Private & Confidential – Not for Circulation

This document is neither a prospectus nor a statement in lieu of prospectus but a Disclosure Document prepared in

conformity with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 and Amendment issued vide circular no. LAD-NRO/GN/2012-13/19/5392 dated October 12, 2012

DAMODAR VALLEY CORPORATION Head Office: DVC Head Quarters, DVC Towers, VIP Road, Kolkata-700054 Tel: (033) 2355-1311/9939 Fax: (033) 2355-1311 Website: www.dvcindia.org E-mail: sbr_choudhuri@dvcindia.org

DISCLOSURE DOCUMENT issued in conformity with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 and Amendment issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008, as amended and Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide Circular No. LAD-NRO/GN/2012-13/19/5392 dated October 12, 2012, as amended.

PRIVATE PLACEMENT OF GOVERNMENT OF INDIA GUARANTEED UNSECURED REDEEMABLE NON-CONVERTIBLE NON-CUMULATIVE TAXABLE BONDS IN THE NATURE OF DEBENTURES (SERIES - 15) OF RS. 10,00,000/- EACH FOR CASH AT PAR AGGREGATING TO RS. 2600 CRORE.

TRUSTEES FOR THE BONDHOLDERS R & TA TO THE ISSUE

GDA Trusteeship Ltd. M/S C. B. Management Services (P) Ltd. GDA House, P-22 Bondel Road, Plot No. 85, Kolkata – 700019. Bhusari Colony (Right), Tel No. (033) 4011-6700/2280 Paud Road, Fax No. (033) 4011-6739 Pune 411 038. Email: rta@cbmsl.com Ph. 020-2528-0081 Fax- 020-2528-0275

LISTING The Bonds are proposed to be listed on Wholesale Debt Market (WDM) segment of BSE Limited (BSE) and National Stock Exchange (NSE)

LEAD ARRANGERS TO THE ISSUE

A K. Capital Services Ltd. 3rd Floor, 30-39 Free Press House. Free Press Journal Marg, Mumbai – 400 021. Ph. (022)-6754-6500 Fax- (022)-6610-0594

AXIS Bank

1, Shakespeare Sarani Kolkata 700001 ---------------------------------- Tel No. (033) 2282-4973 Fax No.(033) 2282-2149

Barclays Bank Plc 8th Floor, Ceejay House, Shivsagar Estate Dr. Annie Besant Road, Worli, Mumbai – 400 018. Ph – (022) 6719-6000. Fax- (022) 6719-6100.

Regent Chambers, 12th floor, 1205-06, 208 Nariman Point, Mumbai - 400 021 Tel: (022) – 4302-2222 Fax: (022) – 2204-0040 (022) – 2204-0031

ICICI Bank Ltd. ICICI Bank Tower Bandra-Kurla Complex Bandra (East) Mumbai – 400 051 Tel. : (022)- 2653-1027 Fax : (022) - 2653-1099

Kotak Mahindra Bank Ltd, 36-38A, Nariman Bhavan, 227 Nariman Point, Mumbai - 400 021

Trust Investment Advisors Pvt. Ltd. 1101, Naman Centre, G – Block, C – 31, Bandra Kurla Complex, Bandra East Mumbai – 400 051.

Tel. : (022) -4084-5600 Fax.: (022) -4084-5066

BANKERS TO THE ISSUE

STATE BANK OF INDIA, Corporate Account Group Branch, RELIANCE HOUSE, 34, JAWAHARLAL NEHRU ROAD,

KOLKATA - 700071

UNITED BANK OF INDIA, New Manicktala Branch,

KOLKATA-700 054

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TABLE OF CONTENTS

INDEX TITLE

I. DEFINITIONS/ABBREVIATIONS

II.

DISCLAIMER 1. Disclaimer of the Issuer 2. Disclaimer of the Securities & Exchange Board of India 3. Disclaimer of the Arrangers to the Issue 4. Disclaimer of the Stock Exchange

III. NAME AND ADDRESS OF HEAD OFFICE OF THE ISSUER

IV. NAMES AND ADDRESSES OF THE BOARD MEMBERS OF THE ISSUER

1. Current Directors of the Issuer 2. Change in Directors of the Issuer since last Three Years

V Details of Statutory Auditors of the Issuer

VI

BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF ISSUER AND ITS LINE OF BUSINESS 1. Overview 2. Corporate Structure 3. Key Operational & Financial Parameters of the Issuer 4. Gross Debt Equity Ratio of the Issuer 5. Project Cost and Means of Financing, in case of Funding New Projects 6. Subsidiaries of the Issuer

VII

BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIES INCLUDING ANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS

1. Brief History of the Issuer 2. Key Milestones 3. Capital Structure 4. Equity Capital History of the Issuer for Last Three Years. 5. Changes in Capital Structure of the Issuer for Last Three Years. 6. Details of any Acquisition or Amalgamation in the Last 1 Year 7. Details of Any Reorganisation or Reconstruction in the Last 1 Year 8. Shareholding Pattern of the Issuer 9. Top 10 Shareholders of the Issuer 10. Promoter Holding in the Issue 11. Borrowings of the Issuer

a. Secured Loan Facilities b. Unsecured Loan Facilities c. Non-Convertible Bonds/Debentures

12. Top 10 Bondholders 13. Amount of Corporate Guarantees Issued by the Issuer in favour of Various Counter Parties

including its Subsidiaries, Joint Venture Entities, Group Companies etc. 14. Commercial Paper Issued by the Issuer 15. Other Borrowings (including Hybrid Debt like Foreign Currency Convertible Bonds (FCCBs),

Optionally Convertible Bonds /Debentures/ Preference Shares) 16. Servicing Behavior on Existing Debt Securities, Default(s) and/or Delay(s) in Payments of

Interest and Principal of any kind of Term Loans, Debt Securities and other Financial Indebtedness including Corporate Guarantee issued by the Issuer in the Past 5 Years

17. Outstanding Borrowings / Debt Securities Issued for Consideration Other Than Cash, whether in whole or part, at a Premium or Discount, or In Pursuance of an Option

18. Audited Consolidated and Standalone Financial Information of the Issuer a. Statement of Profit & Loss b. Balance Sheet c. Cash Flow Statement d. Auditors’ Qualification

19. Latest Audited/ Limited Review Half Yearly Consolidated and Standalone Financial Information of the Issuer a. Statement of Profit & Loss b. Balance Sheet c. Auditors’ Qualification

20. Material Event, Development or Change at the Time of Issue VIII SUMMARY TERM SHEET

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IX

TERMS OF OFFER (DETAILS OF DEBT SECURITIES PROPOSED TO BE ISSUED, MODE OF ISSUANCE, ISSUE SIZE, UTILIZATION OF ISSUE PROCEEDS, STOCK EXCHANGES WHERE SECURITIES ARE PROPOSED TO BE LISTED, REDEMPTION AMOUNT, PERIOD OF MATURITY, YIELD ON REDEMPTION, DISCOUNT AT WHICH OFFER IS MADE AND EFFECTIVE YIELD FOR INVESTOR)

1. Issue Size 2. Eligibility to Come Out with the Issue 3. Registration and Government Approvals 4. Authority for the Issue 5. Objects of the Issue 6. Utilisation of the Issue Proceeds 7. Minimum Subscription 8. Underwriting 9. Nature of Bonds 10. Face Value, Issue Price, Effective Yield for Investor 11. Terms of Payment 12. Deemed Date of Allotment 13. Letter(s) of Allotment/Bond Certificate(s)/ Refund Order(s)/ Issue of Letter(s) of Allotment 14. Issue of Bond Certificate(s) 15. Depository Arrangements 16. Procedure for Applying for Demat Facility 17. Fictitious Applications 18. Market Lot 19. Trading of Bonds 20. Mode of Transfer of Bonds 21. Common Form of Transfer 22. Interest on Application Money 23. Interest on Bonds 24. Computation of Interest 25. Record Date 26. Deduction of Tax at Source 27. Put & Call Option 28. Redemption 29. Default Interest Rate 30. Events of Default & Remedies 31. Additional Covenants 32. Settlement/ Payment on Redemption 33. Effect of Holidays 34. List of Beneficial Owners 35. Succession 36. Who Can Apply 37. Who are not Eligible to Apply for Bonds 38. Documents to be Provided by the Investors 39. How to Apply 40. Force Majeure 41. Applications Under Power of Attorney 42. Application by Mutual Funds 43. Acknowledgements 44. Basis of Allocation 45. Right to Accept or Reject Applications 46. PAN / GIR Numbers 47. Signatures 48. Nomination Facility 49. Right of Bondholder(s) 50. Modification of Rights 51. Future Borrowings 52. Bond / Debenture Redemption Reserve (DRR) 53. Notices 54. Joint Holders 55. Disputes & Governing Law 56. Investor Relations and Grievance Redressal

X CREDIT RATING FOR THE BONDS

XI TRUSTEES FOR BONDHOLDERS

XII STOCK EXCHANGE WHERE BONDS ARE PROPOSED TO BE LISTED

XIII MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER

A. MATERIAL CONTRACTS

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B. DOCUMENTS

XIV DECLARATION

XV

ANNEXURES COPY OF RATING LETTER FROM M/S CARE COPY OF RATING LETTER FROM M/S India Ratings (FITCH) COPY OF CONSENT LETTER FROM M/S GDA Trusteeship Ltd.

A. CREDIT RATING LETTER FROM CARE

B. CREDIT RATING LETTER FROM FITCH

C. CONSENT LETTER FROM TRUSTEE TO THE BOND

D. SAMPLES OF APPLICATION FORM.

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I. DEFINITIONS/ ABBREVIATIONS

AY Assessment Year Allotment / Allot / Allotted The issue and allotment of the Bonds to the successful Applicants in the issue. Allottee A successful Applicant to whom the Bonds are allotted pursuant to the Issue, either in full or in part. Applicant / Investor A person who makes an offer to subscribe the Bonds pursuant to the terms of this Disclosure Document

and the Application Form. Application Form The form in terms of which the Applicant shall make an offer to subscribe to the Bonds and which will

be considered as the application for allotment of Bonds in the Issue. Bondholder(s) Any person or entity holding the Bonds and whose name appears in the list of Beneficial Owners

provided by the Depositories. Beneficial Owner(s) Bondholder(s) holding Bond(s) in dematerialized form (Beneficial Owner of the Bond(s) as defined in

clause (a) of sub-section of Section 2 of the Depositories Act, 1996) Board/ Board of Directors The Board of Directors of Damodar Valley Corporation or Committee thereof, unless otherwise

specified. Bond(s)/ NCD(s)/ Debenture(s)

Government of India Guaranteed Unsecured Redeemable Non-Convertible Non-Cumulative Taxable Bonds in the Nature of Debentures (Series 15) of Rs. 10,00,000/- each of Damodar Valley Corporation offered through private placement route under the terms of this Disclosure Document

BSE / Designated Stock Exchange

BSE Limited and National Stock Exchange of India Ltd. being the stock exchanges in which Bonds of the Issuer are proposed to be listed.

Book Closure/ Record Date Reference date for payment of interest / repayment of principal CAR Capital Adequacy Ratio CAG Comptroller and Auditor General of India CDSL Central Depository Services (India) Ltd. CRISIL CRISIL Limited CARE Credit Analysis & Research Limited Debt Securities Non-Convertible debt securities which create or acknowledge indebtedness and include debenture,

bonds and such other securities of the Issuer, whether constituting a charge on the assets of the Issuer or not, but excludes security bonds issued by Government or such other bodies as may be specified by SEBI, security receipts and securitized debt instruments

Deemed Date of Allotment The cut-off date declared by the Issuer from which all benefits under the Bonds including interest on the Bonds shall be available to the Bondholder(s). The actual allotment of Bonds (i.e. approval from the Board of Directors or a Committee thereof) may take place on a date other than the Deemed Date of Allotment.

Depository A Depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996, as amended from time to time

Depositories Act The Depositories Act, 1996, as amended from time to time Depository Participant A Depository participant as defined under Depositories Act Disclosure Document Disclosure Document dated 20-03-2013 for private placement of Government of India Guaranteed

Unsecured Redeemable Non-Convertible Non-Cumulative Taxable Bonds in the nature of Debentures of face value of Rs. 10,00,000 each (Bonds) to be issued by Damodar Valley Corporation aggregating upto Rs. 2600 crore.

DER Debt Equity Ratio DP Depository Participant DRR Bond / Debenture Redemption Reserve DVC Damodar Valley Corporation (the Issuer of the Bonds) EPS Earning Per Share FIs Financial Institutions FIIs Foreign Institutional Investors Financial Year/ FY Period of twelve months period ending March 31, of that particular year GoI Government of India/ Central Government HUF Hindu Undivided Family SBI State Bank of India CARE Credit Analysis & Research Ltd. FITCH India Ratings & Research Pvt. Ltd. (“Formerly-FITCH”). Issuer/ DVC/ Corporation Damodar Valley Corporation I.T. Act The Income Tax Act, 1961, as amended from time to time Listing Agreement Listing Agreement for Debt Securities issued by Securities and Exchange Board of India vide circular

no. SEBI/MD/BOND/1/2009/11/05 dated May 11, 2009 and Amendments to Simplified Debt Listing Agreement for Debt Securities issued by Securities and Exchange Board of India vide circular no. SEBI/MD/DOF-1/BOND/Cir-5/2009 dated November 26, 2009 and Amendments to Simplified Debt Listing Agreement for Debt Securities issued by Securities and Exchange Board of India vide circular no. SEBI/MD/DOF-1/BOND/Cir-1/2010 dated January 07, 2010.

MF Mutual Fund MoF Ministry of Finance NRIs Non Resident Indians NSE / BSE National Stock Exchange of India Ltd. / Bombay Stock Exchange NSDL National Securities Depository Ltd. PAN Permanent Account Number

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GIR General Index Registration Number Private Placement An offer or invitation to less than fifty persons to subscribe to the Bonds in terms of sub-section (3) of

Section 67 of the Companies Act, 1956 (1 of 1956) Rs./ INR Indian National Rupee RBI Reserve Bank of India RTGS Real Time Gross Settlement Registrar Registrar to the Issue, in this case being Registrar of Bonds, DVC SEBI The Securities and Exchange Board of India, constituted under the SEBI Act, 1992 SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time SEBI Debt Regulations Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued

vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008, as amended and Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide circular no. LAD-NRO/GN/2012-13/19/5392 dated October 12, 2012, as amended.

TDS Tax Deducted at Source The Act The Damodar Valley Corporation Act (Act No. XIV of 1948) as amended from time to time The Issue/ The Offer/ Private Placement

Private Placement of Government of India Guaranteed Unsecured Redeemable Non-Convertible Non-Cumulative Taxable Bonds in the Nature of Debentures (Series 15) of Rs. 10,00,000/- each for cash at par aggregating to Rs. 2600 Crore.

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II. DISCLAIMER 1. DISCLAIMER OF THE ISSUER

This Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus and is prepared in accordance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008, as amended and Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide circular no. LAD-NRO/GN/2012-13/19/5392 dated October 12, 2012, as amended. This Disclosure Document does not constitute an offer to the public in general to subscribe for or otherwise acquire the Bonds to be issued by Damodar Valley Corporation (the “Issuer”/ the “DVC”/ “the Corporation”). This Disclosure Document is for the exclusive use of the addressee and it should not be circulated or distributed to third party(ies). It is not and shall not be deemed to constitute an offer or an invitation to the public in general to subscribe to the Bonds issued by the issuer. This Bond Issue is made strictly on private placement basis. Apart from this Disclosure Document, no offer document or prospectus has been prepared in connection with the offering of this bond issue or in relation to the issuer. This Disclosure Document is not intended to form the basis of evaluation for the prospective subscribers to whom it is addressed and who are willing and eligible to subscribe to the bonds issued by Damodar Valley Corporation. This Disclosure Document has been prepared to give general information regarding Damodar Valley Corporation to parties proposing to invest in this issue of Bonds and it does not purport to contain all the information that any such party may require. Damodar Valley Corporation believes that the information contained in this Disclosure Document is true and correct as of the date hereof. Damodar Valley Corporation does not undertake to update this Disclosure Document to reflect subsequent events and thus prospective subscribers must confirm about the accuracy and relevancy of any information contained herein with Damodar Valley Corporation. However, Damodar Valley Corporation reserves its right for providing the information at its absolute discretion. Damodar Valley Corporation accepts no responsibility for statements made in any advertisement or any other material and anyone placing reliance on any other source of information would be doing so at his own risk and responsibility. Prospective subscribers must make their own independent evaluation and judgment before making the investment and are believed to be experienced in investing in debt markets and are able to bear the economic risk of investing in Bonds. It is the responsibility of the prospective subscriber to have obtained all consents, approvals or authorisations required by them to make an offer to subscribe for, and purchase the Bonds. It is the responsibility of the prospective subscriber to verify if they have necessary power and competence to apply for the Bonds under the relevant laws and regulations in force. Prospective subscriber should conduct their own investigation, due diligence and analysis before applying for the Bonds. Nothing in this Disclosure Document should be construed as advice or recommendation by the Issuer or by the Arrangers to the Issue to subscribers to the Bonds. The prospective subscribers also acknowledge that the Arrangers to the Issue do not owe the subscribers any duty of care in respect of this private placement offer to subscribe for the Bonds. Prospective subscribers should also consult their own advisors on the implications of application, allotment, sale, holding, ownership and redemption of these Bonds and matters incidental thereto. This Disclosure Document is not intended for distribution. It is meant for the consideration of the person to whom it is addressed and should not be reproduced by the recipient. The securities mentioned herein are being issued on Private Placement Basis and this offer does not constitute a Public Offer/Invitation. The Issuer reserves the right to withdraw the Private Placement of the Bond Issue prior to the issue closing date(s) in the event of any unforeseen development adversely affecting the economic and regulatory environment or any other force majeure condition including any change in applicable law. In such an event, the Issuer will refund the application money, if any, along with interest payable on such application money, if any. 2. DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIA This Disclosure Document has not been filed with Securities & Exchange Board of India (SEBI). The Bonds have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this document. It is to be distinctly understood that this document should not, in any way, be deemed or construed that the same has been cleared or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project for which the Issue is proposed to be made, or for the correctness of the statements made or opinions expressed in this Disclosure Document. The issue of Bonds being made on private placement basis, filing of this Disclosure Document is not required with SEBI. However SEBI reserves the right to take up at any point of time, with the Issuer, any irregularities or lapses in this Disclosure Document. 3. DISCLAIMER OF THE ARRANGERS TO THE ISSUE It is advised that the Corporation has exercised self due-diligence to ensure complete compliance of prescribed disclosure norms in this Disclosure Document. The role of the Arrangers in the assignment is confined to marketing and placement of the bonds on the basis of this Disclosure Document as prepared by the Corporation. The Arrangers have neither scrutinized/ vetted nor have they done any due-diligence for verification of the contents of this Disclosure Document. The Arrangers shall use this document for the purpose of soliciting subscription from particular class of eligible investors in the bonds to be issued by the Corporation on private placement basis. It is to be distinctly understood that the aforesaid use of this Disclosure Document by the Arrangers should not in any way be deemed or construed that the document has been prepared, cleared, approved or vetted by the Arrangers; nor do they in any manner warrant, certify or endorse the

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correctness or completeness of any of the contents of this Disclosure Document; nor do they take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of the Corporation. The Arrangers or any of its directors, employees, affiliates or representatives do not accept any responsibility and/or liability for any loss or damage arising of whatever nature and extent in connection with the use of any of the information contained in this Disclosure Document. 4. DISCLAIMER OF THE STOCK EXCHANGE As required, a copy of this Disclosure Document has been submitted to the National Stock Exchange of India Ltd. (hereinafter referred to as “NSE”)/ Bombay stock Exchange (BSE) for hosting the same on its website. It is to be distinctly understood that such submission of the Disclosure Document with NSE/ BSE or hosting the same on its website should not in any way be deemed or construed that the Disclosure Document has been cleared or approved by NSE/ BSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Disclosure Document; nor does it warrant that this Issuer’s securities will be listed or continue to be listed on the Exchange; nor does it take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of the Corporation. Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.

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III. NAME AND ADDRESS OF HEAD OFFICE OF THE ISSUER Name of the Issuer : Damodar Valley Corporation Head Office : DVC Head Quarters, DVC Towers VIP Road, Kolkata-700054 Telephone No. : (033) 2355-1311/6607-2403/11/12/20 Fax No. : (033) 2355-1311/1944 Website : www.dvcindia.org E-mail : sbr_choudhuri@dvcindia.org

Compliance Officer for the Issue : S. Basu Ray Chaudhuri, Registrar of Bonds, DVC,

DVC Towers, VIP Road, Kolkata – 700054. Tel No. 033-6607-2403, 09432569311. Fax No 033-2355-1311. E-mail : sbr_choudhuri@dvcindia.org Chief Financial Officer of the Issue : Director (Accounts), Damodar Valley Corporation, DVC Towers, VIP Road, Kolkata -700054. Tel No. 033-2355-9939. Fax 033-2355-1944.

IV. DETAILS OF MEMBER OF THE OF THE BOARD OF DAMODAR VALLEY CORPORATION

1. CURRENT MEMBERS OF THE BOARD OF DVC

The composition of the Members of the Board of the Corporation as on date of Disclosure Document is as under:

Sr. No. Name Designation Nominee of Address 1. Mr. R. N. Sen Chairman Govt. of India DVC Head Quarters, 11th Floor, DVC

Towers, VIP Road, Kolkata-700054 2. Mr. Malay Kumar De, IAS,

Principal Secretary , Department of Power & , NES, Govt of W.B.

Member of the Board

Govt. of West Bengal

Principal Secretary, Power and Non-Conventional Energy New Secretariat Buildings (7th floor), Block – ‘A’ 1, Kiron Sankar Roy Road, Calcutta – 700 001.

3. Mr. Vimal Kirti Singh, IAS, Principal Secretary, Energy Dept, Govt of Jharkhand.

Member of the Board

Govt. of Jharkhand

Principal Secretary, Energy Department, Nepal House, Ranchi, Jharkhand.

4. Mr. I. C. P. Keshari, IAS Jt. Secretary, Ministry of Power,

Member of the Board (Part Time)

Govt. of India Jt. Secretary (UMPP, TH, IPP, FS) Ministry of Power, GOI, Shram Shakti Bhawan, New Delhi - 1

None of the current Members of the Board of Damodar Valley Corporation appear in the RBI’s defaulter list or ECGC’s default list. DVC is an autonomous body established under DVC Act 1948 and not a Company under the Companies Act, as such the nominee directors are not having any DIN for the Corporation.

9

2. CHANGES IN MEMBERS OF THE BOARD SINCE LAST THREE YEARS

Name, Designation Date of

Appointment Date of Cessation

Reason / Remarks

Sri S. Biswas, IAS, Chairman 14-10--2009 26-07-2010 Transfer to other assignment of GOI

Sri D. Singh, IAS, Chairman 26-07-2010 10-06-2011 Transfer to other assignment of GOI

Sri N. N. Pandey, IAS, Member Jharkhand.

20-12-2008 04-04-2011 Transfer to other assignment of GOI

Dr. G. D. Gautama, IAS, Member West Bengal

05-03-2010 14-12-2010 Transfer to other assignment of GOI

CREDIT RATING AGENCIES: (1) Credit Analysis & Research Ltd (2) India Ratings & Research Pvt. Ltd. (“Formerly-FITCH”). V. DETAILS OF AUDITOR OF DAMODAR VALLEY CORPORATION

Comptroller and Auditor General of India, Pocket 9, Deen Dayal Upadhyay Marg, New Delhi 110124

Tel No. - 23231440,23509600 Fax No. ---------------

E-mail pdis@cag.gov.in

VI. BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF ISSUER AND ITS LINE OF BUSINESS

HIGHLIGHTS & RECOGNITIONS 1. DVC emerged as a culmination of attempts made over a whole century to control the wild and erratic

Damodar River. The river spans over an area of 25,000 sq. kms covering the states of Bihar (now Jharkhand) & West Bengal. A multipurpose development plan was designed similar to Tennessee Valley Authority (TVA) of United States of America, for achieving flood control, irrigation, power generation and navigation in the Damodar Valley. Four consultants appointed by the Government of India examined it and recommended early initiation of construction of multipurpose Dams, beginning with Tilaiya to be followed by Maithon. By April 1947, full agreement was practically reached between the three Governments of Central, Bengal and Bihar on the implementation of the scheme and in March 1948, the Damodar Valley Corporation Act (Act No. XIV of 1948) was passed by the Central Legislature, requiring the three governments – the Central Government and the State Governments of West Bengal and Bihar (now Jharkhand) to participate jointly for the purpose of building the Damodar Valley Corporation. The Corporation came into existence on July 07, 1948 as the first multipurpose river valley project of independent India.

2. Incorporated on 7th July 1948 as Corporation by the Damodar Valley Corporation Act, 1948 (XIV of 1948)

passed in the Parliament of India. The primary aim of facilitating the economic and industrial growth of the Damodar Valley Region in Jharkhand and West Bengal (The jurisdictional area of DVC is also referred to as its ‘Command Area’, where it has been supplying power since 1952) covering 25000 sq. kms.

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3. The Corporation is wholly owned by the three Governments, Government of India, Government of West Bengal and Government of Jharkhand (erstwhile Bihar). Capital of the Corporation is contributed by these Governments.

4. FUNCTIONS OF THE CORPORATION:

Section 12 of DVC Act 1948 mandates the following functions within the command area of DVC, which are otherwise the functions of the Jharkhand State and West Bengal State

a) the promotion and operation of schemes for irrigation, water supply and drainage,

b) the promotion and operation of schemes for the generation, transmission and distribution of electrical energy, both hydro-electric and thermal,

c) the promotion and operation of schemes for food control in the Damodar river and its tributaries and the channels, if any, excavated by the Corporation in connection with the scheme and for the improvement of flow conditions in the Hooghly river,

d) the promotion and control of navigation in the Damodar river and its tributaries and channels, if any,

e) the promotion of afforestation and control of soil erosion in the Damodar Valley, and

f) the promotion of public health and the agricultural, industrial, economic and general well-being in the Damodar Valley and its area of operation.

5. For funding for the above functions Section 30 of DVC Act 1948 provides that the participating

Governments shall, as hereinafter specified, provide the entire capital required by the Corporation for the completion of any project undertaken by it and Section 31 of DVC Act 1948 provides that each participating Government shall provide its share of the capital on the dates specified by the Corporation and if any Government fails to provide such share on such dates the Corporation may raise loan to make up the deficit at the cost of the Government concerned. However, this is subject to specific approval of the Central Government, to borrow money in the open market or otherwise for the purposes of carrying out its functions under this Act as provides in Section 42 of DVC Act.

6. While DVC has no authorised share capital, as per the DVC Act. Initial seed Capital contribution by the

three participating Governments were made upto the year 1968-69 amounting to Rs. 214.72 Cr., which with the ploughed back Profit and interest on subsequent years grown to Rs. 5286.90 Crore as on 31.03.2012. The Capital Fund of DVC consists of Fund contributed / ploughed back profit of the three participating Governments i.e. Government of India, Government of Jharkhand and Government of West

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Bengal. Of the total capital contribution of approx. Rs. 5287 Crore, 96.12% of the capital contribution is for power related activities, the break-up as on 31st March 2012 of which is as under –

(In Rs. Crore)

SL. Name of the Owner Power Irrigation Flood Control Total Amount

1. Government of India 1813.67 Nil 7.00 1820.67

2. Government of Bihar 1781.28 0.27 Nil 1781.55

3. Government of West Bengal

1486.69 185.52 12.47 1684.68

TOTAL 5081.64 185.79 19.47 5286.90

Corporate Management:

1. Mr. R. N. Sen CMD DVC Head Quarters, 11th Floor, DVC

Towers, VIP Road, Kolkata-700054 2. Mr. P. K. Sinha IP & TA &

FS Chief Vigilance Officer DVC Head Quarters, 8th Floor, DVC Towers, VIP

Road, Kolkata-700054 3. Mr. T. K. Gupta Director (Finance) DVC Head Quarters, 11th Floor, DVC

Towers, VIP Road, Kolkata-700054 4. Mr. B. P. Singh Director (Technical) DVC Head Quarters, 11th Floor, DVC Towers, VIP

Road, Kolkata-700054 5. Mr. A. Mallik Director (System) & Addl.

Charge of HRD DVC Head Quarters, 11th Floor, DVC Towers, VIP Road, Kolkata-700054

6. Mr. R. Basuri Director (Projects) DVC Head Quarters, 11th Floor, DVC Towers, VIP Road, Kolkata-700054

AUDITED STANDALONE FINANCIAL INFORMATION OF DVC a) Statement of Profit & Loss

(In Rs. Crore)

Particulars F Y 2011-12 F Y 2010-11 F Y 2009-10

Sale of Power 7358 5620 5554 Total Income (Power) 7523 5755 5883 1. Operating Profit on Power 874 777 1188

2. Interest on Project Loan & Others 864 590 383

3. Current Year’s Profit on Power (1-2) 10 187 805

4. Arrear Pension & Gratuity Contribution & Others

(850) (221) (394)

5. Profit/(Loss) on Power (3+4) (840) (34) 411

6. Loss on Irrigation & Flood Control (18) (86) (77)

7. Profit/(Loss) Before Tax (5+6) (858) (120) 334

8. Income Tax - - 34

9. Profit/(Loss) After Tax (7-8) (858) (120) 300

** NOTE ON FINANCIAL PERFORMANCE DURING 2011-12 During the financial year 2011-12 the Operating Profit and Profit from current year Operations from sale of power were Rs.874 Cr. and Rs.10 Cr. respectively. However, the same were more than off-set reflecting net loss of Rs.858 Cr. during the year mainly due to the following reasons :-

1) Loss due to Flood Control and Profit on Irrigation activities were Rs.21 Cr. and Rs.3 Cr. respectively during the year.

2) Past year debits of Rs.850 Cr. is mainly on account of arrear pension liabilities as computed by the License actuarist as on 31st March, 2012 amounting to Rs.733 Crore and other expenses amounting to Rs.117 Crore, which includes Rs.62 Crore on account of change in accounting policy relating to Afforestation expenses which has been charged to Revenue account instead of being capitalized.

12

3) Increase in interest charges are largely on account of new Thermal Capacity Addition Units commissioned during the year which required initial stabilization time during which these Units generated partial revenue.

7. SYNOPSIS OF BALANCE SHEET

The balance sheet of DVC can be considered to be healthy with a net worth (capital contribution + reserves less Intangible assets) of Rs.16,266 Crore. Key financials for the past 3 years are summarised below -

(In Rs. Crore) Particulars 2011-12 2010-11 2009-10 Share Capital 5,287 5,020 4,655 Reserves and Surplus 5492 5,410 5,324 Revenue Account (Owner) (827) (67) 103 Revaluation Reserve 5,370 6,075 6,780 Redemption Reserve 125 199 272 Secured Loans : short term 3,033 2,605 1,328 : long term 15,862 14,135 10,610 Unsecured Loans 3,716 2,202 891 Total Liabilities 38,058 35,579 29,963 Net Block 13,549 9,847 10,634 Capital Work in Progress (Including Intangible Assets)

20,312 21,369 16,234

Investments in subsidiaries 527 440 316 State Power Bonds 647 809 971 Current Assets: Inventories 728 710 664 Sundry debtors 6,078 4,261 4,097 Cash & bank balances 54 52 16 Current Investments NIL 500 - Loans & advances to others (Including Unbilled Revenue)

1,463 1,738 994

Current Assets 8,323 7,261 5,771 (Less : Current liabilities) 4,864 3,808 3,380 (Less: Prov for power consumers & bad debts)

436 339 583

Net Current Assets 3,023 3,114 1,808 Total Assets 38,058 35,579 29,963

* Previous year (FY 2010-11) figures have been re-arranged / re grouped wherever required

13

8. KEY RATIOS (Power)

Particulars March 31, 2012 March 31, 2011 March 31, 2010 Audited * Audited Audited

Growth (%): i) Increase in Total Income 30.73 -2.18 4.05

Profitability (%): i) Gross Margin/ Sales 19.00 17.61 22.12

Solvency / Liquidity: i) Debt to Net Worth Ratio (Including Revaluation Reserve)

1.02 0.89 0.68

Ii) DSCR 1.00 1.69 3.22 iii) Current Ratio 2.91 2.58 1.89 iv) Quick Ratio 2.65 2.32 1.66

Turnover Ratio: i) Inventory Holding – Thermal 1.01 1.14 1.13 ii) Debtors Holding (Monthly Sales) 10.18 10.39 7.73

Financial results of the Corporation for financial year 2011-12 are audit by the Comptroller & Auditor

General of India (“CAG”), which is pending approval of the Parliament. The Debtors holding is mainly on account of power supply to Jharkhand State (JSEB), which is

recoverable through Central Plan allocation under the Tripartite Agreement of the Securitisation Scheme of the GOI.

Past Years’ liabilities have been discharged from Internal Resources released by availing full borrowings at normative levels and therefore, have not been considered in calculation of DSCR, which is based on current year’s profit only.

* Previous year (FY 2010-11) figures have been re-arranged / re grouped wherever required

Key Operational & Financial Parameters of DVC for the Last 3 Audited Years

( Power) (Consolidated) (Rs. In Crore) Sl. No.

Parameters FY 2011-12 FY 2010-11 FY 2009-10

1. Net Worth 16,266 16,696 17,024 2. Total Debt – of which a. Non Current Maturities of Long Term

Borrowing 16,550 14,909 11,470

b. Short Term Borrowing 6,061 4,033 1,359 c. Current Maturities of Long Term

Borrowing

3. Net Fixed Assets 33,861 31,216 26,868 4. Non Current Investments 1,174 1,249 1,287 5. Cash & Cash Equivalents 54 52 16 6. Current Investment - 500 - 7. Current Assets 8,323 7,261 5,771 8. Current Liabilities 4,864 3,808 3,380 9. Net Sales (Including Other Income of

Power) 7,523 5,755 5,883

10. Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) (Power)

1,478 1,115 1,539

11. Earnings Before Interest and Taxes (EBIT) (Power)

874 777 1188

12. Interest (Power) 864 590 383 13. Arrear Pension & Gratuity Contribution

and Others 850 221 394

14. Loss on Irrigation & Flood Control 18 86 77 15. Income Tax - - 34 16. Profit / ( Loss) After Taxation (858) (120) 300 17. Dividend Amount - - - 18. Current Ratio (Times) 2.91 2.58 1.89 19. Interest Coverage Ratio (Times) * 1.55 2.60 10.56 20. Gross Debt/Equity Ratio (Times) 1.39 1.13 0.75 21. Debt Service Coverage Ratio (Times) 1.00 1.69 3.22

14

Cash Flow Statement

DVC is not a Company and Annual Accounts is prepared as per DVC Act/ Rules, Cash Flow Statement is not structured as per Company Accounts. SEBI has kindly allowed relaxation on this issue vide No. IMD/ DOF-I/ Bonds/NK/ OW/ 9357/ 2010 dated June 22, 2010. The Cash Flow Statement as prepared is furnished below: SL NO PARTICULARS FY 2011-12 FY 2010-11 FY 2009-10

A : Source of Fund

1 Opening Balance

a. Cash 52 16 53

b. Short Term Deposit 500 - 765

2 Internal Resources including Retained Interest (756) (557) 69

3 New Loans: 1,752 5,225 5,342

4 PSU Bond –Govt. of India Guaranteed 1,700 - -

5 Redemption of State Bonds (Securitisation Scheme) 162 162 162

6 Bank Accommodation 1,128 1,277 1,196

7 Excess of CL over CA of Capital Projects 596 277 25

TOTAL 5,134 6,400 7,612

B: Application of Fund

1 Repayment of Loans: 911 389 293

2 Capital Expenditure (Power) 4083 5329 7192

3 Investment in Joint Venture Companies 87 130 112 4 Closing Cash Balance

a. Cash 54 52 16

b. Short Term Deposit - 500 -

TOTAL 5,134 6,400 7,612 Auditors’ Qualification

Financial Year Auditors’ Qualification 2011-12 There is no Audit Comment on Accounts except general observations on System.

2010-11 Audit Comment on Revenue Account:

Deficit was understated by Rs. 6.92 Cr. on account of Old outstanding advance to suppliers for Rs. 2.82 Cr., Capitalisation of interest on Loan Rs. 2.06 Cr. and Excess credit on own consumption of Power for Rs. 2.04 Cr. Management Reply: Consistent practice was followed in respect of write off of advances and own consumption of power, which will however, be examined for appropriate disclosure. In respect of capitalization of interest on Loan it is noted for adjustment in the next year. Audit comments on Accounting Standard: The Corporation did not comply with the requirement of Accounting Standard 28 on “Impairment of Assets” with respect to actual loss / damage in respect of plant and machinery in unit 4 of Durgapur Thermal Power Station and also in respect of Gas Turbine Plant at Maithon, which is lying inoperative since 2000. Management Reply: The necessity of making provisions for any amount of loss / damage will arise only when the future earning capacity of assets are affected. The PLF of DTPS during July 2011 was 73.80%, which reflects the performing and earning capacity of the project. Maithon Gas Turbine has remained inoperative since 2000, as it functions as a black starter in time of complete black Out of GRID. However, the actual expenses has been shown separately for the plant.

15

2009-10 Audit Comment on Foot Notes No. 36 (d) to Accounts:

The above Note is deficient to the extent that it does not disclose the amount of estimated liability of Rs. 3000 Cr. (as worked out by management of DVC) towards Power consumers / Licensees for the period from 1st April 2006 to 31st March 2009 in addition to interest @ 6 percent per annum as per Order of CERC dated 6th august 2009, which was upheld by the Appellate Tribunal on 10th May 2010. Management Reply on Audit Comment: The present status has been described in Foot Note no. 35 to the extent possible at this stage. Since Hon’ble Supreme Court has already stayed the refund, quantification will be ascertainable only after final order from the Hon’ble Supreme Court and bills for the past years are revised based on the Distribution Tariff determined by the appropriate SERCs pursuant to the final order of the Hon’ble Supreme Court. Hence, any interim computation of refund not authenticated by any order of the CERC / JSERC/ WBSERC/ Appellate Tribunal / Supreme Court has no legal validity.

DETAILS OF OTHER BORROWINGS (DETAILS DEBT SECURITIES ISSUED IN THE PAST, PARTICULARS OF DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER THAN CASH OR AT A PREMIUM OR DISCOUNT OR IN PURSUANCE OF AN OPTION, HIGHEST TEN HOLDERS OF EACH CLASS OR KIND OF SECURITIES, DEBT EQUITY RATIO)

DETAILS OF BORROWINGS (Rs. in Crore) (as on March 31, 2012)

(a) Secured Loans 1. Short Term Borrowings from Banks 3033.37 2. Long-Term Borrowings from Banks and Financial Institutions 14011.50 3.PSU Bonds guaranteed by GOI 1700.00 (b) Unsecured Loans 1. Public Sector Bonds 688.00 2. Short term Loan 3000.00 (c) Foreign Currency Borrowings 174.25 (d). Others 4.38 Total 22611.50

BORROWINGS OF DAMODAR VALLEY CORPORATION

a) SECURED LOAN FACILITY (AS ON 31-03-2012) IN Rs. CR

Lender’s Name

Type of facility Amount sanctioned

Principal amount outstanding

Repayment Date/ Schedule

Security

PFC TERM LOAN 8095 7163 QTLY UPTO APRIL 2027

Negative lien on land, hypothecation on movable properties of corresponding projects etc.

REC TERM LOAN 3120 2912 QTLY UPTO MARCH 2026

Negative lien on land, hypothecation on movable properties of corresponding projects etc.

CONSORTIUM OF BANKS & FIS

TERM LOAN 6589 3937 QTLY UPTO 2023-2024

Negative lien on land, hypothecation on movable properties of corresponding projects etc.

16

ECB TERM LOAN 151 151 QTLY UPTO 2015-16

PARI PASU CHARGES ON PROJECT

BANKS SHORT TERM LOAN

1400 1400 Within 1 year Second Charge of Project assets

BANKS WORKING CAPITAL

2150 1633 1 YEAR RENEWABLE

Hypothecation against Current Assets.

TOTAL 21505 17196 b. UNSECURED LOAN FACILITY (AS ON 31-03-2012) IN Rs. CR Lender’s Name Type of facility Amount

sanctioned Principal amount outstanding

Repayment Date/ Schedule

Banks Bridge Loan 800 800 Within 9-12 months and repaid

Banks Short-Term Loan 3000 2200 DO EXIM Bank USA ECB 200 23 Half yearly upto

2019 GOI GOI Loan 5 4 TOTAL 3205 3027 C. NON-CONVERTIBLE BONDS DEBENTURE

(AS ON 31.03.2012) IN Rs. CR BOND/ DEBENTURE SERIES

TENNURE /PERIOD OF MATURITY

COUPON RATE(% P.A)

AMOUNT OUT STANDING

REPAYMENT DATE / SCHEDULE

CREDIT RATING

SECURED/ UNSECURED

SECURITY

Series 12 10 YRS 7.70% 48 Jan 2013 AA- UNSECURED

Series 13 7yrs 8.95% 640 Feb 2017 AA UNSECURED

Series 14 15 Yrs 9.30% 1700 2027 AAA (SO)

SECURED GOI Guaranteed and Pari-passu charge on project assets

TOTAL 2388.00 TOP TEN BONDHOLDERS

(AS ON 30.09.2012) IN Rs. CR SL NO NAME OF BOND HOLDERS TOTAL AMOUNT OF BOND

HELD 1 LIFE INSURANCE CORPORATION OF INDIA 3030 2 STATE BANK OF INDIA EMPLOYEES PENSION FUND 1000 3 CBT EPF-05-D-DM 246.10 4 INFOSYS TECHNOLOGIES LIMITED EMPLOYEES

PROVIDENTFUND TRUST 87.50 5 COAL MINES PROVIDENT FUND 78.40 6 CENTRAL BOARD OF TRUSTEES EMPLOYEES 54.80

17

PROVIDENT FUND 7 POSTAL LIFE INSURANCE FUND A/C SBIFMPL 45 8 POSTAL LIFE INSURANCE FUND A/C UTI AMC 45 9 AXIS BANK LIMITED 43 10 ICICI BANK LTD. 30.70 TOTAL 4660.50 DEBT EQUITY RATIO

(Rs. in Crore) Particulars Pre-Issue (as on March

31, 2012) Post Issue of Bonds

TOTAL DEBT Total Debt 22,612 25212 SHAREHOLDERS’FUND Share Capital 5,287 5287 Reserves & Surplus 5,617 5617 Revaluation Reserve 5370 5370 Less: Intangible Assets 8 8 Net Worth 16,266 16266 GROSS DEBT EQUITY RATIO 1.39 1.55 CAPITAL STRUCTURE

(as on March 31, 2012) Sr. No.

Name of Owner Aggregate Value of Capital Held (Rs. Cr.)

% Share

I. Government of India 1820.67 34.44 II. Government of Bihar 1781.55 33.70 III. Government of West Bengal 1684.68 31.86

Total 5286.90 100.00

OPERATING PERFORMANCE:

The data on past operational performance of DVC is summarised in the table below.

Particulars (as at March) 2009 2010 2011 2012 Installed Capacity (MW) 2857 2857 2857 3857 Plant Load Factor (PLF) 66.66% 61.17% 68.51% 65.33% Energy Generated (MU) 15554 14720 16380 19366 Auxiliary Power Consumption (%) 12.17 11.31 11.43 10.75 T&D Loss (%) 2.00 3.38* 4.03* 3.91

* From FY ending 2010, T&D Loss includes Station Loss.

1. Power Generation Capacity includes Thermal and Hydel Power. Thermal Capacity in operation at the end of 2011-12 is 3710 MW and Hydel Capacity is 147.2 MW. New capacity addition in Thermal power is in full swing and by the end of the year 2012-13, total Thermal Capacity will be 5210 MW and by 2013-14 it will be 7410 MW. In addition, 1050 MW Thermal capacity addition has been commissioned within 2012-2013 through JV Company with Tata Power at Maithon.

2. DVC is having own Transmission and Distribution Network with 3629 CKM in 132 KV line and 1852

CKM in 220 KV line and 10 numbers Sub-stations under 220 KV and 33 numbers Sub-stations under 132 KV. Augmentation & Expansion of existing T&D network within the command area of DVC. Matching with thermal capacity addition is also in progress.

3. Bulk Power supply through own Transmission and Distribution network to consumers, which includes,

RAIL, Coal, SAIL, TISCO, WBSEDCL, JSEB, DPSCO etc.

4. DVC has already started Export of Power to other States. The power from new capacity will be exported to Delhi, Madhya Pradesh, Haryana, Punjab and Himachal Pradesh for which Power Purchase Agreements have already executed.

5. Five no. Joint venture Companies, Maithon Power Limited with Tata Power Company for Thermal

Capacity addition at Maithon Right Bank, Bokaro Power Supply Company (P) Ltd. with SAIL for supply of power to Bokaro Steel Plant, DVC EMTA Coal Mines Ltd. with EMTA for mining of Coal Blocks allotted to DVC, Damodar Valley Tourism Development Pvt. Ltd. with IL&FS IDC Ltd. For development of Tourism in Damodar Valley area and National High Power Testing Laboratories Pvt. Ltd. for installation of High Power Testing Laboratories for Power Sector in partnership with NTPC, NHPC and PGCIL

18

The details with regard to DVC shareholding and purpose of formation are as under.

Sl. No

Joint Venture (JV) JV partner DVC holding in JV

Purpose

1 Maithon Power Limited Tata 26% It has been formed to generate power to meet the energy needs of power deficient regions on export basis.

2 Bokaro Power Supply Co. Pvt. Ltd

SAIL 50% It has been formed to run the captive power plant and steam generation plant hived off by SAIL at its Bokaro Steel Plant.

3 DVC EMTA Coal Mines Ltd EMTA 26% It has been formed to develop the captive coal block of Khagra –Joydev, Barjora (North) & Kasta (East) allotted to DVC.

4 Damodar Valley Tourism Development Pvt. Ltd.

IL&FS IDC 50% It has been formed to promote tourism in the command area of DVC.

5 National High Power Testing Laboratories Ltd.

NTPC, PGCIL, NHPC

25% It has been formed for installation of high power testing laboratory for power sector.

GENERATION PROJECTS (EXISTING PROJECTS PRIOR TO 10TH PLAN)

THERMAL

Name Location Capacity (MW) Commissioning Bokaro 'B' Dist- Bokaro

State- Jharkhand 630

(3 X 210 MW) U-I Mar 86 U-II Nov 90 U-III Aug 93

Chandrapura Dist- Bokaro State- Jharkhand

390 (3 X 130 MW)

U-I Oct 64 U-II May 65 U-III July 68

Durgapur Dist.- Barddhaman State- WestBengal

350 (1X140 MW)+ (1X210 MW)

U-III Dec 66 U-IV Sept 82

Mejia Dist.- Bankura State- WestBengal

630 (3 X 210 MW)

U-I Mar 96 U-II Mar 98

U-III Sept 99 Total Thermal 2000

HYDEL Name Location Existing Capacity (MW) Commissioning Tilaiya River- Barakar

Dist.-Hazaribagh State- Jharkhand

4 (2 X 2 MW)

U-I Feb’53 U-II July’53

Maithon River- Barakar Dist.- Burdhaman State- West Bengal

63.2 (2 X 20 MW+ 1x23.2)

U-I Oct’57 U-II Mar’58 U-II Dec’58

Panchet River- Damodar Dist.- Dhanbad State -Jhankhand

80 (2 X 40 MW)

U-I Dec’59 U-II Mar’91

Total Hydel 147.2 GRAND TOTAL(1+2) 2147.2

A. Capacity Addition Programme implemented in 10th & 11th Plan (2002-2012)

Sr. No. Project Capacity

(MW) Date of

Commissioning 1 Mejia TPS Extension Unit No. 4 (1x210 MW)

[Location: P.O. Durlavpur, Dist.Bankura,West Bengal] 210 Feb-2005

2 Mejia TPS Extension Unit No. 5 &6(2x250 MW) [Location: P.O. Durlavpur, Dist.Bankura,West Bengal]

500 U# 5 - Feb-2008 U#6 - Sep-2008

3 Chandrapura TPS Extension Unit No. 7 & 8 (2x250 MW) [Location: P.O. Chandrapura, Dist.Bokaro, Jharkhand]

500 U#8 - July’2011 U#7 - Nov’2011

3 Mejia TPS Extension Unit No. 7 (1x500 MW) [Location: P.O. Durlavpur, Dist.Bankura,West Bengal]

500 U#7 – Aug-2011

TOTAL 1710

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B. 11th Plan projects Commissioned in 2012-13 (upto December 2012)

Sr. No. Project Capacity (MW)

Date of Commissioning

1 Durgapur Steel TPS (2x500 MW) [Location: Andal (Durgapur) Dist. Barddhaman ,West Bengal]

1000

May 2012 Mar-2013

2 Mejia Phase-II TPS unit 8 (1x500 MW) [Location: P.O: Durlavpur, Dist. Bankura, West Bengal]

500 Aug-2012

3 TOTAL 1500

TOTAL INSTALLED CAPACITY UPTO DEC-2012 5357.2 MW C. 11th Plan Projects under construction and to be commissioned within 2013-14

Sr. No. Project Capacity

(MW) Expected Date

of Commissioning

1 Kodarma TPS (2x500 MW) Stage-I [Location: P.S. Jainagar, Dist Koderma, Jharkhand]

1000 Unit # 1 Mar-13 Unit#2 Sep-13

2 Raghunathpur TPS Phase-I (2x600 MW) [Location: Raghunathpur, Dist. Purulia, West Bengal]

1200 Unit # 1 June-13 Unit#2 Sep-13

3 TOTAL 2200 D. Implementation through Joint Venture: Maithon Power Ltd.

(A JVC of DVC and Tata Power Company) Sr. No. Project Capacity

(MW) Date of

Commissioning 1 Maithon Power Limited –PH-I (2X525 MW) 1050 U# 1 – Sep-2011

U# 2 – July-2012

E. 12th Plan Projects:

Sr. No. Project Capacity (MW)

Expected Date of Commissioning

1 Bokaro TPS (1x500 MW) [Location: Bokaro Thermal Dist. Bokaro ,Jharkhand

500

2 Raghunathpur TPS Phase-II (2x660 MW) – Super Critical Technology [Location: Raghunathpur, Dist. Purulia, West Bengal]

1320

3 Kodarma TPS (2x800 MW) Stage-I I [Location: P.S. Jainagar, Dist Kodarma, Jharkhand]

1600

4 MPL PH-II- with Tata Power Company (2x660MW) Maithon, Dhanbad, Jharkhand

1320

TOTAL 4740

Existing Thermal Capacity and progressive capacity addition upto the end of 11th Plan 2007-12.

Capacity in MW

SL Projects End 2007-08

End 2008-09

End 2009-10

End 2010-11

End 2011-12

End 2012-13

End 2013-14

1 Existing Projects 2210 2210 2210 2210 2210 2210 2210 2 Mejia # 5&6 250 500 500 500 500 500 500

3 Chandrapura # 7&8

500

500

500 4 Mejia # 7&8 500 1000 1000 5 Koderma # 1&2 500 1000

6 Durgapur STPS # 1&2

1000 1000

7 Raghunathpur # 1&2

1200

8 Bokaro-A 500 9 TOTAL 2460 2710 2710 2710 3710 5710 7910

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12TH PLAN CAPACITY ADDITION PROGRAMME: In the12th Plan the Corporation contemplates implementation of mega power plants with Super Critical technology. Corporation has planned to install 2 X 660 MW Super critical units at its existing location at Raghunathpur (Raghunathpur PH-II) and has also planned to install 2 X 660 MW super critical units at Maithon (MPL PH-II) jointly with Tata Power Company Ltd. Projects and setting up of 2 Nos. Super Critical units of 800 MW each at Koderma (PH-II) and R&M of existing plants are also being explored. INVESTMENT IN PROJECTS During the 10th, 11th and initial 12th Plan periods, the Corporation has planned huge investment, in order to achieve many fold thermal capacity addition. In line with Govt. of India’s vision “Power for all”, DVC has taken up Thermal Capacity Addition Projects of 7020 MW directly and 2370 MW though Joint Venture Companies during the 11th & the 12th Plan. This involves investment of Rs.46000 Cr. (Approx.), out of which Rs. 28000 Cr. (approx.) has already been invested within 2011-12. In the Revised Budget estimate for 2012-13 DVC has Capital plan expenditure of Rs. 4180 Cr. the Budget Estimate for Capital Plan expenditure is Rs. 4081 Cr. and approved by the Planning Commission of India.

DVC CAPACITY ADDITION PLAN

SL. Projects Capacity (MW)

Total Fund Requirement

Estimated Project Cost

Equity Funding (30%)

Debt Funding (70%)

1 MEJIA #5,6 500 2,366 710 1,656

2 CHANDRAPURA #7,8 500 2,611 783 1,828 4 MEJIA - B 1000 5,286 1,586 3,700 5 BOKARO - A 500 3,552 1,066 2,486 6 KODERMA 1000 5,583 1,675 3,908

7 DURGAPUR 1000 5,715 1,715 4,001 8 RAGHUNATHPUR - I 1200 6,745 2,024 4,722 9 RAGHUNATHPUR - II 1320 9,089 2,727 6,362 10 T&D 1,616 485 1,131 11 OTHERS 1,387 416 971 12 TOTAL DIRECT PROJECTS 7,020 43,950 13,185 30765 13 MPL-PH-I 1050 380 380 - 14 MPL-PH-II 1320 1,584 1,584 - 15 TOTAL JV PROJECTS 2,370 1,964 1,964 -

16 TOTAL PROJECTS 9,390 45,914 15,149 30,765 Fuel security for the Thermal Plants: DVC Power plants are within close vicinity to the largest coal reserve In India and its Thermal Projects are near Coal Pit Head stations. Hence availability of coal with minimum logistic support and low transportation cost is available to DVC. Long-term Coal linkages with the Subsidiaries of Coal India namely Bharat Cocking Coal Ltd, Eastern Coalfields Ltd. Central Coalfields Ltd, and Mahanadi Coalfields Ltd. are tied up with execution of Fuel Supply Agreement as per New Coal Distribution policy of GOI. In addition to the long-term Coal linkages, DVC was allotted Coal Blocks for making the coal available for the up-coming power plants of DVC. The details of Coal Blocks are as under: 1. Coal Block Barjora North and Khagra Joydev are allotted to DVC vide No. 47011/4/2003-CPAM/CA dated

03.03.2005 by the Ministry of Coal, GOI. The Captive Coal Mine is being developed through Joint Venture Company formed by DVC and EMTA.

2. Mining of Coal from Barjora (North) mine has been started from March 2011 and coal is supplied to Mejia

power plant since June 2011.

3. Mining of Coal from Khagra Joydev mine is expected to commence from 2nd Qtr of the FY 2013-14.

21

4. Coal Block Saharpur Jamarpani was allotted to DVC Vide No. 13016/8/2007- CA-I dated 25.07.2007 of Ministry of Coal, GOI.. Estimated Reserve 600 Million Ton. Activities to explore the mine has been started.

5. Coal Block of Gondul Para is allotted to DVC jointly with Tenughat Vidyut Nigam limited (TVNL), Tenughat,

Jharkhand on 50: 50 basis, with lead partner TVNL. The exploration of mines is in process and expected to start mining within 2013-14.

6. Corporation has applied for allocation of some more coal locks for captive consumption of power plants of DVC.

7. Corporation is also contemplating expansion in Mining in its existing Coal mine at Bermo in consultation with

Central Coal Fields Limited and has approached Ministry of Coal , GOI for allocation of Captive Coal Blocks, which will replace long-term linkage.

SALE OF POWER ESTIMATED POWER ALLOCATION AFTER CAPACITY ADDITION DURING XTH AND XITH PLAN PROJECTS

(Figures in MW)

CONSUMERS EXISTING UNITS

MTPS-7&8

CTPS-7&8

DSTPS - 1&2

KTPS - 1&2

RTPS - 1&2

BTPS-A TOTAL

JSEB - JHARKHAND 384 200 300 300 1184 WBSEDCL - WEST BENGAL 164 200 364 RAILWAY 212 212 STEEL INDUSTRIES - SAIL, TISCO etc. 1374 100 100 1574

COAL INDUSTRIES - BCCL, CCL, ECL 296 296

DPSC LTD. 115 115 OTHERS IN COMMAND AREA 165 165 BRPL -DELHI 130 130 BYPL -DELHI 119 82 201 TPDDL - DELHI 88 88 HPPC - HIMACHAL 100 100 100 300 BSEB - BIHAR 100 100 PSPCL - PUNJAB 200 300 200 700 MPPMCL - MP 200 100 300 RESERVE FOR COMMAND AREA TOTAL ALLOCATED POWER 2710 619 500 400 300 700 500 5729 BALANCE PPA TO BE MADE 0 381 0 600 700 500 0 2181 GRAND TOTAL 2710 1000 500 1000 1000 1200 500 7910

Note - MTPS = Mejia Thermal Power Station, CTPS = Chandrapura Thermal Power Station, DSTPS = Durgapur Steel Thermal Power Station, KTPS = Koderma Thermal Power Station, RTPS = Raghunathpur Thermal Power Station, BTPS = Bokaro Thermal Power Station.

Comparative Tariff of Other Licensees in Eastern India w.r.t DVC

Name of Licensee Rate(In Rs/Kwh) at PF-0.93, LF-0.65 and Normal energy rate

JUSCO 4.72

SAIL 5.48

JSEB 5.93

CESC 6.11

DPSCL 4.75

WBSEDCL 5.81

DVC 4.09

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POWER DEMAND IN DVC COMMAND AREA AND OUT SIDE VALLEY AREA: There is huge demand in DVC Valley area for supply of power from DVC. At present, power Demand of about 3500 MW is pending for new connection and additional demand from existing consumers. In addition, demand for power from other States (Kerala, Bihar etc.) is also received by the Corporation. The industrial tariff of DVC is comparatively lower from other power supply agencies for industrial consumers. TRANSMISSION & DISTRIBUTION DVC had a humble beginning: a small generating unit with a few connected lines. Today it has a vast network of transmission lines & sub stations spread across the state of Jharkhand & West Bengal extending beyond its command area up to Jamshedpur & Howrah. DVC supplies bulk power at 33KV, 132KV, 220KV & 400KV through a network covering more than 6748 circuit kilometers. The DVC grid is interconnected with the State Electricity Boards of Jharkhand (JSEB) & West Bengal State Electricity Transmission Corporation Ltd (WBSETCL), Orissa & Power Grid Corporation of India Ltd.

Existing Lines (Ckt Kms.)

State 33 KV 132 KV 220 KV 400 KV

Jharkhand 824 2457 1074.35

West Bengal 497 1098 727.65 28

Orissa 42

TOTAL 1321 3555 1844 28

Existing Sub-stations (Nos.) excepting Generating Stations

State 33 KV 132 KV 220 KV

Jharkhand 7 14 5

West Bengal 7 10 5

TOTAL 14 24 10 Charged with the responsibilities of providing electricity, the vital input for industrial growth in the resource – rich Damodar Valley region, DVC over the last 65 years has developed a big robust transmission network consisting of 132KV, 220KV Grids. DVC grids operate in unison with the Eastern regional grid through 132KV & 220KV tie lines. All the Power stations & Sub stations of DVC are connected through DVC grid. DVC power consumers are provided supply at 25KV, 33KV, 132KV & 220KV voltage level. The construction of 400KV Transmission lines network has been undertaken for evacuation of power of Durgapur Steel thermal Power Station (W.B) , Raghunathpur thermal Power Station (W.B) , MTPS(W.B) ,KTPS (J.H) & BTPS A (J.H) under 11th plan projects. Considering 12th plan projected load & evacuation of generation corresponding to 2016-17 Power scenarios, DVC has taken transmission system augmentation work under 12th plan already approved by DVC Board after duly vetted by CEA, MOP. Replacement of old electromagnetic relays by new generation Numerical relays in different Power Houses & Substations, installation of high accuracy energy meters are a few examples. DVC has under taken a major initiative to renovate & update the existing infrastructure by replacing old circuit breakers by new generation breakers of high rupturing capacity, increasing transformer capacity by capacity addition process at various transformation level at different locations & Sub-station Automation system for up coming projects.

In line with present day requirement, DVC has introduced towards meter reading via remote link in automatic mode which will lift DVC a step towards generation of E-billing in energy metering system. Further in order to keep monitoring towards loss & pilferage of Electricity, DVC has already introduced SEMA project for Energy auditing up to 33KV voltage level.

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Interconnecting Tie Lines with DVC Network

Tie-Line Voltage Other Utility Length(CKm) D/C DTPS-Bidhannagar 220KV WBSEB 34.52 S/C Jamshedpur-Joda 220KV GRIDCO 135.00 D/C Kalyaneswari-Pithakari 220KV PGCIL 15.2 D/C Parulia-Parulia 220KV PGCIL 2.00 S/C Barhi-Biharsharif 132KV JSEB 95.00 S/C Barhi-Rajgir 132KV JSEB 80.00 S/C Maithon-Sultanganji 132KV JSEB 107.60 S/C Ramgarh-PTPS 132KV JSEB 30.40 D/C Patratu-PTPS 132KV JSEB 20.00 S/C Chandil-Manique 132KV JSEB 3.00 S/C Kolaghat-Kolaghat 132KV WBSEB 3.00 S/C Kharagpur-Kharagpur 132KV WBSEB 1.00 S/C Purulia-Purulia 132KV WBSEB 0.00

Transmission & Distribution Projects

A. Renovation & Augmentation of existing infrastructure Projects Completed: 1. 220/132/33KV Borjora Sub station: 220/33KV infrastructure developed & in service since 06.01.2006 &

creation of 132KV infrastructure completed. 2. 220KV D/C(double Ckt) MTPS – Durgapur line completed. 3. 220/33KV Dhanbad Sub station & allied works of LILO(Loop in Loop out) of 220KV CTPS-Kalyaneswari

D/C lines at Dhanbad Sub station completed on 30.06.11 & 132KV Switch yard is in progress. 4. Diversion of D/C 220KV DTPS-Parulia, 132KV DTPS-Kalipahari & 132KV DTPS-CTPS lines at

Durgapur Steel Projects area completed. 5. 132/33KV Jamuria Sub station & allied LILO of 132KV CTPS-DTPS line at Jamuria Sub station

completed. 6. 33KV Biada Receiving station at Bokaro & allied 33KV CTPS-BIADA line completed. 7. 33KV Koderma Receiving station completed. 8. 132KV D/C LILO of existing BARHI – KODERMA line at New 220KV Koderma Sub station completed. 9. S/C LILO of 400 KV Durgapur-Jamshedpur D/C line at DSTPS commissioned. 10. S/C LILO of 400 KV Maithon (PG) -Ranchi(PG) line at RTPS. 11. 220KV D/C LILO of CTPS-MTPS line at Kalyaneswari & 220KV D/C Kalyaneswari.– Pithakari line

commissioned. 12. D/C 220KV IISCO ISP feeder from 220KV Burnpur S/S. 13. 132KVMHS—Kalyaneswari Line (3rd / 4th circuit). 14. Retrofitting of Protection Relays. 15. SEMA PH-I up to 33KV( Energy Audit system)-completed. 16. GSM & RMR(Remote Meter reading system)-completed. 17. 220/132/33 KV Koderma Sub station –completed. 18. 220/132/33 KV Giridih Sub station –completed except 1No ATR & 1No PTR. 19. 220/132/33 KV Dhanbad substation and allied works of LILO of 220 KV CTPS-Kalyaneswari D/C lines at

Dhanbad substation – completed except few bays.

B. New Projects under construction:

Construction of 220KV D/C Dhanbad - Giridih , Koderma-Giridih line & 132KV D/C Patherdih-Gobindpur line extn. up to Dhanbad

220KV D/C Mejia-Gola line extn. up to Ramgarh 2nd Circuit LILO of 220KV Mejia- Kalyaneswari line at Burnpur S/stn 400 KV D/C DSTPS – Raghunathpur Twin line 400 KV D/C RTPS – Ranchi(PG) Quad line 2nd Circuit LILO of 132 KV Gola –Jamshedpur line at Chandil 132 KV extension of Biada Sub station & allied line works 220KV D/C Gola – Ranchi (PG) line 220/132/33 KV Substation at Gola Substation- could not be taken up due to land acquisition problem

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C. New Projects being taken up for construction:

132KV D/C Gobindpur-Dhanbad line 220 KV DSTPS Switch yard & allied works of LILO of DTPS – Parulia line at DSTPS 220KV D/C LILO of DTPS – Parulia line at 220KV Raniganj 220KV D/C Raghunathpur-Chas line 220KV D/C Parulia – Panagarh line 220KV D/C Panagarh-Burdwan line 220KV D/C Panagarh-Borjora line

220/132/33 KV Mejia Sub station 220/33 KV Raghunathpur Sub station 220/33 KV Panagarh Sub station 220/132/33 KV Chas Sub station 132/33 KV Mugma Sub station 220/132 KV Burdwan Sub station Ph-II

SEMA PH-II above 33KV (Energy Audit system) Pre paid Metering system (Colony metering)

NEW INITIATIVES: CORPORATE PLAN:

Corporation engaged M/S Deloitte Touche Tohmatsu India Pvt. Ltd., the international consultancy firm, for preparation of long Term Corporate Plan of DVC upto 2022 and perspective plan upto 2027 the report of the consultancy firm is at the final stage. Corporation is also in the process of creation of Strategic Business units (SBU).

NON-CONVENTIONAL POWER: DVC is having vast Land area and Canals for irrigation and the geographical location of DVC fields are with Solar energy. Considering the same, DVC has already planned for installation of Solar Power Plants, initially at the Canal top. SINKING FUND: As per prudential practice consistently followed by DVC, a sinking fund will be created with annual contribution towards redemption of Bonds as per scheduled dates by way of appropriation of profits in terms of Section 40 of the DVC Act’1948 and as prescribed by CAG. The Annual contribution to such fund is being allowed to DVC’s Tariff for recovery from consumers ensuring dedicated provision for cash fund for redemption of the Bonds.

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VII. BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIES INCLUDING ANY REORGANISATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITAL STRUCTURE & BORROWINGS 1. BRIEF HISTORY OF DAMODAR VALLEY CORPORATION

Brief History and activates of the Corporation is mentioned earlier.

2. KEY MILESTONES

Financial Year Major Milestones / Achievements 2011-2012 New Thermal Power capacity addition 1525 MW. (Including JV) 2012-2013 (upto Dec-12)

New Thermal Power capacity addition 1525 MW. (Including JV)

3. CAPITAL STRUCTURE & HISTORY OF CAPITAL DVC has no authorised share capital, as per the DVC Act. Initial seed Capital contribution by the three participating Governments were made upto the year 1968-69 amounting to Rs. 214.72 Cr., which with the ploughed back Profit and interest on subsequent years grown to Rs. 5286.90 Crore as on 31.03.2012. The Capital Fund of DVC consists of Fund contributed / ploughed back profit of the three participating Governments i.e. Government of India, Government of Jharkhand and Government of West Bengal. Of the total capital contribution of approx. Rs. 5287 Crore, 96.12% of the capital contribution is for power related activities, the break-up as on 31st March 2012 of which is as under

SL. Name of the Owner Power Irrigation Flood Control Total Amount

1. Government of India 1813.67 Nil 7.00 1820.67

2. Government of (Bihar) Jharkhand

1781.28 0.27 Nil 1781.55

3. Government of West Bengal

1486.69 185.52 12.47 1684.68

TOTAL 5081.64 185.79 19.47 5286.90

4. DETAILS OF ANY ACQUISITION OR AMALGAMATION IN LAST 1 YEAR

None

5. DETAILS OF ANY REORGANISATION OR RECONSTRUCTION IN LAST 1 YEAR

Type of Event Date of Announcement Date of Completion Details None

6. SHAREHOLDING PATTERN OF DAMODAR VALLEY CORPORATION

DVC has no Share Capital, DVC is owned by Government of India, Government of West Bengal and Government of Jharkhand (erstwhile Bihar). Capital contribution is made by the three participating Governments.

7. AMOUNT OF CORPORATE GUARANTEES ISSIED BY DVC IN FAVOUR OF VARIOUS COUNTER PARTIES INCLUDING ITS SUBSIDIARIES, JOINT VENTURE ENTITIES, GROUP COMPANIES ETC.

DVC has not issued any Corporate Guarantee in favour of any counter party including its subsidiaries, joint venture entities, group companies etc., except undertaking to the lenders of MPL, Joint Venture Company, for equity infusion for project Capital expenditures.

8. COMMERCIAL PAPER ISSUED BY DVC

DVC has not issued any Commercial Paper.

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9. OTHER BORROWINGS (INCLUDING HYBRID DEBT LIKE FOREIGN CURRENCY CONVERTIBLE

BONDS (FCCBs), OPTIONALLY CONVERTIBLE BONDS/ DEBENTURES/ PREFERENCE SHARES) DVC has not issued any hybrid debt like Foreign Currency Convertible Bonds (FCCBs), Optionally Convertible Bonds/ Debentures/ Preference Shares etc.

10. SERVICING BEHAVIOUR ON EXISTING DEBT SECURITIES, DEFAULT(S) AND/OR DELAY(S) IN PAYMENTS OF INTEREST AND PRINCIPAL OF ANY KIND OF TERM LOANS, DEBT SECURITIES AND OTHER FINANCIAL INDEBTEDNESS INCLUDING CORPORATE GUARANTEE ISSUED BY DVC IN THE PAST 5 YEARS a. The main constituent of DVC’s borrowings are generally in the form of loans from banks and financial

institutions, assistance from multilateral and bilateral financing agencies, bonds etc. b. DVC has been servicing all the principal and interest liabilities on time and there has been no instance

of delay or default since inception. c. DVC has neither defaulted in repayment/ redemption of any of its borrowings nor affected any kind of

roll over against any of its borrowings in the past.

11. OUTSTANDING BORROWINGS/ DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER THAN CASH, WHETHER IN WHOLE OR PART, AT A PREMIUM OR DISCOUNT, ON IN PURSUANCE OF AN OPTION DVC confirms that other than and to the extent mentioned elsewhere in this Disclosure Document, it has not issued any debt securities or agreed to issue any debt securities or availed any borrowings for a consideration other than cash, whether in whole or in part, at a discount or in pursuance of an option since inception.

12. LATEST AUDITED/ LIMITED REVIEW HALF YEARLY STANDALONE FINANCIAL INFORMATION OF

THE ISSUER

DVC is not a Company and Accounts is prepared annually and audited by the sole auditor C&AG of India as per DVC Act/ Rules and No Half Yearly audited accounts is prepared. SEBI has kindly allowed relaxation on this issue vide No. IMD/ DOF-I/ Bonds/NK/ OW/ 9357/ 2010 dated June 22, 2010.

13. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE

DVC hereby confirms that there has been no material event, development or change having implications on the financials / credit quality of DVC (e.g. any material regulatory proceedings against DVC, tax litigations resulting in material liabilities, corporate restructuring event etc.) at the time of issue which may affect the issue or the investor’s decision to invest / continue to invest in the debt securities of DVC.

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VIII. SUMMARY TERM SHEET

Issuer Damodar Valley Corporation (the “Issuer/ “DVC”/ the “Corporation”) Issue Size Rs. 2,600 Crore Option to retain oversubscription

Nil

Objects of the Issue The present issue of Bonds is being made for financing of the Thermal and T&D Projects of the Corporation, some of which already commissioned and some others are to be commissioned shortly. The Thermal Power Projects of the Corporation, which are to be funded, are namely Mejia Unit 5&6 (2x250 MW) and Unit 7&8 (2x500 MW), Chandrapura Unit 7&8 (2x250 MW), Koderma Unit 1&2 (2x500 MW), Durgapur Steel Unit 1&2 (2x500), Raghunathpur Unit 1&2 (2x600MW). The Projects are already funded in part .

Instrument Government of India Guaranteed Unsecured Redeemable Non-Convertible Non-Cumulative Taxable Bonds in the nature of Debentures (NCD).

Security Name 8.69% DVC Bonds 2028 (Series – 15) Issuance Mode In demat mode only Trading Mode In demat mode only Rating “CARE AAA(SO)” (in-principle) by CARE and “AAA(SO)(Ind) (exp)” by India

Ratings & Research Pvt. Ltd. (“Formerly-FITCH”) Mode of Issue Private Placement Timetable for Issuance 21st March 2013 to 25th March 2013 Government of India Guarantee

The Bonds shall be backed by an unconditional and irrevocable guarantee by the Government of India for timely payment of interest and repayment of principal amount.

Conditions Precedent DVC’s Guarantee proposed to have following mechanism: Issuer will have to fund the Escrow account at T- 10 days. In case the fund is not placed, Trustee will invoke the guarantee at T-8 days, and the Government (guarantor) will fund the designated account by T -1 day for interest and principal servicing. Where, “T” is the due date for payment of principal and/ or interest.

Face Value Rs. 10 Lakh per Bond Premium / Discount on Issue Nil Issue Price At par (Rs. 10 Lakh per Bond) Premium / Discount on Redemption

Nil

Redemption Amount At par (Rs. 10 Lakh per Bond) Minimum Application 10 Bonds (Rs.1 Crore) and in multiples of 1 Bond (Rs. 10 Lakh) thereafter

Tenor Total 180 Months from the Deemed Date of Allotment Put / Call Option None Put Option Price Not Applicable Put Option Date Not Applicable Put Notification Time Not Applicable Call Option Price Not Applicable Call Option Date Not Applicable Call Notification Time Not Applicable Redemption / Maturity 30%, 30%, 40% at the end of 13th, 14th & 15th Yr. Redemption Date 25-03-2028 Coupon Rate 8.69% p.a. Step Up / Step Down None Coupon Payment Frequency

Half Yearly

Coupon Payment Dates Half Yearly on 25th September & 25th March each year till maturity of Bonds Coupon Type Fixed Coupon Reset Process (including rates, spread, effective date, interest rate cap and floor etc.)

None

Default Interest Rate In the event of delay in the payment of interest amount and / or principal amount on the due date(s), DVC shall pay additional interest of 2.00% per annum in addition to the Coupon Rate payable on the Bonds, on such amounts due, for the defaulting period i.e. the period commencing from and including the date on which such amount becomes due and upto but excluding the date on which such amount is actually paid.

Day Count Basis Actual / Actual Interest shall be computed on an “actual/actual basis”. Where the interest period

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(start date to end date) includes February 29, interest shall be computed on 366 days-a-year basis.

Interest on Application Money

Interest at the coupon rate (subject to deduction of Income Tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) will be paid to the applicants on the application money for the Bonds for the period starting from and including the date of realisation of application money in DVC’s Bank Account upto one day prior to the Deemed Date of Allotment.

Listing Proposed on the Wholesale Debt Market (WDM) segment of BSE Limited (BSE) and NSE

Trustees GDA Trusteeship Ltd. Depository National Securities Depository Ltd. and Central Depository Services (India) Ltd. Registrars & Transfer Agent C B Management Services (P) Ltd. Settlement Payment of interest and repayment of principal shall be made by way of

Cheque(s)/ interest/ redemption warrant(s)/ demand draft(s)/ credit through RTGS/ NECS / NEFT mechanism.

Business Day Convention ‘Business Day’ shall be a day on which commercial banks are open for business in the city of Kolkata. If any coupon payment date and / or redemption date falls on a day which is not a business day, payment of interest and / or principal amount shall be made on the next business day without liability for making payment of interest for the delayed period.

Record Date 15 days prior to each coupon payment date and redemption date. Mode of Subscription Applicants should make remittance of application money through following mode:

By way of electronic transfer of funds through RTGS mechanism for credit in the account of “Damodar Valley Corporation” at the Banks as detailed in the Annexure-1.

Narration Application Money for Bond Issue

Eligible Investors Mutual Funds, Public Financial Institutions as defined in Section 4A of the Companies Act, 1956, Scheduled Commercial Banks, Insurance Companies, Provident Funds, Gratuity Funds, Superannuation Funds and Pension Funds, Co-operative Banks, Regional Rural Banks, authorised to invest in Bonds / Debentures, Corporates authorised to invest in Bonds / Debentures, Societies authorised to invest in Bonds / Debentures, Statutory Corporations / Undertakings established by Central / State Legislatures authorised to invest in Bonds / Debentures, Trust, Resident Individual.

Non-Eligible Classes of Investors

Non-resident Individuals, Foreign Nationals, Foreign Institutional Investors, Persons Resident Outside India, Venture Capital Funds, Overseas Corporate Bodies, Partnership Firms formed under applicable laws in India in the name of the partners, Hindu Undivided Families through Karta, Persons ineligible to contract under applicable statutory / regulatory requirements, Minor.

Transaction Documents DVC has executed / shall execute the documents including but not limited to the following in connection with the Issue: 1. Letter appointing Trustees to the Bondholders. 2. Bond Trusteeship consent. 3. Bond Trust Deed. 4. Rating from CARE. 5. Rating from India Ratings & Research (P) Ltd. (FITCH). 6. Tripartite Agreement between DVC, Registrar and NSDL for issue of Bonds in

Dematerialised Form. 7. Tripartite Agreement between DVC, Registrar and CDSL for issue of Bonds in

Dematerialised Form. 8. Letter appointing Registrar and MoU entered into between DVC and the

Registrar. 9. Application made to BSE / NSE for seeking its in-principle approval for listing of

Bonds. 10. Listing Agreement with BSE/NSE. 11. Letters appointing Arrangers to the Issue.

Conditions precedent to subscription of Bonds

The subscription from Investors shall be accepted for allocation and allotment by DVC subject to the following:

1. Rating Letter(s) from the aforesaid rating agency(ies) not being more than one month old from the issue opening date.

2. Letter from the Trustees conveying their consent to act as Trustees for the Bondholders.

3. Letter from BSE/NSE conveying its in-principle approval for listing of Bonds. Conditions subsequent to subscription of Bonds

DVC shall ensure that the following documents are executed / activities are completed as per time frame mentioned elsewhere in this Disclosure Document:

1. Credit of demat account(s) of the allottee(s) by number of Bonds allotted within 2 working days from the Deemed Date of Allotment.

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2. Making application to BSE/NSE within 15 days from the Deemed Date of Allotment to list the Bonds and seek listing permission within 20 days from the Deemed Date of Allotment in terms of sub-section (1) of Section 73 of the Companies Act, 1956 (1 of 1956).

3. Execution of Bond Trust Deed for creation of security within time frame prescribed in the relevant regulations / act / rules etc.

4. Execution of Guarantee Agreement and Guarantee Fee Agreement with GOI. Besides, DVC shall perform all activities whether mandatory or otherwise, as mentioned elsewhere in this Disclosure Document.

Events of Default If DVC commits a default in making payment of any installment of interest or repayment of principal amount of the Bonds on the respective due date(s), the same shall constitute an ‘Event of Default’ by DVC. Besides, it would also constitute an ‘Event of Default’ by DVC, if DVC does not perform or does not comply with one or more of its material obligations in relation to the Bonds issued in pursuance of terms and conditions stated in this Disclosure Document, Bond Trusteeship Agreement and Bond Trust Deed, which in opinion of the Trustees is incapable of remedy.

Remedies Upon the occurrence of any of the Events of Default, the Trustees shall on instructions from majority Bondholder(s), declare the amounts outstanding to be due and payment forthwith and the Guarantee provision shall become enforceable, and the Trustees shall have the right to enforce the Guarantee under the applicable laws.

Cross Default Not Applicable. Role and Responsibilities of Trustees

The Trustees shall perform its duties and obligation and exercise its rights and discretions, in keeping with the trust reposed in the Trustees by the holder(s) of the Bonds and shall further conduct itself, and comply with the provisions of all applicable laws, provided that, the provisions of Section 20 of the Indian Trusts Act, 1882, shall not be applicable to the Trustees. The Trustees shall carry out its duties and perform its functions as required to discharge its obligations under the terms of SEBI Debt Regulations, the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Debenture Trusteeship Agreement, the Trust Deed, Disclosure Document and all other related transaction documents, with due care, diligence and loyalty. The Trustees shall be vested with the requisite powers for protecting the interest of holder(s) of the Bonds including but not limited to the right to appoint a nominee director on the Board of DVC in consultation with institutional holders of such Bonds. The Trustees shall ensure disclosure of all material events on an ongoing basis and shall supervise the implementation of the conditions regarding creation of security for the Bonds and Bond Redemption Reserve. DVC shall, till the redemption of Bonds, submit its latest audited / limited review half yearly consolidated (wherever applicable) and standalone financial information such as, Statement of Profit & Loss, Balance Sheet and Cash Flow Statement and auditor qualifications, if any, to the Trustees within the timelines as mentioned in Simplified Listing Agreement issued by SEBI vide circular no. SEBI/MD/ BOND/ 1/2009/11/05 dated May 11, 2009 as amended. Besides, DVC shall within 180 days from the end of the financial year, submit a copy of the latest annual report to the Trustees and Trustees shall be obliged to share the details so submitted with all ‘Qualified Institutional Buyers’ (QIBs) and other existing Bondholder(s) within two working days of their specific request.

Governing Law and Jurisdiction

The Bonds are governed by and shall be construed in accordance with the existing laws of India. Any dispute arising thereof shall be subject to the jurisdiction of district courts of Kolkata.

Additional Covenants 1. Trust Deed Creation: In the event of delay in execution of Bond Trust Deed and / or other security document(s), DVC shall refund the subscription at the Coupon Rate or shall pay penal interest of 2.00% per annum over the Coupon Rate till such conditions are complied with, at the option of the Bondholder(s).

2. Default in Payment: In the event of delay in the payment of interest amount and / or principal amount on the due date(s), DVC shall pay additional interest of 2.00% per annum in addition to the Coupon Rate payable on the Bonds, on such amounts due, for the defaulting period i.e. the period commencing from and including the date on which such amount becomes due and upto but excluding the date on which such amount is actually paid.

3. Delay in Listing: DVC shall complete all the formalities and seek listing

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permission within 20 days from the Deemed Date of Allotment. In the event of delay in listing of Bonds beyond 20 days from the Deemed Date of Allotment, DVC shall pay penal interest of 1.00% per annum over the Coupon Rate from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the Bondholder(s).

4. Refusal for Listing: If listing permission is refused before the expiry of the

20 days from the Deemed Date of Allotment, DVC shall forthwith repay all monies received from the applicants in pursuance of the Disclosure Document along with penal interest of 1.00% per annum over the Coupon Rate from the expiry of 20 days from the Deemed Date of Allotment. If such monies are not repaid within 8 days after DVC becomes liable to repay it (i.e. from the date of refusal or 20 days from the Deemed Date of Allotment, whichever is earlier), then DVC and every director of DVC who is an officer in default shall, on and from expiry of 8 days, will be jointly and severally liable to repay the money, with interest at the rate of 15% per annum on application money, as prescribed under Section 73 of the Companies Act, 1956.

The interest rates mentioned in above four covenants shall be independent of each other.

Issue Opening Date ^ 21-03-2013 (10.00AM)

Issue Closing Date ^ 25-03-2013 (5.00PM) Pay in Date ^ 21-03-2013 (10.00 AM) to 25-03-2013 (PM) Deemed Date of Allotment ^ 25-03-2013 ** Payment of Interest is subject to deduction of tax at source, as applicable.

^The Corporation reserves its sole and absolute right to modify (pre-pone/ postpone) the above issue schedule without giving any reasons or prior notice. In such a case, investors shall be intimated about the revised time schedule by the Corporation. The Corporation also reserves the right to keep multiple Deemed Date(s) of Allotment at its sole and absolute discretion without any notice. In case if the Issue Closing Date / Pay in Dates is / are changed (pre-poned / post-poned), the Deemed Date of Allotment may also be changed (pre-poned / post-poned) by the Corporation at its sole and absolute discretion. Consequent to change in Deemed Date of Allotment, the Coupon Payment Dates and / or Redemption Date may also be changed at the sole and absolute discretion of the issuer.

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IX. TERMS OF OFFER (DETAILS OF DEBT SECURITIES PROPOSED TO BE ISSUED, MODE OF

ISSUANCE, ISSUE SIZE, UTILIZATION OF ISSUE PROCEEDS, STOCK EXCHANGES WHERE SECURITIES ARE PROPOSED TO BE LISTED, REDEMPTION AMOUNT, PERIOD OF MATURITY, YIELD ON REDEMPTION, DISCOUNT AT WHICH OFFER IS MADE AND EFFECTIVE YIELD FOR INVESTOR)

PRIVATE PLACEMENT OF GOI GUARANTEED UNSECURED REDEEMABLE NON-CONVERTIBLE NON-CUMULATIVE TAXABLE BONDS IN THE NATURE OF DEBENTURES (SERIES 15) OF RS. 10 LAKH EACH FOR CASH AT PAR AGGREGATING TO RS. 2600 CRORE

1. Issue Size Damodar Valley Corporation (the ‘Issuer’ or “DVC” or “the Corporation”) proposes to raise upto Rs. 2600 Crore through issue of Government of India Guaranteed Unsecured Redeemable Non-Convertible Non-Cumulative Taxable Bonds in the Nature of Debentures (Series -15) (hereinafter referred to as “Bonds”) of the face value of Rs. 10,00,000/- each . 2. Eligibility to come out with the Issue The Corporation or the person in control of the Corporation, has not been restrained or prohibited or debarred by SEBI / any other Government authority from accessing the securities market or dealing in securities and such direction or order is in force.

3. Registration and Government Approvals The Borrowing of the Corporation is with the approval of the Government of India in terms of the Section 42 of the DVC Act 1948. The Corporation can undertake the activities proposed by it in view of the present approvals and no further approval from any government authority(ies) is required by it to undertake the proposed activities save and except those approvals which may be required to be taken in the normal course of business from time to time. 4. Authority for the Placement The present issue of Bonds is being made pursuant to the resolution of the Board of Directors of the Corporation, passed at its meeting held on 10.09.2012 and the delegation provided thereunder and with the borrowing approval from Ministry of Power, GOI. The Corporation can issue the Bonds proposed by it in view of the present approvals and no further internal or external permission / approval(s) is / are required by it to undertake the proposed activity. 5. Objects of the Issue The present issue of bonds is being made for financing of the Thermal and T&D Projects of the Corporation, some of which are already commissioned and some others are to be commissioned shortly. The Thermal power projects of the Corporation, which are to be funded are namely Mejia Unit 5&6 (2x250MW) and Unit 7&8 (2X 500MW), Chandrapura unit 7&8 (2x250MW) Koderma unit 1&2 (2x500MW), Durgapur steel unit 1&2 (2x 500 MW), Raghunathpur unit 1&2 (2x600 MW). The projects are already funded in part by short-term line of credit from Banks and the same are to be repaid from the proceeds of Bonds. The expenses of the present issue would be met from the proceeds of the Issue. The Main Object of the Corporation in terms of the DVC Act 1948 enables it to undertake the activities for which the funds are being raised through the present issue and also the activities which the Corporation has been carrying on till date. The proceeds of this Issue after meeting all expenses of the Issue will be used by the Corporation for meeting issue objects. 6. Utilisation of Issue Proceeds The present issue of bonds is being made for financing of the Thermal and T&D Projects of the Corporation, some of which are already commissioned and some others are to be commissioned shortly. The Thermal power projects of the Corporation, which are to be funded are namely Mejia Unit 5&6 (2x250MW) and Unit 7&8 (2X 500MW), Chandrapura unit 7&8 (2x250MW) Koderma unit 1&2 (2x500MW), Durgapur steel unit 1&2 (2x 500 MW), Raghunathpur unit 1&2 (2x600 MW). The projects are already funded in part by short-term line of credit from Banks and the same are to be repaid from the proceeds of Bonds. The Corporation is subject to a number of regulatory checks and balances as stipulated in its regulatory environment. The Corporation is a Government of India Undertaking under the administrative control of Ministry of Power, Government of India and is managed by professionals under the supervision of its Board Members. The Comptroller and Auditor General (CAG) of India is the sole statutory auditor for audit of the accounts of the Corporation. Therefore, the management shall ensure that the funds raised via this private placement shall be utilized only towards satisfactory fulfillment of the Objects of the Issue.. The management of the Corporation shall ensure that the funds raised via the present issue shall be utilised only towards satisfactory fulfillment of the Objects of the Issue.

The Corporation undertakes that proceeds of the present issue shall not be used for any purpose which may be in contravention of the regulations / norms issued by the RBI / SEBI / Stock Exchange(s).

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In accordance with the SEBI Debt Regulations, the Corporation further undertakes that it shall not utilise the proceeds of the issue for providing loan to or acquisition of shares of any person who is part of the same group or who is under the same management. However, the Corporation is a public sector enterprise and, as such, it does not have any identifiable ‘Group Companies’ or ‘Companies under the same Management’. The issue proceeds shall not be utilised towards full or part consideration for the purchase or any acquisition, including by way of a lease of any property. Further, the Corporation undertakes that issue proceeds from the present issue of Bonds allotted to banks shall not be used for any purpose which may be in contravention of the RBI guidelines on bank financing to NBFCs including those relating to classification as capital market exposure or any other sectors that are prohibited under the RBI regulations.

The main objects of the Corporation in terms of DVC Act, 1948 permits it to undertake its existing activities as well as the activities for which the funds are being raised through the present Bond Issue.

7. Minimum Subscription The Corporation has decided not to stipulate any minimum subscription for the present issue and therefore the Corporation shall not be liable to refund the issue subscription(s)/ proceed(s) in the event of the total issue collection falling short of issue size or certain percentage of issue size. 8. Underwriting The present Issue of Bonds is not underwritten. 9. Nature of Bonds The Bonds are to be issued in the form of Government of India Guaranteed Unsecured Redeemable Non-Convertible Non-Cumulative Taxable Bonds in the nature of Debentures (Series 15).

The following provisions of the DVC Act, 1948 spells out the underlying risk in investing in DVC Bond: Section 30 of DVC Act 1948: “The participating Governments shall, as hereinafter specified, provide the entire capital required by the Corporation for the completion of any project undertaken by it” and Section 31 of DVC Act 1948 provides that each participating Government shall provide its share of the capital on the dates specified by the Corporation and if any Government fails to provide such share on such dates the Corporation may raise loan to make up the deficit at the cost of the Government concerned. Over and above, tin terms of the GOI Notification of the Ministry of Finance, Department of Economic Affairs F. No. 5(88) / 2006 – PR dated 14-08-2008, DVC Bonds fall within the combined category of G-Sec and others as quoted below: 1(b): Other Securities the principal whereof and interest whereon is fully and unconditionally guaranteed by the Central Government or any State Government ….”. The above provisions of both the DVC Act 1948 and MOF Notification implies non- existence of underlying risk in investment in DVC Bonds. 10 Face Value, Issue Price, Effective Yield for Investor Each Bond has a face value of Rs. 10,00,000/- and is issued at par i.e. for Rs. 10,00,000/-. The Bonds shall be redeemable at par i.e. for Rs. 10,00,000/- per Bond. Since there is no premium or discount on either issue price or on redemption value of the Bonds, the effective yield for the investors shall be the same as the coupon rate on the bonds. 11. Terms of Payment The full face value of the Bonds applied for is to be paid alongwith the Application Form. Investor(s) need to send in the Application Form and details of RTGS for the value of the Bonds applied for. For Bond Series 15

Face Value per Bond Minimum Application for Amount Payable per Bond on Application Rs. 10,00,000/- 10 Bonds and in multiples

of 1 Bond thereafter Rs. 10,00,000/-

12. Deemed Date of Allotment All benefits under the Bonds including interest on Bonds shall accrue to the Bondholder(s) from and including 25-03-2013, which shall be the Deemed Date of Allotment. All benefits relating to the Bonds will be available to the investors from the Deemed Date of Allotment. The actual allotment of Bonds may take place on a date other than the Deemed Date of Allotment. The Corporation reserves the right to keep multiple allotment date(s)/ deemed date(s) of allotment at its sole and absolute discretion without any notice. In case if the issue closing date / pay in date is/are changed (pre-poned/ postponed), the Deemed Date of Allotment may also be changed (pre-poned / postponed) by the Corporation at its sole and absolute discretion.

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13. Letter(s) of Allotment/ Bond Certificate(s)/ Refund Order(s) Issue of Letter(s) of Allotment

The beneficiary account of the investor(s) with National Securities Depository Ltd. (NSDL)/ Central Depository Services (India) Ltd. (CDSL)/ Depository Participant will be given initial credit within 2 working days from the Deemed Date of Allotment. The initial credit in the account will be akin to the Letter of Allotment. On completion of the all statutory formalities, such credit in the account will be akin to a Bond Certificate. 14. Issue of Bond Certificate(s) Subject to the completion of all statutory formalities within time frame prescribed in the relevant regulations/ act/ rules etc. , the initial credit akin to a Letter of Allotment in the Beneficiary Account of the investor would be replaced with the number of Bonds allotted. The Bonds since issued in electronic (dematerialized) form, will be governed as per the provisions of The Depository Act, 1996, Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, rules notified by NSDL/ CDSL/ Depository Participant from time to time and other applicable laws and rules notified in respect thereof. The Bonds shall be allotted in dematerialised form only.

15. Depository Arrangements The Corporation has appointed M/s C. B. Management Services (P) Ltd (Address: P-22 Bondel Road, Kolkata – 700 019; Tel No. -033-4011-6700/6720/6722; Fax No. 033-2287-0263; E-mail: cbmsl1@cal2.vsnl.net.in) as Registrar (‘Registrar’) for the present bond issue. The Corporation has entered into necessary depository arrangements with National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL) for dematerialisation of the Bonds offered under the present issue, in accordance with the Depositories Act, 1996 and regulations made thereunder. In this context, the Corporation has signed two tripartite agreements as below: Tripartite Agreement between the Corporation, National Securities Depository Limited (NSDL) and the

Registrar for dematerialisation of the Bonds offered under the present issue. Tripartite Agreement between the Corporation, Central Depository Services (India) Limited (CDSL) and

the Registrar for dematerialisation of the Bonds offered under the present issue. Investors can hold the bonds only in dematerialised form and deal with the same as per the provisions of Depositories Act, 1996 as amended from time to time 16. Procedure for applying for Demat Facility 1. Applicant(s) should have/ open a Beneficiary Account with any of the Depository Participants (DPs) of

NSDL or CDSL. 2. The applicant(s) must specify the beneficiary account number and Depository Participant’s ID in the

relevant columns of the Application Form. 3. If incomplete/ incorrect beneficiary account details are given in the Application Form which does not match

with the details in the depository system, the allotment of Bonds shall be held in abeyance till such time satisfactory demat account details are provided by the applicant.

4. The Bonds shall be directly credited to the Beneficiary Account(s) as given in the Application Form and

after due verification, allotment advice/ refund order, if any, would be sent directly to the applicant by the Registrars to the Issue but the confirmation of the credit will be provided to the applicant by the Depository Participant of the applicant..

5. Interest or other benefits with respect to the Bonds would be paid to those Bondholders whose names appear on the list of beneficial owners given by the Depositories to the Corporation as on Record Date/ Book Closure Date. In case, the beneficial owner is not identified by the Depository as on the Record Date/ Book Closure Date due to any reason whatsoever, the Corporation shall keep in abeyance the payment of interest or other benefits, till such time the beneficial owner is identified by the Depository and intimated to the Corporation. On receiving such intimation, the Corporation shall pay the interest or other benefits to the beneficiaries identified, within a period of 15 days from the date of receiving such intimation.

6. Applicants may please note that the Bonds shall be allotted and traded on the stock exchange(s) only in dematerialised form.

17. Fictitious Applications In terms of Section 68 of the Companies Act, 1956, any person who makes, in fictitious name, any application to a body corporate for acquiring, or subscribing to, the bonds, or otherwise included a body corporate to allot, register any transfer of bonds therein to them or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to 5 years. 18. Market Lot The market lot will be one Bond (“Market Lot”). Since the Bonds are being issued only in dematerialised form, the odd lots will not arise either at the time of issuance or at the time of transfer of Bonds. 19. Trading of Bonds The marketable lot for the purpose of trading of Bonds shall be 1(one) Bond of face value of Rs.10 lakh each. Trading of Bonds would be permitted in demat mode only in standard denomination of Rs.10 lakh and such

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trades shall be cleared and settled in recognised stock exchange(s) subject to conditions specified by SEBI. In case of trading in Bonds which has been made over the counter, the trades shall be reported on a recognized stock exchange having a nationwide trading terminal or such other platform as may be specified by SEBI. 20. Mode of Transfer of Bonds Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL/ CDSL/ Depository Participant of the transferor/ transferee and any other applicable laws and rules notified in respect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Bonds held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant. The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption will be made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) not with the Corporation. Transfer of Bonds to and from NRIs/ OCBs, in case they seek to hold the Bonds and are eligible to do so, will be governed by the then prevailing guidelines of RBI.

21. Common Form of Transfer The Corporation undertakes that it shall use a common form/ procedure for transfer of Bonds issued under terms of the Disclosure Document. 22. Interest on Application Money Interest at the coupon rate (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) will be paid to the applicants on the application money for the Bonds. Such interest shall be paid for the period starting from and including the date of realisation of application money in DVC’s Bank Account upto one day prior to the Deemed Date of Allotment. The interest on application money will be computed as per Actual/ Actual day count convention. Such interest would be paid on all valid applications, including the refunds. Where the entire subscription amount has been refunded, the interest on application money will be paid alongwith the Refund Orders. Where an applicant is allotted lesser number of bonds than applied for, the excess amount paid on application will be refunded to the applicant alongwith the interest on refunded money. The interest cheque(s)/ demand draft(s) for interest on application money (alongwith Refund Orders, in case of refund of application money, if any) shall be dispatched by the Corporation within 15 days from the Deemed Date of Allotment and the relative interest warrant(s) alongwith the Refund Order(s), as the case may be, will be dispatched by registered post to the sole/ first applicant, at the sole risk of the applicant. 23. Interest on the Bonds The Bonds shall carry interest at the Coupon Rate from, and including, the Deemed Date of Allotment upto, but excluding the Redemption Date, payable on the ‘Coupon Payment Dates’, on the outstanding principal amount of Bonds till Redemption Date, to the holders of Bonds (the ‘Holders’ and each, the ‘Holder’) as of the relevant Record Date. Interest on Bonds will cease from the Redemption Date in all events. The first interest period is defined as the actual number of days falling between 25-03-2013 to 25-09-2013 including the first date but excluding the last date. The first interest payment would be made on 25-09-2013. The second and subsequent interest period (except the last interest period) is defined as the actual number of days in a year as 365 (366 in case of a leap year provided the bond proceeds are outstanding on February 29 of that year). The last interest period is defined as the actual number of days falling between 25-09-2027 and 25-03-2028 for Bonds under 15 series and the respective redemption dates including the first date but excluding the last date. The last interest payment would be made on the redemption date alongwith the redemption of principal amount. If any Coupon Payment Date falls on a day which is not a business day (Business Day being a day on which commercial Banks are open for business in the city of Kolkata, West Bengal) payment of interest will be made on next business day but without liability for making payment of interest for the delayed period. 24. Computation of Interest Interest for each of the interest periods shall be computed as per 'Actual/ Actual day count convention on the face value amount of Bonds outstanding at the Coupon Rate rounded off to the nearest Rupee. Where the interest period (start date to end date) includes February 29, interest shall be computed on 366 days-a-year basis, on the face value amount of Bonds outstanding. 25. Record Date The ‘Record Date’ for the Bonds shall be 15 days prior to each Coupon Payment Date and Redemption Date. In case of redemption of Bonds, the trading in the Bonds shall remain suspended between the Record Date and the Redemption Date. Interest payment and principal repayment shall be made to the person whose name appears as beneficiary with the Depositories as on Record Date. In the event of the Corporation not receiving any notice of transfer at least 15 days before the respective Coupon Payment Date and at least 15 days prior

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to the Redemption Date, the transferees for the Bonds shall not have any claim against the Corporation in respect of interest so paid to the registered bondholder. 26. Deduction of Tax at Source Deduction of Tax at Source: No TDS is required to be deducted U/S 193 (ix) of Income Tax Act, 1961, when any interest payable on security issued by a company, where such security is in dematerialised form and is listed on a recognised stock exchange in India in accordance with Securities Contract (Regulation) Act, 1956 and Rules made there under. 27. Put & Call Option Neither the bondholder(s) shall have any right to exercise Put Option nor the Corporation shall have right to exercise Call Option to redeem the Bonds, in whole or in part, prior to the Redemption Date. 28. Redemption The face value of the Bonds shall be redeemed at par, on the Redemption Date. The Bonds will not carry any obligation, for interest or otherwise, after the Redemption Date. The Bonds held in the dematerialised form shall be taken as discharged on payment of the redemption amount by the Corporation on the Redemption Date to the registered Bondholders whose name appear in the Register of Bondholders on the record date. Such payment will be a legal discharge of the liability of the Corporation towards the Bondholders. In case if the Redemption Date falls on a day which is not a Business Day (‘Business Day’ being a day on which Commercial Banks are open for business in the city of Kolkata, West Bengal), then the payment due shall be made on the next Business Day together with additional interest for the intervening period.

29. Default Interest Rate In the event of delay in the payment of interest amount and/ or principal amount on the due date(s), the Corporation shall pay additional interest of 2.00% per annum in addition to the Coupon Rate payable on the Bonds, on such amounts due, for the defaulting period i.e. the period commencing from and including the date on which such amount becomes due and upto but excluding the date on which such amount is actually paid.

30. Events of Default & Remedies

If the Corporation commits a default in making payment of any instalment of interest or repayment of principal amount of the Bonds on the respective due date(s), the same shall constitute an ‘Event of Default’ by the Corporation. Besides, it would also constitute an ‘Event of Default’ by the Corporation, if the Corporation does not perform or does not comply with one or more of its material obligations in relation to the Bonds issued in pursuance of terms and conditions stated in this Disclosure Document, Bond Trusteeship Agreement and Bond Trust Deed, which in opinion of the Trustees is incapable of remedy. Upon the occurrence of any of the Event of Default, the Trustees shall on instructions from majority Bondholder(s), declare the amounts outstanding to be due and payable forthwith and the GOI Guarantee shall become enforceable, and the Trustees shall have the right to enforce the GOI Guarantee as per Guarantee Agreement under the applicable laws. 31. Additional Covenants a. Security Creation: In the event of delay in execution of Bond Trust Deed and/or other Guarantee

documents, the Corporation shall refund the subscription at the Coupon Rate or shall pay penal interest of 2.00% per annum over the Coupon Rate till such conditions are complied with, at the option of the Bondholder(s).

b. Default in Payment: In the event of delay in the payment of interest amount and/or principal amount on the due date(s), the Corporation shall pay additional interest of 2.00% per annum in addition to the Coupon Rate payable on the Bonds, on such amounts due, for the defaulting period i.e. the period commencing from and including the date on which such amount becomes due and upto but excluding the date on which such amount is actually paid.

c. Delay in Listing: The Corporation shall complete all the formalities and seek listing permission within 20 days from the Deemed Date of Allotment. In the event of delay in listing of Bonds beyond 20 days from the Deemed Date of Allotment, the Corporation shall pay penal interest of 1.00% per annum over the Coupon Rate from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the Bondholder(s).

d. Refusal for Listing: If listing permission is refused before the expiry of the 20 days from the Deemed Date of Allotment, the Corporation shall forthwith repay all monies received from the applicants in pursuance of the Disclosure Document along with penal interest of 1.00% per annum over the Coupon Rate from the expiry of 20 days from the Deemed Date of Allotment. If such monies are not repaid within 8 days after the Corporation becomes liable to repay it (i.e. from the date of refusal or 20 days from the

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Deemed Date of Allotment, whichever is earlier), then the Corporation and every Director of the Corporation who is an officer in default shall, on and from expiry of 8 days, will be jointly and severally liable to repay the money, with interest at the rate of 15% per annum on application money, as prescribed under Section 73 of the Companies Act, 1956.

The interest rates mentioned in above four covenants shall be independent of each other. 32. Settlement/ Payment on Redemption

Payment of interest and repayment of principal shall be made by way of cheque(s)/ interest/ redemption warrants(s)/ demand draft(s)/ credit through direct credit/ NECS/ RTGS/ NEFT mechanism in the name of the Bondholders whose name appear on the List of Beneficial Owners given by Depository to the Corporation as on the Record Date. The Bonds shall be taken as discharged on payment of the redemption amount by the Corporation on the Redemption Date to the list of Beneficial Owners as provided by NSDL/ CDSL/ Depository Participant as on Record Date. Such payment shall be a legal discharge of the liability of the Corporation towards the Bondholders. On such payment being made, the Corporation shall inform NSDL/ CDSL/ Depository Participant and accordingly the account of the Bondholders with NSDL/ CDSL/ Depository Participant shall be adjusted. The Corporation’s liability to the Bondholders towards all their rights including for payment or otherwise shall cease and stand extinguished from the due date of redemption in all events. Further the Corporation will not be liable to pay any interest or compensation from the Redemption Date. On the Corporation dispatching/ crediting the amount to the Beneficiary(ies) as specified above in respect of the Bonds, the liability of the Corporation shall stand extinguished. 33. Effect of Holidays

Should any of date(s) defined in the Disclosure Document, excepting the Deemed Date of Allotment, fall on a Saturday, Sunday or a Public Holiday, the next working day shall be considered as the effective date(s).

34. List of Beneficial Owners The Corporation shall request the Depository to provide a list of Beneficial Owners as at the end of the Record Date. This shall be the list, which shall be considered for payment of interest or repayment of principal amount, as the case may be.

35. Succession In the event of the demise of the sole/first holder of the Bond(s) or the last survivor, in case of joint holders for the time being, the Corporation shall recognize the executor or administrator of the deceased Bondholder, or the holder of succession certificate or other legal representative as having title to the Bond(s). The Corporation shall not be bound to recognize such executor or administrator, unless such executor or administrator obtains probate, wherever it is necessary, or letter of administration or such holder is the holder of succession certificate or other legal representation, as the case may be, from a Court in India having jurisdiction over the matter. The Corporation may, in its absolute discretion, where it thinks fit, dispense with production of probate or letter of administration or succession certificate or other legal representation, in order to recognize such holder as being entitled to the Bond(s) standing in the name of the deceased Bondholder on production of sufficient documentary proof or indemnity. Where a non-resident Indian becomes entitled to the Bond by way of succession, the following steps have to be complied with:

a. Documentary evidence to be submitted to the Legacy Cell of the RBI to the effect that the Bond was acquired by the NRI as part of the legacy left by the deceased holder.

b. Proof that the NRI is an Indian National or is of Indian origin. Such holding by the NRI will be on a non-repatriation basis. 36. Who Can Apply

The following categories of investors are eligible to apply for this Issue of Bonds. However, the prospective subscribers must make their own independent evaluation and judgment regarding their eligibility to invest in the Issue. a. Mutual Funds; b. Public Financial Institutions as defined in Section 4A of the Companies Act, 1956; c. Scheduled Commercial Banks; d. Insurance Companies; f. Provident Funds, Gratuity Funds, Superannuation Funds and Pension Funds; g. Co-operative Banks; h. Regional Rural Bank authorised to invest in Bonds/Debentures; i. Companies and Bodies Corporate authorised to invest in Bonds/ Debentures; j. Societies autorised to invest in Bonds/ Debentures; k. Trusts authorised to invest in Bonds/ Debentures; l. Statutory Corporations/ Undertakings established by Central / State legislature authorised to invest in Bonds/ Debentures; m. Resident Individual Investors.

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All investors are required to comply with the relevant regulations/ guidelines applicable to them for investing in the issue of Bonds as per the norms approved by Government of India, Reserve Bank of India or any other statutory body from time to time. However, out of the aforesaid class of investors eligible to invest, this Disclosure Document is intended solely for the use of the person to whom it has been sent by the Corporation for the purpose of evaluating a possible investment opportunity by the recipient(s) in respect of the securities offered herein, and it is not to be reproduced or distributed to any other persons (other than professional advisors of the prospective investor receiving this Disclosure Document from the Corporation.

37. Who are not Eligible to Apply for Bonds

This Issue is no being offered to the following categories of Investors and any application from such investors will be deemed and invalid application and rejected:

a. Minors without a guardian name; b. Qualified Foreign Investor; c. Foreign Nationals; d. Non-Resident Indians; e. Persons Resident Outside India; f. Venture Capital Funds; g. Overseas Corporate Bodies; h. Partnership Firms formed under applicable laws in India in the name of the partners; i. Hindu Undivided Families through Karta; j. Person ineligible to contract under applicable statutory/ regulatory requirements.

38. Documents to be Provided by Investors Investors need to submit the certified true copies of the following documents, along-with the Application Forms, as applicable:

Memorandum and Articles of Association/ Constitution/ Bye-Laws/ Trust Deed; Board Resolution authorising the investment and containing operating instructions; Power of Attorney/ relevant resolution/ authority to make application; Specimen signatures of the authorised signatories (ink signed), duly certified by an appropriate authority; Government Notification (in case of Primary Co-operative Bank and RRBs); Copy of Permanent Account Number Card (PAN Card) issued by the Income Tax Department; Copy of a cancelled cheque for ECS payments; Necessary Forms for claiming exemption from deduction of tax at source on interest or application money, where applicable. In case of Individuals, proof of Address.

39. How to Apply

This being a private placement issue, the eligible investors who have been addressed through this communication directly, only are eligible to apply. Applications for the Bonds must be in the prescribed form and completed in BLOCK LETTERS in English and as per the instructions contained therein. Applications complete in all respects must be submitted before the last date indicated in the issue time table or such extended time as decided by the Corporation, to the Head Office of the Corporation, accompanied by the application money by way of UTR No. of payment through RTGS/NEFT. The original Application Forms (along with all necessary documents as detailed in the Disclosure Document), pay-in-slip and other necessary documents should be sent to the Head Office of the Corporation through respective Arrangers on the same day. Payment by RTGS/ NEFT mode only should be made to any of the designated Accounts of “Damodar Valley Corporation”. The entire amount of Rs. 10 lakh per Bond is payable on application. Applications should be for the number of Bonds applied by the Applicant. Applications not completed in the said manner are liable to be rejected. The name of the applicant’s bank, type of account and account number must be filled in the Application Form. This is required for the applicant’s own safety and these details will be printed on the refund orders and interest/ redemption warrants. The applicant or in the case of an application in joint names, each of the applicant, should mention his/her Permanent Account Number (PAN) allotted under the Income Tax Act, 1961 or where the same has not been allotted, the GIR No. and the Income Tax Circle/ Ward/ District. As per provision of Section 139A (5A) of the Income Tax Act, PAN/GIR No. needs to be mentioned on the TDS certificates. Hence, the investor should mention his PAN/GIR No. In case neither the PAN nor the GIR Number has been allotted, the applicant shall mention “Applied for” and in case the applicant is not assessed to income tax, the applicant shall mention ‘Not

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Applicable’ (stating reasons for non applicability) in the appropriate box provided for the purpose. Application Forms without this information will be considered incomplete and are liable to be rejected. Unless the Corporation specifically agrees in writing with or without such terms or conditions it deems fit, a separate UTR No. of RTGS remittance must accompany each Application Form. Applicants are requested to write their names and Application Form serial number on the reverse of the instruments by which the payments are made. All applicants are requested to tick the relevant column “Category of Investor” in the Application Form. Public/ Private/ Religious/ Charitable Trusts, Provident Funds and Other Superannuation Trusts and other investors requiring “approved security” status for making investments. For further instructions about how to make an application for applying for the Bonds and procedure for remittance of application money, please refer to the Summary Term Sheet and the Application Form.

40. Force Majeure

The Corporation reserves the right to withdraw the issue prior to the Issue Closing Date in the event of any unforeseen development adversely affecting the economic and regulatory environment. 41. Applications under Power of Attorney

A certified true copy of the power of attorney or the relevant authority as the case may be alongwith the names and specimen signature(s) of all the authorized signatories and the tax exemption certificate/ document, if any, must be lodged alongwith the submission of the completed Application Form. Further modifications/ additions in the power of attorney or authority should be notified to the Corporation or to its Registrars or to such other person(s) at such other address(es) as may be specified by the Corporation from time to time through a suitable communication. 42. Application by Mutual Funds

In case of applications by Mutual Funds, a separate application must be made in respect of each scheme of an Indian Mutual Fund registered with SEBI and such applications will not be treated as multiple applications, provided that the application made by the Asset Management Company/ Trustees/ Custodian clearly indicate their intention as to the scheme for which the application has been made.

43. Acknowledgements

No separate receipts will be issued for the application money. However, the Bankers to the Issue receiving the duly completed Application Form will acknowledge receipt of the application by stamping and returning to the applicant the acknowledgement slip at the bottom of each Application Form.

44. Basis of Allocation

Beginning from the issue opening date and until the day immediately prior to the issue closing date, full and firm allotment against all valid applications for the Bonds will be made to applicants on a first-come-first-served basis and based on mandates made to the respective arrangers, subject to a limit of the Issue size, in accordance with applicable laws. If and to the extent, the issue is fully subscribed prior to the issue closing date, no application shall be accepted once the Issue is fully subscribed. Allotment will be done on “day-priority basis”. In case of oversubscription over and above the basic issue size, the allotment of such valid applications received on the closing day shall be on pro rata basis to the investors in the ratio in which they have applied regardless of investor category. If the proportionate allotment of Bonds to such applicants is not a minimum of one Bond or in multiple of one Bond (which is the market lot), the decimal would be rounded off to the next higher whole number if that decimal is 0.5 or higher and to the next lower whole number if that decimal is lower than 0.5. All successful applicants on the issue closing date would be allotted the number of Bonds arrived at after such rounding off.

45. Right to Accept or Reject Applications The Corporation reserves its full, unqualified and absolute right to accept or reject any application, in part or in full, without assigning any reason thereof. The rejected applicants will be intimated along with the refund warrant, if applicable, to be sent. Interest on application money will be paid from the date of realisation of fund till one day prior to the date of refund. The application forms that are not complete in all respects are liable to be rejected and would not be paid any interest on the application money. Application would be liable to be rejected on one or more technical grounds, including but not restricted to: a. Number of bonds applied for is less than 10 Bonds ( Rs 1 Crore); b. Application exceeding the issue size; c. Bank Account details not given; d. Details for issue of Bonds in electronic/ dematerialised form not given; e. PAN/GIR and IT Circle/ Ward/ District not given;

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f. In case of applications under Power of Attorney by limited companies, corporate bodies, trusts, etc. relevant documents not submitted;

In the event, if any Bond(s) applied for is/ are not allotted in full, the excess application monies of such Bonds will be refunded, as may be permitted. 46. PAN/GIR Number

All applicants should mention their Permanent Account Number or the GIR Number allotted under Income Tax Act, 1961 and the Income Tax Circle/ Ward/ District. In case where neither the PAN nor the GIR Number has been allotted, the fact of such a non-allotment should be mentioned in the Application Form in the space provided. 47. Signatures

Signatures should be made in English or in any of the Indian Languages. Thumb impressions must be attested by an authorized official of a Bank or by a Magistrate/ Notary Public under his/her official seal.

48. Nomination Facility As per Section 109 A of the Companies Act, 1956, only individuals applying as sole applicant/Joint Applicant can nominate, in the prescribed manner, a person to whom his Bonds shall vest in the event of his death. Non-individuals including holders of Power of Attorney can not nominate. 49. Right of Bondholder(s) Bondholder is not a shareholder. The bondholders will not be entitled to any of the rights and privileges of shareholders other than those available to them under statutory requirements. The Bond(s) shall not confer upon the holders the right to receive notice, or to attend and vote at the General Meeting of the Corporation. The principal amount and interest on the Bonds will be paid to the registered Bondholders only, and in case of Joint holders, to the one whose name stands first. Besides the above, the Bonds shall be subject to the provisions of the DVC Act, 1948, the terms of this bond issue and the other terms and conditions as may be incorporated in the Bond Trust Deed and other documents that may be executed in respect of these Bonds. 50. Modification of Rights The rights, privileges, terms and conditions attached to the Bonds may be varied, modified or abrogated with the consent, in writing, of those holders of the Bonds who hold at least three fourth of the outstanding amount of the Bonds or with the sanction accorded pursuant to a resolution passed at a meeting of the Bondholders, provided that nothing in such consent or resolution shall be operative against the Corporation where such consent or resolution modifies or varies the terms and conditions of the Bonds, if the same are not acceptable to the Corporation. 51. Future Borrowings The Corporation shall be entitled to borrow/ raise loans or avail of financial assistance in whatever form as also issue Bonds/ Debentures/ Notes/ other securities in any manner with ranking as pari-passu basis or otherwise and to change its capital structure or redemption or reduction of capital, on such terms and conditions as the Corporation may think appropriate, without the consent of, or intimation to, the Bondholder(s) or the Trustees in this connection.

52. SINKING FUND:

As per prudential practice consistently followed by DVC, a sinking fund will be created with annual contribution towards redemption of Bonds as per scheduled dates by way of appropriation of profits in terms of Section 40 of the DVC Act’1948 and as prescribed by CAG. The Annual contribution to such fund is being allowed to DVC’s Tariff for recovery from consumers ensuring dedicated provision for cash fund for redemption of the Bonds. 53. Joint-Holders Where two or more persons are holders of any Bond(s), they shall be deemed to hold the same as joint tenants with benefits of survivorship subject to other provisions contained in the Act. 54. Notices All notices required to be given by the Corporation or the Trustees to the Bondholders shall be deemed to have been given if sent by ordinary post/ by courier to the original sole/ first allottees of the Bonds and/or if published in one All India English daily newspaper and one regional language newspaper. All notice(s) required to be given by the Bondholder(s), including notices referred to under ‘Payment of Interest’ and ‘Payment on Redemption’ shall be sent by registered post or by hand delivery to the Corporation or to such persons at such address as may be notified by the Corporation from time to time. 55. Disputes & Governing Law The Bonds are governed by and shall be construed in accordance with the existing laws of India. Any dispute arising thereof shall be subject to the jurisdiction of the courts at Kolkata, (West Bengal).

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56. Investor Relations and Grievance Redressal Arrangements have been made to redress investor grievances expeditiously as far as possible, the Corporation endeavours to resolve the investor’s grievance within 30 days of its receipt. All grievances related to the issue quoting the Application Number (including prefix), number of Bonds applied for, amount paid on application, may be addressed to the Compliance Officer at the Head Office of DVC. All investors are hereby informed that the Corporation has appointed a Compliance Officer who may be contacted in case of any pre-issue/ post-issue related problems such as non-credit of letter(s) of allotment/ bond certificate(s) in the demat account, non-receipt of refund order(s), interest warrant(s)/ cheque(s) etc. Contact details of the Compliance Officer is furnished below: COMPLIANCE OFFICER Mr. S. Basu Ray Chaudhauri, Registrar of Bonds, Damodar Valley Corporation, Central Accounts Office, DVC Towers, VIP Road, Kolkata – 700 054. Tel.: (033) 23551311/6607-2403/11/12 Fax.: (033) 23551311 Mob: 09432569311

E-mail: sbr_choudhuri@dvcindia.org X. CREDIT RATING & RATIONALE THEREOF Credit Analysis and Research Ltd. (“CARE”) vide its letter dated 28-02-2013 has assigned a rating of "In –Principle AAA (SO)” (Pronounced Triple A Structured Obligation) for the present issue of Bonds of the Corporation aggregating to Rs. 2600 Crore. Instruments with this rating is considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. A copy of rating letter from CARE is enclosed elsewhere in this Disclosure Document. India Ratings & Research Pvt. Ltd. (“Formerly-FITCH”) vide its letter dated 28-02-2013 has assigned a rating of "IND AAA (SO) (exp)” (Pronounced Triple A Structured Obligation) for the present issue of Bonds of the Corporation aggregating to Rs. 2600 Crore. Instruments with this rating is considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. A copy of rating letter from India Ratings & Research Pvt. Ltd. is enclosed elsewhere in this Disclosure Document. Other than the credit ratings mentioned hereinabove, the Corporation has not sought any other credit rating from any other credit rating agency(ies) for the Bonds offered for subscription under the terms of this Disclosure Document. The above ratings are not a recommendation to buy, sell or hold securities and investors should take their own decision. The ratings may be subject to revision or withdrawal at any time by the assigning rating agencies and each rating should be evaluated independently of any other rating. The ratings obtained are subject to revision at any point of time in the future. The rating agencies have the right to suspend, withdraw the rating at any time on the basis of new information etc. XI TRUSTEES FOR THE BONDHOLDERS In accordance with the provisions of (i) Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008, as amended, (ii) Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide circular No. LAD-NRO/GN/2012-13/19/5392 dated October 12, 2012, as amended, (iii) Section 117B of the Companies Act, 1956 and (iv) Securities and Exchange Board of India (Debenture Trustees) Regulation, 1993, the Corporation has appointed GDA Trusteeship Ltd.

GDA Trusteeship Ltd GDA House Plot No. 85 Bhusari Colony (Right), Paud Road,

Pune - 411 038. A copy of letter from GDA Trusteeship Ltd., conveying their consent to act as Trustee for the current issue of Bonds is enclosed elsewhere in this Disclosure Document.

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The Corporation hereby undertakes that a Trust Deed shall be executed by it in favour of the Trustees within fifteen days of the allotment of the Issue. The Trust Deed shall contain such clauses as may be prescribed under regulation and those mentioned in Schedule IV of the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993. Further the Trust Deed shall not contain a clause which has the effect of (i) limiting or extinguishing the obligations and liabilities of the Trustees or the Corporation in relation to any rights or interests of the holder(s) of the Bonds, (ii) limiting or restricting or waiving the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992); Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008: Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 and circulars, regulations or guidelines issued by SEBI and (iii) indemnifying the Trustees or the Corporation for loss or damage caused by their act of negligence or commission or omission. The Bondholder(s) shall, without further act or deed, be deemed to have irrevocably given their consent to the Trustees or any of their agents or authorized officials to do all such acts, deeds, matters and things in respect of or relating to the Bonds as the Trustees may in their absolute discretion deem necessary or require to be done in the interest of the holder(s) of the Bonds. Any payment made by the Corporation to the Trustees on behalf of the Bondholder(s) shall discharge the Corporation pro tanto to the Bondholder(s). The Trustees shall protect the interest of the Bondholders in the event of default by the Corporation in regard to timely payment of interest and repayment of principal and shall take necessary action at the cost of the Corporation. No Bondholder shall be entitled to proceed directly against the Corporation unless the Trustees, having become so bound to proceed, fail to do so. The Trustees shall perform its duties and obligations and exercise its rights and discretions, in keeping with the trust reposed in the Trustees by the holder(s) of the Bonds and shall further conduct itself, and comply with the provisions of all applicable laws, provided that, the provisions of Section 20 of the Indian Trusts Act, 1882, shall not be applicable to the Trustees. The Trustees shall carry out its duties and perform its functions as required to discharge its obligations under the terms of SEBI Debt Regulations, the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Bond Trusteeship Agreement, the Trust Deed, Disclosure Document and all other related transaction documents, with due care, diligence and loyalty. The Trustees shall be vested with the requisite powers for protecting the interest of holder(s) of the Bonds including but not limited to the right to appoint a nominee director on the Board of the Corporation in consultation with institutional holders of such Bonds. The Trustees shall ensure disclosure of all material events on an ongoing basis and shall supervise the implementation of the conditions regarding creation of security for the Bonds and Bond Redemption Reserve. XII. STOCK EXCHANGE WHERE BONDS ARE PROPOSED TO BE LISTED The Bonds are proposed to be listed on the Wholesale Debt Market (WDM) Segment of the National Stock Exchange of India Ltd. (“NSE”)/ Bomaby Stock Exchange (BSE). The Corporation obtained in-principle approval from the NSE for listing of said Bonds on its Wholesale Debt Market (WDM) Segment (Annexed). The Corporation shall make an application to the NSE to list the Bonds to be issued and allotted under this Disclosure Document and complete all the formalities relating to listing of the Bonds within reasonable time. The Corporation shall make an application to BSE & NSE along with applicable disclosures within 15 days from the Deemed Date of Allotment of the Bonds to list the Bonds to be issued and allotted under this Disclosure Document. The Corporation shall complete all the formalities and seek listing permission within 20 days from the Deemed Date of Allotment. In the event of delay in listing of Bonds beyond 20 days from the Deemed Date of Allotment, the Corporation shall pay penal interest of 1.00% per annum over the Coupon Rate from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the Bondholder(s). If such permission is refused before the expiry of the 20 days from the Deemed Date of Allotment, the Corporation shall forthwith repay all monies received from the applicants in pursuance of the Disclosure Document alongwith penal interest of 1.00% per annum over the Coupon Rate from the expiry of 20 days from the Deemed Date of Allotment. If such monies are not repaid within 8 days after the Corporation becomes liable to repay it (i.e. from the date of refusal or 20 days from the Deemed Date of Allotment, whichever is earlier), then the Corporation and every director of the Corporation who is an officer in default shall, on and from expiry of 8 days, will be jointly and severally liable to repay the money, with interest at the rate of 15% per annum on application money. In connection with listing of Bonds with NSE/ BSE, the Corporation hereby undertakes that: (a) It shall comply with conditions of listing as specified in the Listing Agreement for the Bonds ; (b) The Credit Ratings obtained for the Bonds shall be periodically reviewed by the credit rating agencies

and any revision in the ratings shall be promptly disclosed by the Corporation to NSE/ BSE; (c) Any change in credit ratings shall be promptly disseminated to the Bondholder(s) in such manner as

NSE/ BSE may determine from time to time; (d) The Corporation, the Trustees and NSE/ BSE shall disseminate all information and reports on Bonds

including compliance reports filed by the Corporation and the Trustees regarding the Bonds to the Bondholder(s) and the general public by placing them on their websites;

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(e) Trustees shall disclose the information to the Bondholder(s) and the general public by issuing a press release and placing on the websites of the Trustees, the Corporation and NSE/BSE, in any of the following events:

(i) default by the Corporation to pay interest on the Bonds or redemption amount; (ii) revision of the credit rating(s) assigned to the Bonds. (f) The Corporation shall, till the redemption of Bonds, submit its latest audited/ limited review half yearly

consolidated (wherever available) and standalone financial information such as Statement of Profit & Loss, Balance Sheet and Cash Flow Statement and auditor qualifications, if any, to the Trustees within the timelines as mentioned in Simplified Listing Agreement issued by SEBI vide circular no. SEBI/ MD/ BOND/1/2009/11/05 dated May 11, 2009 as amended. Besides, the Corporation shall within 180 days from the end of the financial year, submit a copy of the latest annual report to the Trustees and the Trustees shall be obliged to share the details so submitted with all Qualified Institutional Buyers (QIBs) and other existing Bondholder(s) within two working days of their specific request.

5. PARTICULARS OF DEBT SECURITIES ISSUED (I) FOR CONSIDERATION OTHER THAN CASH,

WHETHER IN WHOLE OR PART, (II) AT A PREMIUM OR DISCOUNT, OR (III) IN PURSUANCE OF AN OPTION

The Corporation confirms that other than and to the extent mentioned elsewhere in this Disclosure Document, it has not issued any debt securities or agreed to issue any debt securities for consideration other than cash, whether in whole or in part, at a premium or discount or in pursuance of an option since inception.

XIII. SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES AND OTHER BORROWINGS The Corporation hereby confirms that: a) The main constituents of the Corporation’s borrowings have been in the form of borrowings from Banks

and Financial Institutions, Bonds etc. b) The Corporation has been servicing all its principal and interest liabilities on time and there has been no

instance of delay or default since inception. c) The Corporation has neither defaulted in repayment/ redemption of any of its borrowings nor affected any

kind of roll over against any of its borrowings in the past. XIV. UNDERTAKING REGARDING COMMON FORM OF TRANSFER The Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL/ CDSL/ Depository Participant of the transferor/ transferee and any other applicable laws and rules notified in respect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Bonds held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant. The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption will be made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not with the Corporation. The Corporation undertakes that it shall use a common form/ procedure for transfer of Bonds issued under terms of this Disclosure Document. XV. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE The Corporation hereby declares that there has been no material event, development or change at the time of issue which may affect the issue or the investor’s decision to invest/ continue to invest in the debt securities of the Corporation. XVI. PERMISSION/ CONSENT FROM PRIOR CREDITORS The Corporation hereby confirms that it is entitled to raise money through current issue of Bonds without the consent/ permission/ approval from the Bondholders/ Lenders/ other creditors of the Corporation. XVII. MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE

ISSUER By very nature and volume of its business, the Corporation is involved in a large number of transactions involving financial obligations and therefore it may not be possible to furnish details of all material contracts and agreements involving financial obligations of the Corporation. However, the contracts referred to in Para A

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below (not being contracts entered into in the ordinary course of the business carried on by the Corporation) which are or may be deemed to be material have been entered into by the Corporation. Copies of these contracts together with the copies of documents referred to in Para B may be inspected at the Head Office of the Corporation between 10.00 a.m. and 2.00 p.m. on any working day until the issue closing date. A. MATERIAL CONTRACTS a. Copy of letter appointing Arrangers to the Issue b. Copy of letter appointing Registrars and copy of MoU entered into between the Corporation and the Registrars. c. Copy of letter appointing Trustees to the Bondholders.

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Annexure-I

DAMODAR VALLEY CORPORATION

ISSUE OF GOI GUARANTEED BONDS OF Rs. 2600 Cr. ON 21-03-2013

BANK ACCOUNT DETAIL FOR SUBSCRIPTION TO THE BONDS 1.

NAME DAMODAR VALLEY CORPORATION

ACCOUNT NO 0082050000277

BANK NAME & BRANCH NAME UNITED BANK OF INDIA,

NEW MANICKTALA BRANCH,

KOLKATA-700 054

IFSC UTBI0NMT147 (0 stands for Zero)

2.

NAME DAMODAR VALLEY CORPORATION

ACCOUNT NO 00000030511070452 BANK NAME & BRANCH NAME STATE BANK OF INDIA,

CORPORATE ACCOUNT GROUP BRANCH,

RELIANCE HOUSE,

34, JAWAHARLAL NEHRU ROAD,

KOLKATA 700071

IFSC SBIN0009998 (0 stands for Zero)

DAMODAR VALLEY CORPORATION

Registered Office: Central Accounts Office, DVC Tower, VIP Road, Kolkata: 700 054 Tel 033 – 6607-2403/2411/2412, Fax: 033 – 2355-1311, Website: www.dvcindia.org, E-mail : sbr_choudhuri@dvcindia.org

PRIVATE PLACEMENT OF GOVERNMENT OF INDIA GUARANTEED, UNSECURED, REDEEMABLE, NON-CONVERTIBLE, NON CUMULATIVE TAXABLE BONDS – SERIES 15 Having read and understood the Terms & Conditions for the Private Placement, we apply for allotment to us of the Government of India Guaranteed, Unsecured, Redeemable, Non-Convertible, Non-Cumulative, Taxable Bonds in the nature of Debentures Series 15 the amount payable on application as shown below is remitted herewith. On allotment, please place our name on the Register of Bondholders. We bind ourselves to the terms and conditions of the Private placement. We note that the Corporation is entitled in its absolute discretion to accept or reject this application in whole or in part without assigning any reason whatsoever. I / We irrevocably give my/ our authority and consent to the Trustees for doing such acts and signing such documents to carry their duties in such capacity.

(PLEASE READ THE INSTRUCTIONS CAREFULLY BEFORE FILLING THIS FORM)

No. of Bonds applied for (in figures) No. of Bonds applied for (in words) Amount (Rs.) (in figures) Amount (Rs.) (in words) Mode of remittance

RTGS

RTGS made through (name of the bank) UTR no

DP Name: DP ID Client ID We are applying as (Tick whichever is applicable)

1. Company / Body Corporate 2. Commercial Bank 3. Regional

Rural Banks 4. Financial Institution 5. Insurance

Companies

6. Provident / Superannuation / Pension / Gratuity Fund 7. Mutual Fund 8. Co-operative Banks 9. Societies

10. Statutory Corporations/ Govt. Undertakings 11. Trusts 12. Individual

APPLICANT DETAILS (USE ONE BOX FOR ONE ALPHABET LEAVING ONE BOX BLANK BETWEEN FIRST WORD AND SECOND) 1. Name

Fax No. E-Mail Tel. No.

Address in full (do not repeat name). Post Box No. alone is not sufficient

PIN CODE

TAX DETAILS

PAN No.*

IT Circle / Ward / District

Not Allotted

*Please attach a Self- Attested copy of Pan Card of the applicant. BANK DETAILS (required for payment of interest/redemption proceeds) Bank Name ………………………………………………………………………………………………….Branch……………………………………………………………… ………………………………………………….IFSC Code……………………….................................................... Account No…………………………………..…………… Type of Account…………………..…………..……Branch code..…………………….…..………MICR code.……………………………………………………..…………… DETAILS OF DEMAT (DEPOSITORY) - [NSDL / CDSL]

Series 15

APPLICATION FORM SR. NO.

DP Name…………………………………………………………………………………………………………………………………………………………..……… ………... DP-ID………………….……………………………………………………………………………………………………………………………………… ……………………. Client ID……….……………………………………………………………………………………………………………………………………………………………………. Tax Deduction Status (Interest on Application): (Please tick one)

Fully Exempt (Please furnish exemption certificate):

Tax to be deducted at source : SIGNATORIES (TO BE SIGNED BY THE APPLICANTS / AUTHORISED SIGNATORIES) Sl. No. Name of the Applicant(s) / Authorised Signatories Status / Designation Signature

1.

2.

3.

4.

Tear Here

DAMODAR VALLEY CORPORATION

Registered Office: Central Accounts Office, DVC Tower, VIP Road, Kolkata: 700 054 Tel 033 – 6607-2403/2411/2412, Fax: 033 – 2355-2311, Website: www.dvcindia.org, E-mail : sbr_choudhuri@dvcindia.org

Received from M/s………………………………………...….. Address………………………………………………………... ………………………………………………………………… ………………..City……………….………..Pin…...…………

Government of India Guaranteed, Unsecured, Redeemable, Non-Convertible, Non-cumulative, Taxable Bonds Series 15 in the nature of debenture

No. of Bonds

Amount in Rs. Bank Stamp

UTR No.

Date

Name of the Bank and Branch

Series 15 ACKNOWLEDGEMENT SLIP Sr. No.

3

INSTRUCTIONS “Applicants are advised to read Information Memorandum carefully in order to satisfy themselves before making an application for subscription. For a copy of Information Memorandum, the applicant may request the Corporation”. 1) Application Form must be completed in BLOCK LETTERS IN ENGLISH. A blank space must be left

between two or more parts of the name. For example:

A B C D W X Y Z

2) Signatures should be made in English / Hindi. Signatures made in any other Indian language must be attested by an authorised official of a Bank or by a Magistrate / Notary Public under his / her official seal.

3) Application shall be for a minimum number of 10 Bonds and multiples of One Bond

thereafter

4) Applications can be made in single or joint names; in case of joint names, all payments will be made out in favour the applicant whose name appears first in the application form; all notices, correspondence and communication will be addressed to the first applicant.

5) The payment can be made only through RTGS.

6) For payment made through RTGS, the RTGS details are given in the term sheet.

7) Payment in any other mode will NOT be accepted.

8) As a matter of precaution against possible fraudulent encashment of interest warrants due to loss / misplacement, applicants are requested to mention the full particulars of their bank account, as specified in the Application Form. Interest warrants will then be made out in favour of the sole / first applicant’s account. Cheques will be issued as per the details in the register of Bondholders at the risk of the sole / first applicant at the address registered with Corporation.

10) The PAN / GIR No. and IT Circle / Ward / District of the Sole / First Applicant and all Joint Applicants(s) should be mentioned in the Application Form. In case neither the PAN nor GIR Number has been allotted, the fact of non-allotment should be mentioned in the space provided and Form 60 should be submitted duly signed. In absence of PAN no. it may be noted that TDS will be deducted at a higher rate if applicable.

11) Income Tax as applicable will be deducted at source at the time of payment of interest and interest on application money. Those who are eligible and desirous of claiming exemptions of tax under Income Tax Act, 1961 are required to submit relevant certificate issued by the Income-Tax Officer and / or submit Form 15AA / 15G/15H (in duplicate as prescribed in the Income Tax Rules, 1962) along with the Application Form.

12) Receipt of application will be acknowledged by Bankers stamping the “Acknowledgement Slip” appearing below the Application Form. No separate receipt will be issued.

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13) In the case of applications made under Power of Attorney or by limited companies, corporate bodies, registered societies, trusts etc., following documents (attested by Company Secretary / Directors / Trusties) must be lodged along with the application or sent directly to DVC along with a copy of the Application Form.

(a) Certificate of incorporation and Memorandum & Articles of Association. (b) Resolution of the Board of Directors/Trustees and identification of those who have authority to

operate. (c) Certified True Copy of Power of attorney granted to transact business on its behalf. (d) Form 15AA for investors seeking exemption for Tax deduction at source from interest on the

application money. (e) Any officially valid document to identify the trustees, settlers, beneficiaries and those holding Power

of Attorney. (f) Resolution of the managing body of the foundation/association. (g) Certificate of registration. (h) Documentary evidence of the Demat details and DPID to be submitted by the investor along with

application form. (i) The applicants are requested to clearly indicate the DP ID and Client ID details. In case these details

are not filled up correctly, the investor shall have to bear the charges levied by NSDL for getting the credit Corporate Action conducted again.

(j) Copy of PAN card. (k) Any other document as may be required to fulfill KYC Requirement.

14) Please give the Complete Bank details like Bank Account Number, IFSC Code, Name of the Bank and

Branch and Branch Code in the Column for Bank details for the purpose of payment of interest / redemption proceeds through RTGS.

15) The applications would be scrutinized and accepted as per the provisions of the terms and conditions of

the Private Placement, and as prescribed under the other applicable statues / guidelines etc. DVC is entitled, at its sole and absolute discretion, to accept or reject any application, in part or in full, without assigning any reason whatsoever. An application form, which is not complete in any respect, is liable to be rejected.

16) All future communication should be addressed to the Registrar of Bonds, DVC (whose address is given below) or to such other person at such address as may be notified by DVC from time to time.

Mr S Basu Ray Chaudhuri Registrar of Bonds DAMODAR VALLEY CORPORATION Head Office: Central Accounts Office, DVC Tower, VIP Road, Kolkata: 700 054 Tel 033 – 6607-2403/2411/2412, Fax: 033 – 2355-1311, Website: www.dvcindia.org, E-mail : sbr_choudhuri@dvcindia.org