c



 

Audit of the JVs will be conducted in accordance with the Petroleum Concession Agreement (PCA) with
special emphasis over Joint Operating Agreement (JOA) Annexure II to PCA and Accounting Procedures
Appendix A to PCA.

For execution of audit we will obtain approved annual work programme along with budget drafted in
the light of minimum work programme stated in the PCA, this should be approved by WIOs. Operator
shall provide us all the cost statements and cash calls (supported with AFE) the year submitted to
Working Interest Owners (WIOs) so that it could be reconciled with the annual audited accounts and
accounting system and also cash calls could be traced to bank statements. Through operator will obtain
the confirmation of year end balances from WIOs to conclude that cash calls made during the year by
WIOs and expenditure charged by the operator against it is appropriate.

Exploration expenditures charged to joint account will be verified in accordance with the ͞Accounting
Procedures͟ and ͞Joint Operating Agreement͟ among WIOs. For expenditures ͞Approval for
Expenditure͟ (AFE) will be required (AFE is required for specific work to be carried out by operator as
mentioned in PCA) so that only those expenditures could be charged which are approved by AFE or
Annual Work Programme and having supporting evidence for its reasonableness to be charged in the
respective year.

V



V
On the completion of the audit work following deliverables will be submitted as final product.
Before going forward it will be worthwhile mentioning here that maintenance of an adequate
financial record rests with the Operator. Our responsibility will include expressing an opinion on
the verification of expenditures, cash calls and identifications of weaknesses while verifying
those expenditures and cash calls.

As part of audit process the following deliverables will be submitted:

1)V G

  This will cover the overall opinion on the joint account.

2)V A
  This will be issue after the matters identified in the draft report has been
resolved between WIOS and auditor.

3)V bs



 This will include our audit observation