Integrated Report 2013 3

About the report Report on major business themes

It is with great pride that we present to you, our readers, the Votorantim Cimentos Integra- ted Report 2013. In the preparation this report, we have sought to demonstrate our achievements, advances and efforts during the year, especially in relation to economic, financial, governance, social and environmental aspects. Integrated For the first time, we have constructed a materiality matrix which is specific to Votorantim Cimentos. This has enabled us to identify the main issues relevant to the company’s business and to advance in the process of incorporating these strategic issues into the company’s management processes. Prior to this, we had been using the materiality matrix developed by our Report 2013 parent company, Votorantim Industrial, for the Group’s industrial companies as a whole.

To enhance the credibility of the report, it has been prepared in accordance with the core option of the G4 version of the Global Reporting Initiative (GRI) guidelines, the most advanced methodology for sustainability reporting. We participate in the integrated reporting initiative of the International Integrated Reporting Council (IIRC), and have described our business model and increasingly incorporated the IIRC guidelines into our management approach, through a process of continuous improvement. The report has also incorporated specific eport – 2013 – eport

R content established by the Cement Sustainability Initiative (CSI), of which Votorantim Cimen- tos is a signatory and founding member The CSI was created in 1999 by the World Business Council for Sustainable Development (WBCSD) to develop solutions for sustainability issues rated rated

g in the cement industry. Furthermore, the report content has been correlated to the principles of the Global Compact, an initiative of the United Nations (UN), which calls on companies to Inte manage their businesses in accordance with ten universally accepted principles, in the areas of human rights, labor rights, environmental protection and anti-corruption.

Overall we have presented 39 indicators of the GRI framework for the period from January 1st to December 31st 2013 and information related to certain relevant events in 2014.

The information herein refers to the company’s operations in Brazil (VCBR), Canada and the United States (VCNA – North America), Spain, Turkey, India, Morocco, Tunisia, and China (VCE- AA – Europe, Asia and Africa) and Bolivia, Uruguay, Peru, Chile and Argentina (South America).

PricewaterhouseCoopers (PwC) audited the financial information and provided limited assurance on certain social and environmental information, and its opinions are included in this report on pages 15 and 17 respectively. [G4-17, G4-28, G4-29, G4-30, G4-32, G4-33]

This principle aim of this integrated report is to demonstrate our commitment to be accoun- table to all of our stakeholders in a transparent manner. In addition to presenting our progress on our targets, the report aims to describe how we have incorporated an integrated management approach (economic, social and environmental) into our day-to-day business activities. Questions, suggestions and comments related to the report are most welcome and should be directed to the following address: [email protected]. Further information is available on our website: www.vcimentos.com.br. [G4-31] OUR PRODUCTS AND SERVICE OUTPUTS ■ BASIC CONSTRUCTION MATERIALS AND SERVICES OUR RESOURCES INPUTS ■ INFRASTRUCTURE ■ HUMAN RESOURCES ■ REAL ESTATE ■ MINERAL RESERVES ■ DOITYOURSELF CONSTRUCTION ■ PLANT AND EQUIPMENT ■ INDUSTRY ■ THERMAL AND ELECTRICAL ENERGY ■ SERVICES INCLUDING TRANSPORT

OUR BUSINESS ACTIVITIES OUR VISION

CUSTOMER FOCUS

EMPOWERED PEOPLE

BESTINCLASS OPERATIONS

SUSTAINABLE PRACTICES OUR VALUE CREATION

OUR IMPACTS OUTCOMES ■ SAFETY AND DISTRIBUTION ■ CO EMISSIONS ■ ECOEFFICIENCY AND OUTCOMES ■ AIR EMISSIONS INNOVATION ■ EMPLOYEE SALARIES AND BENEFITS ■ BIODIVERSITY AND LAND USE CHANGE ■ ETHICS AND COMPLIANCE ■ ■ GOVERNMENT TAXES ■ WATER COMMUNITY ENGAGEMENT ■ ECONOMIC DEVELOPMENT ■ WASTE OF LOCAL COMMUNITIES AND SUPPLIERS ■ SHAREHOLDER DIVIDENDS ■ CUSTOMER SATISFACTION List of contents

Message from the president 02 Company profile 04 Construction of the materiality 13 Letter of assurance 15 Market context 18 Strategy 25 Vision and strategic drivers 26 Governance 29 Risk management and compliance 32 Economic performance 35s People 40 Sustainable practices 49 Relations with stakeholders 66 GRI index 76 GRI statement 76 Additional information 86 UN Global Compact principles 103 Financial statements 104 2 VOTORANTIM CIMENTOS

The year 2013 marked the beginning of a new cycle of value Message from creation for Votorantim Cimentos. I joined the team this year, in June, with a mission to contribute to the continuation of the president the company’s success story. It is with great pride that I share with you the reasons for celebrating our achievements in the One team, past year: we made significant progress in our operational results. We ended the year with a net income of R$ 12,142 one company million (+29%) and Ebitda of R$ 3,517 million (+14%), due to the good performance of our operations in Brazil and the United [G4-1] States, as well as the incorporation of our new operations in Europe, Asia and Africa (VCEAA).

As a result, our sales grew at a rate higher than the market average, with record production levels and increased market share in almost all our regions. In 2013, our cement sales volume reached 38 million metric tons (+31%) and our global installed capacity rose to 53.9 million metric tons per year, of which 31.7 million metric tons in Brazil.

It was also a year marked by the consolidation of our process of internationalization, as we began to reap more consistent benefits from the greater level of synergy in our operations. Based on this new global context we decided to rethink the way we do business.

The first step on this new journey was the creation of the movement “One Team, One Company”, with the aim of implementing global governance processes and seeking a greater level of integration between all our businesses. We began by organizing the many regions in which we operate into three geographical areas: Brazil, North America and Europe, Asia and Africa. Then, we set up the Global Executive Team (GET) to promote our global strategic alignment, harmonize policies and implement best practices throughout the organization; similarly, we set up the Brazilian Executive Team (BET) to develop the integration of the operations in Brazil and capture functional synergies from the various businesses; we established the Votorantim Cimentos Board of Directors composed of members representing the holding company, shareholders and an external advisory and also Committees for Audit, Finance, Strategy, and Remuneration and People. In addition, as part of the process to improve management, we are increasingly seeking to implement the International Inte- grated reporting Council (IIRC) guidelines, that are founded on a more holistic view of business.

To strengthen our relations with customers we have re- thought and restructured the way we operate in sales and marketing. We are now directing our sales teams and the entire organization to “go to market” – with our Sales Excellence project. As a result of the restructuring, all of our sales teams Integrated Report 2013 3

are now organized by business segments and market the only one of our strategic drivers but is also a cross-cutting entire portfolio of products (cement, concrete, aggregates concept that we have to work on in order to embed it in all and complementary products such as lime and mortar). This of our business activities. This is a driver of value not only for enables them to better meet the needs of our customers and our shareholders but for all our stakeholders. Votorantim partners, in a comprehensive manner, rapidly and transpar- Cimentos, as the market leader in Brazil and one of the larg- ently, and with a focus on creating mutual value. All of this est global companies in the construction materials sector, in- aims to ensure that the customer will always find the product tends to play a leading role in the search for solutions to the that fulfils the need and provides the best technical solution. sustainability challenges faced by the industry globally. We are working to achieve benchmark status as a responsible All these changes and transformations were guided by our company that is economically, socially and environmentally vision that has guided our actions as from 2014. That is, we sustainable. seek to be a construction materials company that is committed to customer success through excellence. This is based on Finally, the good financial results of 2013 contributed to four main strategic drivers: customer focus, employees with our being “crowned” in April this year, by being awarded an autonomy, operational excellence and sustainable practices. investment grade rating, on a global scale, by Standard & Poors, Moody’s and Fitch Ratings. As a result, Votorantim In relation to this last strategic driver, sustainable practices, Cimentos became the first Brazilian company in its sector to Votorantim Cimentos has spared no effort to improve. Inter- be awarded such a rating by the three major rating agencies. nally, we have a number projects underway aimed at reducing This recognition motivates us to move forward, to imple- the ecological footprint of our operations, not only in terms ment a series of actions and initiatives that will lead us in of carbon emissions, but also in terms of the more efficient the direction of our vision. This means truly incorporating use of water, the use of alternative fuels, the co-processing of structural and governance changes, leveraging the competi- waste and the search for more sustainable raw materials for tive advantages of this transformation and focusing increas- our products. Votorantim Cimentos is a pioneer in Brazil in ingly on meeting the needs of our customers. In addition to the production of artificial pozzolan, a cementitious mate- conducting the business with transparency, following the rial made from non-traditional inputs. This is an innovative best practices related to competition. technology that reduces both carbon emissions and the consumption of non-renewable natural resources. These projects We are fully aware that the macroeconomic environment for are described in detail later in this report. 2014 is challenging, but we believe that we are well positioned to seize opportunities and will continue to implement Our geographical reach is very broad and diverse and it is our R$ 10 billion investment plan. This plan, the largest in our for this reason that each operating unit undertakes initia- history, began in 2007 and will extend out to 2016. The year tives to support the economic, social and cultural develop- of 2013 was also marked by the company’s planned offer to ment of the surrounding region, based on a commitment open its capital, which, due to adverse market conditions, to build strategies and actions by engaging in dialogue with was not completed. The company maintains its intention to the local communities. open its capital, subject to a favorable market environment.

Our strategic sustainability plan encompasses ethics and On behalf of the Board of Directors, I would like to thank our compliance with national and international laws and com- employees and partners for the part they have played in Vo- mitments. Since 2001 Votorantim Industrial has been a torantim Cimentos’ success story. I invite you all, together, to signatory of the United Nations Global Compact, an initia- continue to help to build a company that focuses on people, tive which promotes the observance of human rights, labor strives for performance and operational excellence, inspires rights, environmental protection and anti-corruption in an atmosphere of trust and open dialogue, and contributes business. Safety is another question that is being discussed at to the development of the communities where it operates. a global level with the aim of taking cultural differences into We are increasingly a global organization, with several “ac- consideration however without making concessions on fun- cents”, but united in just “one voice, one team, one company.” damental principles and values. We strive to ensure that all of our employees and contract staff are informed about and We hope you find the report a good read! follow our safety rules and are untiring in our efforts to reach a zero level of fatalities – a target which we failed to achieve Walter Dissinger in 2013. We are continually stressing the idea that safety is not Global CEO of Votorantim Cimentos 4 VOTORANTIM CIMENTOS

Company profile One of the largest companies in the world

Votorantim Cimentos (VC) is part of In 1973, following the death of José the Votorantim Group, one of the larg- Ermírio de Moraes, his sons Antônio est business conglomerates in Brazil. It and José took control of the Group’s is a 100%, Brazilian-owned, company companies. In 1998, Votorantim Cimen- that produces cement, concrete, ag- tos established a holding company, with gregates and complementary prod- its headquarters in São Paulo, to control ucts such as mortar and lime, and had all of the Group’s companies that pro- 16,228 employees, and 528 trainees and duced cement, lime, industrial mortar apprentices at year-end 2013. It is one and concrete. [G4-4, G4-5] of the world’s ten largest companies in the cement sector and operates in In 2001, the company initiated a process Brazil and in over 13 countries in North of international expansion with the America, South America*, Europe, Asia acquisition of St. Marys Cement Inc., a and Africa. The product portfolio con- cement company with plants in Canada sists of more than 25 products which and the United States. This process are sold under a number of different continued, in 2007, with the acquisition brand names. Votorantim Cimentos of shareholdings in cement companies first plant was opened in Brazil in 1936. in South America by the company or [G4-3, G4-6, G4-9, G4-10] its parent or affiliates. These included shareholdings in Bío Bío (Chile), Artigas * via shareholdings (Uruguay) and Avellaneda (Argentina).

History In the last quarter of 2012, the company Votorantim Cimentos began opera- completed an asset swap with the Portu- tions in Brazil in 1936, and was, at the guese cement company Cimpor – Cimen- end of 2013, the market leader in Brazil tos de Portugal SGPS S.A. (“Cimpor”), and with an approximately 36% market as a result expanded the geographical share. The company was founded in reach of its operations by the acquisi- the city of Votorantim, in the state of tion of cement plants in Spain, Morocco, São Paulo, where it built its first ce- Tunisia, Turkey, India and China, as well ment factory, Santa Helena. In its early as limestone deposits in Peru. years of operation, the company won public tender for the redevelopment Then, in 2013, the company made good The company was of the Viaduto do Chá in the city of São progress on the implementation of its founded in the city of Paulo. The bridge, a metal frame with expansion plan in Brazil. Firstly, construc- Votorantim, in the interior wooden flooring, was demolished in tion started on a new plant in Edealina of the State of São Paulo, 1938 and replaced by the current struc- (GO) and the expansion of the existing ture of reinforced concrete. plant in Xambioá (TO), secondly, the con- Brazil, in 1933, when it struction of the plant in Primavera (PA) began the construction The company’s second cement plant, advanced considerably and, thirdly, the of its first cement plant, Portland Poty, was inaugurated in 1942 plant expansions in Santa Helena (SP) and called Santa Helena. in Paulista, Pernambuco,to serve the Rio Branco do Sul and the new plant in Northeastern market and marked the Cuiabá (MT) were completed. The Cuiabá beginning of the company’s expansion plant went into operation in January. Integrated Report 2013 5 Colored concrete test cylinders 6 VOTORANTIM CIMENTOS

Aggregates

Votorantim Group’s Vision Votorantim Group’s Aspirations To ensure the growth and long-term continuity of To grow in the long term and in a sustainable manner the organization as a large family-owned group, respected and admired by the communities where To achieve world class standards in our operations it operates, and focused on creating economic, and management, comparable to those of the best environmental and social value, based on: global companies.

Ethics and values that guide responsible business conduct. Our values are represented by the Highly competitive businesses. acronym Sereu Constant drive to incorporate creative and innovative solutions in its portfolio. Solidity – To seek sustainable growth with value People who are motivated to achieve high per- creation. formance. Ethics – To act responsibly and transparently. Respect – To respect people and be willing to learn. Entrepreneurship – To have the courage to grow, innovate and invest. Union – The whole is stronger than the sum of the parts. Integrated Report 2013 7

Time-line 2013 2015 Initiated the expansion plan in Brazil: 6 million metric tons/year

2012 Exchanged assets with Cimpor 2005 2010 2011 Acquired a 21.21% shareholding Acquired minority in Cimpor * shareholdings in Brazil 2007 2009 Expanded in South America

2001 Installed production capacity in Brazil reached 22 million metric tons/year Initiated international 2002 expansion: North America Diversified the product mix 1996 Acquired a minority shareholding in Itambé 1933 Construction began on the company’s first cement plant, Santa Helena, in Sorocaba (SP) - Brazil 1936 Inauguration of the Santa Helena cement 1977 plant Established a leadership position in the Brazilian market with a market share of about 37%

*Acquired 4% in 2010 and exchanged assets with Lafarge in 2011, resulting in a total shareholding of 21.21% in Cimpor. 8 VOTORANTIM CIMENTOS

Global network [g4-4, G4-8] THE DIAGRAM BELOW SHOWS OUR CEMENT PRODUCTION CAPACITY BY COUNTRY OR REGION

Great 5.2 1.7 tunisia china 6.1 Lakes

spain 3.1 3.0 Turkey

BRAZIL 31.7 0.85 florida 1.2 Morocco 9.2% India 1.2

peru

0.2 bolivia3 SÃO PAULO COMPANY’S HEAD OFFICE

4 uruguay 0.5 Installed capacity in Mtpy 2.26 chile2 argentina1 2.86 (million metric tons per year)

VCBR South America7 VCEAA VCNA

16 cement plants 6 cement plants 13 cement plants 5 cement plants 11 grinding mills 2 grinding mills 8 grinding mills 2 grinding mills 119 concrete centers 45 concrete centers 52 concrete centers 141 concrete centers 25 aggregates plants 18 aggregates plants 16 aggregates plants 37 aggregates plants 8 mortar plants 2 mortar plants 1 mortar plant 1 lime plant 1 clinker plant 2 clinker plants 47 distribution centers 4 lime plants 12 distribution centers 1 limestone mine

1 49% shareholding in Avellaneda, Argentina. 3 67% shareholding in the Itacamba plant, Bolivia. 4 51% shareholding in Artigas, Uruguay. 5 Includes 100% of annual installed capacity of Suwannee, which was not consolidated in December 2013. 6 Includes 100% of annual installed capacity of Bío Bío and Avellaneda, which were not consolidated in December 2013. 7 Shareholdings. Integrated Report 2013 9

Major honors and awards

17º Awards for Best Resale Products Cimentos Votoran, Itaú, Poty, Tocantins and Ribeirão: 1st place in the category “Cement” Cal Hidratada Itaú: 1st place in the category “Hydrated Lime” Cal de Pintura Itaú: 2nd place in the category “Lime-based Ink Powder” Votomassa Cerâmica Interna: 2nd place in the category “Mortar” Cimento Branco Votoran: 5th place in the category “Textured Coating”

Anamaco Awards 2013 Master Award in the categories “Cement” and “Hydrated Lime” 2nd place in the categories “Spraying” and “Large Customers in Adhesive Mortars”

Anamaco Top Award Social Responsibility Category: “Votorantim Cimentos Professional Training Program” Marketing and Sales Category: “Votomassa makes it simpler: New Brand Positioning and Operating Model”

10 years of the magazine”Marcas que eu gosto” (Brands I like) Poty was the most mentioned cement brand in the categories: Preference, Quality, Cost- Benefit,T radition in the survey on “Brands I Like”, organized by the newspaper “Diario de Pernambuco”.

Correio Sergipe Top Award 2013 Top Award in the category “Brand of Cement”, for the 5th consecutive year.

Top Brands Award 2013 For four consecutive years, Cimento Poty won the Top Brand award in the “Cement” category granted by the magazine “Revista Top Marcas”.

Leaders in Environmental Innovation 2013 Award granted by the Clarington Board of Trade to St. Marys Bowmanville plant.

Progressive Rehabilitation Award (2013) Award granted by the Ontario Sand, Stone & Gravel Association (OSSGA) to the VCNA aggregate plants located in Cambridge, Peterborough and Brighton. The award was in recognition of the progressive environmental rehabilitation of former mining areas. VOTORANTIM CIMENTOS IS HERE, RIGID PAVEMENT what?: a rigid pavement is made up of concrete slabs from Portland cement, which may be reinforced or not. The concrete pavement is considered to be “green” due to its sustainability characteristics, and its natural THERE AND EVERYWHERE resources’ conservation. This technology has been employed in Brazil since the 1920’s. See the "What?" and the "Where?" of our products where?: it is used to pave public transport surfaces (roads, avenues, bus lanes), highways, plane taxiing areas at airports, harbor areas, container storage areas, industrial areas, products storage areas and external areas subject to intense heavy goods vehicle trac ﬂows.

CEMENT CONCRETE ARTIFACTS AND BLOCKS

what?: it's a material that what?: a cement artifact is a generic term used to describe a hardens when water is diversity of products ranging from concrete sewage pipes to added and is the basic concrete floor slabs, prefabricated terracing and stairways, ingredient of concrete and fence posts, masonry blocks, roof slabs, floor paving slabs and mortar. It is used in all urban infrastructure. The feature that best explains the use of types of infrastructure CONCRETE the term “artifact” is the fact that it is produced in an industrial from the simplest to the facility rather than at the construction site. more complex. what?: it is composed of a mixture of cement, - sand, gravel and water. It is the most used where?: an example of an artifact is the cement block used to where?: it is used all types material in civil construction, the second most build structural and non-structural walls. Due to being of urban construction, used material in the world after water and one produced in standard sizes, it enables fast construction, lower blocks, floors, foundations, of the most versatile due to its having - consumption of mortar in its laying and finishing and there is roofs, large dams, applications in many dierent types of activity. the option to use it without any finishing. sanitation systems, roads, buidings, ports, bridges, where?: building projects such as houses, concrete structures, and residential and industrial buildings, even works of art. infrastructure projects (subways, roads, dams, bridges) and special construction projects (monuments, historic buildings, museums, churches).

HYDRATED LIME

what?: the ideal complement for cement in the composition of mortars for plastering and MORTAR - laying. This is because it provides a number of attributes to the mortar: gives plasticity to what?: a mix of materials with binding and the mixture, prevents cracking and fracturing, hardening properties. It is used mailnly to provides adherence and strength, inhibits bind together blocks or bricks and for fungi and moulds and for these reasons applying ﬁnishings to surfaces. ensures the durability of the work done.

where?: used in adhesive materials to lay where?: it is mixed with the mortar used for and grout ﬂoors, internal and external plastering walls and laying bricks and blocks. walls, porcelain and ceramic slabs, GRAVEL AND SAND decorative stone-work, among other uses. what?: crushed stone used to make concrete and mortar.

where?: used in making concrete-asphalt mixtures, concrete in general, highway sub-base for heavy trac, road surfaces, mortars and drainage systems. AGRICULTURAL LIME what?: used in agriculture to enhance the eects of fertilizers and nutrients, thus increasing WHITE CEMENT the soil's productive capacity.

what?: a type of cement with a white color. LIME PAINT where?: used in agriculture to where?: used in all kinds of construction for enhance the eects of fertilizers finishings, patinas, industrial, commercial what?: it is a paint in powdered form where?: painting many dierent and nutrients, thus increasing and residential floorings, among other uses. which gives an extremely white finish, types of surfaces, including those the land's productive capacity. and has the lowest cost of all types of which are porous, rough or paint. It helps to prevent the growth of irregular. fungi or moulds due to the lime in its composition. VOTORANTIM CIMENTOS IS HERE, RIGID PAVEMENT what?: a rigid pavement is made up of concrete slabs from Portland cement, which may be reinforced or not. The concrete pavement is considered to be “green” due to its sustainability characteristics, and its natural THERE AND EVERYWHERE resources’ conservation. This technology has been employed in Brazil since the 1920’s. See the "What?" and the "Where?" of our products where?: it is used to pave public transport surfaces (roads, avenues, bus lanes), highways, plane taxiing areas at airports, harbor areas, container storage areas, industrial areas, products storage areas and external areas subject to intense heavy goods vehicle trac flows.

CEMENT CONCRETE ARTIFACTS AND BLOCKS

HYDRATED LIME

Construction of the materiality matrix Votorantim Cimentos’ strategy is guided by material issues

In late 2011 and the first quarter of internal groups and 23 from exter- 2012, the Votorantim Group held a nal groups, in the three regions meeting with external stakehold- where we operate, VCBR, VCNA ers at the Group level. The results and VCEAA. Finally, the results were were then used to provide guidance consolidated and validated with the to the management teams of VID’s company’s senior management. Of the many industrial companies and to prepare issues raised in the the Votorantim Cimentos Integrat- Of the 39 material issues identified consultation process, ed Report 2012, the first of its kind in this process, 17 were validated as seventeen were for the company. being of high priority, as can be seen in the following diagram (for the full selected as being the In order to obtain a better view of the list of issues, please see the Additional most important. material issues and stakeholder per- Information to this report on page 86). ceptions specific to the cement sector, we carried out research in 2013/14, These material issues will serve as with the support of BSD Consulting. a guide to review our sustainability strategy for the coming years, and to The process for identifying the select and manage the GRI indicators material issues for the cement sec- that will be monitored and reported torwas composed of: an analysis of in this report, in order to meet the internal and industry information; needs of our internal and external results from employees’s survey stakeholder groups (for further infor- concerning VC Integrated Report mation please refer to the correlation 2012; face-to-face interviews with between our material issues and the the company’s senior and middle- GRI aspects in the section on Additional management; and interviews, information, page 87). face-to-face or by telephone, with representatives of priority external Now our mission is to help the stakeholder groups, defined by teams in our overseas regions to Votorantim Cimentos. The prior- define the maturity level for the ity groups defined were: custom- management of each material issue ers, suppliers, Board Members, and, following that, prioritize the employees, government entities focus for action and improvements, and financial institutions. In total, in accordance with our business ob- 42 representatives from the above jectives and the expectations of our stakeholder groups were inter- main stakeholders. [G4-24, G4-25, viewed, of which 19 were from G4-26, G4-27, G4-18, G4-19] 14 VOTORANTIM CIMENTOS

Materiality matrix

2 3

13 12

aluations and and aluations 4

5 6 7 8

9 isions of stakeholders of de c isions 15 10

e on the e v the on influen c e of L e v el 14 16 17 11

Level of importance of the economic, social and environmental impacts

Average level of materiality High level of materiality Very high level of materiality

1 Ethics, transparency and integrity 2 Occupational health and safety Now our mission is to 3 CO2 emissions help the teams in our 4 Practices against corruption, cartels and unfair competition overseas regions to 5 Regulatory risks define the maturity level 6 Supply chain management 7 Contribution to local development for the management of 8 Economic performance: value added generated and each material issue and, distributed following that, prioritize 9 Community relations the focus for action 10 Government relations and improvements, in 11 Energy efficiency accordance with our 12 Alternative energy sources and alternative fuels 13 business objectives and Air emissions (Particulate Matter, NOx, SOx) 14 Management and reuse of civil construction waste and the expectations of our reverse logistics of cement bags main stakeholders. 15 Water consumption 16 Customer satisfaction 17 Biodiversity preservation Integrated Report 2013 15

Independent auditor’s limited assurance report on the sustainability information included in the 2013 Integrated Report

To the Management Votorantim Cimentos S.A. São Paulo - SP

Introduction 1 We have been engaged by Votorantim Cimentos S.A. to the international standard ISAE 3000, “Assurance (“VC” or the “Company”) to present our limited assur- engagements other than audits or reviews of historical ance report on the compilation and fair presentation financial information”, issued by the International Au- of information related to sustainability included in the diting and Assurance Standards Board (IAASB). Those 2013 Integrated Report of Votorantim Cimentos S.A., standards require that we comply with ethical require- related to the year ended December 31, 2013 (“2013 ments, including independence requirements, and Integrated Report”). perform our engagement to obtain limited assurance that the information related to sustainability included Management’s responsibility for in the 2013 Integrated Report, taken as a whole, is free the 2013 Integrated Report from material misstatement. 2 The management of Votorantim Cimentos S.A. is responsible for the compilation and fair presentation 4 A limited assurance engagement conducted in ac- of the information related to sustainability included cordance with the Brazilian standard NBC TO 3000 in the 2013 Integrated Report in accordance with and ISAE 3000 mainly consists of making inquiries the criteria and guidelines of the Global Reporting of management and other professionals of the entity Initiative (GRI-G4) for the Core Coverage Level and for involved in the preparation of the information, as well such internal control as management determines is as applying analytical procedures to obtain evidence necessary to enable the preparation of information that allows us to issue a limited assurance conclusion that is free from material misstatement, whether due on the information, taken as a whole. A limited assur- to fraud or error. ance engagement also requires the performance of additional procedures when the independent auditor Independent auditor’s responsibility becomes aware of matters that lead him to believe 3 Our responsibility is to express a conclusion on the in- that the information related to sustainability, taken as formation related to sustainability included in the 2013 a whole, might present significant misstatements. Integrated Report, based on our limited assurance engagement carried out in accordance with the Techni- 5 The procedures selected are based on our understand- cal Communication CTO 01, “Issuance of an Assurance ing of the aspects related to the compilation and Report related to Sustainability and Social Respon- presentation of the information related to sustain- sibility”, issued by the Brazilian Federal Accounting ability included in the 2013 Integrated Report, other Council (CFC), based on the Brazilian standard NBC TO circumstances of the engagement, and our analysis 3000, “Assurance Engagements Other than Audit and of the areas in which significant misstatements might Review”, also issued by the CFC, which is equivalent exist. The following procedures were adopted: 16 VOTORANTIM CIMENTOS

(a) planning the work, taking into consideration the .. Social: LA6, LA7, LA14. guidelines referred to in paragraph 2, above, the materiality and the volume of quantitative and quali- Business unit - Temara tative information, and the operating and internal ..Environmental: EN1, EN2, EN3, EN6, EN7, EN8, EN9, control systems that were used to prepare the infor- EN10, EN11, EN15, EN16, EN17, EN18, EN19, EN21, EN23, mation related to sustainability included in the 2013 EN24, EN25, EN26, EN27. Integrated Report; ..Social: LA6, LA7, LA14.

(b) understanding the calculation methodology and the Business unit - Charlevoix procedures adopted for the compilation of indicators ..Environmental: EN1, EN2, EN3, EN6, EN7, EN8, EN9, through interviews with the managers responsible EN10, EN11, EN15, EN16, EN17, EN18, EN19, EN21, EN23, for the preparation of the information; EN24, EN25, EN26, EN27. ..Social: LA6, LA7, LA14. (c) applying analytical procedures to quantitative information and making inquiries regarding the Corporate business unit - São Paulo qualitative information and its correlation with the ..Organizational profile: G4-12. indicators disclosed in the information related to sus- ..Material aspects identified and limits: G4-18, G4-19. tainability included in the 2013 Integrated Report; ..Stakeholder engagement: G4-24, G4-25, G4-26, G4-27. ..Economic: EC1. (d) technical visits to the business units located in ..En vironmental: EN1, EN2, EN3, EN6, EN7, EN8, EN9, Brazil: Corporate São Paulo - SP, Corporate Curitiba EN10, EN11, EN15, EN16, EN17, EN18, EN19, EN21, EN23, - PR, Salto - SP, Itaú de Minas – MG; and abroad: EN24, EN25, EN26, EN27. Hasanoglan - Turkey, Temara - Morocco and Charle- ..Social: LA6, LA7, LA14. voix - United States of America, in order to interview ..Human rights: HR5, HR6. the members of management and collect data and ..Society: SO1, SO2, SO3, SO4, SO5, SO6, SO7, SO8. information (evidence); Corporate business unit - Curitiba (e) verifying, with regard to the units above, the GRI-G4 ..Organizational profile: G4-12. indicators selected as the most significant for each ..Material aspects identified and limits: G4-18, G4-19. business unit visited: ..Stakeholder engagement:G4-24, G4-25, G4-26, G4-27. ..Economic: EC1. Business unit - Salto ..Environmental: EN1, EN2, EN3, EN6, EN7, EN8, EN9, ..Environmental: EN1, EN2, EN3, EN6, EN7, EN8, EN9, EN10, EN11, EN15, EN16, EN17, EN18, EN19, EN21, EN23, EN10, EN11, EN15, EN16, EN17, EN18, EN19, EN21, EN23, EN24, EN25, EN26, EN27. EN24, EN25, EN26, EN27. ..Social: LA6, LA7, LA14. ..Social: LA6, LA7, LA14. ..Human rights: HR5, HR6. ..Human rights: HR5, HR6. ..Society: SO1, SO2, SO3, SO4, SO5, SO6, SO7, SO8. ..Society: SO1, SO2, SO3, SO4, SO5, SO6, SO7, SO8. (f) verifying the compliance with the requirements es- Business unit - Itaú de Minas tablished by GRI-G4 for Core Coverage Level reports. ..Environmental: EN1, EN2, EN3, EN6, EN7, EN8, EN9, EN10, EN11, EN15, EN16, EN17, EN18, EN19, EN21, EN23, 6 We believe that the evidence we have obtained is EN24, EN25, EN26, EN27. sufficient and appropriate to provide a basis for our ..Social: LA6, LA7, LA14. limited assurance conclusion. ..Human rights: HR5, HR6. ..Society: SO1, SO2, SO3, SO4, SO5, SO6, SO7, SO8. Scope and limitations 7 The procedures applied in a limited assurance engage- Business unit - Hasanoglan ment are substantially less detailed than those applied ..Environmental: EN1, EN2, EN3, EN6, EN7, EN8, EN9, in a reasonable assurance engagement, the objective EN10, EN11, EN15, EN16, EN17, EN18, EN19, EN21, EN23, of which is the issuance of an opinion on the infor- EN24, EN25, EN26, EN27. mation related to sustainability included in the 2013 Integrated Report 2013 17

Integrated Report. Consequently, we are not able to obtain reasonable assurance that we would become aware of all significant matters that might be identified in a reasonable assurance engagement, the objective of which is the issuance of an opinion. If we had performed an engagement with the objective of issu- ing an opinion, we might have identified other matters and possible misstatements in the information related to sustainability included in the 2013 Integrated Re- port. Therefore, we do not express an opinion on this information.

8 Non-financial data are subject to more inherent limitations than financial data, due to the nature and diversity of the methods used to determine, calculate and estimate these data. Qualitative interpretations of the relevance, materiality, and accuracy of the data are subject to individual assumptions and judgments. Furthermore, we did not consider in our engagement the data reported for prior years, nor future projections and goals.

Conclusion 9 Based on the procedures performed, described herein, no matter has come to our attention that causes us to believe that the information related to sustainability included in the 2013 Integrated Report has not been compiled and fairly presented, in all material respects, in accordance with the guidelines of the Global Re- porting Initiative (GRI-G4), specific for Core Coverage Level reports.

São Paulo, March 17, 2015

PricewaterhouseCoopers Auditores Independentes CRC 2SP000160/O-5

André Pannunzio Candido Oliveira Contador CRC 1SP-196603/O-1”S” SP 18 VOTORANTIM CIMENTOS

Market context Grow faster than the market

Over the past five years, Votorantim average annual rate of 8.2% between Cimentos has developed, mod- 2007 and 2012, according to the Na- ernized and expanded its cement tional Union of the Cement Industry plants in Brazil. It increased the in- (SNIC). This was equivalent to 2.3 stalled capacity of cement produc- times the real GDP rate of growth tion from 21.4 million metric tons in the same period, according to in 2007 to 31.7 million metric tons the Brazilian Institute of Geography in December 2013. The company and Statistics (IBGE). The Federal has also focused on diversifying Government has announced plans its installed capacity in concrete to substantially increase public and and aggregates in order to offer a private spending on infrastructure complete range of products to its through the Growth Acceleration customers. Change is inherent to a Program (PAC), with an estimated vertically integrated business, al- investment of R$ 1,016 billion by lowing it to capture a greater share 2014. Of this total, approximately of the cement value chain, and to 23.9% of the funds to be disbursed provide integrated solutions to were destined for highways, ports meet customer needs. The company and airports, among other projects, will also continue to benefit from as from February 2014. its vast sales experience in a wide variety of products and markets. Between 2012 and 2015, the Federal Government plans to invest approxi- Votorantim Cimentos has estab- mately R$ 390 billion in residential lished an investment plan to in- housing construction in Brazil to crease its annual production capac- reduce the national housing deficit, ity of cement in order to meet the which is currently estimated at 5.2 projected growth in demand. De- million homes according to the mand is expected to increase due to National Household Sample Survey pressure from increases in average 2012 conducted by the IBGE. incomes, the existing large housing deficit and the implementation of In line with its view of the im- The company focused on major infrastructure projects by the portance of customer focus, the the diversification of its Brazilian Federal Government. All company believes that due to its full concrete and aggregates of these should generate growth product range of basic construction installed capacity opportunities for the civil construc- materials it can generate operation sector - particularly for cement, tional and commercial synergies, in order to offer its concrete, aggregates, mortar and thus differentiating it from the customers a complete other basic construction materials. competition. Our products cover the range of products spectrum from standard cement, The annual per capita consump- such as Portland cement, to high tion of cement in Brazil grew at an strength cement. In addition, we Integrated Report 2013 19

Sobradinho (DF) Unit – Brazil 20 VOTORANTIM CIMENTOS

can provide customized cement Projections for Brazil supplied, and continues to supply, products to meet specific customer In Brazil, the company’s installed cement and concrete to nine of the needs, including for major infra- capacity for cement production was ten largest projects in the Federal structure projects. Examples are 31.7 million metric tons at year-end Government’s Growth Accelera- the Belo Monte hydroelectric plant, 2013. Although forecasts had been tion Program (PAC). This program under construction in the state of more optimistic at the end of 2012, includes projects in a number of Pará, with a reported total cost of Brazil’s GDP grew by only 2.3% in industries such as petrochemicals, R$ 30 billion, and the Santo Antônio 2013. Foreign direct investment, highways, power generation, ports and Jirau hydroelectric plants, lo- for building plants and improving and airports. It is therefore a busi- cated in the state of Rondônia, with infrastructure, remained at a high ness segment that is expected to reported total costs of R$ 17.5 billion level, but declined in 2013 compared grow in the coming years due to and R$ 17.4 billion respectively. to 2012. According to research domestic demand. [G4-8] published by the United Nations, The company’s market positioning the flow of foreign direct investment In addition to the large infrastructure is founded on a high level of brand to Brazil declined by US$ 2 billion in projects, the housing market played recognition, customer loyalty, the 2013 compared to the prior year. As a an important role in the results we superior quality of its products and result, the country fell from 4th to 7th achieved in 2013. We believe that this an extensive distribution network. position in this world ranking. [G4-6] market still has a high growth poten- These attributes were made pos- tial due to the country’s substantial sible by economies of scale, reliable This reduced level of investment in existing housing deficit and the avail- product supply and country-wide the Brazilian economy also adversely ability of financing. availability. Through its extensive impacted the civil construction sec- and country-wide distribution tor, since progress on infrastructure Votorantim Cimentos’ strategy to network of 47 distribution centers, projects did not occur at the rate increase sales in 2013 was based on strategically located close to major anticipated. The direct causes for expanding the availability of prod- markets, the company is able to these delays, in addition to the lower ucts and strengthening the quality serve approximately 30 thousand level of investment in the public sec- of customer service. In addition we customers per month in 3,350 cities tor projects, were the low availability carried out a project to restructure across Brazil. of bank financing, credit limitations our sales area. The new structure be- and the high cost of real estate. came fully operational in the South The company believes that in Brazil Region in 2013. Implementation in there is currently a higher aggregate Despite this economic scenario be- the other regions will move forward demand for concrete products ing less favorable than in prior years, in 2014, starting early in the year compared to other construction Votorantim Cimentos increased its with the Southeast Region and con- materials. This is due mainly to revenues in Brazil by 4.4%, com- tinuing, later on, with the Northeast infrastructure projects such as pared to 2012, equivalent to an in- and Central-North regions. As a ports, airports, dams, sanitation crease of 1 million metric tons in the result of this restructuring the sales projects and government-subsidized volume of sales. This rate of growth teams are no longer segmented by housing, and will result in increased was twice the average obtained by product lines. All sales areas will sales of bulk cement. the civil construction market (2.2%), now sell the entire VC range of prod- considered to be a good level of per- ucts. We expect that this will gener- formance. The company’s sales area ate business synergies and facilitate also continued to pursue its goal of the interface between the company diversifying its sales and customers and its customers, who will now be by providing a full range of products. able to centralize their purchases through a single sales contact. The company’s sales growth was especially significant in the bulk cement segment, whose main customer base is the infrastructure construction industry. The company Integrated Report 2013 21

Santa Helena cement plant, in Votorantim (SP), the Group’s first plant

Expansion plan

Between January 2011 and December 2013, we invested R$ 3 billion in expansion projects in Brazil, aiming to increase our installed cement production capacity from 23.2 to 31.7 million metric tons per year. Our most important expansion projects in 2013 were as follows:

Initiation of the construction of a new plant located in Edealina (GO). Completion of the construction of a new plant in Cuiabá (MT), which went into operation in January 2013. Completion of the plant expansion in Santa Helena (SP), with the installation of a new cement grinding mill, which went into operation in August 2013. Good progress in the construction of the plant in Primavera (PA). Completion of the plant expansion in Rio Branco do Sul (PR) with the start-up of a new furnace. Expansion of the plant in Xambioá (TO). 22 VOTORANTIM CIMENTOS

Charlevoix, Michigan, USA

VOTORANTIM CIMENTOS’ INTERNATIONAL OPERATIONS INCLUDE NORTH AMERICA (THE UNITED STATES AND CANADA), EUROPE, ASIA AND AFRICA

St Marys, Canada Integrated Report 2013 23

Global scene In December 2012, the exchange was In 2013, even though the economies completed, resulting in an increase sales of the regions where Votorantim Ci- of 16.3 million metric tons per year in mentos operates exhibited different the company’s total installed capac- growth trends, the growth scenarios in the ity for cement production. Following company’s markets were generally the closing of the transaction we very positive throughout the year. have improved the return on the Votorantim Cimentos acquired Cimpor assets by capturing North America’s sales North America synergies, improving cost efficiency volume grew by 1.3% In North America, Votorantim and rationalizing industrial opera- Cimentos is represented by its sub- tions. Furthermore, the company is sidiary Votorantim Cimentos North implementing a plan to dispose of America (VCNA), which controls the its operations in China and expects operations in the United States and such sale to be consummated in Canada. In 2013, the North American 2015. In the case of Spain, we view market showed signs of recovery, the business scene as one that and the revival of economic growth, requires caution due to the ongoing once again, stimulated growth economic crisis. However we believe in the real estate market. Thanks that the European continent as a mainly to this economic recovery, whole is a market that will recover VCNA’s sales volume grew by 1.3%. in the medium term, and we plan to be well positioned in the region In these markets, differently to to benefit from this growth. The Brazilian market practices, cement North African region (Morocco and is usually sold in bulk to concrete Tunisia) has shown signs of good companies. In 2013, approximately growth prospects. Similarly to India, 61% of VCNA’s cement sales were these markets are characterized by in the Great Lakes region (USA and high housing deficits, which should Canada). Besides this, the company ensure a strong rate of growth in ce- sold cement to precast concrete ment demand in the coming years. manufacturers and construction companies. We believe that VCNA is well positioned to benefit from the expected economic recovery and the demand from the civil construction sector in these regions. The Portland Cement Association (PCA) has estimated that cement consumption in North America will increase by 8.2% in 2014 and 9.8% in 2015.

Europe, Asia and Africa In June 2012, the company signed an asset swap agreement with Ca- margo Corrêa Cement Luxembourg S.à.rl and InterCement Austria Hold- ing GmbH. We exchanged our 21.21% shareholding in Cimpor for production plants in Spain, Morocco, Tunisia, Turkey, India and China, and a limestone deposit in Peru. 24 VOTORANTIM CIMENTOSTurkey Integrated Report 2013 25

Strategy More autonomy

In 2013, Votorantim Cimentos under- Furthermore, in 2013, the company went a significant change in its gov- carried out a strategy review and ernance model, aiming at strength- established four main drivers that ening its management approach to will now guide the actions and meet the challenges of positioning decisions of employees at all levels, the company as a global player and starting in 2014 (please see below). of the increased business complex- The goals were, firstly, to con- ity. As a result of this restructuring, solidate Votorantim Cimentos as a the company gained full autonomy construction materials company, to define the most relevant issues committed to customer success for its business (for more information through excellence and, secondly, please see the section on Construc- to develop a new sustainability tion of the materiality matrix), and strategy by the end of 2014. its strategies for the short and long terms. [G4-13]

Votorantim Cimentos’ governance model was restructured as part of a management approach for a global enterprise 26 VOTORANTIM CIMENTOS

Our vision Strategic drivers

Customer focus We take our decisions based on the customers’ needs We have specific business models to serve customers with different aims and needs We work to ensure that the actions of all the company’s areas converge to deliver the result that the customer needs

Empowered people We value leaders who achieve their goals through teamwork, creating strong, diverse and engaged teams We want people who take the initiative to act We work together to create solutions and make them happen

Best-in-class operations We track our performance and are obsessed with continuous improvement We make decisions quickly, with discipline and consistency We strive to maximize productivity in all areas

Sustainable practices Safety first! We always act in an ethical manner, and in accordance with local laws and regulations We strive to improve eco-efficiency and seek to develop innovative products and processes We encourage dialogue and close relations with our local communities to perpetuate the Votorantim legacy Integrated Report 2013 27

Commitments and results

Strategic Driver Targets 2020 Progress Status in 2013

SAFETY

To ensure the implementation of the Global Policy ongoing ongoing and Rules for Saving Lives in all of our business units To achieve zero fatalities and LTI frequency rate Safety Fatalities: 2 for direct employees < 0.4. Promote satisfactory page 52 LTI Frequency working conditions for all our employees and Rate: 0.9 third-party contract staff. ETHICS AND COMPLIANCE

Ethics and compliance: ensure that all our Ethics and operations are in line with Votorantim Cimentos’ page 32 ongoing compliance Code of Conduct

ECO-EFFICIENCY AND INNOVATION

To ensure the implementation of our Global Environmental Policy and Green Rules in all our ongoing ongoing Global business units Sustainability 82% of suppliers Standards To ensure the implementation of global were approved sustainability standards for our supply chain in all page 75 by considering our business units sustainability criteria

Sustainable To achieve a reduction in the clinker/cement factor products and to 72% by means of the development of sustainable pages 54 and 94 76% services innovations, new products and services

To reduce our CO emissions per metric ton of cement CO emissions 2 page 54 -15% 2 by 25% compared to 1990 levels.

To use at least 30% of low-carbon fuels in our energy Low-carbon fuels page 53 6.40% mix for cement production

To ensure that at least 5% of our concrete contains Recycled materials page 61 Ongoing studies recycled materials.

To reduce Particulate Matter, NOx and SO2 PM: 114 Air emissions emissions to 65, 1,950 and 750 g/metric ton of pages 52 and 91 NOx: 2,249 clinker, respectively SO2: 953

To implement water management plans for scarcity areas in our business units. To ensure that all of Water and MM10: 78% our quarries have rehabilitation and biodiversity page 61 biodiversity MM2: 6% management plans by 2020 for local and sensitive biodiversity regions. COMMUNITY ENGAGEMENT

To ensure the implementation of a community Community engagement plan in areas where VC operates that page 66 Engagement 15% have a high degree of social vulnerability 28 VOTORANTIM CIMENTOS

The significance of sustainability for VC

Sustainability for us in VC means creating long-term value for all stakeholders by pursuing the following strategies: meeting our ambition to grow while considering the present and future needs of society; offering eco-efficient building materials and services to our customers; creating an inspiring, healthy and safe working environment for our employees and third-party contract staff; and supporting the development of local communities.

Sustainability monthly meeting, by the Global Direc- The company considers sustainability tor of Energy, Sustainability and Safety, to be a cross-cutting theme and part for discussion and approval. The most of the DNA of every business area and important sustainability topics, such activity. In late 2013, it established the as the company’s sustainability strat- Global Directorate for Energy, Sus- egy and long-term commitments (for tainability and Safety. This directorate 2020), were approved by the Board. is responsible for managing Votoran- tim Cimentos’ sustainability strategy, The criteria for the variable remu- which is based on the following four neration of the company’s senior main themes: safety; ethics, trans- managers - the President and Vice- parency and integrity; eco-efficiency presidents - include sustainability and innovation; and stakeholder targets. These targets, which are engagement. tied to specific issues such as energy efficiency, safety and GHG emis- Sustainability issues are presented to sions, are then cascaded down the the Global Executive Team (GET) at its organization.

Suwanee American Cement, cement plant in Florida (USA) Integrated Report 2013 29

Governance

In late 2013, Votorantim Industrial VC standing committees structure and cash flow, working decided that all of its subsidiar- In accordance with the company’s capital requirements and appropri- ies should go through a process bylaws, the Board of Directors has ate financing alternatives. of renewal and evolution of their established standing committees respective corporate governance to provide advice on specific and Remuneration and People models. Consequently, as was the predefined topics. The four standing Committee case for the Group’s other industrial committees are: The Remuneration and People companies, Votorantim Cimentos Committee is composed of three established a Board of Directors. Statutory Audit Committee members, elected for a term of one [G4-34, G4-38] Finance Committee year. It is responsible for: advising on Remuneration and People matters related to human resources; The Board of Directors is responsible Committee discussing proposals to alter hu- for deciding on strategic questions Strategy Committee man resources policy; analyzing the and approving short and long term performance and action plans of the policies, according to the company’s Statutory Audit Committee area; discussing actions that affect bylaws and Brazilian Corporate Law. In line with the best corporate the remuneration of senior manage- The Board is composed of six perma- governance practices, our Statu- ment (merit, promotion and bonus); nent members, one of whom being an tory Audit Committee, is composed and hiring senior managers. independent member. Members are entirely of independent members. elected by the General Assembly and It is responsible for the ongoing Strategy Committee have a joint term of office of two years. monitoring of financial reporting The Strategy Committee consists of issues, including financial state- three to five members elected an- This new governance model also in- ments, internal controls, policies nually by the Board. It is responsible cluded the creation of Board stand- and procedures, risk management, for: monitoring and analyzing the ing committees for specific topics. complaints to the ombudsman, context of the Brazilian and global Furthermore, the structure aimed to compliance with laws and regula- industry and the implications for ensure the consistency of manage- tions and the relations with, and the company’s competitive position; ment practices in all the countries monitoring of, internal and external discussing and advising the Board where VC operates. Action plans and audit activities. on short, medium and long-term market trends or regulatory changes strategic issues, including competi- will be addressed in an equivalent Finance Committee tiveness, new markets and prod- manner and adopted globally. The Finance Committee is composed ucts, innovation and sustainability; of from three to five members, advising on investment opportuni- In this process to improve our man- elected for a term of one year. It is ties and/or divestitures; proposing agement approach we seek increas- responsible for: presenting medium long-term strategy and defining ingly to integrate financial, gover- and long-term market scenarios; guidelines for multi-year plans; and nance, social and environmental proposing and monitoring the an- advising the Board and the Remu- information, in consonance with the nual performance targets, and the neration and People Committee on International Integrated Reporting budget required to achieve them; setting incentives to capture the Council (IIRC) guidelines. monitoring our performance, mar- company’s value potential. ket developments and internal and external benchmarking; analyzing and proposing best practices; offering suggestions on tax and regulatory issues; analyzing and monitoring the annual investment plan, capital 30 VOTORANTIM CIMENTOS

The Votorantim Institute is responsible Executive teams for allocating resources to projects The Global Executive Team (GET) consists of the Global President, Walter Dissinger, the regional Vice-Presidents (for which benefit local VCBR, VCNA and VCEAA), the Vice-President for Finance and communities Investor Relations and the executive directors for the global areas for People and Management, Corporate Development, Legal and Energy, Sustainability and Safety. The regions also have their Executive Teams, as follows: Brazilian Executive Team (BET) for VCBR; North American Executive Team (NAET) for VCNA; and the European, Asian and African Executive Team (EAAET) for VCEAA.

Commitments objective is to promote sustainable Reserve and Votorantim Cimentos. Votorantim Cimentos has signed development in the cement industry The partnership will develop, imple- a number of voluntary pacts and through the dissemination of best ment and disseminate information initiatives, both global and national. practices, exchange of experiences, on social and environmental best [G4-15, G4-16] the publication of guidelines on sus- practices in limestone areas. The tainable development, and also the aim is to contribute to the protec- UN Global Compact – Votoran- stimulation of stakeholder engage- tion and preservation of biodiversity tim Industrial has been a signatory ment (please see the section Strategy and caves (for more information, please of this pact, an initiative of the Unit- on page 25 for more information on the see the section on Sustainable prac- ed Nations (UN), since 2011. Its main CSI indicators and the company’s perfor- tices on page 49). objective is to encourage companies mance). More information on CSI is to respect human rights, support available at: http://www.wbcsdce- VC also maintains ongoing relations decent work, promote environmen- ment.org/ with government entities in the tal protection and combat corrup- regions in which it operates in order tion. More information is available “Na Mão Certa” (In the Right to participate in the discussions and at: http://www.pactoglobal.org. Direction) Program – Since 2006, preparation of public policies, there- br/ (please see the table of principles and VC has participated in this program by contributing to local develop- page references for this report in the Ad- which is part of the Business Com- ment. Furthermore the company’s ditional Information, page 102 ). pact, a joint initiative of Childhood employees participate in forums Brazil and the Ethos Institute for and public hearings in various areas Cement Sustainability Initia- Business and Social Responsibility. of government to discuss and pro- tive (CSI) – The CSI is a global effort By signing this compact the signato- pose requests or regulations. by 24 major cement producers who ries commit to combating the sexual believe there is a strong business exploitation of children and adoles- Social investments (support for case for the pursuit of sustainable cents on Brazilian highways. http:// projects) are undertaken by the development. These companies namaocerta.org.br/ company based on guidelines set by operate in more than one hundred the Votorantim Institute with the countries and account for 30% of Cooperação Técnica SBE-VC- aim of generating benefits for the global cement production. VC has RBMA – This is a partnership among local community and the prospect been a member of this initiative the Brazilian Society of Speleology, of creating a more mature business since it was founded in 1999. The the Atlantic Rainforest Biosphere environment. Integrated Report 2013 31

New corporate governance MODEL [G4-34]

GLOBAL EXECUTIVE TEAM VOTORANTIM CIMENTOS GOVERNANCE STRUCTURE COMPANIES UNDER VID MANAGEMENT

V oTORANTIM V oTORANTIM Family Institute Participações Board Board (VPAR) Board

V oTORANTIM Institute Finance REMUNERATION Image and Committee AND PEOPLE Reputation Committee Committee

V oTORANTIM Financial Holding V oTORANTIM Industrial (VID)

V oTORANTIM Bank

Citrosuco V oTORANTIM V oTORANTIM Fibria Votorantim V oTORANTIM Board Cimentos Metais Board Siderurgia Energia Board Board Board Board

Statutory Finance REMUNERATION Strategy Audit Committee AND PEOPLE Committee Committee Committee

CEO Wteal r Dissinger

Global Internal Audit Director Ricardo Turra

Brazil President North America Europe, Asia and Paulo Motta President Africa President Marty Fallon Erik Madsen

P eople & CFO & IRO Corporate Legal Global E nergy, Management Global Lorival Luz Development Global Vice-President Sustainability Vice-President Vice-President Alexandre and Safety Global Claudia Soares Marcelo Chamma D’Ambrosio Vice-President Edvaldo Rabelo 32 VOTORANTIM CIMENTOS

Risk management and compliance [G4-14]

Votorantim Industrial has been ing their risks and in ensuring that ISO building a platform for risk manage- the company honors its commitment since 2008. In 2013, following ment to regulatory compliance. 31000 the change in the Group’s governance model, each industrial com- Code of Conduct pany set up its own risk manage- In 2005, Votorantim Industrial intro- global implementation of ment structure. Correspondingly, duced a Code of Conduct, inspired by the ISO 31000 guidelines Votorantim Cimentos created the the values and vision of the Votoran- for risk management Risk Management and Compli- tim Group. The Code expresses our ance area, within its global Finance commitment to ethics in our rela- Directorate. [G4-DMA] tions with customers, employees, shareholders, suppliers, govern- The Risk Management and Com- ment, media, communities and pliance area reports monthly to society in general. The Code applies the Statutory Audit Committee, to all of the Group’s companies and the Global Executive Team and the provides guidelines for the conduc- Brazilian Executive Team. Our con- tion of their business activities. cept of risk follows the overarching guidelines of the Votorantim Group The Code of Conduct is a tool that and considers not only impacts from determines the expected behavior financial and legal issues but also for employees and provides manda- those from social, environmental tory guidance for the actions and de- and reputation aspects. cisions of all Votorantim Cimentos’ companies in Brazil and overseas. Votorantim Cimentos is continually The Code is available in Portuguese, developing its governance practices English, Spanish and Mandarin at: and methodologies in order to bet- http://www.votorantim.com.br/ ter manage the risks related to the pt-br/ouvidoria/codigoConduta/Pa- company’s operational context. A ginas/codigoConduta.aspx [G4-56] good example of this was the implementation of the ISO 31000 risk In addition, we have developed a management standard in all of our Compliance Program and policies for units worldwide. This standard was Conformity with Fair Competition developed based on best market and Anti-Corruption laws. These practices. As a result, the company policies are in line with the best has ensured that there will be a uni- national and international practices, form process for risk management and the current legislation in all in all units, regardless of the country countries where we operate. These in which they are operating. are complemented by a Corporate Policy for Electoral Donations. Cooperation between the Compli- ance and Internal Controls areas provides a robust response process to assist the business areas in manag- Integrated Report 2013 33

Ethics and transparency [G4-SO4, G4-SO7, G4-SO8] By means of its communication channel for complaints the company has CADE administrative proceedings [G4-SO7] identified cases of conflict of interest, fraud and misconduct. [G4-DMA] On May 28, 2014, the Administrative Council for Economic These occurrences have been ad- Defense (CADE) issued its judgment on the administrative dressed and corrective measures proceedings relating to an alleged cartel in the cement sec- have been taken to mitigate the tor. It condemned Votorantim Cimentos and five other com- impacts. [G4-DMA] The company panies in the sector for alleged anti-competitive practices. has developed a report on fraud risks In its judgment, CADE considered that Votorantim Cimentos (FRA - Fraud Risk Assessment), which and the other companies, as well as trade associations and serves as a tool to evaluate business industry executives, had committed acts in violation of the practices. Furthermore, it has set up a competition laws. training program for all managers regarding the Brazilian Anti-Corruption Votorantim Cimentos does not agree with any of the allega- Law (No. 12,846 of 01/08/2013). tions made against it and intends to appeal the conviction in the court. The company reaffirms that it has always acted, There were no legal actions related and acts, in accordance with the law and does not approve to corruption or lawsuits against the of any anti-competitive practices. company for unfair competition, or trust or monopoly allegations in 2013. From the perspective of accounting only the fines and financial impacts of non-monetary sanctions greater than R$ 1 million were provisioned. In this report we have provided information T oTAl number of employees trained on both the amounts involved for in anti-corruption policies and legal actions received and those paid procedures [G4-SO4] and finalized in 2013. Employees 2013 The main labor-related legal actions Director/President* 12 referred to legal quotas, working hours and regulatory standards. The VCBR Manager 41 legal actions related to tax matters Coordinator/Consultantr 2 referred, principally, to income tax, social contribution tax on net income, Director/President* 22 VCNA goods and services tax and service Manager 4 tax. In 2013, the company made TOTAL VC 81 penalty payments related to 401 labor and social security cases in a total *The category Director/President refers to senior management amount of R$13.6 million. 34 VOTORANTIM CIMENTOS

Education and training Ombudsman the rules set out in the Code of Con- In order to provide ongoing educa- As from 2013, the Group determined duct, namely: guidance, warning, tion and training opportunities in that all matters relating to infrac- transfer, dismissal or termination risk management and compliance tions of the Code of Conduct, such of contract. for its employees, the company has as harassment, discrimination, prepared training courses on the suspected fraud, abuse of power In 2013, the company’s Ombudsman laws, regulations and policies that and illegal acts involving any of Working Group organized training relate to the company’s compliance, the companies of the Votorantim courses aimed at improving the anti-corruption and fair competi- Industrial, should be reported to professional skills of the ombuds- tion programs. the Corporate Ombudsman. This is man team, strengthening and dis- an independent body that handles seminating the ombudsman culture The training plan has been divided complaints and requests on a in all business areas and in all Group into two modules: anti-corruption confidential basis and where the companies. Training courses in Data and compliance with fair competi- identification of the complainant Privacy, Anti-Corruption and Moral tion. The training courses were is optional. This same channel can and Sexual Harassment were given, initially given to employees in be used for queries on the Code of in order to reinforce the understand- leadership positions, including direc- Conduct.[G4-41, G4-57, G4-58] ing of the consequences of the oc- tors and managers, because these currence of incidents of this nature groups of employees were consid- The ombudsman channel is available in the workplace. ered to represent a high level of risk to all stakeholders of Votorantim in assessments conducted by Ernst Industrial (VID), which includes Following the introduction of the & Young in 2013. In 2014, the com- employees, suppliers, customers, new governance structure, as from pany aims to train the remaining communities and the media. All 2014, each VID industrial company employees in high risk groups who complaints sent to the ombudsman will have its own ombudsman. were unable to attend the courses are reviewed by conduct commit- Complaints will be dealt with at bi- held in 2013. It also intends to train a tees composed of members of the monthly meetings between Internal broader range of employees, includ- Votorantim Group’s administration. Audit and the Votorantim Cimentos’ ing analysts, via e-learning. Investigations are conducted by Conduct Committee. Corporate Audit, which then sends In the case of suppliers and business the results back to the ombudsman. partners the standard contracts Every complainant receives feedback have been revised. The new con- on the occurrence he reported. tracts, General Terms and Condi- tions for Hiring, contain clauses In order to standardize the under- aimed at strengthening anti-corrup- standings and guidelines for action tion measures among its commer- on cases received by the ombuds- cial partners. Although no formal man, the Group established an training has been provided to these Ombudsman Policy, valid for all its groups, the company has informed companies. The remediation mea- and given guidance to them on its sures, for the complaints considered anti-corruption policies. valid, are taken in accordance with

ombudsman

0800-8911729 www.votorantim.com/pt-br/ouvidoria Integrated Report 2013 35

Economic performance [G4-DMA]

In its 80-year history in the industry, Over the years, the company has completed in 2013, the company has positioned itself to maintain a high developed a body of know-how and level of profitability and to create technical knowledge that is being value for its shareholders. This was applied throughout its global opera- based on the organic expansion of tions. The ongoing measures taken operations in Brazil and abroad, a to reduce operating costs, the ability vertically integrated platform and to respond to market fluctuations in a presence in high growth markets. a timely way, and its high operation- From 2010 to 2013, the company’s in- al standards have boosted the com- stalled capacity for cement produc- pany’s ability to increase profitabil- tion in Brazil increased from 23.2 to ity, even in extremely difficult market 31.7 million metric tons per year, and conditions. These efforts enabled the its total global production capacity company to continuously improve reached 53.9 million metric tons per its key performance indicators. A year. In the coming years, Votoran- good example was the improvement tim Cimentos intends to continue to in furnace efficiency obtained by grow, with financial discipline and The know-how and reducing the proportion of clinker an appropriate capital structure, po- technical knowledge, and increasing the use of alternative sitioning itself as the market leader accumulated in Votorantim fuels. This gain in efficiency, coupled in terms of profitability. Cimentos’ more than 80 with the in-house production of clinker, increased the company’s ability years of history, are used to control operating costs. throughout its operations

Votorantim Cimentos’ head-office in São Paulo 36 VOTORANTIM CIMENTOS

Financial results in 2013 Sale s volumes [G4-DMA] (million) Votorantim Cimentos recorded good financial results in 2013. Total net revenue amounted to R$ 12,142 brazil million, 29% higher than in 2012. The company’s revenues grew by 26 4.4% in Brazil, compared to 2012, higher than both the growth in the market average of 2.2% and the Brazilian GDP of 2.3%. 15

The growth in sales volumes was due to increased demand from the civil construction sector and the 5 consolidation of the results of the 1.7 operations in the Europe, Asia and Africa regional markets.

Cement production is a capital in- tensive activity, based on the mining North America and processing of natural resources. Thus, the company’s cost structure 11 is mainly based on the processing costs, particularly energy, and the 4 4 maintenance and operation of the production facilities. In 2013 the cost of goods sold and the selling, general and administrative expenses increased by 33.31% and 32.02% respectively, compared to 2012, Europe, Asia and Africa primarily due to the consolidation of the results of the operations in 8 Europe, Asia and Africa. 5 3 The consolidated gross profit in- 0.57 creased by 21.8% compared to 2012, and net income in 2013 amounted to R$ 1,388 million, reflecting the company’s high profitability. This tons of cement was due to its management model, tons of aggregates replicated globally, which is based cubic meters of concrete on cost control, efficient use of raw tons of mortar materials and the economies of scale in both sales and production, as well the hiring of experienced and qualified professionals.

The efficient management of liquidity and bank debt based on an adequate capital structure is a Integrated Report 2013 37

priority for the company. In 2013 average debt maturity, consistent we intensified our capital market with obtaining an investment grade activities, raising funding through rating from the rating agencies. bond issues and long-term loans, in order to extend the average ma- At year-end 2013, the company’s turity of our outstanding debt and gross debt totaled R$ 13,501 million, improve our level of liquidity. As a of which 95% were long-term maturi- result we ended 2013 with an aver- ties, and it had a cash position of R$ age debt maturity of 9.3 years. In 1,940 million. The company’s lever- the coming years, the company will age, measured by the ratio of net fulfill its commitment to maintain debt to adjusted Ebitda, was 3,28x an adequate profile of liquidity and at December 31, 2013.

Statement of Value Added & Distributed (in R$ THOUSANDS)* [G4-EC1]

Description 2011 2012 2013

Direct Economic Value Generated 11,269,100 12,190,637 15,197,222

1. Revenues 11,269,100 12,190,637 15,197,222

1.1) Sales of products and services 11,205,555 11,916,935 14,875,281

1.2) Other revenues (expenses) 65,467 284,779 363,292

1.3) Provision for doubtful debts -1,922 -11,077 - 41,351

2. Inputs acquired from third parties -5,740,720 -5,009,488 -7,346,362

2.1) Cost of products and services sold -5,740,720 -5,009,488 -7,346,362

3. Gross value-added 5,528,380 7,181,149 7,850,860

3.1) Depreciation, amortization and depletion -441,055 -544,307 -773,093

4. Net value-added produced 5,087,325 6,636,842 7,077,767 tons of cement tons of aggregates 5. Value-added received in transfers 515,481 135,911 504,009 cubic meters of concrete 5.1) Equity pick-up 311,753 -160,533 127,908 tons of mortar 5.2) Realization of other impacts on written-down investments 0 0 0

5.3) Financial revenues 203,728 296,444 376,101

6. Total value-added to distribute 5,602,806 6,772,753 7,581,776

* After the adoption of IFRS 11, as from January 1, 2013, we began to recognize the result of joint-ventures as equity pick-up and not as a percentage consolidation. As a consequence, the figures for 2011 and 2012 were also revised to make them comparable. 38 VOTORANTIM CIMENTOS

Description (in R$ thousands) 2011 2012 2013

7. Distribution of value-added 5,602,806 6,772,753 7,581,776

7.1) Remuneration and benefits 685,570 1,106,852 1,479,595

7.1.1) Direct remuneration 540,323 939,092 1,260,893

7.1.2) Benefits 145,247 167,760 218,702

7.2) Taxes, tariffs and contributions 2,967,973 2,709,736 3,444,661

7.2.1) Federal 1,531,195 1,442,343 1,434,708

7.2.2) State 1,659,819 1,737,549 1,940,548

7.2.3) Municipal 30,575 31,293 35,307

7.2.4) Deferred taxes -253,616 -501,449 34,098

7.3) Remuneration of third-party capital 1,041,791 1,315,682 1,268,685

7.3.1) Financial expenses 976,142 1,230,908 1,161,897

7.3.2) Rental payments 65,649 84,774 106,788

7.4) Remuneration of own equity 907,472 1,640,483 1,388,835

7.4.1) Dividends 288,823 1,044,172 900,000

7.4.2) Distributions to non-controlling shareholders 19,347 23,684 61,011

7.4.3) Retained earnings 599,302 572,627 476,681

7.4.4) Net income from discontinued operations. 0 0 - 48,857

The Statement of Value-Added pro- Distribution of value-added in 2013 vides detailed information on the direct economic value generated and distributed by the company, including revenues, operating costs, employee remuneration, donations 18% 20% and other community investments, retained earnings and payments to capital providers and governments. 17%

45%

Employee salaries and benefits Payments to governments Remuneration of third-party capital Remuneration of own equity Integrated Report 2013 39

Net revenue by product line (customer revenues) In R$ thousands

8,329,674 69 66 19 22 6,211,178 % %

6 4 6 8

2,099,121 2,280,468 706,192 754,835 777,311 378,932

2012 2013

Cement Concrete Aggregates Other

Adjusted Ebitda 10 In R$ thousands 11 % 10 % 90 79

3.516.695 3.071.924 2.775.051 2.787.930

296.873 356.195 372.570

2012 2013

Brazil North America Europe, Asia and Africa * Consolidated

*The operations in Europe, Asia and Africa were included only in the results for 2013. 40 VOTORANTIM CIMENTOS People People that perform

In 2013, as part of the restructuring Votorantim Cimentos had 16,228 em- of the governance structure, the ployees at year-end 2013. Our people Human and Organizational Develop- are a key asset and so VC takes action, ment (HOD) area was transformed day-by day, to create a better working into the Global Directorate for environment, one where employees People & Management. It is respon- feel valued and have opportunities for sible for human resources activities growth. [G4-10, G4-LA1, G4-DMA] and total quality processes, including management systems, targets and indicators. [G4-DMA]

Toal t own employees* 2013 VCBR ** 9,392 VCNA 3,552 VCEAA*** 2,978 South America 306 Total 16,228 Interns, summer students and apprentices 528 Grand total 16,756

* The total number of own employees corresponds to those working in the units of the regions considered for Group management, namely: VCBR (Votorantim Cimentos, Brazil), VCNA (Votorantim Cimentos, North America), VCEAA (Votorantim Cimentos, Europe, Asia and Africa) and South America (shareholdings held by Votorantim Cimentos, Brazil).** Salaried employees and trainees. *** Includes China.

Average number of hours of training* [G4-LA9]

Job categoryl Women Men Director/President 4 8 Manager 73 68 Coordinator/Consultant 49 65 Technician/Analyst/Supervisor 61 129 Trainee 165 185 Operator 72 54 Our 16,228 employees Intern 5 38 represent a fundamental Apprentice 3 13 asset for the company and, Total 56 66 for this reason we work, Grand Total 64 day-by-day, to build a better working environment *The management of the indicator has not been automated and standardized for all the regions . For 2014 we plan to set up a corporate university, ystematize the management of training and the and establish the governance of the subject of education and training. The data refers only to VCBR. RIntegratedio Branco (PR R) Ueportnit – Brazil 2013 41 42 VOTORANTIM CIMENTOS

Sobradinho (DF) Unit – Brazil

Votorantim Cimentos’ Management Beliefs

Develop talent – We invest time and resources in developing our tal- ented people because we believe in and trust them. Meritocracy – We believe that people are individuals and deserve to be treated fairly and in accordance with their personal performance. Excellence – We believe we can always do more and better, overcoming challenges with discipline, humility and simplicity. Pragmatism – We believe that it is essential to devote time and energy to what is most relevant, with objectivity and without losing sight of the big picture and the future trends. Open dialogue – We believe that an atmosphere of trust fosters open dialogue and ensures that all have room to talk and to be heard, and that a diversity of opinions leads to better solutions. Partnership – We believe our success is a result of collaborative efforts, strengthened by genuine relationships and partnerships in which every- one wins. Sense of ownership – We believe in people that take on responsibilities, work with passion and lead by example, celebrating their achievements and using mistakes as opportunities for learning. Integrated Report 2013 43

Development and training T oTAl number and rates of new employee hires Votorantim Cimentos cares about and employee turnover by age group, gender and the development of its employees, region* [G4-LA1] and for this reason the company established the Votorantim Devel- 2013 opment System (VDS). Under this Employees leaving employment by region Número % system all employees are evaluated and receive feedback from their Women 258 3 managers on their performance and Men 1,968 22 adherence to the company’s beliefs. The evaluation meeting is also an Employees leaving employment by age range Número % opportunity to identify employee Less than 30 years old 800 9 training needs for inclusion in the Annual Training Plan. This plan Between 30 and 50 years old 1,279 14 includes collective training activities More than 50 years old 147 2 and Individual Development Plans, which are focused on both training Employees leaving employment by region Número % and other activities aimed at accel- South 556 6 erating employees’ careers. The VDS also includes the activities of the Vo- Southeast 937 10 torantim Academy, which focuses on the development of the company’s Center-west 253 3 leaders in relation to topics such as North 68 1 People Management, Performance Management and Strategic Manage- Northeast 412 5 ment. The Votorantim Academy also Brazil 2,226 25 develops our younger employees through its Realize Potential Pro- New employees hired by gender Número % gram. All these practices are aimed Women 202 2.2 at increasing VC’s rate of internal recruitment, which is approximately Men 1,717 19.1 67% today. [G4-LA11] New employees hired by age range Número %

The performance evaluation system Less than 30 years old 907 10.1 is linked to remuneration for 100% of Between 30 and 50 years old 954 10.6 employees, in all functional categories. For directors, managers, coor- More than 50 years old 58 0.6 dinators, consultants, technicians, New employees hired by region Número % analysts, supervisors and trainees the company applies a variable South 520 5.8 remuneration criterion, and for op- Southeast 734 8.2 erational employees, the collective profit sharing program (PPR). Center-west 210 2.3 North 83 0.9

Northeast 372 4.1

Brazil 1,919 21.3

* Employees of the VCBR units integrated in the SAP system (excluding interns and trainees). The table does not include data for VCNA and VCEAA, which are still in the process of being consolidated. 44 VOTORANTIM CIMENTOS

Hiring and turnover Remuneration and Employees with children in elemen- In 2013, the turnover rate for VC Benefits [G4-LA2] tary school are entitled to a refund Brazil was 25%, versus a recruitment In addition to their fixed remu- of the expenses for school materials rate of 21%. VC plans to reduce tur- neration all Votorantim Cimentos’ on presentation of the invoice and nover by investing in a management employees are eligible for the proof of the child’s enrollment. system that reconciles and details variable remuneration program, processes and standards, sharing the which aims to recognize and reward In terms of health benefits, the com- knowledge and expertise of indi- performance, encourage align- pany has established the Better Life vidual areas with the whole of the ment between the areas and guide program, which includes a series of company. Knowledge, when shared, employees’ actions in relation to the health-related initiatives and activi- ceases to be personal and becomes defined strategic objectives. ties for employees and their fami- part of the company’s processes. lies. One such initiative is “VC cares [G4-LA1, G4-LA11] VC’s variable remuneration depends about your health”. The employee’s on the employee’s position and sal- health conditions are monitored by ary group. This allows the employee telephone with the aim of support- to increase his total remunera- ing participants to exercise self-con- tion according to his professional trol in relation to their health and development, as follows: Variable clinical stability, as well as reinforc- Remuneration = remuneration for ing their doctors’ recommendations. individual and corporate goals ap- In a similar manner, the Employee plicable to leadership and profes- Support Program, created in 2009, sional staff; and the Profit Sharing provides guidance on a number of Program (PPR) = remuneration for aspects which can adversely affect collective goals for operational staff. health: legal, financial, emotional, The whole process is based on the marital or family, alcohol and drugs. breakdown of the targets in the Both programs are run by multi- company’s strategic plan. disciplinary teams of professionals and all information is confidential. The definition of the salary group for In addition, there are initiatives on each position depends on the knowl- dietary reeducation and the proper edge, intellectual complexity and use of the health plan. responsibility for results required to carry out the function. Using this as- In 2014, a new program, called sessment job positions are weighted “Mom, Baby and Company”, was and allocated to salary groups. established to give support to preg- nant employees. The mothers-to-be All VC employees receive certain who are enrolled in the program RV benefits mandated by law includ- receive information by email and ing: health assistance, accident telephone from health professionals assistance, occupational health with answers to their questions and The company’s variable certificate, maternity leave, pater- guidance on pregnancy. [G4-LA12] remuneration system is nity leave, food vouchers, basic food composed of programs allowance and transportation. In addition all company employees re- related to job category ceive medical and dental care, group and salary group and life insurance, pharmacy benefit and enables employees pension plans (optional). Further- to increase their total more, VC participates in the Citizen remuneration in line with Company Program and offers mater- their professional growth. nity leave of 180 days, provided the employee expresses interest. Integrated Report 2013 45

Diversity VC has made a commitment to hire people with disabilities as part of its efforts to maintain the diversity of One Team, One Company its workforce. [G4-DMA] In 2013, VC began a profound restructuring of its governance In relation to the balance between structure. Managers, employeesand contract staff ad- the numbers of men and women dressed the challenge of developing new strategicdrivers for employed, the company aims to de- the company. As a result the “One Team, One Company” vision velop, as from 2014, the concept of was launched. This vision substituted the view of VC as an Model Units. Under this concept at inward-looking, industrial company for one that looks out- least one unit in each business must wards, at the market and its needs, and makes the client one be a benchmark for this theme. In of its main priorities (for more information, please see the section late 2013, the project began to be on Strategy on page 25). implemented in Cajamar (SP), where at that time 90% of employees were men. The company plans to increase female participation in the Diversity* 2013 workforce from the current 10% to Men 87.6% 35% be means of structural projects, ranging from support for primary Women 12.4% education in local schools to im- Women in management positions 16.5% provements in the unit itself. * Employees of the VCBR units registered in the SAP system (excluding interns and trainees)

Diversity and equal opportunity indicators* [G4-LA12]

Gender (%) Age Range (%) Composition of minority groups in the Under Between Above organization Men Women 30 years 30 and 50 50 years old years o ld old Director/President 0.15 0.01 – 0.05 0.10

Manager/General Manager 1.17 0.25 0.01 1.17 0.24

Coordinator/Consultant 2.55 0,55 0.20 2.42 0.48

Technician/Analyst/Supervisor 13.49 4.15 4.05 11.83 1.76

Trainee 0.05 0.02 0.07 – –

Operator 65.37 6.73 25.62 39.21 7.27

Intern 1.65 1.74 3.29 0.09 0.01

Apprentice 1.32 0.80 2.12 – –

Total Employees** 85.74 14.26 35.36 54.77 9.86

* Votorantim is consolidating its global processes to obtain information on the total number of people with disabilities. In this respect, the operations in Brazil have a partnership with a consulting company which specializes in the hiring of people with disabilities.** Employees of the VCBR units integrated in the SAP system. 46 VOTORANTIM CIMENTOS

Interactive internal Dialogue and feedback communication Each leader is encouraged to imple- The Integrated System for Internal ment direct communication forums, Communication employs , mainly, through which he can talk and listen direct communication and engage- to his team. These initiatives seek ment to ensure the dissemina- proximity and knowledge. There are tion of the company’s vision and several institutional tools available for strategy, by stimulating dialogue, communication between employees openness and pride in belonging. and the company:

As well as face-to-face communica- Ombudsman: available to all em- tion, the employee has access to ployees to indicate situations that are nine communication channels, con- in conflict with the Code of Conduct, sidering digital and printed formats. in confidence. The telephone contact In this way the company can reach numbers are disclosed on notice boards all employees even though they at the units, in meeting rooms, on the are geographically dispersed and intranet and internet, and in printed composed of people from different copies of the Code. A copy of the Code cultures and levels of education. is given to all employees during the integration process (for more information please see the section on Risk Manage- ment and Compliance on page 32).

Internal communication channels

Vehicle Content Frequency Format Audience

Gestão à Vista information on results monthly bulletin board

print and Jornal Mural (Psiu) corporate and local news weekly digital print and Boletim Já recent and urgent news as necessary digital

Nosso Grupo Votorantim Group quarterly all employees print Entrenós (regional and bimonthly business areas) Votorantim group strategy Cimentos Com VC quarterly web

print and Departamento informa directorate/area as necessary digital information on the institution, employees VC intranet portal online web areas, applications and news with email alignment and updating of Informe executivo monthly digital leaders leadership teams Integrated Report 2013 47

“Com VC” (With VC): employ- were analyzed. Of this total, 93 were Dialogue ees can submit questions to the considered valid and resulted in appro- president during his quarterly priate measures being taken, 134 were web-conference. In the four confer- considered unfounded, 10 were closed Each leader is encouraged ences last year over 170 questions due to the lack of information for to implement direct were answered on a variety of topics analysis and the remaining 36 are still communication forums, which included strategy, remunera- under evaluation. For the cases con- tion, expansion plans, the IPO and sidered valid appropriate action was in which he can talk and acquisitions. taken. No complaints were received listen to his team. for discrimination related to race, age, “Fale com os Presidentes” gender, religion, social origin, nation- (Speak to the Presidents): an ality, or political opinion. [G4-DMA] internet channel, through which employees can submit suggestions, As determined by the company’s Code questions and complaints to the of Conduct, a process of consequence president and the executive vice management is used to address valid president for the Brazilian region. complaints. The sanctions include includes guidance, warning, transfer, “Palavra do Leitor” (The reader’s relocation and/or dismissal. For the 93 comment): employees may also cases considered valid in 2013 the fol- communicate with the Votorantim lowing actions were taken: three writ- Group through this channel, which is ten warnings; 10 verbal warnings; eight accessed through the internal publi- dismissals; and eight others underwent cation “Nosso Grupo” (Our Group). training. For the remaining 64 cases, the actions taken were not specified. The Internal Communication Inte- grated System is being revised to The information generated by the adapt it to the new global gover- system is monitored on a daily basis. nance structure. The objective is to This information is reported regularly provide support and guidance to all to the Audit and Conduct Committees, the company’s operations in Brazil and serves as a basis for the discussion and overseas. of the strategies to be adopted. The numbers of complaints has increased Fighting discrimination in recent years due to the company’s [G4-HR3] efforts to establish communication In 2013, the ombudsman channel channels for complaints, the increase received 273 complaints related to in the number of operating units and a cases of discrimination (harassment higher level of confidence in the use of and abuse of power). All complaints these channels by employees.

Discrimination cases [G4-HR3]

2011 2012 2013

Complaints received by the ombudsman - –– 273 cases of harassment and abuse of power

Complaints considered valid - cases of 63 104 93 harassment and abuse of power 48 Sobradinho (DF) UnitVOTORANTIM – Brazil, one CIMENTOS of the locations where a Community Council was established. Integrated Report 2013 49

Sustainable practices The responsibility of being a global benchmark

Sustainability is a theme that to be ahead of potential increased permeates all areas and sectors of requirements or restrictions set the Votorantim Group. In late 2013, by governments. In this respect, the company created the Global Votorantim Cimentos has dedicated Directorate for Energy Sustainabil- resources to stimulate and develop ity and Safety, with the following initiatives to reduce CO2 emis- responsibilities: improve the energy sions, improve the eco-efficiency of efficiency of operations; promote operations, promote sustainable social and environmental responsi- growth in the communities where it bility programs; define policies and operates and preserve biodiversity. guidelines on health and safety; We believe that all of these aspects, implement global greenfield and as well as having intrinsic value, are brownfield projects; manage the important for the present and for company’s long-term geological the future of our business. impact and develop new sources of strategic inputs (cementitious materials). The first priority of this division was to establish, in 2014, a new sustainability strategy for VC, to guide its vision at a global level.

We aspire to become a benchmark in Brazil and the world, as a socially and environmentally responsible Following the company that strives for excellence creation of the Global in its business activities and helps Directorate for to change the image of the cement Energy, Sustainability sector as an industry with a high environmental impact. and Safety a new sustainability strategy Although environmental laws are will be developed different in each of the countries where we operate, we always try 50 VOTORANTIM CIMENTOS

Environmental policy In 2011, in Brazil, Votorantim Cimentos Our environmental policy launched its Environmental Policy principles are and 10 Green Rules. Together they comprise a set of guidelines that 1 Legal and other requirements define the expected behavior of always be in accordance with the legal requirements employees in relation to selected applicable to the organization and its commitments. environmental issues. These documents are being reviewed and 2 Environmental management system the new version will be disseminated implement and maintain our environmental man- globally in the near future. agement system to ensure we meet our environmental commitments, with a focus on continuous improvement.

3 Use of natural resources strive for eco-efficiency in the use of natural resources in our operations, such as fuel, raw materials, water, energy and other materials.

4 Environmental impacts assess, control and reduce the environmental impacts of our activities, focusing on continuous improvement and the adoption of industry best practices. Integrated Report 2013 51

Sobradinho (DF) Unit – Brazil

Green rules

Based on our six principles for environmental policy, 5 Innovation we also developed the 10 green rules to facilitate the invest in innovation to improve our processes, prod- dissemination of the policy among own employees ucts and services, throughout their life cycles, with a and contract staff. focus on the reduction of environmental impacts. 1 Preserve vegetation 6 Engagement with stakeholders 2 Preserve waterways promote ethical and transparent relations with our 3 Dispose of waste properly stakeholders through processes that meet the de- 4 Report operational problems with the mands related to environmental issues. pollution control systems 5 Do not mistreat or capture wild animals 6 Do not carry out activities in protected areas 7 Preserve caves and archaeological sites 8 Do not burn vegetation 9 Do not wash or store inputs in unauthorized areas 10 Use natural resources responsibly 52 VOTORANTIM CIMENTOS

Health and safety [G4-LA6] Investments in Wind Fence The cement industry faces risks environmental We installed a wind fence at the which are inherent to its activities. protection [G4-EN31] Port of Imbituba (SC) to improve Votorantim Cimentos’ goal is zero ac- In 2013, we invested R$ 130.3 million environmental management at cidents or fatalities. We have reduced in environmental programs, more the coke terminal. The fence cost the frequency rates of accidents with than twice the amount of R$ 59.5 R$ 6 million and prevents the wind lost time in our plants. The biggest million for 2012. This increase was from blowing the coke all over challenge, however, continues to be due to investments in new waste the terminal. The fence was built the occurrence of fatalities. co-processing waste projects, which in partnership with the Federal were approved in 2011 and 2012 and University of Rio Grande do Sul In 2013 we had four fatalities in our disbursed in 2013, and other im- (UFRGS) and, together with other operating units, of whom one was provements and adaptations. Other improvements, such as the use of a direct employee and three were projects developed during the year c a dust agglomeration product indirect employees. In addition there were: research on caves and water during the unloading of the coke were 15 fatalities on public roads and tables, maintenance and monitor- and a crusting agent applied highways, more than half of which ing, emission treatment and plans to the piles of coke resulted in we classified as third parties*. A for closures and the rehabilitation of a significant reduction of the number of actions are already being areas. In the case of our Europe, Asia dispersion of particles. taken in 2014 to reduce fatalities. and Africa Region, whose results were consolidated into our financial We have three main programs to statements in 2013, the amounts promote safety in our operations, as invested were recorded as other follows: “Rules for Life” - the goal is environmental costs. [G4-DMA] to decrease the number of accidents by creating a safer environment by the use of safety equipment, methods and processes; “Manager walking in the area” - encourages leadership to have Environmental investments [G4-EN31] more contact with employees and (IN R$) be more present in field operations especially during health and safety 2011 2012 2013 inspections; and “Right of Refusal” - Waste disposal, the employee may refuse to carry out emissions treatment, and 77,409,786 31,826,306,00 48,132,668 a task if he considers the conditions to remediation costs * be inadequate or unsafe. Costs of environmental prevention and 20,655,952 24,880,414 64,692,580 Our safety indicators have been management ** calculated according to the CSI Other environmental costs 12,808,230 2,770,920 17,487,837 methodology and are presented on page 90 this report. [G4-DMA] Total 110,603,968 59,477,640 130,313,086

*Includes treatment of air emissions, solid waste and effluents and plans for closures and the rehabilitation of areas. **Includes environmental education, environmental manage- * Third party – any person who is not ca- ment, preservation, reforestation and biodiversity and environmental insurance. tegorized as employed directly or indirectly by Votorantim Cimentos. In general, third- -parties include customers, visitors to company locations, and drivers or passengers who are involved in accidents off-site, with company or contractor vehicles, but only if company responsibility was involved. Integrated Report 2013 53

Eco-efficiency ash, since all solid matter is incorpo- use substitute fuels and materials, mak- The main initiatives aimed at increas- rated into the clinker produced. ing it more difficult for VC to achieve ing the eco-efficiency of our opera- its ambitious goal of reaching a level of tions were the reduction of the use In Brazil, more than 90% of our inte- 30% thermal substitution by 2020. of fossil fuels and energy consump- grated plants (with furnaces) have tion, with a consequent reduction been licensed for co-processing. In Another initiative taken was the strat- in greenhouse gas (GHG) emissions. 2013, we implemented this process egy to mitigate the GHG emissions The cement industry is responsible in four plants: Vidal Ramos (SC), Rio from the plant in Santa Cruz (RJ). This for around 5% of global CO2 emis- Branco do Sul (PR), Laranjeiras (SE) plant was installed inside the Thyssen- sions. [G4-EN15, G4-EN16, G4-EN17, and Cuiabá (MT). In 2013, the use of Krupp steelworks in order to benefit G4-EN19, G4-EN27, G4-DMA] co-processing in cement production from the reuse of slag produced by the resulted in the substitution of 11% of blast furnace. The use of slag as an We have invested in co-processing the thermal energy from fossil fuels. additive in cement production reduces in cement production to reduce the [G4-EN2, G4-EN6, G4-EN7] the amount of clinker required. As a use of fossil fuels and non-renewable result, this reduces GHG emissions, raw materials. As well as reducing the Despite the increase in the rate of energy consumption and the emission emissions of pollutants, this process thermal substitution, by the use alter- of other pollutants. By 2015, we expect utilized waste that would otherwise native fuels and biomass in some re- to have reduced GHG emissions by have been disposed of in landfills. gions, the inclusion of the new VCEAA 7.6% compared to 2012, which is higher Another advantage of co-processing operating units brought an additional than the 5% reduction established by in cement production is that there is challenge for the company. Most of the State Institute for the Environ- no generation of by-products, such as these plants did not have projects to ment, Rio de Janeiro. [G4-EN6, G4-EN7]

Thermal Substitution Rate (%)

8.5 7.2 6.4 5.6

3.7 3.5 3.3 2.9 3.1

1 1 0

1990 2011 2012 2013

Biomass Low carbon fossil fuels total

Target for 2020: increase the thermal substitution rate to 30%. 54 VOTORANTIM CIMENTOS

GHG emissions inventory The main source of GHG in cement [G4-EN15, G4-EN16, G4-EN17, production is the calcination process, G4-EN18] which releases a large amount of Votorantim Cimentos prepares an CO2. The emissions of other GHGs GHG emissions inventory using the CSI such as CH4 and N2O are relatively methodology for its cement plants, and insignificant. For the cement indus- the GHG Protocol for its aggregates, try, CO2 represents approximately concrete and complementary products 99% of total GHG emissions, accord- units. The CSI methodology was devel- ing to calculations made using the oped by the World Business Council for CSI methodology. Thus, in the case of Sustainable Development (WBCSD) for the cement plants CO2 was the only the cement industry. The GHG Protocol GHG emission considered. For the was developed by the WBCSD and the aggregates, concrete and comple- World Resources Institute (WRI) and mentary products units, we consid- applies to all types of industry. The ap- ered methane and nitrous oxide in proach adopted was that of operation- addition to CO2. al control and the base year was 1990. The GHGs considered in the inventory In 2013, the company’s direct GHG were: carbon dioxide, methane and emissions increased due to increased nitrous oxide for the units producing production. The indirect GHG emis- aggregates, concrete and complemen- sions, from electric power consump- tary products, and carbon dioxide for tion also increased, but by a higher the cement plants. [G4-DMA] percentage due to increased produc-

Clinker/Cement Factor (%)

81 76 76* 74 Life-cycle assessment

In 2014, CSI completed the development of a tool for the preparation of environmental product declarations. Member companies can use it for the preparation of environmental product declarations for their own products. In the coming years, Votorantim Cimentos plans to prepare environmental product declarations for a range of products for sustainable construction. 1990 2011 2012 2013

* This indicator increased in 2013 due to the consolidation of VCEAA and the lower availability of cimentitious materials (such as slag).

Target for 2020: reduce the clinker/cement factor to 72.3% by the increased use of alternative raw materials. Integrated Report 2013 55

tion and the consolidation of the new used as a substitute for clinker in ce- operating units in the Europe, Asia ment production, in Brazil. and Africa region. Furthermore, the supply of electric power from hydro- In VCNA, at St. Marys Cement, we electric plants in Brazil was adversely have continued with our research impacted by water shortages in 2013. into an innovative technology that This led to an increased percentage uses marine algae to mitigate its of electric power from thermoelectric CO2 emissions. The research is un- plants in the overall energy mix and dertaken in a partnership with a bio- consequently increased the GHG fuels company, Pond Biofuels, and emission factor of the network. consists of cultivating algae in bio- reactors through which the waste The company’s total GHG emissions gases from the cement production have reduced considerably in recent process are passed. The accelerates years due to the use of more efficient the algae’s photosynthesis process technologies, the substitution of and they feed on the CO2 and release conventional fossil fuels by alterna- oxygen. Besides the direct environ- tive fossil fuels and biomass, and the mental benefit the algae can also be substitution of conventional raw used to produce bio-fuels. materials by alternatives. However, in 2013, total CO2 emissions increased compared to 2012, due mainly to the reduced availability of slag, which is

Specific CO2 emissions [G4- EN18] (kg CO2/ton cementitious product)

763 763 656 654 647 638 631 649

17% 15% 15%

1990 2011 2012 2013

ESpecific gross CO2 emissions Specific net CO2 emissions Emission reduction (base 1990) 56 VOTORANTIM CIMENTOS

Direct GHG emissions (metric t/CO2e) [G4-EN15]

Source 2011 2012 2013

Indirect GHG Emissions - Scope 1* Stationary combustion 9,478,117 9,346,289 10,237,380 Mobile Sources – owned 170,401 165,350 156,277 Process 17,143,631 16,684,340 17,750,476 Total (Scope 1) 26,792,149 26,195,979 28,144,134 Biogenic GHG Emissions – Scope 1

Biomass fuels 885,783 568,298 639,606

* Following the acquisition of plants in Europe, Asia and Africa, the historical figures for these indicators were recalculated to include these units. Thus, the values reported in this report differ from those published in the Integrated Report 2012.Includes the Scope 1 emissions of the units producing Cement, Aggregates, Concrete and Complementary Products.

Indirect GHG Emissions (metric t/CO2e) [G4-EN16]

Source 2011 2012 2013

Indirect GHG Emissions – Scope 2* Electric power 1,246,048 1,332,633 1,686,733 Total (Scope 2) 1,246,048 1,332,633 1,686,733

* Includes the Scope 2 emissions of the units producing Cement, Aggregates, Concrete and Complementary Products.

Other GHG emissions (metric t/CO2e) [G4-EN17]

Source (upstream e downstream) 2011 2012 2013

Other Indirect GHG Emissions – Scope 3* Transportation of inputs and final products 376,002 410,172 432,112 Total other indirect GHG emissions – Scope 3 376,002 410,172 432,112 Biogenic GHG emissions – Scope 3 Transportation of inputs and final products (bio-diesel) 18,478 20,161 12,606 Total biogenic GHG emissions – Scope 3 18,478 20,161 12,606

* GHGs included in other indirect emissions were: CO2, CH4 and N2O generated by the transportation of inputs and final products. Includes the Scope 3 emissions of the units producing Cement, Aggregates, Concrete and Complementary Products.

Reduction of GHG emissions [G4-EN19]

Reduction of GHG emissions Program/Initiative 2011 2012 2013 Rate of reduction of CO emissions per ton of 2 -15.2% -17.4% -15.0% cementitious product (Scope 1)

Total reduction of GHG emissions -15.2% -17.4% -15.0% Integrated Report 2013 57

Less clinker in cement

Artificial pozzolan is a mineral raw material produced by the calcination of a clay with special characteristics. In the presence of water and calcium hydro- xide, pozzolan reacts in a manner similar to cement. Thus, it can be used as an additive in cement production, thus reducing the use of clinker. Votorantim Cimentos is a pioneer in the use of this material. The first plants to install furnaces especially designed for the production of this type of pozzolan were those located in Porto Velho (RO), Paulista (PE) and Nobres (MT). [EN6, EN7]

At the plant in Porto Velho (RO), the benefits of implementing the pozzolan have been evaluated. There were reductions of:

25% in electric power 10% in thermal energy 40% in water 43% in CO2 emissions 25% in waste generated 6% in cost

There also led to an increase in the useful life of the limestone deposits which will result in social benefits for the region, due to the stimulation of the local economy and job training.

Environmental activities increased by 4.5% com- impacts [G4-EN30] pared to the previous year due to the The main environmental impact of increased cement production and our logistics activities is the emission consequent increased volumes of of GHGs due to fossil fuel combustion. materials transported. [G4-DMA] The energy consumed in our logistics

Significant impacts [G4-EN30] 2011 2012 2013

Quantitative data for logistics:

Energy consumption (GJ) 8,227,546 9,096,332 9,422,545

GHG emissions (metric tons CO2e) 435,660 482,003 499,299

Quantitative data for internal transportation:

Energy consumption (GJ) 41,672

GHG emissions (metric tons CO2e) 2,139 58 VOTORANTIM CIMENTOS

Energy Consumption [G4-EN5] whether produced externally or by Energy consumption is an impor- the cement operations themselves tant contributor to CO2 emissions. (in small hydro-electric plants), ac- Votorantim Cimentos has taken a cording to the CSI guidelines. structured set of actions to increase the fuel efficiency of its operations The energy consumption outside and has invested in the diversification the organization in 2013 considered of its energy mix. [G4-DMA] only transportation and distribution activities, totaling 5,905,183 GJ. As a result of the consolidation of the new VCEAA operating units in our results, we had a small increase Specific consumption of electric power in electric power consumption in (kWh/metric ton cementitious product) 2013. Despite this impact the level of electric power consumption still 119 remains low due to our having in- 109,9 108,8 109,3 vested in the best globally available technology in our capacity expansion projects, resulting in a significant reduction, of around 8%, in the specific consumption of electric power in our operating units.

Votorantim Cimentos recorded an average electric power intensity of 109.3 kWh/ton cementitious product , one of the lowest rates in the cement industry. This calculation included 1990 2011 2012 2013 only the consumption of electric power within Votorantim Cimentos, Reduction in electric power consumption (%)

Spain Integrated Report 2013 59 Reduction

S ince 1990, Votorantim Cimentos has achieved a reduction of 8% in the energy consumption of its cement plants in Brazil.

Energy consumption within the organization (GJ) [G4-EN3]

TOTAL ENERGY CONSUMPTION (GJ) 2011 2012 2013

NON-RENEWABLE ENERGY

Conventional fossil fuels 100,958,554 98,344,712 107,090,179

Alternative fossil fuels 3,125,795 3,731,315 3,786,744

Electric power 6,290,581 5,740,386 5,917,068

Total non-renewable energy 110,390,439 107,833,613 117,886,482

RENEWABLE ENERGY

Biomass (excluding energy sold) 8,215,301 6,446,903 7,054,304

Electric power 9,629,887 9,982,789 11,097,752

Total renewable energy 17,845,188 16,429,692 18,152,056

Total energy consumed (renewable + non-renewable) 128,235,627 124,263,305 136,038,539

* The conventional fossil fuels considered were: coal, coke, heavy fuel, diesel oil, gasoline, natural gas, lignite and liquefied petroleum gas (LPG). ** The alternative fossil fuels considered were: tires, used oil, contaminated soil, solvents, plastics, industrial waste and other fossil fuels from waste.

Energy Consumption outside of the organization (downstream) (GJ) [G4-EN4]

Non-renewable energy 2013

Transportation and distribution 5,905,183 60 VOTORANTIM CIMENTOS

O ther emissions Although we are in compliance with the local laws where we operate in relation to the emissions of NOx and SO2 we have not yet achieved our objectives. We expect that the projects to reduce these emissions, which were started in 2013, will begin to produce results in 2014.

Specific NOx emissions NOx (g/metric ton clinker)

P arTICULATE matter 2,249 emissions were reduced by 21% in 2013 compared to 2012. 1,567 1,599

2011 2012 2013

Specific emissions of Specific SOx emissions Particulate Matter SOx (g/metric ton clinker) (g/ metric ton clinker) 953 160 143 792 114 674

2011 2012 2013 2011 2012 2013 Integrated Report 2013 61

Water management Materials [G4-EN1] We have been working on new Despite the improvement in the procedures to standardize and specific efficiency of our use of further enhance the management natural resources, in 2013 there was of water resources in all Votorantim an increase in the total raw material Cimentos’ units. This was due to our consumption, due to the company’s expanding operations, especially in significant rates of growth in the countries with a higher level water production of cement, concrete and resource stress, and the increasing aggregates. There is a trend towards importance of the water issue on the greater use of renewable raw the global stage. In 2013, Votoran- materials and biomass. [G4-DMA] tim Cimentos participated in the customization of the Global Water Tool, a water management tool for Materials used (metric tons) [G4-EN1] the cement sector developed by the CSI. The tool is freely available on 2012 2013 the WBCSD website (www.wbcsdce- Cement* 41,415,553 55,689,684 ment.org/GWTcement). Other businesses** 30,525,691 34,167,695,95 The monitoring of water resources continues to evolve in the individual Total non-renewable materials 71,941,244 89,857,380 management of each of our plants. Each plant has its own system of * For cement production the raw materials considered were: limestone fragments, gypsum measurement and control and fragments, clay, artificial plaster, limestone additive, slag, fly ash, pozzolan, contaminated soil, iron gravel and mill scale (CSI and MPA) and others (cement). The item “others (cement)” refers to a program to reduce consump- materials that were not specified in the spreadsheet reporting of the environmental indicators. tion, in line with the company’s ** For the other businesses the materials considered were: concrete: cement, limestone frag- environmental policy. In addition, ments, sand, gravel and chemical additives; aggregates: limestone fragments, gypsum frag- Votorantim Cimentos has increased ments and clay; and complementary products: limestone fragments, sand, chemical additives, its level of participation in work- cement, aggregates, filler and white cement. ing groups and discussions on the topic of water. It participates in the Technical Subcommittee for Water, Biodiversity [G4-EN11] of the Brazilian Business Council for In 2012 Votorantim Cimentos surveyed Sustainable Development - CEDBS, the surrounding areas of all its mines and the Working Group on Water located in Brazil and North America, Resources, of the Cement Sustain- using the IBAT tool (Integrated Biodi- ability Initiative (CSI). versity Assessment Tool), to verify if they were situated within 5 km of areas of high biodiversity value. In 2013, the survey was expanded to include all the mining units in Europe, Asia and Africa. The results obtained showed that 72% of the units in Brazil had an overlap with areas of high biodiversity value within 5 km of its surroundings. The results for the Europe, Asia and Africa and North America regions were 35% and 40% respectively. Altogether, Votorantim Cimentos surveyed 119 mines and 62 of them, or 52%, had such overlaps. [G4-DMA] 62 VOTORANTIM CIMENTOS

The IBAT Tool used is recognized and has set up its own system of tainable development of such areas internationally and has a databank monitoring controls in line with the and promote it as a commitment of qualitative and geographical company’s environmental policy. by all participants in the production information on areas of high bio- chain and in local communities. We diversity value. This enabled us to One of the projects under develop- also continued to permit the use of identify the overlaps between these ment, which encompasses biodi- the Xambioá Cave, located on our areas and the location of our mines. versity issues, is technical coop- property near the unit of the same The categories of areas of high biodi- eration with environmental NGOs. name, as a caving school for local versity value used by the tool are: For example, the company signed caving groups. legally protected areas (IUCN cat- a cooperation agreement in 2011 egories); internationally recognized with the Atlantic Forest Biosphere Another ongoing project is the “Sur- areas (World Heritage, Ramsar and Reserve and the Brazilian Society of vey of Environmental Assets in VC’s Natura 2000); priority biodiversity Speleology. For more information Areas”. This project was initiated in areas (Key Biodiversity Areas and on this agreement please see: www. 2013, by our unit in Ribeirão Grande Alliance for Zero Extinction Sites); cavernas.org.br/cooperacaotecnica (SP), and will be completed in 2014. and regions of conservation value This is a research project to iden- (Endemic Bird Areas, Biodiversity We have a number of ongoing proj- tify and classify the environmental Hotspots and High Biodiversity Wil- ects of a collaborative nature. One and social issues in the areas where derness Areas). good example is the Guide to Good Votorantim Cimentos has operating Environmental Practices in Mining. units. Based on the results, measures The CSI recommends that operating The objective was to encourage the will be proposed for their conserva- units located in areas which overlap implementation of good environ- tion and sustainable use, and a model with areas of high biodiversity value mental practices in the limestone for a Sustainable Land Management prepare biodiversity management mining life-cycle in order to promote Plan for Mining will be developed to plans. For 2020, we have set a target and share positive and/or mitigating be applied to the company’s proper- to prepare biodiversity management actions on environmental issues. ties in the Atlantic Forest biome. A plans for 100% of our units located The application of best practices second pilot study of this type will be in overlapping areas. in mining in karst areas (where the carried out at our unit in Laranjeiras erosion of limestone has led to the (SE), and is planned to be completed Each unit continues to develop formation of caves) enabled us to in 2015. [G4-EN13, G4-EN27, G4-DMA] initiatives to manage biodiversity construct a new model for the sus-

Identification of areas for biodiversity management plans 2012 2013

Total number of operations (mines) 81 119

Mining operations located in areas of high biodiversity value (58%) 47 (52%) 62*

Percentage of units which have a BMP in place (4.26%) 2 (6.5%) 4

* of which VCBR 36, VCNA 14, VCEAA 12 Integrated Report 2013 63

Closure plans

In 2013, we prepared 13 closure plans for operating units in Brazil, including: cement plants (Salto de Pirapora, Pinheiro Machado, Laranjeiras, Nobres, Santa Helena, Corumbá, Porto Velho, Vidal Ramos, Xambioá, Cuiabá e Ribeirão Grande); limestone mine (Itapeva); and an aggregates plant (Araçariguama).

As from 2013, the preparation of plans for closures, recovery or rehabilitation of areas has followed the CSI guidelines on this subject. So far, in Brazil, we have prepared rehabilitation plans for 28 of our 50 mines (for cement and aggregates), a rate of 56%. For the Europe, Asia and Africa region we have rehabilitation plans for 31 of the 34 mines (for cement), a rate of 91%. Fi- nally, of the 35 mines (for cement) in the North America region, 34 have a rehabilitation plan, a rate of 97%.

Although the corporate environmental area consolidates this information, each unit is responsible for preparing the plan and ensuring its implementation. As part of its strategy the company will undertake a review of these closure plans every five to ten years in order to update the programs, action plans and costs. Among the main advantages of this method are the amortization of closure costs and the mitigation of liabilities.

Our goal is to have prepared plans for closure and rehabilitation for 100% of the cement plants by 2015.

Plans for mine closures/recovery of areas 2012 2013

Total number of operations that have plans for closure/recovery of area (49%) 40 (78%) 93

Value of the total financial provision for the closure of operations (R$) 75,700,000 194,757,886 64 VOTORANTIM CIMENTOS

Waste management In 2012, the use of additives reduced One of our most important ongoing the volume of waste by about 35%, initiatives is the Sustainable Enge- generating annual savings of ap- mix Program. Initiated in 2008, this proximately R$ 3 million. In 2013, program has enabled our Engemix the reduction increased to 63%, subsidiary to reuse a significant representing savings of R$ 5.8 mil- proportion of the waste generated in lion. In addition there were other its concrete manufacturing process. gains, for example, in the concrete The program’s goal is to reduce the truck washing process. Less water volume of waste to landfill from con- was used to remove waste from the crete manufacture. This was achieved interior of the trucks, and also less by developing a method of using fuel, since the vehicle’s engine must additives to provide better control remain on during the cleaning proof the hydration of concrete and en- cess. Lower fuel consumption also able its reuse before it hardens and resulted in lower CO2 emissions. becomes waste. A further measure was the use of sustainable aggregate. The reuse of waste in the production This is produced by equipment which process, in 2012, amounted to 0.66% crushes leftover hardened concrete of the total volume of concrete into aggregates, which in turn are produced. In 2013, the percentage of used as a raw material for the produc- waste reused increased to 0.81%. tion of fresh concrete.

In 2008, Engemix established a program to reuse the waste materials from concrete production

Engemix concrete mixer truck. Engemix is responsible for Votorantim Cimentos’ concrete production in Brazil. Integrated Report 2013 65

Management system Research & development and using additives such as rice husk Votorantim Cimentos’ management and innovation ash and recycled aggregates. We are system aims to contribute to the In 2013, Votorantim Cimentos’ R & D in the final stage of studies that will success of the company’s customers area focused mainly on develop- enable us to produce aggregates through operational excellence. It ing more sustainable products and from the recycling of waste concrete. comprises a set of practices, pro- services. A new type of cement was cesses, tools and indicators that pro- developed, produced with the addi- In 2013, we launched the micro- vide guidance to operating, business tion of manganese slag, which is not concrete product, in a partnership and support areas on day-to-day a conventional cementitious mate- between Engemix and Tubular activities. The focus is on continuous rial. It was launched in the South- Track, a South African manufacturer improvement, problem solving and east Brazilian market in 2013. The of railway tracks. The product is a the achievement of short, medium use of this raw material resulted in a mixture of sand, water and cement and long-term targets. cement with a high level of durability that has high levels of strength and and a lower level of CO2 emissions. durability. It performs better than the traditional wooden sleepers and A further cementitious material is considered innovative because of based on non-traditional inputs is its industrial pumping system which being developed, but still undergo- uses tubular netted polyethylene ing laboratory trials. It is a type of bags to mold the tracks. We expect artificial pozzolan, whose main con- that micro-concrete will generate a stituent is siliceous limestone, which return that is 40% higher than that is a waste product generated in the for standard concrete. production of aggregates (for more information please see the box entitled In addition, improvements in the Less clinker in cement on page 57). compositions of VC’s mortar products have led to a reduction of its In the case of concrete, it is worth CO2 emissions by up to 47%. These highlighting the trend to producing improvements were due primarily “green” and more technically efficient to research on the impacts of the types of concrete, by optimizing mix- different constituents on the perfor- tures, reducing cement consumption mance of the final product.

Strategy for social activities

In 2013, the Social Responsibility area reviewed its social activities, considering: the importance of the operating unit, the impacts of our business activities on the region where the unit was located and the impacts of the local community on our business. By means of this process, and following a diagnosis of social issues, we selected 32 locations as priorities for medium and long-term social action plans. 66 VOTORANTIM CIMENTOS

Relations with stakeholders are guided by strategy

Votorantim Cimentos considers We contributed to the improvement strong ties and effective communi- of public administration at four location with all its stakeholders to cations, by offering expert technical be essential. The main stakeholder support and training to the munici- groups are: customers, suppliers, palities to assist them in preparing shareholders, investors, employees projects for public administration and the communities where the modernization (tax, administra- company’s plants and units are tive, education and health), and in located. In the following sections we preparing/revising the Municipal will describe our relations with each Sanitation Plan (for more information of these main stakeholder groups. please see the box inset below).

VC and local In 2013, Votorantim Cimentos communities [G4-SO1] established engagement programs, With the support of the Votorantim for community relations and local Institute, we have developed a series development, in 27 locations, repre- of projects to encourage the devel- senting about 15% of all its opera- opment of the communities where tions in Brazil. we operate. By means of these projects we seek to strengthen social The operating units and projects protagonists in the search for alter- were prioritized based on the social natives which improve the commu- characteristics of their localities and nity’s quality of life, and strengthen the findings of a pilot project to as- social transformation. [G4-DMA] sess the social risks. The operating units, in addition to their local teams, In 2013, Votorantim Cimentos have the support of corporate and invested R$ 12.4 million in 62 social regional social responsibility teams projects related to culture, promo- and the Votorantim Institute. tion of employment and income, In 2013, R$ 12.4 million education, sport, and the strength- was invested in 62 social ening of public administration, projects in the areas of among other initiatives. In addition, culture, jobs and income, for the units producing concrete, aggregates and complementary education, sport and the products we expanded our social strengthening of public responsibility strategy, and for our administration. cement plants we strengthened our governance of social activities. Integrated Report 2013 67

Student in the industrial maintenance technical training program (Evoluir Program). 68 VOTORANTIM CIMENTOS

We would like to highlight the following initiatives:

Education – improving the qual- Public administration support program ity of education through projects that complement and strengthen Since 2012, Votorantim Cimentos has supported municipali- the role of the school and school ties in the development of projects to modernize their admin- governance. istration and reduce their infrastructure deficits, in partnership with the Votorantim Institute and the National Bank for Culture – democratizing the Economic and Social Development (BNDES). To participate in access to culture by supporting this program, municipalities must have less than 50 thou- projects that increase the access of sand inhabitants and the presence of a Votorantim operating young people to all types of cultural unit. Expert consultants are made available to the municipal- or artistic production - visual arts, ities to analyze the possibilities for improvements in adminis- performing arts, film and video, trative processes and to develop plans for basic and structur- literature, music and heritage. al sectors. As a result, the first municipality that participated, Cantagalo in the state of Rio de Janeiro, was able to secure Sport – educational training financing in an amount of R$ 14.9 million from the National of young people through sports Health Foundation (Funasa) to carry out a project for sewage activities of all types, strengthening collection and treatment in early 2014. The other cities with leadership skills and teamwork, as ongoing projects under the program are Primavera, in Pará, well as valuing school and family. Edealina, in Goiás, and Xambioá, in Tocantins.

Work – providing access and care- ful placement of young people in the labor market, through support tainability concepts and organized for their professional training and in the following stages: analysis, the establishment of connections distance and classroom training between their interests and the modules, social coaching and a market opportunities. network of continuous learning by the sharing of experience. Ensuring the rights of children and adolescents – support for ReDes (Networks) – this pro- projects that improve the quality of gram is a partnership between the life of children and adolescents in Votorantim Institute and the BNDES vulnerable situations and strength- and aims to foster productive chains ening of administrative agencies in and professional training. For a pe- the area (Councils and Funds). riod of five years, from 2011 to 2015, it will contribute to the promotion Community engagement/com- of inclusive business in 12 locations. munity development – promoting the development of communities We consider these actions to be es- through a participatory process sential to the future of our operations, aiming to increase social capital, since through them we can generate stimulate economic dynamism and income for the community, stimulate encourage the sustainable use of lo- the local economy, improve public cal natural resources. infrastructure, train local workers and contribute to the development of Training of NGOs: – the program public policies by organizing forums aims to improve the management to enable citizens to interact with the of the social sector based on sus- local government authorities. Integrated Report 2013 69

Community Council

Among our various engagement projects, one of the highlights is the Community Council program. We support these councils which facilitate ongoing interaction with the community through contacts with local leaders, business representatives, local government and opinion leaders. The aims of the Council are to seek solutions for local development and social entrepreneurship and to encourage the development of programs that focus on increasing the quality of life of the local community. Working on a consensus basis, the council prepares an agenda for the promotion of community development and proposes initiatives in priority areas such as education, culture and entrepreneurship.

We have invested in the establishment of 13 Community Councils in Brazil, in the municipalities of: Xambioá (TO), Laranjeiras (SE), Cuiabá (MT), Sobradinho (DF), Itaú de Minas (MG), Cantagalo (RJ), Rio Branco do Sul (PR), Vidal Ramos (SC), Imbituba (SC), Salto de Pirapora (SP), São Luis (MA), Sobral (CE) and Jaboatão dos Guararapes (PE).

The methodology aims to improve the dialogue with the various stakeholders involved in the company’s activities (such as consumers, suppliers, employees, legislators, media, financial institutions, non-governmental organizations, international agreements and competitors) and to encourage local sustainable development by aligning the perspectives of those inside and outside the company in order to take advantage of opportunities in decision-making.

After two years of practical experience, the initiative has led to a greater level of approxima- tion between the company and its stakeholders. This has made it possible to build a body of shared knowledge and has strengthened relations, thus creating value for all concerned.

The engagement process is managed by the operating unit in the region and the initiatives are carried out by the unit’s employees. In order to be prepared to carry out and disseminate the methodology in its various aspects, employees go through an extensive training program.

“The Muribeca Community Council for Integration is the result of bold management stroke by Votorantim, which has enhanced the relations between the company and us in the community. Developing the community and enabling it to learn about itself. As for the program, it expresses the commitment and contribution of Votorantim to the development of our community, after all, Vo- torantim motivated, trained and, with a sense of vision, included young people from the community in its workforce. People that before were forgotten, now are chosen! I even made up a catchphrase: “Votorantim and integration, integrating lives with passion”. Elaine Maciel (Member of the Commu- nity Council - Jaboatão Guararapes - Muribeca) 70 VOTORANTIM CIMENTOS

Training of the local ity Award” in 2013, in the category The focus of the company’s action workforce “company”, for its impact on social was to award a prize for the driver of We have developed three programs mobilization and services provided the month based on an analysis and for the professional training of to communities with high rates of installation of tracking devices in young people in the communities crime and social vulnerability. the vehicles. Other initiatives were where we operate: making visits to transport compa- Support for nies and conducting the program Future in Our Hands program, infrastructure [G4-EC7] “How Am I Driving?” with drivers trains professionals for the civil In 2013, Votorantim Cimentos devel- of outsourced vehicles. Based on construction industry, particularly oped two projects with a focus on the data reported by the transport for new plants built by Votorantim investment in infrastructure and ser- companies’ owners and the truck Cimentos. vices: Highways - Vidal Ramos (SC) drivers, these actions resulted in: and Highways - Cuiabá (MT). Both a 50% reduction in the number of Evolve program, provides initiatives were aimed at reducing traffic accidents in the area of the technical training in industrial the volume of truck traffic on urban Vidal Ramos unit, in comparison to maintenance (mechanical, electri- roads, contributing to improved 2012; a decrease in the number of cal and mining) for low-income safety indicators and the quality of complaints about the company’s young people. It has been developed life of the communities surrounding drivers; and improvements in the in partnership with the National the company’s operating units. The transport services provided by third- Industrial Apprenticeship Service high volume of production of the party suppliers. (SENAI) and the Federal Center of Vidal Ramos (SC) plant, which went Technological Education (Cefet), and into operation in July 2011, impacted In 2013, the road safety committee provides training and support for various local productive sectors. also made visits to the community young people, helping them to gain The main impact on the community to listen to their demands and un- entry into the labor market, either in came from the company’s logistics derstand the impact of the actions Votorantim or in other companies. operations, particularly on the local taken, especially in relation to loca- In 2013, we trained 267 young people highways, which had previously only tions which had a higher volume of in 12 municipalities. been used for local traffic.[G4-D MA] truck traffic. [G4-DMA]

VC Work Preparation program, To address these issues, Votorantim Our plant in Cuiabá was built in provides courses on professional Cimentos developed and set up a a region without direct access to training, citizenship and informa- Committee for Road Safety, com- state highways or paved roads. tion on the labor market to low-in- posed of employees, representatives With the start of operations in No- come young people in the communi- of the community, truck drivers, the vember 2012, a stretch of highway ties where the company operates. In State Highway Police and company was built to connect the unit to the 2013 the program was implemented employees from the unit’s social MT-010 highway in order to meet in the municipalities of Jaboatão responsibility and logistic areas. the company’s logistics needs. The Guararapes (PE), Camaçari (BA), The committee meets monthly and construction of this stretch of high- Seropédica (RJ) and São Paulo (SP). discusses actions for improvements way will contribute to the region’s In each case the initiative was pre- in the practices of the transport development with the increase in ceded by a survey of the local labor companies with the aim of improving demand for specific services. market and the company’s needs. road safety in the region and the rela- The program received the Votoran- tions between the community and tim Group “Talent in Sustainabil- truck drivers.

Investments in Number of Duration of Amounts invested (R$) infrastructure beneficiaries project Three years Vidal Ramos (SC) highway 31,896,697,19 More than 5,000 (until July 2014) Cuiabá (MT) highway 7,946,418,84 More than 5,000 1 year and 8 months Integrated Report 2013 71

Jovens integrantes do Programa Evoluir, de formação técnica.

One of the 13 Community Councils – a way to bring the community and VC together

stakeholders engagement During the visit the children played Impact In 2013, Votorantim Cimentos games related to environmental developed 20 engagement plans conservation and participated in with stakeholders, contributing to an outdoor activity on recycling. the management of the impacts The visit included a tour of the In 2013, we developed 20 of the company’s operations on whole plant including both cement engagement plans, which relations with stakeholders in the production and mining activities. enabled us to manage municipalities of Cantagalo (RJ), The children also participated in a the impacts of our Corumbá (MS), Laranjeiras (SE), drawing contest on the theme of Salto de Pirapora (SP), Votoran- the environment. At a later date, operations on a number tim (SP), Sobradinho (DF), Sobral the company’s employees visited of municipalities (CE), Xambioá (TO), São Paulo and the school to present a prize to the Campinas (SP). author of the winning drawing.

A good example of the results of VC and customers these plans, was the “Planting Customer focus is one of VC’s Knowledge” program, developed by strategic drivers (for more informa- our unit in Salto de Pirapora based tion please see the section on Strategy its stakeholder engagement plan. on page 25). Votorantim Cimentos The project consisted of an envi- serves on average 30 thousand ronmental education program for customers across Brazil, ranging children attending a public elemen- from large construction companies tary school in Salto de Pirapora. to small building materials stores. Once a month groups of children The company has developed and were taken on a guided tour of implemented strategies such that the plant. Each visit consisted of all companies receive an excellent about 40 children accompanied level of service according to their by school teachers and directors. individual needs. 72 VOTORANTIM CIMENTOS

The results of a Customer satisfaction and external communication action customer satisfaction surveys [G4-PR5] plans, crisis management and brand survey on our products, In 2013, Votorantim Cimentos car- management. after-sales service, ried out a satisfaction survey with retail customers, which currently Following this, the challenges for marketing and logistics account for approximately 60% of next year will be the definition of in Brazil showed that our sales in Brazil. In this survey we the company’s market positioning 86% were satisfied. analyzed the degree of customer and global brand architecture, in satisfaction in relation to products order to better reflect the current (cement and mortar), sales sup- business strategy, and the develop- port teams, marketing activities ment of reputation indicators to and the logistics operations. The monitor corporate image. results showed that the company had a very high level of customer VC and government [G4-SO6] satisfaction (86%), which was above In 2013, Votorantim Industrial’s area the level of the competition. This for Government Relations became One of the important strategic mea- result reflected mainly the underly- more focused on the business needs sures taken to accomplish this goal ing attributes of product quality and and interactions of each Group com- is the Galileo Project where, by sales brand strength and tradition. pany. In partnership with the Legal excellence, the company aims to Department, Votorantim Cimentos increase customer satisfaction in all In 2014, a new research methodology set up the Advocacy Work-group, a of its business segments (cement, will be adopted in order to measure multi-disciplinary group of employees concrete, aggregates and comple- the level of recommendation for that aimed to identify and address is- mentary products). These actions Votorantim Cimentos, identifying the sues that had the potential to impact are intended to differentiate the brand’s critics and supporters. The re- the business environment and that company from the competition by search will be undertaken initially for required coordination with govern- having the customer at the center. the do-it-yourself market segment, ment entities.[G4-DMA] This was the origin of the name of for cement, mortar and lime products, the project, since it was the Italian and then will be expanded, in 2015, to Our relations with government enti- scientist Galileo Galilei who first the real estate and infrastructure seg- ties, at all levels, are strictly techni- developed the theory that the sun is ments. [G4-DMA] cal and restricted to strategic and/ the center of our universe. or business issues. On a day-to-day Brand and reputation basis we monitor legislative actions, As part of this project, the company As a result of the restructuring of congressional committees and has unified its sales teams, which the company’s governance model, ongoing projects for new legislation had previously been separated the Corporate Communications that are relevant to our industrial by product lines. Following this area now has global responsibility sectors or business activities. restructuring, customers no longer for the management of the corpo- need to deal with different salesmen rate brand. Its mission is to create a In addition, we identify the vari- to purchase a number of different competitive advantage by estab- ous instances of government and products. Based on this centralized lishing a reputation platform that their agencies and entities that structure for the sales of all prod- broadens the scope of dialogue, relate to the company’s projects ucts, the sales teams are now divid- while maintaining consistency, in and initiatives. Besides this, we are ed according to market segments, the company’s relations with its in constant contact with the state such as retail, building materials stakeholders. The initial goals of and municipal governments in the stores, real estate construction and the new approach are to extend its regions where we operate, seeking infrastructure projects. This model communication activities to the 14 to participate in discussions about has already been implemented in countries where the company oper- public policies and to support the the South region. We plan to extend ates and to establish an integrated development of local communities. it to the Southeast, Northeast and communication strategy consist- We also participate in forums at Central-North regions in 2014. ing of policies, procedures, internal various levels of government, such Integrated Report 2013 73

as ministries, secretariats and other periodically (it has been updated Donations, which supplements the public bodies, to discuss and to pro- for the coming 2014 elections), to Manual of Conduct for Electoral pose requests and regulations. ensure it is in accordance with the Processes and reinforces the orga- laws and criteria established by the nization’s governance and degree of We have prepared a Manual for Con- government for each election. It is participation in these processes. All duct in Electoral Processes to guide distributed to all employees who donations are made in accordance our relations with candidates for have management responsibility. In with prevailing legislation. Our dona- public offices and to ensure such re- addition, we provide training for our tions in prior elections were regis- lations are institutionally and legally employees who act as our points of tered at the Supreme Electoral Court correct. This manual provides sup- contact with government entities. (TSE). This policy is available on our port information and recommenda- website at: (www.votorantim.com). tions that serve as a reference for our With specific regard to electoral corporate conduct during electoral donations, we have established In 2013, we made no political contri- processes. The manual is updated a Corporate Policy for Electoral butions of any kind.

V otorantim Cimentos participates in a number of national and international forums on many different topics.

PARTICIPATION IN FORUMS AND ASSOCIATIONS

Organization Topic Person Responsible ABCP – Brazilian Portland Cement Sector discussions on the environment, Marcelo Chamma Association climate change and energy SNIC – National Cement Industry Sector discussions on the environment, climate Marcelo Chamma Association change and energy Cement industry initiative to accelerate progress CSI – Cement Sustainability Initiative Walter Dissinger towards global sustainable development SBE/RBMA – Brazilian Speleological Partnership to develop standards for the Society and the Atlantic Forest conservation of ecosystems in karst areas Edvaldo Rabelo Biosphere Reserve and in the Atlantic Rainforest WBCSD – World Business Council Business initiative which promotes global Walter Dissinger for Sustainable Development sustainable development DRRCC – Durham Region Initiative on climate change in partnership with Martin Vroegh Roundtable on Climate Change government Portland Cement Association Cement industry discussions and positioning on Marty Fallon & Cement Association of Canada climate change OSSGA – Ontario Stone, Sand Aggregates sector discussions and positioning John Moroz & Gravel Association on sustainability, in Ontario RMCAO – Ready Mixed Concrete Concrete sector discussions and positioning John Vanderpas Association Of Ontario on sustainability, in Ontario ECRA – European Cement Research Strategy for reduction of CO emissions 2 Edvaldo Rabelo Academy and innovation IBRAM – Instituto Brasileiro de Mining sector discussions and positioning Edvaldo Rabelo Mineração on sustainability 74 VOTORANTIM CIMENTOS

VC and suppliers During 2013, this evaluation process [G4-12, G4-HR5, G4-HR6] showed that 82% of our suppliers We seek to prioritize long-term met the criteria considered to be partnerships with our suppliers and satisfactory. Based on our commit- contract companies that share this ment to the development of our perspective. A consequence of this suppliers, those cases where perfor- perspective of long-term relations mance was lower than that required means that we must look carefully at were addressed by the managers of the issues related to these potential these contracts. With the support partners that could bring risks to of the purchasing department, the our reputation and our business. performance of these suppliers was [G4-DMA] One of our initiatives to analyzed and action plans were pre- achieve this was the launching, in pared to remediate the shortfalls. 2013, of the Local Suppliers Program, These actions resulted in closer rela- with pilot operations in Xambioá tions with our suppliers, and also (TO) and Sobral (CE). The program, improved the integration between which will continue in 2014, aimed to the operating units and our corpo- increase the financial value of trans- rate center, to pursue a common actions with companies located in goal. Already, in early 2014, a reas- the region of influence of our plants, sessment of the same base of critical thus contributing to the develop- suppliers indicated that 95% had ment of the surrounding communi- now met the approval criteria. ties. [G4-DMA] This methodology has been dissemi- We revised management proce- nated throughout the company. To dures and implemented a process date it has been implemented in 89% for the approval of critical sup- of the manufacturing units, specifi- pliers, including those who work cally in relation to the engagement continually inside our facilities. and training of supplier manage- These suppliers are more significant ment teams, and the measurement in financial terms and also have a and monitoring of indicators. In larger capacity to impact our activi- addition, we continue to work with ties. We have defined five groups of standard contracts that include indicators: health, safety and envi- clauses on compliance with environment; quality of services; quality ronmental, labor and human rights of the service contract; people questions, including prohibitions management; and operational on the use of child labor or forced infrastructure. We have assigned or compulsory labor. Our systems a percentage weighting to each have an automatic trigger to block group of indicators, so that the companies from being registered in final evaluation score reflects these our approved list of suppliers if they themes. The goal is to work only have been “blacklisted” by the Minis- with suppliers that achieve a score try of Labor or IBAMA. higher than 70%. For example, in the case of health, safety and envi- The monitoring of issues related to ronment, an important factor (20%) the occurrence of child or forced or in the composition of the score, it is compulsory labor is carried out ac- mandatory that the supplier com- cording to the Code of Conduct and ply with Votorantim Cimentos’ rules its related instruments, in addition on these aspects, which go beyond to the operational control audits. the legal requirements. The ombudsman is the channel Integrated Report 2013 75

for reporting events related to the which was developed in a joint unions, and has affirmed this in its subject, in relation to all operations project of the purchasing, legal, Code of Conduct. We maintain close whether direct, indirect or involving environmental, health and safety relations and open dialogue with the Group’s suppliers. areas. At this stage the potential the unions that represent the em- risks are identified including: finan- ployees in our industry sector. Col- In 2013, no situations with a risk of cial, tax, labor, violations of human lective negotiations always include transactions or suppliers involving rights, among other risks. Some of the presence of representatives of child, forced or compulsory labor were the specific documents required these unions, and the results are dis- identified.[G4- HR5 e G4-HR6] are: certificates attesting to the closed to our employees through our collection of INSS and FGTS contri- internal communication vehicles. Supplier approval [G4-EN32] butions and copies of the lists issued In 2013, all of the 28 new suppliers, regularly by the Ministry of Labor Although not a common practice, whose services inherently involved and Employment. the company would not be opposed environmental issues, were selected to considering the participation of after having complied with social and 3 Suppliers must renew their reg- employees in the negotiating rounds, environmental criteria. [G4-DMA] istration annually and are also moni- if it were requested by the union. The environmental approval process tored monthly. Additionally, during is based on the use of a supplier the provision of the services, the On the days of the union assembly analysis tool and the presentation contract managers at the units carry meetings to vote on the collective of required documentation out quarterly performance evalua- agreements, the company provides including: environmental permits; tions, which include the control of employees with transportation to registration in the IBAMA federal occupational safety aspects and the the location of the meeting, releasing technical register; and a report by delivery of labor-related documents. them from work early, if necessary. SERASA attesting to environmental conformity. Bases on this analysis Local suppliers [G4-EC9] In 2013, we received no warnings or and documentation, the supplier In 2013, 54.72% of total supplier sanctions of any kind with regard to approval area informs those expenditure was allocated to lo- the processes of association and col- responsible for assessing the risks cal suppliers, that is, individuals lective bargaining from the relevant identified, thus approving or not the or companies based in the same supervisory bodies. supplier to participate in tenders. municipality or region as the operat- [G4-DMA] ing unit. Purchases of up to one Votorantim Cimentos has no opera- thousand Reais are paid directly tions in which employees’ rights to Approval process by the operating units. In the case exercise freedom of association may – step by step of higher values, negotiations are be at risk. [G4-HR4, G4-DMA] Consists of three steps: conducted by the central purchasing department. [G4-DMA] 1 At the opening of the tender, the supplier is informed about The purchasing department is the documents required for the responsible for the supplier selec- analysis. The required items are tion process and has developed, in determined according to a matrix partnership with the Votorantim and vary according to the type Institute, a program to identify and of service/goods. The analysis is develop local suppliers. In 2013, performed internally by the Sup- Votorantim Cimentos increased plier Management team using an its proportion of expenditure with in-house tool. local suppliers to 54.72%, compared to 48.45% in 2012. 2 The approval is based on an analysis of the documentation VC and trade unions [G4-11] requested from the supplier in ac- VC respects the employees’ rights cordance with the approval matrix, to free association with trade 76 VOTORANTIM CIMENTOS GRI list of contents

GENERAL STANDARD DISCLOSURES

General Standard External Page/response Disclosures assurance

Strategy and analysis G4-1 Message from the president, page 2 No

G4-3 Profile, page 4 No

G4-4 Profile, page 4 No

São Paulo, SP, Brazil. Location of the organization’s headquarters G4-5 No Profile, page 4

G4-6 Profile, page 4 No

G4-7 S.A. No

G4-8 Profile, pages 8 and 20 No G4-9 Profile, page 4 No Strategy and People, G4-10 Yes, page 15 Organizational Profile pages 4 and 40 G4-11 Relations, page 75 No

G4-12 Relations, page 74 Yes, page 15

G4-13 Context, page 25 No

Votorantim Cimentos has adopted risk prevention measures for environmental, social, regulatory and financial aspects. For more G4-14 No information on the company’s risk management processes please see page 32

G4-15 Strategy, page 30 No

G4-16 Additional Information – Financial Statements, page 30 No

To see the description of the GRI indicators, please go to page 116. Integrated Report 2013 77

General Standard External Page/response Disclosures assurance

G4-17 Additional Information – Financial Statements, page 105 No

G4-18 Construction of the materiality matrix, page 13 Yes, page 15

G4-19 Construction of the materiality matrix, page 13 Yes, page 15

The definition of the boundaries for material aspects took into account the operations in: Brazil (VCBR); North America (VCNA); and Europe, Asia and Africa (VCEAA). All aspects listed in the Identified material G4-20 No materiality process were considered relevant. Those aspects of aspects and boundaries particular interest to shareholders are indicated in the section on “Construction of the materiality matrix”.

G4-21 Construction of the materiality matrix, 89 No

Information is indicated in the tables where there were G4-22 No restatements. In 2013 we began to include information on the new units in VCEAA G4-23 No resulting from the asset swap with Cimpor.

G4-24 Construction of the materiality matrix, page 13 Yes, page 15

G4-25 Construction of the materiality matrix, page 13 Yes, page 15 Stakeholder engagement G4-26 Construction of the materiality matrix, page 13 Yes, page 15

G4-27 Construction of the materiality matrix, page 13 Yes, page 15

G4-28 About the report, inside front cover Yes, page 15

G4-29 2012 Yes, page 15

G4-30 Annual Yes, page 15 Report profile G4-31 About the report, inside front cover No

G4-32 About the report, inside front cover No

G4-33 About the report, inside front cover No

Governance G4-34 Strategy, pages 29 and 31 No

Ethics and integrity G4-56 Strategy, page 32 No

To see the description of the GRI indicators, please go to page 116. 78 VOTORANTIM CIMENTOS

Specific Standard Disclosures

External Material Aspects D MA and Page/response OMISSION Indicators assurance Economic category

G4-DMA VCBR/VCNA/VCEAA/ Page 36 Yes, page 15 Economic performance G4-EC1 VCBR/VCNA/VCEAA/ Pages 37 and 92 Yes, page 15

G4-DMA VCBR/VCNA/VCEAA/ Page 75 N/A

Omission Currently unavailable. We have a practice of seeking to hire employees in the local labor market, because we have found that employee retention is higher and because it contributes to local development. However, because this indicator was only identified by the materiality process conducted in 2014, we are still developing the process for managing the necessary data, Therefore, we do not have the information about the percentage of senior management members hired from local communities. We will report in the coming years. Market presence G4-EC6 Not responded N/A

Omission Currently unavailable.We have a practice of seeking to hire employees in the local labor market, because we have found that employee retention is higher and because it contributes to local development. However, because this indicator was only identified by the materiality process conducted in 2014, we are still developing the process for managing the necessary data, Therefore, we do not have the information about the percentage of senior management members hired from local communities. We will report in the coming years.

G4-DMA VCBR/ Page 70 No Indirect economic impacts G4-EC7 VCBR/ Page 70 No

G4-DMA VCBR/ Page 75 No Procurement Practices G4-EC9 VCBR/ Page 75 No

Environmental Category

G4-DMA VCBR/VCNA/VCEAA/ Page 61 Yes, page 15 Materials G4-EN1 VCBR/VCNA/VCEAA/ Pages 61 and 95 Yes, page 15

G4-DMA VCBR/VCNA/VCEAA/ Page 58 Yes, page 15

G4-EN3 VCBR/VCNA/VCEAA/ Pages 59 and 93 Yes, page 15 Energy G4-EN4 VCBR/VCNA/VCEAA/ Page 59 and 93 Yes, page 15

G4-EN5 VCBR/VCNA/VCEAA/ Page 58 No

To see the description of the GRI indicators, please go to page 116. Integrated Report 2013 79

External Material Aspects D MA and Page/response OMISSION Indicators assurance G4-DMA Not responded N/A

Omission Currently unavailable. With the expansion of our operations in Europe, Asia and Africa (VCEAA) in 2013, we have initiated a survey of the areas of greatest water stress and consumption at our operating units. Therefore, we do not have detailed information available for this cycle about the total water withdrawal by source. These results will be reported in the coming years. Water G4-EN8 Not responded N/A

G4-DMA VCBR/VCNA/VCEAA/ Page 61 Yes, page 15 Biodiversity G4-EN11 VCBR/VCNA/VCEAA/ Pages 61 and 97 Yes, page 15

G4-DMA VCBR/VCNA/VCEAA/ Pages 54 Yes, page 15

G4-EN15 VCBR/VCNA/VCEAA/ Pages 53, 54 and 95 Yes, page 15

G4-EN16 VCBR/VCNA/VCEAA/ Pages 53, 54, 56 and 95 Yes, page 15

Emissions G4-EN17 VCBR/VCNA/VCEAA / Pages 53, 54, 56 and 93 Yes, page 15

G4-EN18 VCBR/VCNA/VCEAA/ Pages 54 and 55 Yes, page 15

G4-EN19 VCBR/VCNA/VCEAA/ Pages 53, 56 and 96 Yes, page 15

G4-EN21 VCBR/VCNA/VCEAA/ Page 94 Yes, page 15

G4-DMA Not responded N/A

Omission Currently unavailable. Votorantim Cimentos is working on the integration and standardization of global information from its units in Brazil, North America, Europe, Asia and Africa. Therefore, it is not possible present the the data concerning the generation of waste by type and disposal method for this cycle. These data will be reported on the 2016 cycle. Effluents and waste G4-EN23 Not responded N/A

To see the description of the GRI indicators, please go to page 116. 80 VOTORANTIM CIMENTOS

External Material Aspects D MA and Page/response OMISSION Indicators assurance G4-DMA VCBR/VCNA/ Page 62 Yes, page 15 Products and services G4-EN27 VCBR/VCNA/ Pages 53, 62 and 100 Yes, page 15

G4-DMA VCBR/VCNA/VCEAA/ Page 99 No Compliance G4-EN29 VCBR/VCNA/VCEAA/ Page 101 No

G4-DMA VCBR/ Page 57 No Transport G4-EN30 VCBR/ Pages 57 and 95 No

G4-DMA VCBR/VCNA/VCEAA/ Page 52 No Overall G4-EN31 VCBR/VCNA/VCEAA/ Pages 52 and 95 No

G4-DMA VCBR/ Page 75 No Supplier environmental assessment G4-EN32 VCBR/ Page 75 No

G4-DMA Not responded N/A

Omission Currently unavailable. Votorantim Cimentos registers the number of complaints and claims in its Ombudsman area. However, the information related to these complaints and claims is consolidated and we had no breakdown into categories that allowed us to report this indicator for 2013. From the VC 2015 report onwards the Environmental company will register the events by category. grievance mechanisms G4-EN34 Not responded N/A

Social category – labor practices and decent work

G4-DMA VCBR/ Page 40 Yes, page 15 Employment G4-LA1 VCBR/ Pages 40, 43 and 44 No

G4-DMA VCBR/VCNA/VCEAA/ Page 52 Yes, page 15 Occupational health and safety G4-LA6 VCBR/VCNA/VCEAA/ Pages 52 and 97 Yes, page 15

G4-DMA VCBR/ Page 40 No

Training and education G4-LA9 VCBR/ Page 40 No

G4-LA11 VCBR/ Pages 43 and 44 No

To see the description of the GRI indicators, please go to page 116. Integrated Report 2013 81

External Material Aspects D MA and Page/response OMISSION Indicators assurance G4-DMA VCBR/ Page 45 No

G4-LA12 VCBR/ Pages 44, 45 and 93 No Diversity and equal opportunity Omission Currently unavailable. Votorantim Cimentos is currently standardizing its global processes in order to obtain information on the number of employees with disabilities. For this reason it is not possible to calculate this indicator in the current reporting cycle. These data will be reported on the 2018 cycle.

G4-DMA Not responded N/A

Omission N ot Applicable. We do not manage salary by gender. Votorantim Cimentos makes no differentiation in salaries between men and women. We describe and evaluate job positions,classifying them into salary groups according to the operational, technical, managerial and financial responsibilities, without any distinction or relation to the gender of Equal remuneration the employee who holds, or will hold, the position. for women and men G4-LA13 Not responded N/A

Omission Not Applicable. We do not manage salary by gender. Votorantim Cimentos makes no differentiation in salaries between men and women. We describe and evaluate job positions, classifying them into salary groups according to the operational, technical, managerial and financial responsibilities, without any distinction or relation to the gender of the employee who holds, or will hold, the position.

G4-DMA Not responded N/A

Omission Currently unavailable. Votorantim Cimentos registers the number of complaints and claims in its ombudsman area. However, the information related to these complaints and claims is consolidated and we had no breakdown into categories that allowed us to report this indicator for 2013. From the VC 2015 report onwards the company Labor practices will register the events by category. grievance mechanisms G4-LA16 Not responded N/A

Social category – human rights

G4-DMA VCBR/VCNA/ Page 47 No Non-discrimination G4-HR3 VCBR/VCNA/ Pages 47 and 93 No

Freedom of G4-DMA VCBR/VCNA/ Page 75 No association and collective bargaining G4-HR4 VCBR/VCNA/ Page 75 No

G4-DMA VCBR/VCNA/ Page 74 No Child labor G4-HR5 VCBR/VCNA/ Page 74 No

G4-DMA VCBR/VCNA/ Page 74 No Forced or compulsory labor G4-HR6 VCBR/VCNA/ Pages 74 and 75 No

To see the description of the GRI indicators, please go to page 116. 82 VOTORANTIM CIMENTOS

External Material Aspects D MA and Page/response OMISSION Indicators assurance G4-DMA Not responded N/A

OmissIon Currently unavailable. Votorantim Cimentos registers the number of complaints and claims in its ombudsman area. However, the information related to these complaints and claims is consolidated and we had no breakdown into categories that allowed us to report this indicator for 2013. From the VC 2015 report onwards the company Human rights will register the events by category. grievance mechanisms G4-HR12 Not responded N/A

Social category – society

G4-DMA VCBR/ Page 66 Yes, page 15 Local communities G4-SO1 VCBR/ Pages 66, 96 and 102 Yes, page 15

G4-DMA VCBR/VCNA/ Page 32 Yes, page 15 Anti-corruption G4-SO4 VCBR/VCNA/ Pages 32 and 33 No

G4-DMA VCBR/VCNA/ Page 72 No Public policy G4-SO6 VCBR/VCNA/ Page 72 No

G4-DMA VCBR/VCNA/ Page 33 Yes, page 15 Anti-competitive behavior G4-SO7 VCBR/VCNA/ Pages 32, 33 and 98 Yes, page 15

G4-DMA VCBR/VCNA/ Page 33 Yes, page 15 Compliance G4-SO8 VCBR/VCNA/ Pages 32 and 99 No

G4-DMA Not responded N/A

OmissION Currently unavailable. We are studying the best way to provide the information and forward it to our suppliers for their review with respect to criteria for the impacts on society, considering that this indicator was not previously being measured. It has only Supplier assessment recently been identified as material.T hese data will be reported on the 2020 cycle. for impacts on society G4-SO9 Not responded N/A

OmissION Currently unavailable. We are studying the best way to provide the information and forward it to our suppliers for their review with respect to criteria for the impacts on society, considering that this indicator was not previously being measured. It has only recently been identified as material.T hese data will be reported on the 2020 cycle.

To see the description of the GRI indicators, please go to page 116. Integrated Report 2013 83

External Material Aspects D MA and Page/response OMISSION Indicators assurance G4-DMA Not responded N/A

OmissION Currently unavailable. Votorantim Cimentos registers the number of complaints and claims in its ombudsman area. However, the information related to these complaints and claims is consolidated and we had no breakdown into categories that allowed us to report this indicator for 2013. From the VC 2015 report onwards the company Grievance will register the events by category. mechanisms for impacts on society G4-SO11 Not responded N/A

Social category – product responsibility

G4-DMA VCBR – Cement / Page 72 No Product and service labeling G4-PR5 VCBR – Cement/ Page 72 No

Sector Supplement – mining and metals

Biodiversity MM2 VCBR/VCNA/VCEAA/ Pages 27 and 97 Yes, page 15

MM7 Not responded N/A

Omission Currently unavailable. Votorantim Cimentos registers the number of Local communities complaints and claims rs in its ombudsman area. However, the information related to these complaints and claims is consolidated and we had no breakdown into categories that allowed us to report this indicator for 2013. From the VC 2015 report onwards the company will register the events by category.

Closure planning MM10 VCBR/VCNA/VCEAA/ Pages 27 and 97 Yes, page 15

To see the description of the GRI indicators, please go to page 116.

Additional information 86 VOTORANTIM CIMENTOS

VC’s material issues

Ethics, transparency and integrity Biodiversity preservation Occupational health and safety Customer relations and satisfaction CO2 emissions Management of business risks Anti-corruption practices, cartels and unfair com- Policies, reviews, audits, licenses and certification petition of systems Regulatory risks Fines and legal compliance Supply chain management Employment and labor relations Contribution to local development T raining, capacity-building and employee Economic performance: economic value generated development and distributed Respect for human rights in operations and Community relations supply chain Government relations Partnerships and strategic alliances Energy efficiency Alternative sources of raw materials and resources Alternative energy sources and alternative fuels Low carbon products Air emissions (Particulate Matter, NOx, SOx) Product life-cycle and social and environmental Management and reuse of construction waste, and impacts reverse logistics of cement bags Innovation, research and development Water consumption Climate change mitigation and adaptation Sustainable concrete Inclusive and sustainable construction Mining life-cycle processes Water and effluent management

Certifications obtained and adaptation to international standards Internal engagement on sustainability Social dialogue and freedom of association Indigenous people’s rights Diversity and social inclusion Environmental product declaration

VERY HIGH DEGREE OF MATERIALITY High degree of materiality Medium degree of materiality Low degree of materiality INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 87

Correlation of material issues and GRI aspects [G4-21]

VC Material Issues GRI Issues Indicators Stakeholders

G4-LA5

Health and Safety G4-LA6 Employees (own employees LA – Occupational Health and Safety afety Shareholders S and contractors) G4-LA7

G4-LA8

G4-56 Ethics, Employees General Standard Disclosures - Ethics And Transparency G4-57 Shareholders Integrity and Integrity Society G4-58

Regulatory Risks None None

G4-SO3 Employees SO – Anti-corruption G4-SO4 Anti-corruption Society practices; cartels G4-SO5 and unfair competition Competitors Shareholders SO – Anti-competitive Behavior G4-SO7 Society

General Standard Disclosures – Organizational G4-12 Suppliers Profile Employees G4-EN32

thics and Compliance Suppliers E EN – Supplier Environmental Assessment Customers G4-EN33 Society Supply chain Environment management Employees (includes: Suppliers evaluation and LA – Supplier Assessment for Labor Practices G4-LA15 Customers management Society of suppliers, Employees auditing, etc.) HR – Supplier Human Rights Assessment G4-HR11 Suppliers Customers

G4-SO9 Employees SO – Supplier Assessment for Impacts on Suppliers Society G4-SO10 Customers 88 VOTORANTIM CIMENTOS

VC Material Issues GRI Issues Indicators Stakeholders

G4-EN8 Water EN – Water G4-EN9 Environment consumption G4-EN10

G4-EN3

G4-EN4 Energy efficiency Environment (alternative energy EN – Energy G4-EN5 Customers sources G4-EN6

G4-EN7

G4-EN20 Environment Atmospheric EN – Emissions Society Emissions (PM, G4-EN21 NOx, SOx) Environment EN – Transportation G4-EN30 Employees nnovation I G4-EN15

G4-EN16 Environment CO EN – Emissions G4-EN17 2 Emissions Society fficiency and E G4-EN18 co- E G4-EN19

G4-EN1 Environment Management EN – Materials Society and reuse of G4-EN2 Suppliers construction EN – EffluentsA nd Waste G4-EN23 Environment waste, and reverse logistics of used G4-EN27 Environment cement bags EN – Products and Services G4-EN28 Customers

G4-EN11

Biodiversity G4-EN12 EN – Biodiversity Environment preservation G4-EN13

G4-EN14 INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 89

VC Material Issues GRI Issues Indicators Stakeholders

G4-EC5 Employees EC – Market Presence Shareholders G4-EC6 Society

G4-EC7 EC – Indirect Economic Impacts Society Contribution to G4-EC8 local development Employees EC – Procurement Practices G4-EC9 Suppliers

G4-SO1 SO – Local Communities Society G4-SO2

G4-24 Employees G4-25 General standard disclosures – Stakeholder Customers Engagement Suppliers G4-26 Society Government G4-27 ngagement

E Society EN – Environmental Grievance Mechanisms G4-EN34 Stakeholder Environment relations (government, LA – Labor Practices Grievance Mechanisms G4-LA16 Employees Community customers and community) Employees HR – Human Rights Grievance Mechanisms G4-HR12 Suppliers Customers

SO – Local Communities MM7 Society

Society SO – Public Policy G4-SO6 Government

SO – Grievance Mechanisms for Impacts on G4-SO11 Society Society

Employees Economic value Suppliers generated and EC – Economic Performance G4-EC1 Shareholders distributed Government Society Customer relations PR – Rotulagem de produtos e serviços G4-PR5 Customers and satisfaction 90 VOTORANTIM CIMENTOS performance

INDICATORS CSI GRI 2011 2012 2013

ECONOMIC PERFORMANCE 1. Income (gross sales of products and service, other [G4-EC1]* 11,269,100 12,190,637 15,197,222 revenues and provision for credit) 2. Inputs acquired from third parties -5,740,720 -5,009,488 -7,346,362

3. Gross value-added 5,528,380 7,181,149 7,850,860

4. Net value-added produced 5,087,325 6,636,842 7,077,767

5. Value-added received in transfers 515,481 135,911 504,009

6. Total value-added to distribute 5,602,806 6,772,753 7,581,776

7.Distribution of value-added 5,602,806 6,772,753 7,581,776

* in thousands R$

Net income by product (in thousands R$)

Cement 5,890,923 6,211,178 8,329,674

Concrete 1,880,745 2,099,121 2,280,468

Aggregates 371,850 378,932 754,835

Other 554,834 706,192 777,311

Adjusted Ebitda (consolidated) (in thousands R$) 2,776,770 3,071,924 3,516,695 38 million metric tons of cement 31 million metric tons of aggregates Sales volumes 12 million m3 of concrete 1.83 million metric tons of mortar people

Total number of own employees * G4-10

VCBR ** 8,161 9,265 9,392

Interns, summer students and apprentices*** 385 494 528

VCNA 3,146 3,128 3,552

VCEAA**** – 2,978

South America 306

* Includes VCBR (Votorantim Cimentos, Brazil), VCNA (Votorantim Cimentos, North America), VCEAA (Votorantim Cimentos, Europe, Asia and Africa) and South America (shareholdings held by Votorantim Cimentos). ** Salaried employees and trainees. *** VCBR. **** Includes China.

Diversity* [G4-LA12]

Men – 87.4% 87.60% Women – 12.5% 12.40% Women in management positions – – 16.50%

* Employees of VCBR units registered in the SAP system (excluding interns and trainees) INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 91

INDICATORS CSI GRI 2011 2012 2013

Discrimination cases [G4-HR3] Complaints received by the ombudsman – cases of – – 273 harassment and abuse of power Complaints considered valid – cases of harassment and 63 104 93 abuse of power Environmental Performance

Energy consumption within the organization (GJ) [G4-EN3]

Non-renewable energy

Conventional fossil fuels 100,958,554 98,344,712 108,090,179 Low carbon fuels 3,125,795 3,731,315 3,786,744 Electric power 6,290,581 5,740,386 5,917,068 Heating 15,509 17,200 92,491 Total non-renewable energy 110,390,439 107,833,613 117,886,482

Renewable energy

Biomass (excluding energy sold) 8,215,301 6,446,903 7,054,304 Electric power 9,629,887 9,982,789 11,097,752 Total renewable energy 17,845,188 16,429,692 18,152,056 Total energy consumed (renewable + non-renewable) 128,235,627 124,263,305 136,038,539

* The conventional fossil fuels included: coal, coke, heavy fuel, diesel oil, gasoline, natural gas, lignite and liquefied petroleum gas (LPG). ** The low carbon fuels included: tires, used oil, contaminated soil, solvents, plastics, industrial waste and other fossil fuels from waste. Energy consumption outside the organization [G4-EN4] (downstream ) (GJ) – non-renewable energy Transport and distribution – – 5,905,183

NOx, SOx and other significant air emissions* x Total coverage rate V1** (KPI 1) % 60 65 65 Total coverage rate V2*** (KPI 1) % 4 48 62 Continuous monitoring rate (KPI 2) % 67 80 84

* Following the acquisition of plants in Europe, Asia and Africa, the historical figures for the indicators were recalculated to include these units. Thus, the values reported in this report differ from those published in the Integrated Report 2012. Between 2012 and 2013, Votorantim Cimentos invested in the retrofitting of filters, substituting electrostatic filters by bag filters. This change in technology significantly reduced the particulate material emissions. The impact of reduction measures for NOx emissions, such as the installation of exhaust gas abatement systems in the kilns that went into operation in 2012 and 2013, should be reflected in the values of the 2014 indicators. The main difficulty in reducing2 SO emissions, especially in the specific plants, is due to the presence of sulfur in the feedstock. There are ongoing projects and planned investments to reduce these emissions in the affected kilns. ** (V1) overall coverage rate percentage (%) of clinker produced with monitoring of all pollutants Dust, NOx, SO2, VOC, THC, Heavy metals (Hg, Cd, Tl, Sb, As, Cr, Co, Cu, Mn, Ni and V) and PCDD/F. ***(V2) coverage rate continuous measurement: percentage of clinker produced with continuous monitoring of main pollutants Dust, NOx and SO2. Specific emissions (KPI 3 CSI) x

MP (Particulate Matter) – g/t clinker 160 143 114

NOx (Nitrogen Oxides) – g/t clinker 1,567 1,599 2,249

SO2 (Sulfur Dioxide) – g/t clinker 674 792 953 VOC/THC (Volatile organic compounds) – g/t clinker 13 11 19 92 VOTORANTIM CIMENTOS

INDICATORS CSI GRI 2011 2012 2013

PCDD/F (Dioxins and Furans) – ng/t clinker 20 26 19

Hg (Mercury) – mg/t clinker 10 11 17

HM1 (Sum of Cadmium and Thallium) – mg/t clinker 17 19 23 HM2 (Sum of Antimony, Arsenic, Lead, Chromium, Cobalt, Copper, Manganese, Nickel and Vanadium) – 6 787 513 mg/t clinker Absolute emissions (KPI 3 CSI) x [G4-EN21]

MP (Particulate Matter) – t/year 4,786 4,301 3,567

NOx (Nitrogen Oxides) – t/year 46,929 47,951 70,596

SO2 (Sulfur Dioxide) – t/year 20,180 23,759 29,921 VOC/THC (Volatile organic compounds) – t/year 400 339 590

PCDD/F (Dioxins and Furans) – mg/year 586 789 596

Hg (Mercury) – kg/year 297 341 538

HM1 (Sum of Cadmium and Thallium) – kg/year 520 566 717 HM2 (Sum of Antimony, Arsenic, Lead, Chromium, Cobalt, 178 23,607 16,099 Copper, Manganese, Nickel and Vanadium) – kg/year Monitoring rate (KPI 4 CSI) x

MP (Particulate Matter) – % 100 100 100

NOx (Nitrogen Oxides) – % 100 100 100

SO2 (Sulfur Dioxide) – % 100 100 96 VOC/THC (Volatile organic compounds) – % 65 67 75

PCDD/F (Dioxins and Furans) – % 66 77 74

Hg (Mercury) –% 69 75 76

HM1 (Sum of Cadmium and Thallium) – % 69 75 78 HM2 (Sum of Antimony, Arsenic, Lead, Chromium, Cobalt, 10 55 71 Copper, Manganese, Nickel and Vanadium) – % Emission reductions x

NOx – Reduction compared to the base year – 2000 (%) 2 0 -41

SO2 – Reduction compared to the base year – 2000 (%) 31 19 3 MP – Reduction compared to the base year – 2000 (%) 22 30 44

Environmental investments and environmental compliance

Environmental investments (R$) [G4-EN31] Waste disposal, emissions treatment, and remediation 77,409,786 31,826,306 48,132,668 costs * Costs of environmental prevention and management ** 20,655,952 24,880,414 64,692,580

Other environmental costs 12,808,230 2,770,920 17,487,837 INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 93

INDICATORS CSI GRI 2011 2012 2013

TOTAL 110,603,968 59,477,640 130,313,086

*Includes treatment of air emissions, waste treatment, effluent treatment rehabilitation actions and closure plans. ** Includes environmental education, environmental management, preservation, reforestation and biodiversity and environmental insurance.

Provisions for site restoration (R$) – 75,700,000 194,757,886

Significant impacts

Quantitative data for logistics: [G4-EN30]

Energy consumption (GJ) 8,227,546 9,096,332 9,422,545

GHG emissions (tCO2e) 435,660 482,003 499,299 Quantitative data for employee transportation: [G4-EN30]

Energy consumption (GJ) – – 41,672

GHG emissions (tCO2e) (Green house gases) – – 2,139 Materials used (metric tons) [G4-EN1]

Cement * – 41,415,553 55,689,684

Other businesses ** – 30,525,691 34,167,696

Total non-renewable materials – 71,941,244 89,857,380

Direct GHG emissions (tCO2e) – Scope 1* [G4-EN15] Stationary combustion 9,478,117 9,346,289 10,237,380

Mobile Sources – owned 170,401 165,350 156,277

Process 17,143,631 16,684,340 17,750,476

Total (Scope 1) 26,792,149 26,195,979 28,144,134

Biogenic GHG emissions (tCO2e) – Scope 1 Biomass fuels 885,783 568,298 639,606

* Scope 1 includes the GHG emissions for the units producing Aggregates, Concrete and Complementary Products.

Energy indirect GHG emissions (tCO2e) – Scope 2* [G4-EN16] Electric power 1,246,048 1,332,633 1,686,733

Total (Scope 2) 1,246,048 1,332,633 1,686,733

* Following the acquisition of plants in Europe, Asia and Africa, the historical figures for these indicators were recalculated to include these units. Thus, the values reported in this report differ from those published in the Integrated Report 2012. Scope 1 includes the GHG emissions for the units producing Aggregates, Concrete and Complementary Products.

Other indirect GHG emissions (t CO2e) – Scope 3* [G4-EN17] Transportation of inputs and final products 376,002 410,172 432,112

total other indirect GHG emissions – Scope 3 376,002 410,172 432,112

Biogenic GHG emissions – Scope 3 x

Transportation of inputs and final products (bio-diesel) 18,478 20,161 12,606 94 VOTORANTIM CIMENTOS

INDICATORS CSI GRI 2011 2012 2013

Total biogenic GHG emissions – Scope 3 18,478 20,161 12,606

* GHGs included in other indirect emissions were: CO2 CH4 and N2O generated by the transportation of inputs and final products. Scope 3 includes the GHG emissions for the units producing Aggregates, Concrete and Complementary Products.

Reduction in GHG emissions [G4-EN19] Reduction in CO emissions per ton of cementitious 2 -15.2% -17.40% -15% product (Scope 1) total reduction in GHG emissions -15.2% -17.40% -15%

Climate protection

Direct emissions x

Absolute gross CO2 emissions (million metric tons CO2/ year) 26.7 26.1 28.1

Absolute net CO2 emissions (million metric tons CO2/ year) 26.4 25.8 27.7 Specific gross CO emissions 2 654 638.0 656.0 (kg CO2/ton cementitious product) Specific net CO emissions 2 647 631 649.0 (kg CO2/ton cementitious product) Reduction of specific net CO emissions relative to the 2 15.2 17.4 15.0 base year – 1990 (%) Indirect emissions x CO emissions from the generation of external energy 2 1,095,952 1,008,818 1,235,584 (metric tons of CO2) Responsible use of fuels and raw materials x

Specific heat consumption of clinker production 3,409 3,398 3,541

Low carbon fuels rate (%) 8.5 7.2 6.4

Clinker/cement ratio (%) 76% 74% 76%

Alternative raw materials rate (%) 7.3 7.7 7.2

Power consumption (specific) kwh/ t cement 109.9 108.8 109.3

Local impacts on land communities x Percentage (%) of sites with quarry rehabilitation 14% 49% 78% plans in place Percentage (%) of sites with community engagement [G4-SO1] 49% 62% 15% plans in place Biodiversity KPIs Number of quarries within, containing, or adjacent to areas designated for their high biodiversity value, as defined by RIG x [G4-EN11] – 47 62 EN11 (Number and coverage) Percentage (%) of quarries with high biodiversity value where biodiversity management plans are actively – 4.26% 6.5% implemented INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 95

INDICATORS CSI GRI 2011 2012 2013 Total number of operations that have closure plans/ [G4-MM10] – 40 93 recovery of areas Percentage (%) of total units that were evaluated according to the criteria for the need for a BMP (Biodiversity – 58% 52% Management Plan) Number of units which have a BMP in place [G4-MM2] – 2 4

Health and safety x [G4-LA6]

Number of Fatalities of direct employees (on-site) 0 2 1

Number of Fatalities of direct employees (off-site) 0 0 1

Number of Fatalities of direct employees – Total 0 2 2

Number of fatalities (per 10 thousand direct employees) (%) 0 1.59 1.4

Number of fatalities of indirect employees (on-site) 0 2 3

Number of fatalities of indirect employees (off-site) 2 6 6

Number of fatalities of indirect employees – Total 2 8 9

Number of fatalities of third parties* 2 5 8

Number of lost time injuries (directly employed) 33 29 44

Lost time injuries per 1 million man/hours (directly employed) 1.3 1.4 1.28

Number of lost time injuries for indirect employees 26 16 35 Lost time injuries per 1 million man/hours for indirect 0.77 0.47 0.90 employees (on-site) Number of lost days - direct employees (calendar days) 3,335 2,927 3,195

Number of lost days - indirect employees (calendar days) 888 515 1,458

* Third-parties: includes any person not categorized as directly or indirectly employed by Votorantim Cimentos. Normally this classification includes customers, visitors to company locations, and drivers or passengers who are involved in accidents off-site, with company or contractor vehicles, but only if there was blame involved. 96 VOTORANTIM CIMENTOS Additional GRI indicators

T otal number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes [G4-SO7]

2012 2013 Number of legal actions filed against the company in the year 1 0 Value of legal actions filed against the company in the year(R$) 5,600,000,000 - Number of legal actions paid by company in the year 0 - Value paid in the year for legal actions against the company (R$) 0 - Number of administrative sanctions received in the year 1 - Value of administrative sanctions received in the year (R$) 46,920 - Number of administrative sanctions paid in the year 0 - Value of administrative sanctions paid in the year (R$) 0 - Number of TAC's or TC's received in the year 0 - Value of TAC's or TC's received in the year (R$) 0 - Number of TAC's or TC's paid in the year 0 - Value paid in the year for TAC's or TC's (R$) 0 - TOTAL Number 2 0 TOTAL Value (R$) 5,600,046,920 0 INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 7,633,303 97

Non-conformities relating to labor/social security matters [G4-SO8]

2012 2013

Number of legal actions filed against the company in the year 890 1.472

Value of legal actions filed against the company in the year (R$) 30,185,709 310,544,783

Number of legal actions paid by company in the year 324 245

Value paid in the year for legal actions against the company (R$) 7,633,302,65 6,206,181

Number of administrative sanctions received in the year 38 191

Value of administrative sanctions received in the year (R$) 71,410 1,553,058

Number of administrative sanctions paid in the year 7 65

Value of administrative sanctions paid in the year (R$) 15,471 192,430

Number of TAC's or TC's received in the year 0 2

Value of TAC's or TC's received in the year (R$) 0 0

Number of TAC's or TC's paid in the year 0 0

Value paid in the year for TAC's or TC's (R$) 0 0

Non-conformities relating to tax matters [G4-SO8]

2012 2013

Number of legal actions filed against the company in the year 89 90

Value of legal actions filed against the company in the year (R$) 56,139,466 23,484,719

Number of legal actions paid by company in the year 19 11

Value paid in the year for legal actions against the company (R$) 1,146,676 1,466,878

Number of administrative sanctions received in the year 349 250

Value of administrative sanctions received in the year (R$) 863,417,625 331,296,015

Number of administrative sanctions paid in the year 24 80

Value of administrative sanctions paid in the year (R$) 2,694,869 5,669,044

Number of TAC's or TC's received in the year 2 0

Value of TAC's or TC's received in the year (R$) 0 0

Number of TAC's or TC's paid in the year 0 0

Value paid in the year for TAC's or TC's (R$) 0 0

Number of cases resolved [G4-SO8]

2013 Number of cases resolved through 6 TACs (2 labor; 4 environmental) dispute mechanisms 98 VOTORANTIM CIMENTOS

Environmental management [G4-EN27]

Initiatives and actions Impacts Vidal Ramos: the plant consumed 6,140 In relation to the use of materials in the production metric tons of ground waste and 7,032 metric process the highlights were: implementation of co- tons of tires in 2013. processing for fuel substitution in Vidal Ramos ( tires Nobres: the plant achieved a level of and waste), Nobres (pozzolan) and Pinheiro Machado thermal substitution of 27.55% in 2013, Use of (rice husks); initiatives for the decontamination, equivalent to a saving of 3,267 metric tons materials containment and reclassification of transformers of fuel used in 2013, reducing the production (Rio Branco, Corumba and Sobradinho); analysis cost of clinker. of environmental compliance of materials such Corumbá e Sobradinho: 100% of equipment as asbestos (Itaú de Minas); and initiatives in free from PCBs. environmental adaptation in Sobradinho. Pinheiro Machado: Reduced the use of non- renewable materials. The company has invested in projects for the reuse of Examples of results achieved are: rainwater and process water (Rio Branco, Imbituba, Nobres: water consumption reduced by Capivari de Baixo, Nobres e Corumbá). In addition Use of water approximately 4 m³/day or 1,460 m³/year. it has promoted water use reduction campaigns Esteio: water consumption reduced by and substituted and/or improved water meters and 20,455 m³ of water in the year. pumping systems.

Highlights for the year were: washing of equipment (Cajamar, Barueri, Limeira); improvement projects As a result there was an improvement in Effluents for effluent treatment facilities (VidalR amos, Itaú de the quality of the water discharged in Vidal Minas, Sobral, Nobres and Sobradinho); and changes Ramos, Itaú de Minas, Sobral and Nobres in the locations of effluent discharge.

Noise pollution has been reduced by planting native plants and curtains of trees around the units in Vidal Noise pollution Sound impact reduction Ramos (10,000 seedlings) and Itaú de Minas (4,200 seedlings). Cajamar: 47% reduction in the generation of hazardous waste (from 26 metric tons in 2012 to 14 metric tons in 2013 and a 23% reduction in the generation of non-hazardous waste Worthy of note were: the projects to build central (from 657 metric tons in 2012 to 505 metric waste deposits (Cajamar, Vidal Ramos, Pecém tons in 2013. Sobradinho Capivari de Baixo); the initiatives to Barueri: : a 66% reduction in waste reduce hazardous waste (Barueri and Cajamar); compared to the previous year (from 57 the co-processing of waste (Cuiabá, Nobres and metric tons in 2012 to 19 metric tons in 2013. Waste Sobradinho); and the reuse of waste from civil Vidal Ramos: generated 26.84 metric tons construction, tires and production process waste of recyclable waste. (Cuiabá, Itaú de Minas, Sobradinho). Cuiabá: utilization of approximately 22.56 metric tons of waste in co-processing (sacks, In São Luis, we achieved zero waste sent to landfill. food scraps, various non-recyclable types of waste, process waste), and utilization of factory-floor sweeping waste to replace 6,244 metric tons of bauxite. Nobres: reduced amount of waste sent to landfills by 3,000 metric tons/year INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 99

Initiatives and actions Impacts Vidal Ramos: the following species were identified: 51 amphibians; 19 eptiles;r 8 The company invested in the monitoring of small flying mammals; 12 small non-flying terrestrial and aquatic fauna (Vidal Ramos, Cuiabá mammals; 279 birds; 23 fish; and 22,687 macro- and Corumbá - Port Saladeiro) and the formalization invertebrate individuals were collected. of a Private Natural Heritage Reserve on 70 hectares Cuiabá: 153 species of birds; 38 of reptiles; 28 Biodiversity of farmland (Angicos Farm) belonging to the Itaú of mammals; 17 of amphibians and 21 of fish. de Minas plant. In addition it continued investing Corumbá: survey of existing species to in the protection of biodiversity and karst sites in avoid possible moves that could frighten partnership with the Atlantic Rainforest Biosphere away species from their habitats. Reserve and the Brazilian Society of Speleology. In a partnership it also developed a land management plan for the Ribeirão Grande unit (PGTS).

Significant fines Significant environmental fines [G4-EN29] [G4-EN29] In 2013, the company received two 2013 legal processes alleging the emis- Number of legal actions filed against the company in the 2 sion of particulate matter outside year the standards established by law Value of legal actions filed against the company in the year 1,042,413,00* and damage to flora without the (R$) proper environmental permit da- Number of legal actions paid by company in the year 1 mage. Altogether, for its operations Value paid in the year for legal actions against the in Brazil, North America, Europe, 333,963,91 company (R$) Asia and Africa the company received a total of 35 fines and adminis- Number of administrative sanctions received in the year 27 trative penalties, involving values of Value of administrative sanctions received in the year (R$) 382,666,10 R$ 6.9 million. [G4-DMA] Number of administrative sanctions paid in the year 8

Value of administrative sanctions paid in the year (R$) 78,192,33

Number of TAC's or TC's received in the year 4

Value of TAC's or TC's received in the year (R$) 3,808,245,81

Number of TAC's or TC's paid in the year 1

Value paid in the year for TAC's or TC's (R$) 1,308,000,00

Total Number 35

Total Value (R$) 6,875,288,82

*In Brazil. 100 VOTORANTIM CIMENTOS

Operations with implemented local community engagement in 2013 [G4-SO1]

Operations/Units Program

Campinas Engagement with stakeholders Camaçari Program for preparation for work Community Council Engagement with stakeholders Cantagalo Support for public administration

Preparation of organizations Corumbá Engagement with stakeholders Community Council Cuiabá Support for child and adolescent council Engagement with stakeholders

Evolve Edealina - Electrical Edealina Evolve Edealina - Mechanical Community Council

Baraúna Support for child and adolescent council

Esteio Support for child and adolescent council Evolve Imbituba 2011 - Year 3 Community Council Imbituba Support for child and adolescent council

Preparation of organizations Itapeva Votorantim partnership for education Community Council Itaú de Minas Preparation of organizations

Program for preparation for work Jaboatão dos Guararapes Community Council Jaguaré Engagement with stakeholders Evolve Laranjeiras (SE) 2012/2014 - Year 2

Community Council Laranjeiras Engagement with stakeholders

Preparation of organizations

Evolve Paulista 2013/2015- Year 1 Paulista Votorantim partnership for education

Pinheiro Machado Evolve Pinheiro Machado 2012 Year 2 INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 101

Operations/Units Program

Evolve Primavera - Electrical

Evolve Primavera - Mechanical Primavera Support for public administration

Votorantim partnership for education

Reading and Thinking Project

Evolve Rio Branco - Night 2011 Year 3 Rio Branco do Sul Community Council Votorantim partnership for education

Evolve Rio Branco - Night 2011 Year 3

Evolve Salto/Santa Helena - 2013 - Year 1

Salto Community Council

Engagement with stakeholders Votorantim Engagement with stakeholders

Evolve São Luís - 2011/2013 - Year 3 São Luís Community Council Support for child and adolescent council São Paulo (Jaguaré) Program for preparation for work

Seropédica Program for preparation for work

Tae-Kwon-Do education: a choice for life

Evolve Sobradinho (DF) 2012 - Year 2

Sobradinho Community Council

Engagement with stakeholders

Preparation of organizations

Evolve Sobral 2013/2015- Year 1

Community Council Sobral Engagement with stakeholders

Preparation of organizations

Evolve Vidal Ramos 2012 Year 2 Vidal Ramos Community Council Preparation of organizations

Evolve Xambioá (TO) 2012-Year 2

Community Council Xambioá Votorantim partnership for education

Engagement with stakeholders 102 VOTORANTIM CIMENTOS

The UN Global Compact principles

HUMAN RIGHTS PAGE

1 support and respect the protection of human rights 74, 75 and 86

2 ensure non-participation in human rights abuses 74, 75 and 86

LABOR

3 uphold the freedom of association and the right to collective bargaining 75 and 86

4 eliminate of all forms of forced and compulsory labor 74

5 effectively abolish child labor in the production chain 74

6 eliminate discrimination in respect of employment and occupation 34 and 47

THE ENVIRONMENT

7 support a precautionary approach to environmental challenges 27, 71, 74 and 75

8 undertake initiatives to promote greater environmental responsibility 63, 71, 74 and 75

9 encourage the development and diffusion of environmentally friendly technologies 27, 71, 74 and 75

ANTI-CORRUPTION

10 work against corruption in all its forms, including extortion and bribery 14, 32, 33 and 34 INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 103 Financial Statements [G4-17]

Balance Sheet Years ended December 31 All amounts in thousands of reais, unless otherwise indicated Parent company Consolidated Assets Note 2013 2012 2013 2012 Recasted Note “3” Current assets

Cash and cash equivalents 8 14,218 5,565 665,588 936,254 Financial investments 9 1,027,785 1,334,699 1,274,323 2,032,431 Derivative financial instruments 5.4 15,010 1,617 18,548 1,617 T rade accounts receivable 10 258,246 221,738 1,047,747 910,690 Inventories 11 484,343 392,361 1,305,655 1,182,101 Other taxes recoverable 12 86,900 85,590 179,448 176,195 Current Income tax and social contribution receivable 12 95,826 79,746 161,686 83,920 Advances to suppliers 42,200 72,904 90,165 110,174 Dividends receivable 13 143,974 70,973 24,555 512 Other assets 14 105,266 84,334 203,880 93,199 2,273,768 2,349,527 4,971,595 5,527,093 Assets of disposal group classified as held for sale 33 787,981 701,214 2,273,768 2,349,527 5,759,576 6,228,307 Non-current assets

Long-term receivables

Derivative financial instruments 5.4 3,049 3,049 Related parties 13 17,833 32,824 103,767 16,418 Judicial deposits 20 (c) 148,611 193,821 238,994 246,470 Deferred taxes 19 (b) 502,157 532,808 1,012,915 971,979 Other taxes recoverable 12 172,802 26,055 269,802 41,296 Other assets 14 61,243 45,442 170,155 239,198 902,646 833,999 1,795,633 1,518,410 Investments in associates and joint ventures 15 13,283,863 12,138,697 1,491,090 2,050,601 Property, plant and equipment 16 4,945,756 4,497,809 10,384,454 9,421,883 Intangible assets 17 765,548 772,166 5,219,632 4,715,695 18,995,167 17,408,672 17,095,176 16,188,179 Total assets 22,171,581 20,592,198 24,650,385 23,934,896

* The notes to the financial statements are available at: http://www.vcimentos.com.br/ir. 104 VOTORANTIM CIMENTOS

Balance Sheet Years ended December 31 All amounts in thousands of reais, unless otherwise indicated Parent company Consolidated Liabilities and stockholders’ equity Note 2013 2012 2013 2012 Recasted Note “3” Current liabilities

Loans and financing 18 552,526 399,403 721,745 606,875 Derivative financial instruments 5.4 182 2,450 T rade payables 362,922 394,528 925,215 856,226 Payables - Trading 21 112,445 53,784 112,445 53,784 Salaries and payroll charges 159,981 134,285 292,606 227,543 Income tax and social contribution payable 12 68,618 51,186 T axes payable 99,489 90,630 205,783 207,497 Dividends payable 13 1,880 429,158 45,664 439,122 Advances from customers 6,990 11,328 69,957 18,622 Use of public asset 23 24,859 23,561 Account payable for the acquisition of investees 1(a) 155,946 328,452 Other liabilities 22 119,859 217,677 231,919 409,019 1,416,274 1,886,739 2,701,261 3,221,887

Liabilities of disposal group classified as held for sales 33 390,305 274,104 1,416,274 1,886,739 3,091,566 3,495,991 Non-current liabilities

Loans and financing 18 11,326,447 10,505,525 12,779,596 12,177,174 Derivative financial instruments 5.4 3,826 3,826 4,415 Related parties 13 2,860,017 2,194,581 151,623 486,597 Provisions 20 599,202 673,188 946,205 1,070,799 Deferred taxes 19 (b) 609,675 451,843 1,191,153 863,014 Payables with investees 15 26,407 16,098 Use of public asset 23 398,525 381,585 Pension liabilities 30 140,897 184,812 Other liabilities 22 169,379 206,253 334,162 360,259 15,594,953 14,047,488 15,945,987 15,528,655 Total liabilities 17,011,227 15,934,227 19,037,553 19,024,646 INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 105

Parent company Consolidated Liabilities and stockholders’ equity Note 2013 2012 2013 2012 Recasted Note “3” Stockholders’ equity 24

Capital 2,731,375 2,746,024 2,731,375 2,746,024 T ax incentive reserve 752,423 544,441 752,423 544,441 Profit reserves 1,009,380 789,781 1,009,380 789,781

Cumulative other comprehensive income 667,176 577,725 667,176 577,725

Total equity attributable to owners of the parent 5,160,354 4,657,971 5,160,354 4,657,971 Non-controlling interests 452,478 252,279 Total stockholders’ equity 5,160,354 4,657,971 5,612,832 4,910,250 Total liabilities and stockholders’ equity 22,171,581 20,592,198 24,650,385 23,934,896

Income Statement Years ended December 31 All amounts in thousands of reais, unless otherwise indicated Parent company Consolidated Note 2013 2012 2013 2012 Recasted Note “3” Continuing operations

Revenues 25 6,330,908 5,602,214 12,142,288 9,395,423

Cost of sales and services 27 (3,664,506) (3,323,859) (8,102,841) (6,077,981)

Gross profit 2,666,402 2,278,355 4,039,447 3,317,442 Operating income (expenses)

Selling 27 (592,665) (401,377) (893,711) (609,992) General and administrative 27 (506,255) (435,468) (790,373) (665,646) Gain on disposal of equity investments - Cimpor 1(a) 266,774 266,774 Other operating income, net 26 59,784 98,855 326,125 284,779 (1,039,136) (471,216) (1,357,959) (724,085) Operating profit before equity results 1,627,266 1,807,139 2,681,488 2,593,357 and net financial result Results of investees

Equity in the results of associates and joint ventures 15 774,123 526,213 96,863 9,542 Realization of other comprehensive income on disposal 1 (a)(d) 31,045 (170,075) 31,045 (170,075) of investments 805,168 356,138 127,908 (160,533) 106 VOTORANTIM CIMENTOS

Income Statement Years ended December 31 All amounts in thousands of reais, unless otherwise indicated Parent company Consolidated Note 2013 2012 2013 2012 Recasted Note “3” Net financial result

Financial income 186,330 242,189 376,101 296,444 Financial expense (925,452) (735,402) (1,072,152) (864,836) Exchange variations, net (42,241) (388,572) (89,745) (366,072) 29 (781,363) (881,785) (785,796) (934,464) Profit before taxation 1,651,071 1,281,492 2,023,600 1,498,360 Income tax and social contribution 19 (a)

Current (304,079) (166,023) (551,810) (359,326) Deferred (19,168) 501,330 (34,098) 501,449 Profit for the year from continuing operations 1,327,824 1,616,799 1,437,692 1,640,483 Discontinued operations

Loss for the year from discontinued operations 33 (48,857) Net income for the year 1,327,824 1,616,799 1,388,835 1,640,483 Net income attributable to owners of the parent 1,327,824 1,616,799 1,327,824 1,616,799 Net income attributable to non-controlling interests 61,011 23,684 Net income for the year 1,327,824 1,616,799 1,388,835 1,640,483 Total number of shares - thousand (*) 5,422,032 5,437,500 5,422,032 5,437,500 Basic and diluted earnings per share - R$ (*) 0.245 0.297 0.245 0.297 From continuing operations: 0.245 0.297 0.254 0.297 Basic and diluted earnings per share - R$ (*) From discontinued operations: (0.009) Basic and diluted earnings per share - R$ (*)

(*) Adjusted retrospectively from January 1, 2013 by the stock split approved on April 30 and May 27, 2013. Note 24 (a). INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 107

Statement’s of Comprehensive Income Years ended December 31 All amounts in thousands of reais, unless otherwise indicated Parent company Consolidated Note 2013 2012 2013 2012 Recasted Note “3” Net income for the year Lucro líquido do exercício 1,327,824 1,616,799 1,388,835 1,640,483 Other comprehensive income (loss) net of taxes, all of which can be reclassified to the statement of income Realization of other comprehensive income 1 (a) 89,142 89,142 on disposal of investment in Cimpor Realization of other comprehensive (15,720) (15,720) income on disposal of investments Interest in other comprehensive income (7,361) (7,692) 17,216 (5,288) (loss) of associates and joint ventures Hedge of a net investment / Cashflow hedge (563,681) (107,085) (563,681) (107,085) Realization of other comprehensive income 1 (d) (31,045) (31,045) on disposal of investments in VILA Currency translation of investees located abroad 665,051 483,871 660,475 483,751 47,244 458,236 67,245 460,520 Other comprehensive income (loss) net of taxes, all of which may not be reclassified to the statement of income

Remeasurements of post employment benefit obligations 30 42,207 (36,273) 42,207 (36,273) Total other comprehensive income for the year 89,451 421,963 109,452 424,247 Total comprehensive income for the year 1,417,275 2,038,762 1,498,287 2,064,730 Comprehensive income (loss) from:

Continuing operations 1,547,144 2,064,730 Discontinued operations (48,857) 1,498,287 2,064,730 Comprehensive income (loss) from attributable to:

Owners of the parent 1,417,275 2,038,762 Non-controlling interests 81,012 25,968 1,498,287 2,064,730 108 VOTORANTIM CIMENTOS

Statements of changes in equity Years ended December 31 All amounts in thousands of reais, unless otherwise indicated Attributable to owners of the parent Profit reserves Cumulative other Total Tax incentive Retained Non-controlling Note Capital Legal Profit retention comprehensive Total stockholders’ reserve earnings interests income equity At January 1, 2012 2,746,024 360,648 272,230 1,691,705 155,762 5,226,369 192,048 5,418,417 T otal comprehensive income for the year

Net income for the year 1,616,799 1,616,799 23,684 1,640,483 Other comprehensive income for the year 24 (e) 421,963 421,963 2,284 424,247 Total comprehensive income for the year 1,616,799 421,963 2,038,762 25,968 2,064,730 T otal contributions by and distributions to stockholders

Non-controlling interest in business combination 17 (d) 68,953 68,953 Merger of Votorantim Cimentos América (“VCA”) 1 (e) (32,707) (32,707) Increase in non-controlling interest Itacamba 1 (j) (1,983) (1,983) Allocation of net income

Legal reserve 80,840 (80,840) T ax incentive reserve 183,793 (183,793) Interest on stockholders’ equity (R$ 0.03 per share)(*) (178,667) (178,667) (178,667) Dividends (R$ 0.45 per share) (*) 24 (b) (1,562,988) (865,505) (2,428,493) (2,428,493) Profit retention 307,994 (307,994) Total contributions by and distributions to stockholders 183,793 80,840 (1,254,994) (1,616,799) (2,607,160) 34,263 (2,572,897) At December 31, 2012 2,746,024 544,441 353,070 436,711 577,725 4,657,971 252,279 4,910,250

(*) Adjusted retrospectively from January 1, 2013 by the stock split approved on April 30 and May 27, 2013. Note 22 (a). INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 109

A ttributable to owners of the parent Profit reserves Cumulative other Total Tax incentive Retained Non-controlling Note Capital Legal Profit retention comprehensive Total stockholders’ reserve earnings interests income equity At January 1, 2012 2,746,024 360,648 272,230 1,691,705 155,762 5,226,369 192,048 5,418,417 Total comprehensive income for the year

Net income for the year 1,616,799 1,616,799 23,684 1,640,483 Other comprehensive income for the year 24 (e) 421,963 421,963 2,284 424,247 Total comprehensive income for the year 1,616,799 421,963 2,038,762 25,968 2,064,730 Total contributions by and distributions to stockholders

Legal reserve 80,840 (80,840) Tax incentive reserve 183,793 (183,793) Interest on stockholders’ equity (R$ 0.03 per share)(*) (178,667) (178,667) (178,667) Dividends (R$ 0.45 per share) (*) 24 (b) (1,562,988) (865,505) (2,428,493) (2,428,493) Profit retention 307,994 (307,994) Total contributions by and distributions to stockholders 183,793 80,840 (1,254,994) (1,616,799) (2,607,160) 34,263 (2,572,897) At December 31, 2012 2,746,024 544,441 353,070 436,711 577,725 4,657,971 252,279 4,910,250 110 VOTORANTIM CIMENTOS

Statements of changes in equity Years ended December 31 All amounts in thousands of reais, unless otherwise indicated Attributable to owners of the parent Profit reserves Cumulative other Total Tax incentive Retained Non-controlling Note Capital Legal Profit retention comprehensive Total stockholders’ reserve earnings interests income equity At January 1, 2013 2,746,024 544,441 353,070 436,711 577,725 4,657,971 252,279 4,910,250 T otal comprehensive income for the year

Net income for the year 1,327,824 1,327,824 61,011 1,388,835 Other comprehensive income for the year 24 (e) 89,451 89,451 20,001 109,452 Total comprehensive income for the year 1,327,824 89,451 1,417,275 81,012 1,498,287 T otal contributions by and distributions to stockholders

Acquisition of non-controlling interest Cimpor Macau 1 (a) (9,600) (9,600) (27,900) (37,500) Non-controlling interest arising on business combination 1 (c) 224,795 224,795 Artigas Non-controlling interest arising on business combination 1 (j) 6,120 6,120 Antequera Capital redemption in kind – fixed assets 1 (g) (46,881) (46,881) (46,881) Acquisition of non-controlling interest VCNNE 1 (h) (52,670) (52,670) (83,828) (136,498) Capital contributions in kind - Voto IV 1 (i) 32,232 32,232 32,232 Reversal of lapsed unclaimed dividends 62,027 62,027 62,027 Allocation of net income

T ax incentive reserve 207,982 (207,982) Legal reserve 66,391 (66,391) Dividends (R$ 0.17 per share) (*) 24 (b) (900,000) (900,000) (900,000) Profit retention 153,451 (153,451) Total contributions by and distributions to stockholders (14,649) 207,982 66,391 153,208 (1,327,824) (914,892) 119,187 (795,705) At December 31, 2013 2,731,375 752,423 419,461 589,919 667,176 5,160,354 452,478 5,612,832

(*) Adjusted retrospectively from January 1, 2013 by the stock split approved on April 30 and May 27, 2013. Note 22 (a). INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 111

A ttributable to owners of the parent Profit reserves Cumulative other Total Tax incentive Retained Non-controlling Note Capital Legal Profit retention comprehensive Total stockholders’ reserve earnings interests income equity At January 1, 2013 2,746,024 544,441 353,070 436,711 577,725 4,657,971 252,279 4,910,250 Total comprehensive income for the year

Net income for the year 1,327,824 1,327,824 61,011 1,388,835 Other comprehensive income for the year 24 (e) 89,451 89,451 20,001 109,452 Total comprehensive income for the year 1,327,824 89,451 1,417,275 81,012 1,498,287 Total contributions by and distributions to stockholders

Tax incentive reserve 207,982 (207,982) Legal reserve 66,391 (66,391) Dividends (R$ 0.17 per share) (*) 24 (b) (900,000) (900,000) (900,000) Profit retention 153,451 (153,451) Total contributions by and distributions to stockholders (14,649) 207,982 66,391 153,208 (1,327,824) (914,892) 119,187 (795,705) At December 31, 2013 2,731,375 752,423 419,461 589,919 667,176 5,160,354 452,478 5,612,832 112 VOTORANTIM CIMENTOS

Cash Flow Statements Years ended December 31 All amounts in thousands of reais, unless otherwise indicated Parent company Consolidated Cash flows from operating activities Note 2013 2012 2013 2012 Recasted Note “3” Profit before income tax and social contribution 1,651,071 1,281,492 2,023,600 1,498,360 Profit from discontinued operations (48,857) Adjustments to reconcile net income to cash 15 and From operations 269,319 240,502 773,093 544,307 16 Depreciation, amortization and depletion 28,943 37,168 Impairment provision (596) 7,657 (1,853) 7,657 Loss (Gain) on disposal of other investments (6,897) (3,494) (20,478) (9,132) Gain on sale of property, plant and equipament and 1 (a)(d) (31,045) 89,142 (31,045) 170,075 intagible Realization of other comprehensive income on disposal of 1 (a) (34,904) investments Gain on disposal of investments C+PA 15 (774,123) (526,213) (96,863) (9,542) Equity in the results of associates and joint ventures 1 (a) (266,774) (266,774) Gain on disposal of equity investments - Cimpor 10 (b) 15,167 4,561 41,351 11,077 Allowance for doubtful accounts 11 (28,022) 13,790 (29,534) (16,217) Provision (reversion) for inventory losses 857,132 1,257,410 1,087,994 1,215,970 Interest, indexation and exchange variations (6,336) (9,823) Fair value adjustment of derivative instruments 93,061 78,158 188,108 139,121 Provisions 2,067,674 2,176,231 3,877,957 3,284,902 Changes in assets and liabilities

Financial investments 306,914 (129,027) 758,116 (581,921) T rade accounts receivable (51,675) 155,999 (139,480) 166,802 Inventories (63,960) 10,941 (69,408) (14,311) T axes recoverable (48,287) 5,299 (24,472) (11,524) Related parties (56,500) (21,215) 18,264 (65,183) Other assets (16,077) (6,534) (210,428) 159,946 T rade payables (31,606) (17,850) 46,929 (24,775) T axes payable 183,707 (71,623) 60,796 (24,669) Salaries and social charges 25,696 25,789 59,590 76,170 Advances from customers (4,338) 1,598 45,796 4,252 Accounts payable and other liabilities (274,861) (200,186) (434,211) (307,823) Cash provided by operations 2,036,687 1,929,422 3,989,449 2,661,866 Interest paid (792,532) (672,578) (859,411) (719,109) Income tax and social contribution paid (28,626) (262,986) (234,549) (519,525) Cash flows from operating activities 1,215,529 993,858 2,895,489 1,423,232 INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 113

Parent company Consolidated Cash flows from investing activities Note 2013 2012 2013 2012

Recasted Note “3” Cash obtained from the acquisition of subsidiary Artigas 1 (c) 91,034 Acquisition of additional interest in Bio Bio 1 (f) 708 Capital increase in investees 1 (j) (14,699) Acquisition of equity investment in C+PA (69,320) (270,916) (14,102) (58,602) Acquisition of equity investment in Cementos Artigas 1 (a) (27,900) Acquisition of equity investment in Cementos Avellaneda 1 (c) (50,795) Acquisition of investment in VCEAA 1 (b) (121,909) Net cash obtained on the acquisition of VCEAA 1 (a) (155,946) (657,950) (155,946) Acquisition of subsidiary Antequera (net of cash obtained) 124,502 Acquisition of property, plant and equipment (12,728) Acquisitions of intangible assets 15 (816,719) (1,168,102) (1,316,157) (1,497,693) Proceeds from sale of investment Yguazú 16 (2,116) (23,176) (20,848) (41,332) Proceeds from non-current assets 1 (j) 30,535 30,535 Proceeds from disposal of non-current asset held for sale 8,427 47,896 40,721 12,407 C+PA Proceeds from disposal of other investments 1 (a) 60,200 Receivables on sales of investees 112,600 Dividends received 51,313 189,937 61,704 193,377 Net cash used in investing activities (984,361) (1,851,068) (1,368,825) (1,236,806)

Parent company Consolidated Cash flows from financing activities Note 2013 2012 2013 2012

Recasted Note “3” New loans and financing 18 807,954 3,466,254 1,489,205 3,665,782 Derivative financial instruments (346) (3,095) (2,542) Payments of loans and financing 18 (699,780) (140,871) (2,226,676) (503,628) Related parties, net 655,749 (26,674) (65,882) (207,001) Acquisition of non-controlling interest in Macau 1(a) (37,500) Cash obtained from capital contribution in kind - Voto IV 1(i) 52,294 Acquisition of non-controlling interest VCNNE 1(h) (136,498) Interest on stockholders' equity (178,667) Dividends paid (986,092) (2,441,304) (986,563) (2,263,402) 114 VOTORANTIM CIMENTOS

Cash Flow Statements Years ended December 31 All amounts in thousands of reais, unless otherwise indicated Parent company Consolidated Cash flows from financing activities Note 2013 2012 2013 2012

Recasted Note “3” Net cash (used in) provided by financing activities (222,515) 857,405 (1,914,715) 510,542 Exchange results on cash and cash equivalents of foreign 117,385 17,516 subsidiaries Increase (decrease) in cash and cash equivalents 8,653 195 (388,051) 696,968 Cash and cash equivalents at the beginning of the year 5,565 5,370 936,254 221,770 Cash and cash equivalents at the end of the year 14,218 5,565 665,588 936,254

Statements of value added Years ended December 31 All amounts in thousands of reais, unless otherwise indicated Parent company Consolidated Note 2013 2012 2013 2012 Recasted Note”3” Revenue

Sales of products and services 25 8,366,561 7,381,847 14,875,281 11,916,935 Other operating income (expenses) 26 86,140 98,855 363,292 284,779 Allowance for doubtful accounts 10(b) (15,167) (4,561) (41,351) (11,077) 8,437,534 7,476,141 15,197,222 12,190,637 Inputs acquired from third parties

Raw materials and other production inputs (2,321,220) (1,585,720) (5,051,453) (3,189,945) Materials, energy, oustourced services and other (1,248,190) (1,136,504) (2,294,909) (1,819,543) (3,569,410) (2,722,224) (7,346,362) (5,009,488) Gross value added 4,868,124 4,753,917 7,850,860 7,181,149 15 and Depreciation, amortization and depletion (269,319) (240,502) (773,093) (544,307) 16 Net value added generated by the Company 4,598,805 4,513,415 7,077,767 6,636,842 Value added received through transfer

Equity in the results of investees 805,168 356,138 127,908 (160,533) Financial income 29 186,330 242,189 376,101 296,444 991,498 598,327 504,009 135,911 Total value added to distribute 5,590,303 5,111,742 7,581,776 6,772,753 INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 115

Parent company Consolidated Note 2013 2012 2013 2012 Recasted Note”3” Distribution of value added

Personnel and payroll charges

Direct remuneration 434,365 351,144 910,791 662,407 Social charges 237,974 197,610 350,102 276,685 Benefits 124,650 100,156 218,702 167,760 796,989 648,910 1,479,595 1,106,852

Parent company Consolidated Liabilities and Equity Note 2013 2012 2013 2012 Recasted Note”3” Taxes and contributions

Federal 977,648 947,825 1,434,708 1,442,343 State 1,410,183 1,204,210 1,940,548 1,737,549 Municipal 31,586 28,783 35,307 31,293 Deferred taxes 19,168 (501,330) 34,098 (501,449) 2,438,585 1,679,488 3,444,661 2,709,736 Third-party capital remuneration

Financial expense 29 967,693 1,123,974 1,161,897 1,230,908 Rentals 59,212 42,571 106,788 84,774 1,026,905 1,166,545 1,268,685 1,315,682 Own capital remuneration

Non-controlling interests 61,011 23,684 Dividends 900,000 865,505 900,000 865,505 Interest on equity 178,667 178,667 Retained profit 427,824 572,627 476,681 572,627 Losses on discontinued operations (48,857) 1,327,824 1,616,799 1,388,835 1,640,483 Value added distributed 5,590,303 5,111,742 7,581,776 6,772,753 116 VOTORANTIM CIMENTOS

General Standard Disclosures

G4-1 Message from the president

G4-3 Name of organization

G4-4 Principal brands, products and/or services

G4-5 Principal brands, products and/or services Countries where the major operating units or those most relevant to the sustainability aspects of the G4-6 report are located G4-7 Type and legal nature of the property

G4-8 Markets in which the organization operates

G4-9 Size of the organization G4-10 Profile of employees

G4-11 Percentage of employees covered by collective bargaining agreements

G4-12 Description of the organization’s supply chain

G4-13 Significant changes regarding size, structure, shareholders and supply chain

G4-14 Description of how the organization adopts the precautionary principle or approach

G4-15 Memberships of associations and organizations

G4-16 Entities included in the consolidated financial statements and entities not covered

G4-17 Entities included in the consolidated financial statements and entities not covered by the report

G4-18 Defining the report content and theA spect Boundaries

G4-19 List of material aspects

G4-20 Boundary within the organization, for each material aspect

G4-21 Boundary outside the organization, for each material aspect

G4-22 Restatements of information provided in earlier reports

G4-23 Significant changes from previous reporting periods in the scope and aspect boundaries

G4-24 List of stakeholder groups engaged by the organization

G4-25 Basis used for identification and selection of stakeholders with whom to engage

G4-26 Organization’s approach to stakeholder engagement

G4-27 Key topics and concerns that have been raised through stakeholder engagement

G4-28 Reporting period

G4-29 Date of most recent previous report

G4-30 Reporting cycle

G4-31 Contact for questions regarding the report or its contents

G4-32 ”In accordance” option of GRI guidelines and location of GRI list of contents

G4-33 Policy and current practice with regard to seeking external assurance for the report

G4-34 Governance structure of the organization

G4-56 Organization’s values, principles, standards and norms of behavior INTEGRATED REPORT 2013 – ADDITIONAL INFORMATION 117

Specific Standard Disclosures

G4-EC1 Direct economic value generated and distributed

G4-EC6 Local hiring of senior management

G4-EC7 Development and impact of infrastructure investments and services supported benefiting the public

G4-EC9 Policies, practices, proportion of spending on local suppliers at significant locations of operation

G4-EN1 Materials used by weight or volume

G4-EN3 Energy consumption within the organization

G4-EN4 Energy consumption outside of the organization

G4-EN5 Energy intensity

G4-EN8 Total water withdrawal by source Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high G4-EN11 biodiversity value outside protected areas G4-EN15 Direct GHG emissions

G4-EN16 Energy indirect GHG emissions

G4-EN17 Other indirect GHG emissions

G4-EN18 Emissions intensity

G4-EN19 Reduction of GHG emissions

G4-EN21 NOx, SOx, and other significant air emissions G4-EN23 Total weight of waste by type and disposal method

G4-EN27 Extent of impact mitigation of environmental impacts of products and services Monetary value of significant fines and total number of non-monetary sanctions for non-compliance G4-EN29 with environmental laws and regulations G4-EN30 Significant environmental impacts of the transportation of products and members of the workforce

G4-EN31 Total investments and expenditures on environmental protection, by type

G4-EN32 Percentage of new suppliers that were screened using environmental criteria Number of grievances about environmental impacts filed, addressed, and resolved through formal G4-EN34 grievance mechanisms G4-LA1 Total number and rates of new employee hires and employee turnover by age group, gender, and region

G4-LA6 Rates of injury, occupational diseases and lost days

G4-LA9 Average hours of training per year

G4-LA11 Percentage of employees receiving regular performance and career development reviews

G4-LA12 Composition of governance bodies and breakdown of employees per employee category Ratio of basic salary and remuneration of women to men by employee category, by significant locations G4-LA13 of operation Number of grievances about labor practices filed, addressed, and resolved through formal grievance G4-LA16 mechanisms 118 VOTORANTIM CIMENTOS

Specific Standard Disclosures

G4-HR3 Total number of incidents of discrimination and corrective actions taken Operations and suppliers identified in which the right to exercise freedom of association and collective G4-HR4 bargaining may be violated or at significant risk, and measures taken to support these rights Operations and suppliers identified as having significant risk for incidents of child labor, and measures G4-HR5 taken to contribute to the effective abolition of child labor Operations and suppliers identified as having significant risk for incidents of forced or compulsory labor, G4-HR6 and measures to contribute to the elimination of all forms of forced or compulsory labor Number of grievances about human rights impacts filed, addressed, and resolved through formal G4-HR12 grievance mechanisms Percentage of operations with implemented local community engagement, impact assessments, and G4-SO1 development programs G4-SO4 Communication and training on anti-corruption policies and procedures

G4-SO6 Total value of political contributions by country and recipient/beneficiary Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their G4-SO7 outcomes Monetary value of significant fines and total number of non-monetary sanctions for non-compliance G4-SO8 with laws and regulations G4-SO9 Percentage of new suppliers that were screened using criteria for impacts on society Number of grievances about impacts on society filed, addressed, and resolved through formal grievance G4-SO11 mechanisms G4-PR5 Results of surveys measuring customer satisfaction The number and percentage of total sites identified as requiring biodiversity management plans MM2 according to stated criteria, and the number (percentage) of those sites with plans in place The extent to which grievance mechanisms were used to MM7 resolve disputes relating to land use, customary rights of local communities and indigenous peoples (*), and the outcomes MM10 Number and percentage of operations with closure plans Report production

General coordination and production Directorate of Energy, Sustainability and Safety - Corporate Environmental Management Coordination Janaína de Oliveira Barros Team: Patrícia Monteiro Montenegro, Carolina Moreira Meira, Andressa Depetriz Marcelino, Gisele Guandalini Bagoli and Ana Credits Gonzalez de Aledo. Corporate Communication & Brand Management: Malu Weber, Bruna Gomes and Carolina GRI consultancy, editorial Simonetti. coordination and design Report Sustentabilidade Directorate of Finance and Team: Ana Souza and Pamela Investor Relations Jaboour (project management and Gabriela Woge, Daniel Gonçalves, relations), Paloma Cavalcanti (GRI Thiago Lobato, Carolina Trindade consulting), Tita Berton (editing), and Cristiane Dantas Renata Costa (writing), Guilherme Falcão (graphic design), Flavia VC contributors Ocaranza (layout). Adriana Laporta Cardinali, Alexandre Paraiso Cari, Ana Review Paula de Medeiros Carracedo, Assertiva Produções Editoriais Daniel Motta, Danielle Zeitune Totti, Elaine Bohme Pellacani, English translation Elisa Badziack, Fernanda Teves Richard Wightwick de Souza, Frederico Cruvinel, Giuliano Giordano, Guilherme Photography Tanferri, Maria de Fatima Peixoto pages 02, 05, 12, 19, 35, 41, 42, Nascimento, Martin Vroegh, 48, 50, 51 and 67 – Leonardo Maurilo Rodrigues Moura, Meire Rodrigues Correa Fontes, Patricia Ramalho pages 06, 21, 22, 23, 28, 58, 64 Diniz, Regiane Velozo Dias, Renata and 71 – Banco de imagens da Brecailo, Ricardo Turra, Roberto Votorantim Cimentos Akiau, Rogier Hans Hofman, Ruben Plaza, Silvia Regina Soares Infographic da Silva Vieira, Simone Vilela Cássio Bittencourt – page 10 Lopes, Stefanie Linzmaier Felix Palma, Thiago Tadeu Genda da Typography Silva and Vanessa Nunes Elias. Fedra Sans by Peter Biľak, 2001. SOBRE O RELATÓRIO PUBLICAÇÃO ELENCA PRINCIPAIS TEMAS PARA O NEGÓCIO

É com muito orgulho que apresentamos aos nossos leitores o Relatório Integrado 2013 da Vo - torantim Cimentos. Com a publicação, buscamos demonstrar nossas realizações e nossos avanços e esforços ao longo do ano, principalmente nos aspectos econômicos, financeiros, RELATÓRIO de governança e socioambientais. Pela primeira vez, passamos por um processo de construção de uma matriz de materialidade específica da Votorantim Cimentos, o que nos ajudou a identificar os principais pontos INTEGRADO relevantes para os negócios da Companhia e, também, no processo de incorporação dessas questões estratégicas à gestão da empresa. Anteriormente, utilizávamos como base a matriz de materialidade da Votorantim Industrial – grupo do qual fazemos parte.

Para dar ainda mais credibilidade ao reporte, aderimos a versão G4 da Global Reporting Initiative (GRI), na opção essencial (core). Participamos da iniciativa de Relato Integrado, do International Integrated Reporting Council (IIRC), apresentando o nosso modelo de negócio RADO RADO e incorporando cada vez mais as diretrizes desta importante iniciativa à nossa gestão, em um processo de melhoria contínua. Também estamos alinhados aos conteúdos estabele - cidos pela Cement Sustainability Initiative (CSI), iniciativa da qual a Votorantim Cimentos é signatária e uma das fundadoras, criada em 1999 pelo World Business Council for Sustainable Development (WBCSD) para trabalhar questões de sustentabilidade no setor de cimentos, além das diretrizes do Pacto Global, uma iniciativa das Nações Unidas (ONU) voltada para a RELATÓRIO INTE G RELATÓRIO gestão dos dez princípios universalmente aceitos nas áreas de direitos humanos, trabalho, meio ambiente e combate à corrupção.

Ao todo são 39 indicadores GRI, com informações que compreendem o período de 1° de janeiro a 31 de dezembro de 2013. Além disto, pontuamos algumas informações relacio - nadas à temas relevantes ocorridos em 2014.

As informações apresentadas retratam as operações no Brasil (VCBR), Canadá e Estados Unidos (VCNA – North America), Espanha, Turquia, Índia, Marrocos, Tunísia e China (VCEAA – Europa, Ásia e África) e Bolívia, Uruguai, Peru, Chile e Argentina (América do Sul).

Os dados ﬁnanceiros foram auditados e as informações socioambientais receberam asse - guração limitada pela PricewaterhouseCoopers (PWC), conforme cartas disponíveis nas páginas 15 e 17 deste relatório. [G4-17, G4-28, G4-29, G4-30, G4-32, G4-33]

Este relatório integrado busca prestar contas de forma transparente a todos os nossos públicos de interesse. Além de apresentar as evoluções e metas, a publicação visa evidenciar o caminho que vem sendo percorrido pela Companhia para incorporar a gestão integrada (econômica, social e de ambiental) ao dia a dia dos nossos negócios. Dúvidas, sugestões e comentários sobre a publicação são muito bem-vindos e podem ser encaminhados para [email protected]. Outras informações podem ser obtidas no nosso site, www.vcimentos.com.br. [G4-31]