Indicative Rating. . www.arcratings.com LOCAL EXPERTISE, SHARED - PDF document

Indicative Rating. . www.arcratings.com LOCAL EXPERTISE, SHARED INSIGHT LOCAL EXPERTISE, SHARED INSIGHT , LOCAL EXPERTISE, SHARED INSIGHT LOCAL EXPERTISE, SHARED INSIGHT BETTER JUDGMENT BETTER JUDGMENT BETTER JUDGMENT BETTER JUDGMENT November, 2013 November , 2013 November November , 2013 , 2013

Indicative Rating Indicative Rating is an assessment of the credit risk: - upon request from the entity whose commitments are subject to indicative rating; - with ARC Ratings’ option of not assigning it in the case ARC Ratings considers that the issuer is too complex to be subject to a simplified analysis; - that is not a rating as defined in REGULATION (EC) N.º 1060/2009 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 September 2009 (Regulation 1060/2009) on credit rating agencies and in REGULATION (EC) N.º 513/2011 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 May 2011, that amends Regulation 1060/2009, since it is strictly for private use and may not be made public neither by the issuer nor by ARC Ratings; - that is based on all information deemed necessary, including confidential information; - with complete confidentiality guaranteed by ARC Ratings through confidentiality agreements; - in which ARC Ratings will assign a range of notations with the maximum amplitude of three notches in the case of medium and long term rating, and two notches in the case of short-term rating; - that can not be taken in any way as a guarantee of a rating if the issuer chooses to move forward with a "normal" rating process; if a “normal” rating, engaged within six months after the Indicative Rating assignment, is turned public, the public report and ARC Ratings’ website will include a disclaimer that the issuer was subject to an Indicative Rating at a certain date, without mentioning the rating assigned; - in which the report and any communications with the issuer will never have the character or nature of advice; - without continuous monitoring (reflects the information existing at the time ARC Ratings assigns it and ARC Ratings has no obligation to follow the subsequent evolution of the issuer); - with its implementation procedures contained in ARC Ratings’ Organization and Procedures Manual, highlighting differences as compared to a “normal” rating procedure: the simplification of information and analysis; • the elaboration of a single report, to be submitted for approval to the issuer, and to which will subsequently be • attached a chapter "Notation", containing the rating assigned; the communications between analysts and the issuer shall be made preferably in writing; in case there are • telephone calls or any other unwritten communications (including video-conferences) they will be recorded; if there are meetings, there will be signed minutes or with proof of acceptance by the issuer; - which process complies with ARC Ratings’ Code of Conduct; - that can be used as the basis for a “normal” rating, both in terms of analysis and in terms of the discount of the fee 2/4

paid for the Indicative Rating in the fees due for a “normal” rating, as long as the rating process is engaged in the six months following the assignment of the Indicative Rating; - in which ARC Ratings’ responsible for the compliance function must be informed in advance of all meetings, having the option of witnessing them, checking its minutes or exempt himself from any of these acts, and also having the option of listening to any phone call or any other unwritten communication recording. - Indicative Rating is based on information, including confidential information, collected from a wide group of sources, and in particular from the issuer. ARC Ratings uses and treats this information with due care and attention. Although all due care is taken in the collection, cross-checking and processing of the information for the purposes of Indicative Rating, ARC Ratings cannot be held liable for its truthfulness. Information and Analysis Information Request (list to be submitted by ARC Ratings) - Essential information: the definition of the commitment subject to rating; • last two years annual reports and accounts and the more recent interim accounts, whenever the analysis is being • made after May, and their balance sheets; major shareholders and eventual shareholders’ agreements; • main relevant legislation; • main characteristics of the principal markets in which the analyzed entity operates; • detailed characteristics of financial debt; • insurance policies summary; • medium and long term plan / budget; • response to a questionnaire to be prepared by ARC Ratings that addresses a range of relevant topics, including: • o level of concentration and dependence on customers and suppliers; o sales breakdown by geographical markets and product classes; o direct and indirect competitors o relative position of its key brands in the markets in which it operates; o main competitive advantages and strengths of the company; 3/4

o main difficulties / weaknesses of the company; o organizational structure and staffing; o ... Meetings The norm will be to have a meeting with the issuer’s management for clarification of strategy and discussion of key risks. The issuer will nominate a correspondent to liaise with ARC Ratings. Report A single report with the notation. Points covered by the report: - Issue; - Institutional Framework: shareholders; • legislation; • - Operational Analysis; - Economic and Financial Analysis; - Perspectives. About ARC Ratings ARC Ratings, S.A. is an international credit rating agency based in Europe and registered with the European Securities and Markets Authority (ESMA). Gathering the know-how and background of five experienced partner agencies on four continents (ARC Ratings, Credit Analysis and Research Limited, from India, Global Credit Rating Company Limited, from South Africa, Malaysian Rating Corporation Berhad, from Malaysia, and SR Rating – Prestação de Serviços, Ltda., from Brazil), ARC Ratings takes advantage of its global reach, local expertise and network-based approach to best serve issuers and investors by assigning stable credit ratings that optimally identify credit risk. This global partnership pools decades of industry experience and ratings expertise on four continents. 4/4