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Message from the CEO

Biosev is a global leader in sugarcane processing. In our daily management activities, we strive to build an increasingly stronger and sustainable business by focusing on the efficient production of food and energy. Functioning as a link connecting various segments of the ethanol, sugar and energy production chains in a business based on the use of renewable energy sources, Biosev seeks to drive local development in the regions where it operates and to respond responsibly to the opportunities for creating shared value made possible by the various dimensions of its business.

To ensure accurate decision-making in this effort, we have been systematically investing in improving our social responsibility actions, in optimizing our positioning and in developing strategic actions with the capacity to generate significant and lasting results for strengthening our stakeholder relations. This is a continuous development process supported by the company’s commitment and responsibility on all fronts, which help to keep sustainability front and center in our discussions.

Over the coming pages, we highlight one of the most significant steps taken recently on this path, namely conducting a Participatory Social Diagnosis, which enabled us to identify in a systematized manner our stakeholders perceptions and expectations and the most relevant topics in our dialogue with them.

This publication seeks to present the results of this comprehensive consultation process and how the Company has been using the wealth of the data compiled in the Diagnosis to build a more strategic operation. It also aims to address the information gaps identified among the stakeholders consulted and to share with them our commitment to the present and future. This commitment is reflected effectively in the approval of specific policies, in the creation of a Corporate Social Responsibility Platform and a Stakeholder Engagement Plan, in the reinforcement of our health and safety practices and our management of impacts, as well as other initiatives to enhance our operations, which we will detail later.

Enjoy your reading! Rui Chammas Chief Executive Officer

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About Biosev

Biosev is the world’s second largest sugarcane processor. It is headquartered in São Paulo and has 11 agroindustrial units strategically located in the Brazilian states of São Paulo, Minas Gerais, Rio Grande do Norte, Paraíba and Mato Grosso do Sul. It has processing capacity of 36.4 million tons of sugarcane per crop year. Biosev produces sugar, ethanol, yeast, molasses, animal feed and electric power from biomass, and sells its products to the food, beverage, fuel, energy, cosmetics, pharmaceutical and animal nutrition industries. In Brazil’s retail sector, it sells products through its private-label sugar brands, Dumel and Estrela, a market leader. In addition to the Brazilian market, it serves another 30 countries in North America, Europe, Africa, Asia, the Middle East and Oceania.

Functioning as a link connecting various segments of the ethanol, sugar and energy production chains in a business based on the use of renewable energy sources, Biosev seeks to drive local development in the regions where it operates and to respond responsibly to the opportunities for creating shared value made possible by the various dimensions of its business.

The cane it processes comes from some 120 municipalities. There are 346,000 hectares under its management1 and another 195,000 hectares of land cultivated by its suppliers. Production is distributed across various regions of Brazil, which enables cultivation throughout the year, with the Brazilian crop year extending from September to March in the Northeast region and from April to November in the Center-South region. In addition to reducing the impacts of seasonality on the company’s cash flow, this structure helps to mitigate the weather risks inherent to agricultural activities.

It employs 16,800 professionals, who are essential to the development of the business. Guided by a code of conduct and the set of attitudes of the Biosev Spirit (team work, accomplishments and excellence), it foster a constructive workplace and opportunities for professional development with quality of life. Its decentralized operations located in various regions of Brazil strengthens local hubs for job creation and professional development that serve as alternatives to major urban centers, which are increasingly saturated by migratory flows seeking jobs. Through its Annual Training Program, the Company administers technical training programs on specific activities and safe attitudes.

Biosev maintains partnerships with around 1,300 sugarcane suppliers, who participate in the Mais Cana Program, which is present at all agroindustrial units. The program seeks to boost yields and capture synergies with cane suppliers by transferring technologies, supplying healthy saplings, implementing and financing planting activities, pesticides and herbicides, and promoting integration with cattle producers (feedlot and cattle feed).

BIOSEV Products: sugar, ethanol, power, animal feed, yeast and powdered molasses Production capacity:

2.5 million tons of sugar 1.6 million m³ of ethanol

1 Managed lands are lands owned by third parties on which Biosev directly participates in the planting

and harvesting activities.

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1,300 GWh of power Highly mechanized planting and harvesting

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Governance Biosev is the result of acquisitions and expansions that began in 2000 with the

acquisition of a mill in Leme, São Paulo by the Louis Dreyfus Commodities Group. Its French controlling shareholder has more than 160 years of experience in the global commodities market (sugar, cotton, rice, coffee, fertilizers and inputs, grains, dairy, metals, oleaginous plants and juices) and operates in around 100 countries.

In 2013, Biosev went public on the São Paulo Stock Exchange (BM&FBovespa), listing its shares on the Novo Mercado segment, where it adopts corporate governance standards that exceed even the requirements of Brazilian law.

Strategy and competitive advantages Biosev’s strategy is based on a series of actions that aim to boost yields using

agricultural technologies that improve quality and the structure of production activities. Its operation is organized into five agroindustrial clusters, two administrative centers in São Paulo and Sertãozinho (SP) and one sugar export terminal in the Port of Santos (SP). All structures operate on an integrated basis, which provides economies of scale and reductions in costs with production, procurement and logistics.

The Company operates integrated platforms and participates in all stages of production, from sugarcane planting, harvesting and processing to storing, transporting and marketing product in Brazil and abroad. With a diversified portfolio, thanks to its ability to use all of the sugarcane, Biosev is able to prioritize higher-value products and in turn maximize its business profitability.

Its cogeneration systems produce power from sugarcane bagasse and make Biosev self-sufficient in terms of the industrial operations of its 11 units during harvest activities. Any surplus energy is sold to the national power grid. Furthermore, ten of the Company’s units feature flexible production systems, which allow them to adjust the proportion of sugar to ethanol based on their needs and market conditions.

The intense use of mechanization in planting and harvesting operations is also strategic and aims to increase efficiency and create a better workplace. The reduction in manual labor in the field, which causes physical deterioration, also has a positive impact on the employability profile. In addition to offering better compensation, the more specialized jobs are not as subject to production seasonality, which reduces turnover.

The mechanization process is supported by the use of technology and automation. Planting is monitored by Unmanned Aerial Vehicles (UAVs), also known as drones, which are used to monitor plantations, weeds and certain pests. To ensure production quality, the Company invests in selected and high-quality pre-sprouted seedlings (PSS), which are free from disease and pests, ensuring a higher multiplication rate compared to traditional planting systems. The harvesters have autopilot and guidance systems and geo-referencing technology (such as that used by GPS systems) based on satellite images.

INDUSTRY OVERVIEW

Sugarcane arrived in Brazil back in the country’s colonial period and today the country is the world’s largest producer. According to data from the Sugarcane Industry Association (UNICA), Brazil processed nearly 670 million tons of cane in the 2015/16 crop year. The sugar and energy industry accounts for around 2% of Brazil’s Gross Domestic Product (GDP) and for around 30% of agricultural GDP, with this percentage expected to increase over the coming years, driven by higher domestic and international consumption and productivity gains over the years.

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Large-scale production makes Brazil the world’s top producer of sugar and ethanol. More than half of the sugar consumed worldwide is produced in Brazil and the country is expanding its presence in international markets through the growing use of biofuels as an alternative energy source. The country’s continental dimensions and ample supply of fertile land dedicated to agriculture put it in a privileged position globally and make it possible to allocate planted areas to the production of energy without compromising food production. With production technology and distribution infrastructure, Brazil masters the full ethanol production cycle, from high-yield crops to the construction of distilleries, which produce fuel by fermenting sugarcane juice.

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Clusters

RIBEIRÃO PRETO CLUSTER Biosev has four units in this cluster, all of which are located in the interior of São Paulo

state: two in Morro Agudo, one in Sertãozinho and one in Colômbia. They account for nearly 50% of the Company’s total crushing capacity. When they were acquired by Biosev, in 2009, the units already had amassed decades of experience in the region: the oldest had started operating in the 1930s and 1980s, and the newest in 2007.

The region concentrates a large portion of Brazil’s cane cultivation, with the presence of different companies, a structured production chain and recognition in the global sugar and ethanol industry. The municipalities of Sertãozinho and Morro Agudo, for example, constantly vie for the top spot in world sugarcane cultivation and sugar and ethanol production.

Sertãozinho is home to the Santa Elisa Unit, which produces sugar (crystal, liquid and VHP1), ethanol (anhydrous, hydrous and neutral), energy, powdered molasses and animal supplements. It has a population of 121,400 (IBGE, 2016), Gross Domestic Product (GDP) of R$4.3 billion and a Municipal Human Development Index (MHDI)2 of 0.761, which is considered high.

Morro Agudo is one of Brazil’s largest sugarcane producers. The city has a population of 31,900 (IBGE, 2016), GDP of R$ 1 billion and a high MHDI of 0.712. Biosev operates two units in the city: Vale do Rosário, which produces VHP3 sugar, ethanol (hydrous and anhydrous) and energy; and UMB, which produces sugar (crystal and VHP), ethanol (hydrous and anhydrous) and energy.

The municipality of Colômbia, with a population of 6,200, is home to the Continental unit, which produces VHP sugar and hydrous ethanol. Local GDP is R$222.5 million and the city has an average MHDI of 6.710.

LEME CLUSTER The Leme (SP) unit was Biosev’s first acquisition, in 2000, and produces crystal sugar,

ethanol (hydrous and anhydrous), energy and dry yeast. With a population of 100,200 (IBGE, 2016) and an economy supported by industry and agriculture, formed predominately by the sugarcane and orange crops, the city has a high MHDI of 0.744 and GDP of R$2.3 billion (IBGE, 2013).

LAGOA DA PRATA CLUSTER The Lagoa da Prata unit, located in the city with the same name in the state of Minas

Gerais, produces sugar (crystal and VHP), ethanol (hydrous and anhydrous) and energy. It began operating in 1948 and was acquired in 2001. Since 2012, after the expanding the cogeneration system, the unit is energy self-sufficient during harvest. The expansion of cogeneration capacity, to 85 MW, was concluded in July 2012. The unit is not only energy self-sufficient, but also produces surplus power for sale.

1 VHP: Very High Polarization.

2 The MHDI is calculated by the United Nations Development Programme (UNDP) of the United Nations

(UN) and assess aspects such as the city’s income, longevity and education. It results are classified as very low, low, medium, high and very high. 3 VHP: Very High Polarization.

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Sugarcane plantations drive the local economy, along with other agricultural activities. Lagoa da Prata has a population of 50,100 (IBGE, 2016), a high MHDI of 0.732 (PNUD, 2010) and GDP of R$1.1 billion (IBGE, 2013).

MATO GROSSO DO SUL CLUSTER The cluster is formed by three units: two in the municipality of Rio Brilhante and one in

Maracaju. Rio Brilhante is home to the Rio Brilhante and Passa Tempo units, which produce

ethanol (hydrous and anhydrous, at both), energy and crystal sugar. The former was built by Biosev and started operating in 2008. The latter was acquired in 2007, and later, in 2013, had its energy cogeneration capacity expanded to 77.8 MW.

Sugarcane cultivation in the city is relatively recent, dating back to the late 1990s, and since then has driven economic growth. Its population is estimated by the IBGE at 35,400 (2016), GDP is R$1.4 billion (IBGE, 2013) and it has a high MHDI of 0.715 (PNUD, 2010). The city is currently Brazil’s third leading sugarcane producer.

The third unit in this cluster is located in Maracaju and produces crystal sugar and hydrous ethanol. It started operating in 1985 and was acquired in 2007. The intense economic activity, based on agriculture and cattle raising, puts Maracaju among the highest GDPs of the state of Mato Grosso do Sul (R$1.7 billion). Annual per-capita income is around R$43,100 (IBGE, 2013) and the city has a high MHDI of 0.736. It has a population of 44,000 (IBGE, 2016).

NORTHEAST CLUSTER The Estivas and Giasa units form this cluster, which is marked by a poorly structured

production chain and scattered production: small producers account for 70% of the supply of the sugarcane processed by the units.

Estivas, located in Arez (RN), produces sugar (crystal, refined and VHP1), ethanol (hydrous and anhydrous) and energy. It started operating in 1929 and was acquired in 2007. The city’s economy is based on industry (mainly sugar mills), agriculture (mostly sugarcane) and cattle raising. Its population is only 14,100, according to IBGE’s estimates for 2016. GDP is R$220 million (IBGE, 2013) and the MHDI is 0.606, considered medium.

The Giasa unit is exclusively a distillery producing the types of ethanol requiring more developed industrial processes, such as neutral ethanol, in addition to hydrous, anhydrous and industrial. It has an energy cogeneration unit that supports its production processes, and any surplus energy is sold back to the power grid. It has been part of Biosev since 2007. It is located in the municipality of Pedras de Fogo (PB), which has a population of 28,300 (IBGE, 2016) and GDP of R$387 million. Its MHDI is considered low, at 0.590 (PNUD, 2010).

1VHP: Very High Polarization.

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Participatory Social Diagnosis

With the goal of compiling, in a structured manner, information on how Biosev impacts its area of influence in the social, economic and environmental dimensions and identifies topics of relevance to its dialogue with strategic stakeholders, the Company conducted a Participatory Social Diagnosis. The process was conducted by an expert consulting firm from April to December 2015, and adopted specific methodologies for the various phases of analysis and consultation, which involved a highly representative public of the municipalities where Biosev operates.

The document was developed in three phases. In the first, analyses were conducted of studies, research, reference documents and news about the sugar and ethanol industry to identify relevant topics and data on the perceptions of the companies.

The second phase involved the interview of 30 leaders at the Company to map stakeholders and the impacts considered in internal management. Compliance with standards and rules, the Company’s practices and local demands were also taken into account.

The third phase focused on external stakeholders. Through interviews and focus groups, a total of 64 people were consulted in the five clusters. Those who contributed in this phase included employees, sugarcane suppliers, owners of managed lands, farmers, clients, local residents and representatives from trade unions, municipal governments and city councils.

Some of the conclusions drawn from the Diagnosis included the need to:

create and establish mechanisms to continuously manage and identify demands, impacts and grievances at Biosev’s clusters and units;

strengthen the instances of governance and local decision-making to strengthen the relationship;

adopt guidelines for stakeholder engagement to orient permanent dialogue, seeking to identify opportunities to improve and strengthen relationships and partnerships.

This comprehensive snapshot of the operation’s impacts (both positive and negative,

actual or potential) and of the expectations and needs of internal and external stakeholders served as the basis for enhancing the management and planning of various strategic sustainability actions, which, over the course of 2016, have been concretizing into guidelines and initiatives, as detailed in the chapter Results.

Defining Biosev’s social responsibility positioning was one of the immediate results of the Participatory Social Diagnosis and was guided by a systemic vision of the Company’s value creation processes, always seeking to improve the dynamics of the relations with different stakeholders in a continuous development process.

Context and trajectory

Conducting a Participatory Social Diagnosis is part of Biosev’s process of continuous improvement in its sustainability management that began with the company’s creation. Because of the growth profile of the business, which was heavily driven by the merger of existing units in its first decade of operation, social responsibility was marked by the challenge

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of preserving local knowledge and strategically aligning practices that were carried out independently by each unit.

In 2015, Biosev began a process to improve and repurpose its social efforts that included the following objectives:

defining corporate guidelines for the topic;

ensuring the focus and regularity of actions;

producing more significant and lasting impacts;

engaging teams in the development of strategic social programs and projects;

reinforcing the connection between actions and the business; and

prioritizing relations with the communities surrounding Biosev’s operations and, more broadly, with its stakeholders.

This effort of strategic repurposing gained new dimensions with the review, in 2015, of

the principles and organizational drivers of the business: Biosev Vision and Spirit. The two processes connect to define the Company’s positioning and the future it wants to build.

Vision: To be the leading sugar and energy producer by generating sustainable results

from land, partnerships and knowledge, and efficiently producing food and energy to serve the needs of our clients.

Biosev Spirit Success Teamwork Excellence

Results-oriented Autonomy with

responsibility Focus on priorities Planning and organization Discipline Playing a leading role Systemic vision

Influencing and being influenced

Collaboration Sharing Being an agent of change Dialogue bridging different

levels Respect for diversity Commitment to engage Welcoming challenges Dynamic attitude Being transparent

Seeking business excellence Being an industry reference Knowledge management Medium and long term vision Taking sustainable decisions

and actions Guardian of health, safety and

the environment Doing what is right

Values Commitment Humility Diversity Entrepreneurship

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Results

The information obtained from the Participatory Social Diagnosis was used as the basis for various actions to enhance the company’s sustainability management. A list of the main actions follows. To facilitate comprehension, they were grouped didactically into two blocks:

enhancing impact management: description of how leaders are already applying the results of the Diagnosis to the process of managing the effects from our operations on communities, with a focus on reducing the potentially negative aspects and on replicating the positive results.

defining strategic guidelines: presents the evolution in the policies, action plans and positioning of Biosev for which the Diagnosis was the starting point, combined with other studies, references and parameters.

Enhancing impact management

Fostering local economies Despite the wide variety of socioeconomic profiles of the regions where Biosev

operates, one element is common to all the municipalities: the economic boost produced by the activities, whether through job creation, demand for local products and services or higher tax receipts. Using the information from the Diagnosis, Biosev has been systematically exploring other facets of its commitment to make local businesses and development more dynamic by coordinating with various social players.

In the municipality of Rio Brilhante (MS), for example, the Company served as the link between the creativity of the local government with the expertise of the National Industrial Training Service (SENAI). Because it lacked adequate facilities, the city was not served by any of the technical/vocational programs offered by the organization. Supported by Biosev’s coordination, the local government provided trucks adapted to function as schools, which were used to train local residents to work as administrative assistants and agricultural machinery maintenance technicians.

Use of vinasse The waste from the fermentation of cane to produce ethanol is nutrient-rich and, if used

as a complement to other fertilizers, can improve soil conditions and increase yields. Its use, however, requires some care, and must take into consideration the risks of contamination of bodies of water, as well as the substance’s strong smell, which can affect communities. Focusing on these aspects, Biosev has been studying processes for handling and using vinasse in its agroindustrial units, such as by adopting concentration processes (removal of water) for the substance and alternative application methods, without depending on irrigation channels. Consultations made during the Diagnosis are being taken into consideration to improve these processes.

Fires

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Biosev actively works to reduce and control natural fires and arson on its agricultural properties. Through a structured study that began at the Ribeirão Preto Cluster, the Company worked in partnership with the Environmental Police and the Brazilian Agribusiness Association of the Ribeirão Preto Region (Abag) to raise awareness and train suppliers on fire prevention activities. The Diagnosis confirmed the topic’s relevance to communities and indicated the potential engagement of the population in prevention efforts. The Company has already put into practice certain engagement measures. The Company conducted a broad campaign to publicize the Talk to Biosev channel (telephone 0800 940 9199), which included the installation of signs instructing the population to use the free and anonymous channel to alert about the occurrence of fires or report suspicious activities.

DID YOU KNOW? That fire is different from burning?

A fire in the field is any uncontrolled fire affecting the vegetation. It may be caused by human activity (whether due to carelessness, negligence or on purpose) or by natural causes, such as lightning, for instance.

Burning is an agricultural or forest practice adopted by some producers, where fire is used in a controlled manner to clean a cultivation area and destroy the waste from production activities.

To help prevent and fight fires, call the number below to report fires or any suspicious activity:

0800 940 9199 (Talk to Biosev) Safety The topic is a priority for Biosev and its management is constantly being improved.

Actions are structured under the Integrated Safety, Health and Environment Program (Prisma), which consists of 14 guidelines and 77 requirements and procedures to orient the conduct of employees and suppliers across the entire operation. Prisma also includes specific orientations for higher-risk activities (e.g., working at heights, with electricity and in confined spaces) and on the use of personal protective equipment.

The Company’s commitment to the topic has been yielding positive results, with a decline in total recordable and lost-time injuries and an overall reduction in the injury frequency rate.

The introduction of the Vehicle Safety Program is another initiative that already is bearing fruit. All vehicles are equipped with telemetry and monitoring systems, which provide complete information on vehicles and drivers. With this information, managers can adopt more effective measures for reducing the number of accidents. In just a few months, the program has already proved its effectiveness, with no fatal traffic accidents registered in the period.

Environmental preservation Neighboring communities present a high level of awareness with regard to biodiversity

conservation and the recovery of degraded areas, as well as of Biosev’s positive impacts on the care of the Permanent Preservation Areas (APP) located on lands under its management.

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Another relevant point raised by the Diagnosis was the company’s potential to foster environmental preservation through local partnerships and campaigns to raise awareness, promote engagement and mobilize suppliers.

DID YOU KNOW?

Sugarcane cultivation is beneficial for the environment, because it retains water in the soil, recovers nutrients and microbiology, conducts photosynthesis and reduces the risk of erosion.

Permanent Preservation Areas (APPs) are protected areas, whether public or private, rural or urban, whether or not covered by native vegetation, used to protect the soil and, especially, riparian vegetation (i.e., bordering streams and rivers). They were created by the Brazilian Forestry Code (Federal Law 12,651 of 2012) and serve to preserve water resources and biodiversity.

Truck traffic If, on the one hand, the coming and going of production produces wealth, on the other

hand, it causes trouble for cities, especially smaller ones, which are more likely to have insufficient logistics infrastructure, which is characteristic of the Brazilian production system. Dirt roads are the source of one of the main impacts of this activity: dust. To deal with this problem, Biosev promotes actions such as systematically spraying water on the roads used for sugarcane transportation.

The Participatory Social Diagnosis, which identified the relevance of the topic to strategic stakeholders, led to the decision to adopt the procedure at all units of the Company as of the 2016/17 crop year. A detailed study, cluster by cluster, is also orienting the definition of action plans for managing sugarcane transportation more efficiently.

With a focus on safe circulation, the vehicles in the fleet used to transport cane are equipped with a tracking system that permits the active management of the operations, which includes establishing speed limits in high-risk areas and issuing warnings when speed limits are exceeded.

DID YOU KNOW?

Around 70% of the sugar exported by Biosev is transported inside Brazil by train. Rail transportation, which is considered to have a lower impact, is used whenever possible.

Herbicides and pesticides: the Diagnosis demonstrated the interest of communities in

the topic, especially with regard to information on application methods, contamination risks and effective management actions.

In addition to rigorously complying with environmental laws governing the use of herbicides and pesticides, Biosev trains its employees and suppliers on the proper way to apply products and the correct use of Personal Protective Equipment (PPE). It also supplies equipment to the professionals who work on the properties under its management.

To provide more information to communities regarding the safe use of herbicides, Biosev already has planned for the 2016/17 crop year to reinforce the topic and clarify any questions regarding potential impacts and the risk management strategies and good practices adopted by the Company. With a focus on training and raising awareness among suppliers and

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operating teams, a specific publicity campaign will be conducted for the agricultural aviation program.

DID YOU KNOW?

Herbicides are chemical compounds that eliminate or delay the growth of weeds, which can hinder the development of sugarcane fields and reduce production. Herbicides may be applied manually or aerially, depending on the size of the area and applicable laws. Their use is governed by legal and technical standards to ensure their safe and effective use.

The aerial application of herbicides and pesticides requires a study of specific weather conditions. The aircraft are equipped with GPS navigation, which ensures the proper application, respecting the minimum distance from communities or populations living close to the plantations.

Indigenous lands Biosev has a Corporate Policy on Indigenous Land that establishes a prohibition on the

leasing of indigenous lands and the purchase of sugarcane cultivated on such lands. Twice a year, the Company conducts geo-referencing of its production areas in the state of Mato Grosso do Sul, a state with a higher concentration of indigenous peoples, to ensure compliance with the policy. The Internal Social Responsibility Policy provides for the formulation and execution of an engagement plan that includes the indigenous communities and maroon settlements (quilombos) that exist near the Company's operations.

Defining strategic guidelines

INTERNAL SOCIAL RESPONSIBILITY POLICY Biosev formalized guidelines for executing its social actions in a more structured manner

in the regions where it operates. The guidelines are compiled in the Internal Social Responsibility Policy. Published in August 2016, the document defines the social programs in which the company will participate and orients the support for social initiatives that are aligned with the business. It also establishes rules for donations, social investment, sponsorships, community relations and social responsibility. Its goal is to promote and encourage ethical and transparent relations with communities and in turn contribute to local development through the creation of shared value.

Within this rationale, the use of tax incentives also was restructured. The Company defined the criteria for orienting the project assessment and selection process, which began to be conducted through Public Calls for Incentivized Projects, which is a simplified bid process that is accessible also to small social organizations and helps to ensure transparency in the selection process.

The incentives are allocated to projects that promote sports and culture. The scope of each topic must prioritize actions involving health, nutrition and quality of life, as well as environmental education or expressions of the local culture of the regions in São Paulo state where Biosev operates. The sponsorships are developed under the Tax Incentive Laws made available to Biosev each year.

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Transparency

Clear communication of the criteria for selecting initiatives and of the focus of the Company's social efforts helps to respond directly to the needs for information identified by the Diagnosis.

After the close of the submission period for each Public Call (the first lasted from

January to February 2016), the Internal Project Selection Committee is responsible for assessing and selecting the projects, as well as for monitoring their implementation. The committee is formed by the leaders of each unit and is supported by the Social Responsibility, Communication, Human Resources and Health, Environment & Safety (HES) departments.

The policy also defined the roles and responsibilities for the Social Responsibility department and establishing some orientations for the execution of activities. These included building and executing a Stakeholder Engagement Plan, which was completed in January 2016. The area is committed to conducting studies and research to map stakeholders and identify the impacts caused by the Company. Its responsibilities include managing actions arising from the voluntary commitments that Biosev comes to undertake and creating strategies for orienting the partnerships with municipal governments. It also is responsible for providing support to other departments on matters related to social issues and to local communities.

Sponsorships

Biosev invests in cultural and sports projects focusing on the topics of health, nutrition, quality of life, environmental education or strengthening the culture of local communities. The projects to be supported are selected annually and developed in accordance with the tax incentives available.

To learn more or register your project, visit:http://www.biosev.com/sustentabilidade/responsabilidade-social-corporativa/programas/

http://www.biosev.com/sustentabilidade/responsabilidade-social-corporativa/incentivos-fiscais/.

CORPORATE SOCIAL RESPONSIBILITY PLATFORM The Internal Corporate Social Responsibility Policy established the Social Responsibility

Platform, which is a channel for guiding social initiatives that adopts criteria to unify the efforts of each unit and through which the Company already operates. We created four social programs for the platform, which focus on creating shared value and strengthening the relationship of trust with communities by coordinating partnerships.

The four programs are: Environmental Education, Health Education, Community Integration and Citizenship Participation.

Environmental Education The Environmental Education Program includes two projects: The Environmental

Education Centers (EEC), whose projects focus on disseminating sustainable practices among schools, teachers, students, social organizations and other publics in local communities; cultural projects with environmental themes that draw on tax incentives; and environmental education actions at all units. The goal is to promote environmental education in local schools and communities on a permanent basis.

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Health Education Health and safety are key values for local development and a priority to Biosev. The

topic, with a focus on employees and suppliers, is managed through the Integrated Safety, Health and Environmental Program (Prisma), and includes guidelines for conduct and practices to eliminate accidents. Biosev also organizes for its employees a monthly calendar of health information campaigns that address important topics, such as STDs/AIDS and the prevention of breast and cervical cancer.

For the local community, the actions focus on information and prevention. One example is Health Week, which is organized in partnership with various local agents, which include municipal governments, universities, the National Industry Support Service (Senai), social organizations, drugstore chains, suppliers and clients.

Using funding from tax incentives, Biosev also supports sports projects to promote health and quality of life.

Community Integration The Community Integration Program was designed to improve stakeholder relations

through actions that integrate employees, communities, municipalities and non-governmental organizations. It involves processes to bring communities and Biosev closer together.

One example is the Program Experience, Understand and Replicate (V.E.M.), in which Biosev opens its doors to welcome visits from groups in the community. The events are organized regularly and scheduled in advance. Visitors can tour the Company’s facilities, learn about the production cycle and the versatility of sugarcane and receive information on practices, especially those related to managing safety, the environment and social responsibility.

Another highlight was the creation of Talk to Biosev. The nationwide channel, which is available to the general public through the toll-free number 0800 940 9199, handles requests for information, complaints, reports of violations and reports of emergencies involving the Company. The calls, which are managed by an independent company, are confidential and forwarded to local managers, who are responsible for directing and resolving the demands.

Furthermore, the EntreNós Inclusion Program was launched to foster greater participation in the Company by professionals with disabilities and women. In the first stage of the Program’s implementation, Biosev strengthened its relationship with the municipal government and local social organizations to identify persons with disabilities who live near its units. The goal is to create a database of the résumés of persons with disabilities who are interested in working at Biosev, who may be invited to work at the Company when new positions become available.

Citizenship Participation The Citizenship Participation Program proposes opportunities for Biosev to participate in

the dynamics of local communities through social campaigns and support for projects that foster local development and value the regional culture. Projects that use tax incentives must be aligned with the Internal Social Responsibility Policy.

The program also encourages volunteer work by employees in initiatives that benefit the community. Participation reflects key elements of the Biosev Spirit, such as teamwork and

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playing a leading role, and reinforces the engagement of teams in the Company's purpose of strengthening relations with communities.

Another objective of Citizenship Participation is to give a more strategic focus to Biosev’s efforts in initiatives to improve the industry and in national and international agreements to promote good practices, which further strengthens its commitment to the sustainable development of businesses. In terms of industry engagement, the Company participates in the discussion forums and committees of industry organizations, such as the Sugarcane Industry Association (Unica).

STAKEHOLDER ENGAGEMENT PLAN The document is aligned with Biosev’s social responsibility positioning and represents an

important advance in promoting its stakeholder relations. The document was drafted to systematize the dialogue and relationship processes with the Company’s existing stakeholders, to create new relationship actions and to define the roles and responsibilities for achieving them. Based on the Plan, the communication channels with clients, social organizations, municipal governments, employees, suppliers, the media and other players in society work together to strengthen relations and promote their shared development.

The Engagement Plan created was supported by the mapping of stakeholders, under the scope of the Participatory Social Diagnosis, which also helped to identify the material topics to be addressed proactively in the dialogue. The Plan also drew on the following:

the performance standards of the International Finance Corporation (IFC), the arm of the World Bank Group that promotes development in emerging markets (see table); and

elements of the methodology of the Global Reporting Initiative (GRI), the main global reference for sustainability reporting that is used to prepare the sustainability report published every crop year.

The plan provides for three levels of engagement, to be adopted in accordance with the

different steps and specificities of the relationships of all Biosev areas with stakeholders:

inform: consists of providing correct, balanced, objective, accurate and consistent information on the Company’s operation and its role in the production chain;

consult: seek to learn stakeholders’ demands and needs through in-person or distance activities that support the free expression of opinions;

involve: consider stakeholder’s demands and needs in the company’s decision-making and actions, as well as the company’s real or potential impacts on society, whether negative or positive, through periodic dialogue.

To reinforce practices, the Plan also provides for the development and training of the

leaders of operating units to prepare them to act on a day-to-day basis to promote relations with local communities, governments, social organizations and other local social actors.

External boost The International Finance Corporation (IFC), the financial arm of the World Bank, is the largest global development institution focusing on the private sector in developing nations. It operates in over 100 countries to advance corporate governance, environmental care and the development of local communities in emerging markets.

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With the IFC becoming, in 2014, a relevant shareholder in Biosev, with a 5.8% interest, the Company was able to draw on the institution’s expertise in matters related to managing social and environmental risks. The IFC’s Performance Standards on Environmental and Social Sustainability provide guidance on, for example, the identification of risks and impacts with a view to enhancing the business. They served as a reference for defining the strategies for reporting on projects to the community and for regularly engaging strategic stakeholders. The IFC’s commitment also has been guiding the improvements made in supply chain management, which is being completely rethought through a structured process.

Use as highlight on the final page.

EYE ON THE FUTURE

“The Participatory Social Diagnosis marked an important step in the evolution of our strategic sustainability efforts. It allowed us to gain in-depth knowledge on how local communities and other strategic stakeholders see our activities and on their expectations and topics of interest. We also gained an even clearer understanding of our social, environmental and economic impacts and of the potential for creating shared value from these relationships.

The methodological consistency of the process provided us with high-quality information that is helping to define our guidelines and positioning, which will support improvements in our social efforts and concrete results. Progress already can be perceived in topics such as managing operational impacts, local economic development, private social investment or stakeholder engagement, among others.

Our challenge now is to keep our eye on the future and to continue on the path of progress that has marked our history. Constant evolution lies at the root of the Company’s management and is what drives us towards the vision of becoming the industry leader, while conducting all activities in the best possible way and working to always be a strong and sustainable company."

Rui Chammas

Chief Executive Officer

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Profile and accomplishments1

The company

BIOSEV IN NUMBERS 16,800 employees 1,300 sugarcane suppliers Products: sugar, ethanol, power, animal feed, yeast and powdered molasses Production capacity:

2.5 million tons of sugar 1.6 million m³ of ethanol 1,300 GWh of power

Mechanization: 93.1% of planting and 96.9% of harvesting

Pie chart Net revenue by market (2015/16 crop year) Domestic market: 58.5% Export market: 41.5% Pie chart Net revenue by product (2015/16 crop year) Sugar: 37.3% Ethanol: 33.6% Cogeneration: 25.3% Other: 3.8% Highlights Training and development Investment of R$1.8 million Average training per employee: 41 hours Energy for Brazil During the 2015/16 crop year, Biosev produced 929 GWh of surplus energy from cane

bagasse, enough to meet the annual household consumption of more than 1.8 million people. That is equivalent to supplying a state capital such as Curitiba (PR) or 4.5 times the city of Santos (SP).

Technology 3 million pre-sprouted seedlings

1 Data for the 2015/2016 crop year.

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Investment of R$33.6 million in research and development

VEHICLE SAFETY

No fatal accidents

95% decline in speeding tickets* 59% decline in total recordable injuries* 55% decline in total lost-time injuries* Decline in injury frequency rate: from 15.96 to 12.32* *Compared to the previous crop year.

Social action

DRIVING LOCAL ECONOMIES

Payments of taxes and fees: R$619.8 million

Investments in the community: R$643.8 million

Wages and benefits: R$594.4 million

Job creation: 16,800 direct employees (10.26% more than in the previous crop year, due to the decision to retain people who before were contracted only for the harvest period)

Service providers: nearly 3,000 professionals

ENVIRONMENTAL EDUCATION

Culture Trails Project, with the theatrical performance “Planeta Água: Um Mundo Sustentável” (Water Planet: A Sustainable World), in the cities of Leme, Morro Agudo and Colômbia. The project is a partnership with the São Paulo State Government. The performance targets children and, in an entertaining way, raises awareness on environmental preservation and wasting natural resources.

Árvore da Vida Project, in partnership with FMC

Environmental awareness actions and the donation of recycling bins to schools, as well as a game for promoting donations of recyclable materials to help recyclable-material collectors.

Support for the actions held during the Environment Week event organized by the Municipal Government of Sertãozinho (SP). Biosev is a partner of the initiative, whose goal is to promote reflection on the environment through awareness-raising activities, games and prizes.

Campaign to combat arson conducted in four cities in the Northeast region: Utinga (BA), Centro de Pedras de Fogo (PB), Imbiribeira (PE) and Jangada (PB). The action also involved presentations on the topic and the dissemination of informational material, which is also supported by Energisa, the power distribution utility for Paraíba state.

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HEALTH EDUCATION

Health Week in Arez (RN): consultations provided to 1,700 employees and 1,600 people from the community with guidance on oral health, nutrition and dengue fever, blood pressure exams, hearing tests, issue of documents, etc.

Health Week in Pedras de Fogo (PB):

COMMUNITY INTEGRATION

Inclusion Project Entre Nós to value diversity (focus on gender and persons with disabilities).

Professional training to local residents.

Talk to Biosev (toll-free 0800 940 9199): direct and confidential communication.

CITIZENSHIP PARTICIPATION

Drive to collect toys and books for donation to social, health or education organizations, seeking to create toy libraries or improve existing ones.

To value and promote regional culture, Biosev sponsored the Viola Guitar Orchestra Project – Me, Them and the Viola Guitar, which drew on tax incentives, in São Joaquim da Barra, Morro Agudo, Sertãozinho, Leme and Barretos, all cities in São Paulo state.