BASIC DATE: January 24, REQUESTING PARTY:

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1 REPORT: RJ-0043/11-01 BASIC DATE: January 24, REQUESTING PARTY: ESTÁCIO PARTICIPAÇÕES S.A., a company with head offices at Av. Embaixador Abelardo Bueno, nº 199, sala 601, bairro Barra da Tijuca, City and State of Rio de Janeiro, with CNPJ/MF (Corporate Taxpayer Identification) No / , hereinafter referred to as ESTACIO. SUBJECT: SOCIEDADE EDUCACIONAL ATUAL DA AMAZÔNIA LTDA., a company with principal place of business at Rua Y, nº 308, bairro União, City of Boa Vista, State of Roraima, with CNPJ/MF (Corporate Taxpayer Identification) No / , hereinafter referred to as FACULDADE ATUAL. SUBJECT: Appraisal of FACULDADE ATUAL, in order to comply with Article 256 of Law 6.404/76 (Brazilian Corporate Law) in the transaction of acquisition of FACULDADE ATUAL by IREP SOCIEDADE DE ENSINO SUPERIOR, MÉDIO E FUNDAMENTAL LTDA., with CNPJ/MF No / , hereinafter referred to as IREP, controlled by ESTÁCIO. 1

2 EXECUTIVE SUMMARY APSIS was appointed by ESTÁCIO in order to appraise the value of FACULDADE ATUAL, to comply with Articloe 256 of Law 6.404/76 (Corporate Law), in the transaction of acquisition of FACULDADE ATUAL by IREP, controlled by ESTÁCIO. The appraisal is made using the methodologies mentioned in the said law, in Article 256, II: a) Average quotation of the shares in the stock exchange or organized over-the-counter market, during the ninety (90) days before the transaction date; b) Value of the owners equity of the share, having appraised the assets at market prices; c) Value of net income per share. The technical proceedings employed herein are in agreement with the criteria established by appraisal regulations. The chart below presents the summary of the results computed, comparing the acquisition value with the highest of the three amounts found: Value of the average stockexchange quotation of the shares in the last 90 days Not applicable to this analysis Value of the Shareholders Equity per share, assessed at market price: (R$81.84) Value of the Net Income per share Not applicable to this analysis Value of acquisition per share R$ Comparison with the value of acquisition -2.55x 2

3 SUMMARY 1.INTRODUCTION PRINCIPLES AND CAVEATS LIMITS OF LIABILITY APPRAISAL METHODOLOGY CHARACTERIZATION OF FACULDADE ATUAL APPRAISAL AVERAGE QUOTATION OF THE SHARES LISTED IN STOCK EXCHANGE APPRAISAL VALUE OF THE SHAREHOLDERS EQUITY AT MARKET PER SHARE APPRAISAL - VALUE OF NET INCOME PER SHARE APPRAISAL VALUE OF ACQUISITION PER SHARE OF FACULDADE ATUAL CONCLUSION LIST OF SCHEDULES

4 1. INTRODUCTION APSIS CONSULTORIA EMPRESARIAL Ltda., hereinafter referred to as APSIS, with head offices at Rua da Assembléia, nº 35, 12º andar, Centro, in the City of Rio de Janeiro, in the State of Rio de Janeiro, with CNPJ/MF No / , with appointed by ESTÁCIO to appraise the value of FACULDADE ATUAL, in order to comply with Article 256 of Law No. 6404/76 (Corporate Law), in the transaction of acquisition of FACULDADE ATUAL by IREP, controlled by ESTÁCIO. In the preparation of that work, there was the use of data and information provided by third parties, in the form of documents and oral interviews with the customer. The estimates used in this process are based on documents and information, which include, among others, the following: Balance sheets of FACULDADE ATUAL of 2009, 2010 and on the basic date. The APSIS team responsible for conducting this work is composed of the following members: AMILCAR DE CASTRO Project manager ANA CRISTINA FRANÇA DE SOUZA Civil engineer Post-graduation in accounting (CREA/RJ ) BETINA DENGLER Project manager CLAUDIO MARÇAL DE FREITAS Accountant (CRC/RJ 55029/O-1) FLAVIO LUIZ PEREIRA Accountant (CRC/RJ O-9) GABRIEL ROCHA VENTURIM project manager LUIZ PAULO CESAR SILVEIRA Mechanic engineer Master in business administration (CREA/RJ ) MARGARETH GUIZAN DA SILVA OLIVEIRA Civil engineer (CREA/RJ ) RICARDO DUARTE CARNEIRO MONTEIRO Civil engineer Post-graduation in economic engineering (CREA/RJ D) SÉRGIO FREITAS DE SOUZA economist (CORECON/RJ ) 4

5 2. PRINCIPLES AND CAVEATS The report subject matter of this work faithfully obeys the fundamental principles described below: The consultants have no personal inclination in relation to the matter involved herein and do not derive any advantage therefrom, and there is no conflict of interest that prevent them from preparing this report. To the best knowledge and credit of the consultants, the analysis, opinions and conclusions expressed herein are based upon data, actions, researches, and assessments that are true and correct. The report contains all the limitative conditions imposed by the methodologies adopted, which affect the analysis, opinions and conclusions contained herein. The professional fees of APSIS are not, in any manner, determined in accordance with the conclusions of this report. APSIS assumes total liability for the matter of Appraisal Engineering, including implicit liabilities, in connection with the discharge of its honorable functions, especially those established by specific laws, codes and regulations. We presume to be correct the information received from third parties, and the sources are informed in the said report. The report was prepared by APSIS and no one, except for its own consultants, has prepared the analysis and respective conclusions. For purposes of projection, we are based on the presupposition of inexistence of burden or encumbrance of any kind, whether judicial or extrajudicial, affecting the companies in question, other than those listed in this report. This report complies with the specifications and criteria established by USPAP (Uniform Standards of Professional Appraisal Practice), in addition to the requirements imposed by different agencies, such as: Ministry of Finance, Central Bank, Banco do Brasil, CVM (the Brazilian Securities Commission), SUSEP (the Brazilian Insurance Regulator), RIR (Income Tax Regulations), etc. 5

6 3. LIMITS OF LIABILITY For the preparation of this report, APSIS used information and data of background audited by third parties or unaudited and unaudited projected data, furnished in writing or orally by the management of the company or obtained from the sources mentioned. Therefore, APSIS assumed as true the data and information obtained for this report and has no liability for the truth thereof. The scope of this work does not include the audit of the financial statements or review of the works conducted by the auditors. Our work was conducted in order to be used by the REQUESTING PARTY and others involved in the project, for the purpose already described. We are not liable for occasional losses incurred by the REQUESTING PARTY and its shareholders, officers, creditors or other parties in consequence of the utilization of the data and information provided by the company and contained herein. The analysis and the conclusions contained herein are based on several premises, carried out on the date hereof, of future operating projections, such as: prices, volumes, market share, revenues, taxes, investments, operating margin, etc. Hence, the future operating income of the company may be different from any prediction or estimate contained herein. 6

7 4. APPRAISAL METHODOLOGY MARKET APPROACH: STOCK-EXCHANGE QUOTATION This methodology seeks to appraise a company by adding all its shares at market price. Since the price of a share is defined by the present value of the flow of future dividends and of a selling price at the end of the period, at a return rate required, on an Ideal Financial Market, this approach will indicate the right value of the company for investors. ASSET APPROACH SHAREHOLDERS EQUITY AT THE MARKET This methodology derives from the generally accepted accounting principles (PCGA), in which the financial statements are prepared according to the principle of historical cost, or acquisition cost. Because of this principle and the fundamental accounting principle, the book value of the assets of a company less the book value of its liabilities is equal to the book value of its shareholders equity. On the other hand, the basic principles of economy allow us to create the following appraisal technique: the value defined for the assets less the value defined for the liabilities is equal to the value defined for the shareholders equity of the company. From the perspective of appraisal, the relevant definitions of value are those adequate for the subject being appraised. The approach of the assets, therefore, is meant to appraise the company by the adjustment of book value (net balance) to its respective fair market values. The assets and liabilities deemed relevant are appraised by the fair market value, and then there is a comparison between this amount and the book value (net balance). These adjustments, duly analyzed, are added to the value of the accounting Shareholders Equity, thereby determining the market value of the company through the asset approach. The fair market value of the company will be the value of the Shareholders Equity, considering the adjustments found for the assets and liabilities appraised. INCOME APPROACH: FUTURE YIELD This methodology defines the future yield of the company according to the projected net income and carrying this result to present value. The projection period of the net income is determined taking into account the time that the company will take to present a stable operating activity, that is, without operating variations deemed to be material. The net income is then brought to present value, using a discount rate, which will reflect the risk associated with the market, company and capital structure. PROJECTION FOR FUTURE INCOME For the computation of future yield, we used as the measure of income the Net Income, where: Profit before noncash items, interest and taxes (EBITDA) (-) Noncash items (depreciation and amortization) (=) Net income before taxes (EBIT) (-) Income Tax and Social Contribution (IR/CSLL) (=) After-tax net income 7

8 RESIDUAL VALUE After the end of the projection period, perpetuity is considered, which comprises all the flows to be generated after the last year of the projection and the respective growths. The residual value of the company (perpetuity) is generally estimated by the use of the model of constant growth. This model assumes that after the end of the projection period, the net income will have a constant perpetual growth. It calculates the value of the perpetuity in the last year of the projection period, by means of a model of geometric progression, and then carries it to the first year of projection. Discount Rate The discount rate to be used to calculate the present value of the yield determined on the projected cash flow corresponds to the minimum yield required by investors, considering that the company will be financed partially by shareholders equity (equity), which requires a yield higher than that obtained in a standard-risk investment, and partially by liabilities to outsiders (debt). This rate is computed using the methodology WACC - Weighted Average Cost of Capital, a model in which the cost of capital is determined by the weighted average of the economic value of the components of the capital structure (equity and debt), as described below: Cost of real shareholders equity Rf Rp Rm beta Leveraged beta Cost of debt to outsiders Rf (*) Alfa Discount Rate Re = Rd = We = Wd = Re = Rf + beta*(rm Rf) + Rp Risk-free rate based on the yearly interest rate of the US Treasury for 30-year bonds, considering the long-term US inflation Country Risk corresponds to the risk of investing in a country in question in comparison with a similar investment in a country considered to be safe. Market risk it measures the valuation of a totally diversified portfolio of shares for a 30-year period. Adjusts the market risk to the risk of a specific sector. Adjusts the beta of the sector to the risk of the company. Rd = Rf (*) + alfa + Rp Risk-free rate based on the yearly interest rate of the US Treasury for 10-year bonds, considering the long-term US inflation Specific risk corresponds to the risk of investing in the company under analysis. WACC = (Re x We) + Rd (1 t) x Wd Cost of shareholders equity. Cost of debt to outsiders. Percentage of the shareholders equity in the capital structure. Percentage of the debt to outsiders in the capital structure. 8

9 T = Actual rate of the income tax and social contribution of the company. 9

10 5. CHARACTERIZATION OF FACULDADE ATUAL SOCIEDADE EDUCACIONAL ATUAL DA AMAZÔNIA LTDA. is the maintainer of Faculdade Atual da Amazônia FAA. FAA offers different on-site courses of graduation and post-graduation, and is the leading institution of private higher education in the State of Roraima, with a market share estimated at 40%. BACKGROUND. The Project of Faculdade Atual da Amazônia was created after a diagnosis about the reality of higher education in the state of Roraima in In 2000, it started a small class of specialization in business consultancy, in partnership with Universidade Federal de Roraima (UFRR) and the Serviço de Apoio a Micro e Pequena Empresa (Sebrae). COURSES Faculdade Atual da Amazônia has more than 160 professors, 150 collaborators and 4,000 students distributed in the courses of Law, Business Administration, Information System, Accounting Science, Advertising, Journalism, Pedagogy and Computing, Technician in Public Management, Technician in Agribusiness Management, Technician in Events, Technician in Executive Secretary, Technician in Environmental management, and Technician in Managerial Processes, Technician in Foreign Trade, in addition to post-graduation courses in partnership with Fundação Getúlio Vargas. It was established in Boa Vista definitively, and started its activities at Colégio Colméia, in March 2001, date on which it was authorized by the Ministry of Education, through Ordinance No Little time later, it started the construction of the campus, in an area with more than 150,000 sq.mts., and today with more than 12,000 sq.mts. of built-up area and common area with parking lot, sports complex and integration square, in the neighborhood called União. 10

11 6. APPRAISAL AVERAGE QUOTATION OF THE SHARES LISTED IN STOCK EXCHANGE FACULDADE ATUAL is a limited-liability company and, therefore, it does not have shares traded in a stock exchange and organized over-the-counter market. This methodology does not apply to this analysis. 11

12 7. APPRAISAL VALUE OF THE SHAREHOLDERS EQUITY AT MARKET PER SHARE This report uses the approach of assets for the appraisal of the consolidated Shareholders Equity, at market value, of FACULDADE ATUAL. We adopted the book values as the market values, according to the charts below. SOC. EDUCAC. ATUAL DA AMAZONIA LTDA BALANCE STATEMENT (R$) ACCOUNTING STATEMENTS BALANCE ON JANUARY 24, 2011 MARKET ADJUSTMENTS ADJUSTED BALANCES CURRENT ASSETS 3,952, ,952, Cash 20, , Cash in bank 9, , Accounts receivable 3,798, ,798, Other receivables 24, , Taxes recoverable 98, , NONCURRENT 2,340, ,340, ASSETS NONCURRENT 83, , RECEIVABLES Other accounts 83, , (consortia) PERMANENT 2,257, ,257, ASSETS Investments 1, , Fixed assets 2,255, ,255, Library 481, , Machines and 1,146, ,146, equipment Furniture and utensils 620, , Facilities 6, , Total assets 6,292, ,292, SOC. EDUCAC. ATUAL DA AMAZONIA LTDA BALANCE STATEMENT (R$) ACCOUNTING STATEMENTS BALANCE ON JANUARY 24, 2011 MARKET ADJUSTMENT S ADJUSTED BALANCES CURRENT 10,622, ,622, LIABILITIES Suppliers materials 366, , and services Social obligations 240, , Employment 1,161, ,161, obligations Tax liabilities 1,399, ,399, Provision for contingencies 57, ,

13 Related parties 7,232, ,232, (IREP Soc. Ens. Superior) Loans and financing 165, , NONCURRENT 3,526, ,526, LIABILITIES LONG-TERM 3,233, ,233, LIABILITIES Financing/installmen 3,191, ,191, t plans Other liabilities 42, , INCOME OF 292, , FUTURE PERIODS Anticipated revenue 292, , SHAREHOLDERS EQUITY (7,856, ) (7,856, ) Capital stock 96, , Income of the period 757, , Retained earnings (losses) (8,710, ) (8,710, ) TOTAL LIABILITIES 6,292, ,292,

14 8. APPRAISAL - VALUE OF NET INCOME PER SHARE. According to Article 256, Item 2, c, the projected income cannot correspond to more than 15 times the average yearly net income per share in the two last fiscal years, adjusted for inflation at the IGP-M rate. Considering that FACULDADE ATUAL has had a negative average shareholders equity in the two last fiscal years before the basic date, this methodology does not apply to this analysis. 14

15 9. APPRAISAL VALUE OF ACQUISITION PER SHARE OF FACULDADE ATUAL The value payable by IREP for shares corresponding to 100% of the capital stock of FACULDADE ATUAL will be R$ 20 million. Valor de aquisição por quota Valor de Aquisição Nº de quotas adquiridas (100%) Nº total de quotas R$ 208,33 R$ , Value of Acquisition per share Acquisition Value No. of shares acquired Total number of shares R$ R$20,000, ,000 96,000 15

16 10. CONCLUSION In the light of the examinations conducted in the documentation mentioned before and taking into account the studies of APSIS, the experts concluded that the value to be paid by IREP per share of FACULDADE ATUAL exceeds by one and a half times the highest of the three amounts computed, according to the methodologies prescribed in Article 256, II, of Law 6.404/76 (Corporate Law), on the basic date of January 24, 2011, according to the following schedule. Appraisal report RJ-0043/11-01 was prepared in the form of Digital Report (PDF document), with the digital certification of the persons responsible and printed by APSIS, composed of fifteen (15) pages typed on one side and two (2) schedules. APSIS Consultoria Empresarial Ltda., CREA/RJ and CORECON/RJ RF/ , a company specialized in asset appraisal, lawfully represented by its undersigned officers, is at your disposal for any further explanation that may be deemed necessary. Value of the average stockexchange quotation of the shares in the last 90 days Not applicable to this analysis Value of the Shareholders Equity per share, assessed at market price: (R$81.84) Value of the Net Income per share Not applicable to this analysis Value of acquisition per share R$ Comparison with the value of acquisition -2.55x Rio de Janeiro, March 9, Officer Project Manager 16

17 11. LIST OF SCHEDULES 1. APPRAISAL CALCULATIONS 2. GLOSSARY AND PROFILE OF APSIS SÃO PAULO SP Av. Angélica, nº 2.503, Conj. 42 Consolação, CEP: Tel.: Fax: RIO DE JANEIRO RJ Rua da Assembleia, nº 35, 12º andar Centro, CEP: Tel.: Fax: