HERE I CREATE MY HISTORY.” We Present Testimonials of Those Who Are Building the Company’S Successful History

Here I create

2013 my history

This is the eighth Sustainability Report published by AMAGGI as n a b i l it y Repo rt Su stai a form of communicating with its stakeholders and account for activities developed, goals, and future objectives. This publication follows the guidelines of the Global Reporting Initiative – GRI, an international organization that established the sustainability report standard most widely adopted by companies in different sectors worldwide.

The theme of this report is “HERE I CREATE MY HISTORY.” We present testimonials of those who are building the company’s successful history. In order to value our most precious asset –people – AMAGGI invited its employees to tell stories of their personal and professional lives related to the company.

In this print version, you will find 10 stories of people that are building the company’s future. These and other testimonials can be seen at http://www.AMAGGI.com.br/relatorio2013. Approximately 50 employees have participated in these stories, some of whom have been with Sustainability Report 2013 the company for over 30 years, others less than 1, working in the fields, factories, warehouses, hydroelectric plants, and ports. They are the stories of those who, together, are writing the future of AMAGGI. www.amaggi.com.br/relatorio2013 2013 Highlights Credits Governance and management

Creation of the Department of Corporate Affairs to streamline operations across the sustainability, communications, procurement, internal controls, and engineering areas. US$ 5 2.8 billion in million tons Creation of the Sustainability Department incorporates this topic into decision- revenue of grain making processes transported via In another year of record the Madeira River DEPARTMENT OF CORPORATE AFFAIRS MATERIALITY, GRI CONSULTING, PUBLISHING New People Committee strengthens the personnel development strategy production of grain in Brazil, 9 João Zamboni COORDINATION, AND DESIGN The Stakeholder Engagement Plan structures the relationship with strategic stake- million tons Report Sustentabilidade AMAGGI successfully carried holders of grain sold 2 GENERAL COORDINATION new SHEPs Juliana de Lavor Lopes TEAM: Luana Bessa (project management and relationship), Advances in the Aroeira Project, with the training of 203 leaders including direc- out its actions planned for tors, managers, and supervisors Diretoria de Sustentabilidade Michel Steinecke, Ana Fisch e Érica Liberato (GRI consulting), the four business areas with Gustavo Magaldi (editing), Adriana Camargo Pereira (copy), Excellence project promotes review of management, logistics, and procurement 100% EXECUTIVE COORDINATION Report Sustentabilidade (print design) and Paula Mosti (layout). engagement and synergy. processes acquisition Edson Cintra of DENOFA Corporate Communications Revisão Development of the strategic planning for the André and Lúcia Maggi Foundation Assertiva Produções Editoriais MATERIALITY AND GRI INDICATORS The only Brazilian company to participate in the development of the UN’s Sustain- able Agriculture Principles Cristiane Borges ENGLISH VERSION Social Responsibility Gotcha Idiomas!

PUBLISHING COORDINATION PICTURES Franchesca Bogo Felipe Barros and the communication department archives Daniel Escobar Corporate Communications PRINTING AND FINISHING Business Social and Environmental Printing Company: Midiograf Investments in new offices, warehouses, farms, R$12.5 million in investments Print run: 250 copies Revenue of US$ 5 billion in Brazil and abroad. and factories in Brazil and abroad, as well as a and expenses in environmental new river corridor to channel production through 9 million tons of grain sold in Brazil and abroad protection FONT TYPE the Tapajós River and the entry into operation of Verdana, Matthew Carter para a Microsoft Corporation, 1996. 2.8 million tons of grain transported through the Madeira River corridor Investment of R$2.6 million in Sansation, Bernd Montag, 2009. two new small hydroelectric plants (SHEPs), led projects in communities, with the company to overcome the logistical prob- Acquisition of 100% interest in the Norwegian crusher DENOFA (a reference company direct and indirect benefits to lems faced by Brazil in 2013, yielding results in the processing of non-GMO soybeans in Europe) 162,300 people through the An- that exceed the goals planned for the period. dré and Lúcia Maggi Foundation Advances in the Tapajós–Amazonas export corridor and in the construction project for the Maranhão Bulk Grain Terminal (TEGRAM), which will start in 2014. 54 farmers certified according to the Round Table on Responsible Start of construction work at the Porto Velho (RO) Port Soy (RTRS) guidelines Beginning of operations of two new SHEPs: Ilha Comprida and Segredo, in the state More than 76,000 m3 of water of Mato Grosso saved with initiatives such as water recycling or reuse See below: Beginning of operations of the sales office in Switzerland - AMAGGI’s major highlights in 2013. 5,600 GJ of energy saved through Beginning of construction of four new warehouses in the state of Mato Grosso energy efficiency initiatives Purchase of a farm and leasing of another, both located in São Félix do Araguaia, in Mato Grosso fsc Sustainability Report 2013 1

Summary

2 66 116 Foreword Management Vision of the Future and Results 4 70 118 Message from Economic About the Report the CEO and Financial Performance 122 6 74 Ibase Social Audit Profile Environmental Performance 124 42 88 GRI Table of Corporate Social Performance Contents Governance 98 Supply Chain 50 Management Dialogue and 106 Engagement Awards and Recognition 60 Scenario and Strategies 110 André and Lúcia Maggi Foundation 2 AMAGGI

Foreword

Comments and suggestions are always welcome and will be received through e-mail [email protected] and [email protected] G4-31

The website < www.amaggi.com.br/relatorio2013 > includes a survey with the entire content of the report. The results of this survey have been considered in the adoption of initiatives that aim for the continuous improvement of the publication. Sustainability Report 2013 3

Dear Reader,

The 2013 Sustainability Report presents AMAGGI’s economic, environmental, and social performance and describes the evolution of its business strategy, which generates and distributes value across the company’s relationship chain and contributes to sustainable development. In addition to the year’s results, the report provides an outlook for 2014 and for the coming fiscal years.

With the theme “HERE I CREATE MY HISTORY,” the motto of the campaign developed in 2013 by AMAGGI, this edition features the testimonials of those who are building the company’s successful history.

Published annually, the report is prepared based on the guidelines of the Global Reporting Initiative (GRI), an international organization that established the sustainability report standard most widely adopted by companies in different sectors worldwide. As with its most recent edition, adherence to the principles of this methodology and accuracy of the information presented were submitted for assurance by GRI.

Based on G4, the version recently launched by GRI, the content of the report was developed based on discussions with the various stakeholders in our value chain, which resulted in the choice of nine material topics – considered a priority in sustainability-focused management – and in a structured engagement plan that identified AMAGGI’s main relationship stakeholders in 2013 (read more in Dialogue and Engagement).

The indicators reported here are those that address essential issues for the strategic stakeholders and for AMAGGI’s Senior Executives. The answers may be found in the GRI Table of Contents on page 124. In addition, they are identified in the texts in which they are found, preceded by “G4.”

The report is a means of providing accountability and improving communication with the main stakeholders identified. The publication, in addition to the print and online versions in English and Portuguese, includes an abridged version with the main highlights of the year.

Enjoy your reading! 4 AMAGGI

Message from the CEO

The year 2013 was filled We closed 2013 with revenue of US$5 billion in Brazil and abroad. We originated and with challenges and sold approximately 9 million tons of grain, achieved good results in the sales offices in Argentina and Europe, successfully started our operations in Switzerland, and are accomplishments for preparing our operation in Paraguay. We acquired 100% interest in DENOFA, a Nor- AMAGGI. We overcame the wegian crusher recognized as a reference in the processing of non-GMO soybeans throughout Europe, and we finished the construction of two SHEPs – small hydroelec- critical logistical problems tric power plants – in Mato Grosso. faced by Brazil, which had We adopted innovation 16 years ago with the Madeira corridor, our very own al- significant impacts on ternative route for the outflow of grain from a large production area – Parecis, in agribusiness. Thanks to Mato Grosso – as a solution that provided gains in the social, environmental, effi- integrated and synergic ciency, and cost areas. In 2012, the company planned a new waterway corridor, the Tapajós-Amazonas, and in 2013 we invested in assets to start operating through a planning, we managed joint venture in 2014. Also, in partnership with another company, we invested in the to exceed the expected Maranhão Bulk Grain Terminal (TEGRAM) with operations expected to start in 2014 for receiving grain from Maranhão, Tocantins, Piauí, and Bahia, states that form the results and end the year region known as Matopiba. successfully. These logistical alternatives and the investments in infrastructure allow us to more confidently plan the company’s evolution for the coming years. We kicked off our growth strategy for 2020, a bold project that plans investments to double the size G4-1 of AMAGGI. In order to grow without losing sight of our institutional values and our vision – to be a reference in sustainable development – we make significant investments in people and sustainability. We changed the governance structure and added two new departments – Corporate Affairs and Sustainability – formed by internal employees, a strategy that marks the consolidation of placing career executives as new company managers.

The new Department of Corporate Affairs will streamline and provide integration for the sustainability, communications, procurement, internal controls, and engineering areas. As for the Sustainability Department, headed for the first time by a woman, the idea is to incorporate sustainability criteria and values into the company’s growth strategies, since it influences the management of risks and opportunities, not only in the economic area, but also in the social and environmental aspects.

In 2013, with the support of the consulting company Delloite, we identified and prioritized our business risks and developed operating models and monitoring actions. In line with this work, we also strengthened the Excellence Project with the implementation of two projects: the Matrix Management of Expenses (GMD -Gestão Matricial de Despesas) and the Organizational and Process Restructuring (ROP - Re- estruturação Organizacional e de Processos). Both allow for the identification of gaps and opportunities for improvement in our processes.

In this context, the Board of Directors and the Executive Board took part in a workshop with Fundação Dom Cabral in which they discussed and defined topics that are Sustainability Report 2013 5

relevant for the company’s growth and continuity.

We also consolidated the Aroeira Project, further investing in personnel development and the training of leaders, and advanced in the areas of Occupational Health and Safety, implementing a behavioral program on three farms.

We advanced in the sustainable agriculture path through several partnerships. As signatories to the Global Compact, we represent Brazil in a partnership with the UN for the development of the Business Principles for Sustainable Agriculture, which started in the Rio +20 discussions and is expected to be launched in the second half of 2014.

I participated in the United Nations’ 2013 Global Compact Leaders Summit in New York and felt very proud to see that we are on the right path and to be able to speak with business leaders about the creation of a more sustainable agribusiness model in their countries. We support and believe in the Global Compact’s purpose and work, as well as in this initiative. I hope these principles are embraced by governments and other institutions interested in producing food for the world.

For more than 12 years we have been including these topics in our supply chain, in close partnership with rural producers. In 2013, we certified 54 farmers according to the criteria of the Round Table on Responsible Soy (RTRS) and other projects. By adhering to the GRI’s G4 version, we also advanced in the relationship with the value chain, structuring an engagement plan with strategic stakeholders.

We collaborate with the development of the communities where we operate. To this end, we also reevaluated our private social investments with the development of a new strategic plan for the André and Lúcia Maggi Foundation.

We remain optimistic about 2014. Our investments in infrastructure, people, and sustainability give us the confidence to achievement the various goals planned for 2014. We still have many challenges ahead of us, but the path we chose will be Waldemir Ival Loto strengthened in the coming years so that we continue to be part of agribusiness CEO of AMAGGI history as a company committed to the country’s sustainable growth, to the world’s food safety, and to best practices in agriculture as a way to contribute to the sustainability of the planet. 6 AMAGGI

Profile

In this section

ABOUT AMAGGI GROWING WITH BRAZIL INTERNAL AUDIENCE SUPPLY CHAIN BUSINESS AREAS CERTIFICATIONS Sustainability Report 2013 7

AMAGGI operates with integration and synergy in all phases of the agribusiness production chain.

Goals People Growth INCREASE OF MORE AMAGGI HAD 3,949 ACQUIRED 100% INTEREST THAN 20% IN VOLUME DIRECT EMPLOYEES AT OF THE NORWEGIAN OF GRAIN ORIGINATED THE END OF 2013. CRUSHER DENOFA. IN BRAZIL IN 2014. 8 AMAGGI

AMAGGI AMAGGI in Numbers G4-3, G4-4, G4-5, G4-6, G4-8, G4-9, G4-10, G4-11, G4-12 and G4-13

AMAGGI is present in every Brazilian region and is headquartered in Cuiabá, capi- 4 3 tal of the state of Mato Grosso. The company works in all phases of the agribusi- business areas plants ness chain with integration and synergy, from the production of soybeans, corn, cotton, and soy seeds to river transport, and also in soybean origination and processing, the trading of grain, commodities, electric power, and port operations. 33 3 silos and ports The company also has sales offices in the Netherlands and Argentina and has warehouses started its activities in Switzerland.

12 In 2013, the company acquired 100% interest in the Norwegian crusher DENOFA, 5 farms a reference company in the processing of non-GMO soybeans with a presence Small throughout Europe, in which AMAGGI has had 51% interest since 2009. Hydroelectric Plants (SHEPs) 3,949 For 2014, the company plans the operations of two new offices, one in the state direct of Goiás and one in Paraguay. employees 5 In the beginning of 2014, the André Maggi Group changed its name to AMAGGI countries with for strategic reasons. The name of its business areas also changed: the AMAGGI AMAGGI offices 2,500 Division became AMAGGI Commodities, the Agro Division became AMAGGI Agro, large, medium, the Navigation Division became AMAGGI Navigation, and the Energy Division be-

and small came AMAGGI Energy. The new names have been used in this report. 3,600 enterprises in the suppliers of transport of grain soybeans and corn, approximately See the online version to learn more about: - AMAGGI’s operations in eight sectors. Sustainability Report 2013 9

Growing with Brazil From a small company headquartered in Paraná to a large corporation with activities throughout Brazil and abroad, AMAGGI evolved along with the country, spreading the seed of sustainable development. 10 AMAGGI Map of Operations Worldwide

Brazil Argentina Norway The Netherlands Switzerland

Activities and Business Areas

AMAGGI AMAGGI AMAGGI ENERGY AGRO NAVIGATION

Grain Agricultural Seed Agricultural Soy Port River ENERGY origination Trading production production inputs processing operations and logistics transport

AMAGGI COMMODITIES Sustainability Report 2013 11 Map of Operations in Brazil

BELÉM Barcarena

MANAUS Itacoatiar Itaituba PA AM MA

Balsas PI Guaraí

PORTO VELHO Bom Jesus

TO São Félix do RO Araguaia Sinop Luis Eduardo Vilhena Magalhães BA Cerejeiras Sapezal Lucas do Querência Rio Verde Correntina

CUIABÁ GO

Itiquira Rondonópolis

Rio Verde

Farm

SP Warehouse Maringá

Guarujá Office PR Paranaguá Port São Francisco do Sul Plant SC Passo Fundo

SHEP RS RS Joint Venture

Headquarters 12 AMAGGI

AMAGGI’s Timeline

1997 > Opened the Northwest Export Corridor and started operations of AMAGGI Navigation in Porto Velho 1979 (RO) and Itacoatiara (Am). 2002 > Acquired first Created the André Maggi farm (Fazenda Foundation, currently the > Inauguration of Sm1) in Itiquira, André and Lúcia Maggi the Itacoatiara Mato Grosso. Foundation. (AM) Plant.

1977 1992 2001 2003 > Started operations > F ounded AMAGGI Energy > Beginning of the > Started in São Miguel do and built the first small soybean crushing commercial Iguaçu (PR) with the hydroelectric plant process in Cuiabá (MT). production at company Sementes (SHEP), Santa Lúcia I, the Santa Lúcia Maggi (Maggi Seeds), the transmission lines, Death of founder André II SHEP in currently named and the power distribution Antonio Maggi. Sapezal (MT). AMAGGI Commodities. system in Sapezal (MT). Sustainability Report 2013 13

2011 2013 > Finished construction of > Acquired 100% interest the new headquarters and in the Norwegian 2007 transfer from Rondonópolis crusher DENOFA. to Cuiabá. > ProTerra and ISO 14001 Acquired Santa Lúcia certifications achieved. 2009 Unprecedented achievement Farm in São Félix do of the Round Table on Araguaia (MT). AMAGGI Commodities started > The company increased its Responsible Soy (RTRS) operations in the Guarujá presence in Europe with certification. Started commercial Bulk Terminal (TGG). the acquisition of 51% operations of the Ilha interest in the Norwegian Started operations of the Comprida and Segredo Sales reached 1 billion dollars. crusher DENOFA. Divisa SHEP. SHEPs in Sapezal (MT).

Beginning of AMAGGI operations in Switzerland.

2006 2008 2010 2012 > Adherence to the > New AMAGGI plant in > Opening of corporate > AMAGGI became the first Soybean Moratorium Lucas do Rio Verde (MT) office in Cuiabá. Brazilian company to Sector Pact. received first shipment of achieve the International soybeans. Inauguration of an Sustainability & Carbon origination office in Certification (ISCC). Beginning of operations Argentina. in Rotterdam in the Group is acknowledged Netherlands. as a reference in environmental management Global Reporting Initiative in agribusiness by the (GRI) guidelines adopted Forest Footprint Disclosure in the sustainability report. (FFD) Annual Report, 2011 edition, distributed in 2012. 14 AMAGGI

G4-10

INTERNAL AUDIENCE AMAGGI ended 2013 with 3,949 direct employees, a number that remained sta- ble in comparison with the previous year. Most contractors are in construction work. The number of contractors dropped in the period mainly due to the comple- internal tion of the work on the Ilha Comprida and Segredo SHEPs. audiences There is a large concentration of employees in the Midwest, the region with the largest company operations. Given the characteristics of the work in the fields, ports, plants, and warehouses, most employees are men. However, the number of women in our workforce has been increasing year on year.

In 2013, the highlight in gender diversity was the appointment of the first woman for an executive management position (learn more on page 47).

See the online version to learn more about: - profile of employees who create the company’s successful history - profile of professionals who work in AMAGGI’s governance

Supply Chain G4-12 AMAGGI’s suppliers are in the areas of origination, procurement and logistics.

Origination – rural producers Origination includes relationships with rural producers, which are essential in the rural company’s value chain. We have approximately 3,600 suppliers of soybeans and producers corn, some of which are also buyers of commodities, broken down by region: Parecis (MT), BR 163 or mid-North (MT and RO), and South (South of MT, PR, and RS).

Relationships with large groups are managed through a specific department at the headquarters. As for small and medium rural producers, the relationship is managed by the origination manager of each unit, based on the guidelines of regional managers at the headquarters.

Since AMAGGI’s founders began their activities and had their entire history associated with agricultural production, rural producers are always very close to the company’s daily operations. Given their priority, we frequently map and develop new engagement actions to further improve this relationship (learn more on page 101). Sustainability Report 2013 15

>>>>>>>> Rural producers have always been a priority for AMAGGI. The company is constantly investing in the relationship with this audience, improving the physical service structure and hiring qualified professionals to serve them. . 16 AMAGGI

With a detailed Subgroups engagement plan, Large groups (over 50,000 ha): approximately 15 large groups AMAGGI seeks in Mato Grosso supply nearly 30% of the volume originated by to create two-way the company. communication Large- and mid-sized producers, certified by the Round Table on opportunities. Responsible Soy (RTRS): 54 producers from the Middle North and Parecis regions in Mato Grosso.

Small- and mid-sized partner producers: from all regional units, supply nearly 20% of the volume originated by AMAGGI.

Small- and mid-sized producers: from all regional units.

HERE I CREATE MY HISTORY

“In 2004, a young woman, recently graduated and eager for a job opportunity, arrived in Sapezal (MT). It was not easy for a 22-year-old to go live on a farm, traveling over unpaved roads with no cell phone, no Internet access, and no knowledge of agriculture. But AMAGGI offered me a challenge and I accepted it. Today I only see the good in the path I chose, with the seeds I planted. I met people, made friends, saw good examples and qualified professionals, raised my family, and challenged other people who are now part of my team, each in their profession, their area, with their values and principles... It is like this at AMAGGI AGRO and in all business areas. I love my profession... let the next challenges come!

GISELE OLIVEIRA HAS BEEN A DIETITIAN AT THE ÁGUA QUENTE FARM IN SAPEZAL (MT) FOR NINE YEARS Sustainability Report 2013 17

Suppliers Suppliers can be divided by product category and location (local, regional, national, and international levels).

Subgroups by product category

Environmentally critical: suppliers of biomass, fuels, lubri- suppliers cants, chemicals, and minerals.

Construction Companies: companies hired for the construction of warehouses and SHEPs, among others.

Equipment Suppliers: includes companies that supply warehouse dryers, furnaces, silos, parts for vessels (rudders, beds, kitchens, engines), and material for SHEPs such as turbines. Most products in this category are imported.

Other: includes suppliers of everyday consumables such as stationery, cleaning products, and coffee. They are generally local suppliers.

The company prioritized suppliers of biomass and gravel among the environmentally critical suppliers to be included in engagement actions (learn more on page 104).

Logistics – transport suppliers There are nearly 2,500 contracts with large, medium, and small enterprises, which transport corn and soy to AMAGGI Commodities. The largest companies relate directly with the transport area at the headquarters, whereas the smaller companies are retained in centers in the transport offices of Rondonópolis, Lucas do Rio Verde and Cuiabá (MT), Vilhena (RO), and Paranaguá (PR). transport The largest transport flows run from Mato Grosso to Porto Velho (Itacoatiara/ suppliers RO mode) and from Rondonópolis and Alto Araguaia, in Mato Grosso, to the Port of Santos (Guarujá Bulk Terminal /TGG mode).

AMAGGI develops awareness campaigns for truckers and infrastructure improvement actions to serve these professionals. 18 AMAGGI

PROFILE AMAGGI Commodities

AMAGGI Commodities operates in the origination of grain, manufacturing, logistics, port operations, importing, and trading of inputs.

In 2013, the greatest challenge was to overcome the logistical problem faced by Brazil. Despite the necessary adjustments, AMAGGI Commodities not only achieved the goals planned for the year, but exceeded these goals, reaching 9 million tons of grain traded. Additionally, in 2013 the company advanced in the ranking of the largest Brazilian exporters, going from the 21st to the 18th position, according to the ranking of the Ministry of Development, Industry and Foreign Trade. 19 19

A AMAGGI BRAZIL AMAGGI ARGENTINA AMAGGI ommodities LDC & AMAGGI EUROPE AMAGGI F DENO SWITZERLAND AMAGGI

GION 1.4% 5.5% 4.7% 1.1% 15.2% 2013 72.1% E OF GRAIN TRADED BY RE PERCENTAG rt nability Repo Sustai 36+7+231 20 AMAGGI

The combined For AMAGGI Commodities, 2013 began with major challenges, mainly in terms operations of AMAGGI of logistical issues related to the increase in road freight costs and payment of demurrage, which had a negative impact on the AMAGGI Commodities operat- Commodities abroad ing income. Nevertheless, those effects were offset throughout the year with the have already totaled results obtained from origination and trading of corn. Abroad, AMAGGI Com- modities reached record results in the Argentina, Netherlands, and Norway op- 4.7 million tons of erations (with the acquisition of 100% interest in DENOFA), and the beginning of grain, with 50% of this operations in Switzerland, also with positive results. It is important to note that the AMAGGI Commodities combined operations abroad have already totaled 4.7 volume originating million tons of grain, with 50% of this volume originating within AMAGGI. within AMAGGI. In order to improve production outflow from the North of Mato Grosso, the company started the construction of the Porto Velho Terminal. Additionally, the company invested in the new Tapajós River transport corridor and in a new terminal in Maranhão called TEGRAM, with operations planned to start in 2014. The company also began the construction of four warehouses in Matupá, Santa Rita do Trivelato, Diamantino, and Tapurah, municipalities located in the state of Mato Grosso. The operations were discontinued in the Cuiabá plant and in seven warehouses, which were leased. The company is considering the expansion of the Lucas do Rio Verde plant in the future.

ORIGINATION OF GRAIN BY AMAGGI IN BRAZIL– VOLUMES (THOUSAND TONS)

3,948 3,704 3,616 1,787 1,501 452 4,156 5,177 5,735

2011 2012 2013

SOYBEAN CORN total Sustainability Report 2013 21

“We are very careful about social and environmental issues, and we conduct thorough analyses of our suppliers. We work in partnership with rural producers, and we greatly encourage best practices in the field. Producers already perceive the benefits. There will always be room for those who have a differentiated product.”

Judiney Carvalho, AMAGGI Commodities Director

VALUES SHARED WITH RURAL PRODUCERS In order to achieve the expansion goals pursuant to corporate values, AMAGGI sees rural producers as essential partners. The company believes that growth should be shared and responsible in order to be continuous. Therefore, the company participates in studies and discussions, establishes commitments such as the Brazilian Pact for the Eradication of Bonded Labor, and disseminates these values in its supply chain. Through a partnership with Aliança da Terra (Earth Alliance), the company certified 54 rural producers from Mato Grosso according to the principles of the Round Table on Responsible Soy (RTRS), which represents a total of 372,900 tons of soybeans produced and originated by AMAGGI (learn more on page 40).

10% growth in the volume of grain originated in Brazil

Construction of new warehouses to support the Tapajós (PA) and Itaqui (TEGRAM) Goals export corridors – (construction to be completed in the beginning of 2014) for 2013 AMAGGI Switzerland operation kickoff

More than 20% growth in the volume of grain originated in Brazil Goals Improvement of the engagement project with farmers for 2014 Advances in the construction of the new Porto Velho (RO) port

Construction of new warehouses

Beginning of AMAGGI’s operation in Paraguay 22 AMAGGI

PROFILE AMAGGI Agro

AMAGGI Agro manages 223,400 hectares of soybean, corn, and cotton crops, in addition to its soybean seed production.

Agro invested more than R$300,000 in software development and the acquisition of 150 tablets equipped with GPS in order to promote automated management, which facilitates decision-making in the field. Technology generated productivity and social and environmental gains. Initiatives like this led AMAGGI Agro to a 25% increase in revenue in 2013 and to becoming a highlight in the Agricultural and Livestock Production sector in the Agribusiness Annual Report published by Globo Rural Magazine. Sustainability Report 2013 23

Investments in technology and the quality of life of employees resulted in higher productivity and social and environmental gains. 24 AMAGGI

In the 2012/2013 harvest, climate factors affected soybean production. We ex- 165,000 pected 56 sacks per hectare and achieved 53 sacks per hectare, with a total TONS OF SOYBEANS HAVE production of 410,000 tons, a little below the goal. The corn harvest was the ALREADY BEEN CERTIFIED BY THE highlight: the goal was 400,000 tons and it exceeded 474,000 tons. Seed pro- ROUND TABLE ON RESPONSIBLE duction also stood out, going from 156,000 sacks in 2011 to 560,000 in 2013. SOY (RTRS), AND 284,000 On the other hand, the cotton planted area decreased, since the product has low TONS OF SOYBEANS HAVE BEEN attractiveness in the market compared with soybeans and corn. CERTIFIED BY THE INTERNATIONAL SUSTAINABILITY & CARBON (ISCC), Productivity Indicators 2010-2013 BOTH IN 2013. PLANTED AREA 2010-2011 2011-2012 2012-2013 (in hectares) Harvest Harvest Harvest

Soybean 127,788 131,259 139,087

Corn Corn 47,059 52,105 73,958 THE HARVEST WAS A HIGHLIGHT, EXCEEDING THE GOAL OF 400,000 Cotton 32,647 35,336 10,415 TONS AND REACHING A TOTAL OF 474,000 TONS.

AGRICULTURAL PRODUCTION 2010-2011 2011-2012 2012-2013 (in tons) Harvest Harvest Harvest

Soybean 417,550 441,545 410,160

Corn 194,274 332,910 474,601

Cotton 113,563 127,494 43,548

AVERAGE PRODUCTIVITY 2010-2011 2011-2012 2012-2013 (sacks) Harvest Harvest Harvest

Soybean 54.5* 56.1* 52,98

Corn 68.8* 106.5* 106,95

Cotton 231.9** 240.5** 278,75

*Sack per hectare **Arroba per hectare (one arroba equals approximately 33 pounds) Sustainability Report 2013 25

>>>>>>>>

AMAGGI invested more than 300,000 in software development and the acquisition of 150 tablets equipped with GPS to promote automated management, which facilitates decision-making in the field. 26 AMAGGI

“We do not want to be Investments result in higher productivity and social and environmental gains the largest. We want to Based on the use of improved seeds, increasingly efficient soil management, and be sustainable, to have the mechanization of the field, production rates increased much more than the size of the planted area in the country’s agricultural production. Indicators show organized growth, a solid that AMAGGI Agro stood out in the sector with higher productivity rates in the base, competent people, three crops – soybean, corn, and cotton – compared with the averages in the and quality of life for our state of Mato Grosso, according to the Mato Grosso Institute of Agricultural Eco- employees. In order to grow nomics (IMEA - Instituto Mato-grossense de Economia Agropecuária). within these principles, With the investments in technology, the Geo Agricultural system, with the use of our main strategy is to tablets, allows employees in the satellite-monitored farms to record crop condi- maximize access to the tions in real time and register the critical points. They can also access documents information available and to such as farm maps; health, safety, and environmental manuals; and procedures. the use of this information. In turn, managers receive the operational indicators and analyze all the infor- With consistent and clear mation registered. In addition to gains in productivity, the process allows for a indicators, we can make reduction in machine operation and fuel use and prevents the consumption of better decisions.” 50,000 sheets of paper per harvest. It is also important to note the professional development of field workers, who went through more than 100 hours of training to qualify for the innovation. Pedro Valente, Director of AMAGGI Agro AMAGGI Agro also maintained investments in the improvement of crop management and the use of agricultural inputs, allowing for the rational use of minerals, fertilizers, and agrochemicals.

Agricultural practices in productivity and social and environmental gains led to the achievement of several certifications. Since 2007, the Tucunaré and Tanguro farms have been certified by ISO 14001. In 2013, a total of 165,000 tons of soybeans were certified by the Round Table on Responsible Soy (RTRS) and 284,000 tons were certified by the International Sustainability & Carbon (learn more on page 40). Sustainability Report 2013 27

QUALITY OF LIFE FOR EMPLOYEES Pursuant to its human resources policies, AMAGGI Agro, along with 45% of the company’s employees, invests in their quality of life.

In occupational health and safety, accident rates are being reduced year on year after the creation of the Occupational Health and Safety Department in 2012, thanks to the dedication of all employees to accident prevention processes.

During that period, the company invested in new work methodologies and increased hours of training and the incorporation of this topic into leadership training.

In 2013, the company launched the Behavioral Safety Program in three AMAGGI Agro Farms: Água Quente, Itamarati, and Tucunaré. In each pilot unit, committees for behavioral observation will be created to help create proactive indicators that anticipate the occurrence of accidents.

The use of technology also provided higher qualification and quality of life to the field. With the elimination of work on Sundays and the increase in harvesting time, there was also a significant decrease in turnover rate (learn more in the Social Performance section).

To produce 440,000 tons of soybeans Goals To produce 395,000 tons of corn and 15,000 tons of cotton lint for 2013 To reach the planned planted area: 129,000 ha of soybeans, 73,000 ha of corn, and 10,000 ha of cotton

Corn, soybean, and cotton production goals: 54 sacks per hectare of soybeans, 75 sacks per hectare of corn, and 257 arrobas per hectare of cotton

Goals Goals for the production area: 139,000 hectares of soybeans, 60,000 hectares of corn, for 2014 and 30,000 hectares of cotton

The development of new production areas acquired in 2013 and the implementation of the Environmental Management System (SGA) in these areas. 28 AMAGGI

PROFILE AMAGGI Navigation Sustainability Report 2013 29

Fifteen years ago, the company saw new logistical possibilities for the outflow of the grain production from the North and the Midwest and launched the Madeira- 2.8 million Amazonas Corridor. Investments in modernization, the acquisition of new barges, TONS OF GRAIN TRANSPORTED and the record harvest of grain made it possible to exceed the goals for this area THROUGH THE MADEIRA RIVER. in 2013. AMAGGI Navigation also invested in a shipyard for the maintenance of vessels in Itacoatiara (AM) and in a new corridor: the Tapajós-Amazonas. 30 AMAGGI

The company has one of the largest river fleets in Latin America, with 115 ves- VOLUME TRANSPORTED sels. Soybean and corn production is transported by truck to Porto Velho, where BY AMAGGI NAVIGATION* the company has a transshipment port terminal. Shipments then follow in con- (IN MILLION TONS) voys of barges through the Madeira River to the bulk handling port of Itacoatiara (AM), located in the margins of the Amazon River. From there, the soybeans, oil, and soymeal are exported in Panamax-class ships to Europe and Asia.

2.5 River navigation depends on four factors: product, river navigation conditions, vessel efficiency, and good ship logistics. These factors consistently occurred in 2011 2013, helping to achieve a record transported volume of 2.8 million tons of grain, which exceeded the company’s expectations.

2.6 For 2014, the acquisition of new barges and pushers is planned. This investment, as well as the ongoing construction work, should increase the volume of trans- 2012 ported grain to five million tons.

New port will provide more efficiency and reduce impacts 2.8 Aimed at improving the efficiency in transport logistics in the MadeiraAmazonas corridor and minimizing the impact of activities in the city of Porto Velho, the 2013 company started the construction of a new port, located farther away from the city center, which should be operating in 2015. The facilities of the city’s public port are currently being used. The company also acquired a new floating terminal *On the route between Porto Velho and Itacoatiara. in Itacoatiara.

AMAGGI Navigation planned to resume transport of fertilizers in 2013; however, the plan was postponed to the beginning of 2014.

The waterway mode is an environmentally responsible alternative that allows for the production of municipal, state, and federal revenues and boosts job and income generation in the cities along the way. The company has the ISO 140001 certification, which ensures compliance with environmental standards, invests in crew training, and develops projects in partnership with the Navy aimed at miti- gating eventual impacts on riverfront communities. Sustainability Report 2013 31

“The Navigation strategy has always been based on sustainability, since it offers a cleaner mode, with up to 10 times less emissions than the road transport mode.” Jorge Zanatta, Director of AMAGGI Navigation

NEW EXPORT ROUTE THROUGH THE TAPAJÓS RIVER In a joint venture with another company working in the grain sector, AMAGGI invests in the Tapa- jós corridor, a more efficient alternative for the outflow of grain production from the middle and northern regions of Mato Grosso. The plan proved feasible with the advance of paving in the BR- 163 highway, which runs across the region. The new route is expected to transport up to 6 million tons of grain each year.

The project opens a new perspective on the export of soy and corn harvested in the middle- northern region of Mato Grosso. Nowadays, almost the entire crop is transported through the South ports, located more than 2,000 kilometers away. With the new corridor, production follows by truck to Mirituba (PA), and from there it is transported in barges through the Tapajós river to the Port of Barcarena (PA) on the Amazon River, where it is shipped to Europe and Asia in large draught ships.

To start construction of the new Porto Velho (RO) Port Goals To acquire a second floating terminal in Itacoatiara (AM) for 2013 To resume transport of fertilizers (operation to start in 2014)

To begin operations of the Tapajós - Amazonas corridor

To resume transport of fertilizers

Goals To complete construction of new shipyard in Itacoatiara (AM) for 2014 To expand the fleet in the Madeira-Amazonas corridor 32 AMAGGI

PROFILE AMAGGI Energy Sustainability Report 2013 33

AMAGGI Energy manages five small hydroelectric plants (SHEPs) in the state of Mato Grosso. Four of them are located in the Juruena River in Sapezal, and one of them 5 is in the Formiga River in the municipality of Campos de Júlio. The SHEPs are con- SMALL HYDROELECTRIC nected with the National Interconnected System that distributes electricity in Brazil. PLANTS (SHEPs) ARE OPERATED BY AMAGGI. The Segredo and Ilha Comprida SHEPs, both in the Juruena River, started operations in 2013, raising the company’s installed capacity from 23 MW to approximately 70 MW. Together, the new plants have an installed capacity of 46.2 MW, which accounts for a 200% increase in relation to the company’s three other power plants. Investments totaled more than R$300 million. 34 AMAGGI

“These two projects are In the execution of projects, the company is in strict compliance with environ- milestones in AMAGGI’s mental legislation and adopts the Basic Environmental Program (PBA - Programa history, since the company Básico Ambiental), which aims to ensure the fulfillment of the most stringent environmental protection principles. The company also adopts preventive preserva- now operates with 70 MW of tion measures to mitigate eventual environmental impacts on the various phases installed capacity, which is of construction and operation of the SHEPs. sufficient to supply a city with a population of 200,000.” INSTALLED CAPACITY PER SHEP IN MATO GROSSO MW

Santa Lúcia I 5 Roberto Rubert, Director of 7.6 AMAGGI Energy, in a statement Santa Lúcia II about the Segredo and Ilha Divisa 10.8 Comprida SHEPs Ilha Comprida 20.1

Segredo 26.1

Note: The Jesuíta SHEP project in Mato Grosso, mentioned in the 2012 Sustainability Report, is still under analysis.

To complete the construction work and begin commercial operations of the Segredo Goals and Ilha Comprida SHEPs for 2013

To begin studies for the implementation of two plants to explore hydroelectric potential Goals (AHE), in partnership with another player in the market for 2014 Sustainability Report 2013 35

THE SEGREDO AND ILHA COMPRIDA SHEPS, BOTH LOCATED IN THE JURUENA RIVER, WERE INAUGURATED IN 2013, RAISING THE COMPANY’S INSTALLED CAPACITY FROM 23 MW TO APPROXIMATELY 70 MW. 36 AMAGGI

PROFILE Certifications

AMAGGI, aware of the market demands and demonstrating a vision for the future, has a strategy in place to remain up to date in terms of quality requirements and the new social and environmental concepts, which can be substantiated not only through the certification of the company’s agriculture, but also of its warehouses, ports, and crushers.

In this sense, it became the first company in Brazil to certify a soybean farm – Tu- cunaré Farm in Sapezal (MT) – in the ISO 14001 standard. It was also the first, at the international level, to obtain the Round Table on Responsible Soy (RTRS) certificate and the first company in the country to achieve the International Sustain- ability & Carbon Certification (ISCC). In 2012 and 2013, the company had further advances in this area, training and certifying some of its suppliers in the RTRS. Sustainability Report 2013 37

First company in Brazil to certify a soybean farm – Tucunaré Farm in Sapezal (MT) – in the ISO 14001 standard. It was also the first, at the international level, to obtain the Round Table on Responsible Soy (RTRS) certificate and the first company in the country to achieve the International Sustainability & Carbon Certification (ISCC). 38 AMAGGI

ISO 14001 In 2013, the company audited 22 units to renew certification, which is valid for the next three years with annual maintenance audits. The environmental management system and the work of the employees involved were, once again, very well assessed by ABS Quality Evaluations, the company that audits the system.

This international standard establishes requirements for planning, implementation, and operation of an Environmental Management System (SGA - Sistema de Gestão Ambiental) already in place in all of the company’s operating units. The SGA allows units to have efficient management of their significant environmental aspects by adopting environmental controls, as well as in the qualification of the grain supply chain through a registration program and social and environmental guidance to rural producers.

See the online version to learn more about: -AMAGGI units with ISO 140001 certification.

HERE I CREATE MY HISTORY

“I had been living abroad for three years, and Europe was in the middle of a major economic downturn. Also, there was an outbreak of H1N1 – known as the swine flu – and my wife was close to giving birth to our first daughter. It was in this scenario that the opportunity to join AMAGGI came. I had my first interview by phone when I was still in Lisbon (Portugal), then we returned to Brazil where I went through the entire selection process. I was approved for the position and my daughter, Sofia, was born in the same month I started working in the company. Today when I look back, I see how important AMAGGI’s support and confidence in my ability was at that hectic time of my family’s life. Looking ahead, I see new opportunities and challenges because the company is growing and I am evolving as an individual and a professional.

DANIEL ESCOBAR HAS WORKED AT AMAGGI FOR FOUR YEARS AS A COMMUNICATION ADVISOR IN THE COMPANY’S HEADQUARTERS IN CUIABÁ (MT) Sustainability Report 2013 39

ProTerra Standard AMAGGI once again obtained the ProTerra Standard certification and, in 2013, traded 1 million tons of soybeans certified with the ProTerra seal.

The standard establishes social and environmental responsibility criteria for the responsible production of non-genetically modified soybeans in order to meet the specific demands of the commodities market.

ProTerra verifies if raw material suppliers have sustainable production. To this end, the company evaluates compliance with legal, environmental, ethical, social, and non-GMO (non-genetically modified) product requirements in the entire production chain, from farm (production and origination) to port.

In this process, the soy meal, oil, and grain exported through the Itacoatiara (AM) port are evaluated. The standard is aligned with the Basel Criteria, the SA 8000 standard (workplace environment), the Universal Declaration of Human Rights, the Child Rights Convention, the International Labor Organization (ILO) conventions and recommendations, and the United Nations (UN) standards for human rights and the Global GAP Standards (accounting). 40 AMAGGI

Round Table on Responsible Soy In 2013, the company advanced in its partnership with the Round Table on Re- sponsible Soy. In addition to certifying 165,000 tons of soybean produced by AMAGGI Agro, it certified 373,000 tons from 54 suppliers.

In 2011, AMAGGI was the first agribusiness company in the world to receive certification for producing soy according to the RTRS principles and criteria.

In 2012, the company expanded the certification to its supply chain by certifying 40 producers. In 2013, in addition to maintaining 39 partners, it certified another 15 producers.

Certification is preceded by an audit that evaluates 98 indicators within the five principles established by RTST: legal compliance and best practices; fair and responsible work conditions; a responsible relationship with the community; environmental responsibility; and best agricultural practices.

The agreement to validate the certification is considered historic, since six years of negotiations with NGOs, companies, and producers from several countries were necessary to reach a consensus on the certification criteria for responsible soy. These certifications are currently seen as important credibility statements, ensuring that clients are receiving a responsible product that is increasingly better from an agricultural, environmental, and social standpoint.

International Sustainability & Carbon Certification (ISCC) The certificate documents the route followed by bioenergy by accounting for biomass based on the entire value added chain – from the field to delivery to end users. In order to meet the strategic objectives associated with the sustainable use of the land, protection of the natural environment, and reduction of greenhouse gas (GHG) emissions and to supply EU’s biofuel market, the company certified 284,500 tons of soy and corn in 2013.

The ISCC certification system was developed to meet the demands of the Euro- pean Union (EU), according to the Renewable Energy Guideline (EU-RL 2009/28/ EC). This certificate safely comprises all phases of the production process, taking into account the legal requirements for the production of energy and fuel from biomass.

To obtain certification, it is necessary to prove that the biofuel produced from soy or corn is at least 35% less pollutant than fossil fuel. In 2017, this percentage will be increased to 50%. Sustainability Report 2013 41

Brazilian Responsible Cotton In 2013, AMAGGI Agro was again granted the Brazilian Responsible Cotton seal from the Social Cotton Institute (IAS - Instituto Algodão Social) for the cultiva- tion of cotton on the Tucunaré, Itamarati, and Água Quente farms, located in Mato Grosso.

The Brazilian Responsible Cotton seal attests to compliance with Brazilian labor legislation and with work safety and environmental protection guidelines, including the encouragement of social action in the field to the benefit of employees, their families, and the social communities surrounding the properties.

The seal, which until last year was called Algodão Social (Social Cotton) and comprised only the state of Mato Grosso, now has nationwide coverage.

Quality Certifications G4-PR1 In the entire development, production, and trading chain, AMAGGI uses systems to ensure the safety and quality of its products. Through these procedures, it is possible to verify compliance of the product with applicable legal requirements, especially those related to suitability and quality of all intermediate and final items.

Since 2001, the company has had the Quality Program, which was developed based on the Best Manufacturing Practices (BPF - Boas Práticas de Fabricação) and the principles of Analysis of Hazards and Critical Control Points (APPCC - Análise de Perigos e Pontos Críticos de Controle), which allow for the analysis of the risks involved in each phase in the production of the products traded and the evaluation of the effectiveness of the control measures currently adopted.

The process ensured the company’s plants and ports the GMP+B2 certification, expanded in 2012 to GMP+FSA, similar to GMP+B3 certification which applies to the areas of ports, origination, trade, execution, and logistics certified by the GMP+ International, a Dutch agency that regulates companies operating in the animal feed industry and is renowned for its high standards.

Furthermore, AMAGGI has some warehouses and all plants certified by the Min- istry of Agriculture, Livestock and Food Supply. Each of our plants undergoes an average of four inspections annually. They were successfully approved in all nonconformity checks carried out in the period covered by this report. For soybean (grain), meal, and oil, there are also the HARD IP (Preserved Identity) and the See the online version Non-GMO (non-genetically modified) certifications, issued by Cert ID. to learn more about: - Quality Certifications With the implementation of the program for monitoring equipment and environ- ments to detect outbreaks of possible poisoning by Salmonella spp, the main points were identified and routine cleaning and disinfection were implemented in those areas. These actions led us to a clearer understanding of the contamination mechanisms triggered by these microorganisms, and we managed to reduce the contamination identified by the program. Continuous monitoring is carried out through microbiological swab analysis (qualitative quick set - path check hygiene pathogen system), to check the effectiveness of our control measures. 42 AMAGGI

Corporate governance

In this section

GOVERNANCE STRUCTURE PRINCIPLES AROEIRA PROJECT RISK MANAGEMENT Sustainability Report 2013 43

Our main challenge is to prepare people who support the company’s growth strategy and who are guided by our corporate values.

People NEW DEPARTMENTS THE BOARD OF DIRECTORS AND AND SUSTAINABILITY REINFORCE THE STRATEGY. THE EXECUTIVE BOARD PRIORITIZE ARE THE STRATEGIC RISKS AND DISCUSS TOPICS THAT PILLARS OF GROWTH. ARE RELEVANT FOR THE BUSINESS. 44 AMAGGI

“We initiated our business Corporate Governance succession process, and that G4-34, G4-35, G4-36, G4-37, G4-38, is not simply a father-to-son G4-39, G4-40, G4-45, G4-47 issue. Succession is much The corporate governance guidelines incorporated into the company’s Manage- more complex and involves ment Policies seek to develop professional management that promotes sustain- the company’s daily activities able economic growth and continuous improvement based on the equal treat- and its perpetuity. It is strategic ment given to shareholders, transparency in management, full accountability by managers, and corporate responsibility while seeking the best results for AMAGGI to those who are part of the and caring for its longevity. agribusiness chain and want to firmly proceed in the market in Our main challenge is to prepare people who support the company’s growth a sustainable way.” strategy and who are guided by our corporate values. In 2013, major advances in leadership training were achieved in the Aroeira Project. Sustainability, and in turn, the Sustainability Area, gained importance as it gained the status of a Blairo Maggi, Shareholder and Department. People and sustainability are the basis of the company’s growth one of AMAGGI’s founders strategy until 2020. GOVERNANCE STRUCTURE AMAGGI’s senior management is comprised of the Board of Directors and the Executive Board, each with formally different roles and responsibilities. Both rely on support committees. In line with best practices in corporate governance, the Chairman of the Board does not hold a position on the Executive Board.

The Board of Directors, which is the highest governance body, is formed by seven members, one of whom is an independent member (in line with the Code of Best Corporate Governance Practices of the Brazilian Institute of Corporate Gover- nance – IBCG). Members are elected for a three-year term and are eligible for reelection.

Board members meet regularly to discuss strategic guidelines for economic, environmental, and social issues. Management of topics is structured and hierarchical; the competency, authority, and autonomy of the CEO and Directors are established for these purposes. The Board convenes monthly to discuss results of the business areas, as well as their challenges, goals, and opportunities regarding those three topics. An evaluation is also carried out to check if the goals planned by the Board of Directors for the current year are being met. Sustainability Report 2013 45

AMAGGI Chairman of the Board of Directors

CEO AMAGGI

Risk Management Legal Department

Human Corporate Financial AMAGGI AMAGGI AMAGGI AMAGGI Resources Affairs Adm. Agro Commodities Navigation Energy Management Managemen Managemen

Sustainability Comptroller- Origination Sales Managemen ship Managemen Managemen 46 AMAGGI

MISSION To contribute to the development of agribusiness by adding value, respecting the environment, and improving life in the communities.

VISION To be a reference in sustainable development.

VALUES G4-43, G4-51, G4-56 Integrity To be ethical, fair, and consistent with In 2013, AMAGGI planned its growth strategy until 2020, based on the preser- our thoughts, words, and actions. vation of its beliefs and values and the development of leaders. In 2013, there were changes in the governance structure with the creation of two new depart- Respect for the Environment ments – Corporate Affairs and Sustainability – and the new People Committee. To be a reference in social and envi- The organizational structure marks the consolidation of career executives in the ronmental management. role of new company managers.

Simplicity To better evaluate the business from a sustainability standpoint, the adminis- Focus on the essential, encouraging trative and executive boards attended a workshop conducted by Dom Cabral agility and less bureaucracy. Foundation, discussing topics defined in the 2012 Materiality and incorporating other topics of interest. Humility To show respect for all, following com- Variable remuneration of directors and managers already includes the perfor- mon sense in professional and person- mance of sustainability indicators – a measure that should apply to all em- al relations. ployees in the future. Performance goals are established for bonus payments shared by employees in two hierarchical levels immediately below manage- Participatory Management ment. And the goals defined for the CEO, for example, are in line with those To encourage participation by pro- applied to the executive management and managers. moting recognition and professional growth, involving people in key com- The stakeholder engagement plan, structured in 2013 by the Sustainability De- pany processes. partment, foresees the determination of impacts, challenges, and opportunities that provide support for assessments and definitions of the strategies for the Commitment Board of Directors and the Executive Board. “Fly the company flag.” Work with pas- sion and pride and strive for the com- Principles pany’s success. AMAGGI’s growth is grounded in a culture that values integrity, respect for the environment, partnership, and people development. Innovation and Entrepreneurship Retain creative, participative, bold, The principles that define the relationship for AMAGGI in the value chain talented, and enthusiastic people who through partnerships are responsible for structuring governance. Internally, can make a difference in the competi- we foster our Mission, Vision, and Values through policies, communication, and tive market. training. Externally, we reaffirm our principles through national and international pacts established with governmental agencies and society and participate Respect for our partners in discussion groups and agribusiness associations. Foster good business relations, remain- ing faithful to the commitment of being a company admired and respected by all. Sustainability Report 2013 47

“We need to be very mindful, looking ahead and slowly preparing for future demands. At RTRS, for example, we managed to be the first because we started talking to them from the beginning and modifying our processes right away. When the moment came, we were ready and had no significant impact on cost. The challenge for the new Board is to operate proactively.”

Juliana de Lavor Lopes, Sustainability Director

NEW SUSTAINABILITY DEPARTMENT The first woman to become a Director at AMAGGI, Juliana de Lavor Lopes will head the new Sustain- ability Department, created in 2013. The area was previously at the management level and worked mainly in management processes. Although the topic is already present across the company, it was necessary to work proactively, being attentive to the markets in which the company operates and identifying challenges and opportunities.

Also in 2013, a workshop was conducted with the Executive Board to discuss relevant topics for the company. It was the first step in the design of the Global Sustainability Plan to be launched in 2014, partially based on the Business Principles for Sustainable Agriculture and the Global Compact of the United Nations (UN).

Our idea is to incorporate sustainability criteria and values into the company’s growth strategies. To this end, the Executive Board is also developing the 2020 Vision with annual steps to support the strategy of each business area.

AROEIRA PROJECT The Aroeira project is aimed at preparing leaders, identifying talents to execute our growth strategy, ensure business continuity and the company’s values, and also develop and conduct a succession plan.

The project started in 2011 at the Board level. Then it was extended to managers, and in 2013 it included supervisors, who took part in assessments and workshops in the School for Leaders (learn more in the Social Performance section). Having already planned the continuous phases, the project will slowly include AMAGGI’s nearly 4,000 employees.

The Aroeira Project links the people management work to the analysis of individual results and to the business matrix, and aligns it to medium- and long-term business plans of all company areas. It does all this without losing sight of the essence of success the company was founded with in the 1970s and the intention to continue in the essence of a family company.

Another objective of the Aroeira project is to encourage the necessary leadership attitudes to ensure the company’s continuity. The Aroeira (Brazilian Pepper Tree) was one of the favorite trees of our founder, André Maggi, who insisted on planting one on each of his properties. The tree is found throughout the country and is a symbol of tenacity, continuity, and future. 48 AMAGGI

Committees identify RISK MANAGEMENT and measure the main AMAGGI applies preventive management through the work of committees based on an appropriate information system. Committees identify and regularly mea- financial, environmental, sure the main financial, environmental, and social risks to which the company is and social risks to exposed, establishing preventive or mitigation measures and procedures. which the company is To improve this work, in 2012 the company started a project, supported by the exposed, establishing consulting company Delloite, aimed at implementing, in a more integral way, the risk management process in all its activities. In 2013, the group identified, docu- preventive or mitigation mented, and prioritized the strategic, financial, operational, and regulatory risks measures and of its companies, created action templates for risk management and monitoring of actions that embody the response strategy to the risks prioritized, and also procedures. Learn more defined the most appropriate actions to manage the risks. about the committees Risks were prioritized according to their complexity, volume, and degree of risk in the online version related to the process, according to the figure below. of the report. To ensure best practices in governance and maintain transparent management conduct, AMAGGI relied on the work of six corporate committees in 2013: Sus- tainability and Occupational Health and Safety; Ethics and Conduct; Financial Risks; Tax and Fiscal; Internal Audit; and the new People Committee.

G4-2, G4-14, G4-41, G4-44, G4-46, G4-49, See the online version G4-50, G4-53, G4-57, G4-58, G4-SO3 to learn more about: -Sustainability and Occupational Health and Safety Committee -Ethics and Conduct Committee -Financial Risks Committee -Tax and Fiscal Committee -Internal Audit Committee -People Committee

HERE I CREATE MY HISTORY “I only joined AMAGGI in 2001, but I had already learned about the founder when I was still working for a major competitor. Having been hired by that company as a trainee in the 1970s, during the onboarding process I had the opportunity to visit all its units in the state of Paraná. Upon arrival, I noticed that local managers of that company talked about Mr. André Maggi as a reference in the region (farms, seeds, trade, politics, etc.), and their challenge was to bring that visionary entrepreneur to their client’s portfolio. It was a goal that was accomplished only 10 years later, in the 1980s, when I met Mr. André Maggi in Itiquira (MT) and we started doing business. AMAGGI’s reputation and the way its founder would relate and lead were already acknowledged as differentials by major corporations, so much so that in the 1990s, high ranking leaders of the American headquarters of the company I worked for came to Brazil. They visited AMAGGI’s properties and were welcomed by the Maggis themselves. Unfortunately, when I joined the company in 2001, Mr. André Maggi had passed away, but I can say that during my professional life, AMAGGI and its founder were always present in some way.”

JOÃO ZAMBONI HAS BEEN ON THE TEAM FOR 13 YEARS AND IS CURRENTLY DIRECTOR OF CORPORATE AFFAIRS Sustainability Report 2013 49

IMPACT

6 5 1 7 RISKS high 3 4 8

2 10 9 1 Succession 2 Adherence to Policies 3 Investments and Projects medium 4 Logistics (outflow) 5 Market and Competition 6 Cash Flow 7 Commodities (exhibition) 8 Integrity of Information low 9 Attraction / Retention of Talents 10 Tax / Fiscal

low medium high VULNERABILITY 50 AMAGGI

Dialogue and engagement

In this section

SHARED VALUE IN THE VALUE CHAIN ENGAGEMENT AND MATERIALITY COMMITMENTS AND INSTITUTIONAL PARTNERSHIPS Sustainability Report 2013 51

AMAGGI believes that generation of value in the long term depends on the engagement of its main relationship stakeholders and on participation in agreements and sector studies.

9 MATERIAL TOPICS ARE 6 GROUPS ARE PRIORITIZED AMAGGI’s CEO TALKS ABOUT DEFINED BY THE LEADERSHIP. IN A STRUCTURED SUSTAINABLE AGRICULTURE ENGAGEMENT PLAN. AT THE UN. 52 AMAGGI

Shared value in the value chain In addition to market-related factors, AMAGGI believes that long-term genera- Dialogues help senior tion of value is essentially based on the engagement of its main stakeholders and executive management their participation in agreements and sector studies. Thus, the company will be able to identify the main positive and negative impacts of its activities on society consider the social and and manage them adequately. environmental risks and Based on this vision, in recent years the company has intensified initiatives to opportunities in their map and consult stakeholders, in addition to taking a pioneering stance in na- strategic and operational tional and international commitments on sustainability. This work has helped the company’s senior management consider social and environmental risks and op- decisions. portunities in their strategic and operational decisions.

Next, we describe the main outcomes of the consultation process and AMAGGI’s commitments and studies. G4-18, G4-25

Engagement and Materiality In 2011, AMAGGI carried out the first structured mapping of its stakeholders, an effort that involved many areas of the company. In the following year, we chose a group of stakeholders and asked for their opinions about the main impacts (positive and negative) on the business. Based on this consultation, the company chose the nine most relevant topics to be managed more strictly (for more details on the consultation see the About the Report section).

The nine material topics are presented in the Materiality Matrix (see chart on the opposite page).

In 2013, these material topics were discussed by the Board of Directors and by senior management in a workshop conducted in partnership with the Dom Cabral Foundation. The leaders carried out a review for a new materiality process to be carried out in 2014.

Last year, the company also invested in a structured plan for stakeholder engagement with the support of an external consulting company. This project will structure the materiality review process. Sustainability Report 2013 53

We adopted the engagement concept from ISO 26000: to create two-way “It is important for us to dialogue opportunities in order to build a consistent basis for decision-making in share information and the organization. The plan was developed based on inputs raised in the following encourage integration between processes: institutions. Sharing can

analysis of six internal documents inspire new actions.”

survey of communication channels and tools Participante do II DialogAção

interviews with six key area leaders (sustainability, environment, communications, procurement, transport logistics, and origination)

evaluation of results of the Dialogue with Social Organization Panel

development of the Fofa matrix (strengths, opportunities, weak- nesses, and threats)

G4-19

MATERIALITY MATRIX

3.0 Transparency and accountability to society Commitment to sustainability and the pursuit of consistency in the company’s daily actions Cooperation and partnerships (adherence to voluntary initiatives, associations, round tables, agreements, etc. – e.g., Soy Moratorium) Training and skill building (professional qualification, courses, etc.) 1.5 Compliance with legislation (labor, environmental, land, etc.) Environmental Preservation (e.g., respect for permanent I NT E RNAL A XIS preservation areas and legal reserves, protection of riparian forests and springs, etc.) Monitoring of risks (environmental, social, human rights, etc.) Development of local communities (creation of jobs and income, tax payments, boost in local economy, etc.) 0.0 Market presence (relevance of the company in the market, 0.0 1.5 3.0 operation strategy by geography, etc.) EXTERNAL AXIS 54 AMAGGI

Based on the inputs collected, we developed AMAGGI’s map of stakeholders, shown on the opposite page.

The criteria for prioritizing the stakeholders included in the action plan were:

audiences considered critical for the achievement of AMAGGI’s strategic and sustainability objectives G4-26

audiences that can indicate risks and/or opportunities based on the impacts of the business on local communities and/or propose solutions for mitigation of these risks

audiences that are part of AMAGGI’s supply chain and whose product and/or service could present a high social and/or envi- Audiences ronmental risk with potential to affect the company’s reputation and/or cause major damage to the environment and to society (learn more on page 104)

audiences whose cooperation may bring opportunities for the company and create a competitive advantage and differentiation internal local in the current scenario. audiences communities

Based on these criteria, the priority stakeholders are:

internal audiences (senior management, key area managers, managers of the Mato Grosso units, and employees that deal rural institutional with truckers) producers partners

rural producers (large, medium, and small)

environmentally critical suppliers (biomass and gravel) suppliers transport local communities (municipalities in Mato Grosso) suppliers

institutional partners (local, national, and international)

truckers (contractors) G4-24

An action plan for the short and medium term was developed for each priority group with the assumption to maximize the existing communication channels and tools and propose replicable and low-cost actions with potential large-scale impact.

A cultural change necessarily includes cognitive, attitude, and behavioral changes. These phases (changes) were applied to the plan’s actions in order to promote a cultural change toward valuing dialogue and engagement. G4-37 Sustainability Report 2013 55

Map of stakeholders

ENERGY

STAKEHOLDERS government, local community, internal audiences, AGRICULTURAL AMAGGI contractors, competitors, client (ANEEL), suppliers, INPUTS ENERGY players of the energy sector

AGRICULTURAL PRODUCTION

STAKEHOLDERS government, local community, internal audiences, contractors, AMAGGI Commodities and AMAGGI AMAGGI PRODUCTION OF SEEDS Navigation, competitors, clients, suppliers, players in AGRO the Agribusiness sector.

GRAIN ORIGINATION AND LOGISTICS STAKEHOLDERS government, local community, internal audiences of the national and international business units, contractors, SOYBEAN AMAGGI rural producers, truckers, clients, AMAGGI Navigation PROCESSING and AMAGGI Agro, competitors, suppliers, players in the COMMODITIES domestic and foreign trade and transport sectors

PORT ADMINISTRATION

STAKEHOLDERS government, local community, internal audiences, contractors, competitors, clients, suppliers, players RIVER TRANSPORT AMAGGI in the logistics sector NAVIGATION

TRADING

STAKEHOLDERS government, internal audiences, family members of internal audiences, institutional partners, suppliers, agencies and trade AMAGGI associations, media/press, financial institutions, shareholders, players in the agribusiness sector, society 56 AMAGGI Commitments and institutional partnerships

G4-15

AMAGGI has institutional commitments that, along with its mission, vision, and values, express the company’s position on topics of relevance for society and for the business. Current commitments include: the United Nations Global Compact, the National Pact for the Eradication of Bonded Labor, the Business Pact for In- tegrity and Against Corruption, the Programa Empresa Amiga da Criança (Child- Friendly Company Program), the Millennium Development Goals and the Natural Capital for Leadership Compact.

Before making a new commitment, we evaluate whether the initiative is aligned with the company’s values and if the company meets at least 70% of the commitments and goals.

In 2013, AMAGGI participated in the process to restructure the National Pact for the Eradication of Bonded Labor, along with the Instituto Ethos de Empresas e Responsabilidade Social, the Instituto Observatório Social, the NGO Repórter Brasil, the International Labor Organization (ILO), and other companies.

The work resulted in the launch of InPacto, a non-profit organization whose objective is to provide better governance structure and financial sustainability for activities already being developed and for activities that need to be developed to turn the eradication of bonded labor into a reality in Brazil.

In association with the United Nations Global Compact, the company works to create the Business Principles for Sustainable Agriculture. For two years, the proposals will undergo global consultation with the pact’s signatory companies, NGOs, and signatory academic experts in the areas of agriculture and food. The goal is to launch the development agenda in 2014.

HERE I CREATE MY HISTORY

“As an AMAGGI employee, this is the fifth city I’ve lived in, having participated in the construction of six new units. Everything started when my daughter was less than one year old and I joined the company at Tanguro Farm in Querência (MT). Soon after that, I was transferred to the headquarters when it was still in Rondonópolis (MT). Six months later, the headquarters changed to the state capital and I moved with it. The good work that I developed in the procurement area opened doors, and I was promoted to the administrative supervision of two new SHEPs that were to be built by AMAGGI Energy: Segredo and Ilha Comprida. For that reason, I moved to Sapezal (MT) and reached one of my greatest personal achievements: I bought a house. Two years later, when the construction work ended, the opportunity came to participate in the construction of the Portochuelo Shipping Terminal, and I moved to Porto Velho (RO) with my family where I found out that my wife, who was always by my side and supported me, was pregnant with our second child. There were many happy moments, and for all that, I can say that I am part of AMAGGI’s history and the company is part of mine.

SILVIOMAR MARCHESINI HAS WORKED AT AMAGGI FOR SIX YEARS AND IS CURRENTLY AN ADMINISTRATIVE SUPERVISOR IN PORTO VELHO (RO) Sustainability Report 2013 57

II DIALOGAÇÃO – ROUND TABLE WITH SOCIAL ORGANIZATIONS The sustainability area, in partnership with the André and Lúcia Maggi Foundation, carried out a con- versation panel in the headquarters, in Cuiabá, with representatives of social, governmental, and non- governmental organizations from many municipalities of Mato Grosso where the company operates and that received or used to receive financial support from the foundation.

Some activities were conducted in order to elicit the opinion of participants about the most relevant topics for the relationship, to improve management and communication processes, and to report on the survey of topics carried out in 2012 and its outcomes. The panel also provided material to support the Engagement Plan.

In 2014, we intend to map representatives of the communities where the company operates in order to expand the diversity of opinions and perspectives and create other forums to listen to the communities, which will increase our understanding about the impacts of the business and aid in the decision- making process.

AMAGGI’s CEO TALKS ABOUT SUSTAINABLE AGRICULTURE AT THE UN AMAGGI’s CEO, Waldemir Loto, invited some of the most important business leaders in the world to think about a more sustainable model of agriculture in their countries in a lecture at the United Na- tions Global Compact Leaders Summit 2013.

The Leaders Summit 2013, whose theme was “Architects of a Better World,” brought together more than 2,000 participants including executives and business leaders, representatives of civil society, governments, and the United Nations in New York (USA). The executive spoke about the discussions on the Business Principles for Sustainable Agriculture, with a focus on corporate responsibility to ensure world food safety.

Waldemir was one of the three Brazilians to speak during the summit, along with the Minister of En- vironment, Izabella Teixeira, and Jorge Abrahão, President of the Instituto Ethos de Responsabilidade Ambiental. 58 AMAGGI

AMAGGI participated in all phases of the project, which included 20 other private organizations, and it was the only Brazilian company invited. In the beginning of the year, AMAGGI will be the host in the regional consultation to be held in Brazil. The work that is already finished will serve as a base for the company’s Global Sustainability Policy.

Global Compact An initiative led by the United Nations (UN) to mobilize the international business community to adopt, in their business practices, fundamental and internationally accepted values – expressed in 10 principles – in the areas of human rights, labor relations, and environment, as well as in the fight against corruption. AMAGGI joined the Global Compact on April 22, 2009. Learn more about the principles at www.unglobalcompact.org.

National Pact for the Eradication of Bonded Labor AMAGGI joined the pact on November 16, 2005 and committed to defend human rights and ban any type of bonded or slave labor in its production chain.

Business Pact for Integrity Against Corruption The pact aims to promote the engagement of companies against all forms of corruption and establish guidelines that regulate the relationship between organizations and the government. AMAGGI joined the pact on April 22, 2009.

Programa Empresa Amiga da Criança (Child-Friendly Company Program) The program, created by the Abrinq Foundation in 1995, is aimed at mobiliz- ing companies into social actions that benefit children and adolescents in Brazil. AMAGGI was awarded the Child-Friendly Company seal on April 24, 2009. Since then, we have published an annual performance report to communicate our main actions on the topic.

Millennium Development Goals A set of eight macro-goals that must be achieved by signatory countries by 2015 through tangible actions developed by the government and society. AMAGGI supports the Millennium Goals and disseminates them to its employees. Furthermore, these guidelines have become one of the criteria for the Seleção Pública de Proje- tos (Public Selection of Projects), a program created by the André and Lúcia Maggi Foundation. Learn more about this initiative at . Sustainability Report 2013 59

Natural Capital Leadership Compact In 2012, the company became a signatory to the Natural Capital Leadership Com- “I invite you, business leaders, pact, created by the Cambridge University Sustainability Leadership Programme. to contribute to the creation Launched during the UN Conference Rio +20, the pact had the adherence of 16 sig- of a more sustainable natories. AMAGGI and Natura are the only Brazilian business organizations included in it. The pact aims to achieve the mutual agreement of business leaders to value agribusiness model in your and maintain natural resources, while prompting governments to align economic de- countries. And I hope these velopment with the responsible and sustainable use of nature. In 2013, the company principles [of sustainable joined a study group that intends to create the methodology to map externalities. agriculture] are welcomed by governments and by other Initiatives, partnerships, and studies agencies interested in the AMAGGI participates in discussion groups and initiatives with national and inter- production of food for the world.” national organizations and associations involved in agribusiness and sustainable development. The company is also part of several institutions and representatives of various sectors that tackle issues that affect all companies in the sector, such Waldemir Loto, CEO of AMAGGI, as the Brazilian Association of Vegetable Oil Industries (ABIOVE - Associação in a passage from his speech at Brasileira das Indústrias de Óleos Vegetais), Association of Soy and Corn Produc- the Leaders Summit 2013 ers of the State of Mato Grosso (APROSOJA - Associação dos Produtores de Soja e Milho do Estado de Mato Grosso), and the Association of Cotton Producers of Mato Grosso (AMPA - Associação Mato-grossense dos Produtores de Algodão).

See the online version to learn more about: G4-16 - Business Services for Ecosystemic Services - Trends in Ecosystemic Services - Major Projects and Local Development - FGV - Abrange - Greener Soybean Project - Soy Moratorium

HERE I CREATE MY HISTORY

“The greatest adventure of my life was to come alone on a motorcycle from Rio Grande do Sul to Mato Grosso, following my parents’ path: they went to work in Sapezal (MT). I started to work there for a competitor, but I was curi- ous about the reason why AMAGGI’s employees were different from workers of other companies and why the company was so admired by the population. In the following years, I got married and moved to Sinop where I finally started working at AMAGGI. Today I can say that the outside view I had about the company’s differential and its employees was not only true, but it is even better. I am very happy and pleased with the path AMAGGI has planned for itself, and consequently, for me.”

RICARDO HUFFEL HAS WORKED AS A BUYER AT THE SINOP (MT) WAREHOUSE FOR TWO YEARS 60 AMAGGI

Scenario and strategies

In this section

GROWTH WITH SUSTAINABILITY ADDRESSING MARKET DEMAND Sustainability Report 2013 61

In this positive scenario for Brazilian agribusiness, AMAGGI proceeded with its growth strategy.

STUDIES CONDUCTED BY OECD AMAGGI REACHED THE GOAL AMAGGI COMMODITIES RANKS AND FAO INDICATE AN INCREASE OF A 10% INCREASE IN THE 18th AMONG THE LARGEST OF UP TO 40% IN THE GLOBAL VOLUME OF GRAIN ORIGINATED BRAZILIAN EXPORT COMPANIES DEMAND FOR FOOD BETWEEN IN BRAZIL. ACCORDING TO THE RANKING FROM 2007 AND 2019. THE MINISTRY OF DEVELOPMENT, INDUSTRY, AND FOREIGN TRADE. 62 AMAGGI

Growth with sustainability

Studies conducted by the Organisation for Economic Co-operation and Develo- pment (OECD) and the United Nations Food and Agriculture Organization (FAO) indicate an increase of up to 40% in the global demand for several types of food between 2007 and 2019. Most of this demand will come from developing countries. The studies also appoint Brazil as one of the main countries to expand its production and exports in order to supply a large part of this increased demand.

These perspectives represent both an opportunity and a challenge to Brazilian agribusiness. In order to expand agribusiness production and exports and consolidate the country’s leadership in the international agricultural market, it is necessary to intensify joint efforts of farmers and the government, whose public policies should ensure adequate levels of support and contribute to the improvement of logistics and infrastructure conditions.

Based on the commitments reaffirmed in the Corporate Sustainability Forum at Rio+20, aligned with the Zero Hunger initiative and the Nutrição em Escala (Nu- trition in Scale) movement, the Global Compact is promoting the voluntary development of Business Principles for Sustainable Agriculture (PEAS - Princípios Empresariais para uma Agricultura Sustentável) so that companies work more efficiently with the United Nations and reach the goals listed in The Future We Want document produced at Rio+20. The PEAS are meant to be guiding principles for sustainable agriculture, consolidating and referencing the significant advances achieved in politics, technology, knowledge, and innovation that have defined the food and agriculture sector in recent years – especially those achieved by the private sector.

HERE I CREATE MY HISTORY

“When I started working at AMAGGI, I had no idea how big the company would become. I learned the history of the Maggi family and would have really liked to have met Mr. André Maggi because everyone said good things about him being an ethical and fair person. I have a lot to thank the company and God for because I grew both personally and professionally. The company helped me finish my college education and supported me with its benefits in difficult times. In all this time I’ve met a lot of people, exchanged experiences, and cultivated good friendships that remain even today, just like I want to remain at AMAGGI, contributing to the company’s growth and thus growing as a person.”

REGIANE SILVA HAS BEEN PART OF THE TEAM FOR 13 YEARS AND IS CURRENTLY AN ADMINISTRATIVE SUPERVISOR AT THE CAMPO NOVO DO PARECIS (MT) WAREHOUSE. Sustainability Report 2013 63

Growing to meet The company’s strategy the demand to expand trading, Despite the adverse climate conditions that affected important production re- based on its principles gions in Brazil in 2013, production of grain hit a new record of 188.2 million tons, of sustainability and 16.2% over the 2012 harvest. This performance, based on gains in productivity and also on the expansion of the planted area, reaffirms the importance of Brazi- focused on origination, lian agriculture and the entrepreneurship of rural producers. The sector ensures is consolidated by a supply for the domestic market and contributes to the trade balance surplus, not to mention employment and income generation. strong partnership with rural producers. Brazil increasingly stands out in the international agricultural market as one of the largest global producers and exporters, showing that the sector is mindful of opportunities arising from a growing demand for food, driven mainly by the increased income in emerging and developing countries.

Agribusiness exports totaled US$99.97 billion in 2013, an increase of 4.3% compared with 2012, according to data from the Department of International Re- lations of the Ministry of Agriculture, Livestock, and Food Supply (SRI/MAPA). Imports increased by 4% and reached US$17.06 billion. The agribusiness foreign trade balance was positive by US$82.91 billion.

The main exporting sector was the soybean complex (US$30.96 billion), responsible for 31% of sales abroad. Soybean grain exports hit the record amount of US$22.81 billion, increasing US$5.36 when compared with 2012. The amount exported went from 32.9 million tons to 42.8 million tons, which represented 52.3% of the Brazilian soybean harvest in 2012/2013.

Another record-breaking result was reached with sales of corn abroad, which totaled US$6.25 billion, an increase of 18.2% when compared with the previous year.

On the wave of increased soybean exports, China, the largest global importer of the grain, exceeded the EU as the main buyer of Brazilian agribusiness products for the first time, purchasing US$22.88 billion, US$4.91 billion more than in 2012.

In this positive scenario for Brazilian agribusiness, AMAGGI proceeded with its growth strategy. 64 AMAGGI

In grain exports, the company achieved its goal of a 10% growth in volume of grain originated in Brazil. AMAGGI’s strategy was influenced by the serious logistical problems faced by the country in 2013. In order to reach the volumes planned, our trading origination focus was adjusted: of the total volume planned for soybeans, we replaced 450,000 tons with corn. With the climate-related problems faced by soybean crops, the record corn harvest, and the increase of transportation costs, the corn margins proved to be better and ensured the company’s planned result.

Trading ranks 18th among the largest Brazilian export companies, according to the ranking from the Ministry of Development, Industry, and Foreign Trade, advancing from the 21st position held the previous year. Our growth strategy, based on the company’s sustainability principles and focused on origination, is consoli- 25% dated by a strong partnership with rural producers. increase in In agricultural production, soybean crops suffered from the severe drought in Agro’s revenue. the grain filling period and from rains during the harvest, which caused results a little below expectations. The forecast of 56 sacks per hectare was reduced to 53 The navigation AMAGGI sacks, totaling 405,000 tons, which was below the expected 440,000 tons. strategy was Energy consolidated increases As for corn production, the goal of 400,000 tons was surpassed, with production through its installed exceeding 450,000 tons. Seed production also stood out, going from 156,000 investments capacity from sacks in 2011 to 560,000 in 2013. The cotton planted area decreased due to in the Madeira 23 to 70 MW attractive soybean and corn prices. Corridor In all, AMAGGI Agro achieved a 25% increase in revenue. The productivity growth strategy was consolidated through investments in technology, better agricultural practices, and quality-of-life projects for the employees in the fields.

In spite of climate adversities, the company ended the year with higher productivity than the average achieved in the state of Mato Grosso, the country’s largest producer of grain. For soybeans, the state average was 50 sacks per hectare, while AMAGGI Agro produced 53 sacks per hectare. Corn productivity was 106 sacks, while the state’s rate was 101 sacks per hectare. As for cotton, productivity was 4,180 kg per hectare, whereas the state average was 3,890 kg.

AMAGGI Navigation, in view of the record grain harvest and the logistical difficul- ties in the country’s South and Southeast ports, invested in the improvement of its infrastructure, which enabled the company to exceed the volumes planned for 2013. The company transported 2.8 million tons of grain through the Madeira corridor, an increase of 9.7% when compared with the 2.6 million tons transported in the previous year.

The company planned to resume the transport of fertilizers in 2013, but the activity will be resumed in 2014. The unforeseen increase in transported volumes had no impact on final results.

Our Navigation strategy was consolidated through investments in the Madeira Corridor, such as a new port in Porto Velho, with larger capacity and less impact on the local community. In addition, the company started construction of the Sustainability Report 2013 65

Tapajós corridor, which opens a new option for the outflow of Mato Grosso’s production. The new corridor will have an outflow capacity of up to 20 million tons of grain and will supply the European market and the Asian market, which is currently the largest importer of grain in the world.

AMAGGI energy finished the construction of two new small hydroelectric plants, already in operation. With five operational plants, the company has consolidated its strategy and started to fully generate cash flow, increasing its installed capacity from 23MW to 70 MW.

>>>>>>>>

The agribusiness sector is mindful of opportunities arising from the growing demand for food. 66 AMAGGI

Management and results

In this section

ECONOMIC AND FINANCIAL PERFORMANCE ENVIRONMENTAL PERFORMANCE SOCIAL PERFORMANCE SUPPLY CHAIN MANAGEMENT AWARDS AND RECOGNITION Sustainability Report 2013 67

To consolidate its position as one of the world’s largest players in agribusiness, AMAGGI monitors indicators and annually reviews its management processes for continuous improvement.

US$5 BILLION R$12.5 MILLION IN INVESTMENT IN PEOPLE AND IN REVENUE. INVESTMENTS AND EXPENSES THE SUPPLY CHAIN TO ENSURE FOR ENVIRONMENTAL THE COMPANY’S CONTINUITY. PROTECTION. 68 AMAGGI

To enable its Management and results growth strategy AMAGGI closed 2013 with positive results; with revenue of US$5 billion, the company proceeded with its growth strategy. with sustainability and according to The commodities market requires cost-efficient management, since margins in this sector are small and tend to decrease. For this reason, in 2013 the company institutional values, in launched the Excellence Project, which combines internal initiatives in cost man- addition to a strong and agement and gains in efficiency for logistics and procurement processes. responsible governance Another aspect deemed important by the company is financial management. To structure, it is necessary enable its growth plan, the company needs to invest in fixed assets (port termi- nals, barges, pushers, warehouses) with appropriate credit lines. It is also nec- to rely on efficient essary to have working capital for the origination of grain, considering that the management and a medium-term goal is to double the volume originated. system that ensures the New financial partners are essential in this context, partners who feel comfort- protection and integrity able with the way the company conducts its economic, social, and environmental management. of information. To enable its growth strategy with sustainability and according to institutional values, in addition to a strong and responsible governance structure, it is necessary to rely on efficient management and a system that ensures the protection and integrity of information.

To consolidate its position as one of the world’s largest players in agribusiness, AMAGGI monitors indicators and annually reviews its management processes for continuous improvement. Investments in Information Technology To keep up with the growing demand for quality, agility, and security, AMAGGI invests in people, equipment, and systems to support its activities. The Informa- tion Technology Department has nearly 50 professionals who work in the infrastructure, support, and development of software and systems.

In 2013, the area was deeply involved in the implementation of new units and the maintenance of existing ones, as well as the creation and management of tools for improvement and standardization of processes, both in Brazil and abroad. In 2014, we expect an even bigger investment to support the company’s sustainable expansion actions. Sustainability Report 2013 69

EXCELLENCE PROJECT Since 2012, AMAGGI has been analyzing internal processes for the management of costs and for the logistics and supply chain. In order to implement its business and sustainability strategies in 2013, the company, with the support of an external consulting company, implemented two projects: the Matrix Management of Expenses (GMD in the Brazilian acronym) and the Organizational and Process Restructuring (ROP in the Brazilian acronym).

Through the GMD, the company grouped accounts and created package managers. After a three- month training, managers identified opportunities for improvement and established indicators and goals for each group of accounts. The 2014 budget had the help of these managers, based on the opportunities identified in the previous year.

The establishment of goals to use and manage energy, water, paper, and solid waste is in line with the company’s Environmental Policy. They are the result of the continuous monitoring of the use of natural resources in line with the opportunities for improvement identified by the Excellence Project, with reduction goals for the headquarters in 2014 and, later, for the branches.

For the ROP, supply and logistics chains were defined as a priority. Based on the analysis of AMAGGI’s strategy for the coming years and the gaps identified in the processes, a new design was conceived. To this end, we created an action plan to be implemented in the first half of 2014. The goal of the project is to gain efficiency and align processes with the company’s sustainability principles. 70 AMAGGI

MANAGEMENT AND RESULTS Economic and financial performance

AMAGGI’s executive board annually defines budgets and performance goals and reviews them monthly in specific meetings for the purpose. The areas of accounting, tax planning, and risk control prepare financial statement tables, develop and monitor budgets, and track exposure to market variables. There are goals related to those assignments in the variable remuneration plan of these areas.

The CEO is globally responsible for the determination and supervision of the company’s results and for the risk management structure. The company maintains a risk management department, which reports regularly and directly to the CEO. Sustainability Report 2013 71

The policies that define limits of exposure to the risk of commodity prices and exchange rates are continuously monitored by AMAGGI’s risk department. These values are reviewed by the CEO in order to reflect eventual changes in market conditions and in the operations developed by the company. 72 AMAGGI

Results Throughout 2013, AMAGGI reached the goal established to increase sales volumes in all its business areas. In this period, AMAGGI Commodities shipped 9 million tons of grain, between corn and soybeans, while AMAGGI Agro closed the year with production volumes close to one million tons. Also in 2013, AMAGGI Navigation transported 2.8 million tons and AMAGGI Energy began operating with installed capacity of 70 MW.

“Our flagship is still soy, For AMAGGI Commodities, 2013 came with great challenges, especially in terms but in 2013 corn had an of logistical issues associated with the increase of inland freight costs and the important contribution payment of demurrage, which had a negative impact on the operating income for AMAGGI Commodities. Nevertheless, these effects were offset throughout the to the results, which was year with the results obtained in corn origination and trading. Abroad, AMAGGI unprecedented in the Commodities reached record results in its operations in Argentina, the Nether- company’s history.” lands, and Norway (with the acquisition of 100% interest in DENOFA), in addition to the beginning of operations in Switzerland, also with positive results. It is Dante Pozzi, Administrative- important to note that the combined operations of AMAGGI Commodities abroad Finance Director already amount to 4.7 million tons of grain, with 50% of these volumes originating within AMAGGI.

AMAGGI Agro achieved its production goals, especially due to a larger corn harvest in 2013. The decreased result when compared with the previous year is mainly a reflection of the reduction in soybean prices when compared with 2012.

AMAGGI Navigation reached new records in transported volume in 2013 as a result of improvements in the logistics for the receiving of products at the Porto Velho (RO) Port, of the river barge fleet, and of the ships in Itacoatiara (AM).

Finally, AMAGGI Energy, now with five plants in operation, will start operating with a total installed capacity of approximately 70MW in 2014. The 2013 results for the area partly reflect this expansion with the completion of the Ilha Comprida and Segredo SHEPs in the first half of the year.

See the online version G4-EC1 to learn more about: -Breakdown of Value Added Distribution in 2012 and 2013. Sustainability Report 2013 73

to increase by 10% the volume of grain originated in Brazil

to build new warehouses to support the export corridors of the Tapajós River and Goals Itaqui Port in Maranhão (the warehouses will be finished in 2014) for 2013 to advance in the construction of the Bulk Terminal of Itaqui (MA), in a joint venture with Louis Dreyfus Commodities

to begin the operation of the new Ilha Comprida and Segredo SHEPs in Sapezal (MT)

to begin investments in navigation in the Tapajós (PA) corridor

to begin AMAGGI operations in Switzerland

to develop internal projects for cost management and gains in efficiency in the logistics and procurement processes

Growth above 20% in the volume of grain originated in Brazil Goals Advances in the construction of the new Porto Velho (RO) Port for 2014 Increase in the fleet in the MadeiraAmazonas corridor

To begin navigation in the Tapajós-Amazonas corridor (PA)

To build new warehouses to support the export corridors of the Tapajós River and Itaqui Port in Maranhão

To begin AMAGGI operations in Paraguay 74 AMAGGI

MANAGEMENT AND RESULTS Environmental performance Sustainability Report 2013 75

In 2013, the environmental area restructured its processes, which enabled the improvement of collection and the analysis of indicators. In partnership with the 90,000 + agricultural GHG Protocol, the area took part in studies and conducted an analy- HECTARES OF sis of its emission inventory to launch a Carbon Management Plan in 2014. The PRESERVED AREA company advanced in the evaluation of ecosystemic services in partnership with the PESE Platform from Fundação Getúlio Vargas and Cambridge University Natu- ral Capital Leadership. The area also advanced in the work with the production chain, certifying 54 rural producers pursuant to the criteria of the Round Table on Responsible Soy (RTRS). 76 AMAGGI

Basic Environmental policy guidelines and management

AMAGGI’s Environmental Policy is defined by the CEO and by the Executive Board, based on the company’s mission and values and its business strategy. In > order to remain up-to-date with these principles and with variations in the mar- To meet applicable legal ket, the policy is reviewed annually. In 2013, management of greenhouse gas requirements and other emissions was included in the basic guidelines, given the fact that this has proven requirements subscribed to by the organization in terms of its to be a relevant topic for the business, for the renewal of certifications, for meet- environmental aspects ing the demands of the foreign market, and for the benefit of society at large.

> The policy reaffirms AMAGGI’s commitment to preserving the environment, pro- To improve processes, seeking moting solid waste management and the continuous monitoring of environmental to prevent pollution, manage performance, and established environmental objectives and goals. To this end, greenhouse gas emissions, and continuously improve the company grounds its operations in the prevention of environmental damages environmental performance and seeks continuous improvement of its processes.

> Environmental management is based on the Environmental Policy. The Environ- To apply best techniques and mental Management System, certified since 2007, was developed based on ISO procedures for the effective 140001 and applies to all business areas. In addition to the management of legal mitigation of environmental issues, the system enables the management of units, better use of natural re- accidents sources, and better performance, not only from an environmental standpoint but > also from an economic and social standpoint. To provide training to all employees who work on behalf The environmental area, under coordination of the Sustainability Department, of AMAGGI was restructured in 2013. The units’ environmental analysts, who were allocated > to the units and who previously reported to the corporate area, now report to To encourage and guide our the manager of each unit under the supervision of the corporate environmental commercial partners in the team, providing greater autonomy to tackle peculiarities. At the headquarters, improvement of their social and environmental performance specialists divided by themes (licenses, management system, external partnerships, and corporate affairs) monitor and guide the units. These changes enabled improvements of processes and in the analysis of indicators. Sustainability Report 2013 77

Compliance and investments R$ 12.5 MILLION IN ENVIRONMENTAL INVESTMENTS G4-EN29, EN31, G4-EN31 and EN33

One of the processes of the Environmental Management System (SGA in the Bra- zilian acronym) which are conducted annually is the Legal Compliance Evaluation, Legal which evaluates the compliance of each environmental aspect of the activities developed by the company. Likewise, when a new activity is implemented, the Compliance environmental aspects and the associated impacts are identified, along with the STRICT EVALUATION THROUGH applicable environmental legislation. the Environmental Management System When inconsistencies are identified, a nonconformity is registered internally to be duly addressed, and the actions necessary for its correction are defined.

In addition to internal processes, the social and environmental compliance of environmentally critical suppliers is evaluated by checking applicable licenses, the existence or non-existence of embargoes at IBAMA (Brazilian Institute for the Environment and Natural Resources), and the presence or lack thereof of the company in the Ministry of Labor and Employment’s black list for bonded labor. The evaluation results in a report containing the information collected in the consultations, including risk analysis, when applicable. If some of the items evaluated prove to be nonconforming, the contract is not executed until the irregularity is solved.

The company was not assessed significant fines or non-monetary sanctions in 2013. Also, there were no lawsuits by arbitration mechanisms against the company. We continued with the actions to comply with the Termo de Ajustamento de Conduta - TAC (an agreement between a private company and the Public Attorney’s Office to committing to act pursuant to the law) that aim to recover degraded Permanent Protected Areas, in compliance with one of the phases of the MT Legal Program, to which AMAGGI voluntarily adhered.

Every year the company makes environmentally-related investments to maintain a continuous improvement structure of its processes and mitigate impacts. Investments are focused on the maintenance of the Environmental Management System, on improvements in our operating units, and on research and development. In 2013, these investments totaled R$12,472,667.52. 78 AMAGGI

In the operating units, there were many improvements last year that were in line with the guidelines established in the Environmental Policy, both in operating units and in new projects, such as the structure to build deposits for waste and the purchase of equipment for wastewater treatment.

Another highlight in 2013 was the increased investment in research and development through partnerships with the UN (Global Compact and Sustainable Agri- culture Principles), The Nature Conservancy (TNC), Aliança da Terra (social and environmental actions in the soybean supply chain), Cambridge University, and GVces (ecosystemic services and environmental valuation).

See the online version to learn more about: -details on investments and expenditures in environmental protection, by type. -extension of the mitigation of environmental impacts of products and services.

HERE I CREATE MY HISTORY

“To become an AMAGGI employee was undoubtedly a great achievement because the company has a considerable differential when it comes to respecting the environment and valuing its employees, as well as commitment and seriousness. Before joining the team, I considered myself a citizen with “sustainable” attitudes, but when I learned more about the company’s dynamic and projects, I realized my contribution to the environment was next to none. AMAGGI greatly influenced my habits, especially in terms of concern about sorting different types of waste, among other attitudes. I take these new habits to my home, my friends, and everywhere I see the need. Great results are a consequence of great efforts, and they must come from everyone.”

CAMILA ROCHA HAS WORKED AS AN ADMINISTRATIVE ASSISTANT IN THE HEADQUARTERS IN CUIABÁ (MT) FOR SIX MONTHS Sustainability Report 2013 79

INVESTMENTS IN SEARCH OF SELF-SUFFICIENCY IN BIOMASS Aimed at achieving self-sufficiency in the biomass used for grain drying (warehouses) and steam production (crushers) processes, AMAGGI invests in reforestation with exotic species on its own properties. Today the company has farms with eucalyptus in different phases of development.

In 2012, for example, the company acquired Santo André Farm, with 3,200 hectares in Sorriso (MT), as part of a plan to achieve self-sufficiency for the Lucas do Rio Verde plant.

In Itacoatiara, there is an ongoing experiment called “Evaluation of phosphate fertilization and spacing on experimental planting of two forest species (Eucalyptus urograndis and Sclerolobium paniculatum) for the production of energy in Central Amazon,” which has been ongoing for five and a half years and is currently in the data collection phase. In 2014, we expect the first results about the two species evaluated, considering variables such as the equation for volume, the equation for biomass, the density, and the evaluation of phosphate fertilization and spacing. The experiment is being conducted by AMAGGI and will be evaluated by Embrapa Amazônia Ocidental. 80 AMAGGI

AMAGGI has over Biodiversity 90,000 hectares of G4-EN13 area preserved as legal reserves and permanent In order to contribute to the conservation of biodiversity, we developed programs to monitor wildlife and flora in the areas surrounding the company’s large proj- preservation areas. ects, both those under implementation and operational.

AMAGGI also has 90,357.40 ha of area preserved as legal reserves and permanent preservation areas. Of this total, 18,980.59 ha are located within state parks Of this total, 19,000 (intended for compensation or exemption of legal reserve), and 71,376.81 ha are ha are located within preserved in the company’s farms. state parks and 71,000 The percentage of legal reserve calculated to comply with the legislation may are preserved in the vary between 20% and 35% when the area is located in the cerrado region, and between 50% and 80% when it is located in forests. This variation may occur ac- company’s farms. cording to the year and the size of the area of the property that is cleared. When two types of areas are found within a single property, calculations are made individually. Results of the recovery measures are evaluated by internal experts and checked in inspections and surveys from environmental licensing agencies.

In areas where plant cover is non-compliant with the parameters required by legislation, Recovery Plans Degraded Areas (PRAD in the Brazilian acronym) are implemented. The company purchased nearly 14,400 seedlings of native species to recover these areas and produced more than 47,000 kg of seeds in its own nurseries.

AMAGGI also invests in its own eucalyptus and acacia reforestation areas to supply its biomass demand to discourage the clearing of new areas.

When acquiring biomass, the company prefers, whenever possible, to use firewood from the reforestation of exotic species, such as eucalyptus, to avoid a greater impact on biodiversity.

In factories we use sawmill waste from wood processing, thus promoting the sustainable destination of waste and avoiding the exploration of new areas. Sustainability Report 2013 81

>>>>>>>>

AMAGGI invests in its own eucalyptus and acacia reforestation areas to supply for its biomass demand to discourage the clearing of new areas. 82 AMAGGI

SIGNIFICANT IMPACTS ON BIODIVERSITY

G4-EN12

The construction of AMAGGI’s small hydroelectric plants started in 2008 with the opening of access roads and the consequent degradation of areas, as planned in the licensed project. In 2013, AMAGGI Energy carried out several recovery activities for degraded areas in approximately 58 hectares of construction sites, access ways, and deposits of gravel and clay, in addition to monitoring wildlife in the Ilha Comprida and Segredo SHEPs. In the areas of SHEPs, some endangered species were detected in our wildlife monitoring.

3 More than 76,000 m The impacts identified are reversible, comprising the area surrounding our projects of water saved through and their corresponding reservoirs. Reconfiguration of these areas, the object of the PRAD, will fully reestablish the area to the conditions prior to the impacts. water recycling or reuse initiatives. In 2013, AMAGGI Commodities acquired four plots of land of approximately 10 hectares each for the implementation of storage units. The areas had already been cleared, causing no impact on local biodiversity.

5,600 GJ of energy In turn, when we built AMAGGI’s Private Port Terminal in Porto Velho, Rondônia, saved through energy we had to suppress 27.80 ha of vegetation. In order to obtain authorization for this suppression, the company prepared a forest inventory in partnership with a efficiency initiatives. specialized consulting company. The inventory considered impacts that were ir- reversible and had possible compensation, a process previously carried out in the project’s licensing process.

A dam, located in the same area, was drained and had its ichthyofauna recovered to prevent environmental accidents involving fish. Seven species of fish were collected: cará (Aequidens tetramerus), lambari (Acinocheirodon melanogramma), joaninha (Crenicichla spp), peixe cobra/muçum (Synbranchus marmoratus), traíra (Hoplias brasiliensis), curimba (Prochilodus lineatus), and tambaqui (Co- lossoma macropomum).

AMAGGI Agro acquired new properties in 2013, totaling 81,5039 ha of Degraded Permanent Preservation Areas (APPD in the Brazilian acronym), which are not the object of recent deforestation. In 2014, we are going to start the Recovery Plan for Degraded Areas in order to recover the environmental liability and restore local biodiversity.

Impacts related to APPDs involve depletion of the soil due to removal of the local plant cover and possible silting of waterways. The local impacts described are reversible after the recovery of these areas with the use of native species. The projects are devised in compliance with the guidelines established by competent environmental agencies.

G4-EN11, G4-EN23 See the online version to learn more about: -location and area of AMAGGI’s properties -endangered species identified -wastewater and waste management Sustainability Report 2013 83

WATER AND ENERGY At AMAGGI’s plant operations, water is used in the production process for the generation of steam to extract degummed oil. As for other units, water use is restricted to cleaning activities and human consumption. Considering that industries account for 72% of the total water used, we consider the monitoring of these operating units a priority.

In terms of energy, AMAGGI develops its own generation projects and invests in energy efficiency in order to identify both new opportunities to save that resource and to reduce carbon emissions.

In the materiality process carried out in 2013, water and energy resources were not identified as material. Thus, the indicators referring to their use are presented only in the GRI Table of Contents on page 124.

ENVIRONMENTAL RESEARCH WITH IPAM AMAGGI maintains a partnership with the Environmental Research Institute of the Amazon (IPAM - Instituto de Pesquisa Ambiental da Amazônia) at the Tanguro Farm, one of its main production units, in Querência (MT). Researchers are monitoring water quality in local streams and collecting information about animals in order to gather knowledge to guide governmental agencies in the definition of public policies that preserve the forest and its biodiversity. Research also aims to generate information for rural producers and help guide forest recovery actions.

In 2013, we continued the execution of the Savanização Project, which evaluates the vulnerability of tropical forests to climate change and modification in the use of land. That same year, IPAM requested authorization to slash and burn the Legal Reserve Area in order to conduct a study in the area. Results are still under analysis. Experimental slash and burn was carried out with the purpose of quantifying the relationships between microclimate, amount of combustible material (leaves and branches), and fire behavior. Preliminary results show that low-intensity fire has an immediate effect on the plant cover, with a 20% reduction in the leaf area index. Web link . 84 AMAGGI

CLIMATE CHANGE

G4-EC2

Climate change is an increasingly relevant topic at AMAGGI, considering the im- AMAGGI participates pact on its operations. in the development of According to EMBRAPA’s evaluation, “Agriculture is highly dependent on climate the GHG Agriculture factors, such as temperature, rainfall, soil humidity, and solar radiation. Climate Protocol to expand its change may affect agricultural production in many ways: through the change in climate factors, including frequency and severity of extreme events, the increase current tool, considering in production due to the fertilizing effect through greater concentration of CO2 in the most significant the atmosphere, changes in harvest intensity due to changes in the number of degrees-day for growth, or by modifying the occurrence and severity of pests and emissions associated disease, among other effects.” with the agribusiness.

In agricultural production of soybeans, corn, and cotton, the acknowledgement of risks resulting from climate change leads the company to increasingly invest more in knowledge (research, information systems) and adaptation of production (seeds and pest control, among others) to tackle challenges and turn them into opportunities. This preparation reduces losses and ensures better productivity.

Reduction of productivity has a direct impact on the sales volume planned by the company, causing impacts on economic results. Since the company operates with commodities, the result of other countries’ crops may also represent a risk or an opportunity. When another country has a record harvest, product supply increases and the price for the product may be smaller than expected, reducing gains planned by the company. Similarly, a bad harvest in another country can represent an opportunity for the product to reach higher prices or enter new markets, such as the case in 2002 with the corn harvest in the U.S., which caused the country, traditionally the largest corn producer in the world, to import it from Brazil.

Changes in the rainfall regime also have a major impact on river operations and the generation of energy, considering the impact on river volumes, essential for the small hydroelectric plants (SHEPs) and for river transportation. An extended drought requires more convoy voyages, since it is not possible to load the barges to full capacity, and it also requires more attention to river drought. In turn, with floods and excessive increases of river levels, there is a risk of falling tree trunks, which are dragged to the river bottom and may cause damage to vessels.

As for the storage of grain, when room temperature increases, it is necessary to turn on warehouse fans to keep the crushed soybeans from “burning,” which increases spending for electricity. Sustainability Report 2013 85

>>>>>>>>

Risk management becomes a competitive advantage when the company operates efficiently, even in face of climate adversities. 86 AMAGGI

AMAGGI’s operations in terms of climate conditions can be observed in the man- AMAGGI’s operations agement of natural resources in production processes and the evaluation of at- in terms of climate mospheric emissions. conditions can be In industrial plants, periods of intense rainfall increase consumption of biomass observed in the (firewood and wood chips) and electricity. In times of drought, we have the risk of hot spots and outbreaks of fire in the biomass. management of natural resources in The greatest risks are associated with our core activity. Therefore, the company invests in new technologies and knowledge about the topic in order to mitigate production processes impacts. Risk management becomes a competitive advantage when the company and the evaluation of operates efficiently, even in face of climate adversities. atmospheric emissions. In regulatory terms, AMAGGI identified opportunities, such as the case with the European Union Renewable Energy Directive, which determines the maximum level of greenhouse gas emissions from the field to end users. Since the company has been adopting best agricultural practices in its farms and supply chain for more than 10 years, it quickly obtained the ISCC certification, which meets the European directive and, consequently, the European market demand. AMAGGI was one of the first Brazilian companies to obtain this certification. See the online version to learn more about: It is not possible to measure the amount invested in mitigation of climate im- The company’s emissions pacts, considering that the topic is associated with the company’s activities in a in the online report process of continuous improvement.

HERE I CREATE MY HISTORY

“When I was called for the job interview, I couldn’t sleep waiting for the day to come. I was very anxious because I was unemployed and had been left with three children to take care of by myself. I needed the job, and God gave me a little hand. Once employed, I worked with love and dedication until destiny played a trick on me: I underwent surgery to remove my saphenous vein and was no longer able to perform my kitchen and cleaning activities. I was on leave for a long time. I wasn’t fully rehabilitated until 2012, when AMAGGI not only took me back but also promoted me to the administrative area. What can I say about this company? It is true to its mission, vision, and values... it offers many opportunities to employees who fly the company’s flag and are committed to their work. I am proud to be part of this team; it is an honor for me to be able to share my story. Quoting one of the founders, Lúcia Borges Maggi: “From here, I only move forward. Never backward!”

RAQUEL SILVA HAS BEEN WORKING AT AMAGGI FOR 10 YEARS AS AN ADMINISTRATIVE ASSISTANT IN ITACOATIARA (AM) Sustainability Report 2013 87

Green House Gas (GHG) emissions G4-EN15, G4-EN16, G4-EN17, AMAGGI participates in discussion forums about green house gas emissions, iden- G4-EN18, G4-EN21 tified by scientists as the main cause of climate change. Among the forums, the Agriculture GHG Protocol initiative stands out, in partnership with the World Resources Institute (WRI) and the Getúlio Vargas Foundation Center for Sustain- ability Studies (GVCes in the Brazilian acronym). The purpose is to expand the current GHG Protocol tool, taking into consideration the most significant emissions associated with agribusiness. The idea is to launch a new tool by February 2014 to allow companies in the agribusiness sector to enter their data on emissions, which in the past was impossible given the lack of methodology to convert emission factors.

The company also obtained two certifications that deal with the inventory of emissions: the Round Table on Responsible Soy Association (RTRS REDD) and the International Sustainability Carbon Certification (ISCC). RTRS promotes discussions among parties about the development of production, processing, and marketing of more sustainable soy. The ISCC certification is more focused on GHG emissions of the product chain of custody, aligned with international directives that set goals or boundaries for emissions of GHG (learn more in the Certifica- tions section).

In 2013, AMAGGI prepared its third inventory of green house gases (GHG) in order to identify sources of emissions arising from its activities. This is an essential procedure to establish a baseline for the development of the Strategic Carbon Management Program, planned for 2014.

In order to prepare a new inventory, we commissioned a specialized consulting company, Pangea Capital, which analyzed the results of the previous year and proposed improvements in the management of emissions to increase transparency and credibility of the results disclosed.

The new inventory incorporated modifications in the scope and methodology to calculate GHG emissions, including emission factors that are more appropriate for the local reality. Furthermore, new sources of emissions associated with agricultural activities were included.

See the online version to learn more about: - AMAGGI’s direct and indirect emissions 88 AMAGGI

MANAGEMENT AND RESULTS Social performance

People management is one of AMAGGI’s main focuses. With a successful history, the small family company, which became an internationally recognized company with operations abroad, foresees a significant expansion of future business and invests in people to ensure its continuity. Sustainability Report 2013 89

Our People Management Policy is based on respect for human beings and diversity, transparency of its actions, and personal and professional development of its employees. 90 AMAGGI

“Our challenge is no longer DEVELOPMENT AND EDUCATION to be in compliance with the The growth strategy based on people development is materialized through the country’s complex legislation, Aroeira Project. The initiative consists of, among many actions, preparing leadership and identifying potential talents to execute the growth strategy, seeking to because that is strictly what we ensure the continuity of the business and organizational values. do. Looking ahead, I see that our main challenge is to attract, The Personnel Department manages actions and impacts of training and educa- develop, and retain qualified tion, based on the Human Resources Policy and through human and organizational development programs. Each area defines its action plan based on its own people who cultivate our values, organizational strategy and business plan, as well as on the employees’ develop- essence, and culture. These mental needs, which are identified through competencies. people will implement the strategic business planning to The action plan, defined until 2020 to attract, develop, and retain employees, is called Strategy Decoding. ensure the company’s growth in an increasingly The People Committee regularly assesses the work in a continuous improvement competitive scenario.” process. In 2014, the challenge is to apply a new survey on engagement, culture, and values. In 2013, the following development and education programs stood out.

Nereu Bavaresco, Human Resources Director

AMAGGI Corporate Education

FORMAL PROFESSIONAL ADM/ SCHOOL OF GENERATION OF EDUCATION TECH/OPERATIONAL LEADERS HUMAN CAPITAL

PDD – Education Improvement Executive Board Young Talent allowance trails

PDG – Manager

Language Internships courses

PDS – Supervisor

External courses Apprentices PDC – Coordinator Sustainability Report 2013 91

Education Allowance Program The purpose is to invest in academic training for employees. In 2013, a to- The Education tal of 192 people benefitted from the program, which finances up to 50% of Allowance the expenses for enrollment and tuition in technical and professional training courses, as well as graduate and post-graduate degrees. The investment totaled Program helped R$264,000 that year. Between 2012 and 2013, eighty percent of employees who 192 people in 2013. participated in the program received recognition through promotion or merit. In 2014, the organization will focus on language courses, given the company’s Investments totaled internationalization. R$264,700. Professional Qualification – Improvement Trails Project designed according to the mapping of careers and needs identified in the medium- and long-term strategy. It includes technical and behavioral qualifications customized for each business area, aimed at the improvement of administrative, technical, and operational performance of employees. In 2013, the positions included in the program were mainly: buyers, field coordinators, sales representatives of chemical products, and unit supervisors.

School of Leaders – Management & Action In order to prepare leaders, one of the main objectives of the Aroeira Project, we created a School of Leaders in 2013, with competency development projects for supervisors, coordinators, managers, and directors. Since 2011, the entire Executive Board (12 directors) have been undergoing assessment and coaching processes, in addition to courses. In 2013, a total of 75 managers completed the third module and 116 supervisors completed the first module. All 203 leaders are in the process of the individual development plan.

AVERAGE NUMBER OF TRAINING HOURS PER YEAR G4-LA9

Organizational Employee Competencies OHS Environment Category / gender 2011 2012 2013 2011 2012 2013 2011 2012 2013

Managers 7.93 19.94 15.04 15.65 14.49 12.47 1.56 3.01 4.54

Administration 5.21 7.88 7.22 15.65 4.97 6.89 1.56 3.55 6.98

Technical 4.67 7.93 4.44 15.65 11.46 27.89 1.98 8.50 4.87

Young Talents - - 31.49 - - 6.26 - - 5.68

Operational 4.49 4.23 4.11 15.65 18.27 23.81 1.53 2.61 3.69

Contractors* 0.00 0.00 0.63 3.46 6.01 2.19 1.56 1.11 0.40

TOTAL 4.96 6.75 3.25 7.80 11.93 10.35 1.56 3.00 2.39

Note: It was not possible to generate the number of employees trained by gender, since the records were prepared based on Version 3 of the GRI guidelines. Ad- justments will be carried out for 2014. 92 AMAGGI

Young Talent Program The program’s objective is to identify and develop young people to assume management positions or specific technical positions. It is a two-year program and includes development actions in knowledge areas aligned with the participants’ field of work, with AMAGGI’s business needs, and future challenges. In 2013, the company had 28 youths in the program, one who was hired, and 13 who are expected to be hired in 2014.

Young Apprentice Program AMAGGI supports the entry of young people into the labor market through partnerships with schools and companies as a way to encourage the development of creativity, commitment, and teamwork. In 2013, the company had 59 young apprentices in the program and 16 were hired.

Internship Program Enables employer and students to exchange knowledge, which allows for the sharing of technological, scientific, and cultural advances between educational institutions and the company. In 2013, a total of 10 interns who started work last year were hired and 5 new interns entered the program.

G4-LA10 Career Transition Planning Aims to prepare the employee in the last two years before retirement, both in psychological terms and in the creation of business plans to continue with other activities.

Outplacement Applied at the executive level, it is also available according to business requests and needs. The company helps the terminated employees, through a specialized consulting company, in their reentry into the labor market.

AVERAGE NUMBER OF TRAINING HOURS IN 2013 – ORGANIZATIONAL COMPETENCIES, OHS, AND ENVIRONMENT

Hours per Employee Category Employees Hours Employee

Managers 411 13,172.6 32.05

Administration 833 17,566.6 21.08

Technical 119 44,26.7 37.19

Young Talents 22 955.6 43.43

Operational 2,564 81,033.2 31.60

Contractors* 4,227 13,592.2 3.21

TOTAL 8,176 130,746.9 16.0 Sustainability Report 2013 93

PERFORMANCE ASSESSMENT PROGRAM AMAGGI’s current Goals Program was defined in 2011, including all leadership and specific job positions, seeking to evaluate competencies, work methodology, and the results obtained in terms of our corporate values.

Strategic objectives were turned into goals for the various management levels in practical and operational terms so they could become a collective task and allow for the company’s performance evaluation.

Of the total number of AMAGGI’s employees, 487 employees (of which 439 are men and 48 are women) are involved in the performance assessment (learn more in the GRI indicators on page 124).

DIVERSITY In governance structure and in relationships with employees and other strategic stakeholders, the promotion of diversity is based on the Diversity Valuation Guideline, an integral part of the People Management Policy and formalized in the Code of Ethics and Conduct.

In terms of physically challenged people, the company invests in campaigns to attract professionals and employee awareness campaigns.

In 2013, to attract more professionals in all business areas, the company launched an advertising campaign on radio stations, television, websites, and in newspapers in the states of Mato Grosso, Rondônia, and Amazonas.

AMAGGI simultaneously developed an internal campaign with managers, who received a primer to guide the process of PCDs. Employees also took part in a discussion conducted by the Social Responsibility Center based on informational material distributed to raise awareness and encourage employees to respect dif- ferences and keep the work environment free of prejudice and discrimination. The campaign is part of the project Eu cidadão: refletindo sobre os direitos e deveres da gente (I am a citizen: reflecting on people’s rights and duties).

“Recognizing and valuing talents makes us stronger. However, to find those talents, we need to look beyond appearances and understand that physically challenged people may have some limitations, but here they have the same responsibilities and abilities of any other professional.” (Statement of AMAGGI’s CEO, Waldemir Ival Loto, in a message to managers).

See the online version to learn more about: -ratio of remuneration between men and women in the company 94 AMAGGI

Well-being and citizenship To support and contribute to the well-being of its employees and their families, AMAGGI develops activities focused on the six health areas recommended by the World Health Organization (WHO) – physical, social, emotional, professional, intellectual, and spiritual – in order to achieve a better balance between personal life and work.

The program was launched in 2008 and comprises seven projects: Better Life for Couples (59 employees and 23 family members in 2013), Better Life for Children (109 children in 2013), Better Life for Women (pilot project with 22 employees’ wives in 2013), Open Doors (23 families in 2013), and Financial Balance (821 employees in 2013). Projects are carried out through lectures and workshops for employees, spouses, and their children.

Since 2008, we have held the Environment Week, an annual event that includes discussions and lectures on the topic. AMAGGI expanded the scope of the event with the Weekly Sustainability Talks, using the company’s internal channels to publish weekly messages on social and environmental topics. The Annual Confer- ence on Sustainability was held in 95% of the company’s units and involved 73% of the company’s employees.

Topics like ethics and corruption are also addressed in the project I Am a Citizen: reflecting on people’s rights and duties. In 2013, campaigns on diversity and integrity were conducted in all company units. G4-SO4, G4-HR2

The Well-being and Citizenship See the online version to learn more about: Project benefits employees and -Work benefits offered to employees. addresses topics such as ethics, corruption, diversity, and integrity. >>>>>>>> Sustainability Report 2013 95

HEALTH AND SAFETY AT THE WORKPLACE AMAGGI consistently invests in OHS management in order to ensure health and physical integrity for its employees, contractors, and suppliers.

In recent years, the company has improved its Management System to ensure compliance with the Occupational Health and Safety Policy. In 2011, the company carried out the first internal audit and developed the Safe Practices Guide, and in 2012, we distributed it to employees and contractors to inform them about occupational hazards and control measures to eliminate or minimize them.

Also in 2012, the company presented, in partnership with a renowned company, a sample diagnosis on culture in the Health and Safety Management System. The survey was conducted with over 1,000 people through online questionnaires and visits to farms, plants, warehouses, and other company units. Results showed the main points for improvement in structural processes and OHS leaderships.

In 2013, the print version of the Safe Practices Guide was turned into a video presented in all units. Since then, the material has been shown to every hire.

Also in 2013, the company started the Behavioral Safety Program in three AMAGGI Agro farms: Água Quente, Itamarati, and Tucunaré. The purpose is to further reduce the number of accidents at work through nearly 80 actions conducted in 2013 and 2014.

Rates of injury, occupational diseases, lost days, absenteeism, and number of work-related fatalities G4-LA6

Health and Safety 2011 2012 2013 Indicators Employees Contractors Employees Contractors Employees Contractors

Number of accidents** 234 32 196 37 160 14

Injury severity rate 24.58 - 15.93 - 13.19

Rate of occupational diseases 0 - 0 - 0

Total number of lost days* 1,193 - 2,571 - 8,207

Total absenteeism 0.11% - 0.20% - 0,16%

Total number of fatalities 2 0 0 1 2 in the period

*Lost days: this rate considers calendar days away from work, except the day of the accident and the return day. The system of norms applied to the recording and reporting accident statistics is the NBR 14280 – Registry of Accidents in the Workplace. ** In addition to typical accidents at work, the number includes accidents while commuting. 96 AMAGGI

Also in 2014, we intend to extend the program to the other farms and later expand activities to all AMAGGI units.

The reduction of injury severity rates is mainly due to significant work to raise awareness among leaders and the adoption of the new tools provided by the OHS Management System. Since 2012, unlike previous years, in addition to lost days, the transported and debited days are included in the calculation, which explains the increase in the number of lost days. The increase in the total number of lost days in 2013 results from the fatality that occurred at AMAGGI Navigation in Porto Velho. In 2013, the 15% goal for the injury severity rate was exceeded. The goal remains the same for 2014.

G4-LA1 See the online version to learn more about: -the guidelines of the Occupational Health and Safety Policy -risk prevention and control actions

HERE I CREATE MY HISTORY

I was married for 15 years to the father of my three daughters and when we broke up, I had to look for my first job at the age of 35. Since I was studying for a degree in Environmental Management Technology, I managed to enter AMAGGI’s internship program after hounding everyone I knew who worked there. Today, I have finished my degree, and I’m beginning a second college degree helped by the company’s education allowance, and one of my daughters is in the Young Apprentice Program, also offered by the company. Thank you very much, AMAGGI!”

CLAUDEJANE BRAGADO WORKS AS A LAB TECHNICIAN IN SEED PRODUCTION IN SAPEZAL (MT); SHE HAS BEEN AT AMAGGI FOR TWO YEARS Sustainability Report 2013 97

Representation in OHS committees AMAGGI has 100% of its employees represented in formal committees (CIPA, CIPATR, and CPATP). We also have an Occupational Health and Safety Committee formed by members of the Executive Board, responsible for making decisions on topics related to this area.

We currently have 160 representatives in the formal committees (CIPA, CIPATR, and CPATP), and 593 employees to act in situations of environmental or occupational health and safety emergency (Emergency Brigade). G4-LA5

In 2011, the OHS Committee joined AMAGGI’s Sustainability Committee to form the Sustainability and OHS Committee composed of the CEO and members of the Executive Board.

There are also local OHS committees in each operating unit, totaling 211 members, appointed by local managers who help implement and maintain the OHS Management System, among other competencies.

Occupational Health and Safety is a regular topic in the dialogue between AMAG- GI and its employees, including in collective bargaining agreements. The company adopts the practice of including more items and information than required by law in agreements with trade unions.

See the online version to learn more about: -employee turnover indicators - return rates after maternity / paternity leaves 98 AMAGGI

MANAGEMENT AND RESULTS Supply chain management

G4-EN32, G4-EN33, G4-HR10, G4-HR11, The company’s Procurement area follows rules and procedures approved by the G4-LA14, G4-LA15, G4-SO9 and G4-SO10 Executive Board. The purchasing policy prioritizes local and regional suppliers to contribute to the development of the regions where AMAGGI operates.

In 2013, a total of 2,060 new suppliers were hired. All of them were assessed based on environmental criteria, human rights, labor practices, and impacts on communities. In terms of current suppliers, only one– a supplier of mineral products – among the 1,177 that already had commercial relationships with the company was not qualified, and improvement measures were established. Sustainability Report 2013 99

All contracts prepared by AMAGGI contain specific human rights clauses in order to G4-HR5, G4-HR6 prevent exploitation of child labor, degrading or bonded labor in its production chain, and benefits from or support for such practices.

Furthermore, suppliers are required to preserve the environment, pursue sustainable development, and minimize adverse environmental effects that might result from their activities. Contracts also include clauses regarding labor and social security obliga- tions, as well as employee safety and health assurance with the use of individual and collective protective equipment, employee training, and awareness on these topics. 100 AMAGGI

AMAGGI has a system to block all suppliers that are on the blacklist of bonded labor, thus avoiding any type of business relations with such suppliers and ensuring compliance with the institutional commitment of the Pact for the Eradication of Bonded Labor, which the company embraces.

All contracts presenting environmental, property or personal, financial, or labor damages risks follow specific procedures to minimize those risks. In these cases, legal and environmental documents are required and records of pertinent regulatory agencies are consulted.

These topics are set forth in the contracts and, in cases of noncompliance, adjustments are required to formalize supply. If irregularities are identified during the term of the agreement, it may be terminated.

Purchasing practices are constantly reviewed by the corporate team and, if nec- G4-EC9 essary, measures are taken to improve processes. In 2013, Procurement started reviewing and restructuring its processes with the help of a consulting company, within the Excellence Project - ROP, in addition to other improvements that were RATIO OF EXPENSES FOR identified by the area and have been implemented since 2010 (learn more on LOCAL SUPPLIERS IN IMPORTANT page 102). OPERATING UNITS For the company, work with the supply chain is strategic. As a result, in the mapping of audiences for the Engagement Plan developed in 2013, three among the five priority groups were part of the supply chain: rural producers, environmentally critical suppliers, and truckers. 96% The company already develops projects with these audiences and the two-way 2011 communication will be enhanced with the action plan created for the coming years aiming to provide AMAGGI with a responsible supply chain that shares the 87% company’s principles and values. LOCAL PURCHASES 2012 The company prefers to procure supplies in the region where its units are located. When local suppliers cannot meet the demand or do not comply with the require- 85.37% ments established by AMAGGI, other suppliers are sought. The result of this guided process can be seen, for example, in the purchase of grain 2013 from third parties, who in 2013 accounted for 30% of the amounts paid in the state of Mato Grosso alone, and 14% in the other regions where the company operates.

Note: The company considers local purchases those occurring within the state where the company The chart on the left shows how this policy has been carried out in recent years. branches are located, and all units are considered in the calculation. The percentages above include, in addition to local purchases of materials and supplies, the contributions for strengthening local agriculture. Sustainability Report 2013 101

Rural producers, strategic partners. Rural producers are AMAGGI works with approximately 3,600 rural producers who supply grain for strategic players and sale, and many of them receive support from the company in the form of inputs and credit. These are strategic players and are essential to the growth of the are essential to the business; therefore, it is critical for them to be in line with our corporate values growth of the business; and commitments. Our challenge is to mobilize and engage all agents in the supply chain. therefore, it is critical for them to be in line with Soybean supply AMAGGI’s supply chain qualification program promotes responsible agricultural our corporate values production by encouraging producers to apply best agricultural and sustainability and commitments. practices to crop management. Our strategic goal is to interact with rural producers, whose production is sold by the company, and stimulate gradual improvement in legal compliance and in social and environmental performance standards.

Strategic guidelines

Prohibition of degrading work

Prohibition of child labor

Commitment not to interfere with Indigenous areas

Commitment not to interfere with preservation areas

Commitment not to produce in areas under embargo (IBAMA)

Commitment not to produce in areas cleared after July 2006 in the Amazon biome (Soy Moratorium) 102 AMAGGI

In 2013, a total of Social and Environmental Registry 831 properties were The company carries out the social and environmental registration of producers in the category of Future Purchase, which foresees detailed monitoring of assessed based the social and environmental conditions of the farms, including aspects such as on social and water and soil conservation, social management and work safety, conditions of operational and maintenance areas, environmental protection areas, handling of environmental aspects, agrochemicals, waste destination, legal compliance, and management and con- including records tinuous improvement. kept in registration In 2013, the environmental department updated the registry, including new indi- forms, visit forms, cators to improve analyses. Altogether, 831 properties were monitored throughout the year, including registration forms, visit forms, and suggestions for im- and suggestions for provement based on the aspects listed. improvement. The social and environmental visit is an in loco survey to check the conditions of rural properties and the social and environmental practices, including occupational health and safety aspects. The Sustainability team participates in the credit approval strategy and has power to veto deals. Their decisions are based on the registration and visit information, as well as on the analysis of reports and property documents.

In order to facilitate monitoring of the areas, a collection of up-to-date satellite images of over 320 municipalities covering soy-producing regions or regions in agricultural expansion is available. To ensure that no trading occurs with areas under embargo, the public list issued by IBAMA is entered in AMAGGI’s control system, which automatically blocks these areas. The system also blocks areas listed in the Soy Moratorium and the bonded labor blacklist, thus avoiding any type of business with these areas.

AMAGGI also carries out, with certain producers, a social and environmental diagnosis based on data gathered in the annual assessments, allowing for the evaluation of this aspect in the supply chain through the monitoring of a series of environmental indicators. Sustainability Report 2013 103

>>>>>>>> Our challenge is to mobilize and engage all agents in the supply chain.

AMAGGI CERTIFIES 54 RURAL PRODUCERS THROUGH THE RTRS. In 2012, a partnership was established between the André and Lúcia Maggi Foundation and the NGOs Aliança da Terra and Solidaridad to conduct the social and environmental registration and certification through the Round Table on Responsible Soy (RTRS) of 40 properties located in the Mid-north and Parecis regions in Mato Grosso.

In 2013, a total of 54 rural producers were certified, totaling 373,000 tons of soy. The first steps were visits to the farms and a social and environmental survey of each property, followed by audits, which certified all farms involved with the project.

For 2014, the Engagement Plan prepares actions to further improve the relationship with these rural producers, allowing all of them to share the benefits and also to plan the future of the partnership together. 104 AMAGGI

CRITICAL SUPPLIERS

G4-LA14, G4-LA15 e G4-HR1

AMAGGI established guidelines to select and evaluate the profile of all suppliers, including criteria on compliance with labor, social security, and fiscal and environmental legislation. In terms of environmentally critical business partners (among which are suppliers of biomass, sand, gravel, and fuel), the Procurement area requests legal and environmental analyses prior to entering into an agreement based on the risk assessment involved in supplying. In recent years, the company has Since 2010, the hiring of all suppliers has been evaluated by the Sustainability Department, which is responsible for issuing an environmental report. When nec- intensified the essary, inspections are carried out to determine work conditions (physical struc- evaluation of biomass ture, personal protective equipment, and meal and lodging structures offered to employees), as well as environmental compliance in its activities. suppliers, of which the inspection process is For three years, the company has used a system that undergoes continuous improvement to control environmental evaluation requests of environmentally required by internal critical suppliers and, as a result of the SGA and of the audit and legal compliance procedures. of processes, the company defined this category of suppliers more specifically in its internal procedures.

In recent years, the company has intensified the evaluation of biomass suppliers (native firewood or eucalyptus), which require, pursuant to our internal procedures, a mandatory inspection process. The purpose is to verify environmental lawfulness, including the analysis of the production capacity of the supplier in terms of maintenance of environmental balance and compliance with applicable legislation in the use and processing of wood. The information collected is registered in a standard report, which includes a checklist.

If during the term of the agreement, any adjustable irregularity is found, the supplier is notified and activities are blocked until the problem is duly solved. If the problem persists, the agreement is terminated and the supplier’s name is removed from the company’s supplier list. In the event of a shortage of suppliers to serve a region where AMAGGI operates, work to promote and provide technical support is conducted, when applicable, to help regularize potential suppliers. Sustainability Report 2013 105

Responsible Truckers IN 2013, AMAGGI proceeded with the campaign with approximately 2,500 truckers (contractors) of partner carriers using the Responsible Trucker Guide, a guide for the activity’s best practices inside and outside of the company.

Starting with the prioritization of this group of suppliers in its Engagement Plan, activities became part of an action plan. In 2013, a field study was conducted at some of AMAGGI’s units involving interviews with truckers and company employees, seeking to identify management and communication improvement opportunities, including in loco visits to truck driver hiring locations.

Improvements in the logistic processes under development in the Excellence Plan (learn more on page 69) will also have a positive impact on this group, since one of the objectives is to decrease trucker waiting time in warehouses and plants.

A campaign with approximately 2,500 truckers is part of the See the online version G4-HR7 engagement plan for this audience, to learn more about: which is considered a priority. -private security management >>>>>>>> 106 AMAGGI

MANAGEMENT AND RESULTS Awards and recognition Sustainability Report 2013 107

For the first time, AMAGGI has been included in Exame Magazine Sustainability Guide as one of the most sustainable companies in Brazil. The company also showed a significant improvement in rankings by important publications such as Valor Grandes Grupos, Valor 1000 Yearbook, and Maiores e Melhores by Exame Magazine. 108 AMAGGI

Exame Sustainability Guide The 14th edition of the Exame Magazine Sustainability Guide lists AMAGGI as one AMAGGI stands out in of the 61 most sustainable companies in Brazil among 20 industry segments and people development at as one of the 4 best companies in agribusiness. HR Management. Valor Grandes Grupos AMAGGI was highlighted in the ranking of the Valor Grandes Grupos Yearbook by Valor Econômico. The publication ranks the 200 largest business groups in Brazil The Tanguro Farm by revenue. In 2013, AMAGGI advance 10 positions in the ranking (to 86th posi- receives the Produzindo tion), further strengthening its place among the country’s 100 largest companies. The company also ranks 13th among the 20 largest in the trade sector. Certo (Producing Right)

Valor 1000 Yearbook award from the NGO AMAGGI advanced in the ranking and is now among the 70 largest companies in Aliança da Terra. Brazil. Compared with the previous edition, the company advanced 15 positions, going from 84th to 69th. In the ranking by region, the company also advanced one position and today ranks 4th among the largest companies in the North and Midwest. It is the first company in Mato Grosso in this ranking, and it stands out as having one of the best performances in the region.

Agro was highlighted in the Globo Rural Agribusiness Yearbook. >>>>>>>> Sustainability Report 2013 109

Maiores e Melhores by Exame Magazine In the 2013 edition, AMAGGI Commodities advanced 27 positions in the national ranking when compared with 2011, going from 103rd to 76th, holding its place among the country’s 100 largest companies. AMAGGI Agro, one of the 1,000 largest, advanced 65 positions, going from 670th to 605th.

Latin America’s 500 (AméricaEconomia) The magazine includes 13 countries in the ranking: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Panama, Paraguay, Peru, Uruguay, and Venezuela. Net revenue in dollars is the criteria used to rank companies. AMAGGI ranked 203rd. In the evaluation of the 100 largest exporters in Latin America, the company ranked 40th.

Agribusiness Yearbook by Globo Rural Magazine AMAGGI Agro was the most outstanding company in the Agriculture and Livestock Production of the 2013 edition of the Agribusiness Yearbook published by Globo Rural Magazine, in addition to advancing several positions in the Yearbook’s 500 Largest ranking, going from 154th to 120th. AMAGGI advanced 10 positions in the ranking to achieve 15th place among the 500 largest companies by net revenue.

Gestão RH Publishing Company AMAGGI was the only company in Mato Grosso to receive, in 2013, the Highlight in the Personnel Development Dimension, after competing with 10 other institutions – all of which are located in the Rio-São Paulo region.

Produzindo Certo – Aliança da Terra The Tanguro Farm, located in Querência (MT), was one of the winners in the fourth edition of the Produzindo Certo (Producing Right) award, granted by the NGO Aliança da Terra. Our unit was awarded in the Environmental Highlight category, which acknowledges the sustainability practices developed by the branch. 110 AMAGGI

André and Lúcia Maggi Foundation

In this section

THE ANDRÉ AND LÚCIA MAGGI FOUNDATION EVALUATION OF IMPACT, DEVELOPMENT, AND ENGAGEMENT PROJECTS IN COMMUNITIES Sustainability Report 2013 111

New direction points to projects and programs that are not focused exclusively on philanthropy or exclusively on the business.

2.6 MILLION IN 162,300 DIRECT AND INDIRECT A WOMAN’S NAME AND NEW PRIVATE SOCIAL BENEFICIARIES. STRATEGIC POSITIONING. INVESTMENT. 112 AMAGGI

TOTAL ANNUAL INVESTMENT André and Lúcia Maggi Foundation (R$ MILLION) Created in 1997, the Foundation closed 2013 with nearly 1 million people assisted and new challenges on the way. Its former name, André Maggi (the founder of the company) was changed to the André and Lúcia Maggi Foundation to include the name of the matriarch, who greatly influenced AMAGGI’s history and had her 1.17 name included to acknowledge her importance. Also last year, the company revised its Social Investment Policy with the redevelopment of its strategic planning. 2011 The Foundation carried out an assessment to define strategic guidelines for its social investments, with the help of a consulting company. The new direction 2.29 indicates projects and programs that are not focused exclusively on philanthropy or exclusively on the business. Strategies were divided into four dimensions: hu- 2012 man resources, internal projects, stakeholders, and added value. The company also revised and consolidated its project portfolio in an action plan for 20142018.

2.62 The Foundation receives annual resources from AMAGGI companies, which gives it financial sustainability. In 2013, the total amount invested was R$2.6 million and 2013 the number of direct and indirect beneficiaries exceeded 162,300.

The annual budget for the activities is approved in a General Shareholders Meet- ing, which ensures the maintenance, improvement, and expansion of projects and programs. Annually, the Foundation publishes an account of its resources and ac- NUMBER OF BENEFICIARIES tivities in the National Registry of Public Interest Entities (CNEs - Cadastro Nacio- nal de Entidades de Utilidade Pública Federal) on the Ministry of Justice website.

247,560 In 2013, the Foundation operated on three fronts: partnership with social institutions and some specific financial aid; its own projects and actions; and local development.

232,605 162,360

2011 2012 2013 20+ 21 + 9 Sustainability Report 2013 113

Map of operations

Mato Grosso Boa Esperança, Brasnorte, Campo Novo do Parecis, Campo Verde, Campos de Júlio, Cuiabá, Deciolândia, Diamantino, Ipiranga do Norte, Itiquira, Lucas do Rio Verde, Nova Mutum, Nova Ubiratã, Primavera do Leste, Querência, Rondonópolis, Santa Rita do Trivelato, Sapezal, Sinop, Sorriso, Tangará da Serra, Tapurah and Vera

Amazonas Itacoatiara and Manaus

Pará Barcarena and Belém

Rondônia Porto Velho, Vilhena and Cerejeiras

Paraná Maringá, Paranaguá e São Miguel do Iguaçu

Rio Grande do Sul Passo Fundo

Santa Catarina São Francisco do Sul

HERE I CREATE MY HISTORY

“I was hired by AMAGGI to work in replanting tree seedlings in Itacoatiara (AM), and in these 10 years with the company I have worked for AMAGGI En- ergy and currently for AMAGGI Navigation. I hope I can tell my great-grandchildren about the opportunity that this company gave to a brave woman who came from the countryside, with no formal education but who was very eager to work and support her children. Today, I just retired due to my age, even though I am still active in the company where I am very proud to work.”

ARLETE NASCIMENTO HAS BEEN A KITCHEN ASSISTANT IN ITACOATIARA (AM) FOR 10 YEARS 114 AMAGGI

Evaluation of impact, development, and engagement

G4-SO1, G4-SO2 and G4-EC8

The André and Lúcia Maggi Foundation promotes the Management Pact project in Itacoatiara (AM). With the participation of public managers, it supports public project planning and assessment of public initiatives as a way to strengthen the work of local leaders.

The purpose of the pilot project implemented in 2011, in partnership with the Center for Studies and Research in Education, Culture, and Community Action (CENPEC - Centro de Estudos e Pesquisas em Educação, Cultura e Ação Comu- nitária), is to promote discussions between public managers and civil society about the problems of municipal education. In 2013, the Management Pact held monthly meetings for discussions and training with the main center and extended discussion forums with the participation of communities. The main topics discussed were the work of the municipality’s rights council and participation in social control.

Also in 2013, the Foundation incorporated the methodology implemented by CEN- PEC’s technical coordination in order to improve actions and replicate them in other municipalities.

To identify the significant impacts of its operations, the Foundation also has the DialogAção Project, conducted annually since 2012 with social and environmental partner organizations. The aim is to involve the community and their interests in the decision-making processes at the Foundation and at AMAGGI. In 2013, a total of 12 organizations from Mato Grosso took part (learn more on page 57).

In 2014, the Foundation intends to expand the panel to three cities in Mato Grosso, increasing community representation by involving not only partner organizations, but also community leaders, experts, and local suppliers, among others. Objectives include better identification of the significant impacts of AMAGGI’s operations, definition of mitigation actions, and promotion of social control in the municipalities where the company operates. Sustainability Report 2013 115

Projects in communities

G4-EC7

In 2013, a total of R$487,200 was invested in social and environmental projects with communities. In 2014, the Foundation plans to conduct a participatory diagnosis assessment to identify community demands and needs.

Among the projects are the support for initiatives aligned with the UN Millennium Development Goals, donations to social entities, cultural activities, and dietary supplementation.

See the online version to learn more about: - the projects developed by the Foundation in 2013

The Foundation invested a total of R$2.6 million in 2013, and the number of direct and indirect beneficiaries exceeded 162,300. >>>>>>>> 116 AMAGGI

Vision of the future

AMAGGI is preparing for The Brazilian agribusiness scenario is promising for this decade. According to a significant increase, projections by the Ministry of Agriculture, Livestock, and Food Supply (MAPA), the growth of the agriculture, livestock, and forestry sectors in 2012/13-2022/23 will by 2020, in the volume allow the country to supply a total of 200 million Brazilians annually, in addition of grain originated to generating a surplus that can be exported to over 200 countries, resulting in a strong internal agriculture and livestock market and a trade balance surplus of and marketed. To this more than R$100 billion per year. end, the company Production of grain should exceed 222 million tons in the 2022/2023 harvest, invests in logistics which represents an increase of at least 34 million tons to the current production and warehousing in Brazil. infrastructure, people However, to reach these results, Brazil must invest in infrastructure and research training, and the and improve financing conditions. The growth of agriculture production should be based on greater productivity, especially with the dissemination of the use of incorporation of technology in the field. sustainability as a value According to analyses of the Ministry of Development and Foreign Trade, the fore- of its corporate culture. cast for the coming years is for Brazil to have a significant increase in exports, but the domestic market will continue to be an important growth factor. MAPA’s forecast shows that by 2022/23, 51% of soybean production and 67% of corn G4-28 will be destined for the domestic market. Thus, there will be extra pressure upon domestic production given the expansion of the internal market and the country’s exports. Currently, 52% of soybeans produced is geared to the domestic market, as well as 66.7% of the corn.

In this scenario, AMAGGI is preparing for a significant increase, by 2020, in the volume of grain originated and sold. To this end, the company is investing in logistics and warehousing infrastructure, people training, and the incorporation of sustainability as a value of its corporate culture in order to generate continuous value for society as a whole.

The company’s main strategy is to increase the volume of grain originated, especially in Mato Grosso, relying on the improvement of production outflow conditions through the North.

In 2014, the company will start operating in the TapajósAmazonas corridor and foresees a volume of 2 million tons, with the potential to reach 4 million tons in the next five years. Sustainability Report 2013 117

The company also invests in infrastructure that allows for an increase in the volume of grain originated. In 2014, it invested in four new warehouses in Mato Grosso, and by 2015/16, it plans to build five additional units.

With the new production outflow possibilities through the Northeast, we are also building a terminal at Itaqui Port in the state of Maranhão. Based on projections of production growth in the region known as Matopiba (Maranhão, Tocantins, Piauí, and Bahia), the goal is to originate approximately 1.2 million tons of grain in the next three years in order to utilize the terminal, whose operation starts in 2014.

Despite forecasts for a reduction in the margins of grain sales, the company counts on offsetting this reduction with the increase in volume originated.

As for agricultural production, the focus is to increase productivity in two ways: better use of the current area and an increase in planted area. In recent years, 30% of the area was used for more than one harvest; today, it is 50% of the area and we plan to increase this to 70% of the production area.

As for the international market, the company operates in Argentina, The Neth- erlands, Switzerland, Norway, and recently started operations in Paraguay with origination offices. The acquisition of 100% interest of DENOFA, a Norwegian crusher that supplies the European non-GMO market, reaffirms the company’s strategy to expand its market share. For the coming years, AMAGGI also plans a more structured presence in Asia.

In summary, the company’s future growth is based on sustainability through pro- For the coming years, AMAGGI also ductivity gains, with preservation of the environment and use of technologies and plans a more structured presence practices that reduce costs and bring more income to producers. in Asia. >>>>>>>> 118 AMAGGI

About the report

Nine material topics, This sustainability report presents a balance of AMAGGI’s main activities devel- validated by senior oped in the company units in Brazil from January 1 to December 31, 2013. The annual review, along with a set of future goals and objectives, allows for the defi- management, are nition of a scenario for advancement of the company in its sustainability practices the basis of the associated with the business and its responsibility in the agribusiness chain. Sustainability Report. The publication reports on the operations of the units in the Brazilian territory that are fully controlled by AMAGGI, including leased properties. It does not report on quantitative data for companies that are not fully controlled by AMAGGI, G4-17, G4-28, G4-33 thereby excluding joint ventures and operations in other countries.

The eighth annual report, and the sixth developed according to the guidelines of the Global Reporting Initiative (GRI), one of the world’s references in corporate reports already in its G4 version and launched in 2013, consolidates information related to 67 performance indicators, divided into three sustainability dimensions: economic, social, and environmental. The application level adopted was the Es- sential level, since at least one indicator associated with the aspects defined as material is presented.

There is also a set of data reported based on Ibase’s Social Audit.

The economic and financial indicators were determined according to the criteria established by the Brazilian accounting rules and are subsequently analyzed and validated by an external independent audit.

The social and environmental data, which cover both the administrative activities at company headquarters in Cuiabá (MT) and the activities developed by the various units and business areas, were consolidated without analysis and validation by external auditors. This measure, which was planned for 2013, is under study for implementation in the next cycle, since the adoption GRI’s G4 version required adjustments in the collection of indicators to be implemented in 2014. Sustainability Report 2013 119

In the development the report, inputs from those audiences identified as strategic G4-18 were considered, based on the materiality process conducted in 2012. The consultations were the following:

Comparative study of four companies operating in the sectors of agribusiness, logistics and food

Online consultation with 12 stakeholders – institutional partners (four suppliers, two government representatives, three members of organized civil society, one client, and one representative of a financial institution)

A dialogue panel with the participation of 22 social institutions that received financial support from the André and Lúcia Maggi Foundation between 2008 and 2012

Analysis of six sector studies of topics that are relevant for AMAG- GI’s operating areas, three of which are national and three international

Interviews with four experts about topics that are relevant to the agribusiness and logistics sectors

Dialogue panels with 81 employees. Meetings were held in seven locations: Cuiabá, Rondonópolis, Sapezal, Lucas do Rio Verde, Itacoatiara, Belém, and Porto Velho

Personal interviews with members of senior management, conducted with six directors and the CEO, about the most relevant topics for the company in terms of the social, economic, and environmental impacts of its activities and business strategies

Analysis of six internal documents: Code of Ethics and Conduct; environmental evaluation of rural producers; environmental evaluation of suppliers; strategic planning guidelines; Environment Policy; and People Management Policy. 120 AMAGGI

Based on the topics considered a priority by internal and external audiences, nine topics were validated by AMAGGI’s Executive Board (according to the materiality matrix on page 53 and the table below).

G4-19, G4-20, G4-21 and G4-27

Material topic GRI – G4 Aspect Correlation Topic/Audience Risk monitoring Economic performance Internal audience – senior management Environmental evaluation of suppliers Mechanisms for grievances and complaints associated with environmental impacts Occupational health and safety Evaluation of suppliers on labor practices Mechanisms for grievances and complaints associated with labor practices Investment practices and procurement processes Freedom of association Child labor Bonded labor Safety practices Evaluation Evaluation of suppliers on Human Rights Mechanisms for grievances and complaints associated with Human Rights Corruption Evaluation of suppliers on impacts on society Mechanisms for grievances and complaints associated with impacts on society Development of local Market presence Suppliers communities Indirect economic impacts Clients Employment Government Relationship between employees and governance Institutional partners Local communities Partner NGOs of the André and Lúcia Maggi Foundation Agribusiness experts Market presence Economic Performance Internal audience – employees Procurement practices Environmental preservation Biodiversity Suppliers Emissions Clients Effluents and Waste Government Transportation Institutional partners Partner NGOs of the André and Lúcia Maggi Foundation Agribusiness experts Internal audience – employees Internal audience – senior management Compliance with legislation Conformity Suppliers Occupational Health and Safety Clients Anti-competitor behavior Government Compliance Institutional partners Client health and safety Agribusiness experts Labeling of products and services Internal audience – senior management Communication and marketing Client privacy Training and development Training and education Internal audience – senior management of capabilities Corruption Transparency and There is no relation to GRI Aspects Partner NGOs of the André and accountability to society Lúcia Maggi Foundation Internal audience – senior management Commitment to sustainability There is no relation to GRI Aspects Partner NGOs of the André and Lúcia Maggi Foundation and search for coherence in the Agribusiness experts company’s daily actions Internal audience – senior management Cooperation and partnerships There is no relation to GRI Aspects Suppliers Clients Government Institutional Partners Agribusiness experts Internal audience – employees Sustainability Report 2013 121

In 2013, in order to improve the identification of relevant topics for the business To improve the and society and to improve the quality of our relationship with strategic stake- process of identifying holders, AMAGGI advanced on many fronts. The company promoted a workshop with the Board of Directors and the Executive Board to debate and validate stra- relevant topics for the tegic topics for the business and structured an engagement plan geared toward business and society, the following audiences: rural producers, suppliers, carriers, (supply chain), internal audiences, local community, and institutional partners (learn more on page AMAGGI discussed 47). These actions will provide support for a new materiality process, to be car- and validated strategic ried out in 2014. topics and structured Comparability with the content of the previous report (2012) is ensured, since an engagement plan for changes and eventual corrections are duly highlighted, when necessary, in different passages throughout the text or in explanatory notes. Nevertheless, it is priority stakeholders. important to mention that there are no significant changes compared with previous editions in terms of scope, boundary, or even measurement methods used in this report.

Two important institutional commitments with which AMAGGI engaged in 2009 (Global Compact and Millennium Development Goals) continue to stand out G4-22 throughout the report, with the respective correlation of topics covered by the two global initiatives, which is presented in the beginning of each section.

The same procedure is adopted with GRI’s performance items and indicators for their easy identification and to facilitate reading.

The report has two versions: a relatively abridged print version and a more detailed online version. In addition, for the second year we have produced a short edition for employees as a response to one of the suggestions made by stakeholders. 122 AMAGGI

Annual Social Audit / 2013

Company: 1 – Calculation Basis 2013 (thousands) 2012 (thousands) Net Income (NI) 8,589,766 5,982,711 Operating Income (OI) 737,892 662,194 Gross Payroll (GP) 176,781 169,439 2 – Internal Social Indicators Value (thousand) % on GP % on NI Value (thousand) % on GP % on NI Food 18,577 10.51% 0.22% 16,691 9.85% 0.28% Mandatory social contribution 35,423 20.04% 0.41% 36,651 21.63% 0.61% Private pension 642 0.36% 0.01% 915 0.54% 0.02% Health 9,015 5.10% 0.10% 8,453 4.99% 0.14% Occupational health and safety 3,462 1.96% 0.04% 2,914 1.72% 0.05% Education 379 0.21% 0.00% 484 0.29% 0.01% Culture 0 0.00% 0.00% 0 0.00% 0.00% Training and professional development 1,600 0.91% 0.02% 861 0.51% 0.01% Daycare or daycare assistance 29 0.02% 0.00% 33 0.02% 0.00% Profit sharing 20,760 11.74% 0.24% 16,021 9.46% 0.27% Other 2,242 1.27% 0.03% 4,527 2.67% 0.08% Total – Internal Social Indicators 92,129 52.11% 1.07% 87,550 51.67% 1.46% 3 – External Social Indicators Value (thousand) % on GP % on NI Value (thousand) % on GP % on NI Education 1,210 0.16% 0.01% 1,001 0.15% 0.02% Culture 1,295 0.18% 0.02% 691 0.10% 0.01% Health and sanitation 232 0.03% 0.00% 95 0.01% 0.00% Sports 121 0.02% 0.00% 73 0.01% 0.00% Hunger prevention and food safety 763 0.10% 0.01% 707 0.11% 0.01% Other 4,557 0.62% 0.05% 245 0.04% 0.00% Total social contribution 8,178 1.11% 0.10% 2,812 0.42% 0.05% Taxes (less social contribution) 483,468 65.52% 5.63% 236,578 35.73% 3.95% Total – Internal Social Indicators 491,646 66.63% 5.72% 239,390 36.15% 4.00% 4 – Environmental Indicators Value (thousand) % on GP % on NI Value (thousand) % on GP % on NI Investments related to production/operation 11,584 1.57% 0.13% 32,807 4.95% 0.55% Investments in programs and/or external projects 888 0.12% 0.01% 1,011 0.15% 0.02% Total investments in the environment 12,472 1.69% 0.15% 33,818 5.11% 0.57%

Regarding “annual goals” to minimize waste, general consumption for ( ) has no goals ( ) meets 51 to 75% ( ) has no goals ( ) meets 51 to 75% production/operation, and increased efficiency in the use of natural ( ) meets 0 to 50% (x) meets 76 to 100% ( ) meets 0 to 50% (x) meets 76 to 100% resources, the company: 5 – Workforce Indicators 2013 2012 Number of employees at the end of the period 3,965 4,108 Number of hires in the period 2,346 2,436 Number of contractors 821 1,072 Number of interns 5 9 Number of employees over 45 years of age 561 553 Number of women working in the company 670 659 % of management positions held by women 8.49% 10.17% Number of Black employees in the company 3,166 3,201 % of management positions held by Black employees 66.30% 53.80% Number of people with disabilities or special needs 91 83 Sustainability Report 2013 123

6 – Relevant information on corporate citizenship 2013 Goals 2014 Ratio between highest and lowest salary 66.3 66.3 Total number of work-related accidents 160 0 ( ) Board and ( ) Board and The social and environmental projects developed by the company were ( ) Board (x) all employees ( ) Board (x) tall employees defined by: managers managers ( ) Board and (x) all employees ( ) Board and (x) all employees ( ) all employees ( ) all employees The standards for occupational health and safety were set by: managers + CIPA managers + CIPA ( ) encourages (x) will encourage (x) follows ILO ( ) follows ILO Concerning freedom of association, the right to collective bargaining ( ) is not involved and follows ( ) is not involved and follow standards standards and internal employee representation, the company: ILO standards ILO standards ( ) Board and ( ) Board and ( ) Board (x) all employees ( ) Board ( x) all employees Private pension plans include: managers managers ( ) Board and ( ) Board and ( ) Board (x) all employees ( ) Board (x ) all employees Profit sharing includes: managers managers ( ) are not ( ) are not (x) will be In selecting suppliers, the same ethical and social responsibility (x) are suggested ( ) are required ( ) will be required standards adopted by the company: considered considered suggested ( ) organizes and ( ) will organize ( ) is not involved (x) supports ( ) is not involved (x) will support Regarding employee participation in volunteer programs, the company: encourages and encourage Total consumer claims and criticisms: In company: 6 At Procon: 0 In court: 0 In company: 5 At Procon: 0 In court: 0 Total consumer claims and criticisms resolved: In company: 100 % At Procon: 0% In court: 0% In company: 100% At Procon: 0% In court: 0% Total value added for distribution (in thousand R$) In 2013: 1,779,223 In 2012: 1,325,051 28.82% government 16.67% employees 17.85% government 20.08% employees Distribution of Added Value (DVA) 2.48% shareholders 38.19 % third parties 13.83% withheld 3.58% shareholders 47.50 % third parties 10.99% withheld 7 – Other Information

G4-17

The companies that comprise AMAGGI are: André Maggi Participações S/A (legal nature: closed capital corporation/CNPJ: 04.786.144/0001-76), AMAGGI Exportação e Importação Ltda (legal nature: limited liability company / CNPJ: 77.294.254/0001-94), AMAGGI International Ltda, Agropecuária Maggi Ltda (legal nature: limited liability company / CNPJ: 00.315.457/0001-95), AMAGGI Argentina S.A., Hermasa Navegação da Amazônia S/A (legal nature: closed capital corporation / CNPJ: 84.590.892/0001-18), Maggi Energia S/A (legal nature: closed capital corporation / CNPJ: 03.908.754/0001-32), Agro Sam Agricultura e Pecuária Ltda (legal nature: limited liability company / CNPJ: 92.644.715/0001-03), Divisa Energia S/A (legal nature: closed capital corporation / CNPJ: 10.431.501/0001-86), Ilha Comprida Energia S/A (legal nature: closed capital corporation / CNPJ: 08.936.794/0001-01), Jesuíta Energia S/A (legal nature: closed capital corporation / CNPJ: 08.918.031/0001-38), Segredo Energia S/A (legal nature: closed capital corporation / CNPJ: 08.936.816/0001-33), AMAGGI S.R.L (created in 2013, origin Paraguayan), and Fundação André Maggi (legal nature: private foundation / CNPJ: 01.832.808/0001-06). AMAGGI’s headquarters, whose industry is agribusiness, is located in Cuiabá-MT. For inquiries on the data provided, contact: Juliana de Lavor Lopes, phone: +55 (65) 3645-5000, email: [email protected]. This company does not use child, Indigenous or bonded labor, is not involved in prostitution or sexual exploitation of children or adolescents, and is not involved in corruption. Our company values and respects diversity, both internally and externally.

General information on item 1 (Calculation Basis) The Operating Income and Value Added Statement figures comply with the changes brought by Law 11.638/07 and by the Provisional Measure 449/08, later converted into law 11.941/09, which adjusted the Brazilian accounting rules and practices to international standards (IFRS – International Financial Reporting Standards).

General Information on Internal Social Indicators Occupational health and safety: the difference in investment from 2012 to 2013 refers to the natural adjustment of market values and increase in work demand. Training and professional development: the difference in investment from 2012 to 2013 refers to the implementation of the School for Leaders for the Executive Board, Management and Supervisor levels, and to development Programs for critical positions and technical training in partnership with universities, technical schools, and specialized consulting companies. Participation in profits or results: amount paid in 2013, referring to profit-sharing in 2012.

General Information on External Social Indicators Other: refers to local development projects, operational structuring of private social investments, project selection, and support for social institutions. Taxes: value mentioned corresponds to the taxes collected in the period.

Environmental Indicators The value of investments related to production/operations includes investments that provide environmental improvements (R$7,358,720.50) and the values of expenses for the regular environmental management operations and ongoing construction work (R$3,766,288.80) and treatment and disposal of waste (R$459,471.31). In the calculation of investments in programs and/or external projects, the support for environmental projects executed in partnership is also included (R$888,186.91). The difference in investment from 2012 to 2013 is due to the acquisition of the Santo André Farm in the municipality of Lucas do Rio Verde/MT for the implementation of reforestation projects, including the acquisition of eucalyptus seedlings.

General Information on Workforce: Hires in the period: this number includes all hires made by AMAGGI, including the seasonal jobs typical in agribusiness. Number of Black employees: methodology used for calculation according to Ibase’s guideline for the preparation of the Social Audit, which requires considering Black employees as the sum of individuals classified/self- -declared as having black or brown skin (according to RAIS). Number of people with disabilities: according to the GRI LA13 indicator in this material. Number of contractors – fixed and in construction work / Construction of SHEPs (monthly average): 124

General information on corporate citizenship Work-related accidents: This item accounted for all accidents, including those with and without accident leave, in addition to accidents while commuting. All consumer complaints are settled within the company, and cases of complaints were not substantiated by laboratory analysis, but actions were taken in order to intensify prevention and respond to the client’s complaint. DVA: value referring to AMAGGI companies. There were reclassifications in the 2012 DVA, referring to PCLD (provision for doubtful debtors), “Costs”, and retained profits and dividends that had been classified in incorrect lines. Due to these adjustments, in 2012 the percentages distributed to stakeholders (shareholders, employees, government, retained profits, and interest and leases) had small changes when compared with the demons- tration of the previous year. 124 AMAGGI

GRI Table of Contents

GENERAL CONTENT

External Item Description Page /response Omission Assurance STRATEGY AND ANALYSIS G4-1 Message from the CEO 4,5 NO G4-2 Description of key impacts, risks and 48, 49 NO opportunities Organizational profile NO G4-3 Company name 8 NO G4-4 Main brands, products, and/or services 8, 10 NO G4-5 Location of company’s headquarters 8 NO G4-6 Countries where the organization 8, 10 NO operates and where its main operations are located G4-7 Type and legal nature of the property The companies that comprise AMAGGI are: André Maggi Participações S/A (legal nature: closed NO capital corporation/CNPJ: 04.786.144/0001-76), AMAGGI Exportação e Importação Ltda (legal nature: limited liability company / CNPJ: 77.294.254/0001-94), AMAGGI International Ltda, Agropecuária Maggi Ltda (legal nature: limited liability company / CNPJ: 00.315.457/0001- 95), AMAGGI Argentina S.A., Hermasa Navegação da Amazônia S/A (legal nature: closed capital corporation / CNPJ: 84.590.892/0001-18), Maggi Energia S/A (legal nature: closed capital corporation / CNPJ: 03.908.754/0001-32), Agro Sam Agricultura e Pecuária Ltda (legal nature: limited liability company / CNPJ: 92.644.715/0001-03), Divisa Energia S/A (legal nature: closed capital corporation / CNPJ: 10.431.501/0001-86), Ilha Comprida Energia S/A (legal nature: closed capital corporation / CNPJ: 08.936.794/0001-01), Jesuíta Energia S/A (legal nature: closed capital corporation / CNPJ: 08.918.031/0001-38), Segredo Energia S/A (legal nature: closed capital corporation / CNPJ: 08.936.816/0001-33), and Aruanã Comercializadora de Energia Ltda, AMAGGI S.R.L (legal nature: limited liability company / CNPJ:16.587.133/0001-46). AMAGGI’s headquarters, whose industry is agribusiness, is located in Cuiabá-MT. G4-8 Markets served 8, 10, 11 NO G4-9 Company size 8 NO G4-10 Total workforce by employment type, 14 NO employment contract, and region G4-11 Percentage of employees covered by All collective negotiations – whether in Agreements or Collective Labor Conventions – apply to NO collective bargaining agreements all employees registered in their units. G4-12 Describe the company’s supply chain 14, 15, 16, 17 NO G4-13 Major changes in the reporting period 8 NO COMMITMENT TO EXTERNAL INITIATIVES G4-14 Explanation of whether and how the 48, on-line NO precautionary approach or principle is addressed by the organization G4-15 Externally developed charters, 56, 57, 58, 59, on-line NO principles, or other initiatives G4-16 Memberships in associations and/ 58, 59, on-line NO or national/international advocacy organizations Aspectos materiais identificados e limites G4-17 Entities reported in the consolidated 118, 123 NO financial statements and entities not covered in the report G4-18 Process for defining report content 52, 119 NO G4-19 List of material topics 53, 120 NO G4-20 Materiality and boundaries of each 120 NO aspect within the organization G4-21 Materiality and boundaries of each 120 NO aspect outside the organization G4-22 Restatements of information provided 121 NO in earlier reports G4-23 Significant changes in scope There were no changes in scope and boundaries from the previous report. NO Sustainability Report 2013 125

External Item Description Page /response Omission Assurance ENGAGEMENT OF STAKEHOLDERS G4-24 List of stakeholder group engaged by 54 NO the organization G4-25 Basis for identification and selection of 52, 53, 54 NO stakeholders with whom to engage. G4-26 Approaches to stakeholder 54 NO engagement G4-27 Key topics and concerns that have 120 NO been raised through stakeholder engagement REPORT PROFILE G4-28 Reporting period for information 118 NO provided G4-29 Date of most recent previous report The most recent previous report was published in 2013 and reported data from 2012. NO G4-30 Reporting cycle Annual NO G4-31 Contact details for questions about the 2 NO report or its contents G4-32 Table identifying the location of 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136 e on-line NO information in the report G4-33 Policy and current practice concerning 118 NO external assurance for the report GOVERNANCE G4-34 Governance structure of the 44, 45, 48, on-line NO organization, including committees under the highest governance body G4-35 Report process to delegate authority 44 NO for economic, environmental, and social topics of the highest governance body for senior executives and other employees G4-36 Report whether the organization 44 NO appointed an executive-level position or positions with responsibility over economic, environmental, and social topics and whether holder of the position reports to the highest governance body G4-37 Report processes of consultation 44, 54 NO of stakeholders and of the highest governance body in economic, environmental, and social topics. If consultation is delegated, describe who is responsible for it and what the feedback process is to the highest governance body G4-38 Independent or non-executive members 44 NO of the highest government body G4-39 Chair of the highest governance body 44 NO G4-40 Qualifications of members of the 44, 46 NO highest governance body G4-41 Processes to ensure that conflicts of 48, on-line NO interest are avoided G4-42 Report role of the highest governance AMAGGI’s governance model establishes that culture-related decisions are shared between the NO body and senior executives in the Board of Directors and the Executive Board. development, approval, and updating of mission, vision, values, strategies, policies, and goals related to environmental, social, and economic impacts G4-43 Report measures taken to develop 46 NO and improve the collective knowledge of the highest governance body in economic, social, and environmental topics 126 AMAGGI

Conteúdo geral

External Item Description Page /response Omission Assurance G4-44 Process for self-assessment 48, on-line NO of performance of the highest One of the responsibilities of the People Committee is to support the Chairman of the governance body Board and AMAGGI’s CEO in the annual evaluation process of executive directors and board members. This evaluation involves several qualitative instruments to analyze profile, 360-degree evaluation, competencies, and quantitative research associated with the business (business result). The development of the eight leadership competencies is conducted through the School of Leaders with directed programs and actions. G4-45 Responsibility for adopting economic, 44 NO environmental, and social policies G4-46 Report role of the highest 48 NO governance body in the analysis of efficacy of the company’s risk management processes for economic, environmental, and social topics G4-47 Report the frequency with which the 44 NO highest governance body reviews economic, environmental and social impacts, risks, and opportunities G4-48 Highest body or position that formally The sustainability report first undergoes analysis and approval by the Sustainability NO analyzes and approves the company’s Department to verify whether the material topics, identified in the materiality matrix, are duly sustainability report and ensures that reported. After the initial validation, the document is analyzed and validated by all Directors and all relevant aspects are covered the CEO in order to ensure that all information pertains to the reporting period. G4-49 Report the process to communicate 48, on-line NO critical concerns to the highest governance body. G4-50 Report the nature and the total number 48, on-line NO of critical issues communicated to the highest governance body and the mechanisms used to solve them G4-51 Relationship between remuneration 46 NO and company performance (including social and environmental) G4-52 Report the process to determine 46 NO remuneration. Report whether AMAGGI’s Career and Salary Structure follows the Hay methodology (Hay Group Consulting), remuneration consultants are involved which adopts a points system for each role and salary levels for each position group. The salary in the definition of remuneration ranges are reviewed through studies provided by the consulting company. At the same time, and whether they are independent AMAGGI conducts a salary survey through Taji Consultoria to evaluate the competitiveness of from management. Report any other salaries and benefits in the market. The results will be evaluated in the first half of 2014. relationships that remuneration consultants have with the organization G4-53 Report how the opinions of 48 NO stakeholders are consulted and taken By means of suggestions sent to the Ethics committee, which also functions as Ombudsman. into account in terms of remuneration, including the results of voting sessions on remuneration policies and proposals, if applicable G4-54 Report the ratio of the total annual Strategic NO remuneration of the highest paid information for individual in the company (in each the company. country with significant operations) to the total average annual remuneration of all employees (except the highest paid individual, in the same country) G4-55 Report the proportion of percentage Strategic NO increase in the total annual information for remuneration for the highest paid the company. individual in the company (in each country with significant operations) to the total average annual remuneration of all employees (except the highest paid individual, in the same country) ETHICS AND INTEGRITY G4-56 Mission and values statements, codes 46, 48, on-line NO of conduct, and relevant principles Sustainability Report 2013 127

External Item Description Page /response Omission Assurance G4-57 Report internal and external 48, on-line NO mechanisms to seek advice on ethical and legal behavior and issues related to organizational integrity, such as assistance services or advice help lines G4-58 Report internal and external 48, on-line NO mechanisms adopted by the Organization to communicate concerns with unethical behavior or behavior that is incompatible with the legislation, and issues related to organizational integrity, such as the escalation of concerns through hierarchical channels, mechanisms to report irregularities or channels for grievances.

Specific Content ECONOMIC CATEGORY

DMA and Material Aspect Indicators Description Omission Assurance Page/ response ECONOMIC PERFORMANCE

DMAEC Management Practice NO 70, 71, 72, 73

Market presence G4-EC1 Direct economic YES 72, on-line value generated and distributed, including revenue, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.

Risk monitoring G4-EC2 Financial implications NO 84, 86 and other risks and opportunities for the organization's activities due to climate change

Market presence G4-EC4 Significant financial YES R$ 40,501,000.00 assistance received from government.

MARKET PRESENCE

G4-DMAEC Management Practice NO 70, 71, 72, 73

Development of G4-EC5 Range of ratios of NO In 2013, all AMAGGI’s employees received more than the minimum wage. The local communities standard entry-level percentage ratio between the lowest salary paid by the Company at significant wage compared with locations of operation and the national minimum wage is 5% on the farms; 12.5% local minimum wage at at the Cuiabá (MT) Plant; 20.5% at the Lucas do Rio Verde (MT) plant; and 9.8% significant locations of at the Itacoatiara (AM) plant. Calculation was made considering the lowest salary operation paid, divided by the current minimum wage (R$622.00). We consider significant locations of operation those with a significant workforce; that is, a total workforce of 2,203 employees (54% of the total). The amount of the lowest salary used in the operational units is R$ 653.00.

Percentage between the lowest standard Lowest salary paid by the company (2013) entry-level Minimum wage in wage important determined Percentage operating by law ratio (%) units used as reference compared Energy Navigation Commodities Agro AMAGGI with reference minimum wage

Men 826.00 735.00 763.20 800.00 735.00 R$ 678.00 8.41%

Women 857.00 700.00 750.00 800.00 700.00 R$ 678.00 3.24%

* national reference minimum wage ** definition of “important operating units”: We use the lowest salary of each Business Division. 128 AMAGGI

Specific Content

DMA and Material Aspect Indicators Description Omission Assurance Page/ response Development of G4-EC6 Procedures for local NO AMAGGI does not have a formal hiring policy that prioritizes members of the local local communities hiring and proportion community; the company recruits at the national level where positions are advertised on of senior management regional websites. For senior management positions, the company prioritizes internal hired from the promotion, incorporating the help of the Aroeira Project, which identifies talents. Both in local community at 2012 and 2013, all members of senior management, directors, and the CEO are from Brazil, significant locations of as defined by the company as local community. Thus, when hiring members of senior operation management and employees in general, we prefer local workforce, whether in Brazil or in another country where the company operates, strengthening the construction of a career within the company.

INDIRECT ECONOMIC IMPACTS

DMAEC Management practice NO 112, 114 and 115

Development of G4-EC7 Development and NO 115 local communities impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement.

Development of G4-EC8 Description of NO 114 local communities significant indirect economic impacts

PROCUREMENT PRACTICES

DMAEC Management practice NO 98, 99, 100, 101

Market presence G4-EC9 Policy, practices, and NO 100 proportion of spending on locally-based suppliers at significant locations of operation

ENVIRONMENTAL CATEGORY

DMA and Material Aspect Indicators Description Omission Verification Page/ response BIODIVERSITY DMAEN Management Practice NO 75, 76 Environmental G4-EN11 Operating units owned, NO 82, on-line Preservation leased, managed in, or adjacent to protected areas and areas of high biodiversity value outside protected areas Environmental G4-EN12 Description of NO 82 Preservation significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas Environmental G4-EN13 Habitats protected or NO 80 Preservation restored. EMISSIONS DMAEN Management practice NO 75, 76 Environmental G4-EN15 Total direct greenhouse NO 87, on-line Preservation gas emissions (GHG) (scope 1), by weight. Environmental G4-EN16 Total indirect NO 87, on-line Preservation greenhouse gas emissions (GHG) (scope 2), by weight. Environmental G4-EN17 Other relevant NO 87, on-line Preservation indirect greenhouse gas emissions (GHG) (scope 3), by weight. Sustainability Report 2013 129

DMA and Material Aspect Indicators Description Omission Verification Page/ response Environmental G4-EN18 Intensity of greenhouse NO 87, on-line Preservation gas emissions. Environmental G4-EN19 Reduction of Management of NO Preservation greenhouse gas greenhouse gas emissions (GHG). emissions will be implemented this year.

Environmental G4-EN20 Emissions of These emissions NO Preservation ozone-depleting are not substances by weight. controlled. Environmental G4-EN21 NOx, SOx, and other NO 87, on-line Preservation significant air emissions by type and weight. WASTE AND WASTEWATER DMAEN Management practice. NO 75, 76 Environmental G4-EN23 Total weight of waste NO 82, on-line Preservation by type and disposal method. Environmental G4-EN24 Total number and NO The volume and significant spills defined by AMAGGI are based on internal Preservation volume of significant procedures, considering the necessary controls for assistance to emergencies. As spills. a preventive measure, units have their Individual Emergency Plans (PEI), which list the different emergency scenarios mapped for each type of activity. Also, there are controls planned for cases of spills, which are considered significant in cases that result in environmental impacts related to damages or direct losses to society. Based on these criteria, in 2013, a spill considered significant was registered in Paraná, and required mobilization of internal and outsourced specialized assistance, given the location of the incident (mountain area and steep slope) and the type of material (degummed oil). The criticality was due to the fact that the accident happened downstream from the point where water is collected to supply the municipality of Carambeí. Actions were effective and there was no damage caused to society or the environment.

Environmental G4-EN26 Identity, size, protection NO AMAGGI does not make discharges to bodies of water or habitats that are Preservation status, and biodiversity significantly affected. The only discharge in water made in the company’s activities value of bodies of water is in Itacoatiara, whose effluent flows into the Amazon River. That river has a high and related habitats purifying potential, as seen in information already reported in indicator EN 09 significantly affected (reported exclusively in the online version, since it is not material). by discharges of water and runoff. COMPLIANCE DMAEN Management practice NO 75, 76, 77 Conformity with G4-EN29 Monetary value of NO 77 legislation significant fines and total number of non- monetary sanctions for non-compliance with environmental laws and regulations. TRANSPORTATION Environmental G4-EN30 Significant The Greenhouse NO Preservation environmental impacts Gas Emissions of transporting Management products and members Program will be of the workforce. implemented this year.

GENERAL DMAEN Management practice NO 75, 77 Environmental G4-EN31 Total investments NO 78 Preservation and expenditures in environmental protection by type. ENVIRONMENTAL EVALUATION OF SUPPLIERS DMAEN Management practice NO 98, 99, 100 Monitoring G4-EN32 Percentage of new NO 98 of Risks suppliers whose selection is based on environmental criteria. Monitoring G4-EN33 Significant real and NO 77, 98 of Risks potential negative impacts in the supply chain and related measures taken. 130 AMAGGI

Specific Content

DMA and Material Aspect Indicators Description Omission Verification Page/ response MECHANISMS FOR GRIEVANCES AND COMPLAINTS ASSOCIATED WITH ENVIRONMENTAL IMPACTS DMAEN Management practice NO 48, on-line Monitoring G4-EN34 Number of grievances NO There were no grievances associated with environmental impacts in 2011, 2012, of Risks and complaints and 2013. In terms of formal communication mechanisms for existing grievances associated with and complaints, the company responds to social and environmental issues environmental impacts according to internal guidelines, providing channels that can be used by internal or registered, processed, external audiences to register any type of communication (complaint, suggestion, and solved through compliments, and questions). formal mechanisms The following social and environmental communication channels are available for for grievances and internal or external audiences or stakeholders: complaints. - Contact Us channel available on the company’s website - Forms, available at the company units’ reception desk, indicate information fields to be completed to register the communication. The forms can also be sent by mail at no cost - operational units’ telephone - email ([email protected])

SOCIAL CATEGORY – LABOR PRACTICES AND DECENT WORK

DMA and Material Aspect Indicators Description Omission Verification Page/ response EMPLOYMENT DMALA Management practice NO 89, 90, 91 Development of G4-LA1 Total number and NO 97, on-line local communities rate of new hires and employee turnover rate by age, gender, and region. RELATIONSHIP BETWEEN EMPLOYEES AND GOVERNANCE DMALA Management practice NO 48, on-line Development of G4-LA4 Minimum notice NO All information on changes, whether of an institutional nature or concerning local communities period(s) regarding employee movements (internally), are available for the units through the operational changes, Communication department, within time frames that precede the fact or including whether it is immediately after the confirmation or modification or change occurred, whether or specified in collective not is its set forth in Collective Bargaining, as negotiation between the parties in agreements. the month of the reference date is provided by law. Generally, unions send their list of claims one month prior to the employee category negotiation date, according to time frame provided by law. HEALTH AND SAFETY AT WORK DMALA Management practice NO 95, 96 Respect to G4-LA5 Percentage of total NO 97 legislation workforce represented in formal health and safety committees. Risk monitoring G4-LA6 Rates of injury, NO 95 occupational diseases, lost days, absenteeism, and number of work-related fatalities by region. Risk monitoring G4-LA7 Number of employees NO There are no employees involved in activities with high incidence/risk of serious with high incidence/risk specific diseases. of serious work-related disease. Sustainability Report 2013 131

DMA and Material Aspect Indicators Description Omission Verification Page/ response TRAINING AND EDUCATION DMALA Management practice NO 90, 91, 92, 93 Training and G4-LA9 Average hours of NO 91 development of training per year, per skills employee, and per gender by employee category Training and G4-LA10 Programs for the NO 92 development of management of skills competencies and continuous learning that support the continued employability of employees and assist them in managing career endings.

Training and G4-LA11 Percentage of NO What is the total percentage of employees 2012 2013 development of employees receiving who received performance assessments and career development (%)? Men Women Men Women skills regular performance and career Total number of employees (same as G4-10) 4,108 3,293 656 development reviews Number of employees submitted to 501 439 48 performance assessment and career by gender. development

% by gender - 13% 7%

% of the total 12% 12%

EVALUATION OF SUPPLIERS ON LABOR PRACTICES DMALA Management practice NO 98, 99, 100, 101, 102, 103, 104, 105 Monitoring G4-LA14 Percentage of new NO 98, 104 of risks suppliers selected based on labor criteria. Monitoring G4-LA15 Significant real and NO 98, 104 of risks potential negative impacts referring to labor practices in the supply chain and related measures taken. MECHANISMS FOR GRIEVANCES AND COMPLAINTS ON LABOR PRACTICES DMALA Management practice NO 48, on-line Monitoring G4-LA16 Number of grievances NO One incident in the construction work of the Matupá warehouse identified by the of risks and complaints internal Occupational Health and Safety area, causing shutdown of work until associated with labor security items and occupational medicine items were duly adjusted. practices registered, processed, and solved through formal mechanisms for grievances and complaints. 132 AMAGGI

Specific Content

SOCIAL CATEGORY – HUMAN RIGHTS DMA and Material Aspect Indicators Description Omission Verification Page/ response INVESTMENT AND PROCUREMENT PRACTICES DMAHR Management practice NO 98, 99, 100, 101, 102 Monitoring G4-HR1 Percentage and total NO 99, 104 of risks number of significant 2 Contracts for the Acquisition of Properties – investments of approximately investment agreements R$145 million. that include human 5 Contractor Agreements for the Construction of New Warehouses and Ports – rights clauses or that investments of approximately R$110 million have undergone human rights screening. Monitoring G4-HR2 Total number of NO 94 of risks hours of employee Total of 2,230 hours of training in the project “Eu cidadão: refletindo sobre os training on policies and direitos e deveres da gente” procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained. FREEDOM OF ASSOCIATION DMAHR Management practice NO 100, 101, 102 Monitoring G4-HR4 Operations and NO AMAGGI only establishes partnerships with suppliers with Collective Labor of risks significant suppliers Conventions. The highest risk is in the state of Mato Grosso, where most of the identified in which company’s units are located. the right to exercise freedom of association and collective bargaining may be at significant risk and actions taken to support these rights. CHILD LABOR DMAHR Management practice NO 56, 98, 99 Monitoring G4-HR5 Operations and NO 58, 99 of risks significant suppliers identified as having significant risk for incidents of child labor and measures taken to contribute to the elimination of child labor . FORCED/BONDED LABOR DMAHR Management practice NO 56, 58, 98, 99 Monitoring G4–HR6 Operations and NO 56, 58, 98, 99, 101 of risks significant suppliers identified as having significant risk for incidents of forced or compulsory labor and measures to contribute to the elimination of forced or compulsory labor. SECURITY PRACTICES DMAHR Management practice NO 105, on-line Monitoring G4–HR7 Percentage of security NO 105, on-line of risks personnel trained in the organization's policies or procedures concerning aspects of human rights that are relevant to operations. Sustainability Report 2013 133

DMA and Material Aspect Indicators Description Omission Verification Page/ response Monitoring G4–HR8 Violation of rights of NO There were no cases of violation of rights of Indigenous people registered within of risks Indigenous people. AMAGGI’s operation areas in 2013. AMAGGI Energy coordinates the operation of Small Hydroelectric Plants (SHEPs) in the Alto Juruena Basin in Mato Grosso, with Indigenous land in its surroundings inhabited by the Enawenê_Nawê, Parecis, Nhanbikuara, Minky, and Erikbatsa nations. The properties where the Divisa, Segredo, and Ilha Comprida SHEPs are located, which belong to AMAGGI Energy, were taken into account in the environmental licensing studies in the social and environmental area of influence. In this sense, a conciliation agreement was signed with the support of Federal Justice on September 28, 2012 with the Enawene-Nawe ethnic group (the group that lives the closest to the SHEPs) to meet the permanent compensation request for ethnic-environmental damage that might have already happened or might affect the community due to the implementation of the SHEPs. The agreement establishes monthly payments (fixed amounts) of permanent compensation for each SHEP for 20 years, which is already in effect. EVALUATION DMAHR Management practice NO 98, 99, 100, 101 Monitoring G4–HR9 Percentage and total NO 100% of the operations annually analyze risks related to human rights. The of risks number of operations Occupational Health and Safety System and the labor audit are the tools used in all analyzed in terms of the company’s units which, in 2013, were conducted twice in each location. risks related to human Throughout the years, AMAGGI has intensified efforts to ensure the safety rights and/or their and health of its employees. Among the most important actions are: the impacts. implementation of a specific management system, which addresses items such as people qualification and engagement; compliance with applicable legislation; analysis and planning of tasks; and correction of inappropriate conditions, among others. This year the Behavioral Security Program was implemented, a pilot initiative that was first implemented on the Água Quente, Itamarati, and ucunaréT Farms. Program actions are aimed at identifying and correcting deviations, improving employees’ perceptions of risks, encouraging the participation of leaders in issues related to OHS, and creating proactive indicators. There is a tool in the OHS Management System that comprises management of issues related to service providers. Items such as structure of lodging, food, and transportation; supply of PPEs; specific activity training; and legal programs that aim to protect the health, safety, and integrity of employees are included in the tool. As for labor and union relationships, all of the company’s employees in all units are covered by Collective Bargaining Agreements or Conventions, negotiated with entities that represent employees. To ensure compliance with the labor and social security legislation of contractors, regular inspections of documents, payment of fees, and labor practices are carried out. EVALUATION OF SUPPLIERS ON HUMAN RIGHTS DMAHR Management practice NO 98, 99, 100, 101 Monitoring G4–HR10 Percentage of new NO 98 of risks suppliers selected based on human rights criteria. Monitoring G4-HR11 Significant real and NO 98, 99 of risks potential negative impacts referring to human rights in the supply chain and related measures taken. MECHANISMS FOR GRIEVANCES AND COMPLAINTS ON HUMAN RIGHTS DMAHR Management practice NO 48, on-line Monitoring G4-HR12 Number of grievances NO We had no conclusive findings related to human rights through the Ethics and of risks and complaints Conduct Committee. associated with human AMAGGI reports on cases investigated twice a year, and we had no conclusive rights registered, cases. The survey process is not disclosed before a final conclusion is not processed, and communicated. solved through formal mechanisms for grievances and complaints. 134 AMAGGI

Specific Content

SOCIAL CATEGORY – SOCIETY

DMA and Material Aspect Indicators Description Omission Verification Page/ response LOCAL COMMUNITIES DMASO Management practice NO 112, 113, 114 Development of G4-SO1 Percentage of operations NO 114 local communities with implemented local community engagement, impact assessments, and development programs. Development of G4–SO2 Operations with NO 114 local communities significant actual and potential negative impacts on local communities. CORRUPTION DMASO Management practice NO 48, on-line Monitoring G4–SO3 Percentage and total NO 48, on-line of risks number of business Non-existent evaluation. In 2013, we conducted an action plan to improve our work units analyzed for risks toward our institutional commitments, which included the Pact for Integrity and Against related to corruption. Corruption. We identified possible improvements, which are under discussion with corporate areas for implementation. Training and G4–SO4 Communication and NO 94 development training on policies and of skills procedures against corruption. Monitoring G4–SO5 Confirmed cases NO Legal department registered no incidents. of risks of corruption and measures taken. Anti-competitive behavior DMASO Management practice NO 48 Respect to G4–SO7 Unfair competition. NO Legal department registered no incidents. legislation Compliance DMASO Management practice NO 48 Respect to G4–SO8 Monetary value of NO There are no significant cases in 2013, whose defenses and administrative and/or legislation significant fines and total judicial appeals are final and that resulted in fines or other penalties. number of non-monetary sanctions for noncompliance with laws and regulations. EVALUATION OF SUPPLIERS ABOUT IMPACTS ON SOCIETY DMASO Management practice NO 98, 99 Monitoring G4–SO9 Percentage of new NO 98, 100, 101 of risks suppliers screened using criteria for impacts on society. Monitoring G4–SO10 Significant actual and NO 98, 99 of risks potential negative impacts on society in the supply chain and measures taken in that respect. MECHANISMS FOR GRIEVANCES AND COMPLAINTS RELATED TO IMPACTS ON SOCIETY DMASO Management practice NO 48, on-line Monitoring G4–SO11 Number of grievances NO There was one case in Porto Velho, conducted by the Public Prosecutor’s Office, of risks and complaints about related to the discharge of dust in the Porto Velho Port. The case was monitored impacts on society by the environmental area and it was confirmed that the levels of dust were within filed, addressed, and the limits defined by law. resolved through formal mechanisms for grievances and complaints.

Sustainability Report 2013 135

SOCIAL CATEGORY – PRODUCT RESPONSIBILITY

DMA and Material Aspect Indicators Description Omission Verification Page/ response CLIENT HEALTH AND SAFETY DMAPR Management practice NO 41, 48, on-line G4–PR1 Percentage of NO 41 significant product and Although the indicator is not material, the company considered it should be service categories in reported. which health and safety impacts are evaluated to seek improvements. Respect to G4–PR2 Total number of NO Clients carry out analyses by product sampling, and at times positivity for legislation incidents of non- salmonella was found. compliance with For the grievances made, the positives for salmonella were not confirmed in regulations and counter samples that were sent to the lab. AMAGGI develops a salmonella voluntary codes program at points considered critical among the points surveyed in the process. concerning health What is the total number of cases of non-compliance with regulations and voluntary codes and safety impacts of related to health and safety? products and services 0 during their life cycle, Cases of noncompliance with regulations that resulted in fine or penalty by type of outcomes. Cases of noncompliance with regulations that resulted in warning 0 Cases of noncompliance with voluntary codes (GRIEVANCES) 6

Total 6

LABELING OF PRODUCTS AND SERVICES DMAPR Management practice NO 41 Respect to G4–PR3 Type of product and NO Based on IN 42 OF 2012, the MAPA (Ministry of Agriculture, Livestock, and legislation service information Food Supply) exempted the registration of ingredients in animal feed specific to required by procedures soymeal, in which case a Technical Report for Registration-Exempt Product (RTPI) and percentage of containing product information must be created and sent to MAPA. Any change in significant products product formula or label must be approved by the Technician Responsible for the and services subject Unit, provided it complies with the current legislation. Classification, identity and to such information quality standards, labeling rules (such as indication of product purpose, expiration requirements. date, product storage instructions) and other demands are met. Negotiations include discussions about quality standards of the product supplied to clients, and in the case of any requirement different from the ANEC standard (National Association of Grain Exporters), the Sales Department, aided by Quality and Sustainability, analyses if it is possible to meet the demand. For exports, sales are usually based on the quality defined in ANEC’s contracts both for degummed oil and for soymeal, soybeans, and corn. For products sold as transgenic, extra documents are not required, except for non-GMO products whose clients demand certificates and reports that ensure the authenticated identity and traceability of the product. Products derived from genetically-modified organisms are regulated by IN 01 of 2004 and by international regulations that require the inclusion of the transgenic icon for the identification of transgenic products. Respect to G4–PR4 Total number of incidents NO There were no cases of noncompliance related to labeling, since we comply with legislation of noncompliance the current legislation. When clients request any extra product information before with regulations loading, the company immediately provides it. and voluntary codes concerning product and service information and labeling, by type of outcome. 136 AMAGGI

Specific Content

DMA and Material Aspect Indicators Description Omission Verification Page/ response COMMUNICATION AND MARKETING DMAPR Management practice NO 41 Respect to G4–PR6 Sale of banned or NO We are certified by the ProgramsIdentidade Preservada, NGMO e legislation disputed products. Rastreabilidade. The non-GMO market is very important in the company’s action strategy to supply a demanding market, whether about the type of product or assurance about the social and environmental responsibility of the product produced and sold. Our institutional stand is that we should have any type of product available to ensure the right of choice to our consumer market. As for non-GMO, we are founding members of ABRANGE (Brazilian Association of Producers of Non-Genetically Modified Grains) – whose mission is to promote the market of transgenic-free products, ensuring consumers’ right of choice and offering support to the agribusiness supply chain with technological and innovative solutions that seek transparency, quality, and safety, with economic, social, and environmental sustainability. Furthermore, the company participates regularly in conferences on the topic, and presents these differentials and the results obtained to clients and other companies in the consumer market that wish to maintain the consumption standard. Respect to G4–PR7 Total number NO Legal department registered no incidents. legislation of incidents of noncompliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes. Respect to G4–PR8 Breaches of customer NO No incidents reported. legislation privacy and loss of customer data. Privacidade do cliente DMAPR Management practice NO 48 Respect to G4–PR9 Monetary value of NO There were no fines, but we were granted discounts due to product standard legislation significant fines for deviation according to the definition from ANEC and Mercado Interno. The noncompliance with amount was R$237,232.04. laws and regulations concerning the provision and use of products and services. 2013 Highlights Credits Governance and management

2013 my history