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The Office of the Auditor General of Nepal has repeatedly emphasized the need for auditing 43 government-owned organizations. However, the 62nd report of the Auditor General reveals that 31 of these organizations remain unaudited. Highlighting this issue, the Auditor General has called for policy reforms in corporate governance.

According to the report, during the 45th fiscal year, accounts of 43 companies, worth a combined Rs 447.5bn, were audited. In the 2023/24 fiscal year, audits were completed for an additional 42 organizations valued at Rs 477.49bn. Despite repeated directives, 31 organizations have not completed audits for 80 fiscal years, and 21 fully government-owned organizations still have 38 fiscal years pending audit. These unaudited entities include Udayapur Cement Industry, Nepal Tourism Board, Guthi Sansthan, Gorkhapatra Sansthan, Food Management and Trade Company Limited, Hetauda Cement Industry Limited, Dairy Development Corporation, Janak Education Materials Center Limited, Nepal Drinking Water Corporation, and Nepal Television.

Similarly, 10 corporate bodies majority-owned by the government have not submitted accounts for the 42nd fiscal year. These include the National Insurance Company, National Life Insurance Company Limited, Bishal Bazar Company, Upper Tamakoshi Hydropower Company Limited, Kathmandu Upatyaka Khanepani Limited, Sajha Prakasan, and Nepal Orient Magnesite Private Limited.

The report notes inconsistencies in how boards of directors determine staffing and benefits in public corporations, often based on varying acts that lack uniformity. It recommends policy reforms to ensure that worker appointments and benefits are regulated through a standardized government policy implemented via the boards of directors. Additionally, there is no clear criteria for establishing subsidiaries or assessing the impact of issuing shares to the public on the organizations’ investments and liabilities. Since some organizations have share ownership spread across multiple ministries while the government acts as a single entity, the Auditor General suggests reviewing and amending laws and regulations accordingly.

The report also flags increasing operational expenses—such as financial management, salaries, allowances, and office costs—outpacing income, exacerbated by overstaffing and underutilized capacity. Several organizations have operated at a loss for extended periods, with low returns on government investments and no substantial efforts to strengthen these entities. The government reportedly has not evaluated the public services offered or their economic contributions, nor reviewed investments. The report further notes delays in auditing, failure to meet goals, unreconciled accounts, and non-payment of principal, interest, and dividends.

A significant concern raised involves loans extended by the Employees Provident Fund and the Citizens Investment Fund for Nepal Airlines Corporation’s purchase of aircraft. On 18 June 2013, the Provident Fund and Nepal Airlines provided a loan of Rs 9.98bn, guaranteed by the government, for two A320 narrow-body Airbuses. On 18 May 2017, an additional Rs 11.9bn loan, also government-guaranteed, was provided for one A330 wide-body Airbus. Due to non-payment of interest, the Provident Fund Board has capitalized the principal to Rs 28.5bn. The loans appear only in the retirement fund’s financial statements, with decisions made solely by the fund’s board at a time when no trustee was formed. The loan repayments have not followed the agreement, including the provision requiring 30 percent of ticket sales to be deposited into a special account.

The report stresses that when the government provides guarantees for large, long-term projects, detailed risk assessments and business plan evaluations should precede loan disbursement to ensure proper coverage.

Regarding the Nepal Electricity Authority (NEA), the Auditor General states that the reported profit is not entirely realistic. While total profit increased in the 2023/24 fiscal year compared to the previous year, net profit declined due to higher depreciation expenses. Ratios related to net income, long-term debt, equity, employee expenses, and imported electricity remained stable. The Authority’s accumulated profit reached Rs 46.47bn, but significant depreciation on trade receivables (Rs 11.51bn previously, Rs 5.16bn this year) has affected earnings.

The NEA had also recognized outstanding fines for dedicated and trunk lines as income, based on government commission recommendations for tariff exemptions. Electricity tariff arrears rose by 8.88 percent this year to Rs 48.26bn, with Rs 23.44bn owed by 59 customers on trunk and dedicated lines—debts disputed for over a decade. Another Rs 6.89bn remains unpaid for street lighting. Although power loss (leakage rate) decreased slightly from 13.46 percent to 12.85 percent, it remains above the global average, prompting calls for identifying causes and implementing effective control systems in high-loss areas.

With rising electricity production, the NEA has been urged to implement an effective export strategy while considering growing domestic consumption and demand during the rainy season. The NEA owes Rs 3bn to the government and Rs 5bn to other entities. According to Article 1 of the Mahakali Treaty between Nepal and India, Nepal receives 70m units of electricity free annually, with any additional requirements to be purchased.

The government provides free power to NEA at Rs 4.75 per unit. Of this, NEA owes the government Rs 2.42bn last year and Rs 330m this year. Furthermore, the NEA’s financial statements include Rs 5.6bn in discounts offered during the Covid-19 period, resulting in a net receivable of Rs 2.31bn from the government, which requires verification and settlement.

Farmers in Nuwakot are struggling as they remain unable to apply fertilizers to their crops—including maize, rice, and vegetables—even though it is the peak time to apply urea. They complain that the concerned authorities have failed to act responsibly.

“We were simply told there’s no fertilizer available and had to return home empty-handed,” said Ramchandra Agasti, a local farmer. “There’s a real concern that the maize crop will suffer. The optimal time to apply urea after irrigation is slipping away, and farmers can’t access fertilizer when they need it most.”

The shortage has occurred due to the failure of relevant agencies to ensure timely delivery of urea fertilizer.

Another farmer, Ram Prasad Paneru, echoed similar frustrations. The Agriculture Office has acknowledged that farmers are receiving only limited quantities of fertilizer, as supply falls far short of demand.

Despite high demand for urea fertilizer in Nuwakot, the supply has not met the requirement. Currently, rice is being cultivated on 12,000 hectares and maize on 15,000 hectares in the district. According to agricultural technicians, farmers need around 9,000 tons of chemical fertilizer per hectare.

The Agricultural Development Office in Nuwakot confirmed that fertilizer is not being supplied as per demand. Office Chief Keshav Khanal said there have been frequent complaints of farmers receiving insufficient amounts due to limited supply. The Trishuli branch of the Agricultural Materials Company Limited and the Salt Trading Corporation’s Nuwakot branch are responsible for distributing chemical fertilizers, but both are reportedly facing shortages in their warehouses.

Farmers further complain that, due to the unavailability of subsidized fertilizer, they are being forced to purchase it from the market at much higher prices.

The Nepal Stock Exchange (NEPSE) gained 22.99 points to close at 2,632.05 points on Monday.

Similarly, the sensitive index surged by 4.75 points to close at 442. 92 points.

A total of 16,205,558-unit shares of 324 companies were traded for Rs 7. 35 billion.

Meanwhile, Saptakoshi Development Bank Ltd (SAPDBL) was the top gainer today, with its price surging by 10. 00 percent.

Likewise, Wean Nepal Laghubitta Bittiya Sanstha Limited (WNLB) was the top loser as its price fell by 10.00 percent.

At the end of the day, total market capitalization stood at Rs 4. 37 trillion.

Five out of six hospitality companies listed on the Nepal Stock Exchange (Nepse) reported profits in the first nine months of the current fiscal year 2024/25, indicating a continued post-pandemic recovery for the tourism and hospitality sector. Unaudited third-quarter financial statements show these companies collectively earned a net profit of Rs 803.6m, a 1.58 percent increase compared to the same period of the last fiscal year.

Among the six publicly listed companies—Soaltee Hotel Ltd, Taragaon Regency Hotel Ltd, Oriental Hotel Ltd, City Hotel Ltd and two cable car and hospitality infrastructure companies, Chandragiri Hills Ltd and Kalinchowk Darshan Ltd, all but City Hotel posted profits. City Hotel Ltd, the operator of Hyatt Centric, posted a net loss of Rs 173.8m in the nine-month period. In contrast, Soaltee Hotel Ltd, which operates The Soaltee Kathmandu, led the profit chart with a net profit of Rs 467.3m, a 13.36 percent year-on-year growth. Next were Hyatt Regency operator Taragaon Regency with a net profit of (Rs 337.5m) and Oriental Hotel, which operates Radisson Kathmandu, with a net profit of Rs 44.75m. Kalinchowk Darshan (Rs 18.9m), and Chandragiri Hills (Rs 10.88m) also ended the third quarter in the green.

Despite the marginal increase in overall profitability, hotel companies saw only a slight increase in operating revenue. The combined operating income grew by just 2.71 percent compared to the same period last fiscal year, suggesting that while business has improved, growth is still modest and uneven across companies. For instance, Soaltee Hotel posted the highest operating income of Rs 1.89bn, followed by Taragaon Regency with Rs 1.08bn. Oriental Hotel generated Rs 502.1m, while City Hotel, despite its loss, reported revenues of Rs 202.3m. Chandragiri Hills earned Rs 104.3m, and Kalinchowk Darshan reported the lowest revenue at Rs 58.9m.

Taragaon Regency has the highest paid-up capital at Rs 1.96bn, followed by City Hotel (Rs 1.67bn). Other companies include Chandragiri Hills Ltd with Rs 1.53bn, Oriental Hotel with Rs 1.18bn, Soaltee Hotel Ltd with Rs 1.02bn and Kalinchowk Darshan with Rs 600m.

Reserve funds have also shown a healthy buildup, with Oriental Hotel leading with Rs 2.73bn, followed by Soaltee Hotel with Rs 1.54bn, and Taragaon Regency at Rs 1.03bn. Notably, City Hotel Ltd is the only company with negative reserves. This indicates that while most hospitality firms are now on a stable recovery path from the pandemic, some—particularly newer or highly leveraged ventures—are still struggling to break even.

In terms of earnings per share (EPS), a key indicator for shareholders, Taragaon Regency Hotel Ltd topped the list with an EPS of Rs 17.20, reflecting strong profitability and efficient capital use. Soaltee, Oriental and Kalinchowk Darshan were next, while City Hotel Ltd reported a negative EPS. Reflecting growing investor interest toward tourism and hospitality stocks, nine more hospitality companies have applied to the Securities Board of Nepal (Sebon) for approval to launch their initial public offerings (IPOs).