SUMME 10 Submitted By Praveen Kum GJU09091(3 ER TRAINING REPO 0May2010 to 19June2 y:- mar 3 sem) ORT 2010
Nov 26, 2014
SUMMER TRAINING REPORT
10May
Submitted By: Praveen Kumar GJU09091(3
SUMMER TRAINING REPORT10May2010 to 19June2010
Submitted By:-
Praveen Kumar
GJU09091(3 sem)
SUMMER TRAINING REPORT 2010
INDEX
• INFORMATION ABOUT
TRANING
• ACKNOWLEDGEMENT
• INTRODUCTION
� ABOUT NTPC
• ABOUT BTPS
• FINANCE DEPARTMENT
• STUDY ON ECONOMIC VALUE
ADDED
Training at BTPS
I was appointed to do six-week training at this esteemed organization from 10
May to 19 June 2010. In these six weeks. I was assigned to visit various
division of the Finance department which is as follow:
1. Establishment
2. Commercial
3. Cash & Bank
4. Books Section
5. Concurrence(Works)
6. Concurrence(Purchase)
7. Works Payment
8. Store Payment
This six-week training was a very educational adventure for me. It was really
amazing to see the plant by yourself and learn how finance, which is one of
our daily requirements of life, is managed in the production of electricity.
This report has been made by self-experience at BTPS. The material in this
report has been gathered from my textbooks, senior student report, and
trainer manual provided by training department. The specification &
principles are at learned by me from the employee of each division.
(PRAVEEN KUMAR)
ACKNOWLEDGEMENT
With profound respect and gratitude, I take the opportunity to convey my
thanks to complete the training here. I do extend my heartfelt thanks to Mrs. Rachna Singh for providing me
this opportunity to be a part of this esteemed organization.
I am extremely grateful to all the financial staff of BTPS/NTPC for their
co-operation and guidance that helped me a lot during the course of
training. I have learnt a lot working under them and I will always be
indebted of them for this value addition in me.
I would also like to thank the training in charge of NIILM SCHOOLOF
BUSINESS (NEW DELHI) and all the faculty member of FINANCE
department for their effort of constant co-operation
Which have been significant factor in the accomplishment of my industrial
Training
I do extend my heartfelt thanks to Navneet Goel DGM (FINANCE)
(PRAVEEN KUMAR)
NTPCNTPCNTPCNTPC
NATIONAL THERMAL POWER
CORPORATION LTD
NTPC PROFILE
1. Scenario of power sector in India 2. Company Profile:-
� Introduction � History � Evolution � Mission � Vision
3. Organizational Structure 4. Core Value 5. Station Detail 6. Diversified Growth 7. Operation Growth 8Award Details 9. SWOT Analysis 10. Competitors overview 11. Future Expansion
SCENARIO OF POWER IN INDIA
Growth of economy calls for a watching rate of growth in infrastructure
facilities. Power sector is one of the major aspects of this infrastructure
building. Some prominent people like the Ex Chairman of GE Jack Welch
have gone to the extent of saying, “you don’’’’t have a chance to stand in the
21st century without lots of power………Without this you miss the next
revolution.” Moreover, the growth rate of demand for power in developing
countries is generally higher than that of GDP. In India, the elasticity ratio
was 3.06 in 1st plan, and peaked at 5.11 during 3rd plan and came down to
1.65 in 80‟‟‟‟s. For 90‟‟‟‟s a ratio of around 1.5 was projected. Hence, in order to
support a growth of GDP of around 7% the rate of growth of power supply of
10%is required. If we look at current scenario, electricity consumption in
India has more than doubled in the last decade, outpacing the economic
growth. If we analyze the various statistics of Indian power sector, we will find
that the generating capacity has gone up tremendously from a meager
1712MW in 1950 to a whooping 112000MW today.
Generating capacity has grown manifold from 1,712 MW in
than 112,000 MW today.
At the same as a result of growing installed capacity, the power produced has
also gone up. In 1950, the total power produced by Indian power sector was a
meager 50BU and that is now 587.3BU. The Indian govt. emphasize
of independence in power generation and in all subsequent five
allocated budget for power sector development was increased. But despite all
these efforts by our govt., there is an acute power shortage in the country.
GROWTH OVER YEARS:
period:
Generating capacity has grown manifold from 1,712 MW in
than 112,000 MW today.
At the same as a result of growing installed capacity, the power produced has
also gone up. In 1950, the total power produced by Indian power sector was a
meager 50BU and that is now 587.3BU. The Indian govt. emphasize
of independence in power generation and in all subsequent five
allocated budget for power sector development was increased. But despite all
these efforts by our govt., there is an acute power shortage in the country.
GROWTH OVER YEARS: installed capacity around the end of
Generating capacity has grown manifold from 1,712 MW in 1950 to more
At the same as a result of growing installed capacity, the power produced has
also gone up. In 1950, the total power produced by Indian power sector was a
meager 50BU and that is now 587.3BU. The Indian govt. emphasized the need
of independence in power generation and in all subsequent five-year plans the
allocated budget for power sector development was increased. But despite all
these efforts by our govt., there is an acute power shortage in the country.
installed capacity around the end of
0
50000
100000
150000
200000
250000
Installed capacity(MW)Installed capacity(MW)
Installed capacity(MW) MW
company profile
Introduction: India’s largest power company, NTPC was set up in 1975 to accelerate power development
in India. NTPC is emerging as
chain of the power generation business. Apart from power generation, which is the
mainstay of the company, NTPC has al
utilization and coal mining.
The total installed capacity of the company is 31,704 MW (including JVs) with 15 coal
based and 7 gas based stations, located across the country. In addition under JVs, 3
stations are coal based & another station uses naptha/LNG as fuel. By 2017, the p
generation portfolio is expected to have a diversified fuel mix with coal based capacity of
around 53000 MW, 10000 MW through gas, 9000 MW through Hydro generation, about
company profile:-
Introduction:
India’s largest power company, NTPC was set up in 1975 to accelerate power development
in India. NTPC is emerging as a diversified power major with presence in the entire value
chain of the power generation business. Apart from power generation, which is the
mainstay of the company, NTPC has already ventured into consultancy, power trading, ash
The total installed capacity of the company is 31,704 MW (including JVs) with 15 coal
based and 7 gas based stations, located across the country. In addition under JVs, 3
stations are coal based & another station uses naptha/LNG as fuel. By 2017, the p
generation portfolio is expected to have a diversified fuel mix with coal based capacity of
around 53000 MW, 10000 MW through gas, 9000 MW through Hydro generation, about
India’s largest power company, NTPC was set up in 1975 to accelerate power development
a diversified power major with presence in the entire value
chain of the power generation business. Apart from power generation, which is the
consultancy, power trading, ash
The total installed capacity of the company is 31,704 MW (including JVs) with 15 coal
based and 7 gas based stations, located across the country. In addition under JVs, 3
stations are coal based & another station uses naptha/LNG as fuel. By 2017, the power
generation portfolio is expected to have a diversified fuel mix with coal based capacity of
around 53000 MW, 10000 MW through gas, 9000 MW through Hydro generation, about
2000 MW from nuclear sources and around 1000 MW from Renewable Energy Sources
(RES). NTPC has adopted a multi
addition through green field projects, expansion of existing stations, joint ventures,
subsidiaries and takeover of stations.
NTPC has been operating its plants at high
18.10% of the total national capacity it contributes 28.60% of total power generation due to
its focus on high efficiency.
2000 MW from nuclear sources and around 1000 MW from Renewable Energy Sources
RES). NTPC has adopted a multi-pronged growth strategy which includes capacity
addition through green field projects, expansion of existing stations, joint ventures,
subsidiaries and takeover of stations.
NTPC has been operating its plants at high efficiency levels. Although the company has
18.10% of the total national capacity it contributes 28.60% of total power generation due to
2000 MW from nuclear sources and around 1000 MW from Renewable Energy Sources
pronged growth strategy which includes capacity
addition through green field projects, expansion of existing stations, joint ventures,
efficiency levels. Although the company has
18.10% of the total national capacity it contributes 28.60% of total power generation due to
In October 2004, NTPC launched its Initial Public Offering (IPO) consisting of 5
fresh issue and 5.25% as offer for sale by Government of India. NTPC thus became a listed
company in November 2004 with the government holding 89.5% of the equity share
capital. The rest is held by Institutional Investors and the Public. The issue
resounding success. NTPC is among the largest five companies in India in terms of market
capitalization.
In October 2004, NTPC launched its Initial Public Offering (IPO) consisting of 5
fresh issue and 5.25% as offer for sale by Government of India. NTPC thus became a listed
company in November 2004 with the government holding 89.5% of the equity share
capital. The rest is held by Institutional Investors and the Public. The issue
resounding success. NTPC is among the largest five companies in India in terms of market
In October 2004, NTPC launched its Initial Public Offering (IPO) consisting of 5.25% as
fresh issue and 5.25% as offer for sale by Government of India. NTPC thus became a listed
company in November 2004 with the government holding 89.5% of the equity share
capital. The rest is held by Institutional Investors and the Public. The issue was a
resounding success. NTPC is among the largest five companies in India in terms of market
History: The company was incorporated
private limited company under the name
Limited, and the word 'Private' was
Notification issued by the Government
The use of word 'private'. In
On September 30,1985, our Company was converted from a
a public limited company.Subsequently,
present name NTPC LIMITED and a fresh certificate of incorporation was issued on
October 28, 2005.
Major events: 1975 - Incorporation of Company.
1977 - NTPC acquired the f
The first batch of executive trainees joined the company.
1978 – Takeover of management of the Badarpur Project.
construction of the first transmission network singrauli
was incorporated on 7on 7on 7on 7 November, 1975November, 1975November, 1975November, 1975 under the Companies
private limited company under the name National Thermal Power Corporation Private
Limited, and the word 'Private' was deleted on September 30, 1976 consequent upon the
issued by the Government of India. Exempting government companies from
In their name.
On September 30,1985, our Company was converted from a Private Limited company into
a public limited company.Subsequently,the name of our Company was changed to its
present name NTPC LIMITED and a fresh certificate of incorporation was issued on
Incorporation of Company.
acquired the first patch of land at Singrauli.
batch of executive trainees joined the company.
management of the Badarpur Project.
construction of the first transmission network singrauli – korba
under the Companies Act as a
Power Corporation Private
September 30, 1976 consequent upon the
government companies from
Private Limited company into
the name of our Company was changed to its
present name NTPC LIMITED and a fresh certificate of incorporation was issued on
korba
1982 - Commissioning of the first 200MW unit at Singrauli
Center for education at Power Management Institute, Delhi
established.
First direct foreign currency borrowing . a consortium of foreign
banks,
led by Standard Chartered Merchant
298.41 million for the Rihand project
1983 – in the very first year
of Rs 4.51 corer in the financial year
1984 - The transmission line based on High Voltage Direct Current
(¡°HVDC¡±) technology, commissioned for power transmission from
Rihand to Delhi Singrauli project received World Bank loan of US$
150 million through GOI.
1985 –This year marked the completion of decade existance.NTPC achieved a generating capacity of 11 unites of 200 MW The GOI approved the setting of three gas based combined cycle projects
Commissioning of the first 200MW unit at Singrauli
Center for education at Power Management Institute, Delhi
First direct foreign currency borrowing . a consortium of foreign
led by Standard Chartered Merchant Bank extends a loan of GBP
298.41 million for the Rihand project.
in the very first year of commercial operation , NTPC earned
of Rs 4.51 corer in the financial year 1982-83.
transmission line based on High Voltage Direct Current
(¡°HVDC¡±) technology, commissioned for power transmission from
Rihand to Delhi Singrauli project received World Bank loan of US$
150 million through GOI.
This year marked the completion of decade (1975- 1985) existance.NTPC achieved a generating capacity of 220 MW11 unites of 200 MW each at its various projects in country.The GOI approved the setting of three gas based combined cycle projects
Center for education at Power Management Institute, Delhi
First direct foreign currency borrowing . a consortium of foreign
Bank extends a loan of GBP
earned a profit
transmission line based on High Voltage Direct Current
(¡°HVDC¡±) technology, commissioned for power transmission from
Rihand to Delhi Singrauli project received World Bank loan of US$
of NTPC’s 220 MW commissioning
each at its various projects in country. The GOI approved the setting of three gas based combined cycle projects
by NTPC in KAWAT in Gujrat For these projects which was the largest single loan in the history of bank.
1986 - Synchronized first 500MW unit at Singrauli Our Company became one of the first PSUs to issue bonds in the debt market
1987 – Crossed the 5,000 MW
1988 - The First syndicated Japanese loan of 30 billion JPY raised
1989 - Consultancy division of our Company launched
(88 MW) of our Company’s first gas based combined cycle power
plant at Anta, Rajasthan commissioned
1990 – Total installed capacity crossed
1992 - First acquisition by our Company of Feroze
Unchahar Thermal Power Station (2x210MW) from Uttar
Pradesh Rajya Vidyut Utpadan Nigam of Uttar Pradesh The
by NTPC in KAWAT in Gujrat , Auraiya in U.P. and Anta in Rajasthan.For these projects, the WORLD BANK agreed to provide US$ 48 million,which was the largest single loan in the history of bank.
Synchronized first 500MW unit at Singrauli Our Company became one of the first PSUs to issue bonds in the debt market
5,000 MW installed capacity mark.
First syndicated Japanese loan of 30 billion JPY raised
Consultancy division of our Company launched First unit
of our Company’s first gas based combined cycle power
plant at Anta, Rajasthan commissioned.
Total installed capacity crossed 10,000MW.
First acquisition by our Company of Feroze Gandhi
Unchahar Thermal Power Station (2x210MW) from Uttar
Pradesh Rajya Vidyut Utpadan Nigam of Uttar Pradesh The
, Auraiya in U.P. and Anta in Rajasthan. the WORLD BANK agreed to provide US$ 48 million,
Synchronized first 500MW unit at Singrauli Our Company became one of the first PSUs to issue bonds in the debt market.
First syndicated Japanese loan of 30 billion JPY raised.
of our Company’s first gas based combined cycle power
Pradesh Rajya Vidyut Utpadan Nigam of Uttar Pradesh The
transmission systems owned by our Company were transferred
to Power Grid Corporation of India Limited (¡°PGCIL ¡±) pursuant
to legislation by the Parliament of India
1993 - IBRD extended direct loan of US0 million to our Company under time slice concept for its projects
1994 - 15,000 MW of installed capacity achieved Maiden
declaration of dividend of
(Gujarat) becomes our first thermal power station to have
commissioned an integrated
1995 – NTPC celebrated A new logo was adopted. NTPC took over the Orissa State Electricity Bo
1997 - 'Navratna' status granted by the GoI100 billion units
generation in one year achieved A consortium of foreign
transmission systems owned by our Company were transferred
to Power Grid Corporation of India Limited (¡°PGCIL ¡±) pursuant
to legislation by the Parliament of India.
IBRD extended direct loan of US0 million to our Company under time slice concept for its projects.
15,000 MW of installed capacity achieved Maiden
declaration of dividend of Rs. 650 million Jhanor-Gandhar
(Gujarat) becomes our first thermal power station to have
commissioned an integrated Liquid Waste Treatment Plant
NTPC celebrated 20yrs of its existence. A new logo was adopted. NTPC took over the 460 MW Talcher Thermal Power Station from Orissa State Electricity Board.
status granted by the GoI100 billion units
generation in one year achieved A consortium of foreign
transmission systems owned by our Company were transferred
to Power Grid Corporation of India Limited (¡°PGCIL ¡±) pursuant
Gandhar
Liquid Waste Treatment Plant.
Talcher Thermal Power Station from
banks led by Sumitomo Bank, Hong Kong extends foreign
currency loan of 5 billion Japanese Yen for the first time
without GOI guarantee
1998 - Commissioned the first Naphtha based plant at Kayamkulam with a capacity of 350 MW
1999 - Our Company.s Dadri thermal power project, Uttar
Pradesh adjudged the best in India with a PLF of 96.12%
Dadri thermal power project, Uttar Pradesh certified with
ISO 14001
2000 - Commenced constr project of 800 MW capacity in Himachal Pradesh.
2002 - Three wholly owned subsidiaries, viz., NTPC Electric
Supply Company Limited, NTPC Hydro Limited and NTPC
Vidyut Vyapar Nigam Limited incorporated ESP
[Electrostatic precipitators) set up at Talcher power plant
20,000 MW installed capacity mark exceeded
2003 - Our Company undertook debt re
banks led by Sumitomo Bank, Hong Kong extends foreign
currency loan of 5 billion Japanese Yen for the first time
guarantee.
Commissioned the first Naphtha based plant at Kayamkulam with a capacity of 350 MW.
Our Company.s Dadri thermal power project, Uttar
Pradesh adjudged the best in India with a PLF of 96.12%
Dadri thermal power project, Uttar Pradesh certified with
Commenced construction of the first hydro – electricity powerproject of 800 MW capacity in Himachal Pradesh.
Three wholly owned subsidiaries, viz., NTPC Electric
Supply Company Limited, NTPC Hydro Limited and NTPC
Vidyut Vyapar Nigam Limited incorporated ESP
[Electrostatic precipitators) set up at Talcher power plant
20,000 MW installed capacity mark exceeded.
Our Company undertook debt re-structuring. Raised
banks led by Sumitomo Bank, Hong Kong extends foreign
Dadri thermal power project, Uttar Pradesh certified with
electricity power
Supply Company Limited, NTPC Hydro Limited and NTPC
funds through bonds (Series XIII and XIV) Construction of
first hydro-electric power project of 800 MW capacity in
Himachal Pradesh commenced after
2004 - The award of contract for the first Super Critical Thermal
Power Plant at Sipat Reached a total installed capacity of 22,249
MW with the Talcher Unit V getting synchronized on May 13, 2004
Our Company.s Feroze Gandhi Unchahar Thermal station achieves
a record PLF of 87.43% in current year up from 18.02% in February
92 when it was taken over by us LIC extends credit facility for
Rs. 70 billion. Rs. 40 billion is in the form of unsecured loans and
Rs30 billion is in the form of bonds Our Company makes its debut issue
of euro bonds amounting to USD 200 million in the international
market First coal mining block allotted Listing of our Equity Shares
on the Stock Exchanges
2005 - Our Company received the International Project Managem
Award 2005 for its Simhadri project at the International Project Management Association World Congress. Oil block allocated under NELP V Our Company adopted core values 'BCOMIT' (Buisness Ethics, Customer Focus, Organisational Pride, Mutual Respect and Trust, Innovation and Speed and Total Quality for Excellence) Our Company ranked as the Third Great Place to work for in India for second time in succession by a survey conducted by Grow Talent and Business World 2005
2006 - Badarpur Thermal Power Station having an installed capacity of 705 MW transferred to
2007 - MOC, GOT granted in
funds through bonds (Series XIII and XIV) Construction of
electric power project of 800 MW capacity in
Himachal Pradesh commenced after the investment approval.
The award of contract for the first Super Critical Thermal
Power Plant at Sipat Reached a total installed capacity of 22,249
MW with the Talcher Unit V getting synchronized on May 13, 2004
Our Company.s Feroze Gandhi Unchahar Thermal station achieves
a record PLF of 87.43% in current year up from 18.02% in February
it was taken over by us LIC extends credit facility for
Rs. 70 billion. Rs. 40 billion is in the form of unsecured loans and
30 billion is in the form of bonds Our Company makes its debut issue
of euro bonds amounting to USD 200 million in the international
market First coal mining block allotted Listing of our Equity Shares
on the Stock Exchanges.
Our Company received the International Project Managem
Award 2005 for its Simhadri project at the International ProjectManagement Association World Congress. Oil block allocated underNELP V Our Company adopted core values 'BCOMIT' (Buisness Ethics, Customer Focus, Organisational Pride, MutualRespect and Trust, Innovation and Speed and Total Quality forExcellence) Our Company ranked as the Third Great Place to workfor in India for second time in succession by a survey conductedby Grow Talent and Business World 2005.
Badarpur Thermal Power Station having an installed capacity of 705 MW transferred to our Company.
granted in-principle approval for allocation of a
funds through bonds (Series XIII and XIV) Construction of
approval.
The award of contract for the first Super Critical Thermal
Power Plant at Sipat Reached a total installed capacity of 22,249
MW with the Talcher Unit V getting synchronized on May 13, 2004
Our Company.s Feroze Gandhi Unchahar Thermal station achieves
a record PLF of 87.43% in current year up from 18.02% in February
it was taken over by us LIC extends credit facility for
Rs. 70 billion. Rs. 40 billion is in the form of unsecured loans and
30 billion is in the form of bonds Our Company makes its debut issue
of euro bonds amounting to USD 200 million in the international
market First coal mining block allotted Listing of our Equity Shares
Our Company received the International Project Management
Award 2005 for its Simhadri project at the International Project Management Association World Congress. Oil block allocated under
(Buisness Ethics, Customer Focus, Organisational Pride, Mutual Respect and Trust, Innovation and Speed and Total Quality for Excellence) Our Company ranked as the Third Great Place to work for in India for second time in succession by a survey conducted
Badarpur Thermal Power Station having an installed capacity
principle approval for allocation of a new
coal block, Chatti conditions stipulated in the approval letter. The share of reserves is estimated to be 354 Million Tonnes
2008 - Our Company adjudged as the Star PSU Board expanded by appointment of five independent Directors India Power Award conferred on Centre for Power Efficiency and Environmental Protection
2009 - Memorandum of understanding entered into with the Nuclea
Power Corporation of India Limited (NPCIL) for deve lopment of
nuclear power in India 30,000 MW installed capacity mark crossed
Long term fuel supply agreement signed with Coal India Limited
for supply of coal to our power stations for a period of 20 years
Our Company acquired 44.6% of presently paid
Kerala and Transformers and Electricals Kerala Limited from
Government of Kerala at a total consideration of Rs. 313.4 million,
subject to final price to be based on the valuation of the assets
of Kerala and Transformers and Electricals Kerala Limited.
Kerala and Transformers and Electricals Kerala Limited is
engaged in manufacturing and repair of heavy duty transformers
International Gold Star Quality Award conferred on Centre for
Power Efficiency and Environmental Protection.
NTPC enters MOU with Nuclear Power Corpo
(NPCIL) to work together for development of Nuclear Power in India
and for this purpose to form a Joint Venture Company for setting up
Nuclear Power Projects.
coal block, Chatti-Bariatu (South) to our Company subject to theconditions stipulated in the approval letter. The share of reserves
estimated to be 354 Million Tonnes.
Our Company adjudged as the Star PSU - 2008 Board expanded by appointment of five independent Directors India Power Award conferred on Centre for Power Efficiency andEnvironmental Protection.
Memorandum of understanding entered into with the Nuclea
Power Corporation of India Limited (NPCIL) for deve lopment of
nuclear power in India 30,000 MW installed capacity mark crossed
Long term fuel supply agreement signed with Coal India Limited
for supply of coal to our power stations for a period of 20 years
Our Company acquired 44.6% of presently paid-up capital of
Kerala and Transformers and Electricals Kerala Limited from
Government of Kerala at a total consideration of Rs. 313.4 million,
subject to final price to be based on the valuation of the assets
of Kerala and Transformers and Electricals Kerala Limited.
Kerala and Transformers and Electricals Kerala Limited is
manufacturing and repair of heavy duty transformers
International Gold Star Quality Award conferred on Centre for
Power Efficiency and Environmental Protection.
NTPC enters MOU with Nuclear Power Corporation of India Ltd.
(NPCIL) to work together for development of Nuclear Power in India
and for this purpose to form a Joint Venture Company for setting up
Nuclear Power Projects.
Bariatu (South) to our Company subject to the conditions stipulated in the approval letter. The share of reserves
Board expanded by appointment of five independent Directors India Power Award conferred on Centre for Power Efficiency and
Memorandum of understanding entered into with the Nuclea
Power Corporation of India Limited (NPCIL) for deve lopment of
nuclear power in India 30,000 MW installed capacity mark crossed
Long term fuel supply agreement signed with Coal India Limited
for supply of coal to our power stations for a period of 20 years
up capital of
Kerala and Transformers and Electricals Kerala Limited from
Government of Kerala at a total consideration of Rs. 313.4 million,
subject to final price to be based on the valuation of the assets
of Kerala and Transformers and Electricals Kerala Limited.
manufacturing and repair of heavy duty transformers
International Gold Star Quality Award conferred on Centre for
ration of India Ltd.
(NPCIL) to work together for development of Nuclear Power in India
and for this purpose to form a Joint Venture Company for setting up
Evolution:-
1975
1977
2004
NTPC was established in
100% ownership by the Government Of
India. In the last 30 years , NTPC has grown
into the largest power utility in India.
In 1997 , GOV granted NTPC status oo
of “Navratan” being one of the nine jewe
jewels of India, enhancing the powers to
the Board Of Directors.
NTPC became a listed company with
majority Government ownership 89.5%
NTPC becomes third largest by
capitalization or listed companies.
in 1975 with
by the Government Of
India. In the last 30 years , NTPC has grown
largest power utility in India.
In 1997 , GOV granted NTPC status oo
of “Navratan” being one of the nine jewe
jewels of India, enhancing the powers to
NTPC became a listed company with
majority Government ownership 89.5%
NTPC becomes third largest by market
capitalization or listed companies.
LTD
2005
2008
2009
The company rechristened as NTPC
LTD in line with its changing business
portfolio and transform itself
thermal power utility to an integrated
utility.
National Thermal Power Corporation
is the largest power generation com
pany in India. Forbes Global 2000 &
2009 ranked it 317th in the world.
Memorandum of understanding
that into with the Nuclear
Corporation of India Ltd(NPCIL).
In India 30,000MW installed capa
city mark crossed.
The company rechristened as NTPC
LTD in line with its changing business
portfolio and transform itself from a
thermal power utility to an integrated
National Thermal Power Corporation
is the largest power generation com-
pany in India. Forbes Global 2000 &
2009 ranked it 317th in the world.
Memorandum of understanding
with the Nuclear Power
Corporation of India Ltd(NPCIL).
In India 30,000MW installed capa-
city mark crossed.
A public sector company, it was incorporated in the year 1975 to accelerate power
development in the country as a wholly owned company o
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. Within a span of 31
years, NTPC has emerged as a truly national power
facilities in all the major regions of the
Today NTPC is the largest power generating company in India and contributes one
of the thermal energy generated in the country. NTPC has 463 ranking the world
2000‟‟‟‟s companies which are improved from last year rank i.e. 486. Over all these years
NTPC has been an organization which has delivered expected performance in all the
spheres of its business activities and meeting all the challenges for growth
through adoption of excellent management system and practices.
The success of NTPC is the result of a modest but systematic beginning. NTPC known as
the NAVRATANS of PSU‟‟‟‟
major stakeholder. Railway are
A public sector company, it was incorporated in the year 1975 to accelerate power
development in the country as a wholly owned company of the Government of India. At
present, Government of India holds 89.5% of the total equity shares of the company and
the balance 10.5% is held by FIIs, Domestic Banks, Public and others. 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.
Today NTPC is the largest power generating company in India and contributes one
of the thermal energy generated in the country. NTPC has 463 ranking the world
s companies which are improved from last year rank i.e. 486. Over all these years
NTPC has been an organization which has delivered expected performance in all the
spheres of its business activities and meeting all the challenges for growth
through adoption of excellent management system and practices.
The success of NTPC is the result of a modest but systematic beginning. NTPC known as
‟‟‟‟S have central govt. and the finding agencies as one of their
Railway are the major supplier of NTPC.
A public sector company, it was incorporated in the year 1975 to accelerate power
f the Government of 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. Within a span of 31
company, with power generating
Today NTPC is the largest power generating company in India and contributes one-fourth
of the thermal energy generated in the country. NTPC has 463 ranking the world top class
s companies which are improved from last year rank i.e. 486. Over all these years
NTPC has been an organization which has delivered expected performance in all the
spheres of its business activities and meeting all the challenges for growth and operation
The success of NTPC is the result of a modest but systematic beginning. NTPC known as
S have central govt. and the finding agencies as one of their
If anything which is manufactured is to be sold out. In the same manner NTPC also has
some of its buyers. The main buyers who purchase electricity from NTPC are; the state
electricity board (SEB‟‟‟‟S) and the state govt.
Goal of establishment:
State Electricity Boards were not able to cope up with the situation
If anything which is manufactured is to be sold out. In the same manner NTPC also has
some of its buyers. The main buyers who purchase electricity from NTPC are; the state
S) and the state govt.
Goal of establishment: To bridge the huge electricity supply-
State Electricity Boards were not able to cope up with the situation.
If anything which is manufactured is to be sold out. In the same manner NTPC also has
some of its buyers. The main buyers who purchase electricity from NTPC are; the state
-demand gap and the
Mission:-
“Develop and provide reliable power, related products and services at
prices, integrating multiple energy sources with innovative and eco
technologies and contribute to society"
• Make a reliable and available quality power in
competative prices and ensure timely realization of revenues.
• Adopt a broad based capacity portfolio including Hydro Power , LNG Nuclear
Power , and non- conventional and eco
• Plan and speedily implement power projects using state of the art tecnologie
“Develop and provide reliable power, related products and services at
prices, integrating multiple energy sources with innovative and eco
technologies and contribute to society"
Make a reliable and available quality power in increasingly large quantities
competative prices and ensure timely realization of revenues.
a broad based capacity portfolio including Hydro Power , LNG Nuclear
conventional and eco- friendly fuels.
implement power projects using state of the art tecnologie
“Develop and provide reliable power, related products and services at competitive
prices, integrating multiple energy sources with innovative and eco–friendly
increasingly large quantities at
a broad based capacity portfolio including Hydro Power , LNG Nuclear
implement power projects using state of the art tecnologie
• Develop a strong portfolio of profitable business in overseas market including
technical services, generating assets
• Continuously attract and develop committed human resources to match w
standards.
• Leads developmental efforts in the Indian power sector including assisting state
utility reform, policy recover.
• Be a socially responsible corporate utility with thrust on environment protection,
ash utilization, community development, energy conservation.
Contribution of different sources of power generation:
Develop a strong portfolio of profitable business in overseas market including
technical services, generating assets etc.
Continuously attract and develop committed human resources to match w
Leads developmental efforts in the Indian power sector including assisting state
utility reform, policy recover.
cially responsible corporate utility with thrust on environment protection,
ash utilization, community development, energy conservation.
different sources of power generation:
Develop a strong portfolio of profitable business in overseas market including
Continuously attract and develop committed human resources to match world
Leads developmental efforts in the Indian power sector including assisting state
cially responsible corporate utility with thrust on environment protection,
ash utilization, community development, energy conservation.
different sources of power generation:
THERMAL 93392.64 HYDRO 36647.76 NUCLEAR 4120 OTHERS 13242.41
THERMAL 93392.64
HYDRO 36647.76
OTHERS 13242.41
THERMAL
HYDRO
OTHER
NUCLEAR
VISION:- “To be one of the world’s largest and best power utilities, powering India’s growth.”
““““A world class integrated power major, powering India’s growth, A world class integrated power major, powering India’s growth, A world class integrated power major, powering India’s growth, A world class integrated power major, powering India’s growth,
with increasing global presence."with increasing global presence."with increasing global presence."with increasing global presence."
To realize this vision, NTPC has drawn up a detailed Corporate Plan for the period 1997
2012 which represents the company's collective optimism and enthusiasm, inspired by a
glorious past, a vibrant present and a brilliant future. The Plan has been prepared in
in consultation the committed, competent and confident members of the NTPC family. The
road map that has been charted out was after a thorough scan of the strengths and
weaknesses within the organization as well as opportunities and threats in the environm
Considering multidimensional opportunities in the energy sector, NTPC will adopt a multi
pronged growth strategy for capacity addition through Greenfield sites, expansion of
existing stations, takeovers and joint ventures. The capacity addition plans
drawn up for the fifteen-year period using all the above strategies to enable the corporation
to become a 40,000 MW company by 2012 A.D.
(NTPC) a global giant in the power sector was set up on 7th Novemb
objective to accelerate the electricity generation by planning, promoting and organizing
integrated development of thermal power in India.
engineering, construction engineering, construction engineering, construction engineering, construction
provides consultancy in the area of power plant constructions and power generation to
companies in India and abroad. As on date the installed capacity
through its 15 coal based (22,895 MW), 7 gas based (3,955 MW) and 4 Joint through its 15 coal based (22,895 MW), 7 gas based (3,955 MW) and 4 Joint through its 15 coal based (22,895 MW), 7 gas based (3,955 MW) and 4 Joint through its 15 coal based (22,895 MW), 7 gas based (3,955 MW) and 4 Joint
VentureVentureVentureVenture Projects (1,054 MW). NTPC acquired 50% equity of the SAIL Power Supply
Corporation Ltd. (SPSCL). This JV company operates the captive power plants of
Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74 MW). NTPC also has Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74 MW). NTPC also has Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74 MW). NTPC also has Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74 MW). NTPC also has
28.33% stake in Ratnagiri Gas & Powe28.33% stake in Ratnagiri Gas & Powe28.33% stake in Ratnagiri Gas & Powe28.33% stake in Ratnagiri Gas & Powe
“To be one of the world’s largest and best power utilities, powering India’s
A world class integrated power major, powering India’s growth, A world class integrated power major, powering India’s growth, A world class integrated power major, powering India’s growth, A world class integrated power major, powering India’s growth,
with increasing global presence."with increasing global presence."with increasing global presence."with increasing global presence."
this vision, NTPC has drawn up a detailed Corporate Plan for the period 1997
2012 which represents the company's collective optimism and enthusiasm, inspired by a
glorious past, a vibrant present and a brilliant future. The Plan has been prepared in
in consultation the committed, competent and confident members of the NTPC family. The
road map that has been charted out was after a thorough scan of the strengths and
weaknesses within the organization as well as opportunities and threats in the environm
Considering multidimensional opportunities in the energy sector, NTPC will adopt a multi
pronged growth strategy for capacity addition through Greenfield sites, expansion of
existing stations, takeovers and joint ventures. The capacity addition plans
year period using all the above strategies to enable the corporation
to become a 40,000 MW company by 2012 A.D. National Thermal Power Corporation Ltd.
(NTPC) a global giant in the power sector was set up on 7th Novemb
objective to accelerate the electricity generation by planning, promoting and organizing
integrated development of thermal power in India. NTPC‟‟‟‟
engineering, construction engineering, construction engineering, construction engineering, construction and operation of power generating plants. It also
provides consultancy in the area of power plant constructions and power generation to
companies in India and abroad. As on date the installed capacity of NTPC is 27,904 MW of NTPC is 27,904 MW of NTPC is 27,904 MW of NTPC is 27,904 MW
through its 15 coal based (22,895 MW), 7 gas based (3,955 MW) and 4 Joint through its 15 coal based (22,895 MW), 7 gas based (3,955 MW) and 4 Joint through its 15 coal based (22,895 MW), 7 gas based (3,955 MW) and 4 Joint through its 15 coal based (22,895 MW), 7 gas based (3,955 MW) and 4 Joint
rojects (1,054 MW). NTPC acquired 50% equity of the SAIL Power Supply
Corporation Ltd. (SPSCL). This JV company operates the captive power plants of
Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74 MW). NTPC also has Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74 MW). NTPC also has Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74 MW). NTPC also has Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74 MW). NTPC also has
28.33% stake in Ratnagiri Gas & Powe28.33% stake in Ratnagiri Gas & Powe28.33% stake in Ratnagiri Gas & Powe28.33% stake in Ratnagiri Gas & Power Private Limited (RGPPL)r Private Limited (RGPPL)r Private Limited (RGPPL)r Private Limited (RGPPL)
“To be one of the world’s largest and best power utilities, powering India’s
A world class integrated power major, powering India’s growth, A world class integrated power major, powering India’s growth, A world class integrated power major, powering India’s growth, A world class integrated power major, powering India’s growth,
this vision, NTPC has drawn up a detailed Corporate Plan for the period 1997-
2012 which represents the company's collective optimism and enthusiasm, inspired by a
glorious past, a vibrant present and a brilliant future. The Plan has been prepared in-house
in consultation the committed, competent and confident members of the NTPC family. The
road map that has been charted out was after a thorough scan of the strengths and
weaknesses within the organization as well as opportunities and threats in the environment.
Considering multidimensional opportunities in the energy sector, NTPC will adopt a multi-
pronged growth strategy for capacity addition through Greenfield sites, expansion of
existing stations, takeovers and joint ventures. The capacity addition plans that we have
year period using all the above strategies to enable the corporation
National Thermal Power Corporation Ltd.
(NTPC) a global giant in the power sector was set up on 7th November 1975, with an
objective to accelerate the electricity generation by planning, promoting and organizing
‟‟‟‟s core business is
and operation of power generating plants. It also
provides consultancy in the area of power plant constructions and power generation to
of NTPC is 27,904 MW of NTPC is 27,904 MW of NTPC is 27,904 MW of NTPC is 27,904 MW
through its 15 coal based (22,895 MW), 7 gas based (3,955 MW) and 4 Joint through its 15 coal based (22,895 MW), 7 gas based (3,955 MW) and 4 Joint through its 15 coal based (22,895 MW), 7 gas based (3,955 MW) and 4 Joint through its 15 coal based (22,895 MW), 7 gas based (3,955 MW) and 4 Joint
rojects (1,054 MW). NTPC acquired 50% equity of the SAIL Power Supply
Corporation Ltd. (SPSCL). This JV company operates the captive power plants of
Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74 MW). NTPC also has Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74 MW). NTPC also has Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74 MW). NTPC also has Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74 MW). NTPC also has
r Private Limited (RGPPL)r Private Limited (RGPPL)r Private Limited (RGPPL)r Private Limited (RGPPL) a joint venture
company between NTPC, GAIL, Indian Financial Institutions and Maharashtra SEB
Holding Co. Ltd .
\\
Organizational Structure:
Organization structure includes three levels of management
top management, then region level
management & last as planning level
company between NTPC, GAIL, Indian Financial Institutions and Maharashtra SEB
Organizational Structure:-
Organization structure includes three levels of management i.e. corporate level
region level comprising management of SBU regional level
planning level management as GMs of various plants
company between NTPC, GAIL, Indian Financial Institutions and Maharashtra SEB
i.e. corporate level including
comprising management of SBU regional level
management as GMs of various plants
Core Value:
This corporate plan provides details of the overall agenda for NTPC. The successful
delivery of this agenda would require a committed work force that identifies with and
supports the vision. To ensure realization of this corporate agenda, a set of core v
should be central to, and govern each activity of the organization. Known as one of the
NAVRATAN ‟‟‟‟S of the PSU
(BCOMIT):
BBBBusiness Ethics
CCCCustomer Focus
OOOOrganizational & Professional Pride
MMMMutual Respect & Trust
IIIInnovation & Speed
TTTTotal Quality for Excellence
This corporate plan provides details of the overall agenda for NTPC. The successful
delivery of this agenda would require a committed work force that identifies with and
supports the vision. To ensure realization of this corporate agenda, a set of core v
should be central to, and govern each activity of the organization. Known as one of the
PSU‟‟‟‟S NTPC has its following core values. They
rganizational & Professional Pride
utual Respect & Trust
otal Quality for Excellence
This corporate plan provides details of the overall agenda for NTPC. The successful
delivery of this agenda would require a committed work force that identifies with and
supports the vision. To ensure realization of this corporate agenda, a set of core values
should be central to, and govern each activity of the organization. Known as one of the
has its following core values. They are known as
Station Detail: Coal Based Power Stations
COAL BASED(Owned by NTPC)
1. Singrauli
2. Korba
3. Ramagundam
4. Farakka
5. Vindhyachal
6. Rihand
7. Kahalgaon
8. NCTPP, Dadri
9. Talcher Kaniha
10. Feroze Gandhi, Unchahar
11. Talcher Thermal
12. Simhadri
13. Tanda
14. Badarpur
15. Sipat-II
Total
:-
Coal Based Power Stations:
COAL BASED(Owned by
STATE COMMISSIONEDCAPACITY(MW)
Uttar Pradesh
Chhattisgarh
Andhra Pradesh
West Bengal
Madhya Pradesh
Uttar Pradesh
Bihar
Uttar Pradesh
Orissa
Feroze Gandhi, Unchahar Uttar Pradesh
Orissa
Andhra Pradesh
Uttar Pradesh
Delhi
Chhattisgarh
24,885
COMMISSIONED CAPACITY(MW)
2,000
2,100
2,600
1,600
3,260
2,000
2,340
1,330
3,000
1,050
460
1,000
440
705
1,000
24,885
Hydro Based Power Projects
NTPC has increased thrust on hydro development for a balanced portfolio for long term
sustainability. The first step in this direction was taken by initiating investment in Koldam
Hydro Electric Power Project located on Satluj river in Bilaspur district of Himachal
Pradesh. Two other hydro projects under construction are Tapovan Vishnugad and
Loharinag Pala. On all these projects construction activities are in full swing
Projects:
NTPC has increased thrust on hydro development for a balanced portfolio for long term
sustainability. The first step in this direction was taken by initiating investment in Koldam
Hydro Electric Power Project located on Satluj river in Bilaspur district of Himachal
Pradesh. Two other hydro projects under construction are Tapovan Vishnugad and
Loharinag Pala. On all these projects construction activities are in full swing
NTPC has increased thrust on hydro development for a balanced portfolio for long term
sustainability. The first step in this direction was taken by initiating investment in Koldam
Hydro Electric Power Project located on Satluj river in Bilaspur district of Himachal
Pradesh. Two other hydro projects under construction are Tapovan Vishnugad and
Loharinag Pala. On all these projects construction activities are in full swing.
HYDRO BASED
1. Koldam (HEPP)
2. Loharinag Pala (HEPP)
3. Tapovan Vishnugad (HEPP)
Total
Gas/Liquid Fuel Based Power Stations The details of NTPC gas based power stations are as follows GAS BASED
(Owned by NTPC)
1. Anta
2. Auraiya
3. Kawas
4. Dadri
5. Jhanor-Gandhar
6. Rajiv Gandhi CCPP Kayamkulam
7. Faridabad
Total
HYDRO BASED STATE
CAPACITY(MW)
Koldam (HEPP) Himachal Pradesh
Loharinag Pala (HEPP) Uttarakhand
Tapovan Vishnugad Uttarakhand
Gas/Liquid Fuel Based Power Stations:
of NTPC gas based power stations are as follows:-
STATE COMMISSIONEDCAPACITY(MW)
Rajasthan 413
Uttar Pradesh 652
Gujarat 645
Uttar Pradesh 817
Gujarat 648
CCPP Kerala 350
Haryana 430
3,955
APPROVED CAPACITY(MW)
800
600
520
1,920
COMMISSIONED CAPACITY(MW)
3,955
Diversified Growth
NTPC’s quest for diversification started with its foray into Hydro Power. It has, since then,
been moving towards becoming a highly diversified company through backward, forward
and lateral integration. The company is well on its way to becoming ‘an Integ
Major’, having entered Hydro Power, Coal Mining, Power Trading, Equipment
Manufacturing and Power Distribution. NTPC has made long strides in developing its Ash
Utilization business. In its pursuit of diversification, NTPC has also developed st
alliances and joint ventures with leading national and international companies.
Hydro PowerHydro PowerHydro PowerHydro Power:::: In order to give impetus to hydro power growth in the country and to have a balanced
portfolio of power generation, NTPC entered hydro power business wit
Koldam hydro project in Himachal Pradesh. Two more projects have also been taken up in
Uttarakhand. A wholly owned subsidiary, NTPC Hydro Ltd., is setting up hydro projects
of capacities up to 250 MW.
Coal Mining:Coal Mining:Coal Mining:Coal Mining: In a major backward integration move to create fuel security, NTPC has ventured into coal
mining business with an aim to meet about 20% of its coal requirement from its captive
mines by 2017. The Government of India has so far allotted 7 coal blocks to NTPC,
including 2 blocks to be developed through joint venture route. Coal Production is likely to
start in 2009-10.
Power Trading:Power Trading:Power Trading:Power Trading: 'NTPC Vidyut Vyapar Nigam Ltd.' (NVVN), a wholly ow ned subsidiary was created for
trading power leading to optimal utilization of NTPC’s assets. It is the second largest
power trading company in the country. In order to facilitate power trading in the coun
Growth :-
NTPC’s quest for diversification started with its foray into Hydro Power. It has, since then,
been moving towards becoming a highly diversified company through backward, forward
and lateral integration. The company is well on its way to becoming ‘an Integ
Major’, having entered Hydro Power, Coal Mining, Power Trading, Equipment
Manufacturing and Power Distribution. NTPC has made long strides in developing its Ash
Utilization business. In its pursuit of diversification, NTPC has also developed st
alliances and joint ventures with leading national and international companies.
In order to give impetus to hydro power growth in the country and to have a balanced
portfolio of power generation, NTPC entered hydro power business wit
Koldam hydro project in Himachal Pradesh. Two more projects have also been taken up in
Uttarakhand. A wholly owned subsidiary, NTPC Hydro Ltd., is setting up hydro projects
integration move to create fuel security, NTPC has ventured into coal
mining business with an aim to meet about 20% of its coal requirement from its captive
mines by 2017. The Government of India has so far allotted 7 coal blocks to NTPC,
s to be developed through joint venture route. Coal Production is likely to
'NTPC Vidyut Vyapar Nigam Ltd.' (NVVN), a wholly ow ned subsidiary was created for
trading power leading to optimal utilization of NTPC’s assets. It is the second largest
power trading company in the country. In order to facilitate power trading in the coun
NTPC’s quest for diversification started with its foray into Hydro Power. It has, since then,
been moving towards becoming a highly diversified company through backward, forward
and lateral integration. The company is well on its way to becoming ‘an Integrated Power
Major’, having entered Hydro Power, Coal Mining, Power Trading, Equipment
Manufacturing and Power Distribution. NTPC has made long strides in developing its Ash
Utilization business. In its pursuit of diversification, NTPC has also developed strategic
alliances and joint ventures with leading national and international companies.
In order to give impetus to hydro power growth in the country and to have a balanced
portfolio of power generation, NTPC entered hydro power business with the 800 MW
Koldam hydro project in Himachal Pradesh. Two more projects have also been taken up in
Uttarakhand. A wholly owned subsidiary, NTPC Hydro Ltd., is setting up hydro projects
integration move to create fuel security, NTPC has ventured into coal
mining business with an aim to meet about 20% of its coal requirement from its captive
mines by 2017. The Government of India has so far allotted 7 coal blocks to NTPC,
s to be developed through joint venture route. Coal Production is likely to
'NTPC Vidyut Vyapar Nigam Ltd.' (NVVN), a wholly ow ned subsidiary was created for
trading power leading to optimal utilization of NTPC’s assets. It is the second largest
power trading company in the country. In order to facilitate power trading in the country,
‘National Power Exchange Ltd.’, a JV between NTPC, NHPC, PFC and TCS has been
formed for operating a Power Exchange.
Ash Business:Ash Business:Ash Business:Ash Business:
NTPC has focused on the utilization of ash generated by its power stations to convert the
challenge of ash disposal into an opportunity. Ash is being used as a raw material input for
cement companies and brick manufacturers. NVVN is engaged in the business of Fly Ash
export and sale to domestic customers. Joint ventures with cement companies are being
planned to set up cement grinding units in the vicinity of NTPC stations.
Power DistributionPower DistributionPower DistributionPower Distribution:::: ‘NTPC Electric Supply Company Ltd.’ (NESCL), a wholly owned subsidiary of NTPC, was
set up for distribution of power. NESCL is actively engaged in ‘Rajiv Gandhi Gramin
Vidyutikaran Yojana’programme for rural electrifica tion and also working as 'Advisor
cum Consultant' for Ministry of Power for implementatio n of Accelerated Power
Development and Reforms Program
Equipment Manufacturing:Equipment Manufacturing:Equipment Manufacturing:Equipment Manufacturing: Enormous growth in power sector necessitates augmentation of power equipment
manufacturing capacity. NTPC has formed JVs with BHEL and Bharat Forge Ltd. for
power plant equipment manufacturing. NTPC has also acquired stake in Transformers
and Electricals Kerela Ltd. (TELK) for manufacturin g and repair of transformers.
‘National Power Exchange Ltd.’, a JV between NTPC, NHPC, PFC and TCS has been
formed for operating a Power Exchange.
NTPC has focused on the utilization of ash generated by its power stations to convert the
l into an opportunity. Ash is being used as a raw material input for
cement companies and brick manufacturers. NVVN is engaged in the business of Fly Ash
export and sale to domestic customers. Joint ventures with cement companies are being
p cement grinding units in the vicinity of NTPC stations.
‘NTPC Electric Supply Company Ltd.’ (NESCL), a wholly owned subsidiary of NTPC, was
set up for distribution of power. NESCL is actively engaged in ‘Rajiv Gandhi Gramin
Vidyutikaran Yojana’programme for rural electrifica tion and also working as 'Advisor
Consultant' for Ministry of Power for implementatio n of Accelerated Power
Programme(APDRP) launched by Government of India.
Equipment Manufacturing:Equipment Manufacturing:Equipment Manufacturing:Equipment Manufacturing:
Enormous growth in power sector necessitates augmentation of power equipment
manufacturing capacity. NTPC has formed JVs with BHEL and Bharat Forge Ltd. for
power plant equipment manufacturing. NTPC has also acquired stake in Transformers
and Electricals Kerela Ltd. (TELK) for manufacturin g and repair of transformers.
‘National Power Exchange Ltd.’, a JV between NTPC, NHPC, PFC and TCS has been
NTPC has focused on the utilization of ash generated by its power stations to convert the
l into an opportunity. Ash is being used as a raw material input for
cement companies and brick manufacturers. NVVN is engaged in the business of Fly Ash
export and sale to domestic customers. Joint ventures with cement companies are being
p cement grinding units in the vicinity of NTPC stations.
‘NTPC Electric Supply Company Ltd.’ (NESCL), a wholly owned subsidiary of NTPC, was
set up for distribution of power. NESCL is actively engaged in ‘Rajiv Gandhi Gramin
Vidyutikaran Yojana’programme for rural electrifica tion and also working as 'Advisor
Consultant' for Ministry of Power for implementatio n of Accelerated Power
me(APDRP) launched by Government of India.
Enormous growth in power sector necessitates augmentation of power equipment
manufacturing capacity. NTPC has formed JVs with BHEL and Bharat Forge Ltd. for
power plant equipment manufacturing. NTPC has also acquired stake in Transformers
and Electricals Kerela Ltd. (TELK) for manufacturin g and repair of transformers.
Operation Growth
In terms of operations, NTPC has always been considerably above the national average.
The availability factor for coal based power stations has increased from 89.32% in 1998
to 91.76% in 2009-10, which compares favourably with international standards. The PLF
has increased from 76.6% in 1998
Growth:-
In terms of operations, NTPC has always been considerably above the national average.
The availability factor for coal based power stations has increased from 89.32% in 1998
10, which compares favourably with international standards. The PLF
has increased from 76.6% in 1998-99 to 90.81% during the year 2009-10.
In terms of operations, NTPC has always been considerably above the national average.
The availability factor for coal based power stations has increased from 89.32% in 1998-99
10, which compares favourably with international standards. The PLF
10.
The table below shows that while the installed capacity has increased by 62.15% in the last
twelve years the generation has increased by 99.84%.
DESCRIPTION UNIT
Installed Capacity MW
Generation MUs
The table below shows that while the installed capacity has increased by 62.15% in the last
twelve years the generation has increased by 99.84%.
UNIT 1998-99 2009-10 % OF INCREASE
MW 17,786 28,840
MUs 1,09,505 2,18,840
The table below shows that while the installed capacity has increased by 62.15% in the last
% OF INCREASE
62.15
99.84
The table below shows the detailed operational performance of coal based stations over the
years.
OPERATIONAL PERFORMANCE OF COAL BASED
Year Generation(BU)
2009-10
218.84
2008-09
206.94
2007-08 2006-07
200.86 188.67
2005-06
170.88
2004-05
159.11
2003-04
149.16
2002-03
140.86
2001-02
133.20
2000-01
130.10
1999-00
118.70
1998-99
109.50
The table below shows the detailed operational performance of coal based stations over the
OPERATIONAL PERFORMANCE OF COAL BASED NTPC STATIONS
Generation(BU) PLF(%) Availability Factor (%)
90.81 91.76
91.14 92.47
92.24 89.43
92.12 90.09
87.52 89.91
87.51 91.20
84.40 88.79
83.57 88.70
81.11 89.09
81.80 88.54
80.39 90.06
76.60 89.36
The table below shows the detailed operational performance of coal based stations over the
NTPC STATIONS
Award Details NTPC has a glorious record of excellence in every field of its activities ever since its
inception in 1975. Leading the country’s power sector with a vision to become a 75,000
MW company by 2017, we take pride in our people and their performance which has been
acknowledged time and again at various national and international fora.
S.no Awards
1. Company RankingsAward
2. Environment Awards
3. HR Awards
4. Safety Awards
5. Performance Awards
6. International Gold Star Award for Quality 2009
7. India Pride Awards
Details:-
NTPC has a glorious record of excellence in every field of its activities ever since its
inception in 1975. Leading the country’s power sector with a vision to become a 75,000
MW company by 2017, we take pride in our people and their performance which has been
acknowledged time and again at various national and international fora.
Instituted by
Company Rankings
Business Standard. Star Company (Public Sector Undertaking) of the year
Awards
Institute of Directors. Significant contribution in protecting the environment
World HRD congress Great Places to Workinnovative HR practices.
Institute of Directors for Occupational Health & Safety
Awards IPMA International Project Management Award 2008.
International Gold Star for Quality 2009
Centre for Power Efficiency & Environmental Protection (CenPEEP)
Recognition of outstanding commitment to Quality, Excellence and Leadership contributing towards the success for India in the business world.
Awards Union Home Minister. Shri P.
Chidambaram
For excellence in Energy and Power Category.
NTPC has a glorious record of excellence in every field of its activities ever since its
inception in 1975. Leading the country’s power sector with a vision to become a 75,000
MW company by 2017, we take pride in our people and their performance which has been
acknowledged time and again at various national and international fora.
Remarks
Star Company (Public Sector Undertaking) of the year Significant contribution in protecting the environment
Great Places to Work & for innovative HR practices.
for Occupational Health & Safety -2008’
International Project Management Award 2008.
Recognition of outstanding commitment to Quality, Excellence and Leadership contributing towards the success for India in the business world.
For excellence in Energy and Power Category.
8. ICAI Award
S.no Awards
9.
International Project Management Award,2008
10. Exim Excellence Award 2008
11. India Power Awards 2008
12. Enterprise Excellence Award
The Institute of Chartered Accountants of India
For Excellence in Financial Reporting
Instituted by
International Project
International Project Management Association (IPMA)
Project Excellence in Vindhyachal (2X500 MW).project was implemented in record time with excellent environmental and economic performanceThe Project Excellence Award is annuallyto the most successful project teams in the world
Award Confederation of Indian Industry(CII)
‘Significant Achievement’Strong Commitment to Excel’
Awards Council of Power Utilities Its commitment the issues of environment protection in India, while simultaneously supporting economic growth and development.
Enterprise Excellence Indian Institution of Industrial Engineering
For its financial and operational strength assessed perspectives Strength, Achievements, Internal Processes, Innovation & Learning and External Customer Orientation.
or Excellence in Financial Reporting
Remarks
Project Excellence in Vindhyachal – Stage III (2X500 MW). project was implemented in record time with excellent environmental and economic performance The Project Excellence Award is annually awarded to the most successful project teams in the world ‘Significant Achievement’ Strong Commitment to Excel’
Its commitment to address the issues of environment protection in India, while simultaneously supporting economic growth and development.
For its financial and operational strength assessed under 5 perspectives - Financial Strength, Achievements, Internal Processes, Innovation & Learning and External Customer Orientation.
SWOT Analysis
StrengthsStrengthsStrengthsStrengths::::
� Largest market share in domestic power generation and a broad customer
portfolio across the country.
Threats
SWOT Analysis:-
Largest market share in domestic power generation and a broad customer
across the country.
SWOTSWOTSWOTSWOT
Strengths
Weakness
Opportunitie
Largest market share in domestic power generation and a broad customer
� Excellent track record of performance in project implementation and plant
operation.
� Diversified thermal generation portfolio multiple and fuels.
� Navaratna status.
� High brand equity among shareholders.
� Strong balance sheet
� Engineering skills in project configuration and package design.
� Turnaround ability for old plants
Tanda and Unchahar.
� High credit rating that is i
� In house training facility
of the sector.
WeaknessWeaknessWeaknessWeakness::::
� Low risk diversification of business portfolio generation assets.
� Poor financial
Excellent track record of performance in project implementation and plant
Diversified thermal generation portfolio multiple and fuels.
brand equity among shareholders.
rong balance sheet – ability to raise low cost debt.
Engineering skills in project configuration and package design.
Turnaround ability for old plants – demonstrated in the takeover plants of Talcher,
High credit rating that is indicative of the confidence of lenders.
In house training facility (PMI),CENPEEP, R&D(PMI),CENPEEP, R&D(PMI),CENPEEP, R&D(PMI),CENPEEP, R&D etc that assist in development
Low risk diversification of business portfolio consists primarily of
oor financial health of customer.
Excellent track record of performance in project implementation and plant
Engineering skills in project configuration and package design.
demonstrated in the takeover plants of Talcher,
ndicative of the confidence of lenders.
etc that assist in development
consists primarily of
� Functional orientation hampering across functional perspective in decision
making.
� Long and multi layered procurement process
process delay.
� Fragmented IT architecture.
� Gaps in HR systems such as
career development.
� Hierarchy for decision making that effects responsiveness.
� Role ambiguity and dilution within different lends of the
Opportunities Opportunities Opportunities Opportunities ::::
� Expand generation capacities by
maintain the position of a dominant generating utility in the Indian Power sector.
� Broad base fuel mix by considering imported coal, gas, domestic coal,
nuclear power etc.With a mitigate fuel risk and maintaining lo
competitiveness.
Functional orientation hampering across functional perspective in decision
Long and multi layered procurement process leading to long lead times and
Fragmented IT architecture.
Gaps in HR systems such as performance management, awards and incentive
erarchy for decision making that effects responsiveness.
Role ambiguity and dilution within different lends of the
Expand generation capacities by putting up thermal & hydro capacities,
maintain the position of a dominant generating utility in the Indian Power sector.
Broad base fuel mix by considering imported coal, gas, domestic coal,
nuclear power etc.With a mitigate fuel risk and maintaining long run
Functional orientation hampering across functional perspective in decision
leading to long lead times and
performance management, awards and incentive
erarchy for decision making that effects responsiveness.
Role ambiguity and dilution within different lends of the organization.
putting up thermal & hydro capacities,
maintain the position of a dominant generating utility in the Indian Power sector.
Broad base fuel mix by considering imported coal, gas, domestic coal,
ng run
� Expand services for
as well as international market.
� Backward integrate into fuel management to exercise greater control and
understanding of supply economics.
� Lead the development
energy sources especially in the distributed generation mode.
� Improve collections by
role in allocation of new plants.
� Execute increased number of power
Projects status, thereby reducing the cost of the p
� Forward integrate into the distribution business in India.
ThreatsThreatsThreatsThreats::::
� Limited experience of operating
competition.
Expand services for EPC, R&M, and O&MEPC, R&M, and O&MEPC, R&M, and O&MEPC, R&M, and O&M activities in the domestic
as well as international market.
Backward integrate into fuel management to exercise greater control and
understanding of supply economics.
Lead the development and commercial deployment of non
gy sources especially in the distributed generation mode.
collections by trading, direct sales to bulk customers and the active
role in allocation of new plants.
increased number of power plants that classify for Mega Power
Projects status, thereby reducing the cost of the projects and power generated.
Forward integrate into the distribution business in India.
Limited experience of operating in a truly liberalized environment with
activities in the domestic
Backward integrate into fuel management to exercise greater control and
and commercial deployment of non – conventional
trading, direct sales to bulk customers and the active
plants that classify for Mega Power
and power generated.
Forward integrate into the distribution business in India.
in a truly liberalized environment with
� Limited experience of operating in an independently regulated system.
� Redirecting power may be constrained by inter
� Downward regulatory and competitive pressure on
� Stringent norms for approval of increase in capital costs for projects in
event of time overrun.
� Stringent environmental norms in the future may add to the cost of
generation.
� Absence of an independent regular for coal
private investments lending to the risk of low availability of coal in the future.
Limited experience of operating in an independently regulated system.
Redirecting power may be constrained by inter- regional connectivity
Downward regulatory and competitive pressure on tariffs.
Stringent norms for approval of increase in capital costs for projects in
event of time overrun.
Stringent environmental norms in the future may add to the cost of
Absence of an independent regular for coal industry and the delay in
private investments lending to the risk of low availability of coal in the future.
Limited experience of operating in an independently regulated system.
regional connectivity
tariffs.
Stringent norms for approval of increase in capital costs for projects in
Stringent environmental norms in the future may add to the cost of
industry and the delay in
private investments lending to the risk of low availability of coal in the future.
Competitors overview Tata PowerTata PowerTata PowerTata Power:::: Tata power is India‟‟‟‟s largest private sector power utility. Its revenues are $ 1 bn. Its Profit
after tax is $ 137 mn$ 137 mn$ 137 mn$ 137 mn. Its generation capacity is
the capacity is 1800 MW. It has presence in generation, transmission and distribution of
power. It supplies power to Mumbai and Delhi regions.
Business strategy: The core business of Tata Power Company is to generate, transmit and distribute
electricity. The Company operates in two business segments: Power and Other services.
The Power segment is engaged in generation, transmission and distribution of electrici
The other services segment includes electronic equipment, broadband services, and project
consultancy and oil exploration.
Competitors overview:-
s largest private sector power utility. Its revenues are $ 1 bn. Its Profit
. Its generation capacity is 2300 MW2300 MW2300 MW2300 MW. Out of that in Mumbai,
capacity is 1800 MW. It has presence in generation, transmission and distribution of
power. It supplies power to Mumbai and Delhi regions.
The core business of Tata Power Company is to generate, transmit and distribute
electricity. The Company operates in two business segments: Power and Other services.
The Power segment is engaged in generation, transmission and distribution of electrici
The other services segment includes electronic equipment, broadband services, and project
consultancy and oil exploration.
s largest private sector power utility. Its revenues are $ 1 bn. Its Profit
. Out of that in Mumbai,
capacity is 1800 MW. It has presence in generation, transmission and distribution of
The core business of Tata Power Company is to generate, transmit and distribute
electricity. The Company operates in two business segments: Power and Other services.
The Power segment is engaged in generation, transmission and distribution of electricity.
The other services segment includes electronic equipment, broadband services, and project
Reliance EnergyReliance EnergyReliance EnergyReliance Energy::::----
Reliance Energy Ltd (REL) formerly known as
(BSES) (BSES) (BSES) (BSES)
is a part of the Anil Dhirubhai Ambani Groupthe Anil Dhirubhai Ambani Groupthe Anil Dhirubhai Ambani Groupthe Anil Dhirubhai Ambani Group
company in
the private sector in India which came into existence when it took over BSES in 2002. The company is the sole distributor of electricity to consumers in the su
It also runs power generation, transmission and distribution businesses in other parts of
Maharashtra, Goa and Andhra Pradesh. REL has significant presence in the field of
execution of the Power projects on EPC (Engineering, Procurement and Commissioning)
basis.
Reliance Energy Ltd (REL) formerly known as Bombay Suburban Electric Supply Bombay Suburban Electric Supply Bombay Suburban Electric Supply Bombay Suburban Electric Supply
the Anil Dhirubhai Ambani Groupthe Anil Dhirubhai Ambani Groupthe Anil Dhirubhai Ambani Groupthe Anil Dhirubhai Ambani Group. It is an integrated power utility
the private sector in India which came into existence when it took over BSES in 2002.
The company is the sole distributor of electricity to consumers in the su
It also runs power generation, transmission and distribution businesses in other parts of
Maharashtra, Goa and Andhra Pradesh. REL has significant presence in the field of
execution of the Power projects on EPC (Engineering, Procurement and Commissioning)
Bombay Suburban Electric Supply Bombay Suburban Electric Supply Bombay Suburban Electric Supply Bombay Suburban Electric Supply
. It is an integrated power utility
the private sector in India which came into existence when it took over BSES in 2002.
The company is the sole distributor of electricity to consumers in the suburbs of Mumbai.
It also runs power generation, transmission and distribution businesses in other parts of
Maharashtra, Goa and Andhra Pradesh. REL has significant presence in the field of
execution of the Power projects on EPC (Engineering, Procurement and Commissioning)
Future Expansion NTPC has formulated a long term Corporate Plan upto 2017. In line with the Corporate
Plan, the capacity addition under
PROJECTS.no CoalCoalCoalCoal 1. NCTPP II ( 2 x 490)
2 Korba III ( 1 x 500)
3 Sipat I (3 x 660) 4. Farakka III ( 1 x 500)
5. Indira Gandhi STPPx 500)
6. Simhadri II ( 2 x 500)7. Vallur I - JV with TNEB ( 2 x 500)
8. Vallur Stage-I Phase
9. Bongaigaon(3 x 250)
10. Mauda ( 2 x 500)
11. Rihand III(2X500)
12. Vindhyachal-IV (2X500)
13. Nabinagar TPP-JV with Railways (4 x 250)
14. Barh II (2 X 660)
15. Barh I (3 X 660)
HydroHydroHydroHydro 1. Koldam HEPP ( 4 x 200)
2. Loharinag Pala HEPP ( 4x 150)
3. Tapovan Vishnugad HEPP (4 x 130)
Total
Future Expansion:-
NTPC has formulated a long term Corporate Plan upto 2017. In line with the Corporate
Plan, the capacity addition under implementation stage is presented below:
PROJECT
Uttar Pradesh
Chhattisgarh
ChhattisgarhFarakka III ( 1 x 500) West Bengal
Indira Gandhi STPP- JV with IPGCL & HPGCL ( 3
Haryana
Simhadri II ( 2 x 500) Andhra PradeshJV with TNEB ( 2 x 500) Tamilnadu
I Phase-II -JV with TNEB ( 1 x 500) Tamilnadu
Assam
Maharashta
Uttar Pradesh
IV (2X500) Madhya Pradesh
JV with Railways (4 x 250) Bihar
Bihar
Bihar
Koldam HEPP ( 4 x 200) Himachal Pradesh
Loharinag Pala HEPP ( 4x 150) Uttarakhand
Tapovan Vishnugad HEPP (4 x 130) Uttarakhand
NTPC has formulated a long term Corporate Plan upto 2017. In line with the Corporate
implementation stage is presented below:
STATE MW
Uttar Pradesh 980
Chhattisgarh 500
Chhattisgarh 1980 West Bengal 500
Haryana 1500
Andhra Pradesh 1000 Tamilnadu 1000
Tamilnadu 500
Assam 750
Maharashta 1000
Uttar Pradesh 1000
Madhya Pradesh
1000
Bihar 1000
Bihar 1320
Bihar 1980
Himachal Pradesh
800
Uttarakhand 600
Uttarakhand 520
17930
BADARPUR THERMAL POWER STATION
BTPSBTPSBTPSBTPS
BTPS PROFILE
Introduction
Organizational Structure
Company Social Responsibility
Awards
Introduction :
BADARPUR THERMAL POWER BADARPUR THERMAL POWER BADARPUR THERMAL POWER BADARPUR THERMAL POWER
Ministry of Energy and is managed by NATIONAL THERMAL POWER
CORPORATION (NTPC) since
management the installed capacity was 300 MW and under NTPC two more unites of 210
MW, each were erected and commissioned.
BTPS was conceived in 1965 to meet the growing electricity demand of Northern Region.
The site construction work started in
commissioning of its first unit on 26th July 1973, 2
’78 & 5th unit in ’8 last 29 years & in the 30 year operation
:-
BADARPUR THERMAL POWER BADARPUR THERMAL POWER BADARPUR THERMAL POWER BADARPUR THERMAL POWER STATIONSTATIONSTATIONSTATION is owned by GOVT. OF INDIA,
Ministry of Energy and is managed by NATIONAL THERMAL POWER
CORPORATION (NTPC) since 1 April , 19781 April , 19781 April , 19781 April , 1978. At the time of change over
capacity was 300 MW and under NTPC two more unites of 210
rected and commissioned.
BTPS was conceived in 1965 to meet the growing electricity demand of Northern Region.
The site construction work started in 1968196819681968 and plant became operational with the
commissioning of its first unit on 26th July 1973, 2nd unit in ;74 , 3rd unit in ’75 , 4
last 29 years & in the 30 year operation BTPSBTPSBTPSBTPS
owned by GOVT. OF INDIA,
Ministry of Energy and is managed by NATIONAL THERMAL POWER
. At the time of change over
capacity was 300 MW and under NTPC two more unites of 210
BTPS was conceived in 1965 to meet the growing electricity demand of Northern Region.
plant became operational with the
unit in ’75 , 4th unit in
BTPSBTPSBTPSBTPS has been moving
from strength to strength. It achieved new heights in Generation, Availability and
substantial reduction in inputs; thereb
performance, towards its end
old & ageing unites, PLF of BTPS has remained higher than the National Average for the
last 16 consecutive years. In the t
current FY and Achieved all our MOU Targets with Excellent Rating.
There is total five unites in the thermal power station , details of the various unites are:
3 units * 95 = 285
2 units * 210 = 420
The installed capacity of the BTPS is 705
The coal sources include:
CCL (Center Coal Field Ltd.)CCL (Center Coal Field Ltd.)CCL (Center Coal Field Ltd.)CCL (Center Coal Field Ltd.)
BCCL (Bharat Coking Coal Ltd. )BCCL (Bharat Coking Coal Ltd. )BCCL (Bharat Coking Coal Ltd. )BCCL (Bharat Coking Coal Ltd. )
ECL (Eastern Coal Field Ltd.)ECL (Eastern Coal Field Ltd.)ECL (Eastern Coal Field Ltd.)ECL (Eastern Coal Field Ltd.)
from strength to strength. It achieved new heights in Generation, Availability and
substantial reduction in inputs; thereby demonstrating overall efficiency in plant
performance, towards its end-objective of providing power to the Capital. In spite of the
old & ageing unites, PLF of BTPS has remained higher than the National Average for the
last 16 consecutive years. In the top 20 power station of India BTPS has got 8th position in
Achieved all our MOU Targets with Excellent Rating.
There is total five unites in the thermal power station , details of the various unites are:
lled capacity of the BTPS is 705 MW.
CCL (Center Coal Field Ltd.)CCL (Center Coal Field Ltd.)CCL (Center Coal Field Ltd.)CCL (Center Coal Field Ltd.)
BCCL (Bharat Coking Coal Ltd. )BCCL (Bharat Coking Coal Ltd. )BCCL (Bharat Coking Coal Ltd. )BCCL (Bharat Coking Coal Ltd. )
ECL (Eastern Coal Field Ltd.)ECL (Eastern Coal Field Ltd.)ECL (Eastern Coal Field Ltd.)ECL (Eastern Coal Field Ltd.)
from strength to strength. It achieved new heights in Generation, Availability and
y demonstrating overall efficiency in plant
objective of providing power to the Capital. In spite of the
old & ageing unites, PLF of BTPS has remained higher than the National Average for the
of India BTPS has got 8th position in
Achieved all our MOU Targets with Excellent Rating.
There is total five unites in the thermal power station , details of the various unites are:
The water supplied is taken from Agra irrigation canal and is used for cooling. There are
cooling towers provided so that the plant can operate in the closed cycle. BTPS is designed
and engineered by the central water and power.
The water supplied is taken from Agra irrigation canal and is used for cooling. There are
cooling towers provided so that the plant can operate in the closed cycle. BTPS is designed
and engineered by the central water and power.
The water supplied is taken from Agra irrigation canal and is used for cooling. There are
cooling towers provided so that the plant can operate in the closed cycle. BTPS is designed
Organizational Structure s.no Structure
1. Approved capacity
2. Installed capacity
3. Location
4. Coal source
5. Beneficiary state
6. Water source
7. Unit sizes
8. Manpower
9. Coal Consumption
10. Residential Quarters
Organizational Structure:-
Structure Numbers, Quantity, Rupees , MW, Location
705
New Delhi
Jharia and Bokaro
Delhi, since 1 April, 1987.
Agra canal
3 units * 95
2 units * 210
Executive : 374 Supervisor : 217Workmen : 1079
3.9 Million Tones P.A.
Residential Quarters
1201
Numbers, Quantity, Rupees , MW, Location
705 MW
705 MW
New Delhi
Jharia and Bokaro (Bihar)
Delhi, since 1 April, 1987.
Agra canal
Executive : 374 Supervisor : 217 Workmen : 1079
3.9 Million Tones P.A.
Corporate Social Responsibility BTPS plays a important role
better environment , increasing industrial harmony and improving the standard of life of
its employees.
Human Resources
Development
Social Responsibility:-
BTPS plays a important role in Corporate Social Responsibility activities like creating a
better environment , increasing industrial harmony and improving the standard of life of
CSRCSRCSRCSR
Betterment of
Environment
Social Role
Industrial Harmony
Resources Development
Responsibility activities like creating a
better environment , increasing industrial harmony and improving the standard of life of
Efforts For the betterment of Environment: As a responsible corporate citizen the station has been
the environment clear and pollution free.
Generation of green
plantation, careful ash disposal and
Social Role: BTPS has progressive philosophy which aims to
and the general masses. Among the facilities provided are
schools namely KENDRIYA KENDRIYA KENDRIYA KENDRIYA
centers, banks, mother dairy outlet, recreational facilities,
sports facilities.
The villagers in the vicinity have been assisted medically by setting up free
medical camps for eye operation, cancer detection, and diabetes and family measures.
Industrial Harmony Communication channels with unions and association and regular periodic meeting helps
in reducing employee grievances to a minimum level.
Some of the schemes in operation are adult literacy, worker’s education,
worker’s participation in management etc.
Efforts For the betterment of Environment:
corporate citizen the station has been making concrete
the environment clear and pollution free.
Generation of green-power, major thrust to contain the emission level, mass tree
plantation, careful ash disposal and productive ash utilization.
progressive philosophy which aims to enhance the quality of life of its employees
and the general masses. Among the facilities provided are self sufficient
KENDRIYA KENDRIYA KENDRIYA KENDRIYA VIDYALAYAVIDYALAYAVIDYALAYAVIDYALAYA and NOTRENOTRENOTRENOTRE
banks, mother dairy outlet, recreational facilities, hospital, medical amenities and
The villagers in the vicinity have been assisted medically by setting up free
cal camps for eye operation, cancer detection, and diabetes and family measures.
Industrial Harmony :
Communication channels with unions and association and regular periodic meeting helps
in reducing employee grievances to a minimum level.
Some of the schemes in operation are adult literacy, worker’s education,
worker’s participation in management etc.
Efforts For the betterment of Environment:
making concrete effort in making
, major thrust to contain the emission level, mass tree
quality of life of its employees
self sufficient township with two
DAME, DAME, DAME, DAME, shopping
hospital, medical amenities and
The villagers in the vicinity have been assisted medically by setting up free
cal camps for eye operation, cancer detection, and diabetes and family measures.
Communication channels with unions and association and regular periodic meeting helps
Some of the schemes in operation are adult literacy, worker’s education,
Human Resources Development: BTPS conducts regular training for skill up gradation. Multi
exploiting the potential for the employees in different disciplines. Careful training has
resulted in increase in the ratio of the million unit’s generation per man.
Human Resources Development:
conducts regular training for skill up gradation. Multi - skilling is being stressed for
exploiting the potential for the employees in different disciplines. Careful training has
resulted in increase in the ratio of the million unit’s generation per man.
skilling is being stressed for
exploiting the potential for the employees in different disciplines. Careful training has
resulted in increase in the ratio of the million unit’s generation per man.
Awards Bagged by BTPS: BTPS has bagged many awards and certification not only for its plant management, safety
measure but also for its sensitive corporate role.
To name few awards
Safety Award, Vishwakarma RSafety Award, Vishwakarma RSafety Award, Vishwakarma RSafety Award, Vishwakarma R
Sujhao Yojana, Environment Excellence Awards, Best Young Sujhao Yojana, Environment Excellence Awards, Best Young Sujhao Yojana, Environment Excellence Awards, Best Young Sujhao Yojana, Environment Excellence Awards, Best Young
Manager Awards, Quality Circle Best Of The Session Awards, Manager Awards, Quality Circle Best Of The Session Awards, Manager Awards, Quality Circle Best Of The Session Awards, Manager Awards, Quality Circle Best Of The Session Awards,
Environment Awards etc.Environment Awards etc.Environment Awards etc.Environment Awards etc.
The station is proud recipient
Indian Standard (BIS). The BTPS hospital has also been awarded the ISO 9002
certification.
Awards Bagged by BTPS:
BTPS has bagged many awards and certification not only for its plant management, safety
measure but also for its sensitive corporate role.
To name few awards Meritorious Productivity, Meritorious Productivity, Meritorious Productivity, Meritorious Productivity, Incentive Awards, Incentive Awards, Incentive Awards, Incentive Awards,
Safety Award, Vishwakarma RSafety Award, Vishwakarma RSafety Award, Vishwakarma RSafety Award, Vishwakarma Rashtriya Puraskar, Delhi Sharmik ashtriya Puraskar, Delhi Sharmik ashtriya Puraskar, Delhi Sharmik ashtriya Puraskar, Delhi Sharmik
Sujhao Yojana, Environment Excellence Awards, Best Young Sujhao Yojana, Environment Excellence Awards, Best Young Sujhao Yojana, Environment Excellence Awards, Best Young Sujhao Yojana, Environment Excellence Awards, Best Young
Manager Awards, Quality Circle Best Of The Session Awards, Manager Awards, Quality Circle Best Of The Session Awards, Manager Awards, Quality Circle Best Of The Session Awards, Manager Awards, Quality Circle Best Of The Session Awards,
Environment Awards etc.Environment Awards etc.Environment Awards etc.Environment Awards etc.
recipient ISO ISO ISO ISO 9002900290029002 and 14001140011400114001 certification by the Bureau of
Indian Standard (BIS). The BTPS hospital has also been awarded the ISO 9002
BTPS has bagged many awards and certification not only for its plant management, safety
Incentive Awards, Incentive Awards, Incentive Awards, Incentive Awards,
ashtriya Puraskar, Delhi Sharmik ashtriya Puraskar, Delhi Sharmik ashtriya Puraskar, Delhi Sharmik ashtriya Puraskar, Delhi Sharmik
Sujhao Yojana, Environment Excellence Awards, Best Young Sujhao Yojana, Environment Excellence Awards, Best Young Sujhao Yojana, Environment Excellence Awards, Best Young Sujhao Yojana, Environment Excellence Awards, Best Young
Manager Awards, Quality Circle Best Of The Session Awards, Manager Awards, Quality Circle Best Of The Session Awards, Manager Awards, Quality Circle Best Of The Session Awards, Manager Awards, Quality Circle Best Of The Session Awards,
certification by the Bureau of
Indian Standard (BIS). The BTPS hospital has also been awarded the ISO 9002
FINANCE
FINANCE
Sources of revenue & Expenditure
Accounting policies
Function of finance department
Finance Management in NTPC: National Thermal Power Corporation Ltd(NTPC), some of the largest power sectors in
the country has its objectives to manage the financial operations in
commercial utility practice and to generate returns as per government guidelines. The
finance function can be described as a function concer
cost, optimizing the use its resources, maximizing profits
associates with records keeping of all transactions in accordance with accepted principle of
accounting.
NTPC have the corporate office who are mainly concerned with planning, policy making
and major finance investment a
management and consolidation of account.
The Main Sources of Revenue & Expenditure of BTPS: Sources of Revenue:
Sale of energy.
Rest from residential building.
Finance Management in NTPC:
National Thermal Power Corporation Ltd(NTPC), some of the largest power sectors in
the country has its objectives to manage the financial operations in accordance with sound
commercial utility practice and to generate returns as per government guidelines. The
finance function can be described as a function concerned with raising resources at least
cost, optimizing the use its resources, maximizing profits and minimizing wises. Finance is
associates with records keeping of all transactions in accordance with accepted principle of
NTPC have the corporate office who are mainly concerned with planning, policy making
and major finance investment and expenditure decisions besides, control , cash
management and consolidation of account.
The Main Sources of Revenue & Expenditure of BTPS:
Sources of Revenue:
Rest from residential building.
National Thermal Power Corporation Ltd(NTPC), some of the largest power sectors in
accordance with sound
commercial utility practice and to generate returns as per government guidelines. The
ned with raising resources at least
and minimizing wises. Finance is
associates with records keeping of all transactions in accordance with accepted principle of
NTPC have the corporate office who are mainly concerned with planning, policy making
nd expenditure decisions besides, control , cash
The Main Sources of Revenue & Expenditure of BTPS:
Interest
� Depreciation
� Investment.
� Bank deposits
� Over standing dues.
Other receipts
Sources of Expenditure
Fuel.
Water charge
Depreciation reserve fund.
Investment.
Bank deposits.
Over standing dues.
Other receipts
of Expenditure:
e
Lubricants and Grease.
Salaries, Wages and Allowances contribution to provident fund.
Repair and Maintenance
Building and civil works
Boiler plant and equipment, Cash handling equipments.
Ancillary equipment.
Cooling water system and wolfing tower.
Electrical equipment.
Lubricants and Grease.
Salaries, Wages and Allowances contribution to provident fund.
Maintenance:
Building and civil works
Boiler plant and equipment, Cash handling equipments.
Ancillary equipment.
Cooling water system and wolfing tower.
Electrical equipment.
Salaries, Wages and Allowances contribution to provident fund.
Miscellaneous charges
Depreciation.
General Administration Charges:
Salaries and allowances contribution to provident and other funds.
Welfare and Administrative expenses.
Other Charges:
Interest on Government capital A/C.
Interest on Government current
Miscellaneous charges
General Administration Charges:
Salaries and allowances contribution to provident and other funds.
Welfare and Administrative expenses.
:
Government capital A/C.
Interest on Government current A/C.
Salaries and allowances contribution to provident and other funds.
Accounting policies Revenue:
1. Fixed Assets
Fixed assets are shown at historical cost.
Deposits, payment/ liabilities made provision towards compensation ,
rehabilitation and other expenses relate to land in possession are treated as
cost of land.
In the case of commissioned assets, where final settlement of bills with
contracts is yet to be effected , capitalization is done on provisional basis
subject to necessary adjustment in the year of settlement.
2. Capital work in progress
In respect of supply cum executive contracts the value of supply received at site
and accepted is taken as capital work in progress.
Interest on capital expenditure financed out of Government capital. It is
treated as revenue expenditure.
Incidental expenditure during
work in progress.
Accounting policies:-
Fixed assets are shown at historical cost.
Deposits, payment/ liabilities made provision towards compensation ,
rehabilitation and other expenses relate to land in possession are treated as
In the case of commissioned assets, where final settlement of bills with
contracts is yet to be effected , capitalization is done on provisional basis
subject to necessary adjustment in the year of settlement.
Capital work in progress
upply cum executive contracts the value of supply received at site
and accepted is taken as capital work in progress.
Interest on capital expenditure financed out of Government capital. It is
treated as revenue expenditure.
Incidental expenditure during construction for the year is appointed to capital
work in progress.
Deposits, payment/ liabilities made provision towards compensation ,
rehabilitation and other expenses relate to land in possession are treated as
In the case of commissioned assets, where final settlement of bills with
contracts is yet to be effected , capitalization is done on provisional basis
subject to necessary adjustment in the year of settlement.
upply cum executive contracts the value of supply received at site
Interest on capital expenditure financed out of Government capital. It is
construction for the year is appointed to capital
Inventories:
Inventories are valued at cost, an weighted average basis.
Value of scrap including steel scrap is accounted of in the accounts as and when
sold.
Expenditure:
Depreciation is charged on straight
Depreciation on fixed assets is provided from the year following that in which the assets become available for use.
Inventories are valued at cost, an weighted average basis.
Value of scrap including steel scrap is accounted of in the accounts as and when
Depreciation is charged on straight line method.
Depreciation on fixed assets is provided from the year following that in which the assets become available for use.
Value of scrap including steel scrap is accounted of in the accounts as and when
Depreciation on fixed assets is provided from the year following that in which the
Function of finance department
This department handles all the process starting from coal handling to generation
and transmission of electricity
Store section
Coal
Function of finance department:
department handles all the process starting from coal handling to generation
and transmission of electricity.
Finance Finance Finance Finance departmentdepartmentdepartmentdepartment
Cash in bank
Work station
Store section
department handles all the process starting from coal handling to generation
Establishment
Concurrence
Brief Detail of finance section
Cash In Bank:
There are two section in it:
Receipt:Receipt:Receipt:Receipt: In this all the money from sales will go to the
corporate sector
Payments :Payments :Payments :Payments : It involves employee refund, tour advance, water charges,
electricity charges, hospital charges etc.
This section also do the periodic reconciliation of bank statement.
NTPC has accounts in three banks:
ESTABLISHMENT:
This section covers benefits for the employeees. The benefits includes child education,
increment, provident fund, medical etc.
Briefly
Child educationChild educationChild educationChild education
from kg to 12th and after school Rs 2000/month for college + Rs 2000 extra for hostel
Brief Detail of finance section:-
In this all the money from sales will go to the company’s centralise
It involves employee refund, tour advance, water charges,
electricity charges, hospital charges etc.
This section also do the periodic reconciliation of bank statement.
NTPC has accounts in three banks: Central bank of India, state bank of India & ICICI.
ESTABLISHMENT:
This section covers benefits for the employeees. The benefits includes child education,
increment, provident fund, medical etc.
Child educationChild educationChild educationChild education: any employee who is having 2 kids will get Rs 900/month
and after school Rs 2000/month for college + Rs 2000 extra for hostel
company’s centralise
It involves employee refund, tour advance, water charges,
Central bank of India, state bank of India & ICICI.
This section covers benefits for the employeees. The benefits includes child education,
kids will get Rs 900/month
and after school Rs 2000/month for college + Rs 2000 extra for hostel
fee. All this payment is made only after the receipt is submitted to the finance
department by the employee. However the employees children are
the merit scholarship which is Rs.9000/month.
Increment :Increment :Increment :Increment : this is given to the employee on the basis of their designation.
For workmen category that is from W1 toW8: 3% of basic pay
For W8 and above which supervisor category: 3.5% of b
For all the executive : 4% of basic pay
Medical:Medical:Medical:Medical: This facility is for all the regular employees and their dependents.
Under the medical facility all the hospitals which is outside the company premises
should registered under the CGHS (central
reason for this registration is that all the medical payments is non taxable which is
a sort of bonus for the company.
NTPC has an agreement with the hospitals outside the company premises which is
known as their panel hospitals so any employee goes to that hospital he/she will not
have to pay any amount from their pocket they just have to submit the receipt of
their bill to the finance department and they will pay on their behalf.
Provident fund:Provident fund:Provident fund:Provident fund:
out of which 8.33% goes to pension and rest goes to the fund. However the
fee. All this payment is made only after the receipt is submitted to the finance
department by the employee. However the employees children are
the merit scholarship which is Rs.9000/month.
this is given to the employee on the basis of their designation.
For workmen category that is from W1 toW8: 3% of basic pay
For W8 and above which supervisor category: 3.5% of basic pay
For all the executive : 4% of basic pay
This facility is for all the regular employees and their dependents.
Under the medical facility all the hospitals which is outside the company premises
should registered under the CGHS (central government health scheme). The main
reason for this registration is that all the medical payments is non taxable which is
a sort of bonus for the company.
NTPC has an agreement with the hospitals outside the company premises which is
own as their panel hospitals so any employee goes to that hospital he/she will not
have to pay any amount from their pocket they just have to submit the receipt of
their bill to the finance department and they will pay on their behalf.
Provident fund:Provident fund:Provident fund:Provident fund: : Under this the company will pay 12% of their basic pay
out of which 8.33% goes to pension and rest goes to the fund. However the
fee. All this payment is made only after the receipt is submitted to the finance
department by the employee. However the employees children are elso entitled for
this is given to the employee on the basis of their designation.
asic pay
This facility is for all the regular employees and their dependents.
Under the medical facility all the hospitals which is outside the company premises
government health scheme). The main
reason for this registration is that all the medical payments is non taxable which is
NTPC has an agreement with the hospitals outside the company premises which is
own as their panel hospitals so any employee goes to that hospital he/she will not
have to pay any amount from their pocket they just have to submit the receipt of
their bill to the finance department and they will pay on their behalf.
nder this the company will pay 12% of their basic pay
out of which 8.33% goes to pension and rest goes to the fund. However the
employee, in case of emergency can withdraw from their fund as a loan which they
have to refund according to their paying capaci
Along with these benefits there are many other benefits which the company offers
to their employees like:
Conveyance maintenance:
Rs.1595/month, all supervisor will get Rs. 1190/month & all workmen
month.
Transport allowance:
540/month,for all workmen Rs.435/month.
House rent allowance:House rent allowance:House rent allowance:House rent allowance:
company’s quarter will get t
Fixed Fixed Fixed Fixed compensatory allowance:compensatory allowance:compensatory allowance:compensatory allowance:
company quarters and 1110% of basic pay for those who live in company quarters.
Lease:Lease:Lease:Lease: those who do not live in company quarters and who do not want HRA (only for
executive level) will get 17130/month as lease.
employee, in case of emergency can withdraw from their fund as a loan which they
have to refund according to their paying capacity.
Along with these benefits there are many other benefits which the company offers
like:
Conveyance maintenance: like for motor cycle, for all the executive will get
Rs.1595/month, all supervisor will get Rs. 1190/month & all workmen
For all the executive Rs.675/month, for all supervisors Rs.
540/month,for all workmen Rs.435/month.
House rent allowance:House rent allowance:House rent allowance:House rent allowance: This is 30% of basic pay. Those who are not staying in
company’s quarter will get this allowance.
compensatory allowance:compensatory allowance:compensatory allowance:compensatory allowance: 5% of basic pay for those who do not live in
company quarters and 1110% of basic pay for those who live in company quarters.
those who do not live in company quarters and who do not want HRA (only for
executive level) will get 17130/month as lease.
employee, in case of emergency can withdraw from their fund as a loan which they
Along with these benefits there are many other benefits which the company offers
like for motor cycle, for all the executive will get
Rs.1595/month, all supervisor will get Rs. 1190/month & all workmen will get rs. 790/
For all the executive Rs.675/month, for all supervisors Rs.
This is 30% of basic pay. Those who are not staying in
5% of basic pay for those who do not live in
company quarters and 1110% of basic pay for those who live in company quarters.
those who do not live in company quarters and who do not want HRA (only for
CONCURRENCE : This department actually verifies the requirement which is raised by the indenting
department and also verifies the amount
This section take care of purchase concurrence and works concurrence. Purchase
concurrence involves purchase of various office items and works concurrence involves
hiring servicing consultancy etc.
WORK STATION :
This section involves repairs & maintenance of
repair of machinery, oiling in fans, maintenance of A.C., computers etc. under this section
billing is also done after deducting the TDS under section 194(k). at the time of payment
tax is deducted from the bill of s
of the year tax certificate is given to the supplier.
STORE SECTION :
It involves the payment of the material. Material involvea coal, other office expenses like
furniture, almirahs, capital goo
CONCURRENCE :
This department actually verifies the requirement which is raised by the indenting
department and also verifies the amount which is charges by the supplier is genuine or not.
take care of purchase concurrence and works concurrence. Purchase
concurrence involves purchase of various office items and works concurrence involves
hiring servicing consultancy etc.
WORK STATION :
This section involves repairs & maintenance of various office item and plant item like
repair of machinery, oiling in fans, maintenance of A.C., computers etc. under this section
billing is also done after deducting the TDS under section 194(k). at the time of payment
tax is deducted from the bill of supplier and the balance is paid to the supplier. At the end
of the year tax certificate is given to the supplier.
STORE SECTION :
It involves the payment of the material. Material involvea coal, other office expenses like
furniture, almirahs, capital goods like boiler, maintenance charges.
This department actually verifies the requirement which is raised by the indenting
which is charges by the supplier is genuine or not.
take care of purchase concurrence and works concurrence. Purchase
concurrence involves purchase of various office items and works concurrence involves
various office item and plant item like
repair of machinery, oiling in fans, maintenance of A.C., computers etc. under this section
billing is also done after deducting the TDS under section 194(k). at the time of payment
upplier and the balance is paid to the supplier. At the end
It involves the payment of the material. Material involvea coal, other office expenses like
The payment through this section is direct or via bank. However the main supplier of
capital goods is BHEL.
Another important fact in this section is that approx Rs 1 cr. Per annum is spent on the
filteration of water. The water is supplied by Agra canal which stores Yamuna water but
due to toxicity element huge expenditure incurred every year for the filteration.
COAL :
basically there are three supplier of coal
CCL (Central Coal field limited):CCL (Central Coal field limited):CCL (Central Coal field limited):CCL (Central Coal field limited):
tonne. According to NTPC, their coal is of very low grade.
BCCL(Bharat cooking coal limited):BCCL(Bharat cooking coal limited):BCCL(Bharat cooking coal limited):BCCL(Bharat cooking coal limited):
950/metric tonne.
ECI ECI ECI ECI ((((Eastern coal fields limited):Eastern coal fields limited):Eastern coal fields limited):Eastern coal fields limited):
tonne.
There was a very interesting fact which I came across in this section is that the cost
of transportation (freight charges) exceeds the cost of coal.
The payment through this section is direct or via bank. However the main supplier of
Another important fact in this section is that approx Rs 1 cr. Per annum is spent on the
The water is supplied by Agra canal which stores Yamuna water but
due to toxicity element huge expenditure incurred every year for the filteration.
basically there are three supplier of coal
CCL (Central Coal field limited):CCL (Central Coal field limited):CCL (Central Coal field limited):CCL (Central Coal field limited): They supply coal for rs 1000/metric
tonne. According to NTPC, their coal is of very low grade.
BCCL(Bharat cooking coal limited):BCCL(Bharat cooking coal limited):BCCL(Bharat cooking coal limited):BCCL(Bharat cooking coal limited): They supply coal for rs
Eastern coal fields limited):Eastern coal fields limited):Eastern coal fields limited):Eastern coal fields limited): They supply coal of rsv2200/metric
There was a very interesting fact which I came across in this section is that the cost
of transportation (freight charges) exceeds the cost of coal.
The payment through this section is direct or via bank. However the main supplier of
Another important fact in this section is that approx Rs 1 cr. Per annum is spent on the
The water is supplied by Agra canal which stores Yamuna water but
due to toxicity element huge expenditure incurred every year for the filteration.
They supply coal for rs 1000/metric
They supply coal for rs
They supply coal of rsv2200/metric
There was a very interesting fact which I came across in this section is that the cost
There is very precise information regarding the freight charges which I came to
know:
From 3 - 5 Km : There will be no cost
5 - 10 Km : rs 40
10 - 20 :rs 70
More than 20 Km : on actual basis (depend upon slabs of transport company).
C & M department(contracts and material):
This is another department which is related with finance department. Any item re
the plant whether parts of machinery or even a new machine is first approve by this
department and then finance department comes into picture This department is
responsible for issuing of tenders regarding the various plant items. Under this depart
there are three types of tenders
Single tender: This type of tender is issued for particular supplier of materials
like original equipment manufacturer. For NTPC, BHEL is the original equipment
manufacturer.
There is very precise information regarding the freight charges which I came to
There will be no cost
More than 20 Km : on actual basis (depend upon slabs of transport company).
C & M department(contracts and material):
This is another department which is related with finance department. Any item re
the plant whether parts of machinery or even a new machine is first approve by this
department and then finance department comes into picture This department is
responsible for issuing of tenders regarding the various plant items. Under this depart
there are three types of tenders
This type of tender is issued for particular supplier of materials
like original equipment manufacturer. For NTPC, BHEL is the original equipment
There is very precise information regarding the freight charges which I came to
More than 20 Km : on actual basis (depend upon slabs of transport company).
C & M department(contracts and material):
This is another department which is related with finance department. Any item regarding
the plant whether parts of machinery or even a new machine is first approve by this
department and then finance department comes into picture This department is
responsible for issuing of tenders regarding the various plant items. Under this department
This type of tender is issued for particular supplier of materials
like original equipment manufacturer. For NTPC, BHEL is the original equipment
Limited tender :
issued for the limited supplier.
Open tender : This type of tender is issued when the purchasing items are
substantial and huge amount is involved. Any party can bid in this tender
Complete procedurefor purchasing any item is as follows:
Raising of inquiry by the indenting department
Budget presentation
Budget approval by the financial authority. At this point concurrence comes into
picture.
Selection of material
Material which is is to be purchased is as
grades etc.
Availability of stock
Final list of materials with complete specification.
Collection of information both primary or secondry who can supply the required
material.
Quality checks
This type of tender is issued when the items are limited. It is
issued for the limited supplier.
This type of tender is issued when the purchasing items are
substantial and huge amount is involved. Any party can bid in this tender
purchasing any item is as follows:
Raising of inquiry by the indenting department
Budget approval by the financial authority. At this point concurrence comes into
Material which is is to be purchased is as per the quality specification like ISO,
Final list of materials with complete specification.
Collection of information both primary or secondry who can supply the required
is issued when the items are limited. It is
This type of tender is issued when the purchasing items are
substantial and huge amount is involved. Any party can bid in this tender
Budget approval by the financial authority. At this point concurrence comes into
per the quality specification like ISO,
Collection of information both primary or secondry who can supply the required
Based on the material
or open tender is required
Based on the material and their specification tender is issued whether single, limited
or open tender is required.
and their specification tender is issued whether single, limited
Study On Economic Value Added
Research Methodology
Economic Value Added
� Objective of the study
� Background of EVA
� Definition of EVA
� Concept of EVA
� Characteristics
� Steps in EVA calculation
� Interpretation
Calculation of Economic Value Added
Research Methodology Meaning: It is a way to systematically
of how research is done scientifically. Under it we study the various steps that are generally
adopted by a researcher in studying his research problem along with the logic behind them.
It is necessary for the researcher to know not only the research methods/techniques but
also the methodology.
Objectives of research:
The purpose of the research is to discover answers to the questions through the application
of scientific procedures. The main a
and which has not been discovered as yet. Though each research study has its own specific
purpose, we think of research objectives as falling into a number of following broad
categories:
To gain familiarity with the phenomenon or to achieve new insights into it(studies
with these objects in view are termed as
research studies).
Research Methodology:-
It is a way to systematically solve the research problem. It may be understood as a science
of how research is done scientifically. Under it we study the various steps that are generally
adopted by a researcher in studying his research problem along with the logic behind them.
cessary for the researcher to know not only the research methods/techniques but
Objectives of research:
The purpose of the research is to discover answers to the questions through the application
of scientific procedures. The main aim of research is to find out the truth which is hidden
and which has not been discovered as yet. Though each research study has its own specific
purpose, we think of research objectives as falling into a number of following broad
liarity with the phenomenon or to achieve new insights into it(studies
with these objects in view are termed as exploratory or
solve the research problem. It may be understood as a science
of how research is done scientifically. Under it we study the various steps that are generally
adopted by a researcher in studying his research problem along with the logic behind them.
cessary for the researcher to know not only the research methods/techniques but
The purpose of the research is to discover answers to the questions through the application
im of research is to find out the truth which is hidden
and which has not been discovered as yet. Though each research study has its own specific
purpose, we think of research objectives as falling into a number of following broad
liarity with the phenomenon or to achieve new insights into it(studies
exploratory or formulative
To portray accurately the characteristics of particular individual, situations or a
group (studies with this object in view are termed as
To determine the frequency with which something occurs or with which it is
associated with something else(studies with this object in view are known as
diagnostic research)
To test the hypothesis of a casual relationship between variables(studies with this
object in view are known as
Need & Importa
Research includes scientific and inductive thinking and it promotes the development
of logical habits of thinking and organization.
The role of several fields of applied economics, whether related to business or to the
economy as a whole, has greatly increased n modern times.
Research provides the basis for nearly all government policies in or economic
system.
To portray accurately the characteristics of particular individual, situations or a
group (studies with this object in view are termed as descriptive
To determine the frequency with which something occurs or with which it is
th something else(studies with this object in view are known as
research).
To test the hypothesis of a casual relationship between variables(studies with this
object in view are known as hypothesis-testing research studies)
Need & Importance of Research:
Research includes scientific and inductive thinking and it promotes the development
of logical habits of thinking and organization.
The role of several fields of applied economics, whether related to business or to the
whole, has greatly increased n modern times.
Research provides the basis for nearly all government policies in or economic
To portray accurately the characteristics of particular individual, situations or a
descriptive research).
To determine the frequency with which something occurs or with which it is
th something else(studies with this object in view are known as
To test the hypothesis of a casual relationship between variables(studies with this
research studies).
Research includes scientific and inductive thinking and it promotes the development
The role of several fields of applied economics, whether related to business or to the
Research provides the basis for nearly all government policies in or economic
Research has its special significance in solving various operational and planning
problems of business and industry.
Research is equally important for social scientists in studying social relationships
and in seeking answers to various social problems.
Methodology:- Primary method: In this method of data collection, data is collected either by the statistician himself
correspondents or the person employed by him. It is obtained by design to fulfill the data
are original in character and are also generated in a large number of surveys conducted
mostly by government and by institutional and research bodies. Such
done in either of the following ways i.e.
Methods of collecting primary data are:
Direct Personal Investigation
Indirect Oral Investigation
Information from correspondents
Research has its special significance in solving various operational and planning
problems of business and industry.
arch is equally important for social scientists in studying social relationships
and in seeking answers to various social problems.
Primary method:
In this method of data collection, data is collected either by the statistician himself
correspondents or the person employed by him. It is obtained by design to fulfill the data
are original in character and are also generated in a large number of surveys conducted
mostly by government and by institutional and research bodies. Such
done in either of the following ways i.e.
Methods of collecting primary data are:
Direct Personal Investigation
Indirect Oral Investigation
Information from correspondents
Research has its special significance in solving various operational and planning
arch is equally important for social scientists in studying social relationships
In this method of data collection, data is collected either by the statistician himself or by his
correspondents or the person employed by him. It is obtained by design to fulfill the data
are original in character and are also generated in a large number of surveys conducted
mostly by government and by institutional and research bodies. Such collection can be
Mailed Questionnaire methods
Secondary Methods:
These are not originally collected but rather then obtained from published and
unpublished sources. If the investigator does not collect the data himself his representatives
uses the data that are already available(whether published or unpublished), the method
collecting is known as “Secondary Method of Data Collection”. Methods or sources of
collecting primary data are:
1. Published:
� Government publications
� Private publications etc.
2. Unpublished:
� Research inst
� Universities.
� Labor bureau, research workers and scholars etc.
Mailed Questionnaire methods
Secondary Methods:
are not originally collected but rather then obtained from published and
unpublished sources. If the investigator does not collect the data himself his representatives
uses the data that are already available(whether published or unpublished), the method
collecting is known as “Secondary Method of Data Collection”. Methods or sources of
collecting primary data are:
Government publications.
Private publications etc.
Research institutional and trade association.
Universities.
Labor bureau, research workers and scholars etc.
are not originally collected but rather then obtained from published and
unpublished sources. If the investigator does not collect the data himself his representatives
uses the data that are already available(whether published or unpublished), the method of
collecting is known as “Secondary Method of Data Collection”. Methods or sources of
Methods of data collection used in this project:
� In this project the primary method of data collection used is the financial reports
and annual booklets of the company
� In this project the second
Websites.
In this project, I have collected the data with the help of websites, search engines, in house
magazines, annual reports, books etc.
As far as methodology is concerned, this is mainly on assumption
using capital expenditure decisions which include cost and benefits and appraisal criteria
like internal rate of return (IRR)
Limitations of
No study is free from limitations which are caused by constraints of time, mone
knowledge base and similar facts. An attempt was made to broad base the study as far as
possible, however it is but natural that the study also suffers from some limitations which
are mentioned below
Methods of data collection used in this project:
In this project the primary method of data collection used is the financial reports
and annual booklets of the company.
In this project the secondary method of data collection used is:
Websites.
In this project, I have collected the data with the help of websites, search engines, in house
magazines, annual reports, books etc.
As far as methodology is concerned, this is mainly on assumption basis however, I will be
using capital expenditure decisions which include cost and benefits and appraisal criteria
like internal rate of return (IRR) .
Study:
No study is free from limitations which are caused by constraints of time, mone
knowledge base and similar facts. An attempt was made to broad base the study as far as
possible, however it is but natural that the study also suffers from some limitations which
Methods of data collection used in this project:-
In this project the primary method of data collection used is the financial reports
In this project, I have collected the data with the help of websites, search engines, in house
basis however, I will be
using capital expenditure decisions which include cost and benefits and appraisal criteria
No study is free from limitations which are caused by constraints of time, money,
knowledge base and similar facts. An attempt was made to broad base the study as far as
possible, however it is but natural that the study also suffers from some limitations which
It is practically very difficult to complete this
constraint was one of the limitations
The primary data collection is one of the limitations of this project as per the organization
rules and regulations, providing such data is against the rule.
It is practically very difficult to complete this project in a short span of time , hence time
constraint was one of the limitations.
The primary data collection is one of the limitations of this project as per the organization
rules and regulations, providing such data is against the rule.
project in a short span of time , hence time
The primary data collection is one of the limitations of this project as per the organization
Economic Value Added
Objective of the Study:
This study has the following objectives:
To examine whether NTPC has been able to generate value for its shareholders.
To compute the performance of the company by applying
indicators like ROI and EVA
Also this study seeks to clarify the concept of EVA especially
from the viewpoint of business unit controlling. The obje
Firstly, the study describes the theory and characteristics of EVA. This gives the
framework to discuss the main objectives: How companies should use EVA considering
both its favorable and unfavorable features? In this contex
recommendations of how EVA should be used as a management tool. This study tries to
bring together the relevant theoretical issues and controlling practices.
Background of EVA:
EVA is not a new concept. An accounting perform
defined to be operating profit subtracted with capital charge. EVA is thus one variation of
Economic Value Added:-
Objective of the Study:-
This study has the following objectives:-
To examine whether NTPC has been able to generate value for its shareholders.
To compute the performance of the company by applying traditional performance
indicators like ROI and EVA
Also this study seeks to clarify the concept of EVA especially
from the viewpoint of business unit controlling. The objective of the study is twofold.
Firstly, the study describes the theory and characteristics of EVA. This gives the
framework to discuss the main objectives: How companies should use EVA considering
both its favorable and unfavorable features? In this context, the study also offers some
recommendations of how EVA should be used as a management tool. This study tries to
bring together the relevant theoretical issues and controlling practices.
Background of EVA:
EVA is not a new concept. An accounting performance measures called residual income is
defined to be operating profit subtracted with capital charge. EVA is thus one variation of
To examine whether NTPC has been able to generate value for its shareholders.
traditional performance
Also this study seeks to clarify the concept of EVA especially
ctive of the study is twofold.
Firstly, the study describes the theory and characteristics of EVA. This gives the
framework to discuss the main objectives: How companies should use EVA considering
t, the study also offers some
recommendations of how EVA should be used as a management tool. This study tries to
bring together the relevant theoretical issues and controlling practices.
ance measures called residual income is
defined to be operating profit subtracted with capital charge. EVA is thus one variation of
residual income with adjustments to how one calculates income and capital. The concept of
residual income was given by Al
total net gains less the interest on invested capital at the current rate. The EVA concept is
often called Economic Profit (EP) in order to avoid problems caused by the trade marking.
On other hand the name “EVA” is so popular and well known that often all residual
income concepts are called EVA although they do not include even the main elements.
Definition of EVA:
EVA is a residual income that subtracts the cost of capital from the operating
generated by a business. In other words, EVA measures whether the operating profit is
enough, compared to the total cost of capital. EVA is simply after tax operating profit
minus the total annual cost of capital. Unlike the traditional measures of
where only a part of the cost of capital(cost of debt) is deducted, EVA requires deductions
of full cost of capital(cost of debt as well as cost of equity).
Just earning profit is not enough, a business should earn sufficient profit to
cover its cost of capital and create surplus to grow. Stated simply, any profit
earned over and above the cost of capital is Economic Value Added.
residual income with adjustments to how one calculates income and capital. The concept of
residual income was given by Alfred Marshall in 1890. Marshall defined economic profit as
total net gains less the interest on invested capital at the current rate. The EVA concept is
often called Economic Profit (EP) in order to avoid problems caused by the trade marking.
the name “EVA” is so popular and well known that often all residual
are called EVA although they do not include even the main elements.
Definition of EVA:
EVA is a residual income that subtracts the cost of capital from the operating
generated by a business. In other words, EVA measures whether the operating profit is
enough, compared to the total cost of capital. EVA is simply after tax operating profit
minus the total annual cost of capital. Unlike the traditional measures of
where only a part of the cost of capital(cost of debt) is deducted, EVA requires deductions
of full cost of capital(cost of debt as well as cost of equity).
Just earning profit is not enough, a business should earn sufficient profit to
over its cost of capital and create surplus to grow. Stated simply, any profit
earned over and above the cost of capital is Economic Value Added.
residual income with adjustments to how one calculates income and capital. The concept of
fred Marshall in 1890. Marshall defined economic profit as
total net gains less the interest on invested capital at the current rate. The EVA concept is
often called Economic Profit (EP) in order to avoid problems caused by the trade marking.
the name “EVA” is so popular and well known that often all residual
are called EVA although they do not include even the main elements.
EVA is a residual income that subtracts the cost of capital from the operating profit
generated by a business. In other words, EVA measures whether the operating profit is
enough, compared to the total cost of capital. EVA is simply after tax operating profit
minus the total annual cost of capital. Unlike the traditional measures of accounting profit
where only a part of the cost of capital(cost of debt) is deducted, EVA requires deductions
Just earning profit is not enough, a business should earn sufficient profit to
over its cost of capital and create surplus to grow. Stated simply, any profit
earned over and above the cost of capital is Economic Value Added.
Concept of EVA:
The idea behind the EVA is that shareholders must earn a return that compensates the risk
taken. In other words, equity capital has to earn at least same return as similarly risky
investments at equity markets. If that is not the case, then there is no real profit made and
actually the company operates at a loss from the view point of sharehold
hand if EVA is zero, this should be treated as sufficient achievement because the
shareholders have earned a return that compensates the risk. This approach using average
risk adjusted market return as a minimum requirement is justified s
return is easily obtained from diversified long term stock market return reflects the
average return that the public companies generate from their operations. EVA is an
estimate of true “economic” profit
short of the required minimum rate of return that shareholder and lenders could get by
investing in other securities of comparable risk.
Concept of EVA:
The idea behind the EVA is that shareholders must earn a return that compensates the risk
taken. In other words, equity capital has to earn at least same return as similarly risky
investments at equity markets. If that is not the case, then there is no real profit made and
actually the company operates at a loss from the view point of sharehold
hand if EVA is zero, this should be treated as sufficient achievement because the
shareholders have earned a return that compensates the risk. This approach using average
risk adjusted market return as a minimum requirement is justified s
return is easily obtained from diversified long term stock market return reflects the
average return that the public companies generate from their operations. EVA is an
“economic” profit or the amount by which earnings ex
short of the required minimum rate of return that shareholder and lenders could get by
investing in other securities of comparable risk.
The idea behind the EVA is that shareholders must earn a return that compensates the risk
taken. In other words, equity capital has to earn at least same return as similarly risky
investments at equity markets. If that is not the case, then there is no real profit made and
actually the company operates at a loss from the view point of shareholders. On the other
hand if EVA is zero, this should be treated as sufficient achievement because the
shareholders have earned a return that compensates the risk. This approach using average
risk adjusted market return as a minimum requirement is justified since that average
return is easily obtained from diversified long term stock market return reflects the
average return that the public companies generate from their operations. EVA is an
or the amount by which earnings exceed or fall
short of the required minimum rate of return that shareholder and lenders could get by
Characteristics of EVA:
The main theory behind EVA
EVA measures whether the operating profit is enough compared to the total cost of capital
employed. EVA is defined as Net operating profit after
capital charge:
EVA=NOPAT EVA=NOPAT EVA=NOPAT EVA=NOPAT –––– CAPITAL COSTCAPITAL COSTCAPITAL COSTCAPITAL COST
EVA=NOPAT EVA=NOPAT EVA=NOPAT EVA=NOPAT ––––COST OF CAPITAL *CAPITAL EMCOST OF CAPITAL *CAPITAL EMCOST OF CAPITAL *CAPITAL EMCOST OF CAPITAL *CAPITAL EM
WHERE:
NOPAT =Net operating profit after tax or {EBIT(1Net operating profit after tax or {EBIT(1Net operating profit after tax or {EBIT(1Net operating profit after tax or {EBIT(1
Cost of capital =
Cost of capital or weighted average cost of capital
equity capital and interest bearing debt. Cost of equity capital is the opportunity return
from an investment with same risk as the company has.
Characteristics of EVA:-
The main theory behind EVA:
EVA measures whether the operating profit is enough compared to the total cost of capital
employed. EVA is defined as Net operating profit after taxes (NOPAT) subtracted with a
CAPITAL COSTCAPITAL COSTCAPITAL COSTCAPITAL COST
COST OF CAPITAL *CAPITAL EMCOST OF CAPITAL *CAPITAL EMCOST OF CAPITAL *CAPITAL EMCOST OF CAPITAL *CAPITAL EM
Net operating profit after tax or {EBIT(1Net operating profit after tax or {EBIT(1Net operating profit after tax or {EBIT(1Net operating profit after tax or {EBIT(1
Cost of capital =Cost of equity *Proportion of equity from
capita +Cost of debt
*Proportion of debt from capital*(1
Cost of capital or weighted average cost of capital (WACC) is the average cost of both
equity capital and interest bearing debt. Cost of equity capital is the opportunity return
from an investment with same risk as the company has.
EVA measures whether the operating profit is enough compared to the total cost of capital
NOPAT) subtracted with a
COST OF CAPITAL *CAPITAL EMCOST OF CAPITAL *CAPITAL EMCOST OF CAPITAL *CAPITAL EMCOST OF CAPITAL *CAPITAL EMPLOYEDPLOYEDPLOYEDPLOYED
Net operating profit after tax or {EBIT(1Net operating profit after tax or {EBIT(1Net operating profit after tax or {EBIT(1Net operating profit after tax or {EBIT(1----TAX)}TAX)}TAX)}TAX)}
oportion of equity from
*Proportion of debt from capital*(1-tax rate).
(WACC) is the average cost of both
equity capital and interest bearing debt. Cost of equity capital is the opportunity return
Cost of equity is usually defined with Capital pricing model (CAPM). The
cost of debt is naturally more straightforward, since its cost is explicit. Cost of debt
includes the tax shield due to tax allowance on interest expenses.
Capital employed =capital +reserves and surplus +secured
loans+ unsecured
Steps in EVA calculation
EVA computation requires some basic steps. The common steps are here that may be
modified due to the typical nature of business or processes where it has been used.
Step 1:
Collect and Review Financial Statements
EVA is based on the financial data produced by traditional accounting systems. Most of the
data come from either income statement or balance sheet both of which are available from
general purpose financial statements.
Cost of equity is usually defined with Capital pricing model (CAPM). The
cost of debt is naturally more straightforward, since its cost is explicit. Cost of debt
includes the tax shield due to tax allowance on interest expenses.
capital +reserves and surplus +secured
loans+ unsecured loans.
Steps in EVA calculation:-
EVA computation requires some basic steps. The common steps are here that may be
modified due to the typical nature of business or processes where it has been used.
Collect and Review Financial Statements
is based on the financial data produced by traditional accounting systems. Most of the
data come from either income statement or balance sheet both of which are available from
general purpose financial statements.
Cost of equity is usually defined with Capital pricing model (CAPM). The estimation of
cost of debt is naturally more straightforward, since its cost is explicit. Cost of debt
capital +reserves and surplus +secured
EVA computation requires some basic steps. The common steps are here that may be
modified due to the typical nature of business or processes where it has been used.
is based on the financial data produced by traditional accounting systems. Most of the
data come from either income statement or balance sheet both of which are available from
Step 2:-
Identify the company’s structure
A company’s capital structure comprises all of the money invested in the company
Either by the owner or by borrowing from outsiders. It is the proportions of debt
instrument and preferred and common stock of a company’s balance sheet.
However it can be computed by anyone of the following methods:
DIRECT METHOD: By adding all interest bearing debt (both short and long term) to
owner’s equity.
INDIRECT METHOD:
liabilities (or total assets).
Step 3:-
Determine the company’s weighted average cost of capital (WACC)
Estimation of cost of capital is a great challenge so far as EVA calculation for a company is
concerned. The cost of capital depends primarily on the use of fund, not the so
depends on other factors like financial structures, business risks, current interest level,
investors expectations and so on. It is the minimum acceptable rate of return on new
investment made by the firm from the viewpoint of the creditors and in
securities. Some financial management tools are available in this case to calculate the cost
of capital. A common and simple method is Weighted Average Cost of Capital (WACC).
structure
A company’s capital structure comprises all of the money invested in the company
Either by the owner or by borrowing from outsiders. It is the proportions of debt
instrument and preferred and common stock of a company’s balance sheet.
can be computed by anyone of the following methods:
By adding all interest bearing debt (both short and long term) to
By subtracting all non interest bearing liabilities from total
Determine the company’s weighted average cost of capital (WACC)
Estimation of cost of capital is a great challenge so far as EVA calculation for a company is
concerned. The cost of capital depends primarily on the use of fund, not the so
depends on other factors like financial structures, business risks, current interest level,
investors expectations and so on. It is the minimum acceptable rate of return on new
investment made by the firm from the viewpoint of the creditors and in
securities. Some financial management tools are available in this case to calculate the cost
of capital. A common and simple method is Weighted Average Cost of Capital (WACC).
A company’s capital structure comprises all of the money invested in the company
Either by the owner or by borrowing from outsiders. It is the proportions of debt
instrument and preferred and common stock of a company’s balance sheet.
By adding all interest bearing debt (both short and long term) to
By subtracting all non interest bearing liabilities from total
Estimation of cost of capital is a great challenge so far as EVA calculation for a company is
concerned. The cost of capital depends primarily on the use of fund, not the source. It
depends on other factors like financial structures, business risks, current interest level,
investors expectations and so on. It is the minimum acceptable rate of return on new
investment made by the firm from the viewpoint of the creditors and investors in the firm’s
securities. Some financial management tools are available in this case to calculate the cost
of capital. A common and simple method is Weighted Average Cost of Capital (WACC).
For calculating WACC we have to know a lot of other issues like
Components of capital employed like equity, debt etc
Respective weight of various components into total amount of capital employed
Factors that affect the risk and return of various
The overall cost of capital is the weighted average of the costs of the various components of
the capital structure
Step 4:-
Calculate the company’s Net Operating Profit after Tax (NOPAT)
NOPAT is a measure of a company
activities and disregarding its capital structure. NOPAT is derived from NOP or EBIT
simply by subtracting calculated taxes from
Step5:-
Calculation of economic value added
Finally, the EVA can be calculated by subtracting capital charges from NOPAT i.e.
EVA=NOPAT-CAPITAL EMPLOYED*WACC
If the EVA is positive, the company created value for its owner. If the EVA is negative
owner’s wealth gets reduced.
For calculating WACC we have to know a lot of other issues like
Components of capital employed like equity, debt etc.
Respective weight of various components into total amount of capital employed
Factors that affect the risk and return of various components in a capital structure.
The overall cost of capital is the weighted average of the costs of the various components of
Calculate the company’s Net Operating Profit after Tax (NOPAT)
NOPAT is a measure of a company’s cash generation capability from recurring business
activities and disregarding its capital structure. NOPAT is derived from NOP or EBIT
simply by subtracting calculated taxes from NOP [NOPAT=EBIT (1NOP [NOPAT=EBIT (1NOP [NOPAT=EBIT (1NOP [NOPAT=EBIT (1
Calculation of economic value added
Finally, the EVA can be calculated by subtracting capital charges from NOPAT i.e.
CAPITAL EMPLOYED*WACC
If the EVA is positive, the company created value for its owner. If the EVA is negative
owner’s wealth gets reduced.
Respective weight of various components into total amount of capital employed.
mponents in a capital structure.
The overall cost of capital is the weighted average of the costs of the various components of
’s cash generation capability from recurring business
activities and disregarding its capital structure. NOPAT is derived from NOP or EBIT
NOP [NOPAT=EBIT (1NOP [NOPAT=EBIT (1NOP [NOPAT=EBIT (1NOP [NOPAT=EBIT (1----TAX)]TAX)]TAX)]TAX)]
Finally, the EVA can be calculated by subtracting capital charges from NOPAT i.e.
If the EVA is positive, the company created value for its owner. If the EVA is negative
SCOPE OF EVA EVA fundamentally affects the Management System, motivation, mindset and
measurement aspects of the company.
In the present market scenario every second company is making an attempt to impress the
investors, with their excellent financial performance showing
investors, with their excellent financial showing the high growth rate. With the limited
resources available the investor is confused as to who is better and why? Here comes the
concept of EVA, which helps the investors in simpli
USES OF EVA:
� Measures Of Value Added Performance:
EVA concept will help organizations in evaluating and measuring their performance both
qualitatively and quantitatively. It shows financial performance with a new
or offers new approach especially for the companies where equity is viewed as free source
of funds and performance is measured by some earnings figure.
SCOPE OF EVA:-
fundamentally affects the Management System, motivation, mindset and
measurement aspects of the company.
In the present market scenario every second company is making an attempt to impress the
investors, with their excellent financial performance showing the high growth rate. With
investors, with their excellent financial showing the high growth rate. With the limited
resources available the investor is confused as to who is better and why? Here comes the
concept of EVA, which helps the investors in simplifying investment decision making.
USES OF EVA:-
Measures Of Value Added Performance:
EVA concept will help organizations in evaluating and measuring their performance both
qualitatively and quantitatively. It shows financial performance with a new
or offers new approach especially for the companies where equity is viewed as free source
of funds and performance is measured by some earnings figure.
fundamentally affects the Management System, motivation, mindset and
In the present market scenario every second company is making an attempt to impress the
the high growth rate. With
investors, with their excellent financial showing the high growth rate. With the limited
resources available the investor is confused as to who is better and why? Here comes the
fying investment decision making.
Measures Of Value Added Performance:
EVA concept will help organizations in evaluating and measuring their performance both
qualitatively and quantitatively. It shows financial performance with a new pair of glasses
or offers new approach especially for the companies where equity is viewed as free source
� Basis Of Decision Making:
It will help organization to align its management
based management system can provide the basis on which the companies can take
decisions related to the choice of strategy, investment activities related to research and
development , human development, capital allocation,
divesting business and goal setting.
� Device To Design And Implement Plan :
It can form a basis to devise and implement incentive plan/
that the only way in which managers can earn a high bonus is by creating more values for
shareholders. An EVA based incentive system will encourage managers to operate in such a
way as to minimize the EVA, not just of the operation they o
whole.
Benefits of EVA:
Provides insight of each period
It is a direct link to performance
Reduces cost of capital
Basis Of Decision Making:
It will help organization to align its management system to the EVA process. The EVA
based management system can provide the basis on which the companies can take
decisions related to the choice of strategy, investment activities related to research and
development , human development, capital allocation, mergers and acquisitions,
divesting business and goal setting.
Device To Design And Implement Plan :
It can form a basis to devise and implement incentive plan/bonus. This
that the only way in which managers can earn a high bonus is by creating more values for
shareholders. An EVA based incentive system will encourage managers to operate in such a
way as to minimize the EVA, not just of the operation they oversee, but of the company as a
Benefits of EVA:-
Provides insight of each period
It is a direct link to performance
Reduces cost of capital
system to the EVA process. The EVA
based management system can provide the basis on which the companies can take
decisions related to the choice of strategy, investment activities related to research and
mergers and acquisitions,
Device To Design And Implement Plan :
bonus. This plan will ensure
that the only way in which managers can earn a high bonus is by creating more values for
shareholders. An EVA based incentive system will encourage managers to operate in such a
versee, but of the company as a
Improves operational efficiency
Better management of assets
Easy to communicate to the employees
Helps managers to make better decisions by charging their operations for the cost of
capital
Limitations of
Not easy to use, too complicated for small business
Recommends inexpensive debts in order to reduce the cost of capital
A passive tool, measures past performance
EVA can be improved by investing in high return projects
return for the same capital base
Earn more profit without using more capital
Employ less capital
Invest capital in projec
Improves operational efficiency
Better management of assets
Easy to communicate to the employees
Helps managers to make better decisions by charging their operations for the cost of
EVA:-
Not easy to use, too complicated for small business
Recommends inexpensive debts in order to reduce the cost of capital
measures past performance ways to improve EVA
EVA can be improved by investing in high return projects. By increasing the rate of
return for the same capital base
Earn more profit without using more capital
Invest capital in projects with greater return potential
Helps managers to make better decisions by charging their operations for the cost of
Recommends inexpensive debts in order to reduce the cost of capital
EVA
By increasing the rate of
Interpretation: -
A positive EVA means the firm generated a return to invested capital that exceeds the
opportunity cost of capital.
The value of firm should increase
A negative EVA means the firm did not generate
capital.
The value of the firm should decline
Return On Investment
A performance measures used to evaluate the efficiency of an investment or to compare the
efficiency of a number of different investments. The return on investment, often called a
company’s return on total assets, measures the overall profit made on an inv
expressed as a percentage of the total invested. Like return on
return on investment measures a company’s profitability and its management’s ability to
generate profits from the funds investors have placed at its dispo
It is often said if a company’s operation cannot generate net profit as a percentage of the
amount invested greater than the interest rate on financial markets, its future is grim. In
finance rate of return also known as return on investment, rate of
return, is the ratio of money gained or lost on an investment relative to the amount of
money invested.
-
A positive EVA means the firm generated a return to invested capital that exceeds the
The value of firm should increase
A negative EVA means the firm did not generate sufficient return to cover its cost of
The value of the firm should decline
Return On Investment (ROI):
A performance measures used to evaluate the efficiency of an investment or to compare the
efficiency of a number of different investments. The return on investment, often called a
company’s return on total assets, measures the overall profit made on an inv
expressed as a percentage of the total invested. Like return on assets,
on investment measures a company’s profitability and its management’s ability to
generate profits from the funds investors have placed at its disposal.
It is often said if a company’s operation cannot generate net profit as a percentage of the
amount invested greater than the interest rate on financial markets, its future is grim. In
finance rate of return also known as return on investment, rate of profit or sometimes just
is the ratio of money gained or lost on an investment relative to the amount of
A positive EVA means the firm generated a return to invested capital that exceeds the
sufficient return to cover its cost of
A performance measures used to evaluate the efficiency of an investment or to compare the
efficiency of a number of different investments. The return on investment, often called a
company’s return on total assets, measures the overall profit made on an investment
assets, or return on equity,
on investment measures a company’s profitability and its management’s ability to
It is often said if a company’s operation cannot generate net profit as a percentage of the
amount invested greater than the interest rate on financial markets, its future is grim. In
profit or sometimes just
is the ratio of money gained or lost on an investment relative to the amount of
Return on investment analysis is one of the several approaches to build a financial business
case. The term means that the d
magnitude and training of expected gains to the investment costs.
Decision makers will also look for ways to improve ROI by reducing costs, increasing gains,
or accelerating gains.
The return on investment often called a company’s return on total assets, measures the
overall profit made on an investment expressed percentage of the amount invested. Like
return on assets, or return on equity return on investment measures a company’s
profitability an d its management’s ability to generate profit from the funds investors have
placed at its disposal.
It is often said if a company’s operation cannot generate net profit as a percentage of the
amount invested greater than the interest rate on financial mark
finance rate of return also known as return on investment, rate of profit or sometimes just
return, is the ratio of money gained or lost on an investment relative to the amount of
money invested.
Return on investment analysis
case. The term means that the decision makers evaluate the investment by comparing the
magnitude and training of expected gains to the investment costs.
Decision makers will also look for ways
or accelerating gains.
Return on investment analysis is one of the several approaches to build a financial business
case. The term means that the decision makers evaluate the investment by comparing the
magnitude and training of expected gains to the investment costs.
Decision makers will also look for ways to improve ROI by reducing costs, increasing gains,
investment often called a company’s return on total assets, measures the
overall profit made on an investment expressed percentage of the amount invested. Like
return on assets, or return on equity return on investment measures a company’s
d its management’s ability to generate profit from the funds investors have
It is often said if a company’s operation cannot generate net profit as a percentage of the
amount invested greater than the interest rate on financial markets, its future is grim. In
finance rate of return also known as return on investment, rate of profit or sometimes just
return, is the ratio of money gained or lost on an investment relative to the amount of
Return on investment analysis is one of the several approaches to build a financial business
case. The term means that the decision makers evaluate the investment by comparing the
magnitude and training of expected gains to the investment costs.
Decision makers will also look for ways to improve ROI by reducing costs, increasing gains,
Return on investment analysis is one of the several approaches to build a financial business
ecision makers evaluate the investment by comparing the
Decision makers will also look for ways to improve ROI by reducing costs, increasing gains,
investment often called a company’s return on total assets, measures the
overall profit made on an investment expressed percentage of the amount invested. Like
return on assets, or return on equity return on investment measures a company’s
d its management’s ability to generate profit from the funds investors have
It is often said if a company’s operation cannot generate net profit as a percentage of the
ets, its future is grim. In
finance rate of return also known as return on investment, rate of profit or sometimes just
return, is the ratio of money gained or lost on an investment relative to the amount of
is one of the several approaches to build a financial business
case. The term means that the decision makers evaluate the investment by comparing the
to improve ROI by reducing costs, increasing gains,
The return on investment often called a company’s return on total assets, measures the
overall profit made on an investment expressed percentage of the amount invested. Like
return on assets, or return on equity return on investment measures a company’s
profitability and its management’s ability to generate profit from the funds investors have
placed at its disposal.
CALCULATION OF RETURN ON INVESTMENT
The basic return on investment can be found by dividing a company’s net profit(also called
as net earnings ) by the total investment (total debt plus total equity) and by multiplying by
100 to arrive at a percentage
Return on investment =net profit/ capital employed *100
Return on investment is a very popular metric because of its versatility and simplicity.
That is, if an investment does not have appositive ROI or if there are other opportunities
with a higher ROI, then the investment should not be undertaken.
The return on investment often called a company’s return on total assets, measures the
overall profit made on an investment expressed percentage of the amount invested. Like
on assets, or return on equity return on investment measures a company’s
profitability and its management’s ability to generate profit from the funds investors have
CALCULATION OF RETURN ON INVESTMENT :
investment can be found by dividing a company’s net profit(also called
as net earnings ) by the total investment (total debt plus total equity) and by multiplying by
100 to arrive at a percentage
net profit/ capital employed *100
rn on investment is a very popular metric because of its versatility and simplicity.
That is, if an investment does not have appositive ROI or if there are other opportunities
with a higher ROI, then the investment should not be undertaken.
The return on investment often called a company’s return on total assets, measures the
overall profit made on an investment expressed percentage of the amount invested. Like
on assets, or return on equity return on investment measures a company’s
profitability and its management’s ability to generate profit from the funds investors have
:-
investment can be found by dividing a company’s net profit(also called
as net earnings ) by the total investment (total debt plus total equity) and by multiplying by
net profit/ capital employed *100
rn on investment is a very popular metric because of its versatility and simplicity.
That is, if an investment does not have appositive ROI or if there are other opportunities
Calculation of Economic Value Added STATEMENT SHOWING EBIT & NOPAT PARTICULARS 2007
INCOME
NET SALES 370501
OTHER INCOME 29676
[A]
400177
EXPENDITURE
FUEL COST 220202
EMPLOYEE COST 18960
DEPRICIATION 21385
OTHER EXPENDITURE
19100
[B]
279647
EBIT (A-B) 120530
NOPAT=EBIT(1-TAX)
79562
Calculation of Economic Value Added
STATEMENT SHOWING EBIT & NOPAT :-
2007-08 2008-09
370501 419237
29676 33490
400177 452727
220202 271107
18960 24631
21385 23645
19100 19520
279647 338903
120530 113824
79562 75135
Calculation of Economic Value Added:-
2009-2010
463226
18987
482213
294627
24123
26500
20271
365521
116692
77028.389
CAPITAL EMPLOYED DEFINATION :- Capital employed is the value of assets that contributes to a company’s ability to generate
revenue. In general, it represents the capital investment necessary for a business to
function. Consequently, it is not measures of assets, but of a capital
share and long term liability.
PARTICULARS
NET WORTH
PAID & SHARE CAPITAL
RESERVE & SURPLUS
DEBENTURE REDEMPTION RESERVE
A
ADD-: SECURED LOANS
ADD-: UNSECURED LOANS
B
CAPITAL EMPLOYED(A+B)
CAPITAL EMPLOYED :-
Capital employed is the value of assets that contributes to a company’s ability to generate
it represents the capital investment necessary for a business to
function. Consequently, it is not measures of assets, but of a capital investment;
share and long term liability.
2007-08 2008-09
82455 82455
443931 491246
13602 16889
539988 590590
73147 89695
198759 255981
271906 345676
811894 936267
Capital employed is the value of assets that contributes to a company’s ability to generate
it represents the capital investment necessary for a business to
investment; stocks or
2009-2010
82455
541920
19867
644242
90799
287171
377970
1022212
COMPUTATION OF WEIGHTED AVERAGE COST OF
CAPITAL (WACC) FOR THE YEAR 2007
PARTICULARS AMOUNT
Equity, reserve and surplus
539988
Debt 271906
Total 811894
Weighted average cost of capital = ke * w1 + kd * w2
Working notes -:
• Cost of equity is taken as
14% as per govt. norms
• Cost of Debt = Total interest expenses * {(1
= 17981*(1
COMPUTATION OF WEIGHTED AVERAGE COST OF
CAPITAL (WACC) FOR THE YEAR 2007 -08
AMOUNT WEIGHT COST
539988 66.5 0.14
271906 33.5 0.048
811894
Weighted average cost of capital = ke * w1 + kd * w2
=.14*66.5 + 0.048*33.5
= 10.92%
Cost of equity is taken as
14% as per govt. norms
Cost of Debt = Total interest expenses * {(1-effective tax rate)/total borrowing}
= 17981*(1-0.3399)/244844
COMPUTATION OF WEIGHTED AVERAGE COST OF
TOTAL
9.31
1.61
10.92
effective tax rate)/total borrowing}
=0.048
COMPUTATION OF WEIGHTED AVERAGE COST OF
CAPITAL (WACC) FOR THE YEAR 2008
PARTICULARS AMOUNT
Equity, reserve and surplus
590590
Debt 345676
Total 936267
Weighted average cost of capital
Working notes -:
• Cost of equity is taken as
COMPUTATION OF WEIGHTED AVERAGE COST OF
CAPITAL (WACC) FOR THE YEAR 2008 -09
AMOUNT WEIGHT COST
590590 63.07 0.14
345676 36.93 0.049
936267
Weighted average cost of capital = ke * w1 + kd * w2
=0.14*63.07+ 0.049*36.93
= 10.63%
taken as 14% as per the govt. norms
COMPUTATION OF WEIGHTED AVERAGE COST OF
TOTAL
8.82
1.81
10.63
0.14*63.07+ 0.049*36.93
• Cost of Debt = Total interest expenses * {(1 =20229*(1
= 0.049
Where effective tax rate is taken to be 33.99% as per income tax act
COMPUTATION OF WEIGHTED AVERAGE COST OF
CAPITAL (WACC) FOR THE YEAR 2009
PARTICULARS AMOUNT
Equity, reserve and surplus
644242
Debt 377970
Total 1022242
Weighted average cost of capital = ke * w1 + kd * w2
Cost of Debt = Total interest expenses * {(1-effective tax rate)/total borrowing}
=20229*(1-0.3399)/271906
= 0.049
Where effective tax rate is taken to be 33.99% as per income tax act
COMPUTATION OF WEIGHTED AVERAGE COST OF
CAPITAL (WACC) FOR THE YEAR 2009 -10
AMOUNT WEIGHT COST
644242 63.02 0.14
377970 36.98 0.035
1022242
Weighted average cost of capital = ke * w1 + kd * w2
= 0.14*63.02 + 0.035*36.98
= 10.11%
effective tax rate)/total borrowing}
COMPUTATION OF WEIGHTED AVERAGE COST OF
TOTAL
8.82
1.29
10.11
= 0.14*63.02 + 0.035*36.98
Working notes -:
• Cost of equity is taken as
• Cost of Debt = Total interest expenses * {(1
= 18089* (1
=0.0506
Comparison of EVA & ROI for the 3 financial years i.e. 20072009,2009-2010:- Statement showing EVA & ROI comparison of NTPC(In millions)
EVA CALCULATION
EBIT
TAX RATE
NOPAT
CAPITAL EMPLOYED WACC
EVA=NOPAT-(CAPITAL EMPLOYED*WACC) ROI=(EBIT/CAPITAL EMPLOYED)*100 Working notes (calculation of EVA) Year 2006-07: 71072-(730812*0.1133)
Cost of equity is taken as
Cost of Debt = Total interest expenses * {(1-effective tax rate)/total
= 18089* (1-0.03399)/345678
0.0506
Comparison of EVA & ROI for the 3 financial years i.e. 2007
Statement showing EVA & ROI comparison of NTPC(In millions):-
2006-07 2007-08 2008-09
107668 120530 113824
33.99% 33.99% 33.99%
71072 79562 75135
730812 811894 936267
11.33% 10.92% 10.63%
(11729) (9097) (24390)
14.73% 14.85% 12.16%
Working notes (calculation of EVA)
(730812*0.1133)
effective tax rate)/total borrowing}
Comparison of EVA & ROI for the 3 financial years i.e. 2007-2008, 2008-
2009-2010
126945
33.99%
83796
1022242
10.11%
(19553)
12.42%
=(11729)
Year 2007-08: 79562-(811894*0.1092)
= (9097)
Year 2008-09: 75135-(936267*0.1063)
= (24390)
Year 2009-2010: 83796-(1022242*.1011)
= (19553)
Graphical representation
Calculation of ROI Year 2006-07: 107668/730812*100
= 14.73%
Year 2007-08: 120530/811894*100
= 14.85%
-30000
-25000
-20000
-15000
-10000
-5000
0
2007
(811894*0.1092)
(936267*0.1063)
(1022242*.1011)
Graphical representation:-
07: 107668/730812*100
08: 120530/811894*100
2008 2009 2010
EVA
Year 2008-09 = 113824/936267*100
= 12.16%
Year 2009-2010: 126945/1022242*100
= 12.42%
Graphical representation
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
2007
09 = 113824/936267*100
2010: 126945/1022242*100
Graphical representation:-
2008 2009 2010
ROI
INTERPRETATION The above statement basically implies that unlike the traditional measure of accounting
measures of accounting profit where only a part of the cost of capital (cost of debt) is
deducted , EVA requires deduction of full cost of capit
equity).
Return on investment measures a company’s profitability &
generate profits from funds investors have placed at its disposal but just earning profit is
not enough, a business should earn sufficient profit to cover its cost of capital & create
surplus to grow.
Therefore it is advisable to the company to follow the EVA method as it gives a more
rigorous. A positive EVA means the firm generated a return to invested capital that
exceeds the opportunity cost of capital i.e. the “value”
In this case of NTPC EVA comes out to be negative th
company did not added any value to the shareholder’s wealth but if we look at ROI is not
necessarily good for the shareholders the reason could be that ROI measures profitability ,
while EVA measures shareholder wealth
of before-tax operating profit.
The reason for EVA being negative is the cost of capital being greater than the operating
profit of the firm i.e. there is no capital employed rather there is the capital ero
place. It shows that NTPC is not considering the cost aspects.
INTERPRETATION -:
The above statement basically implies that unlike the traditional measure of accounting
measures of accounting profit where only a part of the cost of capital (cost of debt) is
deducted , EVA requires deduction of full cost of capital (cost of debt as well
Return on investment measures a company’s profitability & its management’s ability to
generate profits from funds investors have placed at its disposal but just earning profit is
not enough, a business should earn sufficient profit to cover its cost of capital & create
ble to the company to follow the EVA method as it gives a more
rigorous. A positive EVA means the firm generated a return to invested capital that
exceeds the opportunity cost of capital i.e. the “value”
In this case of NTPC EVA comes out to be negative thereby implying that the profit of the
company did not added any value to the shareholder’s wealth but if we look at ROI is not
necessarily good for the shareholders the reason could be that ROI measures profitability ,
while EVA measures shareholder wealth. EVA focuses on after-tax instead income instead
tax operating profit.
The reason for EVA being negative is the cost of capital being greater than the operating
profit of the firm i.e. there is no capital employed rather there is the capital ero
place. It shows that NTPC is not considering the cost aspects.
The above statement basically implies that unlike the traditional measure of accounting
measures of accounting profit where only a part of the cost of capital (cost of debt) is
al (cost of debt as well the cost of
its management’s ability to
generate profits from funds investors have placed at its disposal but just earning profit is
not enough, a business should earn sufficient profit to cover its cost of capital & create
ble to the company to follow the EVA method as it gives a more
rigorous. A positive EVA means the firm generated a return to invested capital that
ereby implying that the profit of the
company did not added any value to the shareholder’s wealth but if we look at ROI is not
necessarily good for the shareholders the reason could be that ROI measures profitability ,
tax instead income instead
The reason for EVA being negative is the cost of capital being greater than the operating
profit of the firm i.e. there is no capital employed rather there is the capital erosion taking
EVA vs. Return of Investment (ROI) There are two very good reasons
ROIC) as a controlling tool and as a performance measure.
1. Steering failure in ROI
Increase in ROI is not necessarily good for shareholders i.e. maximizing ROI cannot be set
as a target. Increase in ROI would be unambiguously good only in the companies where
capital can be neither increased
2. EVA is more practical and understandable than ROI As an absolute and income statement based measure EVA is quite easily explained
to non-financial employees and furthermore the impacts of different day
actions can be easily
decreases EVA with $100. (ROI is neither easy to explain to employees nor can day
to-day actions easily be expressed in terms of ROI)
This latter benefit if often totally forgotten in academic discussio
course, be visible in desk studies or empirical studies which try to trace the
correlation of EVA and share prices.
Reason 1 : Steering failure in ROI
EVA vs. Return of Investment (ROI):-
reasons why EVA is much better than ROI (RONA, ROCE,
ROIC) as a controlling tool and as a performance measure. There are as follows:
Steering failure in ROI:-
Increase in ROI is not necessarily good for shareholders i.e. maximizing ROI cannot be set
in ROI would be unambiguously good only in the companies where
capital can be neither increased nor decreased.
EVA is more practical and understandable than ROI:-
As an absolute and income statement based measure EVA is quite easily explained
financial employees and furthermore the impacts of different day
actions can be easily turned into EVA- figures since an additional $100 cost
decreases EVA with $100. (ROI is neither easy to explain to employees nor can day
day actions easily be expressed in terms of ROI)
This latter benefit if often totally forgotten in academic discussio
course, be visible in desk studies or empirical studies which try to trace the
correlation of EVA and share prices.
Steering failure in ROI:-
why EVA is much better than ROI (RONA, ROCE,
are as follows:
Increase in ROI is not necessarily good for shareholders i.e. maximizing ROI cannot be set
in ROI would be unambiguously good only in the companies where
-
As an absolute and income statement based measure EVA is quite easily explained
financial employees and furthermore the impacts of different day- to- day
figures since an additional $100 cost
decreases EVA with $100. (ROI is neither easy to explain to employees nor can day-
This latter benefit if often totally forgotten in academic discussion since it cannot of
course, be visible in desk studies or empirical studies which try to trace the
suppose of a SBU earning currently a return (ROI,ROIC,ROCE) of 30 % and
suppose that this SBU faces an investment opportunity producing a return of 20 %
(an error occurred while processing this directive)
• Before investment: Capital 100, Operating profit 30, Capital cost 100 %
• ROI = 30/100=30%, EVA=30
• Investment’s
yearly operating profit is 20 % *20= 4
• After investment : Capital 100, Operating profit 30, Capital Cost 10%
• ROI = 34/100= 28% , EVA = 34
• In this case decreasing ROI is good for
not be maximized and therefore it is problematic controlling tool.
• Usually large corporations have at least some very profitable units and
particularly these units are steered wrongly with ROI.
Reason 2: EVA is more practical and understandable than rate of return(ROI):-
• Usually the rate of return is not used and totally understood at the lower level of
organization in the companies using ROI as the prime performance measure. i.e.
operating people do not use ROI while making day to day operation actions
• This kind of behavior is obvious since cost reduction, revenue increases capital
increases and reductions etc. are too difficult to convert into change of ROI with day
to activities
• Further those percentage would not be so informative to operating people than
absolute dollar changes in operating profit.
suppose of a SBU earning currently a return (ROI,ROIC,ROCE) of 30 % and
that this SBU faces an investment opportunity producing a return of 20 %
(an error occurred while processing this directive)
Before investment: Capital 100, Operating profit 30, Capital cost 100 %
ROI = 30/100=30%, EVA=30 – (10%*100) = 20
Investment’s capital requirement 20, return 20%/year : Thus increase in
yearly operating profit is 20 % *20= 4
After investment : Capital 100, Operating profit 30, Capital Cost 10%
ROI = 34/100= 28% , EVA = 34 – (10 % *120) = 22
In this case decreasing ROI is good for the shareholders, thus ROI should
not be maximized and therefore it is problematic controlling tool.
Usually large corporations have at least some very profitable units and
particularly these units are steered wrongly with ROI.
EVA is more practical and understandable than rate of
Usually the rate of return is not used and totally understood at the lower level of
organization in the companies using ROI as the prime performance measure. i.e.
le do not use ROI while making day to day operation actions
This kind of behavior is obvious since cost reduction, revenue increases capital
increases and reductions etc. are too difficult to convert into change of ROI with day
e percentage would not be so informative to operating people than
absolute dollar changes in operating profit.
suppose of a SBU earning currently a return (ROI,ROIC,ROCE) of 30 % and
that this SBU faces an investment opportunity producing a return of 20 %
Before investment: Capital 100, Operating profit 30, Capital cost 100 %
capital requirement 20, return 20%/year : Thus increase in
After investment : Capital 100, Operating profit 30, Capital Cost 10%
the shareholders, thus ROI should
not be maximized and therefore it is problematic controlling tool.
Usually large corporations have at least some very profitable units and
EVA is more practical and understandable than rate of
Usually the rate of return is not used and totally understood at the lower level of
organization in the companies using ROI as the prime performance measure. i.e.
le do not use ROI while making day to day operation actions
This kind of behavior is obvious since cost reduction, revenue increases capital
increases and reductions etc. are too difficult to convert into change of ROI with day
e percentage would not be so informative to operating people than
• This is even more understandable when we keep in mind that ROI is not an
unambiguous measure.
• Thus in ROI-steered companies the capital base is
operating people do not even realize that tying money in inventories or sales
receivables is costly.
• Therefore the meaning of capital efficiency is often forgotten and some operating
people do not even realize that tying mo
costly.
• EVA, in contrast to ROI, is an absolute measure easy to integrate into operating
activities since all cost reductions and revenue increases are already in terms of
EVA (reduction in all costs in one period
the similar fashion capital increases/ reductions are also fairly easy to turn into
change of EVA.
• Furthermore EVA is (in contrast to ROI) an unambiguous measure i.e. always
increasing EVA increases the position o
• It is also very common that in ROI
know what profitability is.
• Often many educated employees know something about the flaws of ROI and
therefore they have some vague conception that real profit
improve although ROI decreases.
This is even more understandable when we keep in mind that ROI is not an
unambiguous measure.
steered companies the capital base is left to very little attention in
operating people do not even realize that tying money in inventories or sales
Therefore the meaning of capital efficiency is often forgotten and some operating
people do not even realize that tying money in inventories or sales receivables is
EVA, in contrast to ROI, is an absolute measure easy to integrate into operating
activities since all cost reductions and revenue increases are already in terms of
EVA (reduction in all costs in one period = increase in EVA in the same period). In
the similar fashion capital increases/ reductions are also fairly easy to turn into
Furthermore EVA is (in contrast to ROI) an unambiguous measure i.e. always
increasing EVA increases the position of shareholders.
It is also very common that in ROI-steered companies many employees do not really
know what profitability is.
Often many educated employees know something about the flaws of ROI and
therefore they have some vague conception that real profit
improve although ROI decreases.
This is even more understandable when we keep in mind that ROI is not an
left to very little attention in
operating people do not even realize that tying money in inventories or sales
Therefore the meaning of capital efficiency is often forgotten and some operating
ney in inventories or sales receivables is
EVA, in contrast to ROI, is an absolute measure easy to integrate into operating
activities since all cost reductions and revenue increases are already in terms of
= increase in EVA in the same period). In
the similar fashion capital increases/ reductions are also fairly easy to turn into
Furthermore EVA is (in contrast to ROI) an unambiguous measure i.e. always
steered companies many employees do not really
Often many educated employees know something about the flaws of ROI and
therefore they have some vague conception that real profit ability might also
FINDINGS:- � ROI increases in 2007-08 because of increase in EBIT but at the same time there is an
increase in Capital employed also thus implying that the effect of EBIT on ROI is more
as compared to that of capital employed.
� During the year 2007-08 the ROI has gone up by 12
year 2008-09, the ROI has decreased
increased by 26 basic points.
� As we see in the year 2007
cost of capital but in 2008
than the operating profit. In the year 2009
EBIT.
� EVA is better than ROI as an indicator of creation of value.
� Calculation reflects the idea that firm must earn enough to cover the cost of debt and
the opportunity cost of equity before it even begins to create value.
08 because of increase in EBIT but at the same time there is an
increase in Capital employed also thus implying that the effect of EBIT on ROI is more
that of capital employed.
08 the ROI has gone up by 12 basic points
09, the ROI has decreased by 269 basic points. In the year 2009
points.
2007-08, EVA increases because of increase in EBIT & decrease in
cost of capital but in 2008-09 it move towards negative as the cost of capital is more
than the operating profit. In the year 2009-10, EVA increases because of increase in
r than ROI as an indicator of creation of value.
Calculation reflects the idea that firm must earn enough to cover the cost of debt and
the opportunity cost of equity before it even begins to create value.
08 because of increase in EBIT but at the same time there is an
increase in Capital employed also thus implying that the effect of EBIT on ROI is more
points whereas during the
. In the year 2009-10, ROI
08, EVA increases because of increase in EBIT & decrease in
09 it move towards negative as the cost of capital is more
10, EVA increases because of increase in
Calculation reflects the idea that firm must earn enough to cover the cost of debt and
the opportunity cost of equity before it even begins to create value.
CONCLUSIONS:- The EVA depicts the actual profits benefit over cost of capital employed where as ROI
shows actual profits over normal profits. Hence EVA is good measure of evluating
performance as it evaluate profit against cost.
If EVA is positive, that it indicates that the firm is ad
EVA is negative , it shows that the firm is destroying value evan though it may be reporting
a positive or growing earning per share(EPS) or return on investment(ROI). This means, if
a firm wants to have an attractive
other investment options with a similar risk.
EVA shows financial performance with a new pair of glasses or offers new approach
especially for the companies where equity is viewed as free source of f
performance is measured by some earning figure.
Inflation can distort the value of EVA. Furthermore EVA suffers from wrong
periodization Economic value added is a residual income variable. It is defined as Net
operating profit after tax subtrac
In a periodical performance measurement EVA can how
misleading information because it suffers from the same shortcomings as (ROI). EVA
inspite of its fault seems to have importance for
and controlling tool.
-
actual profits benefit over cost of capital employed where as ROI
shows actual profits over normal profits. Hence EVA is good measure of evluating
performance as it evaluate profit against cost.
If EVA is positive, that it indicates that the firm is adding value to its shareholders. But if
EVA is negative , it shows that the firm is destroying value evan though it may be reporting
a positive or growing earning per share(EPS) or return on investment(ROI). This means, if
a firm wants to have an attractive invstment: it has to have a return that would exceed
other investment options with a similar risk.
EVA shows financial performance with a new pair of glasses or offers new approach
especially for the companies where equity is viewed as free source of f
performance is measured by some earning figure.
Inflation can distort the value of EVA. Furthermore EVA suffers from wrong
periodization Economic value added is a residual income variable. It is defined as Net
operating profit after tax subtracted cost of capital tied in operations.
In a periodical performance measurement EVA can how-ever in some occasions give
misleading information because it suffers from the same shortcomings as (ROI). EVA
inspite of its fault seems to have importance for companies as a performance measurement
actual profits benefit over cost of capital employed where as ROI
shows actual profits over normal profits. Hence EVA is good measure of evluating
ding value to its shareholders. But if
EVA is negative , it shows that the firm is destroying value evan though it may be reporting
a positive or growing earning per share(EPS) or return on investment(ROI). This means, if
invstment: it has to have a return that would exceed
EVA shows financial performance with a new pair of glasses or offers new approach
especially for the companies where equity is viewed as free source of funds and
Inflation can distort the value of EVA. Furthermore EVA suffers from wrong
periodization Economic value added is a residual income variable. It is defined as Net
ever in some occasions give
misleading information because it suffers from the same shortcomings as (ROI). EVA
companies as a performance measurement
RECOMMENDATION It is suggested that NTPC should take the following steps to change its negative EVA to
positive EVA such as:
� Earning more profit without using more capital and this
a cost analysis over product line or by doing analysis of expenses.
� Change capital structure to reduce capital cost by employing less capital or invest
capital in projects with greater return potential.
� Decrease overall cost o
available or it can buy back its equity.
RECOMMENDATION :-
It is suggested that NTPC should take the following steps to change its negative EVA to
Earning more profit without using more capital and this could be done by carry out
a cost analysis over product line or by doing analysis of expenses.
Change capital structure to reduce capital cost by employing less capital or invest
capital in projects with greater return potential.
Decrease overall cost of capitalby paying debts, loans etc. if sufficient funds are
available or it can buy back its equity.
It is suggested that NTPC should take the following steps to change its negative EVA to
could be done by carry out
a cost analysis over product line or by doing analysis of expenses.
Change capital structure to reduce capital cost by employing less capital or invest
f capitalby paying debts, loans etc. if sufficient funds are
APPENDICES
BIBLIOGRAPHY:- BOOKS
1. EVA and value based management- a practical guide to implementation
2. Financial management and policy
3. Financial Management by I.M. Pandey.
4. Stern Stewart & co.(1991), The Quest for value. The EVA Management guide.
5. NTPC journals
6. MAFA
WEBSITES:-
� www.ntpc.co.in
� www.google.com
� www.reliancepower.com
� www.tatapower.com