Financial-Statement-31-December-2014 - BOARD OF...

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BOARD OF DIRECTORS’ REPORT Dear Shareholders, On behalf of the Board of Directors of Al Batinah Power Company SAOG (“ABPC” or the “Company”), I have the pleasure to present the Annual Report of the Company for the year ended 31 December 2014. The Company was incorporated in 2010 after award of the Sohar 2 IPP project. The Company owns and operates the 744MW power generation plant in the Sohar industrial area (“Sohar 2” or “the Plant”), selling electrical power to Oman Power and Water Procurement Company SAOC (“OPWP”) under a 15-year Power Purchase Agreement (“PPA”). The Company purchases gas from the Ministry of Oil and Gas (“MOG”) under a 15-year Natural Gas Supply Agreement (“NGSA”). The operations and maintenance of the power plant are subcontracted to Suez-Tractebel Operation and Maintenance Oman (“STOMO”) under a 15-year O&M agreement. Over the year 2014, the first “full” year of operation, the health and safety performance was excellent, with no lost time injuries (“LTI”). STOMO has reached 1274 days without LTI at the end of 2014. All health, safety and environmental (“HSE”) processes were carefully audited by a third party in the frame of an OHSAS 18001 and ISO 14001 certification and no major non-compliances could be detected. The certificates are expected by early 2015. Corporate governance 2014 brought some important changes to the Company. The Board of Directors, further to an invitation by the Capital Market Authority (“CMA”), recommended the Shareholders to proceed with a split of the nominal value of the Company’s shares from RO 1 per share to Baizas 100 per share and this recommendation was accepted during an extraordinary general meeting in February. In March, the Shareholders approved the proposal to convert the Company from a closed joint stock company to a public joint stock company and to offer 35% of the issued share capital of the Company to the public. Consequently, the Company launched its initial public offering (“IPO”) which was completed successfully in June with a listing on the Muscat Securities Market. In addition, the Board of Directors was extended from 9 to 11 Directors during an extraordinary general meeting of the shareholders in December and reached its current composition. Given the new “listed company” status, significant time and effort has been dedicated to review corporate structures, policies and processes in order to ensure the highest standards of corporate governance in compliance with local regulatory requirements as well as with international principles and best practice. This process will continue in 2015. Operations During the year 2014, the Company achieved an excellent operational performance, with the Plant demonstrating a high level of reliability (the key parameter to monitor performance of the plant and the profit generated over the period.) The power plant dispatched an aggregated net power volume 1
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of 3,614 GWh (vs 2,654 GWh in 2013 which was an incomplete year since commercial operation date was declared in April 2013).
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