Ntpc

Overview

India's largest power company, NTPC was set up in 1975 to accelerate power development in India. NTPC is emerging as a diversified power major with presence in the entire value chain of the power generation business. Apart from power generation, which is the mainstay of the company, NTPC has already ventured into consultancy, power trading, ash utilisation and coal mining. NTPC ranked 341st in the '2010, Forbes Global 2000' ranking of the World's biggest companies. NTPC was awarded Maharatna status in May, 2010

The total installed capacity of the company is 34,854 MW (including JVs) with 15 coal based and 7 gas based stations, located across the country. In addition under JVs, 5 stations are coal based & another station uses naptha/LNG as fuel. The company has set a target to have an installed power generating capacity of 1,28,000 MW by the year 2032.

NTPC has been operating its plants at high efficiency levels. Although the company has 17.75% of the total national capacity, it contributes 27.40% 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. In February 2010, the Shareholding of Government of India was reduced from 89.5% to 84.5% through Further Public Offer. The rest is held by Institutional Investors and the Public.

At NTPC, People before Plant Load Factor is the mantra that guides all HR related policies. NTPC has been awarded No.1, Best Workplace in India among large organisations and the best PSU for the year 2010, by the Great Places to Work Institute, India Chapter in collaboration with The Economic Times.

The concept of Corporate Social Responsibility is deeply ingrained in NTPC's culture. Through its expansive CSR initiatives, NTPC strives to develop mutual trust with the communities that surround its power stations.

Governance

The company has a sound Corporate Governance mechanism in place built around following principles:

Diversified Expertise based Board

NTPC Board, at present, comprises of six full time functional Directors and the Managing Director who is also the Chairman of the company. The functional directors are highly experienced professionals in their functional areas, provide directions to the management on operational issues, adoption of systems and best practices in management and oversight of compliance of various legal and other requirements.

The Company has nine Independent Directors and two directors nominated by the administrative ministry. The Independent Directors on the Board of the company are appointed by the Government of India through an elaborate procedure of selection which encompasses induction of professionals and experts in relevant field through a "Search Committee" by the Government of India.

Clear definition of roles and responsibilities of Board of Directors leading to decentralized decision making

NTPC's framework is designed to enable the Board to provide strategic guidelines for the company the effective over-sight of management. The respective roles and responsibilities of Board Members and Senior Executives are clearly defined to facilitate accountability to company as well as its shareholders. This ensures a balance of authority so that no single individual has unfettered powers.

Delegation of decision making to various Committees of the Board

NTPC has taken steps to form various Committees at the Board level to focus attention on crucial issues before placing the same before the Board for consideration. These include the 'Projects Committee', 'Contracts Committee', 'Committee on Management controls' 'Investment/Contribution Sub-Committee'. Other Committees of the Board are- 'Audit Committee', 'Shareholders/Investors Grievance Committee' and 'Committee of the Board for allotment and post-allotment activities of the company's Securities'.

Established Code of Conduct to promote ethical and responsible decision making

There are two separate Codes of Conduct - one for Board Members and another for Senior Management Personnel in alignment with Company's Vision and Values to achieve the Mission & Objectives and aims at enhancing ethical and transparent process in managing the affairs of the Company. The Code of Conduct also covers issues relating to insider trading in the Company's security.

Established System of Accountability - Evaluation of Performance of Board of Directors

The performance of the Board and the Directors are evaluated by the Ministry of Power which is the administrative Ministry for the Company. For evaluating the performance of the company the Government has instituted a system of target setting which is agreed to between the company and the Government through a Memorandum of Understanding (MOU).

Performance of functional directors on the Board is also evaluated through a performance evaluation system at two levels- first evaluation at the level of Chairman & Managing Director and the second at the level of Ministry.

Policy of making timely and balanced disclosures

NTPC discloses all material matters concerning the company to all investors. The announcements about the company are based on factual details and presented in a clear and balanced way on regularly on its website and also to the regulators.

Establishing a Risk Management System

NTPC has formulated a Risk Management Policy in fiscal 2005 to institutionalize the risk management in the Company. The policy aims to identify, assess, monitor and manage risk for identifying and capitalizing on opportunities to create value.

Customer Relationship Management

NTPC engages itself in extending continuous support to all its stake holders including customers and it is regarded among its customers for its professionalism. Under its Customer Relationship Management (CRM) programme, the Company has started to offer services/support to customers in selected areas such as Operation & Maintenance, R&D Finance, IT etc with the explicit objective of overall power sector growth.

Undivided Commitment towards Society

NTPC has been a committed and socially