666

Claims receivable 265,333 25,226
Others 476,150 469,413
822,149 575,305
Claims considered doubtful 8,946 9,637
831,095 584,942
Provision for doubtful claims (8,946) (9,637)
822,149 575,305
24 INCOME TAX - ADVANCE
Income tax- advance at beginning of the year 37,118,984 20,027,510

Income tax paid during the year 54,879,431 51,524,836
Provision for current taxation - profit or loss 33 (44,650,382) (42,481,837)
Tax (charge)/ credit related to remeasurement (gain)/ loss on employee
retirement benefit plans - other comprehensive income (1,596,374) 8,048,475
Income tax - advance at end of the year 24.1 to 24.4 45,751,659 37,118,984
24.1 The tax authorities has raised demand of Rs 29,727 million on account of disallowance of actuarial loss amounting to Rs
58,744 million which the Company claimed in its return for the tax years 2014 to 2018 and 2020, out of which Rs 21,785
million (2020: Rs 21,785 million) has been paid to tax authorities. This actuarial loss was recognized in the books as a
result of retrospective application of IAS 19 (as revised in June 2011) 'Employee Benefits' from the year ended 30 June
2014 and onwards. CIRA disallowed the actuarial loss for tax years 2015 and 2016, however, allowed to claim the actuarial
loss for tax years 2014, 2017 and 2018 over a period of seven years. Being aggrieved, the Company has filed appeals
against the orders of CIRA in the Appellate Tribunal Inland Revenue (ATIR) for tax years 2014, 2015, 2016, 2017 and
2018 on 08 January 2016, 30 June 2020, 05 January 2018, 21 August 2019 and 12 February 2020 respectively and against
the order of Additional Commissioner Inland Revenue with the CIRA for tax year 2020 on 19 April 2021 which are
currently pending. The management, based on opinion of its tax consultant, believes that the actuarial loss is an admissible
expense under the tax laws and there is reasonable probability that the matter will be decided in favor of the Company by
appellate forums available under the law.
24.2 During the year ended 30 June 2014, tax authorities raised demands of Rs 13,370 million (2020: Rs 13,370 million) by
disallowing effect of price discount on sale of crude from Kunnar field and have recovered Rs 5,372 million (2020: Rs
5,372 million) from the Company upto 30 June 2021. During the year ended 30 June 2015, appeal before ATIR against the
said demands were decided against the Company. The Company filed a reference application before Islamabad High Court
(IHC) against the decision of ATIR. IHC vide order dated 17 February 2016, set aside the order of ATIR and remanded the
case back to ATIR with the instructions to pass a speaking order. The case is currently pending before ATIR. Further, IHC
vide order dated 14 January 2019 directed ATIR to decide the appeal expeditiously and until seven days after the decision
on the Company's appeal, the tax department is restrained from adopting coercive measures for the recovery of the disputed
tax liability in the event the appeal is dismissed. Management and its legal advisor are of the view that the price discount is
not the income of the Company and hence not liable to tax. Accordingly, management is confident that the matter will be
decided in favor of the Company as the discounted price for Kunnar field was finally determined by the Ministry of Energy
(Petroleum Division) and the total amount of price discount amount has been paid to the Government of Pakistan (GoP)
upon directions from the Ministry of Finance, to this effect.
Page 50
tax liability in the event the appeal is dismissed. Management and its legal advisor are of the view that the price discount is
not the income of the Company and hence not liable to tax. Accordingly, management is confident that the matter will be
decided in favor of the Company as the discounted price for Kunnar field was finally determined by the Ministry of Energy
(Petroleum
OIL AND Division) and the
GAS DEVELOPMENT total amount
COMPANY of price discount amount has been paid to the Government of Pakistan (GoP)
LIMITED
upon directions from the Ministry of Finance, to this effect.
24.3 Income tax advance includes Rs 1,259 million (2020: Rs 1,259 million) on account of disallowances made by the
Additional Commissioner Inland Revenue (ACIR) in respect of decommissioning cost for tax year 2015. The CIRA vide
order dated 18 March 2020 has remanded the case back to ACIR and the Company has filed an appeal against the order of
CIRA in ATIR on 30 June 2020. Management believes that the disallowance is against income tax laws and regulations and
accordingly no provision has been made in this respect in these financial statements.
24.4 During the year the tax authorities have raised demand of Rs 15,295 million for tax year 2020 on account of alleged
production differences and by making disallowances on account of post retirement medical benefits, compensated absences,
cost of dry and abandoned wells, field decommissioned/ surrendered during the year and Workers' profit participation fund
(WPPF) out of which Rs 4,558 million has been paid. Appeal has been filed by the Company before CIRA on 19 April
2021, which is currently pending adjudication. Management is confident that the above disallowances do not hold any
merits and the related amounts have been lawfully claimed in the tax returns as per the applicable tax laws. Accordingly, no
provision has been made in respect of these in the financial statements.
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-------------------
25 OTHER FINANCIAL ASSETS
Investment in Term Deposit Receipt (TDRs) 25.1 56,016,300 47,405,986

Investment at fair value through profit or loss - NIT units 342,020 255,255
56,358,320 47,661,241
25.1 This represents foreign currency TDRs amounting to USD 356.149 million (2020: USD 281.320 million), and accrued
interest amounting to USD 0.453 million (2020: USD 0.993 million), carrying interest rate ranging from 0.60% to 1.55%
(2020: 1.45% to 5.06%) per annum, having maturities up to six months (2020: six months).
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-------------------
26 CASH AND BANK BALANCES
Cash at bank:
Deposit accounts 26.1 7,205,296 12,120,165
Current accounts 26.2 203,238 4,674,103
7,408,534 16,794,268
Cash in hand 35,510 48,037
7,444,044 16,842,305
26.1 These deposit accounts carry interest rate of 0.05% to 7.05% (2020: 0.20% to 7.90%) per annum and include foreign
currency deposits amounting to USD 15.545 million (2020: USD 33.535 million). Deposits amounting to Rs 1.281 million
(2020: Rs 1.281 million) with banks were under lien to secure bank guarantees issued on behalf of the Company.
26.2 This includes foreign currency current account amounting to USD 0.462 million (2020: USD 20.491 million).
Page 51
2021 2020
Restated
--------------------------------------------------------------------------------------------------(Rupees '000)------------------
27 SALES - NET
Gross sales
Crude oil 97,257,246 95,456,260
Gas 148,346,586 147,514,059
Liquefied petroleum gas 24,399,345 21,702,920
Sulphur 501,467 348,376
Gas processing 115,519 121,523
270,620,163 265,143,138
Government levies
General sales tax (27,541,313) (28,274,944)
Petroleum levy (1,369,464) (1,259,724)
Excise duty (2,605,833) (2,683,227)
(31,516,610) (32,217,895)
239,103,553 232,925,243
27.1 Gas sales include sales from Nur-Bagla field invoiced on provisional prices. There may be adjustment in revenue upon
issuance of final wellhead prices notification by Ministry of Energy (Petroleum Division), impact of which cannot be
determined at this stage.
27.2 Gas Sale Agreement (GSA) in respect of Kunnar Pasakhi Deep (KPD) fields between the Company and Sui Southern Gas
Company Limited is being finalized and adjustments, if any, will be accounted for in the financial statements after execution
of GSA.
27.3 In respect of six of its operated concessions, namely, Gurgalot, Sinjhoro, Bitrisim, Khewari, Nim and TAY Blocks and one
non-operated Tal Block, Petroleum Concession Agreements (PCAs) were executed under the framework of Petroleum
Policies 1994 and 1997. Later on, in pursuance to the option available under Petroleum Policy (PP) 2012, the Tal Block
working interest owners wherein the Company’s working interest is 27.7632% signed the Supplemental Agreement (SA)
dated 28 August 2015 with the GoP for conversion of eligible existing and future discoveries under Tal PCA to the PP 2012.
Further, for aforementioned operated Concessions, the Company also signed the SAs for conversion to PP 2012. Under the
said arrangement, price regimes prevailing in PP 2007, PP 2009 and PP 2012 in terms of PP 2012 shall be applicable,
correlated with the spud dates of the wells in the respective policies starting from 27 November 2007. The conversion
package as defined in the SAs included windfall levy on natural gas only.
Oil and Gas Regulatory Authority (OGRA) has been notifying the revised wellhead prices in accordance with the Tal Block
SA for the period from the commencement of production of the respective discoveries. Accordingly, the financial impacts of
the price revision were duly accounted for in the financial statements for the years ended 30 June 2016, 30 June 2017 and 30
June 2018 on completion of the process laid down in the law and in line with the Company’s accounting policy.
On 27 December 2017, the Ministry of Energy (Petroleum Division) notified amendments in PP 2012 after approval from the
Council of Common Interests (CCI) dated 24 November 2017. These amendments include imposition of Windfall Levy on
Oil/Condensate (WLO). Under the said Notification, the Supplemental Agreements already executed for conversion from
Petroleum policies of 1994 and 1997 shall be amended within 90 days, failing which the working interest owners will not
remain eligible for gas price incentive. On 03 January 2018, the Directorate General Petroleum Concessions (DGPC) has
required all exploration and production companies to submit supplemental agreements to incorporate the aforementioned
amendments in Petroleum Concession Agreements (PCAs) signed under 1994 and 1997 policies, for execution within the
stipulated time as specified above.
Based on a legal advice, the Company is of the view that terms of the existing PCAs as amended to-date through the
supplemental agreements already executed cannot unilaterally be amended by the GoP through introduction of amendment
nor can the GoP lawfully require and direct that such amendments be made to include imposition of WLO retrospectively and
nor the GoP unilaterally hold and direct that the gas price incentive to which the Company is presently entitled to and
receiving under the conversion package as enshrined under the supplemental agreement stands withdrawn or the Company
ceases to be eligible for such incentive in case of failure to adopt the unilateral amendments in the existing PCAs.
Accordingly, the aforementioned amendments as well as the subsequent letters requiring implementation of the amendments
are not enforceable or binding upon the Company.
Page 52
nor the GoP unilaterally hold and direct that the gas price incentive to which the Company is presently entitled to and
receiving under the conversion package as enshrined under the supplemental agreement stands withdrawn or the Company
ceases to be eligible for such incentive in case of failure to adopt the unilateral amendments in the existing PCAs.
Accordingly, the aforementioned amendments as well as the subsequent letters requiring implementation of the amendments
are not enforceable or binding upon the Company.
The Company along with other Joint Venture Partners has challenged the applicability of WLO against the backdrop of
supplemental agreements already executed pursuant to PP 2012 in the Honorable Islamabad High Court which has granted
stay order till next date of hearing against the CCI decision dated 24 November 2017 on imposition of WLO. As mentioned
above, the Company on the advice of its legal counsel is confident that it has sound grounds to defend the aforesaid issue in
the Court and that the issue will be decided in favour of the Company.
The cumulative past benefit accrued and recorded in these financial statements by the Company upto 23 November 2017 in
the form of revenue and profit after tax is Rs 8,550 million and Rs 4,426 million, respectively. However, without prejudice to
the Company's stance in the court case, revenue of Rs 16,876 million (2020: Rs 12,608 million) related to gas price incentive
against the supplemental agreements has been set aside on a point forward basis effective 24 November 2017 (the date of
decision of CCI).
2021 2020
Restated
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-------------------
28 OPERATING EXPENSES
Salaries, wages and benefits 28.1 25,635,217 22,880,377
Stores and supplies consumed 1,848,602 1,673,141
Contract services 2,550,970 2,245,364
Joint operations expenses 111,292 533,729
Workover charges 2,578,114 1,225,157
(Reversal)/ charge of provision for decommissioning cost - (480,019)
Travelling and transportation 594,020 663,098
Repairs and maintenance 1,665,030 915,370
Rent, fee and taxes 1,404,831 928,748
Insurance 419,727 379,424
Communication 38,170 36,525
Utilities 86,068 76,797
Land and crops compensation 408,161 1,259,496
Desalting, decanting and naphtha storage charges 59,430 71,354
Gas processing charges 165,644 189,633
Training, welfare and Corporate Social Responsibility (CSR) 1,937,487 1,447,235
(Reversal)/ provision for slow moving, obsolete and in transit stores (93,283) 503,367
Stores inventory written off 27,956 26,482
Depreciation 13 9,805,115 10,381,264
Amortization of development and production assets 14 17,864,645 17,247,061
Reversal due to change in decommissioning cost estimates (1,019,391) (44,432)
Transfer from general and administration expenses 31 4,013,895 3,189,999
Miscellaneous 7,528 7,017
70,109,228 65,356,187
Stock of crude oil and other products:
Balance at beginning of the year 472,505 446,645
Balance at end of the year (404,339) (472,505)
70,177,394 65,330,327
28.1 These include charge against employee retirement benefits of Rs 3,046 million (2020: Rs 2,003 million).
Page 53
2021 2020
Restated
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-------------------
29 FINANCE AND OTHER INCOME
Income from financial assets
Interest income on:
Investments and bank deposits 10,726,476 18,343,450
Finance income - lease 7,627,527 7,917,810
18,354,003 26,261,260
Dividend income from NIT units 5,857 7,037
Un-realized gain on investments at fair value
through profit or loss 86,765 8,263
Exchange (loss)/ gain -net (6,158,620) 6,143,464
12,288,005 32,420,024
Income from non financial assets
Signature bonus/ contract renewal fee 29.1 443,200 248,720
Gain on disposal of property, plant and equipment 25,032 58,878
Gain on disposal of stores, spare parts and loose tools 205,275 125,930
Liquidated damages / penalty imposed on suppliers 673,096 443,497
Others 344,365 519,086
1,690,968 1,396,111
13,978,973 33,816,135
29.1 This represents income recognized on account of signature bonus/ contract renewal fee in respect of allocation of LPG quota.
For contingencies related to this matter refer note 12.1.3
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)-------------------
30 EXPLORATION AND PROSPECTING EXPENDITURE
Cost of dry and abandoned wells 15 8,372,663 10,025,964

Prospecting expenditure 8,993,524 8,187,474
17,366,187 18,213,438
31 GENERAL AND ADMINISTRATION EXPENSES
Salaries, wages and benefits 31.1 7,825,150 6,811,117
Joint operations expenses 1,136,882 1,212,662
Unallocated expenses of technical services 413,217 704,994
Travelling and transportation 420,607 460,675
Repairs and maintenance 40,357 40,349
Stores and supplies consumed 85,663 65,866
Rent, fee and taxes 244,058 214,464
Communication 50,491 50,408
Utilities 91,964 100,579
Training and scholarships 35,817 33,921
Legal and professional services 39,821 35,257
Contract services 215,919 229,725
Auditors' remuneration 31.2 48,443 29,347
Advertising 144,289 93,363
Insurance 264 267
Depreciation 13.3 208,317 170,764
Miscellaneous 44,050 35,127
11,045,309 10,288,885
Allocation of expenses to:
Operations 28 (4,013,895) (3,189,999)
Technical services (2,363,304) (2,027,982)
(6,377,199) (5,217,981)
4,668,110 5,070,904
Page 54
31.1 These include charge against employee retirement benefits of Rs 972 million (2020: Rs 590 million).
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)------------------
31.2 Auditors' remuneration
M/s KPMG Taseer Hadi & Co., Chartered Accountants

Annual audit fee 3,200 2,420
Half yearly review 1,200 968
Concession/ Joint operations audit fee 3,575 3,442
Audit fee for claims lodged by employees under BESOS - 262
Verification of Central Depository Company record 100 100
Verification of statement of free float of shares 200 200
Certification of fee payable to OGRA 1,200 200
Certification on payment of petroleum levy 1,125 -
Dividend certification 200 200
Out of pocket expenses 984 677
11,784 8,469
M/s A. F. Ferguson & Co., Chartered Accountants
Annual audit fee 3,200 2,420
Half yearly review 1,200 968
Concession/ Joint operations audit fee 3,711 3,823
Verification of Central Depository Company record 100 100
Verification of statement of free float of shares 200 200
Dividend certification - 100
Decommissioning certification 1,462 1,364
Tax services 18,379 7,242
Physical verification - Stores, spare parts & loose tools 4,292 2,873
Physical verification - Fixed Assets 1,990 -
Services for certification of payment to Government 431 925
Out of pocket expenses 1,694 863
36,659 20,878
48,443 29,347
32 FINANCE COST
Unwinding of discount on provision for decommissioning cost 9 2,199,467 3,007,255
Others 5,307 4,199
2,204,774 3,011,454
2021 2020
Restated
--------------------------------------------------------------------------------------------------(Rupees '000)-------------------
33 TAXATION
Current- charge for the year 44,650,382 42,481,837

Deferred- (credit)/ charge for the year (7,198,461) 941,898
37,451,921 43,423,735
Page 55
2021 2020
Restated
--------------------------------------------------------------------------------------------------(Rupees '000)------------------
33.1 Reconciliation of tax charge for the year:
Accounting profit 128,986,345 144,361,628

Tax rate 51.21% 51.56%
Tax on accounting profit at applicable rate 66,053,907 74,432,855

Tax effect of royalty allowed for tax purposes (10,724,792) (11,071,958)
Tax effect of depletion allowance (14,745,143) (14,956,216)
Tax effect of exempt income (47,450) (11,275)
Tax effect of unwinding of discount on provision for decommissioning cost 1,126,347 1,550,541
Tax effect of income chargeable to tax at reduced corporate rate (4,595,573) (7,071,032)
Others 384,625 550,820
37,451,921 43,423,735
33.2 Various appeals in respect of assessment years 1992-93 to 2002-03, tax years 2003 to 2020 are pending at different appellate
forums in the light of the order of the Commissioner of Inland Revenue (Appeals) and decision of the Adjudicator, appointed
by both the Company as well as the Federal Board of Revenue (FBR) mainly on the issues of decommissioning cost,
depletion allowance, prospecting, exploration and development expenditure, tax rate, super tax and unrealized exchange gain/
(loss). Total amount of tax demand against the major issues, raised in respect of assessment years 1992-93 to 2002-03 and tax
years 2003-2020 amounts to Rs 136,275 million out of which an amount of Rs 131,654 million has been paid to tax
authorities and has also been provided for in these financial statements. Also refer to note 24.1 to 24.3 of these financial
statements.
33.3 During the year the tax authorities have raised demand of Rs 4,311 million for tax years 2013 and 2016 on account of alleged
issue of not offereing consideration of sale of working interest in a block for tax and by making disallowances on account of
GIDC payable and certain expenditure due to alleged non deduction of withholding taxes. Appeals have been filed by the
Company before CIRA for assessment year 2013 and 2016 on 30 June 2021 and 26 March 2021 respectively, which are
currently pending adjudication. Management is confident that the above demands do not hold any merits and the related
amounts have been lawfully claimed in the tax returns as per the applicable tax laws. Accordingly, no provision has been
made in respect of these in the financial statements.
2021 2020
Restated
34 EARNINGS PER SHARE - BASIC AND DILUTED
Profit for the year (Rupees '000) 91,534,424 100,937,893

Average number of shares outstanding during the year ('000) 4,300,928 4,300,928
Earnings per share - basic (Rupees) 21.28 23.47
There is no dilutive effect on the earnings per share of the Company.
Page 56
35 SALARIES, WAGES AND BENEFITS
Salaries, wages and benefits have been allocated as follows:

Operating General and Technical Total
expenses administrative services
expenses
Note 28 Note 31 Note 35.1
--------------------------------------------------------------------------------------------------(Rupees '000)---------------------------------------
For year ended 30 June 2021
Salaries and wages 14,813,858 4,429,506 8,418,181 27,661,545

Awards and bonuses 3,960,161 1,362,508 2,235,712 7,558,381
Charge for accumulating compensated absences 1,829,952 398,945 1,016,614 3,245,511
Gratuity expense 119,848 46,386 58,708 224,942
Charge for post retirement medical benefits 1,017,064 261,354 628,018 1,906,436
Charge for employees' pension 1,909,027 663,830 1,037,508 3,610,365
Other allowances and benefits 1,985,307 662,621 1,368,831 4,016,759
25,635,217 7,825,150 14,763,572 48,223,939
For year ended 30 June 2020
Salaries and wages 13,967,517 4,179,596 8,119,098 26,266,211

Awards and bonuses 2,719,863 916,154 1,591,770 5,227,787
Charge for accumulating compensated absences 2,198,857 522,078 1,291,703 4,012,638
Gratuity expense 121,796 33,087 58,848 213,731
Charge for post retirement medical benefits 1,003,915 246,782 577,321 1,828,018
Charge for employees' pension 877,538 309,726 456,530 1,643,794
Other allowances and benefits 1,990,891 603,694 1,351,853 3,946,438
22,880,377 6,811,117 13,447,123 43,138,617
35.1 Salaries, wages and benefits relating to in-house technical services of the Company are further allocated to various cost
centers including wells, projects and prospecting expenditure as per Company's policy.
36 OPERATING SEGMENTS
For management purposes, the activities of the Company's are organized into a single reportable segment. The operating
interests of the Company are confined to Pakistan. Accordingly, the financial statements have been prepared on the basis of a
single reportable segment. Revenue from external customres for products of the Company is disclosed in note 27.
Following are the details of the major customers with whom the revenue transactions amounting to 10% or more of the
Company's overall gross revenue and which constitutes 59% (2020: 57%) of total revenue for the year:
2021 2020
--------------------------------------------------------------------------------------------------(Rupees '000)------------------
Customer Name Product
Sui Northern Gas Pipelines Limited Gas 63,068,179 62,009,606

Sui Southern Gas Company Limited Gas 45,246,273 53,129,705
Attock Refinery Limited Crude 52,082,931 46,880,409
The sales to Government owned entities other than those mentioned above amounts to Rs 36,609 million (2020: Rs 33,575
million).
Page 57
37 FINANCIAL INSTRUMENTS
The Company has exposure to the following risks from its use of financial instruments:
- Credit risk
- Liquidity risk
- Market risk
This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring
and managing risk, and the Company’s management of capital. Further quantitative disclosures are included throughout these financial statements.
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Board is
responsible for developing and monitoring the Company’s risk management policies.
The Company’s risk management policies are established to identify and analyze the risks faced by the Company to set appropriate risk limits and
controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market
conditions and the Company's activities. The Company through its training and management standards and procedures, aims to develop a disciplined and
constructive control environment in which all employees understand their roles and obligations.
The Board's Risk Management Committee assists the Board in the identification and monitoring of the principal risks and opportunities of the Company
ensuring that appropriate systems and internal control framework are in place to manage these risks and opportunities, including, safeguarding the public
reputation of the Company. The Committee is required to oversee, report and make recommendations to the Board in respect of financial and non-
financial risks faced by the Company.
37.1 Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. As
part of these processes the financial viability of all counterparties is regularly monitored and assessed.
The Company is exposed to credit risk from its operating and certain investing activities and the Company's credit risk exposures are categorized under
the following headings:
37.1.1 Counterparties
The Company conducts transactions with the following major types of counterparties:
Trade debts and lease receivables

Trade debts and lease receivables are essentially due from oil refining companies, gas distribution companies and power generation companies and the
Company does not expect these companies to fail to meet their obligations. Majority of sales to the Company’s customers are made on the basis of
agreements approved by GoP.
Sale of crude oil and gas is at prices specified in relevant agreements and/ or as notified by the Government authorities based on agreements with
customers or relevant applicable petroleum policy or Petroleum Concession Agreements. Prices of liquefied petroleum gas are determined by the
Company subject to maximum price notified by OGRA.
The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade debts and lease receivables that
are due directly/ ultimately from GoP till 30 June 2021 as per policy disclosed in note 4.15.5 to the financial statements.
Bank balances and investments
The Company limits its exposure to credit risk by investing in liquid securities and maintaining bank accounts only with counterparties that have a credit
rating of at least A. In addition to the exposure with Banks, the Company also holds investments in Term Finance Certificates issued by PHL. Investment
in TFCs is secured by sovereign guarantee of GoP. While bank balances and investments in term deposits are also subject to the requirements of IFRS 9
the identified impairment loss was immaterial as the counter parties have reasonably high credit ratings. The credit rating of the counterparties is as
follows:
Page 58
2021 2020
Short term Long term Short term Long term Credit rating agency
National Bank of Pakistan A-1+ AAA A-1+ AAA PACRA
Allied Bank Limited A-1+ AAA A-1+ AAA PACRA
Askari Bank Limited A-1+ AA+ A-1+ AA+ PACRA
Bank Alfalah Limited A-1+ AA+ A-1+ AA+ PACRA
Bank Al-Habib Limited A-1+ AA+ A-1+ AA+ PACRA
Standard Chartered Bank A-1+ AAA A-1+ AAA PACRA
Faysal Bank A-1+ AA A-1+ AA PACRA
Habib Bank Limited A-1+ AAA A-1+ AAA VIS
Habib Metropolitan Bank A-1+ AA+ A-1+ AA+ PACRA
Dubai Islamic Bank A-1+ AA A-1+ AA VIS
MCB Bank A-1+ AAA A-1+ AAA PACRA
Soneri Bank Limited A-1+ AA- A-1+ AA- PACRA
United Bank Limited A-1+ AAA A-1+ AAA VIS
Citibank N.A. P-1 A-1 P-1 Aa3 Moody's
Meezan Bank Limited A-1+ AAA A-1+ AA+ VIS
National Investment Trust - AM1 - AM2++ PACRA
37.1.2 Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:
2021 2020
Restated
-----------------------------(Rupees '000)-------------------
Long term investments 22,399,470 42,583,441

Long term loans 8,783,849 8,468,690
Trade debts - net of provision 358,821,853 307,563,536
Lease receivable 37,259,605 44,821,590
Loans and advances 11,571,459 9,480,431
Deposits 30,062 29,287
Other receivables 741,483 494,639
Current portion of long term investments 122,465,116 95,115,426
Current portion of lease receivables 22,253,115 16,360,220
Other financial assets 56,358,320 47,661,241
Bank balances 7,408,534 16,794,268
648,092,866 589,372,769
The maximum exposure to credit risk for financial assets at the reporting date by type of counter party was:
Oil refining companies 27,951,136 20,623,531

Gas distribution companies 273,764,966 257,796,772
Power generation companies 93,740,246 73,254,336
National Bank of Pakistan 21,293,054 21,671,861
Banks and financial institutions-others 54,623,270 55,241,442
Power Holding Limited 132,715,116 124,985,818
Partners in joint operations 8,727,173 6,718,200
Others including employees 35,277,905 29,080,809
648,092,866 589,372,769
The Company’s most significant customers, are an oil refining company and two gas distribution companies (related parties), amounts to Rs 289,101
million of trade debts as at 30 June 2021 (2020: Rs 268,478 million).
The credit quality of financial assets that can be assessed by reference to external credit ratings or to historical information about counterparty default
rates:
2021 2020
----------------------------------------------(Rupees
Note '000)-------------------
Investments
AAA 16.2 12,149,470 12,713,049
Unrated 16.2 132,715,116 124,985,818
144,864,586 137,698,867
Page 59
2021 2020
Note
-----------------------------(Rupees '000)-------------------
Other financial assets
A-1+ 56,016,300 47,405,986

AM2++ - 255,255
AM1 342,020 -
25 56,358,320 47,661,241
Bank balances
AAA 4,135,368 8,184,092
AA+ 1,372,116 3,829,274
AA 1,697,725 106,707
AA- 88 92
A-1+ 203,228 4,674,094
P-1 9 9
26 7,408,534 16,794,268
The maximum exposure to credit risk for trade debts at the reporting date by type of product was:
2021 2020
Restated
-----------------------------(Rupees '000)-------------------
Crude oil 28,083,179 20,731,646

Gas 330,614,347 286,761,729
Kerosene oil - 1,984
High speed diesel oil - 86
Liquefied petroleum gas 88,281 38,541
Other operating revenue 36,046 29,550
358,821,853 307,563,536
37.1.3 Impairment losses
The aging of trade debts at the reporting date was:

2021 2020
Note Gross debts Impaired Gross debts Impaired
Restated
-----------------------------(Rupees '000)-----------------------------
Not past due 50,111,591 - 37,943,990 -

Past due 0-30 days 15,244,397 - 10,732,052 -
Past due 31-60 days 13,145,398 - 15,820,638 -
Past due 61-90 days 13,613,299 - 11,288,258 -
Over 90 days 266,808,281 (101,113) 231,879,711 (101,113)
20 358,922,966 (101,113) 307,664,649 (101,113)
The aging of trade debts from related parties at the reporting date was:
Past due Past due Past due Impaired
Total Not past due Over 90 days
0-30 days 31-60 days 61-90 days balance
(Rupees '000)
30 June 2021
Enar Petroleum Refining Facility 2,890,959 3,103,492 - - - (212,533) -

Pakistan Refinery Limited 3,422,574 1,496,963 602,345 468,864 523,383 331,019 -
Pak Arab Refinery Company Limited 4,092,535 3,031,375 993,682 - 41 67,437 -
Sui Northern Gas Pipelines Limited 124,696,006 9,667,093 4,900,677 4,738,045 4,774,983 100,615,208 -
Sui Southern Gas Company Limited 149,068,959 6,859,144 3,422,356 3,574,024 3,702,130 131,511,305 -
WAPDA - - - - - 21,282 (21,282)
284,171,033 24,158,067 9,919,060 8,780,933 9,000,537 232,333,718 (21,282)
Page 60
Past due Past due Past due Impaired

Total Not past due Over 90 days
0-30 days 31-60 days 61-90 days balance
(Rupees '000)
30 June 2020
Enar Petroleum Refining Facility 755,612 951,829 16,316 - - (212,533) -

Pakistan Refinery Limited 2,619,216 517,746 218,541 519,495 813,704 549,730 -
Pak Arab Refinery Company Limited 1,879,657 1,558,887 40,080 189,420 - 91,270 -
Sui Northern Gas Pipelines Limited 116,344,013 9,384,080 3,823,500 5,050,307 3,894,944 94,191,182 -
Sui Southern Gas Company Limited 140,535,396 9,275,312 3,201,896 4,470,636 4,351,828 119,235,724 -
Engro Fertilizers Limited 285,789 222,105 - 32,327 31,357 - -
WAPDA - - - - - 21,282 (21,282)
Pakistan State Oil 1,867 - - - - 1,867 -
262,421,550 21,909,959 7,300,333 10,262,185 9,091,833 213,878,522 (21,282)
The movement in the allowance for impairment in respect of trade debts during the year was as follows:
2021 2020
-----------------------------(Rupees '000)-------------------
Written off during the year - -
Balance at end of the year 101,113 101,113
2021 2020
Restated
-----------------------------(Rupees '000)-------------------
The aging of current portion of lease receivables billed to the customers at the reporting date was:
Not past due 1,458,374 1,424,096

Past due 0-30 days 1,016,282 990,337
Past due 31-60 days 1,022,433 990,358
Past due 61-90 days 1,022,433 990,358
Over 90 days 12,259,279 6,962,711
16,778,801 11,357,860
As explained in note 18.2 and note 20 to the financial statements, the Company believes that no impairment allowance is necessary in respect of lease
receivables and trade debts past due other than the amount provided. Trade debts and lease receivables are essentially due from oil refining companies,
natural gas and liquefied petroleum gas transmission and distribution companies and power generation companies, the Company is actively pursuing for
recovery of debts and the Company does not expect these companies to fail to meet their obligations. Impact of ECL on financial assets not covered under
exemption as explained in note 2.6.2 was not material and accordingly has not been included in these financial statements.
The aging of loan and advances from related parties at the reporting date was:
2021 2020
-----------------------------(Rupees '000)-------------------
Not past due 6,936,633 4,869,526
Past due - -
6,936,633 4,869,526
Impaired - -
6,936,633 4,869,526
Expected credit loss on loans, advances, deposits and other receivables is calculated using general approach (as disclosed in note 4.15.5). As at the
reporting date, Company envisages that default risk on account of loans, advances, deposits and other receivables is immaterial based on historic trends
adjusted to reflect forward looking information. The movement in the expected credit loss allowance in respect of these financial assets during the year
was as follows:
2021 2020
-----------------------------(Rupees '000)-------------------

Reversed + written off during the year (691) (180)
Balance at end of the year 196,601 197,292
The aging of principal amount of TFCs at the reporting date was:
Page 61
2021 2020
-----------------------------(Rupees '000)-------------------
Not past due 30,750,000 51,250,000

Past due 51,250,000 30,750,000
82,000,000 82,000,000
The aging of interest accrued on TFCs at the reporting date was:
Not past due 2,198,454 3,424,612

Past due 48,516,662 39,561,206
50,715,116 42,985,818
As explained in note 16.2.2 to the financial statements, the TFCs are secured by sovereign guarantee of GoP, covering the principal, markup, and /or any
other amount becoming due for payment. ECL has not been assessed in respect of TFCs as disclosed in note 2.6.2.
37.2 Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. Prudent liquidity risk management implies
maintaining sufficient cash and marketable securities to close out market positions due to dynamic nature of the business. The Company’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
The maturity profile of the Company’s financial liabilities based on the contractual amounts is as follows:
2021 2020
All the trade and other payables have maturity upto one year Carrying Contractual Carrying Contractual
amount cash flows amount cash flows
-----------------------------(Rupees '000)-----------------------------
Trade and other payables 33,701,787 33,701,787 35,341,228 35,341,228
Unpaid dividend 29,112,645 29,112,645 25,557,624 25,557,624
Unclaimed dividend 209,503 209,503 210,970 210,970
63,023,935 63,023,935 61,109,822 61,109,822
37.3 Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, equity price and crude oil price will affect the
Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimizing the return on risk.
37.3.1 Foreign currency risk management
PKR is the functional currency of the Company and as a result currency exposure arise from transactions and balances in currencies other than PKR. The
Company's potential currency exposure comprise;
- Transactional exposure in respect of non functional currency monetary items.

- Transactional exposure in respect of non functional currency expenditure and revenues.
The potential currency exposures are discussed below;
Transactional exposure in respect of non functional currency monetary items
Monetary items, including financial assets and liabilities, denominated in currencies other than the functional currency of the Company are periodically
restated to PKR equivalent, and the associated gain or loss is taken to the statement of profit or loss. The foreign currency risk related to monetary items
is managed as part of the risk management strategy.
Transactional exposure in respect of non functional currency expenditure and revenues
Certain operating and capital expenditure is incurred by the Company in currencies other than the functional currency. Certain sales revenue is earned in
currencies other than the functional currency of the Company. These currency risks are managed as a part of overall risk management strategy. The
Company does not enter into forward exchange contracts.
Page 62
Exposure to foreign currency risk

The Company’s exposure to foreign currency risk was as follows based on carrying values:
2021 2020
Restated
---------(USD ($) '000)---------
Trade debts 44,060 47,076
Lease receivable 271,256 301,061
Other financial assets 356,602 281,320
Cash and bank balances 16,007 33,535
Loans and advances 55,397 39,878
Trade and other payables (85,405) (122,398)
657,917 580,472
----------(EURO (€) '000)----------
Trade and other payables 2,205 2,200
2021 2020
Foreign currency commitments outstanding at year end are as follows: -----------------------------(Rupees '000)-------------------
Euro 7,740,555 8,228,842
USD 37,249,753 36,474,375
GBP 72,434 1,172,607
45,062,742 45,875,824
The following significant exchange rates were applied during the year:
Average rate Reporting date mid spot rate
2021 2020 2021 2020
----------------------------------(Rupees)----------------------------------
USD 1 160.60 158.32 157.54 168.47
Foreign currency sensitivity analysis
A 10 percent strengthening of the PKR against the USD at 30 June 2021 would have decreased equity and profit or loss by the amounts shown below.
This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 30 June 2020.
2021 2020
-----------------------------(Rupees '000)-------------------
Statement of profit or loss 10,364,824 9,779,212
A 10 percent weakening of the PKR against the USD at 30 June 2021 would have had the equal but opposite effect on USD to the amounts shown above,
on the basis that all other variables remain constant.
37.3.2 Interest rate risk management

The interest rate risk is the risk that the value of the financial instrument will fluctuate due to changes in the market interest rates. Sensitivity to interest
rate risk arises from mismatches of financial assets and liabilities that mature in a given period. The Company adopts a policy to ensure that interest rate
risk is minimized by investing in fixed rate investments like TDRs while the Company has no borrowings.
Profile
The return on investments in TFCs amounting to Rs 82,000 million is related with KIBOR as disclosed in note 16.2.2. The interest rate profile of the
Company's remaining interest - bearing financial instruments at the reporting date is as follows:
2021 2020 2021 2020

----------------%----------------
----------------------------------(Rupees '000)-------------------
Fixed rate instruments
Financial assets
Investments 14 13.10 to 14.00 12,149,470 11,833,441
Long term loans 12.2 11.53 964,792 1,032,699
Other financial assets 0.6 to 1.55 1.45 to 5.06 56,016,300 47,405,986
Cash and bank balances 0.05 to 7.05 0.20 to 7.90 7,205,296 12,120,165
76,335,858 72,392,291
Financial liabilities - -
76,335,858 72,392,291
Page 63
Fair value sensitivity analysis for fixed rate instruments
The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Company does not have
derivatives as hedging instruments recognized under fair value hedge accounting model. Therefore, a change in interest rates at the reporting date would
not affect profit or loss.
37.3.3 Other market price risk
The Company is following a policy to set aside reserve for self insurance of rigs, buildings, wells, plants, pipelines, workmen compensation, inventory,
terrorism, vehicle repair and losses for petroleum products in transit and is keeping such reserve invested in specified investments. The primary goal of
the Company’s investment strategy is to maximize investment returns on surplus funds. The Company's price risk arises from investments in NIT units
which are designated at fair value through profit or loss, however, in accordance with the investment strategy the performance of NIT units is actively
monitored and they are managed on a fair value basis.
Sensitivity analysis of price risk
A change of Rs 5 in the value of investments at fair value through profit or loss would have increased or decreased profit or loss by Rs 22.701 million
(2020: Rs 22.701 million).
Sensitivity analysis of crude oil price risk
A change of USD 5 in average price of crude oil would increase or decrease profit by Rs 10,624 million (2020: Rs 7,159 million) on the basis that all
other variables remain constant.
37.4 Fair values and risk management
The following table shows the carrying amounts and fair values of financial assets and liabilities. The fair value of financial assets measured at fair value
is shown below. It does not include fair value information for financial assets and financial liabilities not measured at fair value as the carrying amount is
a reasonable approximation of fair value as the current financial assets and liabilities are short term and some financial assets are also interest bearing.
Further, the financial assets due directly/ ultimately from GoP carries contractual right and entitlement to receive interest on late payment and is exempt
from ECL accounting/ disclosure as disclosed in note 2.6.2. The non current financial assets are also interest bearing.
Carrying amount
Financial assets Fair value Financial
at amortised through liabilities at Total
cost profit or loss amortized cost
30 June 2021 Note--------------------------------------------------------------(Rupees '000)-------------------------------------------
Financial assets measured at fair value

Other financial assets- NIT Units 25 - 342,020 - 342,020
Financial assets not measured at fair value

Long term investments 16.2 22,399,470 - - 22,399,470
Long term loans 17 8,783,849 - - 8,783,849
Trade debts - net of provision 20 358,821,853 - - 358,821,853
Lease receivable 18 37,259,605 - - 37,259,605
Loans and advances 21 11,571,459 - - 11,571,459
Deposits 22 30,062 - - 30,062
Other receivables 23 741,483 - - 741,483
Current portion of long term investments 16.2 122,465,116 - - 122,465,116
Other financial assets 25 56,016,300 - - 56,016,300
Bank balances 26 7,408,534 - - 7,408,534
625,497,731 342,020 - 625,839,751
Financial liabilities not measured at fair value
Trade and other payables 10 - - 33,701,787 33,701,787

Unpaid dividend - - 29,112,645 29,112,645
Unclaimed dividend - - 209,503 209,503
- - 63,023,935 63,023,935
Page 64
Carrying amount
Financial assets Fair value Financial
at amortised through liabilities at Total
cost profit or loss amortized cost
--------------------------------------------------------------(Rupees
Note '000)---------------------------------------
30 June 2020 - Restated

Other financial assets - NIT units 25 - 255,255 - 255,255
Financial assets not measured at fair value

Long term investments 16.2 42,583,441 - - 42,583,441
Long term loans 17 8,468,690 - - 8,468,690
Trade debts - net of provision 20 307,563,536 - - 307,563,536
Lease receivable 18 44,821,590 - - 44,821,590
Loans and advances 21 9,480,431 - - 9,480,431
Deposits 22 29,287 - - 29,287
Other receivables 23 494,639 - - 494,639
Current portion of long term investments 16.2 95,115,426 - - 95,115,426
Other financial assets 25 47,405,986 - - 47,405,986
Cash and bank balances 26 16,794,268 - - 16,794,268
572,757,294 255,255 - 573,012,549
Financial liabilities not measured at fair value
Trade and other payables 10 - - 35,341,228 35,341,228

Unpaid dividend - - 25,557,624 25,557,624
Unclaimed dividend - - 210,970 210,970
- - 61,109,822 61,109,822
Interest rates used for determining fair value
The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at the reporting date plus an adequate
credit spread. Since the majority of the financial assets are fixed rate instruments, there is no significant difference in market rate and the rate of
instrument, fair value significantly approximates to carrying value.
Fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Level 1 Level 2 Level 3

----------------------------------(Rupees '000)----------------------------
30 June 2021

Other financial assets - NIT units 342,020 - -
30 June 2020

Other financial assets - NIT units 255,255 - -
Page 65
Determination of fair values
A number of the Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and
liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods.
Investment in fair value through profit or loss
The fair value of held for trading investment is determined by reference to their quoted closing repurchase price at the reporting date.
Investment in associate
The fair value of investment in associate is determined by reference to their quoted closing bid price at the reporting date. The fair value is determined for
disclosure purposes.
Non - derivative financial assets
The fair value of non-derivative financial assets is estimated as the present value of future cash flows, discounted at the market rate of interest at the
reporting date. This fair value is determined for disclosure purposes.
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at
the market rate of interest at the reporting date.
Capital management
The Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern so that it can continue to provide
returns for shareholders and benefits for other stakeholders, and to maintain a strong capital base to support the sustained development of its businesses.
The Company manages its capital structure which comprises capital and reserves by monitoring return on net assets and makes adjustments to it in the
light of changes in economic conditions. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividend paid to
shareholders and/or issue new shares. There were no changes to Company's approach to capital management during the year and the Company is not
subject to externally imposed capital requirement.
Page 66
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)--------------------
38 CASH AND CASH EQUIVALENTS
Cash and bank balances 26 7,444,044 16,842,305

Short term highly liquid investments
Investment in Term Deposit Receipts 25 56,016,300 47,405,986
63,460,344 64,248,291
2021 2020
39 NUMBER OF EMPLOYEES
Total number of employees at the end of the year were as follows:

Regular 10,440 9,571
Contractual 1,454 2,562
11,894 12,133
Average number of employees during the year were as follows:
Regular 10,006 9,142
Contractual 2,008 2,903
12,014 12,045
40 RELATED PARTIES TRANSACTIONS
Government of Pakistan owns 74.97% (2020: 74.97%) shares of the Company. Therefore, all entities owned and
controlled by the Government of Pakistan are related parties of the Company. Other related parties comprise associated
company, major shareholders, directors, companies with common directorship, key management personnel, The
Company in normal course of business pays for airfare, electricity, telephone, gas, yield analysis required under
Petroleum Concession Agreements and make regulartory payments to entities controlled by GoP which are not
material, hence not disclosed in these financial statements. Transactions with related parties other than disclosed below
are disclosed in relevant notes to these financial statements. Transactions of the Company with related parties and
balances outstanding at year end are as follows:
2021 2020
--------------------------------------------------------------------------------------------------(Rupees '000)--------------------
Associated company-20% share holding of the Company and common
directorship
MPCL
Share of profit in associate - net of taxation 6,288,982 6,062,575
Share of other comprehensive income of the associate - net of taxation 2,184 3,801
Dividend received 1,799,155 156,585
Expenditure charged to joint operations partner- net 360,999 314,752
Cash calls received from/ (paid to) joint operations partner- net 501,424 (64,243)
Share (various fields) payable as at 30 June 595,211 272,009
Share (various fields) receivable as at 30 June 385,125 202,348
Major shareholders
Government of Pakistan (74.97% share holding)

Dividend paid 22,926,970 19,589,041
Dividend paid - Privatization Commission of Pakistan 2,547,441 2,176,611
OGDCL Employees' Empowerment Trust (OEET) (10.05% share holding)
Dividend payable 28,441,367 25,027,074
Page 67
2021 2020
--------------------------------------------------------------------------------------------------(Rupees '000)--------------------
RELATED PARTIES TRANSACTIONS- continued
Related parties by virtue of GoP holdings and /or common directorship
Sui Northern Gas Pipelines Limited

Sale of natural gas 63,068,179 62,009,606
Trade debts as at 30 June 124,696,007 116,344,013
Pakistan State Oil Company Limited

Sale of liquefied petroleum gas 790,104 807,294
Purchase of petroleum, oil and lubricants 1,462,351 4,766,989
Trade debts as at 30 June - 1,867
Payable as at 30 June 7,879 7,151
Advance against sale of LPG as at 30 June 94,923 64,284
Pakistan Petroleum Limited

Expenditure charged to joint operations partner- net 5,348,160 1,531,426
Cash calls received from joint operations partner- net 2,745,864 669,499
Share (various fields) receivable as at 30 June 4,258,766 2,897,057
Share (various fields) payable as at 30 June 1,843,790 2,821,070
Pak Arab Refinery Company Limited

Sale of crude oil 14,176,040 12,164,880
PARCO Pearl Gas (Private) Limited

Pakistan Refinery Limited

Sale of crude oil 5,453,159 6,295,365
Khyber Pakhtunkhwa Oil & Gas Company (KPOGCL)

Expenditure charged to joint operations partner 109,713 91,729
Cash calls received from joint operations partner 77,710 104,268
KPOGCL share (various fields) receivable as at 30 June 47,028 15,025
State Bank of Pakistan

Interest earned on Treasury Bills - 2,616,538
Sui Southern Gas Company Limited

Sale of natural gas 44,624,837 52,630,576
Pipeline rental charges 36,660 36,660
Sui Southern Gas Company LPG (Pvt) Limited

Page 68
2021 2020
--------------------------------------------------------------------------------------------------(Rupees
Note '000)--------------------
RELATED PARTIES TRANSACTIONS- continued
Government Holdings (Private) Limited (GHPL)

Expenditure charged to joint operations partner 3,839,630 5,137,189
Cash calls (received from)/ paid to joint operations partner (3,332,662) 4,849,605
GHPL share (various fields) receivable as at 30 June 2,245,714 1,713,448
GHPL share (various fields) payable as at 30 June 2,714,871 7,269
National Investment Trust

Investment as at 30 June 342,020 255,255
Dividend received 5,857 7,037
National Bank of Pakistan

Balance at bank as at 30 June 1,700,731 4,106,138
Balance of investment in TDRs as at 30 June 19,592,323 17,565,723
Interest earned 360,834 554,742
Power Holding Limited (PHL)

Mark-up earned 7,729,298 11,464,274
Balance of investment in TFCs not yet due as at 30 June 30,750,000 51,250,000
Balance of past due principal repayment of TFCs as at 30 June 51,250,000 30,750,000
Balance of mark-up receivable on TFCs not yet due as at 30 June 2,198,454 3,424,612
Balance of past due mark-up receivable on TFCs as at 30 June 48,516,662 39,561,206
National Insurance Company Limited

Insurance premium paid 1,189,648 532,935
Payable as at 30 June 164 164
National Logistic Cell

Crude transportation charges paid 2,278,419 1,853,758
Payable as at 30 June 521,527 821,929
Enar Petrotech Services Limited

Consultancy services 31,243 27,817
Payable as at 30 June - 7,477
Enar Petroleum Refining Facility

Sale of crude oil 15,311,775 13,441,671
Trade debts as at 30 June 2,890,959 755,612
Other related parties

Contribution to pension fund (also refer note 10) 53 1,220,643
Contribution to gratuity fund (also refer note 10) 47,337 515,834
Remuneration including benefits and perquisites of key management
personnel 40.1 699,405 669,606
Page 69
40.1 Key management personnel

Key management personnel comprises chief executive, chief financial officer, company secretary, executive directors
and general managers of the Company.
2021 2020
--------------------------------------------------------------------------------------------------(Rupees '000)--------------------
Managerial remuneration 238,787 242,351
Housing and utilities 159,162 167,347
Award and bonus 162,229 113,404
Other allowances and benefits 86,353 92,250
Leave encashment 15,896 16,640
Medical benefits 6,423 11,434
Pension fund 16,779 10,687
Gratuity fund 13,776 15,493
699,405 669,606
Number of persons 28 35
40.2 The amounts of the trade debts outstanding are unsecured and will be settled in cash. No expense has been recognized
in the current or prior years for bad or doubtful debts in respect of the amounts owed by related parties.
40.3 The names of key management personnel during the year or at year end are as follows:
1 Mr. Shahid Salim Khan 15 Mr. Syed Nadeem Hassan Rizvi

2 Dr. Naseem Ahmad 16 Mr. Masood-ul- Hasan
3 Mr. Irteza Ali Qureshi 17 Mr. Muhammad Fasih Akhtar
4 Mr. Muhammad Aamir Salim 18 Mr. Munsif Hussain Channa
5 Mr. Muhammad Anas Farook 19 Mr. Ameen Aftab Khan
6 Mr. Shahzad Safdar 20 Mr. Muhammad Hussain
7 Mr. Ahmed Hayyat Lak 21 Mr. Syed Iftikhar Mustafa Rizvi
8 Lt Col (R) Tariq Hanif 22 Mr. Zahid Abbas
9 Mr. Salim Baz Khan 23 Mr. Muhammad Azim
10 Mr. Kamran Yusuf Shami 24 Mr. Abdul Rashid Wattoo
11 Mr. Khan Alam 25 Mr. Shahid Waqar Malik
12 Mr. Irfan Babar Khan 26 Mr. Rohail Aziz Quidwai
13 Mr. Jahangaiz Khan 27 Mr. Ashraf Ali Pathan
14 Dr. Syed Ahmad Nadeem 28 Mr. Jamal Nasir
41 REMUNERATION OF CHIEF EXECUTIVES, DIRECTORS AND EXECUTIVES
The aggregate amount charged in these financial statements for the remuneration of the chief executive and executives
was as follows:
2021 2020
Chief Chief
Executive Executives Executive Executives
--------------------------------------------------------------------------------------------------(Rupees '000)-------------------------------------
Managerial remuneration 29,419 7,064,462 19,230 5,003,842

Housing and utilities 16,181 5,781,106 11,721 4,049,294
Award and bonus 10,808 4,595,196 10,329 2,431,928
Other allowances and benefits 3,098 5,826,785 3,309 3,268,625
Leave encashment - 1,039,900 4,334 367,706
Medical benefits - 253,161 4,098 226,322
Pension fund - 954,294 - 356,995
Gratuity fund - 56,426 238 35,038
59,506 25,571,330 53,259 15,739,750
Number of persons including those who worked part of the 1 3,300 3 2,315
year
Page 70
NOTESNumber
TO THEof FINANCIAL
persons including
STATEMENTS
those who worked part of the 1 3,300 3 2,315
yearYEAR ENDED 30 JUNE 2021
FOR THE
- Executive means any employee whose basic salary exceeds Rs 1,200,000 (2020: Rs 1,200,000) per year. Non
management employees whose basic salary is more than Rs 1,200,000 per year have also been included in the
executives.
- Awards are paid to employees on start of commercial production and new discoveries of natural resources. Bonus
includes performance bonus with respect to officers and for staff under section 10-C of the West Pakistan Industrial
and Commercial Employment (standing orders) Ordinance 1968.
- The aggregate amount charged in these financial statements in respect of fee to 20 directors (2020: 12) was Rs 26.085
million (2020: Rs 21.525 million). This amount includes Rs 1.713 million (2020: Rs 2.4 million) in respect of monthly
compensation being paid to Chairman of board of directors.
- The employees of the Company have option to avail car facility as per the entitlement policy of the Company.
42 INFORMATION RELATING TO PROVIDENT FUND
Oil and Gas Development Company Limited (OGDCL) Employees’ Provident Fund is a contribution plan for benefit
of permanent employees of the Company. For employees regularized before 01 January 2016, the Company does not
contribute to the fund in respect of employees who are eligible for pension benefits and the contributions are made by
the employees only.
Investments out of Provident Fund have been made in accordance with the provisions of section 218 of the Companies
Act, 2017 and the rules formulated for the purpose.
During the year ended 30 June 2016, the Company changed its policy for entitlement of pension fund whereby
employees regularized after 01 January 2016 will contribute one basic salary towards provident fund annually and the
Company shall match the contribution. Contributory provident fund trust in this respect has not yet been created.
43 DISCLOSURE REQUIREMENTS FOR ALL SHARES ISLAMIC INDEX
Following information has been disclosed as required under para 10 of Part-I of the Fourth Schedule to the Companies
Act, 2017.
Description --------------------------------------------------------------------------------------------------(Rupees
Explanation '000)----------
i) Bank balances as at 30 June 2021 Placed under Shariah permissible arrangement 41,201
ii) Return on bank deposits for the year ended 30 June Placed under Shariah permissible arrangement 50,204
2021
iii) Relationship with banks having Islamic windows Meezan Bank Limited & Dubai Islamic Bank
Disclosures other than above are not applicable to the Company.
Page 71
44 INTEREST IN JOINT OPERATIONS, WHOLLY OWNED CONCESSIONS AND GEOGRAPHICAL LOCATION AND
ADDRESSES OF ALL BUSINESS UNITS
44.1 The Company has working interest in the following operated and non operated exploration licenses/ leases in Pakistan and their geographical
location and addresses are as follows:
Working Interest
2021 2020
Operated by OGDCL- Wholly owned concessions (%)
Exploration licenses Location
Bela North Khuzdar, Awaran & Lasbela 100 100
Bostan Ziarat, Pishin, Killah Abdullah & Quetta 100 100
Cholistan Bahawalnagar & Bahawalpur 100 100
Fateh Jang Islamabad, Rawalpindi & Attock 100 100
Jhelum Jhelum and Gujrat 100 -
Lilla Chakwal, Jhelum & Khushab 100 -
Sujawal South Thatta 100 -
Nowshera ** Nowshera, Mardan, Charsada & Swabi 100 -
Hazro ** Attack, Swabi & Haripur 100 -
Vehari ** Bahawalpur, Vehari & Lodhran 100 -
Sutlej ** Bahawalpur, Vehari, Khenewal & Bahawalnagar 100 -
Khewari East ** Khairpur 100 -
Jandaran Barkhan, Kohlu & Loralai 100 100
Jandran West Kohlu & Barkhan 100 100
Kharan Kharan & Noshki 100 100
Lakhi Rud Loralai, Musakhel, Barkhan & Kohlu 100 100
Latamber * Bannu & Tribal area adjacent to Bannu - 100
Mari East Ghotki, Rahim Yar Khan & Rajanpur 100 100
Samandar Awaran & uthal 100 100
Saruna Khuzdar & Lasbella 100 100
Shaan * Zhob, Qila Saifullah & Musakhel Bazar - 100
Shahana Washuk & Punjgur 100 100
Soghri Attock, Punjab & Kohat, KPK 100 100
Thal Khairpur, Sukkur & Ghotki 100 100
Wali South Waziristan Agency, Bannu, Lakki Marwat & Tribal area
adjacent to Taank 100 100
Development and Production/ Mining Leases

Soghri Attock, Punjab & Kohat, KPK 100 100
Bagla Thatta & Badin, Sindh 100 100
Bhal Syedan Attock, Punjab 100 100
Bhambra Sukkur, Sindh 100 100
Bobi / Dhamrakhi Sanghar, Sindh 100 100
Buzdar Hyderabad, Sindh 100 100
Chak 5 Dim South Sanghar, Sindh 100 100
Dakhni Attock, Punjab & Kohat, KPK 100 100
Daru Thatta, Sindh 100 100
Dhodak Dera Ghazi Khan,Punjab 100 100
Fimkassar Chakwal, Punjab 100 100
Hundi Dadu, Sindh 100 100
Kal Chakwal, Punjab 100 100
Kunnar Hyderabad, Sindh 100 100
Kunnar Deep Hyderabad, Sindh 100 100
Kunnar West Hyderabad, Sindh 100 100
Lashari Centre & South Hyderabad, Sindh 100 100
Loti Dera Bugti Agency, Balochistan 100 100
Misan Hyderabad, Sindh 100 100
Missa Keswal Rawalpindi, Punjab 100 100
* The Company has requested DGPC for relinquishment of these exploratory blocks and development and production lease.
** These exploration licences have been granted to the Company subsequent to the year end.
Page 72
INTEREST IN JOINT OPERATIONS, WHOLLY OWNED CONCESSIONS AND GEOGRAPHICAL LOCATION AND
ADDRESSES OF ALL BUSINESS UNITS- Continued
Working Interest
2021 2020
(%)
Development and Production/ Mining Leases Location
Nandpur Multan & Jhang, Punjab 100 100

Nur Thatta & Badin, Sindh 100 100
Pali Hyderabad, Sindh 100 100
Pasahki & Pasahki North Hyderabad, Sindh 100 100
Pasahki Deep Hyderabad, Sindh 100 100
Pirkoh Sibi (Bugti Tribal Territory), Balochistan 100 100
Pirkoh (Additional) Dera Bugti Agency, Balochistan 100 100
Rajian Chakwal & Jehlum, Punjab 100 100
Sadkal Attock, Punjab 100 100
Sara West Ghotki, Sindh 100 100
Sari Sing Dadu, Sindh 100 100
Sono Hyderabad, Sindh 100 100
Tando Alam Hyderabad, Sindh 100 100
Thal East Sukkur, Sindh 100 100
Thal West Khairpur & Sukkur, Sindh 100 100
Thora / Thora East & Thora Add Hyderabad, Sindh 100 100
Toot Attock, Punjab 100 100
Uch Dera Bugti, Balochistan 100 100
Zhob Zhob, Musa Khail Bazar & Tribal area of D.I. Khan 100 100
Operated by OGDCL- Joint operations
Exploration licenses
Baratai Kohat 97.50 97.50
Bitrism Shaheed Benazirabad, Khairpur & Sanghar 95.00 95.00
Gawadar Gwadar & Kech 97.50 97.50
Guddu Rajanpur, Rahim Yar Khan, Ghotki & Kashmore 70.00 70.00
Gurgalot Kohat & Attock 75.00 75.00
Kalchas Kohlu, Dera Bugti & Rajanpur 50.00 50.00
Khanpur * Rahim Yar Khan - -
Khewari Khairpur & Shaheed Benazirabad 95.00 95.00
Killah Saifullah Killah Saifullah 60.00 -
Suleiman MusaKhel, Zhob, Killa Saifullah & Loralai 50.00 -
Khuzdar North Khuzdar 72.50 72.50
Kohat Kohat, Naushera, Orakzai Agency, Peshawar & Darra Adam Khel 50.00 50.00
Kohlu Kohlu, Dera Bugti & Barkhan 40.00 40.00
Kulachi * D.I. Khan, D.G. Khan, Layyah & Bhakkar - 95.45
Nashpa Kohat, Karak, North Waziristan & Mianwali 65.00 65.00
Shakr Ganj West Pakpatan, Bahawalnagar, Vehari & Sahiwal 50.00 100.00
Khuzdar South Khuzdar & Dadu 97.50 100.00
Nim Hyderabad & Tharparker 95.00 95.00
Orakzai Kurram, Orakzai Agency & Hangu 95.34 95.34
Pasni West Gwadar & Kech 97.50 97.50
Pezu D.G. Khan, Lakki Marwat, Tank, D.I. Khan & Tribal area of D.I. Khan 68.38 68.38
Plantak Washuk & Panjgur 97.50 97.50
Rakhshan Washuk 97.50 97.50
Ranipur Khairpur, Larkana & Naushahro Feroz 95.00 95.00
Sinjhoro Sanghar & Khairpur 76.00 76.00
Tando Allah Yar Hyderabad & Tharparker 95.00 95.00
Tirah Khyber, Kurram & Orakzai Agencies. 95.00 95.00
Zin Dera Bugti, Nasirabad, Kohlu & Sibbi 95.00 95.00
Zorgarh * Ghotki, Jaffarabad, Kashmore, Dera Bugti & Rajanpur - 95.80
* The Company has requested DGPC for relinquishment of these exploratory blocks and development and production lease.
Page 73
INTEREST IN JOINT OPERATIONS, WHOLLY OWNED CONCESSIONS AND GEOGRAPHICAL LOCATION AND
ADDRESSES OF ALL BUSINESS UNITS- Continued
Working Interest
2021 2020
(%)
Development and Production/ Mining Leases Location
Baloch Sanghar, Sindh 62.50 62.50
Britism West Shaheed Benazirabad, Khairpur & Sanghar, Sindh 77.50 77.50
Chabaro Khairpur & Shaheed Benazirabad, Sindh 77.50 77.50
Chak Naurang Chakwal, Punjab 85.00 85.00
Chak-63 Sanghar, Sindh 62.50 62.50
Chak-63 South East Sanghar, Sindh 62.50 62.50
Chak-66 Sanghar/Khairpur, Sindh 62.50 62.50
Chak-7A Sanghar, Sindh 62.50 62.50
Chanda Kohat, KPK 72.00 72.00
Chandio Hyderabad, Sindh 77.50 77.50
Chak-2 Sanghar, Sindh 62.50 62.50
Dars Hyderabad, Sindh 77.50 77.50
Dars Deep Hyderabad, Sindh 77.50 77.50
Dars West Hyderabad, Sindh 77.50 77.50
Dhok Hussain Kohat, KPK 97.50 97.50
Gopang Hyderabad, Sindh 77.50 77.50
Gundanwari Shaheed Benazirabad, Khairpur & Sanghar, Sindh 77.50 77.50
Hakeem Dahu Sanghar/Khairpur, Sindh 62.50 62.50
Jakhro Sanghar, Sindh 77.50 77.50
Jhal Magsi South Jhal Magsi, Balochistan 56.00 56.00
Kunnar South Hyderabad, Sindh 77.50 77.50
Lala Jamali Sanghar, Sindh 62.50 62.50
Maru Ghotki,Sindh 57.76 57.76
Maru South Ghotki,Sindh 57.76 57.76
Mela Kohat, KPK 56.45 56.45
Nashpa Karak, KPK 56.45 56.45
Nim Hyderabad, Sindh 77.50 77.50
Nim West Hyderabad, Sindh 77.50 77.50
Chutto & Mangrio Hyderabad, Sindh 77.50 -
Jarwar Hyderabad, Sindh 77.50 77.50
Norai Jagir Hyderabad, Sindh 77.50 77.50
Pasahki East Hyderabad, Sindh 77.50 77.50
Pakhro Tando Mohammad Khan, Sindh 77.50 77.50
Qadirpur Ghotki & Kashmore, Sindh 75.00 75.00
Resham Sanghar, Sindh 62.50 62.50
Reti Ghotki,Sindh 57.76 57.76
Saand Tando Allah Yar, Sindh 77.50 77.50
Shah Hyderabad, Sindh 77.50 77.50
Tando Allah Yar Hyderabad, Sindh 77.50 77.50
Tando Allah Yar North Hyderabad, Sindh 77.50 77.50
Tando Allah Yar South West Hyderabad, Sindh 77.50 77.50
Unnar Hyderabad, Sindh 77.50 77.50
Page 74
INTEREST IN JOINT OPERATIONS, WHOLLY OWNED CONCESSIONS AND GEOGRAPHICAL LOCATION AND ADDRESSES OF
ALL BUSINESS UNITS- Continued
Working Interest
2021 2020
Non Operated Location Operator %
Exploration Licenses
Block-28 Kohlu, Dera Bughti & Barkhan Mari Petroleum Company Limited 5.00 5.00
Bunnu West Bannu & North Waziristan Agency Mari Petroleum Company Limited 35.00 35.00
Offshore Indus-G Offshore Area Eni Pakistan Limited 25.00 25.00
Musakhel Musa Khel & Zhob District, Balochistan Pakistan Petroleum Limited 35.30 47.80
South Kharan Washuk Pakistan Petroleum Limited 46.50 46.50
Tal Block Kohat, Karak & Bannu MOL Pakistan Oil and Gas B.V. 30.00 30.00
Makhad Attock, Punjab Kirthar Pakistan B.V. (KUFPEC) 15.00 15.00
Punjab Pakpatan, Sahiwal, Okara and Bahawalnagar Pakistan Petroleum Limited 50.00 -
Sharan Killa Saifullah and Zhob Mari Petroleum Company Limited 40.00 -
Development and Production/ Mining Leases
Adhi /Adhi sakessar Rawalpindi & Jhelum, Punjab Pakistan Petroleum Limited 50.00 50.00
Ali Zaur Badin, Sindh United Energy Pakistan Limited 15.00 15.00
Badar Kashmor, Sukkur & Ghotki, Sindh Petroleum Exploration (Pvt) Limited 50.00 50.00
Badhra Dadu, Sindh Eni Pakistan Limited 20.00 20.00
Bhangali Gujjar Khan, Punjab Ocean Pakistan Limited 50.00 50.00
Bhit Dadu, Sindh Eni Pakistan Limited 20.00 20.00
Buzdar South Badin, Sindh United Energy Pakistan Limited 49.00 49.00
Dhurnal Attock, Punjab Ocean Pakistan Limited 20.00 20.00
Fateh Shah North Thatta, Sindh United Energy Pakistan Limited 15.00 15.00
Jabo Golarchi & Badin, Sindh United Energy Pakistan Limited 49.00 49.00
Jagir Badin, Sindh United Energy Pakistan Limited 24.00 24.00
Jalal Hyderabad, Sindh United Energy Pakistan Limited 49.00 49.00
Jhaberi South Badin, Sindh United Energy Pakistan Limited 15.00 15.00
Kadanwari Khairpur, Sindh Eni Pakistan Limited 50.00 50.00
Kato Tando Muhammed Alam & Badin, Sindh United Energy Pakistan Limited 49.00 49.00
Makori Karak, KPK MOL Pakistan Oil and Gas B.V. 27.76 27.76
Makori Deep Karak, KPK MOL Pakistan Oil and Gas B.V. 27.76 27.76
Makori East Karak, KPK MOL Pakistan Oil and Gas B.V. 27.76 27.76
Mamikhel Kohat & Hangu, KPK MOL Pakistan Oil and Gas B.V. 27.76 27.76
Mamikhel South Kohat & Hangu, KPK MOL Pakistan Oil and Gas B.V. 27.76 -
Manzalai Karak, Kohat & Bannu, KPK MOL Pakistan Oil and Gas B.V. 27.76 27.76
Maramzai Kohat & Hangu, KPK MOL Pakistan Oil and Gas B.V. 27.76 27.76
Meyun Ismail Hyderabad, Sindh United Energy Pakistan Limited 49.00 49.00
Miano Sukkur, Sindh OMV (Pakistan) Exploration (OMV) 52.00 52.00
Muban Hyderabad, Sindh United Energy Pakistan Limited 24.00 24.00
Paniro Matli & Badin, Sindh United Energy Pakistan Limited 49.00 49.00
Pindori Chakwal, Punjab Pakistan Oilfields Limited 50.00 50.00
Pir Golarchi & Badin, Sindh United Energy Pakistan Limited 49.00 49.00
Raj Hyderabad, Sindh United Energy Pakistan Limited 24.00 24.00
Ratana Attock, Punjab Ocean Pakistan Limited 25.00 25.00
Rind Tando Muhammed Alam & Badin, Sindh United Energy Pakistan Limited 49.00 49.00
Sakhi Deep Tando Muhammad Khan, Sindh United Energy Pakistan Limited 24.00 24.00
Sara Ghotki, Sindh Spud Energy Pty Limited 40.00 40.00
Shah Dino Badin, Sindh United Energy Pakistan Limited 15.00 15.00
Suri Ghotki, Sindh Spud Energy Pty Limited 40.00 40.00
Tolang Kohat, KPK MOL Pakistan Oil and Gas B.V. 27.76 27.76
Tolang West Kohat, KPK MOL Pakistan Oil and Gas B.V. 27.76 27.76
Zaur Badin, Sindh United Energy Pakistan Limited 49.00 49.00
Page 75
44.2 GEOGRAPHICAL LOCATIONS OF REGIONAL OFFICES
Office Address Location

Kohat Bunglow # 22, CMH Road Kohat, KPK
Quetta House # 3, Jinnah Town Quetta, Balochistan
Sukkur Bungalow # A-25, Shikarpur Road Sukkur, Sindh
Karachi Bangalow # 1, PECHS Shaheed-e-Millat Karachi, Sindh
Hyderabad Muslim Housing Society Hyderabad, Sindh
Multan Piraan Ghaib Road Multan, Punjab
45 BENAZIR EMPLOYEES' STOCK OPTION SCHEME (BESOS)
On August 14, 2009, the Government of Pakistan (GoP) launched BESOS Scheme for employees of certain State Owned
Enterprises (SOEs) and non-State Owned Enterprises where GoP holds significant investments (non-SOEs).
However, keeping in view the difficulties that may be faced by the entities covered under the BESOS Scheme, the
Securities and Exchange Commission of Pakistan had granted exemption to state owned enterprises from the application
of IFRS2 to the Scheme vide SRO 587 (I)/2011 dated 07 June 2011.
During the year, it has been communicated by the GoP that pursuant to the Honourable Supreme Court of Pakistan's short
order dated 22 October 2020, the status of Trust enforceable under BESOS Scheme is illegal hence; void ab-initio. The
detailed order of the Supreme Court is still awaited. Also refer note 11.
46 IMPACT OF COVID-19 ON THE FINANCIAL STATEMENTS
During the year ended 30 June 2021, second and third wave/ resurgence of Coronavirus (Covid-19) was encountered
across the Country. Management's focus and efforts continued for coping up with the changing scenario at all levels. The
Company's operations financial position and results have not been affected by Covid-19 during the year.
Based on management's assessment there is no material impact on the carrying values of assets and liabilities as of 30 June
2021. From the very outset of Covid-19, the management has adopted various policies and practices to minimize adverse
impact of Covid-19 on the business and is continuously monitoring the situation in order to proactively address any
challenges which may arise from Covid-19.
47 NON ADJUSTING EVENT AFTER REPORTING DATE
47.1 Subsequent to the year end, a Consortium comprising of the Company, Mari Petroleum Company Limited (MPCL),
Government Holdings (Private) Limited (GHPL) and Pakistan Petroleum Limited (PPL) (Operator) has been awarded
Offshore Block 5 in Abu Dhabi's second competitive exploration block bid round. Offshore Block 5 covers an area of
6,223 square kilometers and is located 100 kilometers north-east of Abu Dhabi city. To this end, the consortium
companies have established an independent company viz., Pakistan International Oil Limited (PIOL) at Abu Dhabi Global
Market with each consortium company having a 25% equity stake in PIOL. The exploration concession agreement
between PIOL and Abu Dhabi National Oil Company (ADNOC) was signed on 31 August 2021. The minimum
commitment of the consortium under the concession documents is USD 304.7 million during the exploration phase.
As part of the arrangement, each of the Consortium companies have also provided, joint and several, parent company
guarantees to ADNOC and Supreme Council For Financial and Economic Affairs, Abu Dhabi, UAE to guarantee the
obligations of PIOL.
47.2 Subsequent to the year end, the Company signed Petroleum Concession Agreements (PCAs) for five (5) new exploratory
blocks in Pakistan. The Company's share in the minimum work commitments of these exploratory blocks under PCA
amounts to Rs 2,098 million.
Page 76
Subsequent to the year end, the Company signed Petroleum Concession Agreements (PCAs) for five (5) new exploratory
blocks in Pakistan. The Company's share in the minimum work commitments of these exploratory blocks under PCA
amounts
OIL AND GAStoDEVELOPMENT
Rs 2,098 million. COMPANY LIMITED
47.3 The Board of Directors recommended final cash dividend at the rate of Rs 1.50 per share amounting to
Rs. 6,451 million in its meeting held on September 27, 2021.
48 GENERAL
48.1 Capacity and Production
Saleable production (net) from Company's fields including share from non-operated fields for the year ended 30 June 2021
is as under:
Product Unit Actual production for the year
Crude oil/condensate (at ambient temperature) Barrels 13,465,715
Natural gas MMSCF 317,443
Liquefied petroleum gas M.Ton 293,153
Sulphur M.Ton 18,827
Due to nature of operations of the Company, installed capacity of above products is not relevant.
48.2 Figures have been rounded off to the nearest thousand of rupees, unless otherwise stated.
49 DATE OF AUTHORIZATION FOR ISSUE
These financial statements were authorized for issue on September 27, 2021 by the Board of Directors of the Company.
Page 77

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OIL AND GAS DEVELOPMENT COMPANY LIMITED Annexure II

STATEMENT OF FINANCIAL POSITION CS04-08 (PSX/LSE/SECP)

955,993,814 888,973,636 795,058,357 955,993,814 888,973,636 795,058,357

CONTINGENCIES AND COMMITMENTS 12

The annexed notes 1 to 49 form an integral part of these financial statements.

Chief Financial Officer Chief Executive Director

Profit for the year 91,534,424 100,937,893

Other comprehensive income/ (loss) for the year

Items that will not be reclassified to profit or loss:

The annexed notes 1 to 49 form an integral part of these financial statements.

Chief Financial Officer Chief Executive Director

Transactions with owners of the Company

Total comprehensive income for the year

Transfer to self insurance reserve - - 1,461,064 - - - (1,461,064) -

Transactions with owners of the Company

The annexed notes 1 to 49 form an integral part of these financial statements.

Chief Financial Officer Chief Executive Director

Royalty paid (16,915,850) (25,979,217)

Cash flows from investing activities

Cash flows from financing activities

Net increase/ (decrease) in cash and cash equivalents 3,222,581 (32,527,582)

The annexed notes 1 to 49 form an integral part of these financial statements.

Chief Financial Officer Chief Executive Director

1 LEGAL STATUS AND OPERATIONS

2.1 STATEMENT OF COMPLIANCE

2.2 BASIS OF MEASUREMENT

2.3 ADOPTION OF NEW ACCOUNTING STANDARDS

2.4 FUNCTIONAL AND PRESENTATION CURRENCY

2.5 ACCOUNTING ESTIMATES

2.5.1 Property, plant and equipment

2.5.2 Exploration and evaluation expenditure

Amortization charge would have been lower by 1,883

2.5.5 Provision for decommissioning cost

Provision for decommissioning cost would have been higher by 1,262

2.5.6 Employee benefits

2.5.8 Stores, spare parts and loose tools

2.5.9 Measurement of the expected credit loss allowance

2.5.10 Provision against financial assets not subject to ECL model

2.6 NEW AND AMENDED STANDARDS AND INTERPRETATIONS

OIL AND GAS DEVELOPMENT COMPANY LIMITED

- IFRS 1 – First Time Adoption of International Financial Reporting Standards

- IFRIC 12 – Service Concession Arrangements

3 CHANGE IN ACCOUNTING POLICIES

As previously IFRS-16 GIDC

Share capital and reserves

Share capital and reserves

Sales - net 251,610,001 (12,506,448) - 239,103,553 244,856,754 (11,931,511) - 232,925,243

Operating expenses 71,918,782 (1,741,388) - 70,177,394 66,560,465 (1,230,138) - 65,330,327

Taxation 39,361,361 (1,909,440) - 37,451,921 42,983,233 440,502 - 43,423,735

Statements of cash flows

Cash flows from operating activities

Profit before taxation 134,067,555 (5,081,210) - 128,986,345 143,064,904 1,296,724 - 144,361,628

Depreciation 11,754,820 (1,741,388) - 10,013,432 11,782,166 (1,230,138) - 10,552,028

Cash flows from investing activities

Interest received 1,727,317 4,473,893 - 6,201,210 6,248,210 4,868,139 - 11,116,349

4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4.1 EMPLOYEE BENEFITS

Past service costs are recognized immediately in profit or loss.

4.2.1 Current tax

4.2.2 Deferred tax