Avaliação Bovespa - KPMG PDF

BM&FBOVESPA S.A.
–
Bolsa de Valores,
Mercadorias e Futuros
Economic Valuation Report of Cetip S.A. –

Mercados Organizados
April 11, 2016

Contents
I. Executive summary
II. Information about the appraiser
III. Information on the Company
IV. Market information
V. Methodology
VI. Discount rate
VII. Assumptions
VIII. Economic valuation
Appendix
1. Appendix I – Glossary
2. Appendix II – Important notes
© 2016 KPMG Corporate Finance Ltda., a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Brazil.
2
I. Executive Summary (1/3)
Context (source: Client) • In this sense, to meet the requirements of Clause 264 of Law No.
6404/76 ("the Brazilian Corporate Law") in line with the Operation,
• BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
BM&FBOVESPA hired KPMG Corporate Finance ("KPMG") to prepare
(“BM&FBOVESPA”, or “Client”) is a company that manages organized
the economic valuation report of Cetip by the criteria of discounted cash
equity and derivatives markets providing registration, clearing, and
flow.
settlement services. It acts mainly as a central counterpart, guaranting
financial liquidity for the trades executed in its environments. • This Report includes important notes (see Attachment II) relating to the
KPMG Scope of work before the Client.
• Cetip S.A. – Mercados Organizados (“Cetip” or “Company”) is a
company that provides services of registry, central depository, trading, Sources of information
clearing and settlement of assets and securities. Through technology
and infrastructure solutions, its proposal is to provide liquidity, security,
• We used the audited consolidated financial statements of the
Companies, of 2013, 2014 and 2015, on the base date, management
and transparency for financial transactions in the Brazilian market.
reports, and documents available in the virtual data room ("VDR") by
• BM&FBOVESPA and CETIP will be jointly named hereafter as Cetip to BM&FBOVESPA.
“Companies”.
• The work also took into account information of financial and economic
• BM&FBOVESPA, according to a material fact released on February 19, projections provided by the Client and its financial advisors.
2016, approved the submission of a binding proposal to the respective
shareholders of the Companies for the combination of the operations
• In addition, public market information were used, in order to analyze the
assumptions used in the valuation.
of the Companies ("a Binding Proposal" or “Operation"), which will
result in the following: (i) the ownership by BM&FBOVESPA, of all the • KPMG analyzed including the information available to the general public
shares of Cetip; and (ii) the receipt, subject to the adjustments and those provided by the Client and used in this work, understanding
provided for in that material fact, for each common share issued by be consistent.
Cetip, of 0.8991 common share of BM&FBOVESPA, in addition to R$
30.75 (thirty Brazilian Reais and seventy five cents).
• We had access to Cetip projections in a limited way. We used
information about new projects/products supplied by Cetip to
• According to that, BM&FBOVESPA intends to conduct the Operation BM&FBOVESPA.
through a corporate reorganization, using a company called Companhia
Sao Jose, formerly named as Netanya Empreendimentos e
Participacoes S.A. ("Netanya" or "Holding"), to incorporate the shares of
Cetip, and redeem part of the issued shares, and finally, perform the
merger of the Holding by BM&FBOVESPA.
This Report is a free translation into English (requested by the Client) of the report issued in Brazilian Portuguese. If there are any discrepancies or differences between the
versions, the version in Portuguese will prevail.
3
Subsequent Events Discount rate
• We emphasize that this report is based on the position of the • The discount rate was estimated according to the methodology of
consolidated balance sheet of Cetip as of December 31, 2015. Any WACC (Weighted Average Cost of Capital), in nominal terms, of
relevant facts that may have occurred after the reporting date which 14.7%, as follows:
have not been brought to our attention up to the date of the issuance
of this Report may change the estimated value for Cetip in this Report. Discount rate Cetip
• On March 3, 2016, Cetip announced to the market a dividend payment Risk free (US$ nominal) (source: Bloomberg) 3.0%
of R$0.3194231187 per share, which was considered in this work. US inflation (source: Economist) 1.8%
• On March 21, 2016, Cetip announced to the market a JCP gross Brazilian inflation (source: BACEN) 5.1%
payment of R$0,0842715836 per share, which was considered in this Relevered Beta 1.0
work. Expected return on the market (source: Damodaran) 4.5%
Country risk premium (Global 37) (source: Bloomberg) 3.1%
• KPMG was not hired to update this report after its date of issue.
Size premium (source: Ibbotson Associates, 2015) 1.0%
Valuation Criterion CAPM - nominal - Ke (a) 14.8%
• We use the criterion of discounted cash flow, which we consider to be Cost of debt 12.0%
the most appropriate for the valuation, because captures the expected Tax 34.0%
future performance of the Company. This methodology is described in Kd after tax - nominal - Kd (b) 7.9%
more details in Chapter 5 of this report.
WACC
% common equity capital in the capital structure ( c ) 97.5%
% of debt capital in the capital structure ( d ) 2.5%
WACC nominal = (a*c) + (b*d) 14.7%
4
Summary Report
• Based on the scope of this Report, and subject to the assumptions,
restrictions and limitations described here, we estimate the fair value
of Cetip, as below:
Equity Value
11,296 12,423
(R$ MM)
Economic value
per share (R$) 42.67 46.93
Note: Considered the number of 264,716,860 shares (262,978,823 outstanding +

4,900,800 open, regarding stock option - 3,162,763 treasury) net of treasury
shares, as FS of 2015 reviewed by independent auditors.
We conclude that the estimated economic value of Cetip shares is

between R$ 42.67 and R$ 46.93 estimated by the methodology of
discounted cash flow and the equity value is between R$ 11,296
millions and R$ 12,423 millions.
Fernando A. Mattar Gabriel Carracedo Fabiano Goulart Delgado

KPMG Corporate Finance Ltda. KPMG Corporate Finance Ltda. KPMG Corporate Finance Ltda.
Partner Director Manager
5
Contents
V. Methodology
VI. Discount rate
VII. Assumptions
Appendix
6
I . Information about the appraiser (1/5)
The KPMG Network - Anti-money laundering;
• KPMG is a global network of professional services firms providing - Restructuring (services of company’s restructuration and consulting
Audit, Tax and Advisory services. We operate in 155 countries and to creditors for debt recovery);
have 174,000 people working in member firms around the world. The
- Consulting in PPP’s (services related to public private partnerships);
independent member firms of the KPMG network are affiliated with
KPMG International Cooperative ("KPMG International"), a Swiss entity. - Consulting for financing for private companies;
Each KPMG firm is a legally distinct and separate entity and describes
- Consulting related to merger and acquisitions;
itself as such.
- Financial valuations.
• In Brazil, approximately 4,000 professionals work in 22 cities located in
13 States and the Federal District. KPMG in Brazil has offices located • The Corporate Finance segment of KPMG International member firms
in São Paulo (head office), Belém, Belo Horizonte, Brasília, Campinas, sum up to approximately 2,500 professionals, in 167 offices across 82
Cuiabá, Curitiba, Florianópolis, Fortaleza, Goiânia, Joinville, Londrina, countries.
Manaus, Osasco, Porto Alegre, Recife, Ribeirão Preto, Rio de Janeiro,
Internal process of approval of the report
Salvador, São Carlos, São José dos Campos and Uberlândia.
• KPMG brand was created in 1987 from the merge of Peat Marwick
• The economic valuation of Cetip was performed by a team of qualified
consultants, monitored and reviewed by the engagement partner, a
International (PMI) and Klynveld Main Goerdeler (KMG).
director and the manager coordinating the work. In addition, the team
• In Brazil, the area of Deal Advisory, deliver the following professional was also composed of a partner-reviewer.
services:
Identification and qualification of the involved professionals
– Transaction Services (due diligence services during acquisitions);
• Fernando Afonso C. S. B. Mattar, Gabriel Carracedo and Fabiano
– Forensic Services (services related to investigations and fraud Goulart Delgado coordinated and participated in the development of
prevention); this report. Paulo G. M. Coimba was the partner reviewer of the work.
• You can find the curricula vitae of these professionals on pages 9 and
10.
7
Appraiser declarations – In addition to the relationships related to the operation mentioned
above, KPMG Corporate Finance Ltda. and other companies
• KPMG Corporate Finance declares, in April the 11th, 2016, that:
operating under the KPMG brand in Brazil declare they have
- It does not entitle any shares of the Client nor the Company, nor do its received remuneration of R$ 212,500.00 (Two hundred and twelve
partners, directors, officers, directors, controllers or persons related to thousand, five hundred Reais) from BM&FBOVESPA for the
them; provision of professional services related to general advice, in the
twelve months preceding the filing of this Report, and do not
- There are no commercial and credit relations that could impact the
impact its drafting.
Report;
- There is no conflict of interest that impairs the necessary
independence required for the performance of this work.
- For the services referring to the preparation of this Report,
independently of the success or failure of the Operation, KPMG will
receive, from BM&FBOVESPA, a fixed remuneration of R$ 120,000.00
(One hundred and twenty thousand Reais), net of taxes.
- On the date of this Report, in addition to the relationship concerning
the Report mentioned above, KPMG has the following ongoing work in
the context of the operation, which do not impact on the analysis in
the preparation of this report:
a) Due diligence, financial, fiscal and labor in the total amount of
approximately R$ 510,000.00 (Five hundred and ten thousand
Reais);
b) Valuation report using the criteria of the net book value adjusted to
market prices, worth a total amount of approximately R$
100,000.00 (One hundred thousand Reais); and
c) Advice on the allocation of pre-purchase price (pre-PPA) in the
amount of R $ 30,000.00 (Thirty thousand Reais).
8
Name Fernando A. C. S. B. Mattar
Position Partner, Corporate Finance – Valuation Services, Brazil
Qualifications Post Graduation in Business Administration – Fundação Getúlio Vargas – FGV/ SP

Undergraduate degree in Mechanical Engineering - Mackenzie - SP
Experience Since 1995 works in in business consulting, conducting projects in the financial restructuring of
companies, economic-financial, mergers and acquisitions and start-up companies and business units.
Started at KPMG in 2006. Before he served as manager of Arthur Andersen and worked as manager of
business development for the Cisneros Group in Latin America.
Sector of experience Pharmaceutical, Entertainment, Internet Services, Consumer Products (food, beverage, pulp and paper
etc..), Telecommunications and Retail Companies.
Name Gabriel Chamadoira Carracedo
Position Director, Corporate Finance – Valuation Services, Brazil
Qualifications Post Graduation in Finance – iBMEC/ SP

Graduate degree in Business Administration – Universidade Salvador - Bahia
Experience Started at KPMG in 2003, Gabriel has a strong experience in financial valuation, trough different
methodologies.
Sector of experience Banking, Telecommunications and IT (software and hardware), Entertaining, Publishing, Aviation,
Education, Retail. Companies.
9
Name Fabiano Goulart Delgado
Position Manager, Corporate Finance, KPMG Curitiba - Brazil
Qualifications Specialization in Controllership at UFPR-PR

Graduated in Economics at UFMS-MS
Experience Works in the accounting, auditing and consulting areas for over six years. Fabiano has experience in
financial advisory services, including financial planning, business plan development and project
analysis. Acts in mergers and acquisitions area, with a greater focus on valuation models (valuation)
and mergers and acquisitions.
Sector of experience Banking, real estate, power, agribusiness, foods and beverages, retail and logistic.
10
• Presented below are some of KPMG’s experiences in company’s valuations in the last years:
2016 2015 2015 2015
Évora S.A. Eneva S.A. Eneva S.A. Banco Santander S.A.
Economic and Financial Valuation Economic and Financial Valuation

Economic and Financial Valuation Economic and Financial Valuation
of Évora in its Public Offering of Eneva Participações S.A. e
of Parnaíba Gás Natural S.A. of Banco Santander
(Deslisting) BPMB Parnaíba S.A.
ABCD ABCD ABCD ABCD

2014 2013 2013 2013
Com panhia De Bebidas Das

Banco Santander S.A. Banco Santander (Brasil) S.A. Banco Santander (Brasil) S.A.
Am ericas - Am bev
Economic and Financial Valuation

Economic and Financial Valuation Economic and Financial Valuation Economic and Financial Valuation
of CND - Cerveceria Nacional
of BR Properties of Webmotors of Tecban
Dominicana
ABCD ABCD ABCD ABCD

11
Contents
V. Methodology
VI. Discount rate
VII. Assumptions
Appendix
12
I I Information on the Company (1/4)
Overview of CETIP (Source: public information) • The chronology of the main events that occurred in the history of Cetip
are explained below:
• Cetip (Ticker: CTIP3) was established in 1984 by the National Monetary
Council, in the city of Rio de Janeiro - RJ, and currently manages 1984 Creation of Cetip as a nonprofit entity.
markets relating to trading and listing of securities, public and private
fixed income securities, and OTC derivatives. Cetip is the largest 1986 Beginning of activities of Cetip.
depositary of private fixed income securities in Latin America and the
largest private asset clearinghouse of the Brazilian financial market. Its Agreement with Andima (the current Brazilian Association of
1988 Financial Markets and Capital (Associação Brasileira das Entidades
performance provides the necessary support to the entire cycle of dos Mercados Financeiro e das Capitais, Anbima)) to operate the
transactions with fixed income securities, securities and OTC National Debentures System (Sistema Nacional de Debêntures,
derivatives. SND)
2008 Demutualization and creation of Cetip S.A.
• The simplified structure of Cetip is shown below:
Advent becomes shareholder of Cetip, with a share stake in the
Framework 2009 capital of 32%.
IPO and beginning of the trading of the shares on the Novo
Mercado of BM&FBOVESPA.
Shares in
Ice Overseas Blackrock. Inc. Others
Treasury Acquisition of GRV Solutions, which currently represents the Cetip
Limited 2010
Financing Unit.
12.00% 5.28% 81.52% 1.2%
Repositioning of the Cetip brand and implementation of new logo
and product architecture.
2011 IntercontineltalExchange (ICE) becomes a shareholder of the
company, with a 12.4% stake.
Launch in partnership with Clearstream, of the Cetip Collateral.
Launch in partnership with ICE, of the Cetip business platform |

Trader Launch of Cetip | InfoAuto PagamentosIngresso of Cetip's
2012 shares in Ibovespa and IBrX50.
100.00% 100% 100%
Reform of the bylaws to improve the corporate governance
Cetip Info structure of Cetip.
GRV Solutions Cetip Lux S.à.r.l.
Tecnologia S.A. 2013 Launch, in partnership with the FNC, of the real estate valuation
platform
Spurce: Cetip
13
Income Statement – Consolidated– Cetip (Source: audited financial statements)
IS Consolidated - R$ '000 2013 2014 2015

Net Revenue 908,575 1,015,885 1,125,430
Expenses (276,176) (316,666) (354,941)
General and administrative (275,359) (315,634) (350,248)
Other net operacional revenues 31 584 144
Other net operacional expenses (848) (1,616) (4,837)
EBITDA 632,399 699,219 770,489
Depreciation and amortization (75,790) (83,108) (92,771)
EBIT 556,146 616,825 678,683
Financial revenues 33,595 59,069 294,476
Financial expenses (77,174) (117,760) (405,904)
Equity in income of investees (463) 714 965
EBT 512,567 558,134 567,255
IR / CSLL accounting period (90,447) (111,193) (129,730)
IR / CSLL deferred (61,092) (19,822) 60,081
Net profit 361,028 427,119 497,606
14
Balance Sheet – Consolidated – Cetip (Source: audited financial statements)
BS Consolidated - R$ '000 2013 2014 2015 BS Consolidated - R$ '000 2013 2014 2015
Asset 2,735,651 2,998,539 3,497,064 Liabilities 2,735,651 2,998,539 3,497,064
Current asset 505,117 740,930 1,007,642 Current liabilities 337,300 240,225 340,198
Cash and Cash Equivalents 475 551 2,438 Suppliers 25,969 23,496 54,416
Financial investments - non restricted 381,685 590,349 801,956 Labor obligations and social charges 48,195 56,682 68,411
Accounts receivable 93,073 106,735 117,658 Taxes payable 12,837 14,902 18,183
Recoverable taxes and contributions 16,679 17,431 63,917 Income tax and social contribution 787 2,181 8,435
Prepaid expenses 7,011 7,784 7,084 Dividends and interest on own capital payable 45,858 80,130 110,261
Other receivables 6,194 18,080 14,589 Debentures issued 156,053 17,427 21,431
Non-current asset 85,768 135,944 373,958 Financial instruments 11,572
Financial investments - non restricted and restricted 79,746 128,197 248,553 Loans and finance lease obligations 3,507 2,608 7,113
Derivatives - - 120,663 Deferred revenues 44,044 42,754 40,223
Judicial deposits 162 137 181 Other liabilities 50 45 153
Prepaid expenses 3,744 5,526 2,659 Non-current liabilities 708,788 1,012,361 1,461,051
Other receivables 2,116 2,084 1,902 Suppliers 3,662 2,073 8,046
Fixed 2,144,766 2,121,665 2,115,464 Deferred income tax and social contribution 176,052 195,785 136,465
Investments 5,497 6,211 6,873 Provision for contingencies and legal obligations 3,067 4,536 5,933
Property and equipment 109,683 128,612 126,771 Debentures issued 474,774 498,175 498,849
( - ) Accumulated depreciation (68,861) (78,681) (79,086) Loans and finance lease obligations 9,291 271,153 775,019
Intangible assets 2,307,087 2,347,452 2,423,547 Deferred revenues 41,942 40,639 36,739
( - ) Accumulated amortization (208,640) (281,929) (362,641) Shareholders' equity 1,689,563 1,745,953 1,695,815
Capital 586,428 635,937 658,416
Capital reserves 533,193 533,821 527,834
Carrying value adjustments (247) (413) (8,313)
Income reserves 405,655 464,715 539,388
Treasury shares - - (104,502)
Retained earnings (5,031) - -
Additional dividends proposed 169,565 111,893 82,992
15
Financial indicators
• Below are shown the historical financial indicators of Cetip (source: audited financial statements)
Volume Gross Revenues per segment – (R$ 000)

8,193
7,611 7,751
6,757
6,393
5,312
412,579
436,216
384,024
786,642 950,495
690,132
2013 2014 2015 2013 2014 2015

Volume records securities unit (R$ bi) Vehicles financed ('000) Financing unit Securities unit
EBITDA – (R$ 000) Net profit – (R$ 000)
69.60% 68.83% 68.46%
632,399 699,219 770,489

361,028 427,119 497,606
2013 2014 2015

2013 2014 2015
EBITDA % Margin EBITDA
16
Contents
V. Methodology
VI. Discount rate
VII. Assumptions
Appendix
17
IV. Market information (1/5)
Markets and financial instruments
Overview (source: Cetip website) – Cetip, which is directed to the custody of fixed income investments
(such as CDB, LCI, LCA, among others), and derivatives;
• The financial system is the set of institutions and financial instruments
that enables the transfer of resources belonging to final offerers to the • Cetip is the main service provider of the custody market for private
final takers of resources, and creates conditions for the securities to be fixed income.
marketable.
• The fixed income market reached, in January 2016, US$ 2,658 billion
• Among the institutions that can be highlighted within the financial of actual value invested in their segments, an increase of 3.69% when
system, there are the custodian agencies. compared to January 2015.
• Custody agencies are organized and centralized markets, to provide an • Next, there is the evolution of the fixed income market between
appropriate environment for conducting business and the pricing of January / 2015 and January / 2016:
securities issued by companies, funds and other fund raising entities.
Custody (source: Cetip)
• Changes in the market and in the large volume of securities traded Amount invested in fixed income (in R$ bi)
every day permanently changed the landscape of the custody world.
The vast majority of assets custodies are held in book-entry form, both
for government securities assets, and private securities.
• Fixed income assets are bonds that pay a certain compensation in
defined periods, which can be determined at the time of the
investment or upon redemption.
2,654 2,658
2,639 2,644
• The major custodians in the international market are the DTCC (United 2,625
States), Euroclear, and Clearstream (Europe). 2,564 2,561 2,562

2,579 2,582
2,534 2,532
2,519
Brazilian fixed income market (source: Cetip)
• In Brazil, two of the main players of the financial system are:
Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16
– BM&FBOVESPA, whose activities are focused on the equity
market, bonds, futures, and the options market. Source: Cetip
18
Brazilian fixed income market (cont’d.) Brazilian credit market (source: Bacen)
• The table below shows the segmentation of the fixed income • The relationship between the balances of credit and the gross
investments in January 2016: domestic product (GDP) of the countries is a reference measure of the
economic conditions and of the depth of a country’s market.
• Below is the balance of credit operations between January 2015 and
19% January 2016, as well as their respective percentage in relation to the
35%
Brazilian GDP.
54.5%
54.0% 54.0% 54.0%
53.8%
29% 53.6%
2%
53.2% 53.3% 53.4% 53.4%
53.0%
13% 2% 52.8% 52.9%
Bank funding (CDB, LF and DPGE) Agricultural securities (LCA, CRA and CDCA)
3,220
Debt securities (NCE, CCB and CCE) Real estate securities (LCI, CRI and CCI)
3,199
3,164 3,157 3,177
Debentures and promissory notes DI 3,135
3,100 3,110
3,082
Source: Cetip 3,061 3,062
3,013 3,024
• Income yields are mainly linked to the following indexes:
– SELIC (Special System for Settlement and Custody);
– IPCA (National Index of Consumer Price);
– IGP-M (General Index of Market Prices); and Credit balance (in R$ bi) % GDP
Source: Bacen
– CDI (Interbank Deposit Certificates).
• The CDI is an index linked to SELIC rate, as well as the amount of
funds transfers between financial institutions.
19
• The segmentation of credit, both for individuals and for legal entities, • Below, please see the most used modes during the period of 2016:
according to the Central Bank, is presented below:
3%
16%
BNDES
21.25%
26.63% Real estate
Financing
Personal Credit
Consortium
Rural
Others
Vehicles
0.17%
Credit card
0.95% 5.65% 17.98%
Acquisition of goods
81%
Microcredit
5.69%
Others
7.22%
14.47%
Source: Cetip
• The values obtained for vehicle financing declined from January 2015
Source: Bacen to January 2016, as shown below:
184 182
Brazilian credit market (vehicles) (source: Bacen and Cetip) 180 178 175 173 171 169 167 165 163 161 160
• The credit for vehicles operates as follows:
– Financing, i.e., a loan for financing vehicles;
– Leasing, where the lender is the owner of the property, and the
possession and use are of the lessee; and
– Consortium, where one or more individuals participate in a common
activity or resource sharing to achieve a common goal. 19 18 18 18 18 17 17 17 17 17 17 16 16
Source: Bacen
Natural person (R$ bi) Legal entity (R$ bi)
20
• The interest rates for vehicle financing rose in the last 12 months due
to the current political and economic conditions in Brazil, as shown
below:
28%
26% 26% 26% 26%
25% 25% 25% 25% 25% 25% 25%
24%
23%
22% 22% 22%
21% 21% 21% 22% 21% 21% 21%
21% 21%
Natural person (% p.a.) Legal entity (% p.a.)
Source: Cetip
21
Macroeconomics
Macroeconomics assumptions (source: Bacen and Economist)
Brazilian inflation Exchange rate R$ / US$
• The inflation rate (IPCA) estimated for the 2016-2025 period is shown • The average annual exchange rate for the 2016-2025 period is
in the chart below. We can observe a fall between the years 2016 and presented below. We can observe an increase in market expectations
2019, according to the expectations of the institutions consulted by the about the exchange rate. After 2021, the exchange rate was
Central Bank (Central Bank of Brazil) considered as the difference between the Brazilian and American
inflation.
10,7% 5,50
11,5% 4,79 4,94
5,00 4,40 4,54 4,65
9,5% 4,19 4,20 4,26
6,4% 7,4% 4,50 3,95 4,11
7,5% 5,9% 4,00 3,33
5,9% 5,5% 5,2% 5,1% 5,1% 5,1% 5,1% 5,1% 5,1%
3,50
5,5%
3,00 2,35
3,5% 2,50 2,16
2,00
American inflation Brazilian GDP

• The American inflation rate estimated for the period between 2016 and
2025 is shown below. In the chart are observed growth of price indices
in the years 2016 and 2017 in relation to 2015. In the long-term the
• The Brazilian GDP projection estimated by institutions consulted by the
Central Bank between 2015 and 2018 is a decrease in the biennium
trend is stabilizing, according to projections made by The Economist.
2015-2016, followed by a slow growth with a tendency to stabilize.
8,0% 2,3% 1,5% 1,9% 2,0% 2,0% 2,0% 2,0% 2,0% 2,0%
2,0%
6,0% 1,0% 0,1%
0,3%
0,0%
4,0%
2,0% 2,4% -1,0%
1,5% 1,3% 1,5% 1,8% 1,8% 1,8% 1,8% 1,8% 1,8%
2,0% 0,7% 0,7% -2,0%
-3,0% -3,7%
0,0% -3,8%
-4,0%
22
Contents
V. Methodology
VI. Discount rate
VII. Assumptions
Appendix
23
V. Methodology (1/3)
Valuation criterion • To calculate the future cash flow generated by a company's
• The criterion used for the study of Cetip’s economic valuation was the operations, we initially project its statement of income. To the
discounted cash flow. projected net profits calculated, expenses with depreciation and
amortization expenses are added (as they are expenses without an
• The criterion of the discounted cash flow method is widely used in the impact on cash generation) and investments and the need for
market for business valuation, determining feasibility studies, projected working capital. Projected turnover. Other items with an
purchase, sale, merger and IPO companies because it allows for the impact on the company's cash flow are also considered when
proper measurement of the expected return on investment for the appropriate.
investor. Below, we present a brief description of this criterion.
• It is worth emphasizing that the net income calculated in the
Description of the discounted cash flow method projections of income is not directly comparable with the accounting
net income to be determined in the future in subsequent years. This
• The discounted cash flow criterion has its grounds in the concept that occurs, among other reasons, because the net income realized is
the value of a company or business is directly related to the sums and affected by non-operating or nonrecurring facts, such as occasional
to the times in which the free cash flows, originating from its and/or non-operating income and expenses etc. These factors are not
operations, will be available for distribution. Therefore, for the projected due to their unpredictability.
shareholders the value of the company is measured by the sum of
financial resources to be generated in the future by the business, • Moreover, it should be noted that when using the "cash flow to the
discounted at their present value, to reflect the time, the opportunity firm" (or "free cash flow") approach in projecting profits, revenue and
cost and the risk associated with this distribution. interest expenses are not projected. In that approach, cash flows
available to all capital providers (i.e., both shareholders and creditors)
• This criterion also captures the value of intangible assets, such as are projected.
brand, customer portfolio, product portfolio and market share, to the
extent that this value is reflected in the ability to generate results. • The projection of statements of income for the future is intended only
for the purpose of calculating the projected cash flow of the company
• For the purposes of this study, it is assumed that 100% of the surplus being valuated, which includes future cash flows to be available for
cash will be available for distribution at the time it is generated. shareholders and creditors. What is intended to be determined is the
ability to generate cash flows arising from the company's normal
operations, i.e., its potential to generate wealth for capital providers as
a result of its operating features.
24
• Projected annual cash flows are discounted using the Weighted • However, due to the great difficulty of estimating parameters for long
Average Cost of Capital (WACC), which already incorporates the periods, it is market practice to consider a projection horizon of a few
impacts of projected indebtedness in income taxes by taking into years, according to the characteristics of the business valuated and at
account the cost of debt after taxes in its calculation. The discounted the end of that period, add a residual value.
cash flows are then added to obtain the value of the business.
• In the value present study, according to the Company's characteristics,
• To determine the assessed value of the company, and therefore the it was considered a 10-year forecast period from the base date of
market value of its shares, the debt is deducted from the calculated December 31, 2015.
value of the business on the reference date.
• The value of perpetuity was calculated as follows:
• All non-operational assets and liabilities are then added/deducted on
the reference date of the value study. Any contingencies and/or other
Free cash flow of FCn x (1+g)
extraordinary, non-operational payments identified are also deducted. normalized last year
Perpetuity value at =
the end of last year =
• Note that, when the “cash flow to equity” method is used, flows are of the projection (Discount rate – Growth (i-g)
discounted at own capital cost, normally calculated based on CAPM rate in perpetuity)
(Capital Assets Pricing Model) methodology. In this case, the evaluated
company’s loans and financing value is not deducted from its value and
financial expenses and income are projected in cash flow.
Projection horizon and residual value

• From a theoretical point of view, with a view to continuity of business
operations measured, the projection horizon would extend to infinity or
for long periods.
25
• A brief diagram of the discount to present value is present below:
Terminal value
Cash flow horizon explicit projection Perpetual cash flow grows constant or
zero rate
Adjustment
s
Present value of
terminal value
Market value of CFN CFN + 1 CF∞

analyzed company CF3
CF2
Present value of
projected cash CF1
......... .................
flows
0 1 2 3 .........
N N+1 .................
Projected horizon Perpetuity
Discount rate
Firm: Cost of debt (WACC)
Equity: Cost of equity (CAPM)
26
Contents
V. Methodology
VI. Discount rate
VII. Assumptions
Appendix
27
VI. Discount rate (1/4)
Discount rate
Ke
• Establishing the discount rate is a fundamental stage of the economic Cost of Equity
valuation. This single factor reflects aspects of a subjective nature,
=
varying from one investor to another, such as cost of opportunity, and
the individual perception of investment risk. Rf / (1+Ia) * (1+ lb)
+
• The Weighted Average Cost of Capital (WACC) used was an
appropriate parameter to calculate the discount rate to be applied to ß x (E[Rm] – Rf)
the Company’s cash flows. The WACC methodology considers a +
variety of financing components used by companies to finance their
cash needs, including debt and equity cost. Rb
+
WACC = (E/(E + D))*Ke + (D/(E + D))*Kd Rs
■ Where:
– E = Total Equity;
– Rf = Average Risk-Free Return;
– D = Total Debt;
– β = Beta - Market Risk Coefficient ;
– Ke = Cost of Equity; e
– E[Rm] = Average Long Term Return Obtained in the Stock Market;
– Kd = Cost of Debt.
– E[Rm] - Rf = Market premium;
– Rb = Country Risk;
• The cost of equity may be calculated with the Capital Assets Pricing
– Rs = Size premium;
Model (CAPM). The equity cost is calculated according to the following
formula: – Ia = USA Long Term Inflation;
– Ib = Brazil Long Term Inflation;
28
• The components used to calculate the discount rate of the Company Inflação americana (Ia)
are detailed as follows:
• For the projected American inflation, the long term inflation rate was
Risk free rate (Rf) considered, as of March, 2016. The rate used was 1.8%. (source:
Economist).
• In order to quantify the average risk free return (Rf), we considered the
average return of the American 30-year Treasury Bond (T-Bond) for 24 Beta Calculation
months before March 24, 2016, which was 3.0%. (source:
Bloomberg).
• The following procedure is used for obtaining the betas:
– Identification and selection of comparable companies;
Market Risk Premium (E[Rm] - Rf)
– Determining their correlations with relevant stock markets; and
• For the long term stock market risk premium (E[Rm] – Rf), we used
the average return above the Treasury Bond rate provided by investing – Calculation of average betas, which will be used in determining the
in the American stock market from 1928 to 2015, which was 4.5% risk of companies.
(source: Aswath Damodaran website).
• It is important to note that the betas observed in capital markets for
Country Risk (Rb) comparable companies include the different degrees of leverage of
these companies. Thus, it is necessary to extract the leverage factor to
• To estimate the risk associated with Brazil (Rb), we used the average
calculate the specific risk factor by the market on the operational risks
difference between the yield of the Global-Bond 37 in relation to the T-
inherent in the business.
Bond performance, from the 24 months before the base date of March
24, 2016, which was 3.1% (source: Bloomberg). • For this purpose the following formula is used:
Size Premium
βd = β/[1 + (1 – T)*(D/E)]
• For the Company’s size premium it was considered the rate of 1.0%, a • Where:
rate applied to the same-sized companies. (source: Ibbotson
– βd = Unlevered Beta – share risk of comparable companies,
Associates, 2015).
regardless of their leverage;
Brazilian Inflation (Ib)
– β = Levered Beta – share risk of comparable companies, adjusted
• The Brazilian long term projected inflation rate was considered, as of by leverage;
March 24, 2016 according to Relatório Focus (source: Banco Central do
– T = Tax rates for income tax and social contribution; and
Brasil). The rate used was 5.1%.
– D/E = Debt / Equity of each comparable.
29
• The following formula is used to releverege beta: Cost of debt (Kd)
• The cost of debt indicates the cost of the loans made to project
βr = βd*[1 + (1 – T)*(D/E)] financing. In general terms, it is determined by the following variables:
– The current level of interest rates;
• Where:
– The delinquency risk of companies; and
– βr = Levered Beta - to be used as a basis for calculating the cost of
financing; – Tax benefits associated with financing (debt).
– βd = Unlevered Beta – share risk of comparable companies; • The rates of income tax and social contribution have direct influence
on the cost of debt, since these payments are tax deductible.
– β = Levered Beta – calculated in the two-year period, average
weekly; • Thus, the cost of debt is calculated by the following formula:
– T = Income tax and social contribution, as the effective rate of
company analyzed; e Kd = RD * (1 – T)
– D/E = Debt / Equity of the analyzed company.

• Where:
• The calculation of Cetip’s beta is shown below:
– Kd = Cost of debt;
Debt to
Comparables Ticker Levered Beta Tax rate Unlevered Beta
Equity – RD = Debt rate;
Cetip S.A. - Mercados Organizados CTIP3 BZ Equity 0.9 1.3% 26.1% 0.9
ASX Ltd.
CME Group Inc.
ASX AU Equity
CME US Equity
1.3
0.7
0.0%
3.0%
29.5%
36.4%
1.3
0.7
– T = Tax rate of income tax and social contribution.
London Stock Exchange Group LS4C GB Equity 1.0 5.9% 30.5% 1.0
Average 1.0 2.6% 30.6% 1.0
Source: Bloomberg for the base date March 24, 2016.
Relevered Beta
Beta 1.0
D/E 2.6%
Tax 34.0%
Relevered Beta 1.0
Source: Bloomberg for the base date March 24, 2016.
30
Cost of debt (Kd)
• For the purposes of cost of debt, it was considered a nominal cost of
debt before tax of 12.0%, based on the long-term interest rate (Selic),
plus a 1.0% of spread. After tax effect the cost of debt is 7.9%.
Capital Structure
• The capital structure adopted was based on the capital structure of
comparable companies (market participants).
Discount Rate Calculation
• The following table shows the calculation of the WACC:
Discount rate Cetip

Risk free (US$ nominal) (source: Bloomberg) 3.0%
US inflation (source: Economist) 1.8%
Brazilian inflation (source: BACEN) 5.1%
Relevered Beta 1.0
Expected return on the market (source: Damodaran) 4.5%
Country risk premium (Global 37) (source: Bloomberg) 3.1%
Size premium (source: Ibbotson Associates, 2015) 1.0%
CAPM - nominal - Ke (a) 14.8%
Cost of debt 12.0%
Tax 34.0%
Kd after tax - nominal - Kd (b) 7.9%
WACC
% common equity capital in the capital structure ( c ) 97.5%
% of debt capital in the capital structure ( d ) 2.5%
WACC nominal = (a*c) + (b*d) 14.7%
31
Contents
V. Methodology
VI. Discount rate
VII. Assumptions
Appendix
32
VII . Assumptions (1/6)
General Assumptions
General assumptions • Thus, in order to simplify the calculations, the average flow between
the beginning and end of each period forecast was selected to
• The general assumptions adopted in the study of the Company’s
discount the cash flows.
economic value were based on information provided and analyses
prepared in accordance with market data, obtained from recognized Discount rate:
sources.
• The discount rate was forecast in accordance with the WACC method
Currency and data base for the forecast (Weighted Average Cost of Capital), in nominal terms, at 14.7% p.a.
• The forecasts were prepared using the Brazilian Real as the currency Growth rate into perpetuity:
and were prepared in nominal terms (considering the effects of
inflation), for the base date December 31, 2015.
• To calculate perpetuity, long term inflation in Brazil, and Brazilian long
term GDP were added as “g” growth of 7.1%.
Forecast horizon
Value into perpetuity:
• From a theoretical point of view, given the continuity of the Company’s
• The terminal value was calculated based on a perpetual future cash
operations, the forecast horizon extends over very long periods.
flow, based on the normalized value of the estimated cash flow for the
However, given the difficulty in estimating the parameters for long
last year of the forecasts.
periods, a specific forecast horizon has been considered for a certain
number of years, in accordance with the characteristics of the Adjustments:
Company, and a terminal value added at the end of this period.
• Non operational assets and liabilities were not considered in the
• The forecast horizon adopted was from January 2016 to December Company’s free cash flow forecasts. Its balances, when appropriate,
2025 and the estimated terminal value was made based on cash flows were treated separately.
into perpetuity normalized for the operations in 2025.
Discounted cash flows over time
• A company’s cash inflows and outflows occur over time during its
business cycles. Consequently, the calculation of the present value of
the cash flows generated over a specific time should discount the
individual expenses and income, considering the different dates they
occur. Thus, the cash generated at the start of the year should be
discounted for less time that the cash generated at the end of the
year.
33
Specific assumptions
Revenue • The revenue from registration services was segregated as follows:
• Revenue consisted of two large divisions: – Fixed income: bank funding instruments, real estate market
instruments;
i. UTVM – Securities Unit, the original Cetip, which includes services
related to the Register, Deposit, Liquidation of Financial Assets and – Derivatives; and
Securities, and Organized over the counter market.
– Others
ii. UF – Financing Unit, previously GRV, responsible for the
administration of the national system for vehicle liens and 3,000
registration of vehicle financing contracts. Register revenue composition (R$ MM)
2,500
iii. New projects
(i) UTVM – Securities Unit 2,000
• The UTVM revenue was forecast according to the expectations of

1,500
BM&FBOVESPA and its advisors. UTVM income is segregated as
follows:
3,000
1,000
UTVM revenue composition (R$ MM)
500
2,500
–
2,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
1,500 Fixed income Derivatives Others
1,000
500
–
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Register Custody Transactions Utilization Others
34
• Custody revenue was segregated as follows: (ii) UF – Vehicle Financing Unit
– Debentures; • The UTVM revenue considers the expectations of market analysts and
those of BM&FBOVESPA and is segregated as follows :
– Bank funding instruments;
– Derivatives and structured operations; and
3,000 Financial revenues composition (R$ MM)
– Maintenance of consignors
2,500
Custody revenue composition (R$ MM) 2,000
3,000 1,500
2,500 1,000
2,000 500
1,500 –
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
1,000
SNG Sircof Market data and developing solutions Real estate segment Others
500
• SNG: System for Custody of Information on inclusions and exclusions
– of liens provided by to the Traffic entities by Users. It enables financial
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
institutions to gain custody of the asset given in guarantee for the
Debentures, fund shares & others Bank funding instruments vehicle financing operation, through the efficient electronic register of
Derivatives and structure operations Consignors maintenance liens.
• Sircof: The Contracts System is a complete Solutions platform,
consisting of revenues, custody and transmission of information and
vehicle financing contracts to the state traffic institutions.
35
• Market data and developing solutions: Access to platforms: 3000 New projects revenues composition (R$ MM)
– Cetip | InfoAuto: loan platform through which financial institutions 2500

can gain access to vehicle data using a CPF, in real time.
2000
– Cetip | Vehicle Reports: analytical information on the operation
performed by the client using the National Lien System – SNG. 1500
– Cetip Performance: System to identify the financing potential for
1000
each resale, determine goals for the sales team and accompany
their performance throughout Brazil. 500
• Real estate segment: services that refer to assessing real estate.
0
(iii) New projects 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
• Refers to revenue from new projects, according to Cetip Projects - CCP and Icelink Projects - Vehicles Projects - Real estate
management’s expectations, and informed to BM&FBOVESPA
Administration. The inclusion of income from these new products is Indirect tax
considered as from 2020, with a more conservative growth rate than • Indirect taxes refer to ISS, PIS and COFINS. For 2016 the historic rate
that forecast by Cetip management, aligned with the expectations of of 17.4% was used. As from 2017, a reduction of 3 percentage points
the markets in which the Company intends to operate (Fixed income, to ISS was considered only for UTVM revenues, as a result of moving
vehicles and real estate). the various services to the location in Barueri-SP, which resulted in
the rate of 14.4%. The ISS rate for the UF revenue remained
unaltered.
Taxes
• Direct taxes refer to corporate income tax (IRPJ) and Social
Contribution on Net Profit (CSLL). The rates used were those
permitted by tax legislation in force:
– Income tax: 15% on profit before tax, plus additional of 10% on
taxable profit in excess of R$ 240,000 per annum; and
– Social Contribution: rate of 9% on profit before tax.
36
Operational expenses Interest on own capital
• Expenses such as personnel, hire of equipment and systems, third • In accordance with the policy approved by Cetip at the end of 2015,
party fees, maintenance and general administrative expenses, were payment of interest on own capital was considered (TJLP on
forecast and corrected using the IPCA, plus 2% for real growth. shareholders’ equity), limited to 50% of profit for the period or 50% of
the revenue reserve, less 15% for tax on the income earned by the
• Cleaning, maintenance of machinery and equipment, reception, safety,
shareholder.
security, press relations and marketing, recruitment and selection,
other operational income and expenses were corrected by the IPCA. Stock related compensation plan – matching (source: financial
statements)
• Fees and taxes, FENASEG costs and credential registration fees and
other services were estimated based on a fixed percentage of net • Cetip introduced a new stock related compensation program as from
revenue with reference to the percentage registered in 2015. 2016, whereby employees have the option to acquire the company´s
shares and with this adhesion the Company makes an equal
• The expenses for new projects were forecast as from 2020 based on
contribution (matching) in shares or in cash. This expense was
an average percentage of revenue from new projects of 24% p.a. in
estimated based on Cetip’s expectations of costs of R$2,500,000 per
accordance with the business plan for existing products.
annum, corrected by the IPCA.
3,000 Operational expenses brak-down (R$ MM)
Working capital
2,500
• Based on historic published financial information, the historical balance
2,000 sheet accounts of Cetip were analyzed and subsequently, the balances
for these accounts were classified between operational and non
1,500 operational assets and liabilities.
1,000 • The forecast indicators were calculated for working capital for
operational assets and liabilities (drivers), based on net operational
500
revenue and operational expenses for the year 2015.
–
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
• The following table presents the applications and sources for the
working capital and respective drivers:
Operational expenses Personnel expenses
Third party service General and administrative expenses
Others Project expenses
37
Depreciation and amortization
Working capital Driver Days • The depreciation charges were calculated based on the deprecation of
fixed assets held at the base date.
Applications
Cash and cash equivalents Days of Revenues 0.8
• Presented below is a table with the forecast depreciation charges:
Accounts receivables Days of Revenues 37.6 D&A - R$ MM 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Taxes and contributions Days of Revenues 20.4 D&A 94 101 107 113 119 126 132 139 146 154
Prepaid expenses Days of Expenses 7.6

Other credits Days of Revenues 4.7
Sources
Suppliers Days of Expenses 67.1
Labor liabilities and charges Days of Expenses 73.4
Taxes payable Days of Revenues 5.8
Income tax and social contribution Days of Revenues 2.7
Revenues to be recognized Days of Revenues 24.6
Other obligations Days of Expenses 0.2
Capex
• Refer to the investments necessary to ensure the continuity and
maintenance of Cetip´s productive capacity.
• The assumption adopted was reinvestment of the depreciation of
assets held at the base date for the study and new investments, with
the amounts presented below:
Capex - R$ MM 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Capex 150 134 130 125 119 126 132 139 146 154
38
Contents
V. Methodology
VI. Discount rate
VII. Assumptions
Appendix
39
VII . Economic valuation (1/3)
Discounted cash flow - Cetip
Income Statement
• The projections of the Cetip’s results for the January 2016 to December 2025 period are presented, based on the assumptions described earlier:
Incom e Statem ent - R$ MM 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Net revenue 1,266 1,436 1,585 1,748 2,295 2,512 2,748 3,006 3,291 3,604
Operational expenses (368) (399) (430) (462) (595) (636) (678) (724) (773) (825)
EBITDA 898 1,037 1,155 1,286 1,700 1,877 2,069 2,283 2,518 2,780
% EBITDA Margin 71.0% 72.2% 72.9% 73.6% 74.1% 74.7% 75.3% 75.9% 76.5% 77.1%
Depreciation and amortization (94) (101) (107) (113) (119) (126) (132) (139) (146) (154)
EBIT 804 936 1,048 1,173 1,581 1,751 1,937 2,143 2,372 2,625
% EBIT Margin 63.5% 65.2% 66.1% 67.1% 68.9% 69.7% 70.5% 71.3% 72.1% 72.8%
(-) Income tax and social contribution (273) (318) (356) (399) (537) (595) (659) (729) (806) (893)
Net Profit 531 618 692 774 1,043 1,156 1,279 1,415 1,565 1,733
40
Cash Flow
• Based on the assumptions used, the nominal discount rate of 14.7% (see Appendix I - Discount Rate Analysis) and information provided by
Management, were projected operational free cash flows and discounted to present value, considering the base date December 31, 2015.
Discounted cash flow - R$ MM 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Perp.
EBIT 804 936 1,048 1,173 1,581 1,751 1,937 2,143 2,372 2,625 2,813
(-) Income tax and social contribution (273) (318) (356) (399) (537) (595) (659) (729) (806) (893) (956)
(+) D&A 94 101 107 113 119 126 132 139 146 154 165
(+/-) Investment in w orking capital 0 (3) (1) (2) 3 (3) (4) (5) (6) (7) (5)
(-) Capex (150) (134) (130) (125) (119) (126) (132) (139) (146) (154) (165)
(+) Tax effect of the payment of interest on equity (*) 25 25 25 25 24 24 24 23 23 23 25
Free cash flow 499 606 693 786 1,070 1,176 1,298 1,433 1,583 1,749 1,876
Discount rate 14.7% 14.7% 14.7% 14.7% 14.7% 14.7% 14.7% 14.7% 14.7% 14.7%
Discount period 0.93 0.81 0.71 0.62 0.54 0.47 0.41 0.36 0.31 0.27
Discounted cash flow 466 493 492 487 578 554 533 513 494 476
Sum of the discounted cash flow s 5,087

Perpetuity grow th ( "g") 7.1% Sensibility -4,75% Mid point +4,75%
Present value of perpetuity 6,778
Equity value 11,296 11,860 12,423
Entreprise value 11,865 price per share 42.67 44.80 46.93
Non-operating assets and liabilities (**) (6) Base-date: 12/31/2015
nº of shares 264.7
Equity value 11,860
Source: Financial Statements - December 2015
(*) Considering only the net effect of the tax benefit.
Perpetuity = ∑ [( free cash flow 2025 x (1 + g)) / (WACC – g)]

“g” = 7,1%
41
(**) Non operating assets and liabilities to equity value Summary Report
Assets [a] 1,531

• Based on the scope of this Report, and subject to the assumptions,
restrictions and limitations described here, we estimate the fair
Financial applications - free 802 value of Cetip, as below:
Financial applications - free and related 249
Derivative financial instruments 121
Judicial deposits 0
Prepaid expenses 3 Equity Value
Exercise of stock options (*) 119 (R$ MM) 11,296 12,423
Buildings 28
Investments 16
Deferred income tax and social contribution 192
Other credits 2
Liabilities [b] (1,537)
Economic value
per share (R$) 42.67 46.93
Dividends and interest on equity payable (110)
Dividends and interest on equity payable - announced in 2016 (107)
Issued debentures (520) Note: Considered the number of 264,716,860 shares (262,978,823 outstanding +
4,900,800 open, regarding stock option - 3,162,763 treasury) net of treasury
Loans and finance lease obligations (782) shares, as FS of 2015 reviewed by independent auditors.
Derivative financial instruments (12)
Provision for contingencies and social obligations (6)
Total non-operating assets and liabilities [a] + [b] (6)
We conclude that the estimated economic value of Cetip shares is
between R$ 42.67 and R$ 46.93 estimated by the methodology of
(*) For the recognition of the conversion of stock options issued and not exercised by
December 31, 2015, was considered the exercise of 4,900,800 granted and valid actions discounted cash flow and the equity value is between R$ 11,296
on the valuation date based on the updated exercise price as reported by Cetip’s
‘management.
millions and R$ 12,423 millions.
42
Contents
V. Methodology
VI. Discount rate
VII. Assumptions
VIII. Economic and financial valuation
Appendix
2. Appendix II – Important Notes
43
Appendix I – Glossary (1/2)
BACEN Central Bank of Brazil (Banco Central do Brasil)
BS Balance Sheet
CAGR Compounded Annualy Growth Rate
CAPM Capital Asset Pricing Model
COFINS Contribution for Social Security Financing (Federal Tax Over Revenues)
Company Cetip S.A. – Mercados Organizados
Client BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
CVM Securities and Exchange Commission
EBIT Earnings Before Interest and Tax
EBITDA Earnings Before Interest, Tax, Depreciation and Amortization
Free Float de shares Number of shares free to be traded on the market
FS Financial Statement
GAAP Generally Accepted Accounting Principles
GDP Gross Domestic Product
IBGE Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística)
IPCA Brazilian Consumer Price Index (Índice de Preços ao Consumidor Amplo)
IS Income Statement
ITS Quarterly Financial Statement
44
Appendix I – Glossary (2/2)
Law 6.404/76 Law 6,404 of December 15, 1976 , which provides for the Corporation in Brazil
MPEEM Multi Period Excess Earnings
OS Ordinary shares
On stand alone basis Term adopted to assume that the company operates independently
PIS Brazilian Social Integration Program (Programa de Integração Social)
PS Preffered shares
Report This Valuation Report , dated April 11, 2016
SELIC Brazilian Interest Rate (Sistema Especial de Liquidação e Custódia)
Ticker Action Code traded on BM&FBOVESPA
WACC Weighted Average Cost of Capital
45
Appendix I – Important Notes (1/3)
• This Report is a free translation into English (requested by the Client) not and should not be considered to be a promise or guarantee in
of the report issued in Brazilian Portuguese. If there are any relation to the past or future, or as a recommendation for the price of
discrepancies or differences between the versions, the version in the Operation.
Portuguese will prevail.
• KPMG highlights that the valuation of the Companies was performed
• The report was prepared by KPMG Corporate Finance Ltda. (“KPMG”), “on a stand alone basis”, and does not consider any synergies or
requested by BM&FBOVESPA, in accordance with the rulings correlated elements.
applicable from Law 6,404/76 (Corporate Law), in order to issue the
Economic Valuation Report of Cetip S.A. – Mercados Organizados,
• Assuming that the price of the shares within the ambit of the
Operation will observe the rulings in Corporate Law, KPMG did not
based on the method of discounted cash flow, at the base date
and does not make any recommendation, explicit or implicit, and does
December 31, 2015.
not express any opinion with respect to defining the final price of the
• This report does not constitute a judgment, opinion, proposal, request, Shares within the ambit of the Operation or with respect to the terms
suggestion or recommendation to management or the Client’s and conditions of any operation involving the Company, or any of its
shareholders, or to any third party, as to the convenience and subsidiaries.
opportunity, or as to the decision to approve or participate in the
Operation. This Report, including its analyses and conclusions (i) does
• As established in Corporate Law, the information included in the
Report was based on the audited financial statements of the
not constitute a recommendation to any member of the Management
Companies and the quarterly financial information, management
Board, or any of the Client’s shareholders, or any of its subsidiaries as
information related to Cetip presented by Client Management and
to how to act or vote for any issue related to the Operation; and (ii)
information available to the public in general obtained from public
cannot be used to justify the right to vote of any individual on this
sources.
matter, including the Client’s shareholders.
• The shareholders should perform their own analyses in relation to the
• The information presented to KPMG includes public sources that
KPMG considers reliable, however, KPMG did not undertake an
convenience and opportunity to accept the Operation, and should
independent investigation of this information, and does not assume
consult their own financial, tax and legal advisors, to form their own,
responsibility for the accuracy, precision and sufficiency of this
independent opinions on the Operation. This Report should be read
information. The base date used for the Assessment Report is
and interpreted in light of the restrictions and qualifications previously
December 31, 2015.
stated. The reader should take into consideration in his analysis the
restrictions and characteristics of the sources of information used. • The Client, through appointed professionals, provided information on
data, forecasts, assumptions and estimates related to Cetip, and its
• Neither KPMG, nor any other of its partners, employers or workers
operations markets, used in this Report.
declared or guaranteed, expressly or tacitly, the accuracy and
completeness of this Report, and furthermore, do not provide advice of • During the course of our work, we performed analysis procedures that
any nature, such as legal or accounting. The content of this report is we considered appropriated within the context of the work. However,
46
KPMG did not assess the completeness, sufficiency and accuracy of • The information that refers to data, forecasts, assumptions and
the information provided. Any errors, alterations or modifications to estimates, related to Cetip and its operations markets, used and
this information could significantly affect KMPG’s valuation. included in the Report, is based on certain groups of reports and
presentation lay-out, which could differ considerably in relation to the
• We also highlight that the work does not constitute an audit in
group of accounts presented by the Client for purposes of preparing
accordance with generally accepted auditing standards, or any other
the financial statements or quarterly financial information, made
form, and therefore, should not be interpreted as such.
available to the public. This procedure was adopted to enable the
• The scope of the work proposed does not represent any obligation by forecasts presented to be consistent with the group of accounts
KPMG to detect frauds in the Cetip’ operations, processes, registers or reported in the management financial information presented. Any
documents. differences in the groups of accounts do not have an impact on the
results.
• The scope of this report does not include determining the economic
values of any of the Companies’ contingencies. Therefore, with • Except if expressly stated otherwise, in writing in notes or specific
respect to such items, we have based our work on information and references, all of the previous information, market information,
analyses made available by the Client and its legal advisors, as such, estimates, forecasts and assumptions, included, considered, used or
KPMG is not responsible for the results of these services. presented in this Report refer to that presented by the Client to KPMG.
• Also, the scope of this report does not include the assessment of non- • Neither KPMG nor its representatives declare, guarantee or express
operating fixed assets and fixed assets individually of Cetip. their opinion, explicitly or implicitly, as to the accuracy, completeness
or viability of any forecasts or assumptions on which they are based.
• In order to prepare this report, KPMG presupposes the reliability,
expressly given by the Client, with respect to the accuracy, contents, • This report was prepared according to the economic conditions of the
completeness, sufficiency and integrity of all of the data that was market, amongst others, available on the date it was prepared, such
provided or discussed, such that we do not assume, nor did we that the conclusions presented are subject to variations as a result of a
undertake a physical inspection of any assets or properties, and did not range of factors.
prepare or obtain independent assessments of the Companies’ assets
or liabilities, or the solvency of such, and considered the information
• The sum of the individual values presented in the Report may differ
from the sum presented, as a result of rounding of the amounts
used in this report to be consistent, and the Client is responsible,
involved.
together with its agents, partners and employees, for all of the
information provided or discussed with KPMG. • The range in the Company's value is limited to a range of 10% to be in
accordance to the requirements of Annex III, item II of CVM
Instruction 361.
47
• The market is aware that every assessment prepared using the alterations, required as a result of these acts, will have adverse equity
discounted cash flow method represents a significant degree of effects for the Client or will reduce the benefits to the Client sought
subjectivity, given that they are based on future expectations, which from the Operation.
may or may not occur. It should also be noted that all or any of the
assumptions for financial valuation models based on discounted cash
• The information herein, related to the accounting and financial position
of the Companies, and the market, is that available at December 31,
flows can alter the value obtained for the company, brand or asset
2015, depending on the case. Any change in these positions could
being assessed. These possibilities do not constitute errors in the
affect the results of this report. KPMG does not assume any
valuation and are recognized by the market as part of the nature of the
obligation to up date, review or correct the report, as a result of
valuation process using the discounted cash flow method.
differences in information subsequent to April 11, 2016, or as a result
• There are no guarantees that the assumptions, estimates, forecasts, of any subsequent event.
partial or total results or conclusions used or presented in the Report
will in fact occur or be registered, in full or in part. The Company’s
• This Report should be read and interpreted considering the restrictions
and qualifications stated above. The reader should take into
future results may differ from those in the forecasts, and these
consideration in his analysis the restrictions and characteristics of the
differences may be significant, and may result from various factors,
sources of information used.
including, but not limited to, changes in market conditions. KPMG does
not assume any responsibility for these differences. • This Report can not be distributed, copied, published or used in any
other form, and can not be filed, included or referred to in part or
• The services proposed may be informed and supported by legal norms
totally in any document without prior consent from KPMG, liberating
and regulations, within this context, we highlight that our legislation is
its use by third parties interested in the Operation, within the strict
complex and often the same ruling can be interpreted in more than
terms of Corporate Law.
one way. KPMG seeks to keep up to date in relation to the different
interpretative currents, to ensure it is able to perform an extensive • Presentation of this report concludes the services stated in our
assessment of the alternatives and the risks involved. Thus, inevitably proposal.
there will be interpretations of the law that differ from ours. Within
this context, neither KPMG nor any other firm, can provide Client
management with total assurance that it will not be questioned by
third parties, including tax investigation agencies.
• To undertake this work, KPMG assumed that all of the government
and regulatory approvals or any other approvals, as well as any
exemptions, amendments or renegotiation of contracts necessary for
the business considered were or will be obtained, and that no
48
© 2016 KPMG Corporate Finance Ltda., a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved. Printed in Brazil.

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BM&FBOVESPA S.A.

Economic Valuation Report of Cetip S.A. –

April 11, 2016

II. Information about the appraiser

III. Information on the Company

IV. Market information

VI. Discount rate

VIII. Economic valuation

Note: Considered the number of 264,716,860 shares (262,978,823 outstanding +

We conclude that the estimated economic value of Cetip shares is

Fernando A. Mattar Gabriel Carracedo Fabiano Goulart Delgado

II. Information about the appraiser

III. Information on the Company

IV. Market information

VI. Discount rate

VIII. Economic valuation

Name Fernando A. C. S. B. Mattar

Position Partner, Corporate Finance – Valuation Services, Brazil

Qualifications Post Graduation in Business Administration – Fundação Getúlio Vargas – FGV/ SP

Name Gabriel Chamadoira Carracedo

Position Director, Corporate Finance – Valuation Services, Brazil

Qualifications Post Graduation in Finance – iBMEC/ SP

Name Fabiano Goulart Delgado

Position Manager, Corporate Finance, KPMG Curitiba - Brazil

Qualifications Specialization in Controllership at UFPR-PR

Évora S.A. Eneva S.A. Eneva S.A. Banco Santander S.A.

Economic and Financial Valuation Economic and Financial Valuation

ABCD ABCD ABCD ABCD

Com panhia De Bebidas Das

Economic and Financial Valuation

ABCD ABCD ABCD ABCD

II. Information about the appraiser

III. Information on the Company

IV. Market information

VI. Discount rate

VIII. Economic valuation

Launch in partnership with ICE, of the Cetip business platform |

IS Consolidated - R$ '000 2013 2014 2015

Volume Gross Revenues per segment – (R$ 000)

2013 2014 2015 2013 2014 2015

632,399 699,219 770,489

2013 2014 2015

II. Information about the appraiser

III. Information on the Company

IV. Market information

VI. Discount rate

VIII. Economic valuation

States), Euroclear, and Clearstream (Europe). 2,564 2,561 2,562

Natural person (% p.a.) Legal entity (% p.a.)

American inflation Brazilian GDP

II. Information about the appraiser

III. Information on the Company

IV. Market information

VI. Discount rate

VIII. Economic valuation

Projection horizon and residual value

Market value of CFN CFN + 1 CF∞

Projected horizon Perpetuity

II. Information about the appraiser

III. Information on the Company

IV. Market information

VI. Discount rate

VIII. Economic valuation

WACC = (E/(E + D))Ke + (D/(E + D))Kd Rs