CHAPTER 1

INTRODUCTION
1.1. Background of Study
Nepal has a huge hydropower potential. In fact, the perennial nature of Nepali rivers and the
steep gradient of the country's topography provide ideal conditions for the development of some
of the world's largest hydroelectric projects in Nepal. Current estimates are that Nepal has
approximately 40,000 ! of economically feasi"le hydropower potential. #owever, the present
situation is that Nepal has developed only approximately $00 ! of hydropower. %herefore,
"ul& of the economically feasi"le generation has not "een reali'ed yet. (esides, the
multipurpose, secondary and tertiary "enefits have not "een reali'ed from the development of its
rivers.
)lthough "estowed with tremendous hydropower resources, only a"out 40* of Nepal's
population has access to electricity. ost of the power plants in Nepal are run+of+river type with
energy availa"le in excess of the in+country demand during the monsoon season and deficit
during the dry season.
Nepal's electricity generation is dominated "y hydropower, though in the entire scenario of
energy use of the country, the electricity is a tiny fraction, only ,* energy need is fulfilled "y
electricity. %he "ul& of the energy need is dominated "y fuel wood -$.*/, agricultural waste
-,0*/, animal dung -.*/ and imported fossil fuel -.*/. %he other fact is that only a"out 40* of
Nepal's population has access to electricity. !ith this scenario and having immense potential of
hydropower development, it is important for Nepal to increase its energy dependency on
electricity with hydropower development. %his contri"utes to deforestation, soil erosion and
depletion, and increased flooding downstream in the 1anges plain. 2hortage of wood also pushes
farmers to "urn animal dung, which is needed for agriculture. Not only this, the development of
hydropower will help to achieve the millennium development goals with protecting environment,
increasing literacy, improving health of children and women with "etter energy. 1rowing
environmental degradation adds a sense of urgency.
1
Energy Consu!t"on "n Ne!a#
%he electricity demand in Nepal is increasing "y a"out 3+4* per year. )"out 40 * of population
in Nepal has access to electricity through the grid and off grid system. Nepal's %enth 5ive 6ear
7lan -80089 8003/ aims to extend the electrification within country and export to India for
mutual "enefit. %he new #ydropower 7olicy 800, see&s to promote private sector investment in
the sector of hydropower development and aims to expand the electrification within the country
and export.
%he hydropower system in Nepal is dominated "y run+of+river 7rojects. %here is only one
seasonal storage project in the system. %here is shortage of power during winter and spill during
wet season. %he load factor is :uite low as the majority of the consumption is dominated "y
household use. %his im"alance has clearly shown the need for storage projects, and hence,
cooperation "etween the two neigh"oring countries is essential for the "est use of the hydro
resource for mutual "enefit.
%he system loss is one of the major issues to "e addressed to improve the power system which
accounts to "e 80 * including technical and non+technical losses li&e pilferage.
Status of Po$er %enerat"on and Trans"ss"on
Nepal has $00 ! of installed capacity in its Integrated Nepal 7ower 2ystem -IN72/. %he
power system is dominated "y the hydropower which contri"utes a"out 40 * of the system and
the "alance is met "y multi fuel plant. %he hydropower development in Nepal "egan with the
development of 000 &! 7harping power plant in ,4,,. %he most recent significant power plant
commissioned is the ,44+! ;ali 1anda&i <)= #ydroelectric 7lant.
>ntil ,440, hydropower development was under the domain of government utility, Nepal
?lectricity )uthority -N?)/ only. #owever, with the enactment of new #ydropower
@evelopment 7olicy ,448, the sector was opened to the private sector also. %here are num"er of
projects already "uilt "y the private developers. 7rivate power producers contri"ute ,4. ! of
power to the AIntegrated Nepal 7ower 2ystem'.
2
%he major hydropower plants with their capacity are listed in the ta"le as followsB
Po$er P#ants "n O!erat"on
S&N& Po$er P#ant
Ca!ac"ty
'()*
Annua#
Energy
'%)+*
O$ned ,y Ty!e
, %rishuli 84 848 N?) CDC
8 2un&oshi ,0 $$ N?) CDC
E 1anda& ,0 0E N?) CDC
4 ;ule&hani I $0 ,$4 N?) 2%D
0 @evighat ,4 ,E N?) CDC
$ ;ule&hani II E8 4$ N?) 2%D
3 arshyangdi $4 0,4 N?) 7CDC
. 7uwa $ 4, N?) CDC
4 odi ,0 .3 N?) CDC
,0 ;aliganda&i ,44 34, N?) 7CDC
,, )ndhi&hola 0 E. (7C CDC
,8 Fhimru& ,8 ., (7C CDC
,E ;himti $0 E0E #7G CDC
,4 (hote&oshi E$ 84$ (;7C CDC
,0 Indrawati 3.0 0, N#7C CDC
,$ 2yange 0.8 ,.8 2#C CDC
,3 Chilime 80 ,0, C#C 7CDC
,. 7iluwa E ,. )H#CD CDC
,4 2un&oshi 8.$ ,4.0 2#7C CDC
80 Cha&u ;hola ,.0 )lliance 7ower
8, 2mall hydro ,8.0 8$ N?) CDC
88
2mall hydro
-Isolated/
$.4 N?) CDC
8E icrohydro ,4.0
%otal 0$..3
1.2. O-er-"e$ of C+"#"e Hydro!o$er Co!any .""ted
3
Chilime #ydropower Company Gimited -Chilime/ was incorporated in ,440 with an o"jective of
hydroelectricity generation through optimal utili'ation of resources within the country. Nepal
?lectricity )uthority -N?)/ holds majority ownership with 0,* shareholding. Cemaining 44*
shareholding is from general pu"lic including ,0* e:uity ownership of local people.
Chilime owns and operates 88., ! power plant commissioned on )ugust 80, 800E and located
in Casuwa district, ,EE &m north of capital city ;athmandu. It sales "ul& electricity to N?) at
the long term 77) price. %he annual energy generation from plant is a"out ,00 1!h.
Chilime has esta"lished following three su"sidiariesB
,. Casuwagadhi #ydropower Company Gimited.
8. adhya (hote&oshi Falavidhyut Company Gimited.
E. 2anjen Falavidhyut Company Gimited.
Chilime, through its three su"sidiaries, is developing four hydropower projects with aggregate
capacity of 830.E !.
%he Chilime #ydropower 7lant is a pea&ing run off river type plant constructed and owned "y
Chilime #ydropower Company Gimited. It is located at ,EE &m north of ;athmandu at the right
"an& of (hote&oshi Civer in Casuwa @istrict. %he plant with the installed capacity of 88., !
is delivering power to the National 1rid through a E. &m long $$ &H single circuit transmission
line at %risuli 7ower #ouse 2witchyard at %rishuli, Nuwa&ot.
%he electricity generated from the power plant is purchased "y N?) at the powerhouse and
evacuated as per the 77) made on Fune 80, ,443 and its first amendment made dated @ecem"er
,0, 8003.%he annual deemed energy sala"le to N?) is ,E8.4,. 1!h, excluding penalty+free
outage of 380 !h-E$ hours/ annually. %he plant has started its commercial generation from
00B00 hours of .th (hadra 80$0 -84th )ugust 800E/. @uring nine years of its operation, the plant
has "een operating successfully.
1&/&1& ("ss"on 0 1"s"on
1"s"on
2To ,e t+e #argest !u,#"c +ydro!o$er co!any "n Ne!a#&2
("ss"on
%o harness hydropower potential of the country for the "enefit of the people at large "y
optimally utili'ing the untapped resources and creating synergy with the private sector.
%o ensure attractive and sustaina"le long term return to our shareholders through prudent
and sound investment.
%o create a competitive wor&ing environment with long term career prospects to our
employees where"y they will nurture a culture to learn, grow and put their "est effort to
the growth of the company.
4
%o maximi'e the pu"lic participation and empower them to have "etter living, and
%o ma&e the communities in which we live, wor& and serve "etter places to "e.
1a#ues
Pu,#"c 3ocus4
!e strive to maximi'e the involvement of pu"lic as shareholders ensuring them attractive and
sustaina"le return.
(anageent E5ce##ence4
!e are committed to ensure management excellence through innovation and adoption of the "est
practices "oth in execution and operation of the projects to maximi'e the efficiency and :uality
of the service.
Huan Resource
!e are committed to provide our employees opportunities to learn and grow to achieve their full
potential.
Cor!orate %o-ernance4
!e "elieve in "eing accounta"le, conducting "usiness ethically and transparently.
Cor!orate Soc"a# Res!ons","#"ty4
!e are committed to ta&e social initiatives for the development of local areas in particular and
the nation in general.

Po#"c"es
Quality Management Policy:
!e are committed to develop and generate electricity from hydropower projects
satisfying our sta&eholders through continual improvement in its technology, process,
human resource management and complying the statutory I regulatory re:uirement.
Environmental Management Policy:
!e are committed to produce our products in an environment friendly and responsive
manner "y implementing, maintaining and continually improving our environmental
management system.
1"s"on /6/6
%o develop 000 ! hydropower projects in our portfolio "y 8080.

5
1&/&/& Strategy
%o develop hydropower projects "y optimally utili'ing domestic and foreign resources through
its su"sidiary companies, and in alliance with pu"lic utilities and other prospective
private hydropower developers.
1&/&7& O$ners+"!
6
1&/&8& Board of D"rectors
,. r. )rjun ;umar ;ar&i
Chairperson
8. r. Gila Nath (hattrai
@irector
E. r. 2her 2ingh (hat
@irector
4. r. 1ovind Caj ;harel
@irector
0. r. ;ul an 1hising
anaging @irector
$. r. Fayandra 2hrestha
@irector
3. r. %ulasi Cam @ha&al
@irector
.. r. 7hrupu %enjen %amang
@irector
4. r. 6am ;umar 2hrestha
@irector
,0. r. (idur (ahadur @hungana
Company 2ecretary
,.8.0. Perforance of P#ant
7
%he power plant has very efficient and ro"ust electromechanical e:uipmentJs, as a result, the
plant is a"le to generate ,E..* excess energy in addition to the deemed energy as per the 7ower
7urchase )greement with Nepal ?lectricity )uthority. In fiscal year 80$3K0$., the plant has "een
successful in delivering chargea"le deemed energy ,E8.34 1wh, chargea"le excess energy of
,0.03 1wh and free excess energy ..8$ 1wh. Insurance of the plant has "een made with Castriya
(eema 2ansthan.
1&/&9& Sa#"ent 3eatures
Civer Chilime ;hola.
%ype of scheme Cun of river with pea&ing pondages
%ur"ine discharge 3.0mLEKs
1ross head E0,.0 m
Net head EE3.4$ m
Installed capacity 88., !-8M,,.00 !/
)verage annual energy ,E3.4 1!h -,E3 million units/
@eemed energy ,E8.4 1!h-,E8 million units/
Inta&e si'e 8M0.00 mM,.8 m
@iversion !eir- GM#/ ,E mME.80 m
2luiceway !idth E.0m
@esanding (asin %ype @ufour -@ou"le Cham"er/
@esanding (asin @imension -GM(M#/ $0 mM 3.0 mME.30 m
2yphon -GM@/ 0. mM8.8 m -2teel 7ipe/
7ower Canal -GM(M#/ $0$ mM 8.8 mM 8.8 m
5eeder canal with (emdang &hola -G/ .8.,0 m
7ea&ing pondage 2torage Capacity 0E0E8 mLE
7ressure Conduit -G/ 4,4 m
#eadrace %unnel -G/ 8.8$.0 m
>nderground 2urge tan& -@M #/ $.0 mMEE m
>nderground 7enstoc& -GM@/ $E0.0 mM,.$4 m to 8.,3 m
%ransformer Cavern -GM!M#/ $3 mM,0 mM 3.0 m
2witchgear Coom -GM!M#/ ,4 mM ,8 mM..0 m
7owerhouse Cavern -GM!M#/ 40 m to 00 m M,$ mM ,$.0 m
%ailrace tunnel -GM!M#/ 84E mM E mM E m
%ur"ine -%ype I output/
#ori'ontal, 7elton -8M,,.8. !/ @igital
1overnor
1enerators -%ype, Capacity I Holtage/ (rushless ?xcitation, ,E H), ,, ;H
%ransformers -%ype, Capacity I
Holtage/
2ingle 7hase, 4.80 H) M 3 Nos.
8
2witch gear %ype 1as Insulated etal Clad -1I2 2ystem/
%ransmission Gine -GMH I Circuit/
E. ; M $$ ;H 2ingle Circuit -!olf
Conductor/
%he generation statistics of the 7lant is shown "elow,
@escription 80$0K$, 80$,K$8 80$8K$E 80$EK$4 80$4K$0 80$0K$$ 80$$K$3 80$3K$.
@eemed
1eneration
-!h/
,,0,,4. ,E8,30. ,EE,880 ,E8,34$ ,E8,0$. ,E8,3$4 ,EE,8E4 ,E8,340
%ransmitted
etered
?nergy-!h/
,,E,.,0 ,E,,0$. ,E4,$$4 ,44,0.E ,4,,,3$ ,44,00, ,4.,,E8 ,00,,,0
Chargea"le
?nergy
-!h/
,04,,48 ,84,4.4 ,E$,E88 ,E4,$0, ,E.,400 ,48,,E. ,4,,0$0 ,48,.$0
,.8.3. Suary of P#ant Status
%he hydraulic structures of the plant are in good condition and major repair wor&s have not "een re:uired
so far. %he main e:uipmentJs have proven to "e ro"ust and the whole electromechanical system design
has proven to "e effective and as per the conditions and practices of the Nepalese system. It is seen from
the data that the generation from the plant, for last seven years, has "een fairly higher than the deemed
generation.
Improvement in the system such as cooling water system, inta&e trash rac&, desander flushing, reservoir
flushing, etc., has contri"uted to the high availa"ility of the plant. )s a result the plant has "een a"le to
generate excess energy "esides deemed energy from the 8nd year of its generation.
1&7& Introduct"on of Prof"ta,"#"ty
5inancial analysis is the use of statement and calculation of ratios, to monitor and evaluate the
financial performance and position of a "usiness. 5inancial analysis needs the use of the various
9
types of the financial information, such as "alance sheet, income statement, sources and uses of
fund statement and statement of each cash flow. 5inancial analysis can "e underta&en "y
management of the firm, or "y parties outside the firm, for example owners, creditors etc.
5inancial analysis is the process of extracting and studying information in financial statement for
the use in management decision ma&ing. %herefore, statements provide a summari'ed view of
the financial position and operation of the firms. %herefore, much can "e learnt a"out a firm from
a careful examination of its financial statements as valua"le documents or performance reports.
7rofita"ility is the a"ility to generate profit. It shows the rate at which profit is growing. %he
percentage of input should "e e:ual to the percentage of output. If itJs not e:ual, it indicates that
there is some pro"lem in the company.
7rofit is the difference "etween revenue and expenses over a period of time. It is the ultimate
output of the company and is the goal of each "usiness concern, whether trading, commercial or
industrial. ) venture is underta&e only after an extremely careful assessment with regard to its
profita"ility has "een made and found satisfactory.
<7rofita"ility is the indicator of the success of "usiness in terms of figure from which the
"orrower assures the repayment of loan to the "an&=.
7rofita"ility is a measure of efficiency and the search for it provides an incentive to achieve
efficiency. 7rofita"ility also indicates pu"lic acceptance of the product and shows that the firm
can provide competitively, moreover, profit the money for repaying the de"t incurred to the
finance the project and the resources for internal financing of expansion. %he profita"ility of a
firm can "e measured "y its profita"ility ratio.
7rofita"ility ratios can "e determined on the "asis of either sales or investments. %he profita"ility
ratios in relation to sales are -a/ profit margin -"/ operating ratio. 7rofita"ility ratios in relation to
investment are measured "y -a/ return of assets -"/ return of capital employed, and -c/ return on
shareholdersJ e:uity.
7rofita"ility is an important factor to "e considered as it determines whether the company has
"een successfully operating or not. ItJs one of the main judgment factors to show the real worth
of a company or organi'ation for that matter.
1&8& Stateent of t+e Pro,#es
%his research see&s to find the profita"ility of Chilime #ydropower 7roject Company. @uring the
study of this field wor&, the following pro"lems have "een found in the company.
10
,. anagement practices are tradition.
8. 7oor efficiency due to the use of old technology.
E. ar&et is limited. It cannot cover considera"le position in mar&et.
4. %here is lac& of effective channels of communications. 2o re:uired information may not
"e achieved at the time of re:uirement.
0. Gac& of s&illed trained and professional employees.
$. @eserving and a"le employees do not get chance to wal& due to nepotism and favoritism
3. 5re:uent changes in 7olitical and government policies.
1&:& O,;ect"-e of t+e Study
) 2tudy without clearly stated o"jectives is li&e a fishing expedition in un+chartered water.
?verything else that follows in the study as selection of varia"le to studied, determination of
methods, etc. is "ased on o"jectives. D"jectives are value statement, which descri"e the reasons
for the study. %he pro"lem to addressed, expected achievements, and limitations imposed upon
the study. %he following are the o"jectives of the study.
,. %o analy'e profita"ility position in relation to fund mo"ili'ation of Chilime #ydropower
Company Gtd.
8. %o find the pro"lems of Chilime #ydropower project.
1&9& S"gn"f"cance of t+e Study
2ince the 7rofita"ility analysis is the main study of this project wor& and this is very important in
the context of Nepalese "usiness organi'ation whose main goal is to ma&e profit. ?very
organi'ation aims to earn profit increasing order "ut this may not just happen regularly. )n idle
"lend of sales and cost "ears good profit. It is expected that this study help to promote
hydropower "usiness "y analy'ing their accounting activities. It is sure that the survival and
promotion of such "usiness is directly depending upon good management. %hey can survive only
if they are "earing profit. %his study also help them to plan the profit "y changing the level of
different profit factors li&e selling price, varia"le cost, level of output and the fixed cost. 2o this
project has also tried to ma&e such firms conscious to adopt latest management practices
regarding cost controlling.
1.7. .""tat"ons of t+e Study
%his project wor& is conducted under the following limitationsB
,. %he 2tudy is focused on profita"ility analysis of Chilime #ydropower Company Gtd on
which, it assumed that profita"ility can "e found "y studying gross profit margin on sales,
11
net profit margin on sales, return on total assets, return on common e:uity and earning
power ratio.
8. %he study is solely "ased on data provided "y the firm on its annual report. 2o the result
is highly dependent on the relia"ility of the data provided.
E. %he result of the study in some cases is affected "y lac& of appropriate information as
needed.
1&<& (et+od of Data Co##ect"on
5or the purpose of completion of the report writing assignment, the data are collected from primary as
well as secondary source.
a& Pr"ary data4
7rimary data are collected through survey or o"servation of wor&ing condition "y visiting site and
through interview with concerned authority.
a& Secondary data4
2econdary data are collected through annual, maga'ines, relevant previous studies etc. and also through
unpu"lished official data, etc.
Procedure of data co##ect"on
%he method utili'ed for the purpose of the collection of primary and secondary data are enumerated
"elowB
5ield Hisit
%his is one of the important method to collect accurate information. 5rom this method, we can
collect the data, which we see at the site.
Nuestionnaire method
%his is another way of data collection. In this we prepare the :uestionnaire for the project
manager and other departmental staffs. %his structured :uestionnaire is used to gather
information from the project officials.
7u"lication
%his is another way to collect information a"out the project. !e can collect information from
newspaper, "rochures, prospectus, portal etc. %he 7roject may have pu"lished different articles
relating to the project, from which data can "e gathered.
CHAPTER /
'PRESENTATION 0 ANA.=SIS O3 DATA*
/&1& Prof"ta,"#"ty Rat"o
12
7rofita"ility is an important factor to "e considered as it determines whether the company has
"een successfully operating or not. ItJs one of the main judgment factors to show the real worth
of the company or organi'ation for that matter.
7rofita"ility is the net result of num"er of polices and decisions. %he ratio examined thus to
provide some information a"out the way the firm is operating. 7rofita"ility ratio is shows the
com"ined effect of li:uidity, assets management and de"t management on operating result.
ajor types of profita"ility ratios are+
a. 1ross 7rofit argin on 2ales
". Net 7rofit argin on 2ales
c. Ceturn on %otal )ssets -CD)/
d. Ceturn on Common ?:uity -CD?/
e. ?arning 7ower Catio
/&1&1& %ross Prof"t (arg"n on Sa#es
%his ratio measures gross profit per rupees of sales. 2o, high gross profit margin on sales is a
sign of good management efficiency to produce goods and service at low cost.
It is calculated "y dividing gross profit "y sales
%ross Prof"t (arg"n on Sa#es > %ross Prof"t ? Sa#es
1ross 7rofit margin on sales for five fiscal year is shown "elow,
'Rs& In ("##"on*
5iscal 6ear 1ross 7rofit %otal 2ales Catio -*/
80$0K80$$ .80.E, 4E0.0$ ...8,
80$$K80$3 .,E..E 440.$. .,.34
80$3K80$. .,0.44 ,030.34 30.E.
80$.K80$4 343..3 ,804.$0 $$.84
80$4K8030 .33.30 ,880.E$ 3,.$E
)verage 3$.$4
2ourceB )nnual Ceport of Chilime #ydropower Co. Gtd.
13
3"gure /&1&1 'a*
5rom the a"ove ta"le and figure, it is clear that the gross profit and total sales for the fiscal year
80$0K80$$ are .80,E,0,000 and Cs 4E0,0$0,000 respectively. Its ratio is ...8,*. %he gross profit
and total sales for the fiscal year 80$$K80$3 are .,E,.E0,000 and Cs 440,$.0,000 respectively. Its
ratio is .,.34*. %he gross profit and total sales for the fiscal year 80$3K80$. are .,0,440,000
and Cs ,,030,340,000 respectively. Its ratio is 30.E.*. %he gross profit and total sales for the
fiscal year 80$.K80$4 are 343,.30,000 and Cs ,,804,$00,000 respectively. Its ratio is $$.84*.
%he gross profit and total sales for the fiscal year 80$4K8030 are .33,300,000 and Cs
,,880,E$0,000 respectively. Its ratio is 3,.$E*.
%he ratio is also shown "y trend lines follows,
3"gure /&1&1',*
14
/&1&/& Net Prof"t (arg"n on Sa#es
%his ratio measures net profit per rupees of sales. ) high net profit margin ratio is a sign of good
management efficiency to produce goods and services at low cost. It is calculated "y dividing net
profit "y sales.
Net Prof"t (arg"n on Sa#es > Net Prof"t ? Sa#es
%he net profit margin on sales for five fiscal year is shown "elow,
'Rs& In ("##"on*
5iscal 6ear Net 7rofit %otal 2ales Catio -*/
80$0K80$$ 3E0.E$ 4E0.0$ 3..$0
80$$K80$3 333.4E 440.$. 3..0.
80$3K80$. .4E.,4 ,030.34 3..E3
80$4K80$4 440.E8 ,804.$0 3..4.
80$4K8030 4$0.00 ,880.E$ 3..3$
)verage 3..44
Source: Annual reports of Chilime Hydropower Co. td.
3"gure /&1&/ 'a*
5rom the a"ove ta"le and figure, it is clear that the net profit and total sales for the fiscal year
80$0K80$$ are Cs 3E0,E$0,000 and Cs 4E0,0$0,000 respectively. Its ratio is 3..$0*. %he net
profit and total sales for the fiscal year 80$$K80$3 are Cs 333,4E0,000 and Cs 440,$.0,000
15
respectively. Its ratio is 3..0.*. %he net profit and total sales for the fiscal year 80$3K80$. are
Cs .4E,,40,000 and Cs ,,030,340,000 respectively. Its ratio is 3..E3*. %he net profit and total
sales for the fiscal year 80$.K80$4 are Cs 440,E80,000 and Cs ,,804,$00,000 respectively. Its
ratio is 3..4.*. %he net profit and total sales for the fiscal year 80$4K8030 are Cs 4$0,000,000
and Cs ,,880,E$0,000 respectively. Its ratio is 3..3$*.
%he ratio is also shown "y trend line as follows
3"gure /&1&/',*
/&/&7& Return on Tota# Assets 'ROA*
CD) measures the return on total assets after interest and taxes. ) higher ratio indicates the
efficiency of overall financial resources to investment is good. It means, higher the ratio, the
"etter will "e the performance. It is calculated "y dividing net profit "y total assets.
Return on Tota# Assets > Net Prof"t ? Tota# Assets
16
%he return on total assets for five fiscal year is shown "elow,
'Rs& In ("##"on*
5iscal 6ear Net 7rofit %otal )ssets Catio -*/
80$0K80$$ 3E0.E$ ,4,$.8. E..E3
80$$K80$3 333.4E ,.$4.E0 4,.04
80$3K80$. .4E.,4 8,4..38 E4.84
80$4K80$4 440.E8 88$4.4. 4,.34
80$4K8030 4$0.00 84$0.40 E4.,4
)verage 40.08
Source: Annual reports of Chilime Hydropower Co. td.
3"gure /&1&7'a*
5rom the a"ove ta"le and figure, it is clear that the net profit and total assets for the fiscal year
80$0K80$$ are Cs 3E0,E$0,000 and Cs ,,4,$,8.0,000 respectively. Its ratio is E..E3*. %he net
profit and total assets for the fiscal year 80$$K80$3 are Cs 333,4E0,000 and Cs ,,.$4,E00,000
respectively. Its ratio is 4,.04*. %he net profit and total assets for the fiscal year 80$3K80$. are
Cs .4E,,40,000 and Cs 8,,4.,380,000 respectively. Its ratio is E4.84*. %he net profit and total
assets for the fiscal year 80$.K80$4 are Cs 440,E80,000 and Cs 8,8$4,4.0,000 respectively. Its
ratio is 4,.34*. %he net profit and total assets for the fiscal year 80$4K8030 are Cs 4$0,000,000
and Cs 8,4$0,400,000 respectively. Its ratio is E4.,4*.
17
%he ratio is also shown "y trend line as follows
3"gure /&1&7',*
/&1&8& Return on Coon E@u"ty 'ROE*
%his ratio measures return on common e:uity -CD?/ or the rate of return on stoc&holderJs
investment. %his e:uity involves paid up capital, general reserves, and retained earnings of
surplus I general loan provision. It reflects whether the firm has earned a satisfactory return for
its e:uity+ holders or not. 2o, higher ratio is favora"le for stoc&holders. It is calculated "y
dividing net profit "y total assets.
Ceturn on Common ?:uity -CD?/ O Net 7rofit K Common ?:uity.
%he return on common e:uity for five fiscal year is shown "elow,
'Rs& In ("##"on*
5iscal 6ear Net 7rofit Common ?:uity Catio -*/
80$0K80$$ 3E0.E$ 384.$0 ,00.34
80$$K80$3 333.4E 384.$0 ,0$.0$
80$3K80$. .4E.,4 43E.04 .$.$4
80$4K80$4 440.E8 ,3E0.0, 04.$4
80$4K8030 4$0.00 ,343.80 00.8E
)verage .0.33
Source: Annual reports of Chilime Hydropower Co. td.
18
3"gure /&1&8'a*
5rom the a"ove ta"le and figure, it is clear that the net profit and common e:uity for the fiscal
year 80$0K80$$ are Cs 3E0,E$0,000 and Cs 384,$00,000 respectively. Its ratio is ,00.34*. %he
net profit and common e:uity for the fiscal year 80$$K80$3 are Cs 333,4E0,000 and Cs
384,$00,000 respectively. Its ratio is ,0$.0$*. %he net profit and common e:uity for the fiscal
year 80$3K80$. are Cs .4E,,40,000 and Cs 43E,040,000 respectively. Its ratio is .$.$4*. %he net
profit and common e:uity for the fiscal year 80$.K80$4 are Cs 440,E80,000 and Cs
,,3E0,0,0,000 respectively. Its ratio is 04.$4*. %he net profit and common e:uity for the fiscal
year 80$4K8030 are Cs 4$0,000,000 and Cs ,,343,800,000 respectively. Its ratio is 00.8E*.
%he ratio is also shown "y trend line as follows
19
/&1&:& Earn"ng Po$er Rat"o
%he ratio of operating profit ?(I% to total assets measures earning power ratio "efore interest
and taxes. It is calculated "y dividing earnings "efore interest and taxes "y total assets.
Earn"ng Po$er Rat"o > EBIT ? Tota# Assets
%he earning power ratio for five fiscal year is shown "elow,
'Rs& In t+ousand*
5iscal 6ear ?(I% %otal )ssets Catio -*/
80$0K80$$ 3E0.E$ ,4,$.8. E..E3
80$$K80$3 333.4E ,.$4.E0 4,.04
80$3K80$. .4E.E. 8,4..38 E4.80
80$4K80$4 44E.84 88$4.4. 4,.$0
80$4K8030 4$8.$3 84$0.40 E4.00
)verage E4.4.
Source: Annual reports of Chilime Hydropower Co. td.
3"gure /&1&:'a*
5rom the a"ove ta"le and figure, it is clear that the ?(I% and total assets for the fiscal year
80$0K80$$ are Cs 3E0,E$0,000 and Cs ,,4,$,8.0,000 respectively. Its ratio is E..E3*. %he ?(I%
and total assets for the fiscal year 80$$K80$3 are Cs 333,4E0,000 and Cs ,,.$4,E00,000
respectively. Its ratio is 4,.04*. %he ?(I% and total assets for the fiscal year 80$3K80$. are Cs
.4E,E.0,000 and Cs 8,,4.,380,000 respectively. Its ratio is E4.80*. %he ?(I% and total assets
for the fiscal year 80$.K80$4 are Cs 44E,840,000 and Cs 8,8$4,4.0,000 respectively. Its ratio is
20
4,.$0*. %he ?(I% and total assets for the fiscal year 80$4K8030 are Cs 4$8,$30,000 and Cs
84$0,400,000 respectively. Its ratio is E4.00*.
%he ratio is also shown "y trend line as follows,
3"gure /&1&:',*
/&/& Pro,#e and So#ut"ons
(y the analysis of all the data here, we can say that there is not much pro"lem while running this
project and there is average point for this project. 2o, company seems to achieve its primary goal
and for the expansion it has to ta&e over lots of projects towards villages and remote areas.
/&7& Study Resu#t
5rom the a"ove analysis we can derive the following resultsB
(y the profita"ility analysis of Chilime #ydropower 7roject, we can conclude that the
project is a"le to utili'e its sales of product.
%his study shows medium result, li&e neither good nor "ad. )veragely the project is
running good "ut not "est.
5inally it seems that the company has success in achieving its primary o"jectives.
21
CHAPTER 7
'SU((AR=A CONC.USION 0 RECO((ENDATION*
7&1& Suary
7roject management is fast "ecoming an exciting new profession and it is new way of thin&ing
a"out achieving project o"jectives. 2o, project managers are in great demand for pu"lishing
house, university, agriculture and rural development, industrial construction project etc. It is a
system approach for efficient and effective achievement of project o"jectives through assignment
of inception to completion, co+ordination across functional lines and proper utili'ation of
planning and control tools.
Chilime #ydropower project is the private sector power project in Nepal, "ased on (uild+Dwn+
Dperate %ransfer -(DD%/ policy of Nepal 1overnment. Nepal ?lectricity )uthority and #7G
entered into a 7ower 7urchase )greement -77)/ on 8008. 7roject planning in Chilime
#ydropower Company was ta&en "y top management and project manager. Cecruitment of
employee was done "y "oth internal and external sources, Fo" evaluate is done through rating,
pair comparison etc. and project evaluation is done to improve project implementation. )ll the
phases are finished in prescri"ed time. If there is conflict "etween management and employee,
the executives and project manager resolve the conflict. %o motivate the employee project give
"onus to its employee. %hey also provide training to improve employeeJs s&ill. %he controlling
system used "y Chilime #ydropower Company Gimited was "udget and schedule. %he input
ta&en "y the project is people, technology, money etc.
) study without clearly stated o"jective is li&e fishing expedition in un+ chartered water.
?verything else that follows in the study as selection of varia"le to studied, determinations of the
methods etc. is "ased on o"jectives. D"jectives are value statement, which descri"e the reason
for the study. %he pro"lems to "e addresses, expected achievements, and limitations imposed
upon the study
7&/& Conc#us"on
%his study includes the following thingsB
,. 7roject management is "ecoming an exciting new profession and it is new way of
thin&ing a"out achieving project o"jectives.
8. Chilime #ydropower project is the private sector power project in Nepal.
E. 7roject planning in Chilime #ydropower Company was ta&en "y the top management
and project manager. Cecruitment of employees was done "y "oth internal and external
sources.
4. ) study without clearly stated o"jectives is li&e fishing expedition in un+chartered water.
0. Chilime #ydropower Co. Gtd. performance is effective in sense of profita"ility and
customers.
22
7&7& Recoendat"on
5rom the a"ove study of the profita"ility analysis of Chilime #ydropower Company some
suggestion and recommendations are "eing forwarded.
,. %he Chilime #ydropower Company should try to reduce the costs, which helps the firm
to earn even more profit.
8. 2ince the company is getting good amount of profit, it could even improve its position "y
achieving its target to generate 000 ! as soon as possi"le.
E. (ut while increasing the production, it should use latest technology of high :uality so that
there should "e less chance of "rea&down of e:uipmentJs.
4. Nepotism and favoritism need to "e stop so that deserving candidate can join the team.
23
BIB.IO%RAPH=
)grawal 1.C -8000/, Project Management in Nepal, .; pu"lishers
and @istri"utors.
@awadi C.N -8000/, Nepalese Economics, (hri&uti )cademic
7u"lications.
2hrestha ;.N -,44./, Organization Management, Na"in 7ra&ashan.
2hrestha ;.N -,444/, Human Resource Management, Na"in 7ra&ashan.
1himire 2.C -8000/, Financial Management, ;.7 7usta& (handar.
)nnual report -80$0 to 80,E/ of Chilime #yrdropower Company Gtd.
24