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KUWAIT ENERGY PLC

INDEPENDENT AUDITOR’S REPORT

4

Report on the audit of the financial statements

Opinion

In our opinion the financial statements:

give a true and fair view of the state of the group’s affairs as at 31 December 2017 and of the group’s loss

for the year then ended;

have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as

adopted by the European Union; and

have been properly prepared in accordance the Companies (Jersey) Law 1991.

We have audited the consolidated financial statements of Kuwait Energy plc (the ‘group’) which comprise:

the consolidated income statement;

the consolidated statement of comprehensive income;

the consolidated balance sheet;

the consolidated statement of changes in equity;

the consolidated statement of cash flows; and

the related notes 1 to 34.

The financial reporting framework that has been applied in their preparation is applicable law and IFRSs as adopted by

the European Union.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the

financial statements section of our report.

We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the

financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled

our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our opinion.

Summary of our audit approach

Key audit matters

The key audit matters that we identified in the current year were:

the carrying value of Property, Plant and Equipment (“PP&E”); and

adoption of the going concern basis of accounting.

Materiality

The materiality that we used for the group financial statements was U$$6.3 million (2016:

US$6.8 million) which represents approximately 2.4% of net assets prior to net impairment

of oil and gas assets and approximately 2.9% of revenue.

Scoping

The Group comprises three operational reporting units, Egypt, Iraq and Yemen, alongside

the corporate head office and the Oman JV. All of the components were included in our

assessment of the risks of material misstatement. Full scope audits were performed on all

of the operational business units and the corporate head office and specified audit

procedures were performed on the Oman JV. The materialities applied to components

ranged from US$3.1 million to US$4.4 million.

Significant changes in

our approach

There have been no significant changes in our approach to the audit in 2017.