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HYDRO-CONSULT E N G I N E E R I N G L I M I T E D

AnnualReport 2013

Company ProfileHydro-Consult Engineering Limited (HCE) provides consultancy services in water resource based infrastructure development. We work with water, land and people while respecting the local socio-ecological systems. We investigate, design and assist to develop hydropower projects in Nepal and abroad. We offer our services in water supply, irrigation, and transportation sectors as well.

HCE is the first engineering consulting firm registered as public limited company in Nepal. HCE was converted into public limited from Hydro Consult Private Limited (HCPL) in the year 2012. Prior to this, HCPL was established by People, Energy and Environment Development Association (PEEDA) in 1998. Butwal Power Company (BPC), which is one of the leading companies in Nepal’s power sector since 1966, acquired majority share of HCPL in 2009 and transformed its Engineering Department that was commonly known as BPC Hydroconsult to HCPL. BPC Hydroconsult was established in 1986 as the consulting wing of BPC. Therefore, HCE has inherited 23 years of professional experience of BPC Hydroconsult that had a track record of pioneering multifaceted engineering solutions in hydropower development in Nepal. At present, HCE is a subsidiary of BPC that holds 80% share of HCE and 20% share is held by PEEDA.

HCE has a competent team of more than 50 professionals that includes Civil, Mechanical and Electrical Engineers; Hydrologists, Geologists, and Environmentalists. It has a standard office set up in Kathmandu with state of the art software packages and communication systems. HCE has a proven track record of working with national and international research institutions, consulting companies and clients. HCE currently operates from its Head office at Pabitramarg, Buddhanagar, Kathmandu. At present, HCE is operating its business in Nepal, Pakistan and Kenya.

Corporate InformationName: Hydro-Consult Engineering Limited

(Formerly Hydro Consult Private Limited)

Registration No: 97410

Year of Incorporation: 1998 (As Pvt. Ltd. )2012 ( As Public Ltd.)

Corporate Office: Buddhanagar, Kathmandu

VAT No: 500012033

Statutory Auditor: Pratap Prasad Pradhan(P P Pradhan & Co.)

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Financial Highlights

HCE earned total revenue of NPR 59.86 million in FY 2069/70(FY 2012/13). The revenue from consultancy business was NPR 58.3 million whereas combined interest and other income was NPR 1.56 million.

The Gross profit margin was NPR 22.3 million that was 26% of the total revenue .

The profit befor tax was NPR 8.5 million that was 10% of the revenue earned in FY 2069/70 (FY 2012/13).

The Earning per share (EPS) was NPR 47.22. If the units of shares would not have increased by 17,785 numbers, the EPS would have been NPR 55.62.

The Book Value per share (BVPS) increased to NPR 297.64 in FY 2069/70 (FY 2012/13) from NPR 277 of FY 2068/69.

The net worth of HCE has increased by 22% to 35.06 million in FY 2069/70 (FY 2012/13) from NPR 27.71 million of FY 2068/69 (FY 2011/12).

HCE made capital expenditure of NPR 1.8 million including expenditure in computers and software worth NPR 1.15 million. The expenditure in software and computer was increased by 19 % in the fiscal year2069/70 (FY 2012/13).

The retained earnings increased by 32 % to 23.28 million in FY 2069/70(FY 2012/13) from 17.72 million of FY 2068/69 (FY 2011/12).

2067/682066/67

194.

93

106.

55 47.2

2

9.44

81.2

1

88.3

9

277.

17

297.

64

2068/69

Book Value Per ShareEarnings Per Share

2069/70

Book Value & Earning per share

2067

/68

2068

/69

2066

/67

2069

/70

Operating Income

5625

6867

.68

24,1

90,7

24

5878

3876

5958

5745

.13

2067

/68

2068

/69

2066

/67

2069

/70

Quick Assets

26,0

82,8

91

21,4

73,6

74

32,7

61,8

35

32,4

07,3

32

2066/67 2067/68 2068/69 2069/70

Operating and Administration Expenses Ratio

Operating Expenses RatioAdministrative Expenses Ratio

69%

31%

88.3

2% 11.6

8%

76%

24%

74%

26%

2067

/68

2068

/69

2066

/67

2069

/70

Gross Operating Profit

2610

1602

.61

4,03

1,63

6

2014

2963

2225

9941

.76

2067

/68

2068

/69

2066

/67

2069

/70

1.47

1.14

1.86

2.28

Current Ratio

2067

/68

2068

/69

2066

/67

35,0

57,8

6220

69/7

0

Net worth

10,6

54,5

39

19,4

93,3

70

27,

717,

268

NPR

NPR

NPR NPR NPR

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Engineering and Environment Consultancy has been a promising sector in the Nepalese market especially in the

ctor. Nepal is experiencing an extreme shortage espite having significant promising hydropower omestic consumption as well as for export. This eated opportunities for institutions like HCE to ibute in the overall development of the country.

is exploring its clientele base in South Asia and hydropower development is gathering pace. continuously thriving to become the one-spot e hydropower development and had achieved

ogress in the company’s technical and financial We look forward to keep up this pace and hieve the expectations of our clients, regulators,

shareholders.

to our shareholders, management, employees heir contribution to take the company forward.

Chairman’s Message

Pratik Man Singh PradhanChairman

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Dear Shareholders,

Your Board has pleasure in presenting the Annual Report 2013 and the audited statements of accounts of the company for the fiscal year ended July 15, 2013.

Company PerformanceHCE has continued to provide technical, socio-environmental and financial solutions for hydropower development in national and international market in FY 2069/70. HCE has been providing consultancy services for project

management and construction supervision of Gura Hydropower Project in Kenya. HCE is also providing consulting services for Koragh Hydropower (223 MW) and Jabori hydropower project (5.6 MW) in Pakistan. Moreover, the company is exploring other international projects especially in South Asia and Africa.

In addition, HCE is providing various consultancy services to domestic clients in hydropower projects. Some of the notable consultancy services performed by HCE in the fiscal year 2069/70 were:

DETAILED DESIGN CONSTRUCTION FEASIBILITY, DUE DILIGENCE SUPERVISION ENVIRONMENT AND & OTHER TECHNICAL

SOCIAL STUDY ASSISTANCE

1. Mristi Khola HP (42 MW)

2. Nyadi HP(30 MW)3. Thapa Khola HP (13.6

MW)4. Dordi-1 HP (12.6 MW)5. Kabeli-A HP

(37.6 MW)6. Lower Manang

Marsyangdi HP (140 MW)

1. Tadi SHP (5 MW)2. Gura SHP (5 MW)-

Kenya3. Access road and

bridge for Nyadi HP (30 MW)

4. Andhikhola Upgrading (9.4 MW)

1. Dordi-1 HP(12.6 MW)2. Review of Feasibility of Upper Dordi

HP (25MW)3. Koragh HP (223 MW)- Pakistan4. Hot Spot Study of Large Mammal

and Birds for Hetauda- Dhalke-bar-400 kV Transmission Line (NEA) for WB requirements

5. ESIA of Lower Manang Marsyangdi HP (140MW)

6. Environmental performance study of Rural Electrification & Expansion Project (REEP)

7. EIA of 132 kV Nyadi Transmission Line

1. Due Diligence of Lohore Khola HP (4.2 MW)2. Due Diligence of Mai Cascade HP (7 MW) 3. Due Diligence of Junbesi Khola HP (5.2 MW)4. Inception Study of Kasuwa Khola HP (40 MW)5. IPC Verification of Mai Khola HP (22 MW) 6. IPC Verification of Hewa Khola-A HP (14.9)7. Technical Support for PPA of Nyadi HP 8. Technical Support for Kabeli-A & Nyadi HP to deal

with International Financial Institutions9. Technical support for safeguard requirements of

Kabeli-A HP for IFC and WB10. Consulting service on documentation and specifica-

tion for the construction of Jabori HP (5.6 MW) -Pakistan

ReportFROM THE BOARD OF HCE

Tadi SHP Intake

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Financial Performance In the fiscal year 2069/70, the revenue from consultancy business was NPR 58.3 million. The profit before tax was NPR 8.5 million. An additional paid up capital of NPR 1.78 million was raised by issuing 17,785 new number of shares. The shareholders’ fund and net worth of the company has increased by 22% to NPR 35.06 million from NPR 27.71 million. The gross block of the noncurrent assets has increased to NPR 18.2 million from NPR 16.8 million. The current ratio of 2.28: 1 was as on Ashad 31, 2070. The overall financial performance of the company is commendable.

Human ResourceHCE has a well diversified team of professionals dedicated for reliable and quality service to the clients. HCE’s professionals, technicians and administrators have consistently outperformed and satisfied the clients of the company. HCE has recruited and maintained its human resources with competent pay scale and retention schemes. Currently, 48 technical and 6 non-technical staff are employed in HCE. As a part of capacity building and career development of the staff, HCE has been sponsoring training programs for technical as well as non-technical employees. FK Youth Exchange program with Multiconsult, Norway is also a part of this capacity building program.

Risk, Challenges and Mitigation MeasuresHydropower Development in Nepal is gearing up slowly but still most of the developers including the foreign investors are hesitating to invest in big projects because of insecurity of investment, bureaucratic hassles and fragile political situation. However, some national promoters are still developing small and medium hydropower projects despite the current situation and budget constraint. In this context, scope of consulting business for Institutional consultancies like HCE that have high operating cost is limited whereas individual and small consulting firms are growing. This is creating a cut-throat competition in the local market.

In addition, due to limited opportunities, brain drain of technical human resources to the developed countries is creating a risk of losing competent workforce of consultancy firms like HCE.

Observing the financial position and performance of HCE, there is also a nominal financial risk to the company. At present, HCE has sufficient projects to sustain in the market. As a part of diversification, HCE is promoting strong network to work in other areas of engineering and environment consultancy business such as irrigation and alternative energy sources. As a part of business promotion, potential investors and clients have been approached both on individual and institutional levels.

Board of DirectorsMr. Gokul Sharma has been replaced by Mr. Balram Pradhan as representative of PEEDA as Board Director with effect from December 16, 2013. Similarly, Mr. Ratna Shakya has been nominated as Board Director in place of Mr. Ranjan Lohar on behalf of BPC with effect from October 24, 2013. Mr. Muhan Maskey has been nominated as alternative director representing PEEDA. Currently, the Board consists of three representatives from BPC and one from PEEDA. Now, the Board is chaired by Mr. Pratik Man Singh Pradhan, CEO of BPC. The Board extends its sincere thank to Mr. Ranjan Lohar and Mr. Gokul Sharma for providing guidance and support to HCE during their tenure as Board Directors. Further, the Board takes pleasure to welcome Mr. Ratna Shakya and Mr. Balaram Pradhan as Board Directors of HCE.

Corporate GovernanceHCE thrives to be a good corporate citizen and has a strong notion of ethical business. The Board values the role of Directors, Audit Committee, Internal, and External Audit functions. Adherence to all the legislations and control system and procedures has been assured in day to day operations and decisions of the company.

Relation with the ClientsHCE has been providing satisfactory services to its clients. HCE’s clientele consists of the BPC and subsidiaries of BPC, financial institutions, Government

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and semi-government entities, local and foreign developers, and international institutions. HCE maintains cordial relation with its clients. There have been repetitive request for new service contracts with the same clients. HCE has taken this as an evidence of quality performance and satisfaction to the clients’ needs. HCE will continue to serve its valued customers with the same level of dedication and integrity in the future as well.

Statutory AuditM/S PP Pradhan & Co. has been auditing the books of accounts of HCE since FY 2067/68. The auditor has issued unqualified report on financial statements of FY 2069/70 (FY 2012/13).

Involvement in Social and BusinessAssociationHCE has been enlisted with Asian Development Bank. HCE has been partnering with Multiconsult, Norway in the FK Youth Exchange Program. HCE is a member of ACECOMS (Asian Institute of Technology (AIT), Thailand) and Society of Consulting Architecture and Engineering Firms (SCAEF), Nepal.

Health and SafetyHCE has developed a cordial working environment for its employees at all levels. It has taken all the measures for the safety of its employees at office and at site. Special care has been taken and guidelines and norms for the safety have been developed for the employees. There is a provision of accident insurance covering 24 hours a day, medical insurance and travel insurance for the employees. In the same way, fire and other general insurance policies have been taken for the safety of office premises and other assets.

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Employees are provided with sick, paternity, maternity and personal leaves considering their requirement. HCE is also concerned about the financial implications to its clients and is initiating Professional Indemnity Insurance as well.

Corporate Social ResponsibilityHCE values CSR activities and is committed to fulfill its duty as a good corporate citizen and a responsible member of the society. This year, the wrath of monsoon flood has devastated many villages and towns in western Nepal. HCE, as a part of its CSR activity, supported the flood victims of western Nepal. Further, HCE is also promoting cultural and sports activities at local level.

Future Prospect/OutlookConsultancy service is slowly getting attention among Nepalese investors. Banks and other investing companies are prioritizing the technical importance while conducting the evaluation of Hydropower projects. The developers are gradually showing concern over quality and seeking well established consulting firms for detailed engineering designs and construction supervision works in hydropower sector. Further, HCE management is aware of the national competitive market. Hence, HCE has also been exploring both domestic and international markets and expanding its global business.

The development of infrastructure in Afghanistan, Pakistan and African regions is also creating

Pratik Man Singh PradhanChairmanDate: January 10, 2014

potential market for HCE. HCE is seeking partnership with international consulting firms to bid for the big national and international projects in Africa and SAARC Counties.

Moreover, private investors are initiating investment in the hydropower sector in Nepal. This is kindling the light of market prosperity for engineering, environment and social consulting services for HCE. Some projects undertaken by BPC are also moving towards construction. The competent and energetic team of professionals is one of the major strengths of HCE. Thus, HCE has a growth potential in the coming future.

Closing RemarksWe would like to express our sincere thank to all the stakeholders who have directly or indirectly contributed for the progress of HCE. We would also like to thank the various agencies of the Government, Butwal Power Company and its sister concerns, internal and external auditors, our valued clients, bankers and local community for their support. Further, we extend our thank to our employees and management for their continuous dedication and commitment for fulfilling their roles effectively for the betterment of HCE.

Thank you,

On behalf of the Board of Directors

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Hydro-Consult Engineering’s (HCE’s) growth and enhancement over last five years owes to genuine effort of HCE’s staff and support from the developers, bankers, board of directors, and other stakeholders. Therefore, I would like to extend sincere thank to all on behalf of myself and HCE for their enduring trust and support.

HCE is a company providing consultancy services in water resource based infrastructure development. Hydro-Consult Engineering has its own legacy on working style that provides excellent quality and cost effective solutions to the clients. HCE uses indigenous technology that gives high priority to the environment protection. HCE has established professionalism, goodwill and its own trademark in

the market. To achieve this, our professionals work as a team and also seek advice from their seniors, national and international experts and institutions, if required. They always look for innovation and also strive for new technology.

HCE is emerging as one stop solution for technical assistance in hydropower development in national and international market. In addition to Nepalese projects, the business network of HCE now extends to South Asian and African region and it has consulting assignments in Pakistan and Kenya.

With some delay in EPC contract award by the employer (Kenya Tea Development Agency), construction of Gura Hydropower Project in Kenya has finally commenced in this fiscal year and HCE is carrying out project management and construction supervision of this project. This is definitely a noteworthy milestone in the annals of HCE. In addition, HCE is providing engineering services as a Foreign Consultant in 238 MW Koragh hydropower project feasibility study in Pakistan together with AGES Pakistan and Norconsult, Norway. We have also signed a contract to provide consulting services for the construction of 5.6 MW Jabori hydropower project in Pakistan.

In the domestic market, HCE is providing consultancy service for feasibility study, detail design, due diligence studies, environmental and social studies and construction supervision of 5

Perspective

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MW to 140 MW hydropower projects.

An agreement has been signed with Multiconsult (NORPLAN AS) and FK, Norway for the continuation of FK Youth Professional Exchange Program for three more years. As per this program, each year two young professionals of HCE join Multiconsult in Norway and two Multiconsult professionals join Hydro-Consult Engineering in Nepal. This exchange program has exposed our young professionals to new working environment with latest software and has also enabled them to learn new technologies that will enhance their knowledge, quality of work and confidence in the long run. Continuation of this program will improve HCE resource base and will be a motivational incentive to HCE staff.

HCE has an opportunity to work with different national and international organizations such as Government organizations; World Bank; International Finance Corporation (IFC); Fichtner, Germany; BERNARD, Austria; Multiconsult (NORPLAN AS) and Sweco Norge AS, Norway; Mott MacDonald, UK; and AGES Pakistan, and private developers.

HCE has consistent financial performance since its establishment. In the fiscal year 2069/70, the revenue from consultancy income was NPR 58 million. The profit before tax was NPR 8.5 million. An additional paid up capital of NPR 1.78 million

was raised by issuing 17,785 new number of shares. The shareholders’ fund and net worth of the company has increased by 22 % to NPR 35.06 million from NPR 27.71 million. The gross block of the noncurrent assets has increased to NPR18.2 million from NPR. 16.8 million. The current ratio of 2.28: 1 was as on Ashad 31, 2070. The overall financial performance of the company is commendable.

Present market scenario in hydropower sector is still immature and promoters are focusing more on cost minimization of consultancy service rather than focusing on good professional design encompassing higher level of safety and minimum life cycle cost. Institutional consultancies like HCE; are professional, reliable, and provide long term backup services to the client. It will pay back in the long run if the promoters segregate and identify the jobs where institutional consultancy is a must or where low-cost individual input may be beneficial. Ultimately, market should grow professionally where service providers and promoters both have the win-win situation.

Finally, may HCE achieve another successful and prosperous year and may our well wishers from all walks of life be healthy, happy and prosperous.

Manohar ShresthaChief Executive Officer

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Project Coordination

Soyuz GautamStructural Engineer

From left to right Shyam BhusalPM-Dordi-I HP

Bikas SherchanPM-LMM HP

Bibek NeupaneTeam Leader – LMM HPDeputy Team Leader– Mristi Khola HP

Bharat Raj PandeyChief Engineer

Manohar Shrestha CEO

TEAM MEMBERS

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Pawan Kumar Khadka Manager-Finance & HR

Basanta BagalePM-Nyadi HP

Pranav AcharyaEnvironment Chief

Bandhu DhakalPM-Thapa Khola HP

Diwash Lal Maskey Team Leader –Kabeli A HP PM-AKUP

* PC Member missing in Photo: Ashok Joshi & RB Karki

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A sustainable growth and perpetual existence of a corporate house is possible through properly guided, directed and controlled governance. HCE Board of Directors upholds good governance of the company. The HCE management believes on the spirit of the corporate governance, safeguarding the interest of all stakeholders and continual progress of the company. Corporate governance comprises the management of risk, safeguarding of assets, avoidance of uncertainty, ensuring compliance, preservation of the rights of the shareholders, management and the employees and enhancing company’s goodwill in the corporate sector.

Features of HCE’s Governance

Chairman to avoid the role conflict.

Executive Directors for proper supervision on Executives.

Committee.

Directors and Audit Committee.

basis. The internal audit function is outsourced to maintain independence and fair appraisal of company’s governance system.

the written procedures and manuals of the company

formulation, approval and evaluation is conducted on quarterly basis.

Board of DirectorsHCE Board Members act in good faith in the best interest of the company and are well aware of their individual and collective responsibility towards the institutional shareholders. HCE Board of Directors consists of four members. The Board was chaired by Mr. Ranjan Lohar, the CEO of BPC. There are four representatives including one alternative Director from BPC, two representatives from PEEDA including one alternative director appointed in

Corporate Governance Report

February 2013 in the Board of HCE. Total of 7 Board meetings (numbered 23rd before conversion and 1st to 6th after conversion into public limited) were held during the fiscal year 2069/70 (2012/13). The attendees of the meetings were:

SN NAME POSITION NUMBER OF MEETING ATTENDED

1 Ranjan Lohar Chairman 72 Manohar Shrestha Chief Executive Officer 73 Gokul Prasad Sharm Director 54 Radheshyam Shrestha Director 75 Pratik Man Singh Pradhan Director 76 Ratna Shakya Alt. Director 17 Muhan Maskey Alt. Director 28 Saroj Krishna Ghimire Company Secretary 79 Pawan Kumar Khadka Manager- Finance & HR 7

Currently, there has been change in the Board representation by BPC. Mr. Ratna Shakya is representing BPC in place of Mr. Ranjan Lohar with effect from Ashwin 1, 2070. Similarly, Mr. Pratik Man Singh Pradhan is appointed as new chairman by the Board Meeting held on November 15, 2013.

Functions of the Board of HCE1. Ensure the legal and internal control

compliance2. Review, monitor and approve major financial

and corporate strategies3. Review, monitor and approve budgets and

financial results4. Delegate appropriate authority to management

to conduct business activities effectively and efficiently

5. Ensure the goal congruence between the shareholders and the management through good governance

6. Work for the benefit of the institutional shareholders and the company

Fees and AllowancesHCE Board of Directors represents the institutional shareholders. HCE doesn’t pay fees to its Board members. Instead a transportation allowance is provided to facilitate the attendance of

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representative from PEEDA. Board members representing BPC are ex-officio representative holding senior management positions in BPC and have taken voluntary waiver for Board Meeting fee. Currently, the Traveling Allowance of NPR 1,000/- per meeting is provided to the representative of PEEDA.

Audit CommitteeHCE Audit Committee is performing its role for good governance and ethical corporate practice. There has been no change in the Audit Committee members. The Committee is chaired by Mr. Radheshyam Shrestha, FCA, the non executive director representing BPC. Three meetings of the Committee were held during the fiscal year 2069/70. The members of the committee were:

1 Mr. Radheshyam Shrestha, FCA- Chairman2 Mr. Gokul Prasad Sharma- Member3 Mr. Pratik Man Singh Pradhan- Member

Adhering to the Section 165 of the Companies Act, 2063, the functions of the Audit Committee are to:

1. Review the periodic financial statements and Internal Control System,

2. Review the Internal and External Auditors’ recommendations and reports,

3. Recommend to the Board for the approval of Financial Statements prepared at the year end,

4. Recommend the appointment of Internal Auditor to the Board,

5. Recommend the prospective External Auditors to the AGM and

6. Ensure that the Auditor’s recommendations are implemented by the Management.

The Audit Committee has been successfully fulfilling its role of ensuring compliance and strong internal control and risk management system in HCE.

Internal AuditTo maintain the independence and objectivity of risk management, fair financial and accounting

procedures and effective control and safeguard of assets, the internal audit of HCE was outsourced to MS. Kuber & Company. The internal audit was carried out on quarterly basis and reports were submitted to the Audit Committee. The HCE management has effectively implemented the suggestions received from the internal auditor and the decisions of the Audit Committee.

FUNCTIONS OF THE INTERNAL AUDITOR1. To review and recommend on the procedures

and internal control system 2. To ensure the laid down guidelines and

procedures are adequate to safeguard the company’s assets and mitigate the associated risk

3. To ensure the risk management policies and procedures have been developed and implemented effectively

4. To review adherence to all the legal compliances and constructive obligations by the company

External AuditMs. P P Pradhan & Co. audited the books of accounts of HCE for the fiscal year 2069/70 (FY 2012/13). HCE has received the unqualified audit report for its financial statements.

Management and ExecutionHCE has a blend of professionals to manage the business of the company. The HCE executive team is led by its CEO, Mr. Manohar Shrestha. The Board of HCE oversees the business operation and guides the management on strategic issues.

Code of Conducts and EthicsHCE has set of code of conducts and ethics to be complied by all the staff, management, Board and the organization itself. HCE believes in good corporate citizenship and ethical values. HCE adheres to professional competence, professional behavior, confidentiality, objectivity and integrity in all its business activities.

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Shareholding PatternHCE has two institutional shareholders. The shareholding details are as follows:

Shareholder Number of Shares Held Share holding %Butwal Power Company Ltd (BPC) 94,308 80%People, Energy and Environment Development Agency(PEEDA) 23,577 20%Total 117,885 100%

Transparency and DisclosuresHCE values the corporate governance principles and maintains transparency in its business operations and disclosures as required. The disclosures on related party transactions and significant accounting policies are made in the notes to accounts section of the financial report.

Shareholders’ Information

BUTWAL POWER COMPANY (BPC)Butwal Power Company (BPC) stands today with more than 46 years of experience in the hydro power industry and has placed itself as one of the leaders in the nation. The core business areas of the company are generation and distribution of electricity. Through its subsidiary companies, BPC is engaged in development, operation and maintenance of hydro power plants, engineering consultancy of hydropower and infrastructure projects, manufacturing and repair of hydro–mechanical equipment for power plants.

Pursuing the privatization process in 2003, the Government of Nepal handed over majority ownership and management control to private investor on public –private partnership model. BPC is registered with the Securities Board of Nepal and listed in Nepal Stock Exchange Limited. Starting off with electrification plan of a small city in the Southern Hills of Nepal, BPC is the only enterprise which can look back to a four decade long history of sustained growth in the country and a track record of a pioneering multi-faceted capacity building initiatives in hydropower development. With its four new major projects, Andhikhola Upgrading, Nyadi, Kabeli- A and Lower Manag Marsyangdi, BPC will have installed capacity of nearly 300 MW of generation facility in the near future.

BPC is committed to operational excellence and believes in good governance, corporate citizenship and creating value for stakeholders.

Name: Butwal Power Company LimitedRegistration number: Pa.Li.No.3-049/50Date incorporate: 29 December,1965(2022/09/14 BS)Date Converted into public limited Company:17 February,1993(2049/09/06 BS)Registered/Corporate Office:Gangadevi Magra-313,Buddha Nagar, Kathmandu ,NepalStock exchange listing:Nepal Stock Exchange (NEPSE),as BPCL

PEOPLE, ENERGY & ENVIRONMENT DEVELOPMENT ASSOCIATION (PEEDA)People, Energy & Environment Development Association (PEEDA) was established in 1998 through the joint effort of various hydropower related organizations and United Mission to Nepal (UMN) for the enhancement of renewal energy sector in Nepal. PEEDA aims to mobilize local as well as external resources to harness the indigenous resources of the country thereby promoting poverty alleviation activities. It focuses mainly on institutional development, participation with stakeholders at grass root levels in development activity, research and lobbying for policy change. PEEDA’s team, with its gained experiences in the energy and development sectors, envisioned that economic development can be achieved through sustainable energy development activities, with particular emphasis of seeing this development reach the poor.

PEEDA has also been supporting institutions which have a goal of serving the needs of those developing the water resources of Nepal. It owns 20% shares of Hydro-Consult Engineering Ltd and 50.08% shares of Hydro lab Pvt. Ltd.

PEEDA has also conducted several training events related to management of the energy sector with the aim of building the capacity of people involved in the development sectors. It has also collaborated with other organizations in the research and development of Pico Hydro and has regularly been organizing workshops and seminars to promote such activities.

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Board Members

MR. PRATIK MAN SINGH PRADHANChairman

Mr. Pradhan holds Masters’ Degrees in Civil and Environmental Engineering from University of Michigan, USA and Hydropower Planning and Development from Norwegian Institute of Technology, Norway.

Prior to appointment as CEO of BPC, Mr. Pradhan was Vice President-Business Development. Mr. Pradhan, as a project development expert, has substantial skills in the field of technical aspects of hydro power development with over 16 years of involvement. Prior to joining BPC, Mr. Pradhan was supporting research related to Steam Restoration at the Environment and Water Resource Engineering (EWRE) Program as a Research Associate at the University of Michigan, USA.

His key experiences include working on environmental hydraulic issues at existing hydropower projects with AECOM Environment, USA; leading the first hydraulic research centre ‘Hydro Lab’ in Nepal to solve the hydraulic problems related to steep sediment loaded rivers; and constructing dams and tunnels for hydropower projects in Nepal through Himal Hydro and General Construction Limited.

MR. RADHESHYAM SHRESTHADirector

A certified Chartered Accountant (CA) from the Institute of Chartered Accountants of India, Mr. Shrestha holds a Master’s Degree in Commerce from Tribuvan University.

Mr. Shrestha has served for 30 years in different positions in Nepal Rastra Bank (NRB), the Central Bank of Nepal. He had held the position of Directors of Financial Management Department and Bank and FI Regulation Department at NRB. He had also worked as professional Accountant in CSC & Company and R. Bajrachayra & Co. after serving for NRB.

At present, he holds the position of Vice President-Finance in BPC. Mr. Shrestha is responsible for BPC’s financial operations, and investor and stakeholder relations. He is also the Chairman of Audit Committee of Hydro- Consult Engineering td.

MR. RATNA S. SHAKYAAlt Director

Mr. Shakya holds Master’s Degree in Business Administration from Tribhuvan University. He has also completed skill level in Association of Chartered Certified Accountancy (ACCA) course to further strengthen his professional career.

Mr. Shakya brings about 30 years of experiences in the field of corporate finance, organization development and management. Mr. Shakya is with BPC since 1994. During his tenure as Chief Finance Manager in Finance function, Mr. Shakya was successful in achieving National Best Presented Accounts Award from ICAN in manufacturing sector for six consecutive years 2005-2010 for excellence in financial governance and transparency in financial reporting. This had been recognized from South Asian Federation of Accountants by awarding certificate of Merit for two consecutive years for Best Presented Accounts and Corporate Governance Disclosures Awards in 2009 and 2010. Prior to joining BPC, Mr. Shakya worked in Nepal United Company Limited, a Public Limited Company, as Chief Accountant. He has also served as an Internal Auditor in Architectural Design Associates in the past years. He is serving as alternate director for Hydro-consult Engineering Ltd and Keton Hydropower Limited. At present he is holding the position of Head of Corporate Management in BPC.

BALRAM PRADHANDirector

Mr. Pradhan received Post Graduate Diploma in Electric Power Systems from NTH, Norway, and BSc Engineering in Electrical Engineering from IT, BHU, Varanasi, India. Prior to the work in People Energy & Environment Development Association (PEEDA), Mr. Pradhan was employed by Nepal Hydro & Electric Ltd (NHE) and BPC as a Chief Executive Officer and Manager respectively.

He has over 41 years of professional experience in various Engineering companies. Mr. Pradhan has been involved in PEEDA for more than 16 years of which 6 years are as President. PEEDA is a non-governmental organization with the main objective of improving the livelihoods of communities, particularly the poor, by collective utilization of renewable energy resources, while ensuring due care to the environment. PEEDA executes various donor-funded projects like Pro Poor Hydropower Pilot Project, Bio-Fuels Project, Low Head Pico Hydro Promotion Project, etc.

MUHAN MASKEYAlt. Director

Mr. Maskey received Master of Science (MSc), Energy Systems and Management from the University of Flensburg, Germany. Mr. Maskey has been involved in PEEDA for more than 5 years. Prior to working in People Energy & Environment Development Association (PEEDA), Mr. Maskey worked in Renewal Energy Project (REP) as a Technical, Monitoring and Evaluation Coordinator from June 2006 – September 2008 , Nepalgunj, Nepal, District Development Committee: Rural Energy Development Section (DDC:REDS) as a Technical Officer from October 2001 – June 2003 , Tehrathum, Nepal and Forum for Energy and Environment Development (FEED) P. Ltd. as a Engineer from March 2000 – September 2001 Kathmandu, Nepal.

Mr. Maskey is an active Executive Committee Member of Flensburg Association for Energy Management Nepal (FAEM Nepal) and Water and Energy Consultants Association Nepal (WECAN) and Nepal Engineer’s Association.

BRIEF RESUME

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Profile of the Key Staff Members

MANOHAR SHRESTHAChief Executive Officer

Education: MSc in Hydraulic Structure, Lumumba University, Moscow, Russia; MSc in Hydropower, NTNU, Trondheim, Norway.

Experience: Over 23 years of experience in design, construction management/supervision and managerial job in hydropower and consulting business. Design experience in various projects from 1 MW to 250 MW projects in Nepal and abroad. Abroad experience in Bhutan, India, Pakistan and Kenya. Consulting job experience with Statkraft Engineering, NORPLAN, Norconsult, BERNARD,Hydro Tasmania, Mott MacDonald etc.

Experienced as a founder member and Treasurer of Nepal Hydropower Association (NHA), Former General Secretary, President of Nepal Norway Alumni Association, Board Director of Hydro Lab Pvt. Ltd. Board Director of Hydro Fund for Hydro Investment.

BHARAT RAJ PANDEYChief Engineer

Education: PhD Fellow, University of Newcastle, Upon Tyne UK, MSc in Hydraulic Engineering, IHE Delft, Technical University of Delft, Netherlands. BSc Eng, in Civil Engineering University of the East, Manila, Philippines.

Chattered Engineer Reg. No.: 575823, Engineering Council of UK

Experience: Over 22 years of professional experience in design and construction supervision of hydraulic structures, bridges, hills roads and tunnels. Key experience in the following areas: Structural analysis and design of various components of hydropower projects, structural and hydraulic design of bridges. Responsible as follows: Project management as Resident Engineer, Project Manager for preparation of safety standard for hydropower projects, Course Coordinator MSc Eng., Bridge Eng., Tribhuwan University, IOE, Pulchowk Campus.

SAROJ L. SHRESTHA Senior Hydropower Engineer/Project Manager-Gura SHP

Education: MSc in Hydropower Engineering, Odessa State Academy of Civil Engineering and Architecture, Odessa, Ukraine.

Experience: Over 18 Years of professional experience in engineering design, tender document preparation/procurement process, report writing, project management/ Construction Supervision and managerial job in hydropower engineering consulting business. Experienced in 1 MW to 300 MW hydropower projects in Nepal and abroad for feasibility studies, detail design, due diligence, construction supervision as well as engineering management. Intentional experience is in Kenya.

Experience in proposal preparation, dealing with JV partners as well as clients for business promotion activities of the organization.

Consulting job experience with various international organization such as Acres International (Canada), Canadian International Water and Energy Consultant (CIWEC), BPR inc (Canada), Norplan etc.

PRANAV ACHARYAEnvironment Chief

Education: MSc (Environmental Management), National University of Singapore, Singapore. MA (Sociology and Anthropology), Tribhuwan University, Nepal. BSc (General Forestry), Institute of Forestry, Nepal. BSc (Biology), Tribhuwan University, Nepal.

Experience: An environmental professional with over 16 years of experience in both natural and built environment management. Adept in conservation management as well as technical monitoring across various environmental and social media; his core abilities include conducting in depth research, analysis and review towards the provision of advisory services in the field of environmental management, green product and services, environmental and social safeguards and management frameworks, environmental due diligence and urban environmental management.

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BASANTA BAGALEProject Manager-Nyadi Hydropower Project

Education: MSc in Water Resource Engineering , BE in Civil Engineering, Institute of Engineering, Pulchowk Campus, BSc in science faculty

Experience: Over 13 years of professional experience in design of headworks, waterway and powerhouse components of different hydropower projects; involved in Hydraulic Model Study of Nyadi Hydropower Project; four years experience in construction supervision of different hydropower project such as headworks, waterway and powerhouse components, access road, staff housing camps and offices, slope stabilization and river training works; one year experience in teaching courses of Waterpower Engineering.

BANDHU DHAKALProject Manager- Thapa Khola Hydropower Project

Education: MSc Water Science and Engineering, Surface Water Hydrology, UNESCO-IHE, The Netherlands B.E in Civil Engineering, Institute of Engineering, Pulchowk, Nepal.

Experience: Over 11 years of professional experience in engineering design of headworks, waterway and powerhouse, project management/ supervision of hydropower projects and hydrological analysis of various projects.

PAWAN KUMAR KHADKA, ACCA Manager- Finance and HR

Education: Chartered Accountant 2010, Master in Business Studies (MBS), Tribhuvan University.

Experience: Over 7 years of experience in financial and operation management of various fields. Involved as a Financial Analyst and Instructor for Financial Management and Advance Strategic Management papers of ACCA for Gold Approved Learning Partner of ACCA in Nepal.

BIKASH SHERCHANProject Manager- Lower Manang Marsyangdi Hydropower Project

Education: MSc (Photogrammetry and Geoinformatics), University of Applied Sciences Stuttgart, Germany, 2009; MSc (Water Resources Engineering and Management), University of Stuttgart, Germany, 2007; BE (Civil Engineering), Tribhuvan University, Nepal, 1998.

Experience: Over 13 years of experience in hydropower, hydrological and sediment studies, water resources engineering and GIS analysis. Worked for Construction Contract, Plant and Design- Build Contract; and EPC/Turnkey Contract including Master Procurement Documents applicable for donor funded projects, etc.

SHYAM BHUSALProject Manager-Dordi I HEP

Education: MSc in Water Resources Engineering and Management from Asian Institute of Technology (AIT), Bangkok, Thailand in 2010; BE in Civil Engineering, Institute of Engineering, Pulchowk, Nepal; MA Sociology from Tribhuvan University, Nepal.

Experience: Over 11 years experience in hydrological and GIS analysis, hydrologic and hydraulic modelling, design of various hydraulic structures, project management, contract management, preparation of ICB tender documents meeting the general requirements of WB and IFC, Nepal government, Preparation of Risk Management Report, Plant and Design Build tender documents, NCB tender documents for access road and test tunnel.

DIWASH LAL MASKEYProject Manager - Adhikhola UpgradingDesign Team Leader - Kabeli-A HP

Education: MSc in Hydropower Development 2011, Norwegian University of science and Technology (NTNU), Norway. BE in Civil Engineering 2005, Institute of Engineering(IOE) Tribhuvan University.

Experience: Over 7 years of professional experience in project management, hydraulic and structural design of civil structures, quality and cost estimation of civil designs, feasibility study for detailed designs and construction works, project pre-feasibility study and report preparations, preparation of proposals, flood stage and discharge computations for rivers, constructions drawings preparation, report preparation.

SOYUZ GAUTAMStructural Engineer

Education: Masters in structural Engineering 2010, Tribhuvan University.

Experience: Over 5 years of professional experience in hydraulics, structural analysis and design, knowlwdge sharing regarding finite element software, construction planning, quantity estimation, rate analysis, detail design report preparation.

BIBEK NEUPANEProject Manager- Mai Khola HP, Hewa Khola-A HP IPC verification projectsTeam Leader-Lower Manang Marsyangdi HPDeputy Team Leader- Mristi Khola HP

Education: MSc in Hydropower Development 2010, Norwegian University of Science and Technology (NTNU), Norway. BE in Civil Engineering, 2006, Kantipur Engineering College (KEC), Tribhuvan University, Nepal.

Experience: Over 7 years of professional experience in study of hydropower projects in different phases from conceptual planning to construction level design. Design experience includes hydraulic design of headworks and waterway system, preparation of Bill of Quantities, tender documents and cost estimates. Has special interest in rock engineering and design of rock support for underground construction. Has been involved in due diligence studies and verification of Interim Payment Certificates (IPC) as consultancy to financial institutions during pre-construction and construction phases of various projects. Has been involved in preparation of proposals for bidding of consultancy projects. 19

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RAM BHAKTA KARKISenior Consultant

Education: MSc in Electrical Engineering, Belorussian Polytechnic Institute, Minsk (USSR); BA in Economics and Political Science, Tribhuvan University; Electrical Engineering Diploma, Tribhuwan University

Experience: Over 36 years of professional experience in design of electromechanical equipment of hydro power project, operation and maintenance management of hydro power plants, witness on factory acceptance test of different plants and equipments of hydropower projects at manufacturing workshops.

NARENDRA MAN PATRABANSHSenior Consultant

Education: MSc in Manufacturing Engineering and Management, The University of Birmingham; BE in Mechanical Engineering, Victoria Jubilee Technical Institute, Bombay, India.

Experience: Tender document preparation of civil works, electromechanical works and hydro mechanical works of hydropower projects based on FIDIC Conditions of Contract for Construction and Plant & Design Build. LCB tender document preparation of construction works. Preparation of General Specification for tender documents of hydropower projects. Quality control of report writing. Over 40 years of experience in Department of Roads, procurement and contract management of construction equipment and vehicles based on World Bank as well as Government procedure, fleet management, spare parts management and workshop management

SAROJ GHIMIRE Legal Advisor

Education: LLM Trade and investment Laws, Liverpool John Moores University UK; LLM Corporate Laws University of Pune, India; BA, LLB Tribhuvan University, Nepal.

Experience: Attorney at Law, Legal Consultant and Insolvency practitioner. Consultant lawyer for trade and finance laws, hydropower and Infrastructure development laws and foreign investment and technology transfer laws. Experience of reviewing construction contracts and has involved as a member for preparing and negotiating PPA and PDA for Hydro Power Company including JVA and due diligence. Represented national and multinational companies on commercial litigation in the Supreme Court of Nepal including other courts and to the arbitrator. Faculty of Tribhuvan University and Kathmandu University for corporate governance, trade and investment laws and affiliated to Himalayan Lawyers & Legal Consultants.

ASHOK JOSHIAdmin Officer

Education: MA in Sociology, Tribhuvan University

Experience: Over 5 Years experience in administrative work, facilitating for maintenance of office assets, assistance in human resource matters, arrange domestic and international travels for official visits, manage insurance issues from office personnel, verification of monthly timesheets, maintaining staff leave records, maintaining communication and liaisioning with other organizations for day to day administrative duties.

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Financial Performance

HIGHLIGHTS FROM INCOME STATEMENTHCE earned total revenue of NPR 59.86 million in FY 2069/70(FY 2012/13). The revenue from consultancy business was NPR 58.3 million whereas combined interest and other income was NPR. 1.56 million. The Gross profit margin was NPR 22.3 million that was 26% of the total revenue The profit before tax was NPR 8.5 million that was 10% of the revenue earned in FY 2069/70(FY 2012/13).The Earning per share (EPS) was NPR 47.22. If the units of shares would not have increased by 17,785 numbers, the EPS would have been NPR 55.62.The direct expense related to the consultancy business was NPR 37.32 million in the fiscal year 2069/70. There was decrease of NPR 0.5 million in direct expense.The administrative expense was NPR 13.19 million. The adjustment for book loss on foreign exchange brings the figure in line with the figures of FY 2068/69.NPR 2.99 million has been provisioned for income tax for the fiscal year 2069/70 (FY 2012/13).

HIGHLIGHTS FROM STATEMENT OF FINANCIAL POSITION

The net worth of HCE has increased by 22% to NPR 35.06 million in FY 2069/70 (FY 2012/13) from NPR 27.71 million of FY 2068/69( FY 2011/12).The Book Value per share (BVPS) has increased to NPR 297.64 in FY 2069/70 (FY 2012/13) from NPR 277 of FY 2068/69.HCE made capital expenditure of NPR 1.8 million including expenditure in computers and software worth NPR 1.15 million. The expenditure in software and computer was increased by 19% in the fiscal year2069/70 (FY 2012/13).The retained earnings increased by 32 % to NPR 23.28 million in FY 2069/70(FY 2012/13) from 17.72 million of FY 2068/69(FY 2011/12).

Value Addition to the Nation

HCE CONTRIBUTED THE FOLLOWING AMOUNTS TO GOVERNMENT REVENUEValue Addition FY 2069/70 FY 2068/69 FY 2067/68 FY 2066/67Corporate Tax 2,933,346 2,338,133 2,946,277 314,769

Employee Tax 2,796,021 1,413,161 1,373,203 184,456

TDS 946,578 1,030,192 821,930 287,225

Value Added Tax 3,501,274 6,751,748 4,811,454 1,019,301

Total 10,177,219 11,533,234 9,952,864 1,805,751

* In comparison to FY 2068/69, the VAT collection has slightly decreased due to more number of zero VAT invoicing for the service to foreign clients in the FY 2069/70.

of FY 2069/70

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Gura Small Hydropower Project, Kenya (5 MW)

Hydro-Consult Engineering Ltd was entrusted with a job of Project management and Construction supervision of the Gura Hydropower Project.

HCE has provided the support in tendering process and selection of the EPC Contractor for civil and hydro-mechanical works of the project as well as review of tender document and negotiation support for Electro-mechanical works.

Now, the Construction work is going on and HCE as Employer’s Representative is providing the services of review and approval of the design carried out and the construction drawings prepared by the EPC Contractor as well as quality control of the construction work. HCE is also providing the services in review and approval of the construction methodology, quality assurance plan, environment management plan and other documents prepared by the EPC Contractor.

Project Overview of FY 2069/70International Projects

Type: Run-of-River Client: Kenya Tea Development Agency (KTDA)Location: Kenya Capacity: 5 MWGross head: 154 mAnnual estimated energy: 35 GWhWeir: 30 m (crest length)

2 m (height)Headrace canal: 7085 m (length)

2.5 (w) x 1.4 m (h) concrete canalPowerhouse: Surface

2 units of horizontal Francis turbine

Koragh- Paraith Hydropower Project, Pakistan (223 MW)A Consortium of AGES Consultants Peshawar, Pakistan, Infra-D Consultants, Islamabad (Pakistan), Hydro-Consult Engineering Ltd. (Nepal), Sheladia Associates Inc. (USA) and Norconsult (Norway) was entrusted with the job of detailed feasibility study of Koragh-Paraith Hydropower Project.

HCE as a foreign partner of the Consortium has, so far, provided the services mainly for the conceptual design of the project components and review of the preliminary reports of project hydrology and hydraulic design of the project components.

Type: Peaking Run-of-River Client: Sarhad Hydel Development Organization

(SHYDO)Location: Chitral District, Pakistan Capacity: 223 MWGross head: 145 mAnnual estimated energy: 969 GWhWeir: 120 m (crest length)

32 m (height)Headrace tunnel: 22000 m (length)

10.3 m dia.Powerhouse: Underground

3 units of vertical Francis turbine

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Kabeli-A Hydroelectric Project (37.6 MW)HCE is entrusted with the job of updated feasibility study, tender document preparation, detail design of civil structures and preparation of construction drawings. Similarly, HCE also conducted social assessment of the project and prepared Social Impact Assessment and Social Action Plan.

The updated feasibility study was completed in June 2011. The study report has been approved by DoED. The project is a Peaking Run-of-River project providing 6 hours of peak energy during dry months.

In the course of study, HCE has prepared Geotechnical Baseline Report (GBR), Risk Management Plan (RMP) and Dam Safety Plan (DSP) for the first time.

For the project, three reviewing parties were present: World Bank’s Panel of Expert (WB, POE), Lender’s engineer-Fichtner Gmbh, and Client’s independent reviewer-Mott Macdonald (UK).

HCE coordinated with all the international reviewing parties in designing the project, preparing GBR, RMP and DSP, and preparing tender documents to international standards.

Type: Peaking Run-of-RiverClient: Kabeli Energy LimitedLocation: Panchthar, Eastern Development RegionCapacity: 37.6 MWGross head: 118.8 mAnnual estimated energy: 202.6 GWhBarrage: 60 m (length)

24 m (height)Settling basin: Underground, 2 nos.

123 m (length)15.8 m (width)

Headrace tunnel: 4326 m length5.6 m dia.

Penstock pipe: 288 m (length)3.55 m (dia)

Powerhouse: Surface2 units of francis turbine

Lower Manang Marsyangdi Hydroelectric Project (140 MW)

HCE is entrusted with the job of updating feasibility study, tender document preparation, and detail design of civil structures. HCE also conducted Environmental Impact Assessment (EIA) of the project and prepared EIA Report.

The updated feasibility study was completed in April 2012. The project is a Run-of-River project. In the course of study, HCE has prepared Geotechnical Baseline Report (GBR) and Risk Management Plan (RMP). For the project, the review consultant was BERNARD Ingenieure zt GmbH, Austria.

The draft Prequalification Documents (PQD) and Bidding Documents for civil works, hydro-mechanical works and electro-mechanical works have been submitted on May 2012 and July 2012 respectively. The PQ and Bidding Documents were also reviewed by BERNARD Ingenieure zt GmbH, Austria.

The detail design for preparation of detail civil drawings and typical reinforcement details is ongoing.

National Projects

Type: Run-of-RiverClient: Butwal Power Company LimitedLocation: Tachai-Bagarchhap and Dharapani

VDCs, ManangCapacity: 140 MWGross head: 325 mAnnual estimatedenergy: 646 GWhWeir: 45 m (length)

16 m (height)Settling basin: Surface, 4 nos.


Headrace tunnel: 4651 m long5.3 m dia. Horse Shoe shaped.


Powerhouse: Surface2 units of pelton turbine

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Nyadi Hydropower Project (30 MW)

HCE is entrusted with the job of updating feasibility study, tender document preparation, and detail design of civil structures, EM, HM works and preparation of civil construction drawings.

The updated feasibility study was completed in October 2010. The study report has been approved by DoED.

In the course of study, HCE has prepared Geotechnical Baseline Report (GBR) and Risk Management Plan (RMP).

For the project, HCE is the main consultant of design and tender document preparation, Mott MacDonald (UK) for design of underground works and Client’s independent reviewer-NORPLAN (Norway) for review of all documents of NHP specially detail design and tender documents.

HCE has already submitted final detailed design report and final tender documents including all the comments from NORPLAN in October 2013. HCE is now working in finalizing structural design of surface powerhouse.

Type: Run-of-RiverClient: Nyadi Hydropower LimitedLocation: Lamjung, Western Development

RegionCapacity: 30 MWGross head: 335.5 mAnnual estimatedenergy: 172.14 GWhDiversion Weir: 14 m (length)


108 m (length)8 m (width)




Mristi Khola Hydroelectric Project (42 MW)

HCE in consortium with NORPLAN of Norway is entrusted with the job of detail design of civil structures and preparation of construction drawings.

The consortium has submitted the draft inception report which includes the optimized final layout and principal design of other components of the project.

HCE is now working on finalizing the detail design works, updating the Bill of Quantities and preparation of construction drawings.

Type: Run-of-RiverClient: Robust Energy Pvt. LimitedLocation: Myagdi District, Western Development

RegionCapacity: 42MWGross head: 301.70 mAnnual estimated energy: 226.82 GWhDam: 29.5 m (length)



Headracetunnel: 2300 m length

4.2 m dia.Penstock pipe: 1420 m (length)

2.2 m (dia)Powerhouse: Surface

3 units of horizontal pelton turbine

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Dordi-1 Hydroelectric Project (12.6 MW)

HCE was entrusted with the job of updating feasibility study, tender document preparation, and detail design of civil structures and preparation of construction drawings for Dordi-1 HEP.

Updated feasibility study was completed in February 2013. Client has not decided yet to go ahead for detail design. The project is Run-of-River type with free overflow ogee type weir.

In the course of study, in addition to the normal work of Updated Feasibility Study, HCE has carried out a study for the estimation of irrigation water requirement in the Project Area and has also prepared a report for land acquisition with geo-referencing of cadastral maps.

Thapa Khola Hydroelectric Project (13.6 MW)HCE is entrusted with the job for the preparation of detailed project report, tender document, detail design of civil structures and preparation of construction drawings.

HCE has prepared the Detailed Project Report (DPR) in the line with previous feasibility study in June 2012. Later, the client requested to upgrade the capacity of the project. Therefore, the updated DPR was completed and submitted in September 2013 with upgraded capacity.

Since then, HCE is carrying out the detailed design of the project. Detailed design and preparation of the construction drawings are in final stage.

The tender documents of the project have already been submitted.

Type: Run-of-RiverClient: Mount Kailash Energy Company Private LimitedLocation: Mustang, Western Development RegionCapacity: 13.6 MWGross head: 388.9 mAnnual estimated energy: 69.7 GWhDiversion weir: 25 m (length)

2.5 m (height)Settling basin: Surface, 2 nos.





Type: Run-of-RiverClient: Lamjung Electricity Development Company

(LEDCO)Location: Lamjung, Western Development RegionCapacity: 12.6 MWGross head: 144.3 mAnnual estimated energy: 69.89 GWhWeir: 26 m (crest length)

5 m (height)Settling basin: Surface, 2 bays.


Headrace pipe: 3001m (length)2.3 m dia.



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Andhi Khola Hydroelectric Project (Upgrading) (9.4 MW)

Andhi Khola Hydroelectric Project (AKHP) was commissioned in the year 1991 AD. BPC started study on upgrading of the project by increasing the capacity from 5.1 MW to 9.4 MW.

HCE is involved in the hydraulic, geo-technical and structural design of project components of AKHP(U) from 2012. The consultant’s team is involved in the hydraulic design of fish ladder, tailrace tunnel and surge tank. HEC-RAS and Flowmaster were used in the hydraulic design and modeling whereas Hytran was used in water hammer and surge analysis. Similarly, geo-technical analyses were completed for extending the underground powerhouse cavern and tailrace tunnel using software- Phase2. Structural analyses were completed for weir, intake, gravel trap, settling basin, anchor blocks, surge tank, powerhouse and tunnel portals.

HCE provided construction drawings, rebar drawings and design supports for changes as per site conditions and was also involved in co-ordination regarding retrofitting design of powerhouse and service building structures and hydro-mechanical and electro-mechanical components on need basis.

Type: Run-of-River Free overflow concrete ogee weir with collapsible Obermeyer gate on crest.

Height of the concrete weir: 6.5 m Obermeyer gate: 1.8 mClient: BPCLocation: Syanja, Western Development RegionCapacity: 9.4 MWGross head: 246.00 mAnnual estimated energy: 64.67 GWhDiversion weir: 52.5 m (length)



Headrace tunnel: 1000 m lengthD-Shape.

Penstock Pipe Vertical, Mild Steel, 1m Diameter

Tailrace tunnel: 1087 m lengthD-Shape.

Vertical Shaft: 250 m (height)4 m (dia)

Powerhouse: Underground3 units of pelton turbine

Tadi Khola Hydropower Project (5.0 MW)HCE was entrusted with the Detailed Engineering Design and the Construction Supervision works of the project.

HCE was responsible for issuing the construction drawings, quality control, monitoring of civil, hydro-mechanical and electromechanical works during construction, erection, testing and commissioning of the project.

The commercial operation of the project commenced on March 20, 2013. Currently, the project is undergoing smooth operation.

Type: Run-of-RiverClient: Aadishakti Bidhut Bikas Company Pvt. Ltd.Location: Thaprek, Sundaradevi, NuwakotCapacity: 5 MWGross head: 75 mAnnual estimated energy: 32.64 GWhWeir: 52 m (length)


44.0 m (length)5.0 m (width)

Headrace Pipe/ Culvert: 2258 m long(Pipe: 1.9 m dia.; Culvert 2.0 x 2.0 m)

Powerhouse: Surface2 units of Francis Turbine

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Hewa Khola -A Hydropower Project IPC Verification (14.9 MW)HCE is working as the technical consultant for the consortium of banks led by Sanima Bank Limited for Hewa Khoka-A Khola Hydropower Project. The developer of this project is Panchthar Power Company Private Limited.

HCE’s scope of works for this project is to verify the Interim Payment certificates (IPC’s) issued by the engineer and to monitor the progress of works on behalf of the bank.

The scope of works includes verification of IPC’s for the entire contract packages; civil, hydromechanical, electromechanical and transmission line works.

Type: Run-of-RiverClient: Sanima Bank LimitedLocation: Panchthar District, Western Development

RegionCapacity: 14.9 MWGross head: 212.6 mAnnual estimated energy: 82.095 GWhDam: 31.5m (length)Settling basin: Surface, 3 nos.



Penstock pipe: 270 m (length)Powerhouse: Surface

2 units of vertical francis turbine

Mai Khola Hydropower Project IPC Verification (22 MW)

HCE is working as the technical consultant for the consortium of banks led by Laxmi Bank Limited for Mai Khola Hydropower Project which is being developed by Sanima Mai Hydropower Private Limited.

HCE’s scope of works for this project is to verify the Interim Payment certificates (IPC’s) issued by the engineer and to monitor the progress of works on behalf of the bank.

The scope of works includes verification of IPC’s for the entire contract packages; civil, hydromechanical, electromechanical and transmission line works.

Type: Run-of-RiverClient: Laxmi Bank LimitedLocation: Ilam District, Western Development RegionCapacity: 22 MWGross head: 122 mAnnual estimated energy: 128.30 GWhDam: 86 m (length)





Powerhouse: Surface3 units of vertical francis turbine

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Due Diligence Study of Lohore Khola Small Hydropower Project (4.2 MW)

HCE is entrusted with the job of due diligence study of Lohore Khola Small Hydropower Project being developed by Lohore Khola Hydropower Limited.

The due diligence study was carried out from February to March 2013. In the course of study, HCE reviewed available reports, hydrological, geological, environmental and financial parameters, design standards, quantity estimation and evaluated the viability of the project financially.

The due diligence study report was approved on late March 2013.

Type: Run-of-RiverClient: NMB Bank LimitedLocation: Dailekh, Mid Western Development RegionCapacity: 4.2 MWGross head: 113 mAnnual estimated energy: 22.14 GWhWeir: Boulder Lined Free Over Flow TypeSettling basin: Surface, 2 nos.

75 m (length)5 m (width)

Headrace pipe: Surface3550 m length2 m dia.


Powerhouse: Partially Underground2 units of francis turbine

Due Diligence Study of Junbesi Khola Hydroelectric Project (5.2 MW)HCE was assigned to carry out the due diligence of Junbeshi Khola Hydroelectric Project in July 2013.

The feasibility study was completed in May 2009 while the detailed design was completed in 2012.

HCE reviewed the feasibility study and IEE reports made available by the Client. On the basis of those reports and site visit by the team of experts, the suitability of the project components layout was analyzed. The design parameters and criteria adopted for the hydraulic design of each project component was also assessed.

HCE also reviewed the installed capacity and the annual energy generation of the project. Along with the verification of major quantities of work, the cost of the project was also updated in context of the present scenario and financial viability of the project was checked.

After the detailed evaluation, HCE submitted the due diligence report on September 2013. At present, the Client is negotiating with the lending banks for the financial closure.

Type: Run-of-RiverClient: Sanima Bank LimitedLocation: Solukhumbu, Eastern Development RegionCapacity: 5.2 MWGross head: 221.5 mAnnual estimated energy: 32.12 GWhWeir: 18 m (length)


47.1 m (length)5 m (width)

Headrace pipe: 2975 m length1.4 m dia.

Penstock pipe: 436.8 m (length)1.3 m (dia)


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Review of Feasibility Study Report of Upper Dordi-A Hydroelectric Project(25 MW)

HCE carried out the review study of Upper Dordi A Hydroelectric Project being developed by Liberty Energy Hydropower Pvt. Ltd.

The review study was carried out from July to September 2013.

In the study, HCE reviewed available reports, hydrological, geological and environmental parameters, design standards, quantity estimation and finally recommendations were suggested regarding the findings of the review study.

Type: Run-of-RiverClient: Liberty Energy Hydropower Pvt. Ltd. Location: Lamjung, Mid Western Development RegionCapacity: 25.0 MWGross head: 325.56 mAnnual estimated energy: 138.398 GWhWeir: Gravity Spillway Settling basin: Dufour ( Double-Chamber).

69 m (length)8.5 m (width)4.7 m (height)

Headrace Tunnel: Underground Inverted D, 2632 m (Length), 2.9 m x 3.85 m(BxD)

Penstock pipe: Mild Steel3140 m (length)1.9 m (dia)

Powerhouse: Surface (40 mx20 mx11 m)2 units of pelton turbine

Due Diligence Study of Mai Cascade Hydropower Project (7 MW)

HCE is entrusted with the job of due diligence study of Mai Cascade Hydropower Project being developed by Sanima Mai Hydropower Limited.

The due diligence study was carried out from March to April 2013.

In the course of study, HCE reviewed available reports, hydrological, geological, environmental and financial parameters, design standards, quantity estimation and evaluated the viability of the project financially.

Type: Run-of-RiverClient: Laxmi Bank LimitedLocation: Ilam, Eastern Development RegionCapacity: 7 MWGross head: 43 mAnnual estimated energy: 38.42 GWhWeir: Cascade Project. Weir not neededSettling basin: Cascade Project. Weir not neededHeadrace canal/culvert: 3680m length

Penstock pipe: 75 m (length)1.5 m (dia), three pipes


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Inception Study of Kasuwa Khola Hydropower Project(40 MW)

HCE was entrusted with the job of preparing inception report of Kasuwa Khola Hydropower Project in June 2013.

A team of experts from HCE visited the project site to identify the suitable locations for project components based on which a preliminary layout of project structures was prepared.

HCE carried out the hydrological analysis and determined the design discharge and long term flows of the project. HCE also evaluated the installed capacity and the annual energy generation of the project. The possible access road and transmission line were also explored. Along with the compilation of inception level information on environmental impact and geology of the project area, preliminary cost estimate and financial evaluation of the project were also carried out.

Type: Run-of-RiverClient: CEDB Hydro Fund (CHF)Location: Sankhuwasabha, Eastern Development RegionCapacity: 40 MWGross head: 477 mAnnual estimated energy: 225.52 GWhWeir: 30 m (length)




Penstock pipe: 785.4 m (length)1.9 m (dia)

Powerhouse: Underground3 units of pelton turbine

Andhi Khola Upgrading

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PP PRADHAN & COC H A R T E R E D A C C O U N TA N T S

PP Pradhan & CoSanepa, Lalitpur, Po Box:3242

Kathmandu, NepalTel:+ 977 1 5551126 Fax: +977 1 5532878

Pratap P PradhanFor PP Pradhan & CoChartered AccountantsDate: 17 December 2013

Report on the Financial StatementsWe have audited financial statements of Hydro Consult Engineering Ltd., which comprise the Balance Sheet as at 31 Ashadh 2070 (15 July 2013), Income Statement, and Cash Flow Statement for the year ended on that date and a summary of significant accounting policies and notes relating to the annual accounts.

Management’s Responsibility for the Financial StatementsManagement of the company is responsible for the preparation and fair presentation of these Financial statements in according with the Nepal Accounting Standards. This responsibility includes: designing implementing and maintaining internal control relevant to the presentation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Nepal Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements

in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the attached financial statements give a true and fair view of the financial position of Hydro Consult Engineering Ltd., as at 31 Ashadh 2070 (15 July 2013) and of its financial performance and cash flows for the year then ended in accordance Nepal Accounting Standards.

Report on Other Legal and Regulatory RequirementsOn the basis of our examination and according to explanations given to us, we would like to further report that:

1. We have obtained all the information and explanations, which were considered necessary for the purpose for audit.

2. The books of accounts as required by the prevailing Law have been maintained by the company.

3. The Balance Sheet, the Income Statement and Cash Floew Statement have been prepared in accordance with Nepal Accounting Standards and are in agreement with the books of accounts maintained by the company.

4. We have not come across the cases where the directors or any representative or any employee of the company has acted against Law or caused any loss or damage to the company or misappropriated any funds of the company.

AUDITOR’S REPORT TO THE SHAREHOLDERS OFHydro Consult Engineering Limited

AUDITOR’S REPORT

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BALANCE SHEETAs on Ashad End, 2070 ( July 15, 2013)

Particulars Sch. F.Y 2069/70 NPR F.Y 2068/69 NPR I. Equity and Liabilities 1 Shareholder’s Fund

Share capital 1 11,778,500 10,000,000 Reserve and Surplus 2 23,279,362 17,717,268 Total Shareholder’s Fund 35,057,862 27,717,268

2 Other Funds Advance Share Capital - 1,422,656

3 Current Liabilities and Provisions Creditors and Accounts Payable 3 3,504,468 4,873,910 Advance and Deposit received 4 6,539,567 9,813,857 Provision for Bonus 849,254 1,023,042 Provision for Tax 8,185,677 5,252,331 Other Provisions 5 1,420,771 1,500,628 Total Current Liabilities and Provisions 20,499,737 22,463,768 TOTAL 55,557,599 51,603,692

II. Assets 1 Non-Current Assets 1.1 Property, Plant & Equipments 6

Gross Block 16,262,266 15,306,836 Less: Depreciation reserve (8,821,336) (6,861,518) Net Block 7,440,930 8,445,318

1.2 Intangible Assets 6 Gross Block 1,988,131 1,544,056 Less: Depreciation reserve (881,638) (530,189) Net Block 1,106,493 1,013,867

3 Deferred Tax Assets 357,307 299,532 4 Current Assets:

Debtors and Accounts Receivable 7 30,528,035 30,046,815 Cash in hand and at Bank 8 1,879,297 2,715,020 Current work in progress 9 2,211,940 2,548,831 Advance and Deposit Paid 10 12,033,598 6,534,310 Total Current Assets 46,652,869 41,844,975 TOTAL 55,557,599 51,603,692

Schedule 1-10 form an integral part of this Blance Sheet.

Date: 16.12.2013Place: Kathmandu, Nepal

Pawan Kumar KhadkaFinance Manager

Manohar Shrestha Chief Executive Officer

Radheshyam ShresthaDirector


Balram PradhanDirector

Pratap Prasad Pradhanfor PP Pradhan & Co. Chartered Accountants

Ratna ShakyaDirector

Audited Financial Statements

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Particulars Sch. F.Y 2069/70 NPR F.Y 2068/69 NPR

OPERATING INCOME

Consultancy Services 11 58,307,843 58,783,876

Other Operating Income 1,277,902 1,939,938

Total Operating Income 59,585,745 60,723,814

OPERATING EXPENSE

Direct Cost 12 37,325,803 38,640,913

Total Operating Expense 37,325,803 38,640,913

Gross Operating Profit 22,259,942 22,082,901

Administrative and Other Expenses

Administrative Expenses 13 9,539,673 8,053,832

Depreciation & assets written off 2,674,115 3,017,154

Foreign Currency Exchange gain/(loss) 981,823 113,372

Total Administrative and Other Expenses 13,195,611 11,184,358

NON-OPERATING INCOME:

Interest Income 14 145,239 176,654

Miscellaneous Income 132,228 178,265

Total Non-Operating Income 277,467 354,919

PROFIT BEFORE BONUS AND TAX 9,341,798 11,253,462

Provision for Employee Bonus 849,254 1,023,042

PROFIT BEFORE TAX 8,492,544 10,230,420

Provision for Corporate Tax 2,988,224 2,306,054

Deferred Tax Income 57,774 299,532

Net Profit for Appropriation 5,562,094 8,223,898

PROFIT & LOSS APPROPRIATION ACCOUNTLast Year’s Balance 17,717,268 9,493,370

Profit for this fiscal year 5,562,094 8,223,898

Total 23,279,362 17,717,268

Less: Proposed Dividend

Prior Year Adjustment

Balance Transferred to Balance Sheet 23,279,362 17,717,268

Schedule 11-14 form an integral part of this Income Statement.

INCOME STATEMENTFor the Ashad End 2070 (July 15, 2013)









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STATEMENT OF CASHFLOWAs on Ashad End, 2070 (July 15, 2013)

Sno. Particulars F.Y 2069/70 NPR F.Y 2068/69 NPR F.Y 2067/68 NPR

A. Cash Flow from Operating Activities

Profit before Tax 8,492,544 10,230,420 11,785,108

Add:Non Cash & Non Operating Expenses

Depreciation 2,674,115 3,017,154 3,183,821

Bonus Provision 849,254 1,023,042 1,178,511

Other Provisions and non cash expenses (79,857) 1,519,399 -

Less:

Interest & other Non Operating Income (145,239) (2,294,856) (130,342)

Bonus paid (1,012,736) (1,178,511) (125,907)

Non cash Income(Provison Reversed) (65,186) -

Cash Flow before Working Capital adjustments 10,712,896 12,316,648 15,891,191

Decrease (Increase) in Current Assets (2,653,519) (15,153,254) 5,183,100

Increase (Decrease ) in Current Liabilities (4,643,731) (338,794) (6,146,637)

Operating Cash flow before tax adjustment 3,415,646 (3,175,401) 14,927,654

Less: Tax Paid (2,990,098) (4,353,776) (850,741)

Net Cash Flow from Operating Activities 425,547 (7,529,176) 14,076,913

B Cash Flow from Investing Activities

Fixed Assets Sales( purchased) (1,762,353) (1,353,542) (5,649,431)

Interest Income 145,239 2,294,856 130,342

Net Cash Flow from Investing Activities (1,617,114) 941,314 (5,519,089)

C Cash Flow from Financing Activities

Issue of Share Capital 355,844 - -

Net Cash Flow from Financing Activities 355,844 - -

D Net Change in Cash & Cash Equivalent (A+B+C) (835,723) (6,587,862) 8,557,824

E Cash and Bank Balance at the Beginning of the Year 2,715,019 9,302,881 745,057

F Cash and Bank Balance at the End of the Year 1,879,297 2,715,019 9,302,881









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Particulars Share Capital Retained Earnings Total

Balance as on Ashad End 2069 10,000,000 17,717,268 27,717,268

Additional Capital Injection in FY 2069/70 1,778,500 1,778,500

Proposed Dividend for FY 2069/70 - - -

Profit for the year (FY 2069/70) - 5,562,094 5,562,094

Prior Year Adjustment - - -

Balance as on Ashad End 2070 11,778,500 23,279,362 35,057,862

STATEMENT OF CHANGES IN EQUITYFor the Ashad End 2070 (July 15, 2013)

SHARE CAPITAL As on Ashad 31, 2070 (July 15, 2013)

RESERVE AND SURPLUS As on Ashad 31, 2070 (July 15, 2013)

Particulars F.Y 2069/70 NPR F.Y 2068/69 NPR

Authorised Share Capital

(5,00,000 ordinary shares of Rs. 100 each) 50,000,000 20,000,000

Issued and called up Capital


Paid up Share Capital


Total 11,778,500 10,000,000

Schedule 1


Retained Earnings

This year 5,562,094 8,223,898

Last year 17,717,268 9,493,370

Total 23,279,362 17,717,268

Schedule 2

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CREDITORS AND ACCOUNTS PAYABLEFor the Ashad End 2070 (July 15, 2013)

ADVANCE & DEPOSIT RECEIVEDFor the Ashad End 2070 (July 15, 2013)


ENVIRO- DEV (Norway) - 390,447

Sathi Trading International Pvt Ltd - 11,930

Modern Cleaning & Services Pvt Ltd 11,284 10,051

Mitra Kunj - 5,100

Subidha Sewa Pvt. Ltd. 71,381 4,309

Nissan Securities Pvt. Ltd. 28,098 42,147

TDS and Remuneration Tax Payables 584,146 601,642

Salary Payable 859,062 496,289

Provident Fund Deduction 15,136 -

Citizen Investment Trust Deduction 567,457 -

VAT Payable 135,886 1,856,661

Medical Insurance Claim payable - 1,101

Other payables 7,701 6,126

Prakriti Pure Drining Water Pvt Ltd 6,422 7,291

Other Liabilities to Employees 1,037,871 1,044,929

East Management & Engineering Service Pvt Ltd - 780

Info Developers Pvt Ltd 116,052 257,732

Mercantile Traders 223 12,794

Laxmi Store - 8,015

D’wals’ International 4,014 -

Trithunga Tours & Travels Pvt Ltd 39,469 -

Prasad Transportation Service - 96,300

Nepal Environment & Scientific Pvt. Ltd 20,267 20,267

Total 3,504,468 4,873,910

Schedule 3

Particulars F.Y 2069/70 NPR F.Y 2068/69 NPR Reliance Hydropower Pvt Ltd 600,000 600,000 Himalayan Water Research & Energy(HWREDC) 490,000 490,000 ERMC-BPC-MASINA-DE JV 300,000 300,000 Vandana Power Venture - 203,270 Sanima Mai Hydropower Ltd 336,320 95,138 Liberty Energy Hydropower Pvt. Ltd 318,800 - Advance received from Gura SHP-KTDA 4,494,447 8,125,450 Total 6,539,567 9,813,857

Schedule 4

Particulars F.Y 2069/70 NPR F.Y 2068/69 NPR Provision for Audit fee 125,125 72,500 Provision for Leave Earned 1,126,140 1,198,128 Provision for Gratuity 169,506 - Provision for Legal Expenses - 230,000 Total 1,420,771 1,500,628

PROVISIONSFor the Ashad End 2070 (July 15, 2013) Schedule 5

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,544

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DEBTORS AND ACCOUNTS RECEIVABLES As on Ashad 31, 2070 (July 15, 2013)

CASH IN HAND AND AT BANKS As on Ashad 31, 2070 (July 15, 2013)

CURRENT WORK IN PROGRESS (WIP) As on Ashad 31, 2070 (July 15, 2013)


Butwal Power Company Ltd. 5,096,849 1,775,960

Nyadi Hydropower Ltd. 2,313,580 12,077,226

Kabeli Energy Ltd. 8,572,482 8,244,220

BPC-ERMC JV 352,992 683,163

Adisakti Bidyut Bikash Company - 2,063,917

Mount Kailash Energy Pvt. Ltd. 43,750 2,761,750

Environment & Social Studies Dep. (NEA) 682,198 145,148

Multi Consult AS - 476,520

Lamjung electricity & Development - 892,000

Himalayan Power Partner 2,260 2,260

NMB Bank(Lohore Khola HP) 474,500 -

Panchthar Power Company 1,201 -

Gura Hydropower- KTDA 12,068,264 -

Khudi Hydropower Ltd. 919,960 924,652

Total 30,528,035 30,046,815

Schedule 7


Cash in Hand 1,717 7,176

Standard Chartered Bank Nepal Ltd. 50,674 25,205

Prepaid Card 105,170 -

Himalayan Bank Ltd.(Bidur Branch) 2,587 -

Himalayan Bank Ltd.(New Baneswor Branch) 1,719,149 2,682,639

Total 1,879,297 2,715,020

Schedule 8

Schedule 9 Particulars F.Y 2069/70 NPR F.Y 2068/69 NPR

Tadi Khola HP 1,377,877 -

Detail design of Kabeli - A HEP - 807,549

Gura SHPP - 1,041,008

Detail design of Thapa Khola 89,662 -

Koragh Paraith Hydropower 744,401 -

AHP Upgrading - 700,274

Total 2,211,940 2,548,831

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Business Advance to Staff 2,757,173 260,921

Telephone Deposit 43,000 24,500

Short term Deposit 14,500 -

Prepaid Expenses 133,585 95,004

Miscellaneous Deposit 9,000 8,000

Salary Advance - 100

Advance Income Tax -67-68 1,717,612 1,717,612

Advance Income Tax -68-69 4,337,958 4,337,958

Advance Income Tax -69-70 2,990,098 -

Advance to others 191 4,263

Durga Prasad Ghimire 30,480 -

Devi Maya Shrestha ( House owner ) - 85,951

Total 12,033,598 6,534,310

ADVANCE & DEPOSIT PAIDFor the Ashad End 2070 (July 15, 2013)

INCOME For the Ashad End 2070 (July 15, 2013)

DIRECT COST For the Ashad End 2070 (July 15, 2013)

Schedule 10


Consultancy Services 58,307,843 58,783,876

Total 58,307,843 58,783,876

Schedule-11

Schedule-12 Particulars F.Y 2069/70 NPR F.Y 2068/69 NPR

Staff Cost (Sub Sch-13.1) 29,505,744 27,761,506

Engineering Consultancy (Sub Sch-13.2) 5,295,922 8,912,379

Field Expenses (Sub Sch-13.3) 1,966,349 1,261,376

Vehicle Operation (Sub Sch-13.4) 557,787 705,652

Total 37,325,803 38,640,913

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STAFF COST For the Ashad End 2070 (July 15, 2013)

ENGINEERING AND CONSULTANCY EXPENSES For the Ashad End 2070 (July 15, 2013)

FIELD EXPENSES For the Ashad End 2070 (July 15, 2013)

Sub Schedule-12.1 Particulars F.Y 2069/70 NPR F.Y 2068/69 NPR

Salary 11,145,812 10,678,781

Allowance 11,853,904 10,307,026

Provident Fund 451,066 518,034

Paid Leave 1,371,454 2,315,781

Daily Wage 25,260 51,380

Overtime 86,106 145,443

Gratuity 318,645 -

Insurance 404,508 254,124

Dashain Expenses 1,010,617 905,507

Performance Allowance 2,546,530 2,135,622

Minimum Guaranteed Incentive 291,843 240,915

Payment for Deputed Staff - 208,893

Total 29,505,744 27,761,506


Engineering & Design 308,391.81 -

Management Contract 340,934.59 -

Consultancy Expenses 3,987,756.03 7,382,634

Survey Expenses 658,840.00 1,527,745

Lab & Test Expenses - 2,000

Total 5,295,922 8,912,379

Sub Schedule-12.2


Travel and Daily Allowance 1,051,360 702,882

Field Materials 2,990 24,761

Transport & Transportation Taxes 498,532 533,733

Work Permit Expenses 413,467 -

Total 1,966,349 1,261,376

Sub Schedule-12.3


Fuel & Lubricants 372,593 488,215

Insurance Premium (Vehicles) 100,024 97,014

Taxes & Other 55,170 73,805

Regular Serviceing & Maintenance 30,000 46,618

Total 557,787 705,652

VEHICLE OPERATION For the Ashad End 2070 (July 15, 2013) Sub Schedule-12.4

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ADMINISTRATIVE AND OTHER OVERHEADFor the Ashad End 2070 (July 15, 2013)


A. Administrative Overhead

Rent 2,592,331 1,752,900

Electricity / Water 219,782 228,860

Housekeeping 57,440 58,356

Office Supplies 169,112 258,242

Repair & Maintenance 183,445 107,184

Computer Expenses 254,698 138,797

Photocopy and Binding 177,458 251,325

Printing Expenses 209,884 308,901

Stationery Expenses 157,664 138,484

Communication Related Expenses including Postage 481,789 590,723

Bank Commission & Charges 23,913 24,058

Adertisement & Publicity 67,452 160,917

Books, Newspaper & magazines 55,716 39,875

Membership Fee & Renewals 17,203 26,675

Transportation & Fares 203,108 118,987

Gift & Donatations 31,000 208,104

Employee Motivation Expenses 323,040 350,022

Guest Entertainment 66,327 47,874

Medical Expenses 21,404 4,768

Photo & Audio/Video Expenses 5,460 550

Working Dresses 26,125 36,252

Meeting Expenses 1,650 2,130

Fuel and Lubricants 363,095 354,025

Generator Repair and Maintenance 113,924 26,845

Training & Seminars 161,835 407,977

Total 5,984,854 5,642,831

B. Other Overhead

Audit Fee 125,125 132,500

Annual General Meeting Expenses 71,292 60,322

International Travel 1,886,052 590,126

Tender Bidding Expenses 21,000 6,000

Business Promotion 81,397 39,090

Audit expenses 14,970 8,800

Board Meeting Expenses 11,206 12,326

Legal Expenses - 232,310

Miscellaneous Expenses 19,005 14,710

Insurance Premium (Office Premises & Other Assets) 41,909 30,640

Support Staff Expenses 1,282,863 1,284,175

Total 3,554,819 2,410,999

Total (A+B) 9,539,673 8,053,830

Schedule-13

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Interest 145,239 176,654

Fine & Penalties 709,890 1,463,418

Other Income (Provision reversed) 62,344 -

Grant Income 505,668 476,520

Miscellaneous Income 132,228 178,265

Total 1,555,369 2,294,857

INTEREST & OTHER INCOMEFor the Ashad End 2070 (July 15, 2013)

Schedule-14

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Hydro-Consult Engineering LtdSignificant Accounting Policies and

Notes Relating to the Annual Accountfor the Fiscal Year 2069/70 (2012/13)

Background Hydro-Consult Engineering Ltd.(HCE) was named Hydro Consult Private Ltd (HCPL) prior to conversion into public limited company. Hydroconsult was established on 24 March 1998 and was owned by People Energy and Environment Development Association (PEEDA). Butwal Power Company Limited (BPC) acquired 80% share of the company on 16 July 2009, and remaining 20% is owned by PEEDA. BPC transferred engineering consultancy business, fixed assets, goodwill of its Engineering Department (BPC Hydroconsult) to HCPL with the objective to run the Engineering consultancy business as the separate entity. HCE has inherited 23 years of professional experience from the Engineering Department of BPC. The company acquired public limited status on 18th September 2012 and took its new identity as Hydro-Consult Engineering Ltd (HCE).

With its new identity, the financial statements and all the legal documents of the company are presented, published and communicated in the name of Hydro-Consult Engineering Ltd (HCE) effective from September 18, 2012 (Ashwin 2, 2069 BS).

1. Basis of PresentationThe Financial Statements of Hydro-Consult Engineering Ltd are prepared in accordance with Nepal Accounting Standard and the prevailing rules of the Company Act 2063 (2006). Except where otherwise stated, they are based on accrual and historical cost convention.

2. Capitalization of Fixed AssetsAll fixed assets are recorded at cost-less accumulated depreciation. All direct costs relating to the acquisition and installation of fixed assets are capitalized. Office furniture, equipment and vehicles costing less than NPR 2,000 per unit is

charged to the profit and loss account in the year of purchase.

3. Depreciation and AmortizationOffice furniture, equipment, vehicles and other assets are depreciated using the diminishing balance method at rates prescribed in the Income Tax Act 2058. Depreciation charge for each period has been recognized in Profit and Loss Statement.

4. Foreign CurrencyTransactions in foreign currency are stated in terms using the exchange rate prevailing on the date of transaction. Foreign currency assets and liabilities held in foreign currency on the date of balance sheet are given in Nepalese rupees using the buying rate of Nepal Rastra Bank on that date.

5. On-going Contracts and ProjectsIncomes for on-going contracts are recognized as per the contract agreement with the parties. Expenditure on on-going engineering and consultancy works are shown at cost as Current Work in Progress except the construction supervision which are recognized as per the norms of construction contract.

6. Retirement Benefits Retirement benefits for employees include a provident fund, a citizen investment trust and a gratuity scheme. Periodic contributions are made to the provident fund and charged to Profit and Loss Statement as Staff cost. Regular employees are eligible for the gratuity after completing continuous three years of service in the company.

7. Provision for Employees BonusThe Bonus has been provisioned at 10% of the net profit of the year as per the Bonus Act.

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8. Figures of the previous year and rounding offThe figures of FY2068/69 have been regrouped and reclassified wherever necessary to make comparison with the figures of FY2069/70. All figures are in Nepalese Rupees if not otherwise specified and have been rounded off to the nearest rupee.

9. Transaction with Related PartiesAlmost 30 % business of HCE was with the subsidiary companies of Butwal Power Company (BPC). The clients Kabeli Energy Ltd. and Nyadi Hydro Power Ltd. are the subsidiary companies of BPC.

9.1 Details of Transactions with related partiesName of the company

Transaction Amount

Kabeli Energy Ltd. Tender Document & Detail Design 1,896,926

Nyadi Hydropower Ltd

Construction Supervision and Design works 2,061,309

Butwal Power Company Ltd

For Repair work of Jhimruk, Lower Manang Marshyandi Hydropower Project and Design and quality control support for Adhikhola Upgrading 13,421,929

Total 17,380,164

10. Provision of Income taxUnder provision of tax of fiscal year FY 2067/68 paid with interest and other charges has been adjusted in fiscal year 2069/70. The adjustment amount is NPR 668,213 . Equal amount has been shown in the advance tax heading as per the NAS 9 and IAS 12.

11. Deferred TaxDeferred tax is calculated as per Nepal Accounting Standard (NAS).The assets of NPR 357,307 arises from the calculation of deferred tax because of temporary timing differences and has been shown

in the balance sheet separately as deferred tax assets.

12. Advanced Tax and Foreign TaxCreditThe Tax amounting NPR 2 million has been paid to Kenyan Authority as TDS for the Revenue from Kenya. So, the foreign tax credit has been claimed in Inland Revenue Department as per the provision of Section 71 of Income Tax Act 2058.

13. Zero VAT SalesThere were zero VAT sales for the service rendered to foreign clients. The details of the sales were as follows:

Invoice Number

Client Amount (NPR)

008 VG World DMCC (India) 250,000

048,049,050 Kenya Tea Development Agency (Kenya)

16,709,787

053 AGES Consultant (Pakistan) 1,680,910

006* Kenya Tea Development Agency (Kenya)

6,544,444

Total 25,185,141

14. Change in Company Name and statusHydro-Consult Engineering Ltd has been changed into Public Limited Company from Ashoj 2, 2069. With the change in company’s status from private to public, the company has adopted the new name “Hydro-Consult Engineering Ltd”(HCE) following all the procedures required as per the Company Act 2063.

15. Schedules

Schedules 1-14 form integral part of the financial statements.

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FINANCIAL RATIOSN Parameters UOM FY 2069/70 FY 2068/69 FY 2067/68

I Liquidity Ratios

1 Current Ratio x 2.28 1.86 1.47

II Profitability Ratios

Profitability Ratios related to Sales

Profit Margins

1 Gross Profit Margin % 36% 36% 46%

2 Operating Profit Margin % 13% 15% 23%

3 Net Profit Margin % 10% 14% 16%

Expenses

4 Operating Expenses Ratio % 74% 76% 69%

5 Administrative Expenses Ratio % 26% 24% 31%

III Investment Ratios

6 Return on Assets % 24% 35% 56%

7 Return on Capital Employed % 24% 35% 56%

8 Return on Equity % 16% 30% 45%

9 Book Value Per Share NRs 297.64 277.17 194.93

10 Earnings Per Share NRs 47.22 82.24 88.39

11 P/E Ratio x NA NA NA

IV Assets Efficiency Ratios

12 Total Assets Turnover Ratio x 1.66 2.02 2.68

13 Working Capital Turnover Ratio x 2.23 3.03 5.77

V Capital Structure

14 Debt-Equity Ratio x 0% 5% 7%

15 Equity to Assets Ratio x 100% 95% 95%

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Ratio AnalysisLiquidity RatioThe current ratio indicates HCE’s financial position to meet the short term financial obligation. The current ratio was 1.47 in FY 2067/68, 1.86 in FY 2068/69 and it continued increasing even in FY 2069/70 and now it is 2.28. The increase in receivable has caused the continuous increase in this ratio but these receivables are from good debtors and are virtually certain to be recovered in the FY 2070/71.

Profitability RatioThe profitability ratio is the performance indicator of HCE.

The gross profit margin was 36% in FY 2069/70. This ratio was 36% in FY 2068/69 also. The company is performing consistently well in terms of controlling direct cost and effort in revenue generation.

Operating profit margin was 13% in FY 2069/70. Operating profit margin has slightly decreased in FY 2069/70 compared to 15% in FY 2068/69. In fact, the operating cost has been controlled but there is slight decline in the revenue stream and this caused the decline in operating profit margin. Net profit margin also decreased to 10% in FY 2069/70 from 14% of FY 2068/69. The slight decline in revenue, the adjustment of under provisioned tax of FY 2067/68 and the fixed nature of overheads have direct impact on the profitability ratio. Considering the present projects in hand and future prospects of the market, these ratios will be substantially increased in the future. In totality, the company has performed satisfactorily in terms of profitability in FY 2069/70.

Investment RatioReturn on Capital Employed (ROCE) and Return on Equity (ROE) were 24% and 16% respectively in FY 2069/70. These ratios were 35% and 30% in the FY 2068/69. The difference in these ratios in

the two fiscal years arise due to 18% increment in paid up capital in FY 2069/70 and non distribution of dividend for the last three consecutive years. So considering all these elements, it is commendable to have ROCE of 24% and ROE of 16% in the fiscal year 2069/70.

The Book Value per share was NPR 297.64 in FY 2069/70. It was NPR 277.17 in FY 2068/69. Thus there is increment in book value by NPR 20.47. The EPS was NPR 47.22 in FY 2069/70. EPS was NPR 82.24 in FY 2068/69. The sudden fall in EPS is due to introduction of additional number of 17,785 new shares in FY 2069/70. The EPS would have been NPR 55.62, if 17,785 new shares were not introduced in this fiscal year.

Assets Efficiency RatioTotal assets turnover ratio was 1.66 in FY 2069/70 and it was 2.02 in FY 2068/69. The turnover was slightly lower in FY 2069/70 than in corresponding previous year. Additional assets were purchased in FY 2069/70. These elements have decreased the assets turnover ratio slightly in comparison to FY 2068/69.

The working capital ratio was 2.23 in FY 2069/70. The figure was 3.03 in FY 2068/69. The decline in turnover and the excess amount of receivable at the fiscal year end caused deterioration in working capital ratio. Since the receivables are being recovered in the FY 2070/71, this ratio is expected to be better in the FY 2070/71.

Gearing Ratio

HCE is 100 % equity financed in FY 2069/70. In FY 2068/69 there was advance received from BPC as prospective capital and was booked as medium term liability. Thus, 5% Debt financing and 95% equity appeared in FY 2068/69 and earlier fiscal years.

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Mristi Khola HP Team

Andhi Khola Upgrading Team

Dordi-I HP Team

Nyadi HP Team

Due Diligence and IPC Verification Team

Gura SHP Team

Photo Gallery

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Kabeli-A Team

Lower Manang Marsyangdi Team

Tadi SHP Team

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HCE

Fam

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Hydro-Consult Engineering LtdGPO Box: 14408 Kathmandu, NepalPabitramarg, Buddha NagarTel: +977-1-4782507 / 4785920Fax: +977-1-4785920Email: [email protected]: www.bpch.com.np

Mristi Khola

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