I.O.'S ORDER OF THE CHAIRMAN OF THE AGENCY OF THE REPUBLIC OF KAZAKHSTAN ON REGULATION OF NATURAL MONOPOLIES

of July 31, 2013 No. 240-OD

About approval of Rules of conducting separate accounting of the income, costs and the involved assets by the subjects of natural monopolies rendering services to air navigation

According to the subitem 2) Article 12-1 and the subitem 15) Item 1 of article 14 of the Law of the Republic of Kazakhstan of July 9, 1998 "About natural monopolies and the controlled markets", the subitem 2) Item 3 of article 16 of the Law of the Republic of Kazakhstan of March 19, 2010 "About the state statistics", PRIKAZYVAYU:

1. Approve the enclosed Rules of conducting separate accounting of the income, costs and the involved assets as the subjects of natural monopolies rendering services to air navigation.

2. Recognize invalid some regulatory legal acts of the Agency of the Republic of Kazakhstan on regulation of natural monopolies according to appendix to this order.

3. To department on regulation in the field of rail transport, civil aviation and ports of the Agency of the Republic of Kazakhstan for regulation of natural monopolies (Ibrayeva G. K.) provide:

1) in the procedure established by the legislation state registration of this order in the Ministry of Justice of the Republic of Kazakhstan;

2) publication of this order on Internet resource of the Agency of the Republic of Kazakhstan on regulation of natural monopolies after official publication in mass media.

4. To department of administrative work of the Agency of the Republic of Kazakhstan on regulation of natural monopolies (Bazarbayev S. P.) after state registration of this order in the Ministry of Justice of the Republic of Kazakhstan:

To provide 1) in the procedure established by the legislation its official publication in mass media with the subsequent submission to Legal Department of the Agency of the Republic of Kazakhstan on regulation of natural monopolies (Metenov S. S.) of data on publication;

2) to bring it to the attention of structural divisions and territorial authorities of the Agency of the Republic of Kazakhstan on regulation of natural monopolies, the Ministries of transport and communication of the Republic of Kazakhstan and the republican state company "Kazaeronavigation".

5. I reserve control of execution of this order.

6. This order becomes effective after ten calendar days after day of its first official publication.

It is approved Acting minister of transport and communications Republic of Kazakhstan August 2, 2013

S. Sarsenov

It is approved Chairman of the Agency of the Republic of Kazakhstan according to the statistics August 20, 2013

A. Smailov

It is approved Acting minister of economy and budgetary planning of the Republic of Kazakhstan August 9, 2013

M. Kusainov

Approved by the Order of the Acting Chairman of the Agency of the Republic of Kazakhstan on regulation of natural monopolies of July 31, 2013 No. 240-OD

Rules of conducting separate accounting of the income, costs and the involved assets by the subjects of natural monopolies rendering services to air navigation

1. General provisions

1. These rules of conducting separate accounting of the income, costs and the involved assets by the subjects of natural monopolies rendering services to air navigation (further - Rules) are developed in compliance by the Law of the Republic of Kazakhstan of July 9, 1998 "About natural monopolies and the controlled markets" (further - the Law).

2. Main objective of Rules is determination of procedure and the principles of conducting separate accounting of the income, costs and the involved assets by subjects of natural monopolies by types of regulated services of air navigation and in general on other activities for establishment of economically reasonable rates.

3. Subjects of natural monopolies perform separate accounting of the income, costs and the involved assets on types of service of air navigation regulated according to the legislation on natural monopolies and the controlled markets (further - regulated services), rates for which affirm the authorized body performing management in spheres of natural monopolies and in the controlled markets (further - authorized body).

4. Conducting separate accounting represents system of collection and generalization of information on the income, costs and the involved assets separately by each type of regulated services, and in general on other activities which are technology connected with the main activities and (or) referred to the sphere of natural monopolies according to these rules with provision of the data in authorized body.

5. Basic principles of separate accounting:

1) priority of direct reference in case of possibility of direct reference of the income, costs and the involved assets on the corresponding groups of production processes and types of service on the basis of these source documents;

2) cause and effect relationship of the income, costs and the involved assets with those groups of production processes and types of service with which they are connected;

3) transparency in case of reference and income distribution, costs and the involved assets on the corresponding groups of production processes and types of regulated services.

6. Separate accounting is based on the source documents used for conducting accounting and managerial accounting which to provide the necessary detail level for separation of the income, costs and the involved assets on groups of production processes and types of service according to these rules. These Rules do not change procedure and form of submission of the established financial and tax statements by the subjects of natural monopolies rendering services to air navigation according to the legislation of the Republic of Kazakhstan.

7. The basic concepts applied in Rules for the purposes of conducting separate accounting:

1) the involved assets - fixed assets and intangible assets of subjects of the natural monopolies rendering the services of air navigation used for provision of services of air navigation;

2) management processes - processes of management of production of which increase in effectiveness and efficiency of all other production processes is result;

3) external services - the services provided by the subjects of natural monopolies rendering services of air navigation to external users;

4) external users - the legal entities and physical persons which are the consumers of services of the subject of natural monopolies rendering services to air navigation;

5) the main production processes - production processes of which rendering services is result;

6) groups of production processes (further - GPP) - set of certain production processes of rendering services which participate in rendering services as independently, and in interaction with each other;

7) general assets - assets which are connected with provision of all types of service, but have no certain cause and effect relationship with these services therefore degree of their involvement in provision of services is determined on the basis of the allocation bases approved with authorized body;

8) the assets indirectly involved on services - the involved assets which have causes and effect relationships along with several services (group of services) and therefore they cannot be directly and are unambiguously carried to certain service, but degree of their involvement in rendering certain services is determined on the basis of the allocation bases reflecting these causes and effect relationships;

9) indirect costs on services - costs which have causes and effect relationships along with several services (group of services) and therefore cannot be directly and are unambiguously carried to certain service, but can be distributed on services on the basis of the allocation bases reflecting origins of costs;

10) production processes - the sequence of certain actions in activities of subjects of the natural monopolies rendering services to air navigation with use of its resources with ultimate goal of rendering services. Include the basic production, auxiliary and management processes;

11) elements of group of production processes (further - the GPP elements) - the groups of personnel and fixed assets used when rendering services of air navigation, combined on groups of production processes for distribution of their cost and the related costs for types of service of air navigation;

12) indirectly the involved assets on elements of groups of production processes - the involved assets which have causes and effect relationships along with several GPP elements and therefore they cannot be directly and are unambiguously carried to the GPP certain element, but degree of their involvement is determined on the basis of the allocation bases reflecting these causes and effect relationships;

13) total costs - costs which are connected with provision of all types of service, but have no certain cause and effect relationship with these services therefore are distributed on the basis of the allocation bases approved with authorized body;

14) directly involved assets on services - the involved assets which have direct causes and effect relationships with provision of certain service and therefore can be directly and are unambiguously carried to certain service;

15) direct costs on services - costs which have direct causes and effect relationships with certain service and therefore can be directly and are unambiguously carried to certain service;

16) indirect costs on elements of groups of production processes - costs which have causes and effect relationships along with several GPP elements and therefore cannot be directly and are unambiguously carried to certain element of group, but can be distributed on the GPP elements on the basis of the allocation bases reflecting origins of costs;

17) economically reasonable costs - costs of subjects of the natural monopolies rendering the services of air navigation connected with ensuring operating activiies, compensation on the involved capital invested in the involved assets and the depreciation charges on reproduction of the involved assets;

18) directly involved assets on the GPP elements - the involved assets which have direct causes and effect relationships with the GPP certain element and therefore can be directly and are unambiguously carried to the GPP certain element;

19) direct costs on the GPP elements - costs which have direct causes and effect relationships with the GPP certain element and therefore can be directly and are unambiguously carried to the GPP certain element;

20) distribution on the basis of cause and effect relationship - income distribution, costs and the involved assets by types of regulated services on the basis of preliminary researches of origins, communications of costs, the income and the involved assets with certain services;

21) resources - set of sources, the means used in production economic activity, subdivided on natural (raw, geophysical), labor (human capital), capital (the physical capital - fixed assets), current assets (materials), information resources, financial (money capital) resources;

22) allocation base - the quantitative or percentage index (indicators) used for cost allocation and degree of involvement of assets on types of service;

23) joint assets - the involved assets which are used for provision of several services (group of services), but have no certain cause and effect relationship with these services, but degree of their involvement in provision of services is determined on the basis of the allocation bases approved with authorized body;

24) transfer payments - value term of amount of the rendered internal services;

25) transfer dachshunds - value term of costs per unit of the rendered internal services;

26) auxiliary processes - production processes of which creation of necessary conditions for implementation of the basic production and management processes is result;

27) joint costs - costs which are used for provision of several services (group of services), but have no certain cause and effect relationship with these services therefore are distributed on the basis of the allocation bases approved with authorized body;

28) internal services - conditionally allocated stages of provision of external services which are the services provided by one group of production processes to other group of production processes of the subject of natural monopolies, rendering services to air navigation.

Other concepts used in Rules are applied according to the legislation of the Republic of Kazakhstan on natural monopolies and the controlled markets.

8. For cost allocation and determination of involvement of assets by types of regulated services of costs and the involved assets of subjects of the natural monopolies rendering services to air navigation are grouped in groups of production processes. Cost allocation and determination of involvement of assets is carried out on the basis of consecutive allocation of all stages of provision of services of air navigation. Cost allocation is made by allocation of the costs connected with processes of content and servicing of the GPP elements and sales processes of regulated services of air navigation to external users and allocation of costs from provision of other services. Determination of degree of involvement of assets is made by allocation of the involved assets connected with the GPP corresponding elements and implementation processes of regulated services of air navigation, and allocation of the assets connected with other activities.

For the purposes of conducting separate accounting by the subjects of natural monopolies rendering services to air navigation the following groups of production processes are allocated:

1) planning and air traffic control;

2) other activities.

For the purposes of separate accounting the income, costs and the involved assets grouped in groups of production processes are distributed by each type of regulated services and in general on other activities.

2. Procedure for conducting separate accounting of the income, costs and the involved assets

9. Conducting separate accounting by subjects is based on the principles of conducting financial accounting accepted according to the International Accounting Standards (IAS). For the purposes of separate accounting initial and most reliable source of information in case of interpretation of IFRS are interpretations of the International committee on interpretation of the financial reporting (IFRIC), the recommendation of Advisory Council of the Ministry of Finance of the Republic of Kazakhstan concerning financial accounting and audit.

10. When conducting separate accounting by subjects the following requirements are fulfilled:

1) all production indicators, the income and expenses carried to regulated services of air navigation are confirmed by the relevant accounting documents;

2) records are organized in the form of facilitating their overview, audit and comparison of these mutually controlling documents;

3) if information in accounting and statistical accounting documents is provided not fully, then it is supported with cross references on the documents containing the supplementing information.

11. The documents of accounting, statistical (production) and other records, statistical data, working documents and reports used according to these rules for conducting separate accounting and accounting of natural production indicators, volume natural indicators of services and calculations of specific expenses and the income on units of natural indicators, and other purposes, stipulated by the legislation to be stored within five years.

12. Data on conducting separate accounting according to the income, expenses and the involved assets by types of regulated services of air navigation (further - Data), established by these rules it is constituted by it for the period equal to one calendar year, since January 1 till December 31.

13. Represents subjects to authorized body no later than May 1 of year of the data on income distribution following after accounting year, costs and the involved assets on the external services of subjects of natural monopolies rendering services of air navigation in form according to appendix 17 to these rules, data on income distribution, costs and the involved assets on groups of production processes of subjects of natural monopolies, the rendering services of air navigation in form according to appendix 18 to these rules and the audited financial reporting constituted according to IFRS.

14. Basic principles of conducting separate accounting:

1) balance between advantage of the provided information and costs for its obtaining;

2) balance between quality characteristics for accomplishment of the main destination of the reporting.

15. Criteria of cost allocation in case of separate accounting are:

1) cause and effect relationship;

2) justice.

16. The involved fixed assets and intangible assets, the income and costs are considered on regulated services of air navigation and other activities.

17. On regulated services of air navigation cost of the rendered services (goods, works) join costs except for of the costs which are not considered according to the Special procedure for forming of costs, applied in case of approval of rates (the prices, rates of charges) on regulated services (goods, works) of subjects of the natural monopolies approved by the order of the Chairman of the Agency of the Republic of Kazakhstan on regulation of natural monopolies of April 25, 2013 No. 130-OD (registered in the Register of state registration of regulatory legal acts for No. 8480).

18. Separation of the income by types of regulated services and on non-regulated services is made taking into account the basic principles of separate accounting established by these rules. The income from provision of each type of regulated services and non-regulated services is determined proceeding from amounts of the corresponding types of service and rates (prices) on which the specified types of service were rendered to external users.

19. The income from rendering services has by types of regulated services and on non-regulated services on the basis of these source documents direct reference.

20. Costs on provision of each type of service of air navigation to external users consist of costs of GPP "Planning and Air Traffic Control" connected with rendering and realization of the corresponding types of service.

21. Costs on provision of non-regulated types of service, except services of air navigation, consist of costs of GPP "Other Activities" connected with rendering and realization of the corresponding types of service including transfer payments for the internal services rendered to GPP "Planning and Air Traffic Control". Transfer payments are considered if by provision of non-regulated service internal services were rendered.

22. The involved assets connected with rendering and realization of the corresponding types of service belong to the involved assets by each type of the regulated and non-regulated services of air navigation rendered to GPP "Planning and Air Traffic Control".

23. The involved assets of this GPP connected with rendering and realization of the corresponding types of non-regulated services, and also the involved assets by types of the internal services rendered to GPP "Planning and Air Traffic Control" which are necessary for provision of the specified types of non-regulated services belong to the involved assets on the non-regulated services rendered to GPP "Other Activities". The involved assets by types of internal services are considered if by provision of non-regulated service internal services are used.

3. The income, costs and the involved assets on groups of production processes

24. The group of production processes "Planning and air traffic control" includes production processes:

planning and control of air traffic;

providing aeronautical information (preparation of collections of aeronautical information (further - AIP), messages for pilots (further - NOTAM), circular letters of aeronautical information (further - AIC) and provision of bulletins of preflight information);

emergency notification;

advisory servicing of air traffic;

district dispatching servicing;

dispatching servicing of approach;

airfield dispatching servicing;

forming and operation of radar-tracking systems and systems of navigation;

forming and operation of automated control systems for air traffic;

servicing, content, planning and development of network of telephone communication, network of radio communication, network of the aviation fixed telecommunication (further - AFTN);

contents of reserve sources of power supply;

work with consumers of services (registration and conclusion of agreements, drawing of accounts and settlement).

GPP "Planning and Air Traffic Control" renders external and internal services.

External services are rendered to external users of services. Internal services are rendered to group of production processes "Other activities".

Services of air navigation belong to external services:

aeronautical servicing in airspace of the Republic of Kazakhstan;

aeronautical servicing in areas of airfields.

External services are subdivided into regulated and non-regulated services of air navigation. Services of aeronautical servicing in airspace and in areas of the airfields to foreign airlines performing the international airborne transportations with flight through airspace of the Republic of Kazakhstan without implementation of landing and with implementation of landing to the territories of the Republic of Kazakhstan in non-commercial purposes belong to non-regulated services of air navigation.

The services rendered for the purpose of their further sale to external users belong to internal services:

telephone, radio - and telecommunication;

on electricity supply, made by reserve sources of power supply;

on provision of rooms, the equipment and other property, their content and servicing for the purpose of their further transfer to lease;

aeronautical servicing during the work out of regulations.

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