This document provides an executive summary of a project report on the analysis of financial statements of National Thermal Power Corporation (NTPC) in India. The summary discusses India's growing energy demand driven by rapid economic growth and the important role played by NTPC in meeting this demand. It notes NTPC's ambition to add significant new generation capacity by 2030 to support India's economic development. It concludes that urgent policy actions are needed by governments around the world, including India, to curb emissions growth from fossil fuels and transition to more sustainable energy systems.

1. A
PROJECT REPORT ON
ANALYSIS OF FINANCIAL STATEMENTS
OF
NATIONAL THERMAL P OW ER CORPORATION
PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT OF
POST GRADUATE DIPLOMA IN M A N A G E M EN T
2016-2018
G.L BAJAJ INSTITUTE OF M AN AG EME NT AND
RESEARCH
UNDER THE SUPERVISION OF SUBMITTED BY
J.SRI DEVI ROHIT KUMAR
PGDM-FINANCE
1

2. CERITIFICATE
This is to certify that MR.ROHITKUMAR, is a bonafide regular student of the
G.L BAJAJ INSTITUTE OF M A N A G E M E N T AND RESEARCH for the
session 2016-2018 .He has completed the project report titled “ANALYSIS OF
FININCIALSTATEMENT OF NATIONALTHERMAL POWER
CORPORATION”.
Under my supervision as a part a partialfulfillment for the award of PGDM
degree of AICTE. To the best of my knowledge there port is good and not
copied fromanywhere.
HeadoftheDepartment Projectsupervisors
2

3. DECLARATION
I ROHIT K U M A R hereby declare that this project is the record of authentic
work carried out by me during the academic year 2016-2018 and has not been
submitted to another University or Institute towards the award of any degree.
All the details and analysis provided in the report hold true to the best of my
knowledge.
Signatureofthestudent
3

4. ACKNOWLEDGEMENT
These eight weeks at National Thermal Power Corporation (NTPC) have been a
great learning experience. It has been one of the most enriching experience for
me to work along with the employees of one of the best managed organizations,
a company rightly considered as one of the Navratna’s in the public sector of
the country.
I am very thankful to Ms. J.SRIDEVI, Sr.Manager (Finance& Accounts)
who has given me full opportunity to learn the tendering operations executed
here.
I am very thankful to Mr. RAKESH SHARMA, Faculty-G.L BAJAJ
INSTITUTE OF M A N A M E M E N T AND RESEARCH, Greater Noida
for the guidance and interest evinced throughout the preparation of this project.
I take this opportunity, also to express my love and sincere thanks to my family
members and friends for their support and advice during various stage of work.
4

5. EXECUTIVE S U M M A R Y
India is the emerging giants of the world economy and international energy
markets. Energy development in India are transforming the global energy
system by dint of their size and there growing weight in international fossil-fuel
trade. India is increasingly exposed to changes in world energy markets. The
staggering pace of Indian economic growth in the past few years, out ripping
that of all other major countries, has pushed up sharply their energy needs, a
growing share of which has to be imported. The momentum of economic
development look set to keep their energy demand growing strongly. Astley
become richer, the citizen of India are using more energy to run their offices
and factories, and buying more electrical appliances and cars. These
developments are contributing to a big improvement in their quality of life, a
legitimate aspiration that needs to be accommodated and supported by the rest
of the world. The consequences for India the OECD and the rest of the world of
unfettered growth in global energy demand are, however, alarming. If
government around the world stick with current policies-the underlying premise
of our reference scenario-the world’s energy need would be well over 50%
higher in 2030 than today, china and India together account for 45% of the
increase in demand in this scenario. Globally, fossil flues continue to dominate
the fuel mix. These trend lead to continued growth in energy-related emissions
of carbon-dioxide (co2) and to increased reliance of consuming countries to
imports of oil and gas-much of them from the Middle East and Russia. Both
development would heighten concerns about climate change and energy
security. The challenges for all countries is to put in motion a transition to a
more secure, lower-carbon energy system, without undermining economic and
social development. Now where will this challenges be tougher, or of
greater importance to the rest of the world, than in china and India,vigorous,
5

6. immediate and collective policy action by all government is essential to move
the world onto a more sustainable energy path. There has so far been more talk
than action in most countries. Were all the policies that governments around the
world are considering today to be implemented, as we assume in an alternative
policy scenario, the world’s energy demand and related emissions would be
reduced substantially. Measure to improve energy efficiency stand out as the
cheapest the fastest way to curb demand and emissions growth in the near term.
But even in this scenario, c02 emissions are still one-quarter 4 world energy
outlook 2007 above current levels in 2030. To achieve a much bigger reduction
in emissions alternative policy scenario projections are based on what some
might consider conservative assumptions about economic grow on average 1.5
percentage points per years faster than in the reference scenario (thought more
slowly than of late),energy demand is 21% higher in 2030 in china and
combined. The global increase in energy demand amounts to 6%, making it all
the more urgent for governments around the world to implement policies, such
as those taken into account in the alternative policy scenario, to curb the growth
in fossil-energy demand and related emissions.
6

7. CONTENT
CH.NO PARTICULAR PAGE NO
1. INTRODUCTION……………………………….
Objective 10
2.
INDUSTRY Profile 14
BoardofDirector’s 15
Vision & Mission Statement 18
Core values 19
BackgroundofNTPC 20
Growthrates 21
Recognitions&awards 22
Location of NTPC Plants 26
OrganizationstructureofNTPC 27
Jointventures 29
Futurecapacityadditions 38
Subsidiaries 41
Competitors 43
NTPC shareholding patterns 45
7

8. Acquisitions 46
Diversified growth 47
SWOT analyses 53
3. RESEARCH METHODOLOGY 56
4. DATAANALYSIS 59
Ratio Meaning & Technique 60
Limitations of Ratio Analysis 63
Classification of Ratios & interpretation 65
5. FINDING 91
6. CONCLUSION 93
7. SUGGESTION & RECOMMENDATIONS 97
8. LIMIATION OF STUDY 99
9. BIBLOGRAPHY 101
10. ANNEXURE 102
8

9. 1. CHAPTER
1. INTRODUNCTION
Objective of the study
INTRODUCTION
Scenario of Power in India.
Growth of economy calls for watching the rate of growth in infrastructure
facilities. Power sector is one of the major aspects of this infrastructure
building. Some prominent people like the Ex-ChairmanofGEJackWelch
Have gone to the extent of saying, “revolution”Moreover, the growth rate of
demand for power in developing countries is generally higher than that of GDP.
In India, the elasticity ratio was 3.06 in 1stplan, & peaked at5.11 during 3rd
Plan and came down to 1.65 in 80’s. For 90’s a ratio of around 1.5
was projected. Hence, in order to support a growth of GDP of around 7%, the
rate of growth of power supply of 10% is required. If we look at current
scenario, electricity consumption in India has more than doubled in the last
decade, outpacing the economic growth. If we analyze the various statistics
of Indian power sector, we will find that the generating capacity has gone up
tremendously from a meager 1712MW in 1950 to a whooping 147000MW
today. The critical role played by the power industry in the economic progress
of a country has to be emphasized. A self-sufficient power industry is vital for a
nation to achieve economic stability.
IndianPower Industry
BeforeIndependence
The British controlled the Indian power industry firmly before Independence.
Then legal and policy framework was contributing to private ownership, with
not much regulation with regard to operational safety.
Post-Independence
9

10. Immediately after Independence, the country was faced with capacity restraint.
India adopted a socialist structure for economic growth and all the major
industries were controlled by public sector enterprises. By 1970's, India had
nationalized most of it synergy assets, due to its commitment to social goals. By
the late 1980's, the Indian economy felt the strain of the socialist agenda
followed since independence. Faced with a serious deterioration in public
finance and balance of payment crisis, the Union government as part of its
policy of economic liberalization allowed greater investment by private sector
in the power industry. The electricitysector in India is predominantly
controlled by Government of India's public sector undertakings (PSUs). Major
PSUs involved in the generation of electricity include National Thermal Power
Corporation (NTPC), National Hydroelectric Power Corporation (NHPC) and
Nuclear Power Corporation of India (NPCI). Besides PSUs, several state-level
corporations, such as Maharashtra State Electricity Board (MSEB), are also
involved in the generation and intra-state distribution of electricity. The Power
Grid Corporation of India is responsible for the inter-state transmission of
electricity and the development of national grid. India is world's 6th largest
energy consumer, accounting for 3.4% of global energy consumption. Due to
India's economic rise, the demand for energy has grown at an average of 3.6%
per annum over the past 30 years. In March 2009, the installed
power generation capacity of India stood at 147,000 MW while the per capita
power consumption stood at 612 KWh. The country's annual power production
increased from about 190 billion KWH in 1986 to more than 680 billion KWH
in 2006. The Indian government has set an ambitious target to add
approximately 78,000 MW of installed generation capacity by 2012. The total
demand for electricity in India is expected to cross950, 000 MW by 2030.
Electricity losses in India during transmission and distribution are extremely
high and vary between 30 to 45%. In 2004-05, electricity demand outstripped
10

11. supply by 7-11%.Due to shortage of electricity, power cuts are common
throughout India and this has adversely effected the country's economic growth.
Generation
Grand Total Installed Capacity is 147,402.81MW.
ThermalPower
Current installed capacityof Thermal Power (as of 12/2008) is 93,392.64MW.
Which is 63.3% of total installed capacity.
Current installed base of Coal Based Thermal Power is 77,458.88M W . Which
comes to 53.3% of total installed base.
Current installed base of Gas Based Thermal Power is 14,734.01MW.
Which is 10.5% of total installed base.
Current installed base of Oil Based Thermal Power is 1,199.75MW. Which
Is 0.9% of total installed base? The state of Maharashtra is the largest producer
Of thermal power in the country.
Hydro Power
India was one of the pioneering states in establishing hydro-electric power
plants, the power plant at Darjeeling and Shims (Shivanasamudra) was
established in 1898 and1902 respectively and is one of the first in Asia. The
installed capacity as of 2008 was approximately 36647.76.The public sector has
a predominant share of 97% in this sector.
NuclearPower
Currently, 17 nuclear power reactors produce 4,120.00 MW (2.9% of total
installed base).
RenewablePower
Current installed base of Renewable energy is 13,242.41 MW. Which is 7.7% of
total installed base with the southern state of Tamil Nadu contributing nearly a
third of it (4379.64 MW) largely through wind power. Power for ALL by 2012
11

12. The Government of India has an ambitious mission of POWER FOR ALL BY
2012. This mission would require that our installed generation capacity should
be at least 200,000MW by 2012 from the present level of 144,564.97 MW.
Power requirement will double by 2020 to 400,000MW.
Today’s environment is a tough environment to survive, with the new industries
and the new sectors coming up so strongly and financially sound. But to gain an
extra edge over others they ought to have an extra or special added advantage.
“Ourpeopleareourmostimportantasset.” Nearly every organization report contains
phrase like this & for good reason. Today, the last great source of competitive
advantage is human capital.
OBJECTIVE OF THE STUDY
The above study aimed at:
₪To gain the overall idea about the organization.
₪To gain a first-hand knowledge about the structure and the functioning of
the finance department and the return on investment policy.
₪To gain and enhance different managerial skills.
₪To see the applicability and usability of theory which have been taught to us
during the first year of the course?
₪To find out the financial performance of the organization.
₪To find out the importance of finance in business.
₪To find out the future requirement of finance in business.
₪To study the investment decisions based on the return. Depending on the
studies as started above suggest some new innovative ideas which
may beneficial to the organization.
12

13. CHAPTER 2
INDUSTRY PROFILE
Director’s profile
Vision &Mission Statement
Background of NTPC
Market Share
Achievements
Organization structure of NTPC
Joint Ventures
Location of NTPC Plant
13

14. INDUSTRY PROFILE
BOARD OF DIRECTORS
The Management of the Company is vested with the Board of Directors. In
terms of the Articles of Association of the Company the Board of Directors can
have minimum four Directors and maximum twenty Directors. The
Management of the Company is vested with the Board of Directors.
The Composition of the Board of Directors is given below.
14

15. S.NO NAME DESIGNATION DATE OF
APPOINTMENT
FUNCTIONAL DIRECTORS
1
SHRI GURDEEP
SINGH
Chairman &
Managing Director
(DIN: 00307037)
04/02/2016
2
Shri A.K. Jha
(Technical)
Director
(DIN:
01/09/2015
3
Sh
Shri S.C.Pandey
Director (Projects)
(DIN:03142319)
01/10/2013
4
Shri Kulamani
Biswal
Director (Finance)
(DIN:03318539)
09/12/2013
5
Shri K.K. Sharma
Director
(Operation)
01/11/ 2014
15

16. INDEPENDENT DIRECTORS
1.
Shri Rajesh Jain
Independent
Director
(DIN:00103150)
18/11/2015
2.
Dr. Gauri Trivedi
Independent
Director (Non-
Official Part-time
Director)
(DIN:06502788)
18/11/2015
3.
Shri S. Chander
Independent
Director (Non-
Official Part-time
Director)
(DIN:02336635)
22/06/2016
16

17. Vision & Mission Statement
Vision
To be the world’s largest and best power producer, powering India’s growth.
Mission
“Develop and provide reliable power, related products and services at
competitive prices, integrating multiple energy sources with innovative and eco-
friendly technologies and contribute to society.”
17

18. CORE VALUES –BE COMMITTED
B -Business Ethics.
E
C
-Environmentally & Economically Sustainable.
Customer Focus.
O Organisational & Professional Pride.
M Mutual Respect & Trust.
M Motivating self & others.
I Innovation &Speed.
T
T
Total Quality for Excellence.
Transparent & Respected Organisation.
E
D
Enterprising.
Devoted.
18

19. BACKGROUND OF NTPC
NTPC Limited
CIN: L40101DL1975GOI007966, Regd. Office: NTPC Bhawan, SCOPE
Complex, 7 Institutional Area, Lodi Road, New Delhi-110 003 Tel. no.:011-
24387333 Fax: 011-24361018 Email: ntpccc@ntpc.co.in Website:
www.ntpc.co.in
NTPC – a global giant in power sector
NTPC Limited is the largest 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 & the balance10.5% is held by FIIs, Domestic Banks, Public and
others. Today, it has emerged as an ‘IntegratedPowerMajor’, with a significant
presence in the entire value chain of power generation business.
Basedon1998data,carriedoutbyDatamonitorUK,anISO9001:2000certifiedcompany,
NTPCisthe6thlargestintermsofthermalpowergeneration& thesecondmostefficientin
termsofcapacityutilizationamongstthethermalutilitiesintheworld.
Within a span of 42 years, NTPC has emerged as a truly national power
company, with power generating facilities in all the major regions of the
country. Driven by its vision to lead, it has charted out an ambitious growth plan
of becoming a 75000 MW plus company by 2017.
19

20. G R O W T H RATE
NTPC to be a 130 GW company by 2032 with diversified fuel mix and a 600
BU company in terms of generation.
Coal would continue as predominant fuel with 65% share of coal based capacity
in the portfolio.
Non-fossil fuel based capacity would achieve a share of 30% and Thermal
based generating capacity share would be 70%. Share of RE (including hydro)
would be 28% NTPC targets a market share of 25% in ancillary services and
storage NTPC aims to achieve 10% of the estimated market share for supply of
electricity in E-mobility business.
inG W By 2032
Coal 85
Gas 6
Hydro 5
Solar 30
Other RE 2
Nuclear 2
Total 130
20

21. Recognitions& Awards
It feels great to be recognised and rewarded for our efforts. It motivates and
inspires us to better ourselves. We have been felicitated by various national and
international fora time and again.
PerformanceAwards
http://ntpc.co.in/en/recognitions-awards/performance-awards#
a). ntpc has been bestowed with India pride award 2016 -17 for best
performance in the power sector. Shri Manoj Sinha, union minister of state for
railways and minister of state (IC) for communications presented the award to
shri a. k. bhat nagger, executive director, pmi at New Delhi.
b).NTPC NETRA awarded for Institutional Research, Training and Excellence
in Academia at the 10th Enertia Awards held in New Delhi.
c).NTPC awarded as the Best Thermal Power Utility of the country by Central
Board of Irrigation and Power (CBIP) on 29th December, 2016 at a function
held in New Delhi Union Minister of State for Water Resources, River
Development and Ganga Rejuvenation Dr. Sanjeev Kumar Balyan presented the
award to Shri Gur deep Singh CMD NTPC.
Shri AK Jha Director, (Technical) NTPC was also honored by CBIP on the
occasion for his outstanding contribution to the sector.
21

22. CSR AWARDS
http://ntpc.co.in/en/recognitions-awards/csr-awards#
a).NTPC conferred Golden Peacock Award for Corporate Social Responsibility
constituted by Institute of Directors (IOD), New Delhi. Award was received by
Shri D. K. Sood, ED (CSR & R&R) and RED (DBF) and Shri D. K. Patankar,
GM (CSR) on behalf of NTPC from His Holiness Sri Sri Ravi Shankar, Founder
of The Art of living.
b). NTPC has bagged 2 prestigious awards in CSR- Public Sector Enterprise of
the Year and Swacch Bharat Categories in Bureaucracy Today-CSR excellence
awards held on 14th July,2016 recognizing social initiatives of corporate
organisations and contribution of those who have driven social change in India
through their unique CSR initiatives.
Shri Anant Geete, Union Minister of Heavy Industries and Public Enterprises
presented the award to Shri S K Jain, ED(CSR,R&R and HR) .Shri D K
Patankar, GM (CSR), Shri G Sridhar, AGM (CSR) were also present on the
occasion.
Shri U.P.Pani, Director (HR) congratulated the CSR team on the award and
encouraged them to continue with their efforts towards community.
22

23. Company Rankings
http://ntpc.co.in/en/recognitions-awards/company-rankings#
A) NTPC received Business Standard 'Star PSU award. ‘The award was
presented to Shri Gur deep Singh, CMD by Finance Minister, Govt of India,
Shri Arun Jaitely at the BS Awards held in Hotel Taj Mahal, Mumbai on March
25, 2017.
B).NTPC Ltd was honored with the Dun & Bradstreet Corporate Awards 2016
for excellence in the power sector. Shri A K Rastogi, ED (Law) & Company
23

24. Secretary, NTPC received the award on behalf of NTPC Ltd from Shri Anil
Swarup, Secretary, Ministry of Coal, Govt of India in the presence of Dr. Bibek
Debroy, Member, NITI Ayog on 31st May 2016 at a function held at Mumbai.
The Dun & Bradstreet Corporate Awards 2016 seeks to recognize and felicitate
corporate India’s leading companies honoring them for their consistent
performance in their respective sectors.
24

25. LocationofNTPC Plants
25

26. ORGANIZATION STRUCTURE OF NTPC
Board
Managing Director
Gurudeep Singh
Director
Seethapathy Chander
Director
Rajesh Jain
Director
Pradeep Kumar
Director
Anirudhha Kumar
Director
Gauri Trivedi
CFO
KulamaniBiswal
Vigilance
M... R...
Projects
S... P...
Executive Director
A... A...
Executive Director
S... A...
Executive Director
26

27. K... G...
Executive Director
A... G...
Executive Director
S... J...
Executive Director
S... M...
Executive Director
P... P...
Executive Director
R... R...
Executive Director
H... S...
Operations
K... S...
Sales
A... G...
HR
S... R...
27

28. JOINT VENTURES
JOINT VENTURE (JV) COMPANIES
The following joint venture companies have been formed so far:
NTPC-SAIL P O W E R C OMP AN Y (PVT) LTD (NSPCL)
1. A Joint Venture Company of NTPC and SAIL (50: 50 equity) was incorporated
On 08.02.1999.
2. BESCL (Bhilai Electric Supply Co. Pvt Ltd), another JV Co. of NTPC and SAIL
With 50:50 equity participation), has merged with NSPCL w.e.f 2nd August 2006.
OBJECTIVE To own and operate captive power plants for SAIL’s steel
manufacturing facilities located at Durgapur, Rourkela and
Bhilai. To undertake expansion of Bhilai plants.
28

29. NTPC TAMILNADU ENERGY COMPANY LIMITED
(NTECL)
This JV was incorporated on 23.05.2003 with Tamil Nadu Electricity Board, a State
run Electricity Board in the State of Tamil Nadu engaged in generation, transmission
And distribution of electricity.
OBJECTIVE To set up a 1500 MW coal based power station at vallur, Ennore in
Tamil Nadu utilizing the existing infrastructure facility at Ennore
and supply power mainly to Tamil Nadu and the states of Kerala,
Karnataka and Pondicherry.
PROMOTERS'
EQUITY
NTPC: 50%
TNEB : 50%
ARAVALI P O W E R COMPANY PRIVATE LTD
(APCPL)
The JV Company was incorporated on 21.12.2006 with, Indraprastha Power
Generation Company Ltd. (IPGCL) and Haryana Power Generation Company
Ltd (HPGCL).
OBJECTIVE To set up a coal-based power station of 1500MW capacity in Distt
Jhajjar, Haryana, in joint venture with IPGCL and HPGCL to
Supply power to Delhi and Haryana.
.
PROMOTERS'
EQUITY
NTPC-50%, IPGCL-25%, HPGCL-25%
29

30. MEJA URJA NIGAM PRIVATE LIMITED
The Joint Venture Company has been incorporated on 02.04.2008 with
UPRVUNL.
OBJECTIVE To set up a 2 X 660MW Thermal Power Plant at Meja, Distt.
Allahabad in UP.
PROMOTERS'
EQUITY
NTPC: 50%
UPRVUNL : 50%
RATNAGIRI GAS & P OW ER PVT. LIMITED
This Joint Venture Company was Incorporated on 08.07.2005.
OBJECTIVE To own and operate the assets of the erstwhile Dhabol Power
Company( 1967 MW) and 5 MMTPA LNG Re-gasification
Terminal
PROMOTERS'
EQUITY
NTPC: 30.17%
GAIL: 30.17%
IFIs: 21.77% (ICICI: 10.65%, SBI: 7.14%,
CANARA BANK: 1.87%)
MSEB HOLDING CO. LTD.: 17.89%
Entire Power Block (1967 MW) of the Gas Power project is under commercial
operation. Domestic gas from KG basin has been made available by Mo PNG
for long term requirement for the operation of Gas Power Plant.
30

31. NABINAGAR P O W E R GENERATING CO. PVT. LTD.
The JV Company was Incorporated on 09.09.2008 with Bihar State Electricity Board.
OBJECTIVE To set up 3x660 MW Thermal Power Plant at New Nabinagar,
Bihar And operation & maintenance Thereof.
PROMOTERS'
EQUITY
NTPC: 50%
BSEB: 50%
JVS FOR SERVICES
NTPC GE POW ER SERVICES PVT. LTD.
The JV Company was incorporated on 27.09.1999 and formerly known as NTPC-ABB
ALSTOM POWER SERVICES PVT. LTD.
OBJECTIVE Undertake Renovation & Modernisation of power stations in India
And other SAARC countries.
PROMOTERS'
EQUITY
NTPC: 50% ,
ALSTOM Power Generation AG : 50%
The Company is engaged in undertaking work of renovation & modernisation
of Power Plants, performance optimization and improvement of availability &
efficiency of Power plants and their life extension.G
31

32. UTILITY P OWE R TECH LTD
This JV company incorporated on 23.11.1995 has been promoted with Reliance
Infrastructure Limited (formerly BSES Limited), a private sector Indian power
Company.
OBJECTIVE To undertake project construction, erection and supervision in powe
Sector and other sectors in India and abroad.
r
PROMOTERS'
EQUITY
NTPC: 50%
Reliance Infrastructure Ltd.: 50%
NATIONAL HIGH P O W E R TEST LABORATORY PVT. LTD.
(NHPTL)
This JV was incorporated along with NHPC, PGCIL and DVC on 22.05.2009
OBJECTIVE To set up an Online High Power Test Laboratory for short circuit
Testing facility of electrical equipment’s.
PROMOTERS'
EQUITY
NTPC: 25%
NHPC: 25%
PGCIL: 25%
DVC: 25%
32

33. JVs FOR P O W E R TRADING & P O W E R EXCHANGE
NATIONAL P O W E R EXCHANGE LTD.(NPEX)
This Joint venture Company was incorporated on 11.12.2008 along with NHPC,
PFC and TCS
OBJECTIVE To facilitate nation - wide trading of all forms of contract for buying
And selling of all forms of electrical.
Energy for clearing and settlement of trade in a transparent, fair
And open manner.
PROMOTERS' NTPC: 16.67%
EQUITY NHPC :16.67%
PFC: 16.66%
TCS: 19.04%
BSE: 16.66 %
IFCI: 5.72 %
MEENAKSHI: 4.77 %
DPSC: 3.81 %
JVs FOR COAL MINING
NTPC –SCCL GLOBAL VENTURES PRIVATE LTD
The JV Company with Singareni Coalieries Company Limited (SCCL) was
incorporated on 31.07.2007
33

34. OBJECTIVE To jointly undertake Development and O & M of Coal Blocks(s) and
Integrated Coal based Power Projects in India and overseas.
Promoters’
EQUITY
NTPC - 50 %
SCCL – 50 %
INTERNATIONAL COAL VENTURES
INTERNATIONAL COAL VENTURES PVT. LIMITED (ICVL)
The JV Company was incorporated on 20.05.2009
OBJECTIVE For procurement of metallurgical coking coal and thermal coal from
Overseas & acquisition of coal assets abroad.
PROMOTERS'
EQUITY
NTPC: 14.28%
NMDC: 14.28%
RINL: 14.28%
CIL: 28.58%
SAIL: 28.58%
JVs FOR MANUFACTURING & SUPPLY OF
EQUIPMENT
34

35. NTPC-BHEL P O W E R PROJECTS PVT.LTD
The Joint Venture Company was incorporated on 28.04.2008 with BHEL
OBJECTIVE To explore, secure and execute EPC contracts for Power plants and
Other Infrastructure projects in India and abroad. To engage in
manufacturing and supply of equipment’s for power plants And other
Infrastructure Projects in India and abroad.
Promoter
s’
EQUITY
NTPC: 50%
BHEL : 50%
INTERNATIONAL JOINT VENTURES
TRINCOMALEE P O W E R C OMP ANY LIMITED
This JV was incorporated on 26.09.2011 with the Ceylon Electricity Board, Sri Lanka
(CEB).
OBJECTIVE To set up a 2 X 250 MW coal based power project in the
Trincomalee region.
PROMOTERS'
EQUITY
NTPC: 50%
CEB: 50%
35

36. JOINT VENTURE FOR FERTILIZERS
HINDUSTAN URVARAK & RASAYAN LIMITED (HURL)
This JV was incorporated on 15.06.2016 with the NTPC - COAL INDIA LIMITED.
OBJECTIVE For taking up revival of fertilizer plants of Fertilizer Corporation of
India Limited at Sindri, Jharkhand and Gorakhpur, Uttar Pradesh
By setting up ammonia urea plant at each location.
PROMOTERS'
EQUITY
NTPC: 50%
CIL: 50%
http://ntpc.co.in/en/about-us/joint-venture
36

37. FutureCapacityAdditions
NTPC has formulated a long term Corporate Plan to become a 130 GW
company up to 2032. In line with the Corporate Plan, the capacity addition
under implementation presently:
PROJECT STATE M W
NTPC
1. Barh-I Bihar 1980
2. Singrauli CW Discharge (Small
Hydro)
Uttar Pradesh 8
3. Tapovan Vishnugud-Hydro Uttarakhand 520
4. Kudgi Karnataka 800
5. Solapur Maharashtra 660
6. Bongaigaon Assam 250
7. Lata Tapovan-Hydro Uttarakhand 171
8. Lara Chhattisgarh 1600
9. Gadarwara Madhya
Pradesh
1600
10. Darlipali Odisha 1600
37

38. 11. North Karanpura Jharkhand 1980
12. Rammam-Hydro West Bengal 120
13. Tanda-II Uttar Pradesh 1320
14. Khargone Madhya
Pradesh
1320
15. Telangana Telangana 1600
16. Mandsor-Solar Madhya
Pradesh
25
17. Rojmal-Wind Gujarat 48
Total 15,602
JV & Sub.Companies
1. Meja Uttar Pradesh 1320
2. Nabinagar-BRBCL Bihar 500
3. Nabinagar-BSEB Bihar 1980
4. Rourkela-NSPCL Odisha 250
5. Durgapur-NSPCL West Bengal 40
Total 4,090
38

39. Grand Total(NTPC + JV & Sub. Companies) 19,692
http://ntpc.co.in/en/about-us/future-capacity-additions
39

40. SUBSIDIARIES
NTPC ElectricSupplyCompany Ltd.(NESCL)
The company was formed on August 21, 2002. It is a wholly owned subsidiary
company of NTPC with the objective of making a foray into the business of
distribution and supply of electrical power, as a sequel to reforms initiated in the
power sector. The company was also mandated to take up consultancy and other
assignments in the area of Electrical Distribution Management System.
NTPC Vidyut Vyapar Nigam Ltd. (NVVN)
NTPC Vidyut Vyapar Nigam Ltd. (NVVN) was formed by NTPC Ltd, as it’s
wholly owned subsidiary to tap the potential of power trading in the country
thereby promoting optimum capacity utilization of generation and transmission
assets in the country and to act as a catalyst in the development of a vibrant
electricity market in India. The company holds the highest category ‘I’ trading
license fromCERC.
KantiBijleeUtpadan Nigam Limited,
(Formerly known as Vaishali Power Generating Company Limited)
To take over the Muzaffarpur Thermal Power Station (2*110MW), a subsidiary
company named ‘Vaishali Power Generating Company Limited (VPGCL)’was
incorporated on September 6, 2006 with NTPC contributing 51% of equity and
the balance equity was contributed by the Bihar State Electricity Board. The
company was rechristened as ‘Kanti Bijlee Utpadan Nigam Limited’ on April
10, 2008. Present equity holding is NTPC 64.57% & BSEB 35.43%. The
company is upgrading the existing unit and establishing new plant.
40

41. BharatiyaRailBijleeCompany Limited(BRBCL)
A subsidiary of NTPC under the name of ‘Bharatiya Rail Bijlee Company
Limited’was incorporated on November 22, 2007 with 74:26 equity
contribution from NTPC and Ministry of Railways, Govt. of India respectively
for setting up of four units of 250 MW each of coal based power plant at
Nabinagar, Bihar. Investment approval of the project was accorded in January,
2008. 90% power from this project is to be supplied to Railways to meet the
traction and non-traction power requirements.
PatratuVidyutUtpadan Nigam Limited(PVUNL)
PVUNL has been incorporated on 15.10.2015 as a subsidiary of NTPC with
74% stake in the Company and 26% of stake held by JBVNL to acquire,
establish, operate, maintain, revive, refurbish, renovate and modernize the
performing existing units and further expand capacity of Patratu Thermal Power
Station, District Ramgarh, Jharkhand in two phases i.e. Phase-I (3x800 MW)
and Phase-II (2x800 MW).
Government of Jharkhand has issued the Notification dated 01.04.2016 for
transfer of assets of Patratu Thermal Power Station to Patratu Vidyut Utpadan
Nigam Limited.
http://ntpc.co.in/en/about-us/subsidiaries
41

42. Com petitors
Power
Power
Name Last
Price
Market Cap.
(Rs. cr.)
Sales
Turnover
Net Profit Total
Assets
NTPC 157.85 130,480.04 78,273.44 9,385.26 175,164.76
Power Grid
Corp
206.00
107,770.75 25,716.54 7,520.15 144,973.72
NHPC 32.45 33,291.50 7,271.17 2,795.59 47,137.23
Tata Power 81.50 22,043.90 7,218.06 283.45 28,036.76
NLC India 100.75 15,400.34 8,672.84 2,368.81 18,640.64
Reliance
Infra
503.85
13,250.75 8,771.50 1,288.41 36,154.41
SJVN 31.95 13,216.52 2,468.66 1,544.14 13,527.92
CESC 868.90 11,517.88 7,220.00 863.00 13,060.71
Reliance
40.60
11,388.81 48.06 64.26 21,256.88
JSW Energy 63.10 10,348.75 4,040.97 194.75 11,315.99
Adani
26.80 10,336.60 11,017.97 -6,054.34 33,026.97
Suzlon
Energy
18.40 9,538.77 9,356.81 712.19 6,181.62
Torrent
Power
176.30 8,473.27 10,014.58 432.36 15,613.66
DPSC 38.40 3,739.35 585.58 31.90 1,863.13
Inox Wind 140.15 3,110.18 2,863.22 256.33 3,367.11
42

43. Schneider
Infra
128.40 3,070.10 1,264.87 -159.82 414.15
http://www.moneycontrol.com/competition/ntpc/comparison/NTP
43

44. NTPC's Shareholding Pattern
Description
Promoters
Percent of Share(%)
84.50
Individuals 1.95
Institutions 7.65
FII 4.02
Govt. 0.00O
Others 1.88
84%
2%
8%4%0%2%
% ofshare
promoters
individuals
institutions
fii
gov
others
44

45. ACQUISITION
Business development through Acquisition serves both NTPC's own
commercial interest as well as the interest of the Indian economy. Taking over
being a part of the acquisition process, is also an opportunity for NTPC to add
to its power generation capacity through minimal investment & very low
gestation period. NTPC has, over the years, acquired the following three power
stations belonging to other utilities/SEBs and has turned around each of them
using its corporate abilities.
P OW ER STATIONS TAKEN OVER YEAR ORIGINAL
O W N E R
45

46. DiversifiedGrowth
NTPC’s quest for diversification started about a decade back with its foray into
Hydro Power. It has, since then, been moving towards becoming a highly
diversified company through backward, forward and lateral integration. The
company is well on its way to becoming ‘an Integrated Power Major’, having
entered Hydro Power, Coal Mining, Power Trading, Equipment Manufacturing
and Power Distribution. NTPC has made long strides in developing its Ash
Utilization business. In its pursuit of diversification, NTPC has also developed
strategic alliances and joint ventures with leading national and international
companies.
₪Hydro Power: In order to give impetus to hydro power growth in the
country and to have a balanced portfolio of power generation, NTPC entered
hydro power business with the 800 MW Koldam hydro projects in Himachal
Pradesh. Two more projects have also been taken up in Uttarakhand. A wholly
owned subsidiary, NTPC Hydro Ltd., is setting up hydro projects of capacities
up to 250 MW.
₪Coal Mining: In a major backward integration move to create fuel
security, NTPC has ventured into coal mining business with an aim to meet
about20% of its coal requirement from its captive mines by 2017. The
Government of India has so far allotted 7 coal blocks to NTPC, including 2
blocks to be developed through joint venture route. Coal Production is likely to
start in 2009-10.
₪ Power Trading:NTPC Vidyut Vyapar Nigam Ltd.' (NVVN), a wholly
owned subsidiary was created for trading power leading to optimal utilization of
NTPC’s assets. It is the second largest power trading company. In order to
46

47. facilitate power trading in the country, ‘National Power Exchange Ltd.’, a JV
between NTPC, NHPC, PFC and TCS has been formed for operating a Power
Exchange.
₪ AshBusiness:NTPC has focused on the utilization of ash generated by
its power stations to convert the challenge of ash disposal into an opportunity.
Ash is being used as a raw material input for cement companies and
brick manufacturers. NVVN is engaged in the business of Fly Ash export and
sale to domestic customers. Joint ventures with cement companies are being
planned to set up cement grinding units in the vicinity of NTPC stations.
₪ Power Distribution:‘NTPC Electric Supply Company Ltd.’ (NESCL), a
wholly owned subsidiary of NTPC, was set up for distribution of power.
NESCL is actively engaged in ‘Rajiv Gandhi Gramin Vidyutikaran Yojana’
programme for rural electrification and also working as 'Advisor cum
Consultant' for Ministry of Power for implementation of Accelerated Power
Development and Reforms Programmed (APDRP) launched by Government of
India.
₪ EquipmentManufacturing:Enormous growth in power sector necessitates
augmentation of power equipment manufacturing capacity. NTPC has formed
JVs with BHEL and Bharat Forge Ltd. for power plant. Equipment
manufacturing. NTPC has also acquired stake in Transformers and Electricals
Kerela Ltd. (TELK) for manufacturing and repair of transformers.
PowerGeneration
Presently, NTPC generates power from Coal and Gas. With an installed
capacity of 30,144 MW, NTPC is the largest power generating major in the
47

48. country. It has also diversified into hydro power, power trading & distribution.
With an increasing presence in the power value chain, NTPC is well on its way
to becoming an “Integrated Power Major.” coal mining, power equipment
manufacturing, oil & gas exploration,
NTPCANTA
National Thermal Power Corporation Limited (NTPC) is the largest thermal
power generating company of India.
A public sector company wholly owned by Govt. of India, it was incorporated
in the year 1975 to accelerate power development in the country. NTPC Anta
project is located about 23 Km. from Baran district headquarter and close to
Anta town of the district. Anta project is the first in the series of combined cycle
power projects set up by NTPC indifferent parts of the country. The installed
capacity of first stage is 413 MW comprising3 gas turbines of 88 MW each and
a steam turbine of 149 MW. All the units were synchronized ahead of schedule.
The project has strength of 240 employees.
48

49. The District Industries Centre (DIC) programme was introduced for the first
time in the state in July 1978 for providing the necessary support services under
one roof for industrial development in the district. Kota which is the major
industrial town of the state is just 72 km. from Baran. Where industrialization
has taken roots in the early sixties. After the creation of Baran district, of. face
of the district industry center office wase stablished at Baran in September
1992.Main industries in Baran district are agro based industries included
soyabean and mustard oil, pulse/rice mills, coriander &wheat grinding
agriculture instruments, mineral based units like stone crashers etc. National
Thermal Power Corporation (NTPC), a government of India enterprise, is also
situated in Anta which produces electricity based on the Gas.
The district has a tremendous scope for the rapid industrialization, especially
among agro based industries. The main forest produce of district is “Tendu
leave”. So Bidi, Dona pattal units are beneficial in the district. The minerals
produced in the district are Limestone, Sandstone, building stone etc. So the
units based on the above stones are also beneficial. Rajasthan Financial
Corporation (RFC) is a leading financial institution of the state which caters to
the industrial and financial requirements of the medium, small scale and tiny
industrial units. For setting up the industrial units in the district, RIICO provide
land and infrastructure facilities, technical consultancy and financial inputs.
There are three industrial areas in the district.
49

50. Location& Origin
With the findings of natural gas in Western Offshore fields of Bombay High,
Central Government decided to take this gas up to North India and accordingly
laid the HBJP pipe line starting from Hazira. GOI directed to set up gas based
CCPPs along with HBJ pipeline. Initially 3 such projects were conceived at
Anta, Kawas, & Auraiya in States of Rajasthan, Gujarat & UP respectively.
Anta project was set up to mitigate the power shortage in the Northen region
which was estimated between 13-16% of the peak demand during the VIIth plan
period. Further, looking at the benefit of the low gestation, high efficiency,
quick (Black) start and quick loading capability with mix-fuel flexibility and
low pollution impact, Anta project was considered the most viable option to
eminently fulfill the supply demand gap in Nothern Region. A brief profile of
Project is exhibited ino-3.
Station: Combined cycle Gas based Power Station
Gas Turbines: 3x88.71 MW
Steam Turbine: 1x153.2 MW.
Total Capacity: 419.33 MW
Commercial operation started w.e.f 01.08.1990.
Sole product of NTPC-Anta is electrical power generated by using gas or
naphtha as main fuel. The generated power is transmitted through six 220 KV
lines. Thus NTPC's role is limited up to the Switchyard, beyond which PGCIL
network feeds to respective DISCOMS
50

51. ANTA PROJECT PROFILE
The Anta project profile is given in Table 1
Approved Capacity 419 MWInstalled Capacity 419 MWLocation Anta, District
Baran, RajasthanGas Source HBJ Pipeline – South Basin Gas fieldWater Source
Kota Right Main CanalUnit Size 3*8GT + 1*149 ST
UnitCommissionedCapacityYear
Unit I 89 MW GT January 1989Unit II 89 MW GT March 1989Unit III 89 MW
GT May 1989Unit IV 152 MW ST March 1990Beneficiary States U.P., J&K, H
imachal Pradesh , Delhi, Chandigarh, Rajasthan, Punjab, Haryana
International Assistance IBRD & Japan.
ANTA hasmany uniquefeaturesand achievements
Unique Featuresand achievementsofANTA.
First Gas Power station of NTPC.
First station in India where 13D2 ABB machine was installed.
Anta is the first power station on HBJ gas pipe line.
Having world benchmark for ABB Gas Turbine overhaul period 15.25
days.
ANTA’s journey towards excellence had started since inception. Today ANTA
is one of the best gas power plants in the country. For the financial year 2008-
09, ANTA has been ranked first among all gas stations of NTPC under
ABT regime. It has achieved unique distinction of being the first power station
of the country having zero forced outage. ANTA is certified under ISO 9001:
2000; ISO 14001: 2004; OHSAS 18001: 2007; SA8000: 2001 and Five-S.
Product and Market:
The product of ANTAis Electricity at 220KV, which is supplied to its
customers in northern grid. Allocation of Anta power to various states is shown
in figure: 0-5.
51

52. SWOT ANALYSIS
Strengths:-
1. Good corporate Image.
2. Complete range of product for transmission & distribution.
3. Established brand name with executive oriented program.
4. Strong & wide networks of manpower across India.
5. Considered to be having technology & design ability.
6. Employee friendly work culture and personnel policies.
7. Efficient production process of plants.
8. Fully integrated project management system.
9. Decades of experience in the sector shows its credibility.
Weakness:-
1.The procurement process in the companies is cumbersome and subject
to auditing.
2. Low exposure to the needs & dynamics of distribution business.
3.Role clarity on the requirement of being an equipment supplier or a solution
provider. As there are very few supplier of equipment manufacturing plant.
4. Depleting input materials sources.
5. Govt. intervention can often cause disruptions in operations.
6. Prices are determined by India's Electricity Act.
52

53. Opportunities:-
1.Huge Investment leading to greater demand of goods and services.
2. Demand leading to Industry operating at full & over capacity.
3. Better Price realization.
4.Early birds to learn faster and thus achieve repeat orders. Policy to bid from
ultra-mega power plant.
5.Vertical integration for supply chain management of coal by acquiring coal
blogs.
Threats:-
1.Purchases preference may be extended to distribution sector.
2. Increase in no. of small contractors leading to price war.
3. Emergence of competitors in the market like Schneider, Reliance, Tata etc.
4.Change in government policies for open trade or stock trading or energy
trading.
5. Reduce the time lag.
53

54. 54

55. CHAPTER 3
RESEARCH
M ETH O DO LO G Y
55

56. The information was collected from various source which are listed
below:
₪For the official document.
₪From records and manuals of different departments of the organizations.
₪From a close observation of the functioning of various departments of the
organizations.
₪Last but not least, knowledge, both negative and positive precipitated
through informal discussions with the employees of different departments.
RESEARCH M E T H O D O L O G Y
Planofstudy:-A proper and systematic approach is essential in any project
work. Proper planning should be conducting the data collection, completion
and presentation of the project. Each and every step must be so planned that it
leads to the next step automatically. This systematic approach is a blend a
planning and organization and major emphasis is given to independences of
various steps. The plan of this study is as follows.
Research purpose- The purpose of the research was to criteria on which
investment of the company is raised every year and a favourable rate of return is
arrived at, increasing the net result of the company as per their budget.
56

57. Researchobjective-
The main objective the research is:-
₪ To know the investment decisions.
₪ To analyze the investment depending on internal rate of return.
Researchdesign
₪Research design helps in proper collection and analysis of the data. It helps in
further course of action.
Researchapproaches
₪The most appropriate research is descriptive. This is because the goal of the
study is clear research will help to understand to concept better.
Classificationofdata.
Primarydata
₪This includes the information collected mainly from the office. This has
served as primary source of data for this study.
Secondarydata
₪This includes the information gathered from various website.
SampleSize
₪The sample size selected is of four years.
Samplingtechnique
₪The sampling procedure employed for this is judgmental sampling
a convenience sampling technique in which elements are based on the judgment
of researcher Software tools used for the data analysis. The software tools used
for data analysis in MS WORD & MS EXCEL
57

58. CHAPTER 4
DATA ANALYSIS
Ratio Meaning & Technique
Advantages
Uses of RatioAnalysis
Limitations of RatioAnalysis
Classification of Ratios & interpretation
RATIO ANALYSIS
58

59. INTRODUCTION
Financial analysis is the process of identifying the financial strengths and
weaknesses of the firm and establishing relationship between the items of the
balance sheet and profit &loss account.
Financial ratio analysis is a fascinating topic to study because it can teach us so
much about accounts and businesses. When we use ratio analysis we can work
out how profitable a business is, we can tell if it has enough money to pay its
bills and we can even tell whether its shareholders should be happy! Ratio
analysis can also help us to check whether a business is doing better this year
than it was last year; and it can tell us if our business is doing better or worse
than other.Businesses doing and selling the same things. In addition to ratio
analysis being part of an accounting and business studies syllabus, it is a very
useful thing to know any way! The overall layout of this section is as follows:
We will begin by asking the question, what do we want ratio analysis to tell us?
Then, what will we try to do with it? This is the most important question,
funnily enough! The answer to that question then means we need to make a list
of all of the ratios we might use: we will list them and give the formula for each
of them. Once we have discovered all of the ratios that we can use we need to
know how to use them, who might use them and what for and how will it help
them to answer the question. We asked at the beginning? At this stage we will
have an overall picture of what ratio analysis is, who uses it and the ratios they
need to be able to use it. All that's left to do then is to use the ratios; and we will
do that step- by-step, one by one.
59

60. Ratioanalysis
Ratio analysis is one of the techniques of financial analysis to evaluate the
financial condition and performance of a business concern. Simply, ratio means
the comparison of one figure to other relevant figure or figures. According to
Myers , “Ratio analysis of financial statements is a study of relationship among
various financial factors in a business as disclosed by a single set of statements
and a study of trend of these factors as shown in a series of statements.”
Advantages and UsesofRatioanalysis
There are various groups of people who are interested in analysis of financial
position of a company. They use the ratio analysis to work out a particular
financial characteristic of the company in which they are interested. Ratio
analysis helps the various groups in the following manner:
₪To work out the profitability: Accounting ratio help to measure the
profitability of the business by calculating the various profitability ratios. It
helps the management to know about the earning capacity of the business
concern. In this way profitability ratios show the actual performance of the
business.
₪To work out the solvency: With the help of solvency ratios, solvency of the
company can be measured. These ratios show the relationship between the
liabilities and assets. In case external liabilities are more than that of the assets
of the company, it shows the unsound position of the business. In this case
the business has to make it possible to repay its loans.
₪Helpful in analysis of financial statement: Ratio analysis help the outsiders
just like creditors, shareholders, debenture-holders, bankers to know about
60

61. the profitability and ability of the company to pay them interest anddividend
etc.
₪To simplify the accounting information: Accounting ratios are very useful as
they briefly summarize the result of detailed and complicated computations.
₪Helpful in comparative analysis of the performance: With the help of ratio
analysis a company may have comparative study of its performance to
the previous years. In this way company comes to know about its weak point
and be able to improve them.
LimitationsofRatioAnalysis
In spite of many advantages, there are certain limitations of the ratio analysis
techniques and they should be kept in mind while using them in interpreting
financial statements. The following are the main limitations of accounting
ratios:
₪Limited Comparability:Different firms apply different accountingpolicies.
Therefore the ratio of one firm cannot always be compared with the ratio of
other firm. Some firms may value the closing stock on LIFO basis while some
other firms may value on FIFO basis. Similarly there may be difference in
providing depreciation of fixed assets or certain of provision for doubtful debts
etc.
₪False Results:Accounting ratios are based on data drawn from accounting
records. In case that data is correct, then only the ratios will be correct. For
example, valuation of stock is based on very high price, the profits of the
concern will be inflated and it will indicate a wrong financial position. The data
therefore must be absolutely correct.
61

62. ₪Effect of Price Level Changes:Price level changes often make the
comparison of figures difficult over a period of time. Changes in price affect the
cost of production, sales and also the value of assets. Therefore, it is necessary
to make proper adjustment for price-level changes before any comparison.
₪Qualitativefactorsareignored:Ratio analysis is a technique of quantitative
analysis and thus, ignores qualitative factors, which may be important in
decision making. For example, average collection period may be equal to
standard credit period, but some debtors may be in the list of doubtful debts,
which is not disclosed by ratio analysis.
₪Effect of window-dressing:In order to cover up their bad financial position
some companies resort to window dressing. They may record the accounting
data according to the convenience to show the financial position of the company
in a better way.
Procedure (Stages) For Ratio-analysis Classification of Ratios
Ratios may be classified in a number of ways to suit any particular purpose.
Different kinds of ratios are selected for different types of situations. Mostly,
the purpose for which the ratios are used and the kind of data available
determine the nature of analysis. The various accounting ratios can be classified
as follows:
A.Profitabilityratios:
Gross profit ratio
Net profit ratio
Operating ratio
Return on shareholders’investment or net worth
62

63. Return on equity capital
Earnings per Share Ratio
Price earnings ratio.
B.Liquidityratios:
Current ratio
Liquid /Acid test / Quick ratio
C. Activityratios:
Inventory/Stock turnover ratio.
Debtors/Receivables turnover ratio.
Working capital turnover ratio.
Fixed assets turnover ratio.
D.Leverageratiosorlongterm solvencyratios:
Debt equity ratio.
Proprietary or Equityratio.
Ratio of fixed assets to shareholders funds.
Current Assets to Proprietor's Fund Ratio.
Interest coverage or debt service ratio.
63

64. A .PROFITABILITY RATIOS
1.Grossprofitratio(GP ratio):-
Gross profit ratio is the ratio of gross profit to net sales expressed as a
percentage. It expresses the relationship between gross profit and sales.
GROSS PROFIT RATIO = (GROSS PROFIT /NET SALES*100)
Significance:
Gross profit ratio may be indicated to what extent the selling prices of goods per
unit may be reduced without incurring losses on operations. It reflects efficiency
with which a firm produces its products. As the gross profit is found by
deducting cost of goods sold from net sales, higher the gross profit better it is.
There is no standard GP ratio for evaluation. It may vary from business to
business. However, the gross profit earned should be sufficient to recover all
operating expenses and to build up reserves after paying all fixed interest
charges and dividends. Hence, an analysis of gross profit margin should be
carried out in the light of the information relating to purchasing, mark-ups and
markdowns, credit and collections as well as merchandising policies.
GROSS PROFIT RATIO
YEAR NETSALES GROSSPROFIT GROSSPROFITRATIO
2016 70,506.80 17292.32 24.5
2015 73,246.05 15654.78 21.4
2014 72,018.93 17761.17 24.7
2013 65,673.93 17000.77 25.9
2012 62,052.23 13557.19 21.8
64

65. Interpretation
The Gross profit of NTPC was 24.5% in 2016. It had fallen up by 21.4%. In
2015. In 2014 it had increase to 24.7%. But in 2013 had gone to25.9% .which
Shows Company earned profit. In year 2012 it had fallen up to 21.8%.
30,000.00
20,000.00
10,000.00
0.00
80,000.00
70,000.00
60,000.00
50,000.00
40,000.00
1 2 4 5
70,506.80 73,246.05 72,018.93
65,673.93
62,052.23
17292.32 15654.78 17761.17 17000.77
13557.19
24.5 21.4 24.7 25.9
21.8
netsales
3
AxisTitle
gross profitratio
65

66. 2. Net profit ratio:
Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed
as percentage.
Components of net profit ratio:
The two basic components of the net profit ratio are the net profit and sales.
The net profits are obtained after deducting income-tax and, generally, non-
operating expenses and incomes are excluded from the net profits for
calculating this ratio. Thus, incomes such as interest on investments outside the
business, profit on sales of fixed assets and losses on sales of fixed assets, etc
are excluded. Formula:
Net profit ratio = (Net Profit/Net Sales *100)
Significance:
NP ratio is used to measure the overall profitability and hence it is very
useful proprietors. The ratio is very useful as if the net profit is not sufficient,
the firm shall not be able to achieve a satisfactory return on its investment.
This ratio also indicates the firm's capacity to face adverse economic
conditions such as price competition, low demand, etc. Obviously, higher the
ratio the better is the profitability. But while interpreting the ratio it should be
kept in minds that the performance of profits also be seen in relation to
investments or capital of the firm and not only in relation to sales.
NET PROFITRATIO
YEAR netprofit netsales ratio
2016 10,242.91 70,506.80 14.5
2015 10,290.86 73,246.05 14.0
66

67. 2014 10,974.74 72,018.93 15.2
2013 12,619.39 65,673.93 19.2
2012 9,223.73 62,052.23 14.9
Interpretation:
The net profit ratio of NTPC was 14.5% in 2016 it had fallen up by 14% in
2015. Again in 2014 it had increase to 15.2%. Further it had increase to
19.2% in2013 and again in year 2012 it had fallen down up to 14.9% which
shows the loss.
1 2 3 4 52016 2015 2014 2013 2012
10,242.91 10,290.86 10,974.74 12,619.39
9,223.73
70,506.80 62,052.23
14.5 14.0 15.2 19.2 14.9
GRAPHICAL REPRESENTATION
NET PROFIT RATIO
YEAR net profit netsales
73,246.05 72,018.93
ratio
65,673.93
67

68. 3.Operatingratio:-
Operating ratio is the ratio of cost of goods sold plus operating expenses to net
sales. It is generally expressed in percentage. It measures the cost of operations
per dollar of sales. This is closely related to the ratio of operating profit to net
sales.
Components:
The two basic components for the calculation of Operating ratio are operating
cost (cost of goods sold plus operating expenses) and net sales. Operating
expenses normally include (a) administrative and office expenses and (b) selling
and distribution expenses. Financial charges such as interest, provision for
taxation etc. are generally excluded from operating expenses. Formula of
operating ratio:
Operating ratio = (Cost of goods sold+Operating expenses/Net Sales)*100
Operating ratio shows the operational efficiency of the business. Lower
operating ratio shows higher operating profit and vice versa. An operating ratio
ranging between 75%and 80% is generally considered as standard
for manufacturing concerns.
OPERATING RATIO
YEAR COGS+Operatingexe netsales operatingratio
2016 55849.75 70,506.80 79.2
2015 60036.8 73,246.05 82.0
2014 56228.38 72,081.93 78.0
2013 50566.18 65,673.93 77.0
2012 49954.64 62,052.23 80.5
68

69. Interpretation:
In The graph Operating ratio of NTPC was 79.2% in 2016. It had increase by
82%.in 2015. In 2014 it had gone to 78%. Further it had fallen to 77% in2013
and again in year 2012 it had increase up to 80.5% which shows company
earned maximum profit.
4.Returnon shareholder’sinvestment:-
It is the ratio of net profit to shareholder's investment. It is the relationship
between net profit (after interest and tax) and shareholder's/proprietor's fund.
This ratio establishes the profitability from the share holders' point of view.The
ratio is generally calculated in percentage.
Components: The two basic components of this ratio are net profits and
shareholder's funds. Shareholder's funds include equity share capital,
(preference share capital) and all reserves and surplus belonging to
shareholders. Net profit means net income after payment of interest and income
tax because those will be the only profits available for shareholders.
Formula of return on shareholder's investment or net worth Ratio:
80000
70000
60000
50000
40000
30000
20000
10000
0
1 2 3 4 5
55849.75
60036.8
56228.38
50566.18
70,506.80 73,246.05 72,081.93
65,673.93
62,052.23
49954.64
79.2 82.0 78.0 77.0 80.5
operating profit ratio
COGS+Operatingexe netsales operatingratio
69

70. Netprofitaftertax-Preferencedividend)
ReturnonShareholder’sinvestment
= *100Shareholder’sfund
Significance:
This ratio is one of the most important ratios used for measuring the overall
efficiency of a firm. As the primary objective of business is to maximize its
earnings, this ratio indicates the extent to which this primary objective of
businesses being achieved. This ratio is of great importance to the present
and prospective shareholders as well as the management of the company.
RETURN ON SHAREHOLDERS’INVESTMENT
YEAR PAT SHARE HOLDERSFUND RATIO
2016 10242.91 88782 11.5
2015 10290.86 81657.35 12.6
2014 10974.74 85815.32 12.8
2013 12619.39 80387.51 15.7
2012 9223.73 73291.17 12.6
GRAPHICALREPRESENTION
20000
10000
0
90000
80000
70000
60000
50000
40000
30000
1 2 3 4 5
2014 2013
10242.91
2016
10290.86
2015
10974.74 12619.39
9223.73
2012
88782
81657.35
85815.32
80387.51
73291.17
11.5 12.6 12.8 15.7 12.6
70

71. Interpretation:
The Return on Shareholder’s investment of NTPC was 11.5% in 2016. It had
increase up by 12.6%. In 2015. Again in 2014 .it had increase up to 12.8%. But
in 2013 this ratio had increase to15.7% and again in year 2012 it had fallen
down up to 12.6%we can see by analysis of table sometimes ratio increase some
time constant and sometime decrease which shows company. Shareholder’s
investment up and down.
6.EarningsperShare (EPS) Ratio:-
Definition: Earnings per share ratio (EPS Ratio) are a small variation of return
on equity capital ratio and are calculated by dividing the net profit after taxes
and preference dividend by the total number of equity shares. Formula of
Earnings per Share Ratio: The formula of earnings per share is:
Earnings per Share= (Net profit after tax - Preference
dividend)*10/No. of Equity share
Significance:
The earnings per share is a good measure of profitability and when compared
with EPS of similar companies, it gives a view of the comparative earnings or
earnings power of the firm. EPS ratio calculated for a number of years indicates
whether or not the earning power of the company has increased.
EPS
Column1 PAT NO OF SHARE RATIO
2016 10242.91 8245.46 12.4
2015 10290.86 8245.46 12.5
2014 10974.74 8245.46 13.3
2013 12619.39 8245.46 15.3
71

72. 2012 9223.73 8245.46 11.2
Interpretation:
NTPC EPS was Rs. 12.4 in 2016. Which has raises to Rs.12.5 in 2015 further in
the year 2014. It has increased to Rs 13.3. In 2013 the ratio gone to Rs 15.32
and in 2012 follow down to Rs11.2 which shows A higher value of EPS inthese
years shows that the company is trying to maintain its net profit available to
equity shareholder of NTPC, which also assure efficient utilization of equity
capital.
7. Price Earnings Ratio (PE Ratio):
Definition: Price earnings ratio (P/ E ratio) is the ratio between market price
per equity share and earning per share. The ratio is calculated to make an
estimate of appreciation in the value of a share of a company and is widely used
by investors to decide whether or not to buy shares in a particular company.
0
2000
4000
8000
6000
10000
12000
14000
1 2 3 4
2016 2015 2014 2013
5
2012
10242.91 10290.86
10974.74
12619.39 9223.73
8245.46 8245.46 8245.46 8245.46
8245.46
12.4 12.5 13.3 15.3
11.2
EPS
72

73. FormulaofPriceEarningsRatio:
Following formula is used to calculate price earnings ratio:
Price Earnings Ratio = (Market price per equity share /Earning per share)
Significanceofpriceearningratio
Price earnings ratio helps the investor in deciding whether to buy or not to buy
the shares of a particular company at a particular market price. Generally,
higher the price earnings ratio the better it is. If the P/E ratio falls, the
management should look into the causes that have resulted into the fall of this
ratio.
73

74. B.Liquidityratios
1.Current Ratio:Definition:
Current ratio may be defined as the relationship between current assets and
current liabilities. This ratio is also known as "working capita l ratio". It is a
measure of general liquidity and is most widely used to make the analysis for
short term financial position or liquidity of a firm. It is calculated by dividing
the total of the current assets by total of the current liabilities. Formula:
Following formula is used to calculate current ratio.
COMPONENT
The two basic components of this ratio are current assets and current liabilities.
Current assets include cash and those assets which can be easily converted into
cash within a short period of time, generally, one year, such as marketable
securities or readily realizable investments, bills receivables, sundry debtors,
(excluding bad debts or provisions), inventories, work in progress, etc. Prepaid
expenses should also be included in current assets because they represent
payments made in advance which will not have to be paid in near future.
Current liabilities are those obligations which are payable within a short period
of tie generally one year and include outstanding expenses, bills payable, sundry
creditors, bank overdraft, accrued expenses, short term advances, income
tax payable, dividend payable, etc. However, sometimes a controversy arises
that whether overdraft should be regarded as current liability or not. Often an
arrangement with a bank may be regarded as permanent and therefore, it may be
treated as long term liability. At the same time the fact remains that the
overdraft facility may be cancelled at any time. Accordingly, because of this
74

75. reason and the need for conversion in interpreting a situation, it seems advisable
to include overdrafts in current liabilities.
Significance:
This ratio is a general and quick measure of liquidity of a firm. It represents the
margin of safety or cushion available to the creditors. It is an index of the firm’s
financial stability. It is also an index of technical solvency and an index of
the strength of working capital. A relatively high current ratio is an indication
that the firm is liquid and has the ability to pay its current obligations in time
and when they become due. On the other hand, are latively low current ratio
represents that the liquidity position of the firm is not good and the firm shall
not be able to pay its current liabilities in time without facing difficulties? An
increase in the current ratio represents improvement in the liquidity position of
the firm while a decrease in the current ratio represents that there has been
deterioration in the liquidity position of the firm. A ratio equal to or near 2:1 is
considered as a standard or normal or satisfactory. The idea of having doubled
the current assets as compared to current liabilities is to provide for the delays
and losses in the realization of current assets. However, the rule of 2:1 should
not be blindly used while making interpretation of the ratio. Firms having less
than 2 : 1 ratio may be having a better liquidity than even firms having more
than 2 : 1 ratio. This is because of the reason that current ratio measures the
quantity of the current assets and not the quality of the current assets. If a firm's
current assets include debtors which are not recoverable or stocks which are
slow-moving or obsolete, the current ratio may be high but it does not represent
a good liquidity position.
75

76. LimitationsofCurrentRatio
: This ratio is measure of liquidity and should be used very carefully because it
suffers from many limitations. It is, therefore, suggested that it should not be
used as the sole index of short term solvency.
1.It is crude ratio because it measures only the quantity and not the quality of
the current assets.
2.Even if the ratio is favorable, the firm may be in financial trouble, because of
more stock and work in process which is not easily convertible into cash, and,
therefore firm may have less cash to pay off current liabilities.
CURRANTRATIO
YEAR CURRENT.ASSETS CURRENT.LIA. RATIO
2016 29,746.31 33,846.39 0.9
2015 37,363.43 30,519.52 1.2
2014 39,870.79 25,279.80 1.6
2013 41,167.08 22,610.03 1.8
2012 38,912.52 17,238.64 2.3
76

77. Interpretation:
We can see that there is a clear rise in the current ratio in 2016 and 2015. As a
conventional rule a current ratio of 2:1 is considered satisfactory. The company
has achieved the current ratio of 2.3, 1.8 & 1.6 during the years 2012, 2013,
2014 respectively. Company may have adapted aggressive working capital
policy. The company has high liquidity because of high value of current ratio.
The company can easily fulfill the short term liability.
2.LiquidorLiquidityorAcid TestorQuick Ratio:- Definition:
Liquid ratio is also termed as "Liquidity Ratio”, “Acid Test Ratio" or "Quick
Ratio ". It is the ratio of liquid assets to current liabilities. The true liquidity
refers to the ability of a firm to pay its short term obligations as and when they
become due.
29,746.31
37,363.43
39,870.79 41,167.08
38,912.5233,846.39
30,519.52 25,279.80 22,610.03
17,238.64
0.9 1.2 1.6 1.8 2.3
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
1
2016
4
2013
5
2012
GRAPHICAL REPRESENTATION
CURRANT RATIO
2
2015
year curr.Assets
3
2014
curr.Lia. ratio
77

78. Components:
The two components of liquid ratio (acid test ratio or quick ratio) are liquid
assets and liquid liabilities. Liquid assets normally include cash, bank, sundry
debtors, bills receivable and marketable securities or temporary investments. In
other words they are Ratio current assets minus inventories (stock) and prepaid
expenses. Inventories cannot be termed as liquid assets because it cannot be
converted into cash immediately without a loss of value. In the same manner,
prepaid expenses are also excluded from the list of liquid assets because they
are not expected to be converted into cash. Similarly, Liquid liabilities means
current liabilities i.e., sundry creditors, bills payable, outstanding expenses,
short term advances, income tax payable, dividends payable, and bank overdraft
(only if payable on demand). Sometime bank overdraft is not included in
current liabilities, on the argument that bank overdraft is generally permanent
way of financing and is not subject to be called on demand. In such cases
overdraft will be excluded from current liabilities. Formula of Liquidity Ratio
LiquidityRatio= (QuickAssets/CurrentLiability)
The quick ratio/acid test ratio is very useful in measuring the liquidity position
of a firm. It measures the firm's capacity to pay off current obligations
immediately and is more rigorous test of liquidity than the current ratio. It is
used as a complementary ratio to the current ratio. Liquid ratio is more rigorous
test of liquidity than the current ratio because it eliminates inventories and
prepaid expenses as a part of current assets. Usually a high liquid ratio an
indication that the firm is liquid and has the ability to meet its current or liquid
liabilities in time and on the other hand a low liquidity ratio represents that the
firm’s liquidity position is not good. As a convention, generally, a quick ratio of
"one tone" (1:1) is considered to be satisfactory. Although liquidity ratio is more
78

79. rigorous test of liquidity than the current ratio, yet it should be used cautiously
and 1:1 standard should not be used blindly. A liquid ratio of 1:1 does not
necessarily mean satisfactory liquidity position of the firm if all the debtors
cannot be realized and cash is needed immediately to meet the current
obligations. In the same manner, a low liquid ratio does not necessarily mean a
bad liquidity position as inventories are not absolutely non-liquid. Hence, a firm
having a high liquidity ratio may not have a satisfactory liquidity position if it
has slow-paying debtors. On the other hand,a firm having a low liquid ratio may
have a good liquidity position if it has a fast moving inventory. Though this
ratio is definitely an improvement over current ratio, the interpretation of this
ratio also suffers from the same limitations as of current ratio.
QUICKRATIO
YEAR QUICKASSETES CURRENT LIABILITY RATIO
2016 22,553.78 33,846.39 0.7
2015 29910.43 30,519.52 1.0
2014 34497.44 25,279.80 1.4
2013 37109.81 22,610.03 1.6
2012 35209.67 17,238.64 2.0
40000
35000
30000
25000
20000
15000
10000
5000
0
1
2016
5
2012
22,553.78
29910.43
34497.44
37109.81
35209.67
33,846.39
30,519.52
25,279.80 22,610.03
17,238.64
0.7
1.0 1.4 1.6
2.0
GRAPHICAL REPRESENTATION
QUICKRATIO
2 3
2015 2014
year quickassetes
4
2013
curr. Lia ratio
79

80. Interpretation:From the above graph we can easily point out that there is a
clear rise in the quick ratio in2015 and 2014. As a conventional rule a quick
ratio of 1:1 is considered satisfactory. The company has achieved the current
ratio satisfactorily. The company has high liquidity because of high value of
current ratio. Thus NTPC has the capacity to payoff current obligations
immediately the short term liability.
C.Activityratios
1.DebtorsTurnover RatioorReceivablesTurnover Ratio:
A concern may sell goods on cash as well as on credit. Credit is one of the
important elements of sales promotion. The volume of sales can be increased by
following a liberal credit policy. The effect of a liberal credit policy may result
in tying up substantial funds of a firm in the form of trade debtors
(or receivables). Trade debtors are expected to be converted into cash within a
short period of time and are included in current assets. Hence, the liquidity
position of concern to pay its short term obligations in time depends upon the
quality of its trade debtors.
Definition:
Debtor’s turnover ratio indicates the velocity of debt collection of a firm. In
simple word sit indicates the number of times average debtors (receivable) are
turned over during a year. Formula of Debtors Turnover Ratio
:DebtorsturnoverRatio= (NetCreditSales/Average Trade Debtor)
The two basic components of the ratio are net credit annual sales and average
trade debtors. The trade debtors for the purpose of this ratio include the amount
of Trade Debtors & Bills Receivables. The average receivables are found by
adding the opening receivables and closing balance of receivables and dividing
the total by two. It should be noted that provision for bad and doubtful debts
80

81. should not be deducted since this may give an impression that some amount of
receivables has been collected. But when the information about opening and
closing balances of trade debtors and credit sales is not available, then the
debtors turnover ratio can be calculated by dividing the total sales by the
balance of debtors (inclusive of bills receivables) given. And formula can be
written as follows.
Significanceoftheratio
This ratio indicates the number of times the debtors are turned over a year. The
higher the value of debtor’s turnover the more efficient is the management of
debtors or more liquid the debtors are. Similarly, low debtors turnover ratio
implies inefficient management of debtors or less liquid debtors. It is the
reliable measure of the time of cash flow from credit sales. There is no rule of
thumb which may be used as a norm to interpret the ratio as it may be different
from firm to firm.
DEBTORS TURN OVER RATIO
YEAR NETSALES DEBTORS RATIO
2016 71,770.50 7,843.99 9.1
2015 75,362.37 7,604.37 9.9
2014 74,707.82 5,220.08 14.3
2013 68,775.51 5,365.49 12.8
2012 64,830.65 5,832.51 11.1
81

82. GRAPHICAL REPRESENTATION
Interpretation: The debtor’s turnover ratio in 2016 9.1 times whichshow
efficient management of credit. But in year 2015 it has increase to 9.9 times
further in the year 2014 it had gone to 14.03 times and it again fallen down in
next year i.e. 12.8 times and2012 it has fallen down to 11.1 times.
2.Working CapitalTurnover Ratio:
Definition
Working capital turnover ratio indicates the velocity of the utilization of net
working capital. This ratio represents the number of times the working capital is
turned over in the course of year and is calculated as follows: Formula of
Working Capital Turnover Ratio: Following formula is used to calculate
working capital turnover ratio.
Working CapitalturnoverRatio= (CostofSales/NetWorking
Capital)
71,770.50
74,707.82
68,775.51
64,830.65
7,843.99 7,604.37
5,220.08 5,365.49 5,832.51
9.1 9.9 14.3 12.8 11.1
0.00
10,000.00
60,000.00
50,000.00
40,000.00
30,000.00
20,000.00
70,000.00
80,000.00
2016 2015 2014 2013 2012
DEBTORS TURN OVER RATIO
75,362.37
netsales debtors ratio
82

83. The two components of the ratio are cost of sales and the net working capital. If
the information about cost of sales is not available the figure of sales may be
taken as the numerator. Net working capital is found by deduction from the total
of the current assets the total of the current liabilities.
Significance:
The working capital turnover ratio measures the efficiency with which the
working capital is being used by a firm. A high ratio indicates efficient
utilization of working capital and a low ratio indicates otherwise. But a very
high working capital turnover ratio may also mean lack of sufficient working
capital which is not a good situation.
WORKING CAPITAL TURN OVER RATIO
YEAR NET SALES WORKING CAPITAL RATIO
2016 71,770.50 -4100 -17.5
2015 75,362.37 6843.9 11.0
2014 74,707.82 14590.99 5.1
2013 68,775.51 18557.05 3.7
2012 64,830.65 21673.92 3.0
2015 2014 2013 2012
71,770.50 75,362.37 74,707.82
68,775.51
2016-4100
-17.5
64,83
0
.65
6843.9
14590.99 18557.05 21673.92
11.0 5.1 3.7 3.0
-20000
60000
40000
20000
0
80000
1 2 3 4 5
WORKING CAPITAL TURN OVER RATIO
83

84. Interpretation
In case of NTPC the ratio was negative-17.5 times in 2016. It has been
increased to 11times in 2015 to 5.1 in 2014. Further in 2013 it had fallen
to3.7and in the year 2012 it has again fallen down to 3 times this shows
company has not utilized owners and long-term borrowed funds efficiently.
3.FixedAssetsTurnover Ratio:Definition:
Fixed assets turnover ratio is also known as sales to fixed assets ratio. This ratio
measures the efficiency and profit earning capacity of the concern. Higher the
ratio, greater is the intensive utilization of fixed assets. Lower ratio means
under-utilization of fixed assets. The ratio is calculated by using following
formula:
FixedAssetsTurnover Ratio:(costofsales/networking capital)
FIXED ASSETS TURN OVER RATIO
YEAR NETSALES FIXEDASSETS RATIO
2016 71,770.50 158,063.46 0.5
2015 75,362.37 135,342.56 0.6
2014 74,707.82 116,999.50 0.6
2013 68,775.51 100,045.52 0.7
2012 64,830.65 87,086.22 0.7
100000
80000
60000
40000
20000
0
160000
140000
120000
71,770.50 75,362.37 74,707.82 68,775.51 64,830.65
158,063.46 135,342.56 116,999.50
100,045.52
87,086.22
0.5 0.6 0.6
0.7
0.7
GRAPHICAL REPRESENTATION
fixed assets turn over ratio
YEAR netsales FIXEDASSETS RATIO
84

85. Interpretation
A high ratio indicates efficient utilization of fixed assets in generating sales. In
case of NTPC the ratio was .59 in the year 2016, which had gone to .6 in
2015.inthe year 2014 the ratio had again same to .6 and in 2013 it is .7 and same
is in case of 2012 the ratio had same .73 .its Cleary that in previous year full
utilization of fixed assets but in 2016 this ratio decrease.
D.Leverageratiosorlongtermsolvencyratios:
1.Debt –to-EquityRatio:
Definition:Debt-to-Equity ratio indicates the relationship between the external
equities or outsiders funds and the internal equities or shareholders’funds. It is
also known as external internal equity ratio. It is determined to ascertain
soundness of the long term financial policies of the company. Formula of Debt
to Equity Ratio: Following formula is used to calculate debt to equity ratio.
Debt EquityRatio= (Externalequities/Internalequities)
Components
The two basic components of debt to equity ratio are outsiders’funds i.e.
external equities and share holders’funds, i.e., internal equities. The outsiders’
funds include all debts / liabilities to outsiders, whether long term or short term
or whether in the form of debentures, bonds, mortgages or bills. The
shareholders’funds consist of equity share capital, preference share capital,
capital reserves, revenue reserves, and reserves representing accumulated profits
and surpluses like reserves for contingencies, sinking funds, etc. The
85

86. accumulated losses and deferred expenses, if any, should be deducted from the
total to find out shareholder's funds some writers are of the view that current
liabilities do not reflect long term commitments and they should be excluded
from outsider's funds. There are some other writers who suggest that current
liabilities should also be included in the outsider's funds to calculate debt equity
ratio for the reason that like long term borrowings, current liabilities also
represents firm's obligations to outsiders and they are an important determinant
of risk. However, we advise that to calculate debt equity ratio current liabilities
should be included in outsider's funds. The ratio calculated on the basis
outsider's funds excluding liabilities may be termed as ratio of long-term debt to
shareholders funds.
It means that for every four dollars worth of the creditors investment the
shareholders have invested six dollars. That is external debt share equal to
0.66% of shareholders’funds.
SignificanceofDebttoEquityRatio:
Debt to equity ratio indicates the proportionate claims of owners and the
outsiders’against the firm’s assets. The purpose is to get an idea of the cushion
available to outsiders on the liquidation of the firm. However, the interpretation
of the ratio depends upon the financial and business policy of the company. The
owners want to do the business with maximum of outsider's funds in order to
take lesser risk of their investment and to increase their earnings (per share) by
paying a lower fixed rate of interest to out siders. The outsider’s creditors) on
the other hand, want that shareholders (owners) should invested risk their share
of proportionate investments. A ratio of 1:1 is usually considered to be
satisfactory ratio although there cannot be rule of thumb or standard norm for
86

87. all types of businesses. Theoretically if the owner’s interests are greater than
that of creditors, the financial position is highly solvent. In analysis of the long-
term financial position it enjoys the same importance as the current ratio in the
analysis of the short-term financial position.
DEBT EQUITYRATIO
year ex.Equity Internal.Equity Ratio
2016 101374.97 88782 1.1
2015 91837.16 81657.35 1.1
2014 75173.89 85815.32 0.9
2013 67826.39 80387.51 0.8
2012 58901.95 73291.17 0.8
0
20000
60000
40000
80000
100000
120000
1 2 3 4 5
2016 2015 2014 2013 2012
101374.97
88782 91837.16
81657.35
85815.32
75173.89
80387.51
67826.39
73291.17
58901.95
1.1 1.1 0.9 0.8 0.8
GRAPHICAL REPRESENTATION
debt equity ratio
year ex.Equity internal.equity ratio
87

88. Interpretation
We can easily point out that there is a sharp rise in the debt-equity ratio from
2016 to2015. From the above data we conclude that the company has less debt
it can also payoff the current obligations very easily.
2.ProprietaryorEquityRatio:
Definition:This is a variant of the debt-to-equity ratio. It is also known as equity
ratio or net worth to total assets ratio. This ratio relates the shareholder's funds
to total assets. Proprietary /Equity ratio indicates the long-term or future
solvency position of the business. Formula of Proprietary/ Equity Ratio:
Proprietaryratio=(Shareholdersfunds/Totalassets)
Components:
Shareholder's funds include equity share capital plus all reserves and surpluses
items. Total assets include all assets, including Goodwill. Some authors exclude
goodwill from total assets. In that case the total shareholder's funds are to be
divided by total tangible assets. As the total assets are always equal to total
liabilities, the total liabilities, may also be used as the denominator in the above
formula.
Significance:
This ratio throws light on the general financial strength of the company. It is
also regarded as a test of the soundness of the capital structure. Higher the ratio
or the share of shareholders in the total capital of the company better is the
long-term solvency position of the company. A low proprietary ratio will
include greater risk to the creditors
88

89. proprietary or equity ratio
year shareholesfund totalassets ratio
2016 88782 224003 0.4
2015 81657.35 204014.03 0.4
2014 85815.32 186269.01 0.5
2013 80387.51 170820.08 0.5
2012 73291.17 149424.7 0.5
Interpretation
We can see by graph in 2016 the ratio was .40 and in 2015 ratio had same
.41which shows company soundness and capital structure was good. in 2014
the proportions had increase up to .59 and continued had same to 2012 which
shows general risk to the creditor included.
0
50000
100000
200000
250000
1 2 3 4 5
2016 2015 2014 2013 2012
88782 81657.35 85815.32 80387.51 73291.17
224003
204014.03
186269.01
170820.08
149424.7
150000
0.4 0.4 0.5 0.5 0.5
GRAPHICALREPRESENTATION
proprietaryratio
year share holresfund totalassetes ratio
89

90. CHAPTER 5
FINDING S
90

91. There is a huge crisis over energy in the world especially in the field of
electricity. India is also victim of the same condition. In spite of several efforts
taken by the governments in this regard, there is enormous possibility exists.
NTPC is a key organization in India as far as the supply of power is
concerned. After successfully conducting this project work, it can be said that
the financial health of NTPC is sound enough and it appears positive in
accordance with its balance sheet and profit & loss A/c which are available to
me. Some other finding there are
1.We can easily found that company net profit ratio in 2007-2008 was 20 this
ratio fallen compare to previous year means company profit decrease.
2.Return on equity capital ratio compare to previous year ratio .90 which shows
the company regularly dividend paid.
3. Company earning per ratio increase year by year.
4. Company current ratio is very good which shows highly liquidity available.
5. Company stock turnover ratio 14 which shows full utilization of stock.
91

92. CHAPTER 6
CONCLUSION
92

93. The electricity supply has been in the public domain in most of the developing
countries. Under public ownership, the sector has not been able to catch up with
the growing demand for electricity. The operational inefficiency and financial
losses often lead to poor quality of supply and underinvestment. A wave of
reforms has swept through a number of developing countries. These reforms
were primarily targeted to improve the performance of the state owned
companies and to provide a conducive atmosphere for private investment in the
sector. The erstwhile vertically integrated SEBs in India has been riddled with
inefficiencies due to a lack of accountability and administrative bottlenecks.
Reforms in the Indian power sector were initiated to restructure the SEBs and to
set up independent regulatory institutions. The Electricity Act 2003 led to
deepening of the reform process by enabling competition in the wholesale
electricity market and retail electricity supply, in phases. Thirteen SEBs have so
far unbundled into separate generation, transmission and distribution
companies. Beginning with the establishment of an independent regulatory
commission in Orissa in1996, the SERCs have been set up in all states. Some of
the smaller states in the North East have established a Joint Electricity
Regulatory Commission. The process of tariff determination has become more
transparent and limited tariff rationalization has been undertaken against
consumer opposition and political meddling. The emerging competition in the
bulk power market and phased direct access to large consumers is aimed at
reducing the risks associated with sales to financially weak state utilities. The
policy and regulatory developments are promising, but more needs to be done to
improve the performance of distribution utilities. Amongst other factors, the
autonomy to manage these utilities in a commercial manner remains a key issue.
In the long-run, the state’s objectives are best served by nurturing a financially
sustainable sector that can improve access for poor and rural consumers. This
research undertook a review of the policy and regulatory developments in the
93

94. Indian power sector. A review of the literature and a comparative policy
analysis helped us to unravel some of the lessons to be learned for the process
of reform in developing countries in general. The initial phase of power
sector reform in India allowed commercially-oriented IPPs to sell power to
financially weak SEBs, which do not rely on sound commercial principles. This
marriage of convenience is not sustainable. The initial phase of reforms in
developing countries should be aimed to restructure the sector and to set up an
independent regulator. As private participation grows, it would be suitable to
introduce competition in the sector. This would not only help lower the cost of
power purchase, it would also provide greater incentive for performance
improvement. The experience of private sector investment in Latin American
countries relied on the introduction of commercial interest in the bulk power
market by inviting IPPs as wellas introducing commercial principles at the end
of buyer utilities through their divestiture. The experience in East Asia and
Latin America suggests that macroeconomic stability remains a key to attracting
sustainable and increased investment in the infrastructure sectors. India
continues to demonstrate macroeconomic stability along with prudent currency
management. Future growth prospects in the power sector hold substantial
potential for private investment. However, the financial performance of the state
owned distribution utilities remains a key concern for investors. A positive
outcome of existing distribution privatization programs would guide such future
plans, which remain politically sensitive. There gulatory challenge is to provide
incentives for improvement in technical efficiency and financial performance.
The unavailability of sovereign guarantees can be adequately addressed if state
utilities become viable through greater commercialization, if not privatization.
Inability of the domestic capital market to provide long-term debt for the
power sector needs to be adequately addressed by encouraging contractual
saving through life insurance and pension funds, and channel zing these for the
94

95. power sector. Securitization of project loans after the construction period and
development of secondary bond market would help garner funds for investment
in the sector. The long-term interest of the consumers can only be served if
reasonably priced electricity is available over the long-run. Political interests
would best be served by depoliticizing tariffs, which would be beneficial to
consumers in the long-term through improved quality and reliability of supply.
Given the objective to electrify all villages by 2010 and to double the generating
capacity in the country by 2012, the need to improve the policy environment
and strengthen the regulatory framework cannot be ignored.
95

96. CHAPTER 7
SUGGESTION
&
RECO M M ENDATIO NS
96

97. ₪Regulatory commission should work properly. They should try to minimize
the cost, so that general customer should meet the cost easily.
₪Company should try to get ultra-mega power plant project.
₪They should try to improve the operational efficiency and financial
performance of state utilities.
₪Company has sound data system from where they can start the cost cut
methods at different measures to improve their performance.
₪The human resource can be optimizing to a certain extent for increasing
profitability.
97

98. CHAPTER 8
LIM ITATIO N
OF
STUDY
98

99. The limitations faced during the summer course are:-
₪First-it was not possible to study various aspect of the organization in detail.
₪Employees were apprehensive of secrecy data therefore hesitated in disclosing
all the data regarding some of the points concerning to this study.
₪As this is a general study, hypothesis could not bedrawn.
₪Some executives could not afford time because of their busy schedule.
₪The time was a big constraint as the two months was a short span of time. As
there spondents are no high designations, reaching them was hectic task.
₪The respondents were to be reached through emails and by personals and the
time were not enough get the response about the quarries and doubts raised.
99

100. BIBLIOGRAPHY
Reference Books
Financial management: I.M Pandey
Management Accounting: Sharma & Gupta
Management accountancy: Pillai & bagavati
Websites:
www.ntpc.co.in
moneycontrol.com
www.myiris.com
http://profit.ndtv.com
Search Engine:
www.google.com
100

101. ANNEXURE
NTPC
15-M ar 14-M ar 13-M ar 12-M ar
----------------
Standalone Profit& ---inRs.
Loss account Cr.-----------
--------
Mar 16
12 mths 12 mths 12 mths 12 mths 12 mths
INCOM E
Revenue From
Operations[Gross]
70,860.20 73,393.60 72,311.11 64,919.42 61,654.29
Less: Excise/Sevice
Tax/Other Levies
729.2 669.64 625.09 526.31 428.65
Revenue From
Operations [Net]
70,131.00 72,723.96 71,686.02 64,393.11 61,225.64
Other Operating
Revenues 375.8 522.09 332.91 1,280.82 826.59
TotalOperating
Revenues 70,506.80 73,246.05 72,018.93 65,673.93 62,052.23
Other Income 1,263.70 2,116.32 2,688.89 3,101.58 2,778.42
TotalRevenue 71,770.50 75,362.37 74,707.82 68,775.51 64,830.65
EXPENSES
Cost Of Fuel 43,793.25 48,845.19 45,829.71 41,018.25 41,635.46
Employee Benefit
3,609.32 3,669.78 3,867.99 3,360.12 3,090.48
Expenses
Finance Costs 3,230.36 2,743.62 2,406.59 1,924.36 1,711.64
Depreciation And
Amortisation 5,425.32 4,911.65 4,142.19 3,396.76 2,791.70
Expenses
Other Expenses 5,787.39 4,979.31 4,543.85 4,211.22 3,588.79
101

102. Less: Amounts
Transfer To Capital
Accounts
-74.43 0 0 0 0
TotalExpenses 61,920.07 65,149.55 60,790.33 53,910.71 52,818.07
16-Mar 15-Mar 14-Mar 13-Mar 12-Mar
12 mths 12 mths 12 mths 12 mths 12 mths
Profit/Loss Before
Exceptional,
ExtraOrdinaryItems
And Tax
9,850.43 10,212.82 13,917.49 14,864.80 12,012.58
Exceptional Items
Profit/LossBefore
12.09
9,862.52
0
10,212.82
0
13,917.49
1,684.11
16,548.91
0
12,012.58
Tax
Tax Expenses-Continued
Operations
Current Tax 2,096.09 2,278.97 3,230.56 3,839.69 2,913.64
Deferred Tax 226.88 888.75 136.31 278.4 327.85
Tax For Earlier Years -2,507.21 -2,911.93 -436.96 -158.85 -139.06
TotalTax Expenses -184.24 255.79 2,929.91 3,959.24 3,102.43
Profit/LossAfterTax
And Before 10,046.
76
9,957.03 10,987.58 12,589.67 8,910.15
ExtraOrdinaryItems
Prior Period Items 196.15 333.83 -12.84 29.72 313.58
Profit/LossFrom
Continuing 10,242.
91
10,290.86 10,974.74 12,619.39 9,223.73
Operations
102

103. Profit/LossFor The
Period 10,242.91 10,290.86 10,974.74 12,619.39 9,223.73
16-Mar 15-Mar 14-Mar 13-Mar 12-Mar
12 mths 12 mths 12 mths 12 mths 12 mths
OTHER ADDITIONAL
INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 12.42 12 13 15 11
Diluted EPS (Rs.) 12.42
VALUE OF IMPORTED AND
INDIGENIOUS R A W MATERIALS
STORES, SPARES AND LOOSE
TOOLS
Imported Stores And
12 13 15 11
Spares 5,297.29
Indigenous Stores
8,427.22 6,918.59 4,570.55 7,942.77
And Spares 39,699.89 41,572.55 40,050.32 37,500.66 34,572.43
DIVIDEND AND DIVIDEND
PERCENTAGE
Equity Share Dividend 2,762.24 2,061.38 4,741.15 4,741.16 3,298.19
Tax On Dividend 558.25
417.4 804.74 781.87 527.92
Equity Dividend Rate
(%) 34 25 58 58 40
NTPC
Previous
Years»
103

104. 15-M ar 14-M ar 13-M ar 12-M ar
----------------
Standalone Balance ---inRs.
Sheet Cr.-----------
--------
Mar 16
12 mths 12 mths 12 mths 12 mths 12 mths
EQUITIES AND LIABIL
SHAREHOLDER'S FU
Equity Share Capital
ITI
ES
NDS
8,245.46
8,245.46 8,245.46 8,245.46 8,245.46
TotalShare Capital 8,245.46 8,245.46 8,245.46 8,245.46 8,245.46
Reserves and Surplus 80,536.54 73,411.89 77,569.86 72,142.05 65,045.71
80,536.54 73,411.89 77,569.86 72,142.05 65,045.71
TotalReserves and
Surplus
TotalShareholders
Funds 88,782.00 81,657.35 85,815.32 80,387.51 73,291.17
LITIES
85,083.26 78,532.33 62,405.75 53,253.66 45,908.27
1,152.21 979.07 1,051.61 915.3 636.9
5,318.99 4,280.74 4,122.34 3,210.04 3,159.12
436.41 1,115.71 879.36 739.92 603.7
91,990.87 84,907.85 68,459.06 58,118.92 50,307.99
1,299.50 0 0 0 0
5,502.86 5,953.15 6,633.34 5,158.77 4,468.07
18,384.41 16,807.62 11,343.86 10,446.72 9,554.95
8,659.62 7,758.75 7,302.60 7,004.54 3,215.62
33,846.39 30,519.52 25,279.80 22,610.03 17,238.64
214,619.26 197,084.72 179,554.18 161,116.46 140,837.80
TS
NON-CURRENT LIABI
Long Term
Borrowings
Deferred Tax
Liabilities [Net]
Other Long Term
Liabilities
Long Term Provisions
TotalNon-Current
Liabilities
CURRENT LIABILITIES
Short Term
Borrowings
Trade Payables
Other Current
Liabilities
Short Term Provisions
TotalCurrent
Liabilities
TotalCapitalAnd
Liabilities
ASSETS
NON-CURRENT ASSE
Tangible Assets
Intangible Assets
Capital Work-In-
Progress
Intangible Assets
Under Development
FixedAssets
Non-Current
Investments
91,355.82 78,586.91 71,865.86 62,687.42 45,046.47
273.99 262.16 244.97 248.68 211.89
66,216.04 56,463.11 44,886.74 37,109.42 41,827.82
217.61 30.38 1.93 0 0.04
158,063.46 135,342.56 116,999.50 100,045.52 87,086.22
7,949.52 7,154.07 8,120.90 9,137.64 9,583.92
104

105. Long Term Loans And
Advances
Other Non-Current
Assets
16,980.19
1,879.78
15,527.89
1,696.77
12,776.22
1,786.77
9,633.45
1,132.77
3,883.26
1,371.88
TotalNon-Current
Assets
184,872.95 159,721.29 139,683.39 119,949.38 101,925.28
CURRENT ASSETS
Current Investments 343.63 1,878.06 1,636.96 1,622.46 1,622.46
Inventories 7,192.53 7,453.00 5,373.35 4,057.19 3,702.85
Trade Receivables 7,843.99 7,604.37 5,220.08 5,365.49 5,832.51
Cash And Cash
Equivalents
4,406.36 12,878.81 15,311.37 16,867.70 16,146.11
Short Term Loans
And Advances
2,249.26 2,407.59 3,117.08 1,745.53 2,754.73
OtherCurrentAssets 7,710.54 5,141.60 9,211.95 11,508.71 8,853.86
TotalCurrentAssets 29,746.31 37,363.43 39,870.79 41,167.08 38,912.52
TotalAssets 214,619.26 197,084.72 179,554.18 161,116.46 140,837.80
OTHER ADDITIONAL
INFORMATION
CONTINGENT LIABILITIES,
COMMITMENTS
Contingent Liabilities 78,417.12 65,900.89 81,582.53 73,660.54 53,173.05
CIF VALUE OF IMPORTS
Stores, Spares And
Loose Tools
91 80.16 115.46 124.44 190.09
Capital Goods 949.67 2,788.44 2,472.14 1,009.05 880.34
EXPENDITURE INFOREIGN
EXCHANGE
Expenditure In
Foreign Currency
1,179.38 882.11 855.77 635.06 411.54
REMITTANCES INFOREIGN
CURRENCIES FOR DIVIDENDS
Dividend Remittance
In Foreign Currency
- - - - -
EARNINGS INFOREIGN
EXCHANGE
FOB Value Of Goods - - - - -
Other Earnings 3.97 3.41 3.13 2.25 2.76
BONUS DETAILS
Bonus Equity Share
Capital
- - - - -
NON-CURRENT INVESTMENTS
Non-Current
Investments Quoted 76.8 97.08 81.36 71.94 73.32
Market Value
Non-Current
Investments Unquoted 7,937.52 7,142.07 8,108.90 9,125.64 9,571.92
Book Value
CURRENT INVESTMENTS
Current Investments
Quoted Market Value
- - - - -
Current Investments
Unquoted Book Value
343.63 1,878.06 1,636.96 1,622.46 1,622.46
105