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financial concurrence-ntpc

  1. 1. 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 Limited Rihand Super Thermal Power Project Under The Guidance of: Submitted By: Ms. Gurbandini KAMLESH GAUTAM Roll No.-0509870181 INSTITUTE OF MANAGEMENT STUDIES, NOIDA
  2. 2. 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.
  3. 3. 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
  4. 4. 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.
  5. 5. 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
  6. 6. 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.
  7. 7. 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
  9. 9. 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. 10. 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.
  11. 11. 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.
  13. 13. 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 1st 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.
  14. 14. 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.
  15. 15. TOTAL IMPACT OF ABT ON RIHAND SUPER THERMAL POWER PROJECT FOR THE 6 MONTHS (FROM 1ST APRIL TO 30TH 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)
  16. 16. 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.
  17. 17. 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 6th 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.
  18. 18. 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 4th 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.
  19. 19. 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.
  20. 20. 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.
  21. 21. 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
  22. 22. 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. 1st 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.
  23. 23. 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.
  25. 25. 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
  26. 26. # 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.
  27. 27. 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
  28. 28. 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
  29. 29. 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
  30. 30. 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
  31. 31. work, the contractor shall in all cases in which the time allowed for any work exceed one month say for the special jobs complete 1/8th of the whole of the work before 1/4th of the whole time allowed in the contract has elapsed;3/8th of the work before one half of such time has elapsed and 3/4th 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.
  32. 32. (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.
  33. 33. 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.
  34. 34. SCOPE OF STUDY
  35. 35. 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
  37. 37. 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.
  39. 39. 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
  40. 40. 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. .
  41. 41. 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
  43. 43. 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
  44. 44. 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.
  45. 45. 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
  46. 46. 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
  47. 47. 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.
  48. 48. 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.
  49. 49. 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
  50. 50. (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
  51. 51. 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 NAMES CHAIRMAN AND MANAGING DIRECTOR Shri 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
  52. 52. “COMPANY VISION” "To be one of the world's largest And best power utilities Powering
  53. 53. 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.
  54. 54.  Be a responsible corporate citizen with thrust on environment protection, rehabilitation and ash utilization NTPC POWER PLANTS
  55. 55. 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
  56. 56. 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.
  57. 57. 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
  58. 58. 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.
  59. 59. • 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%.
  60. 60. 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 .
  61. 61. 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
  62. 62. 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 .
  63. 63. 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
  64. 64. 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 .
  65. 65. 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.
  66. 66. 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
  67. 67. 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 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. BANK RECEIPT VOUCHER [B.R.V] BANK PAYMENT VOUCHER [B.P.V.]
  68. 68. 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.
  69. 69. 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.
  71. 71. DATA PRESENTATION GENERATION AND SALES 10 94 40 11 78 90 12 90 40 13 31 78 13 82 76 13 99 10 16 03 87 18 96 94 17 78 68 19 02 06 0 50000 100000 150000 200000 2000-01 2001-02 2002-03 2003-04 2004-05 Rs. Mil lio n Generation (in Mus) Sales (Rs./Million)
  72. 72. PROFIT AFTER TAX 2815 8 3424 5 3733 8 3539 6 3607 5 0 500 0 1000 0 1500 0 2000 0 2500 0 3000 0 3500 0 4000 0 2000-01 2001-02 2002-03 2003-04 2004-05 Sal es (R s./ Mil lio n)
  73. 73. NET WORTH & NET ASSETS 20141 6 22904 5 25811 7 28645 3 31504 0 35447 9 40171 1 42348 9 45041 1 49331 9 15000 0 20000 0 25000 0 30000 0 35000 0 40000 0 45000 0 50000 0 55000 0 2000-01 2001-02 2002-03 2003-04 2004-05 Rs. Mil lio n Net worth Net Assets
  74. 74. NET BLOCK & GROSS FIXED ASSETS 15912 0 17033 5 18465 7 17678 1 19865 0 25210 8 28473 8 32307 3 32891 2 36610 6 5000 0 10000 0 15000 0 20000 0 25000 0 30000 0 35000 0 40000 0 2000-01 2001-02 2002-03 2003-04 2004-05 Rs . Mil lio n Net Block Gross Fixed Assets
  75. 75. 5.26 5.58 6.11 6.26 6.58 0 1 2 3 4 5 6 7 MUs 2000-01 2001-02 2002-03 2003-04 2004-05 GENERATION PER EMPLOYEE
  76. 76. 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). .
  77. 77. 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. Growth in Share Capital and Reserves & Surplus 80000 80000 80000 80000 80000 78125 78125 78125 78125 77215 237002 208400 180082 150979 124333 0 50000 100000 150000 200000 250000 2002-03 2001-02 2000-01 1999-00 1998-99 Year Rs.Million Autorised Capital Paid-up Capital Reserves & Surplus
  79. 79. DATA ANALYSIS MACRO PROCESS MAP • GROUP WORK STEPS • USER DEPTT • FINANCE • C&M • CA Proposal Generation Finance Vetting Concurrence DAL Vetting Proposal Approval Approval DAL Award
  80. 80. 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
  81. 81. Existing Process Flow Chart of Estimate Vetting Proposal initiated By User Marked to Mgr Marked to Officer Financial Concurrence Send for FES Clearance
  82. 82. Existing Process Flow Chart of Proposal for Award Concurrence Documents/ Clarifications/ FES sought Send to CA as Per DOP Proposal initiated By C&M Recd in Finance Marked to Mgr Marked to Officer Financial ConcurrenceProposal in orderSend to CA as Per DOP
  83. 83. Existing Process Flow Chart of Budget Certification DAL Vetting Recd in Finance Marked to Mgr Proposal initiated By C&M Marked to Officer Marked to Officer Recd in Finance Marked to Mgr
  84. 84. 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 Budget Certification Send to C&M DAL Vetting Send to C&M
  85. 85. • 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
  86. 86. • 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.
  88. 88. • 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.
  90. 90. 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.
  91. 91.  Budget Certification/Vetting should be taken up along with concurring the proposal for award CONCLUSION
  92. 92. 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
  93. 93. 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.
  94. 94. APPENDIX
  95. 95. FUND FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2005 (Rs million) Statement of sources and application of funnds sources 2005 2004 Fund generated from operating activities 74,468 47,473 proceeds from issue of share capital 26,664 nil Deffered revenue on account of advance 1783 1,320 Interest/ income on bond 14,991 35,930 development surcharge fund nil 3,784 divident recived on investment 117 95 proceeds from long term borrowingds 29,592 37,949 decrease in working capital 93,755 TOTAL 147,615 219,969 APPLICATION Expenditure on fixed assets 55,089 45,154 purchase of investment 34,167 770 investment in subsidiaries 430 216 purchase of bonds under one time settelment scheme nil 135,720 repayment of long term borrowing 13,242 15,578 Interest 9,740 10,107 guarantee commission and finance charges 1,615 551 development surcharges fund 3,784 nil Dividend 19,790 10,823 Dividend tax 2,679 1,387 INCREASE IN WORKING CAPITA 7,079 TOTAL 147,615 219,969
  96. 96. BALANCE SHEET TO 2001 TO 2005 PRTICULAR 2005 2004 2001 2002 2003 SOURCE OF FUNDS SHAREHOLDER'S FUNDS CAPITAL 82455 78125 78125.49 78125.49 78125 RESERVE AND SURPLUS 335308 277376 180082.4 208399.3 237002 TOTAL 417,763 355501 258207.9 286524.8 315127 DEFERDREVENUE 3374 1591 nil nil 271 DEVELOPMENT SURCHARGE nil 3784 nil nil nil FUNDS LOAN FUNDS SECURED LOAN 44407 45844 19654.69 16454.99 41,226 UNSECURED LOAN 126471 108684 78392.56 99356.83 90,931 TOTAL 170878 154528 98047.26 115811.8 132,157 DEFFERED TAX LIABILITY 50570 52280 nil nil 44,379 LESS: RECOVERABLE 50569 52279 nil nil 44,378 1 1 nil nil 1 TOTAL 592,016 515405 356255.1 402336.6 447,556 APPLICATION OF FUND FIXED ASSETS GROSS BLOCK 431,062 400281 323073.5 328911.6 366,106 LESS:DEPRECIATION 207,914 187736 138416.2 152131.1 167,456 NET BLOCK 223148 212545 184657.4 176780.4 198,650 CAPITAL WORK IN PROGRESS 67063 56413 27896.46 52037.63 51,543 CONSTRUCTION STORE &ADV. 32,222 18540 10268.84 13546.12 12,320 TOTAL 322,433 287498 222822.7 242364.2 262,513 INVESTMENT 207,977 173380 39914.59 40281.14 36,674 CURRENT ASSETS INVENTORIES 17,777 17380 18355.85 20141.97 17,712 SUNDRY DEBTORS 13,747 4699 95851.39 115328.3 124,349 CASH AND BANK BALANCE 60,783 6091 3829.48 12048.57 5,447 OTHER CURRENT ASSETS 9,714 80019 9703.61 5510.95 25,149 LOAN AND ADVANCES 27,052 27279 33011.35 24742.22 21,475 TOTAL 129,073 135468 160751.7 177772 194,132 LESS: CURRENTLIABILITIES
  97. 97. LIABILITES 52,306 65244 27620.22 31416.99 34,202 PROVISION 15,161 15697 39704.11 26736.09 11,648 TOTAL 67,467 80941 67324.34 58153.09 45,850 NET CURRENT ASSETS 61,606 54527 93427.35 119618.9 148,282 MISCELLANEOUS EXPENDITU. nil nil 90.51 72.38 87 TOTAL 592,016 515405 356255.1 402336.6 447,556 BIBLIOGARAPHY