REPORT OF PROFESSIONAL DEVELOPMENT COURSE ON ACCOUNTING AND AUDITING FOR OIL AND GAS COMPANIES

SUBMITTED BY : ALL PARTICIPANTS OF PETRONBANGLA & ITS COMPANIES

Introduction
The arrangement of very potential training program by AIT(Asian Institute of Technology) Extension , Thailand for Petrobangla and its group companies participants is certainly more effective. The training was two weeks long and held on 25th June to 6 th July, 2012. Fifteen participants took part in the training program very attentively and lively. The resource persons those whom provide by AIT Extension was really fantastic. Undoubtedly their depth of knowledge is standard level. Main topics which we learn from the training program: We learn on Strategic Financial analysis for decision making for valuation or investing by: ROE = Return on Equity EPS = Earning Per Share PE = Profit Earning Among the above we learn ROE is more reliable than EPS. Because ROE analyzes both Income Statement and Balance Sheet and EPS analyzes only Income Statement. We also gather knowledge how firms ROE can be improved? Determination of nominal rate that is valuation of share, How maximization of firm value, Reasons behind why market value of a particular share is more than the book value? Discussion also cover actual scenario of TITAS Gas T &D Co. Ltd. of Bangladesh and PTT of Thailand interpreting these two companys financial statement. The use of EBITDA = Earnings before Interest, Taxes, Depreciation and Amortization.

Discussion concludes that, EBITDA is the good substitute of operating cash flow and in case of big investment company EBITDA is more appropriate. Disclosure issues of accounting standard i.e. - Measurement - Recording - Discloser Proper or real process for calculation of ROI. Performance measurement indicator. How it is fit with companys strategy widely discuss difference between ROE and ROCE . Finally, in accounting topic of the Training Programme resource person gave guideline on accounting terms as a Manager. The whole discussion was very rich to learn and the participants learn a lot. In second week out of our two week programme we introduce Mr. Dr. Arun Kumar Gopalaswami of IITM, India. He is a highly experienced and knowledgeable person. He covers the following matters in this short period of the time very easy and practical way. His discussion is briefly noted below:

Financial statement analysis: Two way of financial statement analysis, - Horizontal analysis : Company with single item of production ; - Vertical analysis: required minimum five years of data. He also discuss that, asset intensive companys liquidity will be high. This companys asset turnover ratio is lower. Because Break Even Point (BEP) takes more time to adjust the investment. Ratio analysis: - Liquidity Ratio

- Profitability Ratio - Financial Leverage ratio - Coverage ratio Option: Put option: In case of put option company may repay all money at the money market to the investor. Call option: Company rearranges the interest rate at the end of certain period. In this day of discussion he also covers money market and debt market instruments and their characteristics. Objective of financial analysis: To communicate financial information to outside parties. Parties involves in this concern are equity investor, creditors, employees, suppliers, clients. It also reflected of contingent liability of a company in the Balance Sheet. Financial derivatives: Kinds of DerivativesOption SWAP Forwards Futures

The derivative instruments are discussed elaborately. Fundamental analysis required sector-wise analysis, timing for buy the share. Role of risk management, various kinds of company such as sun rise, sun set and priority sector. Active discussion was also cover risk sharing of E & P Company. Common financing techniques, factor involved in financing E & P sector, operational risk, financial risk, techniques of risk management, Qualitative & Quantitative techniques. IFRS-6:

IFRS developed by IASB is principle based accounting standards where transactions cannot be manipulated, IFRS-6 introduced as a temporary standard for mineral extractive industry. IFRS-6 applies only to exploration & evaluation (E &E) phase and does not consider pre-exploration cost and post exploration development and production cost. Internal Audit: In the training program discussion was held regarding audit. Process of audit, purposes, type, monitoring or follow up etc. This also cover internal audit process, joint venture audit, P S C (Production Sharing Contact) audit and multiple venture audit. On final day we also learn very knowledgeable topic that E & P taxation, taxation in P S C, Royalty and tax regime, types of revenue of P & E sectors, Tax benefit opportunities of Oil &Gas Companies which are under the contract of P S C. We also learn techniques. Functions of a treasury manager, different kinds lease or buy decision etc. What we learn from the training program: Training program actually covered two vital topic which are Accounting and Auditing. The resource persons are covered all matter related to accounting and auditing of Oil and Gas sector. They also discuss proper way of accounting and auditing related to decision making process, cost control and various other factors which very sensitive in an organization specially for Oil and Gas sector like Petrobangla and its companies.