Overview of Organisation

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 317th in the ‘2009, Forbes Global 2000’ ranking of the
World’s biggest companies.

The total installed capacity of the company is 32,194 MW (including JVs) with 15 coal based and 7 gas based
stations, located across the country. In addition under JVs, 4 stations are coal based & another station uses
naptha/LNG as fuel. By 2017, the power generation portfolio is expected to have a diversified fuel mix with coal
based capacity of around 53,000 MW, 10,000 MW through gas, 9,000 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 18.10% 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 is among the largest five companies in India in terms of market capitalisation.
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 2009, 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.

Company History - 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 GoI

exemptinggovernment 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 sourcesand 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 Overviewon 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 Kailash 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 GoI

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

1988 - First syndicated Japanese loan of 30 billion JPY raised

1989 - Consultancy division of our Company launched First unit

(88 MW) of our Company.s 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 Feroze 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 GoI guarantee

1998 - Commissioned the first Naphtha based plant at

Kayamkulam with a capacity of 350 MW

1999 - Our Company.s Dadri thermal power project, Uttar

Pradesh adjudged the best in India with a PLF of 96.12%
Dadri thermal power project, Uttar Pradesh certified with
ISO 14001

2002 - Three wholly owned subsidiaries, viz., NTPC Electric

Supply Company Limited, NTPC Hydro Limited and NTPC
Vidyut Vyapar Nigam Limited incorporated ESP
[Electrostatic precipitators) set up at Talcher power plant
20,000 MW installed capacity mark exceeded

2003 - Our Company undertook debt re-structuring. Raised

funds through bonds (Series XIII and XIV) Construction of
first hydro-electric 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 Company.s Feroze Gandhi Unchahar Thermal station achieves
a record PLF of 87.43% in current year up from 18.02% in February
92 when it was taken over by us LIC extends credit facility for
Rs. 70 billion. Rs. 40 billion is in the form of unsecured loans and
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'
(Buisness Ethics, Customer Focus, Organisational Pride, Mutual
 Respect and Trust, Innovation and Speed and Total Quality for
Excellence) Our Company ranked as the Third Great Place to work
for in India for second time in succession by a survey conducted
by Grow Talent and Business World 2005

2006 - Badarpur Thermal Power Station having an installed capacity

of 705 MW transferred to our Company

2007 - MoC, GoI 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 Tonnes

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.

Power [Key Points | Financial Year '08 | Prospects | Sector Do's and
Dont's]
With the coming of Electricity Act 2003, the power sector, which was highly
regulated with lot of licensing requirements, is in the throes of a long
 awaited change. The licensing requirements have been reduced, as the
generation company will be free to enter distribution business and vice-a-
versa.

The generating capacity in India stood at 143,061 MW (1,253 bn units). Out

of this, the total generation was only about 704 bn units, due to lack of fuel
sufficiency. As a result, it has become necessary to resort to power cuts and
other regulatory measures to ration power supply.

Currently central institutions like National Thermal Power Corporation

(NTPC) and the State Electricity Boards (SEBs) dominate the power scene
in India. India has adopted a blend of thermal, hydel and nuclear sources
with a view to increasing the availability of electricity. Thermal plants at
present account for 64% (91,907 MW) of the total power generation, hydro-
electricity plants contribute 25% (35,909 MW) and the rest comes from
nuclear and wind.

Average transmission and distribution losses (T&D) exceed 25% of total

power generation compared to less than 15% for developing economies.
The T&D losses are due to a variety of reasons, viz., substantial energy sold
at low voltage, sparsely distributed loads over large rural areas, inadequate
investment in distribution system, improper billing, and high pilferage.
Key Points

Supply Many projects have been planned but due to slow

regulatory processes, especially in the distribution segment,
the supply is far lesser than demand. Currently, India needs
to double its generation capacity in the next 7 to 10 years to
meet the potential demand.

Demand The long-term average demand growth rate is 6% to 7% per

annum and is expected to grow at faster rate in the future.

Barriers to Barriers to entry are high, especially in the transmission and

entry distribution segments, which are largely state monopolies.
Also, entering the power generation business requires
heavy investment initially. The other barriers are fuel
linkages, payment guarantees from state governments that
buy power and retail distribution license.

Bargaining Not very high as government controls tariff structure.

power of However, this may change in the future.
suppliers
Bargaining Bargaining power of retail customers is low, as power is in
power of short supply. However government is a big buyer and
customers payment by government can be erratic, as has been seen in
the past.

Competition Not high currently. The Electricity Act 2003 aims to

encourage investments, thereby increasing competition.
TOP
Financial Year '08
 In FY08, the total power
generation figure for the
country stood at 704 bn
units as compared to 663
bn units in FY07, thus
representing a growth of
6.3% YoY. This was
largely on the back of
higher capacity addition
and improved plant load
factor. However, owing to sustenance in strong demand for electricity, the
shortages remained high, with the month of February 2008 recording a
shortage of as high as 14.5%.

The average PLF in the Central Public Sector Undertakings in FY08 was
much higher than that achieved by the SEBs as a whole. Wide inter-state
variations are noticed in the average PLF of thermal power plants with
southern and northern zones having better performances.

As far as T&D segments of the sector are concerned, there was little that
actually happened in FY08. The country continues to reel under the
pressure of higher T&D losses and with the government running very slow
with the reforms in these segments, the long-term sustainable growth of the
sector seems doubtful.
TOP

Prospects
Recognising that electricity is one of the key drivers for rapid economic
growth and poverty alleviation, the industry has set itself the target of
providing access to all households in next seven years. As per Census
2001, about 44% of the households do not have access to electricity.
Hence, meeting the target of providing universal access is a daunting task
requiring significant addition to generation capacity and expansion of the
transmission and distribution network.

Restoration of the financial health of SEBs and improvement in their

operating performance continue to remain a critical issue in the power
sector. The Electricity Act of 2003 contains provision for securitisation of
accumulated SEB dues.

On overall basis, power distribution has been loss-making business in

India. But with the privatization coming in, the investment in transmission
and distribution networking is expected to improve. Distribution business
has already been privatized in Delhi and a five years target has been set to
bring down its T&D losses from 52% to 31%. Following Delhi's example,
many states like Uttar Pradesh, Gujarat and Maharashtra are looking at
corporatising their distribution circles.
 Trading in electricity has
brought a sea change in
the structure of the
industry because some
parts of country are power
surplus and some are
deficient. Power trading
company buys power from
surplus area and sells it in
deficit area using and
transfers power through transmission lines. While the potential for power
trading is huge, the regulator has to play a key role in removing all
discrepancies that occur in terms of electricity pricing across trading
regions.