Corporate Governance

The Board of Directors (BoD) ensure that the activities of the company are conducted as per standards and in the best interests of its stakeholders. From how we structure and develop our business to the partnerships we intend to develop with our stakeholders, HIDCL is committed to the principles best standards of corporate governance.

♦ Board Committees

There is a reliable system of control in all areas of operations of the Company. The effectiveness of the internal control system in the Company is assured by the Board and its following committees:

 

1. Risk Management Committee

The Risk Management Committee has the responsibility to indentify the existing risks both at the enterprise and project level. It meets routinely to analyze the business, its environment, the associated risks, the risk bearing capacity, strategies to be developed to manage the risks, and the sufficiency and suitability of the risk management system. The committee has its own Terms of Reference, very similar to the directives issued by the Central Bank, clearly spelling its domain of work.

The committee, which also has mandates as per the Lending Policy of the company to review project recommendations made to it by the Risk Assessment Cell and make appropriate recommendation to the Board on Projects.

Present Committee:

1. Board Director, Dr. Meg Bd. Bishwakarma
Coordinator
2. Board Director, Mr. Parakram Sharma
Member
3. CEO, Mr. Deepak Rauniar
Member
4. DGM, Mr. Mukti Bodh Neupane
Member

 

2. Audit Committee

It is an independent body answerable directly to the Board of Directors. The committee is responsible for verifying that the financial operations of the company have been conducted and its books kept in a proper manner. It reviews the interim and annual audit report and financial statements of the company, and also helps to create and maintain accounting standards in the Company. On behalf of the board, it monitors the integrity of the company's financial statements, and has the responsibility to ensure that the shareholder's interest are safeguarded in financial reporting.

 

The Committee:

1. Board Director, Mr. Parakram Sharma
Coordinator
2. Board Director, Mr. Yogendra Gauchan
Member
3. Board Director, Mr. Ram Krishna Pokharel
Member

 

3. HR & Compensation Committee

The Human Resources and Compensation Committee is responsible for supporting the Board of Directors in establishing guidelines on compensation and benefits, requirement and need assessment of human resources in the company, and formulating strategies and policies to manage the human resource portfolio of the Company.

The committee recognizes the importance of programs that foster executive and employee development. It also works on such important issues as retention, leadership development, assessment of management capabilities etc. It also recommends compensation to the board, and designs policies and plans related to employee benefits programs.

The Committee:

1. Board Director, Mr. Ram Krishna Pokharel
Coordinator
2. Board Director, Mr. Ram Sharan Pudasaini
Member
3. CEO, Mr. Deepak Rauniar
Member

 

♦ Auditing

a) Internal Audit
The company has outsourced independent chartered accountant firms for the purpose of internal audit. Internal audit is performed on quarterly basis. The internal auditor reviews the books of accounts of the company for compliance and presents the Internal Audit Report which is duly discussed in the Audit Committee. The recommendation by the Audit Committee is forwarded to the Board of Directors of the company, where it is again discussed in detail.

Currently, the internal audit is being performed by P Anand and Associates.

b) Tax Audit
Being a public limited company, HIDCL is required to get performed a tax audit of its financial operations on an yearly basis by a qualified firm. The company is in the process of appointing an auditor for the tax audit of Fiscal Year 070/71.

c) Statutory Audit
The company is required to get its annual statutory audit by a qualified auditor, the appointment of whom is to be done in consultation with the Office of the Auditor General. The company is in the process of appointing an auditor for the statutory audit of Fiscal Year 070/71.

 

♦ Decision Making Process and Authority

1. Decisions Related to Policy Matters

  • Proposal taken by the Chief Executive Officer/Company Secretary to the Board of Directors
  • The Board of Directors approves the proposal after due discussions
  • Management implements and complies with the decision

2. Decisions Related to Investment

  • Proposal for debt/equity investment received directly from hydro power project developers or indirectly through banks or financial institutions
  • Notification of the proposal made to the Board of Directors from the management
  • Risk Assessment Cell (RAC) formed by the management to assess the technical, financial, environmental, social, legal, managerial and other risks involved in the project
  • Report submitted by RAC to the management with its recommendations
  • Risk Management Committee (RMC) on the basis of the RAC report recommends to the Board of Directors regarding investment in the project
  • Necessary decision about investment on the project on the basis of recommendations from the RMC taken by the Board of Directors

3. Decisions Related to Funds Management

  • Finance and Fund Management Unit initiates the procedure of fixed deposit placement on the basis of maturity dates of fixed deposits in different commercial banks
  • Request made to Nepal Rastra Bank regarding financial details (Non Performing Loan, Total LCY loan to LYC deposit, Core Capital and Capital Adequacy) of all commercial banks
  • On receipt of such details, Company calls for quotations for fixed deposits from selected banks under the set eligibility criteria
  • Quotations opened, analyzed and decision regarding fixed deposit placement taken by the management
  • Decision of fixed deposit placement is notified to the Board of Directors