www.cavali.com.pe

Reorganizing and Evolving Corporate Structures Reorganizing and Evolving Corporate Structures of Market Infrastructures: of Market Infrastructures:

"The Peruvian Case ""The Peruvian Case "

Francis StenningChairman & CEO

Panama, February 2008

Initial StructureInitial Structure

• Nonprofit Association

• 100% Owned by Stock Brokers (50)

Caja deValoresDe Lima

1990

The Regulator authorized the Lima Stock Exchange to implement internally a division to provide CSD services.

Lima Stock Exchange

Initial StructureInitial Structure

• Nonprofit Association

• 100% Owned by Stock Brokers (50)

Caja deValoresDe Lima

1997

New Market Law required that CSD services had to be handled independently from the Exchanges. LSE was forced to spin-off its CSD division. CAVALI was incorporated.

• Limited Purpose Corporation

• Original Shareholders- 20% LSE- 80% Stock Brokers

CAVALI

Lima Stock Exchange

Exposition of MotivesExposition of Motives

Adapt local market to the requirements of international standards, in with trends set globalization

Promote Stock Exchanges specialization in trade functions.

Promote the development of Central Securities Depositary with specialization in providing securities clearing and settlement services.

Improve market confidence levels and transparency.

Institutionalize a self-regulatory organization system with the Stock Exchanges under control of its partners.

Special Features as Limited Purpose Corp.Special Features as Limited Purpose Corp.

Aspect 1997

Business Purpose

Registry, Custody, Clearing and Settlement of Securities

Paid-In Capital Minimum amount, and adjusted annually (US$750K)

Shareholders • Limited by shareholder – 20% for Exchanges y 5% for others

• Only Participants

Board Members One representative of each type of Participant.

Tariffs Approved by Regulator

Contracts Approved by Regulator

Statues of Incorporation

Approved by Regulator

Liquidation & Dissolution

Approved by Regulator

Evolution of Special FeaturesEvolution of Special Features

Aspect 1997 Today

Business Purpose

Registry, Custody, Clearing and Settlement of Securities

Derivatives, and open to other related activities

Paid-In Capital Minimum amount, and adjusted annually (US$750K)

Approximately US$1.0MM

Shareholders • Limited by shareholder – 20% for Exchanges y 5% for others

• Only Participants

• Extended limits – 40% for Stock Exchanges y 5% for others.

• Freely

Board Members One representative of each type of Participant.

All chosen freely at shareholders meeting

Tariffs Approved by Regulator Regulator determine only maximum limits.

Contracts Approved by Regulator Eliminated

Statues of Incorporation

Approved by Regulator Unchanged

Liquidation & Dissolution

Approved by Regulator Unchanged

Stock Public ListingStock Public Listing

OBJECTIVES:

• Determine the true market value of shareholders holdings.

• Consolidate advances in Corporate Governance Practices – Transparency – Economic Efficiency – Independence (LSE / Regulator / Participants)

• Improve future funding alternatives – Local Projects – International projects

• Interconnections • Consultancy • Joint Ventures

• Capitalize locally and internationally on Corporate Image

Stock ValuationStock Valuation

CAVALI StockCAVALI StockValue per stock (S/.)

Company Total Value (S/.)

Nominal Value 1.00 13.6 MM(US$ 4.6 MM)

Last Transaction before listing (2006)

1.50 20.4 MM

Initial price (04.07.07)

8.53 115.8 MM

Maximum Price(19.07.07)

21.50 292.0 MM

Current Price (31.01.08)

16.00 217.3 MM(US$ 74.0 MM)

Market Cap. / Book Value 16

PER 10x

Comparison CAVALIC1 vs. LSE Indexes Jul 04-07 = 100 for IGBVL, ISBVL

10

12

14

16

18

20

Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-07

Qu

ota

tio

n C

AV

AL

I (S

/.)

50

60

70

80

90

100

110

IGB

VL

& I

SB

VL

CAVALIC1 IGBVL ISBVL

Quotation CAVALIC1 (S/.)

0

5

10

15

20

25

StartQuot.*

Jul-07 Ago-07 Sep-07 Oct-07 Nov-07 Dic-07 Ene-08

Qu

ota

tio

n S

/.

* CAVALIC1 started its quotation on LSE on July 4th 2007

Improvements in Corporate GovernanceImprovements in Corporate Governance

Bank

Bank

Bank

Bank

Ind

SB

SB

SB

SB

Board Committees:• Auditing • Development • Good Corporate Governance• Cash & Investments

External consultancy with CAF financing for diagnostic and improvements in Good Corporate Governance practices

Shareholding StructureShareholding Structure

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1997 2006 2007

LSE Participants Others

1

11

50 22

2

164

15

CAVALI

LSE(30%)

18 Associates

Participants(65%)

22 Participants

Others(2%)

Before

After

LSE(30%)

150 Stockholders

Participants(50%)

15 Participants

Others(20%)

164 Stockholders

2 Stockholders