POWER FINANCE CORPORATION LIMITED A Navratna PSE Capital

POWER FINANCE CORPORATION LIMITED (A Navratna PSE) Capital Gain Tax Exemption Bonds u/s 54 EC of Income Tax Act, 1961

Overview of PFC n Set up in Jul 1986, as dedicated FI for Power Sector n Registered as NBFC in Feb, 1998 and categorized by RBI as Infrastructure Finance Company (IFC) in July, 2010 n With maiden IPO, PFC got listed in Feb, 2007 n Current Govt. of India Holding 66. 35% n Declared as a Navratna PSE in Jun, 2007 n PFC plays a key role in Govt. schemes for power sector n Nodal Agency for UMPPs, IPDS, ITPs (Bid Process Coordinator) n Largest Infrastructure Finance Co. (IFC) in the country n Consistently rated “Excellent” based on Mo. U targets signed with Govt. of India PFC Credit Ratings Domestic Ratings CRISIL ‘AAA’ (Highest) ICRA ‘AAA’ (Highest) CARE ‘AAA’ (Highest) International Ratings (at par with ‘Sovereign’ rating) Moody’s Baa 3 S&P BBB- FITCH BBB- PFC is one of the most successfully managed public enterprises 1

Loan Asset Profile (~Rs. 2, 45, 525 Crs as on 31. 03. 2017) Segment Mix (%) Client Mix (%) @ * * Others include loans for computerization, equipment manufacturing, studies etc. @ JVs of CPSUs / State Owned & Other Cos like Bhartiya Rail Bijlee Co Ltd (JV of NTPC and Indian Railways) NLC Tamilnadu Power Ltd (JV of NLC & TANGEDCO) 2

Performance at a Glance 120000 Sanctions 1, 00, 613 100000 80000 Disbursements 70000 60000 75, 146* 59, 429 50000 60, 729 60, 784 65, 042 39, 818 62, 798 45, 151 47, 162 44, 691 46, 588 2012 -13 2013 -14 2014 -15 2015 -16 40000 60000 30000 40000 20000 10000 0 2011 -12 2012 -13 2013 -14 2014 -15 2015 -16 2016 -17 *On account of one time Transitional Loans of Rs 18, 188 Cr 0 2011 -12 2016 -17 5 Year CAGR : 10% 5 Year CAGR : 11% 2, 38, 920 Loan Assets 2, 17, 516 250000 1, 88, 995 200000 150000 2, 45, 525 1, 60, 453 1, 30, 209 100000 50000 0 2011 -12 2012 -13 2013 -14 2014 -15 5 Year CAGR : 13. 5% 2015 -16 2016 -17 5 Year CAGR : 12% 3

Financial Performance at a Glance (As on 31. 03. 2017) Financial Assistance to Indian Power Sector Performance Borrowings Cumulative Loan Sanctions - Rs. 6. 06 Lakh Crore Cumulative Loan Disbursements - Rs. 4. 55 Lakh Crore Outstanding Loan sanctions - Rs. 1. 51 Lakh Crore Loan Assets - Rs. 2. 45 Lakh Crore Net worth (all reserves) - Rs. 36, 470 Crore Total borrowing outstanding - Rs. 2. 03 Lakh Crore (Bonds - 94%, Rupee Term Loans – 2%, FCLs – 4%) 4

Borrowing Profile (Y/E – March, Rs. Crore) 31. 3. 2017 Borrowings 31. 3. 2016 Amount % 190, 911 94% 172, 339 86% Term Loans 9, 277 5% 20, 574 10% Short Term Loans 2, 401 1% 7, 572 4% 202, 588 100% 200, 484 100% 194, 144 96% 189, 709 95% 8, 444 4% 10, 776 5% Bonds Total of which Rupee Denominated Foreign Currency Loans 5

Section 54 EC of Income Tax Act, 1961 n Section 54 EC of Income Tax Act, 1961 provides that capital gain to the extent of Rs. 50 lakhs arising from the transfer of a long-term capital asset shall be exempt if the assessee invests the whole or any part of capital gains in capital gain bonds issued by the NHAI or by REC, within the specified time. n The Finance Act, 2017 amended Sec 54 EC to widen its scope so as to provide that investment in any bond redeemable after three years which has been notified by the Central Government in this behalf shall also be eligible for exemption. n Ministry of Finance, Government of India vide its notification no 47/2017 dated 08. 06. 2017 has notified any bonds redeemable after three years and issued on or after 15. 06. 2017 by Power Finance Corporation Limited as long term specified asset for the purpose of 54 EC of Income Tax Act, 1961. 6

PFC Capital Gains Tax Exemption Bonds n PFC Capital Gains Tax Exemption Bonds – Series 1 launched on private placement ‘on tap’ basis w. e. f. 3. 7. 2017. n Eligible investors Ø Individuals Ø Financial Institutions (FIs) Ø Hindu Undivided Families (HUF) Ø Foreign Portfolio Investors (Subject to existing regulations) Ø Partnership firm Ø Insurance Companies Ø Regional Rural Banks Ø NRIs/other foreign eligible investor investing out of NRO A/c on nonØ Provident Funds, Superannuation Funds repatriable basis and Gratuity Funds Ø Co-operative Banks Ø Limited liability Partnership Ø Mutual Funds Ø Companies and Body Corporates 7

Bond Issue Details n PFC Capital Gains Tax Exemption Bonds – Series 1 are Secured, Redeemable, Non Convertible, Non-Cumulative, Taxable Bonds in the nature of Debentures having benefits under Section 54 EC of Income Tax Act, 1961 n Issue Size : Rs. 500 crore + Green Shoe option to retain oversubscription n Face Value : Rs. 10, 000 (Rupees Ten Thousand only) per bond n Issue Price : At Par i. e. Rs. 10, 000 per bond n Coupon Rate : 5. 25 % per annum n Issue Opening Date : July 03, 2017 n Issue Closing Date : March 31, 2018 n Minimum application size : 2 bonds of Rs. 10, 000 each (Rs. 20, 000) n Maximum application size : 500 bonds of Rs. 10, 000 each (Rs. 50, 000) n Tenor : 3 years from the deemed date of allotment n Redemption Amount : At par (Rs. 10, 000 per bond) 8

Bond Issue Details n Deemed Date of allotment : Last day of each month in which the subscription money is received and credited to PFC Capital Gain Bond collection account n Record Date : 15 calendar days prior to actual interest/principal payment date n Coupon Payment Date : Every year on 31 st July till redemption and balance along with redemption n Date of Redemption : At the end of 3 years from the Deemed Date of Allotment n Issuance mode of instrument : Demat / Physical mode n Transferability : Non-transferable, Non-Marketable, Non-negotiable and cannot be offered as a security for any loan or advance n Listing : The Bonds will not be listed on any stock exchange due to nontransferability during the tenure of Bonds 9

Parties to the Issue Registrar & Transfer Agent Karvy Computershare Pvt. Ltd Trustees Milestone Trusteeship Services Pvt. Ltd. National Securities Depository Ltd. (NSDL) Depository Central Depository Services (India) Ltd. (CDSL) Collection bankers State Bank of India HDFC Bank Kotak Mahindra Bank YES Bank Indusind Bank ICICI Bank 10

THANK YOU 11