Investor Presentaiton

ANNUAL REPORT 2018-2019 Business Activities Including Its Operating Performance INFORMATION CRISL A joint Venture Rating Agency of Rating Agency Malaysia Berhad (RAM), Malaysia, JCR-VIS Credit Rating Company Ltd., Pakistan, Investment Corporation of Bangladesh, ABN Amro Pakistan and Sponsors of Bangladesh Setting Global Standard at National Level CRISL/CER/233/19 Key Operating Data for the Previous Five Years ANNUAL REPORT 2018-2019 Khulna Power Company Ltd. (KPCL) is the first Independent Power Producer (IPP) of the country in private sector. Established under the Private Sector Power Generation Policy of Bangladesh 1996 (Revised in November 2004), has been in operation for the last 21 years. Initially KPCL started its journey to empower Bangladesh with its 110 MW barge mounted power plants. However in 2011 KPCL added another two efficient power plants - KPC Unit II 115 MW Plant (KPCL II) and KPC 40 MW Noapara Plant (KPCL III). Following is a snapshot of KPCL plants' operational performance for the recent period: 34 CREDIT RATING REPORT RATIONALE CREDIT RATING AND SERVICES LIMITED KHULNA POWER COMPANY LTD. RATING SPECIFICS Long Term AAA Generation (As demanded by BPDB) Name Licensed Installed Capacity Capacity MW MW 2015 DATE OF RATING June 26, 2019 BASIS OF RATING RATING DETAILS EXPIRY ON: June 25, 2020 KPCLI 110 114 Financials and other relevant information up-to the date of rating Short Term ST-1 KPCL II 115 119 KPCL III 40 44 44% Jan 2016-Jun'2016 Jul 2017-Jun 2018 Plant Generation Plant Generation Plant Generation Plant Generation Plant Generation Factor (MWh) Factor (MWh) Factor (MWh) Factor (MWh) Factor (MWh) 46% 454,203 54% 263,366 43% 423,710 43% 428,293 *38% *110,058 59% 604,045 62% 51% 318,835 529,706 55% 33% 571,023 337,096 156,720 56% 99,437 55% 200,566 59% 213,528 50% Jul'2016-Jun 2017 Jul'2018-Jun 2019 180,532 BRAC Bank Limited Citi Bank, N.A. Standard Bank Alfalah Tk. 2,850.00 *WCL Tk. 3,358.32 Chartered *WCL - Tk. 3,660.00 *WCL Tk. 1,740.00 *WCL-Working Capital Limit Mode Of Exposure (Figures in Million) *WCL Bank Loan Rating blr AAA blr AAA bir AAA bir AAA Total 265 277 1,214,968 681,638 1,153,982 1,212,844 627,686 Entity Rating Outlook Bank Facilities Ratings Bank/FI Stable CRISL has reaffirmed the Long Term rating 'AAA' (pronounced as triple A) and the Short Term rating ST-1' of Khulna Power Company Limited (KPCL) on the basis of its financials and other relevant quantitative and qualitative information up to the date of rating. The above ratings indicate KPCL's good financial performance, good debt servicing capacity, good Fixed deposit base in the bank, good debt servicing capacity, Sound group exposure in power plant operation, experienced top management etc. Being a power plant company, the company has some risks areas within the Power Purchase Agreement such as liquidated damage risk and contract renewal risk. The Long Term rating indicates that entity rated in this category is adjudged to be of best quality, offer highest safety and have highest credit quality. Risk factors are negligible and risk free, nearest to risk free Government bonds and securities. Changing economic circumstances are unlikely to have any serious impact on this category of companies. The Short Term rating. indicates highest certainty of timely payment. Short-term liquidity including internal fund generation is very strong and access to alternative sources of funds is outstanding. Safety is almost like risk free Government short-term obligations. CRISL placed the company with "Stable Outlook" with an expectation of no extreme changes in economic or company situation within the rating validity period. وق Sarwat Amina EVP and Head of Operations Khulna Power Company Ltd. has been assigned the highest rating- Long Term rating 'AAA' and Short Term rating 'ST-1' for the 3rd consecutive years by the Credit Rating Information and Services Limited (CRISL) for its strong equity base, good return on investment, good earnings prospects, good operating performance of the investee and experienced management team. *July 2018 to 12 October 2018 KPCL plants' added 628 GWh of electricity to the national grid during the financial year 2018-2019. In the current year the generation is 48.25% lower than the previous year mainly due to the 1st extended 5 years term IPP contract of 110 MW Barge Mounted Power Plant with Bangladesh Power Development Board (BPDB) expired on 12 October 2018, Since then the power plant is not in operation. Since beginning our plants were being operated and maintained by Wartsila Bangladesh Ltd., a 100% owned subsidiary of Wartsila OY, Finland; the manufacturer and spare parts supplier of these plants. However, from January 2014, these plants have been operated and maintained by the Company itself and Khulna Power Operations & Services Ltd. (KPOSL), a specialized company in power plant operation and maintenance with full sets of experienced engineers and staff as engaged earlier. Khulna Power Company Ltd. has always used brand new highly efficient engines and other auxiliaries of best international standard. The aim is to spend bare minimum fuel for generation of electricity and save costly fuel of the country. The new and quality machine allows Khulna Power Company Ltd. to maintain its guaranteed contractual availability and Heat Rate (fuel consumption for generation of one unit of electricity) ensuring efficient use of fuel. KPCL follows an Integrated Management System (IMS) to maintain all of its power plants, which includes-ISO 9001:2004-Quality Management System (QMS), ISO 14001:2004 - Environmental Management System (EMS), BS OHSAS 18001:2007 - Occupational Health & Safety (OH&S). After introduction of IMS, Bureau Veritas (a global leader in Testing, Inspection and Certification (TIC) with innovative solutions that go beyond simple compliance with regulations and standards, reducing risk, improving performance and promoting sustainable development) audited the management system of the company. KPCL successfully passed the inspections thus received the certificate of accreditation for all three standards e.g. ISO 9001:2008, ISO 14001:2004 & BS OHSAS 18001:2007. 35

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