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1.7.3 Inconductingtheaudit,theGovernmentoritsauditorsshallbeentitledtoexamineandverify,atreasonable times, all credits relating to the Contractor’s activities under the Contract and all books of account, accounting entries, invoices and any other documents,correspondenceandrecordsconsiderednecessarybytheGovernmenttoauditandverifythecre dits. Theauditorsshallalsohavetheright,inconnectionwithsuchaudit,tovisitand inspect, at reasonable times, all sites, plants, facilities, warehouses and offices of the Contractor directly or indirectly serving the Petroleum Operations, and to physically examine other property, facilities and stocks used in Petroleum Operations, wherever located and to question personnel associated with those operations. 1.7.4 Anyaudit exceptions shall be made by the Government in writing and notified to the Contractor within onehundredandtwenty(120)daysfollowingcompletionoftheauditinquestion. 1.7.5 TheContractor shallanswer any notice of exception under Section 1.7.4 within one hundred and twenty (120)daysofthereceiptofsuchnotice.WheretheContractorhas,afterthesaidonehundredandtwenty (120) days, failed to answer a notice of exception, the exception shall prevail and deemed to have been agreedtobytheContractor. 1.7.6 Allagreedadjustmentsresultingfromanauditandalladjustmentsrequiredbyprevailingexceptions underSection1.7.5shallbepromptlymadeintheContractor’saccountsandanyconsequentialadjustments
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76 to the Government’s entitlement to Revenue Shareshall be made within thirty (30) days therefrom along with interestdueforlatepaymentunderSection1.6.3. 1.7.7 NotwithstandinganyreferencetoaSoleExpertor Arbitrationinaccordancewiththeprovisionsofthe Contract, in case any amount is claimed as due to the Government resulting from the audit exception but not accepted or settled by the Contractor, then the Contractor shall deposit such claimed amount in anescrow account to be opened with a financial institution, failing mutually agreed agreement with State BankofIndia,withinthirty(30)daysfromthedatewhentheamountisdisputedbytheContractor. The amount in the escrow account along with any interest accumulated thereon shall be appropriated or adjusted inaccordancewiththedecisionorawardoftheSoleExpertorArbitral Tribunalasmaybeorotherwiseas mutuallyagreedtobetweentheParties. 1.7.8 If the Contractor and the Government are unable to reach final agreement on proposed audit adjustments, either Party may refer any dispute thereon to a sole expert as provided for in the Contract. So long as any issues are outstanding with respect to an audit, the Contractor shall maintain the relevant documents and permitinspectionthereofuntiltheissueisresolved. 1.8 BymutualagreementbetweentheGovernmentandtheContractor,this AccountingProceduremaybe revised from time to time, in writing, signed by the Parties, stating the date upon which the amendments shallbecomeeffective.
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  • Winter '14
  • Bijay K Behra
  • Government, Petroleum Operations, Contract Area

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