Deloitte Haskins & Sells Chartered Accountants

19th Floor, Shapath-V, S.G. Highway, Ahmedabad 380 015, Gujarat.

To

The Board of Directors, Lakshmi Vilas Bank Limited

LVB House No. 4, Sardar Patel Road Guindy Chennai, Tamil Nadu, 600032 India.

Walker Chandiok & Co LLP Chartered Accountants

16th Floor, Tower II, Indiabulls Finance Centre, S.B. Marg, Elphinstone(W), Mumbai 400013

Dated: 04 April 2019

The Board of Directors, Indiabulls Housing Finance Limited

M-62 & 63, First floor, Connaught Place, NewDelhi, Delhi, 110001India.

Sub: Recommendation of the fair equity share exchange ratio for the proposed merger of

Lakshmi Vilas Bank Limited and lndiabulls Housing Finance Limited

Dear Madam / Sir,

We refer to the engagement letters whereby,

• Lakshmi Vilas 'Bank Limited (hereinafter referred to as "LVB") has appointed Deloitte Haskins

& Sells (hereinafter referred to as "OHS") and

• Indiabulls Housing Finance Limited (hereinafter referred to as "Indiabulls Housing") has

appointed Walker Chandiok & Co LLP (hereinafter referred to as "WCC").

for recommendation of the fair equity share exchange ratio (hereinafter referred to as the "Fair

Equity Share Exchange ratio") for the proposed merger of Lakshmi Vilas Bank Limited and Indiabulls

Housing Finance Limited (hereinafter jointly referred to as the "Companies") on a going concern

basis with effect from a date as may be approved by the Companies.

We have been given to understand from the respective Companies that the Companies are

contemplating merger of either LVB into Indiabulls Housing or the merger of India bulls Housing into

LVB. For the purpose of this report, merger of LVB into Indiabulls Housing or Indiabulls Housing into

LVB is referred to as the "Proposed Merger". The entity to be merged is referred to as the "Transferor"

and the surviving entity is referred to as the "Transferee".

Page 1 of 14

Accordingly, the Fair Equity Share Exchange ratio for this report refers to number of equity shares

of the Transferee, which would be issued to the equity shareholders of the Transferor pursuant to

the Proposed Merger.

OHS and WCC are hereinafter jointly referred to as "Valuers" or "we" or "us" and individually referred

to as "Valuer" in this joint Fair Equity Share Exchange ratio report ("Share Exchange Ratio Report"

or the "Report").

SCOPE AND PURPOSE OF THIS REPORT

LVB, incorporated in 1926, provides various banking products and services in India. It operates

through treasury, corporate and wholesale banking, retail banking, and other banking operations

segments. It had reported total revenue and profit/ (loss) after tax of INR 33,884 million and INR

(5,849) million respectively, for the year ended 31 March 2018. LVB has ~569 branches in India and

~4,800 employees.

Indiabulls Housing, incorporated in 2000, operates as a housing finance company in India. It offers

loan products, such as home loans, loans against property, and residential construction finance, as

well as lease rental discounting. It had reported consolidated total revenue and profit/ (loss) after

tax of INR 146,404 million and INR 38,474 million respectively, for the year ended 31 March 2018.

Indiabulls Housing has ~220 branches and more than 8,000 employees around India.

The equity shares of LVB and Indiabulls Housing are listed on the National Stock Exchange and the

BSE Limited.

The managements of the Companies are contemplating the Proposed Merger on a going concern

basis with effect from such date as may be approved by the Companies, pursuant to a Scheme of

Amalgamation under Section 230 to 232 of the Companies Act, 2013 (including any statutory

modifications, re-enactment or amendments thereof) or other applicable securities and capital

market laws. In consideration thereof, equity shares of the Transferee will be issued to the equity

shareholders of the Transferor.

It is in this connection, LVB and Indiabulls Housing have appointed OHS and WCC respectively to

submit a joint report on the Fair Equity Share Exchange ratio, in the event of the merger of LVB into

Indiabulls Housing, and in the event of the merger of Indiabulls Housing into LVB, for the

consideration of the Board of Directors (including audit committees, as applicable) of the respective

Companies in accordance with the applicable Securities and Exchange Board of India ("SEBI"), the

relevant stock exchanges', Reserve Bank Of India ("RBI") and National Housing Bank ("NHB") laws,

rules and regulations.

We understand that this report is required to meet with the applicable SEBI, the relevant stock

hanges', RBI and NHB laws, rules and regulations only and you did not require us to perform this

Page 2 of 14

valuation as a registered Valuer under the Companies Act 2013 ("Act"), the Companies (Registered

Valuers And Valuation) Rules, 2017 or as per any other rules, regulations, standards, bye-laws,

ordinance, notifications issued pursuant to such Act or Rules. Accordingly, our valuation analysis and

this Report does not constitute nor can be construed as a valuation carried out by a registered valuer

in accordance with such Act or Rules or as per any rules, regulations, standards, bye-laws, ordinance,

notifications issued pursuant to such Act or Rules and any such use of our valuation analysis and

this Report is not permitted.

The scope of our services was to conduct a relative fair (and not absolute) valuation of the equity

shares of the Companies and report on the Fair Equity Share Exchange ratio for the Proposed Merger

in accordance with generally accepted professional standards;

The Valuers have been appointed severally and not jointly and have worked independently in their

analysis. The Valuers have received information and clarifications from their respective Companies.

The Valuers have independently arrived at different values per share of the Companies. However,

to arrive at the consensus on the Fair Equity Share Exchange ratio for the Proposed Merger,

appropriate minor adjustments/ rounding off has been done in the values arrived at by the Valuers.

We have considered financial information up to 31 December 2018 (the "Valuation Date") in our

analysis. We have taken into consideration current market parameters in our analysis and made

adjustments for additional facts made known to us till the date of this Report which will have a

bearing on the valuation analysis. The current valuation does not factor impact of any event which

is unusual or not in normal course of business. Further, the managements of the Companies (the

"Managements") have informed us that all material information impacting the Companies has been

disclosed to us.

The Managements have informed us that:

a) There would not be any capital variation in the Companies from the Report date till the

Proposed Merger becomes effective without approval of the shareholders and other relevant

authorities as applicable other than on account of existing Employee Stock Option Plans;

b) None of the Companies would declare any dividend which are materially different than those

declared in the past few years.

c) There are no unusual/ abnormal events in the Companies, not known in the public domain,

since the last quarterly results were declared till the Report date materially impacting their

operating / financial performance.

We have relied on the above while arriving at the Fair Equity Share Exchange Ratio for the Proposed

Merger.

This Report is our deliverable in respect of our recommendation of the Fair Equity Share Exchange

ratio for the Proposed Merger.

Page 3 of 14

This Report (including, for the avoidance of doubt) the information contained in it is absolutely

confidential and intended only for the sole use and information of the respective Companies and only

in connection with the Proposed Merger including for the purpose of obtaining regulatory approvals,

as required under applicable laws of India, for the Proposed Merger. We understand that the

Companies may be required to share this Report with regulatory or government or judicial

authorities, stock exchanges, shareholders, professional advisors, merchant bankers providing

fairness opinion on the Fair Equity Share Exchange ratio, in connection with the Proposed Merger

(together, "Permitted Recipients"). We hereby give consent to such disclosure of this Report, on the

basis that the Valuers owe responsibility to the respective Companies that have engaged us, under

the terms of their respective engagement, and no other person; and that, to the fullest extent

permitted by law, Valuers accept no responsibility or liability to any other party, in connection with

this Report. It is clarified that reference to this Report in any document and/ or filing with Permitted

Recipients, in connection with the Proposed Merger, shall not be deemed to be an acceptance by the

Valuers of any responsibility or liability to any person / party other than the Companies.

Our report can be used by the Companies only for the purpose, as indicated in this report, for which

we have been appointed. The results of our valuation analysis and our report cannot be used or

relied by the Companies for any other purpose or by any other party for any purpose whatsoever.

We are not responsible to any other person / party for any decision of such person / party based on

this report. Any person / party intending to provide finance / invest in the shares/ business of the

Companies/ their holding companies/ subsidiaries/ associates/ investee companies/ other group

companies, if any, shall do so after seeking their own professional advice and after carrying out their

own due diligence procedures to ensure that they are making an informed decision. If any person/

party (other than the Companies) chooses to place reliance upon any matters included in the report,

they shall do so at their own risk and without recourse to the Valuers. It is hereby notified that

usage, reproduction, distribution, circulation, copying or otherwise quoting of this report or any part

thereof, other than for the aforesaid purpose in relation to the Proposed Merger as set out in this

report, is not permitted.

This Report is subject to the scope, assumptions, exclusions, limitations and disclaimers detailed

hereinafter. As such, the Report is to be read in totality, and not in parts, in conjunction with the

relevant documents referred to therein.

SOURCES OF INFORMATION

In connection with this exercise, we have used the following information:

• Annual reports for the year ended 31 March 2018 and earlier periods for the Companies;

• Unaudited financial results for the nine month ended 31 December 2018 for the Companies;

• Other relevant information and documents for the purpose of this engagement.

Page 4 of 14

been provided with the opportunity to review the draft report ( excluding the recommended Fair

Equity Share Exchange ratio) for this engagement to make sure that factual inaccuracies/ omissions

are avoided in our final report.

The Managements have informed us that Ernst & Young Merchant Banking Services LLP and CLSA

India Private Limited have been appointed by LVB and Indiabulls Housing respectively to provide

fairness opinion on the Fair Equity Share Exchange ratio for the purpose of the Proposed Merger.

Further, at the request of the Managements, we have had discussions with the respective fairness

opinion providers mentioned above on the valuation approach adopted and assumptions made by

us.

SCOPE LIMITATIONS, ASSUMPTIONS, QUALIFICATIONS, EXCLUSIONS AND

DISCLAIMERS

Provision of valuation opinions and consideration of the issues described herein are areas of our

regular practice. The services do not represent accounting, assurance, accounting / tax due

diligence, consulting or tax related services that may otherwise be provided by us or our affiliates.

This Report, its contents and the results herein are specific to (i) the purpose of valuation agreed as

per the terms of our engagement; (ii) the date of this Report and (iii) are based on the audited

financial statements of the Companies as at 31 March 2018 and unaudited financial results for the

three quarters comprised in the nine months ended 31 December 2018. The Managements have

represented that the business activities of the Companies have been or would be carried out in the

normal and ordinary course between 31 December 2018 and the Report date and that no material

adverse change has occurred in their respective operations and financial position between 31

December 2018 and the Report date.

Valuation analysis and results are specific to the purpose of valuation and the Valuation Date

mentioned in the Report and as agreed per terms of the respective engagements. It may not be

valid for any other purpose or as at any other date. Also, it may not be valid if done on behalf of any

other entity.

Valuation analysis and results are specific to the date of this Report. The recommendation contained

here is not intended to represent value at any time other than date of the Report. A valuation of this

nature involves consideration of various factors including those impacted by prevailing stock market

trends in general and industry trends in particular, as in effect on, and the information made

available to us as of, the date thereof. This Report is issued on the understanding that the

Managements have drawn our attention to all the matters, which they are aware of concerning the

financial position of the Companies and any other matter, which may have an impact on our opinion,

on the Fair Equity Share Exchange ratio for the Proposed Merger as on the Valuation Date. Events

and circumstances may have occurred since the Valuation Date concerning the financial position of

e Companies or any other matter and such events or circumstances might be considered material

S>

Page 5 of 14

by the Companies or any third party. We have taken into account, in our valuation analysis, such

events and circumstances occurring after the Valuation Date as disclosed to us by the Companies,

to the extent considered appropriate by us based on our professional judgement. Further, we have

no responsibility to update the Report for any events and circumstances occurring after the date of

the Report. Our valuation analysis was completed on a date subsequent to the Valuation Date and

accordingly we have taken into account such valuation parameters and over such period, as we

considered appropriate and relevant, up to a date close to such completion date.

In the course of the valuation, we were provided with both written and verbal information, including

market, financial and operating data. In accordance with the terms of our respective engagements,

we have carried out relevant analyses and evaluations through discussions, calculations and such

other means, as may be applicable and available, we have assumed and relied upon, without

independently verifying, (i) the accuracy of the information that was publicly available, sourced from

subscribed databases and formed a substantial basis for this Report and (ii) the accuracy of

information made available to us by the Companies. While information obtained from the public

domain or external sources have not been verified for authenticity, accuracy or completeness, we

have obtained information, as far as possible, from sources generally considered to be reliable. We

assume no responsibility for such information. Our valuation does not constitute as an audit or

review in accordance with the auditing standards applicable in India, accounting / financial /

commercial / legal / tax / environmental due diligence or forensic / investigation services, and does

not include verification or validation work. In accordance with the terms of our engagement letters

and in accordance with the customary approach adopted in valuation exercises, we have not audited,

reviewed, certified, carried out a due diligence, or otherwise investigated the historical

financials/financial information or individual assets or liabilities, provided to us regarding the

Companies / their holding / subsidiary / associates / joint ventures / investee companies.

Accordingly, we do not express an opinion or offer any form of assurance regarding the truth and

fairness of the financial position as indicated in such historical financials / financial statements. Also,

with respect to explanations and information sought from the Companies, we have been given to

understand by the Companies that they have not omitted any relevant and material factors and that

they have checked the relevance or materiality of any specific information to the present exercise

with us in case of any doubt.

Our conclusions are based on the assumptions and information given by/on behalf of the Companies.

The respective Managements have indicated to us that they have understood that any omissions,

inaccuracies or misstatements may materially affect our valuation analysis/results. Accordingly, we

assume no responsibility for any errors in the information furnished by the Companies and their

impact on the Report.

The Report assumes that the Companies comply fully with relevant laws and regulations applicable

in all its areas of operations unless otherwise stated, and that the Companies will be managed in a

Page 6 of 14

with local laws, and litigation and other contingent liabilities that are not recorded in the audited /

unaudited balance sheets of the Companies/ their holding /subsidiary/ associates/ joint ventures

/ investee companies, if any. Our conclusion of value assumes that the assets and liabilities of the

Companies reflected in their respective latest balance sheets remain intact as of the Report date. No

investigation of the Companies' claim to title of assets has been made for the purpose of this Report

and the Companies' claim to such rights has been assumed to be valid. No consideration has been

given to liens or encumbrances against the assets, beyond the loans disclosed in the accounts.

Our Report is not nor should it be construed as our opining or certifying the compliance of the

Proposed Merger with the provisions of any law/ standards including foreign exchange regulatory,

accounting and taxation (including transfer pricing) laws / standards or as regards any legal,

accounting or taxation implications or issues arising from such Proposed Merger.

Our Report is not nor should it be construed as our recommending the Proposed Merger or anything

consequential thereto/ resulting therefrom. This Report does not address the relative merits of the

Proposed Merger as compared with any other alternatives or whether or not such alternatives could

hP. r1c:hiP.vP.d or r1rP. r1vr1ilr1hle. Any decision by the Companies / their shareholders / creditors

regarding whether or not to proceed with the Proposed Merger shall rest solely with them. This

Report does not in any manner address, opine on or recommend the prices at which the securities

of the Companies could or should transact at following the announcement / consummation of the

Proposed Merger. Our Report and the opinion / valuation analysis contained herein is not nor should

it be construed as advice relating to investing in, purchasing, selling or otherwise dealing in securities

or as providing management services or carrying out management functions. It is understood that

this analysis does not represent a fairness opinion.

We have not conducted or provided an analysis or prepared a model for any individual assets /

liabilities and have wholly relied on information provided by the Companies in that regard.

The fee for our valuation analysis and the Report is not contingent upon the results reported.

WCC owes responsibility to only the Board of Directors of Indiabulls Housing and DHS owes

responsibility to only the Board of Directors of LVB that have respectively appointed us under the

terms of our respective engagement letters and nobody else. We will not be liable for any losses,

claims, damages or liabilities arising out of the actions taken, omissions of or advice given by any

other to the Companies. In no event shall we be liable for any loss, damages, cost or expenses

arising in any way from fraudulent acts, misrepresentations or willful default on part of the

Companies, their directors, employees or agents. In no circumstances shall the liability of a Valuer,

its partners, its directors or employees, relating to the services provided in connection with the

engagement set out in this Report will exceed the amount paid to such Valuer in respect of the fees

charged by it for these services.

Page 7 of 14

We do not accept any liability to any third party in relation to the issue of this Report. It is understood

that this analysis does not represent a fairness opinion. This Report is not a substitute for the third

party's own due diligence/ appraisal / enquiries/ independent advice that the third party should

undertake for his purpose.

This Report is subject to the laws of India.

Neither the Report nor its contents may be referred to or quoted in any registration statement,

prospectus, offering memorandum, annual report, loan agreement or other agreement or document

given to third parties, other than in connection with the Proposed Merger, without our prior written

consent.

Any discrepancies in any table/ annexure between the total and the sums of the amounts listed are

due to rounding-off.

SHARE CAPITAL DETAILS OF THE COMPANIES

Based on the share capital of LVB as at 31 December 2018 , the outstanding employee stock options

as at the Report date and the Qualified Institutional Placement of 63 ,831,328 equity shares of INR

10/- each in March 2019 in LVB, we have considered the diluted equity share capital of LVB of

321,76 7,10 8 equity shares of INR 10/- each, for the purpose of the present valuation analysis.

Indiabulls Housing

Based on the share capital of Indiabulls Housing as at 31 December 2018 and the outstanding

employee stock options as at the Report date, we have considered the diluted equity share capital

of Indiabulls Housing of 441,619,033 equity shares of INR 2/- each, for the purpose of the present

valuation analysis.

APPROACH - BASIS OF MERGER

The Proposed Merger envisages either merger of Indiabulls Housing into LVB whereby equity shares

of LVB will be issued to the equity shareholders of Indiabulls Housing or merger of LVB into India bulls

Housing whereby equity shares of Indiabulls Housing will be issued to the equity shareholders of

LVB.

Arriving at the Fair Equity Share Exchange ratio for the purposes of merger such as the Proposed

sidering the effect of the merger.

Page 8 of 14

The three main valuation approaches are the market approach, income approach and asset

approach. There are several commonly used and accepted methods, within the market approach,

income approach and asset approach, for determining the relative fair value of equity shares, which

can be considered in the present case, to the extent relevant and applicable, and subject to the

availability of detailed information, to arrive at the Fair Equity Share Exchange ratio for the purpose

of the Proposed Merger, such as:

1. Net Asset Value (NAV) Method under AssPt Aprronch

2. Income Approach

a) Discounted Cash Flow (DCF) Method

b) Earnings Capitalization Value (ECV) Method

3. Market Approach

a) Market Price Method

b) Comparable Companies Multiple (CCM) Method

It should be understood that the valuation of any entity or its assets is inherently subjective and is

subject to uncertainties and contingencies, all of which are difficult to predict and are beyond our

control. In performing our analysis, we made assumptions with respect to industry performance and

general business and economic conditions, many of which are beyond the control of the Companies.

In addition, this valuation will fluctuate with changes in prevailing market conditions, the conditions

and prospects, financial and otherwise, of the Companies, and other factors which generally influence

the valuation of the Companies and their assets.

The application of any particular method of valuation depends on the purpose for which the valuation

is done. Although different values may exist for different purposes, it cannot be too strongly

emphasized that a valuer can only arrive at one value for one purpose. Our choice of method of

valuation has been arrived at using usual and conventional methods adopted for transactions of a

similar nature and our reasonable judgment, in an independent and bona fide manner based on our

previous experience of assignments of a similar nature.

Asset Approach - Net Asset Value Method:

Under the asset approach, the net asset value method is considered, which is based on the

underlying net assets and liabilities of the company, taking into account operating assets and

liabilities on a book value basis and appropriate adjustments for, interalia, value of surplus / non­

operating assets.

Income Approach: Income approach is a valuation approach that converts maintainable or future

Page 9 of 14

• Discounted Cash Flow (DCF) Method: Under the DCF method the projected free cash

flows to the firm are discounted at the weighted average cost of capital. The sum of the

discounted value of such free cash flows is the value of the firm.

Such DCF analysis involves determining the following:

Estimating future free cash flows:

Free cash flows are the cash flows expected to be generated by the company that are

availnblc to the providers of the comr;rny's capital - both debt and equity.

Appropriate discount rate to be applied to cash flows i.e. the cost of capital:

This discount rate, which is applied to the free cash flows, should reflect the opportunity cost

to all the capital providers (namely shareholders and creditors), weighted by their relative

contribution to the total capital of the company. The opportunity cost to the capital provider

equals the rate of return the capital provider expects to earn on other investments of

equivalent risk.

• Earnings Capitalization Value (ECV) Method: This method involves determination of the

maintainable earnings level of the company from their operations, based on past and / or

projected working results. These earnings are then capitalized at a rate, which in the opinion

of the valuer combines an adequate expectation of reward from the enterprise risk, to arrive

at the value of the company.

Market Approach: Market approach is a valuation approach that uses prices and other relevant

information generated by market transactions involving identical or comparable (i.e., similar) assets,

liabilities or a group of assets and liabilities, such as a business.

• Market Price Method: Under this method, the value of shares of a company is determined

by taking the average of the market capitalization of the equity shares of such companies

as quoted on a recognized stock exchange over reasonable periods of time where such

quotations are arising from the shares being regularly and freely traded in an active market,

subject to the element of speculative support that may be inbuilt in the market price. But

there could be situations where the value of the share as quoted on the stock market would

not be regarded as a proper index of the fair value of the share, especially where the market

values are fluctuating in a volatile capital market. Further, in the case of an amalgamation,

where there is a question of evaluating the shares of one company against those of another,

the volume of transactions and the number of shares available for trading on the stock

exchange over a reasonable period would have to be of a comparable standard. This method

would also cover any other transactions in the shares of the company including primary /

preferential issues/ open offer in the shares of the company available in the public domain.

Page 10 of 14

• Comparable Companies Multiple (CCM) Method: Under this method, one attempts to

measure the value of the shares / business of a company by applying the derived market

multiple based on market quotations of comparable public / listed companies, in an active

market, possessing attributes similar to the business of such company - to the relevant

financial parameter of the company / business (based on past and / or projected working

results) after making adjustments to the derived multiples on account of dissimilarities with

the comparable companies and the strengths, weaknesses and other factors peculiar to the

company being valued. These valuations are based on the principle that such market

valuations, taking place between informed buyers and informed sellers, incorporate all

factors relevant to valuation. Relevant multiples need to be chosen carefully and adjusted

for differences between the circumstances.

For the present valuation analysis, we have not been provided by the Companies with their projected

financial statements. In the circumstances, in the present valuation analysis, we have considered it

appropriate to apply the Market Price Method and CCM Method, to arrive at the relative fair value of

the shares of the Companies for the purpose of the Proposed Merger.

The values arrived at under such methods by each of the Valuers has been tabled in the next section

of this Report.

Basis of Fair Equity Share Exchange ratio

The fair basis of the Proposed Merger would have to be determined after taking into consideration

all the factors, approaches and methods considered appropriate by the respective Valuers. Though

different values have been arrived at under each of the above approaches / methods, for the

purposes of recommending the Fair Equity Share Exchange ratio it is necessary to arrive at a single

value for the shares of the Companies involved in a merger such as the Proposed Merger. It is

however important to note that in doing so, we are not attempting to arrive at the absolute values

of the shares of the respective Companies but at their relative fair values to facilitate the

determination of a Fair Equity Share Exchange ratio. For this purpose, it is necessary to give

appropriate weights to the values arrived at under each approach / method.

In the ultimate analysis, valuation will have to be arrived at by the exercise of judicious discretion

by us and judgments taking into account all the relevant factors. There will always be several factors,

e.g. quality of the management, present and prospective competition, yield on comparable securities

and market sentiment, etc. which are not evident from the face of the balance sheets but which will

strongly influence the worth of a share. The determination of exchange ratio is not a precise science

and the conclusions arrived at in many cases will, of necessity, be subjective and dependent on the

exercise of individual judgment. This concept is also recognized in judicial decisions. There is,

therefore, no indisputable single exchange ratio.

Page 11 of 14

While we have provided our recommendation of the Fair Equity Share Exchange ratio based on the

information available to us and within the scope and constraints of our engagement, others may

have a different opinion as to the Fair Equity Share Exchange ratio of the equity shares of the

Companies. The final responsibility for the determination of the exchange ratio at which the Proposed

Merger shall take place will be with the Board of Directors of the respective Companies who should

take into account other factors such as their own assessment of the Proposed Merger and input of

other advisors.

The Fair Equity Share Exchange ratio has been arrived at on the basis of a relative fair equity

valuation of the Companies based on the various approaches/ methods explained herein earlier and

various qualitative factors relevant to each company and the business dynamics and growth

potentials of the businesses of these Companies, having regard to information base, key underlying

assumptions and limitations.

We have independently applied methods discussed above, as considered appropriate, and arrived at

our assessment of the value per equity share of the Companies. To arrive at the consensus on the

Fair Equity Share Exchange ratio for the Proposed Merger, suitable minor adjustments / rounding

off have been done in the values.

Page 12 of 14

In light of the above, and on a consideration of all the relevant factors and circumstances as

discussed and outlined herein above, we recommend the following Fair Equity Share Exchange ratio

for the Proposed Merger whose computation is as under:

The Computation of Fair Equity Share Exchange ratio as derived by OHS, is tabulated below:

Lakshmi Vilas Bank Indiabulls Housing

Limited Finance Limited

Valuation Approach Value per

Weight Value per

Weight Share (INR) Share (INR)

Asset Approach - Net Asset Value Method 66.8 - 422.5 -

Income Approach NA - NA -

Market Approach - Market Price Method 77.0 50% 721.6 50%

Market Approach - Comparable Companies 138.0 50% 818.4 50%

Multiple Method

Relative Value per Share (INR) 107.5 770.0

Fair Equity Share Exchange Ratio for

Proposed Merger of LVB into Indiabulls 1,000 140

Housing (rounded off)

Fair Equity Share Exchange Ratio for

Proposed Merger of Indiabulls Housing 7,143 1,000

into LVB (rounded off)

*NA = Not Applicable

The Computation of Fair Equity Share Exchange ratio as derived by wee, is tabulated below:

Lakshmi Vilas Bank Indiabulls Housing

Limited Finance Limited

Valuation Approach Value per

Weight Value per

Weight Share (INR) Share (INR)

Asset Approach - Net Asset Value Method 66.8 - 422.5 -

Income Approach NA - NA -

Market Approach - Market Price Method 77.5 50% 764.8 50%

Market Approach - Comparable Companies 145.0 50% 824.7 50%

Multiple Method

Relative Value per Share (INR) 111.3 794.8

Fair Equity Share Exchange Ratio for

Proposed Merger of LVB into Indiabulls 1,000 140

Housing (rounded off)

Fair Equity Share Exchange Ratio for

Proposed Merger of Indiabulls Housing 7,143 1,000

into LVB (rounded off)

Page 13 of 14

In light of the above, and on a consideration of all the relevant factors and circumstances as

discussed and outlined hereinabove we recommend the following Fair Equity Share Exchange ratio

for the Proposed Merger:

• In the event of the merger of Lakshmi Vilas Bank Limited into Indiabulls Housing Finance

Limited:

140 (One Hundred and Forty) equity shares of Indiabulls Housing Finance Limited of INR 2/­

each fully paid up for every 1,000 (One Thousand) equity shares of Lakshmi Vilas Bank

Limited of INR 10/- each fully paid up.

• In the event of the merger of Indiabulls Housing Finance Limited into Lakshmi Vilas Bank

Limited:

7,143 (Seven Thousand One Hundred and Forty Three) equity shares of Lakshmi Vilas Bank

Limited of INR 10/- each fully paid up for every 1,000 (One Thousand) equity shares of

Indiabulls Housing Finance Limited of INR 2/- each fully paid up.

Respectfully submitted,

Deloitte Haskins & Sells

Chartered Accountants

ICAI Firm Registration Number: 117365W

Kalpesh J. Mehta

Partner

Membership No: 48791

Date: 04 April 2019

UDIN: t9D'f.'l?::/-3IAAAf\AP3�8S

Walker Chandiok & Co LLP

Chartered Accountants

ICAI Firm Registration Number: 001076N/

N500013

@� Huned Contractor

Partner

Membership No: 41456

Date: 04 April 2019

Page 14 of 14

4th April 2019

Indiabulls Housing Finance Limited

and Lakshmi Vilas Bank Limited

Recommendation of Share Exchange Ratio

TPG & CO, CHARTERED ACCOUNTANTS

THANE

RV SHAH & ASSOCIATES, CHARTERED ACCOUNTANTS

MUMBAI

Private and Confidential

TPG&Co. Chartered Accountants

A-303, Prafulla Paradise CHS

Khadakpada, Kalyan

Thane - 421301

Maharashtra

4th April 2019

To,

Board of Directors

Indiabulls Housing Finance Limited

Indiabulls Finance Centre,

Tower 01, 4th Floor,

Senapati Bapat Marg,

Elphinstone Road

Mumbai (W) - 400013

Maharashtra

RV Shah & Associates Chartered Accountants

B-202, Hetal Arch, Off S V Road,

Malad West,

Mumbai - 400 064

Maharashtra

Board of Directors

Lakshmi Vilas Bank Limited

LVB House

No 4, Sardar Patel Road,

Guindy, Chennai - 600032

Tamil Nadu

Subiect: Recommendation ofShare Exchange Ratio for the proposed amalgamation of Lakshmi Vilas Bank

Limited into Indiabulls Housing Finance Limited or proposed amalgamation of Indiabulls Housing Finance

Limited into Lakshmi Vilas Bank Limited pursuant to the Scheme ofAmalgamation ('Scheme')

Dear Sirs/ Madams,

We refer to our engagement letters/ appointment letters whereby

• IBHFL has requested TPG & Co ('TPG') vide engagement letter dated 4th March 2019 and• LVB has requested R V Shah & Associates ('RVS' ) vide engagement letter dated 3rd March 2019

for recommendation of fair equity share exchange ratio ('Share Exchange Ratio') for the proposed amalgamation of

LVB into IBHFL or proposed amalgamation of IBHFL into LVB, pursuant to a Scheme of Amalgamation under section

230 to 232 and other applicable provisions of the Companies Act, 2013 ('Scheme').

TPG and RVS are herein after jointly referred to as 'Valuers' or 'we' or 'us' and individually referred to as Valuer in

SCOPE AND PURPOSE OF THIS REPORT

Private and Confidential

Recommendation of Share Exchange Ratio 4th April 2019

Page 2 of 13

IBHFL, incorporated in 2000, operates as a housing finance company in India. IBHFL's portfolio of products include

loan products, such as home loans, loans against property, corporate mortgage loans etc. IBHFL is headquartered

in Gurugram. The equity shares of IBHFL are listed on the BSE Limited ('BSE') and the National Stock Exchange of

India Limited ('NSE').

LVB, founded in 1926, provides various banking products and services in India. LVBL offers deposits products, loans,

wealth management services etc. through its treasury, corporate and wholesale banking, retail banking, and other

banking operations segments. The equity shares of LVB are listed on the BSE and NSE.

We understand that the Management of the Specified Companies ('Management') are contemplating amalgamation

of LVB with IBHFL or IBHFL with LVB under the provisions of section 230 to 232 of the Companies Act, 2013 and

other applicable provisions of the Companies Act, 2013 ('Transaction'). The Appointed Date for the Transaction is

1st January 2018 or such other date as approved by the Courts.

In this connection, the Specified Companies have appointed TPG and RVS to submit a joint report on the Share

Exchange Ratio for the consideration of the Audit Committee/ Board of Directors (the 'Boards') of the respective

Companies as required under the provisions of Section 230 - 232 of the Companies Act, 2013 and other applicable

provisions of the Companies Act.

As a consideration of amalgamation, equity shareholders of LVB would be issued equity shares of IBHFL or equity

shareholders of IBHFL would be issued equity shares of LVB.

Share Exchange Ratio for this Report refers to number of equity shares of face value of INR 2/- each of IBHFL, which

would be issued to the shareholders of LVB or number of equity shares of face value of INR 10/- each of LVB, which

would be issued to the shareholders of!BHFL, as a consideration for amalgamation.

The scope of our services is to conduct a relative (and not absolute) valuation of the equity shares of LVB and IBHFL

and recommending an exchange ratio for the proposed amalgamation.

The Valuers have been appointed severally and not jointly and have worked independently in their analysis. Both

the Valuers have received information and clarifications from the Specified Companies. The Valuers have

independently arrived at different values per share of Specified Companies. However, to arrive at consensus, on the

Share Exchange Ratio for the proposed amalgamation, appropriate minor adjustments/ rounding off has been done

in the values arrived at by the Valuers.

We have been provided with historical financial information for IBHFL and LVB up to 31st December 2018 including

details of outstanding employee stock options. We have considered the same in our analysis and made adjustments

for further facts made known (past or future) to us till the date of our Report. The current valuation does not factor

impact of any event which is unusual or not in normal course of business. We have relied on the above while arriving

at the Share Exchange Ratio.

This Report is our deliverable for the above engagement.

Private and Confidential

Recommendation of Share Exchange Ratio 4th April 2019

Page 3 of 13

This Report is subject to the scope, assumptions, exclusions, limitations and disclaimers detailed hereinafter. As

such, the Report is to be read in totality, and not in parts, in conjunction with the relevant documents referred to

therein.

SOURCES OF INFORMATION

In connection with this exercise, we have used the following information received from the Management and as

available in the public domain:

• Audited financial statements of LVB and IBHFL for 3 years ended 31st March 2018;• Unaudited financial statements of LVB and IBHFL for 9 months period ended 31st December 2018;• Employee Stock Options outstanding;• LVB Placement Document for Qualified Institutional Buyers ('QIB') dated 15th March 2019 ('QIB Placement

Document');• Discussions with the Management regarding the business operations of LVB and IBHFL, past trends, non­

recurring / non-operating items, future plans and prospects, etc.;• Draft Scheme of Amalgamation;• Shareholding pattern of the Specified Companies as at 31st December 2018;

During the discussions with the Management, we have also obtained explanations and information considered

reasonably necessary for our exercise. The Specified Companies have been provided with the opportunity to review

the draft report ( excluding the recommended share exchange ratio) as part of our standard practice to make sure

that factual inaccuracies/ omissions are avoided in our final report.

VALUATION STANDARDS FOLLOWED AND PROCEDURES ADOPTED FOR THE PURPOSE OF THE VALUATION

We have performed the valuation analysis, to the extent possible, in accordance with Indian Valuation Standards,

2018 issued by the Institute of Chartered Accountants of India ('IVS').

In connection with this exercise, we have adopted the following procedures to carry out the valuation analysis:

• Requested and received following from the Management

Audited financial statements of LVB and IBHFL for 3 years ended 31st March 2018, 31st March 2017

and 31st March 2016,

Unaudited financial statements of LVB and IBHFL for 9 months period ended 31st December 2018

Draft Scheme of Arrangement

Shareholding pattern of the Specified Companies as at 31st December 2018

QIB Placement Document

• Discussions with the Management on understanding of the businesses of the Specified Companies - business

and fundamental factors that affect their earning capacity including historical performance, future plans and

prospects, etc.• Obtained and analysed data available in public domain, as considered relevant by us• Obtained and analysed market prices of equity shares of IBHFL and LVB

• Undertook banking / housing finance industry analysis

Private and Confidential

Recommendation of Share Exchange Ratio 4th April 2019

Page 4 of 13

- Research of publicly available market data including economic factors and industry trends that may

impact the valuation

- Analysis of key trends and valuation multiples of comparable companies, using proprietary

databases subscribed by us

• Selection of valuation approach and valuation methodology/ (ies), in accordance with IVS, as considered

appropriate and relevant by us

• Determination of relative values of the equity shares of the Specified Companies

SCOPE, LIMITATIONS, ASSUMPTIONS, QUALIFICATIONS, EXCLUSIONS AND DISCLAIMERS

Provision of valuation opinions and consideration of the issues described herein are areas of our regular practice.

The services do not represent accounting, assurance, financial / tax due diligence, consulting or tax related services.

This Report, its contents and the results herein are specific to:

(i) the purpose of valuation agreed as per the terms of our engagement;

(ii) the date of this Report; and

(iii) are based on the financial statements of LVB and IBHFL as at 31st December 2018 and other

information provided by the Management till the date of the Report, including QIB Placement

Document.

Other than as stated above, the Management has represented that the business activities of Specified Companies

have been carried out in the normal and ordinary course between 31st December 2018 and the Report Date and no

material adverse change has occurred in their respective operations and financial position between 31st December

2018 and the Report Date.

An analysis of this nature is necessarily based on the prevailing stock market, financial, economic and other

conditions in general and industry trends in particular as in effect on, and the information made available to us as

of the date hereof. Events and transactions occurring after the date hereof may affect this Report and the

assumptions used in preparing it, and we do not assume any obligation to update, revise or reaffirm this Report.

In the ultimate analysis, valuation will have to capture the exercise of judicious discretion by the Valuer and

judgment taking into accounts all the relevant factors. There will always be several factors, e.g. quality and integrity

of the management, capital adequacy, asset quality, earnings, liquidity, size, present and prospective competition,

yield on comparable securities and market sentiment, etc. which are not evident from the face of the balance sheets,

but which will strongly influence the worth of a share. This concept is also recognized in judicial decisions.

This recommendation rendered in this Report represent our recommendation based on information furnished by

the Specified Companies (or their executives/ representatives) and other sources and the said recommendation/

shall be considered to be in the nature of non-binding advice, ( our recommendation will however not be used for

advising anybody to take buy or sell decision, for which specific opinion needs to be taken from expert advisors).

We have no obligation to update this Report.

Private and Confidential

Recommendation of Share Exchange Ratio 4th April 2019

Page 5 of 13

The determination of Share Exchange Ratio is not a precise science and the conclusions arrived at in many cases

will, of necessity, be subjective and dependent on the exercise of individual judgement. There is, therefore, no

indisputable single share exchange ratio. While we have provided our recommendation of the Share Exchange Ratio based on the information available to us and within the scope and constraints of our engagement, others may have

a different opinion. The final responsibility for the determination of the share exchange ratio at which the proposed

Transaction shall take place will be with the Board of Directors who should take into account other factors such as

their own assessment of the proposed Transaction and input of other advisors.

In the course of the valuation, we were provided with both written and verbal information, including financial and

operating data.

In accordance with the terms of our respective engagements, we have assumed and relied upon, without

independent verification:

(i) the accuracy of the information that was publicly available and formed a substantial basis for this

Report; and

(ii) the accuracy of the information made available to us by the Specified Companies.

In accordance with our Engagement Letters and in accordance with the customary approach adopted in valuation

exercises, we have not audited, reviewed or otherwise investigated the historical financial information of the

Specified Companies, provided to us. We have not independently investigated or otherwise verified the data provided by the Specified Companies. Accordingly, we do not express an opinion or offer any form of assurance

regarding the truth and fairness of the financial position as indicated in the financial statements of the Specified Companies. Also, with respect to explanations and information sought from the Specified Companies, we have been

given to understand by them that they have not omitted any relevant and material factors and that they have

checked the relevance or materiality of any specific information to the present exercise with us in case of any doubt.

Our conclusions are based on the assumptions and information given by/ on behalf of the Specified Companies and

reliance on publicly available information. The Management of the Specified Companies has indicated to us that

they have understood that any omissions, inaccuracies or misstatements may materially affect our valuation analysis/ results. Accordingly, we assume no responsibility for any errors in the information furnished by and on

behalf of the Specified Companies and their impact on the Report. Nothing has come to our attention to indicate that the information provided was materially misstated/ incorrect or would not afford reasonable grounds upon

which to base the Report.

The Report assumes that the Specified Companies comply fully with relevant laws and regulations applicable in all

its areas of operations unless otherwise stated, and that the Specified Companies will be managed in a competent and responsible manner. Further, except as specifically stated to the contrary, this Report has given no

consideration to matters of a legal nature, including issues of legal title and compliance with local laws, and litigation

and other contingent liabilities that are not recorded in the audited/unaudited financial statement of the Specified

Companies. Our conclusion of value assumes that the assets and liabilities of the Specified Companies, reflected in

their respective latest balance sheets remain intact as of the Report date.

We are not advisors with respect to legal, tax and regulatory matters for the Transaction.

This Report does not look into the business / commercial reasons behind the Transaction. Similarly, it does not address the relative merits of the Transaction as compared with any other alternative business transaction, or other alternatives, or whether or not such alternatives could be achieved or are available .

...,,»"�-·-.... - . 4'"',,

.--:::•��"¾

� !t'_./ -S:_���\1.'.( �ered Accountants ) ,, ) )

o\_ \,,!: i�N �1.k, .. 1/2

.+ 1265wt,J / "1/

\ .', . -- ___.------:: / ,/ '� ' It /'

-�:. .. - .... ,.---:,,.,--

Private and Confidential

Recommendation of Share Exchange Ratio 4th April 2019

Page 6 of13

No investigation of the Specified Companies' claim to title of assets has been made for the purpose of this Report

and the Specified Companies' claim to such rights has been assumed to be valid. No consideration has been given to

liens or encumbrances against the assets, beyond the loans disclosed in the accounts. Therefore, no responsibility

is assumed for matters of a legal nature.

The fee for the engagement is not contingent upon the results reported.

We owe responsibility to only the Boards of Directors of the Specified Companies that have appointed us under the

terms of our Engagement Letters and nobody else. We will not be liable for any losses, claims, damages or liabilities

arising out of the actions taken, omissions of or advice given by any other advisor to the Specified Companies. In no

event shall we be liable for any loss, damages, cost or expenses arising in any way from fraudulent acts,

misrepresentations or willful default on part of the Specified Companies their directors, employees or agents. In no

circumstances shall the liability of the Valuers, its partners or employees, relating to the services provided in

connection with the engagement set out in this Report shall exceed the amount paid to such Valuers in respect of

the fees charged by it for these services.

We do not accept any liability to any third party in relation to the issue of this Report. It is understood that this

analysis does not represent a fairness opinion on the Share Exchange Ratio. This Report is not a substitute for the third party's own due diligence/ appraisal/ enquiries/ independent advice that the third party should undertake

for his purpose.

Neither the Report nor its contents may be referred to or quoted in any registration statement, prospectus, offering memorandum, annual report, loan agreement or other agreement or document given to third parties, other than in

connection with the Proposed Scheme, without our prior written consent except for the disclosures to be made to

relevant regulatory authorities including stock exchanges, SEBI. In addition, this Report does not in any manner

address the prices at which equity shares of IBHFL and LVB will trade following announcement of the Transaction

and we express no opinion or recommendation as to how the shareholders of either company should vote at any

shareholders' meeting(s) to be held in connection with the Transaction.

This Report is subject to the laws of India.

Any discrepancies in any table/ annexure between the total and the sums of the amounts listed are due to rounding

off.

SHAREHOLDING OF SPECIFIED COMPANIES

Private and Confidential

Recommendation of Share Exchange Ratio

4th April 2019

Page 7 of 13

The issued and subscribed equity share capital of IBHFL as at 31st December 2018 is INR 85.47 crores consisting of 42,73,64,879 equity shares of face value of INR 2 each.

The promoter and promoter group hold ~21.7% of the paid-up equity shares and balance is held by public shareholders.

There are 14,254,154 ESOPs outstanding which are in the money as at 9th March 2019.

The issued and subscribed equity share capital of LVB as at 31st December 2018 is INR 256.1 crores consisting of 25,60,71,902 equity shares of face value of!NR 10 each.

The promoter and promoter group hold ~8.9% of the paid-up equity shares and balance is held by public shareholders.

There are 1,863,878 ESOP outstanding which are in the money as at 31st December 2018 (after adjusting for ESOP

lapsed/ cancelled till date).

APPROACH & METHODOLOGY

Private and Confidential

Recommendation of Share Exchange Ratio 4th April 2019

Page 8 of13

The Proposed Transaction contemplates amalgamation of LVB into IBHFL or IBHFL into LVB. Arriving at the fair

exchange ratio for the purpose of the amalgamation, in accordance with IVS, would require determining the relative values of each company involved and of their shares. These values are to be determined independently but on a

relative basis, and without considering the proposed Transaction.

The three main valuation approaches are the asset approach, income approach and market approach. There are several commonly used and accepted methods including those set out in the IVS, within the asset approach, income

approach and market approach, for determining the relative fair value of equity shares, which can be considered in

the present case, to the extent relevant and applicable, to arrive at the Share Exchange Ratio for the purpose of

amalgamation, such as:

1. Asset Approach - Net Asset Value method

2. Income Approach - Discounted Cash Flows method

3. Market Approach

a. Market Price methodb. Comparable Companies Quoted Multiples method ('CCM')c. Comparable Transaction Multiples method ('CTM')

It should be understood that the valuation of any company or its assets is inherently imprecise and is subject to certain uncertainties and contingencies, all of which are difficult to predict and are beyond our control. In performing our analysis, we made numerous assumptions with respect to industry performance and general business and economic conditions, many of which are beyond the control of the Specified Companies.

Asset Approach - Net Asset Value (NAV) Methodology

The asset base valuation technique is based on the value of underlying net assets of the business, either on a book value basis or realizable value basis or replacement cost basis. This valuation approach is mainly used in case where the firm is to be liquidated that is, it does not meet 'going concern' criteria or in case where the assets base dominate

earnings capability.

Both LVB and IBHFL are operating companies and historical book value does not reflect intrinsic value of their

businesses. A scheme of arrangement for a merger would normally be proceeded with, on the assumption that the

companies merge as going concerns and actual realization of the operating assets is not contemplated. Hence, NAV

methodology has not been considered.

Income Approach - Discounted Cash Flows ('DCF') Method

Income approach is a valuation approach that converts maintainable or future amounts ( e.g. cash flows or income and expenses) to a single current (i.e. discounted or capitalized) amount. The fair value measurement is determined on the basis of the value indicate.d by current market expectations about those future amounts.

/�:/:; (i�� // "\,5---��-� 0 ._,,,. � '\\

/ / / \\ :. ( f Choricr.0(i Accoun��:1nts ) ; '\ st \_• .. ["f;i\! :.?ij, i1+1;2.�6'.iW /. /'/'�<'-\i/ /,'

Private and Confidential

Recommendation of Share Exchange Ratio 4th April 2019

Page 9 of 13 Under the DCF method, the projected free cash flows to the firm are discounted at the weighted average cost of

capital. The sum of the discounted value of such free cash flows is the value of the firm. Using the DCF analysis

involves determining the following:

• Estimating future free cash flows:

Free cash flows are the cash flows expected to be generated by the company that are available to all providers

of the company's capital - both debt and equity.

• Appropriate discount rate to be applied to cash flows i.e. the cost of capital:

This discount rate, which is applied to the free cash flows, should reflect the opportunity cost to all the capital

providers (namely shareholders and creditors), weighted by their relative contribution to the total capital of

the company. The opportunity cost to the capital provider equals the rate of return the capital provider

expects to earn on other investments of equivalent risk.

In the present case, we have not been provided with Financial Projections for Specified Companies and have

therefore not used this method for the valuation.

Market Approach

Market approach is a valuation approach that uses prices and other relevant information generated by market

transactions involving identical or comparable (i.e. similar) assets, liabilities or a group of assets and liabilities, such

as a business.

Market Price ('MP') Method

The market price of an equity shares as quoted on a stock exchange is normally considered as the value of the equity

shares of that company where such quotations are arising from the shares being regularly and freely traded in, subject to the element of speculative support that may be inbuilt in the value of the shares. But there could be

situations where the value of the share as quoted on the stock market would not be regarded as a proper index of

the fair value of the share especially where the market values are fluctuating in a volatile capital market. Further,

where there is a question of evaluating the shares of one company against those of another, the volume of

transactions and the number of shares available for trading on the stock exchange over a reasonable period would

have to be of a comparable standard.

In the present case, since equity shares of IBHFL and LVB are listed on BSE and NSE and the shares are being frequently traded (in terms of Regulation 71A of SEBI issue of Capital and Disclosure Requirements (ICDR)

Regulations), we have considered volume weighted average price for appropriate period for valuation of Specified

Companies.

Comparable Companies' Quoted Multiple ('CCM')

Private and Confidential

Recommendation of Share Exchange Ratio 4th April 2019Page 10 ofl3

Under CCM, value of the equity shares of a company is arrived at by using multiples derived from valuations of

comparable companies, as manifest through stock market valuations of listed companies. This valuation is based on

the principle that market valuations, taking place between informed buyers and informed sellers incorporate all

factors relevant to valuation. Further, relevant multiples need to be chosen carefully and adjusted for differences

between the circumstances.

Since LVB has been incurring losses recently, we have considered price to book value multiple ('P /BV') of

comparable listed companies for the purpose of our valuation of Specified Companies.

While arriving at the multiples of comparable companies, we have used volume weighted average market

capitalization (for arriving at the price) and book value has been considered as at 30th September 2018/ 31st

December 2018 (as available in the public domain).

The value arrived using the relevant multiples under this method is further adjusted for cash received from QIB in

March 2019 (for LVB), cash receivable on ESOP, fair value of investment and other matters as considered

appropriate.

Comparable Companies' Transaction Multiple ('CTM')

Under this method, value of the equity shares of a company/ business is arrived at by using multiple derived from valuation in comparable companies as manifest through transaction valuations. Relevant multiples need to be chosen carefully and adjusted for differences between the circumstances.

We have not used the comparable transactions multiple approach as transaction multiples may include acquirer specific considerations, synergy benefits, control premium and minority adjustments.

Share Exchange Ratio

The basis of the Transaction would have to be determined after taking into consideration all the factors and

methodologies mentioned hereinabove. Though different values have been arrived at under each of the above

methodologies, for the purposes of recommending a fair exchange ratio of equity shares, it is necessary to arrive at

a single value for each of the business/ subject companies' shares. It is however important to note that in doing so,

we are not attempting to arrive at the absolute equity values of the Companies, but at their relative value to facilitate

the determination of a fair exchange ratio. For this purpose, it is necessary to give appropriate weights to the values

arrived at under each methodology.

The Share Exchange Ratio has been arrived at on the basis of a relative equity valuation of the Specified Companies.

The exchange ratio is based on various methodologies explained herein earlier and various qualitative factors

relevant to Specified Companies and the business dynamics and growth potentials of the businesses of Specified

Companies, having regard to information base, key underlying assumptions and limitations.

Private and Confidential

Recommendation of Share Exchange Ratio 4th April 2019 Page 11 of 13

In light of the above, and on consideration of all the relevant factors and circumstances as discussed and outlined hereinabove:

We recommend the Share Exchange Ratio of 140 (One Hundred and Forty) equity shares of lBHFL (of INR 2/- each fully paid up) for every 1,000 (One Thousand) equity shares of LVB (of INR 10/- each fully paid up) for amalgamation of LVB into IBHFL.

Or

We recommend the Share Exchange Ratio of 7,143 (Seven Thousand One Hundred and Forty-Three) equity shares of LVB (of INR 10/- each fully paid up) for every 1,000 (One Thousand) equity shares of!BHFL (of!NR 2/- each fully paid up) for amalgamation of!BHFL into LVB.

Respectfully submitted,

ForTPG&Co

Chartered Accountants ICAJ�!':r,; J.� l��SYJ; < ::_:>,

./' ".;� ·�t· �._:::��::. c� ��0.. l >---.,� �<.\

Chartered Accountants ,

* FRN No.1412Sc ,, // ii

- . ---· ------· __ / �/ 'J \ c.:::.----:,.-,;;,✓ Teja . c:::---/

Proprieto Membership No: 128157 Registered Valuer, SFA- IBBI/RV /06/2018/10207

Date : 4th April 2019 Place: Thane, Maharashtra. India

For Rashmi Shah & Associates

Registered Valuer SFA-!BBi/RV /06/2018/10240

Date: 4th April 2019 Place: Mumbai, Maharashtra, India

Annexure I - Computation of Share Exchange Ratio

Share Exchange Ratio as derived by TPG, is given below:

Valuation Approach

Asset Approach

Income Aooroach

Market Approach - Market Price- Comparable Companies Multiple- Comparable Transaction Multiple

Relative Value Per Share (INR) Exchange Ratio (rounded offi

* face value INR 2 per share for IBHFL

I\ face value INR 10 per share for LVB

# Not applicable/ Not adopted

IBHFL* INR Weight

(%) NA 0% NA 0%

754.6 50% 847.7 50%

NA 0% 801.2

0.14

Share Exchange Ratio as derived by RVS, is given below:

Valuation Approach

Asset Approach

Income Aooroach

Market Approach - Market Price- Comoarable Companies Multiple

Relative Value Per Share (INR) Exchange Ratio (rounded offi

* face value INR 2 per share for IBHFL

A face value INR 10 per share for LVB

# Not applicable/ Not adopted

IBHFL* INR Weight

(%) 422.5 0%

NA 0%

723.5 50% 800.3 50% 761.9

0.14

Private and Confidential Recommendation of Share Exchange Ratio

4th April 2019

Page 12 of 13

LVB" INR Weight

(%) NA 0% NA 0%

76.4 50%

148.0 50% NA 0%

112.2

LVB" INR Weight

(%) 66.8 0% NA 0%

77.0 50% 135.9 50% 106.5

Note: As mentioned earlier, since IBHFL and LVB are operating companies and asset value does not represent the earning

potential of these companies, asset approach has not been used for arriving at the exchange ratio.

Private and Confidential Recommendation of Share Exchange Ratio

4th April 2019 Page 13 of 13

Since the Specified Companies are listed on BSE and NSE and equity shares are frequently traded, volume weighted

average market price has been used. For CCM, we have used Price to Book value approach (P/BV) using multiples of

relevant peers. Considering that both these methods are equally important, equal weightage has been considered for

arriving at fair Share Exchange Ratio.

Share Exchange Ratio for Amalgamation ofLVB into IBHFL (Rounded off)

140 (One Hundred and Forty) equity shares of IBHFL ( of INR 2/- each fully paid up) for every 1,000 (One

Thousand) equity shares of LVB (ofINR 10/- each fully paid up) for amalgamation of LVB into IBHFL.

Share Exchange Ratio for Amalgamation ofIBHFL into LVB (Rounded off)

7,143 (Seven Thousand One Hundred and Forty-Three) equity shares of LVB (of INR 10/- each fully paid up)

for every 1,000 (One Thousand) equity shares of IBHFL ( ofINR 2/- each fully paid up) for amalgamation of

IBHFL into LVB.

\