The income approach estimates the value of an asset based on the income that
the asset can be expected to generate in the future. The approach is applied
where the earnings of a business are sufficient to justify a value exceeding the
separate realisable value of the underlying assets. This approach is typically
applied through a Discounted Cashflow Method (DCF) method or capitalisation
of earnings method.

Under the DCF method, the valuation comprises the present value of estimated
future cash flows for the expected life of the asset, discounted at a rate of return
that considers the relative risk of achieving the cash flows and the time value of
money. This valuation method is generally appropriate for businesses with a finite
life, which are in a start-up phase and/or forecasting significant growth and/or
businesses that experience lumpy or volatile cash flows.

The capitalisation of earnings method is appropriate where a relatively stable
historic earnings pattern is demonstrated. This methodology involves capitalising
the earnings of a business at a multiple which reflects the risks of the business
and the stream of income that it generates. The capitalisation of future
maintainable earnings methodology is a simplified proxy of the DCF
methodology outlined above.

The relief from royalty method is commonly used in the valuation of brands,
patents, licences and franchises. The relief from royalty method is derived from
the economic theory of deprival value, whereby it is assumed that the business
does not own the intangible assets under consideration and therefore has to pay
a royalty to the owner of the intangible asset for its use. The value of the
intangible asset under this method is the capitalised value of the royalties that
the company is “relieved” from paying as a result of ownership of the asset, after
deducting the costs associated with maintaining the licensing arrangements.
The cash flows attributable to the intangible asset are typically discounted to
their present value.

The Multi-period Excess Earnings Method (MEEM) is a specific application of the
DCF method. The underlying principle behind the MEEM is that the value of an
intangible asset is equal to the present value of the incremental after-tax cash
flows attributable only to the subject intangible asset after deducting
Contributory Asset Charges (“CACs”). CACs are based on the assumption that
the intangible asset rents or leases from a hypothetical third party the assets it
needs to produce the cash flows related to the intangible asset. Thus, any net

The market approach estimates the market value by reference to market prices
in actual transactions and asking prices of assets currently available for sale.
The valuation process is essentially that of comparison and correlation between
the subject asset and other similar assets. Considerations such as location,
time of sale, physical characteristics and conditions of sale are analysed for
comparable assets and are adjusted to indicate a current value of the asset
being valued.

The cost approach estimates the market value of an asset using the concept
of replacement cost as an indicator of market value. The premise of the cost
approach is that in the absence of the asset in question, the owner would need to
replace the asset. Replacement cost, which refers to the cost to replace the asset
with like utility using current material and labour rates, establishes the highest
amount a prudent investor would pay. This value is considered the base cost of
the asset. To place this asset into service, indirect costs for design, engineering
and interim financing may be necessary.

To the extent an existing asset will provide less utility than a new one, the value
of the service potential of the existing asset is less. Accordingly, replacement cost
is adjusted for loss in value due to physical deterioration and functional
obsolescence to arrive at a depreciated replacement cost asset value.

Physical deterioration is the loss in value brought about by wear and tear, action
of the elements, disintegration, use in service and all physical factors that reduce
the life of an asset. Functional obsolescence is the loss in value due to changes in
technology, discovery of new materials and improved manufacturing processes.