Companhia Mineira de Açúcar e Álcool Participações Management Report Harvest 14/15

Transcription

1 Companhia Mineira de Açúcar e Álcool Participações Management Report Harvest 14/15

2 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 Management Report. Uberaba, June 11th Dear Shareholders, We present the Management Report, the Financial Statements and Independent Auditors' Report for the harvest 2014/2015, ended on March 31st, 2015 in accordance with CPCs and IFRS. Features of Harvest 14/15 It was crushed 3.511K tons of sugarcane at 12M15, 16% higher than last crop. It was produced 224K tons of VHP, 144K m³ of Ethanol and 269K MWH of Energy. Gross Sales was 500.9MR$, 25.5% above than harvest 13/14 that were 399 MR$. EBITDA of MR$, with margin of 44%, increased 19.5% on last harvest.

3 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 Operatinal & Financial Features (THOUSAND REAIS) 12M14 12M15 Var.(%) CMAA - CONSOLIDATED Gross Sales ,5% Net Sales ,9% COGS ,4% SG&A ,6% Depreciation and Planting Amortizantion ,3% EBITDA* ,9% EBITDA Margin 46,9% 44,0% -6,2% Net Income ,4% Fair Value of Exchange Variation 100,0% Net Adjustment Income ,4% Note: A form of EBITDA calculation includes depreciation, biological assets amortization and off-season amortization. In the season the amortization of treatment ratoon cane is inside the biological assets at a value of 12,551 MR$. Operational Data 12M14 12M15 Var.(%) CMAA - CONSOLIDATED 12M14 12M15 Var.(%) Crushing Sugar Cane (Thousand Tons) ,0% Owner ,7% Third Parties ,2% Mechanized Harvesting 100% 100% 0,0% TRS (Kg/ton of cane) 134,8 131,1-2,7% Production Sugar (Thousand Tons) ,5% Anhydrous Ethanol (Thousand m³) ,5% Hydrous Ethanol (Thousand m³) ,3% Electric Energy (Thousand Mwh) ,1% Sales Sugar (Thousand Tons) ,3% Anhydrous Ethanol (Thousand m³) ,4% Hydrous Ethanol (Thousand m³) ,8% Electric Energy (Thousand Mwh) ,5% Inventory Sugar (Thousand Tons) ,0% Anhydrous Ethanol (Thousand m³) 4,0 4,5 11,6% Hydrous Ethanol (Thousand m³) 0,1 0,1 0,9%

4 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 12M14 12M15 Var.(%) Sugar Cane* 597,06 571,34-4,3% TRS (kg/sugar cane tons) 133,32 136,58 2,4% Sugar* 34,30 31,99-6,7% Ethanol** 25,58 26,15 2,2% Anhydrous 11,01 10,75-2,3% Hydrous 14,57 15,39 5,7% Sugar (%) 45,22 43,02-4,9% Ethanol (%) 54,78 56,98 4,0% Source: FCSTONE/ÚNICA *million tons **billion de liters According last data form ÚNICA, the Mid- South production of harvest 14/15 reached 571 MM tons, 4.3% lower than harvest 13/14. Receita GROSS SALES COMPOSITION 12M14 12M15 Var.(%) In Thousand Reais 12M14 12M15 Var.(%) Internal Market ,8% Hydrous Ethanol ,8% Anhydrous Ethanol ,7% Sugar 0 0 0,0% Electric Energy ,3% Others ,8% External Market ,2% Sugar ,2% Hydrous Ethanol 0 0 0,0% Total Gross Sales ,5% Hydrous Ethanol ,8% Anhydrous Ethanol ,7% Sugar ,2% Electric Energy ,3% Others ,8%

5 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 Sugar Volume (Thousand tons) and Average Price (R$/unit) Sale Volume x Price - VHP , M14 15, M ,00 80,00 60,00 40,00 20,00 0,00 At Harvest 14/15 was sold 224k tons of sugar with average price of R$ 878/ton Volume 000T R$/ton CMAA Cts/lbp NY

6 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 Ethanol R$ 1,32 Volume x Hydrous Price R$ 1, Hydrous: it was sold 54k m3 at harvest 14/15, reduction of 6,9% from last crop, with average price of R$ 1.42/liter M M Volume 000m³ Price R$/Liter CMAA Volume x Anydrous Price R$ 1, M M15 R$ 1, Anhydrous: increase on sales volume at 14% compared previous harvest, being 89k m3 with average price of R$ 1.42/liter. Volume '000m³ Price R$/liter CMAA

7 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 Costs COGS 12M14 12M15 Var.(%) In Thousand Reais 12M14 12M15 Var.(%) Sugar ,0% Ethanol ,6% Electric Energy ,6% Others ,5% Total COGS ,4% TRS Sold (Thousand Tons) ,5% Unit Cost (Sugar&Ethanol COGS/TRS) ,6% Cost of goods sold shows at the end season 14/15 an increase of 29.4% in absolute values over from season 13/14. The variation reflexes an increase of 12.5% in sales volume. When comparing the unit cost of sugar / ethanol on the TRS sold, the increase is 16.6%, reflecting inflation in the costs and especially the fall of the TRS/ton/Cana.

8 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 Expenses Sales Expenses 12M14 12M15 Var.(%) In Thousand Reais Freight of transfers and sales ,0% Port Charges ,0% Comissions and Sales fees ,6% Personnel expenses ,6% Depreciation ,7% Rent ,7% Others Expenses ,9% Total ,9% Administrative Expenses 12M14 12M15 Var.(%) In Thousand Reais Personnel expenses ,9% General expenses and Outsourced Services ,1% Depreciation ,6% Tax, fees and contribuitions ,1% Rent ,2% Total ,5% Vendas: At harvest 14/15 had an increase of 25.9% compared harvest 13/14. The variation is due 19.3% of increase of transported volume of VHP to port and increasing of price of freight and port. Administrativas: Increase of 4.5% at 12M15 compared 12M14. The variation is a result of inflation in the expenses.

9 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 Financial Results Net Financial Results 12M14 12M15 Var.(%) In Thousand Reais Financial incomes ,2% Financial Expenses ,2% Total ,0% At 12M15 had 71.5 MR$ of net financial result, as follows: 24.8 MR$ of interest on short term loans and 44.6 MR$ of interest on long-term loan. The exchange variation of interest for the period was -1.6 MR$, being -2.7 MR$ liquidated contracts and MR$ interest on contracts to be maturing. Other financial income and expenses are composed of bank charges, commissions, IOF financial operations and issuance of debentures (-4.4 MR$). FINANCIAL RESULTS BREAKDOWN 12M15 In Thousand Reais Interest of Short Term debt Interest of Long Term debt Exchange Variation Income of Investment Others financial income/expenses Total EXCHANGE VARIATION - 12M15 ACC SWAP/NDF Outros Total Settled Contracts Fair Value of interest in active contracts Total

10 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 Operational Working Capital OPERATION WORKING CAPITAL 31/3/14 31/3/15 Var.(%) In Thousand Reais ASSETS ,9% Receivables ,4% Inventory ,0% Recoverable Taxes ,0% LIABILITIES ,3% Suppliers ,4% Salaries and Social Security Contribuitions ,4% Payables Taxes ,3% WORKING CAPITAL ,6% The asset and liability position of harvest 14/15 demonstrates a negative variation in asset account due higher volume of inventories,recoverable taxes and lower receivable accounts from clients. Negative variation in liabilities was due suppliers account to be paid. Indebtedness INDEBTEDNESS 31/3/14 31/3/15 Var.(%) In Thousand Reais ACC ,0% FINAME ,0% Working Capital ,2% CRA ,0% Debentures ,1% Diferred Expenses ,4% Gross Indebtedness ,1% Cash ,5% Net Indebtedness ,1% Social Capital + Reserves ,0% Index (Net Indebtedness/Social Capital) 2,74 2,77 1,1% The position of net debt remained stable.

11 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 Investments CMAA - CONSOLIDATED 12M14 12M15 Var.(%) In Thousand Reais 12M14 12M15 Var.(%) Sugar Cane Planting ,2% Agricultural Machinary and Building ,8% Industrial Equipments and Building ,1% Administrative equipments/system and Others ,1% Total ,2% The reduction in level of investments is reflection the stability in the company growth, having almost reached the level of full capacity in the last year. Legal Notice The statements contained herein relating to the prospects of the business, estimates for operating and financial investments are based on management's expectations and these depend substantially on changes in market conditions, the performance of the Brazilian economy and international markets and therefore are subject to change without notice. Non-financial information, as well as other operating information has not been reviewed by the independent auditors. Opinions of Directors on the Annual Information 12M15 The Directors declare that reviewed, discussed and agreed with the annual Information 12M15 and also with the conclusions expressed in the report of the independent auditors, in accordance with Article 25 of CVM Instruction 480/09. CVM Instruction 381/03 In accordance with CVM Instruction No. 381, the Company announced that its independent auditors, KPMG, have not provided during last nine months of 2014 and first quarterly of 2015, ended March 31st of 2015, others services than those related to external audit. The Company's policy on hiring of others services than external audit ensures that there is no conflict of interest or loss of independence of auditors.

12 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 About CMAA The CMAA is a public company registered with the CVM and was created to be a hub for three milling of ethanol, sugar and energy, crushing a total of 12.9 million tons per year. It is located in a region close to major consumption centers (in Triângulo Mineiro). Currently operation is Vale do Tijuco Mill, in Uberaba(MG), which was designed with total processing capacity of 4 Million Tons of sugarcane and export up to 210 MW. This plant started its first season in April 2010 with a grinding of 1.2 million tons, with the second season in 2011, with a grinding of 1.66 million tons of sugarcane, producing VHP, anhydrous ethanol, hydrous ethanol and electric energy. For the season 2013/2014 was crushed million tons and for harvest 2014/15 crushed million tons of sugarcane.

13 Companhia Mineira de Açúcar e Álcool Participações Financial statements March 31, 2015 (A free translation of the original report in Portuguese) KPDS

14 Companhia Mineira de Açúcar e Álcool Participações Financial statements March 31, 2015 Contents Independent auditors' report on the financial statements 3 Balance sheets 5 Statements of income 6 Statements of comprehensive income 7 Statements of changes in shareholders' equity 8 Statements of cash flows - Indirect method 9 Statements of value added 10 Notes to the financial statements 11

15 KPMG Auditores Independentes Rua Sete de Setembro, São Carlos, SP - Brasil Caixa Postal São Carlos, SP - Brasil Central Tel 55 (16) Fax 55 (16) Internet Independent auditors' report on the financial statements To the Board Members and Shareholders of Companhia Mineira de Açúcar e Álcool Participações Uberaba - Minas Gerais We have examined the individual and consolidated financial statements of Companhia Mineira de Açúcar e Álcool Participações ("Company"), identified as Parent Company and, respectively, comprising the balance sheet as of March 31, 2015 and the related statements of income, comprehensive income, changes in shareholders' equity and cash flows, for the year then ended, as well as the summary of the significant accounting practices and other explanatory notes. Management s responsibility for the financial statements The Company's management is responsible for the preparation and adequate presentation of the individual financial statements in accordance with the accounting practices adopted in Brazil and of the consolidated financial statements in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board - IASB, and in accordance with the accounting practices adopted in Brazil as well as for the internal controls that it deemed necessary to enable the preparation of these financial statements free of significant distortions, regardless of whether the latter were caused by fraud or error. Responsibility of the independent auditors Our responsibility is to express an opinion on these financial statements based on our audit, undertaken in accordance with Brazilian and international auditing standards. These standards require compliance with ethical requirements by the auditors and that the audit be planned and executed with the objective of obtaining reasonable assurance that the financial statements are free from significant distortions. An audit involves the carrying out of procedures selected to obtain evidence related to the amounts and disclosures presented in the financial statements. The procedures selected depend on the auditor's judgment, including an assessment of the risks of significant distortion in the financial statements, regardless of whether the latter are caused by fraud or error. In this risk assessment, according to auditing standards, the auditor considers relevant internal controls for the preparation and adequate presentation of the financial statements of the Company, to plan the audit procedures that are appropriate in the circumstances, but not for purposes of expressing an opinion on the efficacy of these internal controls of the Company. An audit also includes the evaluation of the adequacy of adopted accounting practices and reasonability of accounting estimates made by Management, as well as an assessment of the presentation of financial statements taken as a whole. We believe that the audit evidence obtained is sufficient and appropriate to support our opinion. KPMG Auditores Independentes, uma sociedade simples brasileira e firma-membro da rede KPMG de firmas-membro independentes e afiliadas à KPMG International Cooperative ( KPMG International ), uma entidade suíça. KPMG Auditores Independentes, a Brazilian entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity.

16 Opinion on the individual financial statements In our opinion, the individual and consolidated aforementioned financial statements present fairly, in all material respects, the financial position of Companhia Mineira de Açúcar e Álcool Participações as of March 31, 2015, the performance of its operations and its cash flows, for the year then ended, in accordance with the accounting practices adopted in Brazil. Opinion on the consolidated financial statements In our opinion, the individual aforementioned financial statements present fairly, in all material respects, the financial position of Companhia Mineira de Açúcar e Álcool Participações as of March 31, 2015, the performance of its operations and its cash flows, consolidated for the year then ended, in conformity with International Financial Reporting Standards - IFRS issued by the International Accounting Standards Board (IASB) and the accounting practices adopted in Brazil. Emphasis Without modifying our opinion, we draw attention to note 1 to the consolidated financial statements, which demonstrates that the Company's consolidated current liabilities exceeded total consolidated current assets by R$ 492,938 thousand as of March 31, This condition, together with other matters, as described in note 1, indicate that a significant uncertainty exists and may raise significant doubts on the Company's going concern capacity as a going concern. Other issues Statements of added value We have also examined the individual and consolidated statements of value added (DVA) for the year ended March 31, 2015, prepared under responsibility of Company's management, whose presentation is required by Brazilian Corporate Law for publicly-held companies and as supplementary information under IFRS that do not require the presentation of a statement of value added. These statements were submitted to the same audit procedures previously described and, in our opinion, these supplementary statements are adequately presented, in all material respects, in relation to the basic financial statements taken as a whole. São Carlos, June 11, 2015 KPMG Auditores Independentes CRC 2SP014428/O-6 Original report in Portuguese signed by André Luiz Monaretti Accountant CRC 1SP160909/O-3

17 Balance sheets at March 31, 2015 and 2014 (In thousands of Reais) Parent company Parent company Assets Note 03/31/ /31/ /31/ /31/2014 Liabilities Note 03/31/ /31/ /31/ /31/2014 Cash and cash equivalents Loans and financing Trade accounts receivable and other receivables Debentures Inventories Derivative financial instruments Recoverable taxes and contributions Suppliers and other accounts payable Other current assets Provision and labor charges Tax liabilities Total current assets Advances from clients Other current liabilities Long-term assets Inventories Total current liabilities Trade accounts receivable and other receivables Judicial deposits Loans and financing Recoverable taxes and contributions Debentures Deferred income and social contribution taxes Derivative financial instruments Provision for loss in investments Total non-current assets Provisions for contingencies Investments Total non-current liabilities Biological assets Property, plant and equipment Shareholders' equity 21 Intangible assets Capital Capital reserve Total non-current assets Equity evaluation adjustment (59.000) (5.791) (59.000) (5.791) Accumulated loss (75.781) (81.818) (75.781) (81.818) Total shareholders' equity Total liabilities Total assets Total liabilities and shareholders' equity See the accompanying notes to the financial statements

18 Statements of income Years ended March 31, 2015 and 2014 (In thousands of reais) Parent company Note 03/31/ /31/ /31/ /31/2014 Net operating income Variation of the biological asset's fair value Cost of sales and services 24 ( ) ( ) - - Gross income Sales expenses 24 (35.909) (28.532) - - Administrative expenses 24 (14.937) (14.292) (1.054) (626) Other operating income (49.397) (37.528) (1.054) (626) Income (loss) before net financial income (loss), equity in net income of subsidiaries and taxes (1.054) (626) Financial expenses 26 (84.586) (68.658) (273) (770) Financial income Net financial income (expenses) 26 (71.469) (61.613) (264) (760) Equity income (loss) Income (loss) before taxes Current income and social contribution taxes 20 (121) (249) - - Deferred income and social contribution taxes (385) (634) - - Net income for the year attributable to controlling shareholders See the accompanying notes to the financial statements.

19 Statements of comprehensive income Years ended March 31, 2015 and 2014 (In thousands of Reais) Parent company 03/31/ /31/ /31/ /31/2014 Income (loss) for the year Cash flow hedge losses, net (53.209) (5.791) (53.209) (5.791) Total comprehensive income (47.172) (47.172) See the accompanying notes to the financial statements.

20 Statements of changes in shareholders' equity Years ended March 31, 2015 and 2014 (In thousands of Reais) Noteote Capital Capital reserves Equity evaluation adjustment Accumulated losses Total shareholders' equity Balances at April 1, 2013 ## (90.369) Other comprehensive income: Net losses from cash flow hedge reflected (5.791) - (5.791) Capital increase through paid-up capital pursuant to minutes of meeting held on December 25, Net income (loss) for the year Balances at March 31, 2014 ## (5.791) (81.818) Other comprehensive income: - Net losses from cash flow hedge reflected (53.209) - (53.209) Net income (loss) for the year Balances at March 31, (59.000) (75.781) See the accompanying notes to the financial statements.

21 Statements of cash flows - Indirect method Years ended March 31, 2015 and 2014 (In thousands of reais) Note Parent company 03/31/ /31/ /31/ /31/2014 Cash flow from operating activities Income (loss) for the year Adjustments to reconcile income (loss): Change in fair value of biological assets (1.223) (7.040) - - Depreciation and amortization Decrease in biological assets for the crop of sugarcane Off-season amortization Equity income (loss) - - (7.355) (9.937) Residual value of written-off fixed assets Interest on loans and financing Unrealized foreign exchange variation on loans and financing (5.092) Monetary variation on loans receivable from supplier - (50) - - Unrealized losses on derivative financial instruments (974) - - Formation (reversal) of allowance for doubtful accounts Formation (reversal) of provision for contingencies (390) Deferred income and social contribution taxes (373) (1.317) (1.386) Decrease/(Increase) in trade receivable and other receivables (3.862) - - Decrease/(increase) in inventories (9.061) (261) Decrease/(Increase) in loan receivable from supplier Decrease/(increase) in taxes and contributions recoverable (331) (1.777) (1) 18 Decrease/(increase) in other current assets (3.725) (1) Increase/(decrease) in suppliers and other accounts payable (33.586) (123) Decrease/(Increase) in provision and labor charges Increase/(Decrease) in tax liabilities Decrease (increase) in advances from clients Decrease/(increase) in other current liabilities (1.458) Cash (used in) from operating activities (758) (970) Payment of interest on loans and financing (64.992) (57.489) - - Net cash used in operating activities (758) (970) Cash flow from investment activities Formation of biological assets (69.786) (83.862) - - Acquisition of fixed assets 31.b (44.708) (53.975) (1.359) - Acquisition of intangible assets (3.007) (1.537) - - Receipt from disposal of fixed assets Credit granting to related parties (23.739) Net cash (used in) from investment activities ( ) ( ) (23.739) Cash flow from financing activities Loans and financing Payment of principal of loans and financing ( ) ( ) - - Funding with related parties - - (38.515) Net cash (used in) from financing activities (6.633) (38.515) Increase (decrease) in the balance of cash and cash equivalents (1) Statement of cash and cash equivalents Cash and cash equivalents at April Cash and cash equivalents em March See the accompanying notes to the financial statements.

22 Statements of value added Years ended March 31, 2015 and 2014 (In thousands of Reais) Parent company 03/31/ /31/ /31/ /31/2014 Income Sale of merchandise, products and services Other income Allowance for doubtful accounts (3) (4) Inputs acquired from third parties (including PIS and COFINS) Cost of products, goods, and services sold (88.909) (59.120) (4) - Materials, energy, outsourced services and other (59.234) (53.229) (880) (433) Other (37.367) (20.372) (49) - ( ) ( ) (933) (433) Gross added value (933) (433) Depreciation and amortization (96.900) (70.656) - - Net added value generated by the Company (933) (433) Added value received as transfer Equity income (loss) Financial income Total added value payable Personnel Direct remuneration Benefits FGTS Taxes, rates and contributions Federal State Other taxes Third-party capital remuneration Interest Rents Other Remuneration of own capital Income for the year See the accompanying notes to the financial statements.

23 Notes to the financial statements Note Preparation basis 1 Operations 12 2 Group entities 13 3 Preparation basis 13 4 Functional currency and presentation currency 14 5 Use of estimates and judgments 14 Accounting policies 6 Measuring basis 15 7 Changes in accounting policies 16 8 Significant accounting policies 16 Assets 9 Cash and cash equivalents Trade accounts receivable and other receivables Inventories Recoverable taxes and contributions Investments Biological assets Property, plant and equipment 33 Liabilities and shareholders equity 16 Loans and financing Debentures Suppliers and other accounts payable Provision for contingencies Deferred income and social contribution taxes Shareholders' equity 39 Financial instruments 22 Financial instruments 40 Performance of the year 23 Net operating income Expenses by nature Commitments Net financial income (expenses) 52 Other information 27 Related parties Earnings per share Operating segments Insurance coverage Statements of cash flows Environmental risks

24 Notes to the financial statements (In thousands of Reais) 1 Operations The Company, located at Rodovia BR 050 (KM 121) - Distrito Industrial I of Uberaba/MG, is a limited-liability company engaged in holding interest in other companies that produce, sell and export sugar, ethanol, power and other products derived from the processing of sugarcane. It obtained its registry of publicly-traded company on March 4, 2009, by means of CVM/SEP/RIC Circular Nº 001/2009, for trading of common shares on the non-organized over-the-counter market. The Company is the parent company of the following companies: Triângulo Mineiro Açúcar e Álcool S/A. (Triângulo Mineiro); Vale do Tijuco Açúcar e Álcool S/A. (Vale do Tijuco); and Rio Tijuco Agropecuária S/A. (Rio Tijuco). The subsidiary Triângulo Mineiro Açúcar e Álcool S/A., with head offices in Uberlândia, and the subsidiaries Vale do Tijuco Açúcar e Álcool S/A. and Rio Tijuco Agropecuária S.A., both with head offices in Uberaba, are engaged in the production, sale and export of sugar, ethanol and other products derived from the processing of sugarcane; the provision of services to third parties and the industrialization by order of the latter; the co-generation and sale of electric power, and it may exploit the planting of sugarcane in their own or third-party land; the sale of their own or third-party sugarcane; the intermediation of sale of sugarcane, and holding interest in other companies, as partner or shareholder. The subsidiary Triângulo Mineiro Açúcar e Álcool S/A. is at pre-operating phase with estimated grinding of 2.2 million tons per year for the first phase and 5.5 million for the final phase of expansion, according to the business plan. The operations of the subsidiary Vale do Tijuco Açúcar e Álcool S/A. began on April 12, The industrial plant of Vale do Tijuco Açúcar e Álcool S/A. has grinding capacity of around 4 million tons of sugarcane per year, producing sugar, anhydrous ethanol, hydrated ethanol and power, as well as the by-products fusel oil and sugarcane bagasse. The subsidiary Rio Tijuco Agropecuária S/A. is in the operating phase and its main activity is the cultivation and trading of sugarcane both in own lands and third party lands. The planting of sugarcane requires a period of up to 18 months for maturation and beginning of harvest, which usually occurs between April and November. The sale of the production occurs throughout the year and it does not suffer variations due to seasonality, but only variation of the usual market offer and demand (commodity price and foreign exchange).

25 As a way of improving the debt profile of the Company, which, on March 31, 2015, presents the consolidated current liabilities in excess of the consolidated current assets, amounting to R$492,938, the Management is already renegotiating the balances of financing and funding to finance the activity as well as improvement of debt profile, with the main bank creditors whose debt is classified in the current liabilities in order to readjust its operating cash flow, among the main actions taken, the following measures are worth highlighting: Debenture debts amounting to R$93,079 were renegotiated with the banks that are classified in current liabilities of the consolidated reason why contractual clauses were not complied with. However, as mentioned in note 33 (Subsequent Events), the Group obtained a waiver from the banks in June 2015, maintaining the original classification in non-current liabilities again. Search for a long-term line of R$80,000 with the first-tier banks for adequacy of working capital and decrease in financial expenses. Obtaining the partial waiver of the ICSD index of Banco do Brasil dated March 09, 2015 and is in negotiation with the Bradesco and BDMG. The amount classified to current liabilities of this operation is R$126,734, which must be reclassified as non-current liabilities as soon as the Group obtains the waiver with the other Banks. If the Group needs financial resources necessary for going concern in addition to funds from banks and third parties, Shareholders may make a financial contribution. The purpose of the strategic planning the Company has been implementing is to generate positive results in the coming years. These strategies were approved by the Company s shareholders. 2 Group entities The consolidated financial statements include the financial statements of the Parent company Companhia Mineira de Açúcar e Álcool Participações and the following subsidiaries: Ownership Interest Subsidiaries Country Triângulo Mineiro Açúcar e Álcool S/A. (Triângulo Mineiro) Brazil 99.99% 99.99% Vale do Tijuco Açúcar e Álcool S/A. (Vale do Tijuco) Brazil 99.99% 99.99% Rio Tijuco Agropecuária S/A. (Rio Tijuco) Brazil 100% 100% The individual and consolidated financial statements for the year ended March 31, 2015 comprise the Company and its subsidiaries (collectively referred to as the Group ). 3 Preparation basis a. Statement of conformity (regarding the International Accounting Standards Board - IFRS standards and CPC [Accounting pronouncements committee] standards) These financial statements include:

26 The consolidated financial statements prepared according to the International financial reporting standards- IFRS issued by the International accounting standards board (IASB) and also in accordance with accounting practices adopted in Brazil in conformity with the pronouncements issued by the Accounting Pronouncement Committee - CPC; and The individual financial statements of the Parent company were prepared according to the accounting practices adopted in Brazil in conformity with the pronouncements issued by the Accounting pronouncement committee - CPC. The issue of individual and consolidated financial statements was authorized by the Board of Directors in a meeting held on June 11, b. Measuring basis The individual and consolidated financial statements were prepared based on the historical cost, except for the following items recognized in the balance sheets: Financial instruments measured at fair value through profit or loss, and Biological assets measured at fair value less sales expenses. 4 Functional currency and presentation currency These individual and consolidated financial statements are being presented in reais, functional currency of the Company and its subsidiaries. All financial information presented in Brazilian Reais has been rounded to the nearest value in thousands, except otherwise indicated. 5 Use of estimates and judgments In the preparation of individual and consolidated financial statements according to IFRS and CPC standards requires Management to make judgments, estimates and assumptions that affect the application of accounting principles and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and assumptions are revised on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimates are revised and in any future periods affected. The information on critical judgments that refer to accounting policies adopted that have effects on amounts recognized in the financial statements is presented in the following notes: Note 20 - Deferred tax assets and liabilities; and Note 22 - Financial instruments. a. Uncertainties on assumptions and estimates Information on uncertainties as to assumptions and estimates that pose a significant risk of resulting in a material adjustment within the next financial year are included in the following notes: Note 10 - Trade accounts receivable and other receivables; Note 14 - Biological assets;

27 Note 15 - Property, plant and equipment; and Note 19 - Provision for contingencies. Measurement of fair value A series of company accounting policies and disclosures requires the measurement of fair values, for financial and non-financial assets and liabilities. The Company established a control structure related to measurement of fair values. This includes a valuation team which has overall responsibility for overseeing all significant fair value measurements. The Company periodically reviews unobservable data considered significant and valuation adjustments. If third-party information, such as broker quotes or pricing services, is used to measure fair values, then the management assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the CPC requirements, including the level in the fair value hierarchy in which such valuations should be classified. When measuring fair value of an asset or liability, the Company uses observable data as much as possible. Fair values are classified at different levels according to hierarchy based on information (inputs) used in valuation techniques, as follows: Level 1: Prices quoted (not adjusted) in active markets for identical assets and liabilities. Level 2: Inputs, except for quoted prices, included in Level 1 which are observable for assets or liabilities, directly (prices) or indirectly (derived from prices). Level 3: Inputs, for assets or liabilities, which are not based on observable market data (nonobservable inputs). The Company recognizes transfers between fair value hierarchic levels at the end of the financial statements period in which changes occurred. Additional information on the assumptions adopted in the measurement of fair values is included in the following notes: Note 14 - Biological assets; e Note 22 - Financial instruments. 6 Measuring basis The financial statements of the Company were prepared based on the historical cost, except for non-derivative financial instruments at fair value through profit or loss.

28 7 Changes in accounting policies The Company evaluated the following new pronouncements and reviews of pronouncements, with initial application on January 1, 2014: (a) (b) (c) ICPC 19 / IFRIC 21 - Taxes; CPC 38/IAS 36 (Amended) - Disclosures on impairment of non-financial assets; and OCPC 7 - Notes. The application of these amendments did not have any impact on these financial statements. 8 Significant accounting policies The accounting policies described in detail below have been consistently applied to all the years presented in these individual and consolidated financial statements. a. Basis of consolidation (i) (ii) Business combination among entities under joint control The measurement of transactions relating to acquisitions of subsidiaries under common control is carried out book value. Subsidiaries The financial statements of subsidiaries are included in the consolidated financial statements as from the date they start to be controlled by the Group until the date such control ceases. The accounting policies of the subsidiaries are aligned with the policies adopted by the Group. The Company s financial information of subsidiaries is recognized under the equity method in the individual financial statements. The financial statements of the subsidiaries on the same base date of submittal of the financial statements are used to calculate equity in the earnings and consolidation. Subsidiaries are consolidated in the consolidated financial statements. (iii) Transactions eliminated in the consolidation Balances and transactions with subsidiaries, and any income or expenses derived from transactions with subsidiaries, are eliminated in the preparation of the consolidated financial statements. Unrealized gains originating from transactions with investee company recorded using the equity method, are eliminated against the investment in the proportion of the Company's interest in the investee company. Unrealized losses are eliminated in the same way as unrealized gains, but only up to the point where there is no evidence of loss due to impairment.

29 b. Operating income (i) Sale of products The operating income from sales of products in the normal course of business is measured by the fair value of the installment received or receivable. Operating income is recognized when there is convincing evidence that the risks and rewards inherent to the ownership of the assets have been transferred to the purchaser, it is probable that the financial economic benefits will flow to the Group, the related costs and potential return of goods can be reliably estimated, there is no continued involvement with the goods sold, and the amount of operating income can be reliably measured. The correct moment for the transfer of risks and benefits varies depending on the individual conditions of each sales agreement. For sugar and ethanol sales in the domestic market, transfer is normally carried out when the product is delivered in the client's premises of when it is picked up by the client in the Group's premises. For sales in the foreign market, the transfer occurs upon loading of goods in the transportation company of the seller harbor. (ii) Sale of electricity The operating income in the ordinary course of business of the Company and its subsidiaries is measured at fair value of the consideration received or receivable. Operating income is recognized when there is convincing evidence that the most significant risks and rewards have been transferred to the purchaser, it is probable that the financial economic benefits will flow to the entity, the related costs can be reliably estimated, and the amount of operating income can be reliably measured. Income from the sale of power generation is recorded based on the guaranteed energy and tariffs specified in the terms of supply agreements or the prevailing market price, as applicable. c. Financial income and expenses The financial income and expenses of the Company comprises the following: Interest on interest earning bank deposits and other investment; Bank fees; Discounts obtained; and Expenses with interest on loans and financing. Financial income and expenses are recognized in the income (loss) through effective interest method. d. Foreign currency Foreign currency transactions Transactions in foreign currency are translated into the functional currency of the Group at the exchange rates on the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated into the functional currency at the exchange rate at that date. Exchange gain or loss in monetary items is the difference between the amortized cost of the functional currency at the beginning of the period, adjusted by interest

30 and effective payments during the period, and the amortized cost in foreign currency at the exchange rate at the end of the presentation period. Non-monetary items measured at historical costs in foreign currencies are converted by the exchange rate prevailing on the transaction date. Exchange differences arising from the reconversion are charged to income. e. Employee benefits (i) (ii) Short-term employee benefits Obligations for short-term employee benefits are recognized as personnel expenses as the related service is rendered. The liability is recognized at the amount expected to be paid, if the Company has a legal or constructive obligation to pay this amount as a result of prior service rendered by the employee, and the obligation can be reliably estimated. Defined contribution plan Obligations for contributions to defined contribution pension plans are recognized in the income (loss) as personnel expenses when the services are rendered by the employees. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available. The Company has no other post-employment benefits. f. Income and social contribution taxes The income and social contribution taxes, both current and deferred, are calculated based on the rates of 15% plus a surcharge of 10% on taxable income in excess of R$ 240 (annual basis) for income tax and 9% on taxable income for social contribution on net income, and consider the offsetting of tax loss carryforward and negative basis of income tax and social contribution, limited to 30% of the annual taxable income. The income tax and social contribution expense comprises the current and deferred installments. Current taxes and deferred taxes are recognized in profit or loss unless they are related to the business combination, or items directly recognized in shareholders' equity or other comprehensive income. (i) Current tax Current taxes are the taxes payable or receivable on the taxable income or loss for the year and any adjustments to taxes payable in relation to prior years. It is measured based on rates enacted or substantively enacted at the balance sheet date. Current tax also includes any tax liability arising from the declaration of dividends. Current tax assets and liabilities are offset only if certain criteria are met. (ii) Deferred tax Deferred taxes are recognized in relation to the temporary differences between the book values of assets and liabilities for financial statement purpose and the related amounts used for taxation purposes. A deferred income and social contribution tax asset is recognized in relation to tax losses, unused tax credits and deductible temporary differences, to the extent that it is probable that future taxable income will be subject to taxation will be available against which they will be used. Deferred income and social contribution tax liabilities are reviewed at each balance sheet date and reduced when their realization is no longer probable.

31 Deferred taxes are measured at tax rates expected to be applied to temporary differences when they are reversed, based on rates enacted or substantively decreed up to the date of balance sheet. The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Company expects to recover or settle the book value of its assets and liabilities. Deferred tax assets and liabilities are offset only if certain criteria are met. g. Biological assets Biological asset is measured at fair value less sales expenses. Changes in fair value less sales expenses are recognized in results. Sale costs include all costs that are necessary to sell the assets. Sugarcane is transferred to the cost of production at their fair value, minus estimated selling expenses determined on the cutoff date. h. Inventories Inventories are measured at the lower of cost and net realizable value. Inventory costs are valued at the average cost of purchase or production and include expenses incurred in the acquisition of inventories, production and conversion costs and other costs incurred in bringing them to their current locations and conditions. The net realizable value is the estimated price at which inventories can be realized in the normal course of business, less the estimated completion costs and selling expenses. The sugarcane consumed in the production process is measured at its fair value, net of sales expenses determined on the cutoff date. i. Property, plant and equipment (i) Recognition and measurement PP&E items are stated at historical acquisition or construction cost, net of accumulated depreciation and impairment losses, when applicable. The cost includes expenditures that are directly attributable to the acquisition of assets. The cost of assets constructed by the Company itself and its subsidiaries include: The cost of materials and direct labor; Any other costs directly attributable to bringing the assets to the location and condition required for them to operate in the manner intended by the Management; The costs for dismantling and restoration of the site where these assets are located; Borrowing costs on qualifying assets. Purchased software that is integral to the functionality of a piece of equipment is capitalized as part of that equipment. When parts of a property, plant and equipment item have different useful lives, they are accounted for as separate items (major components) of PP&E.

32 Gains and losses on disposal of a property, plant and equipment item are determined by comparing the proceeds from disposal with the carrying amount of Property, plant and equipment and are recognized net within "Other income" in the income (loss). (ii) (iii) Subsequent costs Subsequent expenses are capitalized only when it is probable that associated future benefits may be earned by the Company and its subsidiaries. Maintenance expenses and recurring repairs are recognized in the income when incurred. Maintenance costs The maintenance cost of a component of property, plant and equipment is recognized in the book value of the item when it is probable that the future economic benefits embodied in the component will flow and its cost can be reliably measured. The book value of the component that has been replaced by another is written off. Costs of normal maintenance on property, plant and equipment are charged to the income statement as incurred. The subsidiary Vale do Tijuco Açúcar e Álcool S/A. performs annual maintenance at its manufacturing unit, approximately in the period from December to March. The main maintenance costs include costs of labor, materials, outsourced services and overhead allocated during the off-season period. Said costs are accounted for as a component of the cost of the equipment and depreciated during the following harvest. Any other type of expenditure, which does not increase the useful life or maintain the grinding capacity, is recognized as an expense. (iv) Depreciation Items of property, plant and equipment are depreciated from the date they are installed and are available for use, or, in the case of assets constructed by the Company, as of the date the construction is concluded and the asset is available for use. Depreciation is calculated to amortize the cost of property, plant and equipment items using the straight-line method based on estimated useful lives of items. Depreciation is generally recognized in income (loss), unless the amount is included in the book value of another asset. Land is not depreciated. The estimated useful lives such as weighted average rates, for the current and comparative years are as follows: Years Rates Industrial equipment % Constructions and buildings % Agricultural machinery and tractors % Paving 10 10% Vehicles 5 20% Agricultural equipment % Machinery, equipment and tools % Furniture and fixtures % Computers and peripherals % Other %

33 The depreciation methods, useful lives and residual values are reviewed at each reporting date and potential adjustments will be recognized as a change in accounting estimates. j. Intangible assets (i) (ii) (iii) Other intangible assets Other intangible assets acquired by the Group with finite useful lives are carried at cost, less accumulated amortization and accumulated impairment losses, when applicable. Subsequent expenses Subsequent expenses are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate. All other expenditures are recognized in profit or loss as incurred. Amortization Amortization is recognized in income on a straight-line basis over the estimated useful lives of the intangible assets as of the date they are available for use. The estimated useful life for the current periods and comparative are presented below: Software 5 years The depreciation methods and useful lives and residual values are reviewed at each reporting date and potential adjustments will be recognized as a change in accounting estimates. k. Investments The financial statements of the subsidiaries are included in the consolidated financial statements as from the date they start to be controlled by the Company until the date such control ceases. The accounting policies of the subsidiaries are aligned with the policies adopted by the Parent company. The Individual financial information of the Parent company, financial information of subsidiaries are recognized under the equity method. l. Financial instruments The Group classifies non-derivative financial instruments in the following categories: financial assets measured at fair value through profit or loss, and loans and receivables. The Group classifies non-derivative financial liabilities in the category of other financial liabilities. (i) Non-derivative financial assets and liabilities - Recognition and derecognition The Group initially recognizes the loans, receivables and debt instruments on the date that they were originated. All other financial assets and liabilities are initially recognized on the date of negotiation.

34 The Group fails to recognize a financial asset when the contractual rights to the cash flow of the asset expire, or when the Group transfers the rights to the reception of contractual cash flows over a financial asset in a transaction in which essentially all the risks and benefits of ownership of the financial asset are transferred. Any interest in such transferred financial assets that is created or retained by the Group is recognized as a separate asset or liability. The Group derecognizes a financial liability when its contractual obligations are discharged or canceled or expire. Financial assets and liabilities are offset and the net amount reported in the balance sheet only when there is a legally enforceable right of the Group to set off and there is intention to settle on a net basis, or to realize the asset and settle the liability simultaneously. (ii) Non-derivative financial assets - Measurement Financial assets measured at fair value through profit or loss A financial asset is classified as measured at fair value through profit or loss if it is held for trading or is designated as such upon initial recognition. The transaction costs are recognized in income (loss) as incurred. Financial assets recorded at fair value through profit or loss are measured at fair value and changes in the fair value of such assets, including gains with interest and dividends, are recognized in the income for the year. Loans and receivables Such assets are initially recognized at fair value plus any transaction costs directly assignable. After their initial recognition, loans and receivables are measured at amortized cost using the effective interest rate method. Cash and cash equivalents Cash and cash equivalents comprise balances of cash and financial investments with original maturities of three months or less as of the contracting date, which are subject to an insignificant risk of change in value and are used to manage short-term obligations. (iii) Non-derivative financial liabilities - Measurement Non-derivative financial liabilities are initially recognized at fair value less any transaction costs directly assignable. After their initial recognition, these financial liabilities are measured at amortized cost using the effective interest rate method. The Group has the following non-derivative financial liabilities: loans and financing, debentures and suppliers and other accounts payable. (iv) Capital - Parent company Common shares Common shares are classified as shareholders' equity. Additional costs directly attributable to the issue of shares are recognized as a deduction from shareholders' equity, net of any tax effects. The Company s bylaws determines a percentage higher than 25% to payment of compulsory minimum dividends.

35 (v) Derivative financial instruments, including hedge accounting The Group holds derivative financial instruments to hedge its exposure to foreign currency and interest rate changes. Upon initial designation of the derivative as a hedging instrument, the Group formally documents the relationship between the hedge instruments and the hedgeable items, including the risk management goals and the strategy in the execution of the hedge transaction and the hedgeable risk, together with the methods that will be used to assess the effectiveness of the hedge relationship. The Group evaluates the hedge relationship, initially and then continuously, to conclude if hedge instruments are expected to be "highly effective" in the offset of variations in fair value or cash flows of items subject to hedge during the period for which hedge is assigned whether the actual results of each hedge are within the range of 80%-125%. For a cash flows hedge of a planned transaction, the transaction should have its occurrence as highly probable and should present exposure to variations in the cash flows that at the end could affect the reported income (loss). Derivatives are initially recognized at fair value. Any attributable transaction costs are recognized in profit or loss when incurred. After the initial recognition, derivatives are measured at fair value and changes in fair value are recorded as described below. Cash flow hedge When a derivative is designated as a hedge instrument to hedge cash flow variability attributed to a specific risk associated with a recognized asset or liability or a highly probable foreseen transaction that could affect the net income, the effective portion of variation in the derivative's fair value is recognized in other comprehensive income and disclosed in equity evaluation adjustments caption in shareholders' equity. Any non-effective portion of the variations in the fair value of the derivative is recognized immediately in net income. When the hedged item is a non-financial asset, the accumulated amount held in other comprehensive income is reclassified to income (loss) in the same year or years during which the non-financial asset does not affect income (loss). In other cases, the amount accumulated in other comprehensive income is transferred to income (loss) in the same year in which the hedgeable item affects income (loss). If the hedge instrument no longer satisfies the hedge accounting criteria, expires or is sold, wound up, exercised or has its designation revoked, then the hedge accounting is discontinued prospectively. If there are no more expectations regarding the occurrence of the planned transaction, then the balance in other comprehensive income is reclassified to income (loss). m. Impairment (i) Non-derivative financial assets Financial assets not classified as financial assets at fair value through income, including investments accounted for under the equity method, are evaluated at each balance sheet date to determine if there are objective impairment evidence. Objective evidences of financial assets impairment include: Debtor s default or delays; Restructuring of an amount owed to the Group under conditions that are considered as abnormal;

36 Indications that the debtor or issuer will face bankruptcy; Negative changes in payment situation of debtors or issuers; The disappearance of an active market for an instrument; or Observable data indicating that expected cash flow measurement of a group of financial assets decreased. For investments in membership certificates, objective impairment evidences include a significant or prolonged decline in fair value, below cost. Financial assets measured at amortized cost The Group considers as evidence of impairment of assets measured by amortized cost both individually and on an aggregate basis. All individually significant receivables are assessed for impairment. Those identified as non-impaired on an individual basis are collectively assessed for any impairment loss not yet identified. Assets that are not individually significant are assessed on an aggregate basis in relation to impairment by grouping the assets with similar risk characteristics. When assessing impairment on an aggregate basis the Group makes use of historical trends of the recovery term and the amounts of losses incurred, adjusted to reflect the management's judgment if the current economic and credit conditions are such that the actual losses will probably be higher or lower than those suggested by historical trends. An impairment is calculated as the difference between the asset's book value and the present value of estimated future cash flows discounted at the financial asset's original effective interest rate. The losses are recognized in income and reflected in an account for allowance for losses. When the Group considers that it is not possible to reasonably expect recovery, amounts are written-off. When a subsequent event causes the amount of the impairment loss to decrease, the impairment loss is reversed through profit or loss. Investees recorded under the equity method of accounting A loss by a reduction to recoverable value referring to an investee valued under the equity method is measured by comparing the investment s recoverable value to its book value. An impairment loss is recognized in the statement of income and is reversed if there has been a favorable change in the estimates used to determine the recoverable value. (ii) Non-financial assets The carrying amounts of the Group's non-financial assets, except for inventories and deferred income tax and social contribution assets, are reviewed at each balance sheet date for indication of impairment. If such indication exists, the asset's recoverable amount is estimated. In case of goodwill, recoverable value is tested on an annual basis. For tests of reduction in recoverable value, assets are grouped into the smallest identifiable group of assets that can generate cash inflows by continuous use that are largely independent of cash flows from other assets, or Cash Generating Units (CGU).

37 Recoverable value or CGU of an asset is the higher of value in use and fair value less selling costs. Value in use is based on estimated future cash flows discounted to present value using a discount rate before taxes that reflects current market evaluations of times value of money and the specific risks of the assets or CGU. An impairment loss is recognized when the carrying amount of an asset or its CGU exceeds its recoverable value. n. Provisions Provisions are determined by discounting the estimated future cash flows at a pre-tax rate which reflects the current market evaluations as to the value of the cash over time and the specific risks of the liability. The effects of discounting to present value are recognized in net income as expense. o. Statement of added value ( DVA ) The Group prepared individual and consolidated statements of added value in accordance with the rules of technical pronouncement CPC 09 - Statement of Added Value, which are presented as an integral part of the financial statements under accounting practices adopted in Brazil applicable to publicly-held companies, whereas under IFRS they represent additional financial information. p. New standards and interpretations not yet adopted Several new standards, amendments to standards and interpretations will be effective for the years started after January 1, 2014, and have not been adopted to the preparation of these financial statements. Those that may be relevant to the Company are listed below. The Company does not plan to adopt these standards in advance. IFRS 9 Financial Instruments IFRS 9, published in July 2014, replaces guidelines of IAS 39 Financial Instruments: Recognition and Measurement (Financial Instruments: Recognition and Measurement). IFRS 9 presents reviewed guidelines on classification and measurement of financial instruments, including a new model for expected credit loss to calculate impairment of financial assets, and new requirements on hedge accounting. This rule maintains IAS 39 guidelines on financial instruments recognition and de-recognition. IFRS 9 is effective for periods beginning on or after January 1, 2018, with early adoption allowed. IFRS 15 - Income from Contracts with Clients The IFRS 15 requires an entity to recognize the amount of income reflecting the consideration that it expects to receive in exchange for control of these goods or services. The new standard will replace most of the detailed guidance on income recognition that currently exists in IFRS. The new standard is applicable beginning on or after January 1, 2017, with early adoption permitted by the IFRS. The standard may be adopted retrospectively, adopting a cumulative effects approach. The Company is evaluating the effects IFRS 15 will have on its financial statements and disclosures. The Company has not yet chosen the transition method to the new standard or determined the effects of the new standard in today's financial reports.

38 Agriculture: Production Plants (changes to IAS 16 and IAS 41) These changes require that production plants, defined as live plants, be recognized as property, plant and equipment and included in the ambit of IAS 16 Property, plant and equipment, instead of IAS 41 Agriculture. These changes are to be enforced in years starting on or after January 1, 2016, and early adoption is permitted. In addition, the following new rules or changes are not expected to have a significant impact on the Group s consolidated financial statements. IFRS 14 - Regulatory Deferral Accounts Accounting for Acquisitions of Interests in Joint Operations (change of IFRS 11) Clarification of Depreciation and Amortization Acceptable Methods (changes to IAS 16 and IAS 38) Defined Benefit Plans: Employee Contributions (Defined benefit plan: Employees contribution) (change of IAS 19) Annual improvements of IFRS s Annual improvements of IFRS s The Accounting Pronouncements Committee has not yet issued any accounting pronouncement or amendments in current pronouncements corresponding to these standards. Adoption in advance is not allowed. 9 Cash and cash equivalents Parent company 03/31/ /31/ /31/ /31/2014 Cash and banks 21,021 39, Interest earning bank deposits 120,388 20, ,409 60, The cash balance arises from receipts of business transactions and are resources available to meet the immediate cash needs of the Company and its subsidiaries. All funds are deposited in prime bank institutions. Interest earning bank deposits are cash equivalents since they are promptly convertible into a known sum of cash and subject to an insignificant risk of change of value. These interest earning bank deposits refer to Bank Deposit Certificates (CDB) in several financial statements, remunerated at rates that vary from 95% to 100% of the CDI - Interbank Deposit Certificate. Interest earning bank deposits have no monthly maturity and may be redeemed at any time.

39 The Group's exposure to interest rate risks and a sensitivity analysis of financial assets and liabilities are disclosed in Note Trade accounts receivable and other receivables Parent company 03/31/ /31/ /31/ /31/2014 From the sale of ethanol 728 3, From the sale of energy 4,322 16, From the sale of sugar - 2, From service rendering - 1, From the sale of sugarcane 1,257 2, Other 1,062 4, Trade accounts receivable 7,369 31, Related party credits (Note 27) ,181 Other receivables ,181 Total 7,369 31, ,181 Current assets 7,369 31, Non-current assets ,181 As of March 31, 2015, the Company did not have any operations that might generate a material effect from adjustments to present value. The Company s exposure to credit risks and impairment losses related to trade accounts receivable and other receivables are disclosed in Note Inventories Parent company 03/31/ /31/ /31/ /31/2014 Finished product Hydrous ethanol Anhydrous ethanol 5,624 4, VHP Sugar Storeroom Our inventory held by third parties 2, Warehouse, sundry (a) 7,794 10, Advance to sundry suppliers 2,222 4, Advances to sugarcane suppliers (b) Third parties 35,446 24, Related parties (note 27) 1,896 1, Other 1, Total 57,185 48, Current assets 49,277 39, Non-current assets 7,908 8, (a) The most representative amounts of supplies refer to inputs and agricultural pesticides to be used in the planting areas in plantation - own or third party s.

40 (b) The balance of advance to suppliers refers to the agreement for supply of sugarcane, signed between the subsidiary Vale do Tijuco Açúcar e Álcool S/A. and its suppliers. Balance classified in non-current assets refers to advance contracts that will be realized upon receipt of sugarcane beginning as of 2015/2016 crop, priced based on Total Recoverable Sugar (TRS) index disclosed by CONSECANA - São Paulo State Council of Sugarcane, Sugar and Alcohol Producers at the end of the crop. 12 Recoverable taxes and contributions Parent company 03/31/ /31/ /31/ /31/2014 COFINS recoverable 21,722 21, ICMS recoverable - Acquisition of fixed assets 9,451 11, ICMS recoverable - Purchase of inputs 4,431 5, PIS recoverable 7,849 5, Income tax on interest earning bank deposits 1, Other taxes recoverable 1,090 1, Total 45,942 45, Current assets 16,125 15, Non-current assets 29,817 30, PIS and COFINS The balance comprises credits arising from the non-cumulative collection of PIS and COFINS (taxes on income) on purchases of parts used to perform maintenance on the manufacturing facilities and agricultural fleet, maintenance services provided at the manufacturing and agricultural facilities, freight and storage related to sales transactions and electric power, as well as other credits arising from purchases of machinery and equipment, buildings and constructions to be used in production. These credits may be compensated with other federal taxes. ICMS (Value-added tax on sales and services) The balance is mainly comprised of credits calculated on acquisition of property, plant and equipment items, realized at the rate of 1/48, and may be offset against taxes of the same nature. IRPJ and CSLL Refers to withholding income tax on financial investments and income tax and social contribution prepayments through an offset against federal taxes and contributions due. 13 Investments Breakdown of balances Parent company 03/31/ /31/2014 Investment assessed under the equity method Rio Tijuco Agropecuária S/A. 11,211 11,032 Triângulo Mineiro Açúcar e Álcool S/A. (8,600) (8,038) Vale do Tijuco Açúcar e Álcool S/A. 72, ,988 75, ,982 Classified as: Investments 83, ,020 Provision for loss on investment (8,600) (8,038)

41 The Company recorded income of R$ 7,355 for the year ended March 31, 2015 (R$ 9,937 on March 31, 2014) from equity in subsidiaries. The Company accounts its investments in subsidiaries under the equity method. The Company and its subsidiaries do not have their shares traded on the Stock Exchange. Changes in investments in subsidiaries Parent company 03/31/ /31/2014 Opening balance of investments 120, ,084 Equity income (loss) 7,355 9,937 Equity evaluation adjustment (Vale do Tijuco) (53,210) (5,791) Paid-up capital - 10,752 75, ,982

42 Information from investee companies The chart below presents a summary of all financial information at subsidiaries: Current assets Noncurrent assets Total assets Current liabilities Noncurrent liabilities Total liabilities Shareholders' equity Income Expenses Income (loss) Equity in net income of subsidiaries Interest % March 31, 2014 Triângulo Mineiro S/A % ,829 34, ,688 42,433 (8,038) 860 (1,634) (774) (773) Vale do Tijuco S/A % 147, , , , , , , ,571 (362,140) 10,431 10,430 Rio Tijuco S/A. 100% ,696 11, , (65) , , , , , , , ,776 (363,839) 9,937 9,937 Current assets Noncurrent assets Total assets Current liabilities Noncurrent liabilities Total liabilities Shareholders' equity Income Expenses Income (loss) Equity in net income of subsidiaries Interest % March 31, 2015 Triângulo Mineiro S/A % 44 2,513 2, ,183 11,157 (8,600) - (562) (562) (562) Vale do Tijuco S/A % 218, , , , , ,647 72, ,908 (508,645) 7,737 7,737 Rio Tijuco S/A. 100% ,418 11, , (194) , , , , , ,129 75, ,282 (509,401) 7,355 7,355

43 14 Biological assets The Company s biological assets comprise cultivation and planting of own sugarcane and cultivation and planting through contracts with sugarcane partners, whose yield is to be used as raw material in its ethanol industrial processes. The sugarcane planting starts with the planting of seedlings in third parties' land, and the first cut occurs after a period of 12 to 18 months after planting, when sugar cane is cut and roots ("ratoon") remain in the soil. After each cut or year/crop, treated ratoon grows again and yields an average of five or six crops, depending on culture and genetic material. Biological assets movement is as follows: Balance at April 1, ,437 Increase due to additions of planting 92,168 Decrease due to harvesting (38,235) Fair value less estimated selling expenses 7,040 Balance at March 31, ,410 Increase due to additions of planting 69,786 Decrease due to harvesting (59,091) Fair value less estimated selling expenses 1,223 Balance at March 31, ,328 Biological assets will be realized in the following crops: 2015/ , / , / , / , onwards 10,824 Sugarcane plantations Planted areas refer only to sugarcane plantations, and do not consider planted land. The following assumptions were used in the determination of the fair value: 190,328 03/31/ /31/2014 Estimated harvest area (hectares) 21,911 17,758 Estimated productivity (sugarcane tons/hectares) Total recoverable sugar (TRS) (kg) TRS value/kg (R$)

44 The discount rate used in the cash flow of each period, called as Weighted-Average Cost of Capital, corresponded to 6.11% per year (6.13% on March 31, 2014), which was revised and approved by the Company s management. The Group is exposed to several risks related to its crops: Regulatory and environmental risks The Group is subject to laws and regulations and established environmental policies and procedures directed to compliance with environmental laws and other. The management carries out regular analyses to identify environmental risks and assure that systems under operation are appropriate to manage those risks. Supply and demand risks The Group is exposed to risks resulting from the prices fluctuation and sales volume of its plantations. Where possible, the Group manages this risk by aligning its extraction volume with market supply and demand. The management analyzes on a regular basis the trend of the industry to ensure that the price structure of the Group is in accordance with market and to ensure that estimated volumes of harvest are consistent with expected demand. Climatic risks and other The Group s plantations are exposed to risks of damages caused by climate changes, diseases, forest fires and other nature forces. The Group had extended processes in progress to monitor and reduce those risks, including health regulation inspections of the sugar cane areas and analysis of diseases and plagues of the industry. The Group also protects itself against natural disasters.

45 15 Property, plant and equipment Industrial equipment Constructions and buildings Agricultural machinery and tractors Paving Vehicles Agricultural equipment Land Machinery, equipment and tools Furniture and fixtures Computers and peripherals Construction in process (a) Off-season maintenance expenditures Other Total Cost Balance at April 1, ,798 68,760 24,910 6,739 5,828 8,142 1,939 2,879 1, ,566 26,805 8, ,656 Additions - 1,193 10,861-3,621 3,709 1, ,739 32, ,760 Write-offs (3,694) (23) (2,170) - (237) (3) (7) - (27,498) (4,539) (38,171) Transfers 2, ,200 - (30) - (7) (8,337) Balance at March 31, ,501 69,930 33,601 6,739 9,231 17,051 3,573 3,465 1,227 1,242 31,968 31,465 5, ,245 Additions 4, ,019-1,185 1, ,250 44,217 1,322 83,820 Write-offs (267) (290) (562) - (686) (1,979) - (1) (50) - (15,354) (36,792) (977) (56,958) Transfers 23,298 3,851 (162) 1, (61) (28,497) Balance at March 31, ,146 73,604 39,896 7,862 9,740 16,526 3,573 3,895 1,332 1,612 11,367 38,890 5, ,107 Depreciation Balance at April 1, 2013 (38,445) (3,962) (9,827) (2,022) (1,407) (2,139) - (1,355) (456) (628) - - (1,042) (61,283) Depreciation for the year (18,628) (2,064) (6,328) (673) (1,357) (1,858) - (556) (204) (196) - - (486) (32,350) Write-offs 1,828-1,230 - (16) ,164 Balance at March 31, 2014 (55,245) (6,026) (14,925) (2,695) (2,780) (3,997) - (1,911) (660) (824) - - (1,406) (90,469) Depreciation for the year (20,447) (2,068) (7,443) (740) (1,986) (2,809) - (612) (183) (172) - - (724) (37,184) Write-offs Transfers (38) (1) (68) - 38 (3) Balance at March 31, 2015 (75,730) (8,021) (21,955) (3,435) (4,458) (6,874) - (2,484) (824) (995) - - (2,122) (126,898) Net book value Balance at March 31, ,256 63,904 18,676 4,044 6,451 13,054 3,573 1, ,968 31,465 3, ,776 Balance at March 31, ,416 65,583 17,941 4,427 5,282 9,652 3,573 1, ,367 38,890 3, ,209 (a) Basically refers to works for the expansion of industrial plant and acquisition of equipment.

46 Guarantee Property, plant and equipment items were given in guarantee of loans and financing, as described in note 16. Analysis of recovery value In accordance with CPC 01 (R1) IAS 36 Impairment of Assets, the Company assessed indicators of impairment as of March 31, 2015 and found no need to determine the recoverable amount. 16 Loans and financing This note discloses contract information on the loans and financing of the Company and its subsidiaries. Note 22 discloses additional information on the exposure to interest rate and currency risks of the Company and its subsidiaries. The subsidiary Vale do Tijuco Açúcar e Álcool S/A. obtained loans, contracted in local currency, in order to finance the acquisition of its industrial plant and operations. On March 31, 2015 and 2014, the balance of loans and financing is as follows: Credit facility Ref. Currency Index Average interests and charges p.a. 03/31/ /31/2014 Finame (a) R$ TJLP (Long-term interest rate) 7.47% 28,072 36,590 Finame (a) R$ Prefixed 5.66% 165, ,568 Working capital (b) R$ CDI (Interbank deposit certificate) 4.06% 24,552 25,830 Working capital (b) USD Prefixed 8.71% 29,035 17,078 Working capital (b) R$ Prefixed 9.98% 6,861 38,007 Indirect BNDES onlending (c) R$ TJLP (Long-term interest rate) 4.93% 42,825 51,824 Indirect BNDES onlending (c) R$ Prefixed 5.23% 44,133 54,357 ACC (Advance on exchange contract) (d) USD CDI (Interbank deposit certificate) 5.82% 99,636 54,396 ACC (Advance on exchange contract) (d) USD Prefixed 5.53% 61,870 35,302 PPE (Export pre-payment) (d) USD Prefixed 6.38% 17,490 11,413 CRA (f) R$ Prefixed 6.38% 99, , ,365 Transaction costs (7,777) (3,619) Total 611, ,746 Current liabilities 448, ,718 Non-current liabilities 163, ,028 Credit facility Ref. Currency Index Parent company Interests and charges average p.a. 03/31/ /31/2014 Loans - non-current (note 27) (e) R$ (e) (e) 2,856 41,370 Non-current liabilities 2,856 41,370 (a) Refers to loans contracted to fund the acquisition of industrial and agricultural equipment. The loans have a grace period for payment of the first installment of principal, interest and charges of 6-18 months from the date of contract signing. The contracts are secured by chattel mortgage on disposal of assets as a financing object and pledge of credit rights of electricity receivable.

47 (b) (c) Refers to working capital loans obtained by the subsidiary Vale do Tijuco Açúcar e Álcool S/A. Interest is paid monthly after the signing of the contract. The loans are guaranteed by the Company's surety that mostly relate to 100% of the contracted facility. It refers to a credit operation signed between the subsidiary Vale do Tijuco Açúcar e Álcool S/A. and Banco do Brasil S.A., Banco de Desenvolvimento de Minas Gerais - BDMG and Bradesco S.A., which are the financial agents of the contract, in which Banco do Brasil S.A. is the Leader of the financial agents. The amount was released by the National Bank for Economic and Social Development - BNDES with the prerogative to finance project of implantation of a plant with grinding capacity of 1.8 million tons of sugarcane. The funds obtained were used for acquisition of industrial assets, for expansion of the production capacity of the unit. The contracts are guaranteed by statutory lien on disposal of assets as a financing object and pledge of credit rights of electricity receivable and are collateralized by the Company. The contract of indirect repass of BNDES funds contains a restrictive clause that requires the subsidiary Vale do Tijuco Açúcar e Álcool S/A. to maintain the Index of Debt Service Coverage (ICSD), of at least 1.30 during the validity of the contract, which is calculated upon closing of the fiscal year, as follows: EBITDA (-) Income tax and social contribution (-) changes in working capital / amortization of principal + interest payment. (d) (e) (f) The advances on exchange contracts and credit notes were signed with many financial institutions and will be settled through exports made in years 2015 and Amount granted by the subsidiary Vale do Tijuco Açúcar e Álcool S/A., not subject to interest, and which will be settled by the Company according to its available cash, as Note 27. It refers to Agribusiness Credit Receivables Certificates ("DSRC"), under fiduciary system registered with BM&F Bovespa and CETIP. The authorization was on October 7, CDCA installments will bear interest levied on an annual basis, as of the date of payment of the CRA until the respective payment date of each installment of CDCA interest, calculated on the nominal value and equivalent to 100% of accumulated average daily rates of DI over extra group - Interbank Deposits, calculated by CETIP. The following financial institutions and agents were contracted: Leading coordinating bank: BB-Banco de Investimentos S/A; issuing creditor agent: Gaia Agro Securitizadora S.A.; fiduciary agent: Planner Trustee Distribuidora de Títulos e Valores Mobiliários Ltda; registrar agent: BNY mellon Serviços Financeiros Distribuidora de Títulos e Valores Mobiliários S.A.; custodian agent: SLW Corretora de Valores de Câmbio Ltda. The contracts are guaranteed by statutory lien on disposal of assets as a financing object, pledge of credit rights of electricity receivable of VHP sugar, agricultural pledge and are collateralized by the Company. The agreement of R$97,850 contains covenants requiring the subsidiary Vale do Tijuco Açúcar e Álcool S/A to maintain the following financial ratios: Net Bank Debt (/) EBITDA less than 5.00; and the volume of Net Bank Debt: the volume of net bank debt of the Issuer, may not exceed the total amount of six hundred million reais (R$600,000) during the agreement period, which is calculated at the closing of fiscal year. The transaction costs recorded under loans and financing, to be allocated to the result in each subsequent period, is as follows: March 31, 2015 Book value 12 months 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years 7,777 1,579 2,335 1,538 1, March 31, 2014 Book value 12 months 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years 3,619 2, Covenants The Company has contractual obligations arising from loans and financing and have not met the debt service coverage ratio, which must be equal to or greater than 1.30, contained in the Financing Agreement entered into Banco Bradesco S.A., Banco do Brasil S.A. and Banco de Desenvolvimento de Minas Gerais ( BDMG ) by means of indirect transfer of funds from the Brazilian Economic and Social Development Bank ("BNDES") for the amounts as of March 31,

48 2015. Consequently, the amount of R$126,734 was reclassified from non-current liabilities to current liabilities. 17 Debentures Credit facility Currency Index Average interests and charges p.a. 03/31/ /31/2014 CDI (Interbank Debentures R$ deposit certificate) 3.00% 94, ,923 Transaction costs (1,139) - 93, ,923 Current liabilities 93,042 27,404 Non-current liabilities - 93,519 On November 11, 2013, the subsidiary Vale do Tijuco issued 12,000,000 debentures units pursuant to the indenture of sole series debentures, non-convertible into shares, in a single series, as collateral and personal guarantee in the nominal amount of R$ 120,000. Between the contracted parties, Companhia Mineira de Açúcar e Álcool Participações is the guarantor, and Pentágono S/A - Distribuidora de Valores Mobiliários is the representative company of the holders. The following financial institutions were contracted: Settlement Bank: Itaú Unibanco S/A; Banco Coordenador Líder: Banco Itaú BBA S.A.; Coordinating banks: Banco Rabobank International Brasil S.A., together with Banco Votorantim S.A. and Banco Itaú BBA S.A. The financial release of funds between financial institutions and the issuer occurred on January 20, 2014 maturing in November Maturities range from June to November of each year. The transaction costs recorded under loans and financing, to be allocated to the result in each subsequent period, is as follows: March 31, 2015 Book value 12 months 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years 1,139 1, The Company has also not reached the financial indicator with Banco Itaú, Banco Rabobank and Banco Votorantim for Debentures, as regards the ratio between the equity and total assets, which shall not be less than 0.14 on March 31, Consequently, the amount of R$40,079 was reclassified from non-current liabilities to current liabilities. The subsidiary "Vale do Tijuco" renegotiated the clauses of the indenture with the debenture holders in June 2015, as mentioned in Note 33.

49 18 Suppliers and other accounts payable Parent company 03/31/ /31/ /31/ /31/2014 Domestic suppliers of materials and services 46,234 68, Suppliers of fixed assets - 2, Sugarcane suppliers 13,266 6, ,500 77, The sugarcane harvest period, between April and December of each year, on average, has direct impact on the balance of suppliers of sugarcane and respective cutting, loading and transportation services. Amounts payable to sugarcane suppliers and agricultural partners take into consideration sugarcane delivered and not yet paid, and possible supplementation of sugarcane price calculated based on the final harvest price, using the Total Recoverable Sugar (TRS) index disclosed by Consecana - Sao Paulo State Council of Sugarcane, Sugar and Alcohol Producers. The Company and its subsidiaries evaluated adjustments to present value of its suppliers balances on March 31, 2015 and 2014 and concluded that these amounts did not generate material adjustments to present value in financial information. The exposure of the Group to currency and liquidity risks related to accounts payable to suppliers and other accounts payable, is disclosed in Note 22 - Financial instruments. 19 Provision for contingencies The Group is party to lawsuits involving labor, civil and tax contingencies. To face future losses linked to those processes, a provision was recorded at an amount considered by the Group's management as sufficient to cover probable losses. The Group classified the risk of loss in lawsuits as remote, possible or probable. The likelihood of lawsuit losses and the determination of involved amounts was performed considering claimers' requests, previous court decisions on the matter, and the opinion of legal counsel of the Group. The main information of lawsuits is presented as follows: 03/31/ /31/2014 Opening balance 1, Additions 1,135 1,149 Write-offs (1,525) (663) Closing balance 818 1,208 Based on information from its legal advisors, analysis of the pending legal proceedings, based on previous experience with regards to amounts claimed, management recorded provisions for amounts considered sufficient to cover possible losses from the current actions.

50 Unrecognized contingent liabilities Contingent liabilities not recognized in the financial statements refer to lawsuits for which an unfavorable outcome has been regarded as possible by the legal advisors, amounting to R$ 4,603 as of March 31, 2015 for which no reserve has been recorded, taking into consideration that neither the accounting practices adopted in Brazil nor the International Financial Reporting Standards (IFRS) require it to be accounted for. 20 Deferred income and social contribution taxes Shareholders' Assets Income (loss) equity 03/31/ /31/ /31/2015 Provision for contingencies 278 (132) - Allowance for doubtful accounts 2 (8) - Effects of swap contracts 132 (4) - Tax losses and negative basis (a) 1,167 (222) - Fair value of biological assets (3,889) Effects of exchange forward contracts (NDF) 30,451-27,422 Net 28, ,422 Shareholders' Assets Income (loss) equity 03/31/ /31/ /31/2014 Provision for contingencies Allowance for doubtful accounts Effects of swap contracts Tax losses and negative basis (a) 1, Fair value of biological assets (4,629) (1,665) - Effects of exchange forward contracts (NDF) 3, ,983 Net 347 (385) 2,983 (a) The Company s management recognized deferred tax assets of income tax and social contribution arising from tax and social contribution loss carryforwards up to the limit of 30% of deferred tax liabilities of income tax and social contribution - annual offsetting limit of tax loss, according to the tax legislation, arising from the gain determined in the calculation of the fair value of biological asset. The remaining balance of unrecorded deferred income tax and social contribution on tax losses of income tax and negative basis of social contribution is approximately R$ 45,170. Reconciliation of deferred income and social contribution taxes Effective rate reconciliation 03/31/ /31/2014 Income (loss) for the year before taxes 5,785 9,185 Nominal rate 34% 34% Tax expense at statutory rate (1,967) (3,123) Adjustment of income and social contribution taxes Non-deductible expenses 2,219 2,489 Current tax (121) (249) Deferred tax 373 (385) Effective rate 4.36% (6.90%)

51 The tax nominal rate is 34% on adjusted income, according to current legislation in Brazil for taxable income. The effective rate shown above is the best management estimate of the expected annual rate. The noted distortions arise from the effects of the non-accounting of the tax credits mentioned in item (a) of this note. Deductible timing differences and accumulated taxes losses do not lapse pursuant to the tax legislation in force. 21 Shareholders' equity a. Capital As of March 31, 2015, capital is divided into 250,932,826 (same as on March 31, 2014) registered common shares and with no par value, distributed as follows: Parent company 03/31/ /31/2014 Shares R$ Shares R$ José Francisco de Fátima Santos 28,844,819 9,128 28,844,819 9,128 Maria Ângela Turchetto Santos 24,173,900 4,456 24,173,900 4,456 Luis Gustavo Turchetto Santos 3,324, ,324, Carlos Eduardo Turchetto Santos 3,324, ,324, Francisco José Turchetto Santos 3,324, ,324, IndoAgri Brazil Participações Ltda. 125,466, , ,466, ,466 Ápia SP Participações S.A. 62,474,866 62,475 62,474,866 62, ,932, , ,932, ,364 b. Capital reserves As a result of the capital increase carried out on July 13, 2007, the Company set up a special goodwill reserve in the amount of R$ 4,164, according to the Brazilian Corporation Law. c. Legal reserve The legal reserve is set up at the rate of 5% of the net income determined in each financial year, pursuant to article 193 of Law 6404/76 up to the limit of 20% of the share capital. d. Statutory reserve The Company shall maintain a statutory reserve for business development or expansion, aimed at: (i) ensuring funds for investments in research & technology; (ii) increasing working capital to ensure proper operating conditions to meet the corporate objectives of the Company; and (iii) to fund business growth of the Company. After the adjustments and legal deductions, up to 100% of the remaining net income can be allocated to the statutory reserve, up to the limit of the capital stock, in case it is approved at the Annual Shareholders Meeting. e. Equity evaluation adjustment It includes the effective portion of the cumulative net exchange variation of liabilities in dollar and derivatives designated as cash flow hedge of future exports (hedged item), according to Note 22.

52 The amounts recorded in equity valuation adjustments are reclassified into profit or loss when recognizing the export income. f. Dividends The Company s bylaws determines a percentage higher than 25% to payment of compulsory minimum dividends. In view of the accumulated losses, no dividend was declared or paid. 22 Financial instruments a. Accounting classification and fair values The following table shows the carrying and fair values of financial assets and liabilities, including their fair value classifications. March Book value Fair value Designated at fair value Loans and receivables Other financial liabilities Total Level 1 Level 2 Level 3 Level 4 Financial assets measured at fair value Interest earning bank deposits 120, , , Total 120, , , Financial assets not measured at fair value Cash and cash equivalents - 21,021-21,021 21, Accounts receivable and other receivables - 7,369-7,369 7, Total - 28,390-28,390 28, March Book value Fair value Designated at fair value Loans and receivables Other financial liabilities Total Level 1 Level 2 Level 3 Total Financial instruments measured at fair value Loans and financing , , , ,718 Derivative financial instruments (net) ,999 31,999-31,999-31,999 Debentures ,042 93,042-93,042-93,042 Total , , , ,759 Financial instruments not measured at fair value Suppliers ,500 59,500 59, Total ,500 59,500 59, March Book value Fair value Designated at fair value Loans and receivables Other financial liabilities Total Level 1 Level 2 Level 3 Level 4 Financial assets measured at fair value Interest earning bank deposits 20, ,682-20, Total 20, ,682-20, Financial assets not measured at fair value Cash and cash equivalents - 39,880-39,880 39, Accounts receivable and other receivables - 31,253-31,253 31, Total - 71,133-71,133 71,

53 March Book value Fair value Designated at fair value Loans and receivables Other financial liabilities Total Level 1 Level 2 Level 3 Total Financial instruments measured at fair value Loans and financing , , , ,335 Derivative financial instruments (net) - - 6,909 6,909-6,909-6,909 Debentures , , , ,120 Total , , , ,364 Financial instruments not measured at fair value Suppliers ,724 77,724 77, Total ,724 77,724 77, b. Measurement of fair value The book values referring to the financial instruments contained in the balance sheet, when compared with the amounts that could be obtained in their trading in an asset market or, in the absence hereof, with the net present value adjusted with a basis on the current interest rate in the market, are substantially close to their corresponding market values. There were no transfers between levels to be considered on March 31, c. Management of financial risks The Group has transactions involving financial instruments aimed at meeting their own needs. As of March 31, 2015, the Group does not have financial instruments not recorded nor does make transactions involving financial instruments for speculation. The main risks related to the operations of the Company and its subsidiaries are as follows: Credit risk; Liquidity risk, and Market risk. This note contains information on the Group's exposure to each of the abovementioned risks, the Group's objectives and the processes for measuring and managing risk and the capital management. Risk management structure The Board of Directors is responsible for following the risk management policies of the Group, and the managers of each area report on their activities to the Board of Directors. The Group's risk management policies are established to identify and analyzed the risks that the Group faces, to define appropriate limits and controls of risks, and to monitor risks and adherence to the limits. The risk management policies and systems are reviewed frequently to reflect changes in the market conditions and in the activities of the Company and its subsidiaries. The Group, through its training and management rules and procedures, aims to develop a disciplined and constructive control environment, in which all the employees understand their roles and its obligations.

54 Credit risk Credit risk is the risk of the Group incurring losses due to a client or financial instrument counterparty, resulting from failure in complying with contract obligations. Risk is mainly due to trade accounts receivable, and of financial instruments, as follows. Exposure to credit risk The carrying amounts of financial assets classified as loans and receivables represent the maximum credit exposure. The maximum credit risk exposure on balance sheet date was: Parent company 03/31/ /31/ /31/ /31/2014 Cash and cash equivalents 141,409 60, Trade accounts receivable and other receivables 7,369 31, , ,778 91, ,297 Current assets 148,778 91, Non-current assets ,181 Cash and cash equivalents The objective of the Company and its subsidiaries is to work with a reduced number of financial institutions and to seek business with those that present a greater robustness. In addition, another policy adopted to mitigate credit risk is to maintain investment balances proportional to the balances of the borrowings with each of these institutions. In the history of the Company and its subsidiaries, there are no records of losses on cash and cash equivalents. Loans and receivables The exposure of the Company and its subsidiaries to credit risk is influenced, mainly, by the individual characteristics of each client. In addition, sales are evenly distributed throughout the corporate year (mainly in the crop period from March to December of each calendar year) which allows that the Company and its subsidiaries interrupt deliveries to clients which are considered as a possible credit risk. Impairment losses The composition by maturity of trade accounts receivable recorded in current assets as of the financial statements for which no impairment loss was recognized was as follows: 03/31/ /31/2014 Falling due 5,019 26,372 Overdue up to 30 days 1, Overdue between 31 and 90 days 13 3,541 Overdue over 90 days ,369 31,253

55 The Company and its subsidiaries reviewed the adjustment to present value of its trade receivable balances as of March 31, 2015 and 2014 and concluded that their amounts approximate the carrying amount, since their trade receivables have a short-term turnover. The allowance for doubtful accounts is formed based on the past-due bills for over 90 days, at an amount considered adequate by the Management to cover eventual losses from the realization of trade accounts receivable. From clients that present a history of non-performance of its financial obligations, the Company and its subsidiaries seek to operate with advanced payments. Guarantees The subsidiary Vale do Tijuco Açúcar e Álcool S/A. is guarantor before the financial entities and credit cooperatives, of input purchase transactions and financing to be used in the planting and harvesting of sugarcane of its suppliers. As of March 31, 2015, the total collateralized value amounts to R$ 4,055. The subsidiary Vale do Tijuco Açúcar e Álcool S/A. will assume the debit of its suppliers up to the limit of the pledged collateral, in case of default on obligations. The occasional values disbursed by the Company to pay the obligations of suppliers, in case of default, are adjusted by the TJLP (Long-term interest rate), plus 5.5% p.a. on a pro rata basis, and will be deducted when the sugarcane is supplied by the supplier. As of March 31, 2015, the subsidiary Vale do Tijuco Açúcar e Álcool S/A. did not record the collateral at fair value, because there was no supplier in default in the Company, nor did any likelihood of the use of these collaterals by suppliers. Liquidity risk Liquidity risk is the risk of the Group encountering difficulties in performing the obligations associated with its financial liabilities that are settled with cash payments or with another financial asset. The responsibility for the management of liquidity risk lies with the Group s management and its Board of Directors, which manages the liquidity risk in short, medium and long terms, maintaining credit lines of funding according to its cash needs, combining the profiles of its financial asset and liability maturities. The book value of financial liabilities with liquidity risk is as follows: Parent company 03/31/ /31/ /31/ /31/2014 Loans and financing 611, ,746 2,856 41,370 Debentures 93, , Suppliers and other accounts payable 59,500 77, Derivative financial instruments 31,999 6, , ,302 2,873 41,370 Current liabilities 563, , Non-current liabilities 232, ,456 2,856 41,370 As of March 31, 2015, the Group recorded a current liabilities balance in excess of the current assets balance by R$ 492,938.

56 The recorded maturity of financial liabilities are as follows: March 31, 2014 Book value Up to 12 months 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Loans and financing 496, ,718 79,971 41,909 27,110 8, Debentures 120,923 27,404 93, Suppliers and other accounts payable 77,724 77, Derivative financial instruments 6,909-6, March 31, 2015 Book value Up to 12 months 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Loans and financing 611, ,172 35,525 37,379 30,559 27,192 32,891 Debentures 93,042 93, Suppliers and other accounts payable 59,500 59, Derivative financial instruments 31,999 31, No cash flow expected, included in the analysis of the maturation of the Group, may occur significantly sooner or in amounts significantly different. Market risk Market risk is the risk that alterations in market prices, such as exchange rates and interest rates, have in the Group's earnings, or in the value of its holdings of financial instruments. Because of its activities, the Group is also exposed to financial risks arising from the following: change in the value of total recoverable sugar (ATR, in Portuguese), used for calculating the fair value of the biological asset and the VHP sugar value. Interest rate risk The Group is exposed to risks related to interest rates, by virtue of loans and financing contracted and interest earning bank deposits, primarily exposed to variations in the CDI and TJLP (long-term interest rate). The Group s management monitors the interest rate fluctuations linked to some debts, making use of derivative instruments with the purpose of minimizing the impact of these risks. Cash flow sensitivity analysis for variable rate instruments - The sensitivity analysis is made based on the interest rates of non-derivative financial instruments in the year ended March 31, As established by CVM Instruction 475/08, which requires the presentation of two scenarios with deterioration of 25% and 50% in the variable of risk considered, we show below the possible impacts of how they would have increased (decreased) the equity and the profit or loss for the period according to the following amounts. These scenarios can produce impacts on profit or loss and future cash flows of the Group as described below: Scenario I: It corresponds to the scenario considered as the most probable for interest rates on the date of financial statements; Scenario II: Deterioration of 25% in the main risk factor of the financial instrument in relation to the level verified in the probable scenario; and

57 Scenario III: Deterioration of 50% in the main risk factor of the financial instrument in relation to the level verified in the probable scenario. Interest rate risk on financial assets and liabilities - Appreciation of rates - Scenarios Exposure at Probable Index variation by 25% Index variation by 50% Instruments 03/31/2015 Risk % Amount % Amount % Amount Financial assets Interest earning bank deposits 17,747 CDI (Interbank deposit certificate) 10.81% 1, % % 959 Financial liabilities Indirect BNDES onlending (28,072) Working capital (42,825) TJLP (Longterm interest rate) 7.47% (2,097) 9.34% (524) 11.21% (1,048) TJLP (Longterm interest rate) 4.93% (2,111) 6.16% (528) 7.40% (1,056) CDI (Interbank deposit certificate) 4.06% (997) 5.08% (249) 6.09% (498) ACC (Advance on exchange contract) (24,552) Impact on income (loss) and shareholders equity (821) (1,643) Interest rate risk on financial assets and liabilities - Depreciation of rates - Scenarios Exposure at Probable Index variation by 25% Index variation by 50% Instruments 03/31/2015 Risk % Amount % Amount % Amount Financial assets Interest earning bank deposits 17,747 CDI (Interbank deposit certificate) 10.81% (1,918) 13.51% (480) 16.22% (959) Financial liabilities Indirect BNDES onlending (28,072) Working capital (42,825) ACC (Advance on exchange contract) (24,552) TJLP (Longterm interest rate) 7.47% 2, % % 1,048 TJLP (Longterm interest rate) 4.93% 2, % % 1,056 CDI (Interbank deposit certificate) 4.06% % % 498 Impact on income (loss) and shareholders equity 821 1,643 Currency risk The Group is subject to currency risk (US dollar) in part of their borrowings taken in a currency other than the functional currency. As regards other monetary assets and liabilities denominated in foreign currency, the Group guarantees that its net exposure is kept at an acceptable level, buying or selling foreign currencies at demand rates, when necessary, to address short-term instabilities.

58 The short-term portions of the monetary liabilities denominated in foreign currency are secured by assets also denominated in foreign currency (sugar export at a price fixed in foreign currency). The long-term portion of these liabilities is secured by the Company s sugar exports, which account for 100% of the total exports, and whose prices are fixed in foreign currency and show little sensitivity to exchange rate fluctuations. 03/31/2015 Notional Notional Fair value Derivatives Maturity (US$ thousand) (R$ thousand) (R$ thousand) Interest rate swap Nov ,451 12,000 (389) Exposures to exchange risks Foreign currency net exposure related to principal amounts is presented in the chart below (in US$ thousand): 03/31/ /31/2014 Cash and cash equivalents 3,416 1,287 Loans and financing (61,971) (52,227) NDF - Non-Deliverable Forward (34,700) (34,700) Net exposure (93,255) (85,640) Sensitivity analysis - currency risk - The sensitivity analysis is made based on the exposure of loans and financing to the monetary variation of the US dollar in the period ended March 31, As established by CVM Instruction 475/08, which requires the presentation of two scenarios with deterioration of 25% and 50% in the variable of risk considered, we show below the possible impacts of how they would have increased (decreased) the equity and the profit or loss for the period according to the following amounts. These scenarios can produce impacts on profit or loss and/or future cash flows of the Group as described below: Scenario I: For the probable scenario in US dollar the exchange rate on March 31, 2015 was considered; Scenario II: Deterioration of 25% in the main risk factor of the financial instrument in relation to the level verified in the probable scenario; and Scenario III: Deterioration of 50% in the main risk factor of the financial instrument in relation to the level verified in the probable scenario;

59 Scenarios Increase (R$) Decrease (R$) USD R$ 25% 50% 25% 50% Financial instruments Assets Cash and cash equivalents 3,416 10,959 2,740 5,480 (2,740) (5,480) Liabilities Loans and financing (61,971) (224,017) (56,004) (112,008) 56, ,008 Financial instruments Liabilities Notional Fair value NDF - Non-Deliverable Forward (34,700) (31,610) (7,903) (15,805) 7,903 15,805 Impact on income (loss) and shareholders equity (61,167) (122,333) 61, ,333 Information used to calculate sensitivity analyses presented above were obtained from external market sources, such as Bloomberg and BM&F Bovespa. Hedge accounting Cash flow hedge involving the Company s exports The Group adopts a cash flow hedge accounting structure that consists of covering a highly probable expected transaction of export in foreign currency (USD), against the exchange risk of fluctuation in the exchange rate of USD in relation to BRL, using as coverage instrument the non-derivative financial instruments, such as Advance on Export Contracts (ACC, in Portuguese) and the Export Credit Note (NCE, in Portuguese) and derivatives such as Non- Deliverable Forward (NDF, in Portuguese), at amounts and maturities equivalent to exports. The relation of hedge designated to hedge accounting is as follows: 03/31/2015 Realized Income (loss) Not realized Shareholders' equity ACC and NCE (12,386) (27,391) Net exposure (12,386) (27,391) The effective portion of the change in the fair value of designated derivatives and qualified as cash flow hedge, and not settled, as well as the exchange variation in non-derivative hedge instruments is recognized in equity as Equity valuation adjustments. This portion is realized at the time of the elimination of the risk to which the hedge instruments were designated. At the time of the settlement of financial instruments, gains and losses that were previously deferred in other comprehensive income are transferred into profit or loss. The breakdown of realized and unrealized gains and losses recognized in the operating income and in other comprehensive income, respectively of financial instruments designated as hedge instruments is as follows.

60 03/31/2015 Realized Income (loss) Not realized Liabilities SWAP (2,046) (389) NDF - (31,610) Net exposure (2,046) (31,999) Derivative financial instruments The Group is exposed to the exchange risk of future cash flows in foreign currency, in view of the income from the export of sugar. In order to mitigate this risk, the Group adopts coverage procedures based on the exchange exposure calculated by the commercial credit amount for the next 12 months, which is monthly reviewed. The coverage of the future cash flows is analyzed and discussed by the Group s Board of Directors, which approves and authorizes the purchase and designation of derivative financial instruments for hedge accounting. The table below presents all the financial derivative transactions entered into, as well as their related fair values calculated by the Group's Management: Derivatives Buy/Sold Market Contract Maturity Notional (US$) Fair value (R$) Term Sold CETIP NDF 04/30/2015 2,300 2,056 Term Sold CETIP NDF 05/31/2015 3,800 3,363 Term Sold CETIP NDF 06/30/2015 3,800 3,401 Term Sold CETIP NDF 07/31/2015 3,800 3,437 Term Sold CETIP NDF 08/31/2015 3,800 3,468 Term Sold CETIP NDF 09/30/2015 4,050 3,716 Term Sold CETIP NDF 10/31/2015 4,050 3,734 Term Sold CETIP NDF 11/30/2015 4,050 3,755 Term Sold CETIP NDF 12/31/2015 5,050 4,678 34,700 31,610 Sensitivity analysis of derivative financial instruments - The sensitivity analysis of the change in the fair value of the derivative financial instruments of the Company in the probable, possible and remote scenarios is as follows: Interest rate risk on financial assets and liabilities - Appreciation of rates - Scenarios Exposure at Probable Increase of the index by 25% Increase of the index by 50% Instruments 03/31/2015 Risk % Amount % Amount % Amount Swap 12,000 CDI (Interbank deposit certificate) 12.60% % % 74 Sale commitment - NDF 34,700 Foreign exchange rate R$/US$ - 31,610-7,903-15,805 Impact on income (loss) and shareholders equity 7,964 15,879

61 Interest rate risk on financial assets and liabilities - Depreciation of rates - Scenarios Exposure at Probable Index reduction by 25% Index reduction by 50% Instruments 03/31/2015 Risk % Amount % Amount % Amount Swap 12,000 CDI (Interbank deposit certificate) 12.60% (389) 9.45% (37) 6.30% (25) Sale commitment - NDF 34,700 Foreign exchange rate R$/US$ - (31,610) - (7,903) - (15,805) Impact on income (loss) and shareholders equity (7,939) (15,830) Capital management The Group manages its capital to ensure the continuity of its regular activities and, at the same time, maximizes return to all stakeholders or parties involved in its operation, through debt and equity balance optimization. The capital structure of the Group is formed by the net indebtedness, deducted of cash and bank balances, divided by the capital plus reserves. The Group is not subject to any external requirement on capital. Indebtedness ratio The Group calculates its indebtedness ratio as follows: 03/31/ /31/2014 Loans and financing (611,718) (496,746) Debentures (93,042) (120,923) Cash and cash equivalents 141,409 60,562 Net debt (563,351) (557,107) Shareholders' equity 72, ,919 Net debt ratio (7.74) (4.65) Income from derivative financial instruments The Group recorded the gains and losses on these transactions in income (loss) for the year. As of March 31, 2015, the impacts recorded in profit or loss are shown below: Derivative Market Risk 03/31/ /31/2014 Swap CETIP USD (389) 401 (-) Deferred income and social contribution taxes 132 (136) Net Effect on Company s income (loss) (257) Net operating income The operating income of the Company are comprised of sugar and ethanol sales for the domestic and foreign market and electricity.

62 We reproduce below the reconciliation between gross income for tax purposes and the income presented in the statement of income for the year: Parent company 03/31/ /31/ /31/ /31/2014 Gross income from sales and services: Ethanol - Domestic market 204, , Sugar - Domestic market Sugar - Foreign market 208, , Electric power (a) 98,450 48, Rendering of services - 1,218 - Other income 10,473 3, Gross tax income 500, , Sales tax (24,479) (26,440) - - Refunds and rebates Net operating income 476, , (a) It refers to the supply of electric energy to the Electric Energy Trading Chamber (CCEE, in Portuguese), as established in the contract entered into through the bid promoted by the Brazilian Electricity Regulatory Agency (ANEEL, in Portuguese). The energy supply contract establishes the supply of 876,000 Mwh, during the period between April 2010 and March 2025, as follows: Year of supply Contracted (Mwh) Exported (Mwh) 2010 / ,520 17, / ,320 61, / ,320 61, / ,320 61, / ,320 61, / ,320 61, / , / , / , / , / , / , / , / , / ,320 - Total 876, ,800 The energy income is divided into fixed and variable: Fixed income The subsidiary Vale do Tijuco Açúcar e Álcool S/A. is entitled to the annual fixed income of R$ 9,412, adjusted by the Extended National Consumer Price Index (IPCA, in Portuguese). The payment of the fixed income is monthly made in the proportion of one twelfth.

63 In case the energy is supplied at amounts below the committed one, the subsidiary Vale do Tijuco Açúcar e Álcool S/A. will be required to pay an annual refund to be calculated by CCEE at the end of each supply period. The Company already delivered 100% of the amount contracted by CCEE for the year regarding the amount of 61,320 Mwh. 24 Expenses by nature The Company presented its statements of income using expenses classification based on function. Information on the nature of these expenses recognized in the statements of income is as follows: 03/31/ /31/2014 Cost of goods sold CGS - Sugar (175,318) (122,587) CGS - Anhydrous alcohol (107,141 ) (84,025) CGS - Hydrated Alcohol (62,979) (63,546) CGS - Electricity (22,864) (13,917) Cost of services rendered (1,500) (1,645) CGS - Sugarcane (238) (223) Other expenses (471) (7,467) Recovery of PIS and COFINS 19,509 22,125 Total (351,002) (271,285) Sales expenses Freight, port expenses and commissions (32,507) (26,599) Depreciation, amortization and depletion (957) (941) Personnel expenses (1,654) (610) Other commercial expenses (791) (382) Total (35,909) (28,532) Administrative expenses Personnel expenses (8,788) (8,402) Third party services (3,622) (2,537) Depreciation, amortization and depletion (1,033) (870) Other administrative expenses (1,494) (2,483) Total (14,937) (14,292) 25 Commitments Sales commitment The subsidiary Vale do Tijuco Açúcar e Álcool S/A. mainly operates in the commodities market. The sales are substantially made at the price on the transaction date. However, the subsidiary Vale do Tijuco Açúcar e Álcool S/A. has several agreements in the market of sugar committing itself to selling certain volumes in future crops. As of March 31, 2015, the sale commitments of sugar amount to 220,000 tons, entered into for the 2015/2016 crop. The Company did not have future commitments for sale of ethanol as of March 31, 2015.

64 Agricultural Partnership Agreements The subsidiaries Vale do Tijuco Açúcar e Álcool S/A. and Triângulo Mineiro Açúcar e Álcool S/A. have agriculture partnership contracts for sugarcane crops for the average duration of ten years. These contracts have the purpose of ensuring a portion of the future production, which is estimated as follows: 2014/2015 crop onwards - 55, tons per crop. The payments related to these obligations are calculated on a straight-line basis, according to the contracts, taking into account the commitment to the share of the partner, which will be valued by the prices to be set at each harvest by the CONSECANA - SP system. Operational lease The subsidiary Vale do Tijuco Açúcar e Álcool S/A. has operating lease contracts for lands, sugarcane crops for the average duration of five years. The payments related to these obligations are calculated on straight-line basis, according to the contracts. Payments are monthly made or as provided in each contract. The expenditures related to these contracts are as follows: 2014/2015 Vale do Tijuco 3,608 Triângulo Mineiro 8 Total 3, Net financial income (expenses) 03/31/ /31/2014 Financial expenses: Interest on loans and financing (69,488) (55,323) IOF (1,239) (2,847) Unrealized losses on derivative financial instruments: - Loss on fair value adjustment (1,891) (2,337) - Effective loss - settlement of transactions (2,049) (137) Net exchange variation (basically on ACC) (6,700) (5,634) Other financial expenses (3,219) (2,380) (84,586) (68,658) Financial income: Gains with derivative financial instruments: - Gains on fair value adjustment 1, Effective gains - settlement of transactions Asset foreign exchange fluctuation 7,112 4,707 Other financial income 4,097 1,398 13,117 7,045 Net financial income (loss) (71,469) (61,613)

65 27 Related parties a. Parent company and part of the final parent company The Company is a jointly-controlled subsidiary, by means of the shareholder agreement entered into between IndoAgri Brazil Participações Ltda. and Ápia SP Participações S.A., according to shareholders board presented in Note 21a. b. Remuneration of key management staff Company s key management personnel is comprised of the Executive Board elected in the Annual Shareholders' Meeting. The amounts related to the compensation of key management personnel in the period as short-term benefits were R$ 3,653 (R$ 1,954 on March 31, 2014), recorded in the group of general and administrative expenses and include salaries, bonuses, variable compensations and direct and indirect benefits. The Company and its subsidiaries do not have other types of compensation, such as postemployment benefits, other long-term benefits or benefits of labor contract rescission. c. Principal balances of transactions Transactions with related parties, except for the purchase of raw material, which is made according to the market price, are made based on conditions negotiated between the Company and the related companies, which could be different if they were made with non-related parties. The balances with related parties are presented as follows: Parent company 03/31/ /31/ /31/ /31/2014 Non-current assets Related party credits (Note 10) (a) Triângulo Mineiro Açúcar e Álcool S/A ,156 Vale do Tijuco Açúcar e Álcool S/A Advances - Cane suppliers (Note 11) (b) - Marco Otavio Galvão 1,896 1,541 Total 1,896 1, ,181 Parent company 03/31/ /31/ /31/ /31/2014 Liabilities Debts with related parties (Note 16) (c) Vale do Tijuco Açúcar e Álcool S/A ,855 41,370 Total - - 2,855 41,370

66 Parent company Income (loss) 03/31/ /31/ /31/ /31/2014 Purchase of raw material (sugarcane) (d) Marco Otavio Galvão 4,005 1, JF Citrus Agropecuária 22 14, Total 4,027 16, (a) (b) (c) (d) Amount granted to the respective subsidiaries, not subject to interest, and which will be settled by the Company according to its available cash. Amount granted to Marco Otávio Galvão, not subject to interest, and which will be settled upon delivery of sugarcane, in the 2015/2016 crop. Amount granted by the subsidiary Vale do Tijuco Açúcar e Álcool S/A., not subject to interest, and which will be settled by the Company according to its available cash. Mr. Marco Otávio Galvão and JF Citrus Agropecuária Ltda. have sugarcane properties near Vale do Tijuco Açúcar e Álcool S/A. and, therefore, operate as regular suppliers of sugarcane. They are classified as related parties because they are shareholders of one of the Company s parent companies. The Company grants collateral to its subsidiaries in contracts of loans and financing, as shown in note 16. The subsidiary Vale do Tijuco Açúcar e Álcool S/A. pledges collaterals for transactions with suppliers, as described in Note Earnings per share Basic earnings per share is calculated by dividing net income for the year attributed to the holders of the Group's common and preferred shares by the weighted average number of common shares outstanding during the years, net of treasury shares (if any). The basic and diluted income or loss are equal, because there is no financial or equity instrument that can potentially dilute the number of shares. The tables below shows data of income and shares used in calculating basic and diluted earnings or loss per share: Parent company 03/31/ /31/2014 Basic earnings and diluted per share: Net income (loss) for the year 6,037 8,551 Weighted average of shares 250,932, ,932,826 Earnings per share and diluted (in reais) Operating segments The Group's management bases its reports on the financial statements on the same basis in which such information are disclosed, as these financial statements are those regularly reviewed by the chief manager of the Group for decision making about resource allocations. Therefore, the Company has only one operating segment, called energy.

67 30 Insurance coverage The Group adopts the policy of contracting insurance coverage for assets subject to risks for amounts considered to be sufficient to cover eventual casualties, considering the nature of its activity. As of March 31, 2015, the Group has insurance at amounts considered sufficient by the Management to cover possible losses, as follows: Insured property Amount insured Civil liability 15,000 Rural Pledge 5,856 Vehicles 100% FIPE table Machinery and equipment, sundry 35,524 Patrimonial 200, Statements of cash flows Statements of cash flows were prepared according to technical pronouncement CPC 03 R2 and IAS 7. a. Cash and cash equivalents Cash and cash equivalents consist of cash available in the Company and balances deposited in banks. b. Property, plant and equipment - During the year ended March 31, 2015, the subsidiaries purchased property, plant and equipment at the total cost of R$ 83,820 (R$ 83,760 as of March 31, 2014), of which R$ 23,750 (R$ 24,794 as of March 31, 2014) by raising loans and financing, R$ 15,362 (R$ 2,545 as of March 31, 2014) were by means of suppliers and did not affect cash. Additionally, as of March 31, 2014, of total additions, R$ 2,446 were made by means of the consolidation of the subsidiary Rio Tijuco Agropecuária Ltda. and did not affect cash. 32 Environmental risks The facilities of the Group and its industrial and agricultural activities are subject to environmental regulations. The Group decreases the risks associated with environmental issues, through operating procedures and controls with investments in pollution control equipment and systems, besides believing that no provision for losses related to environmental issues is currently required, based on the effective laws and regulations.

68 33 Subsequent events By means of the Annual Debenture Holders Meeting held on June 10, 2015, it was resolved to exclude the Indenture clause that sets forth about the financial ratio "Equity and Total Assets" of the Financial Covenants; waiving for the entire fiscal year of Vale do Tijuco Açúcar e Álcool S.A., the compliance with the financial ratio "Equity and Total Assets" totaling R$40,079 and amending the maturity date of the debentures which were due short-termly in 2015, amounting to R$53,000, on March 31, 2015, now to be paid in November * * * Board of Directors Board Members José Francisco de Fátima Santos President Luiz Gustavo Turchetto Santos Hansjorg Suelzle Moleonoto Tjang Surjadi Tirtarahardia Mark Julian Wakeford Executive Board Carlos Eduardo Turchetto Santos Celso Oliveira Sylvio Ortega Filho Eduardo Scandiuzzi Lopes Accountant Anderson César Augusto Alves CRC/SP nº 1SP206284/O-8

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