Fibria Celulose SA : Transactions with Related Parties Policy

FIBRIA CELULOSE S.A.

The current Transaction Policy with Related Parties ("Policy") has the objective to define the procedures to be followed by Fibria Celulose S.A. ("Fibria" or "Company"), its subsidiaries, associated parties, joint operations and partnerships where the Company has a significant influence, as well as its employees, management and shareholders as they implement operations with related parties in situations where there is a potential conflict of interests, in order to preserve the interests of the Company, allied to the transparency of the processes and best practices of Corporate Governance.
In addition to guaranteeing that decisions are made by the management in an adequate and diligent manner, this Policy also has the following objectives:

 Guarantee that these transactions are carried out in compliance with the market conditions, according to the definition below, especially in reference to terms, prices and guarantees, and that such transactions are contracted under strictly commutative conditions, and, whenever applicable, for an adequate compensatory payment; and

 Insure that the transactions with related parties are disclosed and reflected in the reports of the

Company, in a correct and comprehensive manner, in full compliance with the current legislation.
This Policy is part of the internal controls and the Corporate Governance of Fibria Celulose S.A. and, in addition to this Policy, employees, management, and shareholders of the Company must observe the provisions outlined in Fibria's Code of Conduct.
The Board must disclose the current Policy to the employees and management of the Company and promote adherence to it.

This policy applies to Fibria, its subsidiaries, associated parties, joint operations and partnerships where the Company has a significant influence, as well as its employees, management and shareholders as they implement operations with related parties in situations where there is a potential conflict of interests

CPC - Accounting Pronouncement Committee
CVM - Securities Commission
IAS - International Accounting Standards
IFRS - International Financial Reporting Standards
SEC - Securities and Exchange Commission, from the United States of America
According to the current regulations issued by the CPC and IASB, which have been fully ratified by CVM, dealing with the matter referred to by this Policy, the following definitions are utilized:

 Related partyis the person or partnership that is related to the Company that is preparing its accounting statements (in this case, Fibria and/or its subsidiaries).

a) An individual or a close family member, is related to the Company if he or she: (i) has full or shared control of the Company;
(ii) has a significant influence in the Company; or
(iii) is a member of the key personnel in the administration of the Company or the Parent
Company.
(i) b) A partnership is related to the Company if:the partnership and the Company are members of the same economic group (meaning that the parent company and each subsidiary are inter-related, as well as the entities under common control are related to each other);
(ii) the partnership is associated to or jointly controlled (joint venture) by a third partnership (or associated to or jointly controlled by a partnership that is member of an economic group where the other partnership is member of) and the Company is an associated party to or controlled by this third party partnership;
(iii) the partnership and the Company are under the joint control (joint ventures)of a third partnership;
(iv) the partnership is under the joint control (joint venture) of a third entity and the other
entity is associated to this third entity;
(v) the partnership is a post-employment benefit plan whose beneficiaries are employees of both partnerships, the Company and the partnership that is related to the Company. If the Company is itself a post-employment benefit plan, the employees that contribute to it will also be regarded as related parties;
(vi) the partnership is controlled fully or in a jointly manner, by a person identified in letter (a); (vii) a person identified in letter (a)(i) has significant influence over the partnership, or is a member of the key personnel in the management of the partnership or the controller of
the partnership.

 Transaction with a related partyis the transference of funds, services or obligations between the Company and a related party, regardless of the amount of the transaction, or if an amount is charged as payment compensation.

 Close family members of a person described in item "a" above, are those family members where it can be expected that they will have an influence or be influenced by the person acting in the business of these members with the partnership and include:

(a) the person's children, spouse or partner;
(b) the children of the person's spouse or partner; and
(c) the person's dependents, his or her spouse or partner.

 Compensation includes all the benefits paid to employees and management (according to what is defined by Technical Statement CPC 33 -Benefits to Employees), including the benefits within the scope of Technical Statement CPC 10 -Payment Based on Stocks. Benefits to employees

cover all forms of paid compensation, to be paid, or provided by the Company, or on its behalf, in exchange for services that are provided to it and include:
(a) short-term benefits to employees and management, such as: wages, salaries and social security contributions, paid leave and sick pay, profit sharing and bonuses (if paid during the period of twelve months after the closing of the corporate year) and non-monetary benefits (such as health insurance, housing, free or subsidized cars or other goods) to current employees and management;
(b) post-employment benefits, such as pension, other retirement benefits, post-employment life insurance and health plan;
(c) other long-term benefits, including leave for worked years or sabbatical leaves, anniversary or other benefits for seniority, long-term disability benefits and, if they are not fully paid during a period of twelve months after the closing of the corporate year, profit sharing, bonuses and deferred compensations;
(d) benefits related to the rescission of labor contracts; and
(e) compensation based on stocks.

 Controlis the power to manage financial and operational policies of a particular entity in order to obtain benefits from its activities.

 Joint-controlis the sharing of the control over an economic activity agreed upon by contract.

 Key management personnelare the individuals that have the authority and responsibility for the planning, management and control of the activities of the Company, directly or indirectly, including any member of the management (executive or other) of the Company.

 Significant influenceis the power to participate in the financial and operational decisions of a particular entity, without the characterization of control over this policy. A significant influence can be acquired by the means of a corporate interest, provisions of statutory or shareholders agreement.

 Staterefers to the government in its wide meaning, government agencies and similar organizations, be they municipal, state, federal, national or international.

 Entity associated to the Stateis the entity controlled by the State, fully or jointly, or the entity that is significantly influenced by the State.

 Still, according to the current regulation, the following are not considered to be related parties:

(a) two partnerships that simply have a manager or other member of the key management personnel in common, or when a member of the key management personnel exercises a significant influence over the other;
(b) two investors that simply share the joint control in an enterprise that is jointly controlled
(joint venture);
(c) partnerships that provide financing; (d) unions;
(e) partnerships that provide public services;
(f) State departments and agencies that do not fully or jointly control, or exercise significant influence in the Company in view of their usual businesses with it (even if they might affect the freedom of action of the entity or participate in its process to make decisions);
(g) client, supplier, franchiser, dealer, distributor or general agent that that Company has a significant business volume with, merely as result of consequent economic dependence.

 Market Conditionsrefer to the conditions existing in business transactions based on the market competition and the law of supply and demand, practiced by the independent parties and without any influence from the involved parties.

In transactions with related parties, the same principles and rules that guide other negotiations carried out by the Company must be observed, as well as those carried out by its subsidiaries, associated parties, joint ventures and partnerships where the Company has a significant influence in, with independent parties, following the rules established by the Company's Code of Conduct and Law 6.404/76.
Furthermore, the transactions must follow market conditions or, if there is no market parameter, follow previous similar transactions, commutative and, as applicable, with an adequate compensatory payment, observing what is set forth by this Policy.
Transactions and existing inter-companies balances with related companies are eliminated in the preparation of consolidated accounting statements of the economic group.

The departments responsible for the contracting/demand involving related parties can forward to the Evaluation Group for Transactions with Related Parties, by the means of the e-mail described in item 9 of the current Policy, their questions and inquiries about transactions to be made or already made, listing the main characteristics of the transaction.
Transactions with related parties will be celebrated in writing by the means of: (i) contract; (ii) addendum; (iii) purchase order ("PO"); and/or (iv) supply agreement ("S/A")according to what is established by the Contract Management Policy (PC 04.014), detailing the main characteristics and conditions, such as price, terms, guarantees, taxes, among other things that become necessary due to the specificity of the intended business.
Contracting established with related parties will occur by the means of proposal requests to 3 (three) companies with similar technical capability, and the conditions that best meet the objective of the contracting will prevail. Cases that allow a single proponent and that such proponent is a related party, will be detailed and adequately justified, and the object of a specific evaluation.
In case there is a need to evaluate the market, transactions with related parties will be based on market quotes from independent parties, and/or, in some cases, independent expert opinions prepared having as basis realistic premises and information backed up by third parties; the latter cannot originate from the parties involved in the operation, be they banks, attorneys, specialized consulting companies or other companies.
The Company must make all the necessary efforts to give greater transparency to the terms and conditions in transactions with related parties.

The following transactions with related parties are prohibited:
(a) Those carried out in circumstances that are adverse to market conditions in a way that the interests of the Company are harmed;
(b) Participation of the collaborators and administrators in a business of a private nature or
in a business that interferes or presents a conflict with the interests of the Company or results in the utilization of confidential information acquired as result of the exercise of the office or function that they occupy at the Company;
(c) Those implemented at a lost for the Company, favoring an associated, subsidiary or parent company, understanding that the transactions between these parties must observe strictly commutative conditions;
(d) Those foreign to the corporate objective of the Company and/or that do not observe the limitations set forth in the By-laws and in the regulations established by the Management of the Company; and
(e) Granting of loans and guarantees to Controlling Shareholders and Management.

In compliance with the Company Shareholders Agreement, a favorable opinion by BNDESPAR (shareholder) is necessary, by the means of a Meeting before the transaction, for any operation between the Company and/or its subsidiaries, on one side, and any related parties, on the other, for an amount higher than R$ 20,000,000.00 (twenty million BRL) per year, except contracts (i) for the commercialization of electrical power, shared services (such as administrative, financial, logistics and information technology) between companies of the same economic group, up to a global annual amount of R$ 80,000,000.00 (eighty million BRL); (ii) financial investments at market conditions for up R$ 200,000,000.00 (two hundred million BRL); and (iii) contracts for the protection of cash flow with a global exposition for the amount of R$ 100,000,000.00 (one hundred million BRL).

According to the terms of current regulations, the Company must promote an adequate disclosure to the market referring the relationship and the transactions between the Company and its related parties, regardless if it existed or not transactions between these related parties or if such transactions have not been consummated, with sufficient and complete information,
allowing to the shareholders the possibility to monitor and follow the management acts of the
Company.
The disclosure must be made, in a clear and precise way, in the explanatory notes to the Financial Statements, respecting conditions that provide enough details for the identification of the related parties and any essential and non-commutative conditions inherent to the mentioned transactions, according to what has been set forth by CVM Decision No 642/2010, which approved Technical Statement CPC 05 (R1), in a way to allow to shareholders to exercise the right to monitor and oversee the management acts of the Company, without any prejudice to the duty to promote its broad disclosure to the market, whenever the operation involves a relevant fact or at the time the Financial Statements are disclosed.
The Company also has the duty to promote the divulgation to the market of Transactions with Related Parties, in the terms set forth in the Listing Rules of the Novo Mercado segment of BM&F Bovespa, in reference, especially, to the additional requirements for Quarterly Information (ITR), and also according to the terms of CVM Instruction No. 480/2009, Attachment 24, that deals with the content of the Reference Form.
Furthermore, in compliance with Section 13 or 15(d) of the Capital Markets Law of 1934 from the USA, the Company must disclose on a yearly basis its information using Form20-F from the SEC, which has detailed information about the transactions involving the related parties of the Company.
The Accounting Department must promote the full and correct disclosure at the explanatory notes of the Financial Statements and Quarterly Information and, Investors Relations Department, at the Reference Form and as Material Fact, whenever the operation falls under the terms of the applicable legislation.

A conflict of interests occurs when one party is involved in a decision process where it has the power to influence the final result a insure gain for itself, a family member or a third party that it is involved with, or still, that might interfere with its judging ability. A potential conflict of interests is characterized when one party is not autonomous in relation to the issue under discussion and can influence or make decisions motivated by interests that are distinct from the interests of the Company.

In relation to the occurrence of eventual conflict of interests regarding the members of Group Evaluating transactions with related parties, the member must refrain from discussing the matter at hand and immediately report the eventual conflict to the others members of the Group.

Whenever an issue of this nature is identified, the Directors must immediately report its conflict of interests. Additionally, they must also be absent during the discussions about the theme and refrain from voting. If requested by the Chairman or by the Chief Executive Officer, the directors can partially take part in the discussion, with the purpose to provide further information about the operation and the involved parties. In this case, they must be absent during the final part of the discussion, including the voting process of the matter. If any Director or Executive Director, that might potentially receive a private advantage resulting from a decision, fails to report his conflict of interests, any other member of the agency that he belongs to that is aware of the situation can do it. In this case, the failure to voluntarily disclose the information is characterized as a violation, and it will be taken to the Statutory Audit Committee to be evaluated so that an eventual corrective action might be proposed to the Board of Directors. The occurrence of the conflict of interests' situation and the subsequent abstention must be listed in the meeting minutes.

With the objective to foster the compliance with the directives set forth by this document, the Group Evaluating the Transactions with Related Parties ("Group") can be accessed by the means the communication channel partesrelacionadas@fibria.com.br. The Group will be composed by the following departments of the Company: Governance, Risks and Compliance (GRC), Legal, Supplies, Treasury, Controllership and Contract Management.
The Group will have the following responsibilities:
(a) Disclose the Transactions with Related Parties Policy to the employees of the Company and promote its compliance;
(b) Discuss and interpret cases where there are questions about the possible
characterization of transactions with related parties;
(c) Propose recommendations about the analyzed cases and procedures that must be observed.
The Group will meet anytime a negotiation with related parties is reported, according to the terms and conditions set forth by the Conduct Code of the Company and/or when it is necessary to accomplish its objectives.
The Group might invite other participants to advise and provide clarifications at the meetings, being the responsibility of the collaborators that are not members of the Group to provide all the support that is necessary for the proper progress of the tasks.

a) The parties responsible for the contracting/demand of any transactions with related parties must identify the transactions with related parties, in accordance to what is established by this Policy;
b) Fulfill the recommendations of the item "Formalization", above;
c) Discuss with the Group the cases where there are questions about the possible characterization of transactions with related parties;

This Policy is aligned to the requirements of Law no. 6.404/1976, especially in reference to the necessary Directors Duty for Loyalty to the Company. According to Article 155, the Management must serve the Company with loyalty, making sure that the interests of the Company always overrule personal interests of the decision makers.

The Group Evaluating transactions with related parties will update, on a frequent basis, this Policy, especially in reference to, but not limited to, changes in its articles and the law, normative alterations by CVM and the definitions utilized in this Policy, changes and/or complementation resulting from recommendations by good practices of corporate governance and alterations in the regulations of BM&FBOVESPA for the segment where the Company is listed under, submitting it for the evaluation and approval by the Board of Directors. The present Policy becomes effective on this date.

It is the duty of all employees, managers and shareholders of the Fibria Group to observe this
Policy as well as the provisions of Fibria's Code of Conduct.
The management should disseminate this Policy to employees and other managers at Fibria and promote its observance.

(i) Absence of internal procedures related to the identification and appropriate handling of transactions involving parties related to the Company, its subsidiaries, associated parties, joint ventures and partnerships where the Company, its employees, management and shareholders have a significant influence;
(ii) Absence of risk management and flaws in internal controls that mitigate risks associated to parties related to the Company, its subsidiaries, associated parties, joint ventures and partnerships where the Company, its employees, management and shareholders have a significant influence;
(iii) Distortion of the Company's financial information, including the Quarterly Information - ITR, Yearly Financial Statements, Standard Financial Statements, Reference Forms and Forms 20F of SEC, based on an incorrect classification and presentation, absence or omission of transactions with related parties involving the Company, its subsidiaries, associated parties, joint ventures and partnerships where the Company has a significant influence, according to the regulations, statements and interpretations issued by the Accounting Pronouncement Committee (CPC) and by the International Accounting Standards Board (IASB)for the IFRS, and ratified by the Securities Commission (CVM).

Annex 1 - Legislation and rules in use
Annex 2 - Workflow Of Approval And Update

 Law and Regulation

 Law 6.404/1976 -Joint Stock Law;

 Listing Regulations for New Market of the Stock, Commodities and Futures Exchange.

("BM&FBOVESPA"), in effect from 05/10/2011.

 CPC, CVM, IFRS and SEC

 Technical Statement CPC 05 (R1) - Related Parties Disclosures;

 IAS 24 - Related Party Disclosures;

 CVM Deliberation no. 642/2010 -Approves Technical Statement CPC 05 (R1) from the

Accounting Pronouncement Committee - CPC about the related parties disclosure;

 CVM Instruction no. 480/2009 - Deliberates about the registration of securities issuers admitted to the negotiation at regulated securities markets (Attachment 24 - Content of the Reference Form);

 Section 13 or 15(d) of the Capital Markets Law of 1934, of the United States of America

(SEC 1852)

 Fibria's official documents

 Code of Conduct

 Shareholders Agreement of Fibria Celulose S.A.

First Issue of this policy as approved in the Ordinary Meeting of the Board of Directors, held on
December 12, 2013.
Developers of this document: General Counsel and Executive Officer of Investor Relations and
Finance.
Approvers of this document: Chief Executive Officer - CEO and Board of Directors
For purposes of approval and update in our information system (DOL - document on line) the responsible will be:
Developer: General Counsel
Approver: Chief Executive Officer - CEO

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