النسخة العربية متوفرة ايضًا

AnnuAl2012report

in the United Arab Emiratesof Abu DhabiEmirAtEsector in the the water, wastewater and electricity

WerEGULAtE

We enforce relevant laws through the licensing of companies who undertake regulated activities in the sector.

Regulated activities include: generation, transmission, distribution and the sale of electricity; production, transmission, distribution and the sale of water; and collection, treatment and disposal of wastewater. Once a licence is issued, we monitor activities, produce and modify regulations where needed and enforce the conditions of the licences.

We establish and monitor technical performance, safety and customer standards. We also oversee industry restructuring and have the power to approve mergers and acquisitions.

Chairman’s message

2012 timeline

performance highlights

An informed customer Consumer outreach: education and awareness New water and electricity bills Customer satisfaction survey

An efficient sector Water management in non-drinking applications Residential water end-use project Time-of-day trial Solar PV roof top pilot programme

A regulated sector PC5 price control review Drinking water tankering project Licensing and regulatory compliance Defining regulatory roles and responsibilities Wastewater SRA

Sector governance and Board of Directors

licence holders

public record of activities and documents

our consultants

Growth and production charts

Financial statements

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07 07 07 07

09 09 09 09 10

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12 13 13

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Contents

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12 01

This year we launched our Powerwise and Waterwise offices, known as ‘Wafir’ (‘to save’ in Arabic) offices, to promote the wise use of electricity and water. These offices are a key cornerstone in our overall strategy to reduce waste and provide a range of tailored solutions for water and power consumers in the Emirate. To this end, both offices have undertaken a range of ‘live’ projects involving real consumers and studying their consumption and behavioural responses to price signals or a change in tariff structure. Although these projects are only partially complete, the results are extremely encouraging. We are confident that this work will allow us to make better decisions in the future.

Reinforcing the need for our work in the area of conservation, the sector experienced substantial growth between this year and last, with increases in water and electricity demand of close to 10 percent year-on-year. This level of demand growth is extremely high, especially for water, and reflects the expansion of the Abu Dhabi economy in all its various aspects.

Conservation takes on many forms. Achievements in this

field include a joint programme of work between the Bureau, ADWEA, AADC and ADDC, for the introduction of a new water and electricity bill. The primary difference between the new and old bills lies in the information elements that provide, for the first time, information on the size of subsidy a customer receives, plus other information relating to ideal consumption bands.

The launch of the new bills, through a range of media channels, was followed by independent customer surveys that found a high degree of satisfaction with the layout and information the bills contained.

As an entity, we continued to promote the use of green energy and established a new licence for customer-side green electricity production such as the use of photovoltaic panels. We anticipate substantial growth in green energy over the next few years, in line with the Abu Dhabi Government’s desire to promote such technologies.

Overall, 2012 was an extremely busy year, which you will discover in reading our 2012 annual report.

Mohammed Ahmed Al Bowardi

‘We anticipate substantial growth in green energy over the next few years in line with the Abu Dhabi Government’s desire to promote such technologies.’

message from our

Chairman

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12 03

JAnUAryCodes of practice for low-risk trade effluent discharges

We launch two codes of practice for managing low-risk trade effluent discharges from restaurants and laundries.

new wastewater treatment plant

Al Saad plant in Al Ain, the first independent sewage treatment plant in the Emirate, is inaugurated.

mArCHnew water and electricity bills

AADC and ADDC customers start receiving separate new-look bills for water and electricity.

APriLPC5 first consultation paper

We begin consulting on price controls that will apply to network companies from January 2014.

2012Timeline

DECEmbEr below-ground drinking water storage tanks

From 1 December 2012, no customer drinking water storage tanks connected to the distribution network shall be built below ground level for low-rise residential properties.

JULy Water Quality regulations consultation We issue a consultation paper on proposed amendments to the Water Quality Regulations 2009.

JUnEA new type of licence

We issue our first self-regulating licence to Abu Dhabi Judicial Department, for the generation of electricity from their roof-mounted photovoltaic panels.

time-of-day trial

Our time-of-day trial commences, with the recruitment of 400 volunteers, to assess the impact of introducing peak and off-peak electricity pricing.

‘...we continued to promote the use of green energy and established a new licence for customer-side green electricity production.’

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12 05

2012 AnnUAL ProDUCtion

SyStEm DEmAnD

inStALLED CAPACity

ELECtriCity

62,165 GWh

ELECtriCity (HoUrLy PEAk)

10,618 MW

This includes exports of 2,094 MW at the time of the peak. Hourly peak for the Emirate of Abu Dhabi: 8,524 mW, +8.6%

This includes Northern Emirates demand

average received at wastewater treatment plants; treatment equivalent annual total of 286,151,701 m³

ELECtriCity

13,842 MW

WAtEr (PotAbLE)

1,151,001 Ml(253,190 MIG)

WAtEr SUPPLy (trAnSmiSSion PEAk)

3,305 MlD(727 MIGD)

WAStEWAtEr

784,000 m³/d

WAtEr (PotAbLE)

4,180 MlD(916 MIGD)

+9.8% (includes exports)

+8.91% (6 August 2012)

+9.35%

+9.5%

(19 october 2012)

+14.75%

perForMAnCehighLighTS

WAtEr QUALity

totAL tEStS

195,239 For 77 pArAMeterS

+1.86%

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SECtor tUrnovEr

CUStomErS

AeD 10.3 billion

ELECtriCity

ELECtriCity

WAtEr

WAtEr

WAStEWAtEr

WAStEWAtEr

AeD 9.1 billion

AeD 2.1 billion

432,127 (+7%)

317,391 (+8%)

320,000 (estimated)

AvErAGE Unit CoStS

ELECtriCity

26.90 fils/kWh

WAtEr

10.32 AeD per unit(unit = 1,000 litres or 1 m3)

Note: the percentage increases are compared with the previous year, based on audited sector companies’ figures

MW = megawatt; GWh = gigawatt hour MIG = million imperial gallons; MIGD = million imperial gallons per day ML = million litres; MLD = million litres per day; m3/d = cubic metre per day

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12 07

customerAn informed

new water and electricity bills

In March 2012, water and electricity customers in the Emirate began receiving new-look bills. The new design was the result of 18 months of collaboration with the Al Ain and Abu Dhabi distribution companies and their owner ADWEA. The aim was not only to enhance the bill format, but also to provide additional information about consumption and the true value of the resources consumed.

The first major change related to the distribution of separate bills for water and electricity under a single, unique account number. As well as displaying clearer data concerning each utility service, new information on government subsidies was also included.

Raising awareness about the cost of supplying water and electricity helps customers to understand their true value (or ‘actual cost’) and encourages responsible consumption.

Residential bills now also include consumption bands to help customers gauge their water and electricity use against an ideal average. These bands are based on annual averages for each property type (villas and flats).

Customers now have the means to monitor and adjust their electricity and water use, in order to remain within an ideal range. The new bills empower customers to make long-term behavioural changes that is essential to a sustainable water and electricity sector.

A major awareness campaign accompanied the launch of the new bills.

Consumer outreach: education and awarenessAhead of a public launch in January 2013, Waterwise and Powerwise began to implement an education and awareness strategy through the use of their websites. This was primarily targeted towards Abu Dhabi residents, offering practical information and used videos and interactive elements which advise consumers on how best to save water and electricity.

Both websites explain the rationale for conservation and highlight key initiatives that aim to build a comprehensive knowledge base, to support energy efficiency strategies, throughout the Emirate.

‘residential bills now also include consumption bands to help customers gauge their water and electricity use against an ideal average.’

10508

Customer supportcontact centre

800 2332

via email

by post PO Box 219, Abu Dhabi

visit our website

SMS2800

NICOLAS STEPHEN CARTERAD 32800 Abu Dhabi UAE

Supply Address: SB17 PLOT 42 VILLA 739 Landlord: TDIC

Meter Details

Meter NumberE5T09D018327

Meter Reading78215.00

Total units13,082.000000

Date of meter reading27/08/2013

Days of use35

Customer details

Customer ID7665577089

Account number0567040926

ResidentialBill number

05670403433601Bill date

27/08/2013Please pay by

08/09/2013Premises

ID 5926107199Type Villa

Welcome to your new

bill is now easier thanever

Your electricity bill

AED Account activity

Balance from last bill

Payments received since last bill

Consumption charges

7000 units at 15.0 fils/unit

6082 units at 15.0 fils/unit

Total

Actual cost at 32.8 fils/unit

Subsidy

Charged to customer

0.00 Other charges0.00 Adjustments/Corrections

Total to pay

.................................................................................................................................................................................................................................

Your payment slipNICOLAS STEPHEN CARTERAD 32800 Abu Dhabi UAE

Bill number Account number Bill date Total to pay

05670403433601 0567040926 27/08/2013

Please pay by08/09/2013

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12 08

Customer satisfaction surveyIn keeping with our mission to better serve the interests of sector customers, and following on from a previous survey in 2009, we commissioned a second, ‘Wave 2’ customer survey in 2012.

The aim of the Wave 2 survey was to provide further insight into customers’ levels of expectation, awareness and satisfaction in relation to the services they receive from AADC, ADDC and ADSSC in Al Ain, Abu Dhabi and the Western Region.

This survey also allowed for comparison with the results of the Wave 1 survey (Al Ain and Abu Dhabi).

Results indicated that public awareness of the range of customer services provided in Abu Dhabi and Al Ain by ADDC and AADC showed a positive increase compared to the Wave 1 survey data.

The services customers in both regions identified as being most familiar with were:• new water and electricity connections; • 24-hour access to the Customer Contact

Centre and emergency services; and• online bill payments and information on

consumption history via the “e-services” website.

There were positive increases in customer satisfaction with the services provided by ADDC and AADC, compared to the Wave 1 survey results. While the responses regarding the provision of sewerage services by ADSSC remained similar to those for the first survey, they varied depending on the category of customer (residential, commercial or industrial), and by geographic location.

In summary, the results of the Wave 2 survey were positive, and reflect the ongoing efforts of the distribution companies and ADSSC to improve customer satisfaction and raise awareness of the services they provide.

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sectorAn efficient

Water management in non-drinking applications

A significant percentage of the Emirate’s overall water use lies in non-drinking applications such as irrigation and district cooling. In 2012, we commissioned a project to study the feasibility of achieving greater sustainability in non-drinking water management, by bringing it under the control of a single entity.

To this end, we appointed an external partner to complete a legal review of suitable management models, including the formation of a new sector entity. The project proposed a set of potential executive regulations for such a body, and these documents were presented to the sector for consultation.

Workshops were convened to discuss the project’s findings and proposals with all relevant stakeholders including the Environment Agency – Abu Dhabi (EAD), the Department of Municipal Affairs, Al Ain, Abu Dhabi and Western Region Municipalities, ADWEA, ADDC, AADC, TRANSCO, ADSSC and the Abu Dhabi Food Control Authority.

The project confirmed the need for improved management of Abu Dhabi’s total water landscape and heralded the introduction of our, ‘three taps’ policy to cover desalinated, ground and recycled water.

This is the first step in promoting a fully-integrated approach to water resource optimization in the region.

residential water end-use project

Understanding when, where, and how water is used in a household can provide vital information for the development of effective water demand management strategies. Detailed knowledge of the quantities of water used for different household applications provides information that is not available from traditional long-term average consumption patterns.

The Residential End-Use of Water Project, under the control of Waterwise, aims to collect and analyse water end-use data in unprecedented detail. The Project involves the survey and metering of 200 villas in Abu Dhabi to investigate the complex drivers of residential water use in the Emirate.

The information collected will inform decisions and strategies for future demand management, system planning and conservation programmes in Abu Dhabi.

A small-scale pilot study of five villas was conducted between September and December 2012. This allowed the Bureau to test each component of the project in the Abu Dhabi context, review potential areas of concern and minimise inconvenience to participants when the full-scale project commences in 2013.

time-of-day trial

The sustained population and economic growth in Abu Dhabi Emirate has placed increased pressure on all resources, but particularly on electricity and water.

‘A significant percentage of the emirate’s overall water use is in non-drinking applications.’

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Electricity demand traditionally peaks between early afternoon and early evening. Meeting this period of daily peak demand is expensive and wasteful – particularly in the summer with the extensive use of air conditioning – because high-capacity transmission is only fully utilised at limited, specific times. In 2012, we launched a pilot project for time-of-day electricity pricing to assess whether pricing signals could help shift demand from peak to off-peak periods. We recruited 400 volunteer households to take part in the scheme. This involved the installation of new meters and special display units to provide real-time information to customers about their electricity consumption.

Under the scheme, peak usage (2:00–8:00pm) is priced at double the standard rate, while off-peak prices are 40 percent cheaper. Although these customers are not charged differently, this allows us to assess whether, theoretically, having a cheaper option can have an impact on consumption. Customers who have managed to reduce and shift their consumption to off-peak periods will receive a rebate equivalent to the amount saved at the end of the trial. To help them gauge and adjust their consumption, these volunteers have an in-house electricity consumption display, receive personalised electricity-usage reports and can access a web portal that provides information about their consumption and the savings achieved. Through both education (in the form of energy saving tips) and pricing (represented by the rebate), the trial seeks to encourage more responsible electricity usage.

Solar pV rooftop pilot programme

A cross-sector working group involving ADWEA, Masdar and the Bureau, has undertaken an exercise

to review and monitor the “in-service” performance of approximately 2.3 MW of installed rooftop solar photovoltaic (PV) capacity across 11 sites in Abu Dhabi. The exercise provided the group with a greater understanding of important factors, including operational performance, actual generation output, and operation and maintenance costs.

Based on the results of the exercise, the working group has produced a document containing general guidelines for the installation of solar PV systems and finalised the technical requirements for solar PV systems in the Electricity Wiring Regulations. Having a firm understanding of these issues will enable the implementation of a broader roll-out strategy for solar PV and would provide a sound basis to structure feed-in tariffs in the future.

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sectorA regulated

pC5 price control review

During 2012, the Bureau began a review of the price controls for each of the four network companies (AADC, ADDC, ADSSC and TRANSCO), issuing a consultation paper in April 2012, followed by a second in October.

Price controls set a cap on the revenues these companies can recover in each year of the specified period. As customer tariffs are subsidised, price controls also help to determine the subsidies provided by the Government to the sector.

The price controls are designed to maintain efficient operating and capital costs for companies whilst encouraging them to reduce these costs and improve their performance, output and quality of service.

The current price controls expire at the end of 2013. A new set of controls – Price Control Five (PC5) – will commence on 1 January 2014, and shall apply for a period of between four and five years.

Drinking water tankering project

During 2012, we studied the potential for enhancing regulations regarding water tanker management in the Emirate,

which covers a fleet of some 6,000 drinking water tankers currently in operation.

The main objective is to better serve consumers by making sure the supply of potable water via tankers to areas not served by the water distribution network is to the same standards as those provided via a piped network.

To assess the effect of an enhanced regulatory framework, we launched a Drinking Water Tankering Management Project, and appointed KEO International Consultants to undertake a regulatory impact assessment and develop a framework for drinking water tankering management in the Emirate.

The assessment studied three regulatory options: enhancing the enforcement of existing regulations; undertaking a major revision of current water supply regulations; and the release of new Tankered Drinking Water Supply Regulations.

To mitigate the risks and maximise the benefits of introducing new regulations, the report recommends two different paths for the implementation and monitoring of the proposed improvements.

‘price controls set a cap on the revenues these companies can recover.’

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The Project reports were presented to the sector along with an implementation roadmap for a safer and more efficient means of delivering tankered drinking water to customers in the Emirate. This work will continue during 2013.

licensing and regulatory compliance

As new projects develop across the Emirate and existing projects are completed, operational licences to engage in regulated activities are constantly being issued, modified or revoked.

In 2012, oversight of existing licence holders has included the review of various information submissions and the provision of direct technical support to licensees who have faced difficulty in generating information or complying with the conditions of their licences.

Additionally, the Bureau has issued consents to various licence holders to expand the scope of their authorised activities, as well as derogations from specific obligations that have proved impractical to enforce. This is to promote the overall efficiency, growth and development of the sector.

These activities form part of the ongoing supervision of the sector and remain a focus of the Bureau’s Legal Services department.

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Defining regulatory roles and responsibilities

The Bureau commissioned a project on behalf of the Wastewater Regulations Review Panel to study the key regulatory frameworks that apply to the Emirate’s wastewater sector operators. This involved working with operators and other Panel members including EAD, the Center of Waste Management, the Abu Dhabi Environment, Health and Safety Center and Abu Dhabi Municipality.

The study was used to assess interaction between government agencies and to determine the effectiveness and efficiency of these frameworks. To facilitate the review, a glossary of wastewater terms and definitions was developed to make sure consistent language is used by regulators involved in the sector.

The project confirmed that, while the objectives of the various frameworks were aligned, there were a number of overlaps and gaps in terms of their requirements and scope. Action is to be taken to improve regulatory efficiency and effectiveness that will require close coordination between the relevant agencies.

Wastewater SrA

In 2011, the Abu Dhabi Environment, Health and Safety Center nominated the Bureau as the Sector Regulatory Authority (SRA) for Wastewater under the Abu Dhabi Environmental, Health & Safety Management System (EHSMS) framework.

The EHSMS aims to safeguard long-term success in identifying, meeting and exceeding the Emirate’s EHS objectives and goals, outlining the structure to be adopted and the requirements to be met by entities nominated to develop EHS systems.

Following its appointment, the Bureau has developed wastewater sector EHSMS requirements – which were accepted by the Abu Dhabi Environment, Health and Safety Center in June 2012. We are in the process of approving the EHS systems of nominated entities such as ADSSC, as well as nominating and supporting new entities to develop their own systems.

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Board of DirectorsSector governance and

Governing sector law

The governing law for the water, wastewater and electricity sector is Law No (2) of 1998 Concerning the Regulation of the Water and Electricity Sector in the Emirate of Abu Dhabi, as amended. Among other things, this law established the Bureau and sets outs its powers and duties. There have been no amendments to Law No (2) during 2012.

ADSSC establishing law

Law No (17) of 2005 Concerning the establishment of the Abu Dhabi Sewerage Services Company (ADSSC), as amended, is also an important sector law. It established ADSSC and enables ADSSC to connect other sewerage services providers that are licensed by the Bureau to ADSSC’s network. There have been no amendments to Law No (17) during 2012.

regulations

Under Law No (2), the Bureau has the power to establish regulations for a number of purposes, such as to protect the public from danger related to water, electricity or wastewater installations.

board of Directorsthe Bureau’s Board of Directors was appointed by His Highness Sheikh Mohammed Bin Zayed Al nahyan on April 9, 2008, consisting of:

• H.E. mohammed Ahmed Al bowardi

• H.E. Hamad Al Hurr Al Suwaidi

• H.E. mohammed Abdullah bin Sahoo Al Suwaidi

• H.E. Falah mohammed Al Ahbabi

• mr ibrahim mubaydeen

We grant licences to ‘Persons’ (undertakings, companies, organisations) to carry out certain activities. Collectively, these Persons are known as licence holders.

licences confer rights and obligations on licence holders, so they can undertake regulated activities. our primary annual funding is derived from licence holders via the application of fees.

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Generation and desalination1

Al Mirfa power Company (AMpC)

operates three power stations at Al Mirfa, Madinat Zayed and Al Ain with a total licensed capacity of 636 MW. Water production of up to 38.7 MGD is at the Al Mirfa station only.

Arabian power Company (ApC)

is licensed to generate 2,200 MW and produce 160 MGD of water at its Umm Al Nar plant.

emirates CMS power Company (eCpC) (t2)

with licensed capacities of 763 MW and 50 MGD of water at Taweelah.

emirates Sembcorp Water and power Company (Sembcorp) (F1)

licensed to produce 861 MW and 100 MGD of water at its plant located at Qidfa in Fujairah, one of the Northern Emirates of the UAE.

Fujairah Asia power Company (FApCo) (F2)

is situated at the Qidfa complex in Fujairah and licensed to produce 2,000 MW and 130 MGD of water, of which 30 MGD is produced via reverse osmosis.

Gulf total tractebel power Company (GttpC) (t1)

with licensed capacities of 1,600 MW and 84.8 MGD of water at Taweelah.

ruwais power Company (rpC) (S2)

with licensed capacities of 1,511 MW and 100 MGD of water at Shuweihat in the Western Region.

Shuweihat Asia power Company (SApCo) (S3)

with a licensed capacity of 1,600 MW at Shuweihat - currently under construction.

Shuweihat CMS International power Company (SCIpCo) (S1)

with licensed capacities of 1,500 MW and 100 MGD of water at Shuweihat.

taweelah Asia power Company (tApCo) (t3)

with licensed capacities of 2,000 MW and 160 MGD of water at Taweelah.

tourism Development and Investment Company pJSC (tDIC)

has a licence to extract and desalinate seawater for non-potable (2.2 MGD) and potable water (0.88 MGD) purposes on Saadiyat Island.

umm Al nar power Company (uAnpC)

owns Baniyas power station with a licensed capacity of 120 MW, currently not in production.

1 Unless otherwise stated, potable water is produced by thermal desalination

holdersLicence

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Generation - renewable energyAbu Dhabi Future energy Company (ADFeC or Masdar)

is licensed to produce up to 40 MW of electricity by Embedded Generation Unit(s) using wind turbines located in the Western Region. ADFEC’s first wind turbine, on Sir Bani Yas Island, has a capacity of 850 kW.

It is also licensed to produce up to 50 MW of electricity from solar power generation in the Emirate of Abu Dhabi.

Shams power Company pJSC is licensed to generate electricity by the use of a solar thermal plant up to 110 MW at a site south of Madinat Zayed in the Western Region.

Self-regulatingAbu Dhabi Judicial Department

is licensed to generate power using solar photovoltaic panels mounted on the roof-top of its courthouses on Al Khaleej Al Arabi Street, Abu Dhabi.

The Zoo and Aquarium Public Institution

is licensed to generate power using solar PV panels mounted on the roof-top of the Sheikh Zayed Desert Learning Centre at the Al Ain Wildlife Park & Resort.

Self-supplyemirates Aluminium Company limited pJSC (eMAl)

has a self-supply licence for desalination of water and generation of electricity at the EMAL Aluminium Smelter Development in Taweelah. Electricity generation in excess of self-supply requirements may be offered for sale to ADWEC, the sector’s single buyer.

transmissionAbu Dhabi transmission and Despatch Company (trAnSCo)

is responsible for all transmission voltages at 400, 220 and 132 kV including despatch of generation and production units, water balancing and the bulk movement of water throughout the Emirate.

Distribution and supplyAbu Dhabi Distribution Company (ADDC)

distributes and supplies water to approximately 242,000 customers and electricity to around 304,000 customers in the central and western regions of the Emirate of Abu Dhabi.

Al Ain Distribution Company (AADC)

distributes and supplies water to approximately 76,000 customers and electricity to around 129,000 customers in the eastern region of the Emirate of Abu Dhabi.

multi-licensedAbu Dhabi Company for Servicing remote Areas (rASCo)

is licensed to generate, desalinate, transmit, distribute and sell electricity and water in remote areas, not connected to either of the distribution networks.

holders (continued....)

Licence

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ProcurementAbu Dhabi Water and electricity Company (ADWeC)

is the single buyer of water and electricity output and capacity from producers under various Power and Water Purchase Agreements and charges the distribution companies for water and electricity, under a Bulk Supply Tariff.

Wastewater - major Abu Dhabi Sewerage Services Company (ADSSC)

is responsible for the collection, treatment and disposal of wastewater throughout the Emirate of Abu Dhabi.

Al etihad Biwater Waste Water Company, (W1)

is licensed to treat wastewater at Al Wathba-Abu Dhabi (up to 345,000 m3/d) and at Al Saad-Al Ain (up to 92,000 m3/d).

Al Wathba Veolia Besix Waste Water Company, (W2)

is licensed to treat wastewater at Al Wathba-Abu Dhabi (up to 300,000 m3/d) and at Alhamah-Al Ain (up to 130,000 m3/d).

Higher Corporation for Specialized Economic Zones (ZonesCorp)

is licensed to collect, treat and dispose of up to 40,000 m3/d of wastewater at the Industrial City - Abu Dhabi (ICAD).

Wastewater - small scaleAbu Dhabi Future energy Company (ADFeC)

is licensed to collect, treat and dispose of 1,500 m3/d of wastewater at the Masdar City Development.

Al tamouh Investments Company llC

is licensed to collect, treat and dispose of 50 m3/d of wastewater at its White Water Rafting Centre at Jebel Hafeet, Al Ain.

Dhafra Beach Hotel is licensed to collect, treat and dispose of 400 m3/d of wastewater generated at the Dhafra Beach Hotel and Danat Jebel Al Dhanna Hotel in Jebel Al Dhanna in the Western Region.

emirates Aluminium Company limited pJSC (eMAl)

is licensed to collect, treat and dispose of 700 m3/d of wastewater at the EMAL aluminium smelter site in Taweelah.

Hyundai engineering and Construction ltd

is licensed to collect, treat and dispose of 1,000 m3/d of wastewater at its labour camp in the Khalifa Port Industrial Zone (KPIZ).

Hyundai engineering and Construction ltd

is licensed to collect, treat and dispose of 1,960 m3/d of wastewater at the Braka Nuclear Power Plant.

Manazel real estate pJSC is licensed to collect, treat and dispose of 1,000 m3/d of wastewater on the Al Reef Villas Development in Shahama.

Samsung Corporation is licensed to collect, treat and dispose of 500 m3/d of wastewater at two labour camps serving the construction of the S2 power plant in Ruwais.

Sorouh real estate Company pJSC

is licensed to collect, treat and dispose of 2,120 m3/d of wastewater on Reem Island.

tourism Development and Investment Company pJSC (tDIC)

is licensed to collect, treat and dispose of 620 m3/d of wastewater at its Qasr Al Sarab desert resort near Hameem in the Western Region.

In law we have a duty to maintain a public register. this section lists documents which are part of our public register.

For the purpose of satisfying the law we maintain our public register using our website, where all public register documents are available for free view and download.

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Licensing

new licences

Al naboodah national Contracting Group LLCSewerage, Wastewater Treatment and Disposal Licence

6 May 2012 ED/L07/013

Abu Dhabi Judicial DepartmentSelf-Regulating generation Licence

26 Jun 2012 ED/L09/001

Zoo and Aquarium Public institution in Al AinSelf- Regulating generation Licence

1 Aug 2012 ED/L09/002

Dhafra beach HotelSewerage, Wastewater Treatment and Disposal Licence

1 Jul 2012 ED/L07/014

ModificationsModifications to a licence are made subject to agreement by the appropriate licence holder.

Abu Dhabi Future Energy Company (ADFEC)incorporation of additional Solar generation installations

1 Jan 2012 ED/L08/001

Exemptions Exemptions are issued by the Bureau to allow the undertaking of particular regulated activities without the issuance of a licence.

Electricity and Water (Licence Exemption) order no. 1 of 2012 16 Dec 2012 ED/L04/100

Electricity and Water (Licence Exemption) order no. 2 of 2012 16 Dec 2012 ED/L04/101

Derogations Derogations are issued by the Bureau to a licensed operator for a period and on terms specified in the derogation, from the performance of particular licence conditions.

Abu Dhabi Distribution Company (ADDC)Maximum Allowed Revenues for 2012 for the Supply Business

15 Jan 2012 ED/L06/020

Al Ain Distribution Company (AADC)Maximum Allowed Revenues for 2012 for the Supply Business

15 Jan 2012 ED/L06/021

Abu Dhabi Water and Electricity Company (ADWEC)Maximum Allowed Revenues for 2012 for the Procurement Business

15 Jan 2012 ED/L06/022

Abu Dhabi transmission and Despatch Company (trAnSCo)Maximum Allowed Revenues for 2012 for the Transmission Business

15 Jan 2012 ED/L06/023

Abu Dhabi Sewerage Services Company (ADSSC) Maximum Allowed Revenues for 2012 for the Sewerage Services Business

15 Jan 2012 ED/L06/024

activities and documents

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Abu Dhabi transmission and Despatch Company (trAnSCo)Maximum Allowed Revenues for 2011, 2012 and 2013 for the Transmission Business

29 Jan 2012 ED/L06/025

Abu Dhabi Sewerage Services Company (ADSSC) Maximum Allowed Revenues for 2011, 2012 and 2013 for the Sewerage Services Business

29 Jan 2012 ED/L06/026

Abu Dhabi Distribution Company (ADDC)Maximum Allowed Revenues for Electricity for 2010-2013

10 Apr 2012 ED/L06/027

Abu Dhabi Distribution Company (ADDC) Maximum Allowed Revenues for Electricity and Water for 2011

15 Apr 2012 ED/L06/028

Abu Dhabi transmission and Despatch Company (trAnSCo)Maximum Allowed Revenues for 2010 for the Transmission Business

16 Apr 2012 ED/L06/029

Abu Dhabi transmission and Despatch Company (trAnSCo)Maximum Allowed Revenues for 2011 for the Transmission Business

16 Apr 2012 ED/L06/030

Shuweihat Asia Power Company (SAPCo)Specific Electricity Transmission Code Conditions

10 Nov 2012 ED/L06/100

revocations

Aldar Properties PJSC Licence revoked as no longer engaged in the licensed activities

16 Sep 2012 ED/L05/004

Consents Consents confer rights and obligations on licence holders. Revisions or renewal of consents are listed for the sake of completeness.

Al mirfa Power Company (AmPC) Relaxation of TDS (Extension)

1 Jan 2012 ED/L03/045

Arabian Power Company (APC)Relaxation of TDS (Extension)

1 Jan 2012 ED/L03/046

Gulf total tractebel Power Company (GttPC)Relaxation of TDS (Extension)

1 Jan 2012 ED/L03/047

Shuweihat CmS international Power Company (SCiPCo)Relaxation of TDS (Extension)

1 Jan 2012 ED/L03/048

taweelah Asia Power Company (tAPCo)Relaxation of TDS (Extension)

1 Jan 2012 ED/L03/049

Abu Dhabi transmission and Despatch Company (trAnSCo)Relaxation of TDS (Extension)

1 Jan 2012 ED/L03/050

Emirates CmS Power Company (ECPC)Relaxation of TDS (Extension)

1 Jan 2012 ED/L03/051

Al Ain Distribution Company (AADC)Relaxation of TDS (Extension)

1 Jan 2012 ED/L03/052

activities and documents (continued....)

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Abu Dhabi Distribution Company (ADDC) Relaxation of TDS (Extension)

1 Jan 2012 ED/L03/053

Al Ain Distribution Company (AADC)Provision of Analytical Laboratory Services

26 Jun 2012 ED/L03/28Rev1

Shuweihat CmS international Power Company (SCiPCo)Supply and Sale of Distillate Water

15 Jul 2012 ED/L03/071

Abu Dhabi Company for Servicing remote Areas (rASCo)Supply and Sale of Brackish Water

23 Oct 2012 ED/L03/072

Consultation papers Consultation papers are designed to seek views from stakeholders and other interested parties on matters which may have a significant effect on licence holders or customers.

2013 Price Controls review (First Consultation) CR/E02/040

2013 Price Controls review (Second Consultation) CR/E02/041

Wastewater Flow metering Code Consultation CR/T06/008

Water Quality regulations revision 4 Consultation CD/R01/019

Publications

Code of Practice for low-risk Trade Effluent discharges from laundry services ED/R01/001

Code of Practice for low-risk Trade Effluent discharges from restaurants and cafes ED/R01/002

Annual report for 2011 – English ER/P02/023

Annual report for 2011 – Arabic ER/P02/023

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Given an ever increasing workload, we employed local and international consultants to undertake a range of work streams under our supervision.

the following consultants were employed in 2012.

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consultantsour

Alpha Data LLC – relocated the Bureau’s IT/AV system as part of the office move to Al Maryah Island and provided IT support

Al tamimi & Co – developed legal framework for management of water in non-drinking applications

british Power international – carried out an asset risk management review of the electricity network activities of AADC, ADDC and TRANSCO

bUt – developed digital applications to be showcased at the International Water Summit 2013

Data and Process Advantage Limited – carried out a Wastewater Licensing Review with the view to re-engineering and implementing a streamlined process for licensing small-scale wastewater licensees

Deloitte and touche middle East (DtmE) – carried out operating expenditures review (AADC and ADDC) and developed future operating expenditure projections (AADC, ADDC, ADSSC and TRANSCO) as well as regulatory accounting guidelines for separate business accounts of the five price controlled companies

Dornier Consulting – carried out a small-scale pilot phase for our Residential Water End-Use project

EC Harris international Ltd – Asset Valuation and Capex efficiency reviews

Flip media LLC – designed and built websites for Waterwise (www.waterwise.gov.ae) and Powerwise (www.powerwise.gov.ae)

French vision Advertising and marketing – provided creative design and support for all Bureau publications

GHD Global Pty Ltd – provided regulatory compliance support and developed a flow meter code of practice for the wastewater sector

GiStec – supplied a geospacial information system and training for wastewater data analysis

Halcrow – assessed the economic price of electricity for Noor 1 PV Plant

impact Porter novelli – provided public relations support, particularly for the launch of the new water and electricity bills

kEmA middle East FZE – carried out PC3 and PC4 capital expenditure review (electricity) and developed projections for PC5 – assessed selected IWPP’s asset management process review

kEo international Consultants – carried out an investigation of the scope and size of the wastewater tankering market and developed a framework for drinking water tankering management

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kPmG (under kEo) – proposed a cost-reflective tariff for tankers

Lloyd’s register EmEA – assisted the Bureau with the day-to-day HSE activities to include the preparation and implementation of the internal Environment, Health & Safety Management System (EHSMS) as well as Codes of Practice related to Electrical Safety for the Emirate

mott macDonald – provided technical support for our demand side management project involving five buildings in Abu Dhabi

nErA – provided economic advice on calculating cost-reflective tariffs

oP3 – designed and built the Bureau’s stand for the International Water Summit 2013

Prose Solutions – provided a range of inputs into a variety of Bureau publications

reed Smith – provided advice on a range of legal matters

Snr Denton – provided advice on a range of legal matters

SWAt – recruited 400 volunteer households to participate in our time-of-day pricing trial

tEXPo LLC – continued work on the deployment, roll-out and training of an office-wide intranet portal and business process platform

trAnE bvbA – installed additional chiller controls for our demand side management project involving five buildings in Abu Dhabi

Utiligence Ltd – partners in our time-of-day trial

WS Atkins and Partners overseas – carried out PC3 and PC4 capital expenditure review (water and wastewater) and developed projections for PC5

youGov – carried out various online and face-to-face surveys with customers

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eleCtrICIty demand growth (MW)

eleCtrICIty generation (gWh)

potABle WAterproduction (Mig)

WAter demand growth (MigD)

chartsGrowth and production

Exports to Northern Emirates

Peak demand

Available capacity

2,000

0

4,000

6,000

8,000

10,000

12,000

14,000

20

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20112012

2,000

0

4,000

6,000

8,000

10,000

12,000

AM

pC

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Co

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Co

20112012

10,000

0

20,000

30,000

40,000

50,000

60,000

AM

pC

Ap

C

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pC

FAp

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Gt

tp

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C

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IpC

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MB

Co

rp

tAp

Co

100

0

200

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1,000

20

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20

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MW – megawattGWh – giggawatt hour

MIG – million imperial gallons MIGD – million imperial gallons per day

Peak demand

Available capacity

‘An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.’

Ernst &Young

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regulation & Supervision bureau

independent auditors’ report to the board members of

We have audited the accompanying financial statements of Regulation and Supervision Bureau (“the Bureau”), which comprise the statement of financial position as at 31 December 2012 and the statement of financial performance and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Public Sector Accounting Standards and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgement, including

the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Bureau as of 31 December 2012 and the results of its financial performance and its cash flows for the year then ended in accordance with International Public Sector Accounting Standards.

Signed by

richard MitchellPartnerErnst & YoungRegistration No. 446

1 August 2013, Abu Dhabi

‘Management is responsible for the preparation and fair presentation of these financial statements.’

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As at 31 December 2012

Statement of financial position

Non-current assetsFurniture and equipment Intangible assetsExpenses pending recharge to licenseesAdvances to employees

Current assetsExpenses pending recharge to licenseesPrepayments and other receivablesBank balances and cash

TOTAL ASSETS

Non-current liabilityAdvances due to licenseesEmployees’ end of service benefits

Current liabilitiesAccounts payable and accruals

TOTAL LIABILITIES

ASSetS notes

lIABIlItIeS

-11,014,177

11,014,177

52,089,791

63,103,968

17,494,2622,006,374

- 527,796

20,028,432

4,220,62629,598,59516,170,543

49,989,764

70,018,196

7,801,381 14,026,120

21,827,501

48,190,695

70,018,196

2012 AED

345

567

59

8

Mohammed Al BawardiCHAIRMAN

Nick CarterDIRECTOR GENERAL

The attached notes 1 to 15 form part of these financial statements.

15,137,407529,369

4,220,6261,311,968

21,199,370

5,074,81821,243,99515,585,785

41,904,598

63,103,968

2011 AeD

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year ended 31 December 2012

Statement of financial performance

The attached notes 1 to 15 form part of these financial statements.

Licence feesOther incomeInterest income

Salaries and staff related costsDepreciationAmortisationRent expensePublicityRecruitmentProfessional feeOthers

reVenue

eXpenSeS

89,788,533493,803

177,620

90,459,956

62,529,2395,053,943

403,9827,316,1941,112,1081,287,8585,783,4166,973,216

90,459,956

11

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notes 2012 AED

2011 AeD

69,610,220188,595174,770

69,973,585

53,340,3475,062,034

121,2621,630,265800,502

1,026,5711,668,1436,324,461

69,973,585

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Adjustments for:Provision for employees’ end of service benefitsInterest incomeLoss on disposal of furniture and equipmentDepreciationAmortisation

Working capital adjustments:Prepayments and other receivablesAccounts payable and accrualsExpenses pending recharge to licenseesAdvances due to licenseesAdvances to employees

Cash from operationsEmployees’ end of service benefits paid

Net cash from operating activities

Purchase of furniture and equipment Purchase of intangible assetsProceeds from disposal of furniture and equipmentInterest received

Net cash used in investing activities

NET INCREASE IN CASH AND CASH EQUIVALENTS

Cash and cash equivalents at 1 January

CASH AND CASH EQUIVALENTS AT 31 DECEMBER

operAtInG ACtIVItIeS

InVeStInG ACtIVItIeS

3,425,645(177,620)682,032

5,053,943 403,982

9,387,982

(8,354,601)(3,899,096)5,074,8197,801,381

784,172

10,794,657 (413,702)

10,380,955

3,096,999(174,770)

5,3215,062,034

121,262

8,110,846

(8,296,689)24,363,240(4,220,626)(1,754,765)(1,046,132)

17,155,875-

17,155,875

(9,123,972)(864,381)

14,536177,620

(9,796,197)

584,758

15,585,785

16,170,543

9

34

9

34

7

Statement of cash flows

The attached notes 1 to 15 form part of these financial statements.

notes 2012 AED

2011 AeD

(13,224,069)(498,500)

40,500174,770

(13,507,299)

3,648,576

11,937,209

15,585,785

year ended 31 December 2012

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31 December 2012

Notes to the financial statements

1. ActivitiesRegulation and Supervision Bureau (“the Bureau”) was established under Law no. (2) of 1998 to regulate the water and electricity sector in the Emirate of Abu Dhabi.

The Bureau is funded by the payment of licence fees by those entities awarded licences and is a not for profit organisation.

The Bureau’s registered office is at PO Box 32800, Abu Dhabi, United Arab Emirates.

The financial statements of the Bureau for the year ended 31 December 2012 were authorised for issue by the management on 1 August 2013.

2.1 Basis of preparationThe financial statements have been prepared in accordance with International Public Sector Accounting Standards (IPSAS) issued by the International Public Sector Accounting Standards Board (IPSASB).

Where an International Public Sector Accounting standard does not address a particular issue, the appropriate IFRS/ IAS has been applied.

The financial statements have been prepared on the historical cost basis. The financial statements have been presented in UAE Dirhams (AED), which is the functional currency of the Bureau.

2.2 Changes in accounting policies and disclosuresThe accounting policies adopted are consistent with those of the previous financial year.

2.3 Significant accounting judgement, estimates and assumptionsThe preparation of the Bureau’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities,

and the disclosures of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future periods.

Estimation uncertaintyThe key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

Useful lives of furniture and equipmentThe Bureau’s management determines the estimated useful lives of furniture and equipment for calculating depreciation. This estimate is determined after considering the expected usage of the asset or physical wear and tear. Management reviews the residual value and useful lives annually and the future depreciation charge would be adjusted where management believes that the useful lives differ from previous estimates.

useful lives of intangible assetsThe Bureau’s management determines the estimated useful lives of intangible assets for calculating amortisation. This estimate is determined after considering the expected usage of the asset. Future amortisation charge would be adjusted where management believes that the useful lives differ from previous estimates.

2.4 Summary of significant accounting policies

Licence fees revenueLicence fees funding from the licensees in respect of the current year is accounted for in the statement of financial performance based on the amount of the funding received from the licensees during the year. Any funding received in excess of the expenditure incurred by the Bureau, is refunded back to licensees in every two years. Short funding is recovered from licensees in every two years.

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interest incomeInterest revenue is recognised as the interest accrues using the effective interest method, under which the rate used exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

Capital work in progressCapital work in progress is recorded at cost and represents costs based on contractual payments for the design, development, procurement, construction and commissioning of the plant and overhead expenses and those incurred during the development stage directly attributable to the construction of the plant. The capital work in progress is transferred to the appropriate asset category and depreciated in accordance with the Bureau’s policies when construction of the asset is completed and commissioned.

Furniture and equipmentFurniture and equipment are stated at cost less accumulated depreciation and any impairment in value.

Depreciation is calculated on a straight line basis over the estimated useful lives of the assets as follows:

Office equipment and furniture 3-5 yearsMotor vehicle 3 years

The carrying values of furniture and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets are written down to their recoverable amount, being the higher of their fair value less costs to sell and their value in use.

Expenditure incurred to replace a component of an item of furniture and equipment that is accounted for separately is capitalised and the carrying amount of the component that is replaced is written off. Other subsequent expenditure is capitalised only when it increases future economic benefits of the related item of property, plant and equipment. All other expenditure is recognised in the statement of financial performance as the expense is incurred.

An item of furniture and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of financial performance in the year the asset is derecognised.

intangible assetsTechnology licences and similar rights are stated at cost and amortised on a straight-line basis over the expected life or contractual term of the asset. The amortisation periods applied are three years.

Costs associated with maintaining software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Bureau are recognised as intangible assets when the following criteria are met:

• It is technically feasible to complete the software product so that it will be available for use

• Management intends to complete the software product and use it

• There is an ability to use the software product• It can be demonstrated how the software

product will generate probable future economic benefits

• Adequate technical, financial and other resources to complete the development and to use the software product are available

• The expenditure attributable to the software product during its development can be reliably measured

Accounts payable and accrualsLiabilities are recognised for amounts to be paid in the future for goods or services received, whether billed by the supplier or not.

Impairment and uncollectibility of financial assetsAn assessment is made at each statement of financial position date to determine whether there is objective evidence that a specific financial asset may be impaired. If such evidence exists, any impairment

31 December 2012

Notes to the financial statements

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loss is recognised in the statement of financial performance. Impairment is determined as the difference between the present value of future cash flows discounted at the current market rate of return for a similar financial asset.

Cash and cash equivalentsFor the purpose of the statement of cash flows, cash and cash equivalents consist of cash in hand, bank balances, and short-term deposits with an original maturity of three months or less, net of outstanding bank overdrafts.

Accounts receivableAccounts receivable are stated at original invoice amount less a provision for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when there is no possibility of recovery.

Employees’ end of service benefitsThe Bureau provides end of service benefits to its expatriate employees. The entitlement to these benefits is usually based upon the employees’ length of service and completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment.

With respect to its national employees, the Bureau makes contributions to Abu Dhabi Retirement Pension and Benefit Fund calculated as a percentage of the employees’ salaries. The Bureau’s obligations are limited to these contributions, which are expensed when due.

Financial instrumentsFinancial instruments include receivables, bank balances and cash, payables and certain other financial assets and liabilities.

Fair values of financial instruments are based on estimated fair values using such methods as net present values of future cash flows.

LeasesOperating lease payments are recognised as an expense in the statement of financial performance on a straight line basis over the lease term.

2.5 Future changes in accounting policies – standards issued but not yet appliedStandards issued but not yet effective up to the date of issuance of the Bureau’s financial statements are listed below:

• IPSAS 28 Financial Instruments: Presentation effective 1 January 2013.

• IPSAS 29 Financial Instruments: Recognition and Measurement effective 1 January 2013.

• IPSAS 30 Financial Instruments: Disclosures effective 1 January 2013.

• IPSAS 32 Service concession Arrangements: Grantor effective 1 January 2014.

• Improvements to IPSASs - effective for annual periods beginning on or after 1 January 2013.

As per management, the adoption of the above standards will not have any effect on the financial performance or the position of the Bureau.

31 December 2012

Notes to the financial statements

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Cost:At 1 January 2012AdditionsWrite off and disposals during the yearTransfer to intangible assets (Note 4)Transfers

At 31 December 2012

Depreciation:At 1 January 2012Depreciation charge for the yearRelating to write offs and disposals

At 31 December 2012

Net carrying amount:At 31 December 2012

Cost:At 1 January 2011AdditionsDisposals during the year

At 31 December 2011

Depreciation:At 1 January 2011Depreciation charge for the yearRelating to disposals

At 31 December 2011

Net carrying amount:At 31 December 2011

2012

2011

24,419,8839,123,972

(7,866,870)(1,016,606)

-

24,660,379

9,282,4765,053,943(7,170,302)

7,166,117

17,494,262

11,370,41213,224,069

(174,598)

24,419,883

4,349,2185,062,034

(128,776)

9,282,476

15,137,407

totalAED

11,400,7649,123,972

(7,866,870)-

11,812,513

24,470,379

9,234,2394,990,609(7,170,302)

7,054,546

17,415,833

11,202,412204,950

(6,598)

11,400,764

4,241,2084,993,624

(593)

9,234,239

2,166,525

Office equipment

and furniture

AeD

Motorvehicle

AeD

190,000----

190,000

48,23763,334

-

111,571

78,429

168,000190,000

(168,000)

190,000

108,01068,410

(128,183)

48,237

141,763

Work in progress

AeD

12,829,119--

(1,016,606)(11,812,513)

-

---

-

-

-12,829,119

-

12,829,119

---

-

12,829,119

In 2011, work in progress comprised both office equipment and furniture and intangible assets. These were related to a re-located office location which was available for use in the current year.

Included in the accumulated depreciation is AED 2,531,052 relating to accelerated depreciation on office equipment and furniture due to the decision by the Bureau to early terminate its office lease and re-locate to a new office (note 5). As a result of this move to the new offices, some of the furniture and fittings became obsolete and were authorised for write off and disposal in February 2012.

3. Furniture and equipment

31 December 2012

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5. results for the yearAs per Bureau policy, any licence fees funding received in excess of expenditure is refunded back to licensees every two years. Short funding is recovered from licensees every two years. The respective amounts have been classified in the statement of financial position as follows:

On re-locating to the new office location in February 2012, AED 4,615,800 of rent was due to be paid in 2012 in accordance with the lease agreement but the Bureau has reported rent of AED 6,996,846 on a straight line basis.

The prior year results also include AED 2,531,052 relating to the re-assessment of the useful lives of the assets at the previous office location (note 3) and provision of AED 2,286,650 for reinstatement of the previous office location to its original condition in accordance with the terms of the office lease.

4. Intangible assets

Cost:At 1 JanuaryAdditionsTransfer from work in progress (Note 3)

At 31 December

Amortisation and impairment:At 1 JanuaryAmortisation

At 31 December

Net carrying amount:At 31 December

373,357498,500

-

871,857

221,226121,262

342,488

529,369

2011AeD

871,857864,381

1,016,606

2,752,844

342,488403,982

746,470

2,006,374

2012AED

Expenses pending recharge to licensees – Non-current assetsExpenses pending recharge to licensees – Current assets Advances due to licensees – Non-current liabilities

4,220,6265,074,818

-

-4,220,6267,801,381

2011AeD

2012AED

6. prepayments and other receivables

Prepaid staff rentOther prepaymentsAmounts pending recharge to licenseesOther receivables

7,128,5071,855,004

10,913,5591,346,925

21,243,995

2011AeD

8,496,4681,970,405

17,781,9051,349,817

29,598,595

2012AED

31 December 2012

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7. Bank balances and cashIncluded in bank balances and cash of AED 16,170,543 (2011: AED 15,585,785) are bank deposits of AED 4,899,242 (2011: AED 5,004,587) with a commercial bank in Abu Dhabi. These are denominated in UAE Dirhams, short term in nature, with effective interest rate of 0.34% (2011: 0.75%).

8. Accounts payable and accruals

The advances from licensees relate to amounts received for specific projects by the Bureau. Included in advances from licensees is an amount of AED 15,538,489 (2011: AED 40,085,001) from Abu Dhabi Water Electricity Authority (note 11) representing licence fees for the subsequent year.

10. related party transactionsRelated parties represent associated companies, board members, directors and key management personnel of the Bureau. Pricing policies and terms of these transactions are approved by the Bureau’s management.

Compensation of key management personnelThe remuneration of the members of key management during the year was as follows:

9. Employees’ end of service benefitsMovements in the provision recognised in the statement of financial position are as follows:

Accounts payableAccrued expensesAdvances from licensees

Salaries Accommodation allowanceOther benefitsEnd of service benefits

Balance at 1 JanuaryProvided during the yearEmployees’ end of service benefits paid

Balance at 31 December

5,472,7844,110,350

42,506,657

52,089,791

7,431,2002,422,9871,296,6761,140,375

12,291,238

7,917,1783,096,999

-

11,014,177

10,387,7034,807,961

32,995,031

48,190,695

8,956,7613,122,4931,244,3051,596,122

14,919,681

11,014,1773,425,645

(413,702)

14,026,120

2011AeD

2011AeD

2011AeD

2012AED

2012AED

2012AED

31 December 2012

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11. licence fees

Licence fees received during the year, net

Licence fees received in advance, net of receivable fees:Beginning balanceEnding balance (note 8)

91,859,812

17,835,409(40,085,001)

69,610,220

65,242,021

40,085,001(15,538,489)

89,788,533

2011AeD

2012AED

Impact on deficit from increase in interest ratesImpact on deficit from decrease in interest rates

25,023(25,023)

2011AeD

24,496(24,496)

2012AED

12. Fair values of financial instrumentsFinancial instruments comprise of financial assets and financial liabilities. Financial assets consist of cash and bank balances and financial liabilities consist of payables.

The fair values of financial instruments are not materially different from their carrying values.

13. Risk managementRisk is inherent in the Bureau’s activities but it is managed through a process of ongoing identification, measurement and monitoring, subject to risk limits and other controls. This process of risk management is critical to the Bureau’s continuing profitability and each individual within the Bureau is accountable for the risk exposures relating to his or her responsibilities.

The main risks arising from the Bureau’s financial instruments are interest rate risk, credit risk and liquidity risk and foreign currency risk. No changes were made in the risk management objectives and policies during the years ended 31 December 2012 and 31 December 2011. The management of the Bureau’s reviews and agrees policies for managing each of these risks which are summarised below.

interest rate riskThe Bureau is exposed to interest rate risk on its interest bearing bank deposits.

Interest rate risk tableThe following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the Bureau’s deficit (through the impact on floating rate deposits).

Assumed change in interest rates 0.50%

31 December 2012

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Credit riskThe Bureau collects licence fees from its related parties. Licence fees are collected based on an annually forecast budget. The Bureau limits its credit risk with regard to bank deposits by only dealing with reputable banks. Credit risk is limited to the carrying values of financial assets in the statement of financial position.

Liquidity riskThe Bureau limits its liquidity risk by monitoring its current financial position in conjunction with its cash flow forecasts and close communication with ADWEA on a regular basis to ensure funds are available to meet its commitments for liabilities as they fall due. Accounts payable are normally settled within 30 days of the date of purchase. The contractual payment terms of all financial liabilities of the Bureau as at 31 December 2012 were less than three months (2011: less than three months).

Currency riskCurrency risk comprises of transactions and statement of financial position risk. Transaction risk related to Bureau’s cash flow being adversely affected by a change in the exchange rates of foreign currencies against UAE Dirham’s. Statement of financial position risk relates to the risk of the Bureau’s monetary assets and liabilities in foreign currencies acquiring a lower or higher value, when translated into UAE Dirham’s as a result of currency movements.

14. Comparative informationThe comparative figures have been reclassified to conform to the current year presentation. Such reclassifications have no effect on the previously reported financial position or performance of the Bureau.

Statement of financial positionExpenses pending recharge to licensees (non-current asset) amounting to AED 197,449 as at 31 December 2011 has now been reclassified to amounts pending recharge to licensees (current asset).

15. CommitmentsEstimated capital expenditure contracted for at the reporting date, but not yet incurred amounted to AED nil (2011: AED 9,356,408).

The Bureau has entered into commercial leases on certain premises. This lease has a life of 10 years with a renewal option included in the contract. There are no restrictions placed upon the Bureau by entering into these leases.

The base rental shall be reviewed in 2018 as agreed with the lessor or determined by a reviewer surveyor.

operating lease commitmentsFuture minimum lease payments:Within one yearAfter one year but not more than five yearsMore than five years

Total operating lease expenditure contracted for at the reporting date

4,846,59033,965,992

6,185,613

44,998,195

2012AED

31 December 2012

Notes to the financial statements

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‘our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with international Standards on Auditing.’

ernst &young

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the regulation & Supervision Bureau

PO Box 32800, Abu DhabiUnited Arab Emiratesbureau@rsb.gov.ae

www.rsb.gov.ae

(ER/P02/024)