KPMG expresses reservations about an item in the financial results of the Jordan Electricity Company... What was the company's opinion?

The financial report of the Jordanian Electricity Company “JEPCO” for the year 2025 showed a reservation by the international auditing firm ‘KPMG’ on one of the items included in the balance sheet for the year 2025.

 

The financial statements of the Jordan Electricity Company Public Shareholding Limited (JEPCO) revealed a reservation expressed by the office of 'KPMG', in its capacity as the company's accredited legal auditor, regarding one of the essential items included in the general budget for 2025.

Furthermore itThe report indicated that this reservation comes within the framework of a thorough review of the final accounts. ThereforeFurther clarification was required regarding the financial impact of this item.

In a related contextFinancial experts have confirmed that such reservations require close monitoring by shareholders and observers. Especially And that it relates to the financial position of one of the Kingdom's largest energy companies.”

In light of this, the company published a disclosure on the Amman Stock Exchange website to clarify its position on this reservation.

The following is the text of the disclosure:

 

To the esteemed Capital Market Authority and the esteemed Amman Stock Exchange

Company Name: Jordan Electricity

Date: 15/4/2026

Subject: Company's opinion on the auditor's report: "Reserves judgment"

We would like to inform you of our opinion regarding the audit report of the company's auditors, KPMG, as follows:

 

The tariff methodology (the set of principles, assumptions, and methods issued by the Authority and used in calculating and reviewing the tariff applied to licensees) and Article (4) of the license granted to the company stipulate the following: the window, including

1- The licensee shall comply with Jordanian laws, the General Electricity Law, the Renewable Energy and Energy Conservation Law, the Environment Law and the Licensing System.

2- The licensee shall comply with all regulatory instructions issued by

Or the Authority may approve it from time to time, to the extent that the provisions contained in these instructions apply to it.

3- The licensee shall comply with all relevant codes and standards

With regard to the safety, security and reliability of the electrical system, which is issued or approved by the Authority, to the extent that it applies to it.

4- The licensee is obligated to comply with any new instructions or regulations issued by the Authority.

Company opinion

Based on the foregoing – and in line with the directives and decisions issued by the Energy and Minerals Regulatory Authority, including exempting the company from applying International Financial Reporting Standard No. (9) “Financial Instruments” related to the provision for expected credit losses –

The company implemented the standard in installments over several years. This allocation is considered part of the expenses that must be covered by the electricity tariff under the retail license. This license obligates the Energy and Minerals Regulatory Authority to either raise the retail tariff for different customer categories or reduce the wholesale purchase price from the national electricity company. Which is suffering losses of millions of dinars, so that the application can be completed in 2024.

The gradual construction of the required provision to comply with International Financial Reporting Standard No. (9) “Financial Instruments” over several years resulted in the allocation of an additional provision in 2024 covering prior years, which led to the auditor’s reservation on the comparative financial statements based on International Accounting Standard No. (8) “Accounting Policies, Changes in Accounting Estimates and Errors”.

Please accept my highest regards.

Chairman of the Board