Quarterly Information ITR BrasilAgro Companhia Brasileira de Propriedades Agrícolas

Transcription

1 Quarterly Information ITR BrasilAgro Companhia Brasileira de Propriedades Agrícolas with Independent Auditor s Review Report

2 Quarterly Information Contents Independent auditor s review report on quarterly information... 1 Quarterly information Balance sheets... 3 Income statements... 5 Statements of comprehensive income (loss)... 6 Statements of changes in equity... 7 Statements of cash flows... 8 Statements of value added... 9 Notes to quarterly information Uma empresa-membro da Ernst & Young Global Limited

3 A free translation from Portuguese into English of Independent Auditor s Report on Individual and Interim Financial Information prepared in Brazilian currency in accordance with accounting practices adopted in Brazil and the International Financial Reporting Standards (IFRS), issued by International Accounting Standards Board IASB Independent auditor s review report on quarterly information The Shareholders, Board of Directors and Officers BrasilAgro - Companhia Brasileira de Propriedades Agrícolas São Paulo, Brazil Introduction We have reviewed the accompanying individual and consolidated interim financial information of BrasilAgro - Companhia Brasileira de Propriedades Agrícolas ( ) contained in the Quarterly Information Form - ITR for the quarter ended, which comprise the balance sheet as at and the related income statement and statements of comprehensive income, of changes in equity and of cash flows for the three-month period then ended, including a summary of significant accounting practices and other explanatory information. Management is responsible for the preparation of the individual and consolidated interim financial information in accordance with Accounting Pronouncement CPC 21 (R1) - Interim Financial Reporting, and in accordance with international standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board - IASB, as well as for the fair presentation of this information in conformity with the standards issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of Quarterly Information - ITR. Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of review We conducted our review in accordance with Brazilian and International Standards on Review Engagements (NBC TR 2410 and ISRE Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with 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. Conclusion on the interim individual and consolidated financial information Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the quarterly information referred to above is not prepared, in all material respects, in accordance with CPC 21(R1) and IAS 34, applicable to the preparation of Quarterly Information - ITR, consistently with the rules issued by the CVM.

4 Other matters Statements of value added We have also reviewed the individual and consolidated Statements of Value Added for the three-month period ended, prepared under the responsibility of s management, the presentation of which in the interim information is required by the rules issued by the CVM applicable to preparation of Quarterly Information - ITR, and as supplemental information under IFRS, whereby no statement of value added presentation is required. These statements have been subject to the same review procedures previously described and, based on our review, nothing has come to our attention that causes us to believe that they are not prepared, in all material respects, consistently with the overall individual and consolidated interim financial information. São Paulo, November 3, 2016 ERNST & YOUNG Auditores Independentes S.S. CRC-2SP /O-6 Marcos Alexandre S. Pupo Accountant CRC-1SP221749/O-0

5 A free translation from Portuguese into English of Interim Individual and Financial Information prepared in Brazilian currency in accordance with accounting practices adopted in Brazil and International Financial Reporting Standards (IFRS), issued by International Accounting Standards Board IASB Balance Sheets (In thousands of reais) Assets Note 9/30/2016 6/30/2016 9/30/2016 6/30/2016 Current assets Restated Restated Cash and cash equivalents ,737 16,123 52,326 54,204 Marketable securities ,617 77, , ,559 Trade accounts receivable 7 22,160 16,598 33,426 18,528 Inventories 8 16,137 12,858 23,080 22,413 Biological assets 9 17,654 22,285 20,023 22,285 Taxes recoverable 5,715 6,104 7,442 7,470 Operations with derivatives ,392 20,694 24,497 Transactions with related parties 26 1,182 5,802 1,107 1,065 Other receivables 1,645 1,308 1, Noncurrent assets 177, , , ,879 Biological assets 9 4,200 5,241 4,200 5,241 Restricted marketable securities 5.2 8,311 8,087 20,929 20,353 Recoverable taxes 16,942 16,474 22,383 21,709 Deferred taxes ,631 31,649 53,663 55,594 Trade accounts receivable ,795 14,411 Investment properties 10 78,995 78, , ,867 Transactions with related parties 26 44,592 44,363 44,592 44,363 Judicial deposits 24.c 6,307 6,228 6,462 6,377 Investments , , , ,955 Property, plant and equipment 12 24,668 27,094 25,344 27,803 Intangible assets 3,302 3,450 3,302 3, , , , ,123 Total assets 792, , , ,002 See accompanying notes.

6 Balance sheets (In thousands of reais) Liabilities and equity Current liabilities Note 9/30/2016 6/30/2016 9/30/2016 6/30/2016 Restated Restated Trade accounts payable 13,888 11,038 14,588 12,073 Loans and financing 14 29,707 23,714 56,665 51,615 Labor obligations 10,699 8,642 11,278 8,856 Taxes payable 486 1,006 4,093 6,277 Dividends payable 2,532 2,532 2,532 2,532 Operations with derivatives 6 1, ,301 2,165 Payables for purchase of farms 13 22,380 22,261 22,380 22,261 Transactions with related parties 26 6,697 5, Advances from customers Other liabilities ,988 5,442 Noncurrent liabilities 87,416 76, , ,035 Loans and financing 14 12,078 13,605 40,376 48,230 Taxes payable Operations with derivatives 6-4,392-4,392 Provision for legal claims 24.a 1,630 1,267 1,824 1,455 Other liabilities ,708 19,264 42,647 55,479 Total liabilities 101,124 95, , ,514 Equity Share capital 16.a 584, , , ,224 Capital reserve 1,771 1,771 1,771 1,771 Treasury shares 16.e (22,322) (37,203) (22,322) (37,203) Income reserves 54,277 91,158 54,277 91,158 Additional dividends proposed 16.c 29,533 7,533 29,533 7,533 Equity adjustment 16.d 41,038 40,005 41,038 40,005 Retained earnings 3,022-3,022 - Total equity 691, , , ,488 Total liabilities and equity 792, , , ,002 See accompanying notes.

7 Income statementsthree-month period ended (In thousands of reais, unless stated otherwise) Note 7/1/2016 to 9/30/2016 7/1/2015 to 9/30/2015 Restated 7/1/2016 to 9/30/2016 7/1/2015 to 9/30/2015 Restated Net revenue 18 35,500 61,302 40,155 61,575 Changes in fair value of biological assets and agricultural products ,641 3,105 7,583 Reversal of (provision for) impairment of agricultural products, net 8.1 (125) 765 (213) 770 Cost of sales 19 (34,535) (54,583) (39,443) (54,698) Gross profit 1,703 12,125 3,604 15,230 Selling expenses, net (585) 90 (626) General and administrative expenses 19 (6,630) (6,858) (7,453) (7,091) Other operating expenses, net 21 (2,604) (852) (2,611) (85) Equity pickup ,676 (1,143) (1,747) Operating profit (loss) before financial results and taxes (6,519) 12,506 (7,513) 5,681 Net financial income (expenses) Financial income 22 18,493 65,694 24,851 80,902 Financial expenses 22 (6,934) (11,860) (11,499) (17,398) Income before income and social contribution taxes 5,040 66,340 5,839 69,185 Income and social contribution taxes 15.2 (2,018) (20,082) (2,817) (22,927) Net income for the period 3,022 46,258 3,022 46,258 Basic earnings per share reais Diluted earnings per share reais See accompanying notes.

8 Statements of comprehensive income Three-month period ended (In thousands of reais) Note 7/1/2016 to 9/30/2016 7/1/2015 to 9/30/2015 Restated 7/1/2016 to 9/30/2016 7/1/2015 to 9/30/2015 Restated Net income for the period Comprehensive income to be reclassified to income for the year in subsequent periods: Effect on the conversion of the investment in joint venture 3,022 46,258 3,022 46, a/16. d 1,033 27,766 1,033 27,766 Total comprehensive income 4,055 74,024 4,055 74,024 See accompanying notes.

9 Statements of changes in equity Three-month period ended (In thousands of reais, except earnings per share) Income reserves Note Capital Capital reserve Treasury shares Legal reserve Reserve for investment and expansion Additional dividends proposed Equity adjustment Retained earnings (accumulated losses) Total equity At June 30, Restated 584,224 1,771 (37,203) 9,020 82,138 7,533 40, ,488 Additional dividends proposed 16.c (22,000) 22, Cancellation of treasury stock 16.e ,881 - (14,881) Net income for the period ,022 3,022 Effect on the conversion of the investment in joint venture 11.a ,033-1,033 At 584,224 1,771 (22,322) 9,020 45,257 29,533 41,038 3, ,543 Note Capital Capital reserve Treasury shares Income reserves Reserve for investment Legal and reserve expansion Additional dividends proposed Equity adjustment Retained earnings (accumulated losses) At June 30, Restated 584,224 2,349 (224) 8,491 84,721 40,333 36, ,162 Total equity Treasury stock acquired - - (6,088) (6,088) Net income for the period ,258 46,258 Effect on the conversion of the investment in joint venture ,766-27,766 At September 30, Restated 584,224 2,349 (6,312) 8,491 84,721 40,333 64,034 46, ,098 See accompanying notes.

10 Statements of cash flow Three-month period ended (In thousands of reais) Notes 7/1/2016 to 9/30/2016 7/1/2015 to 9/30/2015 Restated 7/1/2016 to 9/30/2016 7/1/2015 to 9/30/2015 Restated CASH FLOWS FROM OPERATING ACTIVITIES Net income for the period 3,022 46,258 3,022 46,258 Adjustment to reconcile net income Depreciation and amortization 19 4,127 5,992 5,680 5,993 Net book value of property, plant and equipment disposed of Write-off of capitalized cost in investment properties Equity pick-up 11.a (936) (8,676) 1,143 1,747 Unrealized gain on derivatives, net 22 (1,656) (1,113) (1,656) (1,113) Short-term investments, foreign exchange and monetary variation and other financial charges, net 22 (4,510) (52,419) (7,862) (19,243) Adjustment to present value of receivables from sale of farms, machinery and financial lease, net 22 (2,364) 40 (2,101) (5,436) Deferred income and social contribution taxes ,018 9,203 1,931 9,807 Fair value of biological assets, agricultural products and depletion of crops (863) (4,641) (3,105) (7,583) Set-up (reversal) of provision for impairment of agricultural products, net 125 (765) 213 (770) Allowance for doubtful accounts Provision for legal claims 24.a 363 1, ,039 (399) (5,101) (2,086) 30,714 Changes in operating working capital Trade accounts receivable (6,065) 3,077 (5,815) 4,446 Inventories (3,404) 10,363 (592) 6,648 Biological assets 7,107 7,258 6,408 7,173 Taxes recoverable 358 4,180 1,581 3,227 Operations with derivatives 1,546 2, (33,367) Other receivables (298) (143) (991) (359) Trade accounts payable 2,821 1,732 2,486 1,560 Related parties 2,375 2,632 1,082 (330) Taxes payable (1,349) (62) (1,646) (9,456) Income and social contribution taxes paid - 3,622 (2,202) (2,929) Labor charges 2,057 1,541 2,422 1,579 Advances from customers (165) (2,913) (111) (4,149) Other liabilities (501) - (800) (1,310) Net cash generated by (used in) operating activities 4,083 28, ,447 CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of property, plant and equipment and intangible assets (526) (319) (530) (501) Acquisitions of investment properties (2,253) (292) (4,240) (761) Redemption of (investment in) marketable securities, net (9,945) (70,831) 5, ,394 Dividends received 6, , Future capital contribution, net 855 (27,767) - - Cash received from sale of farms ,505 Net cash generated by (used in) investing activities (5,633) 67, ,637 CASH FLOWS FROM FINANCING ACTIVITIES Payment for purchase of farms (27,395) Loans and financing raised 14 7,888-7,888 - Interest paid on loans and financing 14 (316) (1,514) (2,623) (4,721) Repayment of loans and financing 14 (1,408) (28,993) (7,860) (42,166) Treasury stock, net of shares exercised - (6,088) - (6,088) Net cash generated by (used in) financing activities 6,164 (36,595) (2,595) (80,370) Increase (decrease) in cash and cash equivalents 4,614 60,119 (1,878) 48,714 Cash and cash equivalents at beginning of period 16,123 13,392 54,204 75,620 Cash and cash equivalents at end of period 20,737 73,511 52, ,334 4,614 60,119 (1,878) 48,714 See accompanying notes.

11 Statements of value added Three-month period ended (In thousands of reais) Notes 7/1/2016 to 9/30/2016 7/1/2015 to 9/30/2015 7/1/2016 to 9/30/2016 7/1/2015 to 9/30/2015 Revenues Restated Restated Gross operating revenue 18 36,558 64,630 41,428 65,587 Gain on sale of farm Change in fair value of biological assets and agricultural products 863 4,641 3,105 7,583 Provision for impairment of agricultural products, net 8.1 (125) 765 (213) 770 Other revenues ,056 Allowance for doubtful accounts ,823 70,289 44,845 74,996 Inputs acquired from third parties Cost of sales (30,585) (48,804) (33,940) (48,918) Materials, energy, outsourced services and other (4,380) (2,911) (4,569) (3,014) (34,965) (51,715) (38,509) (51,932) Gross value added 2,858 18,574 6,336 23,064 Depreciation and amortization 19 (4,127) (5,992) (5,680) (5,993) Net value added (used) by the (1,269) 12, ,071 Value added received through transfer Equity pickup 11.a 936 8,676 (1,143) (1,747) Financial income 22 18,493 65,694 24,851 80,902 19,429 74,370 23,708 79,155 Total value added to be distributed 18,160 86,952 24,364 96,226 Personnel and charges Direct compensation 3,361 3,852 3,712 3,853 Benefits Severance fund (F.G.T.S) Taxes, charges and contributions Federal 4,553 24,820 5,990 28,671 State (13) 1,318 (11) 1,323 Local Financing Financial expenses 6,105 9,794 10,496 15,208 Rentals Interest on equity Net income for the period 3,022 46,258 3,022 46,258 Value added distributed 18,160 86,952 24,364 96,226 See accompanying notes.

12 Notes to quarterly information 1. General information BrasilAgro Companhia Brasileira de Propriedades Agrícolas ( BrasilAgro or "") was incorporated on September 23, 2005 and is headquartered at Avenida Brigadeiro Faria Lima, 1309, in São Paulo with branches in the States of Bahia, Goiás, Mato Grosso, Minas Gerais and Piauí, and in Paraguay, in the State of Boquerón. The holds interest in other companies ( subsidiaries), as mentioned in Note 2.1, and its corporate purpose includes: agriculture, cattle raising and forestry activities of any type and nature and rendering directly or indirectly related services; the import and export of agricultural products and inputs and those related to cattle raising activity; the purchase, sale and/or rental of properties, land, buildings and real estate in rural and/or urban areas; real estate brokerage involving any type of operations; holding interest, as a member, in other companies and commercial ventures of any nature, in Brazil and/or abroad, directly or indirectly related to the purposes described herein; and management of its own and third-party assets. The and its subsidiaries have 9 (nine) farms in 5 (five) Brazilian states and one jointly-controlled farm in Paraguay, with total area of 255,888 hectares. 2. Presentation and preparation of quarterly information The significant accounting policies applied when preparing these financial statements are described below. These policies are being consistently applied in all periods presented, unless otherwise stated Basis of preparation and presentation The s Board of Directors is entitled to change s individual and consolidated quarterly information after its issuance. On November 3, 2016, the Management approved the disclosure of this quarterly information. The individual and consolidated quarterly information is presented in thousands of reais ( R$ ), which represents the s presentation and functional currency. The individual and consolidated quarterly information was prepared in accordance with accounting pronouncement CPC 21 (R1) Interim Financial Statements and with international accounting standard IAS 34 and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission ( CVM ) The accounting practices, policies and main judgments on the estimates adopted in preparing the quarterly information, and, are consistent with those adopted and disclosed in Notes 2.1 to 2.28 and Note 3 to financial statements for the year ended June 30, 2016, which were reported on August 18,

13 Considering the above, the quarterly information should be read together with the financial statements for the year ended June 30, The non-financial data included in this quarterly information, such as number of hectares owned by the, among others, has not been subject to audit procedures, or any review from our independent auditors Notes included in the financial statements at June 30, 2016 not presented in this quarterly information The preparation of this interim information involves the exercise of judgment by the s Management on the relevance and on alterations that should be disclosed in the notes to the financial statements. Accordingly, this interim information includes only selected notes and not all the notes to the financial statements for the year ended June 30, As permitted by Official Memorandum 03/2011 issued by the CVM, Note 17 - Trade accounts payable and its references to the financial statements of June 30, 2016 have not been presented in this quarterly information. 3. New standards, amendments and interpretations of standards The standards and interpretations issued, but not yet adopted up to the date of issuance of the quarterly information are presented below. The is assessing potential impacts arising from these standards in its financial statements for the year ending June 30, At the date of preparation of the Quarterly Information, the following amendments to IFRS had been published, however, the application of which is not mandatory: IFRS 9 Financial Instruments: The ultimate aim of this standard is to replace IAS 39 Financial Instruments: Recognition and Measurement. The key changes expected are: (i) all financial assets must initially be recognized at their fair value; (ii) the standard classifies all financial assets, which are currently under IAS 39, into two groups: amortized cost and fair value; (iii) available for sale and held to maturity categories of IAS 39 were eliminated; and (iv) the concept of embedded derivatives in IAS 39 was replaced by the concepts provided in the new standard. The standard will come into effect on January 1, The is evaluating the impact on its financial statements. IFRS 15 Revenue from Contracts with Customers: The new standard provides the principles to be applied by an entity to determine the measurement of revenue and when it must be recognized. The standard is effective as from January 1, The is evaluating the impact on its financial statements. IFRS 16 Leases: It establishes that leases be recognized in the lessee s balance sheet, recognizing a liability amount for future payments and an intangible asset for the right of use. The definition of lease covers all agreements that grant the right of use and control of an identifiable asset, including lease agreements and, possibly, some components of service agreements. The standard is applicable as of January 1, The is evaluating the impact on its financial statements. IAS 16 Property, Plant and Equipment and IAS 41 Agriculture: The main change is that the biological assets for production (bearer assets), such as sugarcane stubble crops, are excluded from the scope of IAS 41 and must be recorded in accordance with IAS 16, that is, cost less accumulated depletion and possible impairment losses. Consumable biological assets, such as unharvested sugarcane and fruits, until they are harvested, are measured at fair value and continue to be under

14 the scope of IAS 41. The adopted the changes introduced in IAS 41 and IAS 16, in effect as of July 1, 2016, and changed its base to determine the fair value of its biological assets and their presentation in the financial statements of the Group. As a result of the adoption of this standard, the main changes for the are: - Bearer plants are now recorded at cost less accumulated depreciation and impairment, instead of at fair value less cost of sale. - Bearer plants and their related amortizations are now classified under property, plant and equipment instead of as biological assets under non-current assets. - Unharvested sugarcane (crop in formation) is now assessed at its fair value less cost of sale and classified as biological assets under current assets instead of as biological assets under non-current assets. Pursuant to CPC 23 Accounting Policies, Changes in Accounting Estimates and Errors, the change in accounting policy was applied retrospectively. As permitted by transition rules, the fair value of these plants at July 1, 2014 (opening balance not presented in this quarterly information) was considered as its cost. The difference between the fair value and the previous book value was recognized in income reserves during transfer. The impacts of initial adoption of these changes on corresponding amounts related to balance sheet at June 30, 2016, as well as the income statement for the quarter ended September 30, 2015, are summarized below: Balance sheet at June 30, 2016 Impacts of Assets Published Impacts of changes from IAS41 and IAS16 Restated Published changes from IAS41 and IAS16 Restated Current assets Biological assets Other current assets 140, , , , ,798 22, , ,594 22, ,879 Non-current assets Biological assets 44,530 (39,289) 5,241 44,530 (39,289) 5,241 Deferred taxes 32,408 (759) 31,649 56,353 (759) 55,594 Property, plant and equipment 7,858 19,236 27,094 8,567 19,236 27,803 Other non-current assets 555, , , , ,564 (20,812) 619, ,935 (20,812) 590,123 Total assets 781,362 1, , ,529 1, ,002 Liabilities Current liabilities 76,083-76, , ,035 Non-current liabilities 19,264-19,264 55,479-55,479 Total liabilities 95,347-95, , ,514 Equity Share capital 584, , , ,224 Capital reserves 1,771-1,771 1,771-1,771 Treasury shares (37,203) - (37,203) (37,203) - (37,203) Income reserves 89,685 1,473 91,158 89,685 1,473 91,158 Additional dividends proposed 7,533-7,533 7,533-7,533 Equity adjustment 40,005-40,005 40,005-40,005

15 Total equity 686,015 1, , ,015 1, ,488 Total liabilities and equity 781,362 1, , ,529 1, ,002 Published Income statement for the three-month period ended September 30, 2015 Impacts of changes from IAS41 and IAS16 Restated Published Impacts of changes from IAS41 and IAS16 Restated Net revenue 61,302-61,302 61,575-61,575 Gain from sale of farm Changes in fair value of biological assets and agricultural products 1,942 2,699 4,641 4,884 2,699 7,583 Reversal of (provision for) impairment of agricultural products, net Cost of sales (54,583) - (54,583) (54,698) - (54,698) Gross profit 9,426 2,699 12,125 12,531 2,699 15,230 Selling expenses (585) - (585) (626) - (626) General and administrative expenses (6,858) - (6,858) (7,091) - (7,091) Other operating income (expenses), net (852) - (852) (85) - (85) Equity pickup 8,676-8,676 (1,747) - (1,747) Operating profit (loss) before financial results and taxes 9,807 2,699 12,506 2,982 2,699 5,681 Net financial income (expenses), net Financial income 65,694-65,694 80,902-80,902 Financial expenses (11,860) - (11,860) (17,398) - (17,398) Profit before income and social contribution taxes 63,641 2,699 66,340 66,486 2,699 69,185 Income and social contribution taxes (19,164) (918) (20,082) (22,009) (918) (22,927) Net income for the year 44,477 1,781 46,258 44,477 1,781 46,258 Basic earnings per share reais Diluted earnings per share reais The impacts on the statements of comprehensive income (loss) and of value added are the result of the adjustment in net income for the period and did not exert significant effects on the presentation of reconciliation. The above adjustments did not have significant effects on total amounts of operating, investing and financing activities in the statement of cash flows for the quarter ended September 30, 2015 and hence are not material for disclosure.

16 4. Financial risk management The financial risk management adopted in the preparation of the quarterly information is consistent with that adopted in Note 4 to the annual financial statements for June 30, 2016, disclosed on August 18, Notes 4.1, 4.2, 4.4 to 4.7 disclosed in the annual financial statements for June 30, 2016 did not have significant changes Analysis of exposure to financial asset and liability risks a) Foreign currency risk This risk arises from the possibility of the incurring losses due to fluctuations in exchange rates, which reduce the nominal values of assets or increase the values of liabilities. This risk also arises with respect to commitments to sell existing products in inventories or still in formation, at prices to be set, depending on the exchange rate. b) Interest rate and indices risk This risk arises from the possibility of the incurring losses due to fluctuations in the interest rates or indices which increase financial expenses with respect to contracts for the acquisition of farms, linked to the General Market Price Index IGP-M ("FGV") c) Commodities risks This risk arises from the possibility of the incurring losses due to fluctuations in the market prices of agricultural products Estimate of fair value of derivative financial instruments a) Sensitivity analysis Management identified for each type of derivative financial instrument the situation of variation in foreign exchange rates, interest rates or commodities prices which may generate loss on the assets and/or liabilities which are being hedged or, in the case of derivative financial instruments related to transactions not recorded in the balance sheet, at the fair value of the contracted derivatives. The sensitivity analysis is intended to measure the impact from the changes in the market variables on the aforementioned financial instruments of the, considering all other market indicators. Upon their settlement, such amounts may differ from those stated below, due to the estimates used in their preparation. This analysis contemplates 5 distinct scenarios that differ as to the intensity of the variation in relation to the current market. At, as reference for scenarios probable for the next twelve months, I, II, III and IV a variation in relation to the current market of 0%, -25%, -50%, +25%, +50%, respectively, was considered. On, to prepare the Probable Scenario, the used as reference the market prices of each of the reference assets of derivative instruments held by the at the date of approval of this quarterly information. Since all these assets are inserted in competitive and open markets,

17 the current market price is a satisfactory reference for the expected price of these assets. Accordingly, since the current market price was the reference for the calculation of both book value of derivatives and the Probable Scenario, the result of the latter is equal to zero. The assumptions and scenarios are as follows: 30/09/2016 Probable scenario Scenario I -25%) Scenario II -50%) Scenario III +25% Scenario IV +50% Soybean R$ / bag July 2017 (CBOT) U.S. dollar October 1, U.S. dollar November 1, /06/2016 Probable scenario Scenario I -25%) Scenario II -50%) Scenario III +25% Scenario IV +50% Soybean R$ / bag August 2016 (CBOT) Soybean R$ / bag November 2016 (CBOT) Soybean R$ / bag July 2017 (CBOT) U.S. dollar August 1, U.S. dollar August 22, U.S. dollar July 29, In addition, the presents a summary of possible scenarios for the following 12 months of the s financial instruments. Reliable sources of indices disclosure were used for the rates used in the probable scenario. CONSOLIDATED Amounts in thousands reais R$ Current Scenario I - Probable Scenario I - Possible Scenario II - Remote Scenario I - Possible Scenario II - Remote Annual average rates At Decrease 25% Decrease 50% Increase 25% Increase 50% Operation Risk (*) Balance (R$) Amount Rate Balance (R$) Rate Balance (R$) Rate Balance (R$) Rate Balance (R$) Rate Balance (R$) Rate Financial investments CDI 128, % (2,117) 12.49% (4,019) 9.36% (8,037) 6.24% 4, % 8, % Marketable securities - CDI CDI 51, % (841) 12.49% (1,597) 9.36% (3,194) 6.24% 1, % 3, % Financial investments USD 7,928 2, (2,181) 2.68 (4,362) , , Total cash, cash equivalents and marketable securities 187,836 2,443 (2,162) (7,797) (15,593) 7,797 15,593 Financing for Bahia Project TJLP (19,285) % % % % (362) 9.38% (723) 11.25% Financing for Bahia Project SELIC (6,117) % % % % (191) 15.61% (382) 18.73% Financing for Machinery and Equipment FINAME TJLP (16) % % % % % (1) 11.25% Financing for sugarcane TJLP (1,743) % % % % (33) 9.38% (65) 11.25% Total financing (27,161) ,171 (586) (1,171) Payables for farms IGP-M (22,380) % % % 1, % (699) 15.61% (1,397) 18.73% Total acquisitions payable (22,380) ,397 (699) (1,397) Araucária II Soybean bags 14, , (502) (3,545) (7,090) , , Total receivables from sale of farms 14, ,000 (502) (3,545) (7,090) 3,545 7,090 Derivatives, net (Note 6) Soybean (779) (473,982) (a) - (a) - (a) - (a) - (a) - (a) Derivatives, net (Note 6) USD 355 8,750 (a) - (a) - (a) - (a) - (a) - (a) Margin Derivatives USD (57) 2.68 (114) Margin Derivatives CDI 16, % (276) 12.49% (524) 9.36% (1,048) 6.24% % 1, % Margin Derivatives SELIC 2, % (43) 12.49% (81) 9.36% (163) 6.24% % % Total derivatives 19,186 (298) (663) (1,325) 663 1,325 Receivables Cresca USD 44,592 13, , (12,268) 2.68 (24,535) , , Cresud USD (129) 2.68 (259) Total related parties 45,062 13,884 4,525 (12,397) (24,794) 12,397 24,794 (*) SOURCE Risks: Bloomberg (a) For sensitivity analysis of derivative positions, forward rates and prices at each maturity date of the operation were used, according to the table above. b) Liquidity risk

18 The prudent management of liquidity risk implies the maintenance of sufficient cash and short-term investments to comply with its financial commitments, due to the mismatch of term or volume between the estimated receivables and payables. The excess cash is mainly invested in our wholly-owned FIM Guardian investment fund, classified as a multi-market investment fund, managed by Banco Santander S.A.. The fund has a clear investment policy, with limits to risk concentration in the corresponding investments. The table below states the 's financial liabilities by group of maturity based on the remaining period at the balance sheet date up to the contract maturity date. The amounts disclosed in the table are the discounted contractual cash flows, in addition to the net derivative financial instruments, where fair value is disclosed. With respect to payables for the purchase of farms all amounts due at September 30 and June 30, 2016 are payable upon the fulfillment of certain conditions precedent by the sellers and as a result its payment date cannot be determined and have been considered as payable on demand in the table below and no interest or other financial charges have been considered. Less than one year From one to two years From three to five years Above five years financial liabilities Note Total On Trade accounts payable 14, ,588 Derivatives 6 1, ,301 Loans and financing 14 56,665 16,540 23,836-97,041 Acquisitions payable 13 22, ,380 Transactions with related parties On June 30, 2016 Trade accounts payable - 12, ,073 Derivatives 6 2,165 4, ,557 Loans and financing 14 51,615 15,875 32,355-99,845 Acquisitions payable 13 22, ,261 Transactions with related parties Capital management As per the table below, the presents net debt of loans, acquisitions payable and trade accounts payable and the financial leverage index. September 30, 2016 June 30, 2016 Total loans and financing (Note 14) 97,041 99,845 Total acquisitions payable (Note 13) 22,380 22,261 Total trade accounts payable 14,588 12,073 Total derivatives (Note 6) 1,301 6, , ,736 Less: cash and cash equivalents (Note 5.1) (52,326) (54,204) Less: marketable securities (Notes 5 and 2) (135,977) (133,912) (188,303) (188,116) Net debt (52,993) (47,380) Total equity 691, ,488* Financial leverage index - - *Restated At and June 30, 2016, the did not have any financial leverage. Capital is not managed at the company level, only at the consolidated level Hierarchy of fair value and financial instruments by category

19 The balances of trade accounts receivable and payable at book value, less impairment, are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the for similar financial instruments.the adopts CPC 40/ IFRS 7 for financial instruments that are measured in the balance sheet at fair value, which requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: Quoted (unadjusted) prices in active markets for identical assets or liabilities (Level 1) Information, in addition to quoted prices, included in Level 1 that are observable in the market for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2). Inputs for assets or liabilities that are not based on observable market data (that is, unobservable inputs) (Level 3). The following table presents the Group's assets and liabilities that are measured at fair value, as well as the level of hierarchy: Fair value through profit or loss Loans and receivables 9/30/2016 6/30/2016 Fair value Fair value through Loans and Fair value Level 2 profit or loss receivables Total Level 2 thousand R$ Note Total Assets Current Cash equivalents ,911-43,911 43,911 47,891-47,891 47,891 Marketable securities , , , , , ,559 Trade accounts receivable, net 7-23,836 23,836 23,836-16,598 16,598 16,598 Receivable from sale of farm, net 7 9,590-9,590 9,590 1,930-1,930 1,930 Transactions with derivatives (c) 6 20,694-20, ,497-24,497 3,309 Non-current Marketable securities ,929-20,929 20,929 20,353-20,353 20,353 Trade accounts receivable, net Receivable from sale of farm, net 7 4,589-4,589 4,589 14,411-14,411 14,411 Transactions with related parties 26-44,592 44,592 44,592-44,363 44,363 44,363 Total 214,761 68, , , ,641 60, , ,414 Designated at fair value through profit or loss Financial liabilities at amortized cost 9/30/2016 6/30/2016 Designated at fair Fair value value through Financial liabilities at Fair value Level 2 profit or loss amortized cost Total Level 2 thousand R$ Note Total Liabilities Current Trade accounts payable - 14,588 14,588 14,588-12,073 12,073 12,073 Loans and financing (a) 14-56,143 56,143 56,143-49,108 49,108 49,108 Financial lease sugarcane crop - Partnership III (b) ,507-2,507 - Transactions with derivatives (c) 6 1,301-1, ,165-2, Acquisitions payable 13-22,380 22,380 22,380-22,261 22,261 22,261 Noncurrent Loans and financing (a) 14-37,516 37,516 37,516-44,964 44,964 44,964 Financial lease sugarcane crop - Partnership III (b) 14 2,860-2,860-3,266-3,266 - Transactions with derivatives (c) ,392-4,392 - Transactions with related parties Total 4, , , ,916 12, , , ,761 (a) The book value of loans and financing presented in the financial statements approximates the fair value, since the rates of these instruments are substantially subsidized and there is no intention of early settlement; (b) Financial lease is measured at fair value in Level 3. (c) The derivative transactions negotiated on an active market are measured at fair value at Level 1, over-the-counter transactions are measured at Level 2, as presented in the table above. 5. Cash and cash equivalents and marketable securities 5.1. Cash and cash equivalents CDI* 9/30/2016 6/30/2016 9/30/2016 6/30/2016 Cash and banks 8,041 6,055 8,415 6,313

20 Repurchase agreements % to % 12,696 10,068 35,575 40,417 Bank deposit certificates 99% to % - - 8,336 7,474 * Interbank Deposit Certificate 20,737 16,123 52,326 54,204 The has R$7,895 (R$5,861 at June 30, 2015) in and R$7,928 (R$5,893 at June 30, 2015) in, of bank balances in U.S. Dollars which do not bear any interest Marketable securities 9/30/2016 6/30/2016 9/30/2016 6/30/2016 Exclusive fund shares - FIM GUARDIAN 81,291 67, Restricted short-term investments (c) ,168 49,703 Variable income transactions ,562 21,670 Bank deposit certificates (b) 10,326 10,058 10,326 10,058 Treasury financial bills ,992 32,128 Total current 91,617 77, , ,559 Bank deposit certificates (b) 8,311 8,087 8,311 8,087 Banco do Nordeste (BNB) (a) ,618 12,266 Total non-current 8,311 8,087 20,929 20,353 Marketable securities 99,928 85, , ,912 (a) The securities in BNB consist of CDBs provided as collateral for financing from BNB Bank, to be held up to the end of the contract maturing in July (b) Indexed to rates from 99% to % of the CDI Interbank Deposit Certificate. (c) On May 19, 2015, the recognized through the sale of Cremaq farm the amount of R$266,000. From the total amount received, R$51,168 is held in marketable securities up to its release, until the following conditions precedent are met: Registration of deed of 6,020 hectares; Filing of petition for dismissal of suit for maintenance of ownership. The exclusive investment fund FIM Guardian, managed by Banco Santander S.A., has the following breakdown as of September 30 and June 30, 2016: 9/30/2016 6/30/2016 Public securities (a) 28,992 32,128 Variable income investments 24,562 21,670 Repurchase agreements 22,908 21,674 Bank deposit certificates 8,334 7,472 Derivatives 19,964 18,711 Other (16) (18) (b) 104, ,637 (a) Of total investments related to margin deposits provided as collateral for derivative transactions contracted by the Fund, the amount of R$17,000 refers to CDBs and R$2,610 refers to LFTs at September 30 and June 30, 2016 (R$2,525 at June 30, 2016). In the consolidated financial information the related amount was reclassified to the caption Operations with derivatives in current assets according to Note 6. (b) At, the amount of R$104,744 (R$101,637 at June 30, 2016) comprises R$81,291 (R$67,555 at June 30, 2016) invested by BrasilAgro and R$23,453 (R$34,082 at June 30, 2016) invested by other companies of the Group. 6. Operations with derivatives Risk Maturity 9/30/2016 Total Volume / Position Short Outstanding derivative Net Notional position (long instruments Counterparty Receivable Payable Receivable Payable balance ('000) position) Unit

21 Currency US$ October -16 BM&F BM&F US$ Currency US$ November -16 BM&F BM&F ,000 - US$ Currency US$ November -16 Options BM&F Options (289) 317 (6,500) - US$ Current (289) 354 8,750 - US$ Non-current US$ Total currency risk (289) 354 8,750 - US$ Soybean CBOT July - 17 Futures Soybean Trading Companies/Banks/CBOT 234 (1,012) 234 (1,012) (778) (473,982) bags Current 234 (1,012) 234 (1,012) (778) - (473,982) bags Non-current bags Total commodities risk 234 (1,012) 234 (1,012) (778) - (473,982) bags Total risks 234 (1,012) 877 (1,301) (424) 8,750 (473,982) Margin deposit ,817-19,817 Current 441 (1,012) 20,694 (1,301) Non-Current P&L at (Note 22) 9,576 (4,640) 9,576 (5,743) 6/30/2016 Total Volume / Position Short Risk Maturity Outstanding derivative instruments Counterparty Receivable Payable Receivable Payable Net balance Notional ('000) position (long position) Unit Currency US$ August -16 BM&F BM&F (1,039) (1,039) 34,750 - US$ Currency US$ August -16 Options BM&F Options (355) 226 (6,500) - US$ Currency US$ August -16 NDF HSBC (489) - US$ Currency US$ July -16 NDF HSBC 1,151-1,151-1,151 (1,786) - US$ Currency US$ July -16 NDF Votorantim 1,263-1,263-1,263 (1,786) - US$ Current 2,728-3,309 (1,394) 1,915 24,189 - US$ Non-Current US$ Total currency risk 2,728-3,309 (1,394) 1,915 24,189 - US$ Soybean CBOT November -16 Futures Soybean Trading Companies/Banks/CBOT - (281) - (281) (281) - (106,589) bags Soybean CBOT August -16 Futures Soybean Trading Companies/Banks/CBOT - (490) - (490) (490) - (24,946) bags Soybean CBOT July -17 F Futures Soybean Trading Companies/Banks/CBOT - (4,392) - (4,392) (4,392) - (473,982) bags Current - (771) - (771) (771) - (131,535) bags Non-Current - (4,392) - (4,392) (4,392) - (473,982) bags Total commodities risk - (5,163) - (5,163) (5,163) - (605,517) bags Total Risks 2,728 (5,163) 3,309 (6,557) (3,248) 24,189 (605,517) Margin deposit 1,664-21,188-21,188 Current 4,392 (771) 24,497 (2,165) Non-Current - (4,392) - (4,392) P&L at September 30, 2015 (Note 22) 8,511 (7,032) 46,084 (7,032)

22 7. Trade accounts receivable 9/30/2016 6/30/2016 9/30/2016 6/30/2016 Sale of sugarcane 19,513 15,084 19,513 15,085 Sale of grains 2,161 1,037 3,837 1,043 Leases and rent Sale of machinery Sale of farms - - 9,590 1,930 23,051 17,754 34,317 19,691 Allowance for doubtful accounts (891) (1,156) (891) (1,163) Total current 22,160 16,598 33,426 18,528 Sale of machinery Sale of farms - - 4,589 14,411 Total non-current 206-4,795 14,411 Breakdown of receivables by maturity 9/30/2016 6/30/2016 9/30/2016 6/30/2016 Falling due: Up to 30 days 1,530 10,725 3,204 10, to 90 days 11, ,954 1, to 180 days to 360 days 8,535 5,404 18,126 5,404 Over 360 days 206-4,795 14,411 Past due: Up to 30 days to 90 days to 180 days to 360 days Over 360 days ,257 17,754 39,112 34,102 a) Receivables for sale of farm Total amounts sold, received and receivables for sale of farm are as follows: Araucária I Araucária II At June 30, ,930 14,411 16,341 Receipts (1,950) - (1,950) Restatement of nominal value (23) (897) (920) PVA realization At - 14,179 14,179

23 8. Inventories 9/30/2016 6/30/2016 9/30/2016 6/30/2016 Soybean 169 1, ,156 Corn Other harvests Agricultural products 170 2, ,364 Inputs 9,897 7,250 14,612 10,833 Advance to suppliers 6,070 3,309 8,227 4,216 16,137 12,858 23,080 22, Adjustment to recoverable value of inventories of agricultural products At June 30, (4) Provision for recoverable value of agricultural products, net (125) (213) Realization at cost of sales At - (4) 9. Biological assets 9/30/2016 6/30/2016 9/30/2016 6/30/2016 Restated Restated Production cattle 4,200 5,241 4,200 5,241 Grain plantation 3,385-5,754 - Sugarcane plantation 14,269 22,285 14,269 22,285 Total 21,854 27,526 24,223 27,526 Current 17,654 22,285 20,023 22,285 Non-current 4,200 5,241 4,200 5,241 The amounts of increases from plantation and treatment of crops are substantially represented by expenditures with the formation of crops such as: seeds, fertilizers, pesticides, depreciation and manpower used in the crops. The area to be harvested corresponding to biological assets is as follows: Planted area (Hectares) 9/30/2016 6/30/2016 Grains - - Sugarcane (a) 10,989 12,055 10,989 12,055 (a) For sugarcane the area considered above refers to the total to be harvested in all the future cuts, considered in the cash flow for calculation of fair value of biological assets. This area includes the total of 4,263 hectares leased from Brenco, according to contract executed on May 8, 2015.

24 Changes in agricultural activity Grains Sugarcane Grains Sugarcane At June 30, 2016 Restated - 22,285-22,285 Increases due to planting 3,385-4,697 - Increases due to handling (a) - 20,459-19,274 Change in fair value (a) - 3,950 1,057 5,135 Reductions due to harvesting - (32,425) - (32,425) At 3,385 14,269 5,754 14,269 (a) In the cost of lease between related parties as regards to the fair value variation and expenditures with tilling is eliminated. Changes in cattle raising activity Head of cattle (in number) Production cattle At June 30, ,148 5,241 Acquisition costs 742 1,042 Cattle-raising costs - 1,049 Deaths (54) (45) Change in fair value - (3,087) At 4,836 4,200 Fair value hierarchy at / Amount Fair value Agricultural products 14,269 Level 3 Cattle 4,200 Level 2 Grains 5,754 Level 2

25 10. Investment properties noncurrent Land Farms Buildings and improvements Land clearing Total in operation Construction in progress 9/30/2016 6/30/2016 Opening balance 21,010 20,202 31,485 72,697 5,649 78,346 77,656 Acquisitions ,148 2,253 7,063 Disposals (a) (1) (1) (12) Transfers - 2,695 1,442 4,137 (4,137) - - (-) Depreciation / amortization - (156) (1,447) (1,603) - (1,603) (6,361) Net book balance 21,010 22,741 31,585 75,336 3,659 78,995 78,346 At Total cost 21,010 28,061 83, ,905 3, , ,312 Accumulated depreciation - (5,320) (52,249) (57,569) - (57,569) (55,966) Net book balance 21,010 22,741 31,585 75,336 3,659 78,995 78,346 Land Farms Buildings and improvements Land clearing Total in operation Construction in progress 9/30/2016 6/30/2016 Opening balance 204,690 23,468 52, ,848 7, , ,347 Acquisitions ,877 4,240 10,745 Disposals (1) (1) (12) Transfers - 2,714 2,208 4,922 (4,922) - - (-) Depreciation / amortization - (199) (2,636) (2,835) - (2,835) (11,213) Net book balance 204,948 25,983 52, ,298 5, , ,867 At Total cost 204,948 32, , ,818 5, , ,552 Accumulated depreciation - (6,073) (76,447) (82,520) - (82,520) (79,685) Net book balance 204,948 25,983 52, ,298 5, , ,867 Four farms owned by the are held as guarantee for loans and financing in accordance with Note 14.

26 11. Investments Thousands of shares or units of interest held by the Interest in total capital - % Total assets Total liabilities Equity Income (loss) for the period 9/30/2016 6/30/2016 9/30/2016 6/30/2016 9/30/2016 6/30/2016 9/30/2016 6/30/2016 9/30/2016 6/30/2016 9/30/2016 6/30/2016 Subsidiaries: Araucária 69,301 69, ,639 75,702 1,741 2,069 73,898 73, ,032 Cremaq 40,361 40, ,566 61,416 5,233 12,613 48,333 48,803 1,239 2,974 Engenho de Maracaju Imobiliária Jaborandi 36,183 36, ,656 44,045 1,597 1,499 43,059 42, Jaborandi Ltda 70,492 70, , ,170 67,901 74,513 30,427 30,657 (230) 1,172 Cajueiro 59,219 59, ,295 64, ,644 63, Mogno 35,134 35, ,625 35, ,492 35, (51) Ceibo 8,239 8, (122) 32 (154) (3) Flamboyant (1) (1) Joint Venture Cresca * , ,291 48,506 47, , ,955 (1,143) (1,747) 398, , ,676 * The total amounts of assets, liabilities, equity and loss for the year are stated proportionally to the interest held in Cresca. a) Changes in investments At June 30, , ,955 Dividends received (1,709) - Future capital contributions (855) - Equity pickup 936 (1,143) Effect of translation adjustment 1,033 1,033 At 398, ,845 *The amounts under column represent the investments in Cresca.