Australia Japan Cable

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Presold Capacity Anticipatory Sales Total Revenue

0 0 0

0 0 0

Net Operating Costs EBITDA EBITDA Margin

0 0

0 0

40 16.2 56.2 20% 11 45.2 80% 24.7% 47.5 25.3 -27.6 -18.40%

40 30.8 70.8 17% 12.2 58.6 83% 9.4% 47.5 9.6 1.5 -0.80%

40 43.9 83.9 16% 13.6 70.3 84%

40 55.7 95.7 16% 15.4 80.3 84%

40 66.3 106.3 16% 17.4 88.9 84%

40 85.5 125.5 16% 19.9 105.6 84%

40 119.9 159.9 14% 22.9 137 86%

40 150.9 190.9 14% 26.5 164.4 86%

47.5 0 22.8 12.10%

47.5 0 32.8 17.50%

47.5 0 41.4 22.10%

47.5 0 58.1 31%

47.5 0 89.5 47.70%

47.5 0 116.9 62.30%

Base Case

Depreciation Net Interest Profit Before Tax ROE (on US$ 150 M)

3.7% 0 3.8 -3.8 -2.50%

11.0% 0 11.3 -11.3 -7.50%

20 0 20 50% 10 10 50% 51.2% 47.5 52.5 -90 -60%

0 -50 -50 0 $293.56 27%

0 -100 -100 0

300 -700 -550 0

493 -100 363 0

268.7 -47.5 209 0

236.8 -47.5 175.7 47.7

177.1 -47.5 114.3 114.3

159.4 -47.5 94.5 94.5

287 -47.5 219.5 219.5

516.6 -47.5 446.1 446.1

464.9 -47.5 338.4 338.4

0 0 -3.8 -2.50%

0 0 -11.3 -7.50%

0 20 10 -90 -60%

-4.1% 54 43.5 -31.3 -20.90%

-6.1% 66.7 54.5 -7.1 -4.70%

-8.7% 77.2 63.5 9.6 6.40%

-11.3% 86 70.7 18.5 12.40%

-12.5% 94.5 77 23.6 15.80%

-13.6% 110.5 90.6 34.5 23%

-13.5% 140.9 118 56.4 37.60%

-12.4% 169.8 143.3 76.7 51.10%

0 0

0 0

0.0% 20 10

1.2% 56.9 45.9

2.4% 72.5 60.3

20.6% 101.2 87.5

60.8% 153.9 138.5

101.8% 214.5 197.1

99.9% 250.9 231

79.7% 287.3 264.4

69.6% 323.7 297.2

-

-

Cash Flow Cash Receipts Capital Expenditures Free Cash Flow Dividends 13% NPV IRR

Downside Scenario Total Revenue EBITDA Net Income ROE (on US$ 150 M)

Upside Scenario Total Revenue EBITDA Net Income ROE (on US$ 150 M)

-3.8

-11.3

-90

-26

4.1

32

72.8

119.7

146.8

173.5

199.7

-2.50%

-7.50%

-60%

-17.40%

2.70%

21.30%

48.90%

79.80%

97.90%

115.70%

133.20%

102.5

2000

2001

2002

2003

2004

2005

2006

2007

2008

Base Case Presold Capacity Capacity sold (Gbit) Anticipatory Sales Total Revenue

0 0 0

56.17 2.1 0 56.17

56.17 2.1 0 56.17

56.17 2.1 88.29 144.45

56.17 2.1 2267.77 2323.94

56.17 2.1 2040.99 2097.16

56.17 2.1 1836.89 1893.06

56.17 2.1 1836.89 1893.06

56.17 2.1 1836.89 1893.06

Net Operating Costs EBITDA EBITDA Margin

0 0 0%

10.99 45.17 80%

9.68 46.49 83%

23.42 121.04 84%

373.97 1949.97 84%

343.28 1753.88 84%

300.17 1592.89 84%

271.11 1621.95 86%

262.79 1630.27 86%

Depreciation Net Interest Profit Before Tax 30% Tax @ 30% PAT 85 ROE (on US$ 85 M) NWC

0 0 0 0 0 0 0

30.33 33.70 -18.86 -5.66 -13.20 -0.16 0

30.33 28.08 -11.93 -3.58 -8.35 -0.10 0

32.00 36.97 52.07 15.62 36.45 0.43 0

33.67 27.73 1888.58 566.57 1322.00 15.55 0

33.67 18.48 1701.73 510.52 1191.21 14.01 0

33.67 9.24 1549.98 464.99 1084.98 12.76 0

33.67 0.00 1588.28 476.48 1111.80 13.08 0

33.67 0.00 1596.61 478.98 1117.62 13.15 0

0 -455 -455.00 0 13% $2,252.83 62%

17.13 0 17.13 0

21.98 0 21.98 0

68.45 -25 43.45 0

1355.67 -25 1330.67 0

1224.88 0 1224.88 0

1118.65 0 1118.65 0

1145.46 0 1145.46 0

1151.29 0 1151.29 0

0

Cash Flow PAT+Dep-NWC

Cash Receipts Capital Expenditures Free Cash Flow Dividends WACC NPV IRR

2000

2001

2002

2003

2004

2005

2006

2007

2008

Base Case Presold Capacity Capacity sold (Gbit) Anticipatory Sales Total Revenue

0 0 0

56.17 2.1 0 56.17

56.17 2.1 0 56.17

56.17 2.1 82.50 138.67

56.17 2.1 2048.47 2104.64

56.17 2.1 1782.17 1838.33

56.17 2.1 1550.49 1606.65

56.17 2.1 1550.49 1606.65

56.17 2.1 1550.49 1606.65

Net Operating Costs EBITDA EBITDA Margin

0 0 0%

10.99 45.17 80%

9.68 46.49 83%

22.48 116.19 84%

338.68 1765.96 84%

300.91 1537.42 84%

254.76 1351.89 84%

230.10 1376.56 86%

223.03 1383.62 86%

Depreciation Net Interest Profit Before Tax 30% Tax @ 30% PAT 85 ROE (on US$ 85 M) NWC

0 0 0 0 0 0 0

30.33 33.70 -18.86 -5.66 -13.20 -0.16 0

30.33 28.08 -11.93 -3.58 -8.35 -0.10 0

32.00 36.97 47.22 14.17 33.06 0.39 0

33.67 27.73 1704.57 511.37 1193.20 14.04 0

33.67 18.48 1485.27 445.58 1039.69 12.23 0

33.67 9.24 1308.98 392.70 916.29 10.78 0

33.67 0.00 1342.89 402.87 940.02 11.06 0

33.67 0.00 1349.96 404.99 944.97 11.12 0

0 -455 -455.00 0 13% $1,914.27 58%

17.13 0 17.13 0

21.98 0 21.98 0

65.06 -25 40.06 0

1226.86 -25 1201.86 0

1073.36 0 1073.36 0

949.96 0 949.96 0

973.69 0 973.69 0

978.64 0 978.64 0

0

Cash Flow PAT+Dep-NWC

Cash Receipts Capital Expenditures Free Cash Flow Dividends WACC NPV IRR

2000

2001

2002

2003

2004

2005

2006

2007

2008

Base Case Presold Capacity Capacity sold (Gbit) Anticipatory Sales Total Revenue

0 0 0

56.17 2.1 0 56.17

56.17 2.1 0 56.17

56.17 2.1 102.56 158.72

56.17 2.1 2839.14 2895.31

56.17 2.1 2753.97 2810.13

56.17 2.1 2671.35 2727.51

56.17 2.1 2671.35 2727.51

56.17 2.1 2671.35 2727.51

Net Operating Costs EBITDA EBITDA Margin

0 0 0%

10.99 45.17 80%

9.68 46.49 83%

25.73 132.99 84%

465.91 2429.39 84%

459.98 2350.15 84%

432.49 2295.02 84%

390.62 2336.89 86%

378.62 2348.89 86%

Depreciation Net Interest Profit Before Tax 30% Tax @ 30% PAT 85 ROE (on US$ 85 M) NWC

0 0 0 0 0 0 0

30.33 33.70 -18.86 -5.66 -13.20 -0.16 0

30.33 28.08 -11.93 -3.58 -8.35 -0.10 0

32.00 36.97 64.03 19.21 44.82 0.53 0

33.67 27.73 2368.00 710.40 1657.60 19.50 0

33.67 18.48 2298.00 689.40 1608.60 18.92 0

33.67 9.24 2252.11 675.63 1576.48 18.55 0

33.67 0.00 2303.23 690.97 1612.26 18.97 0

33.67 0.00 2315.22 694.57 1620.66 19.07 0

0 -455 -455.00 0 13% $3,205.21 71%

17.13 0 17.13 0

21.98 0 21.98 0

76.82 -25 51.82 0

1691.27 -25 1666.27 0

1642.27 0 1642.27 0

1610.15 0 1610.15 0

1645.93 0 1645.93 0

1654.32 0 1654.32 0

0

Cash Flow PAT+Dep-NWC

Cash Receipts Capital Expenditures Free Cash Flow Dividends WACC NPV IRR

Presales Contract time Per year contract Gbit/s Market sales

Gbit Price

Gbit Price

Gbit Price

Base Year Yr Unmet demand Existing capacity Pre sold Remaining Can be added Hw much to add Remaining capacity Total capacity

337 6 56.16667 2.13

$ yrs $ per yr

145 $ 4 yrs 36.25 $ 2003 2004 21.38 19.24 42 153 40 40 2.13 2.13 37.87 37.87 4.13 115.13 40 40 -35.87 75.13 80 120 88.3 2267.8

Presales debt Market sales Total debt Interest Interest expense

2005 17.32 303 40 2.13 37.87 265.13

2006 15.58

120 2041.0

120 1836.9

2.13

Downside Year Yr Unmet demand Existing capacity Pre sold Remaining Can be added Hw much to add Remaining capacity Total capacity

2003 19.98 42 40 2.13 37.87 4.13 40 -35.87 80 82.5

2004 17.38 153 40 2.13 37.87 115.13 40 75.13 120 2048.5

2005 15.12 303 40 2.13 37.87 265.13

2006 13.15

120 1782.2

120 1550.5

Upside Year Yr Unmet demand Existing capacity Pre sold Remaining Can be added Hw much to add Remaining capacity Total capacity

2003 24.83 42 40 2.13 37.87 4.13 40 -35.87 80 102.6

2004 24.09 153 40 2.13 37.87 115.13 40 75.13 120 2839.1

2005 23.36 303 40 2.13 37.87 265.13

2006 22.66

120 2754.0

120 2671.3

2.13

2.13

Principle presales interest Market sales Market sales Sum interest

337 145 482 10% 48.2

33.7

2001 2002 2003 2004 2005 2006 56.16667 56.16667 56.16667 56.16667 56.16667 56.16667 33.70 28.08 22.47 16.85 11.23 5.62 Market sales 36.25 36.25 36.25 36.25 Market sales 14.50 10.88 7.25 3.63 33.70 28.08 36.97 27.73 18.48 9.24

90% Base Scenario Prices Average Price realized per Gbit Particulars 2001 2002 Price/STM-1 in 2001 4@ (In Million 3.60 $) Mbits/STM-1 @ 155.2 Mbits/Gbit/s @ 1024 Gbits/s per STM-1 0.151563 Sale of 1Gbit in Million 26.39 $ 23.75

In USD Million Depreciation Schedule 2000 2001 Total Assets in the455 beginning 455 CAPEX 0 0 Total Assets in the455 End 455 Estimated useful life15 (In years) Depreciation Expenditure 30.33

2003 3.24

2004 2.92

2005 2.62

2006 2.36

21.38

19.24

17.32

15.58

2002 455 0 455

2003 455 25 480

2004 480 25 505

2005 505 0 505

30.33

32.00

33.67

33.67

5.4 4 1.2

35% 60% 70%

3.51 1.6 0.36

87% Downside Scenario Prices Average Price realized per Gbit Particulars 2001 2002 2003 2004 Price/STM-1 in 2001 4.00@ (In Million 3.48 $) 3.03 2.63 Mbits/STM-1 @ 155.2 Mbits/Gbit/s @ 1024 Gbits/s per STM-1 0.151563 Sale of 1Gbit in Million 26.39 $ 22.96 19.98 17.38

2006 505 0 505 33.67

97% Upside Scenario Prices Average Price realized per Gbit Particulars 2001 2002 2003 2004 Price/STM-1 in 2001 4.00@ (In Million 3.88 $) 3.76 3.65 Mbits/STM-1 @ 155.2 Mbits/Gbit/s @ 1024 Gbits/s per STM-1 0.151563 Sale of 1Gbit in Million 26.39 $ 25.60 24.83 24.09

2005 2.29

2006 1.99

15.12

13.15

2005 3.54

2006 3.43

23.36

22.66

Ans 1

Additional sponsors required = [1] Reason [2]

Ans 2 Upside Case Base case Downside case Ans 3

NPV $3,205.21 $2,252.83 $1,914.27

2

IRR 71% 62% 58%

As per "Economic motivations for project finance" - HBS; below is th ecriteria for Project finance companies Inside Directors Grey Directors Outside Directors

12% 83% 5%

Current Structure of AJC Sponsors No of Directors Inside directors 1 Grey directors 10 Outside directors 1 Total 12

Telstra Japan Telecom Teleglobe AT&T NTT

Equity Stake No of Directors 40% 4 10% 1 10% 1 20% 2 20% 2

The incentive for the managers would be the percentage share of the company performance. (As it if divided in the a

AT&T For confirming landing station at Guam Good credit rating of AA-, helpful in raising debt

NTT For confirming landing station at Japan Good credit rating of AA+,helpful in raising debt

nance" - HBS; below is th ecriteria for Project finance companies

he percentage share of the company performance. (As it if divided in the appraisal forms: 60% company performance and 40% personal per

ce and 40% personal performance)