Jordan Electric Power : Disclosure (JOEP) 2023 05 03

JORDAN ELECTRIC POWER

To: Jordan Securities Commission,	ﺔﻴﻟﺎﻤﻟﺍ ﻕﺍﺭﻭﻻﺍ ﺔﺌﻴﻫ ﺓﺩﺎﺴﻟﺍ
Amman Stock Exchange	ﻥﺎﻤﻋ ﺔﺻﺭﻮﺑ ﺓﺩﺎﺴﻟﺍ
Company's Name: JORDAN ELECTRIC POWER	ﺔﻴﻧﺩﺭﻻﺍ ﺀﺎﺑﺮﻬﻜﻟﺍ :ﺔﻛﺮﺸﻟﺍ ﻢﺳﺍ
Date: 03-05-2023 08:48:08 AM	AM 08:48:08 2023-05-03 :ﺦﻳﺭﺎﺘﻟﺍ
Subject: Company's opinion on the aforementioned	ﺕﺎﺑﺎﺴﺤﻟﺍ ﻖﻗﺪﻣ ﺮﻳﺮﻘﺗ ﻝﻮﺣ ﺔﻛﺮﺸﻟﺍ ﻱﺍﺭ :ﻉﻮﺿﻮﻤﻟﺍ
auditor's report
Kindly be informed that our opinion regarding our	ﺓﺩﺎﺴﻟﺍ ﺔﻛﺮﺸﻟﺍ ﺕﺎﺑﺎﺴﺣ ﻖﻗﺪﻣ ﺮﻳﺮﻘﺗ ﻝﻮﺣ ﺎﻨﻳﺍﺮﺑ ﻢﻜﻣﻼﻋﺍ ﺩﻮﻧ
Auditor's report Messrs.' KPMG as follows:-	-:ﻲﻠﻳ ﺎﻤﻛ KPMG
Type of Report: Qualified	ﻆﻔﺤﺗ :ﺮﻳﺮﻘﺘﻟﺍ ﻉﻮﻧ
Company's opinion:	:ﺔﻛﺮﺸﻟﺍ ﻱﺃﺭ
Tariff methodology (set of principles, assumptions and	ﺕﺎﻴﺿﺮﻔﻟﺍﻭ ﺲﺳﻻﺍ ﺔﻋﻮﻤﺠﻣ) ﺔﻓﺮﻌﺘﻟﺍ ﺔﻴﺠﻬﻨﻣ ﺖﺼﻧ
methods issued by EMRC and used to calculate and	ﺔﻓﺮﻌﺘﻟﺍ ﺏﺎﺴﺣ ﻲﻓ ﻡﺪﺨﺘﺴﺗﻭ ﺔﺌﻴﻬﻟﺍ ﻦﻋ ﺭﺪﺼﺗ ﻲﺘﻟﺍ ﺐﻴﻟﺎﺳﻻﺍﻭ
review tariff applied to licensees) and Article 4 of license	ﺔﺼﺧﺭ ﻦﻣ (4) ﺓﺩﺎﻤﻟﺍﻭ (ﺎﻬﺘﻌﺟﺍﺮﻣﻭ ﻢﻬﻟ ﺺﺧﺮﻤﻟﺍ ﻰﻠﻋ ﺔﻘﺒﻄﻤﻟﺍ
granted to JEPCO stipulated: 1-The licensee shall abide by	،ﺓﺬﻓﺎﻨﻟﺍ ﺔﻴﻧﺩﺭﻻﺍ ﻦﻴﻧﺍﻮﻘﻟﺎﺑ ﻪﻟ ﺺﺧﺮﻤﻟﺍ ﻡﺰﺘﻠﻳ -1" :ﻰﻠﻋ ﺔﻛﺮﺸﻟﺍ
the Jordanian laws in force. 2-The licensee shall comply	ﺓﺩﺪﺠﺘﻤﻟﺍ ﺔﻗﺎﻄﻟﺍ ﻥﻮﻧﺎﻗﻭ ،ﻡﺎﻌﻟﺍ ﺀﺎﺑﺮﻬﻜﻟﺍ ﻥﻮﻧﺎﻗ ﻚﻟﺫ ﻲﻓ ﺎﻤﺑ
with all regulatory instructions. 4-The licensee shall abide	ﻡﺰﺘﻠﻳ -2 .ﺺﻴﺧﺮﺘﻟﺍ ﻡﺎﻈﻧﻭ ﺔﺌﻴﺒﻟﺍ ﻥﻮﻧﺎﻗﻭ ،ﺔﻗﺎﻄﻟﺍ ﺪﻴﺷﺮﺗﻭ
by new instructions or regulations issued by Regulator.	ﻖﻓﺍﻮﺗ ﻭﺍ ﺎﻫﺭﺪﺼﺗ ﻲﺘﻟﺍ ﺔﻴﻤﻴﻈﻨﺘﻟﺍ ﺕﺎﻤﻴﻠﻌﺘﻟﺍ ﺔﻓﺎﻜﺑ ﻪﻟ ﺺﺧﺮﻤﻟﺍ
Based on that, JEPCO -in line with directives and decisions	ﻪﻴﻠﻋ ﻖﺒﻄﻨﺗ ﻱﺬﻟﺍ ﺭﺪﻘﻟﺎﺑ ﻚﻟﺫﻭ ،ﺮﺧﻵ ﺖﻗﻭ ﻦﻣ ﺔﺌﻴﻬﻟﺍ ﺎﻬﻴﻠﻋ
issued by EMRC, didn't apply IFRS 9 "Financial	ﻪﻟ ﺺﺧﺮﻤﻟﺍ ﻡﺰﺘﻠﻳ -4 .ﺕﺎﻤﻴﻠﻌﺘﻟﺍ ﻩﺬﻫ ﻲﻓ ﺓﺩﺭﺍﻮﻟﺍ ﻡﺎﻜﺣﻻﺍ
Instruments" related to ECL, based on EMRC letter	ﻰﻠﻋ ﺀﺎﻨﺑ ".ﺔﺌﻴﻬﻟﺍ ﺎﻫﺭﺪﺼﺗ ﺓﺪﻳﺪﺟ ﺔﻤﻈﻧﺍ ﻭﺍ ﺕﺎﻤﻴﻠﻌﺗ ﻱﺄﺑ ﺪﻴﻘﺘﻟﺎﺑ
3/2/10550 dated 20/10/2021, which includes exemption	ﺔﺌﻴﻫ ﺕﺍﺭﺍﺮﻗﻭ ﺕﺎﻬﻴﺟﻮﺗ ﻊﻣ ﺎﻴﺷﺎﻤﺗﻭ- ﺔﻛﺮﺸﻟﺍ ﻥﺈﻓ ﻡﺪﻘﺗ ﺎﻣ
of DISCOs from applying IFRS9 for tariff period (2022-	ﻲﻟﻭﺪﻟﺍ ﺭﺎﻴﻌﻤﻟﺍ ﻖﻴﺒﻄﺘﺑ ﻢﻘﺗ ﻢﻟ ﻥﺩﺎﻌﻤﻟﺍﻭ ﺔﻗﺎﻄﻟﺍ ﻉﺎﻄﻗ ﻢﻴﻈﻨﺗ
2023). However, due to the importance & materiality of	ﺮﺋﺎﺴﺨﻟﺎﺑ ﻖﻠﻌﺘﻤﻟﺍ "ﺔﻴﻟﺎﻤﻟﺍ ﺕﺍﻭﺩﻻﺍ" 9 ﻢﻗﺭ ﺔﻴﻟﺎﻤﻟﺍ ﺮﻳﺭﺎﻘﺘﻠﻟ
this matter on the FSs, and in line with the requirements	ﺦﻳﺭﺎﺗ 10550/2/3 ﻢﻗﺭ ﺏﺎﺘﻜﻟﺍ ﻰﻟﺍ ﺍﺩﺎﻨﺘﺳﺍ ﺔﻌﻗﻮﺘﻤﻟﺍ ﺔﻴﻧﺎﻤﺘﺋﻻﺍ
of IFRS, and within transparency policy, JEPCO calculated	ﻦﻣ ﻊﻳﺯﻮﺘﻟﺍ ﺕﺎﻛﺮﺷ ﺀﺎﻔﻋﺍ ﺪﻳﺪﻤﺗ ﻦﻤﻀﺘﻤﻟﺍﻭ 2021/10/20
ECL provision according to requirements of IFRS9, Where	ﻦﻜﻟﻭ .(2023-2022) ﺔﻓﺮﻌﺘﻟﺍ ﺓﺮﺘﻔﻟ ﺭﺎﻴﻌﻤﻟﺍ ﺍﺬﻫ ﻖﻴﺒﻄﺗ
it was found that it requires JEPCO to allocate 47m JD as	ﺔﻛﺮﺸﻠﻟ ﺔﻴﻟﺎﻤﻟﺍ ﺕﺎﻧﺎﻴﺒﻟﺍ ﻰﻠﻋ ﺮﻣﻷﺍ ﺍﺬﻬﻟ ﺔﻳﺩﺎﻤﻟﺍ ﺔﻴﻤﻫﻸﻟﻭ
end of 2022 as an additional provision, as this type of	ﺹﻮﺼﺨﻟﺍ ﺍﺬﻬﺑ ﺔﻴﻟﺎﻤﻟﺍ ﺮﻳﺭﺎﻘﺘﻠﻟ ﺔﻴﻟﻭﺪﻟﺍ ﺮﻴﻳﺎﻌﻤﻟﺍ ﻊﻣ ًﺎﻴﺷﺎﻤﺗﻭ
burden is considered part of the expenses that must be	،ﺭﺎﻴﻌﻤﻟﺍ ﻖﻓﻭ ﺺﺼﺨﻤﻟﺍ ﺏﺎﺴﺘﺣﺎﺑ ﺔﻛﺮﺸﻟﺍ ﺖﻣﺎﻗ ﺔﻴﻓﺎﻔﺸﻟﺍﻭ
covered in electric tariff to achieve required return for	2022 ﺔﻳﺎﻬﻧ ﻲﻓ ﺎﻤﻛ ﺭﺎﻨﻳﺩ ﻥﻮﻴﻠﻣ 47 ﻎﻠﺒﻣ ﺪﺻﺭ ﺐﻠﻄﺘﻳ ﺎﻤﻣ
JEPCO under the license, which obliges. In this case,	ﺔﻴﺋﺎﺑﺮﻬﻜﻟﺍ ﺔﻓﺮﻌﺘﻟﺎﺑ ﻪﺘﻴﻄﻐﺗ ﻡﺰﻠﺘﺴﻳ ﺎﻤﻣ ،ﻲﻓﺎﺿﺍ ﺺﺼﺨﻤﻛ
EMRC to raise the tariff for different categories of	ﻲﻓ ﺔﺌﻴﻬﻟﺍ ﻡﺰﻠﺗ ﻲﺘﻟﺍﻭ ﺔﺼﺧﺮﻟﺍ ﺐﺟﻮﻤﺑ ﺏﻮﻠﻄﻤﻟﺍ ﺪﺋﺎﻌﻟﺍ ﻖﻴﻘﺤﺘﻟ
subscribers or reduce tariff for bulk supply purchases	ﺔﻓﺮﻌﺗ ﺾﻴﻔﺨﺗ ﻭﺃ ﺔﺋﺰﺠﺘﻟﺎﺑ ﻦﻴﻛﺮﺘﺸﻤﻟﺍ ﺔﻓﺮﻌﺗ ﻊﻓﺮﺑ ﺔﻟﺎﺤﻟﺍ ﻩﺬﻫ
from the NEPCO, which suffers losses of millions JDs. To	ﻦﻣ ﻲﻧﺎﻌﺗ ﻲﺘﻟﺍﻭ ﺔﻴﻨﻃﻮﻟﺍ ﺀﺎﺑﺮﻬﻜﻟﺍ ﺔﻛﺮﺷ ﻦﻣ ﺔﻠﻤﺠﻟﺎﺑ ﺀﺍﺮﺸﻟﺍ
avoid this, JEPCO decided not to record this provision. As	ﻡﺪﻋ ﺔﻛﺮﺸﻟﺍ ﺕﺭﺮﻗ ، ﻚﻟﺬﻟ ًﺎﻳﺩﺎﻔﺗﻭ ،ﺮﻴﻧﺎﻧﺪﻟﺍ ﻦﻴﻳﻼﻤﺑ ﺮﺋﺎﺴﺧ
for the application of IFRS16 "Leases", JEPCO -despite the	ﺮﻳﺭﺎﻘﺘﻠﻟ ﻲﻟﻭﺪﻟﺍ ﺭﺎﻴﻌﻤﻟﺍ ﻖﻴﺒﻄﺘﻟ ﺔﺒﺴﻨﻟﺎﺑ ﺎﻣﺃ .ﺺﺼﺨﻤﻟﺍ ﺍﺬﻫ ﺪﻴﻗ
exemption issued by EMRC in its letter 3/2/10549 dated	ﻡﺍﺪﺨﺘﺳﺍ ﻖﺤﺑ ﻑﺍﺮﺘﻋﻻﺎﺑ ﻖﻠﻌﺘﻤﻟﺍﻭ "ﺕﺍﺭﺎﺠﻳﻻﺍ" 16 ﺔﻴﻟﺎﻤﻟﺍ
20/10/2021, which includes exempting distribution	ﻰﻠﻋ- ﺔﻛﺮﺸﻟﺍ ﻥﺈﻓ ﺎﻬﺑ ﺔﻘﻠﻌﺘﻤﻟﺍ ﺮﻴﺟﺄﺘﻟﺍ ﺕﺎﻣﺍﺰﺘﻟﺍﻭ ﻝﻮﺻﻷﺍ
companies from applying IFRS16 for the tariff period	10549/2/3 ﻢﻗﺭ ﺏﺎﺘﻜﻟﺎﺑ ﺔﺌﻴﻬﻟﺍ ﻦﻋ ﺭﺩﺎﺼﻟﺍ ﺀﺎﻔﻋﻻﺍ ﻦﻣ ﻢﻏﺮﻟﺍ
(2022-2023)- applied the standard and reflected the	ﻦﻣ ﻊﻳﺯﻮﺘﻟﺍ ﺕﺎﻛﺮﺷ ﺀﺎﻔﻋﺍ ﻦﻤﻀﺘﻤﻟﺍﻭ 2021/10/20 ﺦﻳﺭﺎﺗ

Page 1 of 2

JORDAN ELECTRIC POWER

impact of that on FSs for year 2022 instead of adjusting	ﺲﻜﻌﺑ ﺖﻣﺎﻗ - (2023-2022) ﺔﻓﺮﻌﺘﻟﺍ ﺓﺮﺘﻔﻟ ﺭﺎﻴﻌﻤﻟﺍ ﺍﺬﻫ ﻖﻴﺒﻄﺗ
comparison numbers, after re-consulting with EMRC due to	ﻞﻳﺪﻌﺗ ﻦﻋ ًﺎﺿﻮﻋ 2022 ﻡﺎﻌﻠﻟ ﺔﻴﻟﺎﻤﻟﺍ ﺕﺎﻧﺎﻴﺒﻟﺍ ﻰﻠﻋ ﻪﻘﻴﺒﻄﺗ ﺮﺛﺍ
the availability of the possibility Absorbing financial impact	ﻉﺎﻄﻗ ﻢﻴﻈﻨﺗ ﺔﺌﻴﻫ ﻊﻣ ﺭﻭﺎﺸﺘﻟﺍ ﺓﺩﺎﻋﺍ ﺪﻌﺑ ﻚﻟﺫﻭ ،ﺔﻧﺭﺎﻘﻤﻟﺍ ﻡﺎﻗﺭﺃ
without the need to amend electric tariff and committing to	ﺍﺬﻬﻟ ﻲﻟﺎﻤﻟﺍ ﺮﺛﻻﺍ ﺏﺎﻌﻴﺘﺳﺍ ﺔﻴﻧﺎﻜﻣﺍ ﺮﻓﻮﺘﻟ ﺍﺮﻈﻧ ﻥﺩﺎﻌﻤﻟﺍﻭ ﺔﻗﺎﻄﻟﺍ
provid the Securities Committee with financial statements	ﺔﺌﻴﻫ ﺪﻳﻭﺰﺘﺑ ﻡﺍﺰﺘﻟﻻﺍ ﻑﺪﻬﺑﻭ ﺔﻓﺮﻌﺘﻟﺍ ﻞﻳﺪﻌﺘﻟ ﺔﺟﺎﺤﻟﺍ ﻥﻭﺩ ﺭﺎﻴﻌﻤﻟﺍ
for the year 2022 within the law period	ﺓﺩﺪﺤﻤﻟﺍ ﺓﺪﻤﻟﺍ ﻦﻤﺿ 2022 ﻡﺎﻌﻠﻟ ﺔﻴﻟﺎﻤﻟﺍ ﺕﺎﻧﺎﻴﺒﻟﺎﺑ ﺔﻴﻟﺎﻤﻟﺍ ﻕﺍﺭﻭﻻﺍ
	ﻥﻮﻧﺎﻘﻟﺎﺑ
Date of auditor's report: 30-03-2023	2023-03-30 :ﻖﻗﺪﻤﻟﺍ ﺮﻳﺮﻘﺗ ﺦﻳﺭﺎﺗ
Please accept our sincere thanks and appreciation.	.ﻡﺍﺮﺘﺣﻻﺍ ﻖﺋﺎﻓ ﻝﻮﺒﻘﺑ ﺍﻮﻠﻀﻔﺗﻭ
Chairman of Board of Directors	ﺓﺭﺍﺩﻹﺍ ﺲﻠﺠﻣ ﺲﻴﺋﺭ
User Name: ﺭﺩﺎﻘﻟﺍ ﺪﺒﻋ ﻕﺭﺎﻃ	ﺭﺩﺎﻘﻟﺍ ﺪﺒﻋ ﻕﺭﺎﻃ :ﻡﺪﺨﺘﺴﻤﻟﺍ ﻢﺳﺍ

Page 2 of 2