Corporate Governance

philosophy

In NTPC, Corporate Governance philosophy stems from our belief that corporate governance
is a key element in improving efficiency and growth as well as enhancing investor confidence.
The Corporate Governance philosophy is scripted as:

“As a good corporate citizen, the Company is committed to sound corporate practices based
on conscience, openness, fairness, professionalism and accountability in building confidence
of its various stakeholders in it thereby paving the way for its long term success.”

We believe that our company shall go beyond adherence to regulatory framework. Our
corporate structure, business and disclosure practices have been aligned to our Corporate
Governance Philosophy. Transparency, accountability, fairness and intensive communication
with stakeholders are integral to our functioning. We believe in system driven performance
and performance oriented systems. We accord highest priority to these systems and protect the
interests of all our shareholders, particularly the minority shareholders.

We have tried to blend growth and efficiency with governance and ethics. Our Board of
Directors, guided by the mission statement, formulate strategies and policies having focus on
optimizing value for various stakeholders like consumers, shareholders and the society at
large. Besides adhering to provisions of Listing Agreement we are also following guidelines
on Corporate Governance issued by Department of Public Enterprises, Government of India.

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

Diversified Expertise based Board drives our Company

NTPC Board, at present, comprises of six full time functional Directors and the Managing
Director who is also the Chairman of the company. Our Company’s 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. Our Company believes that Independent Directors
bring with them the rich experience followed in other companies resulting in imbibing the
best practices followed in the industry.

For details on Board of Directors please click here

Clear definition of roles and responsibilities of our Board of Directors leading to

decentralized decision making
Our Company’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

Our Company has taken adequate steps to form various Committees at the Board level to
focus attention on crucial issues before placing the same before the Board for consideration.
Some of these committees have been constituted voluntarily even though there is no legal
requirement under listing agreement. These include the ‘Projects Committee’ to consider and
decide on investment proposals before approval by the Board, ‘Contracts Committee’ to deal
with award of contracts upto a threshold limit set by the Board, ‘Committee on Management
controls’, to review various internal control systems and their compliance and
‘Investment/Contribution Sub-Committee’ for matters related to deployment of surplus funds,
approval of contributions/donations for national, public or charitable causes etc. 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’.

The Audit Committee was constituted in NTPC in 1995, much before it became a statutory
necessity under the Companies Act, in 2000. The Audit Committee ensures that truthful and
factual financial position of the company is presented to the Board and hence safeguards
integrity of the management.

Established Code of Conduct to promote ethical and responsible decision making

There are two separate Code 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.

For detailed Code of Conduct please click here

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). The
MOU system defines the evaluation criteria in advance on parameters like financials
performance, productivity, human resource development activities, project implementation,
operation performance in order to have objective evaluation of Central Public Sector
Enterprise (CPSE).

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. The performance reports of all directors are
reviewed by the Chairman & Managing Director and forwarded to the Ministry for evaluation.

Adopted a policy of making timely and balanced disclosures

We believe in disclosure of 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.

Going beyond Regulation, we think for our shareholders

NTPC has more than 9.67 lakh shareholders as on 31.12.08. About 99% of these are retail
shareholders and the Company besides appointing a Share Transfer Agent for servicing these
shareholders has set up an in-house Investor Services Department to ensure proper and timely
redressal of grievances of these small shareholders. As a pro-active investor friendly measure,
we had undertaken an exercise in August 2008 to credit unpaid dividend amounts by use of
supplementary ECS facility/ Direct Payment. Under this initiative, close to 49000 unpaid
warrants were paid amounting to Rs.1.23 crores.

Continuous efforts are being made to enlarge the number of locations for payment of
Dividend through Electronic Clearing System (ECS) etc.

Our Directors constantly interacts with the Institutional Investors to explain to them the
strategies and plans of the company. During such interactions, investors express various view
points on the sector and business of the company and the management, in turn, addresses their
concerns and explains the measures taken by the Company.

We also organize an annual investor and analyst conference where our entire Board meets
with the analyst and investing community and addresses to their queries and concerns about
the company.

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 nt
for identifying and capitalizing on opportunities to create value. In order to imbibe the best
practices prevalent in the industry, we have appointed a reputed Consultant to develop and
implement a Framework for Compliance under clause 49 of the listing agreements with
Bombay Stock Exchange/National Stock Exchange. After holding detailed deliberations
involving all the units of the Company, an elaborate enterprise wide Risk Management
Framework has been developed and risks are being reviewed periodically by the senior
management.

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 responsible corporate citizen since its inception. The
Company has also formulated and adopted Corporate Social Responsibility-Community
Development (CSR-CD) policy for taking up CSR activities in areas adjoining the power
stations. There is an established “NTPC Foundation” to address the niche domains of social
development at national level through strategic interventions.

BOARD OF DIRECTORS
Board of
Directors

Shri R.S. Sharma Chairman and Managing Director, NTPC Limited,

since May 01, 2008, has rich and varied experience spanning over thirty
seven years in the Indian power industry out of which he has spent 30
years in power projects and stations. A graduate in Mechanical
Engineering, Shri Sharma began his career in 1971 as Engineer in
Madhya Pradesh Electricity Board where he laid the foundations of his
exceptional expertise in the area of Operation & Maintenance of power
stations.

He joined NTPC in 1980 and worked in equipment erection and plant

maintenance areas prior to becoming head of various projects. He also
headed the Southern Region of the Company. Later he served as
Executive Director (Corporate Planning) and Executive Director
(Commercial) and looked after key areas of Strategic Planning and
Commercial Functions respectively.

Shri Sharma became Director (Commercial) in October, 2004 and took

numerous initiatives to ensure robust commercial success of NTPC. He
led NVVN, the trading arm of NTPC, to achieve a substantial share in the
power trading market. As Director (Commercial), he also led the team of
New Business Development in setting up various joint ventures, carrying
out the due process for a power exchange and the Company's
diversification into equipment manufacturing. He guided the efforts for
acquisition of coal mines abroad and led the team in preparing the road-
map for nuclear power. Besides his wide-ranging contribution to the
power industry and the Company, Shri Sharma has demonstrated high
commitment to corporate governance, corporate social responsibility and
value based leadership.
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
including equity issues, optimum utilization of funds, formulation of
company’s 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 31
years in the areas of Commercial, Engineering, Contracts & Materials
Management, Consultancy, Cost Engineering, Project co-ordination,
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 ¼th of NTPC’s 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 NTPC’s
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
capacity addition. In addition, he is the Director In- charge of Consultancy
and New Business Development activities. He is also part time Chairman
on the Board of Aravali Power Company Private Limited (1500 MW) and
part time Director on the Board of PTC India Limited, Meja Urja Nigam
Private Limited (1320 MW) and NTPC BHEL Power Projects Private
Limited. 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 NTPC’s 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, Indo–
Australia 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.
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 NTPC’s Captive Coal Blocks.
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 part-
time 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.
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 T. Venkatesh (48 years) has done his Post Graduation in
Mechanical Engineering and is an Indian Administrative Service
officer of 1988 batch of U.P. Cadre. Prior to his assignment as Jt.
Secy. (DOPT) in the Ministry of Personnel & Public Grievances &
Pension, he held various administrative posts including DM
(Bareilly), Commissioner (Gorakhpur) and Secretary (PWD) in the
state of Uttar Pradesh. He is looking after the work of Chief
Vigilance Officer of our company since October, 2009.
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 1970’s 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.
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
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 non-
official 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.
Shri T. Venkatesh,(48 years) has done his Post Graduation in
Mechanical Engineering and is an Indian Administrative Service officer
of 1988 batch of U.P. Cadre. Prior to his assignment as Jt. Secy. (DOPT)
in the Ministry of Personnel & Public Grievances & Pension, he held
various administrative posts including DM (Bareilly), Commissioner
(Gorakhpur) and Secretary (PWD) in the state of Uttar Pradesh. He is
looking after the work of Chief Vigilance Officer of our company since
October, 2009.