INSTRUCTIONS FOR PHYSICAL STOCK OF INVENTORY:

Pakistan State Oil Company Limited:

Inventory:
Test of control

1- Observe management as control being performed by management. Ensure that it is being performed within
your view. Stock taking activity will be conducted in teams, comprising of MTO, KPMG Representative
and PSO representative.

Test of detail

2- Team Members must verify all tanks of inventory (petroleum products) available at the location and fill
Inventory count sheet as provided in email attachment. Sign Inventory count sheet by yourself and get it
signed by PSO representative.

3- in case of any differences in observation in stock taking activity, document the difference and get it signed
by PSO representative.

4- Obtain STK-08 document from client in which all observations are noted along with conversion of
measurement metrics of finished products into liters. STK 08 document should be signed by PSO and
KPMG Representatives.

5- Collect documents for transshipment at each location (Out-bound and In-bound / GRN). 

Process of Measurement:

6- The MTO performs Stock taking activity by taking Manual Dips and the Dips taken was observed and
noted by the KPMG representative and PSO representative on Inventory Count Sheet.

7- Along with taking the Manual Dips*, the Temperature* and the Density* of the petroleum products was
observed and noted by the KPMG representative and PSO representative on Inventory Count Sheet.

8- The Dips were taking in millimeters (mm) and for the purpose of Calculating the Quantity Finished
Products in liters, the millimeters (mm) observed are converted into liters using the Tank Calibration
Charts.

9- The dips are noted in millimeters, temperature is noted in degree centigrade, and density is noted up to 4
decimal places.

Property, Plant and Equipment (PPE):

10- Team Members needs to verify the sample items of PPE (Specific Items identified for each location + 30
Floor to List) by performing the count himself.

11- Physical Condition of PPE must be taken in account, in case of deterioration of asset, kindly mention in
PPE sheet and get signed and stamped by PSO representative.

Cash Count:
12- Team Members need to observe the cash count performed by the PSO representative and document the
same in the Cash Count Proforma and get signed and stamped by PSO representative.