1 Introduction of company/organization

1.1 Overview of organization

Kriti Capital & Investments Ltd. is a public limited company, established in December 28th
2011 by a group of professionals who have realized the need and understood the benefits of
institutionalizing investment banking services in Nepal. Established with the motto of
creating growth opportunities', Kriti Capital and Investments Limited aims to be an efficient
and effective medium for capital mobilization to earn superior return on capital invested.
Kriti Capital aspires to do so, by promoting entrepreneurial and innovative initiatives by
making necessary capital available to committed and dynamic entrepreneurs.
1.2 Mission/vision
Mission: Institutionalize investment banking services in the country that serves to: provide
advisory services to companies/institutions to manage their finances; mediate to access
required capital; and assist them to earn optimal return on their capital invested, create an
environment that promotes capital investments in entrepreneurial, innovative initiatives for
the economic growth of the country, meet financial services needs of individuals to manage
their investments/savings towards superior returns thru researched and reliable information
and optimal investment opportunities and provide superior return to the shareholders
Vision: "Be a leading financial services provider in the country through innovative and
sustainable investment banking services.
1.3 Major services of company
Kriti Capital basically operates as an investment banker, and it has also obtained Portfolio
Management Services license from SEBON. It also has an approved plan in place to apply for
other merchant banking licenses under the SEBON regulations.

Kriti Capital extends wide and seasoned experience of its professional management, both in
the local market as well as the international market, for the benefit of its client. Kriti's ranges
of services are:

Portfolio Management Services (PMS): It assists Savers to be Smart Investors who

opt for best value from their investments, working diligently to ensure optimal returns
to all the clients as per their aspirations.

Financial Advisory Services: It renders customized financial advisory services like

preparation of business plans, business due diligence for investors, etc.

Venture Promotion Services: Kriti provides venture promotion services to the startups
like capital structure planning, preparation of business plan, investors' presentation
and equity raise, shareholders' management, debt financing facilitation froms etc.

Capital Markets Research: Kriti Capital publishes independent research paper on

listed securities of individual companies or industry outlook, conducts research on
capital markets issues for regulators or required by client.

Merger and Acquisition Services: Guide the client through the process of preacquisition review, target identification and business valuation and assist throughout.

1.4 Assigned Department

Kriti Capital is a small organization with friendly working environment. The job tasks are
divided among individuals as per their expertise and preferences; however there prevails an
informal communication channel. There are regular discussion on issues and brainstorming
sessions, meetings, discussions where everybody could provide their viewpoints. Four interns
got an opportunity to work at Kriti Capital. In the first day of our internship, we meet

associates and senior associates at Kriti Capital and discussed about our internship
requirements and criteria. Then after for days we, along with the Kriti personnel brainstormed
for the research topic and discussed upon the areas of work for each of us.
I worked on Research Department under the supervision of Mr. Emil Pradhan, an Associate at
Kriti Capitals. He has been engaged in wide array of Investment Banking services including
Fund Arrangement, Business Valuation, and Portfolio Management Services. He has been
involved in industry analysis and business valuations of tourism, infrastructure and
agriculture industry as well. The major functions of research department are as follows:

Conduct market research on product, services, and regulations governing capital

markets in Nepal.

Conducting any product related or issue related research as per organizations need.

Publish independent research paper on listed securities of individual companies or

industry outlook.

Conduct research on capital markets issues for regulators.

Under Research department, I was assigned particularly to focus myself on the topic
Relevance of fundamental analysis in insurance sector, Nepal. Being an investment
company, insurance as an investment option cannot be neglected. Although four decades have
passed since the formal establishment of the insurance sector, however, the business has taken
place only during the last decade. There were lots of problems that were hindering the private
insurance sector. But over time, people have started taking Insurance sector positively and the
business seems to be growing. Among the sorted nine groups at Nepse, the stocks of the
Insurance Group, which represents 22 insurance companies, have been growing at
astonishing rates in recent months. Specifically, it is difficult to understand the economic

significance of the line item from insurers financial statements. So, Mr. Emil, being an
executive at research department and also handling PMS, felt the requirement to get indepth
insight on the insurance financial reports and analyze the relevance of fundamental analysis
in this sector thereof. In this process, following were my major duties during my internship:

Understand the general scenario of insurance sector in Nepal and its significance as an
investable sector.

Review the related insurance related regulations and directives.

Understand the meaning and significance of line item in insurance sector

Further, I was also given an opportunity to work for the FPO valuation of Nepal Life
Insurance Company Limited.

Keep track on NEPSE index movement and related business news.

2. Organizations
Review of organizational functioning from functional management (Marketing, Human
Resource, Finance, Project Management) and Management Process/ Structure and also
prospectives. (Maximum four pages)
2.1 Organizational structure
The organization structure is headed by Board of Directors (BOD) which consists of seven
members, of whom, four are from the promoter shareholders group, two are proposed to be
represented from the public shareholding group, and one, an independent member. The BOD
supported by the audit committee and special committee.

The organization is small with a vertical hierarchical structure; however there is an informal
communication channel. There are functional department and any issues are brainstormed
and tackled by related personnel.
The organization structure of Kriti Capital is as shown in the figure below:

General Assembly

Board of Directors
Audit Committee

Special
Committee
Chief Executive
Officer
Business
Development Officer

VP - Portfolio

Chief Operating
Officer

VP - Operations

VP - Finance

VP Depository
Participant

VP - Advisory

Associate Portfolio
Associate DP
Associate - Advisory

2.2 Management Team:

Associate

Associate

Managing Director: The management team is headed by Mr. Deepesh Vaidya as the
Managing Director. Mr. Vaidya has more than 12 years of experience in the capital market
related services in Nepal and in the United States.
Manager: Mr. Sabin Karki is the second man at the office. He leads the team of MBAs and
CAs to provide Portfolio Management Services, Venture Promotion Services and Financial
Advisory Services to the clients. Mr. Karki is responsible for operations management at Kriti
Capital.
Senior Associate: Ms. Karuna Thapa oversees the operations department at Kriti Capital, and
mainly heads DEMAT department.
Associate: Mr. Emil Pradhan has been engaged in wide array of Investment Banking services
including Fund Arrangement, Business Valuation, and Portfolio Management Services. He
has been involved in industry analysis and business valuations of tourism, infrastructure and
agriculture industry. He also heads research department.
Associate: Mr. Ujjwal Chand has been involved in investment analysis, deal solicitation,
investor presentation, business valuation and financial reporting services for various
hydropower, hotel, restaurant and manufacturing companies of Nepal. HE heads marketing
and client service department.
Operating Staffs: Operating staffs works under respective associates on either research,
PMS, client service or DMAT division.

2.3 Functional department

Research Department: This department is responsible to conduct market research on

product, services, and regulations governing capital markets in Nepal. They also publish
independent research paper on listed securities of individual companies or industry outlook.
They conduct research on capital markets issues for regulation and also on industry as an
assigned task for the clients. Getting right information about the company where the investors
have invested or are thinking of investing is always crucial and instrumental. Under this
service, Company provides independent assessment of operational business or initiated
project based on its initial business plan, comparative analysis with peers in the industry, the
current financial position along with independent assessment of the performance of the
company.
Client Relationship Department
This department is responsible for the institutional and general client service function. The
employees under this department are the face of the company. They also work with portfolio
managers, relationship managers, product specialists and sales staff to develop and implement
policies and procedures for serving existing institutional and individuals accounts. This
department also performs marketing activities.
HR Department
There is no separate HR department as such. The Sr. Manager looks after the discontents and
disputes that prevail among the employees. However, there seems to be no big HR issues
until now. Since, the organization has relatively small number of staffs so the manager of
organization has been dealing with the HR issues. The automated attendance system is
maintained in the organization where the identity card is used for the attendance.
Accounts Department

An accountant, Mr. Shankar Shrestha is responsible for a companys accounting activities that
include maintaining and reporting on both the cost and financial sets of accounts but does not
handle or negotiate. He establishes and enforces the accounting principles based on statutory
requirements and auditing policy. He makes measurement and interpretation of financial
information. The results of his work ensure compliance, and provide the groundwork for
greater financial strategies.
PMS Department
The PMS team handles the portfolios of its individual and institutional clients. Firstly they
identify and analyse investor's needs, and then define their objectives and set out a strategy,
which can be altered anytime as per the change in objectives of their objectives. Accordingly
the PMS experts manages the clients portfolio, making trading as per need.
DEMAT Department
There is a separate DEMAT department, which handles the demat account of the
accountholders at the company.
Analysing Corporate and Business Strategy
Organizations general and competitive environment
Chapter IV Reflection
Being a Finance Specialist student, I regard myself fortunate to get an opportunity to work at
Kriti Capitals, one of the most reputed investment companies in the country. MBA at
KUSOM provided us basic theoretical knowledge on the functioning of capital market, the
basics of investments and basis for making sound financial decisions. And Kriti Capital

provided me a platform to practically observe closely the functioning of the real financial
market of the country, and learn from it. This internship has provided me an exposure to the
capital market of the country.
Internship at Kriti Capital boosted my interest on the capital market of the country. Seeing the
personnel trade, I got to learn the procedure for trading at NEPSE. With this, I have kind of
developed the habit of watching the market, keeping track on news/events that pops on the
financial news hubs and discussing its implications with my fellow co-members and the
employees over there. In this 3 months duration, I have learned a lot about Nepali Capital
market and how virgin it is. I also got an opportunity to observe how portfolios are handled
by the experts, which technical tools they use, which fundamental ratios they rely and how
they make any buy/sale decision. Tracking the share prices movement and through informal
discussion with the trading people at the company, it seems that the theories of EMH,
fundamental analysis, technical analysis, efficient frontier etc seems to work very little in the
case of Nepali capital market. I found the share prices more sensitive to news and events.
Further I also suspect the instance of insiders trading prevailing in the market, as there were
huge volumes of shares being traded before any news or announcement for any company.
Moreover, I was assigned a research topic Relevance of fundamental analysis in insurance
sector, Nepal, which is also a topic for my business comprehensive report. Being an
investment company, insurance as an investment option cannot be neglected. The current
fluctuation in insurance sector, and the significant role that financial reporting plays in the
uncertainty surrounding insurance companies highlights the importance for the company and
for my knowledge as well to understand insurers financial information and its implications
for the risk and value of insurance companies. Specifically, it is difficult to understand the
economic significance of the line item from insurers financial statements. Not much

research on this topic has been conducted internationally and none in the case of Nepal. So,
people at Kriti have been supporting, supervising and guiding me throughout.
Further, there were more to learn from the organization culture at Kriti. The organization had
a very supportive and friendly environment. There was task division as per individual
preferences and specializations, however there practices informal communication; they would
conduct brainstorming session, knowledge sharing session, informal talks, regular meeting
and outdoor activities (specifically they would play futsal every Friday) very often, creating a
very joyful and energetic working environment. Further the staffs are delegated; they perform
their duties, stay overtime if needed and help and co-ordinate rest of the fellow members.
They work with professionalism and focus on customer service, they consider every big or
small project/ portfolio as important, and respect the objectives set by the respective clients.
With the dedicated team members and coherent mission and vision, Kriti Capital has been
able to provide excellent services to its clients and set a distinctive image in the Nepali
financial market.