Companhia Mineira de Açúcar e Álcool Participações Management Report - Harvest 14/15 2º Quarterly 2Q15

Transcription

1 Companhia Mineira de Açúcar e Álcool Participações Management Report - Harvest 14/15 2º Quarterly 2Q15

2 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 Management Report Uberaba, November 14th Dear Shareholders, We present the Management Report, the Financial Statements and Independent Auditors' Report for the first quarterly of harvest 2014/2015, ended on September 30th, 2014 in accordance with CPCs and IFRS.. Features of Harvest 14/15 2Q15 It was crushed 1,498 K Tons of sugarcane in 2Q15, increased 7.9% if compared with previous crop. YTD of September was 2,781 k Tons, 18.5% higher than last harvest.. On second quarterly of current harvest were produced: 112 k Tons of sugar, 59 K m³ of ethanol and 105 k MWH of energy. YTD up to September, the production of VHP was 17.2% higher than last crop (170 ktons), +7.7% of ethanol (112 k m³) and +29% of energy (193k MWH). Gross Sales of 2Q15 was 166 MR$, +17% than 2Q14. On this first 6 months of current crop was billed MR$, 17.3% higher than last crop. EBITDA was 48.7 MR$ in 2Q15, increased of 15.8%. YTD up to September was 82.4 MR$, 55.9% higher than last crop. Increase of 10.7% at net income in 2Q15 (19.6 MR$). YTD this crop increased 59.1% if compared same period than previous crop.

3 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 Operational & Financial Features (THOUSAND REAIS) 2Q14 2Q15 Var.(%) 6M14 6M15 Var.(%) CMAA - CONSOLIDATED Gross Sales ,0% ,3% Net Sales ,7% ,0% COGS ,6% ,7% SG&A ,0% ,2% Depreciation and Planting Amortizantion ,0% ,9% EBITDA ,8% ,9% EBITDA Margin 30,8% 30,3% -1,6% 26,1% 34,5% 32,2% Net Income ,7% ,1% Note: EBITDA: Net sales (-) COGS (-) SG&A (+)Depreciation and Plating amortization allocated in product cost. Ratoon cane treatment is considered in cost, therefore don t sum to compose EBITDA. Operational Data 2Q14 2Q15 Var.(%) 6M14 6M15 Var.(%) CMAA - CONSOLIDATED 2T14 2T15 Var.(%) 6M14 6M15 Var.(%) Crushing Sugar Cane (Thousand Tons) ,9% ,5% Owner ,7% ,4% Third Parties ,4% ,1% Mechanized Harvesting 100% 100% 0,0% 100% 100% 0,0% TRS (Kg/ton of cane) 142,3 139,7-1,8% 133,4 127,6-4,3% Production Sugar (Thousand Tons) ,1% ,2% Anhydrous Ethanol (Thousand m³) ,5% ,0% Hydrous Ethanol (Thousand m³) ,8% ,5% Electric Energy (Thousand Mwh) ,1% ,0% Sales Sugar (Thousand Tons) ,5% ,9% Anhydrous Ethanol (Thousand m³) ,7% ,0% Hydrous Ethanol (Thousand m³) ,6% ,7% Electric Energy (Thousand Mwh) ,0% ,5% Inventory Sugar (Thousand Tons) ,1% ,1% Anhydrous Ethanol (Thousand m³) ,9% 26,6 42,6 59,9% Hydrous Ethanol (Thousand m³) 7 4,8-35,7% 7,4 4,8-35,7%

4 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 2Q14 2Q15 Var.(%) 6M14 6M15 Var.(%) Sugar Cane* 259,45 238,54-8,1% 440,43 441,54 0,3% TRS (kg/sugar cane tons) 133,08 145,11 9,0% 123,26 135,62 10,0% Sugar* 16,31 14,74-9,7% 25,20 25,08-0,5% Ethanol** 11,22 11,22 0,0% 18,83 19,68 4,5% Anhydrous 5,10 4,80-5,8% 8,07 8,39 4,0% Hydrous 6,12 6,42 4,9% 10,76 11,29 4,9% Sugar (%) 45,15 44,65-1,1% 45,15 43,95-2,7% Ethanol (%) 54,85 55,35 0,9% 54,85 56,05 2,2% Source: FCSTONE/ÚNICA *million tons **billion de liters According last data from ÚNICA, the production of Mid-South of Brazil at 2Q15 crushed 239 million tons, 8.1% lower than last crop Prices 2Q15 Sugar VHP NYBOT #11: The VHP, the screen # 11 of the New York Stock Exchange, began the period 2Q15 with prices higher than 2Q14, but the price dropped and ended the second quarterly of the current crop below 8.24% of the price on 30/09/13. The average 2Q14 was cts/lb while the average 2Q15 was 15,93 cts/lb. The average price of the VHP in the quarterly in R$ / ton was R $ (whereas average PTAX dollar), 5.1% lower than the same period of last season, which was R$ / ton.

5 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 Hydrous Ethanol: the hydrous ethanol price was higher than average historical price and higher than maximum price of last 3 years. The ESALQ average price in 2Q15 was R$ 1,215/m³ while last harvest was R$ 1,116/m³, 8.87% higher. Anhydrous Ethanol: the price of Anhydrous Ethanol started the second quarterly slightly higher the historical average of the last 3 years. The ESALQ average price in 2Q15 was R$ 1,345 / m³ while in 2Q14 was R$ 1,273 / m³, 5.66% higher.

6 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 Demand: The chart above shows a small reduction in fuel demand in the Mid-South in the second quarterly of the current crop, compared to the same period of the previous harvest. The price line shows an increase of 7.83% if compared 2Q15 and 2Q14. Revenues GROSS SALES COMPOSITION 2Q14 2Q15 Var.(%) 6M14 6M15 Var.(%) In Thousand Reais 2T14 2T15 Var.(%) 6M14 6M15 Var.(%) Internal Market ,0% ,5% Hydrous Ethanol ,3% ,4% Anhydrous Ethanol ,7% ,0% Sugar 0 0 0,0% 0 0 0,0% Electric Energy ,6% ,1% Others ,7% ,5% External Market ,2% ,4% Sugar ,2% ,4% Hydrous Ethanol 0 0 0,0% 0 0 0,0% Total Gross Sales ,0% ,3% Hydrous Ethanol ,3% ,4% Anhydrous Ethanol ,7% ,0% Sugar ,2% ,4% Electric Energy ,6% ,1% Others ,7% ,5%

7 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 Sugar VHP Volume (Thousand tons) e Average Price (R$/ton) In the second quarterly of the crop 14/15 were sold 89 k tons of sugar, 15.58% more than the previous harvest at an average price of R$ 915/ton, lower 2% from 2Q14. The YTD of harvest was sold 3% more sugar with an average price higher 1.43% than last crop.

8 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 Ethanol Hydrous: were sold 15 thousand m³ at 2Q15, 26% lower than 2Q15, with average price of R$ 1.38/liter, increased 10.4% if compared second quarterly of harvest 13/14. Anhydrous: At 2Q15 were sold 20 thousand m³, same volume than 2Q14, with average price of R$ 1.40/m³, increased 7.7% if compared same period than last crop. Cost The Cost of goods sold has the second quarterly of the harvest 14/15 an increase of 20.7% in absolute values over the same period of the crop 13/14. This increase is due to the increase of 3% in TRS volumes sold; purchase biomass for power generation and 12% increase in sales volumes of energy. When comparing the unit cost of sugar / ethanol on the TRS sold, there is an increase of 20.3%, reflecting the lower TRS per ton of cane.

9 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 COGS 2Q14 2Q15 Var.(%) 6M14 6M15 Var.(%) In Thousand Reais 2T14 2T15 Var.(%) 6M14 6M15 Var.(%) Sugar ,6% ,8% Ethanol ,3% ,4% Electric Energy ,5% ,7% Others ,2% ,6% Total COGS ,6% ,7% TRS Sold (Thousand Tons) ,0% ,6% Unit Cost (Sugar&Ethanol COGS/TRS) ,3% ,1% Expenses Sales Expenses 2Q14 2Q15 Var.(%) 6M14 6M15 Var.(%) In Thousand Reais Freight of transfers and sales ,0% ,7% Port Charges ,3% ,0% Comissions and Sales fees ,0% ,1% Personnel expenses ,2% ,0% Depreciation ,9% ,1% Rent ,5% ,8% Others Expenses ,9% ,0% Total ,5% ,1% Sales: At 2Q15 increased 36.5% than 2Q14. The variation is due increase of 15.5% in VHP volumes transported to port and increase of 18% in freight prices. Administrative Expenses 2Q14 2Q15 Var.(%) 6M14 6M15 Var.(%) In Thousand Reais Personnel expenses ,7% ,8% General expenses and Outsourced Services ,3% ,3% Depreciation ,8% ,3% Tax, fees and contribuitions ,9% ,7% Rent ,5% ,3% Total ,3% ,4% Administrative: Decrease of 1.3% on administrative expenses if compared second quarterly of harvest 15/16 to second quarterly of last crop.

10 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 Financial Results The second quarterly of season 14/15, had 18.2 MR$ of net financial results, being: 7.5 MR$ of short term interest and 8.7 MR$ of long term interest. The interest exchange variation was -1.5MR$, being -1.5 MR$ of settled contracts and +38 kr$ of maturing contracts. Other financial income and expenses are composed of bank charges, commissions and IOF financial operations. Net Financial Results 2Q14 2Q15 Var.(%) 6M14 6M15 Var.(%) In Thousand Reais Financial incomes ,8% ,2% Financial Expenses ,8% ,1% Total ,7% ,2% FINANCIAL RESULTS BREAKDOWN 2Q15 In Thousand Reais Interest of Short Term debt Interest of Long Term debt Exchange Variation Income of Investment 587 Others financial income/expenses Total EXCHANGE VARIATION - 2Q15 ACC SWAP/NDF Outros Total Settled Contracts Fair Value of interest in active contracts Total

11 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 Operational Working Capital The position of assets and liabilities on September 30th 2014 demonstrates a positive variation in the asset account for the largest volume in stocks. In liabilities, the negative variation was reflected of reduction of supplier to be paid. OPERATION WORKING CAPITAL 31/3/14 30/9/14 Var.(%) In Thousand Reais ASSETS ,8% Receivables ,2% Inventory ,8% Recoverable Taxes ,1% LIABILITIES ,7% Suppliers ,7% Salaries and Social Security Contribuitions ,0% Payables Taxes ,3% WORKING CAPITAL ,6% Indebtedness The net debt position na index of net indebtedness to capital social + reserves increased 15.7% relative March 31st This increase is reflection of increase USD, that updated the amount of debt in USD and higher level of inventory of finished product (VHP) due lack of vessel to shipment, resulting less money in cash. INDEBTEDNESS 31/3/14 30/9/14 Var.(%) In Thousand Reais ACC ,9% FINAME ,3% Working Capital ,1% Debentures ,0% Diferred Expenses ,3% Gross Indebtedness ,9% Cash ,8% Net Indebtedness ,1% Social Capital + Reserves ,0% Index (Net Indebtedness/Social Capital) 2,74 3,17 15,7%

12 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 Investments CMAA - CONSOLIDATED 2Q14 2Q15 Var.(%) 6M14 6M15 Var.(%) In Thousand Reais 2T14 2T15 Var.(%) 6M14 6M15 Var.(%) Sugar Cane Planting ,3% ,9% Agricultural Machinary and Building ,7% ,7% Industrial Equipments and Building ,9% ,7% Administrative equipments/system and Others ,1% ,1% Total ,8% ,7% The largest investments of the second quarter of the crop were in formation of new sugar cane fields and agricultural equipment to meet the expectation of crushing the coming seasons. Legal Notice The statements contained herein relating to the prospects of the business, estimates for operating, financial and investments results 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 Quarterly information s 2Q15 The Directors declare that reviewed, discussed and agreed with the quarterly Information 2Q15 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 six months of 2014, ended September 30th 2014, 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 auditor.

13 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 About CMAA Group The CMAA is a public company registered with the CVM and was created to be a hub for three mills 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 unit Usina Vale do Tijuco, 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 crushing of 1.2 million tons, with the second season in 2011, with a grinding of 1.66 million tons of sugarcane, already producing VHP, anhydrous & hydrous ethanol and electric energy. For the season 2012/2013 was crushed 2.2 million tons and for harvest 2013/14 crushed 3 million tons of sugarcane. The prevision of harvest 14/15 is crushing 3.5 million tons of sugarcane.

14 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 CMAA - Companhia Mineira de Açúcar e Álcool Participações Statements of results of 6-month periods ended September 30th of 2014 & 2013 (In thousands of Reais) Consolidated 30/09/ /09/2013 (6 months) (6 months) Net revenue Variation of the biological asset's fair value (788) Cost of sales and services ( ) ( ) Gross profit Sales expenses (20.140) (15.599) General expenses (7.433) (7.465) Other income Share of loss of equity-accounted investees 0 - (27.176) (22.611) Result before net financial income and expenses and taxes Financial expenses (37.801) (33.734) Financial income Net financial income (expenses) (34.486) (32.475) Loss before taxes Current income and social contribution taxes (2.469) (6) Deferred income and social contribution taxes (1.400) Profit/(Losses) for the period

15 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 CMAA - Companhia Mineira de Açúcar e Álcool Participações Balance sheets at July 30, 2014 and 2013 (In thousands of Reais) Consolidate d Asse ts Note 30/09/ /03/2014 Cash and cash equivalents Trade and other receivables Inventories Loan receivable from suppliers - - Recoverable taxes and contributions Other current assets Total curre nt asse ts Long-term assets Inventories Trade and other receivables Judicial deposits Derivative financial instruments Related party credits Recoverable taxes and contributions Deferred taxes liabilities Investments Biological assets Property, plant and equipment Intangible assets Total non-curre nt assets Total assets

16 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 CMAA - Companhia Mineira de Açúcar e Álcool Participações Balance sheets at July 30, 2014 and 2013 (In thousands of Reais) Consolidated Liabilitie s Note 30/09/ /03/2014 Loans and borrowings Debêntures Suppliers and other accounts payable Provision and labor charges Tax liabilities Advances from clients Other current liabilities Total current liabilitie s Trade and other payables Loans and borrowings Debêntures Debts with related parties Derivative financial instruments Provision for loss in investments Deferred taxes liabilities Provisions for contingencies Total non-curre nt liabilities Equity 18 Share capital Capital reserve Equity evaluation adjustment (20.644) (5.791) Accumulated losses (67.494) (81.818) Total shareholders' equity Total liabilities Total liabilitie s and shareholde rs' e quity

17 COMPANHIA MINEIRA DE AÇÚCAR E ÁLCOOL PARTICIPAÇÕES HARVEST 14/15 2Q15 Kind Regards, Chairman Carlos Eduardo T. Santos Industrial Director Celso Oliveira CFO Sylvio Ortega Filho Agricultural Director Eduardo Scandiuzzi Accountant Anderson Cesar Augusto Alves

18 Companhia Mineira de Açúcar e Álcool Participações Report on the review of quarterly information - ITR quarter ended KPDS

19 quarter ended Contents 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 added value 10 Notes to the quarterly financial information 11 2

20 To the Board Members and Shareholders of Companhia Mineira de Açúcar e Álcool Participações Uberaba - Minas Gerais Introduction We have reviewed the interim, individual and consolidated financial information of Company, contained in the Quarterly Information ITR Form for the quarter ended, which comprise the balance sheet as of and related statements of income, of comprehensive income for the three and six-month periods then ended, of changes in shareholders' equity and of cash flows for the six-month period then ended, including the explanatory notes. The Company's Management is responsible for the preparation of the individual interim accounting information in accordance with Technical Pronouncement CPC 21 (RI) - Interim Statement and of the consolidated interim accounting information in accordance with CPC 21 (R1) and with international standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board - IASB, as well as for the presentation of this information in a manner consistent with the standards issued by the Brazilian Securities and Exchange Commission, applicable to the preparation of the Quarterly Information - ITR. Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of the review We conducted our review in accordance with the Brazilian and international review standards for interim information (NBC TR Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists in asking questions, chiefly to the persons in charge of financial and accounting affairs, and in applying analytical procedures and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Brazilian and International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. 3

21 Conclusion on the individual interim information Based on our review, we are not aware of any facts that would lead us to believe that the individual interim accounting information included in the quarterly information referred to above was not prepared, in all material respects, in accordance with CPC 21 (R1) applicable to the preparation of Quarterly Information - ITR, and presented in a manner consistent with the standards issued by the Brazilian Securities and Exchange Commission. Conclusion on the consolidated interim information Based on our review, we are not aware of any facts that would lead us to believe that the consolidated interim accounting information included in the quarterly information referred to above was not prepared, in all material respects, in accordance with CPC 21 (R1) and IAS 34 applicable to the preparation of Quarterly Information - ITR, and presented in a manner consistent with the standards issued by the Brazilian Securities and Exchange Commission. Emphasis Going concern Without qualifying our opinion, we call your attention to note 1 to the financial quarterly information, which indicates that on that date, the Company s consolidated current liabilities exceeded the total current assets by R$ 251,472 thousand. These conditions, together with other matters, as described in Note 1, indicate that a significant uncertainty exists and may raise significant doubts on the Company's capacity of continuing as a going concern. Other issues Statements of added value We also reviewed the individual and consolidated statements of added value (SAV) for the sixmonth period ended on, prepared by the Company's management, whose presentation in the interim information is required according to the standards issued by the CVM Brazilian Securities and Exchange Commission, applicable to the preparation of Quarterly Information - ITR and considered supplementary information by the IFRS, which do not require the presentation of the SAV. These statements were subjected to the review procedures previously described and, based on our review, we are not aware of any other event that make us believe that those were not prepared, in all material respects, in accordance with the individual and consolidated interim accounting information taken as a whole. São Carlos, November 05, KPMG Auditores Independentes CRC SP /O-6 F-MG André Luiz Monaretti Accountant CRC 1SP160909/O-3 4

22 Balance sheets at e March 31, 2014 (In thousands of reais) Consolidated Parent company Consolidated Parent company Assets Note 09/30/ /31/ /30/ /31/2014 Liabilities Note 09/30/ /31/ /30/ /31/2014 Cash and cash equivalents ### # Loans and financing # - - Trade accounts receivable and other receivables ### - - # Debentures # - - Inventories ### # Suppliers and other accounts payable # Recoverable taxes and contributions ### # Derivative financial instruments Other current assets # Provision and labor charges # # Tax liabilities # Total current assets ### # Advances from clients # - - Other current liabilities # # # Long-term assets - # Total current liabilities # Inventories # # Trade accounts receivable and other receivables # Loans and financing # Judicial deposits # Debentures # - - Recoverable taxes and contributions ### - - # Derivative financial instruments # - - Deferred income and social contribution taxes ### - - # Provision for loss in investments # Investments # Provisions for contingencies # - - Biological assets ### - - # # Property, plant and equipment ### - - # Total non-current liabilities # Intangible assets ### # # - # Shareholders' equity 19 # Total non-current assets ### # Capital # # Capital reserve # # Equity evaluation adjustment (20.644) (5.791) # (20.644) (5.791) - # Accumulated losses (67.496) (81.818) # (67.494) (81.818) - # # - # Total shareholders' equity attributable to controlling interest # ## # - # Total liabilities # # # Total assets ### # Total liabilities and shareholders equity # # See the accompanying notes to the quarterly information.

23 Statements of income Three and six-month periods ended and 2013 (In thousands of reais) Consolidated Parent company Note 09/30/ /30/ /30/ /30/ /30/ /30/ /30/ /30/2013 (3 months) (3 months) (6 months) (6 months) (3 months) (3 months) (6 months) (6 months) Net operating income Variation of the biological asset's fair value (478) (788) Cost of sales and services 21 ( ) (88.513) ( ) ( ) Gross income Sales expenses 21 (13.221) (9.687) (20.140) (15.599) Administrative expenses 21 (3.812) (3.861) (7.433) (7.465) (199) (249) (365) (485) Other operating income (expenses), net (149) (311) Equity in income of subsidiaries (17.182) (13.859) (27.177) (22.611) Income before net financial income (expenses) and taxes Financial expenses (19.945) (18.165) (37.800) (33.734) (42) (273) (246) (375) Financial income Net financial expenses 23 (18.184) (16.576) (34.486) (32.475) (40) (269) (242) (369) Income before taxes Current income and social contribution taxes 18 (2.478) (6) (2.469) (6) Deferred income and social contribution taxes 18 (37) (2.515) 338 (1.400) Income for the period attributable to controlling interest Basic earnings and diluted per share (in reais) 0,0781 0,0705 0,0571 0,0359 0,0781 0,0705 0,0571 0,0359 See the accompanying notes to the quarterly information.

24 Statements of comprehensive income Three and six-month periods ended and 2013 (In thousands of reais) Consolidated Parent company 09/30/ /30/ /30/ /30/ /30/ /30/ /30/ /30/2013 (3 months) (3 months) (6 months) (6 months) (3 months) (3 months) (6 months) (6 months) Income for the period Cash flow hedge gains/losses, net (19.989) (14.853) (14.479) (19.989) (14.853) (14.479) Comprehensive income loss (395) (531) (5.478) (395) (531) (5.478) See the accompanying notes to the quarterly information.

25 Statements of changes in shareholders' equity Six-month period ended and 2013 (In thousands of reais) Note Capital Capital reserve Equity evaluation adjustment Accumulated losses Total shareholders' equity Balances at April 1, (90.369) Other comprehensive income: Net losses from cash flow hedge reflected (14.479) - (14.479) Capital increase through paid-up capital pursuant to minutes of meeting held on December 25, Net income for the period Balances at September 30, (14.479) (81.368) Balances at April 1, (5.791) (81.818) Other comprehensive income: Net losses from cash flow hedge reflected (14.853) - (14.853) Net income for the period Balances at (20.644) (67.496) See the accompanying notes to the quarterly information.

26 Statement of cash flows Indirect method Six-month period ended and 2013 (In thousands of reais) Note Consolidated Parent company 09/30/ /30/ /30/ /30/2013 (6 months) (6 months) (6 months) (6 months) Cash flow from operating activities Income for the period Adjustments to reconcile income (loss): Change in fair value of biological assets 788 (5.188) - - Depreciation and amortization Decrease in biological assets for the crop of sugarcane Off-season amortization Amortization of cultural treatments of ratoon cane Equity in income of subsidiaries - - (14.929) (9.855) Residual value of written-off fixed assets Interest on loans and financing Unrealized foreign exchange variation on loans and financing Monetary variation on loans receivable from supplier 32 (56) - - Unrealized losses on derivative financial instruments (3.473) Formation (reversal) of allowance for doubtful accounts - (29) - - Formation (reversal) of provision for contingencies Formation (reversal) of provision for realization of inventories Deferred income and social contribution taxes (1.069) (1.712) (607) (854) Increase in trade receivable and other receivables (4.441) (22.111) - - Increase in Inventories ( ) (63.400) - - Decrease in loan receivable from supplier Decrease/(increase) in taxes and contributions recoverable (5.469) Decrease/(increase) in other current assets (659) Decrease/(increase) in suppliers and other accounts payable (16.083) (81) Increase in provision and labor charges Increase in tax liabilities Increase in advances from clients Decrease/(increase) in other current liabilities (1.095) (53) 1 6 Cash (used in) from operating activities (149) (531) Payment of interest on loans and financing (33.350) (28.203) - - Net cash used in operating activities (17.666) (881) (149) (531) Cash flow from investment activities Formation of biological assets (31.592) (18.320) - - Acquisition of fixed assets 28.b (21.759) (9.032) - - Acquisition of intangible assets (1.814) (641) (328) - Credit granting to related parties (23.321) Net cash (used in) from investment activities (55.165) (27.993) (23.321) Cash flow from financing activities Loans and financing Payment of principal of loans and financing ( ) ( ) - - Funding with related parties - - (38.800) Net cash (used in) from financing activities (38.800) Decrease in balance of cash and cash equivalents (33.910) (10.145) (3) (6) Statement of cash and cash equivalents Cash and cash equivalents at April Cash and cash equivalents at September a See the accompanying notes to the quarterly information. (33.910) (10.145) (3) (6)

27 Statements of added value Six-month period ended September 30, 2013 and 2012 (In thousands of reais) Consolidated Parent company 09/30/ /30/ /30/ /30/2013 (6 months) (6 months) (6 months) (6 months) Income Sale of merchandise, products and services Other income Allowance for doubtful accounts Inputs acquired from third parties (including PIS and COFINS) Cost of products, goods, and services sold (79.778) (63.220) - - Materials, energy, outsourced services and other (36.612) (40.407) (307) (426) Others (12.195) (10.898) - (1) ( ) ( ) (307) (427) Gross added value (307) (427) Depreciation and amortization (31.444) (29.282) - - Net added value generated by the Company (307) (427) Added value received as transfer Equity in income of subsidiaries Financial income Total added value payable Personnel Direct remuneration Benefits FGTS (Government Severance Indemnity Fund for Employees) Taxes, rates and contributions Federal State Other taxes Third-party capital remuneration Interest Rents Others Remuneration of own capital Income for the period See the accompanying notes to the quarterly information.

28 quarter ended Notes to the quarterly financial information (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 industrialization by their order; 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 thirdparty sugarcane; the intermediation of sale of sugarcane, and in holding interests as a shareholder or partner in other companies. 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). In order to extend the Company s debt profile, which on presented current liabilities above current assets in the amount of R$ 251,472, Management adopted the following strategies: 11

29 On September 24, 2014, Certificates of Agribusiness Credit Rights ("CDCA") in the amount of R$ 99,000 were issued, maturing in 54 installments as of their issuance date, under a fiduciary regime, recorded at BM&F Bovespa and CETIP. The release of that amount occurred subsequently as described in note 30 and will be used for the repayment of short term loans according to their maturities. 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 issuance will be in favor of Gaia Agro Securitizadora S.A., whose amount mentioned will be released until December Financial institutions and agents were hired as follow: 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.; and The Company's management is already renegotiating balances of loans and funding adequate to finance its activity, besides extending the debt profile with the main creditor banks whose debt is classified as current liabilities, in order to adjust its operating cash flow. The strategic planning that the Company has been implementing aims to generate positive results in the coming years. Among the main actions taken, it is worth highlighting the obtainment of longterm credit facilities for adjusting working capital and reducing financial expenses. 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% - The individual and consolidated financial statements for the twelve-month period ended comprise the Company and its subsidiaries (collectively referred to as the Group ). 12

30 3 Preparation basis a. Statement of compliance (in relation to IFRS standards and CPC standards) These quarterly information of the Parent Company and the Consolidated, included in the Quarterly Information Form - ITR, were prepared in accordance with CPC 21 (R1) - Interim Financial Reporting and with IAS 34 - Interim Financial Reporting, issued by International Accounting Standards Board (IASB), and presented in accordance with the rules issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of Quarterly Information - ITR and are identified as Company and Consolidated respectively. These practices differ from IFRS applicable to individual interim financial information only with regard to the valuation of investments in subsidiaries under the equity method, where under IFRS the investment would be valued at cost or fair value. However, there is no difference between the shareholders' equity and consolidated result presented by the Group and the shareholders' equity and result of the Parent company in its individual quarterly information. Accordingly, the Group s consolidated quarterly information and the Parent Company's individual quarterly information are being presented side by side in a single set of quarterly information. The issue of individual and consolidated financial statements was authorized by the Board of Directors in a meeting held on November 05, 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. c. 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. d. Use of estimates and judgments 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 18 Deferred tax assets and liabilities; and 13

31 Note 24 Financial instruments. 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 7 - Trade accounts receivable and other receivables; Note 11 Biological assets; Note 12 Property, plant and equipment; and Note 16 Provision for contingencies. 4 Significant accounting policies The accounting policies described in detail below have been consistently applied to all the periods presented in these individual and consolidated financial statements. The accounting policies have also been consistently applied by the Group companies. 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. 14

32 (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. b. 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 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. c. Financial instruments (i) Non-derivative financial assets The Group recognizes loans and receivables and deposits initially at the date of the transaction that originated them. The other financial assets (including assets designated at fair value through profit or loss) are initially recognized on the date of the negotiation under which the Company becomes a party to the contractual provisions of the instrument. The Group writes-off 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 transferred financial assets that is created or retained by the Group is recognized as a separate asset or liability. 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. The Group has the following non-derivative financial assets: trade accounts receivable and other receivables, other current assets and receivables with related parties. 15

33 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 measured at fair value through profit or loss are measured at fair value and changes in the fair value of such assets, which consider any gain with dividends, are recognized in profit or loss for the year. Financial assets classified as held for trading are actively managed to meet the liquidity needs of the Group. Accounts receivable and other receivables Trade accounts receivable and other receivables are financial assets with fixed or determinable payments, but not quoted on any active market. Such assets are initially recognized at fair value plus any transaction costs directly assignable. After their initial recognition are measured at amortized cost using the effective interest rate method, reduced by any impairment losses. Trade and other receivables include cash and cash equivalents, trade receivables, other receivables and advances to suppliers. 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. (ii) Non-derivative financial liabilities The Group recognizes non-derivative financial liabilities on the date that they are originated. All other financial liabilities are recognized initially on the negotiation date on which the Company and its subsidiaries becomes a party to the contractual provisions of the instrument. The Company and its subsidiaries write off a financial liability when its contractual obligations are discharged or canceled or expired. Such financial liabilities are initially recognized at fair value, net of any transaction costs directly assignable. After their initial recognition, these financial liabilities are measured at amortized cost using the effective interest rate method. The Company and its subsidiaries have the following non-derivative liabilities: loans and financing, suppliers and other accounts payable and debts with related parties. (iii) 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. 16

34 (iv) 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 their 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). d. 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; 17