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A Summer Training Report

On
CASH MANAGEMENT OF NTPC, KORBA CHHATISGARH Submitted for partial fulfillment of requirement for the award of degree of Master of Business Administration Of MATS UNIVERSITY, RAIPUR (C.G.) Session 2010-12

Guided by: Mrs. SHILPI GUPTA Professor of Finance Department of Management

Submitted by:MUKESH KUMAR GUPTA M.B.A. 3rd SEM

Roll No. MU10MBA020 MATS University (C.G.)

CERTIFICATE BY COLLEGE
This is to certify that Mr. MUKESH KUMAR GUPTA a bona fide student of MATS UNIVERSITY, Raipur (C.G.) studying in M.BA.3rd semester has successfully completed his project entitled CASH MANAGEMENT OF NTPC, KORBA CHHATISGARH. I wish him all success in every endeavor of life.

Mrs. SHILPI GUPTA Professor of Finance Department of Management MATS University

DECLARATION
I the undersigned solemnly declare that the report of the Summer Training work entitled CASH MANEGEMENT OF NTPC, KORBA is based my own work carried out during the course of my study under the supervision of MR. PHANIKUMAR. I assert that the statements made and conclusions drawn are an outcome of the project work. I further declare that to the best of my knowledge and belief that the project report does not contain any part of any work, which has been submitted for the award of any other degree/diploma/certificate in this University or any other University.

Signature of the Candidate

__________________

MUKESH KUMAR GUPTA M.B.A. 3rd SEM Roll No. MU10MBA004

ACKNOWLEDGEMENT

I would like to express my gratitude towards all those who gave me the possibility to complete this project. I want to thank finance department NTPC Korba for providing support for necessary research work and to use the departmental data. Further I want to thank Deputy General Manager Finance of NTPC Korba, MR.D.PHANIKUMAR and my placement head of college Mrs. GEETU RATHOD who permitted and encouraged me to go ahead with my project work. I express my gratitude to the Sr. Manager (F) of NTPC Korba Mr. Anuj Kush for his kind support.

Especially I want to thank all my colleagues during this project for their support that helped me a lot in my project work.

__________________ _
Mukesh Kumar Gupta M.B.A. 3rd SEM Roll No. MU10MBA020

Index
S.NO. 1 2 3 4 5 6 TITLE OBJECTIVE OF THE STUDY COMPANY PROFILE INSTALLED CAPACITY LEGEND ORGANISATION STRUCTURE OF NTPC ORGANISATION STRUCTURE OF KORBA SUPER THERMAL POWER. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 HISTORY OF NTPC VISSION & MISSION OF NTPC SWOT ANALYSIS OF NTPC LIMITED BOARD OF DIRECTORS UTILIZATION OF ASH IMPORTANCE OF NTPC IN CHHATISGARH ACHIVEENT OF NTPC AUDIT REPORTS CASH MANAGEMENT CASH MANAGEMENT IN NTPC ELECTRONIC DATA INTERCHANGE INTERNATIONAL CASH MANAGEMENT GROWTH OF YEAR ACCOUNT POLICIES CONCLUSION SUGGESTIONS BIBLOGRAPHY 21 24 25 26 36 42 43 44 52 56 62 63 68 69 76 77 78 PAGE NO. 7 8 11 18 19 20

VOCATIONAL INTERNALSHIP PROJECT


A Study on

CASH MANAGEMENT NTPC LIMITED

OBJECTIVE OF THE STUDY

To understand the flow of cash in NTPC

To understand how cash is managed.

To assess the liquidity of the firm. To know firms operating efficiency

Company Profile

8 Indias largest power utility, NTPC Ltd was set up in 1975 to accelerate power development in India. Today NTPC is a diversified power major with presence in the entire value chain of the power generation business. Apart from power generation, which is the mainstay of the company, NTPC has already ventured into consultancy, power trading, ash utilization and coal mining. NTPC ranked 317th in the 2009, Forbes Global 2000 ranking of the Worlds biggest companies. The total installed capacity of the company is 30, 144 MW (including JVs) with 15 coal based and 7 gas based stations, located across the country. In addition, under JVs, 3 stations are coal based & another station uses naphtha/LNG as fuel. By 2017, the power generation portfolio is expected to have a diversified fuel mix with coal based capacity of around 53000 MW, 10000 MW through gas, 9000 MW through Hydro generation, about 2000 MW from nuclear sources and around 1000 MW from Renewable Energy Sources (RES). NTPC has adopted a multi-pronged growth strategy which includes capacity addition through green field projects, expansion of existing stations, joint ventures, subsidiaries and takeover of stations. NTPC has been operating its plants at high efficiency levels. Although the company has 18.79% of the total national capacity it contributes 28.60% of total power generation due to its focus on high efficiency.

`In October 2004, NTPC launched its Initial Public Offering (IPO) consisting of 5.25% as fresh issue and 5.25% as offer for sale by Government of India. NTPC thus became a listed company in November 2004 with the government holding 89.5% of the equity share capital. The rest is held by Institutional Investors and the Public. The issue was a resounding success. NTPC among largest five companies in India in terms of market capitalization.

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Installed Capacity

PARTICULARS
NTPC Owned Coal Gas/Liquid Fuel Total Owned By JVs Coal & Gas Total

NO. OF PLANTS

CAPACITY (MW)

15 7 22

23,895 3,955 27,850

4 26

2,294 30,144

The generating capacity as well as plant performance or operational efficiency has been continuously growing without break since its inception. NTPCs Installed Capacity and performance depicts the companys outstanding performance across a number of parameters. Regional Spread of Generating Facilities

REGION
Northern Western Southern Eastern JVs Total

COAL
7,035 6,360 3,600 6,900 8,14 24,709

GAS
2,312 1,293 350 1,480 5,435

TOTAL
9,347 7,653 3,950 6,900 2,294 30,144

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Coal Based Power Stations


The coal based power station has been always the main stay of NTPC . It is one of the biggest users of coal in India. The entire generation back bone of NTPC is based on its coal fired stations. Following are the coal based stations of NTPC

COAL BASED(Owned by NTPC) STATE 1. Singrauli 2. Korba 3. Ramagundam 4. Farakka 5. Vindhyachal 6. Rihand 7. Kahalgaon 8. Dadri 9. Talcher Kaniha 10. Unchahar 11. Talcher Thermal 12. Simhadri 13. Tanda 14. Badarpur 15. Sipat-II Total Uttar Pradesh Chhattisgarh Andhra Pradesh West Bengal Madhya Pradesh Uttar Pradesh Bihar Uttar Pradesh Orissa Uttar Pradesh Orissa Andhra Pradesh Uttar Pradesh Delhi Chhattisgarh

COMMISSIONED CAPACITY(MW) 2,000 2,600 2,600 1,600 3,260 2,000 1,840 1,820 3,000 1,050 460 1,000 440 705 1,000 23,895

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Gas/Liquid Fuel Based Power Stations


With a combined gas based commissioned capacity of 3955 MW, NTPC caters to the peeking demand for power. GAS BASED (Owned by NTPC)
1. Anta 2. Auraiya 3. Kawas 4. Dadri 5. Jhanor-Gandhar 6.

COMMISSIONED STATE Rajasthan Uttar Pradesh Gujarat Uttar Pradesh Gujarat CCPP Kerala Haryana CAPACITY(MW) 413 652 645 830 648 350 430 3,955

Rajiv

Gandhi

Kayamkulam

7. Faridabad

Total
Gas Based Joint Ventures:

COAL

BASED

(Owned by JVs) 1. RGPPL Total

STATE Maharashtra

COMMISSIONED CAPACITY 1480 1480

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Hydro Based Power Projects (Under Implementation)


NTPC has increased thrust on hydro development for a balanced portfolio for long term sustainability. The first step in this direction was taken by initiating investment in Koldam Hydro Electric Power Project located on Satluj River in Bilaspur district of Himachal Pradesh. Two other hydro projects under construction are Tapovan Vishnugad and Loharinag Pala. On all these projects construction activities are in full swing.

HYDRO BASED
1. Koldam (HEPP) 2. Loharinag Pala (HEPP)

STATE

APPROVED CAPACITY(MW)

Himachal Pradesh 800 Uttarakhand 600 520 1,920

3. Tapovan Vishnugad (HEPP) Uttarakhand

Total

Performance Statistics
In terms of operations, NTPC has always been considerably above the national average. The availability factor for coal based power stations has increased from 89.32% in 1998-99 to 92.47% in 2008-09, which compares favorably with international standards. The PLF has increased from 76.6% in 1998-99 to 91.14% during the year 2009-10.

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The table below shows that while the installed capacity has increased by 56.58% in the last ten years.

DESCRIPTION Installed Capacity Generation

UNIT MW MUs

1998-09 17,786 1,09,505

2009-10 27,850 2,06,939

% OF INCREASE 56.58 88.98

Excluding JVs and Subsidiaries

16 The table below shows the detailed operational performance of coal based stations over the years.

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ORGANIZATIONAL STRUCTURE OF NTPC


Chairman & Managing Director (CMD)

Director Director (Project) (Vigilance)

Director (Operation)

Director (Technical)

Director (H.R.)

Director (Commercial)

Director (Finance)

Executive Director (NR)

Executive Director (WR)

Executive Director (SR)

Executive Director (ER)

General Manager Addl. General Manager Dy. General Manager

Senior Manager

Manager

Deputy Manager

Senior Engineer

Engineer

Sr. Asst. Engineer

Asst. Engineer

Supervisor & Workmen

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LEGEND

O&M - Operation & Maintenance, MM Mechanical Maintenance, EM Electrical Maintenance, C&I - Control & Instrumentation, M&CS Materials & Contract Services, R&M Renovation and Modernization, FQA Field Quality Assurance, Representative, R&R Rehabilitation and Resettlement, EMG Environment Monitoring Group, ERECT/CONST Erection/Construction,

O Operation, F Finance, TS Technical Services, FM Fuel Management, HR Human Resources, CMO Chief Medical Officer, MR Management

TA Township Administration, MTP Maintenance Planning, HOD - Head of Department.

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ORGANISATIONAL STRUCTURE OF KORBA SUPER THERMAL POWER STATION (KSTPS)

Station In-charge General Manager

Head of O&M

HOD Finance

HOD (HR)

CMO Hospital

HOD (M&CS)

M.R. (ISO 14001)

HOD (Vigilance)

HOD (Safety)

HOD (TRG/SIM )

HOD (ITS)

HOD (TA)

HOD (R&R)

HOD (EMG)

Sec. Head (FQA)

HOD (MM)

HOD (EM)

HOD (C&I )

HOD (O)

HOD (FM)

HOD MTP/O&E)

HOD (R&M)

HOD (TRG)

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HISTORY OF NTPC
Our Company was incorporated on November 7, 1975 under the Companies Act as a private limited company under the name National Thermal Power Corporation Private Limited, and the word 'Private' was deleted on September30, 1976 consequent upon the notification issued by the Go I Exempting government companies from the use of word 'private'. In their name. On September 30, 1985, our Company was converted from a private limited company into a public limited company. Subsequently, the name of our Company was changed to its present name NTPC Limited. And a fresh certificate of incorporation was issued on October 28, 2005. The name of our Company was changed to reflect the diversification of our business operations beyond thermal power generation to include, among others, generation of power from hydro, nuclear and renewable energy sources and undertaking coal mining and oil exploration activities. For further information on our business including description of our activities, services, market of each segment, our growth, technology, market, managerial competence and capacity built-up, our standing with reference to our prominent competitors, see Our Business and Industry Overview on pages 55 and 44, respectively. For further information on our business including description of our activities, services, market of each segment, our growth, technology, market, managerial competence and capacity built-up, our standing with reference to our prominent competitors, see Our Business and Industry Overview on pages 55 and 44, respectively. Our Company is not operating under any injunction or restraining order. In July 1976, the registered office of our Company was changed from Shram Shakti Bhawan, New Delhi to Kailas Building, Kasturba Gandhi Marg, New Delhi. Subsequently, in May 1979 the registered office of our Company was shifted to NTPC Square, 62-63, Nehru Place, New Delhi and thereafter in October 1988 to its present location for administrative and operational efficiency. Major events 1975 - Incorporation of our Company 1978 - Takeover of management of the Badarpur project 1982 Commissioning of the first 200MW unit at Singrauli Center for education at Power Management Institute, Delhi established First direct foreign currency borrowing . a consortium of foreign banks led by Standard Chartered Merchant Bank extends a loan of GBP 298.41 million for the Rihand project 1984 - The transmission line based on High Voltage Direct Current (HVDC) technology, commissioned for power transmission from Rihand to Delhi Singrauli project received World Bank loan of US$ 150 million through Go I 1986 - Synchronized first 500MW unit at Singrauli Our Company became one of the first PSUs to issue bonds in the debt market 1987 - 5,000 MW installed capacity mark crossed

22 1988 - First syndicated Japanese loan of 30 billion JPY raised 1989 - Consultancy division of our Company launched First unit (88 MW) of our Companys first gas based combined cycle power plant at Anta, Rajasthan commissioned 1990 - Total installed capacity of 10,000 MW reached 1992 - First acquisition by our Company of Froze Gandhi Unchahar Thermal Power Station (2x210MW) from Uttar Pradesh Rajya Vidyut Utpadan Nigam of Uttar Pradesh The transmission systems owned by our Company were transferred to Power Grid Corporation of India Limited (PGCIL) pursuant to legislation by the Parliament of India 1993 - IBRD extended direct loan of US0 million to our Company under time slice concept for its projects 1994 - 15,000 MW of installed capacity achieved Maiden declaration of dividend of Rs. 650 million Jhanor-Gandhar (Gujarat) becomes our first thermal power station to have commissioned an integrated Liquid Waste Treatment Plant 1997 - 'Navratna' status granted by the GoI100 billion units generation in one year achieved A consortium of foreign banks led by Sumitomo Bank, Hong Kong extends foreign currency loan of 5 billion Japanese Yen for the first time without Go I guarantee 1998 - Commissioned the first Naphtha based plant at Kayamkulam with a capacity of 350 MW 1999 - Our Companys Dadri thermal power project, Uttar Pradesh adjudged the best in India with a PLF of 96.12% Dadri thermal power project, Uttar Pradesh certified with ISO 14001 2002 - Three wholly owned subsidiaries, viz., NTPC Electric Supply Company Limited, NTPC Hydro Limited and NTPC Vidyut Vyapar Nigam Limited incorporated ESP [Electrostatic precipitators) set up at Talcher power plant 20,000 MW installed capacity mark exceeded 2003 - Our Company undertook debt restructuring. Raised funds through bonds (Series XIII and XIV) Construction of first hydroelectric power project of 800 MW capacity in Himachal Pradesh commenced after the investment approval 2004 - The award of contract for the first Super Critical Thermal Power Plant at Sipat Reached a total installed capacity of 22,249 MW with the Talcher Unit V getting synchronized on May 13, 2004 Our Companys Feroze Gandhi Unchahar Thermal station achieves a record PLF of 87.43% in current year up from 18.02% in February 92 when it was taken over by us LIC extends credit facility for Rs. 70 billion. Rs. 40 billion is in the form of unsecured loans and Rs. 30 billion is in the form of bonds Our Company makes its debut issue of euro bonds amounting to USD 200 million in the international market First coal mining block allotted Listing of our Equity Shares on the Stock Exchanges 2005 - Our Company received the International Project Management Award 2005 for its Simhadri project at the International Project Management Association World Congress. Oil block allocated under NELP V Our Company adopted core values 'BCOMIT' (Business Ethics, Customer Focus, Organizational Pride, Mutual Respect and Trust, Innovation and Speed and

23 Total Quality for Excellence) Our Company ranked as the Third Great Place to work for in India for second time in succession by a survey conducted by Grow Talent and Business World 2005 2006 - Badarpur Thermal Power Station having an installed capacity of 705 MW transferred to our Company 2007 - MoC, Go I granted in-principle approval for allocation of a New coal block, Chatti-Bariatu (South) to our Company subject to the conditions stipulated in the approval letter. The share of reserves is estimated to be 354 Million Tones 2008- Our Company adjudged as the Star PSU 2008 Board expanded by appointment of five independent Directors India Power Award conferred on Centre for Power Efficiency and Environmental Protection 2009 Memorandum of understanding entered into with the Nuclear Power Corporation of India Limited (NPCIL) for development of nuclear power in India 30,000 MW installed capacity mark crossed Long term fuel supply agreement signed with Coal India Limited for supply of coal to our power stations for a period of 20 years Our Company acquired 44.6% of presently paid-up capital of Kerala and Transformers and Electricals Kerala Limited from Government of Kerala at a total consideration of Rs. 313.4 million, subject to final price to be based on the valuation of the assets of Kerala and Transformers and Electricals Kerala Limited. Kerala and Transformers and Electricals Kerala Limited is engaged in manufacturing and repair of heavy duty transformers International Gold Star Quality Award conferred on Centre for Power Efficiency and Environmental Protection. - NTPC enters MOU with Nuclear Power Corporation of India Ltd. (NPCIL) to work together for development of Nuclear Power in India and for this purpose to form a Joint Venture Company for setting up Nuclear Power Projects. - NTPC inks JV agreement with SAIL, RINL, Coal India and NMDC.

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VISSION AND MISSION OF NTPC:VISSION:The Vision

The vision of the company states the fundamental purpose of their existence via: To be one of the worlds largest and best power utilities, powering Indias growth The values of the company provide the essential and enduring general guiding principles in the way it conducts itself in realizing the vision through COMIT. Customer Focus Organizational Pride .mutual Respect and Truth Initiative and Speed .total Quality NTPC dreams of building a great company could be achieved through articulation of this core ideology by involving people in sharing this vision and core values and taking steps for actualization of the same.

MISSION:THE MISSION Develop and provide reliable power, related products and services at competitive prices, integrating multiple energy sources with innovative and eco-friendly technologies and contribute to society. CORE VALUES:-Core Values BCOMIT Business Ethics Customer Focus Organizational & Professional Pride Mutual Respect & Trust Innovation & Speed Total Quality for Excellence .

25 SWOT ANALYSIS of NTPC LIMITED 1. STRENGTH OF NTPC LIMITED The company has kept itself sufficient liquid fund to meet any kind of cash requirement. Efficient working capital of the plant. Efficient and timely completion of projects. A minimum risk factor. Best integrated project management system. Company with excellent records and high profit. An early starter, more than 30 years experience in power sector. One amongst the nine jewels of India called Navratnas. Highly motivated and dedicated workers and officers. Excellent growth prospect with significant additions, modifications and replacements. Employee friendly personnel policies. Low project cost of NTPC LTDs plant. One of the listed companies on BSE & NSE. 2. WEAKNESSESS of NTPC LIMITED Depleting raw materials. Some of the pants of NTPC LTD has become old and need investment for replacement or modifications. 3. OPPORTUNITIES for NTPC LIMITED Demand and supply gap. Upcoming hydro & nuclear sector. Use opportunities in the consultancy services both abroad as well as in India. Growth in power sector. 4. THREATS in NTPC LIMITED Varying price of raw materials makes working costly. Huge competitions from SEBs, Reliance Energy & TATA Power and other private players in power industries. Coming up of other sources of power generation and consumption. Huge capital requirement for expansion, diversification, horizontal and vertical integration.

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BOARD OF DIRECTORS:Shri Arup Roy Choudhury, Chairman & Managing Director since September 01, 2010, has an illustrious career spanning over 32 years of outstanding contribution in the fields of engineering, general management, strategic management and business leadership. He is a Graduate in Civil Engineering from Birla Institute of Technology, Mesra and a Post-Graduate in Management and Systems from IITDelhi. A keen learner of the latest professional developments, he is currently pursuing a doctorate in Select Study of Project Performance Metrics in Indian Construction Industry from IIT-Delhi. Shri Choudhury brings to NTPC the dynamism of a leader with proven abilities to achieve transformational changes. He seeks to position the Maharatna enterprise on course to become the largest and best power producer in the world. Shri Choudhury has the distinction of becoming the youngest Chief Executive Officer of a Central Public Sector Enterprise (CPSE) at the age of 44 years when he joined as Chairman & Managing Director, National Buildings Construction Corporation Limited (NBCC) on April 03, 2001. Prior to that he had worked in prominent public and private sector companies since 1979, when he started his career. Shri Choudhurys rich and varied contribution of over 32 years has been recognized by prestigious professional, academic and

Government institutions, both national and international. His vision, leadership and industriousness transformed NBCC, which was a sick company with negative net-worth and salary back-log in 2001, into a blue-chip enterprise having Schedule A and Miniratna status bestowed upon it by the Government of India. The stunning turnaround of the Company brought about by him has enabled NBCCs turnover grow about 10 times and net-worth over 500 times during his tenure of nine-and-a-half years at the helm. He pulled

27 NBCC out of the abyss and catapulted it into the distinguished league of Top Ten CPSEs. Under him, NBCC broadened its business horizons. Its entry into power project development dovetails very productively with his new role as CMD, NTPC. As Chairman, Standing Conference of Public Enterprises (SCOPE), the apex body of central public sector enterprises (CPSEs), Shri Choudhury has been effectively leading policy advocacy for greater empowerment of these enterprises. He is also promoting the cause of greater professionalism, competitiveness, societal commitment, transparency and global-benchmarking among the CPSEs. Shri Choudhury believes in growth and excellence through proactive approach and his dictum is Sankalp Shuddha Hi Siddha i.e. if your intentions are pure, you are bound to succeed. Shri Choudhury has a strong commitment for the well-being of the society at large. His sharp focus on corporate governance and environmentally sustainable growth has been demonstrated in concrete actions and substantial benefits.

Shri A.K. Singhal, Director (Finance) since August 2005, a Chartered Accountant, comes with rich experience of 29 years of Corporate Finance Management. He is also a member of All India Management Association (AIMA) and Institute of Internal Auditors (IIA). Prior to joining NTPC in 2001, he was the Executive Director (Finance) in National Fertilizers Limited (NFL) as head of Finance & Accounts department. He held various managerial positions in Krishak Bharati Cooperative Limited (KRIBHCO) and Engineering Projects of India Limited (EPIL). As Finance Director on the Board of NTPC, he is responsible for formulating financial strategies and plans to enable the company in achieving its Vision. He gives directions with respect to the entire gamut of Financial Management of the organization including timely financial resource mobilization at minimum possible cost from Domestic & Global sources

28 including equity issues, optimum utilization of funds, formulation of companys annual financial budget and undertaking budgetary controls. He is also responsible for designing internal control systems commensurate with the size of the organization and for ensuring compliance of such systems. Being responsible for compliances of Company Law and other statutory requirements, he also gives direction to the Corporate Governance framework of the company. After company became listed he has been acting as one of the vital links between the shareholders of the company and the rest of the Board. In recognition of his contribution, he was adjudged as the Best CFO in the Public Sector category by the Committee for Members in Industry (CMII) of ICAI for the year 2007-08.

Sh. I.J.Kapoor, Director (Commercial) since December 2008 is a Graduate in Mechanical Engineering and Masters in Business Administration (Marketing). He joined NTPC in 1978 as 3rd batch Engineering Executive Trainee (EET) and is the first EET to be on the Board of the Company. He has a rich and varied experience of over 32 years in the areas of Commercial, Engineering, Contracts & Materials Management, Project Management, Consultancy, Cost Engineering, Station Engineering and Quality Assurance & Inspection. Prior to his elevation as Director (Commercial), he was Regional Executive Director (National Capital), NTPC, responsible for management of ~ 3900 MW generating capacity, administering more than th of NTPCs turn over along with project implementation activities for 2x490 MW at Dadri Stage-II. As Director (Commercial), he is responsible for formulation & implementation of policies & strategies to ensure marketing of NTPCs entire electrical output, appropriate pricing from regulatory authority and 100% & timely realization from customers, thereby generate adequate internal resources for the company to meet the future challenge of higher capacity addition. In addition, he is the Director In- charge of Consultancy and Business Development activities. He is also part time Chairman on the Board of Aravali Power Company Private Ltd. (1500 MW) and National

29 Power Exchange Ltd. He is part time Director on the Board of PTC India Ltd., Meja Urja Nigam Private Ltd. (1320 MW), NTPC- BHEL Power Projects Private Ltd. and NTPC Vidyut Vyapar Nigam Ltd. He is responsible for successful implementation of National Solar Mission Phase-I. He is a Fellow of Institution of Engineers, India and Senior Member, IEEE, USA.

Sri B.P. Singh (55 yrs), Director(Projects), is a Graduate in Mining Engineering. He has rich and varied experience both in coal as well as power sector. He started his career in 1974 in coal mining sector firstly with Indian Iron & Steel Company and subsequently joined Bharat Coking Coal Ltd. He joined NTPC Ltd. in 1981 and worked in various capacities, at Corporate Centre and Power Projects, in the areas of Fuel Management, Coal Mining & Coal Washery. He was elevated as Executive Director (Coal Mining & Coal Washeries) in 2004. He played the pivotal role in formulation of NTPCs overall strategy for fuel security. He has been instrumental in acquisition and development of fuel assets i.e. one Oil & Gas Exploration block under NELP V in Arunachal Pradesh, six coal mining blocks across various coalfields in the country besides two more blocks for joint operation through a 50:50 JV with CIL. He is also the Chairman of NTPC-SCCL Global Ventures Private Ltd. He joined the Board of the Company as Director (Projects) in Aug, 2009. Besides representing NTPC in various committees set up by Govt. of India on Integrated Coal Policy, fuels for Power Generation, Pricing of Coal, Techno-economics of using washed coal, etc. he has also been part of various Govt. teams & missions like U.K. Trade Mission, IndoAustralia Joint Working Group on Energy & Minerals, etc. He is also a 'Senate Member' of Dr. BR Ambedkar National Institute of Technology, Jalandhar, Expert Member on Research Council of Central Institute of Mining & Fuel Research (CIMFR) and represents NTPC as 'Member' in MGMI.

30 Shri D.K. Jain, has taken over the charge as Director (Technical) as on 13th May 2010.

Shri D.K. Jain (58 years), is a graduate in Mechanical Engineering from IIT, Kharagpur. He joined NTPC Limited in 1978. He has rich and varied experience of over 35 years in design and execution of large power plants. He has worked in various capacities in the areas of renovation & modernisation, engineering and project execution. He was actively involved in design and engineering of first pit-head super thermal power station of NTPC at Singrauli. Before his elevation as Director (Technical), he was Executive Director (Engineering), responsible for identification of sites, taking up feasibilities studies, design and detailed engineering of coal, gas and hydro power projects. He also oversees the Mine Planning and Design of NTPCs Captive Coal Blocks.

Shri S. P. Singh(57 Years), Director(HR), is a Graduate in Electrical Engineering from Madhav Institute of Technology & Science, JIWAJI University , Gwalior (year 1973- 74) and completed his schooling from the prestigious Colvin Taluqdars College, Lucknow. Shri Singh joined NTPC in 1984 and worked for more than 25 years in Engineering Department, looking after various functions of Plant Engineering related Quality Assurance & Inspection, Project Layout engineering, Project Engineering etc. He served as ED (Corporate Contacts & Materials) and Chief Executive officer, of NTPC Electric Supply Company (A wholly owned subsidiary of NTPC) and lastly as ED (I/C) Human Resources during his tenure in NTPC. He started his career in BHEL in 1975 as Engineer Trainee and worked for 9 years at BHEL, Hardwar in the Turbogenerator Design Department.

31 Shri N.N.Misra (55 years), Director (Operations), graduated in Electrical Engineering with Honours from Regional Engineering College, Rourkela in the year 1977. Shri Misra joined NTPC in 1977 as Executive Trainee (2nd Batch). He has an experience of 33 years in NTPC out of which 28 years were in the Design Department looking after the various functions of Electrical Design and Project Engineering beginning with the first Project of NTPC. He is actively associated with BIS and represents NTPC in Electro Technical Divisional Council of BIS. Shri Misra represents India in CIGRE (International Conference on Large High Voltage Electric System) for High Voltage Equipment and has contributed in many Study Committees and Working Groups of CIGRE. Shri Misra was involved in selecting and successfully implementing the first 765 KV Sub-Station of India at Sipat. He has a rich and varied experience having worked as Executive Director of the National Capital Region, Executive Director looking after Corporate Contracts & Materials, Executive Director looking after Human Resources and lastly Executive Director looking after Operation Services. Shri Misra also represents NTPC as Part-time Director in a number of Joint Ventures of NTPC.

Shri P.K. Sengupta is B. Com and FICWA. He has held the position of Director (Finance) in Eastern Coalfields Limited, Director (Finance) in Coal India Limited prior to becoming Chairman & Managing Director of Coal India Limited in January 1995. He has held directorship in Steel Authority of India and Neyveli Lignite Corporation as non-official parttime Director. He has expertise in the area of Financial Management and General Administration. He has been on the Board of the Company with effect from August 26, 2008 as a non-official part - time director.

32 Shri M.N. Buch is M.A. (History) from Delhi University, M. Phil (Public Administration) from Indian Institute of Public Administration, Punjab University, PG Diploma holder in Port Management and Administration from University College, London and an Indian Administrative Officer of Gujarat Cadre, 1964 batch. He has held various posts in Gujarat Government. He had held the position of Joint Secretary to the Government of India in Department of Banking, Ministry of Finance, Additional Secretary to the Ministry of Labour, GOI, Director- General, Sports Authority of India prior to becoming Member of Public Enterprises Selection Board, GOI. He has been also on the Board of various public sector banks. He has wide experience in both Development and Regulatory Administration at the Central, State and District levels. He has been on the Board of the Company with effect from August 26, 2008 as a non-official part - time director.

Shri Shanti Narain is B.Sc (Hons. in Physics) and M.Sc. (Mathematics) from Delhi University and has pursued Management Development Programme at British Transport Staff College, UK. He has held various posts in Railways prior to becoming Member (Traffic), Railway Board. He has key expertise in strategic management of transport systems with special focus on Railways, involving planning, marketing, customer relations, monitoring and control of operational and commercial activities and development of transport infrastructure. He has been on the Board of the Company with effect from August 26, 2008 as a non-official part time director.

Shri K. Dharmarajan, a retired IAS offier, has served as faculty and resource person at the IIFT, NIUA, TERI and University of Pennsylvania (USA). He was the Chairman at Expert Committee for Property Tax Reforms, Delhi and is well known in the areas of institutional development, administration, international trade & commerce, energy and poverty. He has been on the Board of the Company with effect from

33 August 26, 2008 as a non-official part - time director.

Dr. M. Govinda Rao is Director, National Institute of Public Finance and Policy, New Delhi. He is also a Member, Economic Advisory Council to the Prime Minister. His past positions include Director, Institute for Social and Economic Change, Bangalore and Fellow, Research School of Pacific and Asian Studies, Australian National University, Canberra, Australia. He has played a number of advisory roles in various Expert Committees. He has published 12 books and monographs on various aspects of Public Finance besides technical articles in a number of journals. He has been on the Board of the Company with effect from August 26, 2008 as a non-official part - time director.

Shri Adesh Jain is a Bachelor of Science in Mathematics and an Electrical Engineer from the Indian Institute of Science, Bangalore. He has done his MS in Control Systems at Carleton University, Ottawa. He has over 40 years of experience in project oriented work beginning with two state-of-the-art projects in early 1970s in USA. In 1973, he returned to India to help the country embark upon major computerization program. He has also served as the Head of IT and Project Management Services in BHEL. In 1992, he started the Centre for Excellence in Project Management. He has been conferred with 6 major awards in India, including the Gem of India award. He is author of the book New Dimensions in Project Management. He has been on the Board of the Company with effect from January 30, 2009 as a non-official part time director.

34 Shri Santosh Nautiyal is a Post Graduate in Political Science and Public Administration. He belonged to Indian Administrative Services (Orissa 1968) and retired in July 2006 as Chairman (in the rank of Secretary to the Govt. of India,) National Highway Authority of India. He has held various positions like Additional Secretary, Govt of India in Department of Consumer Affairs, Principal Secretary of Government of Orrisa, Joint Secretary in Ministry of Steel and Managing Director in Industrial Promotion and Investment Corporation of Orrisa Ltd. He also served as Chairman of Food Corporation of India and after retirement was appointed as Chairman of the National Shipping Board constituted by the Central Government. He has been on the Board of the Company with effect from January 30, 2009 as a non-official part - time director.

Shri Kanwal Nath, is M.Sc. in Physics, and holds PG Diploma in Development Finance from the University of Birmingham, UK. He has over 37 years of experience in Indian Audit and Accounts service. He retired as Dy. Comptroller & Auditor General in February 2007. He has also held position of Joint Secretary & Financial Adviser (JS & FA) in Ministry of Water Resources and additional charge of JS & FA, Ministry of Power. He has wide experience in the Audit of Organisations in Power, Telecommunication and Railway Sector. He has been on the Board of the Company with effect from January 30, 2009 as a non-official part - time director.

Shri Arun Kumar Sanwalka is M.Sc (Engg) from UK, I. Mech. (E), UK. and AMIE (India) Mech. & Prod. He has held various positions in Indian Railways and retired from the position of General Manager, Northeast Frontier Railway after 38 years of service. He has wide expertise in the areas of General Management & Administration, Transport planning, Project management and coordination. He has also handled several projects for establishing large production, maintenance and repair facilities of Indian Railways. He also held the position of

35 Executive Director (Motive Power), RDSO for several years. He has been on the Board of the Company with effect from January 30, 2009 as a nonofficial part - time director.

Shri I.C.P. Keshari, is a Government nominee Director. He graduated with a Master of Arts degree from Delhi University and holds Junior Research Fellowship of UGC for Master of Philosophy. Shri Keshari is an Indian Administrative Services officer of Madhya Pradesh cadre. He is currently Joint Secretary in the Ministry of Power. Prior to this, Shri Keshari was in the Ministry of Commerce & Industry and has also held various administrative posts in the State of Madhya Pradesh and Chattisgarh. Shri Keshari appointed as a Director on Board in May, 2009.

Shri Rakesh Jain, born in 1957, is a Government nominee Director in our Company. He holds Masters Degree in Physics from Delhi University. He is an officer of Indian Audit & Accounts Service (1981). He is currently the Joint Secretary & Financial Adviser (JS & FA) in the Ministry of Power and also holds additional charge of the post of JS & FA of the Ministry of Labour & Employment. He has held various important positions such as Director General (Accounts, Enetitlement, Complaints & Information System); Principal Director (Report States) Office of Comptroller & Auditor General of India; Accountant General

(AG)(Audit), Rajasthan; AG(AE-II) Madhya Pradesh; Principal Director (Commercial Audit), Ranchi and Principal Director of Audit, Embassy of India, Washington, USA.

36

UTILISATION OF ASH
Nearly 75% of India's total power generation capacity is thermal, of which coal-based power generation is nearly 90%, and diesel, wind, gas and steam adding to about 10%. High ash content in the range of 30 to 50% in Indian coals is the major cause of large voluminous quantities of coal ash. India's dependence on coal as a major source of energy had been of prime importance in the past and shall continue in this millennium, and therefore fly ash management would remain an important area of national concern. At present nearly 100 million tonnes of fly ash is being generated annually in India and more than 65000 acres of land is presently occupied by ash ponds.

It is estimated that by 2004 AD the ash generation will increase to 125 million tonnes per annum, which means that it will require nearly 100000 acres of valuable land for storage and disposal of ash by following the conventional methods, which in turn shall necessitate acquiring new ash disposal areas, sites involving displacement and hence rehabilitation problems.

There are 11 major thermal power plants in Chhattisgarh State which produces fly ash to the tune of about 26880 metric tons per day i.e. nearly 9.7 million tones of fly ash annually, out

37 of which the four major thermal power plants in Korba district alone generates about 24000 metric tons per day or 8.7 million tones of fly ash annually. This is nearly 90 % of the total ash generated in the state and about 8.7% of the total ash generated in the country.

The total power generation capacity from the four major coal based thermal power plants situated at Korba is 3650 MW. They are namely -

Korba Super Thermal Power station, NTPC Ltd. Jamnipali, Korba - 2100 MW Balco Captive Power Plant, Pragati Nagar, Korba - 270 MW Korba Thermal Power Station, C.G State Electricity Board (East), Korba - 440 MW Hasdeo Thermal Power Station, C.G State Electricity Board (West), Korba - 840 MW Presently fly ash produced by these plants are stored and disposed off in ash dykes by following the conventional method of ash slurry system consuming about 704.907 hectares of valuable land. Safe disposal and effective utilization of such voluminous quantity of fly ash is of immediate concern and strict compliance of the provisions laid down by the Ministry of Environment of Forest, Govt. of India vide its notification dated 14 Sept 1999 for utilization of fly ash generated from the coal based thermal power plants has to be imperatively carried out.

Fly Ash Utilization Information Centre, Korba The Regional Officer, Chhattisgarh Environment Conservation Board, HIG - 21, 22, Maharana Pratap Nagar (Extension), Near Ghantaghar Chowk, Korba District-Korba.

To ensure maximum and realistic utilization of fly ash a marathon meeting of TPPs, Govt. Works Departments, S.E.C.L, brick manufacturers and builders was held by collector, Korba on dated 24/12/2002 and reviewed again on 11/01/2003. The power plants were directed to submit a detailed action plan consisting of diversified utilisation of fly ashin various potential sectors such as - road, embankment, brick, block, tile manufacturing and back filling, stowing of mines and reclamation of low lying and waste land areas for agriculture. The first step towards this was laid down by commencement of an information centre on fly ash utilization at the Regional Office of Chhattisgarh Environment Conservation Board, Korba. This is an earnest step taken towards providing relevant information on fly ash utilization not only to the entrepreneurs but also to the common people of Korba.

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Workshop on Fly Ash Utilization:-

A national level two-day workshop on "Fly Ash Utilisation" was organized by the District administration in association with Chhattisgarh Environment Conservation Board on 29th and 30th of January 2003. Dr. P. Raghavan, Principal Secretary, Industry Commerce and Mining, Govt. of Chhattisgarh was the chief guest for the workshop and was presided over by Shri Vivek Dhand, Secretary, Environment and Urban Administration and Development Chairman, C.G Environment Conservation Board, Raipur. Dr. Vimal Kumar, Mission

Director, Fly Ash Mission, New Delhi and Advisor (Fly Ash) Department of Science and Technology, Govt. of India was the guest of honor. Other participants of this Workshop were eminent Scientists from the recognized institutes of the country engaged in the field of fly ash utilisation such as Central Road research Institute, New Delhi

Central Mining Research Institute, Dhanbad Regional Research Laboratory, Bhopal, Fly Ash Mission, New Delhi, ECO Environmental Consultancy Group, Vadodara and Gujarat Indian School of Mines, Dhanbad Fly Ash utilisation Division, NTPC

39 Fly Ash utilisation Division, NTPC, New Delhi presented their technical papers with case studies regarding utilisation of fly ash in various sectors. The workshop culminated with site visit which included sites of potential ash consumption i.e. brick making reclamation of low lying area near Risda Ash Dyke, Back filling in the SECL Gevra Open Cast Mines The workshop proved successful in sensitizing people and heads of industries and various Govt. and private sectors towards safe and effective fly ash utilisation in and around Korba district. Fly Ash Utilization by Thermal power Plants and Other Sectors in Korba Pursuant to the directives of District Administration, Power plant management are now diversifying their operations in low lying areas, abandoned mines, major road/ embankment works, agriculture etc. where fly ash can be utilised in large quantity. A series of concerted activities have taken place since December 2002 in the form of a peoples movement towards sensitizing the producers of fly ash that time has now come to convert this so-called wasteful material into resourceful material.

1. Fly Ash Brick Making:-

Six mechanized fly ash brick manufacturing units at Korba are producing about 60000 bricks per day. In addition to this, two mechanized fly ash brick manufacturing units have been set up by private entrepreneurs also at Korba, the total production being about 30000 bricks/day. Apart from this about 23 entrepreneurs have registered in DTIC proposals for establishing ash brick units. To give impetus to ash brick manufacturing, District Mining Officer, who is also the Nodal Officer for fly ash utilisation, is ensuring strict compliance of certain vital instructions issued in connection with conventional brick making by MoEF i.e. mixing a minimum of 25% fly ash with clay and fixed chimney in place of moving kilns.

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2. Reclamation of Low Lying Areas

Reclamation of low lying areas with pond ash has been identified by C.G State Electricity Board, Korba (East), near Risdi Ash Bund for a total of about 13 hectares, which will consume nearly 462000 MT of pond ash. Another low lying area of approximately 7.39 hectares of revenue land near village Dumarmuda, Tehsil Katghora has been identified by C.G State Electricity Board, Korba (West), which will consumed nearly 500000 MT of pond ash from Lotlota ash dyke Balco has identified a low lying area of about 2.2 hectares of land for construction of coal handling plant near Balco Captive Power Plant at village Kendaikhar. 3. Road Making Balco is utilising pond ash/bottom ash for construction/widening of aproximately 82 km. Long Urga - Hati road which is proposed to consume nearly 10000 MT pond ash and bottom ash. RES has constructed two rural roads using fly ash in village Ajgarbahar area.

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4. Mine Stowing

NTPC, Korba is in the process of utilising fly ash for stowing of Balgi underground mine of SECL at Korba area after obtaining technical feasibility and sample testing report from CMRI, Dhanbad. This mine stowing activity shall consume about 3000000 MT of fly ash. 5. Other Activities The Regional office of C.G Environment Conservation Board at Korba, which is the first of its kind in the state, conducts meetings, seminars and workshops on fly ash utilisation and this office has been instrumental in providing necessary information regarding diversified and environment friendly effective utilisation of fly ash. In order to achiev the target of 100% fly ash utilisation in the forthcoming years all the thermal power plants, Govt. Works Departments and SECL Management of Korba, Kushmunda and Gevra area have been asked for maximum utilisation of fly ash in all construction activities as an integral part of their projects. The district Administration, Korba has also taken serious note of pollution caused during transportation of fly ash. To control this menace, the administration has instructed all TPPs and cement manufacturers to deploy closed tankers for bulk and pollution free transportation. Two such tankers have been deployed by NTPC, Korba. Similarly administration has taken earnest steps to control fugitive emission from ash dyke areas and has deployed shift wise personnel under strict vigilance to ensure continuous water sprinkling in ash dyke. The District Administration has also evolved a well orchestrated effort in creating mass awareness by floating populistic slogans amongst to the public, the media and enterpreneurs viz.

42

IMPORTANCE OF NTPC IN CHHATISGARH


Chhattisgarh to get 2,000 Mw from upcoming NTPC project Kolkata/ Raipur: The National Thermal Power Corporation (NTPC) will give 2,000-Mw of power to Chhattisgarh at a nominal price from its proposed 4,000-Mw power project in Raigarh district.

The state government and the largest power producer of the country inked an agreement yesterday to this effect. Under the deal, NTPC will sell 2000-Mw of power to Chhattisgarh government at Rs 2.50 per unit from its 4,000-Mw Lara power project.

The project, with have super critical technology, will have eight units of 800-Mw each. The project is scheduled to be completed and commissioned in the 12th five-year-plan by 2017. States and Union territories of the Western region will be the beneficiaries. NTPC had signed a Memorandum of Understanding (MoU) with the Chhattisgarh on July 12, 2009 for the Lara power project in the coal-rich pocket of Raigarh district, about 300 km north-east of Raipur. The company has already been allotted a coal mine in the area. The development of the mine is in progress. As per the MoU, the NTPC will sell 50 per cent of power generated in the Lara project to the state. The condition to get half of the power produced in the project was put by the government in return for land and water it would give for the construction of the plant.

The agreement to sell 2,000 Mw power from the project to the state was finally sealed yesterday. Raipur, Jan 2 (IANS) The second 500 MW stage-II unit of the state-owned National Thermal Power Corps (NTPC) Sipat project in Chhattisgarh has begun commercial production, a company official said Friday. The approved capacity of Sipat Super Thermal Power Project, located some 140 km from here in Bilaspur district, is 2,980 MW. The second 500 MW unit in the stage-II began commercial production from Thursday. the first 500 MW units was commissioned in June 2008, the official said.

43 ACHIVEMENT OF NTPC Top Liner Maharatna Award to NTPC. SCOPE Excellence Award to Shri Arup Roy Choudhury, CMD, NTPC . PSU Excellence Award for NTPC . Enertia Awards for NTPC Projects & Shri D K Jain, Director (Technical), NTPC Ltd receives award for Excellence in Nuclear, Thermal (Conventional Energy). Vishwakarma Award for 12 NTPC Employees Prime Ministers Shram Award to NTPCs Misri Lal Choudhary The Best Performing CFO Award India Pride Awards Energy and Power Category Enertia Award 2010 SAFA Best Presented Accounts Awards 2008 CII-EXIM Excellence Award, 2010 National Awards for Meritorious Performance

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52 CASH MANAGEMENT

Introduction: Cash management is a broad term that refers to the collection, concentration, and disbursement of cash. It encompasses a company's level of liquidity, its management of cash balance, and its short-term investment strategies. In some ways, managing cash flow is the most important job of business managers. If at any time a company fails to pay an obligation when it is due because of the lack of cash, the company is insolvent. Insolvency is the primary reason firms go bankrupt. Obviously, the prospect of such a dire consequence should compel companies to manage their cash with care. Moreover, efficient cash management means more than just preventing bankruptcy. It improves the profitability and reduces the risk to which the firm is exposed. Cash management is particularly important for new and growing businesses. As Jeffrey P. Davidson and Charles W. Dean indicated in their book Cash Traps, cash flow can be a problem even when a small business has numerous clients, offers a superior product to its customers, and enjoys a sterling reputation in its industry. Companies suffering from cash flow problems have no margin of safety in case of unanticipated expenses. They also may experience trouble in finding the funds for innovation or expansion. Finally, poor cash flow makes it difficult to hire and retain good employees. It is only natural that major business expenses are incurred in the production of goods or the provision of services. In most cases, a business incurs such expenses before the corresponding payment is received from customers. In addition, employee salaries and other expenses drain considerable funds from most businesses. These factors make effective cash management an essential part of any businesses financial

Planning "Cash is the lifeblood of a [store]," wrote Richard Outcalt and Patricia Johnson in Playthings. "Without cash for inventory, payroll, and other expenses, an emergency is imminent."

53 When cash is received in exchange for products or services rendered, many small business owners, intent on growing their company and tamping down debt, spend most or all of these funds. But while such priorities are laudable, they should leave room for businesses to absorb lean financial times down the line. The key to successful cash management, therefore, lies in tabulating realistic projections, monitoring collections and disbursements, establishing effective billing and collection measures, and adhering to budgetary restrictions.

Objectives of cash management:

There are two basic objectives of cash management. They are To meet the cash disbursement needs as per the payment schedule. To minimize the amount locked up as cash balances.

Basic problems in Cash Management:


Cash management involves the following four basic problem given below :-

1. Controlling level of cash Determining the amount of cash to be retained in hand / in current accounts/ in units is the most important part of cash management. Most of the times businesses are able to project the extent of their cash payment .However at times emergency situations may arise when payments have to be made urgently .Hence most of companies like to retain minimum level of free cash for meeting exigencies. However determining what constitutes the minimum cash is a very difficult decision. 2. Controlling inflows of cash Forecasting accurately the inflows from sale of goods is another important part of managing cash. This helps the company in tagging the payments along with the projected inflows and determines cash levels. However during turbulent business environment or in scenarios if extreme competition accurately predicting the correct amount of cash inflows becomes a near impossible task for companies? 3. Controlling outflows of cash All businesses like to have stringent control on the outflow of cash. Ideal condition will be to accurately predict the periodicity and quantum of payments. Though companies tries to keep outflows on a tight leash many times the payment requirements may not match with the best

54 laid plans since as in the case of inflows outflows are also governed by external factors mostly beyond the control of the firms. 4. Optimum investment of surplus cash The deployment of surplus cash in a profitable manner is another important challenge in Cash Management. This process of managing the funds so as to ensure smooth working of business while earning good interest on idle funds is known as treasury management. Funds when invested for longer periods generate higher income while short term investment normally lower returns. However, blocking funds in long term investments reduces flexibility in payments that comes along with a highly liquid cash position. Hence Treasury management usually involves a trade off between liquidity and profitability from the investment of funds. Determining safety level for cash: The finance manager has to take into account the minimum cash balance that the firm must keep to avoid risk or cost of running out of funds. Such minimum level may be termed as safety level of cash. The finance manager determines the safety level of cash separately

both for normal periods and peak periods. Under both cases he decides about two basic factors. They are1. Desired days of cash: It means the number of days for which cash balance should be sufficient to cover payments. 2. Average daily cash flows: This means average amount of disbursements which will have to be made daily.

3. Criteria for investment of surplus cash: In most of the companies there are usually no formal written instructions for investing the surplus cash. It is left to the discretion and judgment of the finance manager. While exercising such judgment, he usually takes into consideration the following factors.

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Security:
This can be ensured by investing money in securities whose price remains more or less stable.

Liquidity: This can be ensured by investing money in short term securities including short term fixed deposits with banks.

Yield:
Most corporate managers give less emphasis to yield as compared to security and liquidity of investment. So they prefer short term government securities for investing surplus cash.

Maturity:
It will be advisable to select securities according to their maturities so the finance manager can maximize the yield as well as maintain the liquidity of investments.

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Cash Management in NTPC: Concept:Cash management has changed significantly over the past 2 decades for two reasons. First, from the early 1970s to the late 1980s, there was an upward trend in interest rate that increased the opportunity cost of holding cash. This encouraged financial manager to search for more efficient ways of managing cash. Second, technological developments, particularly computerized electronic funds transfer mechanism changed the way cash is managed. Most cash management activities are performed jointly by the firm and its banks. Effective cash management encompasses proper management of cash inflow, and outflows, which entails (1) improving forecasts of cash flows, (2) synchronizing cash inflows and outflows, (3) using floats, (4) accelerating collections, (5) getting available funds to where they are needed, and (6) controlling disbursement. Most businesses are conducted by large firms, many sources and make payments from a number of different cities or even countries. For example, companies such as IBM, General Motors, and Hewlett-Packard have manufacturing plants all around the world, even more sales offices, but most of the payments are made from the cities where manufacturing occurs, or else from the head office. Thus a major corporation might have hundreds of bank accounts, and since there is no reason to think that inflows and outflows will balance in each account, a system must be in place to transfer funds from where they come into where they are needed, to arrange loans to cover net corporate shortfalls, and to invest net corporate surpluses without delay. The efficiency of the firm's cash management programme can be enhanced by the knowledge and use of various procedures aimed at a. Accelerating cash inflows, and b. Controlling cash outflows

57 With reference to the control of inflows and outflows, float is an important technique to reduce the length of the cash cycle. When a firm receives or makes payments in the form of Cheque etc., there is usually a time gap between the time the Cheque is written and when it is cleared. This time gap is known as float. The float for the paying firm refers to the time that elapses bank balance exceeds the book balance. However, if the available bank balance is less than the book balance, then the firm has net negative float. If a firm has positive net float (i.e. the payment float is more than the receipt float), it can issue more Cheque even if the net bank balance shown by the books of account may not be sufficient. A firm with a positive net float can use it to its advantage and maintain a smaller cash balance than it would have in the absence of the float. For example, a firm has a payment float of Rs. 1,00,000 and receipt float of Rs, 80,000. This firm has positive net float, which may be ascertained as follows: Net float=Payment float-Receipt float = Rs. 1,00,000 - 80,000= Rs. 20,000. The course of action adopted by a firm to manage the payment and the receipt float is known as playing the float, which has emerged as an important technique of cash management in most of the firms. Float management helps avoiding stagnation of funds. Money paid by Cheque by customers to the firm but not yet available to the latter, as it is tied in the float is stagnant money. Similarly, Cheque issued but no presented t the firm's bank is stagnant money. This can be used by a proper and careful float management.

Since what matters is the available balance, as a finance manager you should try to maximize the net float. This means that you should strive to speed up collections and delay disbursements.

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MANAGEMENT OF FLOAT Speeding Up Collections


When a company receives payments through Cheque that arrive by mail, all the three components of collection time are relevant. The financial manager should take steps for speedy recovery from debtors and for this purpose proper internal control system should be installed in the firm. Once the credit sales have been affected, there should be a built-in mechanism for timely recovery from the debtors. Periodic statements should be prepared to show the outstanding bills. Incentives offered to the customers for early / prompt payments should be well communicated to them. Once the cheques / drafts are received from customers, no delay should be there in depositing these receipts with the banks. The time lag in collection of receivables can be considerably reduced by managing the time taken by postal intermediaries and banks. To speed up collection, companies may also use lockboxes and concentration banking which are essentially systems for expeditious decentralized collection.

Lock Boxes
Under a lock box system, customers are advised to mail their payments to special post office boxes called lockboxes, which are attended to by local collection banks, instead of sending them to corporate headquarters.

The local bank collects the Cheque from the lock box once or more a day, deposits the Cheque directly into the local bank account of the firm, and furnishes details to the firm. Thus the lock box system (i) cuts down the mailing time, because Cheque are received at a nearby post office instead of at corporate headquarters, (ii) reduces the processing time because the company does not have to open the envelopes and deposit the Cheque for collection, and (iii) shortens the availability delay because the Cheque are typically drawn on local banks.

In India, the lock=box system is not popular. However, commercial banks usually provide service to their large clients of (i) collecting the cheques from the office of the client, and (ii) sending the high value cheques to the clearing system on the same day. Both these services

59 help reducing the float of the large clients. However, these benefits are not free. Usually, the bank charges a fee for each cheque processed through the system. The benefits derived from the acceleration of receipts must exceed the incremental costs of the lock box system, or the firm would be better without it.

When is it worthwhile to have a lock box? The answer depends on the costs and benefits of maintaining the lock box. Suppose that your company is thinking of setting up a lock box. You gather the following information:

Average number of daily payments : 50 Average size of payment : Rs. 8000 Savings in mailing and processing time : 2 days Annual rental for the lock box : Rs. 3000 Bank charges for operating the lock box : Rs. 72,000 Interest rate : 15% lock day box x will Rs. increase 8,000 per your item company's x 2 days collected saved = balance Rs by:

The 50 items

800,000

The annual benefit in the form of interest saving on account of this is: Rs 800,000 x 0.15= Rs 120,000 The annual cost of the lock box is: Rs 3,000 (rental) + Rs 72,000 (bank charges) = Rs 75,000 Since the interest saving exceeds the cost of the lock box, it is advantageous to set up the lock box. More so because your company also saves on the cost of processing the Cheque internally.

Concentration Banking
A firm may open collection centers (banks) in different parts of the country to save the postal delays. This is known as concentration banking. Under this system, the collection centers are opened as near to the debtors as possible, hence reducing the time in dispatch,

60 collection etc. The firm may instruct the customers to mail their payments to a regional collection centre / bank rather than to the Central Office. The Cheque received by the regional collection centre are deposited for collection into a local bank account. Surplus funds from various local bank accounts are transferred regularly (mostly daily) to a concentration account at one of the company's principal banks. For effecting the transfer several options are available. With the vast network of branches set up by banks regional / local collection centres can be easily established. To ensure that the system of collection works according to plan, it is helpful to periodically audit the actual transfers by the collecting banks and see whether they are are in conformity with the instruction given.

The concentration banking results in saving of time of collection, and hence results in better cash management. However, the selection of collection centres must be based on the volume of billing / business in a particular geographical area. It may be noted that the concentration banking also involve a cost in terms of minimum cash balance required with a bank or in the form of normal minimum cost of maintaining a current account. Concentration banking can be combined with the lock box arrangement to ensure that the funds are pooled centrally as quickly as possible.

Electronic Fund Transfer


The banking system has responded to the growing need to speed up the transfer of money from one firm to another. For example, the 'CHAPS' system in the UK (Clearing House Automated Payments System) permits same-day cheque clearance and CHIPS (Clearing House Inter bank Payment System), a computerized network, enables the electronic transfer of international dollar payments. These systems provide two benefits to the larger firms, which use them. First, there is greater certainty as to when money will be received and section, they can reduce the time that money is in the banking system. Companies can take other action to create a beneficial float. They could bank frequently to avoid having cheques remaining in the accounts office for more than a few

61 hours. The could also encourage customers to pay on time, or even in advance, of the receipt of goods and services by using the direct debit system through which money is automatically transferred from one account to another on a regular basis. Many UK consumers now pay direct debit. In return they often receive a small discount. From the producer's viewpoint this not only reduces the float but also avoids the onerous task of chasing late payers. Also retailers now have terminals which permit electronic funds transfer at the point of sale (EFTPOS) - money taken from customers accounts electronically using debit card.

Delaying Payments
Just as a firm can increase its net float by speeding up collections, it can also do so by slowing down disbursements. A common temptation is to increase the mail time. For example, Acme Ltd. may pay its suppliers in Cochin with Cheque sent from its Calcutta office and its suppliers in Ludhiana with Cheque mailed from its Chennai office. However such gimmicks provide only a short-term benefit and finally turn out ot be self-defeating when suppliers discover the poly and adjust their price and credit terms appropriately. While maximizing disbursement float is a questionable practice, a firm can still payments. The following may be one in this respect. Ensure that payments are made only when they fall due and not early. Centralize disbursements. This helps in consolidating funds at the head office,

scheduling payments more effectively, reducing unproductive cash balances at region / local offices, and investing funds more productivity. However, care must be taken that the goodwill and credit rating of the firm is not affected. Payments to creditors need not be delayed otherwise it may be difficult to secure trade credits at a later stage.Arrange with suppliers to set the due dates of their bills to match with company's receipts. Synchronization of cash outflows with cash inflows helps a company to get greater mileage from its cash resources.

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ELECTRONIC DATA INTERCHANGE: WILL THE FLOAT DISAPPEAR?


Electronic data interchange (EDI) refers to direct, electronic exchange of information between various parties. Financial EDI or FEDI, involves electronic transfer of information and funds between transacting parties. FEDI leads to elimination of paper invoices, paper Cheque, mailing handling and so on. Under FEDI, the seller sends the bill electronically to the buyer, the buyer electronically authorizes its bank o make payment, and the bank transfers funds electronically to the account of the seller at a designed bank. The net effect is that the time required to complete a business transaction is shortened considerably thereby virtually eliminating the float. Currently one of the drawbacks of FEDI is that it is expensive and complex to set up the drawbacks of FEDI is that it is India. Further, many parties may not ready or willing to participate in it. However with the advancements in technology and the growth of Internet, e-commerce costs will fall significantly. This will induce more parties to participate in FEDI. As Ross (Wererfiled and Jordan Say: " As the use of FEDI increases (which it will) float management will evolve to focus much more on issues surrounding computerized information exchange and funds transfer.

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INTERNATIONAL CASH MANAGEMENT


Cash Management domestic firms to child's play compared with that in large Multinational Corporation operating in dozens of countries, each with its own currency, banking system and legal structure. Unilever for example manufactures and sells allover the world. To operate effectively Unilver has numerous bank accounts so that some banking transactions can take place near to the point of business transaction can take place near to the point of business. Sales receipts from America will be paid into local banks there, likewise many operating expenses will be paid for with funds drawn from those same banks. The problem for Unilever is that some of those bank accounts will have high inflows and others high outflows, so interest could be payable on one while funds are lying idel or earning a low rate of return in another. Therefore, as well as taking advantage of the benefit of having local banks carry out local transactions, large firms need to set in place a co-coordinating system to ensure that funds are transferred from where there is surplus to where they are needed. A single centralized cash management system is an unattainable idea for these companies, although they are edging towards it. For example, suppose that you are the treasurer of a large multination company with operations through out Europe. You could allow the separate business to manage their own cash but that would be costly and would almost certainly result in each one accumulating little hoards of cash. The solution is to set up a regional system. In this case the company establishes a local concentration account with a bank in each country. Then any surplus cash is swept daily into central multicurrency accounts in London or another European banking center. This cash is then invested in marketable securities or used to finance any subsidiaries that have a cash shortage. Payments also can be made out of the regional center. For example, to pay wages in each European country, the company just needs to send its principal bank a computer file with details of the payment to be made, the bank then finds the least costly way to transfer the for the funds to be credited on the correct day to the employees in each country. Most large multinationals have several banks in each country, but the more banks they use, the less control they have over their cash balances. So development of regional cash management system favors banks that can offer a worldwide branch network.

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Analysis of Cash Ratios


Cash to current assets ratio:

This ratio establishes the relationship between the cash and the current assets. It is calculated as follows

Cash to Current Asset

Current Cash 2007 2008 2009 2010 60783 84714 133146 149332 Asset 102705 126958 181351 215134 Ratio 0.59 0.67 0.73 0.69

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0.74 0.72 0.7 0.68 0.66 0.64 0.62 0.6 2005 2005 2006 2006 2007 2007 2008 2008

INFERENCE:
From the above table it can be inferred that the cash to current assets Ratio is shown it is 1.4% in the year 2007 and increased till 2010.

CASH TO CURRENT IABILITIES RATIO:This ratio establishes the relationship between the cash and current liabilities. It is calculated as follows.

Cash to Current Liabilities Current Cash 2007 2008 2009 2010 60783 84714 133146 149332 Asset 52306 49102 54221 55483 Ratio 1.16 1.73 2.46 2.69

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INTERPRETATION: From the above table it can be inferred that the proportion cash to current liabilities ratio is shown decreasing trend. It is 13.40% in the year 2007-08 & decreased to 0.74% in the year 2009-10. Cash Management in Troubled Times Many small business experience cash flow difficulties, especially during their first years of operation. But entrepreneurs and managers can take steps to minimize the impact of such problems and help maintain the continued viability of the business. Suggested steps to address temporary cash flow problems include:

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Create a realistic cash flow budget that charts finances for both the short term (30-60 days) and longer term (1-2 years).

Redouble efforts to collect on outstanding payments owed to the company. "Bill promptly and accurately," counseled the Journal of Accountancy. "The faster you mail an invoice, the faster you will be paid. If deliveries do not automatically trigger an invoice, establish a set billing schedule, preferably weekly." Businesses should also include a payment due date.

Offer small discounts for prompt payment. Consider compromising on some billing disputes with clients. Small business owners are understandably reluctant to consider this step, but in certain cases, obtaining some casheven if your company is not at fault in the disputefor products sold/services rendered may be required to pay basic expenses.

Closely monitor and prioritize all cash disbursements. Contact creditors (vendors, lenders, and landlords) and attempt to negotiate mutually satisfactory arrangements that will enable the business to weather its cash shortage (provided it is a temporary one). In some cases, you may be able to arrange better payment terms from suppliers or banks. "Better credit terms translate into borrowing money interest-free," states the Journal of Accountancy.

Liquidate superfluous inventory. Assess other areas where operational expenses may be cut without permanently disabling the business, such as payroll or goods/services with small profit margins. "Every operation struggling for survival is losing money in some of its components," observed Outcall and Johnson. "[As you analyzed your business], you probably noticed some places where cash was bleeding out of your business without an adequate return. Plan to step the bleeding; that iscut out the losers."

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Growth of year

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ACCOUNTING POLICIES
1. BASIS OF PREPARATION The financial statements are prepared on accrual basis of accounting under historical cost convention in accordance with generally accepted accounting principles in India and the relevant provisions of the Companies Act, 1956 including accounting standards notified there under. 2. USE OF ESTIMATES The preparation of financial statements requires estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses during the reporting period. Although such estimates and assumptions are made on a reasonable and prudent basis taking into account all available information, actual results could differ from these estimates & assumptions and such differences are recognized in the period in which the results are crystallized.
3. GRANTS-IN-AID 3.1

Grants-in-aid received from the Central Government or other authorities towards capital

expenditure as well as consumers' contribution to capital works are treated initially as capital reserve and subsequently adjusted as income in the same proportion as the depreciation written off on the assets acquired out of the grants. 3.2 Where the ownership of the assets acquired out of the grants vests with the government, the grants are adjusted in the carrying cost of such assets. 3.3 Grants from Government and other agencies towards revenue expenditure are recognized over the period in which the related costs are incurred and are deducted from the related expenses. 4. FIXED ASSETS 4.1 Fixed Assets are carried at historical cost less accumulated depreciation. 4.2 Expenditure on renovation and modernisation of fixed assets resulting in increased life and/or efficiency of an existing asset is added to the cost of related assets. 4.3 Intangible assets are stated at their cost of acquisition less accumulated amortisation. 4.4 Capital expenditure on assets not owned by the Company is reflected as a distinct item in Capital Work-in- Progress till the period of completion and thereafter in the Fixed Assets. 4.5 Deposits, payments/liabilities made provisionally towards compensation, rehabilitation and other expenses relatable to land in possession are treated as cost of land. 4.6 In the case of assets put to use, where final settlement of bills with contractors is yet to be effected, capitalization is done on provisional basis subject to necessary adjustment in the year of final settlement.

70 4.7 Assets and systems common to more than one generating unit are capitalised on the basis of engineering estimates/assessments. 5. CAPITAL WORK-IN-PROGRESS 5.1 In respect of supply-cum-erection contracts, the value of supplies received at site and accepted is treated as Capital Work-in-Progress. 5.2 Administration and general overhead expenses attributable to construction of fixed assets incurred till they are ready for their intended use are identified and allocated on a systematic basis to the cost of related assets. 5.3 Deposit works/cost plus contracts are accounted for on the basis of statements of account received from the contractors. 5.4 Unsettled liability for price variation/exchange rate variation in case of contracts are accounted for on estimated basis as per terms of the contracts. 6. OIL AND GAS EXPLORATION COSTS 6.1 The Company follows `Successful Efforts Method' for accounting of oil & gas exploration activities. 6.2 Cost of surveys and prospecting activities conducted in search of oil and gas are expensed off in the year in which these are incurred. 6.3 Acquisition and exploration costs are initially capitalized as `Exploratory Wells-inProgress' under Capital Work-in- Progress. 7. DEVELOPMENT OF COAL MINES Expenditure on exploration of new coal deposits is capitalized as `Development of coal mines' under Capital Work-in- Progress till the mines project is brought to revenue account. 8. FOREIGN CURRENCY TRANSACTIONS 8.1 Foreign currency transactions are initially recorded at the rates of exchange ruling at the date of transaction. 8.2 At the balance sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary items denominated in foreign currency are reported at the exchange rate ruling at the date of transaction. 8.3 Exchange differences (loss), arising from translation of foreign currency loans relating to fixed assets/capital work-in-progress to the extent regarded as an adjustment to interest cost are treated as borrowing cost. 8.4 Exchange differences arising from settlement / translation of foreign currency loans (other than regarded as borrowing cost), deposits / liabilities relating to fixed assets / capital work-in-progress in respect of transactions entered prior to 01.04.2004, are adjusted in the

71 carrying cost of related assets. Such exchange differences arising from settlement / translation of long term foreign currency monetary items in respect of transactions entered on or after 01.04.2004 are adjusted in the carrying cost of related assets. 8.5 Other exchange differences are recognized as income or expense in the period in which they arise. 9. BORROWING COSTS Borrowing costs attributable to the fixed assets during construction/renovation and modernization are capitalized. Such borrowing costs are apportioned on the average balance of capital work-in-progress for the year. Other borrowing costs are recognized as an expense in the period in which they are incurred. 10. INVESTMENTS 10.1 Current investments are valued at lower of cost and fair value determined on an individual investment basis. 10.2 Long term investments are carried at cost. Provision is made for diminution, other than temporary, in the value of such investments. 10.3 Premium paid on long term investments is amortised over the period remaining to maturity. 11. INVENTORIES 11.1 Inventories are valued at the lower of cost, determined on weighted average basis, and net realizable value. 11.2 The diminution in the value of obsolete, unserviceable and surplus stores and spares is ascertained on review and provided for. 12. PROFIT AND LOSS ACCOUNT 12.1 INCOME RECOGNITION 12.1.1 Sale of energy is accounted for based on tariff rates approved by the Central Electricity Regulatory Commission (CERC) as modified by the orders of Appellate Tribunal for Electricity to the extent applicable. In case of power stations where the tariff rates are yet to be approved, provisional rates are adopted. 12.1.2 Advance against depreciation considered as deferred revenue in earlier years is included in sales, to the extent depreciation recovered in tariff during the year is lower than the corresponding depreciation charged. 12.1.3 Exchange differences on account of translation of foreign currency borrowings recoverable from or payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are accounted as `Deferred Foreign Currency Fluctuation Asset/Liability'. The

72 increase or decrease in depreciation or interest and finance charges for the year due to the accounting of such exchange differences as per accounting policy no. 8 is adjusted in sales. 12.1.4 Exchange differences arising from settlement / translation of monetary items denominated in foreign currency (other than long term) to the extent recoverable from or payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are accounted as `Deferred Foreign Currency Fluctuation Asset/Liability' during construction period and adjusted in the year in which the same becomes recoverable/payable. 12.1.5 The surcharge on late payment/overdue sundry debtors for sale of energy is recognized when no significant uncertainty as to measurability or collectability exists. 12.1.6 Interest/surcharge recoverable on advances to suppliers as well as warranty claims/liquidated damages wherever there is uncertainty of realisation/acceptance are not treated as accrued and are therefore accounted for on receipt/acceptance. 12.1.7 Income from consultancy services is accounted for on the basis of actual progress/technical assessment of work executed, in line with the terms of respective consultancy contracts. Claims for reimbursement of expenditure are recognized as other income, as per the terms of consultancy service contracts. 12.1.8 Scrap other than steel scrap is accounted for as and when sold. 12.1.9 Insurance claims for loss of profit are accounted for in the year of acceptance. Other insurance claims are accounted for based on certainty of realisation.

73 12.2 EXPENDITURE

12.2.1 Depreciation is charged on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956 except for the following assets at the rates mentioned below:

a) Kutcha Roads 47.50 b) Enabling works - Residential buildings including their internal electrification. - Non-residential buildings including their internal electrification, water supply, sewerage & drainage works, railway sidings, aerodromes, helipads and airstrips

47.50

06.33 %

19.00 %

c) Personal computers and Laptops including 19.00 % peripherals d) Photocopiers and Fax Machines 19.00 %

e) Air conditioners, Water coolers and 08.00 % Refrigerators

12.2.2 Depreciation on additions to/deductions from fixed assets during the year is charged on pro-rata basis from/up to the month in which the asset is available for use/disposal. 12.2.3 Assets costing up to Rs.5000/- are fully depreciated in the year of acquisition. 12.2.4 Cost of software recognized as intangible asset, is amortised on straight line method over a period of legal right to use or 3 years, whichever is earlier. Intangible assets - Others are amortized on straight line method over the period of legal right to use. 12.2.5 Where the cost of depreciable assets has undergone a change during the year due to increase/decrease in long term liabilities on account of exchange fluctuation, price adjustment, change in duties or similar factors, the unamortised balance of such asset is charged prospectively over the residual life. 12.2.6 Where the life and/or efficiency of an asset is increased due to renovation and modernization, the expenditure thereon along-with its unamortized depreciable amount is charged prospectively over the revised useful life determined by technical assessment.

74 12.2.7 Machinery spares which can be used only in connection with an item of plant and machinery and their use is expected to be irregular, are capitalised and fully depreciated over the residual useful life of the related plant and machinery. 12.2.8 Capital expenditure on assets not owned by the company is amortised over a period of 4 years from the year in which the first unit of project concerned comes into commercial operation and thereafter from the year in which the relevant asset becomes available for use. However, such expenditure for community development in case of stations under operation is charged off to revenue. 12.2.9 Leasehold lands other than acquired on perpetual leases are amortized over the lease period. Leasehold buildings are amortised over the lease period or 30 years, whichever is lower. Leasehold land and buildings, whose lease periods are yet to be finalized, are amortised over a period of 30 years. 12.2.10 Expenses on ex-gratia payments under voluntary retirement scheme, training & recruitment and research and development are charged to revenue in the year incurred. 12.2.11 Preliminary expenses on account of new projects incurred prior to approval of feasibility report/techno economic clearance are charged to revenue. 12.2.12 Actuarial gains/losses in respect of `Employee Benefit Plans' are recognised in the statement of Profit & Loss Account. 12.2.13 Net pre-commissioning income/expenditure is adjusted directly in the cost of related assets and systems. 12.2.14 Prepaid expenses and prior period expenses/income of items of Rs.100,000/- and below are charged to natural heads of accounts. 12.2.15 Carpet coal is charged off to coal consumption. However, during pre-commissioning period, carpet coal is retained in inventories and charged off to consumption in the first year of commercial operation. Transit and handling losses of coal as per norms are included in cost of coal. 13. FINANCE LEASES 13.1 Assets taken on lease are capitalized at fair value or net present value of the minimum lease payments, whichever is lower. 13.2 Depreciation on the assets taken on lease is charged at the rate applicable to similar type of fixed assets as per accounting policy no. 12.2.1. If the leased assets are returnable to the lessor on the expiry of the lease period, depreciation is charged over its useful life or lease period, whichever is shorter.

75 13.3 Lease payments are apportioned between the finance charges and outstanding liability in respect of assets taken on lease. 14. PROVISIONS AND CONTINGENT LIABILITIES A provision is recognised when the company has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are determined based on management estimate required to settle the obligation at the balance sheet date and are not discounted to present value. Contingent liabilities are disclosed on the basis of judgment of the management/independent experts. These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate. 15. CASH FLOW STATEMENT Cash flow statement is prepared in accordance with the indirect method prescribed in Accounting Standard (AS) 3 on `Cash Flow Statements'.

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CONCLUSION
1) Inventory management is an important area for cost reduction and control -a major portion of working capital comprises of inventory. 2) The computation of turnover ratio and average period, holding period for inventory has spotlighted that the company position is good, 3) Closer analysis of inventory shows that on the whole the total inventory has registered an increase throughout the period.

RECEIVABLE MANAGEMENT
1) The computation of turnover ratio and average collection period for receivables has spotlighted that the receivables has been showing increasing trend

CASH MANAGEMENT
1) The cash in the company represents cash on hand, remittances in transit, deposits and current accounts with scheduled banks 2) NTPC has a good liquidity position and cash position is sufficient to meet all short term liabilities. 3) The company has a good internal cash management system

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SUGGESTIONS

1. Improving forecasts of cash flows,

2. Synchronizing cash inflows and outflows,

3. Using floats,

4. Accelerating collections,

5. Getting available funds to where they are needed,

6. Controlling disbursement. Most businesses are conducted by large firms, many sources and make payments from a number of different cities or even countries.

BIBLIOGRAPHY

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1. NTPC Website (ntpc.co.in).

2. House Journal of K.S.T.P.P.

3. Company Information (NTPC).

4. Financial Management (S.M. Shukla.)

5. Annual Report of N.T.P.C.

6. Guideline for closing of accounts (K.S.T.P.S) 7. Other Informations (www.google.com,www.scribd.com) .