Annual Report
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BUTWAL POWER COMPANY LIMITED ANNUAL REPORT 2015 Butwal Power Company (BPC) Limited is one of the leading companies in Nepal’s power sector with generation and distribution as its core business areas, incorporated in 1965 as a private company and converted into public limited company in 1993, BPC has a track record of pioneering multi-faceted capacity building initiatives in hydropower development. Pursuing the privatization process in 2003, the Government of Nepal handed over majority of its ownership and management control to private investors on public-private partnership model. BPC is registered with the Securities Board of Nepal and listed in Nepal Stock Exchange Limited. Contents Company Profile | 03 Financial Statements Vision, Mission and Values | 04 Auditor’s Report | 68 Strategic Goals of the Company | 04 Statement of Financial Position | 69 Integrated Quality, Health, Safety and Environment Policy | 05 Statement of Income | 70 Organisation Structure | 05 Statement of Changes in Equity | 71 Highlights of the Year | 06 Statement of Cash Flow | 72 Financial Highlights | 07 Schedules | 73 Board of Directors | 08 Significant Accounting Policies and Notes | 82 Chairman’s Message | 11 Report from the Board of Directors | 12 Consolidated Financial Statements | 93 CEOs’ Perspective | 20 Statement of Financial position of BPC subsidiaries | 101 Corporate Governance | 24 List of Abbreviations | 103 Management Discussion & Analysis | 34 Risk Management | 44 Management Team | 46 Shareholders Information | 50 Corporate Social Responsibility | 51 Health, Safety & Environment | 54 Sustainability | 56 BPC Subsidiaries | 57 Five Years Financial Highlights | 63 Our Presence | 66 COMPANY PROFILE Starting with electrification of a BPC owns and operates Andhikhola BPC has ownership in Khimti small city in the south central Nepal, (9.4 MW) and Jhimruk (12 MW) Hydropower Project (60 MW) BPC is the only enterprise which plants located in western Nepal. together with partners Statkraft can look back to a five decade long BPC owns majority stake in Khudi Norfund Power Invest AS (SN Power) history of success, sustained growth hydropower plant (4 MW). It is & Bergenshalvoens Kommunale and capacity building in the country. also developing two hydropower Kraftselskap (BKK). BPC also has projects namely Nyadi and Kabeli ownership with some other partners BPC is engaged in operation & A, with combined capacity of 68 in Hydro Lab which specializes maintenance of power plants, MW, through separate SPVs. in hydraulic model study of consulting engineering of hydropower projects, sediment hydropower and infrastructure BPC’s another project namely analysis & efficiency measurements. projects, manufacturing and Lower Manang Marsyangdi repair of hydro-mechanical and Hydropower Project (100 MW), BPC is committed to operational electromechanical equipment for located in southern region excellence and believes in good power plants through its subsidiary of Manang District, is in the governance, corporate citizenship Limited Butwal Power Company companies. preparatory phase. and creating value for stakeholders. Annual Report 2015 3 CORPORATE INFORMATION Name: Butwal Power Company Limited Registration Number: Pa. Li. No. 3-049/50 Date Incorporated: 29 December, 1965 (2022/09/14 BS) Date converted into a public limited company: 17 February, 1993 (2049/11/06 BS) Date privatised: 3 January, 2003 (2059/09/19 BS) Registered/Corporate office: Gangadevi Marga-313, Buddha Nagar, Kathmandu, Nepal PAN /VAT Number: 500047963 Bankers: Himalayan Bank Ltd., Nepal Investment Bank Ltd., Sunrise Bank Ltd., NIC Asia Bank Ltd, Nepal Bangladesh Bank Ltd. Standard Chartered Bank Ltd. Mega Bank Nepal Ltd. Statutory Auditor: SR Pandey & Co, Chartered Accountants Internal Auditor: Kuber & Co., Chartered Accountants Stock Exchange Listing: Nepal Stock Exchange (NEPSE), as BPCL VISION, MISSION AND VALUES VISION MISSION VALUES “To be a leading n To be a competitive hydropower n Customer focus – We enterprise in Power developer and an electric utility seek to understand the Sector with excellence n To secure sustainable customers’ needs and in providing innovative performance of our investments strive to deliver the best as and quality products n To be committed to protect the professionals. and services to meet environment n Transparent – We are the growing demand n To practice corporate social transparent in our business for efficient and clean responsibility by serving the and financial transactions. energy.” communities where we do n Proactive – We explore business and look for solutions, 2015 n To provide a safe, healthy and opportunities, partnerships fulfilling work environment for to improve our business. our employees n Team Work – We work n To maximize value for all together with mutual respect stakeholders and trust to achieve results. Annual Report STRATEGIC GOALS OF THE COMPANY Butwal Power Company Limited Butwal Power Company 4 In order to become the industry leader and management practices including timely achieve operational excellence, BPC has organizational restructuring, well-defined embraced the following Strategic Goals: processes and the latest technologies that creates favourable environment for teamwork • Continuous focus on a strong financial to enhance core competency and institutional performance in terms of reasonable return memory. on investment through maximizing the use • Develop and strengthen workforce of financial capabilities in terms of asset competency to ensure excellence in utilization, optimized resources utilization, performance through identification and risk management and the diversification of development of skills and knowledge the Company’s investment portfolio in other necessary for the Company to succeed as a business areas. commercial enterprise, ensure right people in • Expand the businesses mainly through the right roles and opportunity for career growth, development and acquisition of power instil customer-focused internal and external generation facilities in the sustainable green business relationship and manage and retain field of hydropower and in other renewable knowledge and expertise. projects of mid and large-size for the domestic • Efficient and optimum use of environmental and cross-border markets, respectively. resources along with focus on improved • Improve the business operation or increase occupational health and safety and continual productivity through the prudent and dynamic improvement in the Quality and Environmental Management System. INTEGRATED QUALITY, HEALTH, SAFETY AND ENVIRONMENT POLICY BPC is committed to provide quality and deployment to ensure minimal impact from competitive products and services to meet emergency situations. customers’ expectations and to ensure health • Compliance with the applicable legal and and safety at work by conducting business other requirements. in an environmentally & socially responsible • Qualified and trained work force for manner through: effective implementation of QHSE management system. • Continual improvement of Integrated • Effective communication of policy Management System and Business requirements with internal and external Processes parties. • Identification of occupational health and • Participation of business partners in safety hazards and minimizing potential implementation of QHSE management Limited Butwal Power Company risks to prevent injury and ill health. systems by making them aware of their • Conservation and optimization in use obligations. of key resources, minimizing impact on • Periodic review of the policy to ensure environment and prevention of pollution. its relevancy and appropriateness to the • Effective preparedness and resource company. Annual Report ORGANISATION STRUCTURE 2015 BPC’s business activities are spread across structure is in place viz. Operations, Business 5 Generation, Distribution and Transmission. The Development and Project, Finance and company carries out generation and distribution Corporate which are being monitored by activities directly. Project development activities Planning and Monitoring Unit under CEO. The are carried out directly and through Special overall responsibility of management resides Purpose Vehicles (SPVs). The engineering and with the CEO, who is responsible to the Board O&M service businesses are carried out through of Directors. The CEO is assisted by various subsidiaries. The functional organizational functional heads and the management team. ► Generation Planning & VP- Operation ► Distribution Monitoring ► Project Development VP- Business ► Business Development Development ► Project Finance Board of Directors CEO ► Human Resource VP- Corporate ► Facilities Management ► Corporate Affairs Company Secretary CEO's Office ► Procurement & Legal Advisor ► Information Technology VP- Finance ► Assets & Inventory ► Account ► Finance ► Group Finance HIGHLIGHTS OF THE YEAR l Supplied electricity to 46,215 consumers in the country, i.e. 1.6% of total national consumers connected to INPS l PPA for Andhikhola and Jhimruk Power Plants signed for 30 years. 2015 l Commenced commercial operation of the upgraded 9.4 MW Andhikhola Plant Annual Report l PPA signed for the 30 MW Nyadi Hydropower Project l Loan Agreement with IFC, Financing Agreement and Project Agreement Butwal Power Company Limited Butwal Power Company 6 with World Bank signed for Kabeli-A Hydroelectric Project l PPA signed for the 37.6 MW Kabeli-A Hydroelectric Project l National Best Presented Annual Report 2014 awarded by ICAN FINANCIAL HIGHLIGHTS