Annual Report
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2010 ANNUAL REPORT JP ELEKTROPRIVREDA HZ HB d.d Mostar Mile Budaka 106a 88000 Mostar Bosnia and Herzegovina Tel.: +387 36 335 700 Fax: +387 36 335 777 [email protected] www.ephzhb.ba CONTENTS GENERAL MANAGER’S REPORT .............................4 CONSTRUCTION OF GENERATING PLANTS ................ 41 COMPANY PROFILE ...........................................6 PROJECT ACTIVITIES ........................................ 42 Mission Wind Farms Vision Hydro Power Plants Strategy Fossil Energy Project QUALITY MANAGEMENT POLICY ............................8 Other Activities 2010 General Data Map of Existing and Planned Generation Facilities ORGANIZATION CHART .................................... 10 POWER DISTRIBUTION DIVISION ......................... 47 Distribution Facilities GOVERNING BODIES ....................................... 12 Distribution Facilities Financed out of Shareholders’ Assembly EIB Loan in 2010 Supervisory Board Audit Board POWER SUPPLY DIVISION ................................. 53 Management Board Payment Collection Relations with Customers BASIC LEGAL DATA ........................................ 14 Home Trade Activities of Company ENVIRONMENTAL PROTECTION POLICY .................. 58 Foreign Trade Activities of Company Hydrometeorological System Structure of Company Shareholders in 2010 Information Center Stock Trade – SASE Environmental Protection Activities Shares in Related Legal Entities CONCLUSION ................................................ 62 Human Resources Management Board’s Report COMPANY’S PERFORMANCE ............................... 19 Supervisory Board’s Evaluation of Profit and Loss Account Company’s Performance Balance Sheet Assembly’s Evaluation of Performance Independent Auditors’ Report Map of Power System in BiH in 2010 POWER GENERATION DIVISION ........................... 29 HPP Rama HPP Mostar HPP Peć Mlini PSPP Čapljina HPP Jajce I HPP Jajce II HPP Mostarsko Blato 3 ANNUAL REPORT 2010. GENERAL MANAGER’S REPORT In 2010, performance of Elektroprivreda Hr- vatske zajednice Herceg Bosne, d.d. Mostar was good. In spite of difficult circumstances caused by the crisis, performance of all organizational parts was very good due to good coordination of all officials and rational use of the available resources. Compared with the previous year, power generation in- creased by 34%. The Company operates seven hydro power plants. Thanks to good operating conditions and favourable hy- drological circumstances, the total power generation in 2010 was 2,604.67 GWh. The gross income (mainly from sales of electricity and services) was BAM 382,991,119 or 23% higher than in the previous year. The Company operated at a profit of BAM 40,746,515. The amount of BAM 59,390,013 was invested in various projects in all organizational parts. Continuous investment in the distribution network contributed to loss reduction by 1.3% at all distribution voltage levels. The collection rate was 98.73% (European average) or 1.73% higher than the plan. At the same time we worked on safe and quality supply to all customers. The newly constructed HPP Mostarsko Blato was put into operation in 2010. This multipurpose and complex power-generating plant - civil structure worth BAM 140,000,000 was constructed within four years. In addition to power generation, it will contribute to the field flood protection and agricultural production. In February 2010, the FBiH Government approved a decision confirming the “existence of a public interest” for construction of priority power-generating plants. According to this decision, Elektroprivreda Hrvatske zajednice Herceg Bosne will construct 11 gen- erating plants including six hydro power plants, four wind farms and the integrated lignite mining and power project. The total investment value of these generating plants is about BAM 3,200,000,000. The above-mentioned projects are in different stages of preparation and construction. We particularly worked on promotion of renewable energy sources and greenhouse gas emission reduction. This was con- ANNUAL REPORT 2010. 4 firmed by laying the foundation-stone for construction of the first wind farm in BiH – Mesihovina – Tomislavgrad with the planned annual output of 128-146 GWh. Its construction will cost BAM 155,000,000. The major portion of funds was provided out of the German Develop- ment Bank KfW loan and the rest are our own funds. Construction of new generating plants will contribute to development of economy and industry and offer new possibilities for employment and business for many contractors. In addition, traffic infrastructure will be improved and there will be many other benefits for the large social community. In 2010, considerable funds were invested in other renewable energy projects as well as in revitalization and modernization of the existing hydro power plants, construction and reconstruction of the distribution network and facilities, and the projects of systematic improvement and modernization of the business operation. One of the projects for construction and reconstruction of the distribution facilities and network worth BAM 21,000,000 was implemented and financed out of the European Investment Bank (EIB) loan. The project for in- stallation of remote reading meters in substations was also completed and installation of remote reading meters for households is in progress. Meeting the European standards in the field of information technologies, JP Elektroprivreda HZHB d.d. Mostar is one of few companies that use the Customer Billing and Information System – Hepbilling, Business Intelli- gence System – bIns2 and Financial Management Information System – FMIS. Implementation of the Human Resources Management System started. We kept on maintaining and improving business relations with all interested parties both in our system and the social community. The Company is oriented to satisfaction of all employes and customers. Improvement of our relations with customers and timely informing; relations centralization; and more efficient, fast and professional communication with all types of support are implemented through the Customer Relations Unit. Its Information Center that will be put into operation very soon. Completion of the started and launching of the new projects in accordance with the deci- sions of the Company’s majority owner – the FBiH Government; safe, reliable and quality sup- ply to customers at all voltage levels; network loss reduction; and keeping the achieved collection rate remain our main objective. We keep on monitoring and reducing the operating expenses in all business activites with the successful power system control and new investments in human resources of JP Elektroprivreda HZ HB. Mato Žarić General Manager GENERAL MANAGER’S REPORT 5 ANNUAL REPORT 2010. COMPANY PROFILE ANNUAL REPORT 2010. 6 MISSION The mission of JP Elektroprivreda HZ HB d.d. Mostar is quality, reliable and secure power generation, distribu- tion and supply, and development of new power facilities according to the development needs of users in line with the development plans of Bosnia and Herzegovina. In achievement of its mission, JP Elektroprivreda HZ HB d.d. Mostar will follow its objectives: • Sustainability of overall development • Implementation of worldwide experience and ideas in power activities • Business efficiency • Development of competencies of specialists needed in power activities • Support to partners in similar activities JP Elektroprivreda HZ HB d.d. Mostar has a specific role in the process of integration of Bosnia and Herze- govina into the European energy area. VISION JP Elektroprivreda HZ HB d.d. Mostar wishes to become the main driving force of economic development in the areas of its responsibility and an active participant in the overall development of . Bosnia and Herzegovina. All of our development programs should enable development of other activities for the benefit of all citizens of Bosnia and Herzegovina primarily for our benefit through the power system development STRATEGY The top-priority medium-term objective of JP Elektroprivreda HZ HB d.d. Mostar is finding a solution for bal- ancing power generation and increasing electricity demands primarily by construction of renewable sources taking into consideration the principles of sustainability and decrease in electricity imports.This objective will be accompanied by establishing the system. of management of quality, environment and business risks in the existing processes and investment projects COMPANY PROFILE 7 ANNUAL REPORT 2010. QUALITY MANAGEMENT POLICY In the global liberalization and power sector restructuring, the systematic management of quality, and safety and environmental protection are impor- tant components of modern marketing and prorities in the business policy of JP Elektroprivreda HZ HB d.d. Mostar. Quality is important in all parts of the Company. Each employee must know his role, and rights and liabilities in achieving the set business objec- tives for the Company to be efficient, open, prepared for marketing, coopera- tion with partners and investment. The quality management system is based on the principles and require- ments of the internationally recognized standard ISO 9001:2008 in compli- ance with legal provisions, the Articles of Association and decisions of the Company, relevant conventions and directives, guidelines, recommenda- tions, norms and requrements of customers and other interested parties. The Management Board is determined to implement the quality manage- ment policy in the business operation of the Company.