ANALYTICAL NOTE
on INCOMES AND EXPENSES OF OPEN JOINT-STOCK ENERGY
COMPANIES OF THE KR
(according to the results of conducted annual general meetings of
shareholders on the activities of energy companies for 2011 and
approval of their draft project for 2012)
Executor:
Professor V.M. Kasymova
Member of the SBFESTI, analyst
April – May 2012, Bishkek
Urgency: To fulfill the primary function of the Supervisory Board for the Fuel Energy Sector
Transparency Initiative under the Ministry of Energy of the KR on regular informing of the society about
incomes and expenses of the energy companies, professor Kasymova B.M., the member of the
SBFESTI, took part in past annual general meetings of shareholders and analyzed reports on financial
and economic activities thereof; on distribution of income and dividends, and provided estimate of
planned budgets for 2012 and specified problems existing in the sector
1. Analysis of the financial and economic activities of energy companies following
the results on consideration thereof at the annual general meeting of
shareholders for 2011 and approved budget plan for 2012
1.1. Analysis of the financial and economic activities of the “Severelectro” OJSC for 2011 and budget for
2012
Annual General Meeting of the Shareholders of the “Severelectro” Open Joint-Stock Company was
held on April 11, where 14 issues were considered and heard: reports of the General Directorate
on the results of the financial and economic activities of the «Severelectro» OJSC for 2011;
opinion of the independent auditor of “Hichtec-Audit” LLC on the results of the “Severelectro”
OJSC’s activities for 2011; findings of the Audit Commission; On execution of the Estimate of
expenses for maintaining of the Board of Directors and Audit Commission for 2011; On the
General Directorate’s report on execution of the “EPP” OJSC’s budget for 2011; On annual
balance sheet, profit-an-loss account of the «Severelectro» OJSC for 2011; On the order of
profits distribution for 2011, on the size and order of distribution of the dividends for 2011; on
the Report of the «Severelectro» OJSC’s Board of Directors for 2011; on the strength of the
Audit Commission of the «Severelectro» OJSC for 2012; On Estimate of expenses for
maintaining of the BD’s and Audit Commission’s members for 2012; On annual planned budget
of the «Severelectro» OJSC for 2012; On introduction of amendments and additions into the
Charter of the «Severelectro» OJSC;
Not a Chairman of the Board of Directors but A. Mukanbetov, a representative of the principal
shareholder of the Company from the State Property Fund of the Kyrgyz Republic, chaired the annual
meeting of the shareholders. A. Mukanbetov answered all the questions of the shareholders, but not a
Director General or Chairman of the Board of Directors, at the same time he abruptly pulled up ordinary
shareholders asking questions and did not afford an opportunity to them to speak at a debate on discussing
of reports.
The report of the Director General K. Ismailov on the results of the financial and economic activities
(FEA) of the “EPP” OJSC for 2011 included only current situation. The problems concerning the failure
rate of equipment and networks, extent of wear thereof and required capital investments for their renewal
and modernization were not voiced. The report of the Director General K. Ismailov did not cover the
assistance of the SB FESTI for establishment of Service Quality Centers (SQC) under the distributing
companies of the Kyrgyz Republic and under the Head Office of the “Severelectro” OJSC.
The SQC acted as a community liaison office, trust line, press secretary and performed the functions on
supervising of the quality of electric energy consumers servicing for the past autumn-winter tense period
in power supply accompanied by numerous failures and consumers cut off.
1. Analysis of the results of «Severelectro» OJSC’s FEA for 2011 shows that:
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Production activity was carried out according to the budget approved for 2011, but due to
increase in power demand to 17%, introduction and connection of new multistory apartment
houses and business centers in Bishkek, due to newly installed TS amounting to 75 units and
due to particular cold winter and increase in consumers load, the receipt of power energy in
the «Severelectro» OJSC’s networks increased to 121% as compared to 2010 and to 114 %
under the plan for 2011 and amounted to 5 334.3 million kWh.
As compared to 2010 overall losses decreased by 1.49% and amounted to 23.48% from
receipt to networks or to 1255.0 million kWh and did not reach 19.5% planned by the
Ministry of Energy of the Kyrgyz Republic.
Technical losses amounted to 16.2% and increased by 1.39 % as compared to 2010 due to
increase in receipt of power energy mains. Commercial losses amounted to 7.22% and
decreased by 2.9% as compared to 2010 due to implementation of planned measures and
intensification of work with sales controllers.
Income from power energy sale amounted to 3754.1 million KGS, which 105% more than the plan
and 109.2% for 2010 and is related to the growth of productive supply and increase in demand for power
energy.
.total costs amounted to 3507.5 million KGS out of them:
- own costs of the company for 2011 without purchased power energy amounted to 1357.804 million
KGS and a share of depreciation charges in the structure thereof amounted to 13.4.%, while major 41.2%
share thereof falls within the labor compensation fund under average annual salary of 14539 KGS per
one employee; per auxiliary materials – 9.1% and others 11%. Taxes amounted to 15.805 million KGS or
1.1%.
- power energy purchase costs amounted to 2149.645 million KGS or 57%;
Income tax amounted to 11.431 million KGS; other operating and non-operating expenses amounted to
171.677 million KGS. (The attention should paid here to that the «Severelectro» OJSC does not bear
costs for purchased energy in fact, as the power energy is not stored, production matches with
consumption, the producer («EPP» OJSC and supplier (“NPNK” OJSC)) partially receives income from
its sales when consumers make payments and a part of funds remained at the disposal of the
«Severelectro» OJSC is accumulated in terms of accounts receivable to them). «Severelectro» OJSC
would bear costs for purchased energy if it have taken a loan from the bank for 2149.645 million KGS
and have paid in advance for the energy produced by the «EPP» OJSC and supplied by the “NPNK”
OJSC.
Costs per 1 kWh of productively supplied power energy amounted to 41.4 KGS tyiyns against 45.3 KGS
tyiyns in 2010 based on the own costs. Based on the aggregate costs in view of the purchased energy, the
costs per 1 kWh of productively supplied power energy amounted to 84.8 KGS tyiyns in 2011 against
108.1 KGS tyiyns in 2010.
Average established tariff amounted to 92.02 tyiyns and average collected tariff amounted to 89.74
tyiyns/kWh.
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As of 01.01.12, accounts receivable amounted to 359.3 million KGS and increased by 64.2 million KGS
as compared to its volume as of 01.01.2011 mainly due to non-payment by the state-financed
organizations. The sum of budget debt together with taxes and penalties amounts to 77.3 million KGS,
19.5 million KGS out of them is republican debt – 57.8 million KGS is local. Population debts amount to
204.6 million KGS. According to the detected facts of power energy theft, debt amounts to-95 million
KGS. If the debts are broken down to territories, then: Chui oblast– 124.4 million KGS and it increased to
6.9 % at the same time; Bishkek– 174 million KGS and growth to 43.4 million KGS.; Talas oblast - 61
million KGS and the growth amounted to 13.8 million KGS under the budget.
Cutting consumers off for debts – 266497 users, which debts amounted to 169 million KGS.
Accounts payable –in total they amounted to 2492.8 million KGS as 01.01.11; and to 2171 million
KGS as of 01.01.12, 1053.9 million KGS out of them - «EPP» OJSC, 417 million KGS - NPNK.
Net profit to distribution amounted to 88.093million KGS, which is 2.64 times as many as the planned
and 1.3 times less than the profit gained in 2010. The profit is distributed under the “Provision on the
profit distribution procedure for 2011” prepared by the Board of Directors (BD) and approved at the
present General Meeting of Shareholders. According to the provision, 28.2% or 24.842 million KGS out
of the net profit is spent for payment of dividends, assignments to the reserve fund amount to 5%– 4.407
million KGS., material incentives for employees - 10%– 8. 809 million KGS; 56.8 or 50.037 million
KGS will be used for development of production.
Repairs cost 287.7 million KGS and it is 126% more than in 2010, however, in cost price of power
energy distribution services to be provided …%;
Capital investments amounted to 346.831 million KGS, for reconstruction – 91.7 million KGS or 26%,
for new construction -125.4 million KGS or 36%, for technical re-equipping -104.2 million KGS or 30%
and for purchasing of materials for Automatic system for commercial accounting of power consumption 8%. There were put into operation more HV lines of 35 kW – 1.73 km, HV lines of 6-10 kW - 28 km; of
kW – 0.4 kW - 63.55 km. Particularly in Chui oblast -32.47 km; in Bishkek- 61.4 km. To improve power
supply reliability there were installed and put into operation Substations of 10/0.4 kW – 75 units,
including in Chui oblast–29 units; in Bishkek – 29 units; in Talas– 17 units. The power of transformers of
10/0.4 kW voltage was increased – it covered 93units of transformers, in Chui oblast – 38 units; in
Bishkek – 40 units, in Talas oblast– 15 units.
28.2% of the profit or 24.842 million KGS were assigned for dividends disbursement. Dividend per
share amounted to 0.025733700707 KGS. Amount of dividends payable: 19.99 million KGS to the State
Property Management Fund, 3.269 million KGS to the Social Fund, 978.603 thousand KGS to legal
entities; 599.677 thousand KGS to natural persons.
Dividends due to 2011 will be paid starting from July 1, 2012
2. A “Draft Budget of the «Severelectro» OJSC for 2012 год” has been approved, it covers the
following:
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It is planned that the power energy would be received in the volume of 5250.0 million kWh, losses
are planned to be reduced to 18.5% or 969.5 million kWh, upon consumption for auxiliaries – 9.93
million kWh, productive supply shall amount to 4270 million kWh;
It is expected that income will amount to 3966.214 million KGS from the «EPP» OJSC at a purchase
price of 12.46 tyiyns/kWh for power energy under the formed cost of power energy production – 58.8
tyiyns/kWh.
Expenses will amount to 3 926. 214 million KGS. Therewith, a salary fund is increased to 110 million
KGS in the structure of production costs as compared to 2011, which does not pay its way under the crisis
conditions. Credit repayment costs amounted to 814.360 million KGS, capital investments for repair,
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modernization and development will amount to 614.807 million KGS, particularly, 380.819 million KGS
will be taken from the profit.
Expected profit is evaluated to be 40 million KGS
According to voting results, the General Meeting of Shareholders has approved the draft Budget
of the «Severelectro» OJSC.
1.2. Analysis of the results of «EPP» OJSC’s FEA for 2011 and budget plant for 2012
General Meeting of Shareholders of the “Electric power plants” OJSC was held on April 12,
2012 (“EPP”), where 16 issues were considered and heard: reports of the General Directorate
on the results of the financial and economic activities of the «EPP» for 2011; opinion of the
independent auditor of «Kyrgyzaudit» JSCF CJSC on the results of the «EPP» OJSC’s activities for
2011; findings of the Audit Commission; On the General Directorate’s report on execution of
the “EPP” OJSC’s budget for 2011; On annual balance sheet, profit-an-loss account of the «EPP»
OJSC for 2011; on the Provision of the distributable profit using procedure of the «EPP» OJSC ;
On the order of profits distribution for 2011, on the size and order of distribution of the
dividends for 2011; on the Report of the «EPP» OJSC’s Board of Directors for 2011; on the
strength of the Audit Commission of the «EPP» OJSC for 2012; On Estimate of expenses for
maintaining of the BD’s and Audit Commission’s members for 2012; On annual planned budget
of the «EPP» OJSC for 2012; On introduction of amendments and additions into the Charter of
the «EPP» OJSC; On introduction of amendments and additions into the Provision on the
regulatory bodies of the «EPP» OJSC .
The report of the Director General A. Tentiev on the results of the financial and economic
activities of the «EPP» OJSC for 2011 was factful and included both the current situation and
strategic goals and objectives for production of power and heat energy to ensure reliability and
stability of the power supply to country’s consumers and expand export potential in future.
Analysis of FEA of the «EPP» OJSC for 2011 shows:
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Concerning production activities: electricity production by the power plants has or the first
time reach 14.957 billion kWh, growth amounted to 109.4% as compared to the plan for 2011
and to 126.1% as compared to 2010; productive supply to domestic consumers amounted to
11.185 billion kWh and increased by 891.3 billion kWh against the plan, which was caused by
the weather-climatic conditions of the autumn-winter period; export of power energy
increased to 2.634 billion kWh, which is more to 634.4 billion kWh than the plan and to 1.164
billion kWh in comparison with 2010. Export of power energy to Kazakhstan increased to 2.293
billion kWh, to Uzbekistan – to 340 billion kWh and to China – to 1.228 million kWh;
Income from power energy production amounted to 7.8743 billion KGS and increased to
1 356.2 million KGS or to 20.8% as compared to 2010 due to growth in exports to 1423.4 million
KGS and to 16.8 million KGS due to frequency regulation. Export revenues amounted to 3.452
billion KGS and were equal to revenues gained from selling of power energy to domestic
consumers – 3.5 billion kWh,
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However, revenues increased only to 11.9 million KGS against the increase in power energy
consumption at the domestic market to 1 695.9 million KGS, which is caused by the reduction
of sales rates from 34.05 tyiyns in 2010 to 27.71 tyiyns in 2011.
Production costs of the «EPP» OJSC for 2011 amounted to 5580.8 million KGS and increased to
1 086 million KGS as compared to 2010. Fuel costs reached 2 569.1 million KGS or 46.0% from
production costs, which is 294.1 million KGS less than the plan. The costs increased to 501.5
million KGS as compared to 2010.
Production cost of 1 kWh of the power energy decreased to 22.5 tyiyns against planned 29.7
tyiyns, but it increased by 0.6 tyiyns as compared to 2010 and amounted to 21.9 tyiyns. Cost
price of 1Gcal of heat energy amounted to 981.19 for 2011 against 884.62 KGS in 2010. It
increased to 96.6 or to 11%. Full cost price of 1 kWh of the power energy amounted to 41.5
tyiyns and decreased from 43.9 tyiyns to 2.4 tyiyns as compared to 2010 in view of covering for
losses from the heat energy and makeup water, housing and public utilities, loans and capital
investments.
However, collection from domestic consumers under outstanding invoices amounted to 3.947
billion kWh or 54.7% of incomes. Long-lasting accounts receivable amounted to 1.743 billion
kWh, 90.5% of which fall on distributing companies, including: «Severelectro» OJSC - 66%,
Vostokelectro - 20%, Oshkelectro -12.5%; Jalalabadelectro – 2.5%. As the regional energy
companies did not redeem accounts receivable, current payments were drawn and spent for
repaying of accounts payable.
Upon growth of heat energy supply to 103.8% and decrease in its production costs up to 981.4
KGS/Gcal against planned 1077.5 KGS/Gcal, losses on heat energy amounted to 1.765 billion
kWh against planned 1.933 billion kWh. It is impossible to withdraw it from the loss-making
state for a while because of low tariffs and high production cost. Nevertheless, there were
taken measures and costs were reduced as compared to planned figures: from the production
of heat energy at the HPP - to 167.8 million KGS, from the production of makeup water – to
67.9 million KGS. Cost price of the makeup water amounted to 11.6 KGS/m3 when it was
planned to be 14.6 KGS/m3. In the cost price of the heat energy, fuel costs amounted to 65 %
or 1.460 billion kWh. In this connection, measures were taken to reduce the same and an
agreement was signed with Kulan coal suppliers at a price of 23.5 USD/ton to cut the costs.
However, I am of the earnest conviction that none of power engineering specialists supposed
that the background radiation of the coal would be so high. Here the Customs Service of the
Kyrgyz Republic showed its dishonest attitude to its official duties.
Result and profit from the production cost was obtained at the rate of 2 293.0 million KGS, the
same amounted to 223.8 million KGS from the minor activities, other profits amounted to 280
million KGS, where as credit interests expenses amounted to (-316.7 million KGS). Such results
were obtained due to taking of cardinal measures to cut material costs by 649.2 million KGS. In
addition, fuel costs were reduced to 293 million KGS, auxiliary materials costs were reduced to
224 million KGS and costs of productive nature services reduced to 157 million KGS against the
plan. At the same time power energy production at the HPS increased to 1.27 times, there were
no escapages from Toktogul reservoir in summer (like in previous years).
Pre-tax balance sheet profit was obtained at the rate of 2517.3 million KGS. Income tax
expenses amounted to 267.9 million KGS and in total the net profit amounted to 2 249.432
million KGS, from which there were for the first time assigned dividends per shares at the rate
of 27.61915 % or 621.272 million KGS.
Cost of 1 share evaluated to 64.36 tyiyns. Share of the State Property Fund amounts to
80.48%, so 500.0 million KGS will be transferred to the state budget.
Share of the Social Fund amounts to -13% or 80.6 million KGS will be proceeded for paying of
pensions and allowances to the population.
Ordinary shareholders will receive dividends depending on the quantity of shares owned by
each of them at the same price of 64.36 tyiyns per 1 share.
The remained sum of profits was distributed as follows: capital investment expenses for 2011 437.9 million KGS; expenses for covering of liabilities under principal amount of loans 2011 320.3 million KGS; capital stock creation expenses – 112.471 million KGS.
In total, the profit remained with the Company or development of production amounted to
747.487 million KGS, which was used in 2011.
2. Planned budget of the «EPP» OJSC was approved for 2012 with losses, as the state
Department for regulation of FES reduced the volumes of average selling tariff up to 22.1
tyiyns to domestic large consumers when the power energy production cost amounted to 58.8
tyiyns per 1 kWh. The Company sold energy to REN at a price of 15.2 tyiyns, it exported the
energy at a price of 37.5 tyiyns per 1 kWh. When the production cost of the heat energy
amounted to 130.75 KGS per 1 Gcal, selling tariff was approved at the rate of 190.38 KGS per 1
Gcal, which did not cover all the necessary expenditures for their production. Therefore, there
are planned book losses for 2012 at the rate of 1 760.9 million KGS and the budget is expected
to be executed at a deficit at the rate of 3007.8 million KGS.
Annual General Meeting of Shareholders approved certainly loss-making planned budget of the
«EPP» OJSC. Decisive vote of the State Property Fund of the KR, which owns 80.48% of energy
company’s shares, means nothing in front of the opinion of other shareholders, including
ordinary shareholders who worry more about losses of the “EPP” OJSC planned by the State
Department for regulation of the FES.
Deficit is mainly caused by the low level of the average selling tariff of the energy fixed by the
State Department for regulation of the FES, which does not cover all the necessary
expenditures for the production thereof by the “EPP” OJSC.
Major problems are:
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REN has huge accounts receivable of amounting to 1214.5 million KGS, which is one of the
primary reasons for the tight financial standing of the “EPP” OJSC, which is experiencing
grinding difficulties in financing of operational and repair works saying nothing of the new
construction.
Losses of profit for the state budget of the country for 2012: it is shortfalls of income taxes
and absence of dividends deduction to the State Property Fund and to the country’s budget and
Social Fund accordingly, which amounted to 848 million KGS according to the results of 2011.
The «EPP» OJSC assigned 1.3 billion KGS in whole to the budget for 2011.
1.3. Analysis of the results of «NPNK» OJSC’s FEA for 2011 and budget for 2012
General Meeting of Shareholders of the “National Power Networks of Kyrgyzstan” OJSC was
held on April 12, 2012 (“EPP”), where shareholders heard: reports of the General Directorate
on the results of the financial and economic activities of the «NPNK» OJSC for 2011; opinion of
the independent auditor of «AUDIT GROUP» LLC on the results of the «NPNK» OJSC’s activities
for 2011; findings of the Audit Commission on the results of EA verification for 2011; On the
General Directorate’s report on execution of the «NPNK» OJSC’s budget for 2011; On annual
balance sheet, profit-an-loss account of the «NPNK» OJSC for 2011; Provision on the
distributable profit using procedure of the «NPNK» OJSC; On the order of profits distribution for
2011, on the size and order of distribution of the dividends for 2011; on the Report of the
«NPNK» OJSC’s Board of Directors for 2011; on the strength of the Audit Commission of the
«NPNK» OJSC for 2012; On Estimate of expenses for maintaining of the BD’s and Audit
Commission’s members for 2012; On annual planned budget of the «NPNK» OJSC for 2012; On
introduction of amendments and additions into the Charter of the «NPNK» OJSC; On
introduction of amendments and additions into the Provision on the regulatory bodies of the
«NPNK» OJSC.
The report of the Director General M. Aitkulov on the results of the financial and economic
activities of the «NPNK» OJSC for 2011 included both the current situation and strategic goals
and objectives for ensuring energy security of the country. The report stated that the Kyrgyz
energy system worked in parallel to the Bulk Electricity System of the Central Asia and Unified
Energy Systems of Kazakhstan and Russia in 2011, which positively affected the stability of the
energy system operation and loads passage conditions with standard frequency of current.
Highest consumption as to the power amounted to 236 mVAin December 2011 throughout the
country (North-1700 mW; South-1055 mVAagainst planned 2680 mVA(North – 1700, South 1055 mW). Winter operating conditions were possible to ensure only under parallel operation
of KES with the energy systems of BES CA.
1. Production activity: receipt of power energy to the networks in the volume of 14618 million
kWh exceeded both planned 13 687 million kWh and volumes of 2010– 11525.3 million kWh or
to 11.8%. Technical losses amounted to 5.28%, which lower to -6.32% than planned, but
exceeded the level of 2010 – to 5.17%.
2. Analysis of FEA for 2011 of the «NPNK» OJSC showed that:
 Income from transmission of power energy by the high-voltage networks or tax-free
commercial output in 2011 amounted to 2.677 billion kWh when the plan was 2.425 billion KGS
and growth amounted to 110.8% and to 116% more than the level of 2010. In addition, income
from power energy transmission inside the country amounted to 1875.3 million KGS or 70 %,
from export - 385 million KGS or 14%, income for frequency regulation in BES CA - 417 million
KGS or 16% of the aggregate income. Decrease amounted to 0.61 tyiyns under the transmission
tariff of 13.15 tyiyns/kWh in 2011, which was lower than the tariff of 2010-13.75 tyiyns.
 Amount of costs, expenses and financial obligations was 2456.9 million KGS and increased by
110% as compared to 2010. Material costs trend to reduction in the cost structure, which
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amounted to 5.0 %, salary fund - 17 %, depreciation charges - 12%, assignments to the social
fund and taxes – 3.0 %, co-financing 5.0%, debt servicing -9% , costs on “EPP” OJSC - 23%,
services of the «Uzbekenergo» SJSC -15%;.
Cost price of 1kWh power energy transmission amounted to 18.07 tyiyns in view of ourchased
energy costs (for Kumtor) and frequency regulation costs;
Accounts receivable amounted to 3 189.9 million KGS as of 01.01.12, 1163.1 million KGS or
36.5% out them fall on REN and 271.9 million KGS or 8.5% other account receivable, including
Kumtor JV (50.7 million KGS) иand other CME (48.7 million KGS), besides it 1754.9 million KGS
or 55% fall on the ТВЕА China Company for construction of the SS Datka.
Accounts payable at the end of the year amounted to 511.2 million KGS, 252.2 million KGS or
43% out of them under foreign loans; «EPP» OJSC – 40.7 million KGS; «Uzbekenergo» SJSC - for
the reliability assurance services -31.6 million KGS; other debts amounted to 71 million KGS.
Long-term accounts payable amount to 5 073.2 million KGS including long-term foreign loans of
4 691 million KGS or 92.5 %with a repayment period until 2030.
For 2011, the «NPNK» OJSC settled obligations: on foreign loans 250.3 million KGS to GFRE and
has no debts in arrears;
Under taxes – to the amount of 260.7 million KGS, this is higher to 228.6 million KGS than in
2010;
Accounts payable to the Social Fund– 133.6 million KGS, which is more to 106.4 million KGS
than in 2010.
Net profit of the «NPNK» OJSC amounted to 244.484 million KGS and increased to 2.5 times
against the plan. But profits were 1.7 times less than the profits gained in 2010. Profit per one
share amounted to 0.2533 KGS against 0.4310 in 2010.
Capital investments for 2011 were made in the volume of 926 368.4 thousand KGS or 92.64%,
85.6% were spent for new construction, 2.4% - for reconstruction, 12% - technical reequipment;
The running and capital repair works were performed to the amount of 96 052 thousand KGS,
85% out of it were used for repairing of main power-generating equipment, including running
repair of Substations-10493 units, HV lines-6710.5 km to the amount of 51 634.8 thousand KGS,
overhaul of SS -1812 units, HV lines -745.7 km to the amount of 29 747.7 thousand KGS;
Failure rate: 83 power cutoffs took place in electrical networks of 110-500kW voltage in 2011, which
were qualified as damages, 3 of them were qualified as failures; 15 – as faults of the 1st degree and 65
faults of the 2nd degree. Total failure in power energy supply amounted to 539.2 thousand kWh;
Procedure of profit distribution, size and payment of dividends: according to the decision of the
Board of Directors, minutes dated 12 March 2012, the size of dividends is fixed as 35% of the profit to
the amount of 85 569.4 thousand KGS, which per one share amounts to 8.865119 tyiyns. The dividends
to be paid to the State Property Fund that owns 80.48% shares amounted to 68 870.7 thousand KGS, to
the Social Fund owning 13% of shares -11 262 thousand KGS and to legal persons– 3445.6 thousand
KGS and to natural persons -1990.8 thousand KGS. Thus, ordinary shares will receive dividends based on
the size thereof per one share – 8.86 tyiyns – depending on the number of shares owned by them.
3. The budget for 2012 provided for incomes amounting to 2892201 thousand KGS, including income
from transmission of power energy at the domestic market– 81%, export revenue -12%, from frequency
regulation– 7%.
4. Expenses and costs were estimated in 2012 to the amount of 2892170 thousand KGS , including for:
-repair – operating activities – 27.3%;
- depreciation expenses -11.9%;
- frequency regulation – 2.9%;
- social insurance – 209%, taxes (on land, property and garbage) – 0.3%;
-purchased power energy for Kumtor (KOK) – 12.3%;
- compensation for losses in networks of neighboring energy systems KEGOK, Barki-Tochik,
NPNK OJSC-2.9%; compensation for losses in networks of Uzbekenergo SJSC – 13.4%;
-debt service expenses – 13.65;
- co-financing of capital investments– 12.4%.
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Profit is not expected as the State Department for regulation of the FES has established the average
selling tariff for domestic consumers at the rate being lower than the declared rate capable to cover the
costs and expenses of the «NPNK» OJSC.
Consequently, loss of benefit of the state budget is the absence of the income tax and dividends of the
State Property Fund and Social Fund (it is about 122 million KGS if it is conditionally accepted at the
level of 2011).
Major problems distinguished by the Audit Commission and Supervisory Board are:
- decrease in accounts receivable of REC;
-exercising of control of whether the branches are using cash assets strictly for the intended purpose;
- ensure systemization, regulation, classification and prevention of the growth of residues of commodities
and materials and take materials available at the branches’ warehouses into account upon drawing of the
CAM procurement plan.
-the management of «NPNK» OJSC must ensure maximum cost effectiveness and purchasing efficiency.
While doing so, it must strictly comply with the KR Law “On public purchases” and other regulatory
legal acts on minimization of costs and expenses.
1.4 Analysis of FEA of the “Vostokelectro” OJSC for 2011 and budget for 2012
General Meeting of Shareholders of the “Vostokelectro” OJSC was held on April 24, 2012,
where the shareholders considered and heard 12 issues: reports of the General Directorate on
the results of the financial and economic activities of the «Vostokelectro» OJSC for 2011;
opinion of the independent auditor of «AUDIT GROUP» LLC on the results of the
«Vostokelectro» OJSC’s activities for 2011; findings of the Audit Commission; On execution of
the Budget of expenses for maintaining of the Board of Directors and Audit Commission for
2011; On the General Directorate’s report on execution of the «Vostokelectro» OJSC’s budget
for 2011; On annual balance sheet, profit-an-loss account of the «Vostokelectro» OJSC for
2011; On the order of profits distribution for 2011, on the size and order of distribution of the
dividends for 2011; on the Report of the «Vostokelectro» OJSC’s Board of Directors for 2011;
On Estimate of expenses for maintaining of the BD’s and Audit Commission’s members for
2012; On annual budget of the «Vostokelectro» OJSC for 2012; on the strength of the Audit
Commission; On introduction of amendments and additions into the Charter of the
«Vostokelectro» OJSC.
Achikeev J.I, the Chairman of the Board of Directors, chaired the annual meeting of shareholders, M.
Cholponkulov presented on behalf of the Ministry of Energy of the Kyrgyz Republic and A. Mukanbetov
presented on behalf of the State Property Fund of the Kyrgyz Republic.
«Vostokelectro» OJSC has been operating as the independent legal person since 12 June 2001.
It consists of the parent enterprise having 14 REN and other structural subdivisions with total
strength of 1634 persons under its subordination. Average annual salary of personnel amounts
to 10401 KGS. It has PTL of 12693.9 km length between 0.4 and 35 kW voltage, 63 substations
with total power of 352.2 mVA as well as 4475 transformers ТП-6/10-0.4 kW with total fixed
power of 769.4 mW, which service 14 regions, 33 sections of electrical networks with 58 teams
of operation and operation - maintenance personnel.
1. Analysis of FEA of the «Vostokelectro» OJSC for 2011 shows that:
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Production activities were carried according to the approved budget for 2011, due to particular
cold winter and increase in consumers load, the receipt of power energy in the «Vostokelectro»
OJSC’s network increased to 112% as compared to 2010 and to 100.5 % against the plan for
2011 and amounted to 1459.9 million kWh.
Total losses decreased by 7.4% as compared to 2010, amounted to 23.7 % of the receipt to
network or to 346.2 billion kWh, and did not reach the planned 19.5% established by the
Ministry of Energy of the Kyrgyz Republic.
Technical losses amounted to 16.0 % and decreased by 02% as compared to 2010.
Commercial losses amounted to 112.5 billion kWh or 7.7% against planned 3.5% and decreased
by 7.2% as compared to 2010 due to execution of planned measures and intensification of work
with sales controllers and conducting of 5191 patrol inspections. Failure to achieve planned
indicators of decrease in commercial losses can be explained by that only 17.8% of instrument
gages out of 168291 units are electronic instruments, other gages are induction-type
instruments with poor measurement accuracy. Replacement of old gages require for 925.2
million KGS, which the company do not have for sure.
Productive supply amounted to 1106.7 billion kWh, which is less than the plan to 1141.4 billion
kWh and income from power energy sales amounted to 1097.407 million KGS, which is more to
10.5% than in 2010.
Average selling tariff amounted to 0.89 KGS and 893.167 million KGS or 90.4% were received from the
commercial output, which is more 120.4 million KGS than in 2010.
Accounts receivable without VAT amounted to 291.5 million KGS and it was increased to 4.9% as
compared to 2010. Accounts receivable from the population amounted to 32.4%; from industrial
organizations – growth to 21.4%, from other business entities fund arrears amounted to 98.4%; from
state-financed organizations – 22.3%.
Total costs amounted to 1066.329 million KGS, out of them:
- own expenses of the company for 2011 without purchased power energy amounted to 572.8 million
KGS or 51.8 tyiyns per 1 kWh of supplied power energy and the share of material costs in its structure
amounted to 17%, the share of depreciation charges amounted to 5.5 %,while significant share thereof
amounting to 35.5% falls on the salary fund; miscellaneous expenses -13%, taxes amounted to -0.3%, for
overhaul -3.4%, for running repair – 5.5%, costs from profit - 7.8%.
- power energy purchase costs amounted to 349.855 million KGS or 32% at a rate of 23.96 tyiyns/kWh
for the power energy to be purchased from the «EPP» OJSC; transit costs amounted to 189.028 million
KGS or 17.7% of total costs when the tariff for transit services was 12.95 tyiyns /kWh;
(The attention should paid here to that the «Vostokelectro » OJSC does not bear costs for purchased
energy in fact, as the power energy is not stored, production matches with consumption, the producer
(«EPP» OJSC and supplier (“NPNK” OJSC)) partially receives income from its sales when consumers
make payments and a part of funds remained at the disposal of the «Vostokelectro» OJSC is accumulated
in terms of accounts receivable to them. «Vostokelectro» OJSC would bear costs for purchased energy if
it have taken a loan from the bank for 538 million KGS and have paid in advance for the energy produced
by the «EPP» OJSC and supplied by the “NPNK” OJSC).
Costs per 1 kWh of productively supplied power energy amounted to 51.8 KGS tyiyns against 40.8 KGS
tyiyns. Based on the aggregate costs in view of the purchased energy, the costs per 1 kWh of productively
supplied power energy amounted to 96.3 tyiyns in 2011 against 86.5 tyiyns and …. tyiyns in 2010. As the
Company does not take credit for making of advance payments to producers and suppliers of power
energy received in its network for sale, then only own costs of the «Vostokelectro» OJSC for rendering of
services on distribution and marketing of power energy to consumers upon fixing of tariffs for power
energy.
Average established tariff amounted to 0.89 tyiyns and average collected tariff amounted to ...
tyiyns/kWh.
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Collection of financial assets for 2011 amounted to 893.1 million KGS or 90.45 of the commercial
output. Collection of the same from the population amounted to 411.3 million KGS or 93.2% and
was more to 833.4% than in 2010.
As of 01.01.12, accounts receivable amounted to 291.5 million KGS and increased by 4.9%, particularly
32.4% - due to non-payment by population, 22.3% - by the state-financed organizations. The sum of
budget debt together with taxes and penalties amounts to 26.2 million KGS, 1.8 million KGS out of them
is republican debt and 5.0 million KGS is local debt. Population debts amount to 41.5 million KGS.
According to the detected facts of power energy theft, debt amounts to …..
Accounts payable amounted to 431.258 million KGS in total as of 01.01.11 and 475.509 million KGS
as of 01.01.12, 328.32 million KGS out of them to the «EPP» OJSC, 147.277 million KGS – to the
«NPNK» OJSC.
Net distributable profit amounted to 30.079 million KGS (in report) and 31.078 million KGS (under
CPR) ??, which is 2 times less than planned and … times less than the profit gained in 2010.
The profit is distributed under the “Provision on the profit distribution procedure for 2011” prepared by
the Board of Directors (BD) and approved at the present General Meeting of Shareholders. According to
the provision, 25% or 7.769 million KGS out of the net profit of 31.078 is spent for payment of dividends
and 75% or 23.309 million rubbles- for covering of losses of past years.
One share costs 0.008805 KGS. The amounts of dividends payable is distributed like: to the State
Property Fund -6.253 million KGS, to the Social Fund – 1.022 million KGS; to natural persons -299.749
thousand KGS and to ordinary shareholders – 193.872 thousand KGS.
Dividends for 2011 will be paid starting from 1 July 2012.
Operational works
Overhaul repairs were performed to the amount of 23.402 million KGS, which is more than
planned to 115% and amounted to 3.4% of the cost price. Running repair was performed to the
amount of 29.03 million KGS and exceeded the plan to 130% and amounted to 5.5% of the cost
price;
Capital investments were made to the amount of 19.14 million KGS, particularly for reconstruction 4.233 million KGS, for new construction – 8.404 million KGS, for technical re-equipment - 850 thousand
KGS. They were mainly related to reconstruction and new construction of the HV lines of 10/0.4kW.
2. SB approved “Draft budget of the «Vostokelectro» OJSC for 2012», which states that:
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It is planned that the power energy would be received in the volume of 1402.756 million kWh, losses
are planned to be reduced to 18.5% or 259.85 million kWh, commercial losses shall be reduced to 1.5%
or 21.357 million kWh, for household needs – 0.47%;
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It is expected that income will amount to 1011.957 million KGS under productive supply of the
power energy to the amount of 1136.311 million KGS at an average selling tariff of 0.89 tyiyns,
when the price of power energy purchased from the «EPP» OJSC is 20.0 tyiyns/kWh under the formed
cost of power energy production – 58.8 tyiyns/kWh.
Expenses or own costs of the Company will amount to 492.557 million KGS at the rate of 43.3
tyiyns per 1 kWh of the productively supplied power energy. Therewith, a salary fund is increased to
107% in the structure of production costs for distribution services as compared to 2011, in which case
remuneration for SB members is increased to 150%, for the members of the Audit Commission – to
106%, which does not pay its way under the crisis conditions. In view of the purchased energy and its
transit, expenses are expected to be 10011.857 million KGS.
It is expected that income will amount to 100 thousand KGS. If the company keeps the
remuneration for the members of the SB and Audit Commission at the level of 2011, then the profit
will increase to 555 .9 thousand KGS, if it leaves salary fund as it is, then the profit will increase to
more 14955 thousand KGS and so expected gains may be increased to 15 611 thousand KGS due to
salary fund alone.
Expenses for overhaul increased to 13.3 % of the cost price, for running repair – to 19.2%. At the
same time, it is planned to increase capital investments into reconstruction, technical re-equipment
and into construction to 12% from the profit as compared to 2011.
Problems: The «Vostokelectro» OJSC is experiencing big problems in renewal of fixed assets, as
the wearing of equipment reached 55.12% - on the networks of 6-10kW; 60.37%- 0.4 kW; 59.96%ТП6-10/0.4kW. Total volume to be reconstructed and constructed amounts to 2686.6 km.
1841.683 million KGS will be required in total for modernization of networks and breakers.
Replacement of instrument gages require for 1201.452 million KGS.
1.5 Analysis of FEA of the «Jalalabadelectro» OJSC for 2011 and budget for 2012
General Meeting of Shareholders of the “Jalalabad” Open Joint Stock Company was held on
April 18, where the shareholders considered and heard 15 issues: reports of the General
Directorate on the results of the financial and economic activities of the «Jalalabadelectro»
OJSC for 2011; opinion of the independent auditor of «AUDIT GROUP» LLC on the results of the
«Jalalabadelectro» OJSC’s activities for 2011; findings of the Audit Commission; Reports: On
execution of the Budget of expenses for maintaining of the Board of Directors and Audit
Commission for 2011; On the General Directorate’s report on execution of the
«Jalalabadelectro» OJSC’s budget for 2011; On annual balance sheet, profit-an-loss account of
the «Jalalabadelectro» OJSC for 2011; on the Report of the «Jalalabadelectro» OJSC’s Board of
Directors for 2011; On Estimate of expenses for maintaining of the BD’s and Audit
Commission’s members for 2012; On annual budget of the «Jalalabadelectro» OJSC for 2012;
on the strength of the Audit Commission.
Kenzhekulov S.B, the Chairman of the Board of Directors, chaired the annual meeting of shareholders,
M. Cholponkulov took part on behalf of the Ministry of Energy of the Kyrgyz Republic and A.
Mukanbetov took part on behalf of the State Property Fund of the Kyrgyz Republic.
«Jalalabadelectro» OJSC has been operating as the independent legal person since 12 June
2001. It consists of the parent enterprise having 14 REN and other structural subdivisions with
total strength of 1634 persons under its subordination. Average annual salary of personnel
amounts to 10401 KGS. It has PTL of 12693.9 km length between 0.4 and 35 kW voltage, 63
substations with total power of 352.2 mVA as well as 4475 transformers ТП-6/10-0.4 kW with
total fixed power of 769.4 mW, which service 14 regions, 33 sections of electrical networks with
58 teams of operation and operation - maintenance personnel.
1. Analysis of FEA of the «Jalalabadelectro» OJSC for 2011 shows that:
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Production activities were carried according to the approved budget for 2011, due to particular
cold winter and increase in consumers load, the receipt of power energy in «Jalalabadelectro»
OJSC’s network increased to 119% as compared to 2010 and to 103.0 % against the plan for
2011 and amounted to 1420.549 million kWh.
Total losses decreased by 15.5% as compared to 2010, amounted to 20.0 % of the receipt to
network or 284.552 billion kWh, and fell short of only 0.5% of the planned 19.5% established
by the Ministry of Energy of the Kyrgyz Republic.
Technical losses amounted to 19.5 % against planned 17.5% as compared to 2010 and
decreased by ...
Commercial losses amounted to 7.283 billion kWh or decreased by 0.5% against planned 2%
and decreased by …% as compared to 2010 due to execution of planned measures and
intensification of work with sales controllers and conducting of patrol inspections.
Productive supply amounted to 1135.997 billion kWh, which exceeded the plan to 33.57 billion
kWh, and commercial output amounted to 955.497 million KGS, which is more to 10.5% than in
2010.
Total income amounted to 1061.304 million KGS in view of other income of 105.807 million KGS.
Average selling tariff amounted to 0.84 KGS and 893.167 million KGS or 90.4% were received from the
commercial output, which is more to 149.0 million KGS than in 2010
Accounts receivable amounted to 10%, in which case 1461.7 thousand KGS were written off, and it
decreased by 17 % as compared to 2010. Accounts receivable from the population amounted to 13.8% or
57268 thousand KGS, from budgetary consumers -10.8%, agricultural consumers-34%, other -4.2%
Total costs in view of capital investments amounted to 957.326 million KGS, out of which:
- own expenses of the company for 2011 without purchased power energy amounted to 404.712 million
KGS share of material costs in its structure amounted to 28.2 %, the share of depreciation charges
amounted to 5.1 %, while significant share thereof amounting to 49.4% falls on the salary fund;
miscellaneous expenses -5.8%,
- power energy purchase costs amounted to 496.468 million KGS or 52% of the total costs, out of which
312.942 million KGS under the tariff of …. tyiyns/kWh for the power energy to be purchased from the
«EPP» OJSC; transit costs amounted to 183.525 million KGS when the tariff for transit services of the
NPNK OJSC was.. tyiyns /kWh;
(The attention should paid here to that the «Jalalabadelectro» OJSC does not bear costs for purchased
energy in fact, as the power energy is not stored, production matches with consumption, the producer
(«EPP» OJSC and supplier (“NPNK” OJSC)) partially receives income from its sales when consumers
make payments and a part of funds remained at the disposal of the «Jalalabadelectro» OJSC is
accumulated in terms of accounts receivable to them. «Jalalabadelectro» OJSC would bear costs for
purchased energy if it have taken a loan from the bank for 496.468 million KGS and have paid in advance
for the energy produced by the «EPP» OJSC and supplied by the “NPNK” OJSC).
Total expenses of the Company in view of miscellaneous operating and non-operating costs
amounted to 991.231 million KGS
Costs per 1 kWh of productively supplied power energy amounted to 35.8 KGS tyiyns against planned
34.7 KGS tyiyns. Based on the aggregate costs in view of the purchased energy, the costs per 1 kWh of
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productively supplied power energy amounted to 84.1 tyiyns in 2011 against 86.5 tyiyns and 84.3 tyiyns
in 2010.
As the Company does not take credit for making of advance payments to producers and suppliers of
power energy received in its network for sale, then only own costs of the «Jalalabadelectro» OJSC for
rendering of services on distribution and marketing of power energy to consumers upon fixing of tariffs
for power energy.
Average established tariff amounted to 84.1 tyiyns against planned 84.3, and average collected
tariff amounted to 75.7 tyiyns/kWh.
Collection of financial assets for 2011 amounted to 860.230 million KGS or 90.0% of the
commercial output. Collection of the same from the population amounted to 358.5 million KGS or
86% and was more to 34% than the collection of 2010.
Accounts payable amounted to 519.987 million KGS in total as of 01.01.11 and 389,337million
million KGS as of 01.01.12, 25,709 million KGS out of them to the «EPP» OJSC, 299,161million
KGS to the «NPNK» OJSC, 695.8 thousand KGS on dividends, 6.833 million KGS to the Social
Fund; 5.898 million KGS on taxes and 0.1 thousand KGS on foreign loans
Net distributable profit amounted to 70.072 million KGS, which significantly exceeded the plan to
832.56 thousand KGS.
According to “Provision on the profit distribution procedure for 2011” prepared by the Board of Directors
(BD) and recommendation of the “Hightech Audit” Audit Company dated 30.03.13, it is decided not to
pay dividends from the net profit 70.072 million KGS as there are unrecovered losses of previous years
amounting to 284.295 million KGS.
Overhaul repairs were performed to the amount of 39.879 million KGS, which exceeded the plan to
1302% and amounted to … of the cost price. Running repair was performed to the amount of 29.03
million KGS and exceeded the plan to 121.8% and amounted to … of the cost price;
Capital investments for reconstruction, new construction and technical re-equipment were made to the
amount of 36.291million KGS, which exceeds the plan to 118%.
2. SD approved “Draft budget of the «Jalalabadelectro» OJSC for 2012, which states that:
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It is planned that the power energy would be received in the volume of 1432.2 million kWh, losses
are planned to be reduced to 18.5% or 264.957 million kWh, commercial losses shall be reduced to
0.96%, technical losses – to 17.5%, for household needs – 0.56%;
It is expected that income will amount to 1002.439 million KGS under productive supply of the
power energy to the amount of 1159.236 million KGS at an average selling tariff of 86.5 tyiyns,
when the price of power energy purchased from the «EPP» OJSC is 18.0 tyiyns/kWh under the formed
cost of power energy production – 58.8 tyiyns/kWh.
Expenses or own costs of the Company will amount to 500.108 million KGS at the rate of 43.1
tyiyns per 1 kWh of the productively supplied power energy. Therewith, a salary fund is increased to
120.8% in the structure of production costs for distribution services as compared to 2011, in which case
remuneration for SB members and for the members of the Audit Commission is increased to 286
thousand KGS, which does not pay its way under the crisis conditions. In view of the purchased energy
and its transit, expenses are expected to be 1002.299 million KGS.
It is expected that income will amount to 139.2 thousand KGS
Proposal:
If the company keeps the remuneration for the members of the SB and Audit Commission at the
level of 2011, then the profit will increase to 286 thousand KGS, if it leaves salary fund as it is, then
the profit will increase to more 41449.6 thousand KGS and so expected gains may be increased to
15 611 thousand KGS due to controlling of the salary fund’s growth alone.
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At the same time, it is planned to increase capital investments into reconstruction, technical reequipment and into construction to 125% or 45 723.5 thousand KGS from the profit as compared
to 2011.
Problems: The Company is experiencing big problems in renewal of fixed assets, as the wearing of
equipment reached 40% - on the networks of 6-10kW; 72%- 0.4 kW; 70%-ТП6-10/0.4kW. The
greatest problem is removal of the instrument gages, which amounted to 17%. It is necessary to
speed up their replacement with electronic metering instruments or introduce Automatic system
for commercial accounting of power consumption. It will require for 601.8 million KGS. The
Company needs to make capital investments at the level of 2095 million KGS in order to eliminate
bottlenecks of operating part. There will be needed capital investments amounting to 2 431.3
million KGS throughout the Company to complete planned measures.
1841.683 million KGS will be required in total for modernization of networks and breakers.
Replacement of instrument gages require for 1201.452 million KGS
1.6
Analysis of FEA of the “Oshelectro” OJSC for 2011 and budget for 2012
Annual general meeting of the shareholders of the “Oshelectro” Open Joint-Stock Company was held
on April 20, where 15 issues were considered and heard: 1. On the strength of the Counting
Commission 2. On the report of the General Directorate on the results of the financial and
economic activities of the «Oshelectro» OJSC for 2011. 3. Opinion of the independent auditor
of “Hichtec-Audit” LLC on the results of the «Oshelectro» OJSC’s activities for 2011. 4. Findings
of the Audit Commission. 5. On execution of the Estimate of expenses for maintaining of the
Board of Directors and Audit Commission for 2011. 6. On the General Directorate’s report on
execution of the «Oshelectro» OJSC’s budget for 2011. 7. On annual balance sheet, profit-anloss account of the «Oshelectro» OJSC for 2011. 8. On the order of profits distribution for 2011,
on the size and order of distribution of the dividends for 2011. 9. On the Report of the
«Oshelectro» OJSC’s Board of Directors for 2011. 10 and 11. On Estimate of expenses for
maintaining of the BD’s and Audit Commission’s members for 2012. 12. On annual budget of
the «Oshelectro» OJSC for 2012. 13. On the strength of the Audit Commission. 14. On securing
of the pledged property against the “Rendering of emergency relief” loan. 15. On introduction
of amendments and additions into the Charter of the «Oshelectro» OJSC;
……, the Chairman of the Board of Directors, chaired the annual meeting of shareholders, M.
Cholponkulov took part on behalf of the Ministry of Energy of the Kyrgyz Republic and A. Mukanbetov
took part on behalf of the State Property Fund of the Kyrgyz Republic
«Oshelectro» OJSC has been operating as the independent legal person since 25 May 2001
and was formed due to reorganization of the “Kyrgyzenergo” JSC through separating of the
property complex of electric distribution networks belonged to Osh TES from it. The Company
is the legal successor of the “Kyrgyzenergo” TES in Osh. It consists of the parent enterprise
having 13 regional electrical networks (REN) and one branch of the Batken and Osh power
supply department with total strength of 2195 persons (2131 in CPR) under its subordination.
Average annual salary of personnel amounts to 10 326.9 KGS. It has 13632 km of kW of 0.4
and 35 kW voltage, 164 substations as well as 4511 transformers ТП-6/10-0.4 kW. Quantity
of users amounts to 350 007, 330 763 out of which are residential users, 900 – budget users.
The main activity is power energy supply under tariffs fixed by the authorized state body.
The Company has a license for selling of power energy and is a natural monopolist. According
to the Charter of the «Oshelectro» OJSC, it authorized capital amounts to 169.816 million
KGS, divided into 965237234 ordinary registered shares of 0.1759 KGS nominal value. 80.48%
of shares belong to the State Property Fund, 13.16% - to Social Fund; 4.002% - to legal
persons and 2.4983% -to natural persons.
1. Analysis of results of the “Oshelectro” OJSC’s FEA for 2011 shows that:
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Production activities were carried according to the approved budget for 2011, due to particular
cold winter and increase in consumers load, the receipt of power energy in «Oshelectro» OJSC’s
network increased to 117% as compared to 2010 and to 106.1 % against the plan for 2011 and
amounted to 1982.4 million kWh.
Total losses decreased by 6.4% as compared to 2010, amounted to 19.9 % of the receipt to
network or to 395.4 billion kWh, and did not reach 19.5% planned by the Ministry of Energy
of the Kyrgyz Republic.
Technical losses amounted to 18.3% or 350.1 billion kWh and decreased by 0.7% as compared
to 2010.
Commercial losses amounted to 45.34 billion kWh or 2.3% and decreased by 5.7% as compared
to 2010 due to execution of planned measures and intensification of work with sales controllers
and conducting of patrol inspections. Despite total losses reduction, indicators of some REN
leave much to be desired. For example, Osh City on power supplies – 20.55%, Kadamjai REN –
21.05% and Uzgen REN – 20.2%.
Productive supply amounted to 1583.35 billion kWh, which is more to 117% than in 2010, and
commercial output from power energy sale amounted to 1376.2 million KGS, 1250 million KGS or
90.8% were paid. Payment by the population amounted to 86.2%. Unlike the 2010, the collection of
funds in 2011 increased to 19.2% or to 201.2 million KGS.
Average selling tariff amounted to 86.9 tyiyns/kWh, average collected tariff – 79.0 tyiyns /kWh.
Accounts receivable without VAT amounted to 409.07 million KGS and it was decreased to 14.9% as
compared to beginning of the year. Accounts receivable from the population amounted to 23.2 %; from
industrial organizations – 8.1%, from other business entities fund arrears amounted to 98.4%; from statefinanced organizations – 14%.
Total costs amounted 1335.474 million KGS, out of which:
- own expenses of the company for 2011 without purchased power energy amounted to 601.595 million
KGS or 39.8 tyiyns per 1 kWh of supplied power energy and the share of material costs in its structure
amounted to 27.7%, the share of depreciation charges amounted to 5.4 %,while significant share thereof
amounting to 44% falls on the salary fund; miscellaneous expenses -5.8%, taxes amounted to -0.3%, for
capital investments – 5.8% from the profit expenses.
- power energy purchase costs amounted to 733. 879 million KGS or 55% at a rate of 23.8 tyiyns/kWh
for the power energy to be purchased from the «EPP» OJSC; when the tariff for transit services was 13.1
tyiyns /kWh; tariff for transit services - 37 tyiyns/kWh.
(The attention should paid here to that the «Oshelectro» OJSC does not bear costs for purchased energy
in fact, as the power energy is not stored, production matches with consumption, the producer («EPP»
OJSC and supplier (“NPNK” OJSC)) partially receives income from its sales when consumers make
payments and a part of funds remained at the disposal of the «Oshelectro» OJSC is accumulated in terms
of accounts receivable to them. «Oshelectro» OJSC would bear costs for purchased energy if it have taken
a loan from the bank for .. million KGS and have paid in advance for the energy produced by the «EPP»
OJSC and supplied by the “NPNK” OJSC).
Costs per 1 kWh of productively supplied power energy amounted to 35.9 KGS tyiyns based on the own
costs. Based on the aggregate costs in view of the purchased energy, the costs per 1 kWh of productively
supplied power energy amounted to 96.3 tyiyns in 2011 against 86.5 tyiyns. As the Company does not
take credit for making of advance payments to producers and suppliers of power energy received in its
network for sale, then only own costs of the «Jalalabadelectro» OJSC for rendering of services on
distribution and marketing of power energy to consumers upon fixing of tariffs for power energy
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Average established tariff amounted to 86.9 tyiyns, and average collected tariff amounted to 78.9
tyiyns/kWh per 1 kWh of productively supplied power energy.
Cutting consumers off for debts – 138181 users, which enabled to collect funds to 90.8% and accounts
receivable was reduced to 71.5 million KGS or to 14.9% from the beginning of the year. At the same time
debts of state-financed organizations amount to 38.5 million KGS or 14%, of population -235.2 and the
reduction from the beginning of the year amounted to 23.2%.
Accounts payable amounted to 901.087 million KGS in total as of 01.01.12, 167.7 million KGS out
of them to the «EPP» OJSC, 385.3 million KGS – to the «NPNK» OJSC, to Social Fund– 98.758
million KGS, under loans – 143.671, under salary -20.855, to the budget – 30.232 million KGS, to
suppliers and contractors – 23.437 million KGS.
Net distributable profit amounted to 45.148 million KGS.
The profit is distributed under the “Provision on the profit distribution procedure for 2011” prepared by
the Board of Directors (BD) and approved at the present General Meeting of Shareholders. According to
the provision, 25% or … million KGS out of the net profit shall be spent for payment of dividends. The
“Hightech Group” LLC proposed not to pay dividends due to unrecovered losses of previous years, which
is allowed under the IFRS and KR Law “On accounting”.
Operational works.

Overhaul repairs were performed to the amount of 55.446 million KGS, which is more to 110% as
compared to 2010. Running repair was performed to the amount of 45.856 million KGS and
exceeded the plan to 137%;
Capital construction was performed to the amount of 67.5 million KGS, investments were made to eh
amount of 19.14 million KGS. 5.5 million KGS were used for HVL-10/0.4 kW of 14.98 km length, 11.4
million KGS were spent for replacement of 37 power transformers of 10/0.4 kW, Installation of the
additional package transformer substations of 10/0.4 kW amounting to 18 units required 4.4 million KGS.
Removal of 6533 units of instruments gages made to spend 5.3 million KGS. 5.4 million KGS were used
to reconstruct cable lines of 0.23 kW of 138 km length. There were installed 7 additional units of the
package transformer substations of 10/0.4 kW and 24 power transformers of 10/0.4 kW were replaced
under the project of “Rendering of emergency relief”.


No faults took place as compared to 2010, faults of the 1st degree reduced from 9 to 6, and faults of
the 2nd degree – from 17 to 12 cutoffs.
23 tenders were declared under the public purchases, 18 out of which were held on 18 and 22 lots
and 23 agreements were concluded. According to the inspection of the Audit Commission, the Law
“On public purchases” was not breached.
2. BD approved «Drat budget of the «Oshelectro» OJSC for 2012», which states that:





It is planned that the power energy would be received in the volume of 2059.139 million kWh, losses
are planned to be reduced to 18.5% or 381.918 million kWh, commercial losses shall be reduced to 1.11%
or 22.831 million kWh, for household needs – 0.16%;
It is expected that income will amount to 1011.957 million KGS under productive supply of the
power energy to the amount of 1673.923 million KGS at an average selling tariff of 87.3 tyiyns,
when the price of power energy purchased from the «EPP» OJSC is 16.83 tyiyns/kWh under the formed
cost of power energy production – 58.8 tyiyns/kWh and under the transfer from “NPNK” OJSC at the rate
of 17.02 tyiyns per 1 kWh.
Expenses or own costs of the Company will amount to 763.008 million KGS at the rate of 45.6
tyiyns per 1 kWh of the productively supplied power energy. Therewith, a salary fund is increased to
120 in the structure of production costs for distribution services as compared to 2011, in which case
remuneration for SB members is increased to 123% and for the members of the Audit Commission – to
128% under other expenses, which does not pay its way under the crisis conditions. In view of the
purchased energy and its transit, expenses are expected to be 1460.607 million KGS.
Profit costs are expected to be: for on payment of interests -7.837 million KGS, for repayment of
principal amount – 4.846 million KGS and in total for debt servicing- 12.836 million KGS. Capital
investments for reconstruction -55.309 million KGS and co-financing WB-69.5 million KGS. It is
planned to increase expenses for overhaul repair to 9.3% in the cost price structure.
Such increase will not decide the existing problems in renewing of fixed assets, as the equipment
wear reached the values exceeding their threshold value in twice. In general, assets required for
modernization of networks and breakers and replacing of instrument gages were not voiced in the
annual report.
It is expected that net profit will amount to 171.7 thousand KGS. If the company keeps the
remuneration for the members of the SB and Audit Commission at the level of 2011, then the profit
will increase to 558.9 thousand KGS, if it leaves salary fund as it is, then the profit will increase to
more 53502 thousand KGS and so expected gains may be increased to 54 080 thousand KGS due to
controlling of the salary fund’s growth alone.
2. Proposals (highlighted in yellow by paragraphs) .
3. Appendixes: information containing tables to place in website..
Appendix 1. Income, expenses and profits energy companies for 2011 (million
KGS)
Incomes from
production
activities of
the OJSC
Expenses
Profits in
view of
other
incomes
and net of
taxes
Electric power plants
7 874.2
6 799.8
2249.2
National Power Network
of Kyrgyzstan
Severelectro
2 677.3
3 838.9
2 456.8
3 739.4
416.5
88.1
Vostocelectro
Jalabatelectro
Oshelectro
TOTAL
1 011.9
1 011.8
1 061.3
957.3
1 376.1
1 335.7
17 840.0
16 00.9
0.11
70.7
45.8
2782.3
Appendix 2. Income and expenses of distribution electrical networks (REN) for
2011 (million KGS)
Incomes from
production
activities of
the OJSC
Severelectro
Vostocelectro
Jalabatelectro
Oshelectro
TOTAL
3 838.9
1 011.9
1 061.3
1 376.1
7288.2
Expenses
3739.4
1 011.8
957.3
1 335.7
7044.2
Profits in
view of
other
incomes
and net of
taxes
88.1
0.11
70.7
45.8
204.08
Appendix 3. Structure of tariffs for power energy following the results of
RENs’ activity for 2011 (million KGS)
Cost price
Severelectro
Vostocelectro
Jalabatelectro
Oshelectro
Purchased
from PS
Transit of
NPNK
Average
release
Average
collected
41.60
27.60
12.90
91.40
89.74
41.90
23.96
12.90
89.00
80.70
38.60
22.03
12.90
84.10
75.60
35.90
23.80
13.10
86.90
79.00
Appendix 4.
Structure of accounts receivable of RENs as of 31.12.2011 (million KGS)
Industry
Severelectro
Vostocelectro
Jalabatelectro
Oshelectro
TOTAL
21.486
119.622
20.442
63.645
225.195
Statefinanced
organiz
56.919
26.239
29.087
38.495
150.74
Agricul.
consump.
Population
4.972
2.912
6.498
8.556
22.938
204.585
86.898
127.92
235.198
654.601
Appendix 5
Structure of accounts payable of RENs as of 31.12.2011 (million KGS)
Electric power
plants
Severelectro
Vostocelectro
Jalabatelectro
Oshelectro
TOTAL
1054.13
328.232
25.7
167.7
1575.762
NPN of
Kyrgyzstan
417.2
124.9
299.28
385.3
1226.68
Miscellaneous
581.874
168.4
505.9
901.08
2157
Total
2053.204
621.532
830.88
1454.08
4959.696
Miscell.
71.301
55.837
20.934
63.779
211.851
Total
359.263
291.509
204.883
409.673
1265.325
Appendix 6
Plan of income and expenses of energy companies, expected profit and losses
according to approved budgets thereof for 2012 (million KGS)
Average selling
tariffs, tyiyn/kWh
Electric power plants
58.8
National Power
Networks of Kyrgyzstan
17.00
Severelectro
12.46
Vostocelectro
20.00
Jalabatelectro
18.05
Oshelectro
16.83
TOTAL
Incomes from
production
activities of the
OJSC
6118.972
Expenses
9126.752
2892.201 2892.170
3966.214
Profits+, losses- in
view of other
incomes and net
of taxes
-3007.781
0.030
3926.214
40.000
1011.957
1011.857
0.100
1022.439
1022.299
0.139
1460.607
0.171
1460.778