‫‪Annual report‬‬
‫‪2013‬‬
‫النسخة العربية متوفرة أيضا‬
We regulate the water,
wastewater and electricity
sector in the Emirate of
Abu Dhabi in the
United Arab Emirates.
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.
This document was designed by Noura Al Zaabi from the Regulation and Supervision Bureau
Printed on 100% environment-friendly paper
FSC & PEFC Certified - 100% Natural
Contents
Chairman’s
message
01
Sector
governance
and Board of
Directors
Health,
safety and
environment
Financial
statements
16
27
09
Performance
highlights
03
Our
consultants
24
Facilitating
compliance
11
2013
timeline
Licence
holders
02
Growth and
production
charts
17
Sustainability
05
Corporate
influence
13
Public
record of
activities
and
documents
21
26
The global launch of our new
Waterwise and Powerwise offices at
the Abu Dhabi International Water
Summit at the start of the year, was
a timely reminder to everybody to
seek to be wise in how they consume
power and water.
Chairman’s message
2013 saw demand for water and electricity
continue to increase year on year.
Consequently, the global launch of our new
Waterwise and Powerwise offices at the
Abu Dhabi International Water Summit at
the start of the year, was a timely reminder
to everybody to seek to be wise in how they
consume power and water.
In terms of our economic work-load, 2013
saw the introduction and completion of our
new price controls for the network monopoly
companies. This was a major achievement
given the extremely large capital investments in
the sector over the previous four-year pricecontrol period. Our new controls run until the
end of 2017.
Our ‘Wise’ Offices as we collectively refer to
them, are mainly involved in customer saving
initiatives, by providing advice on consumption
and also running a range of data gathering
exercises and customer focused projects.
They have been a great success and some of
the projects they are running will make a real
difference in the future as explained in this
publication.
Regarding sector demand this continues to
expand with electricity peak demand growing
at nearly six percent compared with 2012,
including exports to other emirates. Water
demand was closer to five percent compared
with the previous year. However, wastewater
received by the sector increased to seven
percent which is good news, as this indicates
that more water, as a percentage of that
produced, is re-entering the wastewater system.
In addition to these customer-facing initiatives
the Bureau has been involved in a wide range
of community based projects such as the
Abu Dhabi Science Festival and our summer
campaign which used interactive games in
shopping malls throughout the Emirate to
promote the wise use of water and electricity.
These games proved to be extremely popular
especially to the younger generation.
01
The Regulation & Supervision Bureau
Annual Report 2013
From our Report you will see that 2013 was
another challenging, but successful year for the
Regulation and Supervision Bureau.
Welcome to our 2013 Annual Report.
Nasser Ahmed Khalifa Alsowaidi
The Regulation & Supervision Bureau
Annual Report 2013
JAN
02
Launch of Waterwise and Powerwise at the
International Water Summit 2013
APR
Issue of a consultation
paper on the revised Water
Quality Regulations
JUN
The start of our summer
campaign promoting the efficient
use of water and electricity
Launch of an interactive webbased wastewater compliance
guideline
Issue of our Water Quality
Regulations (Fourth Edition)
JUL
2013 timeline
Issue of our Code of Practice on
Wastewater Flow Monitoring
SEP
OCT
Participation at the Power and
Water Middle East conference
and exhibition
Hosting of the Finance, Regulatory
and Energy Planning Authority
Workshop for the International
Framework for Nuclear Energy
Cooperation (IFNEC)
Issue of Price Control 5 (PC5) – final
recommendations
NOV
Participation at the Abu Dhabi International
Petroleum Exhibition and Conference
Participation at the Abu Dhabi Science Festival
DEC
Consultation process on the revision
of the Bureau’s Electricity Wiring
Regulations (Third Edition)
Performance highlights
Annual production for 2013
Electricity
65,492 GWh, up 5.35% (including exports)
Water (potable) 1,180,452 ML (259,663 MIG), up 4%
(including exports)
Installed capacity
Electricity
13,899 MW
Water (potable)
4,164 MLD (916 MIGD)
System demand
Electricity
Hourly peak:
11,243 MW, up 5.9% (22 July 2013)
This includes exports of 2,415 MW
Hourly peak for the Emirate of Abu Dhabi:
8,892 MW, up 4.32%
Water supply
Transmission peak: 3,469 MLD (763 MIGD) (18 September 2013),
up 4.95%
This includes Northern Emirates demand
Wastewater
836,228 m3/d, up 7%
average received at wastewater treatment plants;
treatment equivalent annual total of 305,223,169 m3
03
The Regulation & Supervision Bureau
Annual Report 2013
The Regulation & Supervision Bureau
Annual Report 2013
Average unit costs
Electricity
fils 26 per kWh
Water
AED 9.94 per 1,000 litres or one m3
Sector turnover (excluding exports)
Electricity
AED 10.6 billion
Water
AED 8.9 billion
Wastewater
AED 2.3 billion
Customers
Electricity457,193, up 5.8%
Water
336,711, up 6.1%
Wastewater
345,648, up 8% (estimated)
Water quality
Total tests 200,729 for 76 parameters, up 3%
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
04
Our Waterwise and Powerwise offices
lead the way in our efforts to support a
sustainable utility sector in Abu Dhabi. This
year, they carried out various projects to
better understand how water and electricity
are consumed, and ran pilot projects that
aim to find ways to reduce electricity
consumption in homes and buildings.
Sustainability
Demand side management –
Chiller Control Pilot
Another Powerwise pilot project aims to test the
feasibility of reducing peak demand by remotely
controlling air-conditioning chillers in high-rise
buildings and office towers in Abu Dhabi.
Air-conditioning represents some 65 percent
of the total electricity summer demand.
Following the design, installation and testing
of additional controls to chillers in five large
buildings in Abu Dhabi, chiller load is being
reduced by 20 to 40 percent for three hours.
The demand side management (DSM) system
can be activated automatically based on a
predefined schedule, or remotely through an
operator console that also allows real-time
monitoring and control of the system.
05
The Regulation & Supervision Bureau
Annual Report 2013
The pilot project assesses:
• participants’ acceptance of the various DSM
initiatives;
• the technology involved;
• comfort levels on extremely hot and humid
days;
• the cost of implementing different DSM
programmes; and
• the business case for rolling out such
initiatives throughout the Emirate.
Initial results show a decrease of between
20 and 40 percent in peak electricity demand for
three hours during the peak period, equivalent
to an energy reduction of approximately
750 kWh per building, while indoor conditions
(temperature and humidity) were successfully
maintained to acceptable levels.
The Regulation & Supervision Bureau
Annual Report 2013
Utility
selection
Display
screen
24°C
Costs
Messages
now
kW
Consumption
Menu
navigation
button
Menu
now
CO2
Consumption
monitoring lights
menu
enter
Smart Metering Pilot –
Energy Purchasing Trials
Peak demand has a major impact on the
overall efficiency of capital and operational
expenditures. In 2013, Powerwise conducted
a pilot project to assess whether consumers’
behaviour could be influenced to both reduce
electricity consumption and shift their usage
from peak to off-peak times.
The project involved 600 Abu Dhabi residential
households, including a control group of
200 households who did not receive
information about the trial. The trial group,
comprising 400 volunteer participants, was
given information on how to save electricity
and an electronic display unit that showed, in
real time, their consumption levels. A virtual
time-of-day pricing scheme was introduced,
where peak rates (2pm-8pm) were double the
standard rate, and off-peak rates (8pm-2pm the
following day) were 40 percent cheaper than
standard rates. At the end of the trial, volunteers
received a personalised report showing how
they performed during the trial, as well as any
refund for the electricity they saved throughout
the trial.
At the end of the study, the trial group had
realised a 17.25 percent reduction in peak
demand, of which 16.49 percent was attributed
to education and information. While no
significant impact on load redistribution was
observed, overall consumption was 16.8 percent
lower than the control group. In terms of
financial impact, 67 percent of the participants
saved, on average, around 12 percent on their
electricity bills under the trial setup, while the
actual average financial savings due to reduced
monthly bills are estimated to be around
16.8 percent.
This study demonstrated that educating and
informing consumers is a powerful tool in
driving behavioural change. This holds great
potential for Abu Dhabi, where peak demand is
expected to double by the end of the decade.
06
07
The Regulation & Supervision Bureau
Annual Report 2013
The Regulation & Supervision Bureau
Annual Report 2013
Residential End Use of Water Project
Waterwise’s Residential End Use of Water
Project studied 150 households in villas in gated
communities, which included a survey and the
installation of smart meters to understand how
water is being used in real households. The study
focused on collecting accurate water consumption
statistics, investigating the socio-demographic
factors influencing water use, determining the
split between domestic and landscaping water
uses and identifying the scale of water leaks in the
participating households.
Data was collected over three monitoring periods
- June, October and December - to capture water
use trends and patterns daily and seasonally.
Data was analysed using specialised flow-trace
analysis software that disaggregated flow data
for each end-use event and appliance, and
determined average per-capita and per-household
consumption for the study group.
The average water use breakdown for the study
group was as follows:
Total use
Domestic use
Leakage
Landscape use
1679 (lphd)
882 (lphd)
124 (lphd)
643 (lphd)
% of total
53%
7%
40%
339 (lpcd)
168 (lpcd)
23 (lpcd)
149 (lpcd)
% of total
49%
7%
44%
lphd = litre per household per day
lpcd = litre per capita per day
Tap use was the largest component of
domestic water consumption, amounting
to 34.3 percent of average daily household
consumption. The other major categories
were shower use (21.1 percent), toilet use
(19.4 percent) and clothes washing
(11 percent). Homes that reported washing
cars at home had a 13 percent higher tap use,
while homes that used dishwashers reduced
tap use by 2 percent.
Figure 1:
Breakdown of domestic end
uses by household
The number of occupants in the home was
the most important factor influencing water
use, followed by the type of fixtures and
appliances in the home.
The results of this study provided real
baseline data on water use within gated
communities in Abu Dhabi. The next
step is to examine water use within other
property types to broaden understanding
of residential water use. This will support
demand forecasting models and future water
conservation programmes. Data can also be
used in developing targeted communication
campaigns addressing specific water
conservation areas.
Tap, 34.28%
Bathtub, 1.36%
Shower, 21.13%
Clothes washer, 10.99%
Toilet, 19.40%
Dish washer, 0.31%
Leaks, 12.35%
Other, 0.18%
08
The Bureau plays a critical role in the
protection of the water, wastewater and
electricity sector’s stakeholders. Sector
companies must comply with licence
conditions and our regulations to protect
those involved in licensed activities,
consumers and the environment.
Health, safety and
environment
Inspection and cleaning of
customer water storage tanks
Revision of the
Water Quality Regulations
Following a study on water quality in
customer storage tanks in 2011, we
commissioned a project to develop a code
of practice for the inspection and cleaning of
these tanks to safeguard water quality. This
included reviewing current practices, types
of tanks, relevant literature, standards and
guidelines and producing a code of practice
for stakeholder consultation.
In July, we released our Water Quality
Regulations (Fourth Edition) that came into force
on 1 January 2014. These regulations underwent
a two-year consultation process with all
licensees and stakeholders, including the Health
Authority - Abu Dhabi, the Abu Dhabi Food
Control Authority and the Abu Dhabi Water and
Electricity Authority.
This code details the regulatory requirements
for building owners or managers and for water
storage tank cleaning and inspection companies.
It also provides good practice guidance and
methods for the safe and effective cleaning,
disinfection, sampling and testing of the most
common types of water storage tanks used in
the Emirate of Abu Dhabi.
09
The Regulation & Supervision Bureau
Annual Report 2013
The Water Quality Regulations were revised to
reflect current guidance by the World Health
Organization (WHO) and the Gulf Cooperation
Council (GCC).
This edition’s main changes include the
introduction of risk-based sampling frequency,
a new regulatory requirement for Drinking
Water Safety Plans and amendments to certain
parameters in the Schedules to align with the
latest water quality standards, mainly Boron.
The Regulation & Supervision Bureau
Annual Report 2013
Health and Safety
ADSSC operations review
In 2009, the Abu Dhabi Sewerage Services
Company (ADSSC) underwent a Health
and Safety Management and Operational
Review that resulted in recommendations for
safety management improvement. In 2013,
we commissioned a further review, using a
similar assessment process and framework
to review the progress made following the
original recommendations. Overall health
and safety progress has been made in the
majority of work areas, especially regarding the
employment of contractors.
HSE licensee baseline audit
In 2013, we commenced a Health, Safety and
Environment (HSE) baseline review of the
sector. Its main objectives include building
strong working relationships between the
Bureau and its licensees, raising the sector’s
HSE profile and improving awareness of legal
requirements. This review also aimed to
improve licensees’ overall HSE performance
and quality of incident reporting.
10
One of our duties is to ensure the
operation and development of a safe,
efficient and economic sector in the
Emirate. In 2013, we carried out a range
of projects to that end in our endeavour
to further improve the sector’s efficiency.
Facilitating
compliance
Price control review (PC5)
Price controls set a cap on the revenues sector
monopoly network companies can recover
each year for the duration of the price control
period. The main purpose of price controls is to
improve sector performance by allowing sector
companies an efficient level of operating and
capital costs and providing incentives to further
reduce costs and enhance performance, outputs
and quality of service.
With the fourth price controls (PC4) of the four
network companies - the Al Ain Distribution
Company (AADC), the Abu Dhabi Distribution
Company (ADDC), the Abu Dhabi Sewerage Services
Company (ADSSC) and the Abu Dhabi Transmission
and Despatch Company (TRANSCO) - expiring by
the end of 2013, the formal consultation process
with these companies commenced in 2012 with the
publication of the first and the second consultation
papers. This consultation continued in 2013 with
the publication of draft and final proposals and
the experts reviewing the companies’ capital and
operating expenditures. The process entailed
extensive and closer engagement with all the
stakeholders. Following acceptance of the final
proposals by the network companies, their licenses
11
The Regulation & Supervision Bureau
Annual Report 2013
have been modified and the PC5 is now effective
from 1 January 2014 until the end of 2017.
The new price controls help address the
challenges the sector faces by putting in place
flexible arrangements for the review of capital
and operating costs and further incentives during
the PC5 period. While we estimate the network
companies’ aggregate revenue to increase by
60 percent from the current PC4 level to around
AED 16 billion per annum under PC5 to cater for
the growth of Abu Dhabi’s economy, the longterm trend of declining unit network costs for
water, wastewater and electricity continues.
Transmission use-of-system charges
The transmission use-of-system (TUoS) charge
is levied by TRANSCO on AADC and ADDC
(within the Emirate of Abu Dhabi) and on the
Abu Dhabi Water and Electricity Company
(ADWEC) (for utilities outside the Emirates of
Abu Dhabi) for electricity and water supplied to
them using the transmission system. This charge
allows TRANSCO to recover revenue as per the
price controls and provides suitable economic
signals to its customers for efficient use of its
The Regulation & Supervision Bureau
Annual Report 2013
network. The TUoS charge is calculated each
year by TRANSCO and reviewed and approved
by the Bureau for the following year.
From 2013, the TUoS charge has been
restructured from peak-demand charge to
a volume-based charge. The hourly or daily
charges differ for peak and off-peak periods of
the day, month and year. The new structure
provides suitable signals throughout the year
rather than for annual peak only. It is also in
line with the volume-based bulk supply tariff
(BST) and final customer tariffs. It is easy to
understand and will facilitate large-user tariff
calculation and potential customer tariff reforms.
Regulatory accounting guidelines
The five price-controlled companies - AADC,
ADDC, ADSSC, TRANSCO and ADWEC, the single
buyer - submit separate business accounts
(SBAs) to the Bureau annually. These provide
financial information for the companies’ separate
businesses, as if each business was run by a
separate entity, each requiring allocation of costs.
separate businesses. The RAGs are proposed to
take effect in stages, the companies are required
to submit the fully compliant SBAs with the RAGs
for the financial year 2014 and onwards.
Wastewater tankering data collection report
In 2013, we completed an assessment of
wastewater tankering activities across the
Emirate. The project reviewed information from a
wide range of stakeholders including government
agencies, wastewater licensees, tanker service
providers and off-network customers.
The project established baseline information
on the state of service provision for off-network
companies and has informed a number of cross
government initiatives aimed at protecting the
environment and wastewater services customers.
Labour camps’ sewerage services licensing
Following liaison with the municipalities,
predominantly the Western Region Municipality,
we identified around 160 labour camps remotely
located in the Emirate, the majority of which had
no direct connection to ADSSC’s sewerage network.
To streamline and standardise the disclosure
requirements and allocation of costs to separate
businesses in SBAs, we issued regulatory
accounting guidelines (RAGs) and invited the
companies to test these by running a pilot on
existing SBAs.
We found that 58 of these labour camps were
operating private facilities for the collection,
treatment and disposal of wastewater. As such,
these camps need to be licensed for the said
activities under Law No (2) of 1998.
In October 2013, the companies submitted the
pilot run SBAs with the revised disclosures in
accordance with the RAGs. We are currently
working with the companies on the revised
methodology for allocation of costs to each
A comprehensive technical and HSE assessment
will be conducted at all 58 sites in 2014. Once
completed, and once the legal and financial
assessments are met, the labour camp owners
will be issued licences.
12
In 2013, the Bureau participated in several
events targeting sector stakeholders in an
effort to raise awareness of what the Emirate
is doing to address water and energy issues.
We also targeted the residents of Abu Dhabi
through a variety of campaigns to educate
the general public on ways to use water and
electricity more efficiently.
Corporate
influence
IWS – WFES: a flagship event
Sector engagement
The International Water Summit (IWS) and the
World Future Energy Summit (WFES) are jointly
hosted by Masdar each year in January during
the Abu Dhabi Sustainability Week. This is a key
event for the Bureau, as it looks at challenges
and solutions concerning the efficient
management and diversification of energy
resources and rationalisation of water use.
In 2013, we participated in two major regional
events: Power and Water Middle East (PWME)
in September and the Abu Dhabi International
Petroleum Exhibition and Conference (ADIPEC)
in November.
In 2013, we used this event to formally launch
our Waterwise and Powerwise initiatives
that champion the efficient use of water and
electricity in Abu Dhabi. Part of the Wise’s remit
is to conduct local studies and trials to gather
data that ultimately helps better manage these
precious resources.
Our stand attracted a wide range of visitors from
children to VIPs. A major drawcard was our
Waterwise and Powerwise interactive games,
where players were placed in the setting of a
virtual home and had to race against time to make
the best decisions on how to save water and
electricity, guiding them towards greener solutions.
13
The Regulation & Supervision Bureau
Annual Report 2013
Themed ‘Energy for all in a Changing
World’, ADIPEC 2013, the largest regional
event in the gas and oil sector, addressed
opportunities and challenges posed by an
evolving energy landscape.
This event attracted visitors from the energy
sector across the world, to our stand. Here, our
energy efficiency projects led by Powerwise,
such as its time-of-day trial and demand side
management projects, attracted significant
interest, as such trials show promising results
in an increasingly high-electricity consuming
region. We also showcased our popular
interactive Powerwise game, testing players on
their electricity efficiency awareness.
As part of our regulatory role, we hosted the
Finance, Regulatory and Energy Planning
The Regulation & Supervision Bureau
Annual Report 2013
Authority Workshop for the International
Framework for Nuclear Energy Cooperation
(IFNEC) in October. The workshop aimed to
develop an understanding of the relationship
between the critically dependent activities
involved in the development of a nuclear
power project: overall independence, capability
and regulatory requirements of the safety and
market regulators in securing the financing that
is necessary to support the development of
such a project.
The findings of the workshop were presented
at the 2013 IFNEC Executive Committee
Ministerial Meeting, hosted by the Ministry
of Foreign Affairs.
Public outreach programmes
As Waterwise and Powerwise’s remit focuses
on raising awareness on issues surrounding
the consumption of water and electricity, we
targeted residential consumers during the
summer and a younger audience at the
Abu Dhabi Science Festival (ADSF) in November.
Our interactive Waterwise and Powerwise
games played a central part in both events as
‘learning by doing’ is a powerful tool. The Kinect
games presented players with situations such as
setting the AC thermostat or washing cars and
options to save water and electricity.
Our summer campaign - ‘Turn it off. Stay in
the green.’ - was rolled out in malls across the
Emirate, in collaboration with the Abu Dhabi and
Al Ain distribution companies, and supported
by the Environment Agency - Abu Dhabi. We
welcomed thousands of visitors, most of whom
participated in the games, showing them how
easy it is to make small changes to how we use
water and electricity. Collectively, small changes
can make a big difference for Abu Dhabi.
Children are a key audience in our efforts to
educate consumers on the importance of saving
water and electricity, as setting good habits early
is easier, long-lasting and pays off for future
generations. Participating at ADSF 2013 gave
us the opportunity to provide memorable and
educative activities to the Emirate’s youth of all
ages. We introduced fun-, new-look Waterwise
and Powerwise Kinect games and provided
younger ones with other interactive activities,
encouraging all to use water and electricity
more wisely.
We also launched two mascots named ‘Qattra’
and ‘Barq’ - ‘Droplet’ and ‘Thunderbolt’- who
will become regular features in providing
information on water and electricity to Abu
Dhabi’s youth.
14
15
The Regulation & Supervision Bureau
Annual Report 2013
The Regulation & Supervision Bureau
Annual Report 2013
Sector governance and
Board of Directors
Governing sector law
Board of Directors
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 2013.
The following Board of Directors served the
Bureau for the whole of 2013.
ADSSC establishing law
• H.E. Falah Mohammed Al Ahbabi
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 2013.
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.
• H.E. Mohammed Ahmed Al Bowardi
• H.E. Hamad Al Hurr Al Suwaidi
• H.E. Mohammed Abdullah Bin Sahoo
Al Suwaidi
• Mr Ibrahim Mubaydeen
16
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 a licence holder, so they can
undertake regulated activities. Our primary
annual funding is derived from licence holders
via the application of fees.
Licence
holders
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 130 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.
1
17
Unless otherwise stated, potable water is produced by thermal desalination
The Regulation & Supervision Bureau
Annual Report 2013
The Regulation & Supervision Bureau
Annual Report 2013
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 2,000MW 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.
Generation - renewable energy
Abu 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. ADFEC is also licensed to produce up to 50 MW of electricity
from solar power generation in the Emirate of Abu Dhabi and is
authorised to sell output to ADWEC.
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-regulating
Abu 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-supply
Emirates 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.
18
Licence holders
(continued....)
Transmission
Abu Dhabi Transmission
and Despatch Company
(TRANSCO)
is responsible for all transmission voltages at 400, 220 and 132 kV
including despatch of generation units, water balancing and the bulk
movement of water throughout the Emirate.
Distribution and supply
Abu Dhabi Distribution
Company (ADDC)
distributes and supplies water to approximately 259,000 customers
and electricity to around 325,000 customers in the central and
western regions of the Emirate of Abu Dhabi.
Al Ain Distribution
Company (AADC)
distributes and supplies water to approximately 78,000 customers and
electricity to around 132,000 customers in the eastern region of the
Emirate of Abu Dhabi.
Multi-licensed
Abu 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.
Procurement
Abu 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 is responsible for the collection, treatment and disposal of wastewater
throughout the Emirate of Abu Dhabi.
Company (ADSSC)
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 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).
Water Company (W2)
Higher Corporation for
Specialized Economic Zones
(ZonesCorp)
19
The Regulation & Supervision Bureau
Annual Report 2013
is licensed to collect, treat and dispose of up to 40,000 m3/d of
wastewater at the Industrial City - Abu Dhabi (ICAD).
The Regulation & Supervision Bureau
Annual Report 2013
Wastewater - small scale
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.
Arabian Nights for Travel
and Tourism LLC
is licensed to collect, treat and dispose of 100 m3/d of wastewater at
the Arabian Nights Desert Village in Al Khatem.
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.
Dodsal Engineering &
Construction PTE Limited
is licensed to collect, treat and dispose of 3,800 m3/d of wastewater
generated at its two labour camps at habshan and Shah-Hameem 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.
Premier Inn Hotels LLC
is licensed to collect, treat and dispose of 20 m3/d of wastewater
generated at its hotel at the Abu Dhabi International Airport.
Private Property Management
Establishment
is licensed to collect, treat and dispose of 2,500 m3/d of wastewater at
the Al Forsan International Sports Resort in Khalifa City A.
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.
Shams Power Company PJSC
is licensed to collect, treat and dispose of 21 m3/d of wastewater from
the Solar Power Plant in Madinat Zayed.
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.
Tourism Development and
Investment Company PJSC
(TDIC)
is licensed to collect, treat and dispose of 4,500 m3/d of wastewater at
its Workers’ Construction Village on Saadiyat Island.
20
In law we have a duty to maintain a Public
Register. This section of this Annual Report is
constructed so as to list 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.
Public record of activities
and documents
Licensing
New licences
Private Property Management Establishment
6 Feb 2013
ED/L07/101
24 Feb 2013
ED/L09/102
1 Mar 2013
ED/L09/103
19 May 2013
ED/L07/014
27 Jun 2013
ED/L07/105
21 Nov 2013
ED/L07/106
Sewerage, Wastewater Treatment and Disposal Licence
Shams Power Company PJSC
Sewerage, Wastewater Treatment and Disposal Licence
Tourism Development and Investment Company
Sewerage, Wastewater Treatment and Disposal Licence
Arabian Nights for Travel and Tourism LLC
Sewerage, Wastewater Treatment and Disposal Licence
Dodsal Engineering and Construction Pte. Limited
Sewerage, Wastewater Treatment and Disposal Licence
Premier Inns Hotels LLC
Sewerage, Wastewater Treatment and Disposal Licence
Modifications
Modifications to a licence are made subject to agreement by the appropriate licence holder.
Samsung Corporation
Extension of term
21
The Regulation & Supervision Bureau
Annual Report 2013
6 Feb 2013
ED/L07/101
The Regulation & Supervision Bureau
Annual Report 2013
Hyundai Construction and Engineering Company
3 Mar 2013
ED/L07/012
19 Mar 2013
ED/L01/017
6 May 2013
ED/L07/012
6 May 2013
ED/L07/014
9 Dec 2013
ED/L08/001
17 Dec 2013
ED/L08/002
Increased capacity
Emirates Sembcorp Water and Power Company
Increased capacity
Hyundai Construction and Engineering Company
Increased capacity
Manazel Real Estate PJSC
Extension of term and increased capacity
Abu Dhabi Future Energy Company (ADFEC)
Authorisation to sell output to ADWEC
Emirates Aluminium Company Limited PJSC (EMAL)
Increased capacity
Derogation
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 Transmission and Despatch Company (TRANSCO)
24 Apr 2013
ED/L06/101
8 Jan 2013
ED/L05/100
18 Mar 2013
ED/L05/101
3 Feb 2013
ED/L03/009
28 Feb 2013
ED/L03/047
28 Feb 2013
ED/L03/051
29 Apr 2013
ED/L03/102
9 Sep 2013
ED/L03/103
15 Dec 2013
ED/L03/104
17 Dec 2013
ED/L03/105
Maximum Allowed Revenues for 2012 for the Electricity Transmission
Business
Revocations
Al Naboodah National Contracting Group LLC
Sewerage, Wastewater Treatment and Disposal Licence
Abu Dhabi Future Energy Company (ADFEC)
Sewerage, Wastewater Treatment and Disposal Licence
Consents
Consents confer rights and obligations on licence holders.
Revisions or renewal of consents are listed for the sake of completeness.
Arabian Power Company (APC)
Supply and Sale of Demineralised Water
Gulf Total Tractebel Power Company (GTTPC)
Relaxation of TDS (Extension)
Emirates CMS Power Company (ECPC)
Relaxation of TDS (Extension)
Al Ain Distribution Company (AADC)
Supply and Sale of Brackish Water
Abu Dhabi Transmission and Despatch Company (TRANSCO)
Relaxation of Minimum Residual Chlorine limit
Ruwais Power Company (RPC)
Supply and Sale of Demineralised Water
Shuweihat CMS International Power Company (SCIPCO)
Supply and Sale of Demineralised Water
22
Public record of activities
and documents (continued....)
Consultation papers
Consultation papers are designed to seek views from a range of stakeholders and other interested parties
on matters which may have a significant impact on licence holders or customers.
Wastewater Flow Monitoring Code of Practice
9 Apr 2013
CR/T06/100
Water Quality Regulations 2013
10 Apr 2013
CR/R03/100
Water Quality Regulations 2013 “Summary Overview”
10 Apr 2013
CR/T03/100
2013 Price Controls Review – PC5 Draft Proposals
15 May 2013
CR/E02/100
2013 Price Controls Review – PC5 Final Proposals
6 Nov 2013
CR/E02/101
13 Dec 2013
CR/T03/101
Water Quality Regulations (Fourth Edition)
17 Jul 2013
ED/R01/001
Wastewater Flow Monitoring Code of Practice (First Edition)
1 Sep 2013
ED/C01/100
Guide for Chemicals and Products that came in contact with
Drinking Water
Publications
23
Annual Report for 2012 – English
ER/P02/024
Annual Report for 2012 – Arabic
ER/P02/024
The Regulation & Supervision Bureau
Annual Report 2013
The Regulation & Supervision Bureau
Annual Report 2013
Given an increasing workload, we employed local
and international consultants to undertake a
range of work streams under our supervision.
In 2013, the Bureau commissioned the services of
the following consultants:
Our consultants
Alpha Data LLC
provided IT support
Booz Allen
Hamilton Inc
developed Business Continuity (Emergency Water) Regulations and assessed
Business Continuity Plans for the Water and Wastewater Sectors in the Emirate
of Abu Dhabi
B.U.T N.V
developed and installed a variety of interactive applications to support the
Bureau at events and also developed the Bureau’s website
Deloitte and Touche
Middle East (DTME)
developed future operating expenditure projections for the four network
companies (AADC, ADDC, ADSSC and TRANSCO) for PC5 as well as regulatory
accounting guidelines for separate business accounts of the five price
controlled companies (four network companies and ADWEC)
Dornier Consulting
carried out the Residential End Use of Water Project
DPA Consulting
carried out the review of small-scale licensees compliance framework
ERNST & YOUNG
MIDDLE EAST
audited and reported on the financial statements of the Bureau for the year
ended 31 December 2012
eSolutions FZ - LLC
implemented Microsoft Dynamics GP 2010 and additional modules
French Vision
Advertising &
Marketing
provided creative design and support for the Bureau’s prints and web
publications
GHD Global Pty Ltd
provided support for wastewater regulations compliance
24
Our consultants
25
(continued....)
GISTec
supplied a geospacial information system and training for wastewater data analysis
Herbert Smith
provided advice on a range of legal matters
Impact BBDO
Advertising L.L.C
produced a TV commercial and six radio recordings
Impact Porter Novelli
provided public relations support
KEMA Middle East
FZE
carried out efficiency review of PC4 capital expenditure and developed PC5 capital
expenditure projections for the electricity businesses of three network companies
KEO International
Consultants
carried out an investigation of the scope and size of the wastewater tankering
market
Lloyd’s Register
EMEA
carried out health and safety management and operational review of ADSSC and
provided in-house HSE management support and call-off services
Mott MacDonald
provided technical and HSE assessment expertise and fieldwork capability for the
Licensing Labour Camp Sewerage Services project and provided technical support
for our demand side management project
NERA
expanded our model for forecasting generation and production costs by three years
and updated the planned capacity scenarios within the model
OP3 Design LLC
design and build of stands for various Bureau events
Poyry Energy Ltd
carried out the assessment of TRANSCO’s scheduling and despatch process
PA Middle East
Limited
supported project management and work-flow
Reed Smith LLC
provided advice on a range of legal matters
Seven Sense
Environmental
Consultancy &
Studies
developed a Code of Practice for Cleaning and Inspection of Customer’s Water
Storage Tanks
Trane
DSM chiller control
Utiligence Limited
supported the Bureau in the time-of-day trial
WS Atkins and
Partners Overseas
carried out efficiency review of PC4 capital expenditure and developed PC5
capital expenditure projections for the water and wastewater businesses of four
network companies
YouGov M.E. FZ LLC
carried out online and face-to-face surveys with customers
The Regulation & Supervision Bureau
Annual Report 2013
The Regulation & Supervision Bureau
Annual Report 2013
Growth and production charts
Electricity
Water
demand growth (MW)
peak daily supply (MIGD)
1,000
14,000
900
12,000
800
10,000
700
600
8,000
500
6,000
400
300
4,000
200
2,000
100
0
2013
2011
2012
2010
2009
2007
2008
2005
2006
2003
2004
2001
System peak (Northern Emirates)
Peak demand
System peak (Emirate of Abu Dhabi)
Available capacity
Available capacity
Potable Water
2012
MW – megawatt
GWh – giggawatt hour
20,000
2,000
10,000
0
0
2013
2012
MIG – million imperial gallons
MIGD – million imperial gallons per day
2013
TAPCO
4,000
SEMBCORP
30,000
SCIPCO
6,000
RPC
40,000
GTTPC
8,000
FAPCO
50,000
ECPC
10,000
APC
60,000
AMPC
12,000
SHAMS 1
TAPCO
SEMBCORP
SCIPCO
production (MIG)
RPC
GTTPC
FAPCO
ECPC
generation (GWh)
APC
2002
1999
Exports to Northern Emirates
Electricity
AMPC
2000
2013
2011
2012
2010
2009
2007
2008
2005
2006
2003
2004
2001
2002
2000
0
26
Independent auditors’
report to the board
members of
Regulation and
Supervision Bureau
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 2013 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
27
The Regulation & Supervision Bureau
Annual Report 2013
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 2013
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
Mohammad Mobin Khan
Partner
Ernst & Young
Registration No. 532
15 May 2014, Abu Dhabi
The Regulation & Supervision Bureau
Annual Report 2013
Statement of financial position
As at 31 December 2013
Assets
Non-current assets
Furniture and equipment
Intangible assets
Advances to employees
Current assets
Prepayments and other receivables
Bank balances and cash
Notes
3
4
6
7
TOTAL ASSETS
2013
AED
2012
AED
14,728,086
1,538,750
786,042
17,494,262
2,006,374
527,796
17,052,878
20,028,432
12,523,773
39,037,763
11,816,690
16,170,543
51,561,536
27,987,233
68,614,414
48,015,665
Liabilities
Non-current liabilities
Balances with licensees
Employees’ end of service benefits
Current liabilities
Balances with licensees
Accounts payable and accruals
TOTAL LIABILITIES
Nasser Ahmed Al Sowaidi
Chairman
The attached notes 1 to 15 form part of these financial statements.
11
9
11
8
858,219
17,037,500
7,801,381
14,026,120
17,895,719
21,827,501
34,352,608
16,366,087
10,992,500
15,195,664
50,718,695
26,188,164
68,614,414
48,015,665
Nick Carter
Director General
28
Statement of financial performance
Year ended 31 December 2013
REVENUE
License fees
Other income
Interest income
Notes
2013
AED
2012
AED
11
97,196,047
348,040
40,958
89,788,533
493,803
177,620
97,585,045
90,459,956
71,272,733
5,077,016
844,748
7,632,923
1,855,454
807,277
3,393,901
6,700,993
62,529,239
5,053,943
403,982
7,316,194
1,112,108
1,287,858
5,783,416
6,973,216
97,585,045
90,459,956
EXPENSES
Salaries and staff related costs
Depreciation
Amortisation
Rent expense
Publicity
Recruitment
Professional fees
Others
The attached notes 1 to 15 form part of these financial statements.
29
The Regulation & Supervision Bureau
Annual Report 2013
5
3
4
The Regulation & Supervision Bureau
Annual Report 2013
Statement of cash flows
Year ended 31 December 2013
OPERATING ACTIVITIES
Notes
2013
AED
2012
AED
9
3,193,089
(40,958)
5,077,016
844,748
3,425,645
(177,620)
682,032
5,053,943
403,982
9,073,895
9,387,982
-707,083
1,170,423
16,416,946
(258,246)
(8,354,601)
(3,899,096)
12,876,200
784,172
25,695,935
(181,709)
10,794,657
(413,702)
25,514,226
10,380,955
(2,310,840)
(377,124)
40,958
(9,123,972)
(864,381)
14,536
177,620
Net cash used in investing activities
(2,647,006)
(9,796,197)
NET INCREASE IN CASH
AND CASH EQUIVALENTS
22,867,220
584,758
Cash and cash equivalents at 1 January
16,170,543
15,585,785
39,037,763
16,170,543
Adjustments for:
Provision for employees’ end of service benefits
Interest income
Loss on disposal of furniture and equipment
Depreciation
Amortisation
3
4
Working capital adjustments:
Prepayments and other receivables
Accounts payable and accruals
Balances with licensees
Advances to employees
Cash from operations
Employees’ end of service benefits paid
9
Net cash from operating activities
INVESTING ACTIVITIES
Purchase of furniture and equipment
Purchase of intangible assets
Proceeds from disposal of furniture and equipment
Interest received
CASH AND CASH EQUIVALENTS
AT 31 DECEMBER
The attached notes 1 to 15 form part of these financial statements.
3
4
7
30
Notes to the financial statements
31 December 2013
1. ACTIVITIES
Regulation 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 license
fees by those entities awarded licenses 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 2013 were authorised
for issue by the management on 15 May 2014.
2.1 Basis of preparation
The financial statements are prepared under
the historical cost convention. The financial
statements have been presented in United Arab
Emirates Dirhams (“AED”) which is the functional
currency of the Bureau.
Statement of compliance
The financial statements of the Bureau have
been prepared in accordance with International
Public Sector Accounting Standards (IPSAS)
as issued by 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.
2.2 Changes in accounting policies
and disclosures
The Bureau’s accounting policies are consistent
with those applied to the financial statements
as at and for the year ended 31 December 2012,
except for the following amendments to IPSAS
effective as of 1 January 2013 which do not
have any significant impact on the financial
statements:
31
The Regulation & Supervision Bureau
Annual Report 2013
• IPSAS 28 Financial Instruments: Presentation
- effective for annual periods beginning on or
after 1 January 2013.
• IPSAS 29 Financial Instruments Recognition
and Measurement - effective for annual
periods beginning on or after 1 January 2013.
• IPSAS 30 Financial Instruments Disclosures effective for annual periods beginning on or
after 1 January 2013.
• Improvements to IPSASs - effective for annual
periods beginning on or after 1 January 2013.
2.3 Significant accounting
judgements, estimates and
assumptions
The 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 uncertainty
The 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 equipment and
intangible assets
The Bureau’s management determines
the estimated useful lives of furniture and
equipment and intangible assets for calculating
depreciation and amortisation. 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
and amortisation charge would be adjusted
where management believes that the useful
lives differ from previous estimates.
The Regulation & Supervision Bureau
Annual Report 2013
2.4 Summary of significant
accounting policies
Revenue recognition
Revenue is recognised to the extent that it is
probable that the economic benefits will flow
to the Bureau and the revenue can be reliably
measured. Revenue is measured at the fair value
of the consideration received, excluding discounts
and rebates.
License fees revenue
License fees funding from the licensees in
respect of the current year is accounted for in
the statement of financial performance based on
the expenses incurred for the year less income
received from other sources during the year. Any
funding received in excess of the expenditure
incurred by the Bureau, is refunded back to
licensee in every two years. Short funding is
recovered from licensee in every two years.
Interest income
Interest 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.
Furniture and equipment
Furniture 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
Motor vehicle
3-5 years
3 years
Non cash generating assets are assets that are not
held to generate a commercial return. Non-cash
generating assets are tested for impairment when
their carrying amounts are expected to exceed
their recoverable service amounts. The recoverable
amount is the higher of an asset’s fair value less
costs to sell and value in use. The value in use
calculation depends on the specific nature of each
asset type. Value in use for the purpose of testing
non-cash generating assets represents the present
value of the remaining service potential of the asset.
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 assets
Technology licenses 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
Cash and cash equivalents
For 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.
Accounts receivable
Accounts 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.
32
Impairment and uncollectibility of
financial assets
An 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 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.
Provisions
Provisions are recognised when the Bureau has an
obligation (legal or constructive) arising from a past
event, and the costs to settle the obligation are
both probable and able to be reliably measured.
Capitalised leased assets are depreciated over the
shorter of the estimated useful life of the asset and
the lease term, if there is no reasonable certainty
that the Bureau will obtain ownership by the end
of the lease term.
Accounts payable and accruals
Financial instruments
Liabilities are recognised for amounts to be paid in
the future for goods or services received, whether
billed by the supplier or not.
Financial instruments comprise financial assets
and financial liabilities. Financial assets comprise
receivables and bank balances and cash. Financial
liabilities comprise trade payables and balances
with licensees.
Employees’ end of service benefits
The 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.
Fair value measurement
The fair value of an asset or a liability is measured
using the assumptions that market participants
would use when pricing the asset or liability,
assuming that market participants act in their
economic best interest.
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.
A fair value measurement of a non-financial asset
takes into account a market participant’s ability to
generate economic benefits by using the asset in
its highest and best use or by selling it to another
market participant that would use the asset in its
highest and best use.
Foreign currencies
Current versus non-current classification
Transactions in foreign currencies are recorded
at the rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in
foreign currencies are retranslated at the rate
of exchange ruling at the statement of financial
position date. All differences are taken to the
statement of financial performance.
The Bureau presents assets and liabilities in
statement of financial position based on current/
non-current classification. An asset as current
when it is:
Leases
The determination of whether an arrangement is,
or contains a lease is based on the substance of
the arrangement at inception date of whether the
fulfilment of the arrangement is dependent on the
use of a specific asset or assets or the arrangement
conveys a right to use the asset.
Operating lease payments are recognised as an
expense in the statement of financial performance
on a straight line basis over the lease term.
33
Finance leases, which transfer to the Bureau
substantially all of the risks and benefits incidental
to ownership of the leased item, are capitalised at
the inception of the lease at the fair value of the
leased property or, if lower, at the present value
of the minimum lease payments. Lease payments
are apportioned between the finance charges and
reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance
of the liability. Finance charges are reflected in the
consolidated income statement.
The Regulation & Supervision Bureau
Annual Report 2013
• Expected to be realised or intended to sold or
consumed in normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realised within twelve months
after the reporting period, or
• Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for
at least twelve months after the reporting period
All other assets are classified as non-current.
The Regulation & Supervision Bureau
Annual Report 2013
A liability is current when:
• It is expected to be settled in normal operating
cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after
the reporting period, or
• There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period
The Bureau classifies all other liabilities as
non-current.
2.5 Future changes in accounting
policies – standards issued but not
yet applied
Standards issued but not yet effective up to
the date of issuance of the Bureau’s financial
statements are listed below:
• IPSAS 32 Service concession Arrangements:
Grantor effective 1 January 2014.
The Bureau intends to adopt these standards,
if applicable, when they become effective.
Furthermore, the Bureau has assessed the impact
from the adoption of the above new and amended
standards on its financial position or performance
to be insignificant.
3. Furniture and equipment
2013
Cost:
At 1 January 2013
Additions
Work in
progress
AED
Office
Motor equipment
vehicle and furniture
AED
AED
Total
AED
-
190,000
762,000
24,470,379
1,548,840
24,660,379
2,310,840
-
952,000
26,019,219
26,971,219
-
111,571
107,907
7,054,546
4,969,109
7,166,117
5,077,016
At 31 December 2013
-
219,478
12,023,655
12,243,133
Net carrying amount:
At 31 December 2013
-
732,522
13,995,564
14,728,086
12,829,119
(1,016,606)
(11,812,513)
190,000
-
11,400,764
9,123,972
(7,866,870)
11,812,513
24,419,883
9,123,972
(7,866,870)
(1,016,606)
-
-
190,000
24,470,379
24,660,379
-
48,237
63,334
-
9,234,239
4,990,609
(7,170,302)
9,282,476
5,053,943
(7,170,302)
At 31 December 2012
-
111,571
7,054,546
7,166,117
Net carrying amount:
At 31 December 2012
-
78,429
17,415,833
17,494,262
At 31 December 2013
Depreciation:
At 1 January 2013
Depreciation charge for the year
2012
Cost:
At 1 January 2012
Additions
Write off and disposals during the year
Transfer to intangible assets (note 4)
Transfers
At 31 December 2012
Depreciation:
At 1 January 2012
Depreciation charge for the year
Relating to write offs and disposals
34
4. Intangible assets
2013
AED
2012
AED
2,752,844
377,124
-
871,857
864,381
1,016,606
3,129,968
2,752,844
746,470
844,748
342,488
403,982
At 31 December
1,591,218
746,470
Net carrying amount:
At 31 December
1,538,750
2,006,374
2013
AED
2012
AED
30,083,333
14,219,245
1,431,097
3,193,089
22,345,969
28,041,841
13,284,701
1,251,665
3,425,645
16,525,387
71,272,733
62,529,239
2013
AED
2012
AED
9,134,630
1,675,918
1,318,800
394,425
8,496,468
1,970,405
1,318,800
31,017
12,523,773
11,816,690
Cost:
At 1 January
Additions
Transfer from work in progress (Note 3)
At 31 December
Amortisation and impairment:
At 1 January
Amortisation
5. Salaries and staff related costs
Salaries
Accommodation allowance
Employers’ contribution to Abu Dhabi Retirement Pension and Benefit Fund
Employees’ end of service benefits (note 9)
Other benefits
6. Prepayments and other receivables
Prepaid staff rent
Other prepayments
Security deposits
Other receivables
7. Bank balances and cash
Included in bank balances and cash of AED 39,037,763 (2012: AED 16,170,543) are bank deposits
of AED 20,039,958 (2012: AED 4,899,242) with a commercial bank in Abu Dhabi. These are
denominated in UAE Dirhams, short term in nature, with effective interest rate of 0.11% (2012: 0.34%).
35
The Regulation & Supervision Bureau
Annual Report 2013
The Regulation & Supervision Bureau
Annual Report 2013
8. Accounts payable and accruals
Accounts payable
Accrued expenses
2013
AED
2012
AED
8,545,133
7,820,954
10,387,703
4,807,961
16,366,087
15,195,664
9. Employees’ end of service benefits
Movements in the provision recognised in the statement of financial position are as follows:
2013
AED
2012
AED
Balance at 1 January
Provided during the year (note 5)
Employees’ end of service benefits paid
14,026,120
3,193,089
(181,709)
11,014,177
3,425,645
(413,702)
Balance at 31 December
17,037,500
14,026,120
10. Related party transactions
Related parties represent Government of Abu Dhabi and related departments and institutions, 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 personnel
The remuneration of the members of key management during the year was as follows:
2013
AED
Salaries
Accommodation allowance
Other benefits
End of service benefits
2012
AED
9,508,006
2,970,521
1,288,397
1,410,462
8,956,761
3,122,493
1,244,305
1,596,122
15,177,386
14,919,681
Balances with related parties included in the statement of financial position are as follows:
Current and non-current liabilities
Balances with licensees
Abu Dhabi Water and Electricity Authority licensees
Abu Dhabi Sewerage Services Company
(30,231,064)
(5,813,917)
(20,128,209)
(1,552,667)
36
Balances with Government of Abu Dhabi entities included in the statement of financial position are as
follows:
Cash
Government owned banks
Trade payable
Abu Dhabi Retirement Pensions and Benefits Fund
Abu Dhabi Distribution Company PJSC
Abu Dhabi National Oil Company
2013
AED
2012
AED
39,017,557
16,158,771
187,915
1,723
27,496
1,254
24,132
Significant transactions with related parties included in the statement of financial performance are as follows:
Rent expenses
Office service charges
7,632,923
1,425,569
6,996,846
1,700,762
Rental expenses and office service charges
These expenses represent rent expenses and office service charges charged by Al Sowwah Square Properties
LLC, a Government of Abu Dhabi owned company.
All transactions with related parties are made at agreed terms and conditions approved by the Bureau’s
management.
11. Transactions and balances with licensees
Transactions with licensees included in the statement of financial performance are as follows:
2013
AED
2012
AED
License fees received during the year, net
101,657,558
65,242,021
License fees received in advance, net of receivable fees:
Beginning balance
Ending balance
15,538,489
(20,000,000)
40,085,001
(15,538,489)
97,196,047
89,788,533
License fees recognised in the statement of financial performance
Balances with licensees included in the statement of financial position are as follows:
37
2013
AED
2012
AED
Excess recovery of expenses to be adjusted with future license fees
Shortfall in recovery of expenses to be recovered from licensees
Expenses incurred on projects undertaken on behalf of licensees
Funding received in advance for projects undertaken on behalf of licensees
License fee received in advance
(8,731,195)
22,914,397
(29,394,029)
(20,000,000)
(7,801,381)
4,220,626
17,781,905
(17,456,542)
(15,538,489)
Net amount due to licensees
(35,210,827)
(18,793,881)
The Regulation & Supervision Bureau
Annual Report 2013
The Regulation & Supervision Bureau
Annual Report 2013
As per Bureau policy, any license fees funding received in excess of expenditure incurred is adjusted in license fee
calculation after two years. Similarly, any shortfall in funding is recovered from licensee every two years.
The Bureau takes on specific projects on behalf of the licensees and these are funded by the licensees.
Excess of expenditure on specific projects over the funding is recovered from the licensees.
During the year, the Bureau received an amount of AED 20,000,000 (2012:AED 15,538,489) from Abu Dhabi
Water Electricity Authority as advance for license fees for the following year.
The balances with licensees have been classified in the statement of financial position as follows:
2012
AED
2013
AED
Current liabilities
Non-current liabilities
34,352,608
858,219
10,992,500
7,801,381
35,210,827
18,793,881
12. Fair values of financial instruments
The fair values of the Bureau’s financial assets and liabilities are not materially different from their carrying values at
the reporting date.
13. Financial risk management objectives and policies
The Bureau is exposed to credit risk, interest rate risk, currency risk and liquidity risk. Management reviews and
agrees policies for managing each of these risks, which are summarised below.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Bureau collects licence fees from its related parties. Licence fees are
collected based on an annually forecast budget. The Bureau is exposed to credit risk from its operating activities
(primarily for other receivables and amounts due from licensees) and from its financing activities, including
deposits with banks and financial institutions and other financial instruments.
The Bureau trades only with recognised, creditworthy third parties. It is the Bureau’s policy to monitor other
receivables on an ongoing basis.
With respect to credit risk arising from other financial assets of the Bureau, which comprise cash and short term
deposits, the Bureau’s exposure to credit risk arises from default of the counterparty, with a maximum exposure
equal to the carrying amount of these instruments. The Bureau seeks to limit its credit risk to banks by only
dealing with reputable banks.
Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or fair values of
financial instruments. The Bureau earns interest on its short-term deposits.
Interest rate risk table
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other
variables held constant, of the Bureau’s results. There is no direct impact on the Bureau’s equity.
38
Effect on profit
for the year
AED
Increase/decrease
In basis points
2013
AED
AED
50
-50
100,200
(100,200)
2012
AED
AED
50
-50
24,496
(24,496)
Liquidity risk
The Bureau limits its liquidity risk by monitoring its current financial position in conjunction with its cash flow
forecasts and close communication with licensees 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 2013 were less
than three months (2012: less than three months).
Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates.
The Bureau is not exposed to foreign exchange risk as all its transactions are either in UAE Dirhams or US Dollars
or currencies that are pegged to USD. As the UAE Dirham is pegged to the US Dollar, balances in US Dollars are not
considered to represent significant foreign currency risk.
14. Comparative information
The following comparative figure has been reclassified to conform to the current year presentation. Such
reclassification has no effect on the previously reported financial position or performance of the Bureau.
Statement of financial position
Expenses pending recharge to licensees (asset), amounts pending recharge to licensees(asset) and advances
from licensees (liability) have now been consolidated and reported as balances with licensees as at
31 December 2012.
15. Commitments
Capital commitments
Estimated capital expenditure contracted for at the reporting date, but not yet incurred amounted to
AED 176,810 (2012: AED nil).
Operating lease commitments
The Bureau has entered into commercial leases for office 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 surveyor.
Future minimum rentals payable under operating leases as at 31 December are as follows:
2013
AED
39
2012
AED
Within one year
After one year but not more than five years
More than five years
5,088,920
35,062,687
-
4,846,590
33,965,992
6,185,613
Total operating lease expenditure contracted for at the reporting date
40,151,607
44,998,195
The Regulation & Supervision Bureau
Annual Report 2013
‘An audit 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.’
Ernst &Young
The Regulation & Supervision Bureau
PO Box 32800, Abu Dhabi
United Arab Emirates
bureau@rsb.gov.ae
www.rsb.gov.ae
(ED/P02/100)