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I am extremely grateful to all the employees SSTPS/NTPC who have
helped me in completing my training here. Their Guidance has
helped me in completing my training here and enabled me to gain
knowledge about the financial position of organization.

c
I shall forever remain indebted to my project guide, who given me
his valuable guidance & precious time. He had been a constant
source of inspiration all throughout my project work been able to
complete my project successfully.

I am also very thankful the officers of finance department who have

helped me in completing my project.

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 m 
I choose SSTPS as my Organization for study as it has number one
position in generation and a flagship stations of NTPC, a ͚Navaratna
Company͛

During the introductory phase when I was being introduce my guide

the whole personals and administrations department of NTPC/SSTPS,
I came to know much about financial positions only through ͚annual
reports of different year͛s of NTPC, & with help of journals.

I know much more under guidance of ͚finance manager͛. I decided

working capital management of organization as my subject. My work
is totally concerned with collecting the facts, figures and then
compiling them so as to know what is the working capital position of
organization (NTPC, SSTPS).
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S. No Subject

1 INTRODUCTION TO POWER SECTOR

2 BUSINESS OVERVIEW

3 MANAGEMENT OF NTPC
4 CORPORATE OBJECTIVE

5 FINANCIAL DEPARTMENT IN NTPC

6 OBJECTIVE'S OF RESEARCH
7 RESEARCH METHODOLOGY
8 WORKING CAPITAL MANAGEMENT IN
NTPC A PROSPECTIVE.
9 CASH MANAGEMENT IN NTPC
10 INVENTORY MANAGEMENT IN NTPC
11 MANAGEMENT OF ACCOUNT IN NTPC
12 LOAN & ADVANCES IN NTPC
13 CURRENT LIABILITES IN NTPC
14 LIMITATION
15 CONCLUSION
16 SUGGESTION

17 BIBLIOGRAPHY

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  
 
At the time of independence in 1947, India had a meagre power
generating capacity of 1,352 MW which has since increased to
155,859 MW as of November 30, 2009. After independence,
electricity was made subject to the concurrent jurisdiction of the
state and central governments; although Parliament was given the
ability to exercise pre-emptive power. The Electricity (Supply) Act,
1948 (the ͞ m͟) led to the creation of the SEBs. The SEBs is
state government agencies with the sole responsibility for
generation, transmission and distribution of electricity within each
state. Many of the SEBs have since been unbundled into state
utilities for generation, transmission and Distribution. As of
November 30, 2009, the SEBs and the state utilities own or control
approximately 50.3% of India's total generating capacity and have
substantial control of most of the distribution assets. The MoP is
primarily responsible for the development of the power industry in
the country.

The GoI has made a series of investments to develop the power

sector in India, to supplement the efforts of the states. In 1975, the
GoI created NTPC (known then as National Thermal Power
Corporation Ltd.) and NHPC Limited (͞ ͟) to establish thermal
and hydro generating plants andto install associated interregional
transmission systems. In the same year, the GoI established the CEA
in its present form to develop a uniform national power policy. Later,
NEEPCO, Satluj Jal Vidyut Nigam Limited ʹ SJVN (formerly Nathpa
Jhakri Power Corporation Limited - NJPC) and THDCLimited (formerly
known as Tehri Hydro Development Corporation Limited) (͞
 ͟)
were incorporated as hydro power generating companies in the
Central Sector. In 1992, the GoI established the central entity known
Today as the Power Grid Corporation of India Limited (" ") to
construct, operate and maintain inter-state and interregional
transmission systems. These entities are collectively referred to as
the Central Power Sector Utilities ("  ") and are directly
accountable to the MoP. The MoP also controls the Power Finance
Corporation Limited (͞ ͟) and Rural Electrification Corporation
Limited (͞  ͟), both of which are intended to help channel
investment into the power sector. PGCIL, NTPC and PFC promoted
India͛s first power trading company .PTC India Limited (͞
͟) in
1999, to allow surplus power supplies to be efficiently traded to
utilities with deficit power supplies.

To supplement public sector investment, the GoI took steps in 1991

to attract private investment to the power industry. The GoI
permitted 100% foreign ownership of power generating assets and
provided assured returns, a five-year tax holiday and low equity
requirements. Some private generators were also furnished with
counter-guarantees against non-payment of dues by SEBs.Through
successive Five Year Plans; the GoI implemented a major expansion
of generating assets. From 1982, when NTPC's first project was
commissioned, to November 2009, India's total installed capacity
increased from 35,781 MW to 155,859 MW, representing a
compound annual growth rate of 5.46%. In addition, captive
generation capacity at the end of Fiscal 2009 was approximately
19,509 MW. The transmission and distribution network has been
expanded so as to keep pace with the capacity expansion plans.

India has total power generation capacity of 155,859 MW as of

November 30, 2009. The power industry in India has been
characterized by energy shortages. In Fiscal 2009, there was a
shortage of 11.1% in terms of total energy requirements and 11.9%
in terms of peak demand requirements.
During the period of April 1, 2009 to November 30, 2009, the peak
demand deficit rose to 12.6% and energy shortages came down to
9.6%. The total energy shortage during this period was 86,001 million
units and India͛s peak demand deficit during the same period was
13,024 MW. The low per capita consumption of electric power in
India compared to the world average presents a significant potential
for sustainable growth in the demand for electric power in India.
Although power generation capacity has increased substantially in
recent years, it has not kept pace with the continued growth of the
Indian economy, despite very low per capita electricity consumption.
India has one of the lowest electricity consumption levels in the
world, at 704.2 units per capita in 2007-08, due in part to unreliable
supply and inadequate distribution networks.

To address the persistent shortages, the GoI has taken significant

action to restructure the industry, attract investment and plan for
fast track capacity addition through incentivised policy initiatives.
These included measures such as restructuring the SEBs to improve
their financial condition, and regulatory and policy intervention such
as the Electricity Act, the National Electricity Policy 2005, the Tariff
Policy 2006, Tariff Based Bidding Guidelines 2005 and the National
Hydro Policy 2008, among others. The GoI has also liberalised
policies relating to the transmission and distribution sectors.

 
 INTRODUCTION TO NTPC

NATIONAL THERMAL POWER CORPORAION LTDG

The year 1975 witnessed the birth of an

organization that went on to achieve great feats
in performance in a sector that was, until then, characterized largely
by lack of investment, severe supply shortage and operational
practices that made the commercial viability of the sector
unsustainable. On November 7 1975, NTPC came into being and
with it came a bold way of looking at the power infrastructure that
could support the economy, then reeling under the oil crisis. Since
then, NTPC has led the power sector with the creation of an
immensely efficient and reliable power generation infrastructure
which was till then largely in the hands of state electricity boards.
NTPC was set up in the central sector to build, own and operate large
thermal power stations which unit size of 200 MW and 500MW.
Capacity addition by NTPC was meant to supplement the efforts of
state electricity boards (SEBs). The first four projects, namely,
singrauli, Korba, Ramagundam, Farakka, in four different regions of
the country, were already on the drawing board and were to be set
up as pit-head stations. There were challenges aplenty. The
expectations were high and so were the risks. NTPC symbolized
hope of the country suffering from crippling power black-outs, the
government of India, which was trying to put an ailing, economy
back on track and the World Bank, which was supporting the country
in many development initiatives. Thus, NTPC was created not only to
redraw the power map of India but also to excel in its performance
and set benchmarks for others to follow. It succeeded on both
counts. In 1978 it was a clean state. Until the first sketches of an idea
were scribbled on it. And them, in no time, it seems, what was a
dream became a reality ʹpower. Today, Singrauli stands tall among
India͛s foremost power plants. Cleared by the Government of India
on 8th Dec.76, the project began to take shape in early͛78. An
intrepid group of site engineers, supervisors and workmen braved
the elements to lay the foundations of what at the time was thought
to be a dream.

By mid 1978, the first T.G raft connecting, a very precise and
massive task was completed. By Nov. 78, the erection of the first
steam generator had commissioned. In Nov.͛79, the first major mile-
stone in the erection of the main plant was reached with the boiler
drum of unit ʹ I being lifted successfully, signaling the
commencement of pressure parts erections. By June͛80 the turbine
installation work had already begun, and in Sept.͛81, the boiler was
lit up and the cleaning process completed by Oct.͛81.
Finally on 13th Feb.͛1982 the turbine was steam rolled and the first
unit of NTPC was successfully synchronized with the Northern Grid at
Shaktinagar. The peak load of 200MW was touched in April͛82. The
fifth and last one on 20th Feb.͛84, bringing the curtain down on stage
ʹI of the project. National Thermal Power Corporation is the largest
power generation company in India. The Forbes Global 2000 ranking
for 2005 ranks it as the 5th leading company in India and the 486th
leading company in the world. It is a public listed (Bombay Stock
Exchange) Indian public sector company, with majority shares owned
by the Government of India. India. At present, Government of India
holds 89.5% of the total equity shares of the company and the
balance 10.5% is held by FIIs, Domestic Banks, Public and others.
NTPC ranks amongst the top five companies, in terms of market
capitalizations.NTPC's core business is engineering, construction and
operation of power generating plants and also providing consultancy
to power utilities in India and abroad. As on date the installed
capacity of NTPC is 26, 404 MW through its 14 coal based (21,395
MW), 7 gas based (3,955 MW) and 4 Joint Venture Projects (1,054
MW).

NTPC͛s share on 31 Mar 2007 in the total installed capacity of the

country was 19.51% and it contributed 27.68% of the total power
generation of the country during 2007-08. Thus, every fourth home
in India is enlightened by NTPC. A total of 170.88 BUs of electricity
was produced across all the stations of the company in the financial
year 2005-2006.

The Net Profit after Tax on March 31, 2008 was INR 58, 202 million.
Net Profit after Tax for the quarter ended June 30, 2006 was INR
15528 million, which is 18.65% more than the same quarter in the
previous financial year (2006-2007) where the profit was INR 13087
million. Pursuant to special resolution passed by the Shareholders at
the Company͛s Annual General Meeting held on September 23, 2005
and the approval of the Central Government under section 21 of the
Companies Act, 1956, the name of the Company "National Thermal
Power Corporation Limited" has been changed to "NTPC Limited"
with effect from October 28, 2005.

The company, which has completed its thirty years of existence on

November 7, 2008, has made its foray into hydro-power and is
planning to go into nuclear too). Within a span of 31 years, NTPC has
emerged as a truly national power company, with power generating
facilities in all the major regions of the country. Based on 1998 data,
carried out by Data monitor UK, NTPC is the 6th largest in terms of
thermal power generation and the second most efficient in terms of
capacity utilization amongst the thermal utilities in the world

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1.c NTPC Vidyut Vyapar Nigam Limited has been incorporated as a

wholly owned subsidiary of NTPC to tap the vast potential of

Power Trading for optimization of capacity utilization.

2.c NTPC Hydro Limited has been incorporated as a wholly owned

subsidiary of NTPC for development of small and medium scale

hydro power projects.

3.c NTPC Electric Supply Company Limited has been incorporated

as a wholly owned subsidiary of NTPC for taking up power

distribution activities.

4.c Pipavav Power Development Co. Ltd. has been incorporated

under Presidential Directive to acquire land and other site-

related development activities to set up 2000 MW Pipavav

Mega Power Project in the state of Gujarat.


*  

1.c Utility Powertech Limited a 50:50 Joint Venture Company of

NTPC and Reliance Energy Limited has been incorporated to

take up assignments of construction, erection and supervision

in power sector and other sectors in India and abroad.

2.c NTPC-Alstom Power Services Private Limited a 50:50 Joint

Venture Company of NTPC and Alstom Power Generation AG,

Germany has been incorporated for taking up renovation and

modernization assignments of power paints both in India and

abroad.

3.c NPTC India Ltd., in which NTPC holds 8% equity, is engaged in

the business of purchasing power from power projects and

selling the same to SEBS requiring power.

4.c NTPC-SAIL Power Company Private Limited ʹ a 50:50 Joint

Venture of NTPC and SAIL is operating and maintaining the

Captive Power Plants (CPP-II) of Durgapur and Rourkela Steel

Plants (120 MW each).

 5.c Bhilai Electricity Supply Company Private Limited ʹ another

50:50 Joint Venture company of NTPC and SAIL is operating and

maintaining the CPP-II (74 MW) of Bhilai Steel Plant. The

company is also setting up 2 x 500 MW units as expansion of

the CPP.

6.c NTPC Tamil Nadu Energy Company Limited ʹ a 50:50 Joint

Venture company of NTPC and Tamil Nadu Electricity Board has

been incorporated to establish and operate a 1000 MW

thermal power project in Tamil Nadu.

7.c vii) Ratnagiri Gas and Power Private Limited a Joint Venture

Company which has taken over the assets of Dabhol Power

Project from India Lenders. Currently, each of NTPC, GaAIL and

Financial Institutions are holding 28.33% equity share capital of

the Company and MSEB is holding balance 15%.


!"


Badarpur Thermal Power Station (with a total installed capacity of

705 MW) is being managed by NTPC on behalf of the GoI since April
1978. BTPS supplies its entire generation to Delhi. The station
generated 5463 MUs during 2004-05.
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Î  #$$!
We are the largest power generating company in India. As of
September 30, 2009, our owned installed power generating capacity
is approximately 18.6% of India's total installed capacity. In
Fiscal 2009, we contributed 28.6% of the total power generation of
India. (x
 ). In 2009, we were the top IPP in Asia, and ranked
second in the world, on the basis of asset worth, revenues,
Profits and return on invested capital, according to a study
conducted by Platts, a division of the McGraw-Hill Companies. Prior
to this Offer, the GoI owns approximately 89.5% of our Equity Share
Capital. As of September 30, 2009, our total installed power
generation capacity was 30,644 MW, including 28,350 MW of
generation capacity through 112 units owned by us and 2,294 MW of
capacity through two joint venture companies. Of our owned
capacity, 86.0% is coal-based, operated through 15 coal based power
stations, and 14.0% is gas-based, and operated through seven gas-
based power stations (including one naphtha-fired station). In Fiscal
2009, we generated 206.9 billion units of electricity through our
owned stations.
We operate our stations at a level of efficiency that exceeds the
average in India, based upon availability factor (which is a measure
of how often a station is available to generate power) and average
plant load factor (͞͟) (which is a measure of how much of its
capacity a plant actually uses to generate electricity). In Fiscal 2009,
our coal-based stations operated at an average availability factor of
92.5%, and they achieved an average PLF of 91.1%, compared to the
all-India average PLF for coal-based stations of 77.2%. In Fiscal 2009,
of our 15 coal-based power stations, four operated at a PLF of
greater than 95.0% and one operated at a PLF of 99.4%. In Fiscal
2009, our gas-based stations operated at an average availability of
86.7% and an average PLF of 67.0%, compared to the all-India
average PLF for gas-based stations of 57.6%. PLF of our gas-based
stations has improved to 78.4% in the first half of Fiscal 2010 due to
increased gas availability. Our average selling price of electricity was
Rs. 2.12 per unit in Fiscal 2009. We have developed a long term
technology roadmap for the induction of high efficiency equipment,
Including supercritical and ultra-supercritical machines at our new
plants. We also intend to use other advanced technologies in the
renovation and modernisation of our aging power stations. We
believethat these technologies will help us to achieve higher
efficiency and availability. As of September 30, 2009, we have added
3,240 MW during the Eleventh Plan, and we are presently engaged in
construction activities for projects representing 17,930 MW
(including 4,000 MW undertaken by our joint venture companies).
We are also pursuing a basket of projects for approximately 33,000
MW of capacity which are in various stages, including projects for
which tender has been invited, a FR prepared, or a FR is under
preparation and approval, in order to achieve our stated goal of
75,000 MW capacity by Fiscal 2017. We take up new projects upon
establishing the availability of inputs such as land, water, fuel, off-
take arrangements and environmental clearances. We have begun to
progressively diversify our fuel mix. We are currently constructing
hydroelectric power projects. As of September 30, 2009, 1,920 MW
of capacity is under construction and 552 MW is under bidding. We
are also preparing FRs and detailed project reports for hydroelectric
power projects to achieve hydroelectric capacity of approximately
9,000 MW by Fiscal 2017. We are also seeking other renewable
energy projects, such as wind and solar, to have 1,000 MW of our
generating capacity from other renewable sources by Fiscal 2017.
Currently, all of our total sales of electricity are made pursuant to
long term PPAs. More than 90% of our sales of electricity are to SEBs
and state owned distribution companies for which payments are
Secured through LCs and the Tripartite Agreements (͞

m"͟). For private distribution company customers,
payments are secured through letters of credit backed by a first
Charge created on their receivables in our favour. In order to
capitalize on the opportunity from the sale of merchant power, we
are implementing 2,120 MW of power projects, as merchant power
plants for selling power outside long-term PPAs at a market-based
price. As provided by the National Electricity Policy, 2005, up to 15%
of new generating capacity may be sold outside long-term PPAs.
However, some of the power generation from our merchant capacity
may also be sold under PPAs. As of September 30, 2009, we have
signed long term CSAs covering 12 of our 15 coal-based stations.
We have also executed gas supply agreements with GAIL for the
supply of gas for our gas-based power stations, which are valid up to
2021. We are also continuing to diversify our business to become an
integrated power company. In order to secure our fuel supply, we
have diversified into coal mining. We have been awarded eight coals
Mining blocks by the GoI, including two blocks awarded for
development under a joint venture with Coal India Limited. In 2002
we incorporated our power trading subsidiary, NVVN, which has
grown to become the second largest power trader in India. In order
to incentivize the development of solar power in India, the GoI has
designated NVVN as the nodal agency for the purchase of up to
1,000 MW of solar power commissioned by Fiscal 2013 under the
National Solar Mission and sale after bundling an equivalent MW
capacity from our stations. We have developed a consulting business
to leverage our technical and operational skills and knowledge base,
domestically and internationally. Total revenues from our consulting
business has increased to Rs. 1,325 million in Fiscal 2009 from Rs.
341 million in Fiscal 2004. Through our consulting business we are
currently supporting capacity addition, operation and maintenance,
Renovation and modernisation and performance improvement of
approximately 26,000 MW of generating capacity in India. The other
businesses we are developing include equipment manufacturing, to
ensure supply of critical equipment and spare parts, and an
electricity distribution business. In line with the increase in our
supply and generation capabilities over the last two years, we have
achieved significant growth in our gross income and profit after tax.
Our gross revenue increased to Rs. 452,728 million in Fiscal 2009
from Rs. 400,177 million in Fiscal 2008. Our profit after tax was Rs.
82,013 million in Fiscal 2009 and Rs. 74,148 million in Fiscal 2008.

Demand OF POWER
Demand for energy grows in tandem with the growth of the
economy. This can be seen from the following table, which shows
the growth in real GDP from Fiscal 2003 through Fiscal 2009 and the
growth in demand for energy in the same period.
Real GDP Growth and Growth in Demand for Energy
Fiscal Year Real GDP growth Growth in Demand for Energy
2003 3.8% 4.5%
2004 8.5% 2.4%
2005 7.5% 5.7%
2006 9.5% 6.8%
2007 9.7% 9.3%
2008 9.0% 7.1%
2009 6.7% 4.7%
Future Electric Energy Requirements
Fiscal Year Electrical Energy Requirement at Annual Peak
Power Station Bus Bars (GHz) Electric Load at
Power Station
) Bus Bars

2012 968,659 152,746

2017 1,392,066 218,209
2022 1,914,508 298,253

mm 
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At India͛s current projected GDP growth rate of between seven and
eight percent, power demand is expected to grow significantly. We
expect that a large energy deficit will exist as has occurred in the
past. We have embarked on an aggressive capacity addition
program, in line with the GoI͛s policy of adding capacity to meet the
demands for energy in India. We have a stated goal to be a 75,000
MW company by Fiscal 2017. We have also begun to progressively
diversify our fuel mix. We are planning a capacity addition of
approximately 9,000 MW through hydroelectric power, 2,000 MW
Through nuclear power and1, 000 MW through renewable energy
resources by 2017. We have adopted a multi-pronged strategy that
includes capacity addition through green field projects, brown field
expansions, joint ventures and acquisitions. We first identify new
potential sites or existing sites that could potentially be expanded.
We then seek to establish project viability through FRS.

We currently have 17,930 MW of additional capacity under

construction. We have also identified a basket of projects for
approximately 33,000 MW of capacity in various stages, through
which webelieve we can achieve our stated goal of 75,000 MW
capacity by Fiscal 2017. We classify o ur basket of projects for
capacity in the following categories:
ë Projects under construction
ë Projects for which we have invited bids from vendors
ë Projects for which the FR s are approved
ë Projects for which FRs are under preparation.
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We are presently engaged in construction activities for projects
representing 17,930 MW, including 4,000 MW undertaken by joint
venture companies, which are in different stages of completion:

&#!

Name State Cap (MW) Approved Cost (Rs. In Mill)
Fuel Typ
Sipat -I* Chhattisgarh 1,980 83,234 Coal
Barh ʹI* Bihar 1,980 86,930 Coal
Korba- III Chhattisgarh 500 24,485 Coal
NCTPP- II Dadri UP 980 51,353 Coal
Farakka-III W.B. 500 25,704 Coal
Simhadri-II A.P. 1,000 50,385 Coal
Bongaigaon Assam 750 43,754 Coal
Barh-II* Bihar 1,320 73,410 Coal
Mauda-I Maharashtra 1,000 54,593 Coal
Rihand-III U.P. 1,000 62,308 Coal
Vindhyachal-IV M.P. 1,000 59,150 Coal
Kol Dam H.P. 800 45,272 Hydro
Loharinag Pala Uttarakhand 600 28,951 Hydro
Tapovan Vishnugad Uttarakhand 520 29,785 Hydro
#!'m(13,930 719,314

*Indicates projects using super-critical technology

#Unit I (490 MW) of this project commenced commercial operation
w.e.f. January 31, 2010


&#&$
)&  

Vallur ʹ I, Phase ʹ I, JV with TNEB Tamil Nadu 1,000 Coal
Vallur ʹ I, Phase ʹ II, JV with TNEB Tamil Nadu 500 Coal
Indira Gandhi STPP Haryana 1,500 Coal
Nabinagar, JV with Railways Bihar 1,000 Coal
#&$'Î(4,000

#!&$'m*Î(17,930

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Solapur Maharashtra 1,320 Coal
Mauda II Maharashtra 1,320 Coal
North Karanpura Jharkhand 1,980 Coal
Singrauli III Uttar Pradesh 500 Coal
Rupsiyabagar Khasiabara Uttarakhand 261 Hydro
Renewable Energy Various Locations 100 Wind
Subtotal-owned capacity (A) A


&)!++!+$$)$#&
$
)&' ()
Meja Urja Nigam Pvt. Ltd. Uttar Pradesh 1,320 Coal
Nabinagar Power Generating Co Pvt. Ltd. Bihar 1,980 Coal
Kanti Bijlee Utpadan Nigam Limited Bihar 390 Coal
Lata Tapovan Uttarakhand 171 Hydro
Rammam-III West Bengal 120 Hydro
Subtotal-joint ventures and subsidiaries (B) 3,981

#!&$

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ë Multi pronged approach to 1982- 200mw
Capacity addition
ë Greenfield projects 1987- 3100mw
ë Brownfield expansion
ë Joint ventures / 1992- 11333mw
Acquisitions
ë Diversification in related 1997- 16795mw
business areas
ë Hydro projects 2002- 20249mw
ë Coal Mining
ë Power trading 2006- 2500mw
ë Oil / gas exploration
ë LNG value chain 2007- 28890mw
ë Consultancy services
2012- 40000mw

2017- 75000mw

ENERGY TECHNOLOGIES
NTPC has set up Energy Technologies Centre with a well-defined
mandate to develop and innovate cutting edge technologies to meet
the ever-changing scenario in power sector. The centre is working in
both fundamental and applied fields with the ultimate objective of
commercializing the technologies both within and outside. Setting up
of this centre by NTPC meets a long-term need of such a centre in
the power sector in India. Energy Technologies has already started its
research activities in-house and through networking with established
research institutes in India.
ENVIRONMENT MANAGEMENT
ë All NTPC stations have been certified with ISO-14001 by reputed
International certifying agencies.
ë NTPC has planted a total of more than 18.2 Million trees till
March-07 including more than 0.28 million trees planted during the
current year 2006-07
c
c

c  c
we are required to ensure that by 2014, 100% of fly ash produced
through our generation activities is gainfully utilised. New stations
and units must utilize the entire quantity of ash they produced in
four years from the date of commissioning. The GoI also has interim
ash utilisation requirements. Our actual ash utilisation has increased
from 0.3 million tonnes in Fiscal 1992 to 24.4 million tonnes in Fiscal
2009 (or 56.7% of our total ash production) which is more than the
present ash utilization targets. We utilize ash for ash dyke rising,
mine filling, bricks/blocks/tiles manufacturing and landfills.c
At present, we supply ash free of cost to consumers of ash, who use
it in cement and asbestos industry, building products, land
development and road construction. In order to provide fly ash in dry
form to various users, dry ash extraction facilities have been
provided at all our stations. Recently, the GoI has allowed sale of fly
ash to certain users such as cement and asbestos industries, etc.
However, the proceeds from the sale of fly ash are to be utilized only
for development of infrastructure and promotional activities for ash
utilisation. The GoI has given directions to mining companies and the
Construction industry for mandatory use of ash. We believe that
these directions may further increase ash utilisation
CORPORATE SOCIAL RESPONSIBILITY (CSR)
We follow the global practice of addressing Corporate Social
Responsibility (CSR) issues in an integrated multi stake-holder
Approach covering the environment and social aspects. We have
joined Global Compact, a United Nations initiative for corporate
social responsibility committed to basic principles in the areas of
human rights, labour standards, the environment and anti-
corruption, and we submit Communication on Progress (͞ ͟) to
UN Global Compact on an annual basis. In line with our CSR ʹ
Community Development (CSR ʹ CD) Policy, we have taken up
various activities addressing the socio-economic issues at the
national level as well as in the neighbourhood area of operating
stations. We currently work in the areas of Primary Education,
Community Health, Basic Infrastructure Development and Vocational
Training. We also facilitate distributed generation, which involves the
use of non-conventional energy sources to provide electricity to
remote and rural areas. We have also set up NTPC Foundation to
help the physically challenged and other marginalized communities.
This foundation has set up information and communication
technology centres for the visually challenged, provided
management services to a rehabilitation centre, and is running
observable treatment centres for tuberculosis patients.
c
SAFETY
Looking into the necessity and to ensure the best health and safety
performance and the accident free environment, all NTPC Projects/
Stations have obtained the OHSAS ʹ 18001 (Occupational Health &
Safety Management Systems) certification. NTPC Ramagundam,
Dadri, Kahalgaon and Korba station have won the first ͞Safety
Innovation Award 2006͟ for implementing innovative, Safety and
Quality Procedures and Practices. The award is instituted by the
Safety and quality forum of Institution of Engineers (India). The
award has been conferred to Ramagundam for second year in
succession.
HUMAN RESOURCE MANAGEMENT
Our success depends to a great extent on our ability to recruit, train
and retain high quality professionals. We believe that our strong
brand name, industry leadership position, wide range of growth
opportunities and focus on long-term professional development give
us significant advantages in attracting and retaining highly skilled
employees. We follow a ͞people first͟ approach to leverage
the potential of our employees. In 2009, we were ranked as one of
the top 10 Best Companies to work for by the Great Place to Work
and Economic Times survey. We have 24,979 employees as of
September 30, 2009, including employees in our subsidiaries and
joint ventures. We encourage our employees to develop
management and technology skills through internal training
programmes, industry affiliations and external programmes. For
continuous honing of these skills we maintain development and
assessment centres, comprehensive feedback mechanisms and a
number of other learning initiatives including e-learning. As a part of
our commitment to training, we have set up the Power Management
Institute (PMI), which is a training centre for our middle and senior
level management personnel.
c
c
TRAINING AND DEVELOPMENT
The Power Management Institute (PMI), NTPC͛s apex Training and
Development Centre conducted 325 training programmes, the
number of participants trained both internal and external was 8689.
In its effort to go global PMI has organised an international seminar
on ͞Developing Global Business Competencies͟ at Manchester
Business School, UK. In its effort to provide training support to
NTPC͛s customers, PMI has hosted 15 nos. Distribution Reforms and
Upgrades Management Programmes which were attended by 263
SEB participants.

c
EMPLOYEE RELATIONS
Industrial Relations in NTPC continued to be cordial and harmonious
during the year. Workshops for employee representatives from
projects were held, at the apex as well as regional level, to sensitize
them of the opportunities, threats and challenges facing the
company in the dynamics of an uncertain business environment and
to reiterate their significant role in synergizing the potential of the
human resource ʹ the sole differentiating factor of competitive
advantage in today͛s knowledge economy.

c
OPERATIONAL PERFORMANCE c
In Fiscal 2009, we generated 206.9 billion units of electricity, 183.3
billion units or 88.6%, through our coal-based stations and 23.6
billion units or 11.4% through our gas-based stations. The operating
efficiency of our power stations has improved over the years. The
availability factor of our coal-based stations has increased from
86.5% in Fiscal 1994 to 92.5% in Fiscal 2009. The availability factor of
our gas-based stations has increased from 60.2% in Fiscal 1994 to
86.7% in Fiscal 2009. The average PLF of our coal-based stations, has
increased from 78.1% in Fiscal 1994 to 91.1% in Fiscal 2009. In Fiscal
2009, the average PLF for coal-based power stations in India was
77.2%. The average PLF of our gas-based stations has increased from
50.3% in Fiscal 1994 to 67.0% in Fiscal 2009. In Fiscal 2009, the
average PLF for gas-based power stations in India was 57.6%.
The following table presents certain company-wide operating data
for the last five Fiscal years:
Fiscal Year 2009 2008 2007 2006 2005
Installed Capacity (MW) 27,850 27,350 26,350 23,935 23,435
Generation (Billion Units) 206.9 200.9 188.7 170.9 159.1
Sales (Billion Units) 193.7 188.0 176.5 159.0 147.8
Average availability (%)
Coal-fired: 92.5 92.1 90.1 89.9 91.2
Gas-fired: 86.7 85.9 85.1 82.2 82.4
Average PLF (%)
Coal-fired: 91.1 92.2 89.4 87.5 87.5
Gas-fired: 67.0 68.1 71.9 65.8 65.4

? Includes generation during pre-commissioning phase.



ÿ
 
  

??Provisional and unaudited Profit after tax for the year 2006-07 is
Rs. 67,264 million as compared to Rs.58, 202 million during the year
2005-06, an increase of 15.57%.

??Provisional and unaudited Net Sales of Rs 306,387 million during

2006-07 as against Rs. 261,429 million registering an increase of
17.20%. The provisional unaudited gross revenue is Rs. 332,997
million, during 2006-07 as against Rs 287,530 million for the year
2005-06, an increase of 15.81%.

??Highest interim dividend @ 24% amounting to Rs. 19789 million

during the year.

??Highest ever capital expenditure of Rs. 78206 Million during 2006-

07.

??High Investor Confidence: Standard and Poor͛s Ratings Services

raised the Corporate Credit Rating of NTPC to ͚Investment Grade͛ on
the basis of its stand alone credit profile and dominant market share.

??Latest Market Capitalization of the company is Rs 1327 billion (US

$ 30.75 billion) making it the fourth largest company.

??100 % realization of the billing for the fourth year in succession

???Loan agreement of US $ 300 million (approximately Rs 13.15

billion) with ADB - first loan syndication deal for an Indian Corporate
under the Asian Development Bank͛s Complementary Finance
Scheme for Sipat and Kahalgaon Stage II.
??Loan agreement of US $ 100 million (approximately Rs 4.4 billion)
signed with KfW to part finance the expenditure on Renovation and
Modernisation of NTPC Power plants.

??Term-loan of Rs. 20 billion disbursed by LIC in addition to Bonds of

Rs. 15 billion placed with them to finance the capital expenditure of
on-going projects.

??Term loan of Rs. 15 billion signed with SBI in addition to term loan
of Rs. 13 billion signed with various other banks to part finance on-
going capacity addition programmes.

???In the process of concluding financial tie-ups for about US $ 1.5

billion with international banks and multilateral institutions.

The approved outlay for 2007-08 for capital schemes of NTPC is Rs.
127920 million.

REALIZATION OF DEBT
ë The realization of monthly bills from April, 2006 to March, 2007
was 100%. All the customers have opened and are maintaining LC
equal to 105% of average monthly billing as per One ʹ Time
Settlement Scheme and are making full payment of current bill.

The One Time Settlement (͞

͟) addressed these problems.
Tripartite agreements (͞
m"͟) were signed under
which the past dues from the SEBs were securitised by the issue of
8.5% Tax Free State Government special bonds issued under the
OTSS (the ͞
,Î͟) (maturing in various stages, from
October 1, 2006 until April 1, 2016). In addition, the Tripartite
Agreements have improved the situation by requiring the SEBs to
establish letters of credit (LCs) to cover 105% of current payments. In
addition to the Tripartite Agreements, beyond 2016, our sales are
secured through supplementary agreements with our customers
under which the customers have agreed to create a charge over
their own receivables in our favour and in the event of a payment
default, assign their receivables into an escrow account. If
receivables of these customers are not received into such escrow
accounts for any reason whatsoever or if the security over such
receivables is flawed, our payment would not be secured. Any
change that adversely affects our ability to recover our dues will
adversely affect our financial position as we do not have a diverse
customer base. In Fiscal 2008, the SEBs had incurred losses of
approximately Rs. 340,950 million. In addition, there have also been
instances of state governments promising free power to certain
sections of society, such as farmers. The adoption of such policies by
state governments would adversely affect the financial health of the
SEBs, which would in turn adversely affect their ability to make
payments to us.

  m
Î*
  

c 
ccc
c
c
cc
c cc  c cc !"#c
c
cTo realize the vision and mission, eight key corporate objectives
have been identified. These objectives would provide the link
between the defined mission and the functional strategies.

; Business portfolio growth:

ë To further consolidate NTPC͛s position as the leading thermal

power generation company in India and establish a presence in
hydro power segment.
ë To broad base the generation mix by evaluating conventional
and non-conventional source of energy to endure long run
competitiveness and mitigate fuel risks.
ë To diversify across the power value chain India by considering
backward and forward integration into areas such as power trading,
transmission, distribution, coal mining, coal beneficiation, etc.
ë To develop a portfolio of generation assets in international
markets.
ë To establish a strong services brand in the domestic and
international markets.

; Customer Focus:
ë To foster a collaborative style of working with costumers,
growing to be a preferred brand for supply of quality power.

ë To expand the relationship with existing customers by offering a

bouquet of services in addition to supply of power
e.g. trading, energy consulting, distribution consulting, management
practices.
ë To expend the future customer portfolio through profitable
diversification into downstream business, inter alia retail distribution
and direct supply.
ë To ensure rapid commercial decision making, using customer
specific information, with adequate concern for the interests of the
customer.

; Agile Corporation:

ë To ensure effectiveness in business decisions and

responsiveness to
changes in the business environment by:
Adopting a portfolio approach to new business development.
Continuous and co-ordinate assessment of the business
environment to identify and respond to opportunities and threats.
ë To develop a learning organization having knowledge based
competitive edge in current and future businesses.
ë To effectively leverage Information Technology to ensure
speedy decision making across the organization.

; Performance Leadership:
ë To continuously improve on project execution time and cost in
order to sustain long run competitiveness in generation.
ë To operate& maintain NTPC stations at par with the best- run
utilities in the world with respect to availability, reliability,
efficiency, productivity and costs.
ë To effectively leverage information Technology to drive process
efficiencies.
ë To aim for performance excellence in the diversification
businesses.
ë To embed quality in all systems and processes.

; Human Resource Development:

ë To enhance organizational performance by institutionalizing an
objective and open performance management system.
ë To align individual and organizational needs and develop
business leaders by implementing a career development system.
ë To enhance commitment of employee by recognizing and
rewarding high performance.
ë To build and sustain learning organization of competent world
class professionals.
ë To institutionalize core values and create a culture of team-
building, empowerment, equity, innovation and openness which
would motivate employees and enable achievement of strategic
objectives.
; Financial Soundness:

ë To maintain and improve the financial soundness of NTPC by

prudent management of the financial resources.
ë To continuously strive to reduce the cost of capital through
prudent management of deployed funds, leveraging opportunities in
domestic and international financial markets.
ë To develop appropriate commercial policies and processes this
would ensure remunerative tariffs and minimize receivables.
ë To continuously strive for reduction in cost of power generation
by improving operating practices.

; Sustainable Power Development:

ë To contribute to sustainable power development by discharging

corporate social responsibilities.
ë To lead the sector in the areas of resettlement and
rehabilitation and environment protection including effective ash-
utilization, peripheral development and energy conservation
practice.
ë To lead developmental efforts in the Indian power sector
through efforts at policy advocacy, assisting customers in reform,
disseminating best practices in the operations and management of
power plants etc.

?c Research and Development:

ë To pioneer the adoption of reliable, efficient and cost- effective

technologies by carrying out fundamental and applied research in
alternate fuels and technologies.
ë To carry out research and development of breakthrough
techniques in power plant construction and operation that can lead
to more efficient, reliable and environment friendly operation of
power plants in the country
FINANCIAL DEPARTMENT IN NTPC
NTPC is also having their own separate financial department and FAS
(Online Integrated Material and Financial Accounting System). This
department does all the function which is related to the finance or
fund of the company. It use a specific language in the computer for
manage zing all the work or communicating with other department
and this language is ingress.
There are various section are working in the NTPC for managing all
the work in better way this section are divided according to the
nature of work . It is organized into following ways:-

1 Books and Budget section

2 Works and Bills section
3 Store, Bills and PSL (Price Store Ledger) Section
4 Commercial Section
5 Weighting and Concurrences
6 Cash And Bank
7 Establishments
8 Miscellaneous

For doing all this accounting method this section are use FAS method
(Online integrated material & financial Accounting System) and
ingress language in the computers.
Second (Budget) this section prepare budget for all department and
before making the budget first it collect all the expected or
estimated expenditure from each department and then prepare
a perfect budget and it send to their head office or corporate section
for final approval.

In NTPC straight line method are using for calculating the

deprecation on the machinery and finding out net value of the
machinery or for other assets. Deprecation means decrease in the
value of the assets due to wear and tear of assets year to year. And
straight line method are refers to the method in which we use same
amount or a fixed amount for the deprecation for each year. It
calculates with the help of this formula:-
total Value of the assets
ë Amount of Deprecation = ---------------------------------
Estimated life of the assets (in years)

It also done fixed assets registration

I. Works Bill Section

Works Bills section is another section of the NTPC and this work are
manage by or done by O&M Department (Operation &
maintenances). There are many Contractors doing the works under
the contract with NTPC like Building contraction, Road construction,
etc.( This is necessary that all the contract are under the contract act
other vice it become void contract in the eye of law).This section are
responsible to making the payment to all contractors for this they
pass bills before making detail study on it and then make the
payments according to the work of the contractors.
The works which are under the contraction are coming under the
Capital Work-in-progress and when it finished it come under the
goods. This is a way to calculating Capitalization in the company. It is
also liable to pay the interest and Incidentals cost to works.

II. Store Bills and PSL (Price Store Ledger) Section:-

The function of this sector is making all the payment of purchase; it

means payment for raw material, for plants & machinery, Etc. It also
makes the payment for Insurance, Premium, Govt. theme and the
charges of transportation. In Price Store Ledger (PSL) this sector
doing valuation of inventory and it maintain every months. It using
following method for calculating valuation of inventory:-
ë Opening balance of inventory
+ Store Receive Voucher (SRV)
+ Material Return Notes (MRN)
- Store Issue voucher (SIV)
- Material Transfer Notes (MTN)
= Closing balance
In Store Receive Voucher (SRV) this section using invoice pricing
method for determining the actual price of inventory and using
Weight average method for find out actual value of the material,
after that it compare given value of inventory for other department
books where they issue inventory.
And Price Store ledger (PSL) is using other method and this method is
as follow:-
ë FIFO (first in first out method)
ë LIFI (last in first out method)

After doing all the method and finding out the actual value of the
inventory then at last they doing stock verification.

III. Commercial Section

All the works of this section are related with account section and the
work which are done by this section are as follow:-
ë To maintain the account for coal and fuel and making its
payment to supplier of this material.
ë To maintain the adequate level of the material in stock for
continuous manufacturing process without any hurdle due to
shortage of material in the stock.
ë To apply FPVAM fuel price variance adjustment method for
determining the adequate level of required fuel and coal for power
generation making payment for it. In simple way it a method to
clarify the value of coal and fuel in plant.
IV. Weighting and Concurrences
It refers to the group of managers or a department who are
responsible for giving their clean chit to the Bills and Cheques, which
are payable to the supplier. First the bills and cheques are issued by
the Works & bills and Store Bills and PSL (Price Store Ledger) Section
and after that it send to Weighting and Concurrences section for final
approval after detail study and investigation on the all bills and
cheques, After it final payment are made to supplier and the dealer
of coal and fuel.

V. Cash & bank

There are two main deals which are made between Bank and
company and this are as follow:-
1. BRS (Bills Reconciliation System):-
2. Way to relies the bills or cheques:-
3. Receive the short term fund form bank:-

In brief the company means this branch of NTPC needed cash for
fulfil their daily, weekly & monthly cash requirement for smooth
function of the company and removing all the hurdles in the way of
the production. First the branch makes a budget for the actual
requirement of the cash in the company, for making the actual
requirement of cash in the company each department are made
their own budget and after it the merge all department and find out
the whole figure of required amount of cash (it should be on day,
week or monthly bases).And after making the final budget for cash
requirement in company they send it to the Corporate Office and
corporate office arranged this required cash for the branch from
banks on the bases of budget which are sending by the branch to
corporate office. Another works of the bank for the company are it
gives the guarantee for custody of material.
VII. Establishment Section
This section is responsible for the all payments which are necessary
for the company which are as follow:-
1. Payment of salary to the employees,
2. Loans and advances to the employees,
3. Income tax to the Government,
4. PF (provided fund) and pension to the employee,

On the bases of above points we can said that this establishment

section are dealing with all the payment which are made to the
employees in the company.

VIII. Miscellaneous
This section are dealing with all the
non-operational activity but having important place among the work
in company which are as follow:-
1. Horticulture
2. Hospital payments
3. CISF (Central Industrial Security Force)
4. School employee͛s payment
5. And all patty expenses which are necessary for the
organization.




Î*
 
%
My objective of doing research on working capital management in
NTPC are as follows.

1. Management of working capital by organisation.

2. Determine the profitability of various component of working

capital and their relation to profitability and sales.

3. Find out the effect of working capital on capital expenditure.

4. To find out the cost and expenditure which are occurring during
maintaining working capital

 m  
%
SECONDARY DATA COLLECTION

When I do the research on working capital management, first I will

collect the data of last five years and various internal sources from
company.
Tabulations of data and its graphical representation & its
conclusions.
Using various method of accounting which determine actual point of
working capital then I use some documents that are given below:-
1- NTPC Financial Reports.
2- News Magazine of NTPC.
3- Journals of NTPC (SSTPS).
4- Shakti Sandesh Magazine.
5- Reports of NTPC.
6- NTPC annual Reports

WORKING CAPITAL MANAGEMENT IN NTPC (SSTPS)

National Thermal Power Corporation is the largest power generation
company in India. The Forbes Global 2000 ranking for 2005 ranks it
as the 5th leading company in India and the 486th leading company
in the world. It is a public listed (Bombay Stock Exchange) Indian
public sector company, with majority shares owned by the
Government of India. Its main business of this company is to
generate electricity. So, according to its nature it is clear that this
company required hues Working capital for the fulfilments of basic
need of the company. The company engage to producing electricity
which not having physical existence, so there are not any types of
raw material in term of finished goods for the company are present,
which are use by other company as a raw material. And the company
doesn͛t having any types of semi-finished goods in their production
cycle.
A big question is always arising among all the companies and the
question is:

What is Working Capital and why the company needed this

WORKING CAPITAL in the organization?
m! of the above question are as follow:-
Working capital management is concerned with the problems that
arise in attempting to manage the current assets, the current
liabilities and the interrelationship that exist between them. Because
they are highly liquid and need to manage it in a better way for its
best utilization and meet all short term finance and repayment of
short term debt. It manages the required funds to carry the required
levels of current assets to enable the company to carry on its
operations at the expected level without any disruption. The aim of
working capital management is to manage the firm͛s current assets
and current liability in such a way that maintained a satisfactory level
of working capital. This is so because if the firm cannot maintain a
satisfactory level of working capital, it is likely to become insolvent
and may even be forced into bankruptcy. The current assets should
be large enough to cover its current liabilities in order to ensure a
reasonable level of safety.
The interaction between current assets and current
liabilities and its use in best and possible way is the main theme of
the theory of working capital management.
There are two concepts of working capital: Gross and Net.
Gross W.Capital The term Gross working capital is refers to the
total current assets of the company. And the capital which includes
all the detectable items likes expenses and others.
Net W.Capital The term Net working capital can be defined in two
ways:-
(i) The most common definition of net working capital (NWC) is the
difference between current assets and current liabilities.
(ii) Alternative definition of net working capital is that portion of
current assets which is financed with long-term funds. Since current
liabilities represent sources of short term funds, as longs as current
assets exceed the current liabilities, the excess must be finance with
long-term funds.

+")$+-#

I phase: - Cash get converted into raw material.

II phase: - Raw material gets converted into work-in-progress.

III phase: - Work-in-Progress gets converted into finished goods.

IV phase: - Finished goods get converted into sales.

V phase: - Sales gets converted into debtors.

OPERATING CYCLE
If it were possible to complete the sequences instantaneous there
would be no need for current assets (working capital). But since it is
not possible, the firm is forced to have current assets. If cash inflows
and outflows do not match, firm have to necessarily keep cash or
invest in short term liquid securities so that they will be in opposition
to meet obligations when they become due. So, due to above
statement it is clear that why the companies are needed working
capital.
)." 
There are mainly three part of Working Capital in the company which
is as follow:-

A) +

B) $

C) Î $

(A)  m 
Cash is the most important component of current assets. All
othercomponents such as debtors and inventories ultimately get
converted into cash and this fact further emphasizes the importance
of management of cash. The goal of cash management is to maintain
the minimum cash balance that provides the firm with sufficient
liquidity needed to meet financial objectives. The term cash includes
not only currency but also near cash assets such as marketable
securities and demand deposits in bank. Cash section is an important
section of finance and accounts department. It deals with the
employees, contractors and suppliers frothier payments Corporate
office plays a dominant role in cash management. The corporate
office allocates different amount of each to different coalmines as
per its requirements. Corporate office acts as a linkage between the
NTPC and main book. The state bank of India, Corporate office has
determined the credit facility for every units of NTPC. No one unit of
NTPC can get the credit facility more than ones limit. The credit
facility is known as rolling cash limit. This keeps on changing from
year to year depending upon company͛s position transactions,
profitability and inventory position.
Although corporate office provides credit limits facilities, yet NTPC is
not fully dependent on the corporate office. The sale of scrap
materials of defective at plant level generates the cash. Thus at a
time plant can also pay liabilities and then the balance amount is not
only intimated to the corporate office. NTPC gives priority in cash
payment, which is urgent, and sends the report to corporate office.

In brief the main uses of the cash in organization are as follow:-

ë It required paying for the fuel and coal charges to the supplier.

ë It also use to making payment for other construction in

organization like building, road, etc. on every day or week or monthly
bases.
ë It use to buying loose tools, spare parts, etc.

ë And making payment to the employees in the organization.

(B)  
 %
Inventory is stock of a company, which is manufacturing for sale and
component that make up the product. Inventory means ͞a schedule
of items held at a particular point of time.͟
In managing inventories the objective of NATIONAL THERMAL
POWER CORPORATION LTD. is to determine and maintain optimum
level of inventory investment. The optimum level of inventory lies
between two danger point of excess and inadequate inventories. In
NTPC inventory consist of following terms which are as follow:-
ë Components and Spares
ë Chemical & Consumers
ë Loose Tools
ë Fuel Such as Coal, oil, Lethal (too highly inflammable), etc.
There are 73 thousand material item are involve in the NTPC and 53
thousand materials are in use. Some materials are come under the
category of Capital Spares and Mandatory spares. There are some
methods which are use in the organization for dividing
the material according to their value, quantity, importance and these
methods are as follow:-

(1) mÎ 
(2) /%0
(3)  '(
(4) $"$
(5)  $

(1) ABC Analysis

Item, which constitutes to 70% of total consumption value when
arranged in descending order of consumption value, will be termed
as A class items. Next 20% of total consumption value will be termed
as B class items and the rest 10% as the C class items.

(2) XYZ Analysis

Items which constitute top 70% of total stock of stores and spares
holding value when arranged in descending order of stock holding
will be termed as X class items next 20% of the total stock holding
value is Y class items and the rest 10% is Z class items.

(3) ICU (Insurance component and unit spares

In this method Inventory is divided according to its insurance value
and period of insurance, this method is applied by NTPC for dividing
the material according to its group.

(4) Non-Moving Inventories

Items, which have not been issued for the last 3 or 5 years, shall be
non moving items.

(5) Surplus Inventory

Out of the above non moving inventory when there is issue made to
various shops asking the requirement of the inventory and if there
are also it is not needed then transferred to another coalmines and it
again not needed there also then sent for disposal through auction
sale.
)$
Monthly Weighted average method is applied in NTPC for
determining the value of the inventory
Formula Total value of inventory / Total no. of unit

(A) Bills Receivable



The term receivable is defined as "Debt own to

the firm by customer arising from sale of goods or services in
ordinary course of business".
Account receivable management is also an important aspect of
working capital management. When a firm sells its products and
Services and doesn͛t receive cash for its immediately, the firm is said
to have granted trade credit to the customer and the customer from
whom receivables or took debt have to be collected in future are
called trade debtor. Account receivable represents the extension of
credit on an open account by the firm to its customers. In order to
keep current customer and attract new ones, most manufacturing
firms find it necessary to offer credit. The practices give birth to
accounts receivables. Receivable constitute a substantial portion of
current assets of several firms
Although managing the receivables is done by corporate office yet
central marketing organization directly deals with it. Few years ago
when market was having not too much demand for electricity,
they used to receivable accounting to maintain the market share, at
that time credit policy of corporate office helped to retain old
customer and create new customers. Now the situation is opposite
of that there is growing demand of Electricity production not only in
our own country but abroad also, the credit policy is helping to
increase the firm market share. Obviously the minor parts of
receivables management dealt at NTPC, Which consists of recovery
of the direct sale of scrap and defectives and employees related
matters.
Thus we can say that the management of receivables is dealt major
part by corporate office and minor part by the finance department of
NTPC itself. The term receivable is defined as "Debt own to the firm
by customer arising from sale of goods or services in ordinary course
of business". Account receivable management is also an important
aspect of working capital management. When a firm sells its
products and services and doesn͛t receive cash for its immediately,
the firm is said to have granted trade credit to the customer and the
customer from whom receivables or took debt have to be collected
in future are called trade debtor. Account receivable represents the
extension of credit on an open account by the firm to its customers.
In order to keep current customer and attract new ones, most
manufacturing firms find it necessary to offer credit. The practices
give birth to accounts receivables. Receivable constitute a substantial
portion of current assets of several firms. In NTPC all the sales are
done on the credit bases because NTPC produce Electricity which are
not having physical existence like other material and it sale their
product to the state govt. not to other one and the price of the
product are to hues , So the customers are made their payment after
some time not suddenly. NTPC provide two month additional time to
their customer for making payment after sending bills to the
purchaser and Debtor are use letter of credit for making payments to
the NTPC. Billing are use in tariff which having three types and the
types are as follow:-

ë Capacity charges (fixed charges)

ë Energy charges (Variable charges)
ë U I (unscheduled inter change charges)

(B) Loans & Advances

Àc In NTPC Loans & Advances are also donated as the

part of Working Capital and it having too important part in the
organization together with other things.
This thing are use in organization for motivate to
the employees in the organization by providing some types of
loans under this head. There are basically two types of loans
are provided by the company to their employees, which are as
follow:-
ë Interest free loans
In this the company provide such types of loans which having
no any interest charges. And this contain following loans
Multipurpose loans (yearly bases), Furniture advance loans.
ë Interest payable loans In this company provided such
 types of loans which having interest charges on the amount of
loan. And this contain following types of loans:-
Computer loan
Car loan
Scooter loan
House loan, etc.

Àc Advances are also provide to the supplier like BHEL,

mobilizations

Àc advances are given to the contractor but mainly this loans and

advances are use for the employees of the company, it is part of the
current assets
c
m  mm 

 
Cash section is an important section of finance and accounts
department. It deals with the employees, contractors and suppliers
for their payments. Corporate office plays a dominant role in cash
management. The corporate office allocates different amount of
each to different coalmines as per its requirements. Corporate office
acts as a linkage between the NTPC and main book. The state bank of
India, Corporate office has determined the credit facility for every
units of NTPC. No one unit of NTPC can get the credit facility more
than ones limit. The credit facility is known as rolling cash limit. This
keeps on changing from year to year depending upon company͛s
position transactions, profitability and inventory position. Although
corporate office provides credit limits facilities, yet NTPC is fully
dependent on the corporate office. The sale of scrap materials of
defective at plant level generates the cash. Thus at a time plant can
also pay liabilities and then the balance amount is only intimated to
the corporate office. NTPC gives priority in cash payment, which is
urgent, and sends the report to corporate office.

FUND ALLOCATION
Here the initial allocation for funds and NTPC unit is done by
corporate office and all supplementary requirements are to look by
NTPC itself. The corporate office allocates the funds for all
coalmines and particularly about NTPC.

FUND UTILISATION
NTPC operates an annual cash budget and a rolling cash plan drawn
up every month. Although specific forecasting technique is used,
funds are deployed to different departments as per their
requirements. A daily report on cash transaction is prepared by cash
section to keep a track of all payment in the days work. Every month
cash transaction report is sent to corporate office showing the all
transaction of cash, actual utilization of cash and allocation of fund is
compared. If the utilization of cash is more than the allocation of
funds, then the plant has to justify its more utilization and if the
justification is not found satisfactory then the corporate office gives
the letter of improvement.
CASH FORECASTING AND BUDGETING
Cash budget is the more significant device to plan for and control the
cash receipts. Cash budget is a summary of NTPC expected cash
inflows and outflows. Again this cash budget is broken into month
wise budget where allocation of cash on month basis is done with
the help of projection of cash on month wise it becomes easier to
allocate the amount. The information of expected cash flows and
cash balance helps to financial managers of NTPC to determine the
future cash need of the firm, plan for the financing of these needs
and exercise control over the cash and liquidity of NTPC. NTPC needs
cash to carry out the day-to-day functions of business just as the
level of operations affects working capital requirements; it affects
the need for cash. These days the direct sale of billets and merchant
products are increasing cash. Cash has been receiving from
customers and has been providing for adequate cash for their
liabilities.

 mm
 m  mm 

Composition and growth of cash Cash balance represents the
aggregate of cash in hand, cheques on hand, remittances in transit,
and balances with banks in current accounts and in fixed deposits
with others. To bring uniformity on the components of cash, cash
balances of the selected undertakings have been divided into two
segments. Cash in hand and cheques on hand. Cash management at
NTPC includes the discussion on size of each, cash flow statement
and liquidity position of the firm.
c
GRAPHIC REPRESENTATION
On the bases of above points it is clear that cash is to important
term for the organization, and I clear the importance of cash
management with the help of following graph representation which
are based on the formula of ration analysis.

Current asset

 =
current liability

Year 2004-05 2005-06 2006-07 2007-08 2008-09

Current Assets 160751.7 177772 194132 135468 129073
Current Liability27620.23 31881 34202 65244 52306
Ratio 5.82 5.58 5.68 2.08 2.47


Whereas the current ratio is indicated to be most ideal at 2 NTPC's
current ratio was 2.83 in 2004-05 it increase to 3.48 in the next year
increase again to 4.23 in 2005-06 which is the highest for the period
the ratio again show the falling trend with the level at1.68 at a slide
increase to 1.91 in 2008-09. It is seen that the current liability is the
main reason for the highest level of current ratio to 2006-07 during
the first three year the current liability went down from Rs. 67324
Million to Rs.45850 Million the ratio improves during the last three
years of our period only the Strength of an increase in current
liability. During the last two year the current assets also register a
decrease from the trend of the current ratio it is clear that the
organization should give greater importance to its current liability by
obtaining more credit from its supplier. Mainly supplier of fuel and
inventory. It may be noted that the figures for current liability also
include provision.
Liquid Current Assets
2 m
 = -------------------------
Current liabilities

Year 2004-05 2005-06 2006-07 2007-08 2008-09

Liq. Current Assets 142395.85 157630 176420 118088 111296
Current Liability 27620.23 31881 34202 65244 52306
Ratio 5.15 4.94 5.16 1.81 2.13



This ratio indicates the liquidity position of the company more
completely by excluding least liquid current assets that is inventory.
The current visible is of an increase up-to 4.5 in the year 2004-05
while this compare unfair comparison with desire 1, the ratio show
an improvement in the year 2004-05 at the level of 1.39 the moment
is slightly adverse for the last year of our period at the level of 1.61
the improvement in the trend is due to a decrease in the level of
receivables from2004 to2006 but is also due to a generally rising
trend of current liability. The ratio would have a better performance
but for the considerable increase in the level of cash during the last
year.
3- +
$ 
Cash Turnover Ratio are the known about the relationship
between how much company hold the ideal balance of the cash in
the organization.
Interest & Finance Charges

+
$ = ---------------------------------
Average Cash Balance

(In Million Year) 2004-05 2005-06 2006-07 2007-08 2008-09

Interest & Finance Charges 10910 7628.67 79916 33697 16955
Average Cash Balance 4715.67 7939.025 8747.79 5769 33437
Ratio 2.32 1.09 1.13 5.84 0.51


The cash turnover ratio indicates the efficiency of cash and its use
threw the working capital cycle. This ratio relates interest and
finance charges which indicate volume of cash transacted to average
cash balance. Which indicates the ideal cash remaining at the end of
the period? Therefore the ratio should be having a normal rising
trend. The trend for ratio during our period however the reverse up
to 2005-06 mainly due to rising average cash balances for the first
three year. This was due to the need to offset short falls of collection
of receivables for 2006-07 the trend was reversed on the strength of
both considerably increased cash transacted as well hedge control
average cash balance this was due to the policy of turning
receivables into investment with defaulting customer. This trend
however is again reversed in 2007-08 due to sharp increase in
average cash balance because of share premium money received
from the IPO, fore closed investment in government securities and
they result in fall in transacted cash.

4- +":-

This ratio show the actually no. of days on which company

hold the cash in the organization:

Average Balance of Cash

+": ----------------------------------
Interest & Finance Charges

(In Million)
Year 2004-05 2005-06 2006-07 2007-08 2008-09
Average Cash Balance 4715.67 7939.025 8747.79 5769 33437
Interest & Finance Charges10917.62 8677 9916 33697 16955
Ratio 158 334 322 62 720


The holding for any current assets should be the optimum keeping in
the major of the business. The cycle of current assets for NTPC
cannot be very short due to the fact that the company generates an
intangible product that cannot be store, the fact leading to
receivables of a minimum 60 days long ability as also large inventory
of spares having necessarily long holding periods as also of fuel for
safety of continue generation the company follow a policy of holding
the minimal cash balance at any given point of time for the reason
that it has to mobilize liquidity to meets its day to day requirements
not only from its collection against sales (which are my always credit
sales often defaulted) but threw a consideration of banks led by the
SBI in the form of cash credit i.e. Costly as against this the trend of
cash holding period for the first three years is that of a sharp
increase with a sharp fall in 2008-09 the reason discussed about. The
holding period for the last year rises up to an abnormal 720 days due
to sharply increase average cash balance for the extra ordinary factor
prevailing.

5# +
 m:-

This cash to current assets ration show the relationship

between cash and current assets in the organization and also show
that how much cash affect to the current assets:

Cash

+ m= ----------------

Current Assets

(In Million)
Year 2004-05 200-06 2006-07 2007-08 2008-09
Cash 3829.48 12048.57 5447 6544 60783
Current Assets 160751.7 177772 194132 135468 129073
Ratio 0.02 0.07 0.03 0.04 0.47



This ratio intended to have an estimation of the proportion of cash in
the current assets NTPC has been in keeping minimum ideal cash
added any given point of time and this evident during all period of
our period except 2004-05 and 2007-08 where as 2004-05 the
company have to keep cash because of the exceptionally adverse
receivables situation that year, the highest level of cash for the year
2007-08 was due to change into policy lines for investment of cash
there for where as the ratio should have had generally falling trend
and shows abnormally high level for the last year.

6- + $  = Cash

----------------
Receivables

(In Million)
Year 2004-05 2005-06 2006-07 2007-08 2008-09
Cash 3829.48 12048.57 5447 6091 60783
Receivables 95851.39 115328 124349 4699 13747
Ratio 0.04 0.10 0.04 1.30 4.42


 
This ratio serves to estimate the need for cash stemming from a
situation of uncontrollable receivable. It is seem that the need for
cash raises indirectly proportion to the receivables and there for our
working capital a structure to be sound the ratio should have an
increasing trend with increase in stable proportion. The trend should
be increasing because of an increase in generation, installed capacity
and sales. It should be in stable proportion. If the receivables and
the cash balances stick to normal levels is keeping with the
increasing operation and turnover where as the trend of this ratio
should be one of graduated increase, it show a stability for first three
years but increase this proportionately last two the level for 2006-07
i.e. 1.30 has been due to considerably reduce receivable for the
policy of debt management threw investment the trend for the last
year both because of an increasing receivable as well as cash.

INVENTORY MANAGEMENT AT NTPC

Inventory is stock of a company, which is manufacturing for sale and
component that make up the product. Inventory means ͞a schedule
of items held at a particular point of time.͟
In managing inventories the objective of NATIONAL THERMAL
POWER CORPORATION LTD. is to determine and maintain optimum
level of inventory investment. The optimum level of inventory lies
between two danger point of excess and inadequate inventories.
The inventory of NTPC is unique for not having semi finished goods,
finished goods or raw materials. Fuel is some way could be
considering raw material but by most definitions it would not qualify
to be raw material because the product is intangible. The inventory
of NTPC consist of fuel, spare parts, loose tools and components,
chemicals consumables and some other material. The inventory of
NTPC is very large comprising 73000 material codes. The inventory at
Singrauli alone consists of 53000 material codes. Being a large
inventory some of which is to be maintained permanently for to
continuity and security of generation, the inventory is valued by the
monthly weighted moving average method. The valued inventory is
called priced stores ledger (PSL) this is regulated by the four
instruments.

(1)MRN
(2) MTN
(3) SRV
(4) SIV. PSL is run on monthly basis.

The inventory of NTPC is subject to several analysis including ABC,

XYZ, VED, FSN, ICU. The consumption is valued at PSL rate. Whereas
at the point of induction at the store it is valued at the invoice price.
The inventory is regularly verified for a match between the Bin
Card balances and the physical stock as also with the PSL run. This
inventory in NTPC is also subject to regular checks and control
exercises.

RAW MATERIAL
Raw materials are the inputs used by the concern for
products of finished goods through manufacturing process. Raw
material inventory are those, which have been purchased and are
stored for future production. In NATIONAL THERMAL POWER
CORPORATION LTD. raw material is purchased by central
procurement and regional procurement unit of central
marketing organization as per the requirement of the individual coal
plant. The bulk purchase are procured and sent to the place of the
need. Basic objectives in holding raw materials inventory is turn
separate purchase and production activities. If raw material
inventories were not held, purchase would have to be made
continuously at the usage rate in production.

(In Million)
Year 2004-05 2005-06 2006-07 2007-08 2008-09
Cost Of Goods Sold 117804.9 123667 29394 140798 158166
Average Inventory 19291.36 19265.9318944 17546 17578.5
Ratio 6.11 6.42 9.83 8.02 9.00


This ratio estimates the efficiency of inventory in facilitating
generation and sales. It relates cost of goods sold to average
inventory. Cost of goods sold has been taken to include expenses on
fuel, employee remuneration and generation and administration &
other expenses. In other words only the operating expenses have
been taken the average inventory can shows the inventory
specifically availing during the year. Cost of goods sold indicates
sales less profit i.e. sales valued at operating expenses. Where as
this ratio should have increasing trend it does have the same our
period under consideration. Where as the cost of goods sold,
indicative of sales, register a consistent increase the inventory show
a falling trend mainly due to effective inventory control methods and
controlled inventory.
m$"" Average Inventory
= -------------------------
Cost of Goods Sold

(In Million)
Year 2004-05 2005-06 2006-07 2007-08 2008-09
Average Inventory 19291.36 19265.93 18944 17546 17578.5
Cost Of Goods Sold 117804.9 123667 129394 140798 158166
Day 60 57 53 45 41


The holding period in lined with the evidence with the controlled
inventory shows a falling trend over a period under consideration
from 60 days in first year to 41 days in the last year. How ever as
large inventory like NTPC's at the time when the older plants of the
company are nearing there end of useful life many of the inventory
of spares must necessarily have inventory i.e. now obsolete, non-
moving or surplus due to technological changes, up gradation,
renovation and modernization or replacement. The control of such
inventory would improve the holding period further.


$ m :

current assets

Inventory

This ratio shows the proportion of Inventory in the total layout on

current assets. The ratio show a generally constraint trend not only
evidence of inventory control But also the necessity of it͛s in the
basically engineering orientation of the facilities in the country.
(In Million)
Year 2004-05 2005-06 2006-07 2007-08 2008-09
Inventory 18355.85 20176 17712 17380 17777
Current Assets 160751.7 177772 194132 135468 129073
Ratio 0.11 0.11 0.09 0.13 0.14


This ratio shows the proportion of Inventory in the total layout on
current assets. The ratio show a generally constraint trend showing
not only evidence of inventory control but also the necessity of it in
the basically engineering orientation of the facilities in the country.

Cash
+$  = -------------
Inventory

(In Million)
Year 2004-05 2005-06 2006-07 2007-08 2008-09
Cash 3829.48 12048.57 5447 6091 60783
Inventory 18355.85 20176 17712 17380 17777
Ratio 0.21 0.60 0.31 0.35 3.42


 
This ratio relates cash to inventory to procure which cash is mainly
used; this ratio should ideally have a falling trend. This is show
because while larger cash balance would indicates idealness and
interest expenses, a rise in inventory could be normal given added
installed capacity increasing generation and less costly tangible of
current assets. In the right of this the ratio show a generally adverse
trend, because of a generally rising trend of cash set against
controlled inventory.

  mÎ  mm 


The term receivable is defined as "Debt own to the firm by customer
arising from sale of goods or services in ordinary course
of business". Account receivable management is also an important
aspect of working capital management. When a firm sells its
products and services and doesn͛t receive cash for its immediately,
the firm is said to have granted trade credit to the customer and the
customer from whom receivables or took debt have to be collected
in future are called trade debtor. Account receivable represents the
extension of credit on an open account by the firm to its customers.
In order to keep current customer and attract new ones, most
manufacturing firms find it necessary to offer credit. The practices
give birth to accounts receivables. Receivable constitute a substantial
portion of current assets of several firms.
Receivables of NTPC are very important because of the nature of a
product and the credit policy followed by NTPC. NTPC produce
electricity which have no any physical existence like other finished
goods and it sale their goods to the customers on the only credit
bases. NTPC gives 60 days (two months) time to their customer for
making payment, its means all the sales of the NTPC are on the credit
bases. There is a rebate on early or prompt payment. The present
system of Tariff is Availability Based Tariff (ABC) where as the
previous tariff system called the KP Rao Tariff was a two part Tariff
essentially rewarding efficiency or PLF, the present system is a three
part Tariff. (1) Fixed charge (2) Variable charge (now called energy
charge) (3) Unscheduled interchange charge rewarding availability
between the power producers i.e. NTPC and the customer i.e. SEBE
there is a monitor in the institution of the regional electricity board
which coordinates the Availability schedule awarded to each of
power producer in the region as well as the joint meter reading and
both the ends. And implement the new resume. The billing is
completed during the first five days of the month following and
therefore the billing cycle of NTPC comes to be 35 days.
There are default on part of the customer in view
of these NTPC adopted a new receivables management policy in the
form of turning long time receivables into investment with the
defaulting customers these are in the shape of medium term bond
or debenture bearing interest up-to 12.5%, 8.5% or even less. By this
method the company has managed control his receivables to a large
extent.

ACCOUNT PAYABLES IN NTPC

The creditors are managed at plant level only. Mostly the creditor
comprises of contractors to whom payment are to be given and the
capital works. This is basically done as per terms and condition with
respective parties. In case of small-scale industries it is done within
30 days. There is also a scheme of earnests money deposits for the
registered small scale industries. The schemes allow having a security
deposits which is refundable at the end of contract. In case of
statutory payment that is the income tax, excise tax one month due
is there. When the final payment is to be made to ex-employee, it is
only done after the file reaches the department as per the individual
case. Major chunk is from statutory liabilities, which are rapid as per
act that is one month due is given.

Sales

$
$ = ..................
Average Receivable
(In Million)
Year 2004-05 2005-06 2006-07 2007-08 2008-09
Sales 189449.84 178153 190475 188591 225402
Average Receivables 88971.065 105589.7 119838.5 64524 9223
Ratio 2.13 1.69 1.59 2.92 24.44


This ratio gives the efficiency of receivables as current assets. It
is relates sales to average receivables in this way specifically
address the receivables actually contributing to a given volume of
sales during the year. Where are the trend of this ratio ideally be
raising the ratio for the first three year of our period actually
registered a fall. During these three year even though the sales
registered overall increase the receivables have the consistent in a
rise with the control of receivables from 2006-07 to 2007-08 with the
result that the ratio shows a gratis increase from 2.92 in 2006-07 ton
24.44 in last year of our period.

Average Receivable 

m$" d =....................................

Sale
(In Million)
Year 2004-05 2005-06 2006-07 2007-08 2008-09
Average Receivables 88971.065 105589.7 119838.5 64524 9223
Sales 189449.84 178153 190475 188591 225402
Day 171 216 230 125 15


The average collection period is the reciprocal of the receivables
turnover ratio. The collection period of receivables for NTPC in any
given year except the last year of our period is rather long when we
consider the company policy of given 60 days credit to its customers
and having a billing period of 35 days. Which would
make the total collection period with any default from the customer
to be naturally 95 days as against this we have collection period
rising from 171 in 2004-05, 230 in 2005-06 and then with a reduction
to 125 in 2006-07 to 15 in 2007-08 the collection period of the last
year would indicate very prompt payment or settlement of due by
customer.

Receivable
$ m = .........................

Current Assets

(In Million)
Year 2004-05 2005-06 2006-07 2007-08 2008-09
Receivable 95851.39 115328 124349 4699 13747
Current Assets 160751.7 177772 194132 135468 129073
Ratio 0.60 0.65 0.64 0.03 0.11

s
This ratio relates receivables to the total of current assets i.e.
shows the proportion of receivables in the quantum of current assets
where as this ratio so have an ideally falling trend the trend Should
be one of consistent proportion. Against this the ratio rises
marginally for first two year, remains nearly constant during third
year and falls drastically in 2006-07 again registering arising in 2007-
08 with a mix trend of receivables over the last two year and a
generally falling trend of current assets towards the end.

Receivable
$  =......................
Current Liability

(In Million)
Year 2004-05 2005-06 2006-07 2007-08 2008-09
Receivable 95851.39 115328 124349 4699 13747
Current Liability 27620.23 31881 34202 35673 52306
Ratio 3.47 3.62 3.64 0.07 0.26


 

This ratio relates receivables to its financial antithesis therefore

in the two should be inversely proportional to one another in normal
course and the ratio of two should have a consistently falling trend
the ratio however saw a increasing trend up to 2005-06 and there
after a sharp fall to 0.07 in 2007-08and then slide increase to 0.26 in
2008-09. This is because of an increase both in current liabilities as
well as receivables, a sharp increase in current liabilities in 2005-06
along with a drastic fall in receivables there after an increase in
receivables and a fall in current liability.

$ $  = ..Investment..................

Receivables

(In Million)
Year 2004-05 2005-06 2006-07 2007-08 2008-09
Investment 39914.59 40281 36674 173380 207977
Receivables 95851.39 115328 124349 4699 13747
Ratio 0.42 0.35 0.30 36.90 15.13


Investment i.e. trade investments have been a debt management
technique adopted by NTPC to control rising receivables specially
since 2004-05 by this method long standing receivables due from
insolvent customer were converted to medium terms bonds of the
nature of debentures bearing interest and having maturity period
upwards of Seven years. As such investments also are inversely
proportional to one another and this is broadly in evidence over the
period under consideration. Where as the trend of this ratio should
be one of rising level, it should not be show disproportionately, the
trend in evidence is one of a fall up to 2004-05 and a sharp increase
in the next year. The ratio falls to 15.13 in the last year. It is to be
noted that investments increase substantially only from 2005-06
where as receivables, after the sharp fall of 2005-06 due to effective
of recourse to investment resume their original increasing trend in
the last year.

LOAN AND ADVANCEMENT MANAGEMENT IN NTPC

Although current assets traditionally comprise inventory, receivables
and Cash, in an organization like NTPC which provides loans to its
employees and also advances both to the employees and supplier as
well as contractors, the loan and advances are also an important part
of the company. The advances given to contractor are mainly the
nature of mobilization advances and to the employees with the
purpose of providing assistant to them by way facilities to help in the
discharge of their duties. Their loans are included in the category of
current assets for their regular recovery from the employees adjust
and recovery from supplier within a very short period of time. The
loan and advances given by the company to its suppliers, contractor
and its employees are the major part of its current assets. These
other mainly on interest or free of charge advances given to
suppliers and contactor are mostly free two of the advances given to
employees are interest free, multipurpose advances and furniture
advance recoverable in 12 and 60 instalment respectively. Beside
these all other loan and advances are on interest. The recovery of
these interests bearing loan done as such a way that the principal is
recovered first and the interest there after. The interest is levied on
the diminishing balance of principal and there is no interest on
interest. These loan and advances are categorized as current assets
because their recovery is continuous immediately from the after the
drawn month and the principal is first recovered.

m$

 m 

Loan & Advances

= ---------------

Current Assets
(In Million)
Year 2004-05 2005-06 2006-07 2007-08 2008-09
Loan & Advances 33011.35 24742 21482 27279 27052
Current Assets 160751.7 177772 194132 135468 129073
Ratio 0.21 0.14 0.11 0.20 0.21

CURRENT LIABILITIES IN NTPC

Current Liability shows the different combination of liabilities which

includes various liabilities. It generally shows on the liability side in
the balance sheet under the head of liabilities. Others liabilities
represent amount of income tax deducted at source, redemption
amount payable on maturity of bonds, sales tax payable,
development surcharge amount to be transferred to customers etc.
Besides current assets, current liabilities also count in framing the
structure of working capital. Bank over-draft, creditors for goods
supplied, unpaid dividend and taxes are the main constituents of
current liabilities. The share of each constituent to total current
liabilities determines to some extent the availability of current
liabilities, the management remains more concerned with the
administration of current assets.
Other liabilities have increased due to transfer of as amount of
Rs. 2,426 million from Development Surcharge Fund. In the previous
years as per the regulations of central electricity regulatory
commission (CERC) development surcharge was being charged from
customer and kept invested in instruments as required by the
regulations. CERC vide its order dated 09//11/2005 discontinued the
billing and realization of development surcharge. It further directed
that the amount collected earlier from the state utilities and invested
in instruments corresponding to the amount contributed by each of
the state utilities shall be transferred in the name of the concerned
utility.

$

This is a way to show the relationship between Inventory and total

Current Liability
Current Liabilities
Current Liabilities to inventory = ------------------------
Inventory

(In Million)

Year 2004-05 2005-06 2006-07 2007-08 2008-09

Inventory 8355.85 20176 17712 17380 17777
Current Liabilities160751.7 177772 194132 135468 129073
Ratio 0.11 0.11 0.09 0.13 0.14

 Current Liabilities to Inventory
This ratio shows the proportion of Inventory in the total layout on
current liability. The ratio showing a generally constraint trend not
only evidence of inventory control, But also the necessity of it͛s in
the basically engineering orientation of the facilities in the country.

 $-#



This Receivable to Current liability ratio show the

relationship between receivable and current liability:

Receivable

Receivable to Current liability = ------------------

Current Liability

(In Million)
Year 2004-05 2005-06 2006-07 2007-08 2008-09
Receivable 95851.39 115328 124349 4699 13747
Current Liability 27620.23 31881 34202 65244 52306
Ratio 3.47 3.62 3.64 0.07 0.26


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m % 

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 %
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123m% 
LIMITATION

1 NTPC in a working capital is a book profit it is not true.

2. It is based on the re-payment of owner due to the political

power.

3. It is create to the receivable problem to it.

4. It is reduces in a working capital turn over.

CONCLUSION

1c Inventory is area a unique, in the sense of finished goods is

not there.

2c Receivable is presently in large.

3c Permanent working capital preparation is a very large for us.

4c It is control to the inventory analysis going arising

5c Obsolete surplus and non moving inventories.

6c Receivables management reduces billing time, reduces billing

cycle and give more discount and rebates against from them.

7c cash convertible credit instrument should be taken other

policy.

c
uu


1. It is to be managed to effective working capital turnover.

2. Surplus and obsolete of items due to according to managed.
3. NTPC is a consulted conclusion receivables by the investment of
a share period.
4. It is a not repayment of owner due to the political power to it.
5. Cash to be used to effective ways.
6. It should be solved in effective manner the receivables roblem.

If the NTPC/SSTPS, Shaktinagar adapt above to six suggestion point

then employees and management will be happy and profit
management
also.
BIBLIOGRAPHY
I choose SSTPS/NTPC Corporation for my study of working capital
position, when I do the research; in this connection following things
are very useful to write this report and other things.

1. Book of research methodology.

2. Financial policy report of different years issued by NTPC.
3. Performance highlights book.
4. Shakti Sandesh- a Journal of NTPC/SSTPS.
5. NTPC news Magazine of different years.
6. Singrauli (Promise fulfilled) a journal of SSTPS.
7. Employee͛s hand book.