Unaudited Condensed Consolidated Interim Financial Statements For The Six Months Ended 30 June 2019

Unaudited Condensed Consolidated Interim Financial Statements
For the six months ended 30 June 2019
Incorporated in Guernsey
Company Number: 47338
THE FOREST COMPANY LIMITED
TABLE OF CONTENTS PAGE
GENERAL INFORMATION 2
HIGHLIGHTS 3
INVESTMENT MANAGER’S REPORT 4
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL

POSITION 10
UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT 12
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OTHER

COMPREHENSIVE INCOME 13
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN

EQUITY 14
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH

FLOWS 16
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS 17
GLOSSARY 52
1
GENERAL INFORMATION
Board of Directors Registered Office
Rainer Häggblom (Non-executive Chairman) PO Box 286
Dr. Panu Kallio (Non-executive) Floor 2, Trafalgar Court
Howard Myles (Non-executive) Les Banques
Field Griffith (Non-executive) St Peter Port
GY1 4LY
Investment Manager Guernsey
Timber Capital Limited
Wessex House, 5th Floor Valuers
45 Reid Street Simosol Oy
Hamilton, HM12 Rautatietori 4
Bermuda 11130 Riihimäki
Finland
Guernsey Administrator to the Company
Estera International Fund Managers (Guernsey) Limited The International Stock Exchange
PO Box 286 Listing Sponsor
Floor 2, Trafalgar Court Estera Trust (Guernsey) Limited
Les Banques PO Box 286
St Peter Port Floor 2, Trafalgar Court
GY1 4LY Les Banques
Guernsey St Peter Port
GY1 4LY
Company Secretary to the Company Guernsey
Belasko Administration Limited
Hirzel House English Solicitors to the Company
Smith Street Gowling WLG
St Peter Port 4 More London Riverside
GY1 2NG London
Guernsey SE1 2AU
United Kingdom
Guernsey Advocates to the Company
Mourant Ozannes Independent Auditor
PO Box 186 BDO LLP
1 Le Marchant Street 55 Baker Street
St Peter Port London
GY1 4HP W1U 7EU
Guernsey United Kingdom
Brazilian Solicitors to the Company Tax advisors to the Company

Porto Lauand Ernst & Young S.A.
Rua Funchal, 263 - 4° andar Avenida da República 90, 3o
Vila Olimpia 1649-024 Lisboa
São Paulo Portugal
CEP: 04551-060
Brazil Identifiers
ISIN: GG00B4TC8Z57
Secondary trading broker Sedol: B4TC8Z5
Pareto Securities AB Ticker: FCO
Berzelii Park 9 FATCA GIIN: SNR7BX.9999.SL.831
PO Box 7415 Website: www.theforestcompany.se
SE-103 91, Stockholm,
Sweden
2
HIGHLIGHTS
FINANCIAL HIGHLIGHTS FOR THE SIX-MONTHS ENDED 30 JUNE 2019
FINANCIAL RESULTS
 Since inception, in local currency, the Company has generated an aggregate project, after-tax, IRR of
11.2% in Brazil and 12.5% in Colombia as of 30 June 2019.
 Revenue from sales for the period was USD 7.51 million (30 June 2018: USD 8.99 million), a decrease of
16.5%.
 An operating loss of USD 4.23 million, including unrealised gain on forest assets of USD 0.72 million,
down from a USD 8.33 million profit including an unrealised gain on forest assets of USD 9.13 million in
the same period in 2018.
 Loss for the period ended 30 June 2019 attributable to holders of redeemable shares amounted to USD
4.99 million (30 June 2018: gain of USD 6.88 million).
 Loss per share amounted to 9.74 cents based on the weighted average number of shares in issue (30 June
2018: gain of 13.44 cents per share).
 Total comprehensive loss for the period attributable to holders of redeemable shares amounted to USD
2.68 million (30 June 2018: loss USD 17.53 million), including a gain of USD 1.29 million relating to
foreign currency translation differences.
 Positive operating cash flow for the six-month period in 2019 of USD 0.38 million, compared to positive
USD 0.82 million in the same period in 2018.
FINANCIAL POSITION
 IFRS NAV was USD 187.96 million (31 December 2018: USD 190.63 million), a decrease of 1.4%. Adjusted
NAV was USD 207.59 million (31 December 2018: USD 208.94 million).
 IFRS NAV per share was USD 3.67 (31 December 2018: USD 3.72). Adjusted NAV per share was USD 4.06
(31 December 2018: USD 4.08).
 Interest bearing borrowings were USD 19.65 million at 30 June 2019 (31 December 2018: USD 17.26
million).
 The cash balance available for use as at 30 June 2019 was USD 3.66 million (31 December 2018: USD
3.47 million).
3
INVESTMENT MANAGER’S REPORT
NAV SUMMARY
The total IFRS NAV was USD 187.96 million as at 30 June 2019 and the IFRS NAV per share was USD 3.67.
The Adjusted NAV of The Forest Company as of 30 June 2019 was USD 207.59 million and the Adjusted NAV per
share was USD 4.06.
The overall 1% reduction of the period NAV results mainly from a decrease of USD 1 million in the charcoal assets
and of USD 3 million in other assets and liabilities, partially offset by an increase of USD 1 million in the valuation
of the Biological Assets and Land, and a 1% appreciation of the BRL against the USD (from USD/BRL 3.88 as at
31 December 2018 to USD/BRL 3.85 as at 30 June 2019). This FX movement had a positive impact of USD 2
million in the Group’s accounts, including the effect on Joint Ventures.
The forest assets generated an unrealised gain of USD 0.7 million during the six-month period. This gain results
from a decrease in the discount rate applied in the valuation model combined with revised wood flow projections
in the areas affected by the monkey attacks in Kaa. These positive effects were partially offset by a decrease in
the wood flow in Frondosa and Ibiraçu due to the ongoing harvesting operations.
OVERVIEW OF MAIN DEVELOPMENTS DURING THE PERIOD
During the period of six months ended 30 June 2019 the Company saw results in the following areas:
Harvesting operations
 Total harvested volumes were 9% below the same period in 2018 mainly due to a reduction of charcoal
production by 16% and lower harvesting volumes in Aimara and Kaa. These effects were partially
compensated by the Liasa contracts that were not in place in first half 2018.
 Total harvested volume was 357,673 m3.
New sales contracts

 As part of the diversification strategy followed by the company, two new contracts are being negotiated by
Frondosa and Ibiraçu to sell stumpage wood. The harvesting operations are planned to start in 2019 and
will continue until 2020.
4
INVESTMENT MANAGER’S REPORT (CONTINUED)
MACRO ENVIRONMENT IN THE INVESTMENT REGION
Brazil
Economic activity data continue to point to moderate growth. Continuous progress in pension reform will be
decisive for the further development of economic activity, as it could enable more monetary stimulus.
We expect the reform proposal to be ratified in the National Congress during the third quarter of 2019, without
further dilution compared to the current version. This proposal was approved in a second round by the House in
August, and should be approved in the Senate in September. The presence of a notional majority in Congress
which does not seem to be conceptually or ideologically opposed to the proposal, combined with the consensus
among opinion leaders and society regarding the need to restore the financial sustainability of the pension system
reinforce our confidence that the reform will be approved.
After exceeding a rate of USD/BRL 4.00 in May, the Brazilian currency appreciated subsequently and at 30 June
stood at USD/BRL 3.85, an appreciation during the period of almost 1.00%. The country risk perception measured
by the 5-year credit default swap has also recently retreated and ended the first half of 2019 below 150 bp (after
closing 2018 at 205 bp), partly reflecting optimism as the domestic adjustment and reform agenda continues. In
June the 12-month accumulated inflation rate decelerated significantly, from 4.7% to 3.4%.
At its June meeting, the Central Bank's Monetary Policy Committee (Copom) kept the base rate unchanged at
6.50% per annum, as widely expected. The announcement and minutes of the meeting paved the way for the
resumption of the monetary easing cycle at the July 30-31 meeting, conditional upon the “concrete progress” of
the reform agenda.
Colombia
The central bank unanimously chose to keep the benchmark interest rate at 4.25% in June. This now represents
the longest period of stable interest rates within the decade (14 months). The committee expects growth
momentum to accelerate during the second half of the year and inflation to return to the 3.00% target by 2020
as transitional shocks disappear, while external imbalances must be monitored.
Recent data exhibit a gradual recovery in growth. During the second half of 2017, GDP grew by 1.4%, while GDP
growth accelerated to 2.5% in 1H and 2.7% in 2H 2018. Average growth in the first half of 2019 is presumed to
remain at 2.7%, while market analysts forecast an increase of 3.2% for the second half.
The current account deficits are continuing to decline gradually, contributing to the modest appreciation of the
exchange rate during the first half of the year. The USD/COP rate was 3,211 in June, a 1.1% appreciation in
comparison to December 2018. Nevertheless, the pressure on oil prices caused by ongoing global tensions
continues to affect the exchange rate.
PROJECTS PERFORMANCE UPDATE
During the period of six months ended June 2019, the Company has continued focusing on achieving improved
operational performance while pursuing a diversification strategy by seeking to enter into contracts with
different end-user markets. After a significant improvement in 2018, the charcoal market has kept stable during
the first half 2019 in terms of demand and prices. The Company has focused on increasing production capacity
and production to benefit from the recovery of the market.
Since inception, in local currency, the Company has generated an aggregate project, after-tax, IRR of 11.2% in
Brazil and 12.5% in Colombia as of 30 June 2019.
5
Project performance during first half of 2019 can be summarized as follows:
FRONDOSA PROJECT The Frondosa Project is located in the Pirapora region

of Minas Gerais state in south-eastern Brazil.
LOCATION MINAS GERAIS, BRAZIL
YEAR OF INVESTMENT 2011 Frondosa harvested 198,945 m³ of standing wood in

the period.
OWNERSHIP 100%
No planting activities in the period but an area of 921
SPECIES EUCALYPTUS ha forecast to be planted during Q4.
END-USE CHARCOAL/ BIOCARBON
FOR PIG IRON PRODUCTION
TOTAL AREA 26,415 HA
TOTAL HARVESTED 3,363,643 M3

(INCEPTION TO DATE)
FSC CERTIFIED SINCE NOVEMBER 2013
PROJECT IRR 12.60%

(INCEPTION TO DATE)
IBIRAÇÚ PROJECT The Ibiraçu Project is located in the Pirapora region

of Minas Gerais state in south-eastern Brazil.
LOCATION MINAS GERAIS, BRAZIL
A significant part of Ibiraçu’s plantations have
YEAR OF INVESTMENT 2008
reached maturity and in June 2018
OWNERSHIP 100% the Company signed a 4-year contract for the delivery
of 517,500 m3 to a local silicon-alloy producer. A
SPECIES EUCALYPTUS second contract with that same buyer was signed in
August for the supply of 482,457 m3 of wood.
END-USE CHARCOAL FOR PIG IRON
PRODUCTION During the first semester the company harvested
78,221 m³.
TOTAL HARVESTED 166,383 M3

(INCEPTION TO DATE)
FSC CERTIFIED SINCE DECEMBER 2010
PROJECT IRR 6.30%

(INCEPTION TO DATE)
6
After the significant improvement in the charcoal
BIOCARBONO PROJECT market last year, when the company was positively
impacted by a strong rise in market prices and
LOCATION MINAS GERAIS, BRAZIL increasing demand, prices slightly adjusted
downwards during the first half 2019. Nevertheless,
YEAR OF INVESTMENT 2011 prices are still well above 2016 and 2017 levels.
OWNERSHIP 100% BioCarbono produced a total of 122,152 MDC and
sold 116,886 MDC compared to 138,144 in the same
END-USE CHARCOAL FOR PIG IRON period last year, a 15% decrease mainly due to
PRODUCTION lower operational capacity, caused by the delay in
building new operational units in Chapadinha and
TOTAL PRODUCTION 2,151,642 MDC
Sorte Grande as well as some productivity problems
(INCEPTION TO DATE)
with outsourced charcoal producers.
CHAIN OF CUSTODY CERTIFIED JANUARY 2018
SINCE The company continues to invest in new
carbonization assets as well as in existing
PROJECT IRR NOT APPLICABLE – PASS- production assets in order to improve efficiency and
(INCEPTION TO DATE) THROUGH VEHICLE FOR AB production volumes.
FLORESTAL
Aimara, the Company’s first greenfield project, began

AIMARA PROJECT to harvest at the end of 2015 and harvested most of
the mature areas in 2016. The residual volumes were
LOCATION PARANÁ, BRAZIL harvested from those areas in 2017 and during the
first half of 2018, following Klabin’s harvesting plan.
The Company has an off-take agreement with Klabin.
OWNERSHIP 80%
Currently 100% of the plantable area is planted and
SPECIES EUCALYPTUS harvesting operations are planned to start again in
2023.
END-USE PULPWOOD/ SAWLOGS
TOTAL AREA 2,809 HA

(INCEPTION TO DATE)
FSC CERTIFIED SINCE DECEMBER 2010
PROJECT IRR 11.20%

(INCEPTION TO DATE)
7
The Kaa project started in 2011 with add-on

KAA PROJECT acquisitions of neighbouring areas in the following
years. The main end market has been the sawmill
LOCATION PARANÁ, BRAZIL industry in Parana with a total of 1.2 million cubic
metres of standing wood being sold since inception.
2014
The Company planted a total of 468 ha in 2016, with
2015
an additional 836 ha planted during 2017, and 501 ha
OWNERSHIP 100% during 2018.
SPECIES PINE Management has identified other pine plantation

areas nearby to be acquired aiming to continue to
END-USE PULPWOOD/ SAWLOGS meet strong demand in the region.
TOTAL AREA 9,770 HA
Kaa sold a total of 12,113 m3 in this period, 86% less
TOTAL HARVESTED 1,239,057 M3 than in 2017 as mature plantation areas have reduced
(INCEPTION TO DATE) significantly as a result of harvesting. The newly
planted areas will start to be harvested in 2030.
FSC CERTIFIED SINCE OCTOBER 2017
PROJECT IRR 14.80%

(INCEPTION TO DATE)
MS TIMBERLAND PROJECT MS Timberland is a joint venture with an Ecuadorian

wood-based panel producer which started in 2010.
LOCATION ANTIOQUIA REGION,
COLOMBIA Sales volumes reached near 67,660 m3 during the six-
month period of 2019, in line with the same period in
YEAR OF INVESTMENT 2010 2018.
2011
During first six months of 2019 190 ha were planted
OWNERSHIP 90%
and an additional 280 ha will be planted by the end of
SPECIES PINE the year.
END-USE SAW LOGS / WOOD BASED The company is looking to issue and sell carbon
PANELS credits during the second half of 2019.

(INCEPTION TO DATE)
FSC CERTIFIED SINCE OCTOBER 2018
PROJECT IRR 14.60%

(INCEPTION TO DATE)
8
SILVOTECNIA PROJECT Silvotecnia is the leading forest service provider in

Colombia. The core business continues to be forestry
LOCATION ANTIOQUIA REGION, operations, forestry assets management and forestry
COLOMBIA related consulting.
YEAR OF INVESTMENT 2012 The company has received a quality recognition
2014 award and is established as a leader in Colombia in
VOTING RIGHTS 81.2% terms of both technology use and project design.
CORE-BUSINESS FOREST SERVICES After reaching breakeven in 2018 the company

continues to show a solid performance in 2019.
PROJECT IRR 17.10% Revenues of USD 2.7 million in the first half 2019
(INCEPTION TO DATE) represented an increase of 7% in comparison with
the same period 2018, and profits almost doubled to
USD 146,000 in comparison with the same period 2018.
INVESTMENT PIPELINE AND OUTLOOK
In Brazil the reform agenda of Bolsonaro’s government is continuing. The pension reform is expected to be
approved by the Senate in September 2019 and the next item on the reform agenda seems to be tax reform. GDP
growth has been very moderate during 1H 2019. Some sectors, such as forestry, are showing much higher growth
than the average in the country. However, the general slowdown in the economy has had a particularly negative
impact on our charcoal business with reduced prices and sales volumes, given that charcoal demand is driven by
new construction and industrial production.
The positive political and economic developments continue in Colombia. However, we expect the local currency
(Colombian Pesos) to be relatively weak against the USD, partly because of global pressure on oil prices. However,
the demand for our projects is strong and we are looking for strategic ways to increase our asset base and
operations in Colombia. In addition to wood sales, carbon markets will continue to be important in Colombia. We
are looking to continue to issue and sell carbon credits into the local market during 2H 2019. Furthermore, our
service business in Colombia is not only expanding in the forest sector but also in the agriculture sector. For
example, during 1H 2019 we signed a new contract with a local pension fund to provide advice regarding their
existing rubber plantation project.
Johan Larsson
Chief Executive Officer

Timber Capital Limited
29 August 2019
“THE RIGHT TREE, IN THE RIGHT REGION, FOR THE RIGHT CUSTOMER”
9
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2019
30 Jun 31 Dec 30 Jun

2019 2018 2018
Notes USD'000 USD'000 USD'000
ASSETS:
Non-current assets
Forest assets
Land 8 87,477 86,767 86,869
Biological assets 8 64,407 66,099 74,665
Investment property 9 6,166 6,096 14,065
Property, plant and equipment 10 1,292 2,169 2,430
Investment in joint ventures 11 50,735 48,017 56,192
Other non-current assets 12 4,241 5,403 3,275
Deferred tax asset 96 95 123
Total non-current assets 214,414 214,646 237,619
Current assets
Inventory 13 654 1,105 860
Trade and other receivables 14 4,379 4,126 3,481
Cash and cash equivalents
Restricted 15 2,078 1,966 1,045
Unrestricted 15 1,578 1,503 2,066
Total current assets 8,689 8,700 7,452
TOTAL ASSETS 223,103 223,346 245,071
Non-current liabilities
Interest bearing borrowings 16 (14,348) (14,436) (12,329)
Deferred tax liability 17 (4,780) (4,809) (5,080)
Other long term liability 18 (678) (755) (743)
Total non-current liabilities (19,806) (20,000) (18,152)
Current liabilities
Interest bearing borrowings 16 (5,299) (2,823) (8,069)
Trade and other payables 19 (7,675) (7,551) (7,212)
Provisions (2,366) (2,339) (752)
Total current liabilities (15,340) (12,713) (16,033)
TOTAL LIABILITIES (35,146) (32,713) (34,185)

Net assets 187,957 190,633 210,886
The accompanying notes form an integral part of the condensed financial statements.
10
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2019
(Continued)
30 Jun 2019 31 Dec 2018 30 Jun 2018

Equity
Share capital and premium 330,712 330,642 330,642
Revaluation reserve 115,563 115,097 114,894
Foreign currency translation reserve (229,504) (231,340) (227,242)
Share-based payment reserve 35 70 -
Accumulated loss (29,113) (24,092) (7,643)
Non-controlling interests 264 256 235
Equity attributable to holders of
redeemable Ordinary and Class A
Ordinary Shares 187,957 190,633 210,886
Number of redeemable Ordinary Shares

in issue at year end 26,367,709 26,350,553 26,350,553
Number of redeemable Class A Ordinary
Shares in issue at year end 24,836,250 24,836,250 24,836,250
51,203,959 51,186,803 51,186,803
Net asset value per redeemable

Ordinary and Class A Ordinary Share 21 $3.67 $3.72 $4.12
The unaudited condensed consolidated interim financial statements were approved by the Board of Directors on
29 August 2019 and signed on their behalf by:
Howard Myles
Director
29 August 2019
11
UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT
Jan - Jun Jan - Jun Jan - Dec
Notes 2019 2018 2018
Continuing operations USD'000 USD'000 USD'000
Revenue 4 7,511 8,991 19,083
Cost of Sales 4 (7,583) (8,896) (16,829)
Gross profit / (loss) (72) 95 2,254
Depletion 4 (1,570) (992) (4,633)
(1,642) (897) (2,379)
Unrealised gain on biological assets 8 720 9,128 5,684

Realised loss on disposal of assets - - (2,342)
Unrealised gain on investment property 9 - - 329
Unrealised gain/(loss) on financial receivables 85 - (65)
Share of profit of joint ventures 11 3,031 2,819 798
Gain/(loss) on disposal of investment 31 (2) (2)
2,225 11,048 2,023
Operating expenses
Administrative expenses 5 3,255 3,863 7,541
Forestry operating expenses 6 1,900 2,074 5,397
Impairment of inventory 419 (1,494) (1,401)
Impairment of property, plant and equipment 879 (1,726) (1,197)
Total operating expenses 6,453 2,717 10,340
Operating (loss) / gain (4,228) 8,331 (8,317)
Interest income on bank deposits 20 126 120

Interest expense - bank borrowings (845) (1,008) (2,468)
(Loss) / gain before tax (5,053) 7,449 (10,665)
Taxation 7 73 (577) 687
(Loss) / gain for the year from continuing operations (4,980) 6,872 (9,978)
(Loss) / gain attributable to:

Holders of redeemable Ordinary Shares and Class A Ordinary
Shares (4,986) 6,878 (10,005)
Non-controlling interests 6 (6) 27
(4,980) 6,872 (9,978)
Earnings per share - from continuing operations

Basic earnings per share (US cents) 22 (9.74) 13.44 (19.55)
Diluted earnings per share (US cents) 22 (9.74) 13.42 (19.55)
12
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE
INCOME
Notes 2019 2018 2018
USD'000 USD'000 USD'000
(Loss) / gain for the year (4,980) 6,872 (9,978)
Other comprehensive gain / (loss) net of income tax

Items that may be reclassified subsequently to profit or loss
Foreign currency translation differences† 1,294 (27,266) (26,929)
Deferred tax effect on other comprehensive income (130) (64) (60)
Share of other comprehensive income of joint ventures† 487 (759) (5,304)
1,651 (28,089) (32,293)
Items that will not be reclassified subsequently to profit or

loss
Revaluation of planted land 8 - 3,537 3,312
Share of other comprehensive income of joint ventures† 653 151 1,194
653 3,688 4,506
Other comprehensive gain / (loss) for the year 2,304 (24,401) (27,787)
Total comprehensive (loss) for the year (2,676) (17,529) (37,765)
(Loss) / gain attributable to:

Shares (2,684) (17,520) (37,777)
Non-controlling interests 8 (9) 12
(2,676) (17,529) (37,765)
Total comprehensive income per share (US Cents)*

Shares (5.24) (34.23) (73.80)
The results for the period relate to continuing operations.
* Calculated using the weighted average number of shares as the denominator (refer to Note 22).
† The presentation of the currency translation loss and the share of other comprehensive income of joint ventures for the
period to 30 June 2018 has been reclassified to match the presentation in the audited financial statements for the year to
31 December 2018. There is no impact on total other comprehensive income or the total comprehensive loss for the
period.
13
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Currency Share-based Non-

Share capital Revaluation translation payment Accumulated controlling
2019 account reserve reserve reserve profit/(loss) interests Total
Notes USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
As at 1 January 2019 330,642 115,097 (231,340) 70 (24,092) 256 190,633
Loss for the period - - - - (4,986) 6 (4,980)

Other comprehensive loss:
Currency translation gain - - 1,292 - - 2 1,294
Share of other
comprehensive income of
joint venture - 596 544 - - - 1,140
Revaluation of planted land 8 - - - - - - -
Deferred tax effect on other
comprehensive income 17 - (130) - - - - (130)
Total comprehensive loss - 466 1,836 - (4,986) 8 (2,676)
Share-based payments - - - 35 (35) - -

Shares issued 70 - - (70) - - -
Dividends paid - - - - - - -
70 - - (35) (35) - -
As at 30 June 2019 330,712 115,563 (229,504) 35 (29,113) 264 187,957
14
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Currency Non-
Share capital Revaluation translation Accumulated controlling
2018 account reserve reserve profit/(loss) interests Total
Notes USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
As at 1 January 2018 330,625 115,698 (199,235) (18,934) 244 228,398
Transfer on disposal of
revalued land - (4,413) - 4,413 - -
330,625 111,285 (199,235) (14,521) 244 228,398
Profit/(loss) for the period - - - 6,878 (6) 6,872

Other comprehensive loss:
Currency translation loss† - (27,263) - (3) (27,266)
Share of other
comprehensive income of
joint venture† - 136 (744) - - (608)
Revaluation of planted land - 3,537 - - - 3,537
Deferred tax effect on other
comprehensive income - (64) - - - (64)
Total comprehensive loss - 3,609 (28,007) 6,878 (9) (17,529)
Shares issued 17 - - - - 17
17 - - - - 17
As at 30 June 2018 330,642 114,894 (227,242) (7,643) 235 210,886
† The presentation of the currency translation loss and share of other comprehensive income of joint ventures for the period to 30 June 2018 has been reclassified to
match the presentation in the audited financial statements for the year to 31 December 2018. There is no impact on total other comprehensive income or the total
comprehensive loss for the period.
15
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

2019 2018 2018
Cash flows from operating activities
Cash receipts from customers 10,319 10,010 21,765
Cash received in barter transaction 182 892 1,079
Net cash flows received from joint venture 507 1,456 2,967
Cash paid to suppliers and employees (9,981) (11,029) (19,680)
Cash flow from operating activities before financial items and
taxes 1,027 1,329 6,131
Tax paid (643) (510) (1,122)
Net cash generated by operating activities 384 819 5,009
Cash flows from investing activities
Purchase of property, plant and equipment (377) (337) (821)
Purchase of investment property (51) - -
Proceeds from the sale of investment property - - 1,324
Planted land and biological assets costs capitalised (549) (761) (1,925)
Net cash (used in) by investing activities (977) (1,098) (1,422)
Cash flow from financing activities
Proceeds from interest bearing borrowings 3,810 284 4,819
Repayment of interest bearing borrowings (1,613) (3,310) (10,923)
Interest paid and other financial expenses (1,418) (1,090) (2,249)
Interest received 10 17 23
Net cash generated from / (used in) financing activities 789 (4,099) (8,330)
Net increase / decrease in cash and cash equivalents during the

period / year 196 (4,378) (4,743)
Cash and cash equivalents at the beginning of the period / year 3,469 8,158 8,158
Effects of changes in foreign currency (9) (669) 54
Cash and cash equivalents at the end of the period / year 15 3,656 3,111 3,469
16
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. GENERAL INFORMATION
The information relating to the year ended 31 December 2018 included in these accounts does not constitute full
statutory accounts. The Company’s auditors reported on the 2018 accounts and their report contained an
unqualified opinion. The critical accounting judgements have been explained in the section below headed Critical
accounting judgements and estimation uncertainties.
2. ACCOUNTING POLICIES
Basis of preparation
The condensed consolidated interim financial statements have been prepared in accordance with International
Accounting Standard (IAS) 34 “Interim Financial Reporting” as adopted by the European Union. The condensed
consolidated interim financial statements do not include all the information and disclosures required in annual
financial statements, and should be read in conjunction with the Company’s annual financial statements for the
year ended 31 December 2018.
The Company’s forestry operations do not operate in an industry where significant or cyclical variations as a
result of seasonal activity are experienced during the financial year, however the charcoal business is subject to
higher productivity during the dry season in Minas Gerais, Brazil.
The same accounting policies, presentation and methods of computation are followed in these unaudited
condensed consolidated interim financial statements as those followed in the preparation of the Company’s
annual financial statements for the year ended 31 December 2018. The annual financial statements have been
prepared in accordance with IFRS as adopted by the European Union.
Adoption of new and revised standards

The following standards and interpretations were adopted by the Group with effect from 1 January 2019:
 IFRS 16 Leases
 IFRIC 23 Uncertainty over Income Tax Treatments
 Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures
 Annual Improvements to IFRS Standards 2015-2017 Cycle
There was no material impact from the adoption of these standards and interpretations. There are no new or
revised standards endorsed by the European Union effective for accounting periods commencing after 1 January
2020 that are expected to materially impact the financial reporting of the Group’s operations. Additionally, the
Group has not early adopted any standards, amendments and interpretations to existing standards that have
been published and will be mandatory for the Group’s accounting periods beginning on or after 1 January 2020
or later periods.
Going concern
The Board has made enquiries and examined the Group’s cash forecasts for the 30-month period to 31 December
2021, including restricted cash, borrowings, and dividend payments from subsidiaries, under various stressed
scenarios and assumptions. The Board has also considered the 5-year business plans prepared for each project
(2018 to 2022). In each case, the Company adopts a conservative approach by always considering the on-going
business, as it stands, as the most likely scenario with no additional investments or expansion projects.
Additional credit facilities were assumed in the projections to ensure financing of the activities where cash flow
generated from the operations was not sufficient. This accounts for a total of USD 11 million to be contracted in
Q3 2019 in Brazil, and these funds will be used to repay other interest bearing borrowings with more onerous
interest rates or covenants, and to finance the silviculture activities of the Group and any other cash-generating
projects.
17
2. ACCOUNTING POLICIES (CONTINUED)
Going concern (continued)

Finally, and in addition, the company continues to pursue the sale of non-core farms (those which are outliers to
the current clusters and are less productive) in order to improve working capital cash flows and to provide funds
for additional acquisitions of other forestry projects. No sales of non-core farms have however been factored into
the base going concern scenario.
The investment manager notes that there are significant unencumbered assets which could either be sold or
used to secure further finance in the event it were necessary to do so.
As a result of the foregoing, the Board has a reasonable expectation that the Company and the Group have
adequate resources to continue as a going concern for the 12 months after signing the financial statements.
Accordingly, the Group continues to adopt the going concern basis in preparation of these financial statements.
Segmental reporting
The Board is of the view that the Group has two operating segments organised geographically between Brazil and
Colombia. These segments engage in investment in timberland and timber related assets, forestry consulting
services and charcoal production. The Board, as a whole, has been determined as constituting the chief operating
decision maker of the Company. The key measure of performance used by the Board to assess each operating
segment’s performance and to allocate resources is the profit or loss after tax of that segment.
Basis of consolidation
The unaudited condensed consolidated interim financial statements incorporate the financial statements of The
Forest Company Limited and its subsidiaries for the six months ended 30 June 2019.
Foreign exchange rates

Changes in exchange rates can impact the financial results as the Company has operations and assets in
jurisdictions which use currencies other than USD. The exchange rates used in these financial statements relative
to the USD are as follows:
Jan - Jun 2019 Jan - Jun 2018 Jan - Dec 2018

Closing Average Closing Average Closing Average
Currency rate rate rate rate rate rate
Brazilian Reals (BRL) 3.8497 3.8417 3.8769 3.4287 3.8812 3.6550
Sterling (GBP) 0.7875 n/a 0.7572 n/a 0.7847 n/a
Colombian Pesos (COP) 3,211.4 3,187.3 2,931.6 2,848.7 3,248.1 2,952.6
18
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the Group’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts recognised in the financial statements and disclosure of contingent
liabilities. However, uncertainty about these assumptions and estimates could result in outcomes that could
require a material adjustment to the carrying amount of the asset or liability affected in future periods.
In the process of applying the Group’s accounting policies, management has made the following judgments which
are likely to have had the most significant effect on the amounts recognised in the financial statements.
a) The Group is subject to income and capital gains taxes in Brazil and Colombia. Significant judgment is
required in determining the taxation assumed in the biological asset valuation and the total provision
for income and deferred taxes. The valuation cash flows prepared by the Group’s Valuers, Simosol, do
not include the application of Colombian withholding tax or Funrural tax in Brazil, the first because
the Group does not expect to be required to withhold tax in future years, and the second because the
impact was deemed not material. In 2019 the Company is able to elect to continue to pay this social
contribution based on payroll rather than on gross revenue.
b) The Group holds more than 50% of the equity in two investment projects, as described in Note 11.
Despite holding the majority of equity in these projects the Group has accounted for them as joint
ventures, as the Group has agreed to joint control over the projects with the respective joint venture
partner.
c) The Company has considered whether it meets the definition of an investment entity in IFRS 10.
Management has judged that the purpose of the Group is to obtain returns from long-term investment
projects in land and associated biological assets. The investment manager, on behalf of the Group,
manages and administers the day-to-day operations of the projects, and is responsible for maintaining
customer relations. These activities represent substantial non-investment business activities. The
Company is therefore not considered an investment entity, and it consolidates its subsidiaries rather
than accounting for them at fair value.
d) Accounting for revenue under IFRS 15 requires the Group to make a series of judgements, in particular
identifying all of the performance obligations in contracts with customers and identifying the points
at which they are fulfilled. While many of the contracts with customers are straightforward, the varied
and multi-jurisdictional nature of the Group’s operations meant that careful review was necessary to
ensure that revenue recognition was consistent and correct across the Group.
The key sources of estimation uncertainty which have a significant risk of resulting in a material adjustment to
the carrying amounts of assets and liabilities within the next financial year are discussed below. The Group based
its assumptions and made estimates based on the information available when the financial statements were
prepared. However these assumptions and estimates may change based on market changes or circumstances
beyond the control of the Group.
a) Fair values of the investment property, planted land, forest assets and carbonisation assets are based
on the current market valuation provided by Simosol, the independent valuers. The valuations have
been made on the assumption that the owner sells the assets in the open market without a deferred
term contract, leaseback, joint venture, management agreement or any similar arrangement which
could serve to affect the value of the assets. The valuations are based on certain estimates concerning
discount rate, rotations/production cycle, growth rates, prices, forecast wood flow, market and market
capacity to absorb the wood flow, costs and future eligibility for current tax rates of the Company, and
are sensitive to changes in these assumptions (see the sensitivity analysis in Note 8). BioCarbono’s
projected profitability is also considered. In preparing their valuations the valuers are required to
consider other recent transactions in the market to ensure that these assumptions are reasonable, and
that potential purchasers of the Group’s assets would make the similar assumptions.
19
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
b) There are many transactions and calculations for which the ultimate tax determination and timing of
payment are uncertain; in particular the Brazilian projects are assumed to be taxed under the
favourable tax regime of Lucro Presumido which requires management of annual revenues within a
fixed limit. The Group recognises liabilities for anticipated tax obligations based on estimates of
whether additional taxes will be due. Where the final tax outcome of these matters is different from
the amounts that were initially recorded, such differences will impact the income and deferred tax
provisions in the period in which the determination is made.
c) The Board considers forecasts for the charcoal business over the next 3 years to assess the need to
book any impairment against its biological assets or inventory. Given the current situation,
carbonisation assets have been valued by the independent valuer at negative BRL 1.61 million (USD
0.42 million). Carbonisation equipment has therefore been fully impaired, and an impairment of USD
0.42 million has been made against the inventory in the business to reflect the likely net realisable
value.
4. REVENUE
Types of goods or services

Service and
Jan - Jun 2019 Wood Charcoal consultancy* Total
USD'000 USD'000 USD'000 USD'000
Geographic markets
Brazil 1,428 4,737 - 6,165
Colombia - - 1,346 1,346
Total revenue from contracts
with customers 1,428 4,737 1,346 7,511
Cost of sales
Original biological asset cost (1,056) (1,695) - (2,751)
Variable cost - (2,637) (2,195) (4,832)
(1,056) (4,332) (2,195) (7,583)
Gross (loss) / profit 372 405 (849) (72)
Depletion (625) (945) - (1,570)
(253) (540) (849) (1,642)
20
4. REVENUE (CONTINUED)
Types of goods or services

Service and
Jan - Jun 2018 Wood Charcoal consultancy* Total
USD'000 USD'000 USD'000 USD'000
Geographic markets
Brazil 1,615 6,018 - 7,633
Colombia - - 1,358 1,358
Total revenue from contracts
with customers 1,615 6,018 1,358 8,991
Cost of sales
Original biological asset cost (1,745) (2,132) - (3,877)
Variable cost - (2,914) (2,105) (5,019)
(1,745) (5,046) (2,105) (8,896)
Gross (loss) / profit (130) 972 (747) 95
Depletion (398) (594) - (992)
(528) 378 (747) (897)
Total Revenue from contracts with customers, Cost of Sales and Depletion in the tables above have been adjusted
for any intra-group sales that have occurred during the period. Only the costs associated with the external sales
of wood are shown as cost of sales under ‘Wood’, and all of the costs of purchase, growth and the fair value of the
trees used in the Group’s charcoal operations are allocated under ‘Charcoal’. Sales in the ‘Service and consultancy’
category have also been adjusted for intra-group sales where services have been provided to other Group
subsidiaries. The net effect of the adjustments is that these figures show the results of transactions with external
customers only.
* ‘Service and consultancy’ revenue, including intra-group sales, is shown below and reconciled to the tables
above:
Total Total
Total with Elimination excluding Total with Elimination excluding
intra-group of intra- intra-group intra-group of intra- intra-group
Jan - Jun 2019 sales group sales sales Jan - Jun 2018 sales group sales sales
Revenue 2,551 (1,205) 1,346 Revenue 2,529 (1,171) 1,358
Cost of sales (2,195) - (2,195) Cost of sales (2,105) - (2,105)
Gross profit 356 (1,205) (849) Gross profit 424 (1,171) (747)
21
5. ADMINISTRATIVE EXPENSES
Jan - Jun Jan - Jun

2019 2018
USD'000 USD'000
Investment Management fees 1,727 1,803
Legal and professional fees 472 859
Travel expenses 150 223
Audit fees 90 164
Administration fees 268 274
Consultancy fees 319 309
Directors fees and expenses 204 212
Bank charges 25 19
3,255 3,863
There has been no significant movement in Administration Expenses in 2019 against the same period in 2018,
except that Legal and professional fees expenditure was higher in 2018 mainly due to the Company’s completion
of a pre-feasibility study in Colombia.
6. FORESTRY OPERATING EXPENSES
Jan - Jun Jan - Jun

2019 2018
USD'000 USD'000
Payroll 1,175 984
Project facilities 310 476
Irrecoverable tax inputs 148 285
Insurance 78 82
Forestry services 59 102
Valuation fees 71 76
Other general expenses 59 69
1,900 2,074
In aggregate, Project facilities, Payroll and Other general expenses (which is mainly a depreciation charge) are
consistent with the same period in the prior year, but there has been some refinement in the allocation of
expenses.
Irrecoverable taxes input includes taxes derived from the sale of non-core farms in the Frondosa project. The
reduction in 2019 compared to 2018 indicates the higher level of such sales in the prior period.
22
7. TAXATION
Jan - Jun Jan - Jun

2019 2018
USD'000 USD'000
Current tax
Brazil 99 328
Colombia 27 25
126 353
Deferred tax
Temporary differences on revaluations of biological assets and
investment property
Brazil (199) 205
Colombia - 19
(199) 224
Tax expense in the Consolidated Income Statement (73) 577
Jan – Jun Jan - Jun

2019 2018
USD'000 USD'000
Temporary differences on revaluations of planted land

Combined (130) (64)
Deferred tax charged to Other Comprehensive Income (130) (64)
23
8. FOREST ASSETS
The table below details the movements in forest assets for the six months ended 30 June 2019.
Biological
Land* assets Total
USD'000 USD'000 USD'000
Fair value Fair value

Basis of presentation and measurement through OCI through P&L
30 June 2019
Cost:
Opening balance 29,361 34,091 63,452
Land and biological assets costs capitalised - 655 655
Biological assets harvested - (2,007) (2,007)
Exchange differences 240 282 522
Closing balance 29,601 33,021 62,622
Fair value movements:
Opening balance 57,406 32,008 89,414
Increase in fair value of biological assets - 720 720
Exchange differences 470 243 713
Closing balance 57,876 31,386 89,262
Fair value of forest assets 87,477 64,407 151,884
* Includes surface rights (Kaa and Frondosa projects) and owned land. Land has an unlimited useful life and is
therefore not depreciated.
24
8. FOREST ASSETS (CONTINUED)
Biological
Land* assets Total
USD'000 USD'000 USD'000
Fair value Fair value

Basis of presentation and measurement through OCI through P&L
31 December 2018
Cost:
Opening balance 30,576 44,904 75,480
Land and biological assets costs capitalised 5,804 2,018 7,822
Land sold (2,337) - (2,337)
Exchange differences (4,682) (6,318) (11,000)
Closing balance 29,361 34,091 63,452
Opening balance 68,932 36,343 105,275
Increase in fair value of biological assets - 5,684 5,684
Land sold (4,828) - (4,828)
Gain on revaluation of land 3,312 - 3,312
Exchange differences (10,010) (5,386) (15,396)
Closing balance 57,406 32,008 89,414
Fair value of forest assets 86,767 66,099 152,866
* Includes surface rights (Kaa and Frondosa projects) and owned land. Land has an unlimited useful life and is
therefore not depreciated.
25
The Group’s forest assets were valued at 30 June 2019 by independent professionally qualified valuers, Simosol.
The Group’s biological assets consisted of eucalyptus and pine plantations.
The Company has pledged land and biological assets with a value of USD 44.53 million (31 December 2018: USD
67.13 million) as security for interest-bearing loans (see Note 16).
Changes in valuation assumptions

Real post-tax discount rate: The discount rates used range from 6.11% to 6.54% (31 December 2018: 6.63% to
7.02%).
Biological assets sensitivity analysis

The independent valuations of biological assets, in accordance with IFRS, are based on a number of valuation
inputs and assumptions. The independent valuations of standing timber are sensitive to changes in these inputs,
to varying degrees.
The analysis below is provided in order to illustrate the sensitivity of the biological asset valuations to changes
in the discount rate, wood volume assumptions, estimated wood prices and forestry costs. The analysis illustrates
an extent to which the valuations could vary if inputs and assumptions were to change by a given amount and is
not intended to imply the likelihood of change or that possible changes in value would be restricted to this extent.
For example, the discount rate might change by more than the 1% indicated below, as might wood prices. The
analysis is based on biological asset values including those held under joint ventures.
Sensitivity of
biological asset
30 June 2019 Total biological value to change in
asset value Biological variable as a
sensitivity asset value percentage
Variable USD'000 USD'000
Discount rate
1% decrease in discount rate 6,489 106,141 6.51%
1% increase in discount rate (5,915) 93,737 (5.94%)
Forecast wood volume
1% decrease (1,431) 98,221 (1.44%)
1% increase 1,432 101,084 1.44%
Wood prices
1% decrease (1,431) 98,221 (1.44%)
1% increase 1,432 101,084 1.44%
Forestry costs
1% decrease 234 99,886 0.23%
1% increase (231) 99,421 (0.23%)
26
Biological assets sensitivity analysis (continued)
31 December 2018
Sensitivity of
biological asset
Total biological value to change in
asset value Biological variable as a
sensitivity asset value percentage
Variable USD'000 USD'000
Discount rate
1% decrease in discount rate 6,383 106,585 6.37%
1% increase in discount rate (5,828) 94,374 (5.82%)
Forecast wood volume
1% decrease (1,309) 98,893 (1.31%)
1% increase 1,308 101,510 1.31%
Wood prices
1% decrease (1,309) 98,893 (1.31%)
1% increase 1,308 101,510 1.31%
Forestry costs
1% decrease 205 100,407 0.20%
1% increase (205) 99,997 (0.20%)
For example, a decrease in the forecast wood volume of 1% would result in a decrease of the biological asset
value of USD 1.43 million (2018: USD 1.31 million) to USD 98.22 million (2018: USD 98.89 million), and an
increase in the forecast wood volume of 1% would result in an increase in the biological asset value of USD 1.43
million (2018: USD 1.31 million) to USD 101.08 million (2018: USD 101.51 million), when all the other variables
are held constant.
Brazilian tax sensitivity analysis

Changes to tax regimes governing the Group and its assets, or changes to the eligibility of the Group to certain tax
regimes, may adversely affect the Company’s financial performance. This risk is relevant to the Group’s assets in
Brazil where the Lucro Presumido regime has been elected by all of the Group’s forestry operations. This tax
regime allows eligible companies to pay a lower tax rate of 3.08% on operating revenue at a presumed rate of
profitability, as opposed to a higher tax rate of 34% on actual profits under the Lucro Real regime. The Lucro
Presumido regime is currently only available to companies with annual revenue of less than BRL 78 million.
Should the revenue of one of the Group’s Brazilian projects exceed BRL 78 million in any one calendar year, that
project would be subject to Lucro Real the following year. The Company sought legal advice in 2017 to validate
its current Group structure and this has been deemed to be robust in this respect, with no expectation that the 78
million threshold will be reached in the forthcoming years.
The Directors are confident that they have the systems and controls in place to identify when the turnover level
of BRL 78 million is reached and to take adequate action. In the unlikely event that this happens there would be
two consequences:
Firstly, it may mean that current deferred tax provisions on land and biological assets would not equal eventual
taxes payable on the realisation of an asset and the deferred tax provisions would need to increase going forward.
27
Brazilian tax sensitivity analysis (continued)

Secondly, it would mean that the independent valuations of the biological assets, which are computed on a post-
tax cash flow basis, would be updated going forward to consider the tax cash flows under Lucro Real.
For the Brazilian biological assets, forecast revenues are consistent with the criteria for Lucro Presumido. In 2013,
the Group separated out the charcoal activity of Frondosa into a separate company, BioCarbono, which has elected
to be taxed under the Lucro Real tax regime since then. Each of the Group’s Brazilian projects (including the
Aimara joint venture) is treated separately for tax purposes in Brazil. In the event that all of the Group’s Brazilian
projects were forced to elect for Lucro Real instead of Lucro Presumido, the deferred tax liability and biological
asset valuation would be affected, on a worst case basis, as detailed below.
Brazilian tax sensitivity analysis, all Group Brazilian projects

Percentage
Change in change in
Lucro value under valuation
30 June 2019 Presumido Lucro Real Lucro Real under Lucro
USD'000 USD'000 USD'000 Real
Biological asset value sensitivity to tax election 64,407 34,554 (29,853) (46.35%)
Biological asset deferred tax provision sensitivity to
tax election (1,917) (985) 932 (48.62%)
Total biological asset value and deferred tax sensitivity
to tax election 62,490 33,569 (28,921) (46.28%)
NAV sensitivity to tax election on biological asset and

deferred tax 187,957 159,036 (28,921) (15.39%)
Land value deferred tax provision sensitivity to tax

election (2,863) (20,333) (17,470) 610.20%
Total land, forest asset value and deferred tax

sensitivity to tax election 147,104 100,713 (46,391) (31.54%)
NAV sensitivity to tax election 187,957 141,566 (46,391) (24.68%)
28
Brazilian tax sensitivity analysis (continued)
Brazilian tax sensitivity analysis, all Group Brazilian projects

Percentage
Change in change in
Lucro value under valuation
31 December 2018 Presumido Lucro Real Lucro Real under Lucro
USD'000 USD'000 USD'000 Real
Biological asset value sensitivity to tax election 66,099 35,664 (30,435) (46.04%)
Biological asset deferred tax provision sensitivity to
tax election (2,139) (2,507) (368) 17.21%
Total biological asset value and deferred tax sensitivity
to tax election 63,960 33,157 (30,803) (48.16%)
NAV sensitivity to tax election on biological asset and

deferred tax 190,633 159,830 (30,803) (16.16%)
Land value deferred tax provision sensitivity to tax

election (2,670) (19,978) (17,308) 648.24%
Total land, forest asset value and deferred tax

sensitivity to tax election 148,057 99,946 (48,111) (32.49%)
NAV sensitivity to tax election 190,633 142,522 (48,111) (25.24%)
The Directors, through their active management of the Company’s dual purpose of investing in real estate and
forestry, believe that both the land and biological assets of the Brazilian subsidiaries will remain eligible for the
Lucro Presumido regime. In the event that there is a change in the dual corporate purpose the land assets held by
the Brazilian projects would be subject to an additional deferred tax provision of USD 17.47 million as detailed
above (31 December 2018: USD 17.31 million).
Planted land price sensitivity analysis

The following paragraph details the sensitivity of the Group’s reported planted land value to a 1% increase or
decrease in the per hectare values of land. A 1% increase or decrease has been used in order to illustrate the
effect that each 1% movement in the value per hectare will have on the Group’s comprehensive income and is not
intended to imply the likelihood of change or that possible changes in value would be restricted to this range.
At 30 June 2019, if the per hectare values of land were to increase or decrease by 1%, with all other variables
held constant, the planted land values would increase or decrease by USD 1.09 million respectively (31 December
2018: USD 1.07 million).
Monkey damage sensitivity analysis

Pinus taeda plantations aged between 7 and 14 years at the Kaa project in Paraná, Brazil have suffered from
damaged caused by capuchin monkeys. The Group engaged independent firms to carry out assessments of the
severity of the damage, the results of which were considered by the independent valuer when valuing the
biological assets as at 30 June 2019.
29
Monkey damage sensitivity analysis (continued)

The results of the assessment confirmed local management’s expectations that the damages were not as severe
as had been considered possible when the financial statements for the 31 December 2018 were being prepared.
As a result the wood-flows were revised, with a positive impact of USD 0.4 million.
If the monkeys cannot be expelled from the region or deterred from causing such damage, it is likely that the
currently unaffected young stands will also be damaged in future years. In the worst case envisaged by the
independent assessments, this could result in a further decrease in the value of Kaa’s biological assets, by over
40% from USD 6.4 million to USD 3.7 million.
Biological assets sensitivity to charcoal operations profitability

At 30 June 2019, those of the Group’s forestry projects which produce wood primarily for its charcoal production
subsidiary had biological assets valued at USD 24.6 million (31 December 2018: USD 22.2 million). The Group’s
charcoal production subsidiary made net losses during 2018 and previous years. This has been the subject of
management attention through a continuous focus on production efficiency and cost reduction, intended to
mitigate losses while the charcoal market is still recovering.
Adjustments have been made in respect of the inventory of wood held at the roadside (waiting to be moved into
the kilns) and of the inventory of charcoal, to reflect the difficult trading situation in the short term. No
adjustments have been made in respect of the biological assets or for periods beyond 2019, as the Directors
consider that the pig iron/charcoal market is likely to improve which, combined with the impact of greater
efficiency from the newly designed kilns, should show positive returns in the short to medium term.
Fair value of forest assets

All forest assets held by the Company during the current and comparative periods are classified under Level 3 of
the fair value hierarchy under IFRS 13. There have been no transfers in and out of this total.
30
9. INVESTMENT PROPERTY
The table below details the movements in investment property for the six months ended 30 June 2019.
30 June 2019 31 Dec 2018

USD'000 USD'000
Cost:
Opening balance 4,582 13,927
Disposals - (8,105)
Exchange differences 52 (1,240)
Closing balance 4,634 4,582

Opening balance 1,514 1,323
Increases in fair value of investment property - 329
Exchange differences 18 (138)
Closing balance 1,532 1,514
Fair value of investment properties 6,166 6,096
The investment property value brought forward from 2018 comprises an area of 13,576 hectares of unplanted
land in the region of Vichada in Colombia. The Company is conducting research and development activities on
this land to try to establish its viability for reforestation purposes, and therefore to improve its market value. This
land was valued at 30 June 2019 and 31 December 2018 by professionally qualified valuers, Simosol.
The method used to develop the land appraisal is the direct comparative method. The direct comparative method
estimates valuations by comparing the characteristics of the land being appraised to the characteristics and sale
prices of similar parcels of land. This method assumes that the data available allows the formation of a data set
which contains sufficient sales and purchases of properties similar to the land being appraised, and which has
sufficiently diverse characteristics to illustrate the effect of key variables in the regional estate market. The
independent valuers deem surface rights, inferring all rights and obligations of possession of the land for the
long-term, to hold the same value as that of the underlying land on the basis the Group holds options to acquire
the remaining 51% of the freehold interest of such land at nominal cost.
During 2018 the investment property also included a pig iron mill held by the Frondosa project. The mill was sold
during 2018 for a realised loss of USD 2.34 million. The total consideration related to the pig iron mill sale will be
received in four instalments of BRL 5.25 million (USD 1.36 million at the closing exchange rate). The first
instalment was received in the end of 2018, the second instalment will be received in the end of 2019 and the
two remaining instalments will be received during 2020.
31
9. INVESTMENT PROPERTY (CONTINUED)
Investment property price sensitivity analysis

The following paragraph details the sensitivity of the Group’s reported unplanted land (investment property)
value to a 1% increase or decrease in the per hectare values of land.
A 1% increase or decrease has been used in order to illustrate the effect that each 1% movement in the value per
hectare will have on the Group’s comprehensive income and is not intended to imply the likelihood of change or
that possible changes in value would be restricted to this range. At 30 June 2019, if the per hectare values of land
were to increase or decrease by 1%, with all other variables held constant, the NAV would have increased or
decreased by USD 62,000 (31 December 2018: USD 61,000).
Fair value of investment property

All investment property held by the Company during the period is classified under Level 3 of the fair value
hierarchy under IFRS 13. There have been no transfers in or out of this total.
10. PROPERTY, PLANT AND EQUIPMENT
Carbonisation
30 June 2019 Buildings assets* Equipment Total
USD'000 USD'000 USD'000 USD'000
Cost:
Opening balance as at 1 January 598 1,872 2,007 4,477
Additions - 198 176 374
Reclassifications 33 - (33) -
Disposals / write-off - - (16) (16)
Exchange differences 7 15 19 41
Closing balance as at 30 June 2019 638 2,085 2,153 4,876
Depreciation/Fair Value:
Opening balance as at 1 January 112 985 1,211 2,308
Depreciation 15 - 95 110
Impairment / reversal - 1,095 56 1,151
Disposals / write-off - - (6) (6)
Exchange differences 1 5 15 21
Closing balance as at 30 June 2019 128 2,085 1,371 3,584
Carrying value as at 30 June 2019 510 - 782 1,292
* Carbonisation assets have been revalued at the balance sheet date
32
10. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Carbonisation
31 December 2018 Buildings assets* Equipment Total
USD'000 USD'000 USD'000 USD'000
Cost:
Additions - 337 236 573
Reclassification of pig iron mill - 205 (205) -
Disposals / write-off - (2,997) (8) (3,005)
Exchange differences (53) (575) (263) (891)
Closing balance as at 31 December 2018 598 1,872 2,007 4,477
Depreciation/Fair Value:
Depreciation 29 607 176 812
Transfers - 207 (207) -
Impairment / reversal - (1,197) - (1,197)
Disposals / write-off - (3,014) - (3,014)
Exchange differences (10) (520) (149) (679)
Closing balance as at 31 December 2018 112 985 1,211 2,308
Carrying value as at 31 December 2018 486 887 796 2,169
* Carbonisation assets have been revalued at the balance sheet date

In 2018 the company shut down and dismantled several old kilns which had been fully impaired in previous
years. This has been reflected on the disposals/write off lines of the above table.
33
11. JOINT VENTURES
The Company has two joint ventures.
MSTH
The Company has a joint venture with Cotopaxi, an Ecuadorian wood based panel producer whose parent entity
is Gem Corp, through MSTH, 90% of which is owned by the Company. MSTH owns 100% of the shares of El
Guasimo, a former subsidiary of Cementos, one of the largest cement producers in Colombia.
Although the Company owns 90% of MSTH it is not fully consolidated due to the fact that decisions are made in
conjunction with Cotopaxi and the Company does not therefore have control of the joint venture.
Aimara
The Company (via its wholly-owned subsidiary company, Aimara) has an 80% interest in a joint venture project
also known as Aimara, with Klabin owning the remaining 20%. The purpose of the joint venture is to acquire or
lease land to be planted with new plantation forest and managed accordingly. The joint venture’s principal place
of business is in the state of Paraná, Brazil.
Although the Company owns 80% of the joint operation it is not fully consolidated due to the fact that decisions
are made in conjunction with the other partner in the joint venture and the Company does not therefore have
control of the joint venture.
34
11. JOINT VENTURES (CONTINUED)
Both MSTH and Aimara are accounted for using the equity method as the Company only has rights to the net
assets of each of the arrangements. The following summarises the joint ventures’ net assets and summary income
statement, with reconciliations to the amounts recognised by the Group:
MSTH Aimara Total

30 Jun 2019 30 Jun 2019 30 Jun 2019
USD'000 USD'000 USD'000
Non-current assets
Forest assets
Land 19,895 3,941 23,836
Biological assets 32,242 8,507 40,749
Other non-current assets 631 14 645
52,768 12,462 65,230
Current assets
Cash and cash equivalents 189 888 1,077
Other current assets 1,406 57 1,463
1,595 945 2,540
Interest bearing borrowings (311) - (311)
Deferred tax (4,367) (371) (4,738)
Other non-current liabilities - - -
(4,678) (371) (5,049)
Current liabilities
Other current liabilities (449) (2,042) (2,491)
(604) (2,042) (2,646)
Net Assets 49,081 10,994 60,075
Group’s proportion of equity 90% 80%
Group’s share in equity 44,173 8,795 52,968
Effect of intra-group eliminations (2,192) (41) (2,233)

Goodwill - - -
Group’s carrying amount 41,981 8,754 50,735
35
MSTH Aimara Total

31 Dec 2018 31 Dec 2018 31 Dec 2018
USD'000 USD'000 USD'000
Non-current assets
Forest assets
Land 19,190 3,826 23,016
Other non-current assets 275 76 351
50,720 11,369 62,089
Current assets
Cash and cash equivalents 200 1,284 1,484
Other current assets 1,083 39 1,122
1,283 1,323 2,606
Deferred tax (4,395) (336) (4,731)
Other non-current liabilities - - -
(4,579) (336) (4,915)
Current liabilities
Other current liabilities (395) (2,242) (2,637)
(690) (2,242) (2,932)
Net Assets 46,734 10,114 56,848
Group’s share in equity 42,061 8,091 50,152
Effect of intra-group eliminations (2,099) (36) (2,135)

Goodwill - - -
Group’s carrying amount 39,962 8,055 48,017
36
MSTH Aimara Total

30 Jun 2019 30 Jun 2019 30 Jun 2019
USD'000 USD'000 USD'000
Revenue 3,299 - 3,299
Cost of sales (1,664) - (1,664)
Gross profit 1,635 - 1,635
Depletion (890) - (890)
745 - 745
Unrealised gain on biological assets 1,527 820 2,347

2,272 820 3,092
Operating expenses (437) (85) (522)

Profit on disposal of assets 42 - 42
Depreciation (215) - (215)
Interest income 4 78 82
Interest expense (11) - (11)
Profit before tax 1,655 813 2,468
Taxation credit/(charge) 140 (42) 98
Profit for the year 1,795 771 2,566
Items that may be reclassified to profit

or loss 503 77 580
Items that will not be reclassified to
profit or loss 651 84 735
Other comprehensive income 1,154 161 1,315
Total comprehensive income 2,949 932 3,881
Share of profit for the year 1,616 617 2,233

Effect of inter-company elimination 798 - 798
Recognised share of profit for the
year 2,414 617 3,031
Recognised share of other

comprehensive income 1,011 129 1,140
Recognised share of total

comprehensive income 3,425 746 4,171
37
MSTH Aimara Total

30 Jun 2018 30 Jun 2018 30 Jun 2018
USD'000 USD'000 USD'000
Revenue 4,102 1,616 5,718
Cost of sales (1,840) (533) (2,373)
Gross profit 2,262 1,083 3,345
Depletion (968) (1,052) (2,020)
1,294 31 1,325
Unrealised gain on biological assets 1,351 753 2,104

2,645 784 3,429
Operating expenses (500) (124) (624)

Profit on disposal of assets (178) - (178)
Depreciation (240) - (240)
Interest income 5 29 34
Interest expense (18) (13) (31)
Profit before tax 1,714 676 2,390
Taxation credit/(charge) (165) (18) (183)
Profit for the year 1,549 658 2,207
Items that may be reclassified to profit

or loss† 926 (1,983) (1,057)
Items that will not be reclassified to
profit or loss† 168 - 168
Other comprehensive income 1,094 (1,983) (889)
Total comprehensive income 2,643 (1,325) 1,318
Share of profit for the year 1,394 526 1,920

Effect of inter-company elimination 899 - 899
Recognised share of profit for the
year 2,293 526 2,819
Recognised share of other

comprehensive income 978 (1,586) (608)
Recognised share of total

comprehensive income 3,271 (1,060) 2,211
† The presentation of the currency translation loss and share of other comprehensive income of joint ventures
for the period to 30 June 2018 has been reclassified to match the presentation in the audited financial statements
for the year to 31 December 2018. There is no impact on total other comprehensive income or the total
comprehensive loss for the period.
38
12. OTHER NON-CURRENT ASSETS
30 June 2019 31 Dec 2018

USD'000 USD'000
Goodwill 2,959 2,926
Pig iron mill receivable 1,254 2,447
Software licences 23 26
Other 5 4
4,241 5,403
Goodwill arose on the acquisition of additional shares of Silvotecnia in 2014. The pig iron mill receivable refers
to the fourth instalment of the agreed transaction price, which is expected to be received in December 2020.
13. INVENTORY
30 Jun 2019 31 Dec 2018

USD'000 USD'000
Seedlings and consumables 34 25
Work in progress 620 985
Finished products - 95
654 1,105
The Group’s work in progress consists of agricultural produce (harvested from the biological assets) that at the
period end date was going through charcoal production, including harvested wood at the roadside waiting to be
moved into the kilns. The Group’s finished products consist of charcoal. At 30 June 2019, a provision of USD
0.42 million was made against inventory to reflect the likely net realisable value (31 December 2018: Nil).
14. TRADE AND OTHER RECEIVABLES
30 Jun 2019 31 Dec 2018

USD'000 USD'000
Trade receivables 787 1,396

Payments in advance 121 194
Pig iron mill receivable 2,628 1,353
Other receivables 843 1,183
4,379 4,126
The ‘Trade receivables’ balance includes the effect of general and specific bad debt provisions of USD 0.94 million
(31 December 2018: 1.02 million).
‘Other receivables’ refer mainly to tax credits, namely to Brazilian PIS and COFINS tax credits resulting from
BioCarbono operations of USD 0.28 million (31 December 2018: USD 0.25 million), and other tax credits in
Silvotecnia of USD 0.28 million (31 December 2018: USD 0.37 million). The pig iron mill receivable refers to the
second and third instalments of the agreed transaction price, which are expected to be received in December
2019 and June 2020.
39
15. CASH AND CASH EQUIVALENTS
These comprise cash held by the Group and short-term deposits available on demand. The carrying amounts of
these assets approximate their fair value. At the reporting date the Group had the following cash balances which
are considered to be restricted and unrestricted at 30 June 2019:
30 Jun 2019 31 Dec 2018

USD'000 USD'000
Restricted
Amounts held in escrow accounts in respect of assets purchased 749 743
Amounts pledged as collateral for loans 731 651
Amounts held for labour claims 560 539
Other 21 16
Owed to shareholders 17 17
2,078 1,966
Unrestricted 1,578 1,503
3,656 3,469
16. INTEREST BEARING BORROWINGS
Non-
30 Jun 2019 Current current Total
Lender Project USD'000 USD'000 USD'000
MetLife term loan Frondosa 750 11,250 12,000
Banco Rendimento SA Frondosa 38 11 49
Banco Rendimento SA Rio Verde Gusa 334 - 334
Banco Rendimento SA TFC do Brasil 706 2,682 3,388
Itau Unibanco SA TFC do Brasil 3,299 - 3,299
Bancolombia Silvotecnia 110 - 110
Bancolombia – finance leases Silvotecnia 62 405 467
5,299 14,348 19,647
Non-
31 Dec 2018 Current current Total
Lender Project USD'000 USD'000 USD'000
MetLife term loan Frondosa 750 11,625 12,375
Banco Rendimento SA Frondosa 42 27 69
Banco Rendimento SA TFC do Brasil 1,735 2,645 4,380
Bancolombia Silvotecnia 62 - 62
Bancolombia – finance leases Silvotecnia 234 139 373
2,823 14,436 17,259
40
16. INTEREST BEARING BORROWINGS (CONTINUED)
On 11 April 2013, the Company, through SP Timberland Holdings LLC and SP Timberland LLC, agreed the terms
of a loan for USD 15 million from MetLife with an additional line of credit of the same amount. The line of credit
was fully repaid in the year to 31 December 2018.
The term loan was drawn down on 27 November 2013 and utilised to repay the remaining balance on a Banco
Rendimento facility in Frondosa. The fixed interest rate on the term loan is based upon 585 bps above the 10 year
US Treasury rate, subject to a minimum 7.75%. As at 30 June 2019 the principal amount owing to MetLife in
respect of the term loan is USD 12.0 million (31 December 2018: USD 12.4 million).
On 7 December 2018 the Ibiraçu project drew down loans of BRL 1.6 million and BRL 15.4 million from Banco
Rendimento which bear interest at a variable interest rate indexed to the CDI interbank interest rate benchmark
plus a spread of 0.8% per month. The estimated interest rate as of 30 June 2019 is 16.53%.
On 21 June 2019 the Ibiraçu project drew down a new loan of BRL 10.0 million (USD 2.6 million) from Banco Itau
which bears interest at a variable interest rate indexed to the CDI interest rate plus a spread of 0.5% per month.
The estimated interest rate as of 30 June 2019 is 11.89%.
After repayments since drawdown, the balance outstanding on the Ibiraçu loans at 30 June 2019 was BRL 22.9
million (USD 5.9 million) (31 December 2018: BRL 17.0 million or USD 4.4 million).
On 26 March 2019 the BioCarbono project drew down a new loan of BRL 1.8 million from Banco Rendimento
which bears interest at a variable interest rate indexed to the CDI interest rate plus a spread of 1% per month.
The estimated interest rate as of 30 June 2019 is 19.08%. This loan is being used to execute the restructuring of
the charcoal assets and will be repaid by November 2019. The balance outstanding as of 30 June 2019 is BRL 1.3
million (USD 0.33 million).
On 1 February 2019 and on 8 April 2019 the Kaa project drew down new loans of BRL 0.4 million and BRL 2.7
million from Banco Rendimento and Banco Itau respectively. These loans bear interest at a variable interest rate
indexed to the CDI interest rate plus a spread of 0.8% and 0.959% per month respectively and the estimated
interest rates as of 30 June 2019 are 16.43% and 17.9%. These loans are being used to execute the silviculture
plan and will be fully repaid in less than one year. The balance outstanding as of 30 June 2019 is BRL 2.9 million
(USD 0.75 million).
The total interest incurred on these borrowings was USD 0.8 million (30 June 2018: USD 1.0 million).
The Company has pledged land and biological assets with a value of USD 44.53 million (31 December 2018: USD
67.13 million) as security for the MetLife loan (see Note 8). As security for the Banco Rendimento loan, the
Company pledged cash balances of BRL 2.8 million from subsidiaries (see Note 15), cash of BRL 3.3 million from
the Aimara joint venture, and receivables from some sales contracts.
41
17. DEFERRED TAX
The table below details the movements in deferred tax liabilities for the six months ended 30 June 2019.
Biological Land and

30 Jun 2019 assets other Total
USD'000 USD'000 USD'000
Opening balance (2,139) (2,670) (4,809)
Credited to income statement on fair value
adjustments on forest assets 199 - 199
Charged to other comprehensive income on
revaluation adjustments - (130) (130)
Exchange rate differences 23 (63) (40)
Closing balance (1,917) (2,863) (4,780)
Biological Land and

31 Dec 2018 assets other Total
USD'000 USD'000 USD'000
Opening balance (2,473) (3,168) (5,641)
Credited to income statement on fair value
adjustments on forest assets 73 - 73
Credited to other comprehensive income on
revaluation adjustments - (60) (60)
Exchange rate differences 261 558 819
Closing balance (2,139) (2,670) (4,809)
Deferred tax liabilities arise in relation to unrealised fair value adjustments on both forest assets and investment
property and have been recognised on an “in use” basis. Unrealised fair value adjustments on planted land and
their corresponding deferred tax liability are reflected in other comprehensive income (see Note 8 for sensitivity
analysis).
18. OTHER LONG TERM LIABILITY
Other long term liabilities relates to the long term portion of the Funrural liability. In 2017 the Brazilian Supreme
Court judged that the INSS Contribution (Funrural) charged on gross revenue of rural producers is valid and
constitutional. Although this ruling does not specifically apply to the Group, legal advisors have considered it to
be possible or likely that the Supreme Court would rule that it applies to legal entities such as the subsidiary
companies owned by the Group.
Following the approval of the tax amnesty programme by the Brazilian Congress in January 2018, specifically
applicable to Funrural debts, the Group’s legal advisors have advised the Group to adhere to the programme.
Therefore, the Group has booked a provision for Funrural taxes, for the period from 2013 to 2017, which will be
paid in 176 instalments. This is shown under ‘Other long-term liabilities’, reflecting the amount due from July
2020 onwards (USD 0.68 million), and under ‘Trade and other payables’, reflecting the amount due before July
2020 (USD 12,000) – see Note 19.
42
19. TRADE AND OTHER PAYABLES
30 Jun 2019 31 Dec 2018

USD'000 USD'000
Trade payables 4,867 4,187
Taxes payable 2,497 2,815
Accruals 311 549
7,675 7,551
Trade payables include amounts outstanding for trade purchases and on-going costs. The credit period taken for
trade purchases ranges from 30 to 60 days. The carrying amount of trade payables approximates to their fair
value. Tax payable includes income taxes, sales taxes and Funrural taxes (see Note 18).
20. CONTINGENT LIABILITIES
In February 2018 the Colombian National Lands Agency (CNLA) challenged the Company with regard to the areas
of land owned in the Vichada region, and has filed a claim in Court to nullify the sales contracts contained in the
public deeds by which the Colombian branches acquired rural properties initially adjudicated as vacant lands
(“Baldíos”). The plaintiff requested the Court to order the Notary to cancel the respective public deeds and the
notes made before the Registry Office. If the Court were to reach an unfavourable decision, the consequences
would be that all public deeds by means of which the branches acquired their lands would be declared null and
void, and therefore the branches would be obliged to restore the properties’ ownership back to the seller of each
property and the sellers would be obliged to reimburse the price paid for the land. The Company’s lawyers have
classified the likelihood of an unfavourable decision as possible and thus the contingent liability is the fair value
uplift on the land since acquisition in the amount of USD 1.20 million. There are no biological assets on this land.
Should the sellers be unwilling or unable to reimburse the Company for the price of the land, it would be
necessary for the Company to take legal action to recover the purchase price paid (USD 5.98 million).
On July 30, the Company attended the opening hearing of the nullity action procedure. Neither CNLA’s attorney
nor legal representatives showed up in the courtroom. Since Colombian procedural law gives the absent party a
term of three days to excuse its absence, the Judge suspended the hearing. The term expired and no excuse was
submitted. The effects of this absence by CNLA are not clear at the moment. If the CNLA does not attend the
proceedings in the future, depending on some procedural rules, the Company might be authorized to request
termination of the proceedings. However this will not prevent the CNLA restarting the proceedings in the future.
Ibiraçu has been involved in a lawsuit, as claimant, against E. S Reflorestamento. In 2009 Ibiraçu engaged with E.
S Reflorestamento to perform certain silviculture services, including soil preparation and plantation of some
areas. In Ibiraçu’s view these services were not rendered to a satisfactory standard, causing the company
significant losses as the rate of survival of the newly planted trees was very low. The company had to engage
another service supplier to replant the area. Ibiraçu therefore claimed for the recovery of payments made to E. S
Reflorestamento for the silviculture services, plus interest and legal costs, to a total amount of BRL 8,931,665
(USD 2.3 million). During 2018 the court of first instance ruled against E. S Reflorestamento, which appealed that
decision. At the start of 2019 the court rejected the appeal from E. S Reflorestamento. Ibiraçu will now try to
obtain a pledge over any asset possessed by the company in order to secure its right to receive the above
mentioned claim. At this date there are significant uncertainties over the collectability and timing of any recovery
of this amount.
43
21. NET ASSET VALUE
Reconciliations of the Group’s IFRS NAV to the Adjusted NAV as at 30 June 2019 are as follows:
30 June 2019 31 December 2018

USD USD'000 USD USD'000
per share total per share total
IFRS NAV attributable to holders of redeemable
Ordinary and Class A Ordinary shares 3.67 187,957 3.72 190,633
Adjustment for deferred tax duplication 0.13 6,548 0.13 6,651
Adjustment for notional land lease charge 0.26 13,021 0.23 11,565
Adjustment for unamortised organisation expenses - 63 - 90
Adjusted NAV attributable to redeemable Ordinary

and Class A Ordinary shareholders 4.06 207,589 4.08 208,939
The definitions of IFRS NAV and Adjusted NAV are shown in the Glossary.
22. BASIC AND DILUTED EARNINGS PER ORDINARY AND CLASS A ORDINARY SHARE
Basic and diluted earnings per share is based on the following data:

2019 2018 2018
(Loss) / profit for the period/year USD'000 USD'000 USD'000
From continuing operations (4,986) 6,878 (10,005)
Average number of issued shares ('000s) 51,192 51,184 51,186
Basic (loss) / profit per share US cents US cents US cents

From continuing operations (9.74) 13.44 (19.55)
Average number of issued shares (‘000s) including

dilutive potential ordinary shares 51,257 51,233 51,186
Diluted (loss) / profit per share US cents US cents US cents

From continuing operations (9.74) 13.42 (19.55)
The Company has potential ordinary shares relating to the Directors’ incentive scheme. As the issue of these
shares would not be dilutive at 30 June 2019 or 31 December 2018, they do not affect the calculation of diluted
earnings per share for those periods.
44
23. OPERATING SEGMENTS
For management purposes, the Group is organised into three geographically-organised business units:
 the Brazilian operations, which include forestry operations and charcoal production;
 the Colombian operations, which include forestry operations, forestry consulting and management
services; and
 the holding companies (including the Company), which carry out administrative and financing
operations.
The operations in Brazil and Colombia represent reportable operating segments. The holding companies do not
have revenues, so are not operating segments for the purpose of this disclosure. The Board is considered the chief
operating decision maker, as it is responsible for allocating resources and assessing the performance of the
business units. The segment reporting is evaluated by the Board on profit or loss after tax, on a consistent basis
with the profit or loss in the Consolidated Financial Statements. However, the performance of the joint ventures
is evaluated using proportional consolidation. Transactions between entities within each operating segment are
eliminated on preparing the segment results. No transactions have occurred between operating segments.
Finance income and expense, other income and taxes are allocated to the unit in which they arise. This can lead
to an asymmetric effect if some operations are financed from loans within the same operating segment, while
others are financed with loans at the holding company level.
Geographical information on the location of customers is provided in Note 4. The geographical information does
not match the revenue for the business units disclosed here, as the figures below include revenue arising in joint
ventures.
Total Other
30 June 2019 Brazil Colombia segments assets Adjustments Consolidated
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
Revenue
External customers 6,168 4,312 10,480 - (2,969) 7,511
Income/(expense)
Cost of sales and
depletion (6,959) (4,493) (11,452) - 2,299 (9,153)
Unrealised gains/(losses)
on biological assets 1,377 1,374 2,751 - (2,031) 720
Realised loss on disposal
of investment property - - - - - -
Other income/(expense) (3,169) (39) (3,208) (2,947) 2,849 (3,306)
Finance income 55 4 59 (39) 20
Finance (expense) (158) (32) (190) (675) 20 (845)
Taxation 66 99 165 - (92) 73
Segment (loss) / profit (2,620) 1,225 (1,395) (3,622) 37 (4,980)
45
23. OPERATING SEGMENTS (CONTINUED)
Total Other
30 June 2018 † Brazil Colombia segments assets Adjustments Consolidated
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
Revenue
External customers 8,946 4,292 13,238 - (4,247) 8,991
Income/(expense)
Cost of sales and
depletion (9,052) (4,632) (13,684) - 3,796 (9,888)
Unrealised gains/(losses)
on biological assets 9,731 1,216 10,947 - (1,819) 9,128
Realised loss on disposal
of investment property - - - - - -
Other income/(expense) 755 442 1,197 (3,204) 2,107 100
Finance income 132 5 137 16 (27) 126
Finance (expense) (48) (85) (133) (902) 27 (1,008)
Taxation (548) (192) (740) - 163 (577)
Segment profit/(loss) 9,916 1,046 10,962 (4,090) - 6,872
† The segment disclosures for the period to 30 June 2018 have been revised to match the new presentation of
segment disclosures in the audited financial statements for the year to 31 December 2018.
Reconciliation of profit
Jan-Jun Jan-Jun
2019 2018
USD'000 USD'000
Total segment (loss)/profit (1,395) 10,962

Other income and expense - 27
Management fees (1,727) (1,803)
Other operating expenses (1,220) (1,428)
Finance income - 16
Finance expense (638) (902)
(Loss)/profit for the period (4,980) 6,872
46
24. PRESENTATION OF BRAZILIAN AND COLOMBIAN PROJECTS IN FUNCTIONAL CURRENCY
The Group’s projects are located in Brazil and Colombia and their accounting records are maintained in their
respective functional currencies of BRL and COP. The tables below present summarized information for Brazilian
and Colombian projects in their functional currencies. They include balances that relate to the Company’s Joint
Ventures.
Summary of Brazilian projects presented in BRL
30 Jun 2019 31 Dec 2018 30 Jun 2018

BRL'000 BRL'000 BRL’000
ASSETS
Non-current assets
Forest assets
Land 348,898 348,644 348,661
Other non-current assets 16,292 14,655 35,540
Current assets
Inventory 2,522 4,289 3,338
Trade and other receivables 13,709 12,944 11,673
Cash and cash equivalents 14,694 16,961 7,610
TOTAL ASSETS 670,264 677,215 721,157
LIABILITIES
Interest bearing borrowings (10,363) (10,371) (229)
Deferred tax liability (18,613) (18,777) (20,265)
Other long term liability (2,957) (3,276) (2,877)
Current liabilities
Interest bearing borrowings (16,850) (6,897) (198)
Trade and other payables (29,666) (26,307) (28,608)
Provisions (9,085) (9,078) (2,915)

NET ASSETS 582,730 602,509 666,065
47

(CONTINUED)
30 Jun 2019 31 Dec 2018 30 Jun 2018

BRL'000 BRL'000 BRL'000
Continuing operations
Revenue 23,688 62,183 30,611
Cost of sales (including depletion) (26,731) (65,713) (31,033)
Gross (loss) (3,043) (3,530) (422)
Unrealised gain on forest assets 5,290 19,499 33,365

Realised (loss) on disposal of assets - (8,626) -
Other income 327 (439) (199)
Operating expenses
Administrative expenses (1,698) (4,243) (2,527)
Forestry operating expenses (5,928) (16,934) (5,753)
Impairment of inventory (1,610) 5,121 5,122
Impairment of trade receivables - - -
Impairment of property, plant and equipment (3,377) 4,375 5,918
Total operating expenses (12,613) (11,681) 2,760
Operating (loss) / profit (10,039) (4,777) 35,504
Non-operating income and expenses (396) (1,118) 285
(Loss) / profit before tax (10,435) (5,895) 35,789
Taxation 254 2,792 (1,875)
(Loss) / profit from continuing operations (10,181) (3,103) 33,914
Other comprehensive income (250) 11,886 11,904
Total comprehensive (expense) / income (10,431) 8,783 45,818
48

(CONTINUED)
Summary of Colombian projects presented in COP
30 Jun 2019 31 Dec 2018 30 Jun 2018

COP million COP million COP million
ASSETS
Non-current assets
Forest assets
Land 57,499 56,098 52,341
Other non-current assets 27,663 26,823 34,320
Current assets
Trade and other receivables 6,253 5,278 5,163
Cash and cash equivalents 623 893 1,996
TOTAL ASSETS 185,225 180,461 190,150
LIABILITIES
Interest bearing borrowings (2,200) (991) (789)
Deferred tax liability (13,109) (13,337) (14,901)
Other long term liability - - (513)
Current liabilities
Interest bearing borrowings (1,002) (1,822) (1,627)
Trade and other payables (2,887) (2,530) (3,075)
Provisions (19) - -

NET ASSETS 166,008 161,781 169,245
49

(CONTINUED)
30 Jun 2019 31 Dec 2018 30 Jun 2018

COP million COP million COP million
Continuing operations
Revenue 13,747 30,350 14,326
Cost of sales (including depletion) (14,324) (29,390) (11,147)
Gross (loss) / profit (577) 960 3,179
Unrealised gain on forest assets 4,379 (3,192) 3,464

Other income 127 1,187 (399)
Operating expenses
Administrative expenses (274) (596) (373)
Forestry operating expenses (2,527) (5,120) (2,082)
Impairment of trade receivables - (38) (37)
Total operating expenses (2,801) (5,754) (2,492)
Operating profit / (loss) 1,128 (6,799) 3,752
Non-operating income and expenses (86) (337) (228)
Profit / (loss) before tax 1,042 (7,136) 3,524
Taxation 316 62 (553)
Profit / (loss) from continuing operations 1,358 (7,074) 2,971

Non-controlling interests (19) (80) 17
Other comprehensive income 1,692 3,192 387
Total comprehensive income / (expense) 3,031 (3,962) 3,375
50

(CONTINUED)
Reconciliation to IFRS figures
Local currency FX rate USD’000

Statement of Financial Position
Brazilian net assets / BRL’000 582,730 3.8497 151,370
Colombian net assets / COP millions 166,008 3,211.4 51,694
Other net assets (15,064)
Consolidation adjustments (43)
IFRS net assets 187,957
Income Statement
Brazilian (loss) for the period / BRL’000 (10,181) 3.8417 (2,650)
Colombian (loss) for the period / COP millions 1,358 3,187.3 426
Other income and expense (3,622)
Consolidation adjustments 866
IFRS (loss) for the year (4,980)
Statement of Other Comprehensive Income

Brazilian OCI for the period / BRL’000 (250) 3.8417 (65)
Colombian OCI for the period / COP millions 1,692 3,187.3 531
Other Comprehensive (Expense) 1,838
Consolidation adjustments -
IFRS Other Comprehensive Income 2,304
25. SUBSEQUENT EVENTS

There have been no material events after the reporting period that need to be disclosed in these financial
statements.
51
GLOSSARY
AB Florestal: AB Florestal Participacoes Ltda. Company: The Forest Company Limited.
Administrator: Estera International Fund Company Secretary: Belasko Administration

Managers (Guernsey) Limited (formerly Heritage Limited.
International Fund Managers Limited).
COP: Colombian Peso.
AGM: Annual General Meeting.
Corrupt Practice: The offering, giving, receiving
AIC: Association of Investment Companies. or soliciting, directly or indirectly, of anything of
value to influence improperly the actions of
AIC Code: The AIC’s Code of Corporate Governance. another party.
Aimara: Aimara Empreendimentos Imobiliários e Cotopaxi: Aglomerados Cotopaxi S.A., the Group’s
Participações Ltda. joint venture partner in MSTH.
Annual Report: Report of the activities of the CREE: Colombian social income tax.
Company.
CSLL: Contribuição Social sobre o Lucro Líquido
Antioquia: Antioquia Wood Holdings Limited. das Pessoas Jurídicas; a social contribution tax in
Brazil based on net profit.
Auditor: BDO LLP.
Current Adjusted NAV: the most recent Adjusted
BCB: Brazilian Central Bank. Net Asset Value preceding the date of payment.
Biocarbon: Solid material produced from biomass DCF: Discounted Cash Flow.
through carbonisation; also known as charcoal.
Deferred tax: tax payable or recoverable in a
Biocarbono: Biocarbono Produção e Comércio de future period.
Carvão Ltda.
Depletion: The Fair Value of biological assets
Board: Directors of the Company. harvested.
Board Meeting: Meeting of the Directors of the Donahoo: Donahoo Participacoes S.A
Company.
DTF: Colombian central bank interest rate.
BRL: Brazilian Real.
El Guasimo: Reforestadora El Guasimo.
CDI: Brazilian interbank interest rate.
ESG: Environmental, Social and Governance
Cementos: Cementos Argos S.A. considerations.
Chapter: Chapter Participacoes S.A. EU: The European Union.
Charcoal: see Biocarbon. Eucalyptus: Trees of the Genus Eucalyptus.
CIF: Certificado de Incentivo Forestal EY: Ernst & Young.
Class A Ordinary Shares: A redeemable Ordinary Fair Value: Defined in IFRS 13 as the price that
Share of USD 0.10 in the capital of the Company and would be received to sell an asset or paid to
designated a Class A Ordinary Share. transfer a liability in an orderly transaction
between market participants at the measurement
COFINS: Contribuição para o Financiamento da date.
Seguridade Social; a social contribution tax in Brazil
based on gross revenue. FRC: Financial Reporting Council.
52
GLOSSARY (CONTINUED)
Frondosa: Frondosa Empreendimentos
Imobiliários, Atividades Florestais e Participações KPI: Key Performance Indicator.
Ltda.
Law: The provisions of the Companies (Guernsey)
FSC: The Forest Stewardship Council; an Law, 2008, (as amended).
independent, non-profit organisation established in
1993 to respond to global environmental concerns LLC: Limited Liability Company.
especially as they pertain to deforestation. The FSC
is an internationally recognised forest management LLP: Limited Liability Partnership.
certification body.
Lucro Real: Actual Profit Tax Regime in Brazil.
FSC Certification: Obtained by organisations that
comply with the Principles and Criteria set forth by Lucro Presumido: Presumed Profit Tax Regime in
the FSC. This is done through an independent Brazil.
annual audit carried out by accredited auditing
bodies. MAI: Mean Annual Increment.
GBP: Great British Pound. Management Shares: Non-redeemable ordinary

share of USD 1.00 each in the capital of the
GFSC: Guernsey Financial Services Commission. Company and designated as a Management Share.
GFSC Code: Code of Corporate Governance issued Master Hurdle Amount: The Master Hurdle
by the Guernsey Financial Services Commission. Amount is calculated in line with the Investment
Management Agreement.
Group: The Forest Company Limited and its
subsidiaries and other investments. MDC: Volume based unit of charcoal;
approximately 200kg.
Hadoque: Hadoque Propriedades Rurais e
Participacoes Ltda. MetLife: Metropolitan Life Insurance Company.
IAS: International Accounting Standard. Money Laundering: The generic term used to
describe the process by which the original
IASB: International Accounting Standards Board. ownership and control of the proceeds of illegal
conduct is disguised to make such proceeds appear
IFRS: International Financial Reporting Standards. to have been derived from a legitimate source.
IMA: Investment Management Agreement. MOU: Memorandum of Understanding.
Initial Hurdle Amount: the Adjusted Net Asset MSTH: MS Timberland Holdings Ltd.
Value per share on the funding date as increased by
an annual compounding hurdle rate of 8%. NAV: Net Asset Value.
Investment Manager: Timber Capital Limited The Company prepares three NAVs –
(TCL).
1. IFRS NAV – the value of all of the assets of the
IRPJ: Corporate Income Tax in Brazil. Group less the liabilities to creditors of the Group
determined in accordance with the valuation
IRR: Internal Rate of Return. policy. The valuation is determined in accordance
with IFRS.
Joint Venture: joint contractual arrangement,
involving two or more parties, whereby the parties 2. Adjusted NAV – the IFRS NAV adjusted, as
that have joint control of the arrangement have below, for the purposes of reporting to the
rights to the net assets of the arrangement. Shareholders.
Klabin: Klabin S.A.

53
The Adjusted NAV, and corresponding Adjusted Notional Land Lease (NLL) charge: A charge
NAV per share, is currently calculated as the included in the computation of the value of
respective amounts calculated under IFRS, adjusted biological assets where the Group owns the land on
as follows: which the plantations are grown. It is based on
market reference data at the time of valuation.
1. to reflect the future tax liability of the Company’s
investments without duplication. Whereas under NPV: Net Present Value.
IFRS the future tax payments are deducted from
future cash flows in the calculation of the fair value OCI: Other Comprehensive Income/Expense.
of biological assets and are again deducted from the
NAV by way of a deferred tax liability accrual; for the Ordinary Share: A redeemable Ordinary Share of
purposes of the adjusted measures the deferred tax USD 0.10 in the capital of the Company and
liability accrual on biological assets is not included designated as an Ordinary Share.
as a result of an “in use” basis of realisation being
assumed; Pig iron: Crude iron as first obtained from a
smelting furnace.
2. to remove a notional land lease charge over
acquired planted land. Whereas these notional land Pine: Trees of the Genus Pinus.
lease charges are included in the determination of
the fair value of forest assets under IFRS, for the PIS: Programa de Integração Social; a social
purposes of the Adjusted NAV, these costs are not integration programme tax in Brazil.
included in the determination of the fair value of
forest assets, as they are non-cash costs; Prohibited Investments: Investments with, or on
behalf of, terrorists, terrorist organisations or
3. to reflect the capitalisation of costs associated narcotics traffickers, but also include transactions
with the Company’s share capital issuances and with, or on behalf of, those persons or entities that
original organisation costs. Whereas under IFRS are included on any relevant lists maintained by the
these costs are deducted from equity in the first United Nations Security Council or its committees
accounting period, for the purposes of the adjusted pursuant to any resolution issued under Chapter
measures, these costs are capitalised and amortised VII of the United Nations Charter.
over a five-year period
Rendimento: Banco Rendimento S.A.
A reconciliation of the Group’s NAV per share in
accordance with these financial statements and the SCP: Sociedade em Conta de Participações
Group’s Adjusted NAV per share is disclosed in the (meaning approximates to a SPV).
notes to the financial statements.
SDG: Sustainable Development Goals.
3. IMA Adjusted NAV – the Adjusted NAV as
further adjusted to remove liability for warrant Silvotecnia: Silvotecnia S.A.
instruments, if any, for the purpose of calculating
the investment manager’s fee. Simosol: Simosol Oy, appointed to independently
assess and report the value of forestry assets in
NAV per Share: Net Asset Value per Ordinary accordance with IFRS.
Share.
SPV: Special Purpose Vehicles which hold the
New Adjusted Hurdle Amount : the Initial Hurdle Company’s investment portfolio of underlying
Amount as adjusted for any new share issues or forestry assets.
dividends paid by the Company.
Surubim: Surubim Empreendimentos Imobiliários,
New Shares: Shares issued following shareholders Atividades Florestais e Participações Ltda.
electing to receive the declared dividend in fully
paid shares of the Company (either Ordinary TCI: Total Comprehensive Income/Expense.
Shares or Class A Ordinary Shares).
TCL: Timber Capital Limited (also see ‘investment
manager’).
54
TFC: The Forest Company Limited.
TISE: The International Stock Exchange.
TISEA: The International Stock Exchange

Authority.
UK: The United Kingdom of Great Britain and

Northern Ireland.
UK Code: The UK Corporate Governance Code

issued by the FRC.
Updated Adjusted NAV: an updated Net Asset

Value.
USD: United States Dollar.
WACC: Weighted Average Cost of Capital.
55

Unaudited Condensed Consolidated Interim Financial Statements For The Six Months Ended 30 June 2019

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TABLE OF CONTENTS PAGE

INVESTMENT MANAGER’S REPORT 4

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL

UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT 12

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OTHER

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM

Brazilian Solicitors to the Company Tax advisors to the Company

OVERVIEW OF MAIN DEVELOPMENTS DURING THE PERIOD

New sales contracts

PROJECTS PERFORMANCE UPDATE

FRONDOSA PROJECT The Frondosa Project is located in the Pirapora region

YEAR OF INVESTMENT 2011 Frondosa harvested 198,945 m³ of standing wood in

TOTAL AREA 26,415 HA

TOTAL HARVESTED 3,363,643 M3

PROJECT IRR 12.60%

IBIRAÇÚ PROJECT The Ibiraçu Project is located in the Pirapora region

TOTAL HARVESTED 166,383 M3

PROJECT IRR 6.30%

Aimara, the Company’s first greenfield project, began

TOTAL AREA 2,809 HA

TOTAL HARVESTED 790,427 M3

PROJECT IRR 11.20%

The Kaa project started in 2011 with add-on

SPECIES PINE Management has identified other pine plantation

PROJECT IRR 14.80%

MS TIMBERLAND PROJECT MS Timberland is a joint venture with an Ecuadorian

TOTAL AREA 10,671 HA

TOTAL HARVESTED 869,644 M3

FSC CERTIFIED SINCE OCTOBER 2018

PROJECT IRR 14.60%

SILVOTECNIA PROJECT Silvotecnia is the leading forest service provider in

CORE-BUSINESS FOREST SERVICES After reaching breakeven in 2018 the company

INVESTMENT PIPELINE AND OUTLOOK

Chief Executive Officer

30 Jun 31 Dec 30 Jun

TOTAL ASSETS 223,103 223,346 245,071

TOTAL LIABILITIES (35,146) (32,713) (34,185)

30 Jun 2019 31 Dec 2018 30 Jun 2018

Number of redeemable Ordinary Shares

Net asset value per redeemable

Unrealised gain on biological assets 8 720 9,128 5,684

Operating (loss) / gain (4,228) 8,331 (8,317)

Interest income on bank deposits 20 126 120

Taxation 7 73 (577) 687

(Loss) / gain attributable to:

Earnings per share - from continuing operations

(Loss) / gain for the year (4,980) 6,872 (9,978)

Other comprehensive gain / (loss) net of income tax

Items that will not be reclassified subsequently to profit or

Total comprehensive (loss) for the year (2,676) (17,529) (37,765)

(Loss) / gain attributable to:

Total comprehensive income per share (US Cents)*

The results for the period relate to continuing operations.

Currency Share-based Non-

Loss for the period - - - - (4,986) 6 (4,980)

Share-based payments - - - 35 (35) - -

As at 30 June 2019 330,712 115,563 (229,504) 35 (29,113) 264 187,957

Profit/(loss) for the period - - - 6,878 (6) 6,872

As at 30 June 2018 330,642 114,894 (227,242) (7,643) 235 210,886