A

PROJECT REPORT

ON

FINANCIAL CONCURRENCE

(As partial fulfillment for the award of M.B.A. degree under U.P. Technical University Lucknow 2005-07)

Work carried at

National Thermal Power Corporation LimitedRihand Super Thermal Power Project

Under The Guidance of: Submitted By: Ms. Gurbandini KAMLESH GAUTAM Roll No.-0509870181

INSTITUTE OF MANAGEMENT STUDIES, NOIDA

Certificate

To whom it may concern

This is to certify that Mr. Kamlesh Gautam Roll.No.0509870181 of MBA

is a bonafide regular student of Institute of Management Studies (IMS), Noida

for the session 2005-07.

He has completed the summer training project report entitled “Financial

Concurrence” In the Organization National Capital Power Station (N.T.P.C),

Rihand Nagar.

As a part fulfillment for the award of MBA degree under U.P.Technical

University, Lucknow.

I find the research report is up to standard and original one.

Dr.C.S.Nagapal

Executive Director.

Certificate

To whom it may concern

This is to certify that Mr. Kamlesh Gautam Roll.No.0509870181 of MBA

is a bonafide regular student of Institute of Management Studies (IMS), Noida

for the session 2005-07.

He has completed the summer training project report entitled “Financial

Concurrence” In the Organization National Capital Power Station (N.T.P.C),

Rihand Nagar.

As a part fulfillment for the award of MBA degree under U.P. Technical

University, Lucknow.

I find the research report is up to standard and original one.

Project Supervisor

Ms. Gurbandini

PREFACE

In the summer training, the training project provided to me in the area of

“Finance” is “Financial Concurrence” relating to National Thermal Power

Corporation (NTPC) National Thermal Power Corporation, NTPC has been the

power behind India’s sustainable power development since November 1975

contributing 26% of the country’s exiting power generation with 19% of installed

capacity. NTPC today lights up every fourth bulb in the country. NTPC has 16

coal based & 7 gas based power stations spread all over the country with

installed capacity of 22,249 MW with ambitious growth plan to become a

56,000 MW power company by 2017. NTPC the largest power utility of India

has already diversified into hydropower sector.

During my summer training form June 2006 to 31 July 2006. I collected

lot a facts and information related to the inventory in NCPS and try making a

useful project report.

In NTPC mostly inventories item are chemicals and oils, equipment,

machine element & hardware as pipes fittings and flanges, rolling bearings, and

accessories, tools cutting tools welding electronic, stationery, Boiler, Turbo-

generator, Electrical, circuits, components, Computer, Motor and control panel

etc. in NTPC more investment required in capital nature items.

TABLE OF CONTENT

1. Executive summary 1

2. Theoretical concept 5

3. Introduction of the problem 17

4. Scope & importance of study 27

5. Objective of study 29

6. Research Methodologies 31 7. Introduction of industry 35

8. Data presentation 66

9. Data analysis 74

10. Findings of the study 82

11. Recommendations 84

12. Bibliography 89

13. Appendix 92

ACKNOWLEDGEMENT

Although a summer training report is considered to be the result of an

individual effort and the credit goes to the ultimate person conducting the

analysis .But without the invaluable co-operation of some persons, this project

report can not be completed.

I am very much thankful to Mr. B. SAHA(DGM) and Mr. Y.B.

MISHRA(Sr. MANAGER) of finance for preparing my schedule of practical

training at NTPC RIHAND. They helped me to have an insight the functions of

different sections of F& A . Mr. MISHRA patiently provided me his valuable time

and guidance .

I am also very thankful to Mr. R.C. DEBNATH, Mr. KUNDAN MISHRA,

Mr. PUNEET GUPTA, Mr. R.K. SINGH and all other members of F& A

department for their kind support.

My special thanks to Mr . R. M. YADAV( C&M), Mr. K. LAL(C &M ) and

Mr. A.K. SINGH(TQM) for providing necessary information related to l;ead time

of inventories.

I also own my sincere thanks to Mr. B.J.RISHI(CO-ORDINATOR),

Ms.GURBANDINI CHABRA (PROJECT SUPERVISOR) and Mr. A.

HAIDAR(FINANCE) of IMS , NOIDA under the expert guidance of whom this

project report has been completed. I extend my thanks to my uncle Mr.

DINESH RAI(ENGG.) for their moral support and ever encouraging co-

operations .

KAMLESH GAUTAM

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

MyselfKAMLESH GAUTAM, student of M.B.A. second year (3rd sem.)

from I.M.S. NOIDA. I joined NTPC, Rihand on 12/06/2006 for my summer

training as a part of the course of M.B.A. Here is a brief introduction about my

training. My training period started from 12/06/2006 and went till 27/07/2006. I

completed this project under Mr. Puneet Gupta and my Project title is

“FINANCIAL CONCURRANCE”. My training project was associated with

Finance & Account Department.

In NTPC, Rihand there are 10 subdivisions under the Finance &

Account Department, there names are:-

1. Establishment Section

2. Stores Bills Section

3. Work Section

4. Commercial Section

5. Miscellaneous Section

6. Pricing Store Ledger(PSL)

7. Financial Concurrence

8. Cash And Bank

9. Budget Section

10.Books And Account Section.

This training project was almost a like a blast during the course

of M.B.A. because during the training session I came to know about lots of

things related to high level management as well as low level management. I

also came to know about the working schedule and techniques and how to

face the problem which encounter during the real practice. Some of them

are mentioned here.

There I noticed how they issue the award letter and how much

time taken by the finance & account and contract & material department. An

award letter is issued after financial concurrence. In any PSU , It has a vast

channel for financial concurrence NTPC RIHAND take average 31 days.

I learnt there were various types of tenders and contract. Here I

came to know about the concurrence procedure of the NTPC RIHAND.

After studying about the tenders and various channels of the procedure, I

realized that this lead time can be reduced and which will result a large

saving in terms of money and man power also.

So in this order I proposed various suggestions to my project

guide Mr. Puneet Gupta. Some of them are as follows:-

1. Proposal to be received by concurring officer directly.

2. Proposal of construction activities to be cleared by FES before sending

to financial

3. Post award proposal for time extension / deviation to be routed though

CS.

THEORETICAL CONCEPTS

THEORETICAL CONCEPTS

THE FINANCIAL IMPACT OF ABT ON RIHAND SUPER THERMAL

POWER PROJECT

After having discussed the various aspects of the Existing tariff

System and The Availability Tariff System, now the Financial Impact of ABT

on the Rihand Super Thermal Power Project is being analyzed. The

analysis has been done by taking data for the last 6 months i.e. from 1 st

April to 30th Sept, 2002. The Methodology used for the financial analysis is

as per following steps:

Firstly, all Physical and Basic Financial data has been collected for

the 6 months from the Finance and Commercial Department.

a) From this data, the Monthly Cost of Sales has been calculated for the

Project for each of the last 6 months.

b) For every month the Tariff Recovery has been calculated both as per K P

Rao Tariff and Availability Based Tariff System.

c) The Profitability for every month has been compared under both the system

with the reasons for the differences between the two.

d) The Total Impact of ABT for the six months has been calculated on the

profitability of Rihand Project.

e) The same has been extrapolated for obtaining an approximate anticipated

annual data.

The Calculations has been done on the following basis:

S. No. Particular K P Rao Tariff ABT

A Fixed Charges Full recovery above

62.49% PLF

Full recovery above

80% Availability

B Variable Charges As per Actual

Generation

As per Scheduled

Generation

C Incentive Above 68.49% PLF

as per prescribed

rates

Above 77% PLF as

per prescribed rates

D UI charges NA Has been calculated

net of UI charges

payable and

receivable.

E Cess etc Actual basis Actual Basis.

TOTAL IMPACT OF ABT ON RIHAND SUPER THERMAL

POWER PROJECT FOR THE 6 MONTHS (FROM 1 ST APRIL TO 30 TH

SEPTEMBER)

The total effect of ABT on profitability of RhSTPP is as follows:

SR. NO. MONTH NET PROFIT (RS IN

LAKHS)

UNDER K P RAO

TARIFF

UNDER ABT

SYSTEM

1 April, 1999 1571 1407

2 May, 2000 2141 2013

3 June, 2001 2375 2113

4 July, 2002 2778 2254

5 August,

2003

2712 2230

6 September,

2004

724 1086

TOTAL 12301 11103

Difference Rs.1198 Lakhs

Difference for the year Rs. 2400 Lakhs (Approx)

There is a less Net profit of Rs.1198 lakhs for 6 months

under the ABT system. The main reasons for this difference are as

under:

a. The Variable charges have been charged on actual

generation basis in Two Part tariff system and on

Scheduled generation in ABT. As there was large

difference in scheduled generation and Actual generation,

the variable charges in Two part tariff were more as

compared to ABT.

b. The Incentive under Two part tariff is more because it

starts from 68.49% PLF whereas it is less in ABT system.

c. Due to Actual generation more then Scheduled generation

(but within the Declared capability), Rihand has earned UI

charges.

Taking a collective effect of all three elements the net effect

results in a less net profit of RS.1198 lakhs The positive UI charges

were not able to compensate the less recovery due to the other two

elements. As Declared Capacity was more then 80%, the fixed charges

have been fully recovered in both the cases.

AREAS WHICH NEED SPECIAL ATTENTION FROM NTPC

POINT OF VIEW

The application of ABT calls for the special attention of NTPC so

that the negative impact of ABT can be minimized and the profitability

can be maximized. The following are certain areas that need special

attention:

Reliable and Fast communication: Communication is the

essence of the ABT system. The Declared capacity can be revised by

station at any time, which shall be applicable in case of Unit tripping,

from 4th time block and in case of other revisions from 6 th time Block.

Apart from this, Schedules sent by RLDC are applicable irrespective of

the success of communication to station. Whereas, the Capability

revision, if any sent by the generator, is allowed from the time message

reaches RLDC control room. Therefore, the system has to be perfect.

Also the alternatives have to be provided in case of non-functioning of

one mode of communication.

Quality of Coal: The quality of the coal received is to be closely

monitored. This is because operations have to match the schedule given

by RLDC. If the operation group knows in advance the likely GCV of the

coal to be fired, they can plan the generation accurately, thereby

decreasing the chances of negative UI charges and at the same time

saving the coal quantity by optimizing the coal firing.

a. Avoidance of frequent failures : The equipments

have to be kept in very healthy state so as to avoid frequent

failures. The financial impact of even a single failure can result in

negative UI charges running in multi lakhs. As under the ABT

system, the changes in the schedule are applicable from the 4 th

time block, the UI charges will be charged for at least 3 time

blocks. Thus, the equipment healthiness is very important.

b. Planning for Maintenance and Overhauling

activities: The perfect planning of the time of maintenance and

overhauling activities is also very important. Unplanned

maintenance & overhauling activities can result in deviations from

the generation schedule. Further, the overhauling should be

planned in such way that, it does not result in Declared capacity

below 80% annually which may result in under recovery of fixed

charges.

c. Monitoring of Online Generation: The other very

major area is the close monitoring of the accurate online

generation. This is very important because the Shift In charge

must be aware about the actual generation and grid frequency at

every moment so as to take corrective measures within the time

block of 15 minutes. Therefore, the online data should be

accurate with minimum deviations.

d. Taking Quick decisions : Another very special area

is of taking fast decisions. In ABT scenario very quick decisions

are required. As the follow up steps have to be taken within the

time block of 15 minutes, so as to prevent the loss, there will be

no time for consultations etc. The Desk engineer has to be well

equipped with the knowledge of ABT norms and financial

implications of each and every decision he is taking.

STEPS TO BE TAKEN AND MORE FACILITIES TO BE

PROVIDED IN THE VARIOUS UNITS OF NTPC

The following steps are required to be taken by NTPC and

certain Facilities are required to be provided in various units.

These are as under:

I. Alarm System for the Rapid Frequency changes

(Especially for the UI zone) is to be provided. It has been observed that

negative UI charges are incurred during the rapid frequency fall. It is

necessary to provide an audio-visual alarm, if the rate of change of

frequency is more then a prescribed value.

II. A software based analysis of the UI charges and the

generation is required. This should tell that UI charges can be avoided

by planning the generation upto what levels. The Software has to be

made and has to be attached with the field data so as to provide the

online analysis of the generation level etc.

III. Special Energy Meters (SEMs) should be provided at

every unit for the purpose of using them for taking accurate data for the

online analysis purposes, which should be identical to those being

used by grid for calculation of UI.

IV. There should be a Big display of Declared Capability,

Scheduled Generation, Actual Generation and Frequency for the

current time block in the Control Room.

V. Extra fax machines (at least Two) exclusively for the

purpose of ABT should be provided in the control room. Further the

SATCOM fax should also be provided, which may be used in case of

P&T lines failure.

VI. A telephone with memory of atleast 20 numbers and

features of fast dialing should be provided. Further it should also have

the facility of voice recorder, so as to avoid the disputes in the future.

VII. The Unit and the RLDC should be connected by way of a

leased line or Hotline, so that no time is wasted in communication.

PLCC- Power Line Carrier Communication should also be provided

where ever possible.

VIII. Internet connection with SATCOM and the alternatives

from BSNL should also be provided. BSNL can be used as standby

channel of communication

INPUTS FROM THE EXPERIENCES OF VINDYACHAL SUPER

THERMAL POWER STATION.

In Vindyachal Super Thermal Power Station that is in the Western

Region, the Availability Based tariff has already been implemented w.e.f. 1 st

July 2002. A visit was made to the Vindyachal to have the first hand

experiences about the implications of ABT and also to see what steps has been

taken in respect to the implementation of ABT at that station. The various

inputs from there are as follows:

I. An ABT Control Room has been set up with one dedicated

senior engineer posted in shifts who has to regularly monitor the

actual generation and the scheduled generation and is in constant

touch with the Shift in charge.

II. Daily Morning meeting of all the concerned Head of

departments is held with AGM(O&M) where the progress of earlier day

is discussed and the capacity to be Declared for the next day is

decided.

III. Daily ABT report is generated and it is analysed w.r.t. UI

charges and the extra Fuel spent in the generation.

IV. Every shift in charge and all the concerned heads are

having cordless phones, so that they can remain in touch even if they

are in the locations. This helps in better communication.

V. Assistant Shift In charge has been made responsible for

the upkeep of the Scheduled generation.

VI. In case of Unit tripping or any other breakdown or

shutdown, this information is sent to the WRLDC and the WRHQ at the

same moment. The purpose of sending it to the WRHQ is that the HQ

will also in turn confirm the communication from the WRLDC, which is

also in Mumbai where the WRHQ is located. The mode used is Phone

and Fax.

VII. There are 8 Units in total and it is not possible to adjust the

generation os all the units at the same time as per the schedule.

Therefore, one unit has been instructed to increase and reduce the

load as per the schedule and rest units to generate upto there optimum

capability.

INTRODUCTION OF THE PROBLEM

INTRODUCTION OF THE PPROBLEM

FINANCIAL CONCURRANCE

[SOURCE: MANAGER (F&A)]

PURPOSE

To examine the proposal from the financial point of view.

FUNCTIONING:

Financial concurrence is done by keeping in mind the

“cannons of financial proprietary”

The proposals below Rs 5000/ require no financial

concurrence after that financial concurrence is necessary.

According to the delegation of power the signatures of component

authority is necessary for the sanctioning the amount.

Financial powers are exercised in the following ways:

# POWER OF PURCHASE

# POWER FOR WORKS

# POWER RELATING TO THE ESTABLISHMENT

Works comprises civil work, i.e., construction of roads,

building etc. three conditions are required for the approval.

[1] Acceptance of the necessity- for this purpose the

detailed report depicting the necessity has to be prepared by the

concerned department.

[2] Administrative approval of the cost estimate: The

detailed report depicting the cost involved in each and every item

is prepared. The costs are fixed according to [DSR] i.e., Delhi

Schedule of Rate.

[3] Technical approval of the competent authority: The

approval is granted according to the delegation of power.

[4] Availability & appropriation of fund: Availability of fund

is seen as per the budget estimate. In the case of shortage, the

fund is taken out from the unworkable after undergoing these

entire steps contract is awarded.

SCOPE AND PERFORMANCE

CONTRACT DOCUMENT

The contractor shall be furnished, free of charge, two certified true

copies of the contract documents except standard specification and the

schedule of rates and of all further drawings which may be issued during the

progress of the works. he shall keep one copy of these documents on the site

in good order, and the same shall at all reasonable times be available for

inspection and use by the engineer-in –charge, his repetitive or by other

inspecting officers.

SECURITY DEPOSITE: The contractor shall permit the corporation at

the same time of making any payment to him for work done under the contract

to deduct toward the security deposited at the rate of 10% of gross amount of

each on account payment for contracts of value up to Rs 20 lakhs and at the

rate of 5% for contracts of value equal to and greater than Rs 20 lakhs untill the

security deposit so deducted reaches the value of schedule a in cash or in the

form of

Government Security Or Fixed Deposit Receipts Or Bank

Guarantees Furnished By Any Of The Nationalized Bank.

(a) The security deposited reaches a limit of Rs 1 lakhs, the contractor, if

he so desires may convert the amount into one of the government securities or

bank guarantees as aforesaid.

(b) provider that, if at the same time of payment of the final bill , the

deductions so made together with the earnest money already , fall short of the

security deposited the recovery of the balance amount of sd shall be deemed to

have been waived.

DEVIATION /VARIATION EXTENT & PRICING

10 . the engineer – in –charge shall have power

(i) to make alteration in, oomissions from , addition to, substitutions for

the original specification , drawings, designs and instructions that may appear

to him to be necessary or advisable during the progress of the work , and

(ii) to omit a part of the work in case of non-availability of the portion of

the site or for any other reasons, and the contractor shall be bound to carry out

the works in accordance with any instruction given 5o him in writing signed by

the engineer-in charge and such alteration , omission, additions, or subsitution

shall form part of the contract as if originally provided therein and any altered,

additional or substituted work which the contractor may be directed to do in the

manner above specified as part of the work, shall be carried out by the

contractor on the same conditions in all respects including price on which he

agreed to do the main work. any alteration, omissions additions or substitutions

which radically charge the original nature of the contract shall be ordered by the

engineer-in –charge as a deviation and in the event of any deviation being

ordered which in the opinion of the contractor changes the original nature of the

contract, he shall nevertheless carry it out and the disagreement if any, as to

the nature of work and the rate to be paid therefore shall be resolved in

accordance with condition 56.

In the case of the contract items, substituted items, contract-cum-

substituted item or additional items which exceed the contractor may, fourteen

days of receipt of order or occurrence of the excess claim revision of the rates,

supported by proper analysis, for the work in excess of the above – mentioned

limits, provided that if the rates so claimed are in excess of the rates specified

in the schedule of quantities or of those derived in accordance with the

provisions of condition 10 by more than 5%, inform the engineer –in-charge

under advice to the accepting authority and the engineer –in-charge shall,

within 3 months of the receipt of the claim supported by analysis , after giving

consideration to the analysis of the rates and submitted by the contractor,

determined the rates on the basis of market rates and if the rates so

determined exceed the rates specified in the schedule of quantities or those

derived in accordance with the provisions of conditions 10 by more than 5%,

the contractor shall be paid in accordance with the rates so determined by the

engineer-in-charge with 5%of the rates specified in the schedule of quantities

or of those determined in accordance with the provision of condition 10.

TIME AND EXTENSION FOR DELAY:

(13) The time allowed for execution of the work as specified in the

schedule A or the extended time in accordance with these conditions shall be

the essence of the contract. The execution of the works shall commence from

the 15th day after the date on which the corporation issues written orders to

commence the work. If the contractor commits default in commencing the

execution of the work as aforesaid, corporation shall without prejudice to any

other right or remedy is at liberty to forfeit the earnest money absolutely.

(13.1) as soon as possible after the contract is concluded the engineer-

in-charge and the contractor shall agree upon a time and progress chart. The

chart shall be prepared in direct relation to the time stated in the contract

documents for completion of items of the works. It shall indicate the forecast of

the date of commencement and completion of various trades or section of the

work and may be amended as necessary by agreement between the engineer-

in-charge and the contractor within the limitation of time imposed in the contract

document, and further to ensure good progress during the execution of the

work, the contractor shall in all cases in which the time allowed for any work

exceed one month say for the special jobs complete 1/8 th of the whole of the

work before 1/4th of the whole time allowed in the contract has elapsed;3/8 th of

the work before one half of such time has elapsed and 3/4 th before 3/4th of such

time has elapsed.

(13.2) if the work be delayed by

(a) Force majeure, or

(b) Abnormally bade weather, or

(c) Serious loss or damage by fire, or

(d) Civil commotion, local combination of workmen, strike or lockout,

affecting any o the trades employed on the work, or

(e) delay on the part of the other contractors or tradesmen engaged by

corporation in executing work not forming part of the contract, or

(f) Non-availability of stores, which are the responsibility of corporation to

supply, or

(g) Any other cause which, in the absolute discretion of the authority

mentioned in schedule A is beyond the contractor’s control;

Then upon the happening of any such causing delay, the contractor shall

immediately give notice thereof in writing to the engineer-in-charge but shall

nevertheless use do all that may be reasonably required to the satisfaction of

the engineer-in-charge to proceed with the work.

(13.3) request for extension of time , to be eligible for consideration ,

shall be made by the contractor in writing within fourteen days of the happening

of the event causing delay. The contractor may also’ if practicable , indicate in

such a request the period for which extension is desired.

(13.4) in any such case the authority mentioned in schedule A may give

a fair and reasonable extension of time for completion of the work . Such extent

ion shall be communicated if the date of receipt of the date of such request by

the engineer-in-charge.

COMPENSATION FOR DELAY:

If the contractor fails to maintain the required progress in terms of

condition 13 or to complete the work and clear the site o or before the contract

or extended date period of completion , he shall , without prejudice to any other

right or remedy of the corporation on account of such breach, pay as agreed

compensation amount calculated as stipulated below, or such smaller amount

as be fixed by the authority mentioned in schedule ‘A’ on the contract value of

the work for every week that the progress remains below that spacified in

condition 13 or that the work remains incomplete.

This will also apply to items or group of items for which separate period

of completion has been specified (REFER SPECIAL CONDITION OPF

CONTRACT)

For this purpose the term ‘contract value’ shall be the value at contract

rates of the work as ordered.

1. Completion period (as originally stipulated) @ 1 % week

not exceeding 6 months.

2. Completion period (as originally stipulated) @ 1/2 % week

not exceeding 6 months.

3. Completion period (as originally stipulated) @ 1/4 % week

not exceeding 6 months.

SCOPE OF STUDY

SCOPE OF STUDY

(1) The scope of the study in terms of time is limited Critical data’s for 99-

2000, 2001-02, 2003-04, 2004-05.

(2) The study covers the thermal power project NTPC Located at

RIHAND SONEBHADRA

(3) No delay in declaration of commercial operation

(4) To control and direct tall hierarchy of finance and account and contract

material department.

(5) Regularizing work and contract order.

(6) We can save many days; by this we can save manpower and money

OBJECTIVE OF THE STUDY

OBJECTIVE OF THE STUDY

1. To identify best practices for Financial Concurrence & Vetting in

order to reduce process lead-time from 31 days to 16 days,

develop initiative & speed and improve the total quality of the

process to achieve customer delight.

2. To study over all financial policies of NTPC

3. Evaluate financial performance of company

4. To understand the need of financial concurrence.

5. To study the delegation of powers as applicable to the executives

of the company& related process of financial concurrence.

6. To evaluate the measures to reduce the lead time taken in the

process of financial concurrence & vetting.

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

OBJECTIVE OF RESEARCH

As certain the decision making objective

Understand the background o the problem

Isolate & identified the problems

Determine the unit of analysis

Determine the relevant variables

RESEARCH STRATEGY

Research strategy is a general plan of how we will go about answering the research

question . It contain clear objective , derived from our research question specify the

sources from which we intend to collect data , and consider the constraint that we

inevitable have

DIFFFERENT RESEARCH STATEGIES ARE

Experiment

Survey

Case Study

Grounded theory

Ethnography

Action research

Cross – Section & Longitudinal studies

Exploratory , descriptive & exploratory studies

For completing my project report , I have used descriptive

study . The object of descriptive & analytical research is “ To

portray an accurate profile of event or situations” . In my project ,

I have emphasized on financial concurrance of the organization.

.

SAMPLING FRAME

The project work is to analyze the financial concurrence of

NTPC, for this the sampling frame is RIHAND STPP, BIJPUR .

Here I have studied in finance & account department.

APPROCHASES TO RESEARCH

The two main approaches to research are deductive & inductive .

These should not be though o as mutually exclusive, we can use

both in combination on the same research project . The main

influence on our choice o research approach should be our

research questions and objectives. For this project report , I have

used deductive approach for these I have analysis data which

was provided by Finance & Account department

INTODUCTION OF THE INDUSTRY

INTODUCTION OF THE INDUSTRY

NTPC Limited is the largest thermal

power generating company of India. A

public sector company, it was incorporated

in the year 1975 to accelerate power

development in the country as a wholly

owned company of the Government of India. At present, Government of India

holds 89.5% of the total equity shares of the company and FIIs, Domestic

Banks, Public and others hold the balance 10.5%. For shareholding pattern.

Within a span of 30 years, NTPC has emerged as a truly national power

company, with power generating facilities in all the major regions of the country.

Based on 1998 data, carried out by Datamonitor UK, NTPC is the 6th largest in

terms of thermal power generation and the second most efficient in terms of

capacity utilization amongst the thermal utilities in the world

NTPC's core business is engineering, construction and operation of

power generating plants and also providing consultancy to power utilities in

India and abroad. As on date the installed capacity of NTPC is 24,954 MW

through its 14 coal based (20,685MW), 7 gas based (3,955 MW) and 3 Joint

Venture Projects (314 MW). NTPC acquired 50% equity of the SAIL Power

Supply Corporation Ltd. (SPSCL). This JV Company operates the captive

power plants of Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74 MW).

NTPC’s share on 31 Mar 2006 in the total installed capacity of the country was

19.51% and it contributed 27.68% of the total power generation of the country

during 2005-06.

NTPC has set new benchmarks for the power industry both in the area

of power plant construction and operations. It is providing power at the

cheapest average tariff in the country. With its experience and expertise in the

power sector, NTPC is extending consultancy services to various organizations

in the power business.

NTPC is committed to the environment, generating power at minimal

environmental cost and preserving the ecology in the vicinity of the plants.

NTPC has undertaken massive afforestation in the vicinity of its plants.

Plantations have increased forest area and reduced barren land. The massive

afforestation by NTPC in and around its Ramagundam Power station (2100

MW) have contributed reducing the temperature in the areas by about 3°c.

NTPC has also taken proactive steps for ash utilization. In 1991, it set up Ash

Utilisation Division to manage efficient use of the ash produced at its coal

stations. This quality of ash produced is ideal for use in cement, concrete,

cellular concrete, building material.

A "Center for Power Efficiency and Environment Protection (CENPEEP)"

has been established in NTPC with the assistance of United States Agency for

International Development. (USAID). Cenpeep is an efficiency oriented, eco-

friendly and eco-nurturing initiative - a symbol of NTPC's concern towards

environmental protection and continued commitment to sustainable power

development in India.

As a responsible corporate citizen, NTPC is making constant efforts to

improve the socio-economic status of the people affected by the its projects.

Through its Rehabilitation and Resettlement programmes, the

company endeavors to improve the overall socio-economic status of Project

Affected Persons.

NTPC was among the first Public Sector Enterprises to enter into a

Memorandum of Understanding (MOU) with the Government in 1987-88. NTPC

has been Placed under the 'Excellent category' (the best category) every year

since the MOU system became operative.

Powering India's Growth : Through people

NTPC believes in achieving organizational excellence through Human

Resources and follows "People First" approach to leverage the potential of its

23,500 employees to fulfill its business plans. Human Resources Function has

formulated an integrated HR strategy which rests on four building blocks of HR

viz. Competence building, Commitment building, Culture building and Systems

building. All HR initiatives are undertaken within this broad framework to

actualize the HR Vision of "enabling the employees to be a family of committed

world class professionals making NTPC a learning organization.

To induct talent and groom them into a dedicated cadre of power

professionals "Executive Trainee" Scheme was introduced in the year 1977 for

recruitment in the disciplines of Mechanical, Electrical, Civil, Control &

Instrumentation and now encompasses Computer Science, Chemistry, HR and

Finance disciplines also. Besides a comprehensive one-year training

comprising theoretical inputs as well as on-the-job training, the new recruits are

also attached with senior executives under a systematic and formal 'Mentoring

System' of the company to integrate them into the Culture of the company.

Powering India's Growth : Through people

NTPC believes in achieving organizational excellence through Human

Resources and follows "People First" approach to leverage the potential of its

23,500 employees to fulfill its business plans. Human Resources Function has

formulated an integrated HR strategy which rests on four building blocks of HR

viz. Competence building, Commitment building, Culture building and Systems

building. All HR initiatives are undertaken within this broad framework to

actualize the HR Vision of "enabling the employees to be a family of committed

world class professionals making NTPC a learning organization.

To induct talent and groom them into a dedicated cadre of power

professionals "Executive Trainee" Scheme was introduced in the year 1977 for

recruitment in the disciplines of Mechanical, Electrical, Civil, Control &

Instrumentation and now encompasses Computer Science, Chemistry, HR and

Finance disciplines also. Besides a comprehensive one year training

comprising theoretical inputs as well as on-the-job training, the new recruits are

also attached with senior executives under a systematic and formal 'Mentoring

System' of the company to integrate them into the Culture of the company.

As part of post employment training and development opportunities, a

systematic Training plan has been formulated for ensuring minimum seven

man days training per employee per year and includes level-wise planned

intervention designed to groom people for assuming positions of higher

responsibility, as well as specific need-based interventions based on scientific

Training Needs Analysis. NTPC has set up 15 project training centers, 2

simulator training centers and an apex institute namely 'Power Management

Institute' (PMI). While the project training centers (Employee Development

Centers) have specialized in imparting technical skills and knowledge, PMI

places emphasis on management development. Besides opportunities for long

term education are also provided through tie-ups with reputed Institutions like

IIT, Delhi, (M.Tech in Power Generation Technology), MDI, Gurgaon (Executive

MBA programmed), BITS, Pilani (B.Tech) etc.

In order to realize the HR Vision of making NTPC a learning

Organization by providing opportunities to continually learn new capabilities a

number of initiatives have been taken. NTPC Open Competition for Executive

Talent (NOCET) is organized every year in which teams of executives compete

annually through oral and written presentation on a topical theme. Similarly

"Professional Circles" have been formed department-wise where Executives

of the department meet every fortnight to share their knowledge and

experiences and discuss topical issues. In order to tap the latent talent among

non executives and make use of their potential for creativity and innovation,

Quality Circles have been set up in various units/offices in NTPC. Besides a

management journal called "Horizon" is published quarterly to enable

employees to share their ideas and experiences across the organization.

Demonstrating its high concern for people, NTPC has developed

strong employee welfare, health & well-being and social security systems

leading to high level of commitment. NTPC offers best quality-of-life through

beautiful townships with all amenities such as educational, medical and

recreational opportunities for employees and their family members. The

motivation to perform and excel is further enhanced through a comprehensive

NTPC Rewards and Recognition system.

In order to institutionalize a strong Culture based on Values a

number of initiatives are taken to actualize the Vision and Core Values

(BCOMIT) across the company. A culture of celebrating achievements and a

strong focus on performance are a way of life in NTPC.

NTPC has institutionalized "Development Centers" in the

company to systematically diagnose the current. And potential competency

requirements of the employees with the objective of enhancing their

development in a planned manner. These Centers give a good insight to the

employees about their strengths and weaknesses, the gaps in their

competencies, which they can bridge through suitable support from company.

Due to innovative people management practices there is a high level of pride

and commitment amongst employees as reflected in the various external

surveys including “Great Places to Work for in India” in which NTPC was rated

third Great Place to work for in the country in 2005.

OWNERSHIP PATTERN

NTPC being a wholly owned Government of India undertaking has an

authorised capital base of Rs.8000 crores fully subscribed by the GOI. The

board of the company comprises of directors appointed by the government as

well as those internally appointed. The CHAIRMAN AND MANAGING

DIRECTOR, followed by the Functional Directors and subsequently the Govt.

Directors and the Non-Official Directors, heads the board.

Below given is the list of the Board of Directors:

POSITIONS NAMESCHAIRMAN AND

MANAGING DIRECTORShri C.P. JAIN

FUNCTIONAL DIRECTORS Shri K.K. SINHA

Shri P.

NARASIMHARAMULU

Shri R. D. GUPTA

Shri T.

SANKARALINGAM

Shri S. L. KAPOOR

Shri CHANDAN ROY

PART – TIME DIRECTORS Shri ARVIND JADAV

Shri M. SAHOO

NON-OFFICIAL DIRECTORS

Shri DEEPAK S.

PAREKH

Shri ASHOK MISHRA

Dr. R. K. PACHAURI

“COMPANY VISION”

"To be one

of

the world's largest

And

best power utilities

Powering

India's growth"

COMPANY MISSION

Make available reliable and quality power in increasingly large quantities

at appropriate tariffs, and ensure timely realization revenues.

Speedily plan and implement power projects, with contemporary

technologies

Implement strategic diversification in the areas of R&M, hydro, l.N.G. And

non-conventional and Eco-friendly fuels and explore new areas like

transmission, information technology etc.

Promote consultancy and make prudent acquisitions

Continuously develop competent human resources to match world

standards

Lead fundamental and applied research for adoption of state of the art

technologies, breakthrough efficiency improvements and new fuels.

Be a responsible corporate citizen with thrust on environment protection,

rehabilitation and ash utilization

NTPC POWER PLANTS

  

NTPC Limited has bagged the

prestigious DUN & BRADSTREET-AMEX

Corporate Award-2006 for being Number one in

the Indian Power Sector on 5th September

2006.

  

Shri A.R.Kidwai, Hon’ble Governor of Haryana

presented the Distinguished Fellowship of the Institute

of Director’s (IOD) to Shri T.Sankaralingam, CMD,

NTPC Limited at the 17th Annual Day function of IOD

held in New Delhi on 11 August 2006.

Environment Management Division, NOIDA, won golden Peacock

Eco Innovation & Environment Management Award 2005. The Award was

given on 9th June 2006 at the World Congress on Environment.

NTPC wins "Commendation Certificate for Strong

Commitment Among Large Business Organization" in Sustainability

Awards 2006. The award has been instituted by CII-ITC Center of

Excellence for Sustainability. Development for the first time this year to

recognize and reward excellence in Social, Economic and Environmental

Performance.

NTPC Limited ranked first amongst top 10

PSEs for MOU Award for Excellence in

Performance for the year 2003-04. Shri C.P.

Jain, CMD, NTPC also commended for his

contribution as Chairman SCOPE during April

2003-March 2005 through a Special Award. The

Awards where given by Hon’ble Vice President of

India, Shri Bhairon Singh Shekhawat in a function

organized by SCOPE at Vigyan Bhawan on 10th

January, ’06.

   

Best Companies to work in India – ‘Business Today-Mercer

Consulting 2005’ has rated NTPC as fifth Best Company in India to Work For.

NTPC is the only PSU and infrastructure company to figure in the top 10.

Great Places to Work – NTPC was ranked as Third Great Place

to Work for in India, by a survey conducted by Grow Talent and Business World

– 2005 for the second year consecutively.

Platts Global Energy Award 2005 for Community Development

Program of the Year 2005.

Nine employees of NTPC Ltd. have

been awarded Rashtriya Pishwakarma

Puraskar for the year 2006 on 17th September

2006 in New Delhi. Five employees of NTPC

Ramagundam Project received category ‘A’

award while 4 employees of NTPC Dadri

Project were presented category ‘C’ award.

  Ramagundam, Korba, Kahalgaon and

Rihand projects of NTPC Limited have been

conferred Safety Innovation Award-2006

instituted by Safety and Quality Forum of The

Institution of Engineers (India) New Delhi. The

awards were presented by Sh. R. V. Shahi,

Secretary (Power) and recognize the projects

for their outstanding contribution towards

innovating, promoting and implementing Best

Safety Practices on 6th September 2006.

NTPC signed a Loan Agreement of USD 300 million with

Asian Development Bank on September 21,2006 at Manila. This was the

first loan syndication deal for an Indian corporate under the Asia

Development Bank’s (ADB) Complementary Finance Scheme (CFS).

The transaction attracted funds of the order of USD 640 million and was

oversubscribed by 2.9 times. 31 foreign banks participated in loan

syndication. Strong financials of NTPC coupled with its practice of

adhering to stringent environmental standards has infused this

confidence in ADB resulting in overwhelming response during

syndication.

Dr.Manmohan Singh, Hon’ble Prime Minister of India

dedicated the Talcher Super Thermal Power Station to the Nation on

28th August 2006. Situated at Angul Distt. Of Orissa the Station has six

500 MW units with total installed capacity of 3000 MW, and this is the

largest power station of the country.

NTPC Limited [NTPC] and Singareni Collieries Company

Limited [SCCL] have signed a Memorandum of Understanding [MOU] on

23rd August, 2006 for creation of a Joint Venture Company to undertake

various activities in coal and power sectors. This is the first time that

NTPC has signed such an MOU with any Company in India or abroad.

The MOU will leverage both the Companies to pool in their experiences

and expertise in coal mining and O&M of power plants and pave the way

to put up integrated coal based power stations in India and abroad.  

Hon’ble Union Power Minister; Shri Sushilkumar Shinde

commissioned the first 500 MW unit of Stage – III (2X500 MW) of NTPC

Vindhyachal on 9th August 2006 at Vindhyanagar in Madhya Pradesh.

The total installed capacity of the station has now become 2760 MW and

that of NTPC Limited has risen to 26194 MW. States of Madhya

Pradesh, Maharashtra, Chhattisgarh, Gujarat, Goa and Union Territories

are major beneficiaries of the Station.

NTPC Limited declared the unaudited financial results for

the quarter ended on June 30, 2006 today. The profit after tax for the

quarter was Rs. 15,528 million as compared to profit after tax of

Rs. 13,087 million reported in the corresponding quarter in the previous

year thus registering a growth of 18.65%. The gross revenue for the

quarter was Rs. 77,905 million as compared to Rs. 66,095 million

reported in the previous year and has grown by 17.87%.

Shri T. Sankaralingam, Chairman & Managing Director, NTPC Limited

was felicitated for his significant achievements and outstanding contribution to

the Power Sector by Alumni of Regional Engineering College, Tiruchirapalli

(Now National Institute)

PROJECTS OF RIHAND

RIHAND SUPER THERMAL POWER PROJECT is a unit of

NATIONAL THERMAL POWER CORPORATION LTD.( NTPC ) is know for its

impeccable standard of production and productivity , a hall- mark of NTPC ,

the 2000 MW Rihand Super Thermal Power Project has taken further strides to

become a trend setter in various facets of power generation , environment

management, rehabilitation and resettlement , ash utilization , safety etc.

RIHAND STPP is known in the country for its unique features such as

tunneling ( 2.1 KM) , under water piling , steel flue chimney , sheet metal clad

turbine hall , 1.0 KM long rail cum road bridge for merry – go- round system ,

under water dredging for creation of channels , composite circuit mid stream

tower and high voltage direct current transmission system etc. Its compact lay

out , integrated control and instrumentation system , advanced fire fighting

system and well designed cable system are also unique features of the

project , which has made this power project a “ MODEL POWER HOUSE” of

NTPC .

PERFORMANCE STAGE - 1

The unit –1 & 2 of the first stage were declared on commercial

operation from January’90 and January’91 respectively during its commercial

operation, the station has many more accolades to its credit this station has

registered more than 100% PLF on two consecutive months of FEB and

MARCH’93.

IMPORTANT MILESTONES

Commencement of work : 09.02.1983

Unit-1 synchronised : 31.03.1988

Unit –2 synchronised : 05.07.1989

First MGR Coal Rake arrived : 02.10.1989

Unit-1 commercialised : 01.01.1990

Unit-2 Commercialised : 01.01.1991

MAX PLF

Unit-1 : 101.53 % (Nov.1991)

Unit-2 : 102.45 % (Feb.1993 )

Station Maximum Generation : 750.242 Mus ( Jan.1992)

PERFORMANCE STAGE -2

NTPC has doubled its capacity of RIHAND project by adding another

1000MW ( 2*500 MW ). Stage – 2 will have dry ash collection system with an

arrangement of rail line for transportation of bulk quantities . For zero

discharge ash water re - circulation system is also being constructed . The ash

bricks manufactured at project are being used in all construction work of stage

–2 .

TOTAL QUALITY MANAGEMENT

To foster a culture of continuous improvement , creativity & innovation , TQM

is an important part of RIHAND management . A dedicated TQM team is

functioning in the project which monitors and facilitates systematic

implementation of various activities of quality circle , professional circle ,

employee suggestion scheme, 5 S, benchmarking , balance score card , ISO –

9001, ISO-14001, ISO-18001 etc.

ENERGY COSERVATION

A senior level team is responsible to look at each system in plant with the area

person to evolve ways and means for energy conservation. This has led to a

significant saving by improvement in the heat rate , saving of DM water , saving

of diesel, saving of electricity consumed in township and plant . The saving

achieved so for is estimated to be in crore in a year . Conservation of energy

is also practiced in the construction activities by adoption of Lawrie Baker

Design for construction of Bal Bhavan

HUMAN RESOURCES DEVELOPMENT

The project has given utmost importance on actualizing NTPC HR

Vision i.e. “ To enable our people to be a family of committed world class

professional , making NTPC a learning organization” . For this , project has

adopted a four pronged HR strategy to build competency , commitment ,

culture and systems . The project has managed to double its capacity with

minimal increase in man power by maintaining its focus on improving

productivity / performance through training and development , knowledge

management , performance management and value based working .

DEPARTMENTS

SECTION : CASH

(SOURCE : ACCOUNT OFFICER)

CORE OBJECTIVE

[1] To maintain the cash & bank book for RhSTPP.

[2] To make the requisition to corporate for receipt of funds.

[3] To make the payment.

PROCEDURE

[1] Daily the cash book & bank is prepared to check the cash & Bank

Balance.

[2] The amount required is to the corporate. The NTPC corporate sends

the required amount to the subsequent bank of Rihand.

RhSTPP has its bank account in the following banks.

BANK PAYMENT MADE FOR

STATE BANK OF

INDIA[SHAKTI NAGAR]

COAL

STATE BANK OF

INDIA[RIHAND]

CIVIL CONSTRUCTION

UNION BANK OF

INDIA[RIHAND]

OPERATION

The cheques are signed as per the delegation of power. The

following is the detail of Delegation Of Power.

5000& below ANY OFFICER

1 LAC & BELOW ANY TWO OFFICER

1 LAC TO 5 LAC 1 ACCOUNT OFFICER & 1

Day.MANAGER

5 LAC & ABOVE 2 Day. MANAGER & ABOVE

The various statements are prepared to streamline the balance

which is as mentioned below:

It contain details regarding the funds received from

corporate as well from parties and employees

It contains details regarding the payments made to

various parties by the way of cheques/dd.

CASH RECEIPT VOUCHER [C.R.V.]

It contains details regarding the cash received from various parties,

bank, and employees

CASH PAYMENT VOUCHER [C.R.V]

It contains details regarding the payments made in cash

BANK RECEIPT VOUCHER [B.R.V]

BANK PAYMENT VOUCHER [B.P.V.]

BANK RECONCILIATIION STATEMENT is prepared every month

BANK GURANTEES, received from various suppliers/ contractors, are also

kept in cash section. Custody, release, extension of Bank Guarantees is the

responsibility of cash in charge.

NON CASH SECURITIES, such as TDR/FDR/NSC etc. received from

various suppliers/ contractors, are also kept in cash section. Custody,

release, extension of Bank Guarantees is the responsibility of cash in charge.

SECTION : ESTABLISHMENT

[SOURCE: DY. MANAGER(F& A)]

MAIN OBJECTIVE

To make payment to the employees for various purpose.

SALARY

MEDICAL

L T C

LOANS & ADVANCES

ALL THE OTHER REMUNERATION PAID BY NATIONAL

THERMAL COEPORATION LTD to its employees.

The work of establishment deptt. Starts as soon as:

The appointment letters of an employee reach the establishment

deptt.

The joining letter of an employee reaches the office.

In payroll [master file] spaces are specified for the following entries,

based upon which “Salary Of An Employee Is Made”.

NAME OF THE EMPLOYEE

EMPLOYEE NO.

DESIGNATION

SCALE OF PAY

BASIC PAY

DATE OF INCREMENT

LPC [LAST PAY CERTIFICATE]

RECOVERY OF LOANS & ADVANCE IF TAKEN.VARIATIONS IN

MASTER FILE

1. Absentee treatment the no. of day’s duty is being performed. The

source of this information in time office (P&A).

2. Generation incentive depending upon the generation of plant. The

source of this information is industrial Engineering group, medical

payment of O.T. in the case of workers.

DATA PRESENTATION

DATA PRESENTATION

OPERATIONAL PERFORMANCE

P.L.F

Since its inception NTPC has a record of sustained high level of

performance of all its plants which have facilitated All India PLF (Thermal) to

rise from 55.3% in 1991-92 to 72.1% in 2002-03 (NTPC plants achieved a PLF

of 70.59% in 1991-92 which has increased to 87.54.% in 2004-05).

.

NTPC has not only shown exemplary performance in regard to PLF and

availability but has also maintained excellent performance w.r.t. Other

operational parameters such as heat rate, auxiliary power consumption,

specific fuel consumption etc., which are comparable to the best performance

standards in the world.

DATA ANALYSIS

DATA ANALYSIS

MACRO PROCESS MAP

• GROUP WORK STEPS

• USER

DEPTT

• FINANCE

• C&M

• CA

Proposal Generation

Finance Vetting ConcurrenceDAL Vetting

Proposal

Approval Approval

DAL

Award

SUB PROCESS- PRE AWARD

Proposal Estimate Vetting

Award Proposal Concurrence

Budget Certification

Detailed Award Letter Vetting

SUB PROCESS-POST AWARD STAGE

Tentative/Final Deviations

Extra/New items/Change in scope

Provisional/Final Time Extension

Amendment Vetting

Existing Process Flow Chart of Estimate Vetting

Proposal initiatedBy User

Marked to Mgr

Marked to Officer

Financial Concurrence

Documents/Clarifications/

FES sought

Send to CA as Per DOP

Send for FESClearance

Existing Process Flow Chart of Proposal for Award Concurrence

Proposal initiatedBy C&M

Recd in Finance

Marked to Mgr

Marked to Officer

FinancialConcurrence

Proposal in order

Send to CA as Per DOP

Existing Process Flow Chart ofBudget Certification DAL Vetting

Recd in Finance

Marked to Mgr

Budget Certification

Send to C&M

Proposal initiatedBy C&M

Marked to Officer Marked to Officer

Recd in Finance

Marked to Mgr

DAL Vetting

Send to C&M

COVERAGE & ASSUMPTIONS

169 proposals have been examined which were awarded during

the period April’03-Dec’04

Receipt in Finance is considered as the date on which file is

marked by previous authority

Sent from Finance is considered as the date on which the file is

signed by the last authority

Regularizing/Covering Work orders and Contracts/Work orders

awarded during emergent Situation e.g.VVIP visits have not

been considered

OBSERVATIONS

Estimate Vetting

On an average 18 days have been taken for estimate vetting

Almost 50% cases RIO* for want of documents/clarifications

Almost 25% cases again RIO for clarifications

Out of 18 days for estimate vetting, on an average 35% of the time is

consumed to reach a proposal to the concurring officer at each occasion

when file is received in finance

Approx. 6 days have been taken to concurn the proposal for award.

On an average 3 days have been taken for Budget Certification

Almost 4 days have been taken for DAL* Vetting

Approx. 2/3 of the time is consumed in movement of files.

FINDINGS OF STUDIES

FINDINGS

It took 31 days for Pre-Award activities relating to Finance

Out of 31 days, eliminating the procedure of internal marking and

minimizing the RIO’s can reduce 11days

Initiating the activities of Budget certification and Vetting can save 4

days along with concurrence of award proposals.

The present time the committee inspection of material code and reduce

the material code to which useful item don’t to be use less to which total

value of inventory decrease.

RECOMMENDATIONS

RECOMMENDATIONS

Certification to be done by concurring officer.

Proposals to be received by concurring officer directly.

A detailed checklist containing the documentary requirements of

concurrence to be circulated to user departments to minimize RIO’s.

Proposals of Construction activities to be cleared by FES before sending

to Finance.

Proposals for additional manpower deployment /PAP’s* to be cleared by

HR/R&R respectively.

Post award proposals for Time Extension/ Deviations to be routed

through CS.

Budget Certification/Vetting should be taken up along with concurring

the proposal for award

CONCLUSION

CONCLUSION

After having gone through all the aspects of the ABT system and

comparing it with existing system, we have reasonably got a deep

insight of the matter.

It is very difficult to conclude very directly in favour or against the

ABT system. ABT is a new concept, which has come into existence

because the existing system had certain limitations. It has been tried to

overcome those limitations, but at the same time it has incorporated

certain financial measures, which seem to be harsh against the

Generators, generating & selling electricity in more than one state.

The ABT system is better in certain respects. The basic and most

important area is f the Grid discipline. In this system, the grid discipline

shall be maintained through financial incentive and disincentive scheme.

Further ABT facilitates trading in capacity and actual power. ABT also

indirectly facilitates Merit Order dispatch, which is in the interests of

economy and efficiency of the power sector as a whole. It is effectively

applicable to both Generators and Bulk Consumers.

Like any system, ABT also has certain drawbacks. The major is

that the State owned generating stations are not covered in this scheme

till date, so the level playing field is not available to NTPC as on date.

However, it is felt that with the creation of all the State ERCs this system

will also be extended to the State owned generating stations also, thus

ensuring level playing field.

This is only a changing phase, a phase of power sector reforms.

In future we are moving towards a free power market, where the market

forces like Demand, supply and competition with minimum government

interference will derive the tariff. This system is prevalent in West and is

known as ‘Auction’ based tariff.

The ABT might be having some negative impact on the

profitability of the NTPC but if we see from the power sector interest and

we compare Indian power sector with the international scenario, the ABT

is a welcome step. It is good that the NTPC is setting new standards as

Benchmark for the power sector in India. NTPC has a long way to go

and it will prove its worth in the new challenging times of ABT regime.

APPENDIX

FUND FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2005(Rs million)

Statement of sources and application of funnds sources 2005 2004Fund generated from operating activities 74,468 47,473proceeds from issue of share capital 26,664 nilDeffered revenue on account of advance 1783 1,320Interest/ income on bond 14,991 35,930development surcharge fund nil 3,784divident recived on investment 117 95proceeds from long term borrowingds 29,592 37,949decrease in working capital 93,755TOTAL 147,615 219,969APPLICATIONExpenditure on fixed assets 55,089 45,154purchase of investment 34,167 770investment in subsidiaries 430 216purchase of bonds under one time settelment scheme nil 135,720repayment of long term borrowing 13,242 15,578Interest 9,740 10,107guarantee commission and finance charges 1,615 551development surcharges fund 3,784 nilDividend 19,790 10,823Dividend tax 2,679 1,387INCREASE IN WORKING CAPITA 7,079TOTAL 147,615 219,969

BALANCE SHEET TO 2001 TO 2005

PRTICULAR 2005 2004 2001 2002 2003SOURCE OF FUNDSSHAREHOLDER'S FUNDSCAPITAL 82455 78125 78125.49 78125.49 78125RESERVE AND SURPLUS 335308 277376 180082.4 208399.3 237002TOTAL 417,763 355501 258207.9 286524.8 315127DEFERDREVENUE 3374 1591 nil nil 271DEVELOPMENT SURCHARGE nil 3784 nil nil nilFUNDSLOAN FUNDSSECURED LOAN 44407 45844 19654.69 16454.99 41,226UNSECURED LOAN 126471 108684 78392.56 99356.83 90,931TOTAL 170878 154528 98047.26 115811.8 132,157DEFFERED TAX LIABILITY 50570 52280 nil nil 44,379

LESS: RECOVERABLE 50569 52279 nil nil 44,378

1 1 nil nil 1TOTAL 592,016 515405 356255.1 402336.6 447,556

APPLICATION OF FUNDFIXED ASSETSGROSS BLOCK 431,062 400281 323073.5 328911.6 366,106LESS:DEPRECIATION 207,914 187736 138416.2 152131.1 167,456NET BLOCK 223148 212545 184657.4 176780.4 198,650CAPITAL WORK IN PROGRESS 67063 56413 27896.46 52037.63 51,543CONSTRUCTION STORE &ADV. 32,222 18540 10268.84 13546.12 12,320TOTAL 322,433 287498 222822.7 242364.2 262,513INVESTMENT 207,977 173380 39914.59 40281.14 36,674CURRENT ASSETSINVENTORIES 17,777 17380 18355.85 20141.97 17,712SUNDRY DEBTORS 13,747 4699 95851.39 115328.3 124,349CASH AND BANK BALANCE 60,783 6091 3829.48 12048.57 5,447OTHER CURRENT ASSETS 9,714 80019 9703.61 5510.95 25,149LOAN AND ADVANCES 27,052 27279 33011.35 24742.22 21,475TOTAL 129,073 135468 160751.7 177772 194,132LESS: CURRENTLIABILITIESLIABILITES 52,306 65244 27620.22 31416.99 34,202PROVISION 15,161 15697 39704.11 26736.09 11,648TOTAL 67,467 80941 67324.34 58153.09 45,850NET CURRENT ASSETS 61,606 54527 93427.35 119618.9 148,282MISCELLANEOUS EXPENDITU. nil nil 90.51 72.38 87

TOTAL 592,016 515405 356255.1 402336.6 447,556

BIBLIOGARAPHY

BIBLIOGRAPHY

BOOKS

FINANCIAL MANAGEMENT BY I. M. PANDEY

MANAGEMENT ACCOUNTING BY S. N. MAHESHWARI

FINANCIAL ACCOUNTANCY BY S.N. MAHESHWARI

JOURNALS

NTPC NEWS MAGAZINE

NEWS MAGAZINE “RIHAND SAMACHAR”

REPORTS

ANNUAL REPORTS OF NTPC

ANNUAL REPORTS OF NTPC RIHAND

OFFICIAL SOURCES

RIHAND STPP ORGANISATION

NTPC RIHAND OFFICIAL RECORDS

WEB SITES

www.ntpc.co.in

www.google.com