D.N.Shah & Associates Membership No.200 COP No. 164 Chartered Accountants The Institute of Chartered PAN No. 301330714 Nayabaneswar, Kathmandu, Nepal. Accountants of Nepal. 01-5553879,5 I 8501 I Date: - 2075.09.29

INDEPENDENT AUDITOR'S REPORT

TO THE SHAREHOLDERS OF RADHI BIDYUT COMPANY LIMITED (RBCL)

We have audited the accompanying financial statements of Radhi Bidyut Company Limited, (hereinafter collectively referred to as the "the Compffiy"), which comprise the Statement of Financial Position as at 32"d Ashad,2075116th July,2018), and alio the Statement of Profit or Loss and other Comprehensive Income, the statement of Changes in Equity and the Statement of Cash Flows for the year ended and a sunmary of Significant Accounting Policies andNotes to the financial statements,

MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMMNTS

Management is responsible for the preparation presentation and fair - of these financial statements iii accordance with Nepal Financial Reporting Standards (NFRS), and for such internal conrrol as management determines is necessary to enable the preparation of financial statements that are free foom material misstatement, whether due to tiaud or error.

AUDITOR'S RESPONSIBILITY

Our 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 about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment. including the assessment of the risks of material misstatement of the financial statements, whether due to lraud or error. In making those .risk assessments, the auditor considers 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 thecircumstances,butnot for thepurposeofexpressingan opinion on theeffectiveness 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 r.vell as evaluatlng the overall presentation of the financial statements.

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

OPINION

In 9ur apinion. the financial statements give a tr,ue .and fair view, in all material respects" the financial position of Radhi Bidyut Company Limited as at 32'dAshad,2075 (Corresponding 16th July, 20tB), anrl of the results of their tinancial performance and cash flows for the year then ended in accordance r,vith Nepal Financial Reporting Standerds and cornply with the company Act 2063. Wffi rREPORT ON OTHf,RLEGAL AIID RTGULATORY RSQUIREMENTS

On the basis of our examination, we would like to further report that:

i. We haw obtained all the information and explanations, which were considered necessary for the purpose fbr our audit. ii. The company has kept proper books of accounts as rbquired by law, in so far as it appears from our examination of those books of account. 'I'he , iii. Statement of Financial Position, Statement of Profit and Loss, Statement of Cash Flows. I Statement of Changes in Equity, Significant Accounting Policies and Notes to the annual accounts

I b dealt by this report are in agreement with the books of account maintained by the company. i iv. During our examination I of the books of account of the company, we have not come across the cases I where the Board of Directors or any member thereof or any representative or ary office holder or ! t any employee of the company has acted contrary to the provisions of law or caused loss or damage ti: to the company. hl v. We have not come across any fraudulence in the accounts, so far as it appeared from our examination ofthe book, and

L vi. The company has not acted in a manner to jeopardize the interest and security of the stakeholders. ^ ir

.1

I)ate: -2075109129 Place: - Kathmandu

(Dip Narayan Shah, FCA) For: D.N. Shah & Associates Chartered Accountants Radhi Bidyut Company Limited Statement of Financial Position As at 32 Ashad 2075 (16 July 2018) Figures In NPR nes1..el-df: Restated* As at Particulars As at 32 Ashad 2075 -;4{.,4t..,ilr

Assets

Non-Current Assets :J .a.:::::=.1 .:::l::::::::= Property, Plant & Equipment 533,875,098.1 5 :55:S:J:::6O.;30...-! 566,700,373.13 Financial Assets Investment In Associates 5 131,412,473.20 Other Equity Investnents 6 t'l4,203,755.00 ,rW$ia,?-1:!! 99,940,200.00 Other Non Current Assets 7 1,320,490.\3 =-= 3,950,530.38 Defened Tax ffiin Total Non-Current Assets 11,816.48 103.51

Current Assets tui:!.. Inventories 8 .= Financial Assets l:ir,rlii@L Trade Receivables 9 80,851,1 18.74 6,?rEi6.;5.43,,r.:1? 46,978,878.94

Cash and Cash Equivalents l0 4,897,383.75 3.4;9.ex-;r=f.,1 f., 834,984.35 Term Deposit l1 6,100,001.00 ., tii =i Other Current Assets 7 13,559,163.22' 5V,919,4*,5:::14 56,802,2s4.77 Current Tax Assets (Net) 12 504,210.77 Total Current Assets 10s,911,877.48 154.9i9,ffi9:92 104.616.1r8.06 Assets Held For Sale Total Assets 946,723,693.97 810i6s[rt08.+7 775,207,221.57 Equity & Liabilities Equity Equity Share Capital 13 451,004,000.00 333,545;000.00 307,500,000.00 . Other Equity t4 93,384,358.05 88,231,434.45 48,772,793.76 Total Equity 544,388,3s8.05 LLH76;414;45 356,272,793.76 Liabilities Non-Current Liabilities Financial Liabilities Bonoivings l5 317,716,197 .68 :r:f..,,,;:,in7g"gffi$f 376,999,924.92 Other Financial Liabilities l6 1,047,012.40 i'iil'.'.--:.....=$6ii-i.ili.6-3-r, 900,288.97 : :;...: :. : = :-.....,:'::; ;:r:':l:::::::::= : Provisions l7 1:1;:1:r::1;=.:,=:::.j;1:...,::.t1::,ir Defened Tax t2 839,606.90 ::;;;::;;;:.;;:.: ;:.::,I.:,1i5$,.4;11 Other Liabilities 18 '::::r:::.i,: li, i::.:= ::tl:.'i.. i Total Non-Current Liabilities 319,602,816.98.'": 1:: $"19:,86.5-7!2|fi,!j;i: 377,900,213.89 Current Liabilities Financial Liabilities Borrowings 15 40,250,249.07 la'ayE?:?l.t{t, 30,000,000.00 Trade Payables l9 2,065,552.61 : r,642:;u24.iV,2 1,339,006.78 Other Financial Liabilities l6 3,299,604.39 4,698i1:2.i;62 1,554,098.39 Current Tax Liabilities (Net) t2 504,796.47 r '3.,,.,,!t3., Provisions l7 1,042,408.98 1;1 ,432a : 918,207.91 Other Liabilities l8 36,074,703.88 1,70'0,2if,r1$, 6,658,104.37 Total Current Liabilities 82,732,s18.e3 ???llt:s2.r7 41,034,213.e2 Total Liabilities 402,335,33s.91 :L:-:::::=1388,878.12?453=l:liliiili[; 419,934,427,91 r,-...*=1p;ii-51jfOS Total Equity & Liabilities 9 46,7 23,693.97 ;,:r,,,5 7r 775,207,221.57

notes (1-29) are integral part

;#-; Dipendra Lal Karn Assistant Manager -Account Chainnan Director M Mani Prasad Gurung ;i;;;;.;;;_d" ffij^,, Director l"t"{6}5t09tsJ Place Kathrnandu, Nepal ffi Radhi Bidyut Company Limited Statement of Profit or Loss & other Comprehensive Income For The Financial Year 32 Ashad 2075 (16 Juty 2018)

Particulars Year ended 32 Ashad 2075 Revenue CostsofSales Generation Expenses 22,033,829.00 Gross prolit 115,s77,199.34 Depreciation 4 19,489,789.95 Other Income 22 10,387,084.55 Administrative & Other Operating Expenses 23 15,50s.224.50 Gain(Loss) on Sale ofNon Current Assets Held for Sale Profit from Operation Finance Income 24 Finance Costs 25 40,910,072.41 Profit Before Tax Income Tax Expenses

Current Tax 12 Deferred Tax CrediUCharge 12 (1 36,924.85):::.. I Profit for the year 4g,6s3,244,21 other Comprehensive Income: = Other Comprehensive Income not to be reclassilied to profit or loss in subsequent periods =. i. Re-Measurement (Losses) / Gains on post Employment Defined plans ! Benefit i:. ii. Equity Instruments Through Other Comprehensive Income 26 2,108,351.20 r, r i! i 11,., iii. Tax Relating profit ,, to Items That Will Not to Be Reclassified to or t2 (527,087.80) 4 iirI Loss :lJ.:l::::::::::::+ Other Comprehensive Gain(Loss) for The year, Net ofTax Total Comprehensive Gain(Loss) for The year, Net ofTax Earnings per equity share of Rs. 100 each Basic Eamings Per share - Rs. 27 ':..t1::: ,,::1,8i23, Diluted Earnings Per share - Rs. 27 J!i.t* The accompanying notes (1-29) are

As per our report ofeven date

Om Bahadu Thapa Dhurba Raj Mishra Dipendra#2 Lal Kam Assistant Manager -Account Chief Executive Officer Chairman Director

Director

\6f$s%qtN o"t",&01509119 *^i THilANDU \ * Place NEPAL l.; Kathmandu Nepal a-\M ,/5 Radhi Bidyut Company Limited Statement of Cash Flows For The Financial Year 32 Ashad 2075 (f6 July 20f8) Figures In NPR Particulars Cash Flows From Operating Profit for the Year 53,162.854.se Adjristments tr'or: Loss/ (Gain) on Sale ofAsset Held ForSale Depreciation on Property, Plant & Equipment te,48e,79e.es ii,p,,.: Finance Income (3,103,657.56)=-==il r iiit!=,, Finance Cost 40,e10,072.41- Gain(Loss) on Sale of Non Current Assets Held for Sale iE ,3'l{t$ p Gain/Loss on Equity Method of Investment 2.108,35r.20 a-.=-=- fl' Working Capital Adjustments: =,ij (Increase/ Decrease in Trade Receivables (18,734,575.62), :::=.;:;;; 1 1tFn llfi] (Increase/ Decrease in other Assets 45,617,052.04,'.,:::;;::;Xtii:ti t96#t936 : :!!!tt (lncrease/ Decrease in Term Deposit (6,100,001 00) ig,=1 (lncrease/ Decrease in Inventories iF Increase / (Decrease) in Trade Payables 422,721.89 i:=t til:l::::::::-=:5:Erli ${ (Decrease) ,:.,,3;?g#,p,54:5e- Increase / in Financial Liabilities (1,316,825.15) ::=l l- Increase / (Decrease) in other Liabilities 'r t 34,374,489.36 l (4;95:7i!89i8$ (Increase/ Decrease in Current Tax Assets (504,210.77) , l:::,'=,, Increase / (Decrease) - ::=-. in Current Tax Liabilities (361,133.83) i':11:='t ir=:::::1.11=:4.3=il{6ffi } Increase / (Decrease) Provision (135.023.46) 1s1124.54 j -'\-'-': Cash Generated From Operations r6s,889,9r0.05 . 95,9I0,632,7i t. Income Tax Paid 3'372'68s !- s3 Prior Year Adjustment r'' *"*:q Net Cash Flows From Operating Activities 162,5t7,224.s2 92.983J68,49. Cash Flows From / (Used in) Investing Activities Proceeds From Sale ofProperty, Plant & Equipment Proceeds From Sale of Assets Held For Sale

Finance Income 3,103,657.s6 i (Increase)/ Decrease Other Equity Investrnent (11,286,278.00) llit, (Increase/ Decrease Invesffient In Associates (131,412,473.2q= Acquisition bfProperry, PIant & Equipment (3,204,586.30) ii= Purchase of Intangibles Bank Balance Other Than Cash & Cash Equivalents Net Cash Flows From Investing Activlties Cash Flows From Financing Activities - Issue ofShare 76,455,000.00,'r=,76,455,000.00 .r{1"0-,4.t@0ip,S-l. Issue ofBonus Share Share Issue Cost (2,61?,584.00) (851,590.00) Bonowing (Repaid) / Taken (Net) (20,1e r,186.08) (23,84r,ji2.0s) Dividend Paid (2,460,000.00) (16,912,500.0Q) Finance Cost (40,910,072.41) (35,SS6,9?050i Net Cash Flows From Financing Activities 10,276,1s7.s1 . t56.44&352.991 Increase/@ecrease) in Cash & Cash Equivalents Net Foreign Exchange Difference on Cash & Cash Equivalents ,,1 Cash & Cash Equivalents, Beginning ofyear 34.903.681.66 il Cash & Cash Equivalents, End ofperiod 4,897,383.75

Om Bahadur Thapa Assistant Manager -Account

,## Shreya RajbhanddM, Director Director

Kul Bikram Shah Dip Director out".&o?SloglJj Place Kathmandu Nepal Radhi Bidyut Company Limited Statement of Changes in Equity For The Financial Year 32 Ashad 2075 (16 July 2018)

Retained Earnings & Reserves particulars Equitysharecapit"l Totat ,. premium Reserve Eaminqs Belarce at l Shrawan 20T3 307,500 Profit for the Year 56,695,947.93 56,695,947.93 Other Comprehensive Income 526,782.75 526,782.15 Total Comprehensive Income - s7,222,730,68 s7,222,730.68 Dividends to Shareholders (16,912,500.00) (16,912,500.00) Issue ofShare 26,045,000.00 26,045,000.00 Share Issue Cost (851,590.00) (8s 1,590.00) Prior Year's Adjustrnent Balance at 3l Ashad 2074 333,545,000.00 88,231,434.45 42t,T6,$;i:4{ Balance at 1 Shrawan 2074 333,s4s,000.00 8s,23t,Ai1E------AtJ76, Profit for the Year 49,653,244.21 49,6s3,244.21, Other Comprehensive Income 1,581,263.40 1,581,263.40 Total Comprehensive Income - 51,234,507.61 51.234.507.61 Issue ofShare -. 76,455,000.00 76,455,000.00 ; Issue ofRight Share a Issue ofBonus Share 41,004,000.00 (41,004,000.00) Share I Issue Cost (2,617,s84.00) (2,617,584.00) Dividend to Shareholders (2,460,000.00) (2.460.000.00) Balance 32 i At Ashad 2075 451,004,000.00 93,384JS8.05 s44,388,3s8.05 I t" lr

As per ourreport ofeven date

'-----'.vr""""" " Puma Prasad Timalsina

Chaimm Director tu Streya Rajbh#trari M Director

Dip Narayan #kDirector

nut". &bI,SloglI1 Place Kathmandu Nepal ffi;^Iilq ixNEPAL (tr,;r;r6r.(q)5, Radhi Bidyut Company Limited

Notes to the financial statements for the year ended 32 Ashad 2075 (16 July 2018) Note No:l Background

Radhi Bidyut Company Ltd (RBCL) is a public limited listed company incorporated on 05 Jestha,2062 (May 1!,2005) registration no 926161162 and income tax regisration PAN: 302673302 as per prevalent Acts of Nepal, with the objective to develop and invest in hydropower projects. The Company has developed and is currently opearting 4.4 MW Radhi Small Hydropower Project in Lamjung District and owns the project license for the period of 28 Baisakh, 2068 to 27 Baisakh, 2103. The Commercial operation of electricity generation Strated From Jestha 31,2071.The project is located in Marsyangdi Gaupalika 05, Ghermu. Its registered office is located at Kathmandu -11, Bluestar Complex, Tripureshor.

The accompanied Financial Statements have been approved by Board of the Radhi Bidyut Company limited in its meeting held on 29 Poush ,2075 (13 Jmtray,20l9).

Note No:2 Significant Accounting Policies 2.1 Basis of Preparation and Measurement I. Statement of Compliance The financial statements have been prepared in accordance with applicable Nepal Financial Reporting Standards (NFRS) as issued by the Institute of Chartered Accountants of Nepal (ICAN). The financial statements have also been prepared in accordance with the relevant presentational requirements of the Company Act, 2063 of Nepal.

These financial statements for the year ended 32 Ashadh, 2075 are the first the Company has prepared under NFRS. For all periods up to and including the year ended 3 I Ashadh, 207 4, the Company prepared its financial statements in accordance with earlier issued Nepal Accounting Standards (hereinafteireferred to as 'Previous GAAP') used for its statutory reporting requirement in Nepal immediately before adopting NFRS. The financial statements for the year endid 3l Ashidh, 2074 and,the opening Balance Sheet ai at i Shrawan, 2073 have been restated in accordance with NFRS for comparative information. Reconciliations and explanations of the effect of the transition from Previous GAAP to NFRS on the Company's statement of Financial Position, Statement of Profit or Loss and Statement of Cash Flows are provided in Note 3.

II. Basis of Preparation

The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements, including the prepiration of the opening NFRS Balance Sheet as at 1 Shrawan,2073 beingthe 'date of transition tJNfRS'. All assets and liabilities have been classified as current or non-curent as per the Company's normal operating cycle. Based on the nature of products and the time between acquisition of assets for procesiirg una in.i. realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or noncurent classification of assets and liabilitiis. The financial statements is presented in functional and presentation currency of the Company i.e. Nepalese Rupee (,,NpR.) which is the currency of the primary economic environment in which thi company operates.

III. Basis of Measurement

These financial statements are prepared under historical cost convention except for certain material items that have been measured at fair value as required by the relevant NFRS and explained in the ensuing policies below.

2.2 Accounting estimates and judgments

The preparation of the financial statements in conformity with Nepal Financial Reporting Standards requires the use of certain critical accounting estimates and judgments. It also requires management to judgment exercise in the process of applying the Company's accounting policies. The Company makes estimatbs and assumptions regirding ih" futrr* Estimates and judgments 'i:T"a "r.ntr. *" io*iffi, @$* W ffi9 _ Radhi Bidyut Comp?ny Limited

evaluated based on historical experience and other factors, including expectations offuture events that are believed to be reasonable under the circumstances. Management believes that the estimates used in the preparation ofthe financial statements are prudent and reasonable. Future results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year primarily includes:-

I. Useful life and Residual value of Property, Plant and Equipment

Management reviews the useful life and residual values of property, plant and equipment at least once a ;d year. Such life are dependent upon an assessment of both the technical life of the assets and also their likely economic life, based on various intemal and external factors including relative efficiency and operating costs. Accordingly, depreciable lives are reviewed annually using the best information available to the Management.

II. Impairment of Property, Plant and Equipment

I At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication that those assets have suffered an i'mpairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Recoverable amount is the higher of fair value less costs to sell and value in use. Value in use is usually determined on the basis of discounted estimated future cash flows. This involves management estimates on anticipated commodity prices, market demand and supply, economic and regulatory environment, discount rates and other factors. Any subsequent changes to cajh flow due to changes in the above mentioned factors could impact the carrying value olassets.

III. Contingent Liabilities

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Potential liabilities that are possible but not probable of crystallizing or are very difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not recognised.

fV. Fair Value Measurement

Some of the Company's assets and liabilities are measured at fair value for financial reporting purposes.The management determines the appropriate valuation techniques and inputs for faii valui measurements' In estimating the fair value of an asset or a liability, the Company ur"J market-observable data to the extent it is available.

V. Recognition of Deferred Tax Assets

Significant judgment management is required to determine the amount of defened tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. The Company based its assumptions and estimates on parameteis available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changesor circumstances arising beyond the control of the Company.

2.3 Property, Plant and Equipment

I. On transition to NFRS, the Company has elected to continue with the carrying value of all of its properfy, plant and equipment recognised as at Ashad 31,2073 measured as per ihe-previous GAAp and use that carrying value as the deemed cost of the property, plant and equipmenf as on Siarwan 1,2073.

6'.iii c9)e Radhi Bid t Com ny Limited

III. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate assets are derecognised when replaced. All other repairs and maintenance are chargedlo profit and loss during the reporting period in which they are incurred.

W. The Company identifies and determines cost of each component/part of the asset separately, if the component/part has a cost which is significant to the total cost of the asset having useful life that is materially different from that of the remaining asset. These components are depreciated over their useful lives; the remaining asset is depreciated over the life of the principal asset.

V. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

VI. An item of property, plant and equipment and any significant part initially recognised is derecognised I upon disposal or when no future economic benefits are expeqted from its use or disfosal. Any gain or loss arising on derecognition ofthe asset (calculated as the difference between the net diiposal ptoceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised.

VII. Assets in the course of construction are capitalized in the assets under capital work in progress account (CWP). At the point when an asset is operating at management's intended use, the coit of construction is transferred to the appropriate category of property, plant and equipment and depreciation commences. Where an obligation (legal or constructive) exists to dismantle or remove an asset or restore a site to its former condition at the end of its useful life, the present value of the estimate cost of dismantling, removing or restoring the site is capitalized along with the cost of acquisition or construction upoin completion and a corresponding liability is recognised.

2.4 Depreciation and Amortization

I. Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives, using the written down method on Head Offrce Equipment and using straight line method on Hydro generation related Equipment.

II. Depreciation is provided on the written down method and straight line method based on the estimated useful lives of the assets determined by the management. Depreciation on additions to fixed assets is charged on pro-rata basis in the year ofpurchase. The useful life ofthe assets and the corresponding rates at which the assets are depreciated are as follows:-

s% 20: t'=yf; " --'-t,"l;.1 i _ 5% 20 ift'$il+=+i$,"

p-

Vq *yY; PALffig ls ffi.(g Radhi Bid t Company Limited

III. Useful life is either the period of time which the asset is expected to be used or the number of production or similar units expected to be obtained from the use of asset. The estimated useful life, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

fV. Office fumiture, equipment and vehicles costing less than NPR 5,000 per unit and plant equipment- costingless than NPR 5,000 per unit is charged to thJprofit and loss account in the year of purchase.

V. Hydro Project Equipment Assets are depreciated over the period of license term using straight line method of depreciation. id

VI. Leasehold improvements are depreciated over the period of lease or estimated useful life, whichever is lower, on straight line basis.

2.5 Impairment of Tangible Assets

I. At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to dltermine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis ofallocation can be identified, corporate assets are also allocated to individ'ral cash-generating units, or otherwise they are allocated to the smallest Company ofcash-generating units for which a reasonable and consistent allocation basis can be identified

II. Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

III. If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amoult of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in Statement of profit and Loss.

IV. When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increasel carrying amount does not exceed the carrying amount that would have been determined had no impairment iosi been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in Statement of profit and Loss.

2.6 Borrowing Cost

Borrowing costs consist of interest and other costs that an entity incurs in connection with the bonowing of funds. Borrowing cost also includes exchange differences to ihe extent regarded as an adjustment to-the bonowing costs.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use br sale are capitalized as part of the cost of the asset until such time as the assits are iubstantially ready for the intendeJ use or sale. All other borrowing costs are expensed in the period in which they occur.

2,7 Cash & Cash Equivalents ash and cash equivalents in the balance sheet comprise cash at banks and on hand and demand deposits ithan I original maturity of three months or less anO trighty liquid investments that are readily convertible o known amounts of cash and which are subject to an iniignificant risk of changes in value net of ing bank overdrafts as they are considered an integral part of the Company's .uih.urag. yq ryw W, I i I Radhi Bidyut Company Limited I

2.S lnventories

Cost ofinventories includes cost ofpurchase, costs ofconversion and other costs incurred in bringing the inventories to their present location and condition. Inventories of stores, spare parts and loose tools are stated at the lower of weighted average cost and net realizable value. Net realizable value represents the estimated selling price for inventories in the ordinary course of business less all estimated costs of completion and estimated costs necessary to make the sale.

2.9 Revenue Recognition

I. Sales of Electricity Revenue is recognised to the extent that it is probable that economic benefit will flow to the Company and that the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated rebates and other similar allowances. Revenue is recognised when substantial risks and rewards of ownership is transferred to the buyer under the terms of the contract.

II. Dividend and Interest Income

Dividend income (net of withholding taxes) from investments is recognised when the shareholder's right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably). In case of stock dividend only the number of shares is increased. Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

III. Investment Commitment Fee and Other Income

Commitment fee and other income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Commitment fee and other income is accrued on a time basis.

2.10 F'oreign Currency Transaction

I. The functional culrency of the Company is determined on the basis of the primary economic environment in which it operates. The functional currency of the Company is Nepaler" R.upee (l.tpR).

II. In preparing the financial statements, the transactions in currencies other than the entity,s functional curency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions.

III. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing atthat date. Non-monetary items carried at fair value thit are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. fV. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

V. Exchange differences on monetary items are recognised in Statement of profit and Loss in the period in which they arise.

6rx\\ 1( ,(4w ('")"*-69eJj Radhi Bidyut Company Limited

2.11Employee Benefits

The Company has schemes of employment benefits namely provident fund, employee gratuity and accumulate leave payable as per employee service manual.

A. Deffned Contribution PIan

Under defined contribution plans for provident fund and gratuity, the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. Contributions to defined contribution plans are charged to the profit or loss statement in the year to which they relate as the company has no further defined obligations beyond monthly contributions. Contributions to defined contribution schemes are deposited with Employees Provident Fund and Citizen Investment Trust against provident fund and gratuity respectively.

B. Short Term employment benefits

1 rj I. A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

II. Liabilities recognised in respect of short-term employee and contractual employees, benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

2.l2Income Taxation

Income tax on the profit or loss for the year comprises current taxes and defened taxes. Income tax is recognized in the profit or loss statement except to the extent that it relates to items recognized directly to equlty. I. Current Tax

lunenl tax is the expected tax payable on the taxable income for the year using tax rates at the balance sheet date and any adjustment to tax payable in respect ofprevious years. Income tax rates applicable to company:

Incomefrom Saleofelectricity@0%(Fy2074t75),@o%(F]r2073/74)@o%(Fy2072173) Income from Other services: 250%

II. Deferred Tax

Defened I' tax is provided using the balance sheet liability method, providing for temporary differences betrye-en the carrying amounts of assets and liabilities foifinancial reporting]purpor., and the amognts used for taxation purposes. The amount of deferred tax provided is based or'it. expected realization or settlement of the carrying amount of assets and liabilities using tax rates at the balance sheet date.

II' A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the exienithat it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. w \t) \d* ^t. (r,rssT 3 Hq: EHir'd(9 Radhi Bidyut Company Limited

III. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end ofthe reporting period.

2.13 Earning Per Share (EPS)

I. Basic earnings per share is computed by dividing the profit/ (loss) for the year by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for treasury shares, bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation ofshares). .l II. Diluted earnings per share is computed by dividing the profit/ (loss) for the year as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted averuge number of equity shares considered for deriving basic eamings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only iftheir conversion to equity shares would decrease the net profit per share from continuing ordinary 4 !: operations. Potential dilutive equity shares are deemed to bq converted as at the beginning of the period, unless they have been issued at alater date. '

2.14 Provision and Contingent Liabilities

I. Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

II. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain..

III. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

IV. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

V. A provision for onerous contracts is recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.

VI. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rtre cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability bui'discloses its existence in the standalone financial statements.

VII. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly Radhi Bidyut Company Limited

2. 1 5 Financial Instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contraot ernbodying the related financial instruments. All financial assets, financial liabilities and financiql guarantee contracts are initially nreasured at transaction cost and where such values are different from the fair value, at fxtr value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. Transaction costs directly attributable to :, a the acquisition of financial assets and financial liabilities at fair value through profit and loss are immediately recognised in the statement of profit and loss. In case of interest free or concession loans/debentures/preference shares given to subsidiaries, associates and joint ventures, the excess of the actr-ral amount of the loan over initial rneasure at fair value is accounted as an equity investment. Investment in equity instruments issued by subsidiaries, associates and joint ventures are measured at cost less impairment. Investment in preference shares/debentures of the subsidiaries are treated as equity instruments if tlre same are conveftible into equity shares or are redeemable out of tlre proceeds of equity instruments issued for the purpose of redemption of such investments.,lnvestment in preference shares/ debentures not meeting the aforesaid conditions are classified as debt instruments at arnortised cost. ,\ ! i,i I. Financial Assets

a. Financial Assets at amortised Cost Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the. contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

b. Financial Assets at Fair Value

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual tenns ofthe financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Tlre Company in respect of equity investments (other than in subsidiaries, associates and joint ventures) which are not held for trading has made an irrevocable election to present in other comprehensive income subsequent changes in the fair value of such equity instruments. Such an election is made by the Company on an instrurnent by instrument basis at the time of initial recognition of such equity investments. Financial asset not measured at amortised cost or at fair value through other comprelrensive income is carried at fair value through the statement of profit and loss. For financial assets maturing within one year from the reporting date, the carrying amounts approximate fair value due to the slrorter maturity of these instruments.

c. Impairment of Financial Assets

L,oss allowance for expected credit losses is recognised for financial assets measured at amortised cost and fair value through the statement of profit or loss. The conrpany recognises impairment loss on trade receivables using expected credit loss model. For financial assets whose credit risk has not significantly increased since initial recognition, loss allowance equal to twelve months expected credit losses is recognised. Loss allowance equal xpected credit losses is recognised if the credit risk on the financial instruments has sl .naa initial recognition. I

Recognition of Financial Assets xw}j \ry*oW4 Radhi Bidyut Company Limited

The Company de-recognises a financial asset only when the contractual rights to the cash flows from the financial asset expire, or it transfers the financial asset and the transfer qualifies for de-recognition under NFRS 9. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the assets and an associated liability for amounts it may have to pay. If the C_ompany retains substantially all the risks and rewards of ownership of a transferred financial asset, the Cofrrpany continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. On de-recognition of a financial asset in its entirety, the difference between the carrying amounts measured at the date ofde-recognition and the consideration received is recognised in statement ofprofit or loss. '"1 IL X'inancial Liabilities and Equity Instruments

a. Classification as debt or equity Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

b. Equity Instruments An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net ofdirect issue costs.

c. Financial Liabilities

Financial liabilities are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method where the time value of money is significant' Interest bearing bank loans, overdrafts and issued debt are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the statement of profit and loss. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

d. Financial Guarantee Contract

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guaxantee contracts are rec-ognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to thi issuance ofthe guarantee.

e. De-Recognition of Financial Liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lenJer on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the a new liability. The difference in the respective carrying amounts is recognised in the

III. Off-Setting of Financial Instruments HMANDU v w /-r. Radhi Bidyut Company Limited

Financial assets and financial liabilities are offset and the net amount is reported in the standalone balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

2.16 Le_ases

The determination of whether an affangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use ofa specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement. A lease is classified at the inception date as a finance lease or an operating lease. For arrangements entered into prior to 01 Shrawan,2073, the Company has determined whether the arrangement contain lease on the basis of facts and circumstances existing on the date of transition.

I. The Company as a Lessee

A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease. A leased asset is depreciated over the useful life of the asiet. However,lf the.e is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term. Finance leases are capitalized at the commencement of the lease at the inception date fair value of the leased asset or, at the present value of the minimum lease payments at the incepiion of the lease, whichever is lower. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance chargles are recognised in finance costs in the statement of profit and loss, unless they are directly attribudble to qualifying assets, in which case they are capitalized in accordance with the Company's general policy on the borrowing costs. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis overthe lease term unless either:

a. another systematic basis is more representative of the time pattern of the user's benefit even if the payments to the lessors are not on that basis; or

b. the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor's expected inflationary cost increases. If payments to the lessor vary because of factors other than general inflation, then this condition is not met.

II. The Company as Lessor

Rental income from operating leases is generally recognised on a straight-line basis over the term of the relevant lease except where another systematic basis is more represertutir" of the time pattem in which economic benefits from the leased asset are consumed. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

2.17 Non-Current Assets Held for Sate

The Company classifies non-current assets as held for sale if their carrying amounts will be recovered principally through a sale rather than through continuing use. Actions r"quirJO to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will b9 w-ilhdrawn. Management must be committid to the sale expected within one year from the date of classification. The criteria for held for sale classification is regarded met only disposal group is available for immediate sale in its present condition, subject only io customary for sales of such assets, its sale is highly probable; and it will genui . Non-current f,ei qry% V';r\#Y Yfre Radhi Bidyut Company Limited

assets held for sale are measured at the lower of their carrying amount and the fair value less costs to sell. Assets classified as held for sale are presented separately in the consolidated balance sheet. Property, plant and equipment and intangible assets once classified as held for sale/ distribution to owners are not depreciated or amortised.

2.18 Financial Risk Management Objectives and Policies

The Company's business activities expose it to a variety of financial risks, namely primarily to fluctuations in foreign culrency exchange rates, interest rates, equlty prices, liquidity and credit risk, which may adversely impact the fair value of its financial instruments. The Company's Board and senior management has overall responsibility for the establishment and oversight of the Company's risk management. The Company's risk management policies are established to identify and analyse the risks faced by the Company to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Risk Management is done by the Company's management that provides assurance that the Company's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company's policies and risk objdctives.

The Board of Directors reviews and agrees policies for managing each of these risks which are summarized below:-

I. Currency Risk

The Company is subject to the risk that changes in foreign currency values impact the Company's imports of inventories and property, plant and equipment. As at 32nd Ashad, 2075,there is no unhedged exposure to the Company on holding financial assets (Bank balances and Trade receivables) and liabilities (trade payables) other than in their functional currency. The Company is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to US Dollar. The aim of the Group's approach to management of currency risk is to leave the Company with no material residual risk. This aim has been achieved in all years presented. Since, there is not significant currency risk, the Company has not entered into any forward contract.

II. Credit Risk

Credit risk refers to the risk that a counterparty including its subsidiaries and associates will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company's exposure and the credit ratings of its counterparties are continuously monitored. In addition, the Company is exposed to credit risk in relation to financial guarantees given to banks provided by the Company. The Company's maximum exposure in this respect is the maximum amount the Company could have to pay if the guarantee is called on. No amount has been recognised in the financial position as financial liabilities.

III. Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term and short-term debt obligations. Since, the interest rate risk is influenced by market forces, Company has little role to play for minimizing this risk. IV. Liquidity Risk $'SWD /1^*'7s'/mrxutrNou X{, \"- * i NEPAL"- l: Liquidity risk is the risk that the Company will face in meeting its obligarions associated with its fiMfrhl h -1S liabilities. The Company's approach to managing liquidity is to ensure that it will have sufficient nrNJfd'iffit$!7(drii, its liabilities when due without incurring unacceptable losses. In doing this, management cons /t'n/-odrfbr&er'r

{(eJa"\s-,'r qry\y/*r \ \''&arov,t' '- W YN . Radhi Bidyut Company Limited

both normal and stressed conditions. A material.and sustained shortfall in our cash flow could create potential business continuity risk. In order to control liquidity risk and for better working capital management, Company has made arrangement adequate level of OD facility for short term financing. The Company's Finance department regularly monitors the cash position to ensure it has sufficient cash on-goinf basis to meet oplrational needs. Any short term surplus cash generated by the operating entities, ovei and above the amount required for working capital management and other operational requirements, are retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits to optimize its cash returns on investments. The said investments are made in instruments *ith upp-priate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-meniioned forecasts.

2.19 Capital Mana gement

For the purpose of the Company's capital management, capital includes issued capital and all other equity reseryes attributable to the equity holders of the company. The Company maniges its capital so as tt safeguard its ability to continue as a going concem and to optimize returns to the sliareholderi. The capital structure of the Company is based on management's judgement of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proporiion to risk and manage the capital structure in light of changes in economic conditions and ihe risk chiracteristics of the underlying assets. The Company's aim is to translate profitable growth to superior cash generation through efficient capital management. The Company's policy is to maintain a stable and strong capital structuie with a focus on total equity so as to maintain investor, creditor, and market confidence and to sustain future development and growth of its business. The Company's focus is on keeping strong total equity base to insrre independence, security, as well as a high financial flexibility foi potential future borrowings, if required, without impacting the risk profile of the Company. The Company will take appropriate stJps in oider to maintain, necessary or if adjust, its capital structure. The management monitois the retum on capital as well as the level of dividends to shareholders.

2.20 StaffBonus Provision for staff bonus has been made in line with Electricity Act,2049.

2.21 Disaster Management

disaster A is a sudden, calamitous event that seriously disrupts the functioning of a community or society and causes human, material, and economic or environmental losses that Jxceed the community,s or socieU's ability to cope using its own resources. Disaster occur when a hazard impact on vulnerable people. Disasters are older than mankind. We can't control thehazard,like earthquake, fiood, fire, landslide and so on but we can_minimize the damage which may cause by such hazards. preparedness is the key point for minimizing the loss or damage which may oicur due io the disasters. As ie know hazard are older than the mankind so there is some trend in oicurrerce of such events like flood, earthquake so we predict and prepared lave !o be for these kinds ofHazard. Disasters is the product ofprocess and exposure tlougt the process ot hazard are natural so we cannot exactly identify it Uut Uy listinj possible hazard like flood, landslide and fire and so on which may occurred we can onlyreduce tire daffie by reducing such thing on exposure of Disaster. Radhi Smali uydropower Project has located places"prone to such risk where the exposure is reduced by installing gabions ior proteciion of head race pipes which are prone to landslides, installation of emergency siren for disaster notification to the people artuna power house and provision of Personnel Protective Equipment as well as firefighting equipment in case of fi... Along with these Radhi SHPP has provided drills to its employee to impl-emen-t in case of disaster. Risk manag-ement committee of the Radhi Bidyut company Limited is formedio identify, assessment and-**eaietklafor the potential disaster in the power plant area.

2.22Details of Associates and other equity Investments

I. Universal Power Company Limited qryW/,v w %@ Radhi Bidyut Company Limited

Universal Power Company Limited (UPCL) is a public company incorporated on 16 Chaitrq2067 (March 30,2011) as per Company Acts 2063, Nepal with the objective to develop and invest in hydropower projects. It is currently developing Tallo Khare Khola Hydropower Project which has installed capacity of 1l MW. The project is located at Dolakha District, Gaurishanker Rural Municipality, ward no-5, 6 and 8. The company owns generation license of the project. The company's registered office is located at Tripureshwor-l1, Kathmandu. Radhi Bidyut Comapny Limited holds 5 Percent shares of UPCL.

II. Rapti Hydro and General Construction Limited

Rapti Hydro & General Construction Limited (RHGCL), is a public company incorporated on Kartik 5, 2065 (October 21,2008) as per Companies Acts 2063, Nepal with the objective to develop and invest in hydropower projects. It is currently developing 5 MW Rukum Gad Hydropower Project in Rukum East District and owns its Electricity generation license. The Project is located at Sisne and Bhume Gaunpalika of Rukum East District. Its registered office is located at Kathmandu-l l, Bluestar Complex, Tripureshor. Radhi Bidyut Comapny Limited holds 43 Percent shares of RHGCL.

III. Dordi Khola Jat Bidyut Company Limited

Dordi Khola Jal Bidyut Company Limited (DKJBCL), is a public company incorporated on Falgun 14, 2066 (February 26,2010) as per Companies Act 2063, Nepal with the objective to develop and invest in hydropower projects. It is currently developing 12 MW Dordi-l Hydroelectric Project in Lamjung District and owns its generation license. The project is located in Dordi Gaupalika-6, Lamjung. Its registered office is located atKathmandu -ll, BluestarComplex, Tripureshor. Radhi Bidyut Comapny limited holds l8 Percent shares of DKJBCL.

ffi Radhi Bidyut Company Limited

Notes to the Financial Statements for the year Ended 32 Ashad 207s (16 July 2018) Figura In NPR

Note No.3 FIRST TIME ADOPTION OF NFRS

The finan6ial statements have been prepared in accordance with applicable Nepal Financial Reporting Standards (NFRS) as issued by the Institute of Chartered Accountants of Nepal (ICAN) with effect from I Shrawan, 2074,with a transition date of I Shrawan, 2073. These financial statements for the year ended 32 Ashad, 2075 are the first the Company has prepared under NFRS. For all periods up to and including the year ended 31 Ashad, 2074, the Company prepared its financial statements in accordance with earlier issued Nepal Accounting Standards (hereinafter referred to as 'Previous GAAp').

The adoption of NFRS has been carried out in accordance withNFRS 1, First-time Adoption of NFRS. NFRS I requires that all NFRS and interpretations that are issued and effective for the first NFRS financial statements be applied retrospectively and consistently for all financial years presented. Accordingly, the Company has prepared financial statements which comply with NFRS for the year ended 32,Ashad 2075, together with the comparative information as at and for the year ended 3l Ashad 2074 arrd. the opening NFRS Balance Sheet as at I Shrawan 2073,the date of transition to NFRS.

In preparing these NFRS financial statements, the Company has availed certain exemptions and exceptions in accordance with NFRS 1, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under NFRS and previous GAAP have been recognised directly in equity (retained eamings or another appropriate category of equity). This note explains the adjustments made by the Company in restating its Previous GAAP financial statements, including the Statement of Financial Position as at I Shrawan 2073 and the financial statements as at and for the year ended 3l Ashad,2074.

A. Exemptions From Retrospective Application NFRS I allows first-time adopters certain exemptions from retrospective application of certain equirements under NFRS. The Company has elected to apply the following optional exemptions from retrospective application :

a) Deemed cost For Property, Plant And Equipment And rntangible Assets The Company has elected to measure all its property, plant and equipment, intangible assets including under progress at the Previous GAAP carrying amount as its deemed cost on the date of transition to NFRS.

B. Exceptions To Retrospective Application The Company has applied the following exceptions to the retrospective application of NFRS as mandatorily required under NFRS l:

a)Estimates

On assessment of the estimates made under the Previous GAAP financial statements, the Company concluded that there is no necessity to revise the estimates under NFRS, as there is no objective evidl rye that those estimates were in error. However, estimates that were required under NFRS but not under Previous GAAP are made by the Company for the relevant reporting dates reflecting existing as qryqat that date. w;/ -s-4;tan|(,'/ Radhi Bidyut Company Limited

b) Classification And Measurement Of Financial Assets The classification of financial assets to be measured at amortised cost or fair value through other comprehensive income is made on the basis of the facts and circumstances that existed on the date of transition to NFRS.

c)Derecognition Of Financial Assets And Liabilities The Company has applied the derecognition requirements of financial assets and financial liabilities.

C. Transition to NFRS - Reconciliations The following reconciliations provide the explanations and quantification of the differences arising from the transition from Previous GAAP to NFRS in accordance with NFRS l: I. Reconciliation of Equity as at I Shrawan 2073. II. Reconciliation of Equrty as at 3l Ashad,2074. III. Reconciliation of Statement of Profit or Loss and other Comprehensive income for the year ended 3l Ashadh2074.

IV. Adjustments to Statement of Cash Flows. Previous GAAP information has been reclassified/regrouped in accordance with NFRS, wherever necessary, based on the audited financiat statements of the Company for the year ended 3l Ashad2074 and 31 Ashad 2073. Yor w 6re ug-$ f. Reconcilistion ofEquity as at I Shrrwan 2073 Prrticu.lers Note Previouly Raonciliation NFRS Balance Reported Balance

Non-Cunent Assets Property, Plmt Equipment & -A 566,668,5 13. l3 31,860.00 566,700,373.13 Financial Assets lnvestnent in Associat* Other Equity Ilvesfinents B 99,940,200.00 99,940,200.00 Other Non-Cunent Assets C 3,950,530.38 3,950,530.38 i* Defened Ta Curr€nt sssets Invatori€s Financial Assets Trade Receivables 46,978,818.94 46,978,878.94 Cash And Cash Equivalents 834,e84.35 834,984.35 TemDeposit Other Current Assets 61,700,561.43 (4,898,306.66) 56.802.254.77 { CmntTu(Net) { rl Asets Held for Sale : : Total Asets 776J23,137,85 (9rs,916.28) 775,207,22t.57 EQUITY & LIABILITIES i, Equity Equity Shtre Capiral ! 307,500,000.00 307,500,000.00 i..: Otiu Equity 48,772,793.76 48,772,793.76 Liabilitie Non-Current Liabilitics Finmcial liebilities Bonowing 376,999,924.92 376,999,924.92 Other Finmcial Liabilities G 900,288.97 900,288.97 Provisions Defened Tax Other Liabilities Current Liebilitis Financial Liabilitie Borrowing I - 30,000,000.00 30,000,000.00 Tnde Payables J - 1,339,006.78 1,339,006.78 Other Finmcial Liabilities K 812,002.47 742,09s.92 1,554,098.39 Cuent Til Liabilities (Net) E 504,796.47 504,796.47 Provisions 2,826,586.87 (1,848,378.96) 978,207.91 Othor Liabilities 39211,829.83 (32,553,725.46) 6,658,t04.37 Total Equity and Liabilitis 776,123,137.8s (9ts)916.28) 77s207,22t,s7 IL Reconciliation ofDquity es at 3I Ashad 2074

Prrticulan Previously Reconciliation NFRS Balmce

Non-Currena Assets Property, Plant And Equipmmt s50,128,441.80 31,860.00 550,160,301.80 Finencial Assets lnveshn€nt in Associates Other Equity Investnents B 102,215,100.00 702,377.00 102,917,477.00 OtherNon{ment Assets c - 2,637,260.25 2,637,260.25 Defened Tax H Curent rssets lnvmtories Finmcial Assets Tmde Receiwbles 62,116,543.t2 62,116,543.12 Cash And Cash Equivalents 34,903,681.66 34,903,681.66 TmDeposit Other Curmt Assets 63,254,695.U (s,335,250.70) 57,919,445.14 Cment Tu (Net) Asrets lleld for Sale Total assets \'/,N. \t * / ,llvHn Aruou \'4 6.2 ?M- IEPAL ): N Particulars Previouly Reconciliation NFRS Balance

Equity Equity Shde Capital 333,545,000.00 333,545,000.00 otherEq$ty 87,704,65t.70 sza,tg2.ts 88,23t,434.45 Liabilitie Non-Current Liabilitie Finmoial Liabilities Bonowing 346,999,924.58 925,487.tl 347,92s,411.69 Odrer Financial Liabilities G 964,716.32 964,716.32 Prcvisions Defened Tax t75,594.25 175,594.25 Other Non4ment Liabilities Current Liabilitis Financial Liabilities Bonowing I 30,232,221.t4 30,232,221.14 Trade Payables J 1,642,824.72 1,642,824.72 Other Finmcial Liabilities K e2o.$;.s2 3,778,690.80 4,698,725.62 Cment Tu Liabilities (Net) E, a 36 I,133.83 361,133.83 i Provisions 4,618,607.28 (3,44t,t74.84) 1,177,432.44 Other Liabilities 38,830,244.05 (37,130,029.53) 1,700,214.52 Total Equity and Liabilitis 812,618A62.42 (r,963,7s3.45) 810,654,708,97 i' IlL Remnciliatior ofStatement ofProfit or l-ss ,nd other Comprehensive t. income for the year ended 3l Ashad 2074 &. Particulars Note Previously Reconciliation NFRS Balance Fr. i:1

Revenue 13t,627,460.60 131,627,460.60 Cost ofSats Genuation Expmses 16,739,620._24 (139,e35.71) 16,599,684.53 Distribution Expemes Gross Profit 114,887,84036 139,935.71 tt5,027,776.07 Depreciation 20,170,293.21 20,170,293.21 Other Income M 12,109,057.10 (4,241,180.69) 7,867,876.41 Administrative & Other Operating Expenses N t3,130,806.t5 (1,774,449.30) I t,356,356.85 Profit From Operation 93,69s,798.r0 (5,87s994.28) 9r)36s,002.a Fimce Income o - 4,241,180.69 4,24t,lS1.6g Finm@ Costs P 34,824,175.89 1,062,795.01 35,886,970.90 Profit Bcfore Tax 58,871$22.2t (s71,718.s8) 59,723,212,21 Income Tax Expenses Cment Tax 3,027,264.28 - 3,027,264.29 Defmed Tax Credit/Charge H- Profia tr'or The Yeer 5s,844,357,93 (s71,7r8.58) s6,69s,947.93 Other Comprehensive Income: Other Comprehetrive Income Not to be Reclassified to profit or Loss in Subsequent i. ReMeasrement (Losses) / Gains on post Employment Defined Benefit plans

ii. Equity Imtruments Through Other Comprehensive ?02,377.00 702,377.00 lncome

Other Compreheroive Gain(Loss) for thc yesr, Net of Tax 702377,00 702,377.00 Total Comprehensive ymr, Gain(Inss) for the Net ofTax 55,844Js7.93 130,6s8.42 s7,398324,93

Vq $/

NEPA| s rc "\W' Property, Plant & Equipment Under the Previous GAAP, PPE related to hydro power plants were capitalised and depreciation was charged to statement of profit and loss.

B Other Equity Investments (a) Investment in shares other than subsidiaries and associates are reclassified separately as Investment in Shares

:, i (b) Investment in other equlty instruments ire now measured at fair value which used to be measured at cost less impairment loss. Gain/loss on such change in fair value has been recognised in Other Comprehensive Income.

C Other Non-Current Assets Advance to Supplier which is outstanding for more than 12 month from reporting date and other deposit has been reclassified as other non current which was previousiy reported under current assets.

D Other Current Assets (a) Advance to suppliers and prepaid expenses have been grouped as other current assets which were earlier grouped under Advance & Deposit.

(b) Advance tax have been relcassifed to current tax assets/liabilities (net) which is shown separately on the face of SOFP.

E Current Tax (Net) Provision for tax and advance tax have been relcassifed to current tax assets/liabilities (net) which is shown separately on the face of SoFP.

F Other Equity Net Effect of change in defened tax due to different measurement changes on account of NFRS adjustments.

G Other Non Current Financial Liabilities Non Current portion of retention money payable has been classified as other non current Financial liabilities which was previously reported as Current Liabilities.

H Deferred Tax Deferred tax is recognized on difference arises on carrying amount of Property Plant and Equipment and Invesment which was not paid for the year.

I Borrowing

Current portion of long term loan has been classified as short term borrowing which was previously reported as Current Liabilities.

J Trade Payables current portion of payable of suppliers has been reclassified as Trade ly reported under Current Liablities. K Other X'inancialq Liabilitiesry *P/* W Retention payable, royalty payable and other payables have been grouped under other current financial liabilities.

L Other Current Liabilities Bonus payable, VAT payable, TDS payable, employee accounts payable, have been grouped under other current liabilities which were earlier grouped under financial liabilities.

M Other Income Finance income from bank has been classified and shown seperately as finance income on the face of SOPL which was previously reported rJ under other income. { t N Administrative & Other Operating Expenses (a) IPO Expenses has been shown directly on SoCiE which was earlier classified as Administrative and other

$ Operating expenses.

(b) Bank charges has been reclassified as finance cost which was earlier classified as Administrative and other ! operating expenses.

t- ,d F o Finance Income iifr' Interest effect of measuring the non-current financial assets/liabilities on amortised cost has been classified as other finance income(cost).

Finance Costs a. Bank charges has been reclassified as finance cost which was earlier classified as Administrative and other operating expenses. b. Interest effect of measuring the non-current financial assets/liabilities on amortised cost has been classified as other finance income(cost). Yq

-"%r*lp\qNEPAL "xM 1s); Radhi Bidyut Company Limited Notes to the Financial Statements for the year Ended 32 Ashad 2075 (16 July 20lg) Figures in NPR Note No.4 Property, Plant & Equipment: OtherAssats Infrstacaure Oflice Fursiturexnd Plent& Vehicles Computer ed Capit l Civil Works Hydrc Mechmicd Etectro (HO) Mechmicrt Tot I Equipm@t FirtuG Equipment other Euiprent Work-in. Progress Cost

Balance at Shrawan 2073 323,402.2t 2t8,842.88 355,2t6.93 I 346,E09.73 2,992,205.00 519,395.19 31,E50.00 285,231,709.93 10,823,451.39 2t3,387,7t5.t2 614,23q6lD.08 Additions 247,440.50 t;49t,787.42 63.t24.69 62-376.00 2.290.000.00 86,445.00 40,9t5.00 54,338.00 4343496,61 Transfer From CWIP Disposals 2,467,205.00 2,461,205.fi Balance 510,842.11 1A9t,787.42 281,967.51 417$92,93 at 3l Ashad 2074 346,809.13 2,Ets,mo.oo 605,840.89 3t.860.00 285,272,6D4.93 1r0,823.45rJ9 2r3,442p53.r2 616,106p00.69 Additions 90 I Disposals Transfer From CWIP

Balance at 32 510,842.71 3,454,819.tE 489.311.47 984,629.07 346,809,73 Ashad 2075 2,815,000.00 7r9,63t.E9 31,860.00 285,272,694.93 110,823,45139 213,802,170,62 619,311,,1116.9

Accumulated Depreciation Balance 1 186'899.80 - 21E,842.88 307,315.12 at Shrawan 2073 r3g,oii.rs 2,09r,323.00 49r,2s4,r3 - 20,5t6,94r.48 8,080,E76.65 r5,4g7,70s.03 47,530,235.95 Charge for The Year 57,59l.44374,696't6l5,7Et.l7,463,232-856,671,l2o'6l2o,l7o'2g3.2l Disposals 1,753,930.27 \753,s3f.21 Balance at 31 Ashad 244,491'24 t74'696'86 2{,6U.OS 334,88s.03 2074 t7o'237.12 9m'392,73 s19p00.82 - 2sA48135so lt,s44,to9.g) 22,1:,4,s25.64 6sB46,s9s.g9 Charge for The Year Disposals Balance 32 260'808'81 s2a'7o2.91 ?7'311.72 at Ashad 2075 x7,372.73 179,&5.15 1,012,70738 529,887.38 - 38.379.930.32 15,007,342.35 2E,863,199.92 85,436J88.84

Net Book Value At I Shrawan 2073 136J02'41 47,901.21 207,732.48 900,882.00 28,141.76 3r,E60.00 264,i14,76i.45 r02,742,s74.14 r9?,8m,010.@ s66,7@,373.13 At 3l Ashad 2074 326,j5l.471'l24'090.5747)43.52st:lo'27934l,agD1,267'227.4E550'r6o'3o1.Eo At 32 Ashad 2075 31qB3.902'926.ll6.2l242'2o5.75,816'1o9.q184,938B70.7o533'875'(D6'15

ard the a@mulared depreiation d I Shnwm 20?3 uder the pryious GAAP.

OtherAsscts Infrastm.ture 0llice Fumiturc rnd Plxnt & Computer and Capital Civil Worla Hydro Meheicel Electro Mechtnicrl (HO) Equipmcnt FirtuG Equipment other Euipmot Work-in- Progress Gr6s Block As At lst ShEw 2073 323,402.2t 2t8,t42.88 355,216.93 346,809.73 2,992,205.00 519,395.89 31,t60.00 28s,231,[email protected] I 10,t23,451.39 2t3,387,7rs.t2 614,230,6D.08 Amulard Deprciation s at lst ShE\@ It6,899.80 21t,842.Et 307.3t5.72 139,077.25 2,09t,323_00 491.254.t3 20,5t6,941.48 8,080,876.65 2013 15.497.705.03 47,530r35.95

Dc@ed Cost As At lst Shr.wm 2073 136,502.41 47901.21 900,882.00 28,141.16 7t4,768.45 102,742,574.74 566,700,373.r3

{t *ryn,4*:M * Yq M !s, rff lfl i!T5.ril, r" qq.

Radhi Bidyut Company Limited Nots to the Finmcial Statements for the yer Dnded 32 Ashrd 2075 (16 July 201E) FigrcInNPR

Note No.5 Investment in Associrtes: r i:':: ::: As ,t 32 Ashad 2075 As st 3l Ailrsd 2074 , Asrtl Shnwan2073 Particulars NoofShare Amount No ofshiies i it Amouirl llllNo of Shere Amout Unquoted investments at Fair Value (FV) Investment in Associate Companies tii::+:i;:. Rapti Hydro & General Construction Limited 1.290,000.00 129,000,000.00 1..::::-li (Equity Shares of NPR 100 each tully paid up) Gross Investment (A) r"290,000.00 129,000,000.00 Adjustment for Equity Method Rapti Hydro & General Construction Limited 2,4r2,473.20 Total Adjustment (B) 2,412,47r.20 Net Investmcnt at Cost (A+B) 131,412,47J.20

Note No.6 OtherEquity Investment: As at 32 Ashsd 2075 As at I Shrawsn 2073 Particulars NoofShares Amount No ofSheres Amount Other Comprehensive Income Universal Power Company Limited 555,926.00 55,s92,600.00 504,900.00 s0,490,000.00 (Equity Shares ofNPR 100 each fully paid up) Dordi Khola Jal Bidyut Company Limited I,174,888.00 I 17,488,800.00 487,261.00 48,726,100.00 (Equity Shares of NPR 100 each tully paid up) fl$ffi;ffi'u Jal Bidyut Lagani Tatha Bikas Company Limited 7,241.00 I,122,355.00 7,{{iliW t,!2a4n.00 7,241.00 724,100.00 (Equity Shares of NPR 100 each fully paid up) Total %ry ry*&' J&* VW,,*q- lvv M,,% ffi Radhi Bidyut Company Limited Notes to the Fin.ncirl Stotements for the yerr Ended 32 Ashrd 2075 (16 July 2018) Figwu In NPR

Ndte No.7 Other assets (Current and Non-current): Particulars As et 32 Ashrd 2075 Sfl Al$ddiirt}?{: As at I Shrrwan 2073 Current Prepaid Expenses 2,f t8,986.88 L02p's6i.lt 2,042,935.28 Advance to Suppliers 55,47't.46 5il250.00 591,740.94 Loan & Advance to Staff 3,880.00 9t,572.18 18,800.00 Other Receivables : i rllilii,flrS.t 1,238,603.12 Other Receivables From Subsidiaries ',Y,,,.Ei & Assosiates [' Total Non Current t i Prepaid Expenses l:t::i./i+ t Advance to Suppliers t,320,490.t3 :: 3,950,530.38 !l l,oan & Advance to Staff Iflli,ma*4 Other Receivables Other Receivables from Subsidiaries & Assosiates ffi Total 11320,490.13 ;rr;lll I I &-63?. 3.950.530.3E G. Total 14,t?r,653.35 :\ Hl

Note No.8 Inventories:

I

Note No.9 B,\ Trade Receivables: {2-\ \-z Particulars As at 32 Ashad 2075 Ar rt 3l Ashad ZtrZ As st I Shrawan 2073 K,f;c4 l= I e lct Nepal Elechicity Authority 8o,s IC' *=l S ,=ICJ Total vq W- rv)

t,. ll, ffij

Note No. 10 ::i::lisirii!;ii:a:x4 Cash and Cash Equivalcnts: i i Particulars As.t 32 Aihrd 2075 As st I Shrrwan 2073 Bank Balances ln Current Accounts 430,630.53 .,..-5i$ii.gj 92,270.32 In Call Accounts '...iii t 4,455.322.45 34.333,5203i 742,601.03 r Cash i="li,; ...,: : .1. Cash on lland 11,430.77 r l ,=rEi. I 13.00 Cheque on Hand rlt:.,,rr it'lr li Total [, 4,897ier.7s 834,9E4.35

For the purpose ofthe statement ofcash flows, cash and cash equi

Perticulars A! rt 32 Ashrd 2075 llii :ii As rt I Shrrwrn 2073 BankBalances In Current Accounts 43q630.53 :'i 5r0,393.7t 92,270.32 In Call Accounts 4,4s5,322.45 34J&"52$3 742,60t.03 L Cash -r*.4h; ,4il." t: Cash on Hand 1,430.77 9.767.551 t 13.00 Cheque on Ifund Total #*ffi"Iet 1X,iil L #,r,..rlii iir,.,ii i i i :7 Total 4,E97J83.75 i Eit4,9E4.35

Note No. 11 Term Deposit: Particulars As at I Shrawan 2073 Fixed Deposit-Kailash eikash B;[ LimGa

Total *qv **y/g W'$# ,PV Radhi Bidyut Company Limited Nots to thc Fimmid Statements for thc ycrr Etrded 32 Aihad 2075 (16 July 2018) Figuru It NPR Note No. 12 Ircome Trxs Yarddd Ydrsdcd a Tax Erpense Reognised h Tho Statemcnt of Profit And Loss 32Arh.d2075 3lArhrdm71 Currcnt hr 3,312585.53 1,02724.28 - CumtlncomeTuCharge Defened Tsx Crcdit/Cherge Origimtion & Rwemal ofTmporary Diffmes AdjufinmtV(Cre.dits) Related to Prcvious Yem - (Net) Incomc Tax Expensc Reported in Strtement ofProfit or Los

rdrmdd Ydreded n Tax Expense Reogniscd In Ortrer Comprehensivc Income 32 Arhrd 2075 3l A!h.d 2074

Deferred Tu (664,0 I 2.65) Origimtion & Rwasal of Tenrporuy Differences

(564,01165) Income Ter Chargcd to OCI

I C, Cumttuselr0hbillty)*tl Yor 6deil Yo.r endd 32 Arh.d 2075 31 Arh.d 2074 3l Alhrd 2073 :

3,876,896.30 2,K6.130.45 912,210.53 -a Advmce Inmme Tax 3,372.685.53 3,O21,264.2a 1,417,007.00 Less: Income Tax Liability (361,113J3) (301195.47) Total i. D. Reconciliation of trx liability on book profit vis-i- vis actual tax lirbility 32 A.hd 2ff5 3l A.hrd 202

51.r62.854.59 47,614,155. I I r2,109,05?.10 59 J2',212.21 Accomting Profit/ (Loss) Before Inmme Ta 39,612,|2.4a 13,490,742.11 Enrcted Tax Rate - 0.25 o.25 Computed Tu ExpeNe 3J72,6t5,53 3127,.5L8 \on]64,24 Diffcrenccs Due To: Til Effeot Due to Non Tsable Income Eff@t Due to Non Deduotible Expenses Tn Effect Due to Diffaence in Depreciation Rate NFRS Adjush€nt Eflbct I Opening Aooumulated Loses Closing Accumulated Losres Income Tax Expeme Chargcd to The Statcment of 3r72,6tS53 3J72.685.5:l ,.02726+X 3,On264.2t Profit or Loss & OCI

E Thc movement in dcfer€d tax asscb rnd liabilities during thc year ended 31 Ashad 2074 and 32 Ashad 2075 are rs follows:

t Movemontduring the year endcd 31 Ashad 2074 Arra Credu(chrrA.)hlhe Crcdla(cbfgc)ltrOth.r I Sihnwu 2073 ShbDsl of Pntll ud Comprchmtlvc InsDe 31 Alhrd 2074

Dcferred Tu Assets(Liabilitiec) Provision for lrave Encashmmt Provision for Grahrity Investnmt in Equity MeNurEd at Fair Value Through Other Compreltmsive Income (L15,594-25\ (r75,594.25)

Deprciation Unused Ta losses (r7s5e{.29 (r75591.2s)

I Movcment during ttc ycar endcd 32 Ashad 2075 ArrtShnwu2or4 Crcdlt(ch$le)hlhe CEdlu(chrgc)holher Arrt SbemEt of Pmfia md Codprdmtlvc ImDC 3, tuhrd 2075

Defered Tax Assets(Liabilitie) hovision for Leave Encashm€nt Provision for Gratuity Investmmtin Equity Meared a Fair Value Through Otho Comprehensive Income (t75,594.25) (527p87.80) O02,ffi2.05)

Deprmiation 036,924.85) 016,924.85) Unused Tu Los*s (t7559425) (664,0r165) (839606S) Pq ry*

,1 Radhi Bidyut Company Limited Notes to the Financial Statements for the year Ended 32 Ash.d 2075 (16 July 2018) Figwaln NPR

Note No 13 Equity Share Capital

As at at3:[I ParticulaIs 32 Ashad 2075

A. Equity Shares Authorised Equity Shares ofRs. 100 each withvoting rights 1s.000,000.001,500,000,000.00i1j!r,lfrm,fr.e,,=tr= 15,000,000.00 1,500,000,000.00 Issued :- i#ii, lrir'= 410,000,000.00 Equity Shares ofRs. 100 each with voting rights I 2,000,000.00 1,200,000,000.00,.:::rL:1ffi..;fl9.6, :;irffii00,0=,.&=:Ei, s:l 4,100,000.00 Subscribed and Fully Paid ,, r'i';".,-; i ., ,,;,,i,iiiii ,iriiii goz,soo,ooo.oo Equity Shares ofRs. 100 each with voting rights ast,ooa,ooo.oo :,ozs,ooo.oo a,sto,oao.oo :::,r ril.,$.-----"i f lfl..,$iliiil 2?3- 0.,1001* 4,510,0

B. Reconciliation ofthe number ofshares outstanding at the beginning and end of the year

I As at :.::::lf+:i.{E: As at 32 Ashad 2075 31*"$.,[Fd.?0?4 I Shrawan 2073

No. of Shares ff.tiief;sh4fffi No. ofShars a i Balance as the Beginning Year 3,335,450.00 3,075,000.00 at ofthe i 310?5,000:Q0r;t:i Add: Issue ofBonus Share During the Year 410,040.00 .:. : ] Issue ofShare- IPO 764,550.00 r iri. ;2.60;45.0'0$-,4 , Add: Auction ofRight Shares Unsubscribed By Umn Balance as at the End ofthe Year 4,510,(N0,00 3,075,{n0.00 i, C. Details ofshareholding more than 17"

particurars Asat #,,, l:'gffitrtl,,i.;.;'] Asat 32 Ashad 2075 .:]1 ,,l,,|r0t1.'$..{li#UtiaQ@, t1!11' I shrrwan 2073 No. ofshares Share 7n no ofsUres SUt* "A No. ofShares Share %

l'' '* Syange Bidyut Company Limited 153,42 l.00 3/0 t3e,474.00 4.s4 .ii|iilf,il.px$,_} ryl =.1.1 ,..'..,:=. *, Aztech Power Private Limited 295,074.00 6.s4 ir,,',': ft;z4}S, l:i::==;95. 268,249.00 8.72 CEDB Hydro Power Development Company Limited 117,374.00 2.60 t06,704.00=. 2.37 106,704.00 3.47

D. TennVrights attached to equity shares The Company has only one class ofequity shares having par value ofNPR 100 per share. Every member holding equity shares therein shall have voting rights in proportion to the member's share ofthe paid up equity share capital. The Company declares and pays dividend io Nepalese rupees. The dividend proposed by the Board ofDirectors is subject to the approval ofthe shareholders in the ensuing Armual General Meeting. ln the event ofliquidation ofthe Company, the holders ofequity shares will be entitled to receive remaining assets ofthe Company, after distribution ofall preferential amounts. The distribution wil be in proportion to the number ofequity shares held by the equity shareholders.

E. Dividend Paid and Proposed:

Declared dividends and proposed dividends As at ."-*$,;;i?X 32 Ashad 2075 ;il *f,KL{fj ittr

Declared and approved for during the year: Dividends on ordinary shares: Final dividend for 2073-: cl W W @sr '"P Radhi Bidyut Company Limited Notes to the trinancial Ststements for the year Endcd 32 Ashad 2075 (16 July 2018) Figarcs In NPR

Note No. 14 Other Equity General Rcserve Reteined Earnings Totel

Balance at 1 Shrawan 2073 48,772,793.76 48,772,193.76 Profit for the-Year 56,695,947.93 56,695,947,93 Other Comprehensive lncome 526,782.75 526,782.73 Dividends to Shareholders (16,912,500.00) (16,912,s00.00) Prior Year's Adjustunent Share Issue Cost (851,s90.00) (8sr,s90.00) Balance at 31 Ashad 2074 Balance at 1 Shrawan 2074 Profit for The Year 49,653,244.21 49,653,244.21 Other Comprehensive lncome 1,581,263.40 1,581,263.40 Issue ofRight Share Issue ofBonus Share (41,004,000.00) rlr,ool,ooo.ool Share Issue Cost (2,617,s84.00) (2,617,584.00) Dividends to Shareholders (2,460,000.00) (2,460,m0.00) Prior Year's Adjustnent

Balance at 32 Ashad 2075 93,384,358.05 93,384,358.05 *of*11q,4*oilt

** w%fl.4 Radhi Bidyut Company Limited Notes to the Fhancial Statements for the year Ended 32 Ashad 2075 (16 July 2018) Figures In NPR Note No. 15 Borrowings: As at 32 Ashad 2075 As at I Shrawan 2073 Measured At Amortized Cost Non-Current

Termloan _ 317,716,197.68 347;935ilillrdg 376.999.924.92

Short Term Loan :rii,,4 r Overdraft ' l.Ii:r:ir;r Total 317,716,197.68 L69 376,999,924.92 Current Term Loan 30,250,249.01 30,000,000.00 Short Term Loan 10,000,000.00 Overdraft Total 40,250,249.07 30,000,000.00 Grand Total ,966,446.75 406,999,924.92 i rr:tli:.:::::::::::.:: lt. I l::::::::::=i The company has entered into taken loan ofNPR 440 Million on 26 September 2011. By consortium=l financing from the lead bank, Bank of Kathmandu & participating banks Kumari Bank Limited, Janata Bank Nepal limited, Sanima Bank Limited and Global IME Bank Limited by b, hypothicatinghydroplantand land. t

Particulars As at 32 Ashad 2075 .,..:1,4-s,*-1,.&!.A$h-a-d-::!.0.7d .,,,,,,,,,. As at I Shrawan 2073 I 2-3 Years !- 60,000,000.00 ai 4-5 Years 90,101,800.00 8o;*g: ;6,6..a11 80,000,000.00 5-10 Years 147,054,108.68 AaL:OJ 236.999.924.92 317 -716.197.68 376,999,924.92

Note No, 16 Other Financial Liabilities:

Particulars As et 32 Ashad 2075 As at I Shrawan 2073 Non-Current Employees Accounts Payable 40427.s0 ua,arr* 88,286.50 Refundable Deposits of Parties Retention Payable 1,006,s84.90 'ir"ro ri 812,002.47 Interesl Payable '' iti;:;:::::. Miscellaneous Deposits Royalty Payable Other Payable Total Current Employees Accounts Payable 770,595.33 501,919.76 Refundable Deposits Of Parties Retention Payable

Interest Payable 25,849.00 Miscellaneous Deposits Royalty Payable 1,656,857.42 80t,429.16 Other Payable 250.749.47 Total 1,ss4,098.39 Grand Total

Note No. 17 a:::;t::it::r-.:a.' Provisions: Particulars rt i liirl:::: As at 32 Ashad 2075 ,.vt{'= As at I Shrawan 2073 Non-Current Provision for Gratuity (Net) Provision for Leave Encashement Total Current Provision for Gratuity :=$ Provision for Leave Bonus to Employess '1, I iirllit?+ 978,207.91 Total ro 1,042.408.98 978,2U.91 ry Grand Total 1,042,408.98 Yq ry v F

Note No. 18 Other Liabilities:

Particulars As rt 32 Ashad 2ffi5 , *s rt f t ;lad ffia- As st l shrawan z0T3

Dividend Payable Audit Fee Payable Bonusto Employess Total Current Payable to Holding Company 30,630,227.90 6,120,739.43 Dividend Payable 1,202,604.60 91,073.75 Audit Fee Payable 223,000.00 308,6s0.00 Consultancy Fee Payable 223,000.00 Tds Payable 2,456,228.46 Bonus to Employess 1,339,642.92 Total 6,658,104.37 Grand Total 36,074,703.88 I [lJ/,,37

Note No. 19 Trade Payables: As at 31 Ashad 2074 As at I Shrawan 2l)73 Non-Current Sundry Cre.ditors Total Current Sundry Creditors 2,06s,552.61 Total 2,M5,552.61 Grand Total Y q 8.Y rV/,C W wffi#it"x"^ Radhi Bidyut Company Limited Notes to the Financial Statements for the year Ended 32 Ashad 2075 (16 July 2018) Figur* In NPR

Note No.20 Revenue: For the ycar ended Particulars 32 Ashad 2075 Electricity Sale to NEA 137,611,028.34

Total

Note No.21 Generation Expenses: Particulars Salaries & Other Employee cost 3,648,948.53 l,ease Rent 21,333.32 i* a Repair & Maintenance- Vehicles 9l'305.15 Repair & Maintenance- Plant and Machinery 5,738'235'07 , Repair & Maintenance- Power House 3,101,854.48 I 20J06.00 38s,s10 i Transportation Expenses 00 "9s#{fi,flrl]:. 5'000.00 ,.'::,:,:= ari#r,ffiW',- l CustomDuty ... :,itiiliiii 4

Communication 44,505.53 :;:;:::::, '' ilLr-,:. I Expenses ::'! ,1' , rs.lflffiL { 122,943.80 1t&639.10 t Printing & Stationery Expenses !l Insurance Expenses 2,362,291.03 r 2,350,036:20 Travelling daily allowance 450,620.00 & Expenses ffilri iirr?if$.r.,,,\*, ,,ii,ii:it1i1. ' Security 638,185.40 eiil;llo,zt Expenses '- . L 1,357,800.40 SubStationOperationExpenses Lilliri iLii;l li ii l;::;:i:i..,,T6.3:i:-€.,:.1 1 Medical 3,940.00 890:00 I Expenses I : ii Fuel & Lubricants Expenses- Machine 558,499.95 ,; ,,rr..::{ , .r: :::::::::288j,..1ffi Fuel Expenses- Vehicles 271,820.13 :r, t26:0?0:00 Nursery&Re-Plantation 6,9s5.00: 1i' ' 191,000.22 =1{6jll$+?,.E Miscellaneous Expenses ..::llr:"-?$ Training Expenses e4,174.22 ii?6*ii 2,799,008.38 Royalty Expenses J, l Total

For the year .,.i#f particulars ended ii i '*d*e'yr*r-uid$ i;._r Ashad 32 207s . j ,i A$,haa 1074:::.:;i..:=.:: Investnent Commitment Fee 9,476,862.08 , - r:?r*.3-1.;4-5.?J{.. Miscellaneous Income 910,222.47 Total 10.387.084.s5 yq r ==,.'5i.i..it.- , NoteNo.23 , Administrative and other operating '" , expenses: . ,;J: " s* -'qlJtr=y4-l'==T.q-$," " particurars Forthevearended ' ,,'- I 32Ashad207s ; 3l"aF ;. "; StaffBonus 1,042,408.e8 i.,;llliii-i;, :..:.:::..=,i:)17itil4 Lease 637.e88.27 Rent ,:, ;i{ilirt,t , lilll,ii.ra;;1u::7l$;#

218,449.01 ,' i,,,:.:r1,' Water & Electricity Expenses - : , .. $,S,ifitf.;.ffi Transportation Expenses 7,298.00 = 32,465.00 officeExpenses 533.0e7.78,, u,r:dt iiiiiiii:=ts,i..+.€.,,.q Audit Fee - 226.000.00 113,m0.00 Audit Expenses " 4,190.00 ,B?0.00 Management 6,s49,102.00 5+54,950.00 Fee ffi i ,;..==;, ,. - Commilnication Expenses 243,504.30 101,429.66 it ,

I lnsuranceExpenses 81,860.13 :ii ii;,= .'..:::.:;;...:= 9#6,i.: . Travelling&dailyallowance Expenses 32,240.00 , -,.. .. ,zc,eLoi " i Gratuity Expenes *. :3,30,@ 5,000.00 i:::==.,=:1,,liiiirtii.#^: BooksNewspapers&Magazines ::.,:: 6:Ni;t Miscellaneous Expenses 21,047 .97 . ,, 75,q*L; AdvertisementExpenses 121,545.90 ,.-.; 1 t ,iiiiii!.5!!t .,:...= "..,1I ri Membership 44,000.00 ". Expenses " , 4?,fcfr., Legal Expenses 67,800.00 ,:::r, ]I.== ]it.iryts.hf Business Promotion Expenses 9,630.00 . -,. - i- -=:=rt ' t Fuel Expenses- Vehicles 10,500.00 ;,;::::;::1 ;. , ' ; \ .4jl lr Rates & Taxes 26s,2go.oo .. "' ,, '=='=. i lli Write Off Expenses 1,313,270.13 . ..-. . , .-."j+313i2?.t-l4:! Total 1s,s0s,224.50

Note No.24 Finance Income: s Particulars For the year ended 207s lnterest Income 3,103,657

Total 3,103,6s7.s6 , ,-- .-. *a+1lp..!q t ..", t 'tr .', :'." * Note No.25 tr'inance Costs: Particulars For the year ended \ Interest Cost 39,980,857.s8 K Bank Charge 929,214.83

Total )- 40,910,072.41 F Note No.26 \r Equity instruments - through other comprehensive income: r^lsl Particulars For thc year ended Soir:rlb-*.:r r c-*'l Gain(Loss) on Investment on Associates 2,412,473.20 Gain(Loss) on Other Equity Investrnent through OCI (304,122.00) Total 2,108,3sr.20 tr,

Note No.27

Earnings Per Share: :::ii:i:l l l

For the year ended fiti.i -: }$ Particulars =;;iu

Profit for the year 49,653,244.21 Weighted average number ofequity shares outstanding 4,122,528.36 Earnings Per Share (Rs.) - Basic (f,'ace value of Rs. 100 per share)

Add: Weighted average number of potential equity shares Weighted average number of Equity shares (ilcluding dilutive shares) outstanding Earnings Per Share (Rs.) - Diluted (Face value of Rs. 100 per share) EF-:rls?' ::-iqry'il::- =

Radhi Bidyut Company Limited Not6 to the Fiorncial Statemetrts for ahe year Ended 32 Ashad 2075 (16 July 2018)

NoteNo2E Relsted Plrty llilclosure (a) The company is controlled by Lamjung Electricity Development company limited which owns 47.62 % of the company's shares.

(b) Those Chrged With Governance Thos€ chrged with govenimce of the RBCL include mmbers of Boud of Directors mely: Neme

DhrubaRaj Mishn Chaimm DipendmLal Kam Director Bhoj KmKhadka Dir@tor Kul Bikmm Shah Director MmiPmadGumg Director SujmGuug Director Shreya Rajbhadai Director Suita Nimula Itrdependmt Director

The following provides expenss incued for those charged with govemmce of RBCL prticutars corm[-i------Filiiily"a. t27,700 165,000

(c) Tramactions with key manrgemcnt penonnel K€y Mmagement persomel includes: i) Mr. Om Bahadu Thapa - ChiefExecutive Offrca

Key I\4mgment Persomel compffiation : p.rticuhr3 E-ploy

Not€: - The momts disclosed in the tabl€ ile thc mouts rmgnised as m expense dwing the reporting puiod related to keymmgemat persomel.

(d) Other related transactiotrs Curr€nt Name ofthe relrted psrty Nrture oftransaction Yerr Previous Year Trsrsactlon Balance Trrnssction Balance {.dvance 785,000.00 Jrov€Eal Power Compmy Limited {dvmce 226.490 4.799.205.57 {dvmce 3,244,587 38,969,904.32 ,mjmg Electricity Developmmt Compmy Limited v{mgmsrt fee m( 5.834.289 30,004,o77 5,424,@0 nyqopowtr uevelopment -pup Compey Limited 3onsultancy 634,574

NoteNo 2J Contirgetrt Liabilitie and Commitments x0 A. Corporrte Grarantee S.no Psrty Name Purpose Amount Expiry Date (A.D.l oo'di xt'ol" lat-idyut-t6illilffiiGl le Loe re July 13,2033 *q WV,,,X labY\ "-t-''-