1. May 19 - 20, 2008 Bucharest 1 Regional Workshop on Uniform System of Accounts and Regulatory reporting Evgenija Kiprovska, Head of Economic department evgenija.kiprovska@erc.org.mk

2. May 19 - 20, 2008 Bucharest 2 Chart of Accounts Workshop In accordance with the Rulebooks on the method and conditions for regulating prices on regulated activities, the assets valuation concept for the regulatory assets is the concept of original cost less accumulated depreciation (book value of assets) The operating and maintenance costs, according with the Rulebooks, reflect the normalized costs necessary to perform the regulated activity. The Regulator recognize the normalized costs in the procedure for approval and control of the price The principles for calculating of the normalized costs are determinate with the Methodologies for calculation of regulated revenue and price of the regulated activity. According to this principles, -the level of the costs for current maintenance, repair and maintenance services is up to 25% of the calculated annual deprecation, -the level of other services is up to the level of their average three-year participation (as%) in the costs for materials, energy, spare parts and inventory.

3. May 19 - 20, 2008 Bucharest 3 Chart of Accounts Workshop cont. The allocation keys between regulated and non-regulated activities are: -value of assets -number of employees -financial indicators According to the provisions of the Low on Trade Companies, the company shall prepare and announce consolidated annual accounts and issue a report on managing and operating a group of companies, if it has majority participation in one or more companies. Consolidated annual accounts shall include the consolidated balance sheet, consolidated income statement, consolidated cash flow, consolidated movement of capital and notes.

4. May 19 - 20, 2008 Bucharest 4 Chart of Accounts Workshop cont. The Regulator recognized the cost of new construction according the investment plan, and the rate of realized investment in the previous period. According the Rulebook and Methodology, the Regulator requests and the company is obliged to submit a plan about constructing new facilities during the regulated period, with the value of the planned investment, realization dynamics for the whole period and sources of capital for the investment. Also, the company is obliged to submit the investment plan from the previous period with planned investments and realized investments. The costs of new investments appear in financial statement, in the balance sheet as tangible assets in preparation.

5. May 19 - 20, 2008 Bucharest 5 THANK YOU FOR YOUR ATTENTION ☺