SYNOPSIS ON

A STUDY ON CAPITAL STRUCTURE AT KARNATAKA

POWER CORPORATION LIMITED

Dissertation Submitted In Partial Fulfillment of the Requirements for the

Award of the Degree Of

MASTER OF BUSINESS ADMINISTRATION

Of

BANGALORE UNIVERSITY

By

RAPALLI.SURENDRA BABU

Reg. No. 12UHCMA074

Under The Guidance Of

Dr .R. RANGANATH

EAST WEST COLLEGE OF MANAGEMENT

#63, off Magadi road, Vishwaneedam post, Bangalore-560091

2014

CERTIFICATE FROM FACULTY GUIDE

This is to certify that Mr. Rapalli.Surendra babu has successfully

completed his Dissertation project at "KARNATAKA POWER CORPORATION

LIMILITED", Bangalore. He has submitted this report under my guidance and

supervision towards the partial fulfillment of the requirements of MBA course of

Bangalore university, Bangalore during April -May 2014.

Date: Dr.Raganatha

Place: BANGALORE (ASST. Professor)

DECLARATION

I hereby declare that “CAPITAL STRUCTURE” is the result of the project work carried out by

me under the guidance of Dr.RANGANATHA in partial fulfillment for the award of Master’s

Degree in Business Administration by Bangalore University.

I also declare that this project is the outcome of my own efforts and that it has not been

submitted to any other University or Institute for the award of any other degree or Diploma or

Certificate.

Place: BANGALORE Rapalli.Surendra Babu

Date: (Reg.No:12UHCMA074)

ACKNOWLEDGEMENT

The satisfaction that accompanies the successful completion of any task would be incomplete without the mention of the people who made it possible and whose constant encouragement and guidance has been a source of inspiration throughout the course of the project.

I acknowledge my heartful thanks and profound gratitude to Dr.Ranganatha faculty guide for his whole hearted support and valuable guidance during the period of completion of the dissertation report.

I express my profound sense of gratitude to Mr. Sunil V Mudrabettu (Asst. General Manager Finance), Mr. Anand (General Manager) and Mr. Chadersheker (Assistant Manager) Karnataka Power Corporation Limited, Bangalore for sharing their precious time and imparting their invaluable knowledge and expert advice, guidance and inspiration

I praise the Lord, The Almighty for his abundance of grace in giving me health, knowledge and strength to take up this dissertation and complete it in time.

Finally I would like to express my sincere thanks to My Parents and Friends who provided the moral support required to complete the project.

Place: Bangalore Rapalli,Surendra Babu

Date: (Reg.No: 12UHCMA

CHAPTERS TITLE PAGENO.

Chapter-One INTRODUCTION 1-22

Chapter-Two PROFILE OF THE ORGANIZATIONS 23-38

Chapter-Three RESEARCH DESIGN 39-52

Chapter-Four DATA ANALYSIS AND INTERPRETATION 53-84

Chapter-FiveSUMMARY OF FINDINGS, CONCLUSIONS AND SUGGESTIONS

85-87

BIBLIOGRAPHY 88

ANNEXURE 89-97

TABLE OF CONTENTS

LIST OF TABLES

TABLE

NO

TABLES PAGE NO

1. SHARE CAPITAL AND RESERVES AND SURPLUS54-55

2. DEBT AND EQUITY58-59

3. EARNING PER SHARE61-62

4. EQUITY AVAILABLE TO EQUITY SHARE HOLDERS66-67

5. NUMBER OF OUTSTANDING SHARES69-72

6. FINANCIAL PERFORMANCE81

7. CASH MANAGEMENT83

8. CASH FLOW STATEMENT82-84

9. BALANCE SHEET89-97

LIST OF CHARTS

CHARTNO.

CHART SHOWING PAGENO.

1. CAPITAL STRUCTURE13

2. PROCESS OF CAPITAL STRUCTURE15

3. SHARE CAPITAL AND RESERVES AND SURPLUS56-57

4. DEBT AND EQUITY60

5. EARNING PER SHARE63-65

6. EQUITY ABAILABLE TO EQUITY SHARE HOLDERS78

7. FINANCIAL PLAN80

EXECUTIVE SUMMARY

Short-term survival is a perquisite to long term success". One of the most important areas in the day to day management of the firm is the proper management of capital structure. Capital Structure is the functional area of the firm.

The basic aim of Capital Structure is to manage each of the firm's current assets and current liabilities on such a way that an appropriate level of net Capital Structure is always maintained in the business. each current asset must be maintained efficiently in order to maintain the liquidity of the firm and not to keep too high a level of any one of them. In ultimately helps increasing the profitability of the firm flense the problem of the efficient management of Capital Structure is to establish a proper balance between liquidity and profitability. For any business house capital structure is a matter of top priority as it has a bearing on credit worthiness liquidity solvency and profitability. capital structure refers to the funds invested in current assets i.e. investment in stock debtors cash and other. It is also concerned with the management of the level of individual current assets as well as the most of total capital structure. one aspect of capital structure is the tradeoff between profitability and liquidity.

The present study in KPCL is intended to study the current practice in capital structure and to evaluate the performance of the capital structure.

The basic aim of capital structure management is to manage each of the firm's current assets and current liabilities on such a way that an appropriate level of net capital structure is always maintained in the business. Each current asset must be maintained efficiently in order to maintain the liquidity of the firm and not to keep too high a level of any one of them. In ultimately helps increasing the profitability of the firm flense the problem of the efficient management of capital structure is to establish a proper balance between liquidity and profitability

Name of the college and address

EAST WEST COLLEGE OF MANAGEMENT, BANGALORE

MBA Dissertation 2014

Registration Form

1. Name of the Student: RAPALLI.SURENDRA BABU

2. Name of the Guide: Prof, DR.RANGANATHA

3. Proposed research area: FINANCE

4. Proposed research topic: FINANCE

5. Write a brief note on your topic: A STUDY ON CAPITAL STRUCTURE AT

KARNATAKA POWER CORPORATION LIMITED

Capital structure

The term capital structure refers to the percentage of capital (money) at work in a business by

type. Broadly speaking, there are two forms of capital: equity capital and debt capital. Each has

its own benefits and drawbacks and a substantial part of wise corporate stewardship and

management is attempting to find the perfect capital structure in terms of risk / reward payoff for

shareholders. This is true for Fortune 500 companies and for small business owners trying to

determine how much of their start-up money should come from a bank loan without endangering

the business.

Student’s Signature:

Approval of the guide

Guide’s Signature with date