Common use of Property, Plant and Equipment Clause in Contracts

Property, Plant and Equipment. ▪ Significant differences in the reconciliation between the physical inventory and the one registered in the system DC – Crude Oil Transportation Agreement – 018 – 2013 106 ▪ Inventory that cannot be easily inspected ▪ Transfer of property of the assets ▪ Assets used by employees for their personal gain ▪ Falsification or irregular preparation of reconciliations between the detailed records (kardex) and the accounting balances ▪ Frequent or unusual adjustments to the Fixed Assets’ account (obsolescence, sales, thefts, among other) ▪ The fixed assets in the accounting records that apparently are not related to the Company’s business ▪ Lack of adequate policies and procedures to determine whether or not the property and the equipment have been adequately received and registered. ▪ Lack of procedures to control fixed assets that are transferred from one facility to another. ▪ Existence of warehouses or places to store fixed assets that still have useful life but that for whatever reason are not being utilized Liabilities ▪ Recurring payments to suppliers for the same amount ▪ Multiple vendors with the same name or similar names, the same phone number, the same electronic mail or the same bank account in the vendors’ master ▪ Multiple addresses for one same vendor ▪ Differences between the invoicing address or the address for the remittance of payments to a supplier and its address in the vendors’ master ▪ Non documented changes in the vendors’ master ▪ Several invoices with consecutive numbers from one same vendor ▪ Significant increase in the amounts of the payments to a vendor without a justified reason ▪ Non – segregated functions in the preparation and registration of payments to suppliers DC – Crude Oil Transportation Agreement – 018 – 2013 107 ▪ Frequent adjustments to the balances of a vendor for reasons such as the return of inventories ▪ Manual drafting of checks ▪ Payments directly registered as expenses and not as accounts payable The liabilities from the acquisitions in some occasions are presented in different quantities, in general, below the actual figures, which means that not all the obligations or credits are registered, as well as the accruals or accumulated liabilities, and therefore the required provisions. In the payments of works’ contracts, it is common to have the undue appropriation of cash, inserting in the supporting documents or works’ minutes quantities of works and workings higher than those actually done, which leads to the issuance of checks or payments for amounts higher than the ones actually due for the work done. Diversion of funds from loans granted to the Company, not recording them in the books or using the sums destined to their repayment in an undue manner. Income ▪ Undue appropriations of cash, through the lack of registration of sale invoices, of accounts receivable, to cash the money afterwards ▪ Important adjustments of the income at the end of the accounting period ▪ In order to conceal the subtraction of materials, the charges made on accounts receivable are offset against the returns, discounts and rebates’ account. ▪ Income from scrape or waste can be unduly appropriated, omitting to record all the relevant sales or forging the quantities or weight of the materials ▪ Unusual increases in the sales in the months near the close of the period ▪ The clients with unknown names or addresses that do not have an apparent relationship with the business. ▪ Improvement of the late payments as a percentage of sales ▪ Lack of supporting documentation (for example purchase orders, shipping documents).

Property, Plant and Equipment. DC- Crude Oil Transportation Agreement - 009 - 2013 109 ▪ Significant differences in the reconciliation between the physical inventory and the one registered in the system DC – Crude Oil Transportation Agreement – 018 – 2013 106 ▪ Inventory that cannot be easily inspected ▪ Transfer of property of the assets ▪ Assets used by employees for their personal gain ▪ Falsification or irregular preparation of reconciliations between the detailed records (kardex) and the accounting balances ▪ Frequent or unusual adjustments to the Fixed Assets’ account (obsolescence, sales, thefts, among other) ▪ The fixed assets in the accounting records that apparently are not related to the Company’s business ▪ Lack of adequate policies and procedures to determine whether or not the property and the equipment have been adequately received and registered. ▪ Lack of procedures to control fixed assets that are transferred from one facility to another. ▪ Existence of warehouses or places to store fixed assets that still have useful life but that for whatever reason are not being utilized Liabilities ▪ Recurring payments to suppliers for the same amount ▪ Multiple vendors with the same name or similar names, the same phone number, the same electronic mail or the same bank account in the vendors’ master ▪ Multiple addresses for one same vendor ▪ Differences between the invoicing address or the address for the remittance of payments to a supplier and its address in the vendors’ master ▪ Non documented changes in the vendors’ master ▪ Several invoices with consecutive numbers from one same vendor ▪ Significant increase in the amounts of the payments to a vendor without a justified reason DC- Crude Oil Transportation Agreement - 009 - 2013 110 ▪ Non – segregated functions in the preparation and registration of payments to suppliers DC – Crude Oil Transportation Agreement – 018 – 2013 107 ▪ Frequent adjustments to the balances of a vendor for reasons such as the return of inventories ▪ Manual drafting of checks ▪ Payments directly registered as expenses and not as accounts payable The liabilities from the acquisitions in some occasions are presented in different quantities, in general, below the actual figures, which means that not all the obligations or credits are registered, as well as the accruals or accumulated liabilities, and therefore the required provisions. In the payments of works’ contracts, it is common to have the undue appropriation of cash, inserting in the supporting documents or works’ minutes quantities of works and workings higher than those actually done, which leads to the issuance of checks or payments for amounts higher than the ones actually due for the work done. Diversion of funds from loans granted to the Company, not recording them in the books or using the sums destined to their repayment in an undue manner. Income ▪ Undue appropriations of cash, through the lack of registration of sale invoices, of accounts receivable, to cash the money afterwards ▪ Important adjustments of the income at the end of the accounting period ▪ In order to conceal the subtraction of materials, the charges made on accounts receivable are offset against the returns, discounts and rebates’ account. ▪ Income from scrape or waste can be unduly appropriated, omitting to record all the relevant sales or forging the quantities or weight of the materials ▪ Unusual increases in the sales in the months near the close of the period ▪ The clients with unknown names or addresses that do not have an apparent relationship with the business. ▪ Improvement of the late payments as a percentage of sales ▪ Lack of supporting documentation (for example purchase orders, shipping documents).

Property, Plant and Equipment. ▪ Significant differences in the reconciliation between the physical inventory and the one registered in the system DC – Contrato de Transporte de Crude Oil Transportation Agreement – 018 008 – 2013 106 95 Crude Oil Offloading Agreement ▪ Inventory that cannot be easily inspected ▪ Transfer of property of the assets ▪ Assets used by employees for their personal gain ▪ Falsification or irregular preparation of reconciliations between the detailed records (kardex) and the accounting balances ▪ Frequent or unusual adjustments to the Fixed Assets’ account (obsolescence, sales, thefts, among other) ▪ The fixed assets in the accounting records that apparently are not related to the Company’s business ▪ Lack of adequate policies and procedures to determine whether or not the property and the equipment have been adequately received and registered. ▪ Lack of procedures to control fixed assets that are transferred from one facility to another. ▪ Existence of warehouses or places to store fixed assets that still have useful life but that for whatever reason are not being utilized Liabilities ▪ Recurring payments to suppliers for the same amount ▪ Multiple vendors with the same name or similar names, the same phone number, the same electronic mail or the same bank account in the vendors’ master ▪ Multiple addresses for one same vendor ▪ Differences between the invoicing address or the address for the remittance of payments to a supplier and its address in the vendors’ master ▪ Non documented changes in the vendors’ master ▪ Several invoices with consecutive numbers from one same vendor ▪ Significant increase in the amounts of the payments to a vendor without a justified reason ▪ Non – segregated functions in the preparation and registration of payments to suppliers DC – Contrato de Transporte de Crude Oil Transportation Agreement – 018 008 – 2013 107 96 Crude Oil Offloading Agreement ▪ Frequent adjustments to the balances of a vendor for reasons such as the return of inventories ▪ Manual drafting of checks ▪ Payments directly registered as expenses and not as accounts payable The liabilities from the acquisitions in some occasions are presented in different quantities, in general, below the actual figures, which means that not all the obligations or credits are registered, as well as the accruals or accumulated liabilities, and therefore the required provisions. In the payments of works’ contracts, it is common to have the undue appropriation of cash, inserting in the supporting documents or works’ minutes quantities of works and workings higher than those actually done, which leads to the issuance of checks or payments for amounts higher than the ones actually due for the work done. Diversion of funds from loans granted to the Company, not recording them in the books or using the sums destined to their repayment in an undue manner. Income ▪ Undue appropriations of cash, through the lack of registration of sale invoices, of accounts receivable, to cash the money afterwards ▪ Important adjustments of the income at the end of the accounting period ▪ In order to conceal the subtraction of materials, the charges made on accounts receivable are offset against the returns, discounts and rebates’ account. ▪ Income from scrape or waste can be unduly appropriated, omitting to record all the relevant sales or forging the quantities or weight of the materials ▪ Unusual increases in the sales in the months near the close of the period ▪ The clients with unknown names or addresses that do not have an apparent relationship with the business. ▪ Improvement of the late payments as a percentage of sales ▪ Lack of supporting documentation (for example purchase orders, shipping documents).

Property, Plant and Equipment. ▪ Significant differences in the reconciliation between the physical inventory and the one registered in the system DC – Contrato de Transporte de Crude Oil Transportation Agreement – 018 017 – 2013 106 108 Crude Oil Offloading Agreement Attachment E CENIT’S Compliance Manual ▪ Inventory that cannot be easily inspected ▪ Transfer of property of the assets ▪ Assets used by employees for their personal gain ▪ Falsification or irregular preparation of reconciliations between the detailed records (kardex) and the accounting balances ▪ Frequent or unusual adjustments to the Fixed Assets’ account (obsolescence, sales, thefts, among other) ▪ The fixed assets in the accounting records that apparently are not related to the Company’s business ▪ Lack of adequate policies and procedures to determine whether or not the property and the equipment have been adequately received and registered. ▪ Lack of procedures to control fixed assets that are transferred from one facility to another. ▪ Existence of warehouses or places to store fixed assets that still have useful life but that for whatever reason are not being utilized Liabilities ▪ Recurring payments to suppliers for the same amount ▪ Multiple vendors with the same name or similar names, the same phone number, the same electronic mail or the same bank account in the vendors’ master ▪ Multiple addresses for one same vendor ▪ Differences between the invoicing address or the address for the remittance of payments to a supplier and its address in the vendors’ master ▪ Non documented changes in the vendors’ master ▪ Several invoices with consecutive numbers from one same vendor ▪ Significant increase in the amounts of the payments to a vendor without a justified reason ▪ Non – segregated functions in the preparation and registration of payments to suppliers DC – Contrato de Transporte de Crude Oil Transportation Agreement – 018 017 – 2013 107 109 Crude Oil Offloading Agreement Attachment E CENIT’S Compliance Manual ▪ Frequent adjustments to the balances of a vendor for reasons such as the return of inventories ▪ Manual drafting of checks ▪ Payments directly registered as expenses and not as accounts payable The liabilities from the acquisitions in some occasions are presented in different quantities, in general, below the actual figures, which means that not all the obligations or credits are registered, as well as the accruals or accumulated liabilities, and therefore the required provisions. In the payments of works’ contracts, it is common to have the undue appropriation of cash, inserting in the supporting documents or works’ minutes quantities of works and workings higher than those actually done, which leads to the issuance of checks or payments for amounts higher than the ones actually due for the work done. Diversion of funds from loans granted to the Company, not recording them in the books or using the sums destined to their repayment in an undue manner. Income ▪ Undue appropriations of cash, through the lack of registration of sale invoices, of accounts receivable, to cash the money afterwards ▪ Important adjustments of the income at the end of the accounting period ▪ In order to conceal the subtraction of materials, the charges made on accounts receivable are offset against the returns, discounts and rebates’ account. ▪ Income from scrape or waste can be unduly appropriated, omitting to record all the relevant sales or forging the quantities or weight of the materials ▪ Unusual increases in the sales in the months near the close of the period ▪ The clients with unknown names or addresses that do not have an apparent relationship with the business. ▪ Improvement of the late payments as a percentage of sales ▪ Lack of supporting documentation (for example purchase orders, shipping documents).