Districts. Arroio Grande, Camaquã, Canguçu, Chuvisca, Cristal, Pedro Osório and São Lourenço do Sul

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1 Page 1 of 11 PUBLIC MONITORING SUMMARY TANAGRO S.A. has its head office in Montenegro, Rio Grande do Sul, Brazil, and manages an area of approximately 60 thousand hectares, distributed in 21 districts of the State of Rio Grande do Sul. The Forest Management is certified by the FSC Forest Stewardship Council Norms (Forest Management Council) and ISO 9001 (Quality Management System). TANAGRO S.A. plants and harvests Black Acacia forests, supplying raw material for two industrial units of TANAC S.A., private company of state funds, controller of Tanagro. Supplies debarked wood for the woodchip Mill in Rio Grande and bark for the vegetable extract Plant in Montenegro. PLANTED AREA Chart 1: Distribution of the areas of the company by region Region / Head-office Districts Area of effective plantation (ha) Total area (ha) Montenegro Montenegro and Triunfo 1,0 77,8 Cristal Arroio Grande, Camaquã, Canguçu, Chuvisca, Cristal, Pedro Osório and São Lourenço do Sul 6.382, ,9 Encruzilhada do Sul Piratini Amaral Ferrador, Cachoeira do Sul, Dom Feliciano, Encruzilhada do Sul and Piratini Arroio Grande, Bagé, Candiota, Cerrito, Dom Pedrito, Herval, Jaguarão, Pinheiro Machado and Piratini 6.452, , , ,2 TOTAL 21 Districts , ,3 Source: Forest Survey of Tanagro (31/12/2013) FOREST BASE The forest plantations, with a great geographical distribution, are administrated from Montenegro, head-office of the company and by three regional-offices (Cristal, Encruzilhada do Sul and Piratini). Each region includes various districts. The Forest Nursery is situated in the district of Triunfo.

2 Page 2 of 11

3 THE BLACK ACACIA Page 3 of 11 The Black Acacia is a medium sized tree, native from Australia and planted commercially in Rio Grande do Sul since Initially planted due to the quality and of the content of tannin in the bark, gained greater importance along the years by the coincident quality of its wood, such for energy generation as for the plywood and cellulose industries. The culture has a relevant social importance in the state, with more than one hundred nurseries and a dozen of thousand producers, predominantly small and medium, suppliers of the bark and wood market. Besides the social-economical aspect, the species is distinguished as an environmental restorer for being a pioneer of short life, recovers the soil rapidly, is not invasive of preservation areas, favors the natural succession and enriches the soil through the atmospheric nitrogen fixation. PLANTATION QUALITY CONTROL Up to 6 months after the plantation a survey is fulfilled to quantify the main items which affect the quality of the plantation, enabling to define continuous improvement plans of this activity. Chart 2: Description of the Plantation Quality Indices by regions Region Encruzilhada Average of Cristal Piratini Year do Sul the Regions ,1 9,1 7,4 8, ,9 8,0 7,7 8, ,1 5,7 7,9 7, ,0 8,3 9,1 9, ,8 8,8 9,6 9, ,0 10,0 9,5 9,8 FOREST MANAGEMENT The plantation fulfilled with density of seedling per hectare are usually from the second year onwards maintained intercropped with cattle in low stocking and rotating between plots. The forest harvesting is fulfilled around the 7 th year due to the better quality of the wood and level of tannin of the bark. This harvesting age also results lower exportation of nutrients per ton produced. The average annual increase is of 25 m³pilled/hectare.

4 Page 4 of 11 Graph 1: Description of the wood Productivity per year of plantation 40,0 m³pilled/hectare/year 30,0 20,0 10,0 0, Productivity (m³pilled/hectare/year) 22,8 23,8 22,4 24,7 25,2 24,0 22,4 26,0 22,6 23,1 27,2 26,8 30,8 29,5 Years of planting BEETLE MONITORING The main plague for the acaciculture is the coleopter of the gender Oncideres spp. (Coleoptera Cerambycidae) which curls the branches and the top of the trees, damaging shape and growth. The control is due in the state law which obliges the collection and burning of the infested branches, as a phytosanitary measure. The areas are monitored annually between the months of January and June, independently of the infestation level, except for those forests which will be collected during this period. Tanagro monitors the beetle population of the branches burnt in each area along the years. Graph 2: Description of the quantification of the branches collected and eliminated per region Cristal Encruzilhada Sul Piratini Total MONITORING OF THE BEETLE (Collected and eliminated branches) Years FAUNA MONITORING The monitoring began in the year of 2003, with the fulfillment of a Environmental Diagnosis in all the actuation regions of Tanagro, with the objective of giving subsidies to the Managing Plan and to be used as reference for future monitoring. This work pointed out that there is important biodiversity in the areas studied and which in general, the negative impacts of the forest operations and of the cattle activity are not significant to the adjacent natural environments and the fauna present. From the subsidies brought about by the Environmental Diagnosis four strategic lines for the environment conservation were established:

5 Page 5 of 11 a) Effectiveness of all the native forest areas as conservation areas; b) Protection of the animals threatened or in danger of extinction; c) Control of the access to the areas for an effective suppression of hunting; d) Environmental Education for the workers and community of the surroundings in the sense of knowing, disclosing and to guarantee the result in the actions proposed. The field surveys have been demonstrating that there are no significant differences for the occurrence of species between the cultivated environment and the environment of native vegetation. The results pointed out the constant use of the cultivated environments by many species, including species part of the Red Book of the Fauna Species Threatened of Extinction of Rio Grande do Sul. Currently the tasks are being fulfilled in three areas with the monitoring of mammals, birds, reptiles and amphibious. Chart 3: Fauna threatened or in risk of extinction observed in the Farms monitored during the year of 2013 Family Scientific Name Popular Name Registration Site Category Cervidae Mazama gouazoupira veado-virá Camboatá, Cerro Partido e Ouro Verde Cuniculidae Cuniculus paca paca Camboatá e Ouro Verde Dasyproctidae Dasyprocta aguti cutia Camboatá e Ouro Verde Felidae Leopardus wiedii gato-maracajá Felidae Leopardus geoffroyi Cerro Partido e Ouro Verde Camboatá e Ouro Verde Mustelidae Lontra longicaudis lontra Camboatá e Ouro Verde Myrmecophagidae Picidae Tamanduá tetradactyla Dryocopus lineatus gato-do-matogrande tamanduámirim pica-pau-debanda-branca Procyonidae Nasua nasua quati Ramphastidae Ramphastos toco tucanaçu Ouro Verde Camboatá Camboatá, Cerro Partido e Ouro Verde Camboatá, Cerro Partido e Ouro Verde Threatened - In danger Source: Tecnicyamb (Environmental Diagnosis) Also since 2005 the Fauna Spontaneous Monitoring is being fulfilled, where the own collaborators of Tanagro register the presence of animals in the areas of the company. In the sequence, some registries of fauna are presented which were observed in the areas administered by Tanagro between the year of Camboatá Farm, Piratini/RS Camboatá Farm, Piratini/RS

6 Page 6 of 11 Ouro Verde Farm, Cristal/RS Ouro Verde Farm, Cristal/RS Cerro Partido Farm, Encruzilhada do Sul/RS Cerro Partido Farm, Encruzilhada do Sul/RS FLORA MONITORING Tanagro fulfilled during the years of 2003 and 2007 two studies of vegetation characterization. In 2003, a quick survey was fulfilled, with main focus on tree/shrub species, in 5 geoevironmental regions and in 2007 floristic surveys were made in 7 areas. In 2010, with the objective of evaluating the updated situation of the forests remnants, in farms which develop silviculture with Black Acacia intercropped with cattle, permanent plots were installed in two areas (Ouro Verde Farm - Cristal/RS and Camboatá Farm - Piratini/RS) of different watersheds. In this survey, the composition and structure of the vegetable communities were inventoried, in areas which were abandoned after the harvesting of the Black Acacia (APPs) or which suffered some interference of plantation (forest isolated fragments / woods). The information about the richness and abundance of species were also registered, per stratum, allowing future compositions of the results. The presence of flora species endangered or under risk of extinction and their regeneration along the time will be analyzed. In 2012 a new work was developed at the Ouro Verde Farm with the objective of registering information about the richness and abundance of species in all the vegetable extracts (herbaceous, shrubby and trees) in APP areas, in corresponding grassland arrays and forest. Also this year a characterization of the rupestrian areas on rocky outcrops in 3 areas, was fulfilled. Together with the monitoring of the fauna, the photographic register of the gender Orchidae is maintained as indicator of the level of conservation of the environments studied.

7 Page 7 of 11 Following, some photographic registers are presented of the flora and the list of endangered species which were observed in the areas administrated by Tanagro. Chart 4: Flora species threatened of extinction in Rio Grande do Sul, registered in the areas of Tanagro. Family Scientific Name Popular Name Category Occurrence (Region/Area) Anacardiaceae Astronium balansae (1) aroeirão In Danger Encruzilhada / Planície Costeira Araucariaceae Araucaria angustifolia (1) pinheiro-brasileiro Camaquã / Planície Costeira Arecaceae Butia capitata (1) butiá In Danger Camaquã / Piratini Asteraceae Gochnatia polymorpha (3, 4) cambará Ouro Verde Farm Bromeliaceae Aechmea recurvata (1) bromélia Camboatá / Cerro Partido / Ouro Verde Farms Bromeliaceae Dyckia remotiflora (4) - Do Seival Farm Bromeliaceae Tillandsia gardneri (1) cravo-do-mato Ouro Verde Farm Bromeliaceae Tillandsia geminiflora (1) Camboatá / Cerro Partido / Ouro Verde Farms Bromeliaceae Tillandsia lorentziana (4) - Do Seival Farm Bromeliaceae Tillandsia usneoides (1) barba-de-pau Camboatá / Cerro Partido / Ouro Verde Farms Bromeliaceae Vriesea friburguensis (1) bromélia Camboatá / Cerro Partido / Ouro Verde Farms Bromeliaceae Vriesea gigantea (1) bromélia Ouro Verde Farm Cactaceae Frailea gracillima (4) - Endemic Do Seival Farm Cactaceae Frailea pygmaea (4) - Endemic Do Seival / Do Cerrito Farms Cactaceae Gymnocalycium denudatum (4) - Critically Endangered Luis Rodrigues Farm Cactaceae Parodia erinacea (4) - Endemic Do Seival Farm Cactaceae Parodia linkii (4) - Endemic Do Seival Farm Cactaceae Parodia mammulosa (4) - Endemic Do Seival Farm Cactaceae Parodia ottonis (4) - Do Seival / Do Cerrito / Luis Rodrigues Farms Cactaceae Parodia oxycostata (4) - Do Seival Farm Cactaceae Parodia permutata (4) - Critically Endangered Lauraceae Ocotea lanceolata (1) canela-amarela Do Seival Farm Camaquã / Piratini / Planície Costeira

8 Page 8 of 11 Family Scientific Name Popular Name Category Occurrence (Region/Area) Malvaceae Waltheria douradinha (4) - Do Seival / Luis Rodrigues Farms Melastomaceae Tibouchina asperior (2) douradinha In Danger Ouro Verde Farm Moraceae Dorstenia brasiliensis (2) figueirilha Santa Fé Farm Myrtaceae Eugenia dimorpha (4) Luis Rodrigues Farm Orchidaceae Cattleya intermédia (1) orquídea Ouro Verde Farm Poaceae Erianthecium bulbosum (2) - In Danger Solanaceae Solanum cf. viscosissimum (2) - Probably extiguished Cerro Branco / Santa Fé Farms Santa Fé Farm Verbenaceae Lippia ramboi (4) - Camboatá Farm Sources: (1) Tecnicyamb; (2) A. Guglieri & F.J.M. Caporal; (3) Silas Mochiutti; (4) Biota HIGH CONSERVATION VALUE FOREST OURO VERDE FARM After study fulfilled by the company, the areas of native forests of the Ouro Verde Farm, situated in the district of Cristal, RS, were elected as High Conservation Value Areas, because they presented a significant concentration of biodiversity, outstanding the other 100 areas analyzed by presenting attributes such as: Being inserted in a region with a high level of human disturbance according to the definition of the Environmental Forestry (Silviculture) Zoning (EFZ); Sufficiently big area to maintain the biodiversity present; Proximity with the conservation unit; Ecological corridors with the objective of conservation in the EFZ for the region; Occurrence of exceptional number of fauna endangered species; Occurrence of flora endangered species. INDICATORS YEAR 2013 Environmental non-compliances 0 Animals run over of the highways 0 Animals run over inside the farm 0 Occurrence of ilegal activities 1 Social/environmental actions with the community 0 Amphibians: Wealth x Frequency * 16 (516) Birds: Wealth x Frequency * 131 (912) Mammals: Wealth x Frequency * 22 (110) Reptiles: Wealth x Frequency * 2 (3) * Wealth = number of species; Frequency = number of records USE OF SOIL The areas of Forest Management are distributed in 4 hydrological basins and 21 districts. According to the Forest Cadastre (31/12/2013), the distribution of the Black Wattle cultivation in 101 places confers to the plantations a great dispersion without a significant impact in the regional landscape. Due to the relative size of the areas, the use and the management applied

9 Page 9 of 11 in the adjacent properties has significant influence in the fauna circulation, in the quality and availability of superficial water and in the entrance and circulation of seeds. Conversion of natural vegetation areas are only accepted for the use with planted forest if this has been fulfilled before Chart 5: Relation of main uses of soil with the respective occupation area. Areas (ha) 2013 Total % Black Wattle ,5 49,5% Native Forest ,5 21,8% Field ,0 16,8% Others 7.162,3 11,9% Total Area ,3 100,0% MONITORING OF WATER RESOURCES In the year of 2006, the covenant with the IPH - Institute of Hydraulic Research of UFRGS (Federal University of Rio Grande do Sul) for the monitoring of water resources in hydrographic microbiology was signed. The covenant has the objective of monitoring the hydro-sedimentological and water quality of the Ouro Verde Farm stream, as well as the characterization of a standard related to the cultivation of the Black Wattle. Various equipment for monitoring the climate and water conditions were installed, such as: water level measuring gauge, spillway (Parshall gutter), recording rain gauge, rainfall gauge and turbidity gauge. Analyses of the water quality are regularly executed and the data generated is crossed with the automatic weather station on the same farm. These data will also allow to establish the specific water balance for the conditions of Tanagro Forest Management. Graph 3: Data for rainfall (P) and spill (Q) for the years of 2008 until MONITORING OF SUPERFICIAL WATERS Since 2008 two areas were selected for the monitoring of surface waters, which are Crepúsculo Farm (district of Camaquã), situated in the Camaquã Watershed and the Camboatá Farm (district of Piratini) situated in the Mirim Watershed São Gonçalo.

10 Page 10 of 11 The objective of this work is to demonstrate if there will be impact related to the Black Wattle plantations in the quality of the surface waters, due to the management used. To analyze the interference of the rainfall and of the temperature in the selected areas, rainfall gauges and thermometers of maximum and minimum temperatures were installed in each of them for the registry of information. The analyses of the water quality are executed monthly and the parameters monitored are: ph, Temperature, DO (Dissolved Oxygen), Total and Fecal Coliform Bacteria, OBD 5 (Oxygen Biochemical Demand), OCD (Oxygen Chemical Demand), Turbidity, Total Dissolved Solids, Total Phosphorus and Total Nitrogen. OBD5 (mg/l) OBD5 (Input) OBD5 (Discharge) Res. 357/05 CONAMA (Class III until 10 mg/l) 10 0 Oct 08 Dec 08 Feb 09 Apr 09 Jun 09 Sep 09 Oct 09 Jan 10 Feb 10 May 10 Jul 10 Sep 10 Dec 10 Feb 11 Apr 11 Jun 11 Aug 11 Oct 11 Jan 12 Mar 12 May 12 Aug 12 Oct 12 Dec 12 Feb 13 Apr 13 Jun 13 Sep 13 Nov 13 Monitoring Period Graph 4: Data of DBO 5 (mg/l) of Crepúsculo Farm between October 2008 and December 2013 evaluated at the input and output of the water stream of the farm area. HUMAN RESOURCES INDICATORS YEAR Direct and indirect collaborators Training hours Abstention (Forest harvesting) 1,26% 1,67% 2,29% 2,09% 1,56% Abstention (Silviculture) 1,42% 1,38% 1,49% 1,57% 1,99% Labour Claims Accidents without leave Accidents with leave Medical/odontological appointments (R$)

11 Page 11 of 11 WORK Employees instruction / Elementary education SOCIAL WORK YEAR Disclosure of Public Health Campaigns Visit to ecological track Number of external demands - environmental, social, health, safety, etc. (% of attendance) 86 (89,5%) 179 (95%) 202 (93%) 215 (90%) 50 (78%) RESIDUE GENERATION Region Nursery Cristal TYPE OF RESIDUE Yaer 2013 Encruzilhada do Sul Piratini Dry (kg) Dangerous (kg) Contaminated soil (kg) Agrotoxic Containers (un) Further information at through the or 55 0(XX) Review: June 2014.

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