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SUMMER TRAINING PROJECT REPORT CONTRACT AND PROCUREMENT MANAGEMENT SYSTEM AND RATIO ANALYSIS OF NTPC

AT NTPC, NOIDA
SUBMITTED TOWARD PARTIAL FULFILLMENT OF MASTER OF BUSINESS ADMINISTRATION 2009-2011

Under Guidance of:Mr. P.K GOEL DGM (Finance)

Submitted by: SAKSHI BHATNAGAR ROLL NO:0906370091

GLA INSTITUTE OF TECHNOLOGY AND MANAGEMENT MATHURA

PREFACE
This project report deals with the procedures, practices and guidelines adopted by the NTPC Limited with respect to the procurement of various goods and services which are essential for carrying of the smooth functioning of the activities performed at the office. These practices are followed during all procurement by NTPC. The purchase procedure starts at Indenting by the department that requires the material and goes to the cost department and finance department for required approval and vetting. A brief i troduction about the procedure along n with the procurement policy is given along with the recommendation and the limitations of the procurement system. Furthermore this project aims to analyze the financial strength of the company and aims to interpret them thereof with the help of ratio analysis.

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ACKNOWLEDEMENT
The six weeks Summer Training at NTPC have been a great learning experience. It has been one of the most enriching experiences for me to work along with the employees of one of the best managed organizations, a company rightly considered as the Navratna among the public sector undertakings of the India. I am very thankful to Sh.P.K GOEL DGM (Finance) who has given an opportunity to learn about the procurement procedures followed here by allowing me to undergo training at their Finance (Concurrence) Department. He gave me full support to learn t e crucial things of this h whole exercise. I am thankful to sir for the his kind support in completion of this project report by guiding me throughout my training, for his support, guidance and providing the valuable information from his vast experiences which has enabled me in successfully completing the Summer training which is an essential part of my MBA course curriculum. SAKSHI BHATNAGAR

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TABLE OF CONTENTS
S.N TOPIC PAGE NUMBER 1 2 3 4 6 7 8 9 10 11 12 13 14 15 INTRODUCTION OF TOPIC NEED AND RELEVANCES OF STUDY OBJECTIVE OF STUDY INTRODUCTION OF NTPC POWER STATION IN INDIA OF NTPC RESEARCH METHODOLOGY PROCUREMENT STEPS TENDERING PROCEDURE RATIO ANALYSIS OF NTPC FINDINGS RECOMMENDATION LIMITATION OF STUDY CONCLUSION APPENDIX 1 3 4 5 9 12 13 14 40 63 64 65 66 69

In p between various activities like Liquidated Damages calculation. The representatives from the bidders may also be present. The content of the tender document is prepared in such a manner that the prospective bidder comes to know about all the important details ab the contract. Once all the terms and conditions are formulated and approved. they are opened in presence of some nominated officials from Finance. Guarantee in Liability Defect period etc are undertaken. The tender o documents are issued to the prospective bidder for a cost that starts from Rs 200 to Rs 3000. Then a comparative statement of the quoted bids is prepared and the contract is 1 . Once all the bids are received. Procurement Management at NTPC starts with Indenting by the department that requires the material and goes to the cost department and finance department for required a proval. Spare Parts procurement terms. the tender document preparati n starts. The issuance of tender out document is followed by the receipt of Bids from various vendors in the specified format.INTRODUCTION OF TOPIC The report entitled ³CONTRACT AND PROCUREMENT MANAGEMENT SYSTEM AND RATIO ANALYSIS AT NTPC´ is about the purchase practices followed at NTPC for every equipment. Contracts and Materials department.

which is issued to the bidder with the tender documents. and further its comparison with other power sector players Reliance Energy and Tata power will help to analyze the better position of the company in comparison to others or in case of any loop holes the company can perform better in future.awarded to the lowest quoting bidder.e. profit and loss account and balance sheet. It has emerged as a principle technique for the analysis of the financial statements of the companies. Financial statement analysis is yet another one of the important part of the project where in various crucial ratios which help to analyze the financial position of the company are being calculated which provide inside into the growth prospects of the company. which is done for two things. Ratio Analysis is the process of determining and presenting the relationship of items or group of items in the financial statement. The purchase is followed by the evaluation. which are dealt in the tender documents. the vendor¶s performance and the purchase performance. During the document preparation phase. payments terms are also decided and documented in the General Condition of Contract. Liquidated damage is a payment to be made by the contractor in case he fails to complete the project in the stipulated time. These ratios are being calculated with the help of the 2 most important financial statements of the company i. These ar important not only e for the working of the company but they are even important for the outsiders of the company like creditors. Liquidated Damages is one of the very important clauses. Apart from payments. The tool used for financial statement analysis is Ratio Analysis. investors etc. 2 . there are various other issues like Arbitration. The project also includes over all study of the power sector which will help in knowing the company in much better sense and its position in power sector. The Vendor evaluation comes in handy for placing future orders where as the Purchase Performance evaluation provides detailed insight into the procedures being followed to procure the required material.

which serves as a guideline to guide all through the procurement process. requirements to be submitted by the bidder during the contract. y The conditions of contracts. Why. the scope covers the following areas: y The rules. y Additionally the Ratio Analysis tool of Financial Statement Analysis has been used to analyze the profitability. y Various steps involved in the procurement process.NEED AND RELEVANCES THE STUDY This project is an effort to understand the procurement practices followed at NTPC and to understand what they keep in mind before awarding a particular bid contract to the specific bidder. regulations and the appropriate policy that is taken as base. solvency. y It will also highlight the condition taken into consideration in the award of contracts at the NTPC. How of the procurement procedures at the NTPC 3 . liquidity and performan of the company from year ce 2008-2010 y All the above points covered helps an individual in understanding theWhat. Thus.

y To understand the criteria and procedure on which the bidders are selected for placing an order y Using Ratio Analysis the aspects of the profitability.OBJECTIVE OF THE STUDY This project tries to achieve the following objectives: y To study the procurement procedure in NTPC. liquidity and performance are adjudged. 4 . y To study how important is the role of finance concurrence department at various stages of the procurement process. solvency.

Within a span of 35 years. 486. with Power Company.5% of the company and the balance is held by FIIS. it was incorporated in the year 1975 to accelerate power development in the country as wholly owned company of the Government of INDIA.INTRODUCTION TO THE NTPC LIMITED NATIONAL THERMAL POWER CORPORATION NTPC is the largest power generating company of INDIA and contributes one-fourth of the thermal energy generated in the country. Public and others. with power generating in all major regions of the country 5 . NTPC has emerged as a truly national power company. It has 463 rank in the World Top Class 2000 Companies which is improve from the last year rank i. A public sector company.e. At present. Domestic Banks. Government of INDIA holds 84.

integrating multiple energy sources with innovative and eco-friendly technologies and contribute to society. with increasing global presence. powering India¶s growth.Vision And Mission Vision "A world class integrated power major." Mission ³Develop and provide reliable power. related products and services at competitive prices.´ Core Values ± BCOMIT y y y y y y Business Ethics Customer Focus Organisational & Professional Pride Mutual Respect & Trust Innovation & Speed Total Quality for Excellence 6 .

loyalty and organization commitment exist in NTPC lowering he attrition Rate 7 .Recognitions & Awards NTPC has a glorious record of excellence in every field of its activities ever since its inception in 1975.  Contribution of NTPC in power generation: NTPC has contribution of 28% of total power generation capacity of India. Leading the country¶s power sector with a vision to become a 75. we take pride in our people and their performance which has been acknowledged time and again at various national and international level Achievements:  Sixth largest thermal power generator in the World and the Second most efficient utility in terms of capacity utilization.000 MW company by 2017.  All these point to the fact that strong cohesiveness. for what NTPC stands for. NTPC¶S CULTURE  Core values are both intensely and widely shared  Climate of high behavioral control  Low employee turnover  High agreement among the employees.

e.Organization Structure of NTPC Chairman & Managing Director Director (HR) Director (Finance) Director (Projects) Director (Operations) Director (Commercial) Director (Technical) Executive Director (NR) Executive Director (NCR) Executive Director (NR) Executive Director (SR) Executive Director (WR) General Manager General Manager General Manager Organization structure includes three levels of management i. 8 . then region level comprising management of SBU regional level management & last as planning level management as GMs of various plants. corporate level including top management.

coal mining. power trading & distribution.´ 9 . NTPC generates power from Coal and Gas. power equipment manufacturing. With an increasing presence in the power value chain. NTPC is well on its way to becoming an ³Integrated Power Major. With an installed capacity of 28840 MW.POWER STATION OF NTPC IN INDIA Power Generation Presently. NTPC is the largest power generating major in the country. It has also diversified into hydro power. oil & gas exploration.

[ Singrauli | Korba | Ramagundam | Farakka | Vindhyachal | Rihand ] [ Kahalgaon | NCTPP | Talcher Kaniha | Unchahar | Talcher Thermal | Simhadri | Tanda] [ Anta | Auraiya | Kawas | Dadri Gas | Jhanor-Gandhar | Kayamkulam | Faridabad] PERFORMANCE OF NTPC¶s COAL/GAS BASED POWER STATION 10 .

North region 2. Korba 14. Talcher kaniba 21. Dadri gas 11. Anta 9. Unchahar 5. Eastern Region 18. Talcher thermal 22. Dadri coal 8. Kayamkulam 25. Tanda 6.REGION WISE AND STATION WISE PERFORMANCE 2002-2003 STATION GENERATION 1. Kahalgaon 20. Rihand 4. Kawas 16. Vindhyachal 15. Southern Region 23. National Capital Region 7. Jhanor-gandhar 17. Singroli 3. Simhadri 4280 2000 1000 840 440 3152 840 413 652 817 430 5653 2100 2260 645 648 3900 1600 840 1000 460 2950 2100 350 500 31810 15474 7674 6561 2101 23008 6673 3060 4684 5730 2861 39562 16605 15590 3745 3615 21634 8418 4514 6236 2466 17178 15846 1316 1500 CAPACITY 11 . Faridabad 12. Farakka 19. Western Region 13. Ramagundam 24. Auraiya 10.

NTPC Records 4. Other websites 12 . Secondary Data: 1. The main focus was to gain knowledge and experience during the training period that will help understand the wholeprocess of tendering in procurement management. Research Design: To achieve the objectives stated above. NTPC website 2. ³Descriptive Research´ is taken into account. The research methodology comprised of secondary data collected from various NTPC records and through NTPC website. I have done ³Descriptive Research´ and for that data is collected from secondary sources. Collection of Data The data and information for the project is collected by studying various handbooks. assist books. Research Method: Secondary data collection technique to achieve the objectives stated above. bidding documents and internal circulars. experts and doing daily practical work of the organization.RESEARCH METHODOLOGY The methodology adopted for the present study was discussion with company guide. Manuals of NTPC 3.

Requests for Proposals (RFP).  Consumption. and warranty are investigated. or the product or service is to be re-ordered.  Supplier Contact: When one or more suitable suppliers have been identified. and a contract to acquire the P/S is completed. or direct contact may be made with the suppliers. the company determines whether to consider other suppliers or to continue with the same supplier 13 .  Negotiation: Negotiations are undertaken. based on contract terms. or trials undertaken. and customization possibilities are established. and price. shipment. delivery. maintenance. Maintenance and Disposal: During this phase the company evaluates the performance of the P/S and any accompanying service support. and any requirements for follow-up services including installation.  Fulfillment: Supplier preparation. Requests for Information (RFI) or Requests for Tender (RFT) may be advertised. it is necessary to search for suppliers who can satisfy the requirements. the contract expires. If the P/S is to be re-ordered. Requests for Quotation (RFQ). Samples of the P/S being considered may be examined. and payment for the P/S are completed. availability. as they are consumed.  Renewal: When the P/S has been consumed and/or disposed of. Installation and training may also be included.PROCUREMENT STEPS Procurement life cycle in modern businesses usually consists of seven steps:  Information Gathering: If the potential customer does not already have an established relationship with sales/ marketing functions of suppliers of needed products and services (P/S). company experience with the P/S is reviewed. Delivery schedules are negotiated.  Background Review: References for product/service quality are consulted.

But in case of the normal procurement that is done by tendering. Emergent Procurement Though in case of urgency the respective department is allowed to make procurement through cash up to the limit of Rs.000 only. procurement of any material for any plant or the office of NTPC is done by two processes. The guideline lays down the responsibility and authority of various level executives in the PSE (Public Sector Enterprises). 10. However. From there a tender notice is issued and the procurement process starts. The Central Government issued 14 . contracts or HR services as is suitable. The following are the steps involved: Promotion of competition.000 for vetting.TENDERING PROCEDURE FOLLOWED AT NATIONAL THERMAL POWER CORPORATION LTD(NTPC) Procedure: DOP (DELEGATION OF POWER) All the activities undertaken at NTPC are regulated by a guideline called ³DELEGATION OF POWERS´ or ³DOP´ in short. Based on this guideline the following major procedures have been identified. These processes are:y y Procurement through tenders. 10. After getting the required authorization the indent is forwarded to materials. efficiency and economy in electricity industry can be conveniently achieved through the process of competitive bidding. a standard procedure is followed where the int nder sends the e procurement list to the finance department for the goods valued over Rs. Once the finance department clears the cost aspect of the tender it is send for the required approval from the competent authority as described in the DOP.

justification and development before taking up competitive bidding. Preparation of cost estimate in association with cost engineering department and seeking approval thereof. the tender document preparation. Contracts and Materials department. The content of the tender document is prepared in such a manner that the prospective bidder comes to know about all the important details about the c ontract 4.detailed guidelines for competitive bidding of power projects in January 1995 whereby the competitive procurement of power sector projects was made mandatory.a comparative statement of the quoted bids is prepared and the contract is awarded to the lowest quoting bidder. Preparation of the bid documents for issue of NIT. 3. 7. Contract of award is given to the lowest bidder. and special conditions of contract. Once all the terms and conditions are formulated and approved. Bid evaluation. 5. The tender documents are issued to the prospective bidder for a cost that starts from Rs 200 to Rs 3000. 6. they are opened in presence of some nominated officials from Finance. The process involves Vendor evaluation and assessment that includes the physical verification of assets and manufacturing facilities as well as the financial capacity of the bidder. The documents include INB. 15 . Issue of NIT-usually the publication in the newspaper or trade journal. The representatives from the bidders mayalso be present. The issuance of tender document is f llowed by the o receipt of Bids from various vendors in the specified format. Receipt of bids and bid opening. General Condition of Contract. Indent by the engineering department who coordinates the equipment req uirement. Once all the bids are received. 2. 1. These guidelines laid emphasis on project identification.

It can also be explained. so as to obtain the optimum value for each unit of expenditure What is a contract? A contract in its simplest form defined as a promise. the needed equipment. 16 . Any procurement-requiring adherence to the IDA procurement procedure. atthe right time and at the right price after giving fair and equal chance to renderers¶. intense engineering co-ordination or specialized engineering knowledge during procurement etc. All other procurement contracts pertaining to a project will be classified as category ³B´ contracts. Procurement at NTPC is initiated on the basis of approved indents/requisitions and indicating budget and project estimate provisions. In under taking or performing that activity both the parties accept certain responsibilities and in return receive certain benefit for performing the same. The promise is to do. or group of promises. that the law will enforce. The contract services/materials management services receive the requisition/indent for the procurement of materials/equipment/services duly approved by the competent authority and then plan and organize the procurement action. or refrain from doing. long equipment delivery periods. But in commercial context. a contract is a document in which the terms of the promise are recorded. material. a particular activity.INTRODUCTION TO PROCUREMENT Procurement activities to be taken by NATIONAL THERMAL POWER CORPORATION (NTPC) are to satisfy varying project requirement of equipment. Objective The basic objective of procurement management at NTPC is to make available. as ³a contract is an agreement enforceable at law between two or more parties to undertake or perform a particular thing. works and services in the right quality and quantity. materials and services. would be classified as category ³A´ contracts.

There must be a definite promisor. which requires the materials is known as intending department and the department that procures the material is known as the material department. All these steps are discussed here in detail: 1. Hence intending department is the customer for material department. that is. that the agreement be written and enforceable by law. each of whom is legally capable of performing the intended part of the agreement. Intending for Procurement: Procedure for intending is as follow: INDENT COST ESTIMATION FINANCE CONTRACT MATERIAL HR 17 .Procedure of procurement Intent of the contracting parties: An agreement between the two parties does not itself constitute a contract. At NTPC the department. It is necessary for the two parties to have their agreement legally binding.

For the purpose of indenting. factoring of the long process owner for award of all such contracts including high value civil works.Insurance Items (I) 3. material planning is required. A contract management functions as anindependent specialized techno commercial function unit to meet the overall corporate objective in the area of project procurement. has divided the responsibilities of contracts management. It has been in place since inception of NTPC as corporate contract department or concurrence department. 1.Capital Item (P) 5. which are characterized by the adherence to the procurement of external funding agencies.Unit Replacement item (UR) 4. It is nothing butclassifying the materials into various categories to facilitate a speedy and efficient pro curement. 18 .Stock item (Automatic Recoupement items/AR) 2. In this process all the materials which may be required at any of the NTPC projects or offices are classified in to five major categories and their procurement is to be done on the basis predefined for them. The corporate contracts division/department is responsible for installation of the plant & equipment and its execution is the responsibility of the project site.Other non-stock items (Not falling under any of the above category) Identification of Responsibilities. The corporate contracts procures plants/ equipment and services for its projects. whose pre award and post award contracts are handled by the project sites. The principles and guidelines followed for these site contracts are similar to those applicable to corporate contracts. There are number of the other small value contracts with lesser of engineering coordination.its monitoring and post award follow up till the delivery of equipment from the suppliers works till the closure of the contracts. both pre award and post award between the corporate office and project site. NTPC being a utility organization with projects located away from the corporate office.

In view of the complexity involved in the construction of thermal generation projects. The contracts management systems calls for the further sharing of responsibilities for specialized functions such as engineering. field quality assurance etc. quality assurance and inception at corporate center & erection. Each package as developed above normally forms an independent contract. as the conceptual design progresses. The total project work is broken into smaller well-defined packages. 19 . cost engineering. and station water flow systems. coal and ash handling systems etc. finance. site finance. The co-ordination and division of responsibility between the departments at two responsibility centers are also clearly defined. Taking into consideration the requirement of the project master network (PMNW) schedule. a detailed project description emerges as design intent memorandum (DIM) incorporating station schematics like thermal schematics. Subsequently. The engineering function is responsible for development of such schematics. Stages of international competitive bidding (ICB) Step 1 (a) Contract packaging Contract packaging is the first step of procurement for a project. co -ordination and implementation of the whole project and at the same time to execute the project at an optimum cost to the owner. electrical signal line diagrams. (b) Development of packages First of all feasibility report for any project is prepared which contains the details of the various equipment systems and services required for a particular project. as theproject site. grouping of equipment and services is done to arrive at contract packages. these schematics provide the inter linkage between the various equipments and services. This is done with the view to optimize the number of contracts to be handled for the better planning.

There are various methods of cost estimation. and corporate planning and finance functions. which are used at NTPC. Hence the rates thus obtained are very near to the actual that might be prevalent in the market at present. Whenever NTPC procures some material. Some of the methods use very technical details and procedures whereas others are simple to implement and uses market rateto prepare a cost estimate. Cost Estimation: Cost estimation process is the most important financial activity in the process of budgeting and procurement. HISTORICAL COST METHOD MARKET RATE METHOD Historical Cost Method :In this method of cost estimation. The contract package being extremely vital to a successful project implementation is approved for implementa tion by the highest corporate level authority. it is either financed from the budget allocated to the particular department requesting for the material or it will be financed from the central fund. the latest executed Thermal Power Plant rates will be used n ot any other. For example.The development of contract package list for a project is done jointly by engineering. But to 20 . if a cost estimate has to be prepared for· a new Thermal Power Plant. The cost engineering department at NTPC uses the latest cost incurred for a similar kind of project. cost estimate is madebefore forwarding the indent document to the Finance department. For the purpose. 2. contracts. The procurement of the second kind requires financial clearance from the Finance Concurrence department.

limited tendering or single tendering system is also adopted in specific cases. However depending on the circumstances and the requirements. the wages rates are taken from the government gazettes and similarly for some homogeneous products like cement. Following are three types of tenders: 21 . After the information is received. an escalation factor is used. steel etc a standard market prevailing rate is used 3. All the prices of previous projects are multiplied by this factor and a very close estimation of market rateis thus obtained. However if the difference in the price quoted by two vendors are reasonably high an average of the two may be taken as the base. In this method once an indent is prepared.smoothen the effect of inflation and various other financial components in the price at the time of the execution of that project. Market Rate Method: Market rate method is used for the procurements that are not in very large numbers and value. the rates quoted by various vendors are compared and the lowest quoted price is taken as base rate for calculation. some of the vendors registered at NTPC or listed in trade journals are sent a request for quoting the prices of a particular good. The escalation factor calculation is discussed separately in the report. Tendering and Bidding Documents: Normally an open tendering system for procurement is adopted during construction stage of a project. However for civil works component of the contract. This enquiry is not a tender and the rates provided by the vendors are not part of the bid.

Open tender is accessible to all known. For the purpose. a notice inviting tenders must appear in two or more newspapers of all India re pute in addition to one or more local newspaper where the material/equipment is to be delivered. reliable and proven sources o f particular equipment/material. technical competence.TYPE OF TENDERS: Open tender Limited tender Single tender 1. All the plant packages are procured through Open Tender. financial soundness. or approved vendors list of State Government/Central Government/DGS&D vendors to whom enquiries were floated in past. Open Tender: Procurements or value Rs 1 lakh and above must be done through opentendering. Manufacturer's Directory. However to avoid frivolous tenders. This process will take place once in every three years by advertising in two or more newspapers of all India repute in addition to one or more local newspaper where the material/equipment is to be delivered. a pre-qualification procedure may be adopted. The criteria for pre-qualification will inter-alia consist of past performance. But for the items valued less than Rs 1 lakh the pre-qualification can be done on the basis of data available in Trade Journals. 22 . organizational capability etc.

These acquisitions take place on the ground of proprietary items or standardization. This type of tendering is monopolistic in nature and is avoided to the extent possible. An the case of procurements funded by external funding agencies following International Competitive Bidding procedures. 50000/. In case of urgency. 23 . 3. Limited Tender: Limited tender is a type of tender where instead of sending bid enquiry to all the possible vendors through newspapers.may also be procured with authorization of competent authority and the reason must be recorded in the indent documents. In case of procurements under the World Bank funding. the IFB is also published in the µDevelopment Business¶ of United Nations when required. Copies of IFB/NIT are also sent to the bidders who have evinced interest in supplying similar equipment/services in the past. items worth more than Rs. a minimum of four bidders are invited to quote the prices for the required equipment/material /services and these four bidders must be from the approved list of vendors mentioned in the open tender. a Proprietary Article Certificate must be issued by a competent authority and the purchase will not be made without authorization of a Genial Manager or to whom the power is delegated.2. However a Limited Tender is a special case and cannot be issued without proper explanation and requirement. a limited number of vendors arc intimated through post or fax. The Invitation for Bids (IFB)/ Notice Inviting Tender (NIT) are published in leading national newspaper as per guidelines and procedures. 50000/-. However Single Tendering is done in many other cases which are not mentioned anywhere in the DOP. Single Tender: This type of tendering is the easiest and fastest to acquire a good but requires lot of paper work and authorization before the acquisition can be initiated. But a Limited Tender may be invited only for the procurements worth less than Rs. the IFB us also published in the Indian Trade Journal and a copy of IFB sent to each of the embassies/ High commissions of member countries of the funding agency. To initiate a single tender. However the next higher authority of the procurement department will decide the number and names of supplier. In limited tender.

Ea rnest money a nd the like. Contract Performance Security.CONTENTS OF BIDDING DOCUMENTS: Every time when an open tender is invited. Every time a new tender is notified. Here we will see what the documents that are generally issued to bidders are. a set of tender documents is issued against a payment of stipulated fee according to the price list given above. The docu ment also contains the guidelines for bidders for bank gua ra ntee. Finally the document specify about the language and interpretation and implied terms and condition of all the documents provided with the bid. ITB also contains information about how to modify and withdraw the bids already submitted to NTPC. which provides various required information and terms and condition of the contract The documents also contains the various contract forms which the bidder is expected to sign and return to NTPC to acknowledge the acceptance of the termsand condition of the contract. Additionally the ITB contains various references to clauses of GCC (General Condition of Contract) and SCC (Special Condition of Contract). Currencies conversion. The document also specifics the Qualifying/Eligibility requirements of the bidder and the goods/services supplied. this docu ment is issued for a cost that is decided on the basis of the total estimated value of the indent. The ITB also contains information for the foreign bidders. Bid Security. Liquidated Damages. Defects Liability and Work Schedule. the bidders are provided with a set of documents. The documents may vary from project to project. 24 . The document contains the general instructions like the Terms of Payment. (A) Instruction to Bidder (1TB): This document is meant to provide the bidders the vital information required to understand and evaluate the tender offer. Hence in short we can identify this document as the guidelines and information brochure to bidders before they submit their quotation for the notified work. This set of tender document consists of many different documents meant for different purposes.

commercial deviation. Guarantee declaration. civil works price break-up. Construction Equipments. Break up of Bid price. Check list. Price break up of recommended spares.(B) Bid Proposal Sheet or Bid Data Sheet : Bid proposal sheet is a set of documents which contains the formats for bidding. The document also contains different formulae that are to be used on some future dates to calculate the LD or the Price Escalation. Information regarding value addition and Type test charges. arising out of or in connection with the Contract. Special Maintenance Tools. This document is nothing but a standard format providing the bidder to-Furnish the details required by the NTPC in a standard format used at NTPC. This is worth noting that all the terms used in the bid document are predefined and have one and only meaning which is defined in the GCC. (C) General condition of Contract: The document titled General Condition of Contract of GCC is a docu ment that takes care of the legal aspect of the contract between the bidder and NTPC. This docu ment also is an integral part of all the bid docu ments with some minor changes or no changes at all. Declaration of Import content. QR Data and capacity data. The document takes care of the special issues that have come up or may come up in the course of the execution of that particular contract and has not been covered in the General Condition of Contract. The docu ment starts with the definition for The terms used in various tender documents. Bankruptcy of the contractor or any other Force Majeure. The GCC also has a clause called RESOLUTION OF DISPUTES that specifies the procedures to be followed if any dispute occurs. Technical deviations. Summary price proposal. The very first clause of the document is TIME-THE ESSENCE OF CONTRACT. Work completion Schedule. (D) Special Conditions of Contract: Special Condition of Contract or SCC is not a standard document that is issued with all the tender documents. The document also talks about the detailed 25 . Finally the document also refers to the unforeseen events like Out Break of a War. Equipment wise price break-up. Price Adjustment data.

The provisions herein shall prevail over those in the General Conditions of contract. In the document some particular issues pertaining to the erection component of the contract is dealt with. Similarly the document will also enlist all other possible alternative to the already mentioned s specifications (if any). Hence the document may also be considered as the amendments to theGCC. Since there are no financial aspects associated with this document. Wherever there is a conflict. The document is prepared by the Project Engineering department and contains the technical specifications of the equipments and spares to be procured. This document contains all the specification required for that particular project. an Erection Condition of Contract deals with the civil construction works undertaken at the site where the equipment is to be installed and commissioned. (G) Technical Specification: The document is the thickest document or any bid document. This is mentioned in the document itself that "The following Special Condition (if Contract shall supplement the General Condition of Contract. As the name itself suggests. 26 . The document deals with the erection component of the contract (if any). Hence this document is a must for all the work where there is an erection component. This also takes into consideration the statutory and local authority who may be in charge of monitoring the work in progress and whose permission may be required. a detailed study of this document is out of the scope of this report. Typically.(E) Manufacturing plan and Master Schedule of the execution of the contract. (F) Erection Condition of Contract: This document again is specific document which may not be issued with all the tenders. It is the SCC where we mention the issues related to Liquidated Damage Clause. It may also contain the drawings of the equipment or layout of the project.

If the bidder after successful bid refuses to undertake the contract. TENDER OPENING: Tender opening is the penultimate step in the purchasing process. one representative each from the Indenting department. inspection procedures. These all activities are done to ensure proper and transparent procurement process. SECURITY DEPOSITS: A refundable security deposit may be asked at the time of submission of the bid. Delegation of Power has a very important role to play in purchasing process A t N T P C. F or every purchase value of exceeding R s 50000/-. This d eposit is taken to ensure that the vendor who is awarded the contract will not refuse to undertake the contract. This committee also formulates the QR (Qualifying Requirements) for the b idders of that particular tender. All the quoted figures should also be encircled and will be written in words if the bidder have not done so already and will be attested. The committee consists of three members. The representatives of the bidders may also present themselves if they wish so however their absence will not hinder the process. Total numbe of r erasures and correction will also be written and attested. The name and rates quoted by all the present bidders will be read out and any omission or irregularity will be pointed out on the spot. If the data mentioned is declared holiday. Materials Department and Finance (Concurrence). The representatives are nominated by competent authority varying from Senior Manager to DGM depending upon the value of the contract. the next working day will be considered as the opening date but the time will remain the same.TENDER COMMITTEE: As we have mentioned earlier. Alterations or erasures (if any) will be initiated by the officers present at the time or the opening of the tenders. the earnest 27 . This committee will take into consideration every possible aspect of the terms and conditions. Tenders are opened on the due date and time mentioned in the tender notification without fail. The sealed envelopes containing the bid will be opened by the purchase and finance executives nominated by their Head of the Department. phasing delivery if required etc. prices.

Another ma jor deposit is in for m of perfor ma nce gua ra ntee or Liquidity da ma ge (L D ) the equip me nt s pr ovided b y the ven dor fa il to p erfor m a s p er the specification. However there arc various instances where this deposit may be waived off. However in case of procurement of equipment/material/services there is acontract for providing spares for the next three years. However incases of procurement from OEM/OES or proprietary· vendor the same may be waived depending upon the merit of case. In case the prices of these spare parts goes up in the future and the vendor refuses to supply the spares at the same rate this guarantee deposit will be forfeited. On successful completion of bidding the earnest money may either be returned to the bidder or may be adjusted towards the security deposit to be provided by the bidder. the EMD can be waived also. this guarantee is taken just to make sure that the contractor does not refuse to honor the contract in future after he realizes that the prices have gone up or for some similar reasons. 1 2 3 4 5 6 ESTIMATED VALUE OF INDENT Up to Rs. This guarantee is generally 10% of the awarded value and is generally in form of bank guarantee. 10 lakhs Above Rs 10 lakhs and up to 25 lakhs Above Rs 25 lakhs and up to Rs 50 lakhs Above Rs 50 lakhs and up to Rs 100 lakhs COST OF TENDER DOCUMENT 200 300 500 750 Above Rs 100 lakhs and up to Rs 500 lakhs 1500 Above Rs 500 lakhs 3000 28 .money deposited by him will be forfeited.50000/. NSICs and SSI parties. Similarly for the PSUs. the cost for this shortfall may be recovered from the vendor. For example for all the purchases valued less than Rs. 4.the EMD may be waived off.N. As a matter of fact. Cost of Bidding Documents: S.

of Bids: The time allowed for preparation and submission of bids by the bidders is decided takin g Into consideration the particular circumstances and complexity of work involved. Attachment7: Alternative Bids 8.5: Receipt and Opening Submission. For large and complex packages this Period is extended to 10 ±12 weeks. Attachment13: Bought Out Items 29 . Document comprising the bid The bid submitted by the bidder shall comprise of the following documents: 1. Attachment11: Erection Tools and Tackles 12. Attachment12: Technical Data Sheet 13. Each bidder shall submit with its bid the following attachments:1. Attachment9: Deemed Export Benefits 10. Attachment 2: Power of Attorney 3. Generally. 2. The bid shall contain necessary detail of the equipment and mandatory spares to be imported from associated /collaborator by manufacture or bidder. Attachment8: Local Representation 9. 3. Attachment6: Deviations 7. a period of not less than 6 weeks from the date of Invitation of Bids is considered for preparation and submission of bids. Attachment10: Functional Guarantees 11. Attachment5: Subcontractors Proposed by Bidder 6. Attachment3: Bidder Qualification 4. Attachment4: Eligibility and Conformity of the Facilities 5. All price schedule duly completed in all respect by the bidder. Attachment 1: Bid Security 2. Bid form duly completed and signed by the bidder.

14. Attachment14: Quality Assurance Program 15. Bid Form and Price Schedules The bidder shall complete the form and appropriate price schedules furnished in the bidding documents as indicated therein. Attachment15: Additional Information 16. the operation maintenance and training services and such other items and services as may be specified in the bidding documents all in agree accordanc with the requirement of the e general conditions of contract and technical specifications. constructions installation commissioning. 30 . The bidder shall their prices in the following manner:- Schedule No. Bid Prices Bidders shall quote for the entire facilities on a single responsibility basis such that the total bid price covers all the contractors obligations mentioned in or to be responsibly inferred from the bidding documents in respect of the design manufacture. Attachment16: Milestone Schedule 17. This includes all requirement under the contractors responsibilities for testing. completion of the facilities and conduct of guarantee test for the facilities including supply of mandatory spares. Attachment18: Equipment and Mandatory Spares to be imported from Associated Collaborator. Bidders shall give a breakdown prices in the manner and detail called for in the price schedule. pre commissioning and commissioning of the facilities conducting guarantee test and where so required by the bidding documents the acquisition of all permits approvals and licenses etc. Schedule No. delivery.1 Plant and Equipment including Type test charges and Mandatory Spares to be supplied from Abroad. Attachment17: Price Adjustment Data 18. including procurement and sub contracting.2 Plant and Equipment including Type test charges and Mandatory Spares to be manufacture within the employers country.

31 . 4 installation services including erection works civil structural steel and allied works insurance covers other then inland transit insurance and other services as specified in the bidding documents.Schedule No. a bid submitted with a fixed price quotation will not be rejected but the price adjustment will be treated as zero. The price adjustment provision will not be taken into consideration in bid evaluation.3 Local transportation including port handling. Bidder must include the name. source. Schedule No. port clearance. and origin of labor and material indices along with there base values and corresponding coefficients. of India is advised to Indian State Govt. of India. Govt. In case the state govt. Schedule No 5 Grand Summary (Schedule No 1 to 4) Schedule No 6 Recommended Spares Parts Schedule No 7 Taxes and duties not included in bid price Schedule No 8a Break up of type test charges quoted in schedule -1 Schedule No 8b Break up of type test charges quoted in schedule -2 Schedule No 9 Unit rate Schedule Benefits/Exemption to supply for Mega Power Projects Inviting Bids for the package name in the bid data sheet on International Competitive Bidding (ICB) basis has been approved by Ministry of Power. to exempt supplies made to Mega Power Project from sales tax and local levies. material etc. Price Basis Price quoted by bidders shall be subject to adjustment during performance of the contract to reflect charges in the cost of labor. Govt. port charges inland transit insurance and other local costs incidental to delivery of plant & equipment and Mandatory Spares. do not provide the exemption than the employer shall bear and pay applicable sales tax and local levies as per provision of GCC.

at the bidders option be in a form of a banker¶s chequeirrevocable letter of credit or a bank guarantee.Bid security The bidder shall furnish. the foreign bidder shall be fill up the contract and securityfor the contract he must look the bank name that is specified in the company¶s procedure. The bid security shall. as part of its bid security in a separate sealed envelope in the amount and currency as stipulated in the Bid Data Sheet. The bid security may be forfeited a) If the bidder withdraws its bid during the period of validity specified by the bidder in the bid form b) The bidder does not accept the correction of its bid price. if the bidder fails with in the specified time limit there as follows:(I) To sign the contract agreement. d) If the bidder refuses to withdraw. That is helped to the contractor and trust to the company. any deviation no t listed but found else where in the bid. But the banks should be specified in the company¶s list that is given the instruction to fill up the contract. In the case of foreign bidders. without any cost to the employer. That is also helped in increase the goodwill in the market. shall be accordance with the form of bid security include in the bidding document. The bid security shall remain valid for 45 days The format of guarantee letter . in accordance with ITB. 32 . (II) To furnish the required performance securities. e) In the case of a successful bidder. c) If the bidder does not withdraw any deviation listed the cost of withdrawal idicated by him.

A bid is valid for a shorter period shall be rejected by the Employer as being non-responsive. The bid security 33 .2´«« etc. as appropriate. the original shall govern.1´. The request and responses there to shall be made in writing by post or by telefax followed by confirmation. duly marking the envelops as ³ORIGINAL BID ³and ³COPY NUMBER´. If a bidder accept to extend the period of validity.´Copy No. In the event of any discrepancy between them.Period of Validity of Bid Bids shall be remain valid for a period of 180 days from the closing date prescribed by the Employer for the receipt of the bid. The bidder is required to keep the prices of recommended spares covered the validity of the bid security shall be 6th month after notification of award for main equipment and mandatory spares. A bidder may refuse the request will not be required nor permitted to modify its bid. Sealing and Making of Bids The bidder shall seal the original and each copy of the bid in separate envelopes. The original and all copies of the bid. Submission of Bids . In exceptional circumstances the employer may solicit the bidder¶s consent to an extension of the bid validity period. each consisting of the documents shall be all typed or written in indelible ink and shall be signed by the bidder or a person or person dully authorized to bind the bidder to the contract. the validity of bid security shall also be suitable extended. Format and Signing of Bid The bidder shall prepare an original and five(5) copies/sets of the bid clearly making each one as ³Original Bid´ .´Copy No.

will be rejected and returned unopened to the bidder. Late Bids If any bid received by the purchaser after the deadline of submission of bids prescribed by the purchaser pursuant to ITB.´BID SECURITY´. The outer envelop is not sealed and marked that is employers responsibility for the bid misplacement. 34 . the invitation for bid number indicated in the bid data sheet and statement ³DO NOT OPEN BEFORE [DATE]´. The envelops shall then be sealed in an outer envelope. Deadline for submission of Bids Bid must be received by the purchaser at the address specified under ITB later than the time and date specified in the Bids date sheet. The certificate regarding acceptance of importance conditions. duly marking the envelope as ³ATTACHMENT 1´. The inner and outer envelopes shall:- A] B] Be addressed to the employer at the address given in the bid data sheet. The bidder also is sealed in a separate enveloped entitled ³CERTIFICATE REGARDING ACCEPTANCE OF IMPORTANT CONDITIONS´. Bear the package name indicated in the Bid Data Sheet. The all rights and obligation of the Purchaser and Bidders previously subject to the deadline will thereafter be subject to the deadlin as e extended.furnished be sealed in a separate envelope. TO BE COMPELETE IN THE TIME AND SPECIFIED IN THE BID DATA SHEET The inner envelops shall also indicated the name and address of the bidder so t at the bid can h be return unopened in case it is declared ³Late´ or is received without any requisite.

provided that wrtten notice i of the modification. opened and evaluated by a duly constituted Tender Committee comprising members from Contracts. 6. guaranteed parameter. date and time identified in the Invitation for Bids/ Bidding Documents. Opening of Bids The bids received are opened by a team comprising representatives from Engineering. The details such as name of the bidder. Contracts and Finance functions in the presence of bidders¶ representatives who chose to attend the bid opening. Evaluation of Bids: The bids are received. A receipt is issued to the bidders for the bids delivered by hand indicating the date and time of delivery. availability of bid security. bid price. marked a dispatched in accordance with nd the provision of ITB .Modification and Withdrawal of Bids The may modify or withdraw its bid after the bid¶s submission. selected. The bidder¶s modification or withdrawal notice shall be prepared. discounts if any. All the participants in the bid opening are required to sign a register as a proof of attendance maintained for the purpose. Engineering and Fin ance functions in accordance with the µDelegation of Powers¶. is received by the Purchaser prior to the deadline prescribed for submission of bids. are read aloud during the opening. The committee determines the lowest evaluated bid for award of contract in terms of criteria for evaluation of bids stipulated in the bidding documents and 35 .No bid may modified after the deadline for submiss Receipt of Bids Bids are received in a sealed condition at the place. including substitution or withdrawal of the bids.

Other factors su as a domestic ch price preference (applicable in case of WB/ADB funded procurements) and purchase preference to Public Sector Undertakings applicable as per the extant guidelines are also considered for the purpose of evaluation of bids. The process of evaluation of bids begins with an examination of the bi s to determine: d i. with the approval of competent authority. Acceptability of Joint Deed of Undertakings (if envisaged in the bidding documents). Bidders eligibility. The detailed evaluation is carried out only for bids. clarifications may be sought from the bidders. Computational errors in the bid price. Though generally and to the extent possible avoided. which are substantially responsive. 36 . ii.e. which might reflect on the ³substantial responsiveness´ of the bid and justify its rejection. if considered necessary by the tender committee. in the Indian rupees based on the exchange rate prevailing as on the date of bid and comparison of bids. v. Acceptability of bid security furnished by the bidder. iv. Stated deviations from the bidding conditions. Completeness of bid and correctness of signatures. differential price factors for guaranteed parameters etc. vi.puts up its recommendation for the approval of competent authority in accordance with the µDelegation of Powers¶. In case of procurements under International Competitive Bidding procedures. the bid prices are converted into a single currency i. Due care is taken of the fact that such clarifications would not call for any material alterations in the bidder¶s bid. Bid evaluation considers price and other factors in a transparent manner and in accordance with the stipulated evaluation criteria stated in the Bidding Documents such as cost compensations for the deviations from the bidding conditions taken by the bidders. iii.

QUALIFYING REQUIREMENT FOR BIDDERS: The following are the specific requirements. duly certified by the Bankers shall not be less than Rs« Million or in equivalent foreign currency. 1. complete with valves and fittings. 1 The bidder should have engineered. fabricated/supplied.3 The Net Worth of the Bidder as on the last day of the preceding financial year shall not be less than 25% of the paid-up share capital.Once the lowest evaluated bidder is selected as above. the process is continued until the lowest evaluated and qualified bidder is chosen. 1. If the bidderalso fails. as on seven (7) days prior to the date of bid opening of not less than Rs« million or in equivalent foreign currency.2 The average annual turnover of the Bidder. erected and tested at least one (1) piping system. An affirmative determination of the above is a prerequisite for award of contract to the bidder.4 The unutilized Bank Guarantee limits of the Bidder as on seven (7) days prior to the date of bid opening. 37 .5 The Bidder shall have unutilized cash credit limits together with cash and bank balances including fixed deposits. the next step is to determine whether the Qualification Requirements (QR) as stipulated in the bidding documents is met and whether the bidder in question is capable to successfully executing the contract. 1. etc. consisting of steel pipes of size « NB or above. In case the lowest evaluated bidder does not meet the above requirement. 1. in the precedingthree (3) financial years as on the date of bid opening. of minimum « MT. the similar determination is done for the next lowest bidder. shall not be less than Rs« million or in equivalent foreign currency.

b) c) Other income shall not be considered for arriving at annual turnover. But in case a tender committee is absent i. This competition may be in form of many manufacturers making the same good or a single manufacturer providing the goods through many retailers/suppliers and all the retailers/suppliers are free to quote individually. the negotiation should and must be avoided. the negotiation should take place with the technically and commercially evaluated lowest (Lt) vendor only.Notes: a) Net Worth means the sum total of the paid up share capital and free reserves. In normal circumstances. However if it's found that the price quoted by all individual bidders are unreasonably high in comparison to the last purchase price/estimate or in case of some ambiguous technical/commercial terms and conditions. representatives from finance and purchase may complete the task of negotiation. Free reserves means all reserves credited out of the profits and share premium account but does not include reserves credited out of the re-valuation of assets. the exchange rate as on 7 days prior to the date of Bid opening shall beused. no committee was formed to monitor the procurement. shall be reducedfrom Reserves & Surplus. Cash Credit Limits and Turnover in foreign currency. However. if any. negotiation process is not always for negotiating the prices of equipment/material/services supplied but it may also involve terms and conditions of supply. For unutilized BG limits. Further any debit balance of Profit & Loss account and miscellaneous expenses to the extent not adjusted or written off.´ NEGOTIATION: When adequate competition exists. However.e. write back of depreciation provisions and amalgamation. negotiations can be done with the approval of competent authority as per DOP. Normally the negotiation is carried out by the TC (Tender Committee). depending upon the situation the negotiaion t may be carried out with more than one party at a time. future commitments for supply of spareparts and consumables and 38 .

7. the committee's purchase proposal/recommendation will be put up to the competent authority for approval and subsequently the letter of intent may be faxed to the party.many other aspect of the contract. concurrence of the funding agency (wherever applicable) and post-bid discussions with the successful bidder to resolve ambiguities / nonconformity to the bidding provisions observed during the bid evaluation. AWARD OF CONTRACT LOWEST BIDDER . are required within the bid validity period. Award of Contract: All the activities related to evaluation of bids and approval of evaluation report/ award recommendations by the competent authority. For example a lowest price bidder may not get the contract if it¶s found that another bidder who is quoting higher than him but is offering lower priced spares. Hence in this case a negotiation may be conducted with the L 1 to make him offer the spares at the same rate as being offered by his competitor. Once the negotiation process is finished and the two parties involved in the negotiation reach a consensus.The contract is thus awarded to the bidder whose bid has been found as the lowest evaluated techno -commercially-responsive bid and meets the specified Qualifying Requirements.

40 .Financial statement analysis At National Thermal Power Corporation Financial Analysis Introduction Financial analysis is the process of identifying the financial strength and weaknesses of the firm by properly establishing relationship between the items of the balance sheet and the profit and loss account. It is the critical examination of the financial information contained in the financial statements to understand and make decisions regarding the operations of the firm.

Judging the earning capacity or profitability. administrative and marketing expenses. All external users of accounts. the n future earning capacity of the concern may be forecasted. statements. Judging the managerial efficiency. In the words of Kennedy and Muller. Trade creditors are mainly interested in assessing the short-term . ability to pay interest and debt maturities (both current and long-term) and profitability and sound dividend policy. Judging the short and long-term solvency of the concern On the basis of financial . as disclosed by a single set of statements. The financial statements analysis helps to pinpoint the areas wherein the managers have shown better efficiency and the areas of inefficiencies. Debenture holders and lenders judge the ability of the company to pay the principal and interest as most of the companies raise a portion of their capital requirements by issuing debentures and raising long-term loans. solvency of the business as they want to know that the business is in a position to pay 41 . it is possible to analyse relative proportion of production. are interested in this. and a study of trends of these factors.´ Financial statement analysis is largely a study of relationships among the various financial factors in a business. On the basis of financial statements the earnings capacity of the business concern maybe computed. using financial ratios. the solvency of the concern may be judged. Purpose And Significance of Financial Analysis 1. For example.´ The analysis and interpretation of Financial statements are an attempt to determine the significance and meaning of financial statement data so that the forecast may be made of the prospects for future earnings. Any fav orable and unfavorable variations can be identified and reasons thereof can be ascertained to pin 3. I addition to this. 2. specially the investors and potential investors.Definitions In the words of Myer. as shown in a series of statements.

In other words. The advantages derived by an enterprise by the use of accounting ratios are: 1. The inter-firm comparison helps in assessing own performances as well as that of others. For example.Ratio analysis is a technique of analyzing the financial statements by computation of ratios. They are an extremely useful device for analyzing the financial statement. A µratio¶ is defined as ³the relationship between two or more things. Making forecast and preparing budgets. Useful In Analysis of Financial Statements. Ratios are useful for understanding the financial position of the concern. 5. investors. Ratio analysis is a process of determining and interpreting relationship between the items of financial statements to provide a meaningful understanding of the performance and financial position of an enterprise. Analysis thus helps in preparing budgets. Financial statements of different enterprises may be analyzed and comparison be made thereof. ³Ratio analysis is a study of relationship among various financial factors in a business. it may be possible to forecast the next year¶s profit on the basis of earning capacity shown in the past. Ratio Analysis Introduction Ratio analysis is a powerful tool of financial analysis. creditors etc. specially the next year.4. given a certain investment. Interfirm comparison is better carried out if it is based on Ratios.´ In financial analysis. Past financial statements analysis helps a great deal in asseseing developments in the future. a ratio is used as a benchmark for evaluating the financial pos ition and performance of a firm. According to Myers. 42 . Inter-firm comparison. if mergers and acquisitions are considered. all analyse balance sheet and profit and loss accounts by means of ratios.´ Advantages and Uses of Ratio Analysis Ratio analysis is an important technique of financial analysis. Bankers.

Useful For Forecasting Purpose. The trend ratios are analyzed and used as guide to future planning. What should be the course of action in the immediate future is decided. relationships worked out among various accounting data which are mutually dependent and which influence each other in a significant manner. Such an evaluation enables management to assess financial requirements and capabilities of various business units. which exists between various financial statement elements. They are useful for diagnosis of the financial health of a business concern. Useful In Simplifying Accounting Figures. solvency. Useful In Judging The Operational Efficiency Of Business. Its main contribution lies in communicating precisely the interrelationship. 4.. This id done by evaluating liquidity. etc. assistance in locating the weak areas of the business even though the overall performance may be quite good. Ratios simplify.2. on the basis of trend ratios. summarize and systematize a long array of accounting figures to make them understandable. Ratios are essential for understanding the affairs of a firm. profitability. i. many a time. that is. Management can then pay attentionto the weakness and take remedial action.e. The importance of accounting ratios. ratios calculated for a number of years. 3. 43 . Arises from the fact that often absolute figures standing alone do not convey any meaning. Specially its operating efficiency. 5. Useful In Locating The Weak Areas Of The Business Ratios are of great . Ratios are of much help in business planning and forecasting.

34 1627160 1068860 1.3 Cash Ratio Cash & Bank Balance Current Liabilities Cash Ratio 2010 2009 2008 2530269 1075816 2.1 Current Ratio Current Assets Current liabilities current ratio 1.35 2195498 1075816 2.88 2008 2009 cash ratio quick ratio curr nt ratio 2010 0 0. Liquidity Ratio 1.5 2 2.5 3 44   .71 1883770 792990 2.2 Quick Ratio Quick Assets Current Liabilities Quick Ratio 1.NTPC RATIO YEAR 1.04 2407840 1068860 2.5 1 1.37 1445948 1075816 1.25 2083500 1068860 1.52 1493320 792990 1.95 2151340 792990 2.

Higher the current ratio better it is for company as it enhances the liquidity position of the company and builds creditors and investor¶ trust.1. Current ratio of the firm measures its short-term solvency i.e. its ability to meets short term obligation. Liquidity ratio includes current ratio. LIQUIDITY RATIO Liquidity ratio measures the ability of a firm to meet its short term obligation and reflect the short term financial strength or solvency of a firm. s FOR NTPC: Current Ratio has been very good over the years. quick ratio and inventory turnover ratio. y Quick Ratio: It measures the instant debt paying capability or company¶s ability to pay unexpected demand for working capital. y Current ratio Current ratio is the ratio of total current assets by total current liabilities.The current ratio of company shows fluctuating trend but has always been good as current assets have always been more than current liabilities which shows that firm has always enough funds to meet its day to day obligations. This ratio establishes the relationship between quick or liquid current assets and current liabilities 45 . The higher the current ratio the larger the amount of rupees available per rupee of current liability CR= Current asset Current liability Ideally a company should have 2:1 current ratio its shows that company has enough funds to meet its short term obligations.

cash ratio = Absolute Liquid Assets quick Liabilities Ideally it should be 0. y Cash Ratio: It measures the absolute liquidity of the company.34 in year 2010 to showing the firm·s ability to quickly pay its debt 46 .QR = Current assets ± (Inventories + prepaid expenses) Current Liabilities Ideally it should be 1:1 but if the liquid ratio or quick ratio is more than 1:1 than company seems to be sound and good. This shows that company keeps enough liquid funds to meet its unexpected cash requirements or obligations. For NTPC it shows that it can meet unexpected need for funds easily. On the other hand if it is less than 1:1 the company is said to be unsound. It is a relationship between absolute quick assets and quick liabilities. For NTPC Quick Ratio came to 2.04 in the year 2010. Quick Assets include cash. bank and marketable securities and Quick Liabilities includes all current liabilities except bank over draft. this was better than the previous year ratio .5:1 For NTPC Cash Ratio is 1.indicating that the company is having quick assets to pay its current liabilities.

ACTIVITY OR EFFICIECY RATIO 2.69 4192380 3293770 1.1Receivables Turnover Ratio Net Sales Receivables at the end Receivables Turnover Ratio 2.41 2.5 Working Capital Turnover Ratio Net Sales 4632259 Net Current Assets 1454453 W C Turnover Ratio 3.42 4632259 11287374 0.39 3705010 8938800 0.72 2.27 3705010 2609370 1.18 4192380 2023670 2.69 3705010 298270 12.41 4632259 2530269 1.74 3705010 2151340 1.07 3705010 1761890 2.41 4192380 10522480 0.83 4192380 2407840 1.10 47 .3 Fixed Asset TuURNOVER Ratio Net Sales Fixed Assets Fixed Assets Turnover Ratio 2.96 4192380 358420 11.2.2 Total Assets Turnover Ratio net sales Total assets Total assets turnover ratio 4632259 665146 6.4 C/ATurnover Ratio Net Sales Current Assets Current Assets Turnover Ratio 4632259 6686560 0.

2008

wc turnov r ratio curr nt a et turnover ratio 2009

fixed a et turnover ratio total a et turnover ratio receivable turnover ratio
inventory turnover ratio

2010

0

2

4

6

8

0

12

14

FIG ..2«ACTIVTIY RATIO

2. ACTIVITY RATIO
An activity ratio is the relationship between sales or cost of goods sold and investment in various assets of the company. It is always expressed as turnover. They are intended to describe how efficiently or intensively a firm uses its assets to generate sales. Some of the important activity or efficiency ratios are as follow:

y Receivable Turnover Ratio: How far the company is efficient or successful enough in realizing its credit debtor¶s turnover ratio is being calculated. It establishes relationship between net credit sales and average receivables of the year.

48

¢

££

¤¤

¤¤

¢

¡

RT =

Net Credit Sales Average Receivables

Credit sales means all credit sales minus the sales returns. Or else a total sale is considered as credit sales.

Average Receivables are computed as:

AR = Opening Debtors and B/R + closing Debtors and B/R 2 For NTPC Receivables Turnover is 6.96 in 2010. NTPC collected its outstanding credit account & its collection of the fund has reduced as compare to last year .

y Total Asset Turnover Ratio: This ratio expresses relationship between costs of goods sold or net sales and total assets or investments of a firm.

TAT = Net Sales or Cost of Goods Sold Total Assets

Total Assets means all fixed and current assets but the provision for depreciation is adjusted in it. This ratio indicates the number of times the assets are turned over in a year in relation to sales. A higher total assets turnover ratio is the indicator of effective utilization of investment in assets where as lower assets turnover ratio indicates that assets are not properly utilized in comparison to sales. Thus, there is an over investment in assets. Extremely high ratio means over trading in the business.

49

For NTPC

Total Assets Turnover Ratio indicates that NTPC in the year 2010, for every 1 rupees in total assets generate 41 paisa in sales. This shows that company still need to concentrate more on this ratio for its effective utilization of the funds as it can even go much higher .

y Fixed Assets Turnover Ratio: This ratio expresses the relationship between fixed assets (less depreciation) and net sales or cost of goods sold. This ratio measures the efficiency and profit earning capacity of the firm.

FAT =

Sales or Cost of Goods sold Fixed Assets less depreciation

The higher the ratio the greater is the intensive utilization of fixed assets. Lower ratio means under utilization of fixed assets and excessive investment in these assets.

For NTPC

Fixed Assets Turnover indicates that NTPC in the year 2007, for every 1 rupees in fixed assets generate 0.69 in sales. It shows intensive utilization of fixed assets. Indicates the profit earning capacity of the company is high.

y

Current Assets Turnover Ratio:

This ratio expresses the relationship between current assets and net sales or cost of g oods sold. This ratio reflects the efficiency and capacity of working capital. On the basis of this ratio efficiency of current assets and over and under investment in the company can be examined.
50

CAT =

Sales or Cost of Goods Sold Current Assets

For NTPC

Current Assets Turnover Ratio: indicates that NTPC in year 2010 is 1.83. This shows that company·s current assets are effectively utilized.

y

Working Capital Turnover Ratio:

This ratio establishes relationship between net working capital and net sales or cost of good sold. This ratio is used to assess the efficiency with which the working capital is being used in the business.

WCT =

Sales or Cost of Goods Sold Net Working Capital

A high working capital ratio indicates efficient management of working capital or over trading i.e. low investment in working capital and more profits. Low working capital turnover ratio implies under trading i.e. funds are not being utilized efficiently.

For NTPC y Working Capital Turnover Ratio: indicates the proper management of the working capital in the firm which is required for the day to day operations of the firm. It shows that in year 2010 it is 3.18 which has comparatively increased over the years.

51

2 Net Profit Ratio Net Profit Net Sales net profit Ratio 4632259 4192380 3705010 872820 4632259 18.56% 741480 3705010 20.84% 820130 4192380 19.01% 2008 2009 NET PROFIT RATIO GROSS PROFIT RATIO 2010 0 10 20 30 FIG «..PROFITABILITY RATIO 52 .3«.1 Gross Profit Margin Gross Profit (PBIT) Net Sales Gross Profit Margin 3. Profitability Ratio (based on sales) 3.3.

12% in the year 2004 to 33. The ratio measures the trading effectiveness and basic profit earning potentiality of a company. Although it was good in year 2004 which could due to the large sales in that particular year or may be due to market favoring the environment of the sales.3. Still it is good for year 2007 i. Gross Profit X 100 Net Sales Gross profit can be computed as Net Sales ² Cost of Goods Sold. 53 . PROFITABILITY RATIO The management of the firm is naturally eager to measure its operating efficiency.it also indicate public acceptance of the product and show that firm ca produce competitively. for every one rupee sale company can generate 33 paisa as profit after meetings it expenses of generation. The operating efficiency of a firm and its ability to ensure adequate returns to its shareholders depends ultimately on the profit earned by it. Similarly the owners invest their funds in the expectation of reasonable return. Therefore profitability is measure of efficiency . When profitability ratio is computed by relating profit of a firm to its investments that ratio are termed as return on investments (i) Profitability based on sales y Gross profit Ratio: This ratio expresses the relationship of gross profit on sales to net percentage.e. sales in terms of FOR P : Gross Profit Margin: has reduced from 49. The higher the ratio the greater will be the margin.03% in the year 2007. This tells that NTPC generate 33 paisa from every 1 rupee sales.

Net Profit is the excess of revenue over expenses during a particular accounting period. This shows that company is running efficiently and it can pay more to its investors as it generates 18 paisa in the profit for every single rupee of sale. 54 .84% in year 2010 from 20. Though it is less than year 2008 but yet it is not bad it still displays the profit earning efficiency of the company as good.01% in year 2008 . A high net profit ratio would only mean adequate returns to the owners. would only indicate inadequate return to the owners For P Net Profit Margin: has reduced to 18.Net Profit Margin: This ratio measures the relationship between net profit and sales of a firm. It also enables a firm to withstand in cut throat competition when the selling price is declining or cost of production is rising. The net profit ratio is determined by dividing the net profit by sales and expressed as percentage. NP = Net Profit (after tax) X100 Net Sales This ratio is the indication of over all profitability and efficiency of the business. A low net profit ratio on the other hand.

79% 741480 8938800 8.29% 2008 return on total asset 2009 return on equity return on capital employed 2010 0.08% 872820 11287374 7.73% 820130 10522480 7.Profitability Ratio (based on capital) 4.66% 872820 6243742 13.1 Return of Capital Employed Net Profit (PBIT) Capital Employed Return of Capital Employed 4..2 Return On Equity (ROE) Net Profit (PAIT) Shareholder's Fund return on equity 4.18% 1025490 10615838 9.00% FIG «4«.66% 935950 9193781 10.29% 741480 5263860 14.00% 1000.97% 820130 5737010 14.PROFITABILITY RATIO 55 .3 return on total assets net profit after tax total assets return on total assets 1269439 10023444 12.00% 1500.00% 500.4.

Net Profit (after interest and tax) X100 Shareholder¶s funds Shareholder¶s funds include preference share capital as well as equity shareholders funds which in turn comprises of equity share capital. the more effective and efficient would be utilization of capital or vice versa.PROFITABILITY RATIO CAPITAL BASED Return on Capital Employed: This ratio expresses the relationship between profit and capital employed and is calculated in percentage by dividing the net profit by capital employed.66% in year 2010 .66% in year 2009 to 12.4. For NTPC 56 .This shows that company was making most effective utilization of its capital and it is operating efficiently. y Return on proprietor¶s funds or equity: This ratio expresses the percentage relationship between the net profit (after interest and tax) and proprietor¶s funds or shareholder¶s investment. ROCE = Net Profit (PBIT) X100 Capital Employed The return on capital employed provides a test of profitability related to long term funds. share premium and reserves & surplus. The higher the ratio. - For NTPC Return on Capital employed: it has increased from 10.

Total assets mean all net fixed assets.Return on Equity (ROE): It is also consistent over the years reflecting not much v ariation till 2006. The higher the ratio the better is the profit earning capacity of the firm or vice versa. ROTA = Net Profit after Tax X 100 Total assets This ratio measures the profitability of investments which reflects managerial efficiency. 57 . It is 13.73% for the year 2010 indicating that NTPC generates 7.97% for the year 2010 indicating that NTPC generate 13 paisa in profit per 1Rs invested in Equity.73 paisa of profit per one rupee invested in assets. current assets and non trading investments. it is 7. y Return on Total Assets: Profitability of the company can also be measured by establishing relationship between net profit and total assets. For NTPC y Return on Assets (ROA): It has been consistent over the years.

4 Dividend Coverage Ratio net profit after interest and tax Dividend Dividend Coverage Ratio 3456780 5737010 0.2 Debt to Total Assets ratio Total Liabilities 4855518 Total Assets 11287374 Debt to Total Assets Ratio 0.60 4525640 10522480 0..3 interest Coverage Ratio net profit before interest and tax fixed interest charges Interest coverage ratio 5.61 5.43 5..56 2008 interest coverage ratio 2009 Dividend coverage ratio debt to total asset ratio debt equity ratio 2010 0 2 4 6 8 FIG.LEVERAGE RATIO 58 . leverage or Capital Structure Ratio 5.43 2719060 5263860 0.Equity Ratio 0.1 Debt .76 741480 288590 2.78 820130 296830 2..40 1269439 935950 1025490 872820 313328 2..5..5«.Equity Ratio Total Debt 3779702 Net Worth 6243742 Debt .52 3512050 8938800 0.

External liabilities mean all long term and short term liabilities. It indicates the firm¶s capacity to pay long term debts and procure additional loans and informs w hether the firm is following the policy of trading on equity. DTA = Total Liabilities Total Assets 59 . It reveals the relationship between internal and external sources of funds of a company. Net worth mean total paid up amount of equity and preference share capital plus the total or accumulated amount of reserves and surplus.e.6. This ratio shows that the long term solvency of the firm is sound enough it has good capacity to pay its long term debts which make it easy for it to procure funds from the market easily due to its long term solvency ratio.52 times in year 2008. This ratio plays important role in analyzing the long term solvency of a company. For NTPC Debt Equity Ratio: are also consistent and there has been not much variation in this ratio over it is 0.61 in year 2010 and 0. y Debt to Total Assets Ratio: This ratio measures the long term solvency of the business. short term and long term loans. It reveals relationship between total assets and total external liabilities. D-E = Total Debts Net Worth Total debts refer to the total outside liabilities i.LEVERAGE RATIO Debt ± Equity Ratio: This ratio indicates the relative proportion of debt and equity in financing the assets of a firm.

43 times in 2010 indicating that NTPC use 39% Debt and 61% Equity Capital structure in the year 2007. 60 .56 times in year 2008 to 2. it was 0.e.This ratio measures the proportion of total assets provided by creditors (long term as well as short term) of the company i. It uses less funds from outside to finance its working or for generating profits. what part of assets is being financed from loans. FOR NTPC: Total debt ratio is consistent over the year. 0. So. Iftotal assets are more than external liabilities the firm is treated as solvent.40 times in 2008.43 times in 2009 and 0. this is good indicator which shows that company is able to meet its dividend obligations of the shareholder .43 times in 2010. higher the ratio the greater is the amount of creditors that is being used to generate profits for the owners of the firm. Dividend Coverage Ratio: It has increased from 2. This shows that company is solvent enough as its total assets are more than its total debt.78 times in year 2010. And 0.

65 3.8 9.6 8.94 3.5 2008 DPS 2009 EPS 2010 0 2 4 6 8 10 12 FIG«6«««INVESTMENT ANALYSIS RATIO .6.1 earning per share profit after tax no of equity share earning per share Dividend per share 878280 820130 741480 8245464400 8245464400 8245464400 10.99 3.Investment Analysis Ratio 6.

Whatever profits remains.61 6. belongs to equity shareholders. after meetin EPS = Profit after tax ± Preference Dividend No. The higher the ratio the greater would be the market price of a company¶s shares or vice versa.99 in the year 2008 and now it is 10. of equity shares all expenses and paying preference share dividend.65 in 2010 . FOR NTPC EPS has been consistent over year it was 8.INVESTMENT ANALYSIS RATIO Earning Per Share ± EPS The rate of dividend on shares depends upon the amount of profits earned by the firm. This is a popular ratio as it measures the profitability of a firm from owners¶ standpoint.

62 FINDINGS The tendering process requires too much of paperwork. Lack in use of Intranet facility over the departments. cross checkingof reports by different departments starting from scratch. eats too much of time. 63 . The award of contract take place on a fair and transparent bases and everybody is given equal opportunity to take part in bidding. NTPC have good short term financial strength Company EPS is constantly increasing from the past year¶s Return on capital employed is constantly increasing. Certain steps like preparation of similar documents again & again.

delays. Otherwise they should mention µno cutting/no overwriting¶. y While recommending award of a contact to a particular bidder. y All payment terms. however certain leakage of data is possible because of involvement of multiple groups. y The tender committee officials should encircle and initial on each page of the tender documents received from the parties on the tender opening date.RECOMMMENDATIONS y Enough care should be taken while preparing the bid documents to avoid confusions. This will eliminate scope for tampering at the alter date. including advance payments should be mentioned in the bid documents itself so as to obviate release of any payment out of the purview of contract later on y Equity & transparency in the bidding and evaluation process are being strictly followed in NTPC. a justification analysis should also be prepared. favors etc. They should mention number of any corrections (if so made) on each page. This aspect needs more attention\ 64 .

These limitations are as follows: y The coverage of more information about the requirements of a Procurement Contract was not highly successful because of the time limit involved in carrying out the project. these limitations cannot have a drastic impact on the analysis and the recommendations of the study as these limitations are within manageable limits. However. y High degree of accuracy is doubtful as the fact-finding investigations in this project are based on given factual information. Hence.Limitations of the study The study suffers from certain limitations like any other research. y It has been assumed that the information provided by the concerned authoritiesis correct. an allowance should be made for deviations and errors because no attempt has been made to ch the accuracy and reliability of the eck information provided. it has been limited to certain particular areas of the Finance Concurrence Department which actively participates in the procurement function 65 . y Being a purely academic±based project.

CONCLUSION Contract/Purchase management activities at NTPC are one of the most vital activities undertaken by the 25000MW Power Giant of India. Hence assessment of capacity and capability of the bidder which includes detailed financial analysis of his capacity is considered as a very important aspect in the whole process. If incapable contractor is chosen. increase of cost and it disrupts the schedule for this package as well as the projec t schedule. (b) Transparency: NTPC being a public sector company & to be free from nepotism and favoritism has adopted a system where transparency and automation is at their highest levels. (c)Cost reduction: Cost must be reduced by means of optimum utilization of resources and the resources thus saved can be channelized to more profitablesegments. (d)Selection of proper contractor: While an order is placed for execution of any work. Cost estimation for the purpose of cost and budgetary control is a very important aspect of learning during our training in NTPC. 66 . he may not be able to execute the work on time or he may abandon the work in between which will result in loss of time. by awarding the contract to the lowest bidder that is L1 provided that the lowest bidder qualifies himself technically too. GE etc. The process followed by NTPC is found to be very objective in nature and very professional methods are in vogue. We have learned the following while studying the system in NTPC: (a) Advantage of the competition: NTPC tries to take advantage of the Competition in the field of heavy engineering where foreign manufacturers like MHI. are competing with Indian manufacturers like BHEL and L&T. Transparency is achieved by the formation of a multi member bid -opening team and the bidders submitting their bids in sealed packets where no one knows in advance the quotation offered by a particular bidder. it must be awarded to a proper contractor. Moreover the bid documents are available on the website. Automation here signifies that almost all the contracts are awarded following the same procedures.

Turnover ratios i. The long term ratios i. and acid test ratio indicate that NTPC is able to p its short term bills ay without undue stress. 67 . indicates there is slight fall in net income of the company. Over all it can be summarised that NTPC is financially sound i. Also the profitability ratios i. inventory turnover.e.e.e. This shows that company is liquid enough to meet its day to day obligations. The liquid ratios of the company i.Financial statement analysis of the national power thermal corporation shows that firm is efficient enough to run its day to day business. asset turnover indicates NTPC id efficiently using its assets to generate sales.e. financial position and profitability of the company is quite acceptable. quick ratio. debt equity ratio and interest coverage ratio indicates that NTPC is easily able to meet its financial leverages. But the earning per share has remained same all the year this shows the investors side is safe enough.e. receivables turnover. profit margin. return on equity etc. current ratio.

teriin.pfc.II.com 68 .org o www.V o Annual Report of NTPC o Purchase Management Manual of NTPC y Websites Referred o www.Financial Management y Manuals o Delegation of Powers Manual of NTPC o Bidding Documents Sec.nic.in o www.ntpctender.co.powermin.Financial Management o ³I.III.-I.com o www.BIBLOGRAPHY y Books o ³Khan & Jain´.ntpc.ntpceoc.in o www.IV.com o www.M PANDEY´ .

2009 (Audited) (Audited) (Audited) (Unaudited) 4 1144578 5 4632259 6 4192373 7 4825641 Year ended 31.2010 31.2 009 (Audit ed) 8 42661 32 Sl.2009 31. Particulars 1 1 2 (a) Net Sales (Net of Electricity Duty) (b) Other Operating Income Expenditure (a) Fuel Cost 37815 74196 189873 217567 193211 22629 4 2 834598 801583 62025 72639 58984 995231 223543 2946274 241236 265006 202710 3655226 1166906 2711069 246313 236448 195209 3389039 1020901 3018766 252300 289438 247117 3807621 1211231 (b) Employees 74561 Cost (c) Depreciation 73216 (d) Other Expenditure Total (a+b+c+d) Profit from Operations before Other Income.3.3./Lakh) Stand Alone Quarter ended 31.APPENDIX: Financial Results Audited Financial Results for the Year ended 31st March 2010 (Rs.03.3.2010 (Unaudited) 3 1235339 Consolidated Quarter Year ended Year ended Year ended ended 31.2010 31.03.3. Interest & Exceptional Items (1-2) Other Income 59606 1041981 231173 3 27346 45 25325 1 24948 9 22386 4 34612 49 10311 77 4 24950 26709 102533 114668 101483 11389 3 .

5 Profit before 256123 Interest & Exceptional Items (3+4) 6 Interest & 48179 Finance charges 7 Profit after 207944 Interest but before Exceptional Items (5-6) 8 Exceptional items 9 Profit(+)/Loss(.207944 ) from Ordinary Activities before Tax (7+8) 10 Tax Expenses: (a) Current Tax (9762) (b) Deferred Tax (c) Fringe Benefit Tax (FBT) Total (a+b+c) Less: Deferred Tax Recoverable / Payable FBT transferred to Expenditure during Construction / Development of coal mines Tax Expenses (Net) 11 Net Profit(+)/ Loss(-) from ordinary activity after tax (9-10) 15941 0 250252 1269439 1135569 1312714 11450 70 54039 196213 180893 1088546 199622 935947 207803 1104911 21434 6 93072 4 196213 1088546 935947 1104911 93072 4 (15623) 1043 585 194544 20913 269 113834 (44880) 2098 197908 22963 270 11943 0 (4520 3) 2186 6179 - (13955) 1043 215726 - 71052 (44880) 221141 - 76413 (4521 5) - 84 - 115 (5) 150 6179 201765 (15122) 211335 215726 872820 115817 820130 221146 883765 12147 8 80924 6 .

95 10.45 diluted EPS after Extra- - - - - - 211335 872820 820130 883765 80924 6 - - - - (10) 211335 872820 820130 883765 80925 6 824546 824546 824546 824546 82454 6 3779702 5419196 3456775 4912460 5438227 49162 08 198672 168894 2.59 9.) (a) Basic and 2.81 .59 9. 10/each) 17 Paid up Debt Capital 18 Reserves excluding revaluation reserve as per Balance Sheet 19 Debenture Redemption Reserve 20 Earning per share .57 10.95 10.45 diluted EPS before Extraordinary items (not annualised) (b) Basic and 2.81 2.(EPS in Rs.57 10.72 9.12 Extraordinary Items (Net of tax expenses) 13 Net Profit(+)/ 201765 Loss(-) for the year before Minority Interest (11-12) 14 Minority Interest in Consolidated Profit 15 Net Profit (+)/ 201765 Loss (-) for the year after Minority Interest (13-14) 16 Paid-up Equity 824546 Share Capital (Face value of share Rs.72 9.

92 0.50 10.50 1278103220 865830000 15.Number of 6967361180 0.50 - - - - - - - - - - 7379634400 6967361180 7379634400 6967361180 73796 .50 share holding Promoters and Promoter Group Shareholding (a) Pledged/ Encumbered .61 3.21 22 23 24 25 ordinary items (not annualised) Debt Equity Ratio Debt Service Coverage Ratio (DSCR) Interest Service Coverage Ratio (ISCR) Public Shareholding (a) Number of 1278103220 shares (b) %age of 15.Percentage of share (as % of the total share capital of the company) (b) Nonencumbered .50 10.67 13.Number of Shares .60 3.50 1278103220 86583 0000 15.64 10.Percentage of share (as % of the total shareholding of promoter and promoter group) .19 865830000 10.

2009 (Audited) 34400 100.00% 100./Lakh) Stand Alone Particulars Year ended 31.00% 100.50% 84.0 0% 89.Shares .Percentage 100.00% of share (as % of the total shareholding of promoter and promoter group) .50% 84.50% 89.03.50% 89.Percentage 84.03.50% of share (as % of the total share capital of the company) SUMMARY OF ASSETS AND LIABILITIES AS AT 31st MARCH 2010 (Rs.03.2010 (Audited) Year ended 31.2009 (Audited) Consolidated Year ended 31.2010 (Audited) Year ended 31.50 % SOURCES OF FUNDS Shareholders¶ Funds: (a) Capital (b) Reserves and Surplus Deferred Revenue from Advance Against Depreciation Deferred Income from Foreign Currency Fluctuation Loan Funds (a) Secured Loans (b) Unsecured Loans Deferred Foreign Exchange Fluctuation Liability Deferred Tax Liability (net) after Recoverable Minority Interest 824546 5419196 161084 824546 4912460 193601 824546 5438227 161084 824546 4916208 193601 - 60771 - 60765 907992 2871710 6105 896956 2559819 5452 1537654 2877210 6105 1321170 2561094 5445 20925 - 13 22971 27893 13 16619 .00% 100.00% 100.03.

Loans And Advances (a) Inventories 324342 336157 334771 353299 (b) Sundry Debtors 358418 381892 665146 708080 (c) Cash and Bank 1627163 1725045 1445948 1605304 balances (d) Other current assets 84404 97946 86804 99336 (e) Loans and Advances 551311 684653 703888 568062 Less: Current Liabilities and Provisions (a) Liabilities 743907 871909 768758 975798 (b) Provisions 324953 331439 307058 315027 2023662 2042970 Net Current Assets 2005764 2030724 Deferred Expenses from 2008 2009 Foreign Currency Fluctuation 10211558 9453618 10895690 9899461 TOTAL AUDITED SEGMENT-WISE REVENUE.2010 (Unaudited) 1 1 2 3 Segment Revenue (Net Sales) .03.03.03.03.2010 (Audited) 7 Year ended 31.2010 (Audited) 5 Year ended 31.2009 (Unaudited) 4 Year ended 31./Lakh) Stand Alone Quarter Sl.2009 (Audited) 6 Consolidated Year ended 31.9453618 9899461 TOTAL 10211558 10895690 APPLICATION OF FUNDS 62 Goodwill on 62 Consolidation 5934263 6589484 Fixed Assets incl. RESULTS AND CAPITAL EMPLOYED FOR THE YEAR ENDED 31stMarch 2010 (Rs.03.03. Particulars ended 31. CWIP 6686560 7648609 and Construction Stores & Advances 1398349 1169596 Investments 1480709 1177761 97344 97349 Deferred Foreign 36517 36525 Currency Fluctuation Assets Current Assets.Generation 1230529 Quarter ended 31.2009 (Audited) 8 1140489 4616867 4179119 4774989 4227388 .

Total 159674 1522 161196 31979 1015253 5816 1021069 111682 905305 4184 909489 208630 1049376 16085 1065461 138312 902317 12811 915128 220701 (66996) (179159) (235088) (177762) (236297) 196213 1088546 935947 1104911 930724 3383665 3226 2350115 5737006 3945020 5445 2293277 6243742 3383665 3226 2350115 5737006 4373991 33623 1883052 6290666 3596247 18185 2142941 5757373 .Generation 3945020 .Others 1664 .Total Segment Results (Profit 4810 1235339 4089 1144578 15392 4632259 13254 4192373 50652 4825641 38744 4266132 3 before Tax and Interest) .Generation 197550 .Total 199214 Less (i) 28584 Unallocated Interest and Finance Charges (ii) Other (37314) Unallocable expenditure net of unallocable income Total Profit 207944 before Tax Capital Employed (Segment Assets Segment Liabilities) .Un2293277 allocated 6243742 .Others 5445 .2 .Others .