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Performance Evaluation of Barisal Power Company Limited

by,

Sabina Yesmin Anny


ID: 1210303

An Internship Report Presented in Partial Fulfillment of the Requirements


for the Degree
Bachelor of Business Administration

INDEPENDENT UNIVERSITY, BANGLADESH


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August, 2017

Performance Evaluation of Barisal Power Company Limited

by,

Sabina Yesmin Anny


ID: 1210303
has been approved August, 2017

Isma Khan
Assistant Professor, Management
School of Business
Independent University, Bangladesh

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LETTER OF TRANSMITTAL
August, 2017

To
Isma Khan
Assistant Professor, Management
School of Business
Independent University, Bangladesh

Subject: Submission of Internship Report.

Dear Sir,
Here, I am submitting the internship report titled Performance Evaluation of Barisal
Power Company Limited to you, is a great pleasure. The internship program provides
the scope and gives the opportunity of learn different trends and aspects of a reputed
organization. I have already acquired knowledge regarding corporative culture and I have
tried to explain the knowledge by working in Barisal Power Company Limited, Dhaka.
I have also picked up valuable experience in the last three months. Thank you very much
for providing me this type of opportunity and giving me the necessary guidance and
direction needed for preparing the report.
I have tried my level best to make this report holistic and informative enough. I would be
grateful if you consider those from excusable point.

Sincerely yours,

___________________________
Sabina Yesmin Anny
ID: 1210303
School of Business
Independent University, Bangladesh
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ACKNOWLEDGEMENT

At the very beginning, I would like to express my deepest gratitude to almighty ALLAH
for giving me the strength, ability and the energy to finish this task within the scheduled
time. In conducting this report, I have received generous help from many persons, which I
like to put on record here with deep gratitude and great pleasure. First and foremost, I am
highly indebted to my internship supervisor Isma Khan, Assistant Professor, Management,
School of Business Independent University, Bangladesh. She allowed me her precious time
freely right from the very beginning of this internship work till the completion. Her
experienced guidance, affectionate encouragement, scheduled meeting and critical
suggestions provided me necessary help for the report and make the way for the meaningful
ending of this report work in a short duration. I have no hesitation to say that, without her
constant supervision and valuable advices and suggestions from time-to-time, I would be
failed to complete the whole thing. I am also grateful to the employees of Barisal Power
Company Limited, for spending their valuable time and share enough information with me.
Specially, more delightfully I would like to thank Managing Director. Moreover, I would
also like to thanks all of the Barisal Power Company Limited family those who contributed
through their comments and suggestions to prepare this paper in a comprehensive manner.

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Table of Contents
Title Page
Letter of Submission
Table of Contents
Acknowledgement
Chapter One
Introduction of the Report
1.1 Company Profile
1.2 At present Barisal Power Company Ltd
1.3 Mission
1.4 Vision
1.5 Objective
1.6 Projects
1.7 Board of Directors
1.8 Management Committee
1.9 Financial Highlights
Chapter Two
Internship Experience
2.1 Job Responsibilities
2.2 Functions of the Department
2.3 Scope of the Report

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Chapter-01
Introduction on Report

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1.1 Company Overview
Barisal Power Company Ltd. (BPCL) is the pioneer in the private sector power production
field in Bangladesh. Barisal Power is the largest local Independent Power Producer. BPCL
is also the first power generating company to be listed in the local stock exchanges.
Barisal Power Company Limited (BPCL), a company Barisal Group, is the first
Bangladeshi Independent Power Producer (IPP) in Bangladesh and until now the only local
company in private electricity generation and supply business providing power to national
grid. BPCL was incorporated in Bangladesh on March 30, 1997 as a Private Limited
Company. On June 7, 2004 the Company was converted to Public Limited Company under
the Companies Act 1994.
Barisal Group is one of the leading investment and industrial business house in
Bangladesh. The major sectors in which the group is currently investing in include
power generation, port such as container freight station, tank terminal, shipping,
property development, construction, civil & hydro engineering & trading.
The sponsors of Barisal group are interested in infrastructure sectors in Bangladesh
and abroad. This has led to the establishment of the first barge mounted power plant
in Bangladesh namely Khulna Power Co. Ltd, Liquefied Petroleum Gas (LPG) plant
in gas starved area at Mongla Bagerhat, 54 km long gas pipeline of 30 inches
diameter from Ashugonj to Hobiganj, Container Freight Station in Chittagong etc.
The company is also exploring energy markets in Sri Lanka and Vietnam which
have emerging energy sector open to investment.
Barisal Power Company Limited has successfully established in the year 2001 three
power plants each with 11 MW capacities for sale of electricity to Rural
Electrification Board (REB) under build, own and operate basis at Savar, Narsingdi,
and Comilla. The company has already expanded its total generation capacity to 105
MW. Barisal Power Company Limited is going to implement another four power
plants totaling a capacity of 110 MW through its two subsidiary companies Barisal

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Uttaranchol Power Company Limited and Barisal Purbanchol Power Company
Limited.

1.2 At present Barisal Power Ltd


Local Barisal Group and US General Electric (GE) signed an agreement on
Thursday with IDLC to receive $115 million from the World Banks Investment
Promotion Facilitation Fund to implement two 341-megawatt power projects in
Bibiyana.
On the same day, the two companies signed another deal with Janata Bank and
Industrial and Infrastructure Development Finance Company (IIDFC) to raise Tk
1,500 crore through zero-coupon bonds. This fund will be pumped into the
Meghnaghat dual fuel 335MW power project.
Barisal was awarded the Bibiyana gas-fired projects and the Meghnaghat power
project about four months back. The Bibiyana projects will need $560 million (Tk
3,920 crore) and Meghnaghat Tk 2,100 crore investment.
The Thursdays deal ensures a large part of financing for these three power projects
expected to begin production in early 2013 of the cheapest electricity costing less
than Tk 2 per kilowatt hour.

Barisal Group Chairman Muhammed Aziz Khan said Janata Bank and IIDFC
would provide Barisal with Tk 1,500 crore against a sanction of Tk 2,100 crore
financing. The remaining Tk 600 crore is deducted as advance interest for the next
four years.
As infrastructure like this has long gestation periods, zero-coupon bonds enable
companies to implement these projects with an optimised cash flow.

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The bonds carry a 5 percent discount and 12 percent convertible to the shares of
Barisal Meghnaghat Power Company at net asset value of the company.

Barisal Power Ltd has recently become the lowest in yet two more power tenders, Syedpur
100MW power plant and Shantahar 50MW power plant. Reports say the prime minister
signed the work award orders on January 21.

1.3 Mission .
To expand the company into a power generation capacity to the tune of 1000 MW,
which is 20% of the electricity requirement of Bangladesh. Barisal Power Company
Limiteds motto: "Empowering Bangladesh, we can & we will."

1.4 Vision
To provide quality and uninterrupted electricity to vast majority of rural Bangladesh for
their personal, social economic development.

1.5 Objective
Generate and provide uninterrupted reasonably priced electricity to our
customers
Efficient utilization of capital, machines, material and human resources
Continuous improvement of customer satisfaction and resource management

1.6 Projects
(a) Ashulia Power Plant:
This project was set up to provide electricity for Dhaka Palli Bidyut Samity under
15-years Power Purchase Agreement (PPA) with Rural Electrification Board
(REB). An implementation agreement has also been signed with the government of
Bangladesh (GoB).
After signing expansion agreements with REB and GoB, Barisal Power has increased
this plants production capacity by 33.75 MW with the total output being 45 MW.

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(b) Narsingdi Power Plant:
This project was set up to provide electricity for Narsingdi Palli Bidyut Samity under 15-
years Power Purchase Agreement (PPA) with Rural Electrification Board (REB). An
implementation agreement has also been signed with the government of Bangladesh
(GoB).
After signing expansion agreements with REB and GoB, Barisal power has increased this
plants production capacity by 24.30 MW with the total output being 35 MW.
(c) Comilla Power Plant:
This project was set up to provide electricity for Comilla Palli Bidyut Samity under 15-
years Power Purchase Agreement (PPA) with Rural Electrification Board (REB). An
implementation agreement has also been signed with the government of Bangladesh
(GoB).
After signing expansion agreements with REB and GoB, Barisal power has increased this
plants production capacity by 13.50 MW with the total output being 25 MW.
Barisal Uttaranchol Power Company Limited
(d) Ullapara Power Plant
This project was set up to provide electricity for Sirajganj Palli Bidyut Samity under 15-
years Power Purchase Agreement (PPA) with Rural Electrification Board (REB). An
implementation agreement has also been signed with the government of Bangladesh
(GoB).
The total output being 11 MW.
(e) Maona Power Plant
This project was set up to provide electricity for Maymensingh and Gazipur Palli Bidyut
Samity under 15-years Power Purchase Agreement (PPA) with Rural Electrification Board
(REB). An implementation agreement has also been signed with the government of
Bangladesh (GoB).
The total output being 33 MW.

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(f) Jangalia Power Plant
This project was set up to provide electricity for Comilla Grid Substation under 15-years
Power Purchase Agreement (PPA) with Bangladesh Power Development Board (BPDB).
An implementation agreement has also been signed with the government of Bangladesh
(GoB)
The total output being 33 MW.
(g) Rupganj Power Plant
This project was set up to provide electricity for Narayanganj Palli Bidyut Samity under
15-years Power Purchase Agreement (PPA) with Rural Electrification Board (REB). An
implementation agreement has also been signed with the government of Bangladesh
(GoB).
The total output being 33 MW.

1.7 Board of Directors .


Chairman Mr. Muhammed Aziz Khan

Managing Director Mr. Syed Ali Jowher Rizvi

Mrs. Anjuman Aziz Khan


Mrs. Sobera Ahmed Rizvi
Mr. Mohammad Latif Khan
Ms. Ayesha Aziz Khan
Mr. Syed Yasser Haider Rizvi
Directors
Ms. Adeeba Aziz Khan
Mr. Syed Nasser Haider Rizvi
Mr. Faisal Karim Khan
Ms. Azeeza Aziz Khan Alternate

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1.8Management Committees: .

Audit Committee

Mr. Abbas Uddin Ahmed Chairman

Mr. Tauhidul Islam, Managing Director Member

Ms. Ayesha Aziz Khan, Director(Finance) Member

Mr. A.N.M Tariqur Rashid, Executive Director(P&D) Member

Mr. Mahmud Hasan FCMA, Financial Controller Member

Executive Committee

Mr.Tauhidul Islam, Managing Director Chairman

Mr. Md. Latif Khan, Director Member

Ms. Ayesha Aziz Khan, Director (Finance) Member

Dr. Mirza Khairuzzaman, Senior Executive Director Member

Mr. A.N.M Tariqur Rashid, Executive Director(P&D) Member

Mr. Mahmud Hasan FCMA, Financial Controller Member

Purchase Committee

Mr. Md. Latif Khan, Director Chairman

Mr. Tauhidul Islam, Managing Director Member

Mr. A.N.M Tariqur Rashid, Executive Director(P&D) Member

Mr. Mahmud Hasan FCMA, Financial Controller Member

Technical Committee

Mr. A.N.M Tariqur Rashid, Executive Director(O&M) Chairman

Mr. Solaiman Patwary, General Manager (O&M) Member

Mr. Abdus Sobhan, General Manager (P&D) Member

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Md. Nazrul Islam Khan, Manager (E&I) Member

Mr. A.K.M. Asadul Alam Siddique, Plant Manager Member

Operation &smp; Maintenance Committee

Mr. Faisal Karim Khan Chairman

Mr. A.N.M Tariqur Rashid, Executive Director(O&M) Member

Mr. Solaiman Patwary, General Manager (O&M) Member

Md. Nazrul Islam Khan, Manager (E&I) Member

In charge of Plants Member

1.9 Senior Executives: .

Dr. Mirza Khairuzzaman, Senior Executive Director

A.N.M. Tariqur Rashid, Executive Director

Md. Solaiman Patwary, General Manager (Operation & Maintenance)

Md. Abdus Sobhan, General Manager (Planning & Development)

Mahmud Hasan FCMA, Financial Controller & Company Secretary

Md. Nazrul Islam Khan, Manager (Electrical & Instrumentation)

Mr. A.K.M. Asadul Alam Siddique, Plant Manager, Comilla Power Plant

Commander M Emdadul Haque, (E), psc, BN (Retd)

Md. Sirajul Islam, Plant Manager,Narshingdi Power plant

Md. Nazmul Hasan, Plant Manager, Rupganj Power Plant

Md. Fazle Elahi Khan, Plant Manager, Jangalia Power Plant

1.10 Success Milestones: .

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Incorporation of the company March 30, 1997

February 10,
Signing of Project Agreements With REB & GOB
2000

February 8,
Commercial operation at Savar
2001

Commercial operation at Madhabdi April 1, 2001

Commercial operation at Comilla June 08,2001

Conversion from Private to Public June 07, 2004

January 13,
Appointment of Issue Manager
2005

Credit Rating by CRISL March 29, 2005

Agreement with CDBL June 19,2005

Approval of Prospectus from SEC June 25, 2005

Signing of Project Agreements for expansion at Madhabdi and Comilla


June 28, 2005
with REB & GOB

Publication of Prospectus June 28, 2005


August 27,
Subscription Opens
2005

October 03,
Allotment of IPO shares
2005

October 23,
Listing with CSE
2005

November
Listing with DSE
10,2005

November 15,
First Trading in Stock Exchanges
2005

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Signing of Project Agreements for expansion at Savar with REB & GOB March 20, 2006

November 15,
Commercial operation at Comilla expansion project
2006

December 16,
Commercial operation at Madhabdi expansion project
2006

Incorporation of the Barisal Purbanchol Power Company Limited (99% August 15,
subsidiary of Barisal Power Company Limited) 2007

Incorporation of the Barisal Uttaranchol Power Company Limited (99% August 15,
subsidiary of Barisal Power Company Limited) 2007

Increase the Authorized Share Capital of the Company (BPCL) through September 29,
EGM for issuance of Rights Share at the ratio of 5:4 2007

Signing of Project Agreements with REB, BPDB 7 GOB to implement


October 11,
total 110 MW power plants (04 nos) through its two subsidiary
2007
companies.

December 04,
Commercial Operation at Savar expansion project
2007

1.11 Financial Highlights:


Capital and Reserves :
Basic Information Of current Year:
Authorized Capital in BDT (mn) : 10000.0
Paid-up Capital in BDT (mn) : 3034.0
Reserve & Surplus in BDT (mn) : 1184.17

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Capital structure
8%

Authorized Capital in
21%
BDT* (mn)
Paid-up Capital in BDT*
(mn)
Reserve & Surplus in
BDT* (mn)

71%

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Assets, Liabilities and Oweners Equity:
Position of BPCL in Accounting period 2009-10

Financial position

4352.97,
19%

total assets
698.52, 3%
total liability
10121.06, paid up capital
43% net profit
2223.94, shareholder equity
10%

5756, 25%

Turnover:
BPCL has a upword turnover history over the last five year. It indicates this
company is operated with smothness.

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Assests:
BPCL strategically go ahead with a conception of increasing the total assets of it. The following
table and graph show it clearly.
Year 2009 2008 2007 2006 2005
Current Assents 1174 642.55 478.59 253.79 385.63
Total Assents 10121.1 6707.12 4097.69 2782.7 1588.23

Current Assets & Cureent Liabilities:


Every Organization needs to overlock on the position of current assets and cureent
liabilities since it shows the effienciency of a company. Standard level of current assets
and current liabilities ratio is 2:1. BPCL showed over the last five year less current assets
considering current liabities. The relevent information are:
Year 2005 2006 2007 2008 2009
Current Assets 385.63 253.79 478.59 642.55 1174
Current Liabilities 205.48 644.39 886.29 736.58 1326

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Gross Profit & Net Profit:
Over the last five years BPCL is showing a unword rising of profitability which is
shown in the following table and graph.
Year 2009 2008 2007 2006 2005
Gross
Profit 1510.03 945.86 586.62 310.16 283.89

Net Profit 698.52 460.21 268.1 175.1 174.21

Gross Profit Ratio:


BPCL showed a mixed performance for gross profit ratio. It shows
performance over the capital. Following table and graph shows it clearly.
Year 2009 2008 2007 2006 2005

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Gross Profit
ratio (%) 52.98 54.43 51.07 53.08 54.49

Net Profit Ratio:


As like gross profit ratio, Net Profit Ratio also important since it show how much
money is expanded for maintainance of an organization. BPCL also showed around
a flat level performance on it.
Year 2009 2008 2007 2006 2005
Net Profit
Ratio (%) 24.59 26.48 23.34 29.96 33.43

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Net Profit Ratio

40
35
30
25
20 Net Profit Ratio (%)
Taka (mn)

15
10
5
0
2009 2008 2007 2006 2005
Year

Return of Total Assets:


Return on total assets shows how effectively an organization works with its assets.
In this consideration BPCL is not successful. Since over the last five years it is
declining the Return on total assests. The details are given below:
Year 2009 2008 2007 2006 2005
Return on total
Assets (%) 6.9 6.86 6.54 6.29 10.97

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Return on total Assets

12
10
8
Return on total Assets
Taka (mn)

6 (%)
4
2
0
2009 2008 2007 2006 2005
Year

Earning Per Share:


EPS is a key elements of showing the performance to a company or earning per
share. BPCL showed around a flat rate of earning over the last five years. The
following table and graph show it clearly.
Year 2009 2008 2007 2006 2005
Earning per
share (Taka) 31.41 25.71 31.25 25.66 37.33

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Earning per share

40
35
30
Taka (mn)

25
20 Earning per share (Taka)
15
10
5
0
2009 2008 2007 2006 2005
Year

Price Earning Ratio:


P/E ratio over the last five years was in upward movement of BPCL. P/E Ratio is a
very important element in investing of investor. It indicates the efficient
performance of company.

Year 2005 2006 2007 2008 2009


Price Earning Ratio (P/E) 9.46 20.64 46.65 46.69 48.04

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Price Earning Ratio (P/E)

60
50
40
Price Earning Ratio
P/E (tk)

30 (P/E)
20
10
0
2005 2006 2007 2008 2009
Year

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2.12 Financial Position At a glance:
Financial Position of BPCL for fiver years show how it is smoothly operated and
continuoue its business actibities, Relevent financial information are given below:
Operating data (Take in million) 2009 2008 2007 2006 2005

Operating Expenses 1339.84 791.93 1148.77 584.35 521.04

Turnover 2849.87 1737.79 562.15 274.19 237.15

Gross Profit 1510.03 945.86 586.62 310.16 283.89

General & Admin Expenses 258.41 176.71 134.80 102.83 73.76

Interest & Financial Charges 558.91 327.45 189.39 46.76 48.05

Net Profit 698.52 460.21 268.10 175.10 174.21

Balance Sheet data (Taka in


2009 2008 2007 2006 2005
million)

Paid up Capital 2223.94 1853.28 858.00 715.00 650.00

Shareholders Equity 4352.97 3654.44 1412.13 1154.49 1044.38

Total Debt 4430.00 2306.00 2268.12 1494.80 512.29

Current Assets 1174.00 642.55 478.59 253.79 385.63

Current Liabilities 1326.00 736.58 886.29 644.39 205.48

Total Assets 10121.06 6707.12 4097.69 2782.70 1588.23

Total Liabilities 5756.00 3042.97 2685.56 1628.21 543.85

Financial ratios 2009 2008 2007 2006 2005

Gross Profit ratio (%) 52.98 54.43 51.07 53.08 54.49

Net Profit Ratio (%) 24.59 26.48 23.34 29.96 33.43

Return on total Assets (%) 6.90 6.86 06.54 06.29 10.97

Debt Equity ratio 56:44 45:55 62:38 56:44 33:67

Others data 2009 2008 2007 2006 2005

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Operating data (Take in million) 2009 2008 2007 2006 2005

Earning per share (Taka) 31.41 25.71 31.25 25.66 37.33

Dividend (%) 25.00 20.00 20.00 20.00 20.00

Total no. of shares outstanding 222,39,360 1,85,32,800 85,80,000 71,50,000 65,00,000

Weighted average no. of shares


79,84,167 68,25,000 46,66,667
outstanding 222,39,360 1,78,97,346

Total no. of sponsors shares under


45,00,000 45,00,000 45,00,000
lock in 43,91,683 43,91,683

Total no, of free float shares 178,47,677 1,41,41,117 40,80,000 20,00,000 26,50,000

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Chapter-2
Internship Experience

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2.1 Job Responsibilities
BBA academic program is the building up to the theoretical knowledge about
business administration which is the base of practical knowledge. For Example, in
our 7th semester we are experiencing about the credit management system of an
organization. Our course namely Credit Management introduces us how to
manage the credit of an organization. For being practical knowledge, we select
Barisal Power Company Limited. And our key topic of study is Performance
Evaluation of Barisal Power Company Limited. It was assigned to us by our
course teacher, Md. Abdul Mannan. It was a challenge for us to complete a report
on such an important topic. But we have completed this report successfully thanks
to continuous supervision of our academic supervision Md. Abdul Mannan.
This report has been prepared based on Barisal Power Company Ltd. (BPCL) All
information is secondary and collected from Internet, Brochures, annual report
etc. Based on this information ratio has been calculated. For the calculation of ratio
has been calculated to measure the current position of the Barisal Power Company
Ltd. (BPCL). At the same time compare with the market performance.

2.2 Different Aspects of Job Responsibilities


The objective of the report is to provide a clear description of Barisal Power
Company Ltd. (BPCL) It also provides an exposure of practices of different
activities of Barisal Power Company Ltd. (BPCL) Observing the existing rules for
Credit Risk management policy and fulfilling the partial requirement of BBA
program is another objective of the report.

I have completed my report on Barisal Power Company Ltd. (BPCL) And this report
is about this organization. As one of the main objectives of report is to gather

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practical experience on credit risk management system, we have tried to put some
of the experiences that we have learnt from our report.

Primary Objective:
Primary objective of this report is to measure and analyze the operational and financial
performance of Barisal Power Company Ltd. (BPCL)
To analysis the pros and cons of the conventional ideas about credit operation
of Barisal Power Company Ltd. (BPCL)
To have better orientation on credit management activities specially credit
policy and practices, credit appraisal, credit-processing steps, credit
management of Barisal Power Company Ltd. (BPCL)
To analyze the credit risk management system of the Barisal Power Company
Ltd. (BPCL) under the guideline of the Bangladesh Bank (BB).
To analyze the credit performance of BPCL based on ratio analysis, SWOT
analysis, trend analysis and regression analysis.

The specific objectives of this report are


To present an overview of Barisal Power Company Ltd. (BPCL)
To appraise the performance of Barisal Power Company Ltd. (BPCL)
To apprise financial performance of Barisal Power Company Ltd. (BPCL)
To identify the problems of Barisal Power Company Ltd. (BPCL)
To recommend/ remedial measures of the development of Barisal Power
Company Ltd. (BPCL)

2.3 Scope of the Report


The scope of credit risk management is vast and wide. Basically, this report is
composed with two parts: Policy guideline and analysis. The policy guideline part
includes the general procedures and techniques of credit risk management and the
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guideline imposed by the Bangladesh Bank. The analysis part includes how actually
the BPCL follows and practices credit risk management system. Together these
statements give-
A proper and clear idea about the credit risk management techniques.
The practice of credit risk management by the commercial bank of
Bangladesh.
Whether the banks are success or not through using the credit risk
management techniques.

Source of information
Information collected to furnish this report is both from primary and secondary in
nature. We collected primary information by direct conversation with the credit
officers. Sources of secondary information were Annual Report of BPCL. We also
studied different books on Finance and Credit and searched through Internet for
more information.

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