BANGALORE

UNIVERSITY
AN ANALYSIS OF FINANCIAL PERFORMANCE
AT
KARNATAKA POWER CORPORATION LIMITED, BANGALORE

Dissertation report submitted towards the partial fulfillment of requirements of

Master of business Administration course of
Bangalore University, Bangalore.

SUBMITTED BY
DEEPANSHU AGRAWAL
Reg.No. 09QZCMA026
UNDER THE GUIDANCE OF
Prof. VASUDEV

APRIL 2011
BANGALORE INSTITUTE OF MANAGEMENT STUDIES
#35, OPP. R. V COLLEGE OF ENGINEERING, MYSORE ROAD
BANGALORE - 560059

DECLARATION

I Mr. DEEPANSHU AGRAWAL , a student of Bangalore Institute of Management Studies,

Bangalore, declare that this dissertation project titled An Analysis of Financial Performance
at Karnataka Power Corporation Limited , Shakti Bhavan, Race Course Road , Bangalore
was originally carried out by me for the partial fulfillment of the award of Master of Business
Administration and is a genuine and bonafide work prepared for the academic requirement of
Master of Business Administration of Bangalore University.
This report is a result of my study in the organization during the period February March 2011
and is my original work, it has not been copied from earlier reports submitted by any student of
any University.

DATE:

PLACE: BANGALORE

DEEPANSHU AGRAWAL

Reg. No. : 09QZCMA026

ACKNOWLEDGEMENT

I am glad to express my gratitude to all who are connected in bringing out this project.
I express my sincere thanks to Mr R.Nagaraj General Manager KPCL, for giving me an
opportunity to do this project in the company and their co-operation proved to be of great
importance to bring this project out.
I owe my heartly gratitude to my internal guide Prof.Vasudev, faculty of Bangalore Institute of
Management Studies for his outstanding guidance, supervision, suggestions and encouragement
without which the project would not have taken such a form.
I would like to thank my external guide in KPCL, Mr M.S Anand (AGME) who inspite of his
busy schedule helped me in providing the valuable information for making this dissertation
report fruitful.
I am also thankful to my parents, friends and all those who have helped me directly or indirectly
by being always a moral support and strong pillars in all walks of life in making this project a
successful one.
Thanking you,

DEEPANSHU AGRAWAL
Reg. No 09QZCMA026

CONTENTS
SL.NO

TITLE

INTRODUCTION

PAGE NO

1-9

INTRODUCTION TO THE STUDY

CHARACTERISTICS OF FINANCIAL ANALYSIS
ADVANTAGES OF FINANCIAL ANALYSIS
OBJECTIVES OF FINANCIAL ANALYSIS
FINANCIAL ANALYSIS TECHNIQUES
MAIN FINANCIAL PERFORMANCE GUIDELINS
PROBLEMS IN FINANCIAL ANALYSIS

II

RESEARCH DESIGN
STATEMENT OF THE PROBLEM
NEED FOR THE STUDY
REVIEW OF FEW PREVIOUS STUDIES
OBJECTIVES OF THE STUDY
OPERATIONAL DEFINATION OF CONCEPTS
METHODOLOGY
SAMPLE DESIGN
SOURCES OF DATA COLLECTION
TOOLS AND TECHNIQUES OF DATA COLLECTION

10 - 17

LIMITATIONS OF THE STUDY

III

COMPANY PROFILE

18 - 28

VISION
MISSION
COMPANY PROFILE
PRODUCTS AND SERVICES
PROJECTS UNDER KPCL
GENERATION PERFORMANCE
SOCIAL CONTRIBUTION
ENVIRONMENTAL MANAGEMENT
AFFORESTATION & GREEN BELT DEVELOPMENT
COMPETITORS
CAPITAL STRUCTURE
TURNOVER

IV

ANALYSIS & INTERPRETATION OF DATA

TYPES OF RATIOS
RATIO ANALYSIS
CAPITAL BUDGETING PROCESS
FUNDS FLOW ANALYSIS
ANALYSIS OF CAPITAL STRUCTURE
WORKING CAPITAL MANAGEMENT
TYPES OF FINANCING
OTHER FACTORS AFFECTING FINANCIAL PERFORMANCE

29 - 86

SUMMARY OF FINDINGS RECOMMENDATIONS

87 - 91

AND CONCLUSION
FINDINGS
SUGGESTIONS
CONCLUSION

. VI

VII

BIBLIOGRAPHY

92 - 93

ANNEXURE

94 - 95

EXECUTIVE SUMMARY

The Karnataka Power Corporation Limited is mainly involved in the generation of power
and is the sole administrator for the power generation in the state. It was formed on 20 th July
1970 as a sister concern to Karnataka Electricity Board (KEB) in order to eradicate the power
famine of the state.
For over three decades, the Karnataka Power Corporation has been a prime mover and
catalyst behind key power sector reforms in the state - measures that have spiraled steady growth
witnessed in both industrial and economic areas.
This is a finance project specifically focused on analysis of financial performance aspects
in Karnataka Power Corporation Limited (KPCL).
The whole project work gives us an insight into the practical real time corporate exposure
to the operations of the organization which facilitates learning giving us a whole new experience.
The study is conducted to know the financial performance control methods of Karnataka
Power Corporation Limited by studying the tools and techniques of performance of the projects
as well as the problems faced by the company in implementation of the control system. The first
part of the study includes introduction to topic, research design and methodology which forms
the basic premises for the study and it is followed by a study of the company profile.
The second part concentrates on analysis and interpretation of the data collected. The
analysis is done using various statistical tools and techniques specified in the research design,
which forms the core subject of the study consisting of various parts mainly :
Ratio Analysis, Capital Structure Analysis, Fund flow Analysis, Working Capital Analysis etc.
After the analysis and interpretation, the report summarizes findings of the study based on which
suggestions and recommendations are put forward.