1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Base CasePresold Capacity 0 0 20 40 40 40 40 40 40 40 40Anticipatory Sales 0 0 0 16.2 30.8 43.9 55.7 66.3 85.5 119.9 150.9Total Revenue 0 0 20 56.2 70.8 83.9 95.7 106.3 125.5 159.9 190.9

50% 20% 17% 16% 16% 16% 16% 14% 14%Net Operating Costs 0 0 10 11 12.2 13.6 15.4 17.4 19.9 22.9 26.5EBITDA 0 0 10 45.2 58.6 70.3 80.3 88.9 105.6 137 164.4EBITDA Margin - - 50% 80% 83% 84% 84% 84% 84% 86% 86%

3.7% 11.0% 51.2% 24.7% 9.4%Depreciation 0 0 47.5 47.5 47.5 47.5 47.5 47.5 47.5 47.5 47.5Net Interest 3.8 11.3 52.5 25.3 9.6 0 0 0 0 0 0 102.5Profit Before Tax -3.8 -11.3 -90 -27.6 1.5 22.8 32.8 41.4 58.1 89.5 116.9ROE (on US$ 150 M) -2.50% -7.50% -60% -18.40% -0.80% 12.10% 17.50% 22.10% 31% 47.70% 62.30%

Cash FlowCash Receipts 0 0 300 493 268.7 236.8 177.1 159.4 287 516.6 464.9Capital Expenditures -50 -100 -700 -100 -47.5 -47.5 -47.5 -47.5 -47.5 -47.5 -47.5Free Cash Flow -50 -100 -550 363 209 175.7 114.3 94.5 219.5 446.1 338.4Dividends 0 0 0 0 0 47.7 114.3 94.5 219.5 446.1 338.4

13% NPV $293.56 IRR 27%

Downside Scenario 0 -4.1% -6.1% -8.7% -11.3% -12.5% -13.6% -13.5% -12.4%Total Revenue 0 0 20 54 66.7 77.2 86 94.5 110.5 140.9 169.8EBITDA 0 0 10 43.5 54.5 63.5 70.7 77 90.6 118 143.3Net Income -3.8 -11.3 -90 -31.3 -7.1 9.6 18.5 23.6 34.5 56.4 76.7ROE (on US$ 150 M) -2.50% -7.50% -60% -20.90% -4.70% 6.40% 12.40% 15.80% 23% 37.60% 51.10%

Upside Scenario 0.0% 1.2% 2.4% 20.6% 60.8% 101.8% 99.9% 79.7% 69.6%Total Revenue 0 0 20 56.9 72.5 101.2 153.9 214.5 250.9 287.3 323.7EBITDA 0 0 10 45.9 60.3 87.5 138.5 197.1 231 264.4 297.2

Net Income -3.8 -11.3 -90 -26 4.1 32 72.8 119.7 146.8 173.5 199.7

ROE (on US$ 150 M) -2.50% -7.50% -60% -17.40% 2.70% 21.30% 48.90% 79.80% 97.90% 115.70% 133.20%

2000 2001 2002 2003 2004 2005 2006 2007 2008

Base CasePresold Capacity 0 56.17 56.17 56.17 56.17 56.17 56.17 56.17 56.17Capacity sold (Gbit) 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1Anticipatory Sales 0 0 0 88.29 2267.77 2040.99 1836.89 1836.89 1836.89Total Revenue 0 56.17 56.17 144.45 2323.94 2097.16 1893.06 1893.06 1893.06

0Net Operating Costs 0 10.99 9.68 23.42 373.97 343.28 300.17 271.11 262.79EBITDA 0 45.17 46.49 121.04 1949.97 1753.88 1592.89 1621.95 1630.27EBITDA Margin 0% 80% 83% 84% 84% 84% 84% 86% 86%

Depreciation 0 30.33 30.33 32.00 33.67 33.67 33.67 33.67 33.67Net Interest 0 33.70 28.08 36.97 27.73 18.48 9.24 0.00 0.00Profit Before Tax 0 -18.86 -11.93 52.07 1888.58 1701.73 1549.98 1588.28 1596.61

30% Tax @ 30% 0 -5.66 -3.58 15.62 566.57 510.52 464.99 476.48 478.98PAT 0 -13.20 -8.35 36.45 1322.00 1191.21 1084.98 1111.80 1117.62

85 ROE (on US$ 85 M) 0 -0.16 -0.10 0.43 15.55 14.01 12.76 13.08 13.15NWC 0 0 0 0 0 0 0 0 0

Cash FlowPAT+Dep-NWC Cash Receipts 0 17.13 21.98 68.45 1355.67 1224.88 1118.65 1145.46 1151.29

Capital Expenditures -455 0 0 -25 -25 0 0 0 0Free Cash Flow -455.00 17.13 21.98 43.45 1330.67 1224.88 1118.65 1145.46 1151.29Dividends 0 0 0 0 0 0 0 0 0WACC 13%NPV $2,252.83 IRR 62%

2000 2001 2002 2003 2004 2005 2006 2007 2008

Base CasePresold Capacity 0 56.17 56.17 56.17 56.17 56.17 56.17 56.17 56.17Capacity sold (Gbit) 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1Anticipatory Sales 0 0 0 82.50 2048.47 1782.17 1550.49 1550.49 1550.49Total Revenue 0 56.17 56.17 138.67 2104.64 1838.33 1606.65 1606.65 1606.65

0Net Operating Costs 0 10.99 9.68 22.48 338.68 300.91 254.76 230.10 223.03EBITDA 0 45.17 46.49 116.19 1765.96 1537.42 1351.89 1376.56 1383.62EBITDA Margin 0% 80% 83% 84% 84% 84% 84% 86% 86%

Depreciation 0 30.33 30.33 32.00 33.67 33.67 33.67 33.67 33.67Net Interest 0 33.70 28.08 36.97 27.73 18.48 9.24 0.00 0.00Profit Before Tax 0 -18.86 -11.93 47.22 1704.57 1485.27 1308.98 1342.89 1349.96

30% Tax @ 30% 0 -5.66 -3.58 14.17 511.37 445.58 392.70 402.87 404.99PAT 0 -13.20 -8.35 33.06 1193.20 1039.69 916.29 940.02 944.97

85 ROE (on US$ 85 M) 0 -0.16 -0.10 0.39 14.04 12.23 10.78 11.06 11.12NWC 0 0 0 0 0 0 0 0 0

Cash FlowPAT+Dep-NWC Cash Receipts 0 17.13 21.98 65.06 1226.86 1073.36 949.96 973.69 978.64

Capital Expenditures -455 0 0 -25 -25 0 0 0 0Free Cash Flow -455.00 17.13 21.98 40.06 1201.86 1073.36 949.96 973.69 978.64Dividends 0 0 0 0 0 0 0 0 0WACC 13%NPV $1,914.27 IRR 58%

2000 2001 2002 2003 2004 2005 2006 2007 2008

Base CasePresold Capacity 0 56.17 56.17 56.17 56.17 56.17 56.17 56.17 56.17Capacity sold (Gbit) 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1Anticipatory Sales 0 0 0 102.56 2839.14 2753.97 2671.35 2671.35 2671.35Total Revenue 0 56.17 56.17 158.72 2895.31 2810.13 2727.51 2727.51 2727.51

0Net Operating Costs 0 10.99 9.68 25.73 465.91 459.98 432.49 390.62 378.62EBITDA 0 45.17 46.49 132.99 2429.39 2350.15 2295.02 2336.89 2348.89EBITDA Margin 0% 80% 83% 84% 84% 84% 84% 86% 86%

Depreciation 0 30.33 30.33 32.00 33.67 33.67 33.67 33.67 33.67Net Interest 0 33.70 28.08 36.97 27.73 18.48 9.24 0.00 0.00Profit Before Tax 0 -18.86 -11.93 64.03 2368.00 2298.00 2252.11 2303.23 2315.22

30% Tax @ 30% 0 -5.66 -3.58 19.21 710.40 689.40 675.63 690.97 694.57PAT 0 -13.20 -8.35 44.82 1657.60 1608.60 1576.48 1612.26 1620.66

85 ROE (on US$ 85 M) 0 -0.16 -0.10 0.53 19.50 18.92 18.55 18.97 19.07NWC 0 0 0 0 0 0 0 0 0

Cash FlowPAT+Dep-NWC Cash Receipts 0 17.13 21.98 76.82 1691.27 1642.27 1610.15 1645.93 1654.32

Capital Expenditures -455 0 0 -25 -25 0 0 0 0Free Cash Flow -455.00 17.13 21.98 51.82 1666.27 1642.27 1610.15 1645.93 1654.32Dividends 0 0 0 0 0 0 0 0 0WACC 13%NPV $3,205.21 IRR 71%

Presales 337 $ Presales d 337Contract time 6 yrs Market sal 145Per year contract 56.16667 $ Total debt 482Gbit/s 2.13 per yr Interest 10%

Interest e 48.2Market sales 145 $

4 yrs36.25 $

Base Year 2003 2004 2005 2006 2001Yr 21.38 19.24 17.32 15.58 Principle 56.16667Unmet demand 42 153 303 presales in 33.70Existing capacity 40 40 40 Market salesPre sold 2.13 2.13 2.13 2.13 Market salesRemaining 37.87 37.87 37.87 Sum intere 33.70Can be added 4.13 115.13 265.13Hw much to add 40 40Remaining capacity -35.87 75.13

Gbit Total capacity 80 120 120 120Price 88.3 2267.8 2041.0 1836.9

Downside Year 2003 2004 2005 2006Yr 19.98 17.38 15.12 13.15Unmet demand 42 153 303Existing capacity 40 40 40Pre sold 2.13 2.13 2.13 2.13Remaining 37.87 37.87 37.87Can be added 4.13 115.13 265.13Hw much to add 40 40Remaining capacity -35.87 75.13

Gbit Total capacity 80 120 120 120Price 82.5 2048.5 1782.2 1550.5

Upside Year 2003 2004 2005 2006Yr 24.83 24.09 23.36 22.66Unmet demand 42 153 303Existing capacity 40 40 40Pre sold 2.13 2.13 2.13 2.13Remaining 37.87 37.87 37.87Can be added 4.13 115.13 265.13Hw much to add 40 40Remaining capacity -35.87 75.13

Gbit Total capacity 80 120 120 120Price 102.6 2839.1 2754.0 2671.3

33.7

2002 2003 2004 2005 200656.16667 56.16667 56.16667 56.16667 56.16667

28.08 22.47 16.85 11.23 5.6236.25 36.25 36.25 36.2514.50 10.88 7.25 3.63

28.08 36.97 27.73 18.48 9.24

90%Base Scenario Prices

Average Price realized per GbitParticulars 2001 2002 2003 2004 2005 2006Price/STM-1 4 3.60 3.24 2.92 2.62 2.36Mbits/STM 155.2Mbits/Gbit 1024Gbits/s pe 0.151563Sale of 1Gbi 26.39 23.75 21.38 19.24 17.32 15.58

In USD MillionDepreciati 2000 2001 2002 2003 2004 2005Total Asset 455 455 455 455 480 505CAPEX 0 0 0 25 25 0Total Asset 455 455 455 480 505 505Estimated u 15Depreciation Expendit 30.33 30.33 32.00 33.67 33.67

5.4 35% 3.514 60% 1.6

1.2 70% 0.36

87%Downside Scenario Prices

Average Price realized per GbitParticulars 2001 2002 2003 2004 2005 2006Price/STM-1 4.00 3.48 3.03 2.63 2.29 1.99Mbits/STM 155.2Mbits/Gbit 1024Gbits/s pe 0.151563Sale of 1Gbi 26.39 22.96 19.98 17.38 15.12 13.15

97%Upside Scenario Prices

2006 Average Price realized per Gbit505 Particulars 2001 2002 2003 2004 2005 2006

0 Price/STM-1 4.00 3.88 3.76 3.65 3.54 3.43505 Mbits/STM 155.2

Mbits/Gbit 102433.67 Gbits/s pe 0.151563

Sale of 1Gbi 26.39 25.60 24.83 24.09 23.36 22.66

Ans 1 Additional sponsors required = 2

Reason[1][2]

Ans 2 NPV IRRUpside Case $3,205.21 71%Base case $2,252.83 62%Downside case $1,914.27 58%

Ans 3 As per "Economic motivations for project finance" - HBS; below is th ecriteria for Project finance companies

Inside Directors 12%Grey Directors 83%Outside Directors 5%

Current Structure of AJCSponsors No of Directors

Inside directors 1Grey directors 10Outside directors 1Total 12

Equity Stake No of DirectorsTelstra 40% 4Japan Telecom 10% 1Teleglobe 10% 1AT&T 20% 2NTT 20% 2

The incentive for the managers would be the percentage share of the company performance. (As it if divided in the appraisal forms: 60% company performance and 40% personal performance)

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

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

The incentive for the managers would be the percentage share of the company performance. (As it if divided in the appraisal forms: 60% company performance and 40% personal performance)

The incentive for the managers would be the percentage share of the company performance. (As it if divided in the appraisal forms: 60% company performance and 40% personal performance)