'VD & Co. Chartered Accountants

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The S(I,:lt'd of Directors, Bh;:~lti Airtel Liniited . nharti Crescent 1, r\JI?I~on Mand~la Road, Vasant Kunj Phase-II j'~,,·w Delhi, 110070, India

lJe;~r Sir,

To,

# 234, 2nd Floor, JMD Me gapolis, Sector- 48, Sohna Road, Gurga on -122001, Ha rya na, India Tel : +911244203414 Web:www,vdandcQ,in

The Soard of Directors, Sharti Airtel Services Limited '" Bharti Cresent 1, Nelson Mandela Road, Vasant Kunj Phase -" New Delhi, 110070, India

1~(J: !L~commendation of fair value of VSAT Division for the proposed transfer of VSAT Undertaking by Bharti Airtel limited and Sharti Airtel Services Limited as on March 31, 2019

w~~ refer to the engagement letter dated January 18, 2019 with VD & Co., Chartered Accountants (he rei nalter referred to as "VD & Co." or "we") wherein Bharti Airtel Limit~d (hereinafter refer red to as "BAl" or "the Transferor Company 1") has requested VD & Co, to carry out valuation of the VSAT Undertaking ("VSAT Undertaking 1") of BAl, proposed to be transferred to Hughes Communications 1:ldia Limited (hereinafter referred to as "the Transferee Company 1" or "HCll") and to carry out ,.!8Iuation of VSAT Undertaking ("VSAT Undertaking 2") of Bharti Airtel Services Limited (hereinafter t , ,~ferred to as "BASl" or lithe Transferor Company 2/1), proposed to be transferred to HCll Comtel ~,imited (hereinafter referred to as lithe Transferee Company 2" or "Comtel"), as a going concern, on Siurilp Sale basis under a Composite Scheme of Arrangement ("Proposed Transfer") a~ shared by the management of the Transferor Company 1.

1. SCOPE AND PURPOSE OF THIS REPORT:

('I h<lrti Airtel ~imited was incorporated on July 07, 1995 under the Companies Act, 1956 with the (Ol'pOrrlte Identity ~'umber (CIN) as L74899Dl1995PLC070609. It is a public limited company, having its ;'egisterr~d office situated at Bharti Crescent 1, Nelson Mandela Road, Vasant Kunj, Phase ", New Delhi -'Ilo~rlO The equity shares of the Company are listed on the Stock Exchanges in India.

13hrtrti Ailtel Services Limited is a subsidiary of Bharti Airtel Limited. BASlwas incorporated on December 05, 1997 under the Companies Act, 1956 with the Corporate Identity Number (CIN) as 'J6420lDL1997PlC091001. It is a public limited company, having its registered office situated at Bharti Crescent 1, Nelson Mandela Road, Vasant Kunj, Phase II, New Delhi - 110070,

:j\.ie understand that BAl arId BASl desire to tran:;ff!( VSAT Undertaking 1 and VSAT Undertaking 2 to dCL and Comtel respeclive:v on a going concern basis by way of Slump Sale. The transfer is proposed to 'Jr. achieved by way of a Scheme of Arrangement under sections 230 to 232 of the Companies Act, 2013 :.i1rl other applicable provisions of the Companies Act, 2013 for the transfer and vesting of VSAT UI~dt: rtaking 1 to the Transferee Company 1 and the VSAT Undertaking 2 to the Transferee Company 2, ~);l rl goil1g concern basis, by way of Slump Sate under a Composite Scheme of Arrangement for a lump SlIm consideration in the form of cash.

':'; tIll:> connection, we have be':!n requested bV the management of BAI. ("the Management") to carry :'l;{ hll'jCltion of the VSAT Undertaking 1 and VSAT Undeltaking 2 and submit a Valuation Report (lithe ,,',JilJiltirm Report").

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Thi~ Report is our deliverable for the above engagement. It is subject to the scope, ilssumptions, exciusions,limitationsand dis~laimersdetailed hereinafter .. A.s such, the Report is to be read in totality iJnd not in parts, in conjunction with the relevant documents referred to therein . Further, since the valliation report is being issued on April 29, 2019, our report does not take account of events or circumstances arising after April 19, 2019.

2. BRIEF BACKGROUND OF BUSINESS:

VSAT (Very Small Aperture Terminal) is a r.:ornrnul1ication system that is operated through the satellite. rhe e nd-userof a VSAT requires a box that ir.t(~rfaces an outside antenna with the user's computer with the help of a transceiver. The transcp.iver~;end;;the received signal to a satellite transponder in the sky . The satellite receives and sends the signal that wrn;os from the earth's station's computer which acts as ,1 core for the system. Each end -user is connected with the core stotlon .. Alith the help of a satellite connected in the form of a star topo'op,,/. O;:or the end-users to connect with each other, each transmitted firstgues to the hub station, which is then re .. transmitted to the rece iving end-user' s VSAT via the satellite. V5ATh,lndies video, voice and dat3 !:ignals. With the help of VSAT, cornpanies can have cornplete control C)ftheir communicatiOl1 sV~;'~t:rn.~, without depending on other IT companies. Domestic users and bU5in~sses al'so can ~p.t higher speed than reguli3r telephone sNvices.

I h" :1dl.)orJl entrrprise VSAT tr,itrket. has beEn segmented on the basis of c"te~OIi es, hardware & services, '.Hld ~;r;:ographies. On the basis of categorip.5. \:h~ Inilrkc't has been segregated into products and services. T;,c .~\~ rv;ces segmert accounts for 2 domin',lIlt market ~hare. This is mainl y attributed to banks, clinics :!'1d hospitals enable:d with satellite broadband sen/ices, which help them maintain direct two-way data \~:<clw~lJe and communicaf;ion.ln addition; :','ltellite'broedband services al~;o help security agencies and Intel! igence services improve their data ,M<ll'l~is !'ystem. that help the m in deciphering the information !rIOi~' accuratelv. Governrnen1; agf: ncies as , .... : ~:j 3S aviation. maritime and military sectors are major end­IJ :;;~~r<; 01' VSAT as a service. There' h'ls been (;ontinued demand fromthh seem~nt, which is driving the ITlilrket. VSAT principallv ~e rYes rt'creation and f1er~otlal; gove rnment; public safety and disaster relief; oil 31ld gas; maritime alld f!shinf..; ilatural.I'isOllrCf'S, mirring and forestry; construction; utilities; and . . traflsportation .

1\ :'1 iilj 01' driverforthe growth of th~ global' rrhll'ketf 1.)/'{)nterpri:Sl~ VSAT is the provision of practical, cost­':'fff~ctille .501lJtions for indivlrluEd ~nlj-(js(~ls. wh·':':,"ei.jUlre a sp.lf.'regulatir'l€ comrnunications network through which a number of reinote ,;1:% ~I'l~ (onn<~ctecUn additiol1, the VSAT network offers sCltt.'lIite­bH~;t:~, vaILle-addF~d sel\'ices such as vdb,!/fa)(cornl1'lunitiltionj tAN serVices, data transmission, and inl(' rtlet access along with public and private r.etwG·rk communications.

GC~f)gl<lphlcaIiVi the' globalmarketforeni:erprise \lS/\ T has beell5egregated into North America, Europe, Asia Pacific, Middle East & Africa,'and Latil1 AI'r.N!ci) ·. 'North Ainerica holdsthe dominant share of the glob,,1 market. This is attdbutedto high adoption '(If satellite services for various applications such as inspection oh historical 'monuments, vegetation identification,· volcano monitoring, and disaster management incase of storms and hurricanes. The market in Asia Pacific is eSlirnated to witness speedy growth duringthe fo:ecast period, owing'to increase in governm€'I1t initiatives to connect schools and coileges in countries sutt'! as !ndia; 'Chini:li and Australia. .

.: : . A,

Major players operating in the gldbal enterprise V~AT market include Gilat Satellite Networks Ltd. (Israel), IntelsatS.A. (Lux,einbourg) .. Inmar-sat Pic. (UK), Globalstar, Inc. (USA); Iridium Communications

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Inc. (USA), ORBCOMM Inc. (USA), Hughes Communications (USA), ViaSat Inc. (USA), Bharti Airtel (India), TelefOnica, S.A (Spain) etc.

3. BRIEF BACKGROUND OF COMPANIES:

3.1 Sharti Airtel Limited

Bharti Airtel Limiteo is a leading global te lecornmunications company with operations in 18 countries across Asia and Africa, Headquartered in New Delhi, India, the company ranks amongst the top three mobile service providers globally in terms of subscribers. In India, the company's product offerings include 2G, 3G and 4G wireless services, mobile commerce, fixed line services, high speed home broadband, DTH, enterprise services including national and international long distance services to catriers. In the rest of the geographies, it offers 2G, 3G, 4G wireless services and mobile commerce . BhiJrti Airtel had over 403 million customers across its operations at the end of Dec 2018.

3.1.1 VSAT Undertaking of Bharti Airtel L~mited

"VSAT Undertaking I", as defined in the Scheme of Arrangement, means the entire VSAT business undertaking, activities and operations of the Transferor Company 1 comprising of and including, as dt:emed fit, the Transferor Company 1'5 VSAT CUG Authorization issued by DOT under the Unified l.ice1se to provide VSATservices, proposed to be transferred to the Transferee Company 1.

3 .l Bharti Airtel Se,,!ic;es Limited

BhC:lrti lIirtel Se'rvices Limited, the Transferor Company 2, offers telecommunication services. The company waslorrnerly known as Bharti Comtel Ltd . Bha~1i Ailtel Services limited was incorporated in '1997 and is based in New Delhi, India. The t:ompany operates as a subsidiary of Bharti Airtel Limited. It is, iltter alia, engaged in supplying hardware and related services forvery small aperture terminal (VSAT) l:eI('communici:ltion~ services in India.

3 .. 2.1 VSAT Undertaking of Bharti Airtel Services Limited

"VSAT Undertaking 2", as defined in the Scheme of Arrangement, means the entire VSAT business undertaking, activities and operations of the Transferor Company 2 comprising of and including, as deemed fit, supplying hardware and related services for VSAT telecommunications services in India of the Transferor Company 2, including all aspects constituting an und~rtaking, such as customers, contracts, personnel, IT systf.!m, other b'Jsiness infrastructures related to the VSAT Undertaking 2 and other items necessaryforthe Transferee Company 2to operate the VSAT Undertaking 2 independently on a going concern basis.

3.3 Hughes Communications India Limited

Hughes Communications India Limited, the 1ransferee Company 1, was incorporated in March 17, 1992 to marketVSATand pro'vide satellitecommunit:ation ~ervices. It is a publiclimited company, having CIN iJ!; U64202DL1992PLC0480S3 and having its registp.red office situated at 1, Shivaji Marg, Westend Greens, NH-8, New Delhi - 110037. The Transferee Company 1 has set lip Hubs to provide broadband, internet and dther telecommunication services und.c;r I/arious licenses obtained from the DoT.

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The Transferee Company is India's premier networking company and India's largest satellite service operator, offering broadband services underthe Hughes brand. Customers include large enterprises and small and medium businesses across various verticals, and consumers. Solutions include networking, system integration, managed network services, s.ecurity transaction services, intranet, internet, broadband kiosks and interactive distance education. It has two wholly owned subsidiaries, HCll Comtel Limited and Hughes G.lqbal Education India Limited.

3.4 HCll Comtel Limited

HCll Comtel Limited, the Transferee Company 2, is a public limited company incorporated on September 13, 2007 under the provisions ofthe Companies Act, 1956, having ClN as U32204Dl2007PLC168125 and having its registered office situated at 1, Shivaji Marg, Westend Greens, NH-8, New Delhi - 110037.

The Transferee Company 2 is engaged in supplying hardware and related services for very small aperture terminal (VSAT) telecommunications services in India.

4. CAPITAL STRUCTURE:

4.1 Bharti Airtel Limited

The Transferor Company 1 is a listed company and its authorized, issued, subscribed and fully paid-up share capital, as on date, is as under:

Authorized share capital Amount lin ~) 29,506,000,000 equity shares of ,{5/- each 147,530,000,000

Total 147,530,000,000

Issued, subscribed and 'pald UP share capital Amount (in ~) 3,99,74,00,107 equltv shares of ~5/- each 19,987,000,535 Total 19 987 000 535 ,

4.2 Bharti Airtel Services Limited

The TransferorComr·any 2's authorized, issued, subscribed and fully paid-up share capital, as on date, is as under:

Authorized share capital AmountJ!n ~) 10,00,000 equity shares of 11:10/· each 1,00,00,000

Total 1,00,00,000

Issued, subscribed and paid up share capital Amount (In ~) 1,00,000 equity shares of ~10/- each 10,00,000 Total 10,00,000

4.3 Hughes Communications India Limited

The authorized, issued, subscribed and fully paid-up share capital of the Transferee Company 1, as on date, is as under:

Valuation R..ep,or:tO

'- VSAT / ' 0)--" , I .

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--" . ~uthorized share capital Amount (In I{)

2/00/00,000 eq uity s ha res of ~10/- each 20,00,00,000 Total 20,00,00,000

Issued, subscribed and paid up share capital Amount (In ~) 1,.55,00,000 eq uity shares of ~10/- each 15,50,00,000 Total 15,50,00,000

4.4 HCll Comtel Limited

The authorized, issuedl suBscribed and fully paid -up share capital of the Transferee Company 2, as on date, is as under:

1---'-- - -I-~I!~horized sh~re ca~ltal Amount (in ~ )

J~9_0,O(),(J00 egui t:l s ha res of ~10/- ea ch 10,00,00,000 Total 10,00,00,000

-'~1iued, subscribed and eaid ue share r.aeltal Amount lin I( )

_ 20 .. 1)11/000 equi ty 5 ha res of £(1 0/ - each 2 00 00/000 Total 2.00 00,000

5. SOllRCES OF INFORMATION:

The Analysis is based on a review of the information and documents shared by the management ofthe Company and other information as available in the public domain. Specifically, the following sources of information as provided by the Management, verbally or in written form, have been utilized in c.:onducting the valuation analysi3:

• Draft Compo.3ite Scheme of Arrangernent for the proposed transfer of the VSAT Undertaking 1 and VSAT Undertaking 2;

• Unaudited Management carved outfinancials pertaining to the VSAT Undertaking for FY 2016-17, FY 2017-18 and nine months period ending December 31, 2018;

.. Management cer.tified Assets & Liabilities as on December 31,2018, of the VSAT Undertaking 1 and VSAT Undertaking 2, proposed to be transferred under Slump Sale;

• Background information provided through emails, documents and our discussions with the Managelme nt;

'" Discussions w ith the Management to augment our knowledge of the VSAT undertaking; o Other information, explanat.ions illld representation that were required and prOVided by the

Management; .. !=or our analy.;is, we have relied on published ,md secondary sources of data, whether or not

made available by the M<lnagemellL We have not independently verified the accuracy or timeliness of the same;

" Information available in publ;c dOl'nain; " Such other information and explanations as we have required and which have been provided by

the Management.

AI50, we have referred Wt~bsiteof Mr. Aswath Damodaran and have used various data and principles for the purpose ofthe valuiltion.

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It ITI(lY he noted thClt the Managernent has been provided opportunity to review factual information in our report and confirm, wherever wquimrJ, as part of our standard practice to make sure that factual Inaccuracies/omissions/etc. are ilvoide(l ir~ our final report

G. SCOPE LIMITATIONS,. ASSUMPnONS, EXCI.USIONS AI\!D DISCLAIMERS:

Given below are limitations; assumptions, exclusions anel disclaimers which form an integral part of this repo(t and communicate our dependence on information obtained from ' the Management, public and other sources.

• Provision ofvaiuat:on opin ion"cll1d consideration of the issues describf'd herein are areas of our fegular practice. ThE: sr:!rvices do 'lot represent accounting, assurance, accounting / tax due diligence, consulting or tax' related ~ervices that may otherwise be provided by us.

- Valuation is not a' prt~cise science and tile conclusions arrived at in many ca ses will be subjective and dependenton the exerc.iseof indi\,idllaljudgment There is, therefore, no indisputable single

value, While we have provided the valuation of the Undertaking, others may have a different opinion'. The final responsibility fo'rtYie d ~tertnination of the share exchange/ entitle ment ratio at which the proposed transactiol) shalt take place will be with the Board of Directors who should take il'lto account ether factor!; such ' a!i' their 'Jwn assessment of the proposed transaction and i flout of other advisors.

'~ This Re port, it'; colltel1ts and the results he rein are specific to (i) the purpose of valuation agreed ,;;,; per the terms of our engagement; (Ii) the date of this Report; and (iii) the latest available financial statements of the TrallsfNor Company I Transferee Company and other information provided by the Management ortakert tram public sources till the date ofthis Report.

It An analysis ofthis l1ature is nec~s5arll~1 based on the prevailing stock market, f inancial, economic and other conditions in general and ini:lustry trends in particular as in effect on, and the information made available to uS 'a'f, at the date hereof. Events and transactions occurring after the date hereof may affec.t this Report ;Hid the assumptions used i,n preparing it, and we do not assume any obli.gation to updllte, n~·.iise or reaffirm this Report, unless required by regulatory authorities.

.. The ultimate analysis will have to be tempered by the exercise of judicious discretion by the Valuers and judgement taking into account all the relevant factors , There will always be several factors, e,g. Management capabiHt'l, pre~p.nt and prospective competition yield on comparable securities, market sentiment, etc. iNhich are not evident from the face of the balance sheet but which will strongly influence the worth of <I snare . This concept is also recognised in judicial decisions. .

III The valuation rendered in this Report only represent valuation of the Undertaking based upon information furnished by the Transferor Company or it!i executives / representatives and other sources and the said valuation shall be considered to be in the nature of non .. binding advice ,

Our work does not constitute an audit or certification of historical financial statements / prospective re ;ults inCluding th'e working results of VSAT Undertaking referred to in this report In accordance WIth the customary approach adopted in valuation exerCises, we have not audited, reviewed or otherwise investigated the historical financial information provided to us. We have not independently investigated or'otherwise verified data provided by the Transferor Company, Accordinglv, we are unable to and do not express an opinion on the fairness or accuracy of any financial information referred to in this report, Valuation analysis and results are sp edfic to the purpose of valuation and the valuation date is mentioned in the report is as per agreed terms of

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our engagement. 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.

" We have assumed and relied upon, without independent verification, (i) the accuracy of the information t1-3t was publicly available and formed a substantial basis for this Report and (ii) the accuracy of iniormation made available to us by the Transferor Company.

• Also, with respectto explanations and information sOlJghtfrom the Transferor Company, we have been given to understand by the Management of the Transferor Company that it has not omitted any relevant and material facts about the Undertaking to be transferred. Our conclusions are based on the assumptions and information given by and on behalf of the Company and reliance on public information. The Management of the Company has indicated to us that they have understood that any omi.'isions, i naccllrar.ie-s or misstatements may materially affect our valuation <l nalysis/results.

" The Report assumes that the Transferor Company / Transferee Company complies fully with relevant laws and regulations applicable in all its areas of operations unless otherwise stat ed, and that the Company will be managed in a competent and responsible manner. Further, except as specifically stated to the contrary, this Valuation 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

1 liabilities that are not recorded in the balance sheet of the Company. Our

conclusion of value assumes that the assets and liabilities of the Company, reflected in its latest balance sht'e':s remain intact as ofthe Report date.

'41 This Report does not look intothe husiness/ commercial reasons behind the Transaction nor the likely benefits arising out of the same. Similarly, it does not address the relative merits of the Transaction as compared with any other alternative business transaction or other alternatives whether o( not such alternatives could be achieved or are available.

.. No investigati'lO of the Company's clairn to title of assets has been made for the purpose of this Rf!port and the Company's claim tosuc:h rights has been assumed to he valid. No consideration has been given to liem or encumbrnnms against the assets, beyond the loans disclosed in the accounts. Therefore, no responsibility is a!i5umed for matters of a legal nature.

• We owe responsibiliW only to the Boards of Direttors of the Company that has appointed us and nobody else. We will not be liable for any losses, claims, damages or liabilities arising out of the actions taken, omissions of oradvice given by any other advisor to the Company. In no event we shall be liabre for any loss, damages, cost or expenses arising in any way from fraudulent acts, misrepresentations orwillful default 011 part of the Comrany, its directors, employees or age nts. Unless specifico'lly agreed, in no circumstance5, shall the liability of a Valuer, its partners, its directors or employe~s, relating t'lthe services prolJided in connection with the engagement set out in this Report shall exceed the amount paid to such Valuer in respect at the fees charged by it for these services.

" Neithf::r the Valu~atioll Report nor its contents may be referred to or quoted in any registration statement, prospectus offering mernorandum, annUal report, loan agreement or other agree ment or document given to third parties oth<!r than in c.onnection with the proposed transaction, without ,?ur prior written con~ent except for disclosures to be made to relevant regulatory authorities .

.. A valuation ofthis nature involves conside ration of various factors including those impacted by prevailing markettrends in genera~and industrY trends in particular. This ,·eport is issued on the u nderstandinr th<lt the Management n't the company have drawn our attention to all the matters, which they ar~ aware of concernin'g the fl'nanciai position of VSAT Undertaking and any other matter, which may have an impact: on ouropiniol1, on tht~ fairvalue of VSATUndertaking including any significant changl!!; that httve tilJ(tin ~;Iace or are like!y totake place in the financial position of

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VSATUndertakin~. We have no responsibility to update this report for events and circumstances occurring afterthe date of this report.

• In the course of valuation, we w~re provided with both written and verbal information. We have however, evaluated the inf~rmation provided to us by the Company through broad inquiry, analysis and review but have not·carried out a due diligence or audit of the information provided for the purpose of this agreement. Public information, estimates, industry and statistical information relied on in this report have been obtained from the sources considered to be reliable. However, we have not independently verified such information and make no representatio~l as tothe accuracy or completeness of such information from or provided by such sources. Our conclusions are based on the assumptions and other information given by Ion behalf of the Company. We assume no responsibility for any errors in the above information furnished by the Company and consequential impact on the present exercise.

• Our report should not be construed as certification of compliance of the proposed transfer with the provisions of any law including companies, taxation and capital market related laws or as regards any legal implications or issues arising from such proposed transfer.

• This report is prepared only in connection with the proposed tran~fer exclusively for the use of the Company and the submission to any regulatory/statutory authority as may be required under any law. Any personVparty intending to provide finance/invest in the shares/business of the TransferorCompany/Transferee Company 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.

• Durfee forthis Engagement is not contingent upon the results of the Valuation Report. • VD & Co., nor i~s partners, managers, employees makes representation or warranty, express or

implied, as to the accuracy, reasonableness orcompleteness of the information, based on which the valuation is carried out. We expressly disclaim any and all liability for any such information contained inthe valuation. None of us has present or contemplated future interest in the business being valued, any personal interest with respecttothe parties involved, orany other interestthat might prevent us from performing an unbiased valuation.

7. VALUATION APPROACHES:

A valuation approach is the methodology used to determine the fair market value of a business. To determine the value of an enterprise, the following three approaches can be considered:

7.1 Asset approach - Net Assets Value Method

The Asset based approach usesthe value ofan enterprise's underlying net assets asthe key determinant of fair market value. The Asset based approach is based on the value of the underlying net assets of the business, either, on a book value basis orrealizable value basis orreplacement cost basis. Th is valuation approach may be used in cases where the asset base dominates the earnings capability. The asset based approach also provides a useful reasonableness check when reviewing the value conclusions derived underthe income or market approaches. This approach is also used as the minimum break-up value for the transaction .

Since the shares are being valued on "going concern" basis and an actual realization of the operating assets is not cdntemplated, we have considered it appropriate not to determine the realizable or replacement value of the assets. The operating assets have therefore been considered at their book value.

Valuation Report - VSAT

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7.2 Income Approach - Discounted Cash Flow Method

The Income approach quantifies the net present value of future be nefits associated with ownership of the equity interest or asset. The estimated future benefits that accrue tothe owner are discounted or capitalized at a rate appropriate for the risks associated with those future benefits. Common methods within the income approach include the Capitalizat.ion of Earnings (or cash flow) methodology and the Discounted Cas~ Flow methodology.

Under the "Income" approach, most common method being used globally is Discounting Cash Flow (DCr) Method. Under the DCF method, the projected free cash flows from business operation after considering fund re(1uirements for projer.ted clIpit<ll ~:Jipenditure and incremental working capital are di$wunted Jt the W~ighted Average Cost of Capital (WACC) , The sum of the discounted value of such 'iref. cash flows and discounted vallie of perpetuity is the value of the business, The free cash flows t (~ presentthe cash to be generated by' the Company in future which is available for distribution to all the providers of the company's capita! --equity iJnd debt.

The discount rate, which is ilp~llied to free cash flows, should reflectthe opportunity cost to both equity and debt providers, weighted llytheirrelative contribution tothe total capital of the company. WACC is the weighted average of the company'!: cost ~ ... f equity and debts and h,ence, is considered the most <Ippropl'iate discount rate.

To the values so obtained from DCF analysis, various adjustments, as appropriate to a particular transaction, are made for borrowings, surplu~ lIssets'; contingent liabilities etc, to arrive at the equity value .

?3 Market Approat:h

rvlarkd 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.

(tl) Market Price nettlod:

Untie r this method, the market price of an eq uity shale of the company as quoted on a recognized stock exchange is normally considered ::IS the feJl!' value of the e>quity shares of that company where such quotations are arising from the !ihares being regularly Cli)d freely traded.

r he market value gel'lerally reflect.s thE: inveslor's perception about the true worth of the company subject to the element of speculative S!..Ipport that may be inbuiltin the market price But there could be ',itu<ltions where the value l)f the shanis as quoted on thp. stock market would not be regarded as a proper index of the fair \falue of the shtlre. especiallv where the market values are fluctuating in a voiAtile capital market.

(b) Comparable Cornp,mies Multiple (CeM) Method:

lJllde r this method, vallie of an en~erpr!$p. is :;rrived at by applving the derived market multiple based on the? market quotations of coml1ariible publ:c'listed cornp;mies, il1 an act.ive market., possessing attributes

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simila( to the business of sllch company after making <ldjustments to the derived multiples on the account of dissimil(lrities with the comparable companies and the strengths, weaknesses and other factors peculiar to the company being '.Jalued .

Thi!; method is based on the principle that such market valuation!;, taking place between informed buyers and informed sellers, incorporate all factors relevant to valuation. Relevant multiples need to be chosen carefully and adjusted for the difference between the circumstances. This method is usually applied in case of valuation of unlisted companies. Some of the common mUltiples used in the valuation are listed below:

v Enterprise Value/Sales MultiplE'

~ Price /Earnings !'Aultiple

8. VALUATION METHODOLOGY:

M4~thod 1: Asset Approach - Net A!<sets ValUE! Method

rhe val ue arrived at ~ his method is generally bilsed on the latest available audited financial state me nts of the bUsiness, however, we have considered Management Carved Out Financial Statements forthe n;nr. months period ended December 31,2018 for the purpose of computing Net Assets Value (NAV). Enterpr:se Value on tile basis of NAV method has been arrived at after taking into account Contingent I.iilbilities of INR 273.41 million and INR Nil for VSAT Undertaking 1 and VSAT Undertaking 2, r~spectively .

,1\ccordingly, Enterprise Value is computed for'iSAT Undertaking 1 and VSAT Undertaking 2 as INR 67.95 million and INR 274.3!:J million, respectively.

Method 2: Income Approach - Discbunted Cash Flow Method

In view of the rapid de'Jelopments in the' industry, the performance of companies across industry has been quite volatile, leading to uncertainfy in estimating the future cash flows. We have been informed by the Management that the financial projections of Transferor Company 1 and Transferor Company 2 are not available with the Management . . Given these limitations, DCF method has not been used as mei:hodology to arrive at the value of the VSAT Undertaking 1 and VSAT Undertaking 2.

Method 3: Market Approach - Comparable Companies Multiple Method

Though BAl is a listed entity, the market price cannot be specifically attributed tothe VSATUndertaking. Since there are no c(,mparable companies listed purely in VSAT category in India, we have considered the companies in similar business out.side India. There are lots of companies listed in the stock exchanges of USA, UK and other European and Asian markets. Few of the companies which we have found in similar business are Asia Satellite Telecommunications Holdings Limited (Hong Kong), Comtech r elecommunications Corp. (US), EchoStar Corporation (US), Eutelsat Communications SA (France), Gilat Satellite Networks ltd. (Israel), Globalstar, Inc. (US). IlIlTlarsat PIc (UK), Intelsat SA (luxembourg), Iridium Communications Inc. (US), ORBCOMM Inc. (US), Satcom Systems ltd. (Israel), Sescom SA (Poland), SpeedCast International Limited (Hong l(onB)' Telef6nica, SA (Spain), The Egyptian Satellite Company Nilesat (Egypt), ViaSat Inc. (US).

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l3ased on our understanding and analysis of the business segments of the above mentioned companies, we have considered the following companies for the purpose of applying CCM method:

.. Company Nome Country Business Description

1--' EchoStar Corporation United States It is a provider of satellite operations, video delivery solutions, digital

set-top boxes, and broadband satellite technologies and services for home and office, delivering network technologies, managed services,

,";"m,,,,, Pic

and solutions tor enterprises and governments.

United It is a provider of global mobile satellite communications services in Kingdom various segments sllch as Maritime, Government, Enterprise, Aviation

a nd Centra I Servi ces.

i~vi~-Silt, Inc. -United States It is engaged in broadband technologies and services, operating

l through three segments: satellite services, commercial networks and

~9vern ment...~s terns.

We have taken into consideration EV /Sales Multiple and EV /EBIDTA Multipl e for the purpose of valuntion using mCirket approach . The respective comparable company's multiples are computed basis their published financials as CIt December 31,1018.

Further, considering the comparable wmpanies are overseas companies operating under completely dii'ferenteconoinicconditions in comparis.on '"I/ith the lInden:akings being valued, we have averaged the ;r;u Iti pies and thereaftfJr discounted the same ~(1 ,lI'rive at a multiple to be applied for valuing the target undertaidllgs .

!.::Jstly, considering tne management calved out financial numbers forthe nine months period ended December 31, 2018 for VSAT Undertaking 1 anel VSAT Undertaking 2 and considering the average [nterprise Value on the !;lasis of EV/Sales Multiple and EV/EBIDTA Multiple, we have computed the Enterprise Value of VSAT l)ndertaking 1 and V~,AT Undertal,ing 2 to be INR 1390.75 million and INR 673.73 million, respectively. ,Enterprise Value on the basis of ceM method has been arrived at after taking into account Contingent Liabilities of INR 273.41 million and INR NIL for VSAT Undertaking 1 and VS,n., T Undertaki ng 2, respectively.

9. COMPUTATION OF FAIR VALUE:

l,s per the Composite Scheme of Arrangement, the transfer and vesting of VSAT Undertaking 1 of the TransferorCompany 1 tD the Transferee Company land the VSAl Undertaking 2 ofTransferorCompany '2 to the Transferee Company 2 will take place for (j lurnp sum consideration in the form of cash . . !.l,cr.ordingly, valuation of the Transferee Company 1 and Transferee Company 2 is not required in this case and therefore, we have not carried out irlt.lependent valuation of Transferee Company 1 and T"ansft'ree Company 2. Hence, it is not ref4\Jil'~d to compute exchange ratio / swap ratio as well. We have independ~ntly appli~d the varioli.'; method~ discussed above, as considered appropriate, and arrived at fair enterprise value cf IISAT Undettaking 1 and VSAT Undertaking 2 in the following table:

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Computation of Fair Value of VSAT Undertaking 1 and VSAT Undertaking 1:

Particulars VSAT Undertaking 1 VSAT Undertaking 2

Valuation Approach Enterprise Value Weight Enterprise Value Weight (lNR in Million) (INR in Million)

Asset Approach 67.95 55% 274.39 85%

Income Approach* N/A N/A N/A N/A Market Approach 1,390.75 45% 673.73 15%

t--'FairValue 663.21 334.29

/Y.Qill;.

.1. N/A - Not Applicable " 2. As the transfer is for a lump sum consideration in the form of cosh, Fair Enterprise Value has been taken into

consideration instead of per share price of the Transferor Companies; 3. Rationale behind Application of Weights -In case of VSAT Undertaking 1, we have given a little less weightage

to market approach, i.e.; 45% as compared to assets approach, i.e.; 55%. In case of VSAT Undertaking 2, we have given less weightage to market approach, i.e.; 15% as compared to assets approach, i.e.; 85%. VSAT Undertaking 1 is into service, the investment is low and the undertaking is le~s asset-intensive. However, V5AT Undertaking 2 is mainly into trading of goods where the margin is low and the undertaking is more asset­intensive. Hence, we have preferred more weightage to Market Approach in case of VSAT Undertaking 1 in comparison to V5AT Undertaking 2;

" As mentioned above, we have been Informed by the Management of the transferor componies th at the financial projections are not available with the Management and hence, we have not used Income Approach - OCF method for valuing the VSA T Undertakings of the transferor companies.

10. OUR OPINION ON FAIR VALUE:

A business valuation is an exercise conducted towards providing an estimate or opinion as to the fair market value of a business at a particular time . It is more an art than scie nee, and a properly conducted valuation is nothing but an informed opinion based on fact together with best judgment. According to Mr. Aswath Damodaran, "valuation is not an objective exercise, and any preconceptions and biases that an analyst brings to the process will find their way into value".

It is universally understood that business valuation is an art, not a precise science and that estimating values necessarily involves selecting a method or an approach that is suitable for the purpose. Mathematical certainty is not demanded, nor indeed is it possible. There is no legal framework which drives or dictates how valuation should be performed. Since this is an informed opinion, valuation is generally stated as a range of values. Courts in India have, overa period oftime, evolved certain guiding principles, the most leading case being the decision of the Supreme Court in Hindustan Lever Employee's Union VS. Hindustan Lever Limited and Others [(1995) 83 Company Cases 301.

It should be noted that the application of any particular method of valuation depends on the purpose for which the valuation "5 done . Our choice of methodology of valuation has been arrived at using usual and conventional methodologies adopted for transactions of a similar nature and our reasonable judgment in an independent and bona fide manner based on our previous experience ~f assignments of C.I similar nature.

In light of the above and on a consideration of all the relevant factors and circumstances as discussed and outlined he'reinabove earlier in this report, in our opinion, the valuation of VSAT Undertaking 1 and VSAT Undertaking 2 is assessed to be INR 663.21 million and INR 334.29 million, respectively.

Valuation Report - V:AT ) .

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11. DISTRIBUTION OF REPORT:

This valuation analysis is confidential and has been prepared exclusively for the Management of the Company for the purpose as mentioned above. Mis VD & Co. shall not be responsible if this Report is IJsed, reproduced orcirculated in whole or in part, withoutthe prior written consent of Mis VD & Co., to any othe r person and for any other purpose other than mentioned earlier in this report.

Thanking You,

for VD & Co., . Chdrt~1 red Accountants Firm Registration No.: 023090N

V~ \Cv , ~· CA. Vaibhaw Kumar Kedia Membership No.: 511519

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11. DISTRIBUTION OF REPORT:

This valuation analysis is confidential and has been prepared exclusively for the Management of the Company for the purpose as mentioned above. Mis VD & Co. shall not be responsible if this Report is used, reproduced orcirculated in whole orin part, withoutthe priorwritten consent of Mis VD & Co., to any other person and for any other purpose other than mentioned earlier in this report.

Thanking You,

forVD& Co., Chartered Accountants

Place: Gurugram Date : April 29,2019

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