Before the Madhya Pradesh Electricity Regulatory Commission, Bhopal

Table of Contents 1 Comparison of Claimed and Allowed Annual Revenue Requirement for FY 2010-11 5 2. Power Purchase Cost and Intra State Transmission Charges... 5 3. Operation & Maintenance (O&M) Cost... 8 4. Interest & Finance Charges... 10 4.1. Interest on Project Loans... 10 4.2. Interest on Working Capital Loans... 12 4.3. Interest on Consumer Security Deposit... 13 5. Depreciation and Related Debits... 14 6. Bad and Doubtful Debts... 15 7. Other Expenses / Prior period expense... 16 8. Return on Equity... 16 9. Taxes... 17 10. Other Income:... 17 11. Sales... 18 12. Summary of True Up for the FY 2010-11... 21 12.1. Submission on Carrying Cost of revenue gap PRAYER... 23 Before the Madhya Pradesh Electricity Regulatory Commission, Bhopal Page 1 of 23

Filing : Case : of 2013 Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Limited, (MPPKVVCL), GPH Compound, Polo Ground, Indore 452-003 (MP) Petitioner IN THE MATTER OF: Filing of application for True up of the Annual Revenue Requirement (ARR) for FY 2010-11 under the principles laid down in the Madhya Pradesh Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Supply and Wheeling of Electricity and Methods and Principles for Fixation of Charges) Regulations, 2009 (G-35 of 2009) dated December, 2009 by the Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Ltd., Indore as the Distribution Licensee. 9 th The Petitioner above named, M.P. Paschim Kshetra Vidyut Vitaran Company Ltd., Indore, respectfully submits as under:- Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Ltd. (MPPKVVCL), (hereinafter referred to as the Petitioner, West Discom, (the Company or the Licensee ), is a Company incorporated under the Companies Act, 1956 and having its registered office at GPH Compound, Polo Ground, Indore. The Petitioner is a deemed licensee under the Fifth Proviso to Section 14 of the Electricity Act, 2003. The area of supply of the Petitioner is Indore and Ujjain Commissionaires within the State of Madhya Pradesh ( MP ). The Government of Madhya Pradesh ( GoMP or State Government ), vide an Order 3679- FRS-18-13- 2002 dated 31st May, 2005, published in the gazette of Madhya Pradesh dated 31st May 2005, have restructured the functions and undertakings of Generation, Transmission, Distribution and Retail Supply of electricity earlier carried out by the Madhya Pradesh State Electricity Board ( MPSEB or the Board ) and transferred the same to five Companies to function independently. The five Companies are as under: - o M.P. Power Generating Company Ltd., Jabalpur (MPPGCL) (GENCO); o M.P. Power Transmission Company Ltd., Jabalpur (MPPTCL) (TRANSCO); o M.P. Poorv Kshetra Vidyut Vitaran Company Ltd., Jabalpur (MPPKVVCL) (EAST DISCOM); o M.P. Madhya Kshetra Vidyut Vitaran Company Ltd. Bhopal (MPMKVVCL) (CENTRAL DISCOM); o M.P. Paschim Kshetra Vidyut Vitaran Company Ltd., Indore (MPPKVVCL) (WEST DISCOM); With effect from 1st June 2005, the Operation and Management Agreement that existed between MPSEB and the Five Companies came to end with the issue of the said Order dated Page 2 of 23

31 st May 2005. The three Vidyut Vitaran Companies viz. East Discom, Central Discom and West Discom, started functioning independently as Distribution Licensees in their respective area of license and from the said date are no longer operating as an agent of or on behalf of the Board, subject to Cash Flow Mechanism (CFM) provided in the said Order. On 3 rd June 2006 GoMP, in exercise of its powers under Section 23 (Sub-section (1), (2) and (3)) and Section 56 (Sub-section (2)) of Madhya Pradesh Vidyut Sudhar Adhiniyam, 2000 read with Section 131 (Sub-sections (1), (2), (5), (6) and (7) of Electricity Act, 2003, effected the transfer of and vesting of the functions, properties, interests rights and obligations of MPSEB relating to the Bulk Purchase and Bulk Supply of Electricity in the State Government and simultaneously re-transferred and re-vested the same to MP Power Trading Company ( Tradeco or 'MP Tradeco'). Since then, MP Tradeco is discharging the responsibilities of procurement of power in bulk and supplying to the three Discoms, including the Petitioner herein. The transfer was effected through M.P. Electricity Reforms Transfer Scheme Rules 2006 (Transfer Scheme Rules) vide Notification 3474 /FRS/17/XIII/2002 dt 3rd June 2006 (Transfer Scheme Rules). The Government of Madhya Pradesh ( GoMP or State Government ), vide an Order 4068- FRS-18-2002-XIII dated 12 th June, 2008, published in the gazette of Madhya Pradesh the final opening balance sheets of the companies. The effect of differences between provisional and final opening balance sheet have been taken in audited annual statement for FY 2008-09 of the company. Hon ble Commission had notified the Tariff Order for the period FY 2010-11 dated 18th May 2010 relating to the petition numbers 03/10, 04/10 and 05/10 filed by East Discom, Central Discom and West Discom respectively for determination of tariff for distribution and retail supply of electricity to the consumers in respective areas of supply during FY 2010-11. In the backdrop of the above facts and circumstances, the present application is being made by the Petitioner (West Discom) under Section 61 and Section 62 (1) (d) of the Electricity Act 2003, read with Clause 1.38 A of the The Madhya Pradesh Electricity Regulatory Commission (Details to be furnished and fee payable by Licensee or generating company for determination of tariff and manner of making application) Regulations, 2004(Third Amendment) [AG-13(iii) of 2008) dated 19th December 2008 and clause 8 of the The Madhya Pradesh Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Supply and Wheeling of Electricity and Methods and Principles of Fixation of Charges) Regulations, 2009 (G-35 of 2009) dated 9 th December 2009 for truing up of the ARR for the Distribution and Retail Supply Business for the period FY 2010-11. Based on the information available, the Petitioner has made sincere efforts to comply with the Regulations of the Hon ble Commission and discharge its obligations to the best of its abilities and resources of its command. However, should any further material information become Page 3 of 23

available during the process of determination, the Applicant be permitted to reserve the right to file such additional information and consequently amend/ revise the application. Shri Kailas Shiva C.E. (Commercial) of Madhya Pradesh Paschim Kshetra Vidyut Vitaran Co. Ltd. (MPPKVVCL) has been authorized to execute and file all the documents on behalf of MPPKVVCL in this regard. Accordingly, the current filing documents is signed and verified by, and backed by the affidavit of Shri Kailas Shiva C.E.(Commercial). Page 4 of 23

1. Comparison of Claimed and Allowed Annual Revenue Requirement for FY 2010-11 West Discom in their petition dated 11 th January 2010 and subsequent submission for the FY 2010-11 has submitted claims for Net ARR of Rs. 4819.62 Cr. Hon ble Commission in the Tariff Order dated 18 th May 2010, allowed Net ARR of Rs.. 3969.30 Cr. only. Head-wise comparison is given in following table; Claimed in the ARR Petition (A) Allowed in the Tariff Order (B) Variation 1 Power Purchase Cost 3345.04 2945.02 400.02 2 Transmission Cost 448.86 408.92 39.94 3 O&M Cost (including MPERC Fees) 639.89 526.45 113.44 4 Interest and Finance Charges 84.42 41.74 42.68 5 Depreciation and Related Debits 126.05 54.98 71.07 6 Return on Equity 125.31 92.01-33.30 7 Provision for Bad Debts 148.06 0.00 148.06 8 Gross ARR 4917.63 4069.30 848.33 9 Less: Other Income 98.01 100.00-1.99 10 Net ARR 4819.62 3969.3 850.32 With the Audited Accounts of West Discom for the period FY 2010-11, the actual cost has been compared with the Allowed Cost head wise and details of which have been provided in the subsequent Chapters. 2. Power Purchase Cost and Intra State Transmission Charges West Discom in its ARR petition for FY 2010-11 had submitted power purchase requirement of 14553.00 MUs whereas the total power purchase requirement approved in the Tariff Order was 13630.00 MUs. The cost allowed for power purchase was at Rs. 2945.02Cr. Claimed in the ARR Petition (A) Allowed in the Tariff Order (B) Variance 1 Power Purchase Requirement (In MUs) 14553.00 13630.00 923.00 2 Power Purchase Cost (In Rs. Cr.) 3345.04 2945.02 400.02 3 Transmission Cost (In Rs. Cr.) 448.86 408.92 39.94 As per Audited Accounts, West Discom has purchased 14606.37 MU s power during the year 10-11. In the tariff order, the quantum of power allowed was 13630.00 MU. Accordingly, the Discom has purchased 976.37 MU s higher than allowed in tariff order for the year 2010-11.The total cost of power purchase was Rs.3390.68 as per audited accounts. The transmission cost as per the bills received was Rs. 398.71 crore. Page 5 of 23

Actual as per Audited Accounts (A) Allowed in the Tariff Order (B) Variation 1 Power Purchase Requirement (In MUs)* 14606.37 13630.00 976.37 2 Power Purchase Cost (In Rs Cr) 3390.68 2945.02 445.48 3 Transmission Cost (In Rs Cr) 398.71 408.92-10.21 The licensee, thus requests for a true up of Rs. 435.27 Cr. (445.48 for power purchase & (10.21) for transmission charges) on this account. The month wise details of power purchase bills are as under: Summary of Energy billed during FY 2011-12 S. Month/Period Bill / date Unit billed (In Amount of bill (Rs. In crore) MU S) 1 Apr-10 Tradeco/Dicom/WZ/M.Energybill/03/April-10/31.05.2010 994.44 182.43 2 May-10 Tradeco/Dicom/WZ/M.Energybill06/May 10 998.42 218.26 3 Jun-10 Tradeco/Dicom/WZ/M.Energybill/09/June 10/03.08.2010 850.51 204.24 4 Jul-10 Tradeco/Dicom/WZ/M.Energybill/12/July 10 794.91 226.42 5 Aug-10 Tradeco/Dicom/WZ/M.Energybill/15/Aug 10/29.09.2010 763.25 212.04 6 Sep-10 Tradeco/Dicom/WZ/M.Energybill/18/Sept.10/29.10.2010 958.55 208.47 7 Oct-10 Tradeco/Dicom/WZ/M.Energybill/21/Oct 10/30.11.2010 1015.85 220.95 8 Nov-10 Tradeco/Dicom/WZ/M.Energybill/24/Nov 10/ 1198.68 251.66 9 Dec-10 Tradeco/Dicom/WZ/M.Energybill/27/Dec 10/29.01.2011 1416.25 384.14 10 Jan-11 Tradeco/Dicom/WZ/M.Energybill/30/Jan 11/28.02.2011 1520.23 311.06 11 Feb-11 Tradeco/Dicom/WZ/M.Energybill/33/Feb 11/29.03.2011 1271.70 315.63 12 Mar-11 Tradeco/Dicom/WZ/M.Energybill/36/March 11 1145.71 351.46 13 UI Bill for the Apr 10 14 UI bill for the May 10 15 UI bill for the June 10 16 Revised UI bill for the Apr 10 to June 10 17 UI bill for the July 10 18 UI bill for the Aug 10 19 UI bill for the Sep 10 Scheduled Energy 12928.51 3086.77 Debit Note 07-05/SG-11/UI/1119 123.42 80.62 Debit Note 07-05/SG-11/UI/1459 159.83 57.07 Debit Note 07-05/SG-11/UI/1550 168.48 40.31 Debit Note 05-01/F&A/969-222.79-111.12 Debit Note 07-05/SG-11/UI/1668 91.70 20.04 Debit Note 07-05/SG-11/UI/2014 109.46 20.04 Debit Note 07-05/SG-11/UI/2184 56.36 6.11 Page 6 of 23

20 UI bill for the Debit Note 05-01/F&A/121 Oct 10 418.96 86.73 21 UI bill for the Debit Note 05-01/F&A/255 Nov 10 265.62 40.73 22 UI bill for the Debit Note 05-01/F&A/401 Dec 10 299.29 58.85 23 UI bill for the Debit Note 05-01/F&A/736 Jan 11 112.84 22.72 24 UI bill for the Debit Note 05-01/F&A/881 Feb 11 103.88 20.20 UI charges 1687.06 342.31 25 RC charge for the Debit Note 07-05/SG-11/REC/1438 Apr 10 0.19 26 RC charge for the Debit Note 07-05/SG-11/REC/1438 May 10 0.20 27 RC charge for the Debit Note 07-05/SG-11/REC/1564 June 10 0.17 28 RC charge for the Credit Note 07-05/SG-11/REC/1700 July 10-0.17 29 RC charge for the Credit Note 07-05/SG-11/REC/127 Aug 10-0.09 30 RC charge for the Sep 10 Debit Note 07-05/SG-11/REC/181 0.30 31 RC charge for the Deibit Note 07-05/SG-11/REC/189 Oct 10 0.69 32 RC charge for the Debit Note 07-05/SG-11/REC/324 Nov 10 0.22 33 RC charge for the Debit Note 05-01/F&A/500 Dec 10 0.49 34 RC charge for the Debit Note 05-01/F&A/759 Jan 11 0.39 35 RC charge for the Debit Note 05-01/F&A/1010 Feb 11 0.26 36 RC charge for the Credit Note 05-01/F&A/1009 March 11-0.19 Reactive Energy Charges 2.45 Total energy billed for the year 14615.56 3431.53 Bills pertains to previous periods Page 7 of 23

36 Revised REC for the period Nov 09- March 10 38 Revise/Suppl. bill for year April/09 To March/10 39 UI Bill for Nov 09 to March 10 Debit Note 05-01/F&A/239 Tradeco/Dicom/WZ/M.Energybill/03/April Tradeco/Dicom/WZ/UI/Nov 09-March 10/18.01.2011 1.09-36.89-9.20-5.05 Total Previous bills -9.20-40.85 Total 14606.37 3390.68 The Copy of Power Purchase bills & Transmission charges bills are enclosed as Annexure-1. 3. Operation & Maintenance (O&M) Cost The licensee in its petition for FY 2010-11 had submitted for a O&M cost of Rs. 655.26 Cr. (Net of expenses capitalized amounting to Rs.15.37 Crore). Hon ble Commission in its Tariff Order for the period FY 2010-11 had approved the Net O&M Expenses for period FY 2010-11 based on the Madhya Pradesh Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Supply and Wheeling of Electricity and Methods and Principles for Fixation of Charges) Regulations, 2009 (G-35 of 2009) dated 9 th December, 2009. Details of O&M Expenses claimed by the Licensee and approved in the Tariff Order is as shown in the table below: Claimed in the ARR Petition (A) Allowed in the Tariff Order (B) Variation 1 Employee Cost (Excluding Arrear & Terminal Benefits) 408.36 389.37 18.99 2 Terminal Benefit including earned leave encashment but excluding pension & 98.43 0.00 98.43 gratuity 3 6 th Pay Arrear 0.00 31.31-31.31 4 Administrative & General Expenses (Including MPERC Fees and other fees & taxes) 78.16 66.36 11.80 5 Repair & Maintenance Expenses 54.95 39.41 15.54 6 Total O&M Charges 639.9 526.45 113.45 Hon ble Commission has approved Net O&M Expenses to an extent of Rs. 526.45 Cr. which is based on the norms as provided in the Terms and Conditions of Tariff Regulation, 2009. The Page 8 of 23

licensee has computed O&M Cost for the period of FY 2010-11 based on actual figures available as per the Audited Accounts. Details of O&M Expenses as approved in the Tariff Order and actual as per audited accounts are as shown in the table below: 1 2 Employee Cost (Excluding Arrear & Terminal Benefits) Terminal Benefit including earned leave encashment on payment basis but excluding pension & gratuity Actual as per Audited Accounts (A) Allowed in the Tariff Order (B) Variation 383.19 389.37-6.18 14.93 0.00 14.93 3 6 th Pay Arrear 38.31 31.31 7.00 4 Administrative & General Expenses (Including MPERC Fees) 86.64 66.36 20.28 5 Repair & Maintenance Expenses 47.08 39.41 7.67 6 Total O&M Charges 570.15 526.45 43.7 The licensee, thus requests for a true up of Rs. 43.70 Crore on account of O&M Expenses. It may be noted that the licensee has prayed for allowing Rs 14.93 Crore expenses (item 2 nd above) as Terminal Benefits including leave encashment but excluding Pension and Gratuity which has actually been paid by the Licensee to the retirees, and which is not being claimed by or allowed as a pass through expenditure in MP Transco s ARR. The details of the same are as under: Detail of terminal benefits paid by Discom excluding pension & Gratuity: S. No (In Rs. Crore) Amount 1 Earned Leave Encashment 12.56 2 TERMINAL BENEFITS (PF) BOARD'S CONTRIBUTION 0.49 3 TERMINAL BENEFITS (FPS) BOARD'S CONTRIBUTION 0.18 4 PROVIDENT FUND INSPECTION AND AUDIT CHARGES 0.12 5 COMPASSIONATE FINANCIAL ASSISTANCE 0.16 6 TERMINAL BENEFIT G.T.I.S. CONTRIBUTION 0.23 7 TERMINAL BENIFITS OTHER 0.03 8 TERMINAL BENIFITS UNDER ANNUITY SCHEME 0.34 9 FREE ELECTRICITY TO THE RETIRED EMPLOYEES. 0.82 Total 14.93 Page 9 of 23

Since as per the provisions of the clause 32.1 of Tariff Regulations, all the Terminal benefits paid by Licensee are to be treated as allowable expenditure for the purpose of ARR/ Tariff, it is requested that the aforesaid expenditure may please be allowed. 4. Interest & Finance Charges 4.1. Interest on Project Loans The Licensee in its ARR filing had given source wise loan and Interest and Finance Charges details. The interest and finance charges on project loans were Rs. 49.71 Cr. However, Rs. 19.72 Cr. was actually allowed in the Tariff Order including finance charges of Rs. 4.86 Cr. for the period FY 2010-11. Following are the details of the Interest on Project Loans and Finance Charges as claimed in the ARR filing Petition and that allowed in the Tariff Order for the period FY 2010-11. Interest and Finance Charges Claimed in the Petition (A) Allowed in the Tariff Order (B) Variance 1 State Govt. Loans 20.50 2 PFC Loans 6.39 3 REC Loans 9.11 4 ADB Loans 32.02 14.87 5 JBIC 4.67 6 RGGVY 1.24 7 Counterpart Funding 29.49 8 Cost of raising finance and bank charges 5.88 4.86 9 Gross IFC (Rs. Cr.) 109.3 19.72 10 Less IFC Capitalized 59.59 0 11 Net Interest and Finance charges (Rs. Cr.) 49.71 19.72 29.99 Actual interest & finance charges on project loans as per the provision of the regulation are as under: Particular 2010-11 FY 06 Debt identified with GFA as on 1st June 2005 (Allocation of debt and equity to GFA as per the FY 2007-08 Tariff Order) 129.91 70% of addition to net GFA considered as funded through Loan net of consumer contribution 35.31 Debt Repayment 4.41 Total Debt Associated with GFA as on 31st March 2006. 160.81 FY 07 Debt identified with GFA as on 31st March 2006 70% of addition to net GFA considered as funded 160.81 through Loan net of consumer contribution 73.78 Debt Repayment (Equal to depreciation allowed in the True-up order 2006-07) 33.87 Total Debt Associated with GFA as on 31st March 2008. 200.72 FY 08 Page 10 of 23

Debt identified with GFA as on 31st March 2007 200.72 70% of addition to net GFA considered as funded through Loan net of consumer contribution 78.44 Debt Repayment (Equal to depreciation allowed in the True-up order 2007-08) 39.02 Total Debt Associated with GFA as on 31st March 2008. 240.14 FY 09 Debt identified with GFA as on 31st March 2008 70% of addition to net GFA considered as funded 240.14 through Loan net of consumer contribution 65.77 Debt repayment (Equal to depreciation as per regulation for FY 2008-09) 47.71 Total debt associated with GFA as on 31st 2009 258.20 FY 10 Debt identified with GFA as on 31st March 2009 258.20 70% of addition to net GFA considered as funded through Loan net of consumer contribution 39.50 Debt repayment (Equal to depreciation claimed in the True-up petition of FY 2009-10) 50.79 Total debt associated with GFA as on 31st 2010 246.91 FY 11 Debt identified with GFA as on 31st March 2010 246.91 70% of addition to net GFA considered as funded through Loan net of consumer contribution 439.93 Debt repayment (Equal to depreciation claimed in the True-up petition of FY 2010-11) 80.77 Debt identified with GFA as on 31st March 2011 606.07 Average of Loan Balance 426.49 Weighted average rate of interest (%) (as per Interest on Project Loans) 11.81% A Interest and Finance charges on Project Loans 50.35 B Other finance charges 4.13 Total interest and finance charges on Project loans 54.48 Details of Interest Expenses as approved in the Tariff Order and actual as per audited accounts are as shown in the table below: Particular Actual as per regulation (A) Allowed in the Tariff Order (B) Variance 1 Interest and Finance charges on Project Loans 50.35 2 Other interest & Finance charges 4.13 3 Total Interest 54.48 19.72 34.76 The licensee thus requests for a true up of Rs. 34.76 Crore on account of Interest on project loan. Page 11 of 23

4.2. Interest on Working Capital Loans Based on the norms specified in the Terms and Conditions of Tariff Regulation, 2009 Hon ble MPERC approved nil cost against this item in the tariff order of FY 2011-12. Details of Interest on working capital claimed by the Licensee and approved in the Tariff Order is as shown in the table below: Claimed in the ARR Petition (A) Allowed in the Tariff Order (B) Variance 1 Interest on Working Capital 12.69 0.00 12.69 However, the actual Interest on Working Capital for the period FY 2010-11 as per the provision of the regulation is as under: Sl. Actual A 1/6th of annual requirement of inventory for previous year 3.44 B Normative O&M expenses 642.51 B i) 1/12th of total 53.54 C Receivables C i) Annual Revenue (from wheeling charges and retail 4682.64 tariffs and charges) C ii) Receivables equivalent to 2 months average billing 780.44 D Power Purchase expenses 3390.68 D i) 1/12th of power purchase expenses 282.56 E Consumer Security Deposit 514.96 F Total Working capital 39.90 A + B i) + C ii) - D i) E G Rate of Interest 11.75% H Interest on Working capital 4.69 Details of Interest on working capital approved in the Tariff Order and actual as per audited accounts are as shown in the table below: Page 12 of 23

Actual as per Regulation (A) Allowed in the Tariff Order (B) Variance 1 Interest on Working Capital 4.69 0.00 4.69 The licensee thus requests for a true up of Rs. 4.69 Crore on account of Interest on Working Capital Loans. 4.3. Interest on Consumer Security Deposit Interest on Consumer Security Deposit (CSD) as approved in the Tariff Order for the period FY 2010-11 was Rs. 22.02 Cr. which was based on the Security Deposit Regulations, 2004 read with subsequent Amendments to the Regulations and the Terms and Conditions of Tariff Regulation, 2009. However, the actual Interest on consumer security deposits for the period FY 2010-11 for the licensee was Rs.25.42 Cr. Following are the details of Interest on Consumer Security Deposits: Actual as per the Audited Accounts (A) 1 Opening Balance of CSD 472.98 2 Additional CSD received during the year 41.98 3 Refunded to consumers during the year 0.00 4 Closing balance of CSD at the end of the year (1+2-3) 514.96 Allowed in the Tariff Order (B) Variance 5 Interest paid on CSD 25.42 22.02 3.4 The licensee thus requests for a true up of Rs. 3.4 Crore on account of Interest on Working Capital Loans. As per above discussion the summary of total interest & finance charges are as follows: Particular Actual as per Accounts/ regulation (A) Allowed in the Tariff Order (B) 1 Interest and Finance charges on Project Loans 54.48 19.72 2 Interest on Working Capital Loan as per regulation 4.69 0.00 3 Interest on consumer Security Deposit as per accounts 25.42 22.02 Variance Total Interest 84.59 41.74 42.85 Page 13 of 23

Thus licensee requested that the Interest & Finance Charges amounting to Rs 42.85 Crore may kindly be true up. 5. Depreciation and Related Debits Details of the Depreciation Expenses claimed by the Licensee in its ARR filing and Depreciation Expenses approved in the Tariff Order for the period FY 2010-11 is as follows: Claimed in the ARR Petition (A) 1 Land and Building rights 0.02 2 Building & Civil Works 1.29 3 Hydraulic Works 0.18 4 Other Civil Works 0.10 5 Plant & Machinery 44.84 6 Line Cable Networks etc. 77.91 7 Vehicles 0.58 8 Furniture & Fixtures 0.15 9 Office Equipments 0.99 Allowed in the Tariff Order (B) Variance Total 126.05 54.98 71.07 The details of Opening Balance of Gross Fixed Assets on 01 st April 2010, additions and deductions made during the period FY 2010-11 and the Closing Balance of the Gross Fixed Assets for the period FY 2010-11 which is as follows: Opening balance of GFA as on 01.04.2010 Change during the year (additions / deductions) Closing Balance of GFA as on 31.03.2011 1 Land & Land rights 4.87 0.00 4.87 2 Building and Civil Works 36.19 36.75 72.94 3 Hydraulic Works 6.56 0.57 7.13 4 Other Civil Works 2.89 0.43 3.32 5 Plant & Machinery 688.94 383.05 1072 6 Line Cable Networks etc. 1306.76 239.60 1546.37 9 Vehicles 5.27 0.00 5.27 10 Furniture & fixtures 2.29 0.32 2.60 11 Office Equipments 7.51 0.68 8.19 Total (1 to 11) 2061.28 661.4 2722.69 It is submitted that Licensee calculated depreciation as per the provision of the regulation which is as under: Page 14 of 23

Actual as per Provision of the Regulation (A) Allowed in the Tariff Order (B) Variance 1 Land and Building rights 0.02 2 Building & Civil Works 1.82 3 Hydraulic Works 0.27 4 Other Civil Works 0.09 5 Plant & Machinery 32.44 6 Line Cable Networks etc. 45.65 7 Vehicles 0.02 8 Furniture & Fixtures 0.06 9 Office Equipments 0.43 Total 80.8 54.98 25.82 Detailed depreciation model is also being submitted along with petition. Prayer In view of the position explained above, it is requested that the depreciation amounting to Rs 25.82 Cr. may kindly be true up. 6. Bad and Doubtful Debts In the Tariff Order for the period FY 2010-11 the licensee had claimed Rs. 148.06 Cr. as Bad and Doubtful Debts however Hon ble Commission did not admitted any cost against this items. However, the actual Bad and Doubtful Debts written off during the FY 2010-11 is Rs. 78.78 Cr. (Including surcharge written off Rs. 0.29 Cr) and the provision made for Bad and Doubtful Debts is Rs. 41.18 Cr. for the period FY 2010-11:- Amount 1 Bad and Doubtful Debts claimed by the Licensee in its ARR filing 148.06 2 Bad and Doubtful Debts Approved in the Tariff Order 0.00 3 Bad Debts written off as per the Audited Accounts 10-11 78.78 4 Variance (3-2) 78.78 Prayer In view of the position explained above, it is requested that the bad & doubtful debts amounting to Rs 78.78 may kindly be permitted as allowable expenditure as per the norms fixed by Hon ble commission. Page 15 of 23

7. Other Expenses / Prior period expense The Licensee in its ARR filing for the period FY 2010-11 had not claimed any cost against this item. However, for the True Up exercise for the period FY 2010-11 the licensee submits that the amount towards prior period expenses including other expenses is Rs 186.83 Cr details of which are as shown in the table below: Actual as per the Audited Accounts (A) Allowed in Tariff Order (B) Variance 1 Net prior Period Charges as per accounts 186.83 0.00 186.83 2 Other Charges 1.32 0.00 1.32 3 Net Total Other Expenses 186.83 0.00 186.83 Prayer In view of the position explained above, it is requested that the other expenses amounting to Rs 186.32 may kindly be permitted as allowable expenditure. 8. Return on Equity The licensee in its ARR filing for the period FY 2010-11 had claimed a Return on Equity of Rs. 125.31 Cr. However in the tariff order 2010-11 Hon ble Commission allowed RoE amounting to Rs. 92.01 Cr. Based on the Audited Accounts of FY 2010-11 & considering the provision of the regulation Licensee has calculated the RoE amounting to Rs 107.13 Cr which as under: Particular 2010-11 FY 06 Equity identified with GFA as on 1st June 2005 (Allocation of Equity and equity to GFA as per the FY 2007-08 Tariff Order) 449.83 30% of addition to net GFA considered as funded through Equity net of consumer contribution 15.13 Total Equity Associated with GFA as on 31st March 2006. 464.96 FY 07 Equity identified with GFA as on 31st March 2006 (Allocation of Equity and equity to GFA as per the FY 2007-08 Tariff Order) 464.96 30% of addition to net GFA considered as funded through Equity net of consumer contribution 31.62 Total Equity Associated with GFA as on 31st March 2008. 496.58 FY 08 Equity identified with GFA as on 31st March 2007 as per True UP order of 2006-07 496.58 30% of addition to net GFA considered as funded through Equity net of consumer contribution 33.62 Page 16 of 23

Total Equity Associated with GFA as on 31st March 2008. 530.20 FY 09 Equity identified with GFA as on 31st March 2008 as per True Up order 2007-08 530.20 30% of addition to net GFA considered as funded through Equity net of consumer contribution 28.19 Total Equity associated with GFA as on 31st 2009 558.39 FY 10 Equity identified with GFA as on 31st March 2009 558.39 30% of addition to net GFA considered as funded through Equity net of consumer contribution 16.93 Total Equity associated with GFA as on 31st 2010 575.32 FY 11 Equity identified with GFA as on 31st March 2010 575.32 30% of addition to net GFA considered as funded through Equity net of consumer contribution 94.27 Equity identified with GFA as on 31st March 2011 669.59 Total Equity associated with GFA as on 31st 2016 Rate of Return 16% Return on Equity 107.13 Prayer In view of the position explained above, it is requested that the RoE amounting to Rs 107.13 may kindly be allowed. 9. Taxes The licensee submits that for the period FY 2010-11 it has incurred a loss of Rs. 578.26 Cr. hence was not required to pay any Income Tax. 10. Other Income: The licensee in its ARR filing for the period had claimed Rs. 98.01 Cr. as other income. However, Rs. 100 Crs was approved in the Tariff Order for the period FY 2010-11. The licensee was able to earn Rs. 25.68 Cr. as other Income for the period FY 2010-11 and the details are as shown below: S. Allowed in Tariff Order (A) Actual as per Audited Accounts (B) (B)-(A) A Income from Investment, Fixed & Call Deposits 1 Interest on fixed deposits Details not available 14.65 Sub-Total 14.65 B Other Non Tariff Income Page 17 of 23

1 Interest on loans and Advances to staff Interest on Advances to Suppliers / 2 Contractors 3 Income from trading (Other than electricity) 1.99 Income/Fee/Collection against staff welfare 4 0.00 activities Details not 5 Delayed payment surcharge from consumers available 187.53 Miscellaneous receipts 6 41.66 7 Sub-Total 238.52 8 Total Other Income (A+B) 253.17 9 Less: Delayed payment surcharge 187.53 10 Less: Interest Income from Investments 14.65 Less: Interest on Advances to Suppliers / 11 Contractors 7.29 Less : Income received from MPSEB (Included in Miscellaneous receipts) 0.05 7.29 18.02 12 Net other Income 100.00 25.68-74.32 Thus licensee request to the Hon ble Commission that R -74.32 may be true up on account of other income. 11. Sales The Licensee hereby submits that the Hon ble Commission approved total sales of 9527 MU s. Actual sales during 2010-11 are 10558.49 MU which is higher by 1031.49 MU than approved in the tariff. The actual revenue as per audited accounts is 4429.47 (Including subsidy). Details of the same are as shown in the table below: Page 18 of 23

Rs in crore As per Tariff Order Actual (As per R-15) Variance Sales (MU) Revenues (Rs. Crs.) Sales (MU) Revenues (Rs. Crs.) Sales (MU) Revenues (Rs. Crs.) LOW TENSION LV 1: DOMESTIC 2,102.57 843 2,093.30 845.45 9.27-2.45 LV 2: NON-DOMESTIC/COMMERCIAL 521.42 308 555.89 331.72-34.47-23.72 LV 3: PUBLIC WATER WORKS AND STREET LIGHTS 174.79 68 169.94 71.27 4.85-3.27 LV 4: LT INDUSTRY 379.30 199 399.75 210.47-20.45-11.47 LV 5: IRRIGATION PUMP FOR AGRICULTURE 3,111.28 964 3,665.39 1,097.39-554.11-133.39 LT TOTAL 6,289.36 2,382 6,884.27 2,556.30-594.91-174.30 HIGH TENSION HV 1: RAILWAY TRACTION 388.47 203 384.43 198.57 4.04 4.43 HV 2: COAL MINES 0.00 0 0.00 0.00 0.00 0.00 HV-3: INDUSTRIAL AND NON-INDUSTRIAL 2,382.89 1,226 2,874.04 1,376.21-491.15-150.21 HV-4: SEASONAL 15.27 9 9.83 7.26 5.44 1.74 HV-5: HT IRRIGATION AND WATER WORKS 207.62 82 261.59 102.33-53.97-20.33 HV 6: BULK RESIDENTIAL USERS 45.32 19 6.60 3.28 38.72 15.72 HV 7: BULK SUPPLY TO EXEMPTEES (RE Coop Society) 198.10 68 137.70 45.32 60.40 22.68 HT TOTAL 3,237.67 1,606 3,674.19 1,732.96-436.52-126.96 GRAND TOTAL HT + LT 9,527.03 3,987 10,558.46 4,289.26-1,031.43-302.26 GRAND TOTAL HT + LT as per R-15 (Including Meter Rent, Surcharge, Misc Charges etc) 4,545.32 GRAND TOTAL HT + LT as per Audited Accounts 3,722.87 Electricity Duty Recovery 244.80 Other State Levies Recovery 95.36 Meter Rent/Service Line Rental. 36.04 Recoveries for theft of Power/Malpractice 25.08 Wheeling / U.I. Charges Recovery 4.19 TRUE UP PETITION OF ANNUAL REVENUE REQUIREMENT FOR FY 2009-10 Page-19

Misc. Charges From Consumers 35.61 LESS :Electricity Duty Payable (CONTRA) -244.80 Other State Levies Payable (CONTRA) -95.36 GRAND TOTAL Revenue from Sale of Power as per Audited Accounts excluding subsidy 3,823.78 Subsidy From GoMP 605.69 Revenue From Sale Of Power As Per Audited Accounts (Including Subsidy) 4,429.47 Page 20 of 23

12. Summary of True Up for the FY 2010-11 The licensee submits the Net ARR for the period FY 2010-11 at Rs. 4871.96 Cr. and net GAP for true-up Rs. (613.52) Cr including carrying cost amounting to Rs.154.91 after revenue from sale of power of Rs. 4429.47 Cr. Summary of the Net ARR for the period FY 2010-11 is as follows : Allowed in the Tariff Order (A) Actual (B) Variance (B-A) 1 Power Purchase Cost 2,945.20 3,390.68 445.48 2 Transmission Cost 408.92 398.71-10.21 3 O&M Cost 526.45 570.15 43.70 4 Interest and Finance Charges 41.74 84.59 42.85 5 Depreciation and Related Debits 54.98 80.77 25.79 7 Return on Equity 92.01 107.13 15.12 8 Bad Debts 0.00 78.78 78.78 9 Other expenses 0.00 186.83 186.83 10 Income Tax 0.00 0.00 0.00 14 Gross ARR 4,069.30 4,897.64 828.34 15 Less: Other Income 100.00 25.68-74.32 16 Net ARR (14-15) 3,969.31 4,871.96 902.65 17 Revenue from sales of power 3,987.40 4,429.47 442.07 18 (Gap) / Surplus for the Year 18.09-442.49-460.58 19 Additional revenue due to true-up of MP Discom for the FY 2007-08 16.12 16.12 0.00 Total (GAP)/ Surplus before carrying cost 21 1.97-458.61-460.58 21 Carrying cost on above revenue GAP 154.91 154.91 22 Total Revenue (Gap)/surplus after considering Carrying Cost 1.97-613.52-615.49 TRUE UP PETITION OF ANNUAL REVENUE REQUIREMENT FOR FY 2009-10 Page-21

12.1. Submission on Carrying Cost of revenue gap amounting to Rs. 458.61 Cr: It is submitted that on the same ground as explained above carrying cost amounting to Rs. 154.91 Cr., which pertain to revenue gap of Rs 458.61 Crore, may also be allowed in this true-up petition. The calculation of the same is as under. Years (A) Interest Rate on Working capital loans as per Trueup/ ARR of the respective year (B) Opening eligible amount (C) Carrying cost (D) Closing eligible amount (E)=(C)+(D) 2010-11 (Half year) 14.25% 458.61 32.68 491.29 2011-12 11.75% 491.29 57.73 549.01 2012-13 11.75% 549.01 64.51 613.52 Total 154.91 Page 22 of 23

PRAYER In view of the aforesaid facts and circumstances, the Applicant requests that this Hon'ble Commission may be pleased to: a) Take the accompanying True Up Petition for the period FY 2010-11 of Madhya Pradesh Paschim Kshetra Vidyut Vitaran Co. Ltd. on record and treat it as complete. b) Consider and approve Madhya Pradesh Paschim Kshetra Vidyut Vitaran Co. Ltd. s True Up Petition with net ARR for the period FY 2010-11 at 4871.96 Cr. and net GAP of Rs. (613.52) Cr. c) Consider and approve the carrying cost on revenue GAP amounting to Rs. 154.91 Cr. d) Condone any inadvertent omissions/ errors/ shortcomings and permit the petitioner to add / change / modify / alter portions of this filing and make further submissions as may be required at a later stage; and e) Pass such order as the Hon'ble Commission may deem fit and proper in the facts and circumstances of the case in light of justice. Dated: Indore (Kailash Shiva) Chief Engineer MPPKVVCL, Indore Page 23 of 23