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.q14 , •fr:iic6 3 TT 2006 528 (3)

39301 — 2

State of Financials of the Transferee

Financial Status of the Company on the date of this Order

Total Authorized Share Capital Its. 1,00,00,000 Paid up Share Capital

. R. 5,00,400 Other Assets Nil

Other Liabilities Nil

31-Tit — 3

('ASI FLO \V MECIIANISIVI 2006

lite main objective of Me Cash Flow Mechanism ((TM) is the centralization of the cash manititement function across all the six Companies. namely Madhya Pradesh Power Generating Co. lid. (herein after called as 'Gl.:NIC()). Madhya Pradesh Power Transmission Co. lid. (TRANS('O). Madhya Pradesh Poorv Kshetra Vidvut Ventral) Co: lid.. Madhya Pradesh Paschim Kshetra Vidytit Vitaran Co. lid.. and Madhya Pradesh Madhya Kshetrir Vidvm Vitaran Co. Ltd. (collectivek called as .DISCOM .or DISCOMs). and M.P. Power Trading Co. Ltd. (TIZAD1:1.0) with the Madhya Pradesh State Electricity Board (NIPSEB). The details of Me arrangements orked out for various aspects of the (TM are .set out hereunder:

I. Basic Principles of Cash Flow Mechanism:

T.RADF.00 shall have first 'charge over entire generation of the (iINCO from the

stations and projects listed in schedule--I of the liner-se Agreement. and shall purchase entire power from Me 61.:1\1C0 at the will to he determined/ approved by the M PI

ii. TRANI.° shall receive power from all other suppliers. viz. Central Sector Stations. Ws. I atter State Projects. etc. in accordance ‘vit Me existing/ ongoing PPAs IVIPSI.:11. now stood transfeited to the TRAD1'.CO;

in. All the three DISCOMs shalt buy power . of their requirement from the single source. i.e. lion) 'HMI-A:X(). as per the inter se Bulk Supply , greement and at the Iau'ilI as determined; approved by the MPliRC plus -trading margin'.

iv. I)ISCOMS mna advise TRADFC0 to buy short term power kmr their immediate need. "I'lw cost of such power shall he a pass through to the respective DISCOM.

• TRANS('() shall transmit the power to the DISCOMS at the interface' points. received thrciugh TRADFC0. as supplied by ONNCO and from other sources as

528 (41 TIT/41.4a7I 71-111A. 1e,78- 3 3j9 2006

defined in the para ii abo‘e as per the Hulk Ptmer transmission Agreement to be entered between TRADECa TRANsco and Discoms:

All the six companies. namely MANSCO. GENCO. DISCOM EAST. DISCOM. \VEST. DISCOM CENTRAL and IRA DECO shall issue a Power of Attorney or authorisation in favour of MPSER huer ellin authorising it to "own. collect and distribute- cash on behalfol the companies:

All 'the Cash Collected by,, DISCOM R.A0s shall be transferred w IVIPSER a/c as per the existing arrangement. as also discussed in 1101111 3 cash trE v.:actions:

All Letter of Credits. Escrow comthrts and working capital sh: 'I continue to be maimained by MPSER on behalf of the companies as MPSEr3 has first charge over entire revenue of Discerns from sale of pm‘er. subject to escrow - agreements. as per the existing arrangements enlbrced duly supported bv the Authorisation from the Companies.: • NIPSNII shall allocate cash among companies based on a predetermined prior Iv for payment. or expenses as per ex istine arran€,4ements:

N. the ( \illumines shall authorise MPSE.I3 to decide priorit of payments as per availability of cash:

xi. MPSFAI shall continue to service the debt liabilities. including .teneric loans on behalf of all Companies:

Nii. Payments Made by MPS1i13 to be adjusted agaidst the bills raised by the companies among themselves as per the inter se commercial agreements

a. GENCO to raise invoice on TRADI:.00 It Other power Suppliers to raise Bills on TRAI :.00

POCII and other transmission licensees lacilitatine power supply to MP to ra i Se in voice on IRA DECO TRANSCO to raise invoice for transmission charee, on DISCOMS 4111 routed through the TRA DECO

c. IRA DECO to raise invoice on DISCOMs for power/encrey supplied II

MPSEI3 to raise debit note on all companies (or servicing of liabilities which, include generic loans:

Subsidy from GoM P. if any shall he received by MPS HI and reipective credit to be passed on to the DISCOMs to the extent of their eligibility to obtain subsidy and payment made thereof b the state. government:

MPSEI3 needs to maintain , an account each in the name or the respective companies to record and reconcile such transactions and achustnknts.

ilCi +1,7P4i, fritT 3 3F1 2006 528 (5)

Adequate cash comfort for opening of LCs shall be provided by MPS1:11 to the Companies as and when required against various purchase and works orders. on merit basis and on availability of limit.

2. Billing Procedure:

I. (il.:NCO %vitt issue monthlv bills to TRADECO on or before 7th day (il'ibe month lor the units sent out during preceding month at the interfaco points between

NCO and TRANSCO on the basis of joint meter readings:

IRA D1 CO. will receive periodic hills or the power purchased fium Central Generating Stations including from other sources and also len- its transm ission/wheel i charges:

TRANS(i) will prepare separate monthly bills for each D1SCOM on the basis of the inter face meter readings adjusted to input lei el of the MP grid at the approved tariffon or bethre 7th day of succeeding.month and deliver these bills to the TRADECO:

The TRADF,C0 w ill issue monthly hills to the respective DISC, .Ms for the units consumed by diem adjusted at MP grid input level including Ul charges by 10th of every month. For this purpose. hills issued by the TRANSCO or the Energy

Account Statement issued by the SI.DC shall be the basis for determining the energy consumption by the respective DISCOMs.

TRADFC0 will foriSard the bills of GENCO and other power suppliers (1ul) passed to MPSF.B. Similarly DISCON,IS will also thrward the bills of power supplied by TRADECO duly passed to MPSFB. MPSEB will arrange to make PaS:ments within the given time schedule. The respeetive conthanies will make debit/credit entries in their books of accounts.

DI SC( will send directly to the state government the claim:: for payment of subsidy towards free and subsidized supply of power under intimation to MPSEB.

vii. NelPSFB shall issue the -Debit Advise- to each company for all the debt servicing made on behalfol Companies, giving details of repayments and interest payments made, which shall be accounted for by the•Companies in their books.

3. Cash Transactions.

i. Revenue collected from all consumers of the DISCOMs Al II be deposited in the respective RAU): -Revenue Collection Account- as already being done prior to issue of this notification:

ii. As per standing instructions to the Banks, entire revenue collected in DISCOMs. collection account of respective RAOs shall be transferred immediately in the

528 (6) 1:11•4151q1 tbst4 kit,* 3 R 2006

existing NIPS! l Accoittit indintained b' li&CNI at Jabalpur 11.Q. on dail \ mid immediate basis. routed through the -Revenue Collection Account- of the respecti \ e DISCOMs' 11.Q.. except thom: Ft A( that are eserm ed in favour of ITC/ Ft 1K'. revenue of which shall be transferred directly in the existing MPSE:Ws Account at Jabalpur 11.Q. The re \ enue transfer from the escrowed RAOs will be treated as deemed remittance done b\ the comptiny head quarters ' and accordimtiv accounted for in company books:

MPSF.11 will release the pavmentstfunds to the various agencies and the Companies observing follm\ ing priorities:

lhoSe ()Ill of ()niers kinplatre cost includes' .srtlary. contribilliall towards PI:. terminal benefits we. .

et ( oi1 (hi Supply innments aft.il:.\'(11ineltalingfeeiOt :barges. (II Pamela towards pareltase 01 power including 111 (t).: ehargte

am' dent servicing In Pt.(' el Essential eSpeils'es Ille C n Ipt II I

.1) 1:ssenti1l (hc:11 expenses 0.1.the ( .0111Inaties gt Essential ( *annul expenses. 11) 1)ely serviciatz other than 0 .111v allIer intrillents

iv. 13y 10th of each month. the Companies \yin submit to Ni PSElt the monthl‘ fund reqUirenlent on \\ eckly basis regarding their essential requirements 'towards Statutory payments. Fuel. A&G. O&M. Capex debt charges ci.c. based on the approved A121: and emplmee cost as per actual stating head wise details.

NIPSFB \All remit the funds into the expenditure account of the respective Companies on normal due dates and subject to availability of funds towards statuary payments. employee cost: fuel charges. A&G. O&M. ('apex etc. While releasing the funds. Director (Finance) will ensure to maintain the company-wised' percentages under the head A&O, O&M & ('apex as per company's respectivew approved ARRs so that equitable treatment to all companies is meted out.

MPSF13 will make payments towards statutory requirements including those arising out of various Court orders, power purchase. and int hiding wheeling charges and debt servicing.

vii. MPSF.13 \A ill ensure honouring timely payments through I../Cs and Fscrows and also ensure to restrict merdrall to the extent possible while releasing payments to the Companies. •

yin. The revenue received from the DISCOMs will be treated as ad-hoc payment against power supply bills issued by 'lit 1)1 and \vheeling charges bills issued by TRANSCO. The payment made by Ni PSI to the DISC( NEs through

al

hi

VIP* 3 71 2006 528 (7)

‘arious heads and against the debt liabilities IiI I) I SCUMS shall be adjusted against ad-hoc revenue receipts from the DISCOMs and net of receiNs and payments shall be treated as actual payments made by DISCOMs against the energ% as Yell as Transmission/wheeling charges bills. Accor...ingly. necessary entries will be made in the hooks of account of MPSI:13.as well as respective DISCOMs as illustrated in pant 4 (Accounting). MPS1'.11 shall maintain a separate accinint Ii 'r each company for recording and reconciliation of such adjustments and provide the companies with the detailed statement of the net adjustments to the bills and net payments effected by the companies on a monthly basis.

ix. NI PS! will receive subsidy from the state government against the claims/ bills raised In the DISCOMs and the amount shall be treated as ad-hoc payment against energy bills issued to the concerned DISCOMs by TRADECO and necessary entries will be made in the books of account of Mi'SFB as well as respective DISCOMs.

The pa) mem made by IMPSF.13 to the TRANSCO/ Gl'..NCO through various heads and against their debt liabilities shall be deemed to be ad-hoc payments made to them against their hills to IRA Dl towards supply of power/ wheeling charges respectively. Accordingly. necessar\ entries n ill be made in the books of account or MPSkli as well as TRANSCO/ OINCO,TRADFC0 as illustrated in part 4 (Accounting).

NDcc' collected by theDIS (I( )Nijis and cellillitted to MPSH3 along with transfer ()I' entire revenuecollected 3v the

x \s ill in tuin be remitted by

IMPSF.13 to the state government or adjusted against subsidy rec) ivables based on the diredi WS of the state government.

Nii. Thebamount rece. ived by NIPSEI3 against any capital grant/ loan, deposits and reimbursement against claims from any agency will be remitted to the respective Companies in lull and shall not form part of the revenue. for the purpose of these ananuements.

C'ompanies will maintain minimum required balance in their expenditure account to avoid overdraft charges. The overdraft charges paid by IMPS113 shall be booked proportionately to all six Companies. generally in the ratio of their respective expenditure on establishment. A&G and O&M.

xiv. Payment of employee cost for those employees who are not assigned to any of the Companies and working in commthi services in N4PSF.B Yill be charged proportionately to all six Companies. general l\ in the ratio of their respective employee cost as per A RR MI Cril shall issue bills periodically towards

employee cost;

Expenses on account of common service theilities shall be proportionately charged to the beneficiary companies and will be treated as deemed payment

528 (8)

WiwI 11-49. frftthE 3 31 2006

bmards Ack::( i of Me concerned eompanc. general' \ in the ratio or their respective

emploce cost as per ARR. MPSF,1.1 shall issue bills periodically towards these expenses

xvi. At the end of the month. MPtibll zind the Companies will reconcile their accounts and make a statement oldebaultioutstanding payments towards each other.

x ii. At the end of the month. iVIPSH1 vill Furnish to the TRAI)17.00 consolidated statement or account lot- the transactions made ((mauls sale and purchase of

rimer contilan wise and utility; agency wise, and will ids( remit the cash halanee. ii any. to TRAI)F.00 towards trading of Power.

4. Cash Flow Accounting

a) For (lie "D/SCOMS"

To enable the billing and collection From all consumers and to receive funds to

meet out various expenses. the DISCOMs will maintain two bank accounts in their names in each Regional Accounting Unit (RAOs). one "Rt. venue Collection Account- and other 13xpenditure Account-. F.ach RA() will liemte these two hank accounts. At their I [Qs. DISCOlvls will also maintztin a ''Revenue Collection Account- for receiving revenue collection and an bxpenditure ‘ccount for binds received From MI'Skli to meet oil( their expenses:

All re emit: collections ‘‘ ill be reeei ed and accounted in the ievenue collection account. Accounting as current?) passed will be continued in the hooks of the DISCOMs:

The DISC( )N,Is \\'ill keep maintaining standing instruction to the Banks to remit all collections received on a daily basis to a designated central account in the name of

MPSI:.11 (already Mainiained hy ti&CM k Thus all cash ieeeived shall he immediately translerred to the control of the mPskii. Re‘entk•s received in the escroved accounts meant For debt repayment for ITC/ RI :c' loans, in the eventuality of default. if ITC/ In:( c I raws their over clues cl •ectly rrom these RA( is accounts, it will be treated as remittance to iVIPSI.:13 in the books oldie said DISCOM and in turn discharge oh debt liability of PIT/ RFC as the case may be:

iv. On all such remittances made to the MPSFA3 account. the DISCOMs will account the panient as an "Ad-hoc payment made to MPS111- which will be reconciled at the end of' the month. Thus in the hooks ()I' the DIS('OMs, revenue will be accounted against hills raised and collected from the consumers, and the cash

remittances ill be shown as zin advance ' :Ohne payment made 4) MPSI•13 agair"i purchase olpm‘er From TRADIX.X

‘. TRADECO shall, on a monthly basis raise invoices in the name of the DISCOMs f(ur the p0\\ er purchased by them. These invoices shall be passec by the DISCOMs

nv-tme uv14:4, ch 3 IR 2006 528 (9)

and ZICCOUilled ;is expenciktui in Weil books. Imoices raised li I\I )I('( 1"or po \\ er purchase should be credited to the 'IRA Ok.G0 creditor"' account to reflect settlement of specific pm\ er purchase bills of TRAIWCO. [he liabilities so created shall be set off against the "Ad-hoc payment made to MPSNIF account after (Inc confirmations \\itli MUSF.11. On such liability set Mil th-.2 I )1SCONis shall pass a book entry transferring the amount from the "Ad-hoC account to the creditor account created in the name of "TRADF.00 creditor-. mards all pm\ er purchases.

IMPSI'.11 shall also remit in the expenditure account at DISC( IM's IR). funds on a

regular basis for tlw DISGOMs to meet the A&G; routine or essential O&M and

establishment expenditure. Such remittances shall also be set MI against the "Ad-hoc or advance payment made to MPS111-. The DISC OMs \\ ill account die remittances against the above account.. kxpenditure accounting in Illy DISCOMs \\ ill continue to happen as Usual. the expenditure bills will he hooked in the DISCOMs hooks and liabilities so created \\ ill be settled limn the kimiltances received from

Hie bills received from TRANS(( through "InAl)[ro ‘‘ill bc accounted in the books of the DISCOMs as expenditure. MPSEll \\ ill settle the TRANS('() bills under advice to the DISCOMs. The liabilities in DISCOM hooks 'sill be settled against the "Ad-hoc payment made to MPS1:11- on the basis of the advice received !him NWSI:11.

Loan liabilities transferred to the DISCOMs through opening balance sheets. as a pail of the Transfer Scheme, will continue to be in the books of the DISCOMs. MPSF.13 will settle these liabilities on a ease-to-ease basis depending upon aailabilit of funds and priority. On each such !lability repavti ent. NIPSkii will

advice the DISCOMs uI ha\ in made payments on-their behalr. DISCOMs \\ilh account for such liability reduction by crediting the ",‘ d-hoc sayment made" to MI'Sk13- account:

ix. Under normal circumstances, die debit balance in the "Ail-hoc- account in the books of the DISCOMs should represent surplus cash generated from operations

and ideally should be remitted back to the DISCOMs b\ MPSIIi. I 10 \‘‘.: \ er. g VC ii the cash shortfall in the sector. (Ins account in the DISCOM hooks \\ ill have a credit balance i.e. reflecting an accounts payable situation in their books against power purchase hills directly paid OM by MPS111 on their behalf:

This credit balance may be analyzed and reduced based on the • ubsidies received the State Government

For the (EA"( '0"

In the ease of GINO). cash 110 management 'sill he based on the cash paid out against their bulk supplies of power to their single buyer i.e. TR.A.DkCO:

528 (18)

Itt4t1 (ij,4 ?Ca 3 2006

Erom an accounting perspectic. N%ilI account Ibr rot:Imes on the basis ol the bulk sunk invoices raised on TRADLCO. These receivab:es will be settled based on payments made by MPSEB.

For the "TRANSCO"

TRANSCO will raise invoices tor transmission/wheeling charges on the Distribution companies through TRADECO and account Ibr the revenues. These receivables will be settled against remittances received Nun MPSLI1 on behalf of the DISCOMs. .

For the "MPS Ea"

MPSEI3 will have the accounting. perspective as a temporary holder of cash on behalfol all the sector entities:

IL For this. MPSFI3 will maintain three separate accounts Ibr the three DISC( Ms as "Ad-hoc remittances received from DISCOM I.:ast/ Central/ West". These accounts shall be mirror accounts of the similar accounts maintained by the DISCOMs:

MPSEB will have its own separate accounts for the power purchase and trading functions lot and on behalf of TRADECO:

iv. IX pending on utilization of funds. iVIPSEII shall carry out the to owing:

(a) 1311 Is raised by 'MA DECO for 'power sales 'on DISCOMs shall. be accounted in MPSEB accounts as revenue of TRADECO. Amounts settled by MPSEll against these bills will be transferred through a hook entry from the .relevant "Ad-hoc reminances....- Account to the relevant DISCOM debtoraccounts to reflect the settlement of specific bills for power sales;

Amounts remitted back to DI.SCONIs for meeting their re:Teeth expenditure and amounts paid against TRANSCO invoices raised on the 1)1 SC( will be directly debited to the "Ad-hoc. remittances .... accounts relevant to the specilic DISCOMs:

a. The same as in (b) shall apply in the case bf loan liability payments made. MPSER on behallolthe DISCOMs:

Li. Copy of bills received Irom TRADEC'0 for power purchase from GENCO and other bulk suppliers shall be accounted as expenditure of TRADECO in the books. Payments made to GENCO and other bulk suppliers shall be settled against such liabilities.

111dvactil Tr1. 11 . 3•.7f 2006 528 11)

•

vi. On the mondth basis. the DISCOMs and MPSF.II shall reconcile their respective . -Ad-hoc remittances; pa mein" accounts and ensure that the balances reflect the correct position in each other books. MPS111 will also reconcile die accounts with G [NCO. TRANS(J) and IRA iii X'( on monthb basis:

e) For the "TRADECO"

On the montlik basis. MPSI:11 shall furnish a single entry statement ".) TRADFC0 the net and final amount receked and paid towards trading of power I ompam' \ I Agency wise.

Other Trading Business by TRADECO:

In addition to meeting the demand of the three DISC'( )Ms the TRADECO \\ ill also trade the pimer to other utilities within or outside the State. in that case the Cash Flow arrangement shall be as under:

ARV' surplus Po"er of the Slate Power s.ector can he sold 11‘ the TRADNCO to other buyers and proceedings from the sale of ptmer shall be deposited ii 'aseparate bank

„ \ i account (Trading account.) maintained by die TRADLCO. I love er, he cost or energy at the rate being billed to the DISCOMs (pooled rate) shall be tram :erred in MPSF.13 account for making payments to the power suppliers.

The transactions from an \ other trading or pm\ er i.e. purchase and sale of pm\ er other Man the pooled power of the sector, shall be made from tile TRADFC0"s Trading account \ \ hich shall not be part of the Cash Flow Mechanism.

6. Dispute Resolution Committee:

i. Disputes relating to financial matters. if any, shall be resoled in die monthly meetings bemeen heads or 1:&A department in respective companies and r&A head of MPSNIV

TRADFCa TheY will take guidance and directives from the Financial Advisor. NIPSFB as and when necessar).

Disputes relating to commercial matters shall be resolved in the ninthly intxtings bemeen commercial head of TRADNCO and counter parts in respect' \ e companies. II required. they will take guidance and directives num the Financial Advisor/ Secretary. MPSEB.

In the event any dispute. either financial or commercial. remains unresok ed. the same shall be referred to the Apex Redressal Committee comprising of CMDst MD of the companies on quarterk basis or as and \\fien required.

iv. lithe Apex Contminee is unable to arrive at a consensus. then the matter \\ ill be referred to the OoNIP 161. adjudication. Decision of the tioNIP shall be Final ; rid binding on all the parties.

528 ( 12) TfullAt41'I'sl'44. Itilt 3 79 2006

7. Cash Flow Management during' Transit Period

Process for issuing power purchase bills in the name oilAI WC° mity take some time. Similarly. lin- banking arrangements for fund transfer between MPSI. B and companies under the changed scenario, negotiations with bankers are to be Militia' and finalized. For switching over into the new arrangement. the companies would also require approval of their BoD. As such during the transition period, settlement of bulk power energy bills bv MPSE.13 shall be treated as settled with the TRADECO. The transit period will. hm\ ever. be not more than TWO months.

S. Right to amend the Cash How Mechanism

The state gm eminent. k issue of separate ordertsf from time to time. may amend the (TM and make such provisions as ma v appear to be necessar for removing the difficulties arising in implementation of this mechanism.

The Financial Advisor of NIPSF,13 may make changes in the Clivl fr:ini time to time. necessary for smooth operation of the cash Bow mechanism, to the extent not disagreed by any oldie Company. under intimation to the state government.

9. Validity of the Cash How Mechanism

The UM will be valid till: the cash deficit in the revenue earnings and expenditure requirements is'resolved to the satisthetion of all the companies.

Or issue of further directives from the state government.

Once DISCOMs are in a position to meet all their expenses including power purchase. pooling of ',he revenue earnings with MPSF.I3 will not be required and the state government. by an order. will terminate this mechanism.

TEI crtri ̀4 I 1/4FM-11C4 ;WI

altriTIR,

(dui itiluirzT). *-14

1:194.4,71 fcii.w 3 2006 ' 528 (13)

1.1nergy 1)epartment Mantralava. VitIlabli Bhavan 13holial. the 3ni June. 2006

RULES

No. 3474 /FRS/17/X111/2002 - In exercise oldie powers conferred by sub-sections (1). (2). (5), (6) and (7) a Section 131 of the Electricity Act. 2003 (36 of 2003) read with sub sections (I), (2) and (3) of Section 23 and sub-section (2) of Section 56 of the Nladhyzt Pradesh Vidyut Sudhar Adhiniyam. 2000. the State 'Government hereby makes the Ibllowing rules for regulatingtransfer and vesting of the functions. properties, interest righis and obligations of the Madhya Pradesh State Electricity Board relating to Bulk Purchase and Bulk Supply. of Electricity along with die related agreements and arrangements in the State Government and re-transfer and re-vesting thereof by the State Government in MP Power aiding Company Lhnited ('l'radeco) and for determining the terms and conditions on which such transfer and vesting shall he made. namely:

Short Title, Extent and Commencement:

These Rules mav he called the Madhya Pradesh Electricity Reforms Transfer Scheme Rules. 2006.

Thev extend to the whole of the State of Madhya Pradesh. 'Flicy shall come into IiirCe libm die date of their publication in the Miahya Pradesh Gazette.

Applicability of Rules: These rules shall apply to the properties. interests. rights and obligations of the Nilaciliya Pradesh State filectricity Board relating to its functions of hulk purchase and bulk supply of electricity as defined under schedule 1.

3. Definition In these Rules, unless the context otherwise requires:

(a) -ACI— means the Electricity Act. 2003 (36 of 2003) and the Madhya Pradep Vidyut Staniar Adhiniyam. 2000 (No. 4 of 2ou I ) as the case may be:

(Ii) "Board" means Madhya Pradesh State Electricity Board constituted under Section 5 of the Electricity (Suppty) Act. 1948 (54 of 1948):

• (e)

Proceeding- means the proceedings of whatever nature including suits, appeals. complaints, petitions. applications, conciliation, arbitration, whether civil or criminal or otherwise;

r - "Schedule- means the Schedule appended to these Scheme Rules:

:Transferee- means M P Power "I•rading. Company Limited:

528 (14) Tiv4ga91 3. 47 2006

(1) Words and expressions used but not specifically defined in these Scheme Rules shall ha se the same meaning. as assigned to them in the Act.

Transfer of functions of the Board:

On and from the date of publication of these scheme rules. the properties. interest in property. rights. obligations and functions of the Board as limited to those specified in 'Schedule V to these Scheme Rules shall stand transferred to and vest in the State Government (or the purposes of these scheme rules. Thc . property. interest in propert). rights. obligations and functions of the Board transferred to tlw.State Government tinder sub-rule (i)abose. shall be transferred to and vest in the Transferee on and from the date of publication of these scheme rules subject to the terms and conditions as specified in these scheme rules. On such transfer and vesting under sub-rule (ii) :those. the transferee shall be responsible for all functions. contracts, rights. deeds. obligations. agreements and other instruments of whate el. nature relating to the functions transferred specified in 'Schedule I' to which the Board was a parts. subsisting or having effect on the date of the transfer. in the same manner as the Board was liable immediately bethre the date of the transler. and the Same shall remain in force and effect against or in thsour of the ransferee and mas be enforced ellectisely as if the Transferee had been party thereto instead of the Board. Upon the transfer being effected in accordance with the provisions of the 'Acts and these scheme rules. the rights and obligations of all persons shall be restricted to the Transferee. notwithstanding anything to the contrary contained in any deed. documents, instruments. agreements or

arrallgell1C11(S \dliell such perS011 has with the Hoard and he shall not claim any right or interest against the State Gos eminent or the lioard.

All Proceedings of whatever nature. relating to the Ilinctions vested in the Transferee as per Schedule --I. bs or against the Board pending on the date of the transfer shall not abate or discontinue or otherwise in an vay prejudicial() be aliected by reason of the transfer tinder these Scheme Rules and the proceedings may be continued. prosecuted and en hilted by or against thee Transferee in the same manner and to the same extent as it would 01. might ha \'e been continued. prosecuted and enforced by or against the Board. if the transfer specified. in these scheme rules had not been made. • The Opening financials of the Transferee on (Ile transfer of the functions under these scheme rules shall be as specified in 'Schedule 2' to these scheme rules. (a) Not ithstanding that the business of the Transferee under these scheme

rules and of each of the Companies. namely Madhya Pradesh Passer Generating Co. Ltd.. Madhy,a Pradesh Power Transmission Co. Ltd.. Nladhya Pradesh Pours. Kshetra Vidvut Vilaran Co. Ltd., Madhya Pradesh Paschim Kshetra Vidyut Vitaran Co. Ltd.. and Madhya 7radesh Nladhya Kshetra Vidvut Vitaran Co. Ltd.. to whom the undertzd: ngs or the Board were curlier transferred vide Notification No. 6271 dated 01.10.2003. shall be conducted separately and independent of each other, the revenues from the business of the above Companies shall be utilixed in the manner as per

tiuiki thriii1,1-4-4W 3 39 2006 528 (15)

the Cash Flow Mechanism indicated in 'Schedule 3 of these scheme rules till further orders of the State Government.

The State Government may. from time to time, by ordei modify, amend, change or otherwise alter the terms and conditions contained in Schedule - 3 of these scheme rules.

The Cash Flow mechanism specified in Schedule 3 as mock lied from time to time in accordance with stub clause (b) shall supersede any earlier arrangement notified or directed by the State Government.

Transfer by operation of law:

The Transfer under these scheme rules shall be operative and be effective pursuant

to action of the State Government publishing these Scheme Rules and Orders issued

in terms of these scheme rules and without any further act. deed or thing to be done by the State Government. Board, Transferee or any other person. •

6. Power to remove difficulties:

(I) If any doubt, dispute, difference or issue arises with regard to the transfer under these scheme rules, the decision of the State Government thereon shall be final and binding on all parties.

(2) The State Government may. by order published in the Madhya Pradesh Gazette. make such provisions. not inconsistent with the provisions of the Act, as may appear to be necessary for removing the difficulties arising in implementing the transfer under these scheme rules.

SCHEDULE

Functions of Board transferred to the Transferee

I The bulk purchase and bulk supply functions, namely. purchase. of electricity in bulk

from the generating companies and supply of electricity in bulk to the Electricity Distribution Companies in the State of Madhya Pradesh.

2. The Power Purchase agreement or arrangement existing between the Board and the generating companies including inter-state Joint Venture Projects and .the Bulk Supply' Agreements with. the electricity distribution companies in the State of Madhya Pradesh and all arrangements in relation to trading of electricity, inter state and. Intra state.

All short. medium and long term Bulk Power Purchase Agreements or Arrangements between the Board and the power traders existing as on the effective date.

i'he ._ti.., n II: Power Transmission Agreement existing between the Board and Power Grid Corporation of India as well as other Transmission licensees for transmission and wheeling of power interstate or intrastate.

525 (16) Ilv4Vilgl 4 , 171,1ti 3 19 2006

An> future agreements that are presendk beimg contempkited processed bk. the Board in respect of any ()I' the above and an \ activities in regard Ri electricitv trading in the State.

SC! fF1111 .h 2

State of Financials oldie Transferee

Financial Status of the Company on the dale or this C )'der

Total Authorized Share Capital Its. I.00.00.000 Paid up Share Capital Rs. 5.00.600 Other Assets Nil Other Liabilities Nil

S(HNI)HLN. 3

CASH FLOW MECIIANISM 2006

Hie main objective of the Cash Flow Mechanism ((TM) is the centralization of the cash management l'unction across all the six Companies. nionelv NI:kiln:I Pradesh Pinker Generating Co. lad. (herein alter called as 'CIFN(O. ). Madhya Pradesh Po \ker Transmission Co. Ltd. (TRANSCO). Madhya Pradesh Poory Kshetra Vidk ut Vitaran Nladhka Pradesh Paschim Kshetra Vidvut Vitaran Co. Ltd.. and Iveladliya Pradesh Madlik a Kshetra Vidyut Vitaran Co. Ltd. (collectively called as "I)ISCONI or DISC( This'). and M.P. Pok\ er Trading Co. ltd. (TRAI)ECO) with the Madhya Pradesh State Nlectricity Doard (MPSNI1). The details Ail the arrangements. \yolked out for various aspects of the ChM are set- out Ii ereunder:

Basic Principles of ('ash i Flow i‘le.chanisin:

I. 'IRAHNC° shall have lirst charge over entire generation of the (iNNO. ) from the

stations and projects listed in schedule-I of the Inter-se Agreement. and shall purchase entire power from the fil:..NCO at the tariff to be determined/ approved by the MPNR(':

TRADNCO shall receive po\ker from all oilier suppliers.. viz. Central'. Sector Stations. .IVs: Inter State Projects. etc. in accordance k‘idi die existing ongoing PPAs \kith MPSNII. no' \ stood translerred to the fRA )1:.(*(

All the three DISCOMs shall Int.\ power ()I' their requirement from the single source. i.e. from TIZAIWCO. as per the inter se Hulk Sunk \ greement and at the tariff as determined/ approved 11 the MPNRC plus -trading marginTh

T4 "ITA71 fferitw 3 1JI 2006 528 ( 17)

• iv.

DISCOMS ma, ad \ isc I RADLCO to hti short term power for their immediate need. Hie cost of such power shall he a pass through w the respe• ti\e DISCOM.

IRANSCO shall transmit the power to the DISCOMS at the . interface points. received through TRADNCO. as supplied by (IENCO and from other sources as delined in the pan a ii above as per the Bulk Power transmission Agreement to be entered between TRAIThCO. TRANSCO and I )ISCON4s;

vi. All the six companies: namely TRANSCO. OENCO. DISCOM LAST. DISCOM Wf:ST.I )ISCOM CFNIRA I. and TRADE,C0 shall issue a Power of Attorno or authorisation in favour a MPS113 hue/ alio authorising it to -oWn, collect and distribute- cash on hehall of the companies:

All the Cash Collected h) .DISCOM RAOs shall he translerred MPSI.:11 a/c as per the existing arrangement. :is also discussed in point 3 cash transactions:

'xiii. All letter of Credits. 1.1scrow comforts and working capital shall continue to be maintained lw MPSI.:11 on behalf of the companies as N4PSF:13 has lirst charge \ er entire re \ elute of I )IS('( tivls from sale of power. subject to escrow

agreements. as per the existing arratatements enforced duly supported hy the Authorisation from the Companies:

ix. IVIPSI'M shall allocate cash among companies based on a predetermined priority \ cr CNI1C11SCS as per existing arrangements:

N. The Companies shall authorise MPSF.11 to decide priority of payments as per mailability of cash:

xi. MP5F.11 shall continue to sen ice the debt liabilities. including generic loans on bell:111M' all Compzmies:

Nii Payments made hy MPS1.111 to he adjusted against Me bills- raised hv the companies among Menisci \ es as per the inter se commercial agreements

a. OFNCO to raise invoice on ',RADIX() Ii. Other power Suppliers to raise Bills on IRA DECO C.

POCII. and other transmission licensees facilitating pm ter suppl? to MP to raise invoice on IRA DIXO

d. TRANSCO to raise invoice for transmission charges on DISCON4S routed through the-IRADII.00

C. TRAI WC() to raise invoice on DISCOMs for powerienergy supplied MPSFli to raise debit note on all companies for servicing of liabilities which include generic loans:

$28 (18) TItzgrtY1 , feRiT 3 ¶12005

Subsidy from CioMP. if any shall he received by MI'Slfl3 and respective credit to be passed on to the DISCOMs to the extent of their eligibility to obtain subsidy and payment made thereof by the state government:

MPSEB needs to maintain an account each in the name of the respective companies to record and reconcile such transactions and adjustments.

Adequate cash comfort lot:opening of !Xs shall he provided by MPSEB to the Companies as and when required against various purchase and works orders. on 'merit basis and on availability of limit.

2. Baling Procedure: .

GENIC() will issue monthly bills to 'IRADICO on or before 7th day of the month for the units sent out during preceding month at the interlace points between GENCO and TRANSCO on the basis ofjoint meter readings:. IRA DECO. will receive periodic bills lin- the power purchased from Central Generating- Stations including from other • sources and also for its transmission/wheeling charges:

TRANSCO will prepare separate monthly bills for each DISCOM on the basis of the inter face meter readings adjusted to input level of the MP grid at the approved tariff on or before 7th day of succeeding month and deliver these bills to the TRADECO:

iv. The TRADECO will issue monthly bills to the respective DISCOMs for the units consumed by them adjusted at MP grid input level including charges by c); Intl.L I — every month. For this purpose. bills issued by the 'IRANSCO or the Energy Account Statement issued by the SI.DC shall be the basis for determining the energy consumption by the respective DISCOMs.

IRADECO will forward the bills of GENCO and other -power suppliers duly passed to MPSEB. Similarly DISCOMS will also forward the bills of power supplied by IRA DECO duly passed to MPSEB. MPSEB will arrange to make Payments within the given time schedule. The respective companies will 'mike debit/credit entries in their books of accounts.

DISCOMs will send directly to the state government the el-tims for payment of subsidy towards free and subsidized supply of power urder intimation to MPSEB.

vii. MPSEB shall issue the "Debit Advise- to each company Ibr all the debt servicing made on behalf of Companies. giving details of repayments and interest payments made, which shall be accounted For by the Companies in their books.

1:0718,471 0919,1, PG-09, 3 19 2006

528 (19)

3. (..ash Transactions

Revenue collected from all I rrur consumers of the D'SCOMs will be . deposited in the respective RA0's --Revenue Collection Account'. as already being done prior to issde of this notification: As per standing instructions to the Banks. entire revenue collected in DISC( )Ms collection account of respective KAOs shall be transferred immediatel in the existing MPSEB's Account maintained by Bet.CM at Jabalpur 1 I.Q. on daily and immediate, basis, routed through the "Revenue Collection Account- of (lie respective DISC( )Ms' H.Q.. except those RAOs • that are escrowed in _favour of RFC/ RFC'. revenue of which shall_ be translerred directl> in the existing MPSfIlis Account at Jabalpur H.Q. The re s CIMC lrallSrer from the escrowed RA( s sill be treated as deemed reinittance done by the company head quarters and accordingly accounted RH: in company books: MPSITI \Yin release the payments/lunds to the various agencies and the Companies observing following priorities:

cii Stantioci payments inc.huling those aris.ing out of various ('ourt orders Employee Cod i which includes salmy. comribmion Iowan& IT. iermina/ bencfns etc%

ci (.0al Oil 01.11neniS ql .°1:.'\;(1° fivighl charges. Purulent towards purchase of power including HI & wheeling charges

and dein Aervicine /0 Pk . e/ accinkii ••ItUl exPenAcs 0./ . /1w ( .0//// 4//fieN .1) kssentio/ / e.vpenses althe ( 'mummies

Evsemial C .apila/ expenses. Iii Debt servicing other than Pk('

.1/iv other pat lilt';

is'. l3y 10th of each month. the Companies will submit to MPSEB Ilw monthly fund requirement on weekly basis regarding their essential requirements towards Statutory payments. Fuel. MO, O&M. Capex. debt charges etc. based on the approved ARK and employee cost as per actual stating head wise details.

MPSNII will remit the funds into the expenditure account of the respective Companies on normal due dates and subject to availability of funds towards statuary payments. employee cost, fuel charges. A&G. O&M, Capes etc. While releasing the funds. Director (Finance) will ensure to maintain the company-wise percentages under the. head A&Ci. O&M & Capex. as per company's •

respective approved AR Rs so that equitable treatment to all companies is meted Out.

vi. Ni PSI sill make payments towards statutor requirements including those arising out of various Court orders. power purchase. and including wheeling

charges and debt servicing.

528 (20) E1574Tie,71 i<iiT 3 3JR 2006

MI'SNR III ensure honouring timel \ pa \ mews through 1./Cs and 1.:scrm‘s and also ensure to restrict overdraft to the extent possible while releasing payments to the ('0111panies.

The revenue received from the 1)1 S(( will be treated as ad-hoc payment against power supply bills issued by IRA Dl and wheeling charges bills issued by TRANSCO. The payment made by Ni PSI to the DISCOMs through

various heads and against the debt liabilities of DISC'OIVIs shall be adjusted against ad-line revenue receipts from the OISCUMs and net. of receipts and paYments shall be treated as actual. payments made by DISC. /Ms against the energy as well as Transmission/wheeling charges bills. Accordinulv. necessary entries will be made in the books of account of ..MPSE13 as well as respective DISCOMs as illustrated in para 4 (Accounting). NIPS! Al shall maintain a separate account for each compark (or recording and reeoncilizttion of such adjustments and provide the companies \\ ith the detailed statement of the net adjustments to the bills and net payments effected b \ the companies on a monthly basis.

-MI'SF.1 \\ill receke subsidy than die state gine raised by the DISCOMs and the amount shall against energy bills issued to the concerned I necessary entries will be made in the hooks or respective DISCOMs.

rnment against the claims/ hills

be treated ;is ad-lulc payment )1SCON Is by TRAIW.00 and

account of MI'Sld 3 as \\ ell as

The payment made by MPSIA 3 to the TRANSC(); ( if:NCO throtn2.1) various heads and against their debt liabilities shall he deemed to be ad-hoc payments made to them against their hills to TR ADF,C0 un\ ands suppl \ of pm\ et./ wheeling charges respectively. Accordingly. necessary entries \\ ill be made in die books or account of MPSITh as well as TRANSCO/ OliNCO/TR1\DFC0 as illustrated in pant 4 (Accounting).

n & ( Cess collected by the DISCONIs and remitted to N•11,SI:11 zilont...; with transfer 01 entire revenue collected by the DISCOMs will in turn be remitted bya mpski.3 to the state government or adjusted against subsidy rect ivables based on' the dit-ectives of the state government., .

'Me amount received by ivIPSI.:1 1 against any capital grant/ loan. deposits and reimbursement against claims from any agency \\ ill be remitted to the respective Companies in full and shall not l'orm part of the re \ elute. lin- the purpose of these amingements.

Companies will maintain minimum required balance in their expenditure account

to. avoid overdraft charges. The overdran charges paid by. NIPSUB shall be booked proportionately to all six Companies. generally in the ratio or their respective expenditure on establishment. A&G and O&M.

•

fc41-: 319 2006 528 (21)

xn . Pa) meiit 01C1111)10.\ QC cost ir those emploecs who are not assigned to any of the Companies and vtorking in common services in MPSEB will be charged

proportionately to all six Companies. generally in the ratio of their respective emplm cc cost as per AR ft N,IPSNII shall issue bills periodically towards emplo‘ cc cost:

Expenses on account ()I common service facilities shall be. proportionately charged to the bent:lit:Ian companies and ‘‘ ill be treated as deemed payment hmards AS.:(i of the concerned compam . generally in the ratio of their respective emplo‘ce cost as per ARR. NiIPSEll shall issue bills periodically towards these expenses.

N vi . At the end of the month. MPSE.11 and the Companies will reconcile their accounts and make a statement of delimit/outstanding. payments towards each other. - •

x‘ii .At the end of the month. MPSF.11 will furnish to die TRADECO consolidated statement of account for the transactions madc. towards sale and purchase of Inn\ er company W ise and utility.' agency wise- and will also remit the cash balance. i TRADECO umards trading or power.

4. Cash 171(m Accolin(ing,

a) Fe r the -/.)/.S.00/1 LS"

To enable the billing and culla:Lion limn all consumers and to receive. funds to tiled out various expenses. the DISCONls will maintain mo bank accounts in their names in each Regional Accounting I nit (RA0s). one -Revenue Collection Account- and other -Expenditure Account-. Each RA() will operate these two bank accounts. At their I IQs. DISCOMs will also maintain a -12xenue Collection Account- for receiving revenue collection and an Expenditure Account Ihr funds received l'rom MPSF.13 to !fleet out their expenses:

All revenue collections will be received and accounted in the revenue collection .account. Accounting entries. as currently passed will be continued in the books.of the DISCONis:

The DISCOMs ill keep maintaining standing instruction to the Banks to remit all collections received on a dail \ basis to a designated central account in the name of NIPSIli (already maintained by 138.:CM). Thus all cash received shall be immediately transferred to the control of the NIPSE.13. Revenues received in the escrm\ ed accounts meant for debt repayment for ITC/ RFC loans. • in the eventuality of delault. if pru,' RNC dra‘‘s their over dues directly from these RA( 's accounts, it will be treated as remittance, to MI'SliB in the books of the said I )ISCONI and in turn discharge of debt liabilit\ of PEG! RFC as the case may be:

iv. On all such remittances made to the M PS17.13 account. the DISC OMs will account the payment as an -Ad-hoc payment made to ivIPSEB- which will be reconciled at the end of the month. Thus in the books of the DISCOMs, revenue will be

528 (22) Tit/4MC7111,14:4. fe I* 3 qlq 2006

accounted against bills raised and collected from the consumers. and the cash remittances will be shown as an advance / adhoc payment made to N4PSEB against purchase of power from TRADECO;

TRADFC0 shall, On a monthly basis raise invoices in the name of die DISCOMs for the pokker purchased by diem. These invoices shall be passedrby the DISCOMs and accounted as expenditure in their books. Invoices raised by TRADECO for power purchase Should be credited to the "TRADECO creditor account to reflect settlement Of specific power purchase. bills of TRADECO. The liabilities so created shall he set oil against the "Ad-hoc payment made to MPSEB- account alter due confirmations with MPSF.B. On such liabilit) set off. the DISCOMs shall pass a book elfin transferring the amount from the "Ad-hoc- account to die creditor account created in the name of "TRADNCO creditor- towards all power Pt, rchases.

MPSFI3 shall also remit in the expenditure account at DISCOM's lIQ. funds on a regular basis for the DISCON4s to meet the A&G. routine or enential O&M and establishment expenditure. Such remittances shall also he set off against the "Ad-hoe or advance payment made to MPSEB-. Thc DISCOMs will account t remittances against the above account. NXIWIldialre accounting in the DISCONIP will continue to happen as usual. The expenditure bills will be booked in the DISCOMs books and liabilities so created will be settled limn the remittances received from MPSEB;

The hills received from TRANSCO through TRADIX'0 will he accounted in the books of the DISCOMs as expenditure. MPSITI1 will settle the TRANsco bills under advice to the DISCOMs. The liabilities in DISCOM books - will be settled against the "Ad-hoc payment made to MPSEB- on the basis of the advice received! from MPSFB.

Loan liabilities transferred to the DISCOMs through opening mlance sheets, as a part of the Transfer Scheme. will continue to be in the books of the DISCOMs. MPSEB will settle these liabilities on a ease-to-case basis depending upon availability of funcls and priority. On each such liability repayment. MPSE.13 will advice die DISCOMs of having made payments on their behalf. DISCOMs will account for such liability reduction by crediting the "Ad-hoc payment made to MPSEB- account; tinder normal circumstances. the debit balance in the "Ad-hoc- account in U. books of the DISCOMs should represent surplus cash generated from operations and ideally should be remitted back to the DISCOMs by MPSEB. I lowever. given the cash shortfall in the sector, this account in the DISCOM books will have a credit balance i.e. reflecting an accounts payable situation in tneir books against power purchase bills directly paid out bv MPSNII on their behalf . This credit balance may be analyzed and reduced based on the subsidies received from the State Government.

b) For the "GENCO"

In the case of CiENCO. cash How management will be based on the cash paid out against their bulk supplies of power to their single buyer i.e. TRADIECO;

-

tIttrik`21 1htv4-4, kit* 3 T, 2006 528 (23)

Fromt an accounting perspective. Or:NCO NVIII aCC011111 ihr l'CVC.,11.1CS on the basis of the bulk supply invoices raked on TRADECO. These receivables will be settled based on payments made by MPSEI3.

e) Fur the "TRANSCO"

TRANSCO will raise invoices for transmission/wheeling charges on the Distribution companies through TRADECO and account Ibr the revenues. These receivables will be settled against remittances received from MPS I13 on behalf of the DISCOMs.

(I) For the "NI l'SEB"

IvIPSE.13 ‘vill have the accounting perspective as a temporary holder of cash on behalf of all the sector entities: •

1. For this, MPSEB will maintain three separate accounts for the three DISCOMs as "Ad-hoc remittances received from DISCOM East/ Central/ \Vest". These accounts shall be mirror accounts of the similar accounts maintained by the DISCOMs:

MPSEB ‘'ill have its own separate accounts ibr die power purchase and trading litnctions for and on behalf' ofTRADECO:

. Depending on utilization of funds. MPSEB shall carry out the following:

(a) Bills raised by 'IRADECO for power sales on DISCOMs shall be accounted ,in lvIPSEB accounts as revenue of TRADECO. Amounts settled by MPSEB•against these bills will be transferred through a book entry from the relevant "Ad-hoc remittances Account to the relevant DISCOM debtor accounts to relied the settlement of specific bills for power sales:

Amounts remitted hack to DISCOMs tor meeting their respective expenditure and amounts paid against TRANSCO invoices raised on the DISCOMs ‘vill be directly debited to the "Ad-hoe remittances ....- accounts relek ant to the specific DISCOMs:

The same as in (b) shall apply in the case of loan liability payments made by MPSEB on behalf &the DISCOMs; Copy al bills received from TR A DECO for power purchase from GENCO and other bulk • suppliers. shall be accounted as expenditure of TRADECO in the books. Payments made to OENCO and other bulk suppliers shall be settled against such liabilities.

On the monthly basis. the DISCOMs and MPS17.13 shall reconcile their respective "Ad-hoe remittances/ payment- accounts and ensure that the balances reflect the • correct position 6:Leach other books. MPSEB will also reconcile .he accounts \vial OENCO. TRANSCO and TRADECO on monthly basis:

528 (24) TIWM. 1kit-47 3 719 2006

e) For the "TRADECO"

(hi the monthl \ basis. MpsEll shall furnish a simile entry statement to IRA DECO the net and final amount received and paid towards trading power Company/ Utility/ Agency wise.

5. Other Trading Business 1w TRADECO:

• In addition to meeting the demand of the three DISCOMs the TRADECO will also trade the power to other utilities within or outside the State. in that case the Cash Flow arrangement shall he as under:

. . Any surplus power of the State power sector can be sold by the TRADECO to other buyers and proceedings from the sale of power sludl be deposited in a separate bank account (Trading account) maintained by the TRADEco. 1 lo‘‘ ever, the cost of energy at the rate being billed to the DISCOMs (pooled rate) shall be transferred in MPSE:13 account for making payments to the power suppliers.

• ii. The transactions from any other trading of pm \ er i.e. purchase and Sale of power other

than the pooled power of the sector. shall be made from TRADECO'S Trading account which shall not be part of the Cash Flow Mechanism.

6. Dispute Restitution Committee:

I. Disputes relating to financial matters, if any. shall be resolved in the monthly meetings between heads of l&A department in respective companies and F&A head of MPSEB/ 'IRA DI £0. They will take guidance and directives Itom the Financial Advisor. MPSII3 as and when necessary.

Disputes relating to Commercial matters shall be resolved in the monthly meetings between commercial head of -MADERO and counter parts in respective companies. If required. they will take guidance and directives from the Financial Advisor/ Secretary..

•

In the event any dispute. either linancial or commercial. remains unresolved, the sameak shall be relenvd to the Apex .Redressal-Committee comprising of CM Ds! MD of the companies on quarterly basis or as and when required.

the Apex Committee is unable to arrive at a consensus, then the matter will be referred to the UoMP for adjudication. Decision of the GoMP shall be final and binding on all the parties.

7. Cash Flow Management durino- Transit Period

Process for issuing, power purchase bills in the name oh TRADECO may take some time. Similarly. for banking arrangements for litnd transfer between MPSER and companies under the changed scenario, negotiations with hankers' are to be initiated and finalized. For switching over into the . new arrangement. the companies would also • require

ilt74gt41 thir41, siich 3 'T 2006 528 (25) '

approval of their BoD. As suchiduring,The.transition period, settlement of bulk power energy bills by MPSEB shall be ti-eated as settled with the TRADECO. The transit period will, however, be not more than TWO months. ;

S. Right to amend the Cash Flow Mechanism -

The state government. by issue of separate order(s) from time to time, may amend the UM and make such provisions as may appear to be necessary for removing the difficulties arising in implementation of this mechanism. The Financial Advisor of MPSEI3 may make changes in the UM from time to time, necessary for smooth operation of the cash now mechanism, to the extent not disagreed • by any of the Company, under intimation to Me state government.

9. Validity of the Cash Flow Mechanism

The CFM will be valid till: •

(a) the cash deficit in the revenue earnings and expenditure requirements is resolved to the satisfaction of all the companies,

Or

(3) issue of further directives from the state government.

Once DISCOMs are in a position to meet all their expenses including power purchaSe, pooling of the revenue earnings with MPSER will not be required .and the state government, by an order. will terminate this mechanism.

It%ithler and in the name of the Governor of Madhya Pradesh . .

(Sanjay Bandopadhyaya) Secretary

,¶U7MU iturixtyi wo WWII 4,-1 41 Wqrff11, VITITO 14 ICA Mil INA 11(1-2006.