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3Annual Report 2013 - Majan Electricity Co. (SAOC)

Contents05Company’s Profile

07Vision, Mission and Values

09Key Performance Indicator

15Chairman’s Report

20Financial Data

21MJEC Governates Statistics

24Board of Directors

25Corporate Governance Report

34Majan Responsibilities

36MJEC Management Team

37Price Control

41MJEC Achievements 2013

51MJEC IN 2013

• Customergrowth• EnergyImported• MWhDistributed• DistributedEnergyLosses• RevenuefromSaleofElectricity• ElectricityDemand• HumanResources

582013HSSEReport

60Statistics

66Financial Statements


Company’s ProfileMajan Electricity company (MJEC) resulted from restructuring the Electricity Sector in Oman according to the royal decree number 78/2004. The Sector Law defined the duties and responsibilities of all companies. MJEC’s core business is to manage the electricity network through the Distribution and supply of electricity to customers in the authorized area of 50,744 km2 in North Al-Batinah, Al-Dahirah and Buraimi governorates under a license issued by the Authority for Electricity Regulation, Oman.Since its inception, Majan Electricity Company has introduced exceptional services to almost 174,592 customers in its authorized areas and carried out many projects for network enhancements and reliability of supply and provided power to various consumers and establishments within North Batinah, Dahirah and Buraimi governorates.

The authorized capital of the company is fixed at RO. 500,000 divided into 500,000 shares, resulting “One” in Rial Omani value for each share.

Our ShareholdersThe table below summarizes the shareholders pattern as at 31st December 2013

99.99%

00.01%

Electricity Holding Company

Ministry of Finance


Our AchievementsMW

hImp

orted

TotalRevenueRO.’000MWh

Supplied

Bulk

Supply Tariff

RO.’000

No. ofCustomers


MJEC Values1. Teamwork

• Buildingstrongworkingrelationships• Maintainingacollaborativeworkclimate• Recognizingandcelebratingsuccess• Supportingcareermobility• Rewardingappropriateteambehavior

2. Integrity• Keepingcommitmentsandpromises• Representingthetruth• Actinginthebestinterestsofthecustomer,company,teamandindividual• Adheringtothecompany’sethics• Accuratelyrepresentingowncompetencies

VisionTo be one of the most respected energy solution

provider in the region by 2020

MissionDeliver safe, reliable and economical electricity to our customers

and maximize stakeholders’ value

Human Resources

CustomerServices

AssetManagement

Health, Safety, Security and Environment

Communication


3. Respect• Beingsensitivetoothers’time• Recognizingcontributionsofothers• Supportingwork/lifebalanceneedsofselfandothers• Treatingothersimpartiallyandwithdignity• Practicingpatienceandactivelistening

4. Quality• Insistingonhighqualityinallthings• Makingqualitycustomerserviceatoppriority• Strivingforcontinuousimprovement• Providingtimelyandconstructiveperformancefeedback• Recruitinganddevelopingqualitystaff

5. Customer Focus• Makingcustomersatoppriority• Consideringlong-andshort-termcustomerneeds• Deliveringoncommitmentstocustomers• Takingresponsibilityforimprovingcustomerservice

6. Professionalism • Seekingandprovidinghonestfeedback• Maintainingandincreasingskills• Consideringorganizationalneedsinyourowndevelopment• Sharingindividualexpertiseandexperience• Supportingandmentoringothers


Indicators(2006-2013)

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

2006 2007 2008 2009 2010 2011 2012 2013

6,022,3285,693,700

4,798,870

3,616,524

3,004,8662,650,189

2,183,2421,885,375

MWh Distributed

MW

h

MWh Imported

MW

h

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

2006 2007 2008 2009 2010 2011 2012 2013

6,749,9526,418,193

5,398,806

4,232,087

3,666,9093,229,085

2,700,4272,283,121

Customers

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

2006 2007 2008 2009 2010 2011 2012 2013

174,592162,517

150,490141,305

130,998124,572

118,836113,968

Num

ber


Max. Demand

0

200

400

600

800

1,000

2006 2007 2008 2009 2010 2011 2012 2013

967.1939.6

809.7

736.5728.1

653.8583.8

532.0MW

Revenue from Sale of Electricity

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

90,000,000

2006 2007 2008 2009 2010 2011 2012 2013

89,486,63283,520,287

68,104,000

51,711,173

43,204,60937,246,948

30,254,81425,724,387

R.O.

33kV Distribution Network Length

0

500

1,000

1,500

2,000

2,500

2006 2007 2008 2009 2010 2011 2012 2013

2,1942,1152,073

1,9141,8241,7801,719

1,537

kmIndicators(2006-2013)



Compliance with License Conditions

% o

f Com

plian

ce

0

20

40

60

80

100

2006 2007 2008 2009 2010 2011 2012 2013

90918787898987

70

Average Monthly Staff Cost

R.O/

Mon

th

0

400

800

1,200

1,600

2,000

2006 2007 2008 2009 2010 2011 2012 2013

1,5241,5711,478

1,410

1,146

897861880

Recievables Days

Days

0

20

40

60

80

100

120

140

160

2006 2007 2008 2009 2010 2011 2012 2013

95

757890

105

144

8385


Economic Cost

R.O.

/MW

h

0

10

20

30

2006 2007 2008 2009 2010 2011 2012 2013

24.2

2221

2426

2122

26


CAIDI

Minu

tes

0

20

40

60

80

2006 2007 2008 2009 2010 2011 2012 2013

53525050

7372

56

45

EBIT/Share

R.O.

/Sha

re

0

5

10

15

20

25

30

35

2006 2007 2008 2009 2010 2011 2012 2013

33.9

28.3

17.216.1

15.0

9.7

17.5

20.0


Maintenance Cost/MWh

R.O.

/MW

h

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

2006 2007 2008 2009 2010 2011 2012 2013

0.67

0.49

0.61

0.680.640.62

0.51

0.57

Assets per Share

R.O.

/Sha

re

0

50

100

150

200

250

300

350

400

450

2006 2007 2008 2009 2010 2011 2012 2013

441.2

379.5

314.3

227.7

157.0149.0150.0142.0


Total RUD/ No. Customers

MW

h/Cu

stom

ers

0

5

10

15

20

25

30

35

40

2006 2007 2008 2009 2010 2011 2012 2013

34.535.0

31.9

25.622.9

21.2

17.817.0



Staff Cost/MWh

R.O.

/MW

h

0

0.5

1.0

1.5

2006 2007 2008 2009 2010 2011 2012 2013

1.21.3

1.4

1.21.11.11.1

0.6

Opex per MWh

R.O.

/MW

h

0

1

2

3

4

5

6

2006 2007 2008 2009 2010 2011 2012 2013

3.02.8

3.03.2

4.0

3.5

5.2

3.6

Training Cost per Staff

R.O.

0

200

400

600

800

1,000

1,200

1,400

2006 2007 2008 2009 2010 2011 2012 2013

1,2571,224

990

811

962

791740

576


Chairman’s Report

OnbehalfoftheBoardofDirectors,Iamdelightedtopresentthe9thAnnualReportandauditedfinancialstatement of Majan Electricity Company S.A.O.C (MJEC) as at 31st December 2013.

Financial PerformanceThe company sustained a strong financial position which allowed us to provide the shareholders with a secure and growing earning stream. This is in line with the objectives and Strategies that has been proved successful since 2005.

IampleasedtoreportthatMJEChasachievedtotalrevenueofRO145.551million(2012,RO.130.076million), an increase by 11.9%. Revenue from sale of electricity was RO. 89.486 million (2012, RO. 83.520 million) an increase by 7% which is due to the growth in the number of the customers connected to the distribution system and the consumption of the direct connected customers to the Transmission System . Subsidy received was increased from RO 41.09 million in 2012 to RO 60.429 million in 2013. Operating costs stood at RO 117.728 million (2012, RO. 103.117 million). The increase was driven mainly by the high cost of electricity purchase accounting for 72.7% of the total operating cost. The result for the year, an underlying net profit of R.O 14.385million ,which resembles an increase by 12% compared to last year 2012(R.O 12.8 million ). Net cash generated from operated activities was RO 25.821 Million in 2013 compared to RO.19.322 Million in 2012.


Business PerformanceWe continued to take advantage of investment opportunities that will benefit customers, ensure our safe and reliable services for you. MJEC business strategy remained focused on being a top-performing, regulated distribution company. To complement this focus, MJEC is devoted to develop and upgrade its infrastructure, and continued expanding the network in order to support the growth in the customer base and improve existing services.

In2013,MJECinvestedRO.38.2Millioninload,non-loadnetworkrelatedprojectsof33,11kVandLTnetwork as well as in common assets. The investments covered all areas of MJEC authorized areas with a focus on North Batinah Governorate due to the demographic and economic needs. This benefited all types of our customers and has provided corresponding opportunities for shareholders to earn additional returns on a growing asset base. MJEC completed 80% of the projects in 2013.

TheinvestmentsinreliabilityprojectsresultedinmaintainingCustomerAverageInterruptionDurationatasatisfactory level of 53 minutes during 2013. This is strong evidence that our investments are producing the tangible results we expected.

During 2013, the company reduced its network losses to reach and outstanding position of 12.72 % compared to 13.47 by end of 2012.

Health, Safety, Security & EnvironmentThe company put an immense effort into the health, safety, security and environment for the Majan staff and extended this interest to include contractors and the community. During 2013, there were two unfortunateLTIs recorded.A technicianattempting tofixanelectrical faultonacustomerpanelwasunaware of live standby generator. The technician was electrified and died before his arrival to the health center. Another serious accident was the Road traffic accident involving one of MJEC staff.

MJEC has also initiated the work towards implementing IntegratedManagement System to get ISO9001:2008, 14001:2004 and OHSAS 18001:2007 certification


Regulated ActivitiesProactive involvement in Regulatory arenas is one of our highest priorities. The utility business is fundamentally dependent on this economic regulation. MJEC continued to operate in 2013 within the 3rd Price Control allowance.

Human ResourcesWe believe that the focal point of any successful organization is to retain and attract valuable staff in different areas of the company by creating a healthy and motivated environment that satisfies their needs andimprovestheirskillstoreachthehigheststandards.In2013,MJECinvested6.5%oftotalpayrollcost to develop the staff strength of 393 in different development programs. The programs were diverse to ensure that all the aspects of our staff skills, capabilities and behavior are developed. MJEC ended the year with omanization level of 95% which is an integral component in the country’s omanization plan regarding the orientation and induction of Omanis to the private sector, corporate culture and work environment.

Corporate GovernanceThe company recognizes that corporate governance practices are fundamental to the smooth and effective functioning of the organization and its ability to protect the rights of shareholders and stakeholders and enhance stakeholders’ value. As a company regulated by the Authority of Electricity Regulation, we continuedtorespondtotherequirementoftheRegulator.


Future OutlookWe are confident that the company will continue its growth in 2014 both financially and technically. To achieve this, MJEC has developed its 5 years business plan (2014 to 2018) in line with the sector strategy which was based on 5 main themes:

1. Customer Services.

2. Asset Management.

3. Health, Safety, Security and Environment.

4. Human Resources

5. Communication.

InordertoaccomplishthevisionandachievethestrategicobjectivesMJECwill:

• ImplementthebestpracticesinnewtechnologiesinthenetworkaswellasBillingandCollection.

• Strengthenthedevelopmentprograms

• Overcomethechallengesinnetworkreliabilityanddevelopingeffectivesolutions

• EffectivedistinctioninqualityassurancethroughPASS55(ISO5500),ISO9001:2008,14001:2004and OHSAS 18001:2007, 23001 accreditation as well as PCMM level 3.

• Achievesustainablereductionindistributionlosses.

• ImproveanddeveloptheHSSEandRiskManagementcultureintheworkenvironmentasawhole.

• AdheretoandcompletetheprojectsinitiatedbyEHCacrossthegrouplevel.

• To update and enhance the information technology to serve customers andmeet its businessrequirements.

• ComplywiththeRegulatoryrequirementsandtheapplicablelaws.


AcknowledgementOnbehalfof theBoardmembers Iwould like toexpressmygratitude toHisMajestySultanQaboosBin Said for his support and his strong and wise leadership, which has paved the way for ongoing development of Oman.Iwouldliketothankallourcustomersfortheirsupport.Iwishtoexpressmygratitudetomyfellowboardmembers as well as the management and all staff for their dedication and commitment to the safe and reliablesupplyofelectricity.IalsowouldliketothankMinistryofFinance,MinistryofHousing,TenderBoard and Authority of Electricity Regulatory Oman, Public Authority for Electricity & Water, Electricity HoldingCompany&oursistercompaniesfortheireffortandsupportprovidedtothecompany.Iwouldlike to extend my thanks to the contractors for their commitment despite continuous challenges.

Eng. Abdullah bin Mohammed Al-HashimiChairman


FinancialData

FinancialData’000(RO.)

FinancialDATA Unit 2006 2007 2008 2009 2010 2011 2012 2013

Total Revenue RO. 50,993 51,967 62,541 77,633 84,616 103,379 130,076 145,551

Gross profit RO. 9,757 10,086 11,395 15,368 16,727 19,107 26,959 72,823

Operating profit RO. 4,720 3,749 4,988 7,923 8,456 9,016 14,549 16,933

Net profit RO. 4,840 3,643 3,184 6,359 7,585 8,102 12,800 14.386

Government Subsidy RO. 26,100 23,000 18,140 31,199 35,259 32,579 41,093 60,429

Bulk Supply Tariff RO. 28,909 28,494 36,346 42,447 47,649 61,414 77,941 85,633

Transmission use of system charges

RO. 6,042 5,326 6,449 8,605 9,605 11,323 12,082 17,240

Net cash from operating activities

RO. 15,241 11,565 7,078 2,724 19,871 11,280 19,322 25,821

Cashequivalentattheend of the period

RO. 6,126 6,015 5 5 8 8 8 8

Total assets RO. 91,548 102,063 113,171 125,969 138,866 157,165 189,725 220,624


MJEC Governates Statistics

North BatinahParticulars Unit 2011 2012 2013

Area Km2 6887.8

Customers No. 88,441 95,834 102,842

Revenue RO. 52,064,011 65,521,717 70,148,448

Max. Load MW 508.3 604.5 605.6

Min. Load MW 112.6 123.9 146.6

Units supplied MWh 2,204,969 2,541,419 4,707,406

Losses % 15.4 13 14

CAIDI minutes 52.14 69.9 65.1

33/11KVS/S No. 56 58 58

NetworkLength11KV km 2380 2557 2652


Capital investment RO. 15,665,109 21,355,425 21,790,502



Al DhahirahParticulars Unit 2011 2012 2013

Area Km2 36237.9

Customers No. 34,877 37,439 41,153

Revenue RO. 8,477,857 9,507,554 10,242,246

Max. Load MW 172.9 193.5 203.8

Min. Load MW 21.8 27.2 27.6

Units supplied MWh 624,892 659,840 709,628

Losses % -0.02 10 4


33/11KVS/S No. 31 32 31






BuraimiParticulars Unit 2011 2012 2013

Area Km2 7618.3

Customers No. 27,172 29,244 30.597

Revenue RO. 7,562,132 8,491,017 9,095,938

Max. Load MW 128.5 141.5 157.7

Min. Load MW 21.5 26.1 31.4

Units supplied MWh 515,241 567,405 605,294

Losses % 12.8 15 13


33/11KVS/S No. 22 23 27





Board of Directors

Eng. Abdullah bin Mohammed Al-Hashimi

Chairman

Eng. Hassan bin Mohammed Al Abdwani

Deputy chairman

Ibrahim Said Al Suleimani

(joined in December,2013) Board Member

Mr. John Wright, Board

Board Member

Mr. Michael Lim

(left Majan June, 2013) Board Member

Mr. Abdulaziz Mohammed Al-Kharousi

Board Member


Corporate Governance for Majan Electricity Company (SAOC) 2013

Majan Electricity Company (SAOC) is a general closed company committed to adhere to all corporate governances procedures related to closed stock companies. To achieve this it has adopted the corporate governance roles and responsibilities to make sure that the business areas are efficient and support transparency and company’s operations.

Board of DirectorsThe board of directors consists of 5 members. Out of which 4 represents the Electricity Holding Company andonerepresenttheMinistryofFinance.Asperthearticle(132)oftheCommercialLawandbasedonarticle 17 of the Article of Association which specified the membership of the Board of Directors to 3 years and based on the resolution issued by the board of directors of Electricity Holding Company (78/2013) toreformtheboardofdirectorsofMajanElectricityCompanyandtoappointMr.IbrahimAl-SuleimaniasBoardMemberwhenMr.MichaelLimresignedtocovertheremainingperiodofhismembership.Itwasdecided unanimously to appoint the existing Board of Directors as in the table below. The table also includes the number of meetings carried in 2013 and the representative source:

Name Designation No. of meetings Representation

Eng. Abdullah bin Mohammed Al-Hashimi Chairman 5 Electricity Holding Co.

Eng. Hassan bin Mohammed Al Abdwani Deputy chairman 5 Electricity HoldingCo.

Mr. John Wright Board Member 5 Electricity HoldingCo.

Mr. Michael Lim (Resigned) Board Member 2 Electricity HoldingCo.

Mr.IbrahimAl-Suleimani Board Member 1 Electricity HoldingCo.

Mr.AbdulazizMohammedAl-Kharousi Board Member 4 MinistryofFinance


Audit CommitteeThe Audit Committee consists of 3, non-executive members. The internal and external auditors are invited in the committee meetings. The committee was appointed based on Board of Director Resolution no. 5/1/2008 and the committee was reformed by resolution no. 17/2011 as per the details shown in the below table :

Name Position Number of meetings Mr. John Wright chairman 4Mr.AbdulazizMohammedAl-Kharousi Member 3Mr. Michael Lim Member 2

And the Committee was reformed based on the resolution issued by the Board of Directors (1/5/2013) as listed below:

Name Position Mr. John Wright Chairman

Mr.AbdulazizMohammedAl-Kharusi Member

Mr.IbrahimbinSaidSuleimani Member

The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities and in line with the responsibilities and duties assigned to the Corporate Governance for the Closed Stock Companies, The main responsibilities of the Internal Audit Committee can besummarized as follows:

Internal Control and Risk Management:• ApplicableReviewthecompany’sfinancialcontrols,otherinternalcontrols,andriskmanagement.

• Discuss the internal control systems with the management to ensure that they are operatingeffectively.

• Ensure adequate processes are in place to check compliancewith the license conditions andinformationrequirementofAERandotherregulations.


Review of Financial information:• Ensure(onquarterlyandannualbasis)integrityofthefinancialstatementswhilehighlightingany

changes to the accounting policies and practices; aspects subject to significant judgment or estimation; substantial adjustments resulting from the audit going concern nature of the company andcompliancewithInternationalFinancialReportingStandards.

• Consideranysignificantandunusualmatters tobereported in thefinancialstatementsand toaddressconcernsraisedbytheFinancialController,theComplianceOfficerortheExternalAuditors.

Relation with External Auditors:• Monitortheindependenceoftheexternalauditorsanddiscusswithexternalauditornature,scope

and efficiency of the audit in accordance with generally accepted auditing standards;

• Reviewauditplansandensuretheauditorshavefullaccesstoallrelevantdocuments.

• Ensure that significant findings and recommendations made by the external auditors and themanagement’s proposal responses are received , discussed and appropriately acted on;

• Developandimplementapolicyondealingwithexternalauditortosupplynon-auditservices,ifany, to ensure that provision of such services would not impair the independence or objectivity of the external auditor;

• Adoptapolicyondealingwithexternalauditorsandreporting/recommendingtotheBoardanyissuesthatrequireactiononthepartoftheBoard;

• Meetwiththeexternalauditorsatleastonceayearwithoutthepresenceofanymanagementstaff;

• Replypromptlytoanycorrespondenceorqueriesreceivedfromtheexternalauditor;

• Reviewandrecommendtheappointment,reappointmentorplacementofanexternalauditor;

• Reviewandrecommendtheremunerationandtermofengagementoftheexternalauditor.


Internal Audit• Develop a policy on confidential reporting by employees. The policy should relate to financial

regulations, internal controlmatters of concern to the company. Further to ensure that properprocedures are in place to allow independent and fair investigations of reported matters.

• Reviewauditplans,toensuringthatauditorshavefullaccesstoallrelevantdocuments.

• EnsurethattheInternalAuditfunctionisadequatelyresourcedandhasanappropriatestandingwithin the company;

• ConsiderthefindingsofinvestigationinitiatedbytheBoardofDirectors;

• Ensurecoordinationbetweentheexternalandtheinternalauditors;

• Ensureadherencetothedutiesandresponsibilitiesincludedinthismanual.

• Ensure that significant findings and recommendations made by the internal auditors and themanagements proposed responses are received , discussed and appropriately acted on;

• SubmitareporttotheBoardofDirectorsontheextentofthecommittee’scompliancewiththeduties and responsibilities in this manual;

Fraud• Ensurethatadequatefraudoversightmechanismexistsatthecompanyandreviewtheantifraud

processes and control;

• Deviseprocedurestoidentifyandimproveantifraudcontrolandreengineering.

• Setupproactivefrauddetectionmethodology;

• Reviewreportsonfraudriskassessment,fraudmanagementpoliciesandinfrastructure,

• Promotepreventionmechanismswithinthecompany;

• Review reports of fraud investigations, and recommended necessary actions based on fraudinvestigations.


Governance• ReviewthegovernancepracticesoftheBoard,consultasnecessarywiththeexternaladvisorsand

company secretaries and identify leading governance practices.

• RecommendtotheBoardleadinggovernancepracticesandmonitorimplementationoftheBoardadopted practices.

Internal Tender CommitteeAs per the government tender law, the board has established the internal tender committee as per resolution no. (6/1/2008). The committee was redesigned based on the BOD resolution no. (1/2013). ThemembersofInternalTendersCommitteeandthefeesarelistedbelow:

Name Position Number of meeting

Eng. Hassan bin Mohammed Al Abdwani chairman 11

Mr.AbdulazizMohammedAl-Kharousi member 11

Eng. Ahmed Saif Al-Mazrouy member 12

Mr. Ahmed Hamed Al-Shuaili member 14

Mr. Dawood Suliman Al-Mahirizi member 11

Mr.AdelRashidAl-Kalbani Member & Secretary 15

ITChastheauthoritytoassigncontractsforprocuringservicesorgoodswithinitsdelegatedauthorityby the Board,

The main responsibilities of the Internal Tender Committee are:• Ensure that all evaluations are subject to the principles of publicity., equal opportunity, equal

treatment and free competition;


• Ensure thatArticle79of thesector law require fair and transparentcompetition,Article4ofthetender lawrequiringopenness,equalityofopportunityandfreedomofcompetitionarefullycomplied within evaluating tenders;

• EnsuringthatanyBoardMember,ExecutiveManagementorAdvisorswhohaveapotentialconflictof interest do not form part of the evaluation and decisionmaking process. ITC Chairman inparticular will insist that any direct or indirect interest should be declared by the directors before discussanyitemsonITCagenda.Hewillalsoensurethatthepresenceorabsenceofconflictforeach director is confirmed in writing before discussions on any bids.

• Classificationandregistrationofsuppliersandcontractorsinaccordancewiththeprovisionsofthepolicies at EHC and its subsidiaries and regulations prescribed in the Tender Law;

• Acceptingbidsandoffersfromsuppliers,contractorsandconsultingcompanies;• Reviewingandacceptingpreferredvendorlistforongoingpurchases;• Appointingthirdpartyevaluatorswherenecessarytoevaluatethetechnicalandcommercialaspect

of any proposal.• Approvingthemethodsfollowedforevaluatingbids.• ReceivingtheresultsofthebidsanalysisfromtheTenderingandProcurementDepartmentorany

other authorized parties , reviewing them and taking assignment decision thereof;• Reviewing the technicalspecifications,conditionsand instructionssubmittedby thecontractors

and verifying their sufficiency;• Determiningthegeneralconditionstoclassifyandappointthesuppliers,contractorsandconsulting

companies.• Determiningthepriceofanypartoftheselectedcontract,negotiatingwithsuppliers,contractors

and consulting companies;• ApprovingthepricingandrecommendingforfurtherevaluationoftheGovernmentTenderBoard

based on approved delegation authorities.• Approvingtheextensionofcontractcompletionperiodand• Approvingvariationordersandscopechangestoanalreadyacceptedservicewithintheapproved

delegated authority.


Human Resources CommitteeThe Board of Directors has established the Human Resources Committee based on resolution no. (7/1/2008). Based on the resolution no. (5/3/2011) issued by the Board of Directors, the committee was amended; it consisted of the following members. The respected number of meetings attended is also provided in the following table:

Name Position Number of meeting

Eng. Abdullah bin Mohammed Al-Hashimi chairman 3

Eng. Hassan bin Mohammed Al Abdwani member 3

Mr.IbrahimAl-Suleimani member 1

Mr. Ahmed Al-Mazrouy member 2

Mr. Dawood Suliman Al-Mahirizi member 3

Mr. Hamid Omer Alawi Member & Secretary 3

The main responsibilities of Human Resources Committee are:• Toconsiderandreviewthestructureofsalaries,allowancesandbonusesspecifiedfortheemployees

and submission of recommendations thereof to the BOD ;

• Ensurethataneffectivemanagementsuccessionprocessexists;

• Reviewthejobdescriptionsandarrangementthatareapplicableinthecompany;

• reviewmethodsofdevelopmentofworkandcareergradient;

• Conductingdisciplinaryinvestigationsforemployeeswhennecessary;

• AssistBoardinconductingperformanceevaluationofexecutivemanagement;

• EnsurecompliancewithdirectivesetbyMinistryofManpower;

• Reviewingthetrainingplanandcalendar;


• Consideremployees’complaintsandgrievance;

• AddressproblemsarisingfromtheImplementationofHRPoliciesorproblemsarisingfromthelackof provisions dealing with such problems.;

• Reviewthebasisandcriteriarelatedtoassessmentofemployees;and

• ConsiderandsolvinganyissuereferredtotheCommitteebytheBOD.

RemunerationsThe total sitting fees paid to the Board of Directors and the Committees members for 2013 was RO 22,950 /- calculated on the following basis per meeting:

• ChairmanoftheBoard:RO650/-permeeting

• Chairmanofthecommittee:RO400/-permeeting

• Boardmembers:RO500/-permeeting

• Committeemembers:RO300/-permeeting

The table below shows board members and the fees paid to each member:(finance)

NameBoard of directors meeting

InternalAudit

committee

InternalTender

committee

Human Resources Committee

Total

Eng. Abdullah bin Mohammed Al-Hashimi 3,250 - - 1,200 4,450

Eng. Hassan bin Mohammed Al Abdwani 1,800 - 3,600 600 6,000

Mr. John Wright 2,500 1,600 - - 4.100

Mr.AbdulazizMohammedAl-Kharousi 2,000 900 3,100 0 6,000

Mr. Michael Lim 1,000 600 - - 1,600

Mr.IbrahimAl-Suleimani 500 - - 300 800

Total 11,050 3,100 6,700 2,100 22,950


The External Auditor:Deloitte was appointed as external auditor for the year 2013 by the Bord Members in previous Annual General Meeting.

Declaration of Third Party TransactionsThird Party Transactions during the financial year ended 31 December 2013Therelatedparttransactionsareindicatedinnote29oftheFinancialStatement.

Finally,wearefullyconfidentthatthecompanyadheredtohighstandardsofcorporategovernanceinallits activities during the financial year ended December 2013.

Abdullah Mohammed Al-HashimiChairman


Majan ResponsibilitiesArticles number 90 and 91 outlines the responsibilities of Majan and other distribution companies.

Article 90Without prejudice to the provisions of any other Law the Licensed Distribution System Operator shall have the following rights and powers and shall be subject to the following duties:

• Undertaketofinance,operate,maintain,developandexpandtheDistributionSystemownedbyhim in a safe manner and in accordance with the relevant performance Security Standards, and shall offer terms for Connection with the Distribution System and use of the System on a non-discriminatorybasisandequalopportunity.

• TochargethePermittedTarifforCost-ReflectiveTariffforConnectiontoitsDistributionSystem,andshall have the right to disconnect services from the Customers who do not pay amounts due to it or to a Licensed Supplier.

• TobecomeapartytotheGridCode,andtoimplement,publish,developandamendaDistributionCode.

• TochargeaCost-ReflectiveTarifftoPersonsLicensedtoSupplyfromhisSystem.• NottoConnectRAECOSystemwithouttheapprovaloftheAuthority.• ToacquireanyDistributionassetsfromtheRuralAreasElectricityCompanyinaccordancewiththe

manner specified by the Authority pursuant to Article (88) of this Law.• Undertake not to discriminatewithout legal justification in favour or against any Personwhen

undertaking its regulated activities.• Undertaketodesign,construct,develop,own,operateandmaintainInternationalInterconnections

in accordance with Article (115) of this Law.• TopurchaseallgoodsandservicesandmanagethemonthebasisofEconomicPurchase.

All being in the manner specified in the License according to the provisions of this Law.


Article 91Without prejudice to the provisions of any other Law the Licensed Supplier shall have the following rights and powers and shall be subject to the following duties:

• TomeetallreasonabledemandfortheSupplyofelectricitytoPremiseslocatedwithinitsAuthorizedArea, which are Connected to a Distribution or Transmission System on a non-discriminatory basis, andheshallpublishthePermittedTariffandCost-ReflectiveTariff.

• ToarrangeforthemeterreadingandtosubmitbillstoCustomersandtocollectamountsduetoitin accordance with the conditions of its License.

• TopayaLicensedTransmissionSystemOperatororaLicensedDistributionSystemOperator,inconsideration for the use of the System, as the case may be.

• NottoacquireelectricityotherthanfromtheOmanPowerandWaterProcurementCompanyandshall act as the agent of the Oman Power and Water Procurement Company in relation to the purchase of the Output of Auto generators.

• Undertake not to discriminatewithout legal justification in favour or against any Personwhenundertaking his regulated activities.

• TopurchaseandmanageallgoodsandservicesonanEconomicPurchasebasis.

• TochargePermittedTariffsandCost-ReflectiveTariffsinconsiderationofallSuppliesmadebyitaccording to the License granted to him and shall have the right to take all prescribed procedures inthis• LawincaseofCustomerswhodefaultonpayment,includingtheterminationofSupply.

• ToacquireSupplybusinessfromtheRuralAreasElectricityCompanyinthemannerspecifiedbythe Authority.

All being in the manner specified in the License according to the provisions of this Law.


Management of the CompanyMJEC has an organization at the corporate level headed by the Chief Executive Officer, responsible for achieving the strategic objectives of the company and realizing its performance and expansion targets .The Executive Management Team is responsible for the day-to-day management of the company and for establishing the company’s Business Plan as main interface and link with the Board and company staff.

MJEC Organization Structure

Premchand


Price Control AER believes that separate price controls would be conductive to cost transparency, allow MJEC and AER to better assess the performance of each regulated activity and facilitate the application of efficiency incentives appropriate to each regulated activity.Under the new price control period, AER continued the measures to bring the current level of Distribution lossestomoreacceptablelevels,reflectiveofinternationalstandards.Thedifferencebetweentheactuallosses and the target losses in each year will translate into financial reward or penalty. AER have also introduced further incentive for compliance with the Distribution System Security Standards. MADRt means the Maximum Allowed Distribution Business Revenue in relevant Year t.MASRt means the Maximum Allowed Supply Business Revenue in relevant year t.

Price control 2013

MADR t MASR t

PCt 85,632,894

TUoSt 17,240,104

DUoSt 36,179,602

Connection charges 2,383,267

MWh purchased 6,749,952

at 19,791,396

bt 1.582

RUDt 4,065,124

ct 38.811


CAt 174,592 174,592

DBt 32,997,596

dt 40.457

SBt 7,063,532

LF 145,860 48,620

Losses t -496,309

Kt -50,192 4,496,114

MADR t & MASR t 35,084,261 151,253,364

ARDRt ARSRt

Customer Revenue 88,066,728

Subsidy 60,429,125

Other Revenue 1,057,311 18,986

Distribution Use of System 36,179,602

Distribution Connection Revenue 392,547

ARRt 37,629,460 148,514,838

Distribution Business Price Control MADR t = DBt + Ct + LOSSt + NSFt+Mt+ LFDt – KD t


Where:DBt reflectstheeconomiccostoftheDistributionBusinessanddesignedtorecovernonpassthrough

economic cost (i.e. CAPEX , OPEX and a return on capital )and is defined as :DBt = at + (bt*RUDt) + (ct* CAt )

Ct amount due in respect of charges for the connection to a Distribution System or Transmission system in year t

LOSSt means network losses incentive revenues (positive or negative) in relevant year t and is calculated as:LOSSt = RUD t-1 *pt*LDtWhere:RUDt means regulated units distributed. Pt is a notified value determined by the AuthorityLDt means the percentage point difference between the level of Target Losses (TL) and Actual Losses (AL) calculated according to the following formula:LDt = TLt-1 – Alt-1Where:TLt-1 means the target level of Distribution losses stipulated by the authority. Alt-1 means the actual level of Distribution losses in Relevant Year t-1.The above percentage difference is then multiplied by p (expressed in terms of RO/kWh ) to provide the monetary value.

NSFt isanetworksecurityfactorinrelevantyearandiscalculatedasfollows:NSFt=DNS*stWhere DNSt-1 means the demand not secured in relevant year t-1 andst means the notified value provided by AER.

Mt CostpertainingtotheSmallScaleInitiativeinRelevantyeartapprovedforrecoverybyAERLFDt istheLicenseFeepaidtotheAuthorityinyeartrelevanttoDistributionBusinessandpursuantto

Condition 13 in Relevant year.KDt isacorrectionfactorrelevanttoMADRtandiscalculatedasfollows:

KDt=(ADRDt-1–MADRt-1)*(1+i/100)WhereARDRt is the actual regulated distribution business revenue in Relavent year t-1


MADRt is the maximum allowed distribution business revenue in Relavent year t-1i is the specified rate save that when ARDRt-1 exceeds MADRt-1 by more than 2% , the specified rate +3% is applied unless otherwise advised by AER.

Supply Business Price ControlMASR t = PCt + TUoSt + DUoSt+ SBt + LFSt – KS tPCt means amounts due (measured on accruals basis) in respect of purchases of electricity in year

t;

TUoSt means amount due (measured on accrual basis) in respect of charges for use of Transmission System in relevant year t,

DUoSt means amount due (measured on accrual basis) in respect of charges for use of Distribution System in relevant year t,

SBt means the allowed supply cost of MJEC supply business in relevant year t, calculated according to the following formula:

SBt = dt* CAtWhere Dt=dt-1*((1+CPIt)*(1-Xs)

LFSt istheLicenseFeepaidtotheAuthorityinyeartrelevanttoSupplyBusinesspursuanttocondition13

KSt isthesupplybusinesscorrectionfactorinrelevantyeartcalculatedin accordance with the formula

KSt = (ARSRt-1 – MASRt-1) * (1+ it-1/100 )Where ARSRt-1 means the actual regulated supply revenue in relevant year t-1MASRt-1 is the maximum allowed supply business revenue in Relavent year t-1i is the specified rate save that when ARsRt-1 exceeds MASRt-1 by more than 2% , the specified rate +3% is applied unless otherwise advised by AER.


MJEC Achievements 20131 Capital InvestmentInlinewithMJECmissionto“deliversafe,reliableand economical electricity to our customers and maximize stakeholders’ value” and in order to meet customer expectations and demand , the company has strengthened its network and enhanced the reliability of the network and invested RO 38,432,093Million in network and non-network related capital expenditures in 2013:

Category (million R.O)

11KVInvestment&LT-Load 21,051,740

11KVInvestment&LT–NonLoad 3,035,406

33KVInvestment-Load-Non-Load 10,443,322

Other common assets 3,901,624

TOTAL 38,432,093

Some of the major network related projects have been completed during the year are listed below:• Install new 33KV feeder from old Ibri Grid to Al Aynain Primary Substation 2x20 MVA with

additional33KVinterlinkswithtotalcostRO.213,217/-.Themainpurposeoftheprojecttoenablefull compliance with MJEC Licenses Conditions and the Distribution Security Standards also to improve voltage regulation for Al Aynain.


• UpgradeofAlAraqi33KVundergroundcablefeederfromIbriGridSubstationtoAlAraqiPrimarySubstation with total cost RO. 308,000/-. The main purpose of the project is to enables full compliance with MJEC License Conditions and the Distribution Security Standards also improves voltageregulationforAlAraqiPSS.

• InstallofnewOuhi Industrialwithnew2x10MVAinNorthBatinahGovernorate.Theaimofthisprojectistoimprovethequalityofsupply,reducetheloadonMultaqaPrimarySubstation,andenable future prediction of Ouhi industrial demand. The total cost is RO. 362,670/- .

• UpgradeSIE-3PrimarySubstationfrom2x6MVAto2x20MVAinNorthBatinahGovernorate.TheaimofthisprojectistomeetthenewcustomerdemandsinSIE-3.ThetotalcostisRO.680,000/-.

• Constructnew2x20MVASoharFreeZonePrimarySubstationincludingcablefeederfromLiwaGridSS.TheaimofthisprojectistoenablesconnectionofforecastdemandinSFZPhase1areaandmeetstherequirementsofcurrentconnectionapplications.ThetotalcostofthisprojectRO.722,040/-.

• Installnew33KVFeederfromLiwaGridtoSoharFreeZoneBulkCustomertoprovidesufficientcapacity in Sohar Free Zone (SFZ) area which will enable MJEC to meet the new customerdemands as well as comply with N-1 Conditions of Distribution Security Standards. The total cost is RO. 511, 397/-.

• InstallNew33KVFeeders(DIL-1&2Mukhailif-2)atSahamGridSS.Theaimofthisprojectistoenable full compliance with MJEC License Condition and the Distribution Security Standards. Also, toimprovetheoperationalflexibilityandemergencyinterconnectionbetweentwogridstationsandto removes the risk of potential fines for License breech. The total cost is RO. 1,519,943/-.

• In2013,MJEC-NBinvestedRO.2.7/-Millioninnetworkreinforcements.MJEC-NBhasrespondedto907outagesandmanagedemergencycontract(33&11KV)networkwithoutLTI.AlsoNBextensionachievedmore than1796request forextensionsand InvestedR.O15million in loadrelatedinvestment.ConversionofO.HtoU.Gand11KVnetworkand0.415KVtoundergroundcables was one of the main initiatives.

• At11KVnetwork,MJEChasinvestedRO24,039,828/-.MJECinvestedRO4,414,577/-inBuraimi,RO 13,223,609/-in NB and RO 6,401,642/- in DHR. The investment included both load and nonload such as asset replacements, reinforcement and extension.


2 CONDITION MONITORING Operation and maintenance department has established a new condition of monitoring & maintenance planningsection.Themainscopeofthissectionistocontrolthequalityofelectricalnetworks,diagnosisof the condition of the network and develop the maintenance plan for execution and rectification. All these activities will be carried out through using new technology and modern monitoring devices, thus changing the maintenance style from time-based maintenance to condition- based maintenance or corrective maintenancetopredictivemaintenance.In2013,theconditionmonitoringteamsucceededtoallocatemore than 30 underground cables fault by using cable fault locator VAN saving more than RO. 60,000/-


3 LIVE LINE CONNECTION APPROACH HAS SAVED OVER 1,500,000 KWH POWER IN YEAR 2013

In2013,MJEChascompletedmorethan500connections/installationinlivehighvoltagedistributionnetwork using their specialized electrical contractor saving over 60,000 minutes of power outages.

ThevariousworksexecutedaspartofLIVELINEworkincludes,TransformertoOHLtiein,OHLtoOHLtie in, IsolatortoOHLtie,UndergroundcabletoOHLtie in,Fusecutoutreplacement,SurgeArresterreplacement, cross arm replacement, Post and Tension insulator replacement works.

Livelineworkavoidssupplystoppageanditaidscontinuoussupplyofelectricity.Inaddition,itimprovessupply reliability and allows distribution companies to provide uninterrupted power to their customer. Inaddition,itimprovesthemaintenancelevelinthesystemandaidsaddingnewlinesaswellasnewtransformers to the existing network without any shutdown

4 MOBILE GENERATORSMobile generators with capacities between 350 KVA and 500 KVA were installed indifferent MJEC areas to provide better services for our customers, reduce network losses and mminimize the interruptions the mobile generators can be used in the following cases:

• Emergencyandinterruptionsoccurringondistributiontransformersandlowvoltagenetworks.• MaintenanceofL.V.networks• Maintenanceofdistributiontransformers.

5 ELECTRONIC DOCUMENTS MANAGEMENT SYSTEM (EDMS)In2013MJEChaslaunchedtheEDMSsystemtohelpemployeeinsavingpaperandtime.Trainingcourseswere provided to all staff to us the new system effectively. The number of users increased to 95%. Our

MOBILE GENERATORS


aim is to reach 100% usage in 2014. The next step is to transfer all hard copies and documents to soft copies to facilitate searching and keeping all the records electronically.

6 BUSINESS PLAN 2014 TO 2018 In2013,MJEC5yearsBusinessplan(2014to2018)wasapproved.Thebusinessplanwasinlinewiththe sector overall strategy and focused on 5 main themes:

• HumanResources.• AssetManagement.• HSSE• CustomerServices• Communication

Main objectives and initiatives were identified under all the strategic themes in order to achieve MJEC vision by 2020.

7 EMPLOYEE REWARDING SCHEME (TESTAHIL)In2013,96employeeswererewardedfortheiroutstandingachievementsandactivitiesthatwerecarriedby them which are outside their day to day responsibilities and objectives. The rewarding ceremony took placeinCrownPlaza–Sohar.IbrahimAlSuleimani,MJECboardmemberdistributedthecertificatesandthe tokens of appreciation and encouraged all staff to continue with their outstanding performance.


8 SCADA PHASE 3In2013,DCChaveestablishednewRTUsat10Grid Stations to connect MJEC’s SCADA system at DCC in Sohar and increase the reliability and independence. Moreover, MJEC have connected 20 indoor primary s/s and changed a GPRS communication media to fiber optic.

9 ISO 9001, 14001, 18001MJEChasinitiatedtheworkin2013tomovetowardsimplementingintegratedmanagementsystem(MIS)andobtainaccreditationinISO9001(Management),ISO14001(Environment),ISO18001(OccupationalHealth & Safety). MJEC is expected to be accredited in 2014.

10 INSPECTION CAMPAIGNIn2013,MJECconductedinspectioncampaigninNorthBatinahandBuraimiregions.Thecampaignwascarried out by the 13 inspection engineers and 37 female staff from different departments in MJEC. The inspectioncampaignfocusedonrandomsitesaroundthenetworktoensureadequatesafetystandardsarebeingimplementedtoprotectthepublic.Thecampaignhadafurtherandequallyimportantobjectivewhich was to empower the female employees and to ensure that they are able to carry out the same tasks and site visits as male employees to maintain safety standards in the networks. The participants were from departments in the company. The campaign has demonstrated MJEC’s commitment towards public safety as well as the security of the company’s assets

The inspection covered the security of the primary substations, ground mounted and pole mounted transformers and the related assets and that all the precaution measures are taken into consideration to protect the public.


11 Launching Orion systemInJune2013MJECandother sistercompanies lunchedOrion system. The system can transfer the meters reading to database monthly then issue the bills. The program activated in a 15000 accounts in MJEC authorized area (Multaqa/WadiAl.Jizzi/Majees).Theprogramwillmakethe meter reading easier than before.

12 MJEC NEW BUILDING Majan Electricity Company has celebrated the opening ceremony of its head office- Green building on the fifth of May, 2013 under the patronage of H.E. YahiabinSaidbinAbdullahAl-Jabri,ChairmanoftheSEZAuthorityatDuqm.MJECbelievesthattheenvironment comes first so a number of initiatives have been taken in this regard. MJEC uses state of art technology in the green building to contribute to the environment. Utilizing solar energy, recycling water, insulating walls and using saving energy lamps are some of the steps taken in this direction. Open offices with natural light and fresh air contribute to a comfortable and healthy environment at MJEC.


Electricity & Water Conversation & Customer Service Committee

Global Day of the Green Buildings

13 Corporate Social Responsibility and MJEC branding activities Majan Electricity Company believes that branding, communication and social responsibilities are

three elements which should be active on it. The following activities are an example of the company’s commitments towards CSR and branding activities.


Business opportunities forum and projects

Omani Women’s Day (21/10/13)

Basketball Competition


The Indian School-Sohar Awareness Session

Blood Donation Campaign (Give Blood Give Life)

Participation of MJEC football team in sector Football Tournament


%24

%17

%59

Percentage of Customer per Governorate 2013

NB

DH

Buraimi

Percentage of Growth in Customers 2012-2013

Agriculture & FisheriesCommercialResidentialGovernmentIndustrialTourism

10.4%

0.9%

12.4%

4.5%

6.5%

11.6%

MJECIN20131 Customer growth A total number of 12,075 were connected to MJEC network in 2013. The total number of customers connected stood at 174,592 customers and increased by 7.43% from last year 2012. The majority of these customers were connected in North Batinah governorate with 59% followed by Dhahirah 24% and Buraimi at 17%.ThehighestincreasewasintheIndustrialsectorby12.4%followedbyCommercialsectorby11.6%from last year 2012.


Domestic sector represented 74 % ( 129,111) from the total number of customers followed by commercial sector at 19 %.( 33,626).

The table below shows total connected customers in authorized area

Tarif

f/ Ar

ea

Soha

r

Khab

ora

Saha

m

Shin

as

Liw

a

N. B

atin

ah

Ibri

Dhan

k

Yanq

ul

Dhah

ira

Suna

ina

Bura

imi

Bura

imi

Tota

l

Dom. 34,923 9,496 16,703 10,304 6,468 77,893 22,133 3,383 4,897 30,413 656 20148 20,804 129,111

Ind. 247 59 3 10 40 359 13 - - 13 - 90 90 462

Com. 8,584 1,736 4,202 2,227 1,591 18,340 5,516 493 894 6,903 95 8288 8,383 33,626

Agr.&

fish922 300 645 266 148 2,281 371 75 110 556 6 304 310 3,147

Tourism 12 3 - 2 - 17 3 - 1 4 - 329 329 350

MOD 51 - - 1 - 52 4 1 - 5 - 10 10 67

Gov. 1,749 555 720 550 325 3,899 1,711 320 405 2,436 66 1428 1,494 7,829

Total 46487 12149 22273 13360 8572 02,841 29751 4272 6307 40,330 823 30597 31,420 174,592


2 Energy ImportedMJEC imported 6,749,952 MWh during 2013 with a total cost of RO. 85,632,894 /- compared to 6,418,193 MWh and RO. 77,941,091/- in last year 2012 with an increase of 5 % and 10 % respectively.

3 Regulated Units DistributedMJEC distributed 4,065,124 MWh to its customers connected to the distribution system. The end users (direct connected customers to transmission system) consumed 1,957,204 MWh.

MW

h

Energy Imported (2012-2013)

Regulated Units Distributed

MW

h (T

hous

ands

)

0

500

1000

1500

2000

2500

Agricu

lture &

Fisher

iesCom

mercial

Reside

ntial

Govern

ment

Indust

rial

Tourism

12

532515

2204

698

10411

532430

2101

597

97

2012 2013


The highest percentage of energy was distributed to Domestic sector with 54.2% from the total distributed energy followed by Commercial sector with 17% .Agriculture and Tourism sectors consumed the lowest energy from the total distributed energy 2.5% and 0.3% respectively. Because of its large number of customers, North Batinah governorate distributed the highest percentage of energy 78% followed by Dhahirah governorate 12% and Buraimi governate 10%.

4 Distribution Energy LossesOne of the 2013 Majan strategic objectives was to reduce energy losses to 10.9%. The year ended with losses of 12.72% which was improved from last year position of 13.47%. North Batinah governorate recorded the highest percentage of network losses during 2013 of 14% followed by Buraimi governorate at 13% and the lowest was in Al Dhahirah governorate at 4%.

Network Losses

%

0

5

10

15

20

2006 2007 2008 2009 2010 2011 2012 2013

12.7213.4713.7014.10

17.4017.1015.60

12.90

RUD as per Tariff Catagory

Agriculture & FisheriesCommercialDomesticGovernmentIndustrialTourism

2.5%

17.2%

54.2%

12.7%

13.1%

0.3%


5 Revenue from Sale of ElectricityRevenue from sale of electricity is the major component of MJEC revenue. As at December 2013, MJEC recorded total revenue from sale of electricity of RO. 89,486,632 which represents an increase by 7% fromlastyear2012.ThemaincontributorwastheIndustrialsector.ThemajorproportionofrevenuewasfromtheIndustrialsectorof42%followedbyDomesticsectorby29%.16%fromthetotalrevenuewasgenerated from Commercial sector followed by Government sector with 11%.

6 Electricity Demand The peak demand recorded was on 10/07/2013 and it was 967.1 MW with 3% increase from last year 2012. The minimum demand recorded was on 9/02/2013 at 206.8 MW

Monthly Max. and Min. Demand 2013-2012

MW

Revenue from Sale of Electricity

0

5000

10000

15000

20000

25000

30000

35000

40000

1841^200

37^107

10^221

14^906

25^868

1811^113

36^225

8^665

13^673

23^664

RO T

hous

ands

Domestic Commercial Government Industrial Agr. Fish Tourism

2012

2013


7 Human ResourcesAt Majan our employees are our key strength and we believe that they are our most valuable assets. We believe that developing, motivating, promoting, rewarding and the health and safety of our employees are critical for the success of MJEC.

Learning and development MJECbelievesthatthequalifiedworkforceisessentialforthedevelopmentofanyentityandtobringawareness in the best practices in the electricity sector. MJEC development plan is aligned with preparing the Omani national to perform certain jobs that are critical for the business and enhancing their performance andtheskillsrequiredforthenewtechnologyaswellastheirdaytodayoperations.Thecompanycontinuedinvestingindevelopingthehumancapitalbymaintainingqualifiedpeopleandprovidingthemwiththebesttrainingprograms.In2013,MJECinvestedRO.494,133inthedifferent187development programmers conducted over the year with an average of RO. 1,285 for per staff.

Daily Max. and Min. Demand 2013M

W


Training category

Our Employees Ourpriorityistoattractandretainemployeeswhoarequalified,motivatedandengagethroughhumanresourcestrategies.In2013MJECrecruited22employeesandachievedomanizationlevelof95%.Thetable below shows total human resources in MJEC.

Omani Expatriates MJEC

Male Female Male Female Male Female

315 57 20 1 335 58

Training CategoryElectrical EngineeringCustomer serviceHSSEHigher EducationManagementEnglish LanguageIT & GISAccounts & FinanceIMD

37%

7%

7%

5%

20%3%

11%

9%

1%


2013 HSSE Report MajanElectricityCompanyandContractorshavecompleted16,272manhourswithoutLTIs(678safeworking days). More than 12,000 new customers were safely connected to the MJEC electrical network system. Yet, it would have been excellent to complete 2013 without lost time accidents, however; two unfortunateaccidents,afatalityandinjuryoccurredin2013.Itrevealsthatcultureisthemainhurdletosafety and we shall not relent from changing the culture for a better safe working environment.

MJEC is putting all its efforts to improve HSSE performance. All of MJEC staff have now attended all mandatory HSSE courses. The contractors’ HSSE performance is carefully monitored. No contractor can work in MJEC authorized areas without submitting HSSE plan and ensuring staff have attended the basic HSSE courses.

CompanyChiefExecutiveOfficerisverykeentoseeHSSErulesandproceduresareimplemented.Forthis reason he tours all MJEC concession areas to ensure HSSE culture does exist and that MJEC and contractors take safety very seriously. As part of transparency MJEC posts its monthly HSSE performance in website and share incidents learning points with sector companies, contractors and interested parties.

In2013MJECHSSEthemewas‘mypreciousfinger’toindicatetheimportanceoftheuseofthefingers.Indeedmostofaccidentsoccurredincludingtheseriousandfatalonesasaresultofunsafely‘putting’fingers in dangerous places.

Unfortunately during 2013 a fatal accident occurred while a technician attempting to fix an electrical fault on a customer panel. The technician was unaware of standby generator which came on line automatically while part of technician’s hand touching the exposed busbar. The technician was electrocuted and pronounced dead upon his arrival to the health center. Another serious accident was the Road traffic accident involving one of MJEC staff, resulted into minor injuries.


Main HSS&E highlights are summarized below: • ESR,thirdversion

MJEC has printed 500 copies of third version of ESRs, new update has taken place and new section on‘HVlivelinework’hasbeenadded.Also,MJEChasintroducedthefirstArabicversionofESRsinthe country.

• HSSEtrainingpassportsInordertotrackouttheHSSEtrainingcoursesattendedbystaff,MJEChasintroduced the HSSE training passport where individuals need to register allthecoursesattended.Thiswillhelptotrackthe‘refresher’coursesandfor audit purposes.

• INTELEXAllstaffweretrainedtouseINTELEXtoreportandcommunicateHSSEelectronically

• IMS–IntegratedManagementSystem(OHSAS18001,ISO14001&ISO9001)MJEC has initiated the work to move towards IMS (OHSAS 18001, ISO 14001 & ISO 9001)accreditation.Requestedprocedureshavebeenpreparedinaccordancetotherequirements.StaffwastrainedintherequirementsofIMS.ThecompanywasauditedonDecember2013andthefeedbackwas positive. MJEC is expected to be accredited in 2014.


Stat

istics

Daily

max

imum

and m

inimu

m de

mand

Tim

e20

0620

0720

0820

0920

1020

1120

1220

13

Ma

x on

15/0

7/06

Min

on

21/0

1/06

Max o

n 16

/07/

07Mi

n on

21

/01/

07Ma

x on

28/0

6/08

Min

on

02/0

2/05

Max o

n 31

/05/

09Mi

n on

24

/1/0

9Ma

x on

30/6

/201

0Mi

n on

16

/1/2

010

Max o

n 08

/08/

2011

Min

on

22/0

1/20

11Ma

x on

21/0

7/20

12Mi

n on

28

/01/

2012

Max o

n 10

/07/

13Mi

n on

09

/02/

13

1:00

491.6

93.7

558.1

110.7

579.5

126.3

652

133.6

684.8

155.2

713.7

178.7

826.4

196.2

913.1

223.7

2:00

478.4

85.9

542.3

102.7

564

119.4

633.7

124.3

669.4

145.6

733.2

164.4

822.9

183.6

905.9

212.8

3:00

472.1

84.5

526.8

91.4

547.2

115.6

610.3

121.2

652.9

140.8

729.3

157.1

803.2

178.9

882.0

208.1

4:00

464.1

82.1

513.4

98.7

529.1

114.4

598.6

119.7

639.1

141.1

710.4

156

788.6

177.1

859.3

206.8

5:00

429.8

8547

5.210

249

0.1119

.852

8.812

1.558

5.514

468

515

7.776

1.318

3.882

7.121

1.7

6:00

378.7

109.4

421.8

128.6

441.1

146

447.4

153.5

531.8

194.1

626.3

189.2

703.5

225.7

762.8

276.3

7:00

366.2

129.1

409.5

141.6

438.5

166.9

446.5

172.7

503.3

207.6

616.7

192.7

700.1

240

757.8

272.5

8:00

365.1

144

405.6

159.5

441.8

187

463.7

184.8

502.1

208.2

636.5

203.6

699.1

257.9

777.7

283.1

9:00

364.5

149.3

412.4

168.5

443

202.7

473.6

192.7

511.9

205.6

658.2

217.5

721.5

261.3

797.8

294.2

10:0

036

215

7.440

9.916

943

9.121

547

6.620

2.351

0.922

1.267

3.822

5.176

5.127

0.480

8.130

0.0

11:0

036

7.715

7.642

0.416

7.745

1.921

5.649

2.720

4.251

922

3.868

5.422

5.878

027

4.681

1.830

9.2

12:0

039

215

5.345

1.516

5.847

9.620

8.653

1.420

4.854

4.322

9.869

4.122

7.479

8.227

3.583

2.330

4.5

13:0

043

7.815

6.150

1.117

0.953

421

0.260

3.721

2.159

9.723

0.571

5.423

7.581

9.228

2.384

9.530

8.6

14:0

049

1.413

2.754

8.714

659

1.418

7.168

8.418

9.867

7.920

6.178

2.121

7.190

8.525

2.793

3.028

3.6

15:0

053

1.513

2.158

3.814

4.465

3.818

4.472

8.118

2.573

6.520

6.480

9.719

9.693

9.624

6.696

7.128

8.1

16:0

051

6.515

656

9.216

9.963

6.520

5.869

9.721

0.471

7.123

0.278

8.122

2.890

2.527

1.793

6.730

9.5

17:0

040

7.315

8.645

3.217

3.350

4.721

557

8.521

2.658

8.723

6.668

6.922

3.880

2.727

7.984

5.831

6.6

18:0

033

6.618

8.339

5.220

1.143

3.122

4.848

5.224

8.450

5.428

1.261

5.928

3.874

331

2.177

7.833

5.4

19:0

033

6.118

338

819

6.242

7.124

0.148

0.825

9.550

5.227

359

0.928

4.869

9.233

2.874

7.137

3.0

20:0

040

6.817

3.446

0.818

8.250

7.222

955

5.624

7.359

826

6.566

227

6.976

2.731

6.381

1.836

0.0

21:0

042

6.515

7.947

5.317

2.352

0.521

1.958

0.423

2.660

8.625

1.967

9.825

7.678

5.229

5.783

8.333

6.6

22:0

044

6.614

4.549

6.416

2.454

5.919

4.261

0.721

5.861

7.223

7.564

3.724

2.874

9.127

8.580

7.731

8.3

23:0

048

3.812

953

5.214

559

9.317

4.965

8.519

3.466

4.620

9.865

2.622

175

0.325

8.981

0.229

5.1

0:00

499

11155

0.812

6.662

6.915

6.966

8.116

5.969

6.118

668

3.319

9.878

1.622

7.485

1.726

5.1


Month

ly Ma

ximum

and m

inimu

m de

mand

2006

2007

2008

2009

2010

2011

2012

2013

Max

Min

Max

Min

Max

Min

Max

Min

Max

Min

Max

Min

Max

Min

Max

MW

Min

MW

Janu

ary

201.5

82.1

224.8

91.4

257.9

115.2

279.5

119.7

304.7

140.8

336.5

156

360

177.1

402

207

Febr

uary

205.3

8422

3.699

.525

3.811

4.430

9.312

6.230

3.515

133

2.516

7.936

2.418

0.739

5.820

6.8

Marc

h23

3.197

.726

0.210

3.536

113

6.440

8.215

8.945

1.516

9.541

8.216

7.447

8.718

4.447

224

2.9

April

385.8

162.8

463.7

169.2

472.6

235.1

516.2

176.3

591.9

283.3

557.5

263.4

640.5

280.1

761.3

302

May

502.7

214.9

538.6

271.6

645.3

285

728.1

182.9

719.4

326.6

790.4

353.7

827.1

412.2

848.9

314.6

June

516

269.7

573.1

212.9

653.8

335.2

711.6

405.5

736.5

336

799.6

517.6

879.1

519.2

937.1

543.1

July

532

278.9

583.8

326.6

644.1

371.7

721.6

420.8

735

425

790.5

483.2

939.6

567.7

967.1

601.9

Augu

st50

0.226

6.556

332

2.162

6.336

8.872

2.540

0.471

7.343

6.480

9.744

5.993

3.549

2.589

4.751

3.1

Sept

embe

r49

4.225

3.258

0.427

5.364

2.936

8.671

834

6.170

5.935

1.275

1.443

3.185

543

6.988

950

8.6

Octo

ber

460.2

187.4

456.9

179.1

542.8

267.7

600.2

285.6

625.5

312.3

676

306.4

732.1

324.1

820.8

422.5

Nove

mbe

r30

6.812

5.435

2.914

741

2.217

2.842

8.518

146

7.218

7.746

8.223

2.150

8.525

3.764

0.524

1.6

Dece

mbe

r21

8.493

.326

2.712

1.628

9.712

4.831

9.214

134

1.816

2.635

0.315

7.841

5.220

5.745

9.522

8.8


Custo

mers

ervice

Infor

matio

n(No

.ofC

ustom

ers)

Ye

ar

Dom

estic

Com

mer

cial

Gove

rnm

ent

Indus

trial

Agr.

Fish.

Tour

ismTo

tal

Revenues

2013

25,86

7,547

14

,173,8

19

10,22

1,334

37

,839,8

00

1,200

,107

184,0

48

89,48

6,632

2012

23,66

3,848

13

,672,6

02

8,665

,386

36,22

5,067

1,1

12,56

6 18

0,818

83

,520,2

87

2011

21,63

0,766

13,13

7,655

7,538

,630

24,77

0,625

865,1

2816

2,010

68,10

4,814

2010

19,66

0,348

9,940

,929

6,705

,871

14,96

4,775

722,4

3916

2,258

51,71

1,173

2009

18,37

8,974

11,21

0,340

5,582

,605

7,223

,527

657,7

0615

1,457

43,20

4,609

2008

16,42

7,512

9,219

,703

5,999

,592

4,816

,385

615,7

1116

8,046

37,24

6,948

2007

14,00

3,583

8,324

,523

4,738

,880

2,508

,601

534,6

6014

4,567

30,25

4,814

2006

12,98

3,801

5,438

,671

4,739

,148

1,979

,688

476,1

3010

6,949

25,72

4,387

2005

9,993

,199

3,556

,050

3,493

,955

1,691

,777

358,3

3410

2,532

19,19

5,847

MWh

2013

2,237

,255

709,5

9353

6,145

2,488

,959

104,5

4511

,649

6,088

,146

2012

2,100

,594

683,6

1443

0,279

2,370

,582

97,20

211

,428

5,693

,700

2011

1,899

,777

729,6

9340

8,808

1,668

,745

81,71

610

,131

4,798

,870

2010

1,728

,788

497,2

1736

9,249

942,0

2969

,267

9,975

3,616

,525

2009

1,633

,461

563,3

6529

5,109

445,2

8258

,430

9,219

3,004

,866

2008

1,488

,522

460,9

8529

2,371

307,2

2855

,057

16,08

02,6

20,24

3

2007

1,281

,987

416,2

2624

0,461

156,4

7848

,125

8,564

2,151

,841

2006

1,201

,917

271,9

3424

6,466

123,8

0043

,680

5,689

1,893

,486

2005

920,2

8117

7,803

180,7

9192

,489

32,27

95,4

021,4

09,04

5

No of Customers

2013

129,1

11

33,62

6 7,8

96

462

3,147

35

0 17

4,592

2012

121,2

26

30,12

6 7,5

56

411

2,851

34

7 16

2,517

2011

113,9

6426

,486

7,173

244

2,313

310

150,4

90

2010

108,0

0524

,034

6,830

155

2,005

276

141,3

05


Ye

ar

Dom

estic

Com

mer

cial

Gove

rnm

ent

Indus

trial

Agr.

Fish.

Tour

ismTo

tal

No of Customers

2009

100,5

5821

,703

6,588

1161,7

6426

913

0,998

2008

95,38

920

,812

6,445

971,5

6326

612

4,572

2007

91,08

819

,818

6,082

771,5

0426

7118

,836

2006

87,38

819

,139

5,918

741,4

2623

113,9

68

2005

84,67

018

,624

5,652

591,3

5425

110,38

4MWh/Customers (MWh)

2013

1721

6853

8733

3335

2012

1723

5757

6834

3335

2011

1728

5768

3935

3332

2010

1621

5460

7835

3626

2009

1626

4538

3933

3423

2008

1622

4531

6735

6021

2007

1522

4121

1534

372

2599

2006

1414

4216

7331

247

17

2005

1110

3215

6824

216

13

Revenue/Customer (RO.)

2013

200

422

1294

8190

438

152

651

3

2012

195

454

1147

8813

939

052

151

4

2011

190

496

1051

1015

1937

452

345

3

2010

182

414

982

9654

736

058

836

6

2009

183

517

847

6227

237

356

333

0

2008

172

443

931

4965

339

463

229

9

2007

154

420

779

3257

935

554

125

5

2006

149

284

801

2675

333

446

5022

6

2005

11819

161

828

674

265

4101

174

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