Annual Shareholders' Meeting - 03.30.2015 - Management Proposal

8/9/2019 Annual Shareholders' Meeting - 03.30.2015 - Management Proposal

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BM&FBOVESPA ANNUAL AND

EXTRAORDINARY SHAREHOLDERS’

MEETINGS


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MEETINGS

MANAGEMENT PROPOSAL

ANNUAL AND EXTRAORDINARY SHAREHOLDERS’ MEETINGS TO BE HELD ON3/30/2015

São Paulo, February 26, 2015.

We, the Management of BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e

Futuros (hereinafter “Company” or “BM&FBOVESPA”), submit the Proposal set forth

below for the consideration of shareholders convening in the Combined Annual and

Extraordinary Shareholders’ Meeting called for March 30, 2015.

ANNUAL SHAREHOLDERS’ MEETING

1. Financial statements as of and for the year ended December 31,

2014.

The Management Report and the Financial Statements of the Company prepared by

the management of BM&FBOVESPA, together with the opinion of the independent

auditors and the report of the Audit Committee, relating to the fiscal year ended

December 31, 2014, and published on February 11, 2015 in the “Valor Econômico”

newspaper and in the “Official Gazette of the State of São Paulo”, were approved by

the Board of Directors in a meeting held on February 10, 2015.


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(i) R$781,642,000.00 for the mandatory dividends, which after offsetting the

interim dividends paid relating to fiscal year 2014, in the amount of R$595,701,000.00,will result in an outstanding balance of R$185,941,000.00, which it is proposed to be

distributed to the shareholders on account of dividends, resulting in a value of

R$0.10316344 per share (estimated value, which can be modified on account of the

disposal of treasury shares to fulfill the exercise of purchase options for shares

granted based on the Call Option Plan of the Company and any acquisition of shares

within the scope of the Buyout Plan of the Company); and

(ii) R$195,411,025.26 for accrual of the statutory reserve for investments and

composition of the funds and mechanisms for safeguarding the Company.

The proposal of the Management of BM&FBOVESPA also provides that the payment

be effected on April 28, 2015, using as a calculation base the equity position on April

15, 2015.

The information concerning allocation of net income required by Exhibit 9-1-II of CVM


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Reelections:

Candidates nominated as Independent Directors: Mr. Claudio Luiz da Silva Haddad,

Mr. Luiz Fernando Figueiredo, Mr. Luiz Nelson Guedes de Carvalho and Mr. Pedro

Pullen Parente.

Candidates nominated as Directors: Mr. André Santos Esteves, Mr. Charles Peter

Carey and Mr.José de Menezes Berenguer Neto.

New Designations:

Candidates nominated as Independent Directors: Mr. Antonio Carlos Quintella and Mr.

Luiz Antonio de Sampaio Campos.

Candidates nominated as Directors: Ms. Denise Pauli Pavarina and Mr. Eduardo

Mazzilli de Vassimon.

Under the terms of article 10 of CVM Instruction 481, the information on candidates to


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Proposal of Remuneration for Fiscal Year 2015 (R$M)

MANAGERSFixed

Remuneration Benefits

Short-Term

Variable

Remuneration

Long-Term

Variable

RemunerationTOTAL

Directors 6,674 - - 1,641 8,314

Executive Officers 5,296 1,037 12,005 19,222 37,559

TOTAL 11,969 1,037 12,005 20,862 45,873

1.1.1 Fixed Remuneration

The fixed remuneration of the Executive Board consists of 13 salaries per year,

restated annually based on the collective bargaining agreement.

For the members of the Board of Directors there is attribution of a monthly fixed


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In 2015 the total amount of the short-term variable remuneration established by theBoard of Directors, which will be paid to the Executive Officers and other employees of

the Company during fiscal year 2015, will be calculated based on the Adjusted Net

Income of the Company effectively assessed, considering the limit of expenses

provided in the budget for the fiscal year, and will represent 3.5% of such result if the

expenses target established by the Board of Directors is effectively accomplished. If

the expenses budgeted for fiscal year 2015 are exceeded, there will be application of a

reducing factor on the percentage of the Adjusted Net Income to be distributed to the

Executive Officers and other employees. The distribution of such amount will follow the

rule of salary multiples per level and differentiation based on individual performance.

1.1.4 Long-Term Variable Remuneration

The long-term variable compensation is structured on the basis of a stock awards plan

which the shareholders approved in the extraordinary general meeting held on May

13, 2014. Under the plan, share awards are tied to performance measured pursuant

t t i t t i di t l t d t th C ’ ll f d i


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For a portion of approximately 30% of the total long-term variable compensation, an

award of shares is contingent on each beneficiary undertaking to buy company shares(known as ‘own shares’) and hold them for the duration of the award vesting period.

Additionally, actual delivery of the award shares for this portion of the grant is

contingent also on the beneficiary fulfilling the holding period commitment.

Moreover, under the stock awards plan, a specific mechanism has been established

whereby a collective lot of Company shares can be awarded to members of the Board

of Directors. Currently, this collective lot comprises any number up to 172,700 shares,

which are linearly apportioned amongst the directors. Delivery of award shares takes

place after a vesting period that extends for two years after the end of each director’s

tenure.

We should stress that given the terms of the stock awards plan approved in 2014,

starting from this year of 2015, the compensation proposal will include the portion

attributable to long-term variable compensation. Previously, these long-term

incentives took the form of stock option grants made by the Board of Directors within


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provisions of item 8.1 of such Regulation.

Another adjustment that is being proposed consists of an amendment to Article 5 of

the Bylaws, considering that the Board of Directors of BM&FBOVESPA, in a meeting

held on February 10, 2015, approved the cancellation of 85,000,000 shares issued by

the Company held in treasury, which were acquired within the scope of the programs

for repurchase of shares implemented by the Company, without reduction of its capital

stock. As a result of the mentioned cancellation, the subscribed and paid-in capital

stock of two billion, five hundred and forty million, two hundred and thirty-nine

thousand, five hundred and six-three Reais and eighty-eight cents

(R$2,540,239,563.88) was then represented by one billion, eight hundred and fifteen

million (1,815,000,000) common shares.

In addition, amendments to the provisions relating to the Board of Directors, to the

Executive Board and the Advisory Committees to the Board of Directors were

proposed in line with the best corporate governance practices and for the purpose of

constantly improving the governance rules and documents of the Company.


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Article 32, in line with the better recommended corporate governance standards;

(d) to amend the Article 22, indent “b” of paragraph 6, so as to increase from 5% to

7% the ownership limit that defines an independent director;

(e) to reword the Article 30, indent “c”, to be consistency with the rules adopted by

BM&FBOVESPA;

(f) amendments related to the authority and name of the existing Risk Committee,

with changes to: (f.1) Article 45, indent “d”, (f.2) Article 51, main provision and

paragraph 1 (indents “a,” “b,” and “c”); and additions as follows: (f.3) indents “d,” “e,” “f”

and “g” of paragraph 1 of Article 51;

(g) to amend the Article 46, main provision and paragraph 1, and addition of a

paragraph 2 to allow the participation of one more Independent Director as an Audit

Committee member;


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ATTACHMENTS


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ATTACHMENT I

10.1 Management’s discussion and analysis.

a. financial condition and net equity position

Year ended December 31, 2014 compared with year ended December 31, 2013.

The year 2014 was marked by a heatedly contested presidential race which resulted in heightened volatility andincreased trading volumes in the second half of the year, down to the voting day. However, this pre-electoral boostin trading activity was insufficient to make up for the thin volume of trading in the earlier part of the year, so thatultimately the overall volume traded fell short of the prior year volume both in markets comprising our BM&Fsegment (financial and commodity derivatives) and the markets comprising our Bovespa segment (equities andequity derivatives).

The BM&F segment average daily volume reached 2.6 million contracts in 2014, down 9.3% on 2013, reflectingmainly the 23.7% decrease in volume traded in Brazilian-interest rate contracts, which are typically the top tradedcontracts in this segment, while average rate per contract (“RPC”) rose 5.3% to R$ 1.350, due notably to (i)increased average RPC of Brazilian-interest rate contracts (change to the mix of contracts by maturity) and (ii)increased RPC in U.S. dollar-denominated interest rate contracts and forex contracts, that were positively impactedby the depreciation of the Brazilian real against the US dollar in the period, as both contracts reference the UScurrency. As for the BOVESPA segment, the average daily traded value in the stock market and the equityderivatives markets dwindled by slight 1.7% year-on-year, reaching R$ 7.29 billion, to a large extent having trailedthe fall in average market capitalization1 of listed firms, which is attributable to the country’s deterioratingmacroeconomic landscape.

BM&FBOVESPA therefore ended 2014 with total revenues (before PIS and COFINS tax reductions) of R$ 2,246,452thousand, down 5.0% on 2013. This reduction was observed in both segments and in regard to other revenues too(not related to trading and settlement).


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the average daily trading volume of contracts to 2.85 million in 2013 from 2.90 million in 2012, however average “RPC” rose 7.6% to R$ 1.282 in 2013 from R$ 1.191 in 2012, primarily because a substantial portion of thevolumes correlate with contracts for which we charge US Dollar-denominated fees, so that ultimately theserevenues were positively influenced by the depreciation of the Brazilian real against the US Dollar.In a striking note of market performance, while in the first half of 2013 value traded in cash equities as well asvolume traded in financial derivatives hit record highs, in the second half of the year trading value and volumesplummeted, unveiling a shift in market mood triggered by sinking risk appetite and deteriorating marketexpectations, as portfolios investment outflows soared.

Ultimately, our diversified revenue base and innovative products and services offerings (including securities lendingand Treasury Direct services, products as exchange-traded real estate funds (FIIs) and agribusiness credit bills(LCAs) added to the positive effects of our market making program for options on single stocks, and equityofferings worth R$23 billion in gross proceeds (the largest equity-financing volume in three years), all contributedto a climb in total revenues compared with 2012.

Reflecting this performance, our consolidated total revenues climbed 3.3% year-over-year, to R$2,364,956thousand in 2013 from R$2,289,023 thousand one year previously, as the outcome of a 5.9% rise in revenues fromtrading and settlement fees earned in our BM&F segment coupled with a 1.0% drop in revenues from trading andsettlement fees earned in our BOVESPA segment; and an important contribution from revenues unrelated totrading volumes, which surged 9.1% year-over-year.

Once again, our unwavering efforts to controlling costs and expenses drove us to successfully contain the build-up

in adjusted expenses below the average inflation rate to R$575,763 thousand in 2013 from R$563,487 thousand in2012, an increase of 2.2%. In addition, we continue to pledge steadfast commitment to return capital toshareholders by combining cash distributions and share buybacks effectively and without affecting our solidfinancial position.

Thus, our consolidated operating income climbed 2.6% year-over-year, to R$1,335,824 thousand in 2013 fromR$1,301,670 thousand, while the GAAP net income (attributable to BM&FBOVESPA shareholders) rose 0.7% toR$1,081,516 thousand in 2013 from R$1,074,290 thousand one year previously.


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Total onerous liabilities and shareholders’ equity 20,654,894 100.0% 20,767,214 100.0% 20,693,003100.0

%

i. in event of redemptionii. redemption price calculation method

Other than as legally prescribed, we are not contemplating any share redemption and do not anticipate any eventoccurring that would trigger redemption rights.

c. Capacity to service the debt.

Our Company has strong cash generation capacity, as evidenced by consolidated operating income of R$ 1,226,363thousand in 2014, R$1,335,824 thousand in 2013 and R$1,301,670 thousand in 2012, and consolidated operatingmargins of 60.4%, 62.8% and 63.0%, respectively, as well as yearly net income attributable to shareholdersamounting to R$ 977,053 thousand, R$1,081,516 thousand and R$1,074,290 thousand for the same three years,respectively.

Additionally, our consolidated cash and cash equivalents coupled with short- and long-term financial investmentsreached R$ 3,855,527 thousand (15.1% of total assets) in 2014, R$4,870,760 thousand in 2013 (18.8% of totalassets) and R$3,850,639 thousand in 2012 (15.9% of total assets). Moreover, we should note that cash and cashequivalents, as well as financial investments include cash collateral pledged by market participants in the course oftheir dealings, which, as registered under current liabilities in our balance sheet, totaled R$ 1,321,935 thousand atyear-end 2014, versus R$2,072,989 thousand and R$1,134,235 thousand in 2013 and 2012, respectively.

Accordingly, our net indebtedness ratio (see subsection 10.1(f) below) at December 31, 2014 was R$820,812thousand negative, which compares with equally negative figures of 2013 and 2012 (R$1,279,524 thousand andR$1,393,308 thousand, negative, respectively), in each case denoting our low degree of financial leverage and verystrong capacity to service our debt. Given the nature of our available cash flows, which include our own financialresources as well as cash pledged as collateral by customers, our policy calls for lower-risk investing of cashbalances, which we typically accomplish by seeking very conservative, highly liquid, safe investments, often bytaking positions in Brazilian government bonds, notes and other debt securities whose yield and coupon ratestypically track the base rate (interbank lending rates or the SELIC rate), whether or not including a spread. Wetherefore believe our Company is fully capable of servicing its debt both in the short and long term.


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arranging and structuring banks and other offering expenses, listing fees, legal fees, rating fees paid to Standard &Poor’s and Moody’s, and ongoing administration and custody expenses, the actual cost will represent a rate of5.64% per annum. Effective from July 16, 2010, we used the net offering proceeds to purchase additional interestin the shares of the CME Group, thereby increasing our ownership interest to 5% of the shares of common stock(from 1.8% earlier).

As translated into Brazilian Reals, the balance of our debt under the global notes as of December 31, 2014 wasR$1,666,491 thousand (including accrued interest of R$47,368 thousand), as compared to R$1,468,322 thousand(including accrued interest of R$42,129 thousand) on December 31, 2013; and R$1,279,121 thousand (accruedinterest of R$36,882 thousand) at December 31, 2012. Moreover, at December 31, 2014, the fair value of our debtunder the notes, as determined based on market data, was R$1,737,987 thousand (Source: Bloomberg).

Starting from the notes’ issue date (July 16, 2010), we have designated as hedging instrument that portion of theprincipal under the notes which correlates with changes in exchange rates in order to hedge the foreign currencyrisk affecting that portion of our investment in the CME Group Inc. which correlates with the notional amount ofUS$612 million (a hedging instrument in a hedge of net investment in a foreign operation, per Note 7 to ourfinancial statements as of and for the year ended December 31, 2014). Accordingly, we have adopted netinvestment hedge accounting pursuant to accounting standard CPC-38 (IAS 39 -Financial Instruments: Recognitionand Measurement), for which purpose the hedging relationship has been formally designated and documented,including as to (i) risk management objective and strategy for undertaking the hedge, (ii) category of hedge, (iii)nature of the risk being hedged, (iv) identification of the hedged item, (v) identification of the hedging instrument,

(vi) evidence of the actual statistical relationship between hedging instrument and hedged item (retrospectiveeffectiveness test) and (vii) a prospective effectiveness test.

Under CPC 38 (IAS 39) we are required to assess hedge effectiveness in foreign transactions by conductingretrospective and prospective tests. On testing backward-looking effectiveness, we adopt the ratio analysis method,also called dollar offset method, as applied on a cumulative and spot-rate basis. In other words, this methodcompares changes in fair values for the hedging instrument and hedged item attributable to the hedged risk, asmeasured on a cumulative basis over a given period (from the hedge inception to the reporting date) using theforeign currency spot exchange rate at each relevant date in order to determine the ratio of ‘cumulative gain or

l th t ’ i i l t’ t ‘ l ti i l th t i t t i f i ti ’


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(Bankruptcy and Reorganization Law), the financial assets pledged to our clearing houses as collateral fortransactions rank senior to and have priority over any other guarantee up to the amount of thetransactions these collaterals secure, and are not affected in any way in the event of bankruptcy or judicialreorganization proceedings.

Tax and payroll liabilities – pursuant to article 83 of Law No. 11,101/05 (Bankruptcy and ReorganizationLaw), government credits for tax liabilities and government or employee credits for social security andpayroll liabilities (recognized in the line items ‘personnel and related charges’ and ‘income tax andcontributions payable/recoverable’) constitute preferred debt and, thus, have priority over other types ofdebt.

Other payment obligations – other obligations recognized under current and noncurrent liabilities in ourbalance sheet statement as of December 31, 2014, constitute unsecured debt.

(iv) restrictions on indebtedness level and new financing, on dividend declaration, on

assets sales, on new issues and transfer of controlThe indenture governing our issuance of senior unsecured notes includes certain limitations and requirementscustomary in similar transactions found on the international debt markets, which we believe will not restrict ournormal operating and financial activities. Provisions containing such limitations and requirements include mainly thefollowing:

Limitation on liens – a provision limiting our and our subsidiaries’ ability to secure debt by creating liens(other than certain permitted liens, as defined);

Limitation on sale and lease-back transactions ;

General liens basket – a provision permitting us to undertake additional debt provided the sum of (a) theaggregate principal amount of all debt obligations secured by liens other than certain permitted liens (asdefined), and (ii) debt attributable to all our and our subsidiary’ s sale and lease-back transactions (withcertain exceptions), should not exceed 20% of our consolidated net tangible assets (as defined);

Limitation on mergers, consolidations or business combinations – a provision restricting our ability to merge,consolidate or otherwise combine with any other person unless the resulting or surviving company assumesobligation to repay the principal and pay interest on the notes, and meets certain other requirementsdesigned to ensure compliance with the terms and conditions of the indenture.

However, these limitations and requirements include a number of exceptions which are set forth in the indenture.


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Total revenuesTotal revenues for the year ended December 31, 2014, amounted to R$2,246,452 thousand, falling 5.0% year-over-year due primarily to increased revenues from operations in both segments and due to other revenues (not

related to trading and settlement).Trading and settlement systems – BM&F segmentThis line item fell 5.5% year-over-year totaling R$866,577 thousand (38.6% of total revenues), due to a 9.3%drop in volumes partially compensated by a 5.3% increase to average RPC in the period.

Trading and settlement systems – BOVESPA segmentThis line item fell 4.6% year-on-year totaling R$977,373 thousand, and accounted for 43.5% of total revenues.This fall is explained by a 1.7% drop in average daily volume combined with a 2.5% margin drop.

Trading Fees – trading systems. This revenue line item declined 15.7% year-on-year, to R$162,620 thousand fromR$192,985 thousand one year previously, due primarily to the changes in pricing policies implemented in April2013 for a price structure rebalancing (trading and settlement fee rates) which included a cut in trading fees fordifferent investor groups.

Settlement fees – clearing and settlements systems. This revenue line went down 1.4% year-over-year, toR$793,493 thousand from R$804,570 thousand one year earlier, due in part to a price structure rebalancing acrossthe segment (trade and post-trade fees rates mainly) which resulted in changes in pricing policies implemented in April 2013, including changes in fees charged from local institutional investors and intraday traders.

Other revenuesOther revenues hit R$402,502 thousand, a 5.2% drop from the year before, and accounted for 17.9% of totalrevenues, primarily as a result of changes in revenue line items unrelated to trading and settlement operations, asfollows:Securities lending. Revenues of R$81,203 thousand (3.6% of total revenues) dropped 20.5% from 2013, due toreduced financial volume in open interest, for which the average in 2014 was R$32.8 billion, down 19.6% on 2013.

Depository, custody, back office services. Revenues of R$117,089 thousand (5.2% of total revenues), stable onthe previous year.

Market data (vendors) . At R$70,032 thousand (3.1% of total revenues) this revenue line was stable on theprevious year.

Trading access (brokers) . This line item amounted to R$39,333 thousand (1.8% of total revenues), a 17.5% year-


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Gain (loss) on equity-method investment (equity in the results of subsidiaries and investees)We account for our investment in shares of the CME Group under the equity method of accounting and recognizegains and losses through profit or loss in the statement of income. Our net share of gain from the equity-method

investment in CME Group shares went up 23.8% from one year before, totaling R$212,160 thousand, reflecting thedepreciation of the Brazilian Real against the US Dollar and improved CME Group results. It should be noted thatthis figure includes R$80,966 thousand provisioned as recoverable tax paid abroad.

Interest income, netNet interest income for the year hit R$208,157 thousand, up 15.2% year-on-year due primarily to the positiveimpact of interest income rising 21.0% to R$361,761 thousand in 2014 in line with higher interest rates. Interestexpenses, meanwhile, rose 30.0% to R$153,604 thousand due to the depreciation of the Brazilian Real against theUS Dollar, since most our interest expenses correlate with debt under global senior notes issued in a July 2010cross-border offering, and to an R$18,105 thousand nonrecurring REFIS adhesion payment.

Income before taxation on profitIncome before taxation on profit fell by 2.4% year-over-year, to R$1,646,680 thousand from R$1,687,884 thousand oneyear previously.

Income tax and social contributionIncome before taxes totaled R$660,959 thousand and include R$104,159 thousand in current income tax and socialcontribution (related mainly to the offset portion of R$54,688 thousand with cash flow impact, including R$51,318thousand in payment of tax of previous years through REFIS and R$49,471 thousand cleared with tax retainedoverseas). Additionally, at R$556,800 thousand, the line item ‘deferred income tax and social contribution’ breaksdown as follows: (i) recognition of deferred tax liabilities of R$554,576 thousand related to temporary differences

attributable mainly to amortization of goodwill for tax purposes, with no impact on cash flow; and (ii) recognition ofdeferred tax assets amounting to R$2.224 thousand related mainly to temporary differences and reversal ofdeferred tax liabilities.

Discontinued Operations: after assessment of the results generated by the Bolsa Brasileira de Mercadorias in thepast few years, as well as its future prospects, BM&FBOVESPA reassessed its stake and decided to discontinue it,relinquishing from its settlor membership and the rights that it held in Bolsa Brasileira de Mercadorias membershipshares. As a consequence, there was R$7,807 thousand negative income generated from discontinued operations,including recognition of a R$7,539 thousand loss resulting from the relinquishment of the shares, calculated basedon the value of the investment held on November 30, 2014.


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R$243,181 thousand one year previously, driven by pricing changes implemented in April 2013, such as therebalancing between exchange fees and clearing/settlement fees and the reduced exchange fees, applied todistinct groups of investors.

Settlement fees – clearing and settlements systems. The revenue from fees our equities clearing house charges onclearing and settlement transactions (BOVESPA segment) went up 4.6% year-over-year, to R$804,570 thousandfrom R$769,221 thousand in 2012, due mainly to the price structure rebalancing also implemented in April 2013 forlocal institutional investors and day trading.

Other revenuesOther revenues of R$424,448 thousand (17.9% of the total) rose 9.1% from the year before primarily as a result ofchanges in revenue line items unrelated to trading and settlement operations, as follows:

Securities lending services. This revenue line hit R$102,186 thousand (4.3% of total revenues), a 32.6% year-over-year upsurge due mainly to arise in financial value of the balance of open interest positions at year-end, whichamounted to R$40.8 billion, up 27.5% on 2012.

Depository, custody, back office services. The line for revenues derived from the operations of our centralsecurities depository hit R$116,305 thousand (4.9% of total revenues) rising 13.2% year-over-year mainly due to a4.6% climb in average financial value of assets under custody, in addition to revenue from fees related to custodyof Brazilian government bonds traded in our Tesouro Direto platform and LCA registration.

Market data (vendors). At R$69,236 thousand (2.9% of total revenues) this revenue line item picked up 2.3%year-over-year. While the number of customers for our market data shrank somewhat, this climb is attributable

mainly to appreciation of the US Dollar versus the Brazilian Real, as we derive around half of this revenue line fromfees denominated in US Dollars which we charge foreign customers.

Deductions from revenueDeductions from revenue totaled R$238,318 thousand, a 6.3% increase, higher than the increase in total revenuesdue to less use of PIS/COFINS credits from inputs. It should be noted that part of the credits generated in 2013 willbe used in 2014.

Net revenue As a result of the changes in revenue line items discussed above, net revenue rose 3.0% year-over-year, toR$2,126,638 thousand from R$2,064,750 thousand one year previously.


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Interest income, netNet interest income of R$180,695 thousand dropped 13.5% year-over-year mainly due to a 33.7% year-on-yearincrease to interest expenses to R$118,173 thousand due to the appreciation of the US Dollar against the Brazilian

Real, since we are required to make US Dollar-denominated coupon payments under the global senior notes issuedin our July 2010 cross-border offering. Interest revenue was almost unchanged, rising only 0.9% to R$300,023thousand.

Income before taxation on profitIncome before taxation on profit rose by 1.7% year-over-year, to R$1,687,884 thousand from R$1,659,791 thousand.

Income tax and social contributionIncome tax and social contribution for the year totaled R$606,588 thousand. This line item comprises currentincome tax and social contribution amounting to R$60,097 thousand, including R$64.847 thousand which we offsetagainst income tax paid abroad, of which R$4,750 thousand will constitute temporary credits to be used by the

Company in the future. Additionally, at R$546,491 thousand, the line item ‘deferred income tax and socialcontribution’ comprises (i) recognition of R$555,648 thousand in deferred tax liabilities related to temporarydifferences attributable mainly to amortization of goodwill for tax purposes, with no impact on cash flow for theyear; and (ii) recognition of R$9,157 thousand in deferred tax assets related mainly to temporary differences andreversal of deferred tax liabilities.

Net income for the yearNet income for the year rose 0.6% year-over-year to R$1,080,947 thousand at December 31, 2013, fromR$1,074,256 thousand one year before.

Net income attributable to BM&FBOVESPA shareholders

Net income attributable to BM&FBOVESPA shareholders climbed 0.7% year-over-year to R$1,081,516 thousandfrom R$1,074,290 thousand the year before, primarily due to an increase in revenues from the BM&F segment, toother revenues not linked to volumes and the equity-method investment result, all of which were partly offset byhigher expenses and a drop to interest income.

MAIN LINE ITEMS OF THE CONSOLIDATED BALANCE SHEET STATEMENTS


T OTAL ASSETSTotal assets of R$25,538,263 thousand fell 1.4% from R$25.896.659 thousand one year previously.


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before. This change is attributable mainly to a drop in the value of cash collateral deposited by the participants inour markets at end of the periods, which dropped 36.2% to R$1,891,833 thousand from R$2,072,989 thousandone year before.

Noncurrent liabilitiesNoncurrent liabilities of R$4,658,027 thousand were up 12.7% from R$3,886,921 thousand in the prior year. Setforth below is a brief description of the main changes to line items under noncurrent liabilities.

Debt issued abroad and loans. Loans and financing amounting to R$1,619,123 thousand rose 5.1% fromR$1,426,193 thousand one year earlier primarily on account of depreciation of the Brazilian Real against the USDollar.

Deferred income tax and social contribution. Deferred income tax and social contribution liabilities of R$2,859,306thousand versus R$2,295,774 thousand one year before, climbed 7.2% resulting from recognition of thetemporary differences between the tax base of goodwill and its balance sheet carrying value (while goodwillcontinues to be amortized for tax purposes, since January 1, 2009, it has no longer been amortized for accountingpurposes, thus resulting in a goodwill tax base that is lower than its carrying value).

Shareholders’ equity Shareholders’ equity of R$18,988,403 thousand fell slightly, by 1.6% from R$19,298,892 thousand one year before.

MAIN LINE ITEMS OF THE CONSOLIDATED BALANCE SHEET STATEMENTS


T OTAL ASSETSTotal assets of R$25.896.659 thousand climbed 7.2% from R$24.147.114 thousand one year previously.

Current assetsCurrent assets surged 22.1% year-over-year, to R$4,319,483 thousand (16.7% of total assets) from R$3,536,282thousand the year before due mainly to an increase in investments maturing in the near term (less than 12months) and the upcoming maturity of a number of government bonds in our investment portfolio.

Cash and cash equivalents; short-and long-term financial investments . These encompass line items registeredunder both current assets (‘cash and cash equivalents’ comprising cash on hand and demand deposits, in additionto short-term financial investments) and noncurrent assets (long-term financial investments). Short- and long-term


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currency) against the U.S. dollar (the transaction currency for our global senior notes issued abroad in a July 2010cross-border bond offering).

Deferred income tax and social contribution. Deferred income tax and social contribution liabilities of R$2,295,774thousand versus R$1,739,644 thousand one year previously, climbed 32.0% year-on-year surge resulting fromrecognition of the temporary differences between the tax base of goodwill and its balance sheet carrying value(while goodwill continues to be amortized for tax purposes, from January 1, 2009, it is no longer amortized foraccounting purposes, thus resulting in a goodwill tax base that is lower than its carrying value).

Shareholders’ equity Shareholders’ equity of R$19,298,892 thousand was virtually unchanged with a scanty 0.6% year -on-year dropfrom R$19,413,882 thousand one year previously.

10.2. Management’s discussion and analysis of results of operations

a. Material revenue components

Year ended December 31, 2014 compared to year ended December 31, 2013

Our consolidated total revenues climbed by 5.0% year-on-year to R$ R$2,246,452 thousand from R$2,364,956thousand one year previously.

Revenues from trading and settlement fees earned within our BM&F segment . These declined 5.5% year-on-year,to R$866.6 thousand (38.6% of total revenues), due primarily to a 9.3% drop in traded volumes compared with2014, partially offset by a 5.3% increase to average rate per contract (RPC).

Revenues from trading and settlement fees earned within our BOVESPA segment . These declined 4.6% from theprior year and amounted to R$977,373 thousand (48.1% of the total), primarily due to a 1.7% year-on drop inaverage daily trading value, coupled with lower margin rates, which declined 2.5% from the prior year.

Revenues unrelated to trading and settlement operations . These shrank 5.2% year-on-year to R$402,502thousand (17.9% of total revenues).

d d b 3 20 3 d d d b 3 20 2


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MANAGEMENT PROPOSAL



The average daily value traded on equities markets hit an all-time record high of R$7.42 billion (versus R$7.25billion one year previously). However, the average margin (trade and post-trade services) fell to 5.423 basis pointsin 2013 from 5.676 basis points one year earlier, which is attributable primarily to changes in pricing policies andheightened trading activity by investors that enjoy discounts by volume range.

In contrast, the average daily volume traded on financial and commodity derivatives markets dropped 1.8%year-on-year, to average 2.85 million contracts traded versus 2.90 million contracts previously, whereas theaverage rate per contract (RPC) went up 7.6% year-on-year to R$1.282 from R$1.191 in the earlier year, inlarge part due to the local currency depreciation against the US Dollar, since the fees we charge for asignificant number of contract groups are denominated in US Dollars.

c. Changes in revenues attributable to fluctuations in market prices, exchange rates,inflation rates, changes in volumes and offerings of new products or services


Trading and post-trade systems within BM&F segment. The fluctuation in exchange rates between the years2014 and 2013 positively influenced the average RPC for forex contracts (+5.3%) and US Dollar-denominatedinterest rate contracts (+5.1%), as the fees we charge for each of these contract groups are denominated inUS Dollars. Between 2013 and 2014 the average exchange rate for US Dollars appreciated 8.6% against the

Brazilian Real6.

Trading and post-trade systems within BOVESPA segment. As discussed elsewhere herein, in April 2013 weimplemented a price structure rebalancing across the segment (trade and post-trade fees rates mainly) whichresulted in changes in pricing policies that included rate cuts for trades in cash equities by foreign and retailinvestors, in addition to discounts by volume range granted to local institutional investors and intradaytraders dealing on the equity and option markets. To a certain extent, these price changes hampered thecomparability of the revenue lines related to trading and settlement fees between 2013 and 2014.


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The level of interest rates (real or otherwise) influences our financial results (net interest income) as itdetermines the basis on which we earn a return on our financial investments. At December 31, 2014 ourfinancial investments amounted to R$3,354,992 thousand versus R$3,674,171 thousand and R$3,806,997thousand December 31, 2013 and 2012, respectively. Thus, a change in average interest rates paid on ourfinancial investments influences our interest revenue, which at December 31, 2014, amounted to R$361,761thousand versus R$298,868 thousand and R$297,217 thousand at December 31, 2013 and 2012, respectively.

In the case of foreign exchange rate changes, the effects of depreciation of the local currency relative to US Dollarsare threefold: (i) our interest expenses increase, as nearly all our onerous liabilities (interest-bearing obligations)consist of the US-Dollar denominated debt under global senior notes issued by us in a cross-border bond offeringcompleted on July 16, 2010 (see subsection 10.1(b) above); and (ii) our revenues from fees earned on certaincontract groups increase as well, since the average fee rates we charge on trades in forex futures, in US Dollar-

denominated interest rate futures and in certain commodity futures contracts are denominated in US Dollars (seesubsection 10.2(c) and (iii) high revenues of market data vendors, as set forth in subsection 10.2(c).

Additional ly, the inflation rate influences our expenses, in particular expenses with personnel and relatedcharges (see subsection 10.1(h) above.). Under our annual collective bargaining agreement, which is renewedevery month of August, the payroll and related charges increase (by wage bracket), which in the last years,presented material increase over the inflation rate of the period, as measured by the Extended NationalConsumer Price Index (Índice Nacional de Preços ao Consumidor Amplo ) , known as IPCA, which is compiled andreleased by the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística), orIBGE.

10.3. Management’s discussion and analysis of actual or expected material effects on the financial statements or results of operations from the factors set forth below.

a. Creation or disposition of operating segment.

No operating segment was created or sold in the year ended December 31, 2014. Accordingly, no such event hashad or is expected to have any effects on our financial statements, financial condition or results of operations.

b. Company organization; acquisition or disposition of ownership interest.

After assessment of the results generated by the Bolsa Brasileira de Mercadorias in the past few years, as well as


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(60.3% applied on the value of the shares transferred to the Beneficiaries) which will be provisioned andrecognized as personnel expenses proportionate to each year and impact the Company’s cash, almost in itsentirety, on the date of the transfer of the shares. In other words, throughout 2015, payroll charges will be

provisioned in relation to the shares to be transferred to the Beneficiaries in January 2016, and so on for each yearthereafter.

In the year ended December 31, 2014, there were no events or transactions characterized as one-off orextraordinary events or transactions related to us or our business which materially influenced, or are expected tomaterially influence our financial statements and results of operations, in addition the above mentioned.

10.4. Discussion and analysis of

a. Significant changes in accounting practices

There were no significant changes in our accounting practices in the years ended December 31, 2014, 2013 and2012.

b. Significant effects of changes to accounting practices

There were no significant changes in our accounting practices in the years ended December 31, 2014, 2013 and2012.

c. Qualifications and emphasis of matter paragraphs included in the independent auditors’report

There were no qualifications and emphasis of matter included in the independent auditors’ report for the year

ended December 31, 2014.

The independent auditors’ report on our financia l statements as of and for the years ended December 31,2013 and 2012, include, in each case, an emphasis of matter paragraph to the effect that “theunconsolidated financial statements were prepared in accordance with the accounting practices adopted inBrazil. In the case of BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros, these practices differfrom IFRS applicable to separate financial statements only in relation to the measurement of investments insubsidiaries and associate entities accounted for under the equity method, since IFRS would require themto be carried at cost or fair value. Our opinion is not qualified with respect to this matter.”


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and indications of potential impairment are reassessed at shorter intervals. Goodwill is stated at cost lessimpairment losses. Additionally, recognized impairment losses on goodwill are not subsequently reversed.

The assumptions we adopted in estimating the future cash flows expected to be derived from the cash-generatingunit consisting of our BOVESPA segment have been based on our analysis of the segment’s performance over thelast few years, and on our analysis and expectations for growth of the exchange industry, in addition to our ownexpectations and strategies.

For assistance in the measurement of the asset’s value in use (recoverable value) we hire external independentvaluation specialists. The valuation report provided by the specialist valuation firm found no impairment chargeswere required to be recognized, so that no adjustments were made to the carrying value of goodwill as ofDecember 31, 2014.

Based on our expectations for growth of the BOVESPA segment, our estimates of future cash flows take intoaccount certain projections of future revenues and expenses for the segment over a time horizon extending fromDecember 2014 to December 2024, with perpetuity derived by extrapolating the 2024 cash flow projection at agrowth rate of 7.11% per annum, which is equivalent to the expected rate of growth for the nominal GDP in thelonger term.

We understand the ten-year projection horizon to be consistent with perception that the variable income segmentof the domestic capital markets is set to undergo an extended period of growth until it reaches longer termmaturity.

In determining the present value of projected cash flows, we applied average pre-tax discount rate of 15.64% perannum.

The three main variables that influence our calculation of value in use are discount rates, the net revenue growthrate and perpetuity growth rates. We ran sensitivity analysis on our projections to determine how changes in thesevariables impact our calculation of value in use. The equivalent pre-tax discount rate for the entire period being15.64% per annum, an increase of 1.10 percentage point (110bps) to the discount rate (from 15.64% to 16.74% perannum) would reduce our calculation of value in use by approximately 12%. Considering a reduction to averageannual income growth of 15% in the period of 2015 to 2024, value in use would is reduced by approximately 12%. And a 0.50 percentage point (50bps) decrease in perpetuity growth rate (from 7.11% to 6.61% per annum) wouldreduce our calculation of value in use by approximately 4%. For purposes of our sensitivity analysis, the variationsof the two parameters that influence our calculation of value in use were determined, for the former variable, onthe basis of a backward-looking standard deviation of discount rates using data for the last five years, and for the


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Starting from July 2010, when we acquired a 3.2% additional interest in the CME Group (for R$1,075,119thousand), thereby increasing to 5% (from 1.8% previously) our aggregate interest in CME shares, we nowaccount for our investment under the equity method, as in our view this ownership interest and the qualitative and

strategic aspects of our partnership with the CME Group give us significant influence over the investee.On December 31, 2014, the carrying value of our investment in the CME Group amounted to R$3,729,147thousand, whereas based on the current market price for the shares, the fair value of the investment as at thatdate totaled R$3,997,780 thousand. Given that the market value of our investment was now lower than its carryingvalue, we have tested the investment for impairment test as of the base date November 30, 2014. The testingfindings have not indicated there is need to recognize impairment losses on our investment in the CME Group.

The impairments tests were performed pursuant to the discounted cash flow method. Taking into account theexpectations for growth of the exchange industry where the CME Group operates, our cash-flow projections takeinto account activity-related revenues and expenses expressed in nominal US Dollars.

The operating cash flow projections cover a time horizon extending from December 2014 to December 2019.Perpetuity was derived by extrapolating 2019 free cash flow projection at a growth rate of 4.73% per annum,which is equivalent to the expected rate of growth for the U.S. nominal GDP in the longer term. The pre-taxdiscount rate used to determine the present value of the projected cash flows was 11.95% per annum.

The three main variables that influence our calculation of value in use are discount rates, net revenue growth ratesand perpetuity growth rates. To determine how changes in these variables impact our calculation of value in use,we ran sensitivity analysis on our projections which showed a 1.0 percentage point (100 bps) increase in equivalentpre-tax discount rate (from 11.95% to 12.95% per annum) would reduce our calculation of value in use byapproximately 13%. Considering a decrease in average annual revenue growth rate on the order of 10% over the

2015 to 2019 horizon would reduce our calculation of value in use by approximately 4%. Meanwhile, a one-quarterof a percentage point (25 bps) decrease in perpetuity growth rate (from 4.73% to 4.48% per annum) wouldreduce our calculation of value in use by approximately 5%. For purposes of our sensitivity analysis, the discountand perpetuity rate variations were determined, for the former variable, on the basis of a backward-lookingstandard deviation of the discount rates using data for the last four years (which best reflect the existing capitalstructure of CME group), and for the latter variable, on the basis of a backward-looking standard deviation of theaverages for 30-year series of data on the United States’ real GDP growth rate variations. In our individual analysisof the above three sensitivity scenarios, no outcome shows the investment value would fall below its carrying valueof December 31, 2014.


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the shareholders’ interests as well as allow BM&FBOVESPA and its subsidiaries to attract and retain theirmanagement and employees. The fair value of options granted is recognized as an expense during the vestingperiod (the period during which the specific vesting conditions must be met). At the balance sheet date,

BM&FBOVESPA reviews its estimates of the number of options that will vest based on the established conditions.BM&FBOVESPA recognizes the impact of any changes to the original estimates, if any, in the income statement,against a capital reserve in equity.

On May 13, 2014, the Special Shareholders’ Meeting approved the amendments to the articles of incorporationwhereby setting up of a stock granting plan was authorized, additionally to the stock option plan. Such plan willhave an impact on net income as from 2015.

For further information regarding the stock options plan of BM&FBOVESPA, please refer to Note to financialstatements number 18 for the year ended December 31, 2014.

Post-retirement healthcare

BM&FBOVESPA offers post-retirement healthcare benefit to the employees who have acquired this right until May2009. The right to this benefit is conditional on the employee remaining with the Company until the retirement ageand completing a minimum service period. The expected costs of these benefits are accumulated over the period ofemployment or the period in which the benefit is expected to be earned, using the actuarial methodology whichconsiders life expectancy of the group in question, increase in costs due to the age and medical inflation, inflationand discount rate. The contributions that participants make according to the specific rule of the Health Care Plan

are deducted from these costs. The actuarial gains and losses on the health care plan for retirees are recognized inthe income statement in accordance with the rules of IAS 19 and CPC 33 - Employee Benefits, based on actuarialcalculation prepared annually by an independent actuary.

For further information regarding the post-retirement healthcare of BM&FBOVESPA, please refer to Note to financialstatements number 18 for the year ended December 31, 2014.

10.6. Financial reporting internal controls

a. Degree of effectiveness of the internal controls; deficiencies and corrective actions.


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(i) operating lease transactions (as lessor or lessee)

There are no material off-balance sheet items. In particular, we have no material operating lease transactionsundisclosed in our consolidated financial statements.

(ii) obligations retained, risk supported under written off pools of receivables (and relatedliabilities)

No pools of receivables have been written off over which we have retained obligations or incurred risk.

(iii) commitments to purchase or sell products or services in the future

There are no material off-balance sheet items. In particular, we have no material purchase or sale commitmentsundisclosed in our consolidated financial statements.

(iv) unfinished construction contracts

We have no construction contracts undisclosed in our financial statements.

(v) take-out financing commitments

We have no take-out commitments agreed with any parties.

b. Other off-balance sheet arrangements

Our Settlement Bank (BM&FBOVESPA Settlement Bank) manages the BM&FBOVESPA FoF, a fund of funds calledFundo BM&F Margem Garantia Referenciado DI Fundo de Investimento em Cotas de Fundos de Investimento , withnet assets of R$136,331 thousand on December 31, 2014 (versus R$66,008 thousand and R$179,440 thousand onDecember 31, 2013 and 2012, respectively.

In addition, in the course of their business the BM&FBOVESPA Settlement Bank provides financial services and

frequently operates as custodian for financial assets and provider of local representation services for nonresidentinvestors. At December 31, 2014 and the comparative years of 2013 and 2012, the BM&FBOVESPA SettlementBank was operating as custodian for (i) securities on behalf of nonresident investors in total amount of R$365,548thousand (versus R$261,952 thousand and R$154,911 thousand, respectively), and for (ii) agricultural securities(registered in the proper custody system we operate) in total amount of R$15,079 thousand (versus R$15,079thousand and R$15,079 thousand, respectively).

10.9. Discussion of off-balance sheet items

(i) how off-balance sheet items change or may change revenues, expenses, interestexpenses, results of operations and other balance sheet line items.


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‘defaulter pays’ model, meaning a loss-sharing arrangement whereby each participant is required to collateralize,to a high degree of reliability, any exposures it creates for other participants, such that losses possibly resultingfrom a party’s default are borne by the defaulting party. Thus, margin requirements, margin calls and other

collateral we may require market participants to post are key elements of the structure by which we managerisks associated with our role as central counterparty clearing house.

Transactions carried out on our markets are typically secured by collateral pledged as margin in the form ofcash, government bonds and treasury bills, corporate debt securities, bank letters of guarantee and stocks,among other things. At December 31, 2014, the aggregate financial value of cash and other collateral pledgedto our clearing houses totaled R$242,079,177 thousand (versus R$214,389,365 thousand and R$176,481,916thousand at December 31, 2013 and 2012, respectively), with all cash collateral registered in the ‘collateral fortransactions’ line item under current liabilities in our balance sheet, whereas the remainder, i.e., non -cash

collateral amounting to R$240,757,242 thousand on December 31, 2014 (versus R$212,316,376 thousand andR$175,347,681 thousand at year-end in 2013 and 2012, respectively) was registered in off-balance sheet non-cash collateral accounts.

For additional information on collateral pledged to our clearing houses and our safeguard structures, see Note 17 toour Financial Statements for the year ended December 31, 2014.

10.10. Business plan.

a. Investments.

(i) Quantitative and qualitative description of ongoing and planned investments.

Since early 2010 we have been investing heavily in setting up a streamlined, efficient, modern technologyinfrastructure, with IT resources to match, with the aim of establishing a solid foundation on which to capturegrowth opportunities to better execute our strategy and build our future. These capital expenditures should furtherboost our strategic position and sharpen our competitive edge.

Our 2010-2016 strategic growth plan calls for R$1.6 billion worth of investments, of which R$240,220 thousandexecuted in 2014 and R$289,224 thousand in 2013, plus R$258,363 thousand, R$204,041 thousand and R$268,362thousand executed 2012, 2011 and 2010, respectively. The larger part of this plan consists of investments intechnology.


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Integrated Central Clearing Facility (IPN).Since completing the integration of the two formerly independent local exchanges into BM&FBOVESPA, one of ourmore important projects has been to combine the four clearing houses (equities and corporate debt securities;derivatives, forex, bonds) we operate into a single, fully-integrated, central clearing facility. Our new centralclearing facility has been planned to give us highly efficient, multi-asset, multi-market, integrated risk managementcapabilities, allow for cross-margining, and improve risk management processes.

The project made headway in the last quarter of 2011, when we announced a partnership with Cinnober, aSweden-based global provider of advanced financial technology, which will include a perpetual license for use ofTRADExpress RealTime Clearing®, their high performance, multi-asset, clearing and real-time risk managementsystem. The RealTime Clearing system (RTC system) will be the backbone our future multi-asset, multi-market,

integrated clearing facility for its technologically innovative , high performing capabilities, high capacity, stability andsecurity features.

Then, late in 2012, we announced the launch of our Post-Trade Integration Program (Programa de Integração daPós-Negociação - IPN) in connection with the upcoming creation of our multi-market central clearing facility, whichwill be based on CORE, or CloseOut Risk Evaluation, our pioneering, purpose-developed central counterparty multi-asset, multi-market, risk management framework, and the lynchpin of a solid risk management systemarchitecture, with performance to match the RTC system.

In August 2014, the new BM&FBOVESPA Clearinghouse went into production for the entire derivatives market ofthe BM&F segment. As well as the new technology infrastructure, there was the implementation of new CORE riskcalculation system. This new integrated clearinghouse has brought greater efficiency in capital allocation to thedeposit of collateral related to multimarket and multi-asset portfolios, increasing BM&FBOVESPA’s competitivedifferentials. For example, on the launch date of BM&FBOVESPA Clearinghouse on the derivatives market, for thesame open interest positions and without increasing the system’s risk, the amount of collateral required wasreduced to R$20 billion. There now begins the development of the second phase of the project, which willencompass the equities and corporate bonds market.


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(locally known as certificados de operações estruturadas , or COEs) and in early 2015 the Company increased itsproduct portfolio with the launch of Scaled CDB and Financial Letter (locally known as letras financeiras, or LFs).

(ii) sources of financing for these investments.

The primary source of funds we currently use to finance our strategic investment plans is operating cash flow. Wemay also consider alternative sources of financing, such as bank loans or a government or development bankfinancing program, or we may elect to source funds by accessing the domestic or international capital markets. In2010, with the aim of sourcing funds with which to pay for an additional interest in CME shares, we carried out across-border offering of global senior notes. We have since been funding our project with our operating cash flow.

(iii) planned and ongoing material divestments.

Not applicable, as there have been no, and there are no material divestments being considered or ongoing.

b. Disclosed acquisitions of plants, equipment, patents and other assets, which are expected

to materially influence production capacity.Integrated central clearing facility . In the second half of 2011 we announced an agreement with Cinnober toadvance our central clearing facility project, which included a perpetual license for use of their TRADExpress RealTime Clearing system. The module for clearing and settlement of financial and commodity derivatives was launchedin August 2014. The implementation of the equities module is scheduled to 2016 and depends on the approval ofregulators.BM&FBOVESPA PUMA Trading System . In the first half of 2010, consistent with our partnership agreement withthe CME Group, we started the joint development and implementation of our co-owned multi-market, multi-assetclass trading system, and through reciprocal licenses and intellectual property of the system. Furthermore, CME

transferred to BM&FBOVESPA, based on the Globex system technology, all of the knowledge necessary for theoperationalization and development of the new platform. As of the first half of 2013, this platform that is co-ownedby the two exchanges has now replaced our previous trading systems.New data center . In 2010 we purchased a 20,000 square meter plot of land in Santana do Parnaíba, state of SãoPaulo, Brazil. In 2012 we started the construction of our new data center, which was concluded on the first half of2014, now we are initiating the phase of equipment’s acquisition and platforms migration to the new facility.Expansion and modernization the registration systems. In second half of 2011 we announced the development ofour new platform for registration and treatment of transactions in OTC derivatives, corporate debt securities andfinancial instruments. The OTC platform was completed in the second half of 2013 .


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ATTACHMENT II

Information regarding the allocation of earnings proposal, required in Annex 9-1-

II of CVM Instruction nº 481, of December 17, 2009

1. Report the net income for the period. Net income in the year of 2014 was R$977,053,025.26.

2. Report the global amount and value per share of the dividends, including already-declared anticipated dividends and interest on shareholders’ equity.

The global amount to be distributed to the dividends account is R$781,642,000.00.

Once there has been the approval of the proposal for the distribution of dividends, to besubmitted to the Ordinary General Shareholders Meeting, the global amount of the dividends

per share will be R$0.428896, including the dividends that have already been declared, inaccordance with the table below. The value that is reported is an estimated one, as the proposalfor the distribution to shareholders of the remaining amount in balance as dividends - to thevalue of R$0.103163 per share - may be modified due to the divestiture of treasury stock tomeet the exercise of call equity options that have been granted in the scope of the company’sStock Options Plan and the eventual purchase of equities within the scope of the company’sBuyback Plan.


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gross value to be distributed as dividends is R$0.428896 per ordinary share (estimated valuethat may change due to the divestiture of treasury stock to meet the exercise of call equity

options granted within the scope of the company’s Stock Options Plan and the eventual purchase of equities within the scope of the company’s Buyback Plan).

b. The form and the timeframe for the payment of the dividends and interest on

shareholders’ equity;

If approved by the Ordinary General Shareholders Meeting to be held on March 30, 2015, the payment of declared dividends will occur on April 28, 2015.

c. Eventual monetary restatement and interest on dividends and interest on

shareholders’ equity;

There will be no monetary restatement and interest on dividends and interest on shareholders’equity.

d. Date of the declaration of payment of the dividends and interest onshareholders’ equity, considered for identification of the shareholders that will

have the right to receive these;

If approved by the Ordinary General Shareholders Meeting to be held on March 30, 2015, April15, 2015 will be considered for the identification of the shareholders that will have the right toreceive the dividends.

G O OS


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accounting pronouncement CPC 41 – Earnings per Share, issued by the AccountingPronouncements Committee.

2014 2013 2012

Net income in the year 977,053,025.26 1,081,516,765.50 1,074,289,736.88

Weighted average volume of thefree float - ON 1,837,383,111 1,918,813,109 1,930,398,048

Basic earnings per share (R$) 0.531763 0.563638 0.556512

b. Dividends and interest on shareholders’ equity distributed in the previous three

(3) years;

DescriptionGross per

share (R$)Share type Total gross value

Dividends 0.116161 ON 224,341,000.00

Dividends 0.124359 ON 240,065,000.00

Dividends 0.067921 ON 131,181,000.00Interest on shareholders’equity

0.046599 ON 90,000,000.00

Dividends 0.201237 ON 388,702,736.88

Total distributed in 2012 1.074.289.736.88

DescriptionGross per

share (R$)Share type Total gross value

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b. Detail the form of calculation of the legal reserve.

There is no proposal for the allocation of a portion of the earnings for the formation of a legalreserve, as per item ‘a’ a bove.

9. If the company has preferred shares with fixed or minimum dividends rights:

a. Describe the form of calculation of the fixed or minimum dividends;

b. Report whether the income for the year is sufficient for full payment of the fixed

or minimum dividends;

c. Identify whether an eventual unpaid portion is cumulative;

d. Identify the global value of the fixed or minimum dividends to be paid to eachclass of preferred shares;

e. Identify the fixed or minimum dividends to be paid per preferred share of each

class

The Company only issues ordinary shares.

10. In relation to the mandatory dividend:a. Describe the manner of calculation foreseen in the bylaws;

According to article 55 of the Company’s corporate bylaws, after constituting the legal reserve,remaining earnings must be readjusted for the constitution of contingency reserves andrespective offsetting, if such is the case. Of the remaining amount in balance, 25% shall beallocated for payment of the mandatory dividend.

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13. Where there is the allocation of earnings to an unrealized income reserve:

a. Report the amount allocated for the unrealized income reserve;b. Report the nature of the unrealized income that gave origin to the reserve.

There is no proposal for the allocation of net earnings for the constitution of an unrealizedincome reserve.

14. Where there is the allocation of earnings to statutory reserves:

a. Describe the statutory clauses that establish the reserve;

According to article 55 of the Company’s Corporate Bylaws, after the constitution of the LegalReserve, remaining income, readjusted by the constitution of contingency reserves andrespective offsetting, if such is the case, shall be distributed in the following order: (i) 25%, atleast, will be allocated for the payment of the mandatory dividend owed to the shareholders(which may be limited to the amount of net income for the year that will have been executed, aslong as the difference is registered as an unrealized income reserve); and (ii) the totality of the

remaining net income will be allocated for the constitution of a statutory reserve that shallbe used for investments and to compose safeguard funds and mechanisms necessary for

appropriate development of the activities of the Company and its subsidiaries, assuring

the sound settlement of the trades executed and/or registered in any of its environments

and trading, registration, clearing and settlement systems and custody services. The total value allocated to the statutory reserve may not surpass the capital stock of theCompany.The Board may also, considering that the amount of the statutory reserve is sufficient to meet

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16. Where there is income allocated to the tax incentives reserve:

a. Report the amount allocated to the reserve;

b. Explain the nature of this allocation.

There is no proposal for the allocation of net earnings to the tax incentives reserve.


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ATTACHMENT III

Information about the Nominated Candidate Directors requested inSubsections 12.6 through 12.10 of the Reference Form – CVM Ruling 480

dated December 7, 2009

12.6. Information on the Directors

12.6.1. Board of Directors

André SantosEsteves

AntonioCarlosQuintella

Charles PeterCarey

Claudio Luizda SilvaHaddad

Denise PauliPavarina

EduardoMazzilli de

Vassimon

Age 47 49 58 68 51 57

Profession Systems analyst EconomistBusiness Administrator

Mechanical andIndustrialEngineer

Bank employee Economist

Taxpayer

ID (CPF)857.454.487-68 864.614.277-91 - 109.286.697-34 076.818.858-03 033.540.748-09

Position DirectorIndependentDirector Director

IndependentDirector Director Director

Electiondate

03.30.2015 03.30.2015 03.30.2015 03.30.2015 03.30.2015 03.30.2015

Investituredate

03.30.2015 03.30.2015 03.30.2015 03.30.2015 03.30.2015 03.30.2015

Term of

Through to thedate of theannual meetingthat convenes






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meeting thatconvenes to judgethe 2016 financial

statements


statements


statements


statements


statements

OtherPositions

InvestmentIntermediationIndustryCommitteeCoordinator;Nominations andGovernanceCommitteemember;Compensation

Committeemember

-

Risk CommitteeCoordinator; AdvisoryCommittee for theSecuritiesIntermediationIndustry member

Audit CommitteeCoordinator

Governance andNominationsCommitteeCoordinator;CompensationCommitteeCoordinator; RiskCommitteemember

AppointedbyControllingShareholder

No No No No No

12.7. Advisory Committees to the Board of Directors

Not applicable as the new composition of the advisory committees to the Board of Directors will only be defined ata later time by the Members of the Board of Directors themselves elected at the Annual General meeting of March30, 2015 pursuant to Article 29, indent (u) of the Company’s bylaws.

12.8. Directors’ and Executive Officers’ Resumes

a. Resumeb. Judgments of guilt in administrative and court (including criminal) proceedings regarding the

directors

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stipulating a monetary fine of one hundred thousand Reais (R$100,000.00), which was paid in full and thecase closed.

2) Consob Proceeding 18165: Investigation within the civil sphere by the Commissione Nazionale per leSocietá e La Borsa – CONSOB, in Europe, regarding improper secondary use of inside information whentrading securities of Cremonini S.p.A, which at the time was in negotiations about a partnership with JBSS.A., by director André Santos Esteves in November 2007. CONSOB ruled, at the lower level, for a fine of €350,000.00, suspension from all activities as an administrator of companies regulated by the CONSOBand the freezing of the profit supposedly obtained from the trade. Given its administrative nature, thedecision carries no consequences in the criminal sphere. Although he continues to believe that theallegations of CONSOB are groundless, Director André Santos Esteves decided to refrain from appealing,since he was of the opinion that such an appeal would delay even further the conclusion of theproceeding. It should also be clarified that his decision not to pursue this in no way represents aconfession or acknowledgement of any of the alleged facts.

Antonio Carlos QuintellaIndependent DirectorFounding partner of Península Investimentos. He was Chairman of Credit Suisse Hedging-Griffo, headquartered inSão Paulo (2012-2014), and CEO of Credit Suisse Americas and member of the Executive Board of the Credit SuisseGroup (2010-12) and CEO Credit Suisse Brazil (2003-10). He joined Credit Suisse in 1997, as Senior RelationshipBanker of the Investment Banking division and was appointed CEO of the operations of Credit Suisse Brazil in 2003.

As CEO of Credit Suisse Brazil he oversaw the expansion of the bank’s presence in that market, including theacquisition of Hedging-Griffo, in 2007. He is a member of the Board of Directors of Fundação OSESP and sits on theDeliberative Council of the Credit Suisse Hedging Griffo Institute, the Global Advisory Board of the London BusinessSchool, the International Advisory Board of the New York Philharmonic and the Board of Directors of CyrelaCommercial Properties – CCP. He holds a degree in Economics from the Pontifical Catholic University of Rio deJaneiro and an MBA from the London Business School (University of London).Management positions in other public companies: None. No judgment of guilty, in the last five years, has been entered against Mr. Quintella in any disciplinary or courtproceedings (final or otherwise).

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Denise Pauli Pavarina

DirectorShe holds a degree in Economics from Faculdade Armando Álvares Penteado - FAAP and in Law from UniversidadePaulista - UNIP, with an Executive MBA in Finance from Instituto Insper. She began her career in March 1985 atBanco Bradesco de Investimento S.A., a financial institution that merged with Banco Bradesco S.A. in November1992. At Bradesco, she held the positions of Underwriting Manager and Manager of the Managed PortfolioDepartment. In September 1996 she was promoted to the position of Executive Superintendent, being appointedDepartmental Head in January 2001. In June 2006 she was appointed an Executive Officer of Banco Bradesco BBIS.A. and in January 2007, Departmental Manager, remaining until December 2009 when she returned to Bradescoand was appointed Departmental Head. In January 2012 she was appointed Deputy Executive Officer and, inFebruary 2015, Managing Executive Officer, a position she currently holds. She is also and Managing Director ofBram - Bradesco Asset Management S.A. Distribuidora de Títulos e Valores Mobiliários, having previously held theposition of Executive Superintendent. She is a member of the Steering Committee of Fundação Bradesco andDirector of FIMADEN, a foundation institute devoted to the treatment of digestive system and nutrition disorders.In addition to these activities she is President of the ANBIMA - the Association of Brazilian Financial and CapitalMarket Entities, a director of 2bCapital S.A., an Investment Committee member at NEO Capital Mezanino, an equityfund, Member of the National Committee for Financial Education - CONEF, Member of the Council ofRepresentatives of the National Confederation of Financial Institutions - CNF, Director of Instituto BRAiN - BrasilInvestimentos & Negócios and an alternate Director of Sete Brasil Participações S.A. She was a Director of CieloS.A., Bica de Pedra Industrial S.A., Companhia Siderúrgica Belgo-Mineira, CPM Braxis S.A., Latasa S.A. and São

Paulo Alpargatas S.A., an alternate member of the Steering Committee of ABRASCA - the Brazilian Association ofPublicly-listed Companies, Member of the Consultative Council of ANCORD – the National Association of BrokerageHouses and Securities Distributors, Foreign Exchange and Commodities, executive officer of UGB Participações S.A.,and Institutional Relations Officer and Advisor to the Association of Capital Market Analysts and InvestmentProfessionals - APIMEC São Paulo.Management positions in other public companies: She is an Executive Officer and Manager at BancoBradesco S.A. She was a Director of Cielo S.A. and of São Paulo Alpargatas S.A (current name: Alpargatas S.A.).No judgment of guilty, in the last five years, has been entered against Ms. Pavarina in any disciplinary or courtproceedings (final or otherwise).

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Management Committee of the Americas. Between 1994 and 1997 he was the officer responsible for the followingsegments: Head of Fixed Income, Equities Trading, Sales and Research at ING Barings Brazil. He was also aneffective member of the Branch Management, Credit and Trading Risk Management Committees, as well as CEO of

ING Brokerage House in Brazil. He was a member of the boards of Gávea Investimentos S.A., FEBRABAN, ANBIMA,Fundação Brasileira de Proteção da Juventude e Infância and the Emerging Markets Traders Association. He wasalso Vice President of the Federação Bancária Brasileira - Treasury from 2000 to 2002.Management positions in other public companies: He was a Director of Banco Santander (Brasil) S.A., andhe is a Director at BM&FBOVESPA. No judgment of guilty (final or otherwise) has been entered against Mr. Berenguer Neto in any disciplinary or courtproceedings in the last five years.

Luiz Antonio de Sampaio CamposIndependent DirectorLawyer specializing in Corporate Law, founding partner of law firm Barbosa Müssnich & Aragão - Advogados.He was a Director of the Brazilian Securities Commission from 2001 to 2004, where he participated in creating rulesthat cleared the way for a substantial restructuring of the stock market, such as CVM Instructions 361 and 400.He joined Barbosa Müssnich & Aragão – Advogados in 1995 as a founding partner, cutting ties with the officeduring the period when he joined the executive board of CVM, and returning in March 2005.Management positions in other public companies: Member of Fiscal Council of Nitro Carbono S.A. and PronorPetroquímica S.A.No judgment of guilty (final or otherwise) has been entered against Mr. Sampaio Campos in any disciplinary or

court proceedings in the last five years.

Luiz Fernando FigueiredoIndependent DirectorBusiness administrator specializing in Finance from Fundação Armando Álvares Penteado (FAAP), having been aprofessor on that institution’s MBA Program. He is co-founder and Lead Managing Partner at Mauá SekularInvestimentos and currently serves as a Director of the Association of Brazilian Capital and Financial Market Entities(ANBIMA). In the past he has served as Director of Grupo Pão de Açúcar, President of the Association of CapitalMarket Investors (Brazilian acronym, AMEC) and a Director of Industry Romi. He was co-founding partner of Gávea

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the Board of Directors da XBRL International Inc. (2009 –2011); former member of the Financial Crisis AdvisoryGroup (FCAG) from 2008 to 2010 on the initiative of the Financial Accounting Standards Board (FASB) and theIASB; first independent President of the Standards Advisory Council (SAC) of the IASB, (2005 - 2008); former

member of the Consultative and Advisory Group (CAG) of the International Assurance and Auditing StandardsBoard of the International Federation of Accountants (IFAC) from 2005 to 2010; consultant retained by the WorldBank for matters of the Brazilian Financial System and for matters of the Audit Accounting Reforms in Brazil (2003);former Deputy Director of the IAA (Interamerican Accounting Association); President with five (05) terms of officeand a permanent member of the Brazilian delegation on the Intergovernmental Group of Specialists in AccountingStandards and Financial Reports, a UNCTAD/UNO body.Management positions in other public companies: Former director of Banco Nossa Caixa S.A., do BancoBBVA Brasil S.A., Banco Excel-Econômico S.A.; Vicunha Têxtil S.A.; Banco de Crédito Real de Minas Gerais – CREDREAL; former Coordinator of the Audit Committee of Banco Nossa Caixa S.A. and of the Finance and RisksCommittee of Vicunha Têxtil S.A. He is a member of the Board of Directors of BM&FBOVESPA. No judgment of guilty (final or otherwise) has been entered against Mr. Carvalho in any disci

Annual Shareholders' Meeting - 03.30.2015 - Management Proposal

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