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NTPC
BSE: 532555 | NSE: NTPC | ISIN: INE733E01010 | Power - Generation/Distribution
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| Directors Report | Year End : Mar '08 |
The Directors are pleased to present the 32nd Annual Report and the
audited accounts for the year ended March 31, 2008.
FINANCIAL RESULTS
Rs. Million
Income 2007-08 2006-07
Sale of Energy 369462 325344
Consultancy 1039 608
Other income (Including
energy internally consumed) 29612 27814
Gross Income 400113 353766
Expenditure
Fuel 220202 198181
Employees Remuneration
& Benefits 18960 11632
Generation, Administration
& other expenses 16284 15567
Interest 10312 9746
Finance charges 7669 8848
Depreciation 21385 20754
Total Expenditure 294812 264728
Profit before tax, provisions
and prior period adjustments 105301 89038
Tax 28401 20427
Profit after tax but before
provisions and prior period
adjustments 76900 68611
Less
Prior Period Adjustments (Net) 2745 (109)
Provisions (Net) 7 73
Net Profit after tax 74148 68647
Appropriations 2007-08 2006-07
Transfer to Bonds Redemption
Reserve 3822 3487
Interim Dividend 22263 19789
Proposed Dividend 6596 6596
Tax on Dividend 4905 3896
Transfer to General Reserve 39000 36000
Transfer to Capital Reserve * 4
*Rs. 12,723/-
FINANCIAL PERFORMANCE
The total income of the company for the year increased by 13.10% to Rs.
400,113 million from Rs. 353,766 million during the previous year. The
profit after tax but before provisions and prior period adjustments
increased by 12.08% to Rs. 76,900 million from Rs. 68,611 million. Net
profit after tax increased to Rs. 74,148 million from Rs. 68,647
million registering a growth of 8% over last year.
DIVIDEND
In addition to interim dividend of Rs. 2.70 per share paid in February
2008, your Directors have recommended a final dividend of Rs. 0.80 per
share for the year 2007-08. The total dividend for the year is Rs 3.50
per share as against Rs. 3.20 per share paid last year. The final
dividend shall be paid after your approval at the Annual General
Meeting. The total dividend pay-out for the year amounting to Rs.
28,859 million represents 38.92% of the profits after tax as against
38.43% in the previous year. The total dividend payout including tax
accounts for 45.54% of profit after tax. The dividend has been
recommended in accordance with the Company’s policy of balancing
dividend pay-out with the requirement of deployment of internal
accruals for its growth plans. Your Directors believe that growth of
the company through capacity addition, backward and forward integration
and strategic diversification of its operations would lead to increase
in shareholders value.
OPERATIONAL PERFORMANCE
During the year, the power stations of your Company generated 200.863
billion units of electricity which was 28.51% of the total power
generated in India with a share of 19.12% in the total installed
capacity of the country. The power generated by the company has
registered an increase of 6.46% over the previous year’s generation of
188.674 billion units. During the year, the coal based stations of the
company operated at a plant load factor of 92.24% (highest since
inception) as compared to 89.43% during the previous year. However, the
gas stations of the company operated at a plant load factor of 68.14%
as against 71.90% last year due to non-availability of gas. The average
availability for coal and gas based stations for the year was 92.12%
and 85.93% respectively.
A detailed discussion on the operations and performance for the year is
given in the “Management Discussion and Analysis” included as a
separate section in the annual report.
COMMERCIAL PERFORMANCE
During the year, your Company realized 100% of payment of current bills
raised for sale of power. For the fifth consecutive year the Company
has been able to achieve 100% realization of current bills.
All the beneficiaries are paying within 30 days of billing except UP
and J&K who are paying in 60 days cycle.
All the beneficiaries have opened and are maintaining LC equal to or
more than 105% of average monthly billing as per One-Time Settlement
Scheme except New Delhi Municipal Corporation (NDMC) and Military
Engineering Services. NDMC is in the process of establishing LC
shortly. NTPC Payment Rebate Scheme for the year 2007-08 resulted in
realization of nearly 68% of the energy bills within a week of
presentation of bill for the month.
One unit of 500MW of Vindhyachal STPP stage-III was declared commercial
with effect from 15.07.2007. Due to non-availability of water at Sipat
Super Thermal Project, the 500MW unit of stage-II could not be declared
ready for commercial operation although the same was commissioned in
May’2007. However, this unit was declared commercial with effect from
20.06.2008.
INSTALLED CAPACITY
During the year, a total capacity of 1740 MW was added to NTPC’s
installed capacity. Your Company commissioned one 500 MW unit at
Sipat-II (Unit-IV) and one 500 MW Unit at Kahalgaon-II (Unit-VI). In
addition, 740 MW (Module-III) was added through its Joint Venture,
Ratnagiri Gas and Power Private Limited (RGPPL) at Dabhol. Further, one
250 MW unit at Bhilai Expansion Project was commissioned on April 20,
2008 through its Joint Venture Company, NTPC-SAIL Power Company Pvt.
Ltd (NSPCL). Thus, the total installed capacity of the NTPC Group has
increased from 27,904 MW to 29,394 MW. Detail of the installed capacity
is given below:
Owned by NTPC MW
Coal based projects 23,395
Gas based projects 3,955
Sub-total 27,350
Joint ventures
NSPCL (Coal) 564
RGPPL (Gas) 1480
Sub-total 2,044
Total 29,394
CAPACITY ADDITION PROGRAM
In order to actualize the vision of becoming a world class integrated
power major, your company has embarked upon a substantial capacity
addition program so as to become 50000 MW plus company by the year 2012
and to have installed capacity of 75000 MW plus by 2017. Your Company
has adopted a multi-pronged growth strategy which includes capacity
addition through green field projects, expansion of existing stations,
joint ventures and takeover of stations.
By 2017, the power generation portfolio is expected to have a
diversified fuel mix with coal based capacity of around 53000 MW, 10000
MW through gas, 9000 MW through Hydro generation, about 2000 MW from
nuclear sources and around 1000 MW from Renewable Energy Sources (RES).
As a step towards promotion of generation of electricity from RES, your
Company had signed an MOU with Asian Development Bank for establishing
a generating capacity of about 500 MW through Renewable Energy Sources.
Your Company is expected to have a stake of 40% alongwith other global
core investors contributing the balance 60% of equity. The global core
investors are expected to be finalized shortly.
PROJECTS PLANNED
During the year, projects having aggregate capacity of 6570 MW were
approved covering an investment of Rs. 359,734 million. This will help
to achieve the capacity addition target of 22430 MW during XI plan. As
against this target, your Company commissioned 1740 MW last year. In
addition, a unit of 250 MW was commissioned at Bhilai expansion project
in April’2008. Various projects having aggregate capacity of 16680 MW
including 3750 MW to be added by projects undertaken by Joint Venture
companies are under construction. For the balance capacity addition,
Feasibility Reports have been finalized and Main Plant Bids have been
received/invited. A list of the projects expected to be commissioned by
your Company as well as under its joint ventures with other companies
till the year 2012 and beyond are as follows:
Name of the Project Capacity Capacity
(MW) Addition
by 2012
Projects under NTPC LTD.
A. Coal Based-Ongoing Projects
1. Kahalgaon-II, Phase II, Unit - VII 500 500
2. Sipat -II, Unit- V 500 500
3. Sipat-I 1980 1980
4. Barh-I 1980 1980
5. Korba-III 500 500
6. NCTPP-II, Dadri 980 980
7. Farakka-III 500 500
8. Simhadri-II 1000 1000
9. Bongaigaon 750 750
10. Mauda 1000 1000
11. Barh-II 1320 1320
Sub Total (A) 11010 11010
B. Hydro Electric Power Projects(HEPP)-Ongoing
12. Koldam 800 800
13. Loharinag Pala 600 600
14. Tapovan Vishnugad 520 520
Sub Total (B) 1920 1920
Total ongoing projects (A)+(B) 12930 12930
C. Coal Based-New projects
15. North Karanpura 1980 660
16. Rihand-III 1000 500
D. Gas Based-New Projects
17. Kawas- II 1300 1300
18. Jhanor- Gandhar- II 1300 1300
Total of new projects (C) + (D) 5580 3760
Grand Total (A)+(B)+(C)+(D) 18510 16690
Korba- Stage-III, Farakka-Stage-III, Loharinag Pala HEPP and Tapovan
Vishnugad HEPP are being developed as merchant power projects.
The company is also exploring/identifying new sites for setting up of
power projects based on availability of infrastructure and fuel etc.
These locations would be added to the plans at a future date.
Capacity addition through Subsidiaries and Joint Ventures (JVs)
Besides adding capacities on its own, your Company has also plans to
add capacities through some of its subsidiaries and joint ventures.
By leveraging our project execution strength, out of the total capacity
addition of 22430 MW during XI plan, your Company is setting up 4000 MW
(about 18% of the capacity addition) with JV partners giving them a
better dispensation in terms of allocation of power, resulting in a
‘win-win’ situation for both. Four projects having a total capacity of
4000 MW are under construction. The detail of JV Companies/Subsidiaries
alongwith details of Joint Venture partners for addition of capacity is
as under:
JV Partner Company Details
Steel Authority NTPC-SAIL A 50:50 Joint Venture
of India Limited Power Supply Company formed to
(SAIL) Co. Pvt. Ltd. own and operate
captive power plants
at Durgapur(120 MW),
Rourkela (120 MW) and
Bhilai Steel Plant (74
MW). The JV Company
has undertaken
expansion at Bhilai by
adding two coal based
units of 250 MW each.
Tamil Nadu NTPC Tamil A 50:50 Joint Venture
Electricity Nadu Energy Company formed for
Board Company setting up a coal based
Limited. project having two
units of 500 MW each
at Ennore, Tamil Nadu.
Main plant & offsite
civil work package for
Phase-I has been
awarded.
Indraprastha Aravali Power The Joint Venture
Power Company Company shall set up
Generation Private Limited a coal based project
Co. Ltd. (IPGCL) named Indira Gandhi
and Haryana Super Thermal Power
Power Project consisting of
Generation three units of 500 MW
Co. Ltd. each. NTPC Ltd., IPGCL
(HPGCL). and HPGCL contri-
buted equity in the
ratio of 50:25:25.
Most of the packages
for the project have
been awarded. Civil
works are in full swing.
Indian Railways Bhartiya Rail A subsidiary of NTPC
Bijlee Company formed as a Joint
Limited Venture with Ministry
of Railways having
contribution in the
ratio of 74:26 for
setting up of a power
project of 1000 MW
capacity of four units
of 250 MW each at
Nabinagar. Award of
main plant for SG and
TG Package has been
placed on BHEL.
Details of commissioning schedules of the projects being implemented
through joint ventures are given below:
Name of the Project Capacity Addition
by 2012
Projects with JV partners
A. Coal Based-Ongoing Projects
1. Bhilai Power expansion 250
2. Indira Gandhi STPP 1500
3. Vallur STPP 1000
4. Nabinagar STPP 1000
TOTAL 3750
In addition to the above, a unit of 250 MW was commissioned on April
20, 2008 by NSPCL at Bhilai expansion project.
Vaishali Power Generating Company Limited (VPGCL) is a subsidiary of
your Company which took over Muzaffarpur Thermal Power Station having
two units of 110 MW each from Bihar State Electricity Board. Your
Company has contributed 51% of equity and balance equity was
contributed by Bihar State Electricity Board. The equity contribution
of your Company is expected to increase upto 74% depending on final
transfer value of the station to VPGCL. The second Unit has been
successfully resynchronized on 17.10.2007 after four years of being
idle. Renovation and Modernization of first Unit is under progress.
The Company was rechristened as Kanti Bijlee Utpadan Nigam Limited on
10.04.2008.
A JV Company named “Meja Urja Nigam Private Limited” was formed with
Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) for setting
up 1320 MW coal based power project in Tehsil Meja of Allahabad
District in Uttar Pradesh. Both NTPC and UPRVUNL have contributed 50%
each in the equity of the JV Company. Site leveling work is in progress
at this project.
Your Company has signed a Joint Venture Agreement with Bihar State
Electricity Board (BSEB) for setting up 3X660 MW power project at
Nabinagar in Bihar.
Set up to undertake development of small hydro projects having capacity
upto 250 MW, NTPC Hydro Limited, a wholly owned subsidiary of your
company, is implementing the following projects:
Project Location Capacity
Lata Tapovan Uttarakhand 171 MW
Rammam-III West Bengal 120 MW
The techno economic clearance of CEA and environmental clearance of
Ministry of Environment and Forest have been obtained for both these
projects. The land for Lata Tapovan HEPP has been acquired.
STRATEGIC DIVERSIFICATION-FORAY INTO MANUFACTURING
In order to strengthen its competitive advantage in power generation
business, the Company also plans to diversify its portfolio to emerge
as an integrated power major, with presence across entire energy value
chain through backward and forward integration into areas such as coal
mining, LNG Value Chain, manufacturing activities, power trading,
distribution, etc.
Business opportunities are being continuously explored through
environment scanning and new business plans are adopted accordingly.
Your Company has formed a Joint Venture Company with Bharat Heavy
Electricals Limited named “NTPC-BHEL Power Projects Pvt. Limited” on
April 28, 2008 with 50:50 equity participation for taking up activities
of Erection, Procurement and Construction of Power Plants and
manufacturing of equipment.
Another JV Company named “BF-NTPC Energy Systems Limited” was also
formed on June 19, 2008, between your company and Bharat Forge Limited
(BFL) for setting up a new facility to take up manufacturing of
castings, forgings, fittings and high pressure piping required for
power projects and other industries, balance of plant equipment for
power sector. Your company will hold 49% equity and the balance equity
will be held by BFL.
Last year, your Company had signed a Business Collaboration and
Shareholders Agreement with Transformers and Electricals Kerala Ltd.,
TELK and the Government of Kerala for synergy in the field of
manufacturing and repair of Power Transformers etc. As per the
agreement, your Company had agreed to acquire 44.6% stake in TELK from
Government of Kerala and its undertakings. The approval from BIFR has
been obtained for restructuring package and action is being taken for
delisting of shares of the existing company. On completion of such
formalities the acquisition of stake will take place.
GLOBALISATION INITIATIVES
Your Company is keenly exploring opportunities to mark its footprints
in different parts of the world.
In line with its Globalization strategy, your Company is making
consistent efforts to enter the overseas markets and is focusing its
efforts in the Middle East, Asia-Pacific and Africa regions for
business. A Representative office is functioning in Dubai. A site has
been identified for setting up a 2X250 MW coal based power plant in
Trincomalee region, Sri Lanka in Joint Venture with Ceylon Electricity
Board. Energy Audit of 15 Units of Saudi Electric Company has been
successfully completed. Pursuant to signing of MoU with Government of
Nigeria, our team is working on selection of prospective site for
setting up one 700 MW Gas based and one 500 MW coal based power plant
in Nigeria. In lieu of this, Government of Nigeria shall provide LNG
for our stations.
FINANCING OF NEW PROJECTS
All the planned capacity addition programs shall be financed with a
debt to equity ratio of 70:30. Your directors believe that internal
accruals of the company would be sufficient to finance the equity
component for the new projects. Given its low gearing and strong credit
ratings, your Directors believe that your Company is well positioned to
raise the required borrowings.
Your Company is exploring domestic as well as international borrowing
options including overseas development assistance provided by bilateral
agencies to mobilize debt required for the planned capacity expansion
program.
During the year, your Company has tied up a loan for USD 380 million
under the guarantee of Japan Bank for International Co-operation and
another loan of Euro 68.56 million from Nordic Investment Bank at
competitive terms. The company also mobilized new term loans
aggregating to Rs. 44,750 million from domestic banks and financial
institutions. Bonds of Rs. 10,000 million were placed with Life
Insurance Corporation of India to finance capital expenditure of
projects.
FIXED DEPOSITS
The cumulative deposits received by your Company from 367 depositors as
at March 31, 2008 stood at Rs 130 million. Further an amount of Rs. 19
million has not been claimed on maturity by 70 depositors as on that
date.
FUEL SECURITY
Your company is the largest consumer of coal in the country. Total
domestic coal received by your company during the financial year
2007-08 was 120.20 million tonnes, which was about 9.51% more than the
previous year. To overcome temporary shortages in coal supply, your
company resorted to import of coal to the tune of 2.74 million tonnes
being 2.21% of total coal consumed during the year 2007-08. Your
Company also intends to import 5 Million Tonnes of coal during 2008-09.
During the year, your company obtained long term coal linkages for its
various projects from various subsidiary companies of Coal India
Limited (CIL).
In order to have long-term fuel security, your company is also
exploring the possibility of acquiring acreages in the coal assets
abroad for which NTPC teams visited various countries.
Coal Mining
Your Company has been allotted six coal blocks namely Pakri Barwadih,
Chatti Bariatu, Kerendari, Dulanga, Talaipalli and Chatti-Bariatu
(South) with estimated Geological Reserves of plus 3 billion tonnes and
production potential of about 48 Million Tonnes Per Annum (MTPA).
These blocks are targeted to be developed to entail overall coal
production of about 14 MTPA by 2012. Process of selection of Mine
Developer cum Operator for Pakri Barwadih mine is at an advanced stage.
Mining plans for Chatti Bariatu and Kerandari have been submitted to
Ministry of Coal. Land acquisition for five Coal Blocks is under
progress.
Your Company has formed a Joint Venture Company named ‘NTPC SCCL Global
Ventures Private Limited’ with Singareni Collieries Company Limited for
undertaking coal mining in India and abroad.
As a part of developing strategic alliances as well as deriving
technical strengths, your Company has entered into Memorandum of
Understanding with RINL, SAIL, NMDC and CIL for sourcing coking coal
and thermal coal from abroad.
Exploration Activities
Your Company, along with M/s Geopetrol International Inc. and M/s
Canoro Resources Ltd, has been allotted a block for exploration
activities in Arunachal Pradesh, for which it has signed a production
sharing contract with Government of India. Your company has 40%
participating interest in it. M/s Geopetrol International has been
designated as the Operator of the block. Subsequent to the issuance of
the Petroleum License by the State Government, the operator had
initiated various exploration activities. The geological, geochemical,
geo microbiological and 2D seismic survey has been completed.
Environmental clearance has been granted and necessary infrastructure
is being created for initiating exploratory well drilling.
Near Term Strategies
For optimum utilization of the capacity of its Gas based stations, your
Company continued with the procurement of Spot Re-gasified LNG in order
to mitigate gas shortages at its existing gas based stations.
RENOVATION & MODERNISATION
Your Company considers Renovation and Modernization (R&M) as quick
result low investment option to extract higher generation from old
power stations. R&M is being undertaken in project mode with focus on
feasible and cost effective technology upgrade, with capacity and
efficiency improvements to bring the old vintage units near to the
latest design. It gives an opportunity to leverage the technological
advancement which has taken place in the power industry so as to
continue economical power generation. Introduction of advance
technologies is expected to result in improvement in efficiency of the
units. It may also help to reduce green house gases and avail Clean
Development Mechanism benefits apart from life extension of the plant.
HUMAN RESOURCE MANAGEMENT
Your Company takes pride in its highly motivated and trained Human
Resource that has contributed its best to bring NTPC to its present
height. The company has continuously added to its installed capacity
and the Man-MW ratio has improved consistently. The attrition rate
among the executives during the year was 3.1%. The total employee
strength of the company stands at 24,547 as on 31.3.2008 as against
24,375 as on 31.3.2007.
Fiscal 2008 Fiscal 2007
NTPC
Number of employees 23674 23602
Man / MW ratio 0.87 0.91
Generation per employee 8.48 7.99
Subsidiaries & Joint Ventures
Employees of NTPC in
Subsidiaries & Joint Ventures 873 773
Total employees 24,547 24,375
NTPC follows “People First” approach to leverage the potential of its
employees to execute its business plans.
Employee Relations
Employee relations scenario in NTPC continued to be cordial marked by
industrial harmony and mutual trust during the year.
The scheme for Employees Participation in Management continued to
function successfully all over the Company.
The unions and associations and also the individual employees
complimented the efforts of the management in developing and sustaining
an enabling performance culture in the organisation.
There has been continuous interactions between the management and the
apex fora of workmen and executives. Safe methods are practiced in all
areas of Operations & Maintenance and Construction & Erection
activities for the protection of workers against injury and diseases.
Occupational safety at workplace is given utmost importance.
Training and Development
Your Company, as part of its endeavour of being a learning
organization, has created training and development infrastructure both
at its sites as well as at the corporate level. The employee
development centers at our projects and at Power Management Institute
(PMI), Noida impart training in diverse areas including managerial
skill, power station operation and maintenance and project
construction, erection and commissioning and information technology.
Special emphasis is given to developing knowledge and skills of the
employees in the new business areas of coal mining, hydro power,
nuclear power, power trading and distribution etc.
In addition to training its own employees, your Company has been
providing a platform for imparting training to other constituents of
the power sector – State Utilities, Independent Power Producers,
Central Power Sector Undertakings. In the year 2007-08, a total of 324
programmes were conducted at PMI which were attended by a total of 8529
participants.
CORPORATE SOCIAL RESPONSIBILITY
Vitally engaged in the endeavour of nation building, your Company is
not only a partner in powering India’s growth, it is also a partner in
making Indian society more humane and just. Corporate Social
Responsibility is an article of faith for us.
Your Company is providing sponsorship to candidates from villages in
the vicinity of NTPC projects for ITI training at Government/
Government recognized private ITIs in the trades of welder, fitter,
instrument mechanic and electrician. Close to 750 village youth have
been sponsored during the year. Your Company also proposes to set up an
ITI at Chatra District in Jharkhand State at an estimated cost of Rs.
67.10 million on land to be provided by the State Government of
Jharkhand.
As a health care measure, your Company is providing support to
Hyderabad Eye Research Foundation for three specialized Eye Centers at
Bhubaneshwar Eye Hospital.
In the field of education, your Company is committed to provide support
for setting up two technical polytechnics at Uttarakhand at Kaladungi
District Nainital and a women’s Polytechnic at Gopeshwar District
Chamoli. Support has also been extended by NTPC for delivery vehicles
for mid-day meal programme for the children of Government schools
located in the National Capital Region through Food Relief Foundation
of ISKON and for assistance in self reliance for 200 tribal girls/
women in the tribal area of Jhamar Kotra in Udaipur District of
Rajasthan.
Committed to its social responsibilities, your Company became a member
of Global Compact, a voluntary initiative of the UN for CSR. Your
Company confirms its involvement in various CSR activities in line with
the 10 Global Compact principles and share the experiences with the
representatives of the world through “Communication on Progress”. A
report on progress made in this area is enclosed at Annex-IX to
Directors’ Report.
NTPC Foundation
NTPC Foundation has been established by the Company under Indian Trust
Act, 1882 for addressing the identified areas of social development at
national level through supportive interventions.
NTPC Foundation provides loans, training and medical treatment to
physically challenged persons and economically weaker sections in a
phased manner.
Rehabilitation & Resettlement
Your Company is committed to help the populace displaced for execution
of its projects and has been making efforts to improve the
Socio-economic Status of Project Affected Persons (PAPs) and also
undertaking community development works in and around the projects.
Social Impact Evaluation (SIE) for Simhadri and Sipat projects were
completed during the year.
IMPLEMENTATION OF OFFICIAL LANGUAGE
Your Company has made vigorous efforts for the propagation and
successful implementation of the Official Language Policy of the
Government of India. Several Hindi workshops and competitions were
conducted at projects, regional offices and corporate centre during the
year to encourage the employees to use maximum Hindi in official work.
All office orders, formats and circulars were issued in Hindi as well.
All important advertisements and house journals were released in
bilingual form- in Hindi and in English. One Hindi word is being
displayed over the intranet daily. Your company’s website also has a
facility of operating in bilingual form- in Hindi as well as in
English. Hindi software “Saransh” was procured and installed on
computers to facilitate working in Hindi.
CenPEEP
As a proactive measure to address issues concerning sustainable energy
development, your Company had established Center for Power Efficiency
and Environmental Protection (CenPEEP) more than a decade ago with the
help of US DoE and USAID. CenPEEP took various initiatives for
improvement in efficiency and maintenance to achieve sustainable GHG
emission reduction from existing thermal power capacities. Methodology
of acquisition of state-of- the-art technologies and systems,
demonstration in local conditions and widespread dissemination in power
sector was adopted through technical assistance of USAID and USDoE.
A customized ‘Efficiency Management System’ has been developed and is
under implementation in NTPC plants for sustaining the efficiency
improvements.
Encouraged by the success of its efforts in GHG emission reduction, the
USAID extended its technical cooperation with CenPEEP for a period of
two years up to 2010.
SUSTAINABLE ENERGY DEVELOPMENT
Your Company has adopted the following vision statement on sustainable
energy development:
Going Higher on Generation, lowering GHG intensity
A multi-dimensional approach is proposed to be adopted covering
reduction of CO2 intensity through fuel portfolio management, adoption
of state-of-the-art technology and special thrust on renewable energy
sources; developing green building space within your Company’s
premises; spearheading awareness campaign nationally to orient people
at large to support and contribute to measures for sustainable energy
development; strengthening Government’s efforts for dissemination and
adoption of cleaner technologies by the stakeholders, engaging future
generation into the cause of promoting clean and green energy through
awareness programmes conducted in schools like tree plantation,
environment quizzes etc.
Your Company would allocate up to 0.5% of distributable profit annually
for undertaking/sponsoring research leading to sustainable energy
development.
RESEARCH & DEVELOPMENT
Your Company’s Research & Development Centre is ISO 17025 accredited
and provides high end scientific services to all the company’s stations
as well as many outside stations resulting in improving availability
and reliability of stations by providing condition assessment, failure
analysis, solving and analyzing specific problems, and helping our
stations in increasing the availability and reliability of their units.
R&D has filed 4 patent applications viz ANN based Expert system for
health assessment of high voltage transformers; Heat treatment
technique for determining constituents of wear particles in lubricating
oil and hydraulic fluids; ready- to-use Fly ash based product through
setting properties enhancement by using a dry plasticizer; Fly-ash
Based utensil cleaning powder.
R&D along with BARC has developed and installed real time monitoring of
creep fatigue life of high temperature pipings. The system
continuously indicates the life of components consumed and suggests
timely actions for inspection and repair.
ENERGY TECHNOLOGIES CENTRE
Your Company’s Energy Technologies Centre has started its research
activities in-house and through networking with established research
and academic institutes in India. As a step in this direction, Energy
Technologies Centre has earlier networked with 8 institutes for 12
research projects in areas like carbon capture, power plant efficiency
improvement, waste heat utilization, flue gas conditioning etc. Other
research projects would include development of Coal Gasification
Technology for commercial use, reducing cost of harnessing Solar
Energy, LED lighting etc.
Energy Technologies has entered into a MoU with BARC, Mumbai for the
Development of Automated Boiler Tube Inspection System for Coal Based
Thermal Power Plants. Another MoU was signed with Heavy Water Board,
Mumbai for the transfer of Ammonia Based Flue Gas Conditioning
technology to NTPC, on non-exclusive basis, for its use in NTPC power
stations.
ENVIRONMENT MANAGEMENT
Your Company is undertaking massive afforestation programme covering
vast areas of land in and around its projects and till date has planted
more than 18.37 million trees at its projects throughout the country.
The afforestation has not only contributed to the aesthetics but also
has been serving as a “sink” for the pollutants released from the
station and thereby protecting the quality of ecology and environment
in and around the projects. For hydro projects, Catchment Area
Treatment (CAT), Compensatory Afforestation, Rim Plantation etc. are
finalised and implemented in consultation with respective State
Governments.
All NTPC stations have been certified with ISO 14001 and OHSAS 18001 by
reputed National and International certifying agencies.
Your Company has adopted advanced and high efficiency technologies such
as super critical boilers for the up-coming Greenfield Projects. Your
Company has also designed plants for use of beneficiated coal and
imported low ash coal.
These measures will not only help in reducing pollution and minimizing
use of precious natural resources but also lead to reduction of CO2
emissions and thereby reducing global warming.
CLEAN DEVELOPMENT MECHANISM (CDM)
Your Company is a pioneer in the power sector in development of CDM
projects in India. The methodology developed by your Company for
supercritical power plants in respect of North Karanpura project has
been approved by “United Nations Frame Work Convention on Climate
Change (UNFCCC)” as “ACM 0013” which will be globally used for CDM
projects related to supercritical power plants. It is indeed a path
breaking effort in power sector.
Host country approval has already been accorded by national CDM
authority for three projects viz. North Karanpura STPP, Tapovan
Vishnugad HEPP & Loharinag Pala HEPP. More projects are in the pipeline
for posing for host country’s approval. These endeavors shall help in
getting/ earning “Certified Emission Reduction” and will facilitate
development of advanced energy efficient technologies.
ASH UTILISATION
During the year 2007-2008, about 23.7 million tonne of ash was utilized
accounting for 55.1% of total ash generation. Important area of ash
utilization were of Manufacturing Cement, Concrete, Ash based products,
Asbestos sheets etc., Construction of Road Embankment, Ash Dyke
Raising, Mine filling, and Land Development.
During the year, issue of fly ash to cement and concrete industry was
8.69 million tonne, 16.6% more than last year’s issue. All coal based
stations are having Pilot ash brick manufacturing plants.
Construction works at all expansion projects like Dadri-II,
Kahalgaon-II and Rihand-II including their townships are being done
with ash bricks only. Ash Bricks have also been used in green field
project at Sipat project.
MoU has been signed with Railway Design & Specification Organization
(RDSO) Lucknow to explore use of ash in Railway embankments. A number
of studies have been taken up to explore new areas of Ash utilization
in association with various research Institutes- such as Central Road
Research Institute (CRRI), New Delhi, Institute of Mineral and
Materials Technology (IMMT), Bhubaneshwar, National Institute for
Interdisciplinary Science & Technology (NIIST), Thiruvanthapuram etc.
for increased usage of ash in bricks and other building products.
Ash is also being exported to Middle East, Bangladesh & Nepal from our
stations located at Simhadri, Farakka and Unchahar respectively.
MANAGEMENT OF CHANGE-IMPLEMENTATION OF ERP
Your Company believes in keeping pace with latest technology and
acquiring the latest know-how, in line with its growth and
diversification plans. The company is in the process of completing
Enterprise Resource Planning (ERP) implementation, covering most of the
processes of the organization at all its locations. The ERP package has
been implemented at 28 locations of NTPC, its subsidiaries and is being
implemented at the balance locations. In addition to the core business
processes and Employee Self Service (ESS) functionality, ERP solution
also includes e- procurement, Knowledge Management, Business
Intelligence, Document Management, and Workflow etc.
The SAP Implementation in NTPC has been honored with SAP ACE award for
best implementation in Utilities.
LEVERAGING COMPANY’S CAPABILITIES FOR SECTOR REFORMS AND DEVELOPMENT
The Government of India reposes a lot of confidence on your Company’s
abilities in implementing plans and projects. This confidence has led
the Government of India to make your Company a partner in a number of
its initiatives. Some of the key initiatives are:
Rajiv Gandhi Grameen Vidhyutikaran Yojana (RGGVY)
Your Company has been entrusted by Government of India for rural
electrification work under Rajeev Gandhi Grameen Vidyutikaran Yojana in
6 States and one Union Territory (UT) covering approximately 40,000
villages. The work is in progress in 8 districts i.e. West Midnapore
(West Bengal), Ashok Nagar & Guna (Madhya Pradesh), Janjgir- Champa
(Chhattisgarh), Angul & Nayagrah (Orissa) and Deoghar & Jamtara
(Jharkhand) during the X plan. 22 more projects have been sanctioned
for XI plan period. The work is under progress in 9414 villages. Out of
these, 1253 villages have been charged/ made ready for charging.
Partnership in Excellence
In a mission to increase capacity addition and meet the objective of
Power for all by year 2012, Ministry of Power launched the Partnership
in Excellence (PIE) Programme to improve the under performing stations
in India. Under this programme, 13 stations with an operating capacity
of 5050 MW were entrusted to NTPC. Performance turnaround has taken
place at all the 13 power stations. The plants entrusted to NTPC
recorded an additional generation of 2859 MUs in the year 2007-08 from
the existing installed capacity which is equivalent to 440 MW of
additional capacity.
JOINT VENTURES AND SUBSIDIARIES
Your Company has formed a number of joint venture and subsidiary
companies for undertaking specific business activities. The names of
these companies and the percentage of your Company’s stake in these
Companies is as follows.
The name of Vaishali Power Generating Company Limited has been changed
to Kanti Bijlee Utpadan Nigam Limited on April 10, 2008.
The performance of these companies as well as the Consolidated
Financial Statements are briefly discussed in the Management Discussion
& Analysis section. The financial statements of subsidiary Companies
along with the respective Directors’ report are placed elsewhere in
this Annual Report.
STATUTORY AND OTHER INFORMATION REQUIREMENTS
Information required to be furnished as per the Companies Act, 1956,
Listing Agreement with Stock Exchanges, Government guidelines etc. is
annexed to this report as below:
Particulars Annexure
Management Discussion & Analysis I
Report on Corporate Governance II
Information on conservation of
energy, technology absorption and
foreign exchange earnings and outgo III
Information as per Companies
(Particulars of Employees) Rules, 1975 IV
Statement pursuant to Section 212 of
the Companies Act, 1956 relating to
subsidiary companies V
Statistical data of the grievances VI
Statistical information on persons
belonging to Scheduled Caste / Tribe
categories VII
Information on Physically Challenged
persons VIII
UNGC Communications on
progress 2007-08 IX
STATUTORY AUDITORS
The Statutory Auditors of your Company are appointed by the Comptroller
& Auditor General of India. M/s Varma & Varma, B.C. Jain & Co., Parakh
& Co., S.K. Mittal & Co., Dass Gupta & Associates and S.K. Mehta & Co.
were appointed as Joint Statutory Auditors for the financial year
2007-08.
MANAGEMENT COMMENTS ON STATUTORY AUDITORS’ REPORT
The Statutory Auditors of the Company have given an un- qualified
report on the accounts of the Company for the Financial Year 2007-2008.
REVIEW OF ACCOUNTS BY COMPTROLLER & AUDITOR GENERAL OF INDIA
As advised by the office of The Comptroller & Auditor General of India
(C&AG), the comments of C&AG and Management’s replies thereto on the
accounts for the year 2007-08 are being placed with the report of
Statutory Auditors of your Company elsewhere in this Annual Report.
COST AUDIT
The Cost Audit Reports for the year 2005-06 were submitted for the
first time to the Cost Audit Branch in August 2006. The cost audit for
the year 2007-08 has been completed and the Cost Audit reports are
scheduled to be submitted shortly.
BOARD OF DIRECTORS
Shri T. Sankaralingam ceased to be the Chairman & Managing Director of
the Company with effect from April 30, 2008 on superannuation. The
Board wishes to place on record its deep appreciation for the valuable
services rendered by Shri T. Sankaralingam during his association with
NTPC.
Shri R.S. Sharma, Director (Commercial), took over as the Chairman &
Managing Director with effect from May 1, 2008.
Shri V.P. Joy, Joint Secretary (Thermal), Ministry of Power joined the
Board of the Company with effect from 30.08.2007 in place of Shri
Harish Chandra who ceased to be a Director of the Company with effect
from 31.07.2007. The Board wishes to place on record its deep
appreciation for the valuable services rendered by Shri Harish Chandra
during his association with NTPC.
In accordance with the provisions of Article 41(iii) of the Articles of
Association of the company three directors - Dr. R.K. Pachauri, Prof.
Ashok Misra and Shri R.C. Shrivastav shall retire by rotation at the
Annual General Meeting of your Company and, being eligible, offer
themselves for re- appointment.
DIRECTORS’ RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act, 1956 your
Directors confirm that:
1. in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
2. the Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year 2007-08 and of the
profit of the company for that period;
3. the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities; and
4. the Directors had prepared the Annual Accounts on a going concern
basis.
ACKNOWLEDGEMENT
Your Directors acknowledge with deep sense of appreciation the
co-operation received from the Government of India, particularly the
Prime Minister’s Office, Ministry of Power, Ministry of Finance,
Ministry of Environment & Forests, Ministry of Coal, Ministry of
Petroleum & Natural Gas, Planning Commission, Department of Public
Enterprises, Central Electricity Authority, Central Electricity
Regulatory Commission, State Governments, Regional Electricity Boards
and State Electricity Boards.
Your directors also convey their gratitude to the shareholders, various
International and Indian Banks, Financial Institutions for the
confidence reposed by them in the company. The Board also appreciates
the contribution of contractors, vendors and consultants in the
implementation of various projects of the Company. We also acknowledge
the constructive suggestions received from Government and the Statutory
Auditors.
We wish to place on record our appreciation for the untiring efforts
and contributions made by the employees at all levels to ensure that
the company continues to grow and excel.
For and on behalf of Board of Directors
Place: New Delhi (R.S. Sharma)
Date : 9th July 2008 Chairman & Managing Director
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