INSTITUTE OF MANAGEMENT TECHNOLOGY IMT

PGDM EX Full Time RLEB TERM- I

(BATCH: 2014-15)
Faculty Name: Dr. Rashmi Aggarwal

Roll No. : 140301022

Name: Vaibhav Prakash

Date: 8th Dec, 2014

Corporate Social Responsibility of NTPC | IMT Ghaziabad PGDM EX - FT | 140301022

CONTENTS
Introduction of the company..3
CSR as an issue of business compliance under the Companies Act 2013
....3
CSR Policy of the company.......4
Conclusion...12

Corporate Social Responsibility of NTPC | IMT Ghaziabad PGDM EX - FT | 140301022

Introduction of the company

NTPC Limited is the largest thermal power generating company of India. A public sector company, it was
incorporated in the year 1975 to accelerate power development in the country as a wholly owned
company of the Government of India. At present, Government of India holds 89.5% of the total equity
shares of the company and the balance 10.5% is held by FIIs, Domestic Banks, Public and others. Within
a span of 30 years, NTPC has emerged as a truly national power company, with power generating
facilities in all the major regions of the country. Based on 1998 data, carried out by Data monitor UK,
NTPC is the 6th largest in terms of thermal power generation and the second most efficient in terms of
capacity utilization amongst the thermal utilities in the world.
NTPC's core business is engineering, construction and operation of power generating plants and also
providing consultancy to power utilities in India and abroad. As on date the installed capacity of NTPC is
24,249 MW through its 13 coal based (19,980 MW), 7 gas based (3,955 MW) and 3 Joint Venture
Projects (314 MW). NTPC acquired 50% equity of the SAIL Power Supply Corporation Ltd. (SPSCL). This
JV company operates the captive power plants of Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74
MW). NTPC is also managing Badarpur thermal power station (705 MW) of Government of India.
NTPCs share on 31 Mar 2006 in the total installed capacity of the country was 19.51% and it contributed
27.68% of the total power generation of the country during 2005-06. NTPC has set new benchmarks for
the power industry both in the area of power plant construction and operations. It is providing power at the
cheapest average tariff in the country. With its experience and expertise in the power sector, NTPC is
extending consultancy services to various organizations in the power business.

CSR as an issue of business compliance under the Companies

Act 2013
CSR is built on four key points:

Reputation- Building trust in a company is a long, uphill battle, but losing it can have dramatic
effects on share prices and customer loyalty.
Retention and recruitment- Employees want to work for responsible companies that care about
their employees and contribute to society.
Operational efficiency- CSR can improve the bottom line by using materials efficiently and
minimizing waste.
Increased sales- Cause-related marketing, ethical and environmentally conscious labels, and
new product innovation can influence the top line.

The 2013 Act has introduced several provisions which would change the way Indian corporate do
business and one such provision is spending on Corporate Social Responsibility (CSR) activities. CSR,
which has largely been voluntary contribution, by corporate has now been included in law.
Section 135 of the 2013 Act states that every company having:
o net worth of Rs 500 crore or more, or
o turnover of Rs 1000 crore or more ,or
o net profit of Rs 5 crore or more during any financial year shall constitute a Corporate
Social Responsibility Committee of the Board
The committee would comprise of three or more directors, out of which at least one director shall
be an independent director
The mandate of the said CSR committee shall be:

Corporate Social Responsibility of NTPC | IMT Ghaziabad PGDM EX - FT | 140301022

to formulate and recommend to the Board, a Corporate Social Responsibility Policy,

which shall indicate the activities to be undertaken by the company as specified in
Schedule VII;
o to recommend the amount of expenditure to be incurred on the activities referred to
above;
o to monitor the Corporate Social Responsibility Policy of the company from time to time
The Board of every company referred to above shall after taking into account the
recommendations made by CSR Committee:
o approve the CSR Policy for the company and disclose contents of such Policy in its
report and also place it on the companys website, and
o ensure that the activities as are included in CSR Policy of the company are undertaken
by the company, and
o ensure that the company spends, in every financial year, at least two per cent of the
average net profits
If the Company fails to spend such amount, the Board shall, in its report specify the reasons for
not spending the amount
Average net profit shall be calculated in accordance with the provisions of section 198 of the
2013 Act
As per SCHEDULE VII, Section 135(3)a, Activities which may be included by companies in their
Corporate Social Responsibility Policies Activities relating to :
o eradicating extreme hunger and poverty;
o promotion of education;
o promoting gender equality and empowering women;
o reducing child mortality and improving maternal health;
o combating human immunodeficiency virus, acquired immune deficiency syndrome,
malaria and other diseases;
o ensuring environmental sustainability;
o employment enhancing vocational skills;
o social business projects;
o contribution to the Prime Minister's National Relief Fund or any other fund set up by the
Central Government or the State Governments for socio-economic development and
relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other
backward classes, minorities and women; and such other matters as may be prescribed

Corporate Social Responsibility

(1) Every company having net worth of rupees five hundred crore or more, or turnover of rupees one
thousand crore or more or a net profit of rupees five crore or more during any financial year shall
constitute a Corporate Social Responsibility Committee of the Board consisting of three or more
directors, out of which at least one director shall be an independent director.

(2) The Board's report under sub-section (3) of section 134 shall disclose the composition of the
Corporate Social Responsibility Committee.

(3) The Corporate Social Responsibility Committee shall,

(a) Formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall
indicate the activities to be undertaken by the company as specified in Schedule VII;

Corporate Social Responsibility of NTPC | IMT Ghaziabad PGDM EX - FT | 140301022

(b) Recommend the amount of expenditure to be incurred on the activities referred to in clause (a);
and
(c) Monitor the Corporate Social Responsibility Policy of the company from time to time.

(4) The Board of every company referred to in sub-section (1) shall,

(a) after taking into account the recommendations made by the Corporate Social Responsibility
Committee, approve the Corporate Social Responsibility Policy for the company and disclose
contents of such Policy in its report and also place it on the company's website, if any, in such
manner as may be prescribed; and
(b) Ensure that the activities as are included in Corporate Social Responsibility Policy of the company
are undertaken by the company.
(5) The Board of every company referred to in sub-section (1), shall ensure that the company spends,
in every financial year, at least two per cent. of the average net profits of the company made during
the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility
Policy: Provided that the company shall give preference to the local area and areas around it where it
operates, for spending the amount earmarked for Corporate Social Responsibility activities: Provided
further that if the company fails to spend such amount, the Board shall, in its report made under
clause (o) of sub-section (3) of section 134, specify the reasons for not spending the amount.

CSR Policy of the company

NTPC believes in growth with a human face, and pursuing people-centered development. NTPC is a
socially committed organization and a socially responsible corporate citizen. It attaches great importance
to discharging its overall social responsibilities to the community and the society at large where its
projects and stations are located. In this regard Resettlement and Rehabilitation (R&R) program becomes
an area of sharp focus, a program that addresses people affected directly or indirectly in the wake of the
projects undertaken by NTPC.
The Comprehensive Policy Framework
The R&R policy aims at improving the overall economic status of Project Affected Persons (PAPs). This is
achieved by providing opportunities in the fields of sustainable income, health, education, sanitation,
communication and other such areas. Community development activities are carried out in a transparent
and participative manner. Each program is based on the specific local requirement and guided by the
extensive Socio Economic Surveys (SES). This helps meet the objective of ensuring that the Project
Affected Persons (PAPs) improve or at least regain their previous standard of living. Efforts are made to
adopt a holistic approach to community development.
The R&R policy options and entitlements include:
Resettlement

Corporate Social Responsibility of NTPC | IMT Ghaziabad PGDM EX - FT | 140301022

Developed alternate free house plot in resettlement colony with necessary infrastructure facilities
or provisions for self resettlement.
Free transport arrangement for belongings and reusable material or suitable transport grant.
Infrastructure to be provided includes primary school, dispensary, panchayat ghar, drinking water
well/ hand pumps, WBM roads, drainage, Sulabh Sauchalaya etc.
Suitable Resettlement Grant etc.

Rehabilitation

Land for land on a willing buyer willing seller basis

Other rehabilitation options based on need and requirement
Capacity Addition Programmes

Suitable Rehabilitation Grants, Subsistence Allowance etc.

Other innovative measures like incentivizing purchase of land by the landless etc.
Additional Economic Opportunities as per need and requirement

Ash Utilization

Ash utilization is one of the key concerns at NTPC. The Ash Utilization Division, set up in 1991,
strives to derive maximum usage from the vast quantities of ash produced at its coal-based
stations. The division proactively formulates policy, plans and program for ash utilization. It further
monitors the progress in these areas and works at developing new fields of ash utilization.
The quality of ash produced conforms to the requirements of 3812. The fly ash generated at
NTPC stations is ideal for use in cement, concrete, concrete products, cellular concrete,
lightweight aggregates, bricks/blocks/tiles etc. This is attributed to its very low loss on ignition
value. To facilitate availability of dry ash to end-users all new units of NTPC are provided with the
facility of dry ash collection system. Partial dry ash collection systems have also been set up at
the existing stations where these facilities did not exist earlier. Augmentation of these systems to
100% capacity is presently in progress.
The various channels of ash utilization currently include use by a number of Cement, AsbestosCement products & Concrete manufacturing Industries, Land Development, Roads &
Embankments, Ash Dyke Raising, and Building Products. Area wise break-up of utilization for the
year 2004-05 is as under:

NTPC has adopted user friendly policy guidelines on ash utilization. These include actions
identified for:

Ash Collection & Storage System.

Facilities & Incentives to users.
Direct Department Activities.
Administrative & Financial aspects.

In order to motivate entrepreneurs to come forward with ash utilization schemes, NTPC offers
several facilities and incentives. These include free issue of all types of ash viz. Dry Fly Ash /
Pond Ash / Bottom Ash & infrastructure facilities, wherever feasible. Necessary help and
assistance is also offered to facilitate procurement of land, supply of electricity etc. from Govt.
Authorities.

Corporate Social Responsibility of NTPC | IMT Ghaziabad PGDM EX - FT | 140301022

Area of Utilization

Quantity (in Million Tons)

Land Development

4.55

Cement & Concrete

4.59

Roads/Embankments

0.6

Ash Dyke Raising

2.34

Bricks

0.2

Others

0.46

Total

12.74

Aforestation
The a forestation activities of the industrial region not only serve as foreground and background
landscape features but also contribute to the overall improvement in the environment. The crucial need
for conservation and restoration of the degraded ecosystem and preservation of genetic resources of the
country led to the enactment of the "Wild Life Protection Act" (1974) and "Forest Act" (1980) in addition to
legal Acts of Air, Water and Environment.
Maintenance of ecological balance and pristine environment therefore, has been of utmost importance at
NTPC. Environment planning and preservation is an integral part of its project activities. NTPC
undertakes a forestation program covering vast tracts of land in and around its projects in a concerted
bid to counter growing ecological threat.

NTPC' Approach
It has been possible to achieve a satisfactory combination of environmental quality and techno-economics
through determined efforts at NTPC for its projects. Continuous vigilance is maintained to minimize
pollution apart from other management program taking root simultaneously with construction activities.
The appropriate a forestation program for plant, township, green-belt and other sites are designed
according to the geographical features. The species are selected on the basis of their adaptability and
grouped with local representatives. The growth characteristics, flowering pattern and canopy (spreading
nature) are evaluated in their distribution over these sites of a forestation. These considerations not only
contribute to the aesthetics but also go a long way in serving as "Sinks" for the pollutant emissions of the
power plant... At times, they combat pollution from other industries in the surrounding area.
Saving the existing trees, planting right at the beginning of construction phase, preservation of trees and
advice from State Forest Departments and Agriculture Universities are a few general guidelines followed
by NTPC in the a forestation program at their projects. The site specific a forestation details conform to
the natural climatic conditions and adaptability of species. The species are grouped into a heterogeneous
combination to impart a natural and healthy assemblage.
The arrangement of species in the green belt / buffer zone conforms to hexagonal pattern to facilitate
maximum density of species. In addition, the growth pattern and canopy are evaluated in their actual
locations of the hexagonal pattern which help uniform canopy spreading. The tree planting, garden and

Corporate Social Responsibility of NTPC | IMT Ghaziabad PGDM EX - FT | 140301022

park development in and around the township adds to the general aesthetics. Plant species of medicinal
value are cultivated separately in isolated patch and information made available to residents for use
appropriately.
The nursery ensures good quality planting stock so vital in the success of planting program. In order to
reduce the transport cost and damage to the planting stock, nurseries have been developed at the
projects to meet the planting requirement.
NTPC has developed independent Horticulture Department at its projects headed by experienced
horticulture officers / supervisors.

Forest Bank
An innovative proposal to create "Forest Banks" in each state was wherein the Forest Department of all
States / Union Territories should identify land to initiate plantations under various program of the state.
Such areas would facilitate any power project of either the State or Centre to draw necessary
"Compensatory A forestation Area" against the existing balance in the Forest Bank. This will ensure that
projects need not wait for clearance for want of identification of areas and State Government's
concurrence for compensatory a forestation.

Environmental Management
Harmony between man and environment is the essence of healthy life and growth. Therefore,
maintenance of ecological balance and a pristine environment has been of utmost importance to NTPC.
Environment protection continues to be a key area of activity in NTPC along with growth in generation of
power.
Driven by its commitment for sustainable growth of power, NTPC has evolved a well defined environment
management policy for minimizing environmental impact arising out of setting up of power plants.
In November 1995, NTPC became the first public utility to bring out a comprehensive document entitled
"NTPC Environment Policy and Environment Management System". Amongst the guiding principles,
adopted in the document, are the company's proactive approach to environment, optimum utilization of
equipment, adoption of latest technologies and continual environment improvement. The policy also
envisages efficient utilization of resources, thereby minimizing waste, maximizing ash utilization and
providing green belt all around the plant for maintaining ecological balance. NTPC's environment-friendly
approach to power has already begun to show results in conservation of natural resources such as water
and fuel (coal, oil & gas) as well as control of environmental pollution. NTPC has chalked out a set of
well-defined activities that are envisaged right from the project conceptualization stage.
Performance enhancement and up gradation measures are undertaken by the organization during the
post operational stage of the stations. These activities have greatly helped to minimize the impact on
environment and preserve the ecology in and around its power projects. These measures have been
enumerated as follows.

Environment Management System / ISO-14001

NTPC has established Environmental Management System (EMS) as per ISO-14001 at its different
establishments. As a result of pursuing sound environment management practices, all NTPC power
stations (excluding Simhadri which was commissioned recently) as well as the Corporate Environment
Management.

Corporate Social Responsibility of NTPC | IMT Ghaziabad PGDM EX - FT | 140301022

Environment Policy
The Environment Policy of the Corporate Environment Management and Ash Utilization Division as
adopted in March, 2003 under the Environment Management System is stated below.

Continual improvement of environmental performance of all NTPC power stations in pursuance of

our vision of powering Indias growth.
Continually monitor all the stations for pollution prevention and environmental protection.
Conservation of natural resources including land by utilizing more and more cash generated by
thermal power stations of NTPC.
Assist stations for compliance with relevant environmental legislations and regulations.
To promote environmental awareness amongst the employees of NTPC.
To create awareness of Ash Utilization and its environmental benefits among the Engineers,
Builders, Architects, Potential Entrepreneurs, NTPC personnel and public at large.

Resource Conservation
With better awareness and appreciation towards ecology and environment, thermal power utilities have
been continually looking for innovative and cost effective solutions to conserve natural resources and
reduce wastes. Some of the measures include:

Reduction in land requirements for main plant and ash disposal areas in newer units.
Capacity addition in old plants, within existing land.
Reduction in water requirement for main plant and ash disposal areas through recycle and reuse
of water.
Reduction in fuel requirement through more efficient combustion and adoption of state-of-the-art
technologies such as super critical boilers.

Pollution Control Systems

While deciding the appropriate technology for its projects, NTPC integrates many environmental
provisions into the plant design. In order to keep emission, effluents and ambient air quality well within
acceptable limits, NTPC has provided the best available equipments, devices and systems such as high
efficiency Electrostatic Precipitators (ESPs), Tall Stacks and Low NOx Burners for control of stack
emissions, Dust Extraction and Dust Suppression Systems for control of fugitive dust, Effluent Treatment
Plants, Neutralization Pits and Ash Ponds for control of the effluent quality, Ash Water Re-circulation
System and Cooling Towers for control of the effluent quality as well as conservation of water and
Sewage Treatment Plant (STP) for treatment of the domestic sewage from its plant and township areas.

Monitoring of Environmental Parameters

A broad based Environment Monitoring Program has been formulated and implemented in NTPC. All
pollutants discharged from the power plant through stack emission, ash pond effluent, main plant effluent,
domestic effluent and Condenser Cooling Water (CCW) effluent are monitored at the stipulated frequency
at the source itself and at the points of discharge. In addition to the above, ambient air, surface water and
ground water quality in and around NTPC plants are regularly monitored to assess any adverse impacts
as a result of operation of the power plant.

Corporate Social Responsibility of NTPC | IMT Ghaziabad PGDM EX - FT | 140301022

Ash Water Recycling System

NTPC is aiming at adopting the concept of "Near Zero Effluent Discharge" for once - through ash disposal
system wherein huge quantity of water is used for disposal of ash to the ash ponds. This has been further
necessitated in view of ever increasing scarcity of water, as also, fast deterioration in water quality of our
rivers and other water sources due to discharges from polluting industries. For conservation of water, Ash
Water Recycling System has been envisaged for the ash ponds in all new projects and in a number of its
operating stations

Advanced / Eco-friendly Technologies

NTPC has gained expertise in operation and management of 200 MW and 500MW Units installed at
different Stations all over the country and is looking ahead for higher capacity Unit sizes with super critical
steam parameters for higher efficiencies and for associated environmental gains. At Sipat (Chhattisgarh),
higher capacity Units of size of 660 MW and advanced Steam Generators employing super critical steam
parameters have already been envisaged as a green field project.

Global Compact
Globalization has brought significant advantages to countries and business around the world but the
benefits have spread unequally both within and among countries.
While the rules favoring global market expansion have grown more robust, the rules intended to promote
equally valid social objectives viz. in the areas of human rights, labor standards and environment lag
behind and in some cases actually have become weaker.

The Ten Principles of Global Compact

The Global Compact's ten principles in the areas of human rights, labour, the environment and anticorruption enjoy universal consensus

Human Rights

Principle 1 : Business should support and respect the protection of internationally proclaimed
human rights; and
Principle 2: Make sure that they are not complicit in human rights abuses.

Labor

Principle 3 : Business should uphold the freedom of association and the effective recognition of
the right to collective bargaining;
Principle 4 : The elimination of all forms of forced and compulsory labor;
Principle 5 : The effective abolition of child labor; and
Principle 6: The elimination of discrimination in respect of employment and occupation.

Environment

Principle 7 : Business should support a precautionary approach to environmental challenges;

Principle 8 : Undertake initiatives to promote greater environmental responsibility; and
Principle 9: Encourage the development and diffusion of environmentally friendly technologies.

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Corporate Social Responsibility of NTPC | IMT Ghaziabad PGDM EX - FT | 140301022

Anti-Corruption

Principle 10: Business should work against corruption in all its forms, including extortion and
bribery.

Participation by NTPC
Due to keenness of UN that this movement takes root in India, some business leaders took the initiative
and organized a meeting of select business leaders in Mumbai in Dec' 2000. NTPC as a prominent
business and community leader in the power sector was also invited to the meeting and thus
engage/associate itself with Global Compact.
Following this meeting which was attended by CMD NTPC, NTPC agreed to be associated with the
Global Compact. In his letter in May 2001 CMD addressed to Mr. Kofi Annan, Secretary General, UN
formally expressed its support for the Global Compact and its commitment to take action in this regard.
NTPC expresses its continued support for the Global Compact and its commitment to take action
in this regard. The principles of GC are regularly communicated to all employees through inhouse magazines, internal training program and posters.
NTPC along with major corporate in India took the lead and founded Global Compact Society of India in
the year 2003. Further, NTPC as founder member of Global Compact Society took the lead for organizing
the 1st national convention on Excellence in Corporate Citizenship and Global Compact on 27th July
2004 at New Delhi.

Tsunami
The employee of NTPC with support of company volunteered to contribute a total sum of approximately
Rs.15.2 million from their salary, in addition to NTPC contribution of Rs.880 million to Prime Minister
Relief Fund as immediate relief measures. The team of 52 NTPC employee provided medical treatment
and relief material to the affected persons. This team treated 7838 patients and provided food to 18398
villagers and children till alternate arrangements were made by local authorities.
NTPC team assisted for restoration of power supply in 53 relief camps, rectification of 2 nos. control
panel, inspection and suggesting rectification for 33 KV transmission systems, installing small DG set,
and repairing a number of DG sets of various capacities.

Community Development
NTPC has been a committed and socially responsible corporate citizen since its inception and formulated
specific guidelines for the welfare of Project Affected persons (PAPs) and community development in the
neighborhood villages around its power stations as early as 1980s. It is one of the first in the corporate
sector to formulate comprehensive resettlement and rehabilitation policy for addressing the issue of
PAPs.
The concept of Corporate Social Responsibility is deeply ingrained in NTPC.s culture. NTPCs mission in
the area of CSR is to Be a socially responsible corporate entity with thrust on environment
protection, ash utilization, community development, and energy conservation.
NTPCs approach towards CSR, further articulated in the corporate objectives on sustainable power
development, is as follows:

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Corporate Social Responsibility of NTPC | IMT Ghaziabad PGDM EX - FT | 140301022

To contribute to

Sustainable power development by discharging corporate social responsibilities.

Lead the sector in the areas of resettlement and rehabilitation and environment protection
including effective ash-utilization, peripheral development and energy conservation
practices.

Conclusion
Corporate social responsibility has much broader implications for the nation as a whole. It reduces
dependency on the government for social change. Most governmental program quickly becomes
embroiled in political manipulation, corruption, communal overtones, and bitter infighting. There is a need
for public-private partnership with well-defined controls and processes for the best use of resources for
social change. Social reforms driven by the community will bring people together, turn the attention of the
masses to tasks that benefit society, and reinforce peace and harmony.
However, the challenges in India are enormous. Social responsibility should not be limited to large
successful corporations; there should be greater participation from most small, medium, and large
businesses. The goodwill firms can generate from acts of social responsibility may, in fact, be worth far
more to the businesses than the amounts they give. Corporations collectively can make India a better
place for every citizen.

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Corporate Social Responsibility of NTPC | IMT Ghaziabad PGDM EX - FT | 140301022