(Convenience Translation into English from the Original Previously Issued in Portuguese) Biosev S.A.

Transcription

1 (Convenience Translation into English from the Original Previously Issued in Portuguese) Individual and Interim Financial Statements For the Nine-month Period Ended December 31, 2017

2 Interim Financial Statements December 31, 2017 CONTENTS AUDITOR S REPORT ON REVIEW OF FINANCIAL STATEMENTS BALANCE SHEET STATEMENT OF OPERATIONS STATEMENT OF COMPREHENSIVE INCOME (LOSS) STATEMENT OF CHANGES IN EQUITY STATEMENT OF CASH FLOWS STATEMENT OF VALUE ADDED NOTES 1. GENERAL INFORMATION SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES CASH AND CASH EQUIVALENTS SHORT- AND LONG-TERM INVESTMENTS TRADE RECEIVABLES INVENTORIES BIOLOGICAL ASSETS RECOVERABLE TAXES ESCROW DEPOSITS CURRENT AND DEFERRED INCOME TAX AND SOCIAL CONTRIBUTION INVESTMENTS (PROVISION FOR INVESTMENT LOSS) PROPERTY, PLANT AND EQUIPMENT INTANGIBLE ASSETS BORROWINGS AND FINANCING TRADE PAYABLES TAXES AND CONTRIBUTIONS PAYABLE PROVISION FOR TAX, LABOR, CIVIL AND ENVIRONMENTAL CONTINGENCIES RELATED PARTIES EQUITY NET REVENUES AND COST OF SALES AND SERVICES EXPENSES BY NATURE FINANCE INCOME (EXPENSES) OTHER OPERATING INCOME (EXPENSES) LOSS PER SHARE RISK MANAGEMENT AND FINANCIAL INSTRUMENTS COMMITMENTS INSURANCE EMPLOYEES BENEFIT...60

3 29. SEGMENT INFORMATION NON-CASH TRANSACTIONS SUBSEQUENT EVENTS APPROVAL OF INTERIM FINANCIAL STATEMENTS...64

4 Tel.: Rua Major Quedinho 90 Fax: Consolação São Paulo, SP - Brasil (Convenience Translation into English from the Original Previously Issued in Portuguese) REVIEW REPORT OF INDEPENDENT AUDITOR S To the Board of Directors and Shareholders São Paulo - SP Introduction We have reviewed the accompanying individual and consolidated interim financial information of (the ), identified as Parent and, respectively, contained in the Quarterly Information Form ITR for the quarter ended December 31, 2017, which comprises the statement of financial position as of December 31, 2017, and the respective statements of profit or loss and comprehensive income (loss) for the three and nine-month periods then ended and changes in equity and cash flows for the nine-month period then ended, including the explanatory notes. The s management is responsible for the preparation of the individual and consolidated interim financial information in accordance with Technical Pronouncement CPC 21 (R1) Interim Financial Reporting and IAS 34 Interim Financial Reporting, issued by International Accounting Standards Board (IASB), as well for the presentation of this information in accordance with standards issued by the Brazilian Securities and Exchange Commission, 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 the Brazilian and International standards on review engagements of interim financial information (NBC TR 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 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 the 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 the audit standards 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.

5 Conclusion on the interim 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 has not been prepared, in all material respects, in accordance with Technical Pronouncement CPC 21 (R1) and IAS 34, issued by IASB, applicable to the preparation of Quarterly Information ITR, and presented in accordance with standards issued by the Brazilian Securities and Exchange Commission. Emphasis of matter Transactions with related parties The and its subsidiaries have carried out significant transactions with related parties of the Louis Dreyfus Group. The effects on results of these transactions and the corresponding assets and liabilities are disclosed in note 18. Our opinion is not modified with respect to this matter. Other matters Statements of Value Added We also reviewed the individual and consolidated interim statements of value added ( DVA ) for the nine-month period ended December 31, 2017, prepared under the responsibility of the s management, the presentation of which is required by the standards issued by the Brazilian Securities and Exchange Commission applicable to the preparation of Quarterly Information ITR and considered as supplemental information for International Financial Reporting Standards IFRSs, which do not require the presentation of DVA. These statements were subject to the same review procedures described above, and, based on our review, nothing has come to our attention that causes us to believe that they were not prepared, in all material respects, consistently with the individual and consolidated interim financial information taken as a whole.

6 Comparative amounts of the year and the quarter of the previous year The corresponding amounts on individual and consolidated balance sheets related to year ended March 31, 2017 and the statements of profit or loss and comprehensive income (loss) for the three and nine month periods ended December 31, 2016, of changes in equity and cash flows for the nine-month period ended December 31, 2016, presented for comparison purposes were audited and reviewed by other independent auditors. The audit report was issued dated June 1, 2017, without qualifications, containing an emphasis of matter paragraph on transactions with related parties and restatement of comparative values based on the initial adoption of the revised Technical Pronouncement CPC 29 - Biological Assets and Agricultural Product. The review report was issued dated February 8, 2017, without qualifications, containing an emphasis of matter paragraph on restatement of comparative values based on the changes in accounting policy introduced by the Technical Pronouncement CPC 29 - Biological Assets and Agricultural Product and Technical Pronouncement CPC 27 Property, Plant and Equipment. The accompanying individual and consolidated interim financial information has been translated into English for the convenience of readers outside Brazil. São Paulo, February 08, BDO RCS Auditores Independentes SS CRC 2SP /O-1 Francisco de Paula dos Reis Júnior Accountant CRC 1 SP /O-6

7 BALANCE SHEET AS AT DECEMBER 31, 2017 (In thousands of Brazilian reais - R$) ASSETS Note LIABILITIES AND EQUITY Note CURRENT ASSETS CURRENT LIABILITIES Cash and cash equivalents 3 123, , ,019 1,463,438 Borrow ings and financing 14 1,164, ,635 2,097,934 1,944,007 Short-term investments 4 122,568 24, , ,798 Advances from domestic customers 14,036 21,154 23,379 30,998 Derivative financial instruments 25 37, ,482 37, ,708 Advances from foreign customers , , , ,922 Trade receivables 5 150, , , ,626 Trade payables , , , ,048 Inventories 6 413, , , ,391 Accrued payroll and related taxes 58,286 61, , ,609 Biological assets 7 566, , , ,488 Taxes payable 16 65,683 20,396 95,514 49,644 Recoverable taxes 8 173, , , ,911 Derivative financial instruments 25 30,951 15,792 41,635 28,402 Other receivables 21,816 23,227 78, ,549 Other payables 182,893 81, , ,297 Assets held for sale - - 3,506 3,506 1,609,437 1,692,419 2,946,381 4,105,909 Total current liabilities 2,162,937 1,746,482 3,935,654 3,631,927 1,609,437 1,692,419 2,949,887 4,109,415 NON-CURRENT LIABILITIES Borrow ings and financing ,629 1,614,768 3,355,261 4,344,647 NON-CURRENT ASSETS Advances from foreign customers 18 1,016, ,571 2,379,130 2,427,670 Long-term receivables Trade payables ,039 1,310 1,941 Long-term investments 4 4,945 13,218 21,920 19,891 Deferred income tax and social contribution ,967 41, ,636 Advances to suppliers 10,005 9,946 18,830 14,936 Derivative financial instruments ,018 16,236 Escrow deposits 9 195, , , ,966 Provision for tax, labor, civil and enviromental contingencies , , , ,282 Recoverable taxes 8 75, ,783 87, ,747 Other payables , ,796 47,355 56,776 Deferred income tax and social contribution ,665-62,125 3,552 Provision for investment loss 11 1,113, , Other receivables 3,055 9,275 11,648 17,371 Total non-current liabilities 3,845,361 3,808,426 6,141,577 7,318,188 Investments , , , ,387 Property, plant and equipment 12 2,149,290 2,372,269 4,026,446 4,489,025 Intangible assets 13 13,441 16, , ,307 Total non-current assets 2,945,206 3,184,688 5,685,549 6,179,182 EQUITY Capital 19 2,618,214 2,618,214 2,618,214 2,618,214 Capital reserve 19 1,360,072 1,355,616 1,360,072 1,355,616 Accumulated losses (4,971,760) (4,148,598) (4,971,760) (4,148,598) Other comprehensive loss (460,181) (503,033) (460,181) (503,033) Total equity attributable to the 's owners (1,453,655) (677,801) (1,453,655) (677,801) Non-controlling interests ,860 16,283 Total equity (1,453,655) (677,801) (1,441,795) (661,518) TOTAL ASSETS 4,554,643 4,877,107 8,635,436 10,288,597 TOTAL LIABILITIES AND EQUITY 4,554,643 4,877,107 8,635,436 10,288,597 The accompanying notes are an integral part of these interim financial statements. 9

8 STATEMENT OF OPERATIONS FOR THE THREE- AND NINE-MONTH PERIODS ENDED DECEMBER 31, 2017 (In thousands of Brazilian reais - R$) Three-month period Nine-month period ended ended Three-month period Nine-month period ended ended Note NET REVENUE , ,325 1,992,225 2,397,699 1,535,433 1,550,533 5,147,716 5,452,756 Cost of sales and services 20 and 21 (473,027) (533,360) (1,698,738) (2,036,216) (1,155,374) (1,307,104) (4,597,261) (4,708,058) GROSS PROFIT 149, , , , , , , ,698 OPERATING INCOME (EXPENSES) (230,384) (76,117) (840,486) (386,138) (275,854) (124,162) (696,854) (467,802) General, administrative and selling 21 (51,973) (61,623) (191,229) (190,960) (135,442) (146,931) (508,051) (497,915) Equity in subsidiaries 11 (11,023) (27,255) (468,218) (199,893) (2,220) (369) (3,394) (5,011) Other operating income 23 9,067 25,951 39,268 41,906 11,697 48,669 44,435 85,105 Other operating expenses 23 (176,455) (13,190) (220,307) (37,191) (149,889) (25,531) (229,844) (49,981) OPERATING INCOME (LOSS) BEFORE FINANCE INCOME (EXPENSES) (80,561) 30,848 (546,999) (24,655) 104, ,267 (146,399) 276,896 Finance income 22 3,808 5,984 13,684 22,517 10,719 14,961 42,088 64,614 Finance expenses 22 (120,489) (91,938) (322,189) (290,089) (214,199) (169,156) (673,037) (541,395) Derivatives 22 (6,359) 24,976 51,198 (63,025) 867 4,086 (3,843) (169,737) Exchange rate changes 22 (105,259) (17,878) (111,084) 118,745 (237,395) (18,148) (243,469) 270,433 PROFIT (LOSS) BEFORE TAXES (308,860) (48,008) (915,390) (236,507) (335,803) (48,990) (1,024,660) (99,189) INCOME TAX AND SOCIAL CONTRIBUTION ,234 90,718 92,228 (50,393) 57,117 91, ,519 (187,813) PROFIT (LOSS) FOR THE PERIOD (278,626) 42,710 (823,162) (286,900) (278,686) 42,787 (823,141) (287,002) Attributable to: 's ow ners 24 (278,626) 42,710 (823,162) (286,900) (278,626) 42,710 (823,162) (286,900) Non-controlling interests (60) (102) PROFIT (LOSS) PER SHARE - R$ Basic 24 ( ) ( ) ( ) ( ) ( ) ( ) Diluted 24 ( ) ( ) ( ) ( ) ( ) ( ) The accompanying notes are an integral part of these interim financial statements. 10

9 STATEMENT OF COMPREHENSIVE INCOME (LOSS) FOR THE THREE- AND NINE-MONTH PERIODS ENDED DECEMBER 31, 2017 (In thousands of Brazilian reais - R$) Three-month Nine-month period ended period ended Three-month Nine-month period ended period ended Note PROFIT (LOSS) FOR THE PERIOD (278,626) 42,710 (823,162) (286,900) (278,686) 42,787 (823,141) (287,002) OTHER COMPREHENSIVE INCOME (LOSS) Items subsequently reclassified to profit or loss: Financial instruments - hedge accounting of futures 25 (9,916) 116,328 47,885 (3,877) (9,916) 116,328 47,885 (3,877) Financial instruments - hedge accounting of Libor sw ap 25 5,355 19,820 6,654 30,597 5,355 19,820 6,654 30,597 Financial instruments - hedge accounting of Non-Deliverable Forw ard (NDF) 25 (12,478) (59,705) (86,754) 12,621 (12,478) (59,705) (86,754) 12,621 Financial instruments - hedge accounting of exchange differences 25 (72,468) (3,543) 96, ,077 (72,468) (3,543) 96, ,077 Deferred income tax and social contribution related to components of other comprehensive income (loss) ,433 (24,786) (21,967) (123,222) 30,433 (24,786) (21,967) (123,222) Equity in subsidiaries on other comprehensive income (loss) (58,865) 48,114 42, ,196 (58,865) 48,114 42, ,196 COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD (337,491) 90,824 (780,310) (47,704) (337,551) 90,901 (780,289) (47,806) Attributable to: 's ow ners (337,491) 90,824 (780,310) (47,704) (337,491) 90,824 (780,310) (47,704) Non-controlling interests (60) (102) The accompanying notes are an integral part of these interim financial statements. 11

10 STATEMENT OF CHANGES IN EQUITY FOR THE NINE-MONTH PERIOD ENDED DECEMBER 31, 2017 (In thousands of Brazilian reais - R$) Other comprehensive Non-controlling Total consolidated Capital Capital reserve income (loss) Accumulated losses 's equity interests equity BALANCES AS AT MARCH 31, ,618,214 1,355,616 (840,887) (3,548,466) (415,523) 16,580 (398,943) Profit (loss) for the period (286,900) (286,900) (102) (287,002) Other comprehensive income (loss): Adjusted derivatives (hedge accounting), net of taxes , , ,196 Comprehensive income (loss) for the period ,196 (286,900) (47,704) (102) (47,806) BALANCES AS AT DECEMBER 31, ,618,214 1,355,616 (601,691) (3,835,366) (463,227) 16,478 (446,749) BALANCES AS AT MARCH 31, ,618,214 1,355,616 (503,033) (4,148,598) (677,801) 16,283 (661,518) Profit (Loss) for the period (823,162) (823,162) 21 (823,141) Other comprehensive income (loss): Adjusted derivatives (hedge accounting), net of taxes ,643-42,643-42,643 Equity in subsidiaries Comprehensive income (loss) for the period ,852 (823,162) (780,310) 21 (780,289) Acquisition of non-controlling interests - 4, ,456-4,456 Non-controlling interests (4,444) (4,444) BALANCES AS AT DECEMBER 31, ,618,214 1,360,072 (460,181) (4,971,760) (1,453,655) 11,860 (1,441,795) The accompanying notes are an integral part of these interim financial statements. 12

11 STATEMENT OF CASH FLOWS FOR THE NINE-MONTH PERIOD ENDED DECEMBER 31, 2017 (In thousands of Brazilian reais - R$) Nine-month period ended Nine-month period ended CASH FLOW FROM OPERATING ACTIVITIES Note Loss for the period (823,162) (286,900) (823,141) (287,002) Non-cash transactions: Depreciation and amortization , ,413 1,115,230 1,010,766 Loss from sale of property, plant and equipment 23 2,831 4,718 2,981 6,646 Equity in subsidiaries 468, ,893 3,603 5,011 Interest, exchange rate changes and inflation adjustments, net 208,026 30, ,984 (48,191) Exchange, interest rate and commodities risk management (111,139) (5,269) (104,995) 26,708 Recognition of provision for tax, labor, civil and enviromental contingencies 16,366 9,975 31,428 5,591 Recognition (reversal) of allow ance for doubtful accounts 5 (119) 272 (700) 926 Impairment gains 12 (5,074) (662) (5,284) (1,625) Recognition (reversal) of allow ance for negative margin and realization of storeroom inventories and advances to suppliers Gains on changes in fair value less estimated costs to sell biological assets Deferred income tax and social contribution 10.2 (94,096) 50,393 (202,818) 187,655 Hedge operations 53, ,264 64, ,418 Non-controlling interests 4,456-4, , , , ,028 Decrease (increase) in assets: Trade receivables 5 (31,255) (136,596) (58,839) (94,400) Inventories 6 73,079 24,298 82,344 (138,340) Derivative financial instruments 25 94,795 (20,982) 148,021 (20,982) Recoverable taxes 8 (5,690) (36,044) 13,953 (74,120) Advances to suppliers (59) (1,372) (3,894) (9,070) Other receivables 7,631 (8,198) 25,392 (48,390) 138,501 (178,894) 206,977 (385,302) Increase (decrease) in liabilities: Trade payables 15 12, , , ,133 Advances from foreign customers (14,467) (452,017) (194,934) (863,703) Accrued payroll and related taxes (2,764) 6,275 8,014 12,445 Taxes payable 16 45,287 (2,886) 45,870 (12,856) Advances from domestic customers (7,118) (6,820) (7,619) (12,801) Payments of labor, civil, tax and environmental contingencies 17 (9,748) (5,256) (33,565) (28,900) Derivative financial instruments ,298 9, ,010 (54,430) Other payables 292,292 6,757 33,088 (56,377) 441,919 (242,813) 158,420 (679,489) Cash provided by (used in) operating activities, net interest 889, , ,733 (88,763) Interest on borrow ings and financing (158,896) (196,067) (345,366) (375,214) Cash provided by (used in) operating activities 730,586 (24,756) 624,367 (463,977) 6 20 and 21 (5,848) 3,816 (5,343) 6,588 (88,375) (260,124) (39,642) (299,565) CASH FLOW FROM INVESTING ACTIVITIES Increase in escrow deposits 9 (27,448) (31,525) (42,473) (47,236) Decrease (increase) in short-term investments 4 (88,196) 107,677 (101,546) 150,632 Increase in investments (provision for investment loss) 11 (26,995) (227,416) - - Additions to property, plant and equipment 12 (200,235) (280,204) (307,463) (425,117) Additions to biological assets 7 (245,908) (242,570) (397,813) (383,427) Additions to intangible assets 13 (1,947) (5,753) (2,157) (5,933) Investment in subsidiary 13 1, Cash used in investing activities (589,228) (679,791) (851,452) (711,081) CASH FLOW FROM FINANCING ACTIVITIES Borrow ings and financing , ,144 2,501,935 2,363,672 Payment of borrow ings and financing 14 (921,017) (1,133,791) (3,568,269) (2,753,796) Cash used in financing activities (309,008) (139,647) (1,066,334) (390,124) DECREASE IN CASH AND CASH EQUIVALENTS (167,650) (844,194) (1,293,419) (1,565,182) Cash and cash equivalents at the beginning of period 3 290, ,087 1,463,438 1,826,121 Cash and cash equivalents at the end of period 3 123,252 15, , ,939 The accompanying notes are an integral part of these interim financial statements. 13

12 STATEMENT OF VALUE ADDED FOR THE NINE-MONTH PERIOD ENDED DECEMBER 31, 2017 (In thousands of Brazilian reais - R$) Nine-month period ended Nine-month period ended Note REVENUE 2,148,030 2,514,823 5,515,306 5,737, ) Sales 20 2,108,643 2,473,189 5,470,171 5,653, ) Allow ance for doubtful accounts - provision (reversal) (272) 700 (926) 1.3) Other operating revenues 23 39,268 41,906 44,435 85, INPUTS PURCHASED FROM THIRD PARTIES (940,984) (1,219,057) (3,252,318) (3,365,744) 2.1) Cost of products sold (610,671) (428,510) (1,611,554) (1,494,587) 2.2) Materials, electric pow er, external services and other (418,688) (1,050,671) (1,680,406) (2,170,721) 2.3) Gains on changes in fair value of biological assets and other 88, ,124 39, , GROSS VALUE ADDEED (1-2) 1,207,046 1,295,766 2,262,988 2,372, DEPRECIATION AND AMORTIZATION 21 (683,662) (601,413) (1,115,230) (1,010,766) 5 - VALUE ADDED CREATED BY THE ENTITY (3-4) 523, ,353 1,147,758 1,361, VALUE ADDED RECEIVED IN TRANSFER (246,786) 254, , , ) Equity in subsidiaries 11 (468,218) (199,893) (3,394) (5,011) 6.2) Finance income 221, , , , VALUE ADDED FOR DISTRIBUTION (5+6) 276, ,621 1,384,473 1,884, DISTRIBUTION OF VALUE ADDED 276, ,621 1,384,473 1,884, ) Personnel and payroll taxes , , , ,681 Direct compensation 186, , , ,803 Benefits 62,048 53, , ,440 Severance pay fund (FGTS) 32,954 26,632 61,467 48, ) Taxes, rates and contributions 14, ,822 88, ,757 Federal (82,084) 22,837 (85,481) 210,178 State 96,211 99, , ,353 Municipal ) Third-party capital use 804, ,769 1,558,923 1,336,257 Rentals 214, , , ,936 Interest and exchange rate changes 589, ,013 1,118, , ) Equity capital (823,162) (286,900) (823,141) (287,002) Loss for the period (823,162) (286,900) (823,141) (287,002) The accompanying notes are an integral part of these interim financial statements. 14

13 1. GENERAL INFORMATION ( ), headquartered at Avenida Brigadeiro Faria Lima, 1355, 11º andar, Pinheiros, São Paulo, SP, and its subsidiaries (collectively Group ) are mainly engaged in the production, processing and sale of agricultural products, primarily sugarcane and its by-products; the agricultural operations in -owned or third-party land; the export, import and sale of petroleum by-products, lubricants, fuel, grease and hydrated ethyl alcohol; the purchase, sale, import and export of agricultural products and its by-products; and the generation and sale of electricity and its byproducts. The Group comprises the activities of and Biosev Bioenergia S.A. ( Biosev Bioenergia ), based in Brazil, and Biosev Bioenergia International S.A. ( Biosev Bioenergia International ), based in Switzerland. Additionally, the Group consists of the subsidiaries of such companies, including (i) Biosev Finance International B.V, based in the Netherlands, is mainly engaged in the raising of funds, performance of short-term investments with own resources and investment in other companies, either as partner or shareholder, in Brazil or abroad; and (ii) Biosev Comercializadora de Energia S.A., a special-purpose entity established to hold and operate the electric power cogeneration assets of the Passa Tempo unit, located in the State of Mato Grosso do Sul. The Group is organized in industrial clusters, composed as follows, with their corresponding branches: Ribeirão Preto Agri-Industrial Cluster: Santa Elisa, Vale do Rosário, MB (Morro Agudo), Jardest and Continental plants (located in the State of São Paulo); Mato Grosso do Sul Agri-Industrial Cluster: Maracaju, Passa Tempo and Rio Brilhante plants (located in the State of Mato Grosso do Sul); Northeast Agri-Industrial Cluster: Estivas (located in the State of Rio Grande do Norte) and Giasa (located in the State of Paraíba) plants; Leme/Lagoa da Prata Agri-Industrial Cluster: Leme (located in the State of São Paulo) and Lagoa da Prata (located in the State of Minas Gerais) plants. The is a subsidiary of the Louis Dreyfus Group, directly controlled by Sugar Holdings BV, which holds 59.58% of its shares. As described in the interim financial statements, the has a relatively high leverage ratio and negative equity. The consolidated balance of debt falling due during the next 12 (twelve) months amounts to R$2,097,934 against balances of cash and short-term investments amounting to R$385,554 as at December 31, Several measures have been adopted by the s management in order to adjust its indebtedness profile. In particular, the seeks to maximize the use of its assets without impacting its strict financial discipline, in order to increase its operating efficiency and production to meet and maintain a positive free cash flow. The has recorded losses over the last years and nine-month period, mainly due to the negative exchange rate impacts on foreign currency-denominated debt and adverse climate events. The recorded losses of R$ e R$ for the periods ended December 31, 2017 and 2016, respectively. The s ability to continue as a going concern depends on additional capital, renewal of outstanding credit facilities and generation of profitable operations. Specifically, the s and its subsidiaries debt levels may have significant effects on the business, including the capacity to finance working capital and perform recurring capital disbursements, considering the funds necessary to pay debt service. Although there are no guarantees that the will be able to generate sufficient cash flows to finance the operations and meet debt repayments, the s management expects that the current cash balances and credit facilities, as well as the respective operations, will be sufficient to meet the working capital needs, capital expenses, debt service and other needs for the next year. In the event sufficient cash is not generated to support the operations in progress, the will have to obtain additional funds from other sources. The may need to refinance, totally or partially, its debts, which may require more onerous terms and all the effects thereof. Notwithstanding the above, the has been successful in renewing its credit facilities and has obtained continuous financial support from its controlling shareholder through advances for future sales. 15

14 The s management has also been considering raising new funds from trade finance lines and executing a public offering of shares in Brazil and abroad (as previously disclosed). 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES 2.1 Statement of compliance and basis of preparation The individual and consolidated interim financial statements were prepared and are presented in accordance with CPC 21 (R1) - Demonstrações Intermediárias and IAS 34 Interim Financial Reporting, issued by International Accounting Standards Board (IASB), in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of the Interim Financial Information (ITR). The preparation of the individual and consolidated interim financial statements in accordance with CPC 21(R1) and IAS 34 requires the adoption of certain accounting estimates by the s management. The interim financial statements have been prepared based on the historical cost, except for certain financial instruments, held-for-sale assets, and biological assets measured at their fair values. The historical cost is generally based on the fair value of the consideration paid in exchange for assets on the transaction date. Management undertakes that all relevant information related to the interim financial statements, and only such information, is being highlighted and corresponds to the information used by management in its management. For the better presentation, the 's management carried out certain reclassifications between lines of our comparative values of the Statement of Value (DVA). The accounting practices and calculation methods adopted in the interim financial statements are similar to those adopted in the financial statements as at March 31, New and revised standards and interpretations a) Standards, interpretations and revised standards not yet effective and which were not early adopted by the The standards and amendments to the standards below were published and are mandatory for periods beginning after December 31, However, the did not early adopt or amend them. Standard Main requirements Effective date IFRS 15 / CPC 47 Revenue Recognition. IFRS 15 sets forth that the revenue is recognized in order to reflect the transfer of goods or services to the customers at an amount representing the company s expectations to receive back the rights relating to such products or services. Effective for periods beginning on or after January 1, IFRS 9 / CPC 48 "Financial Instruments". IFRS 9 maintains but simplifies the combined measurement model and establishes two main categories to measure financial assets: amortized cost and fair value. The basis for classification depends on the entity s business model and the contractual cash flow characteristics of the financial asset. The new standard introduced a new expected-loss impairment model and restructured the hedge accounting model. IFRIC 22/ ICPC 21 Foreign Currency Transactions and Advance Consideration, are related interpretations and sets forth the principles for recognition, measurement, presentation and disclosure of non-monetary asset or non-monetary liability arising from the payment or receipt of advance. Effective for periods beginning on or after January 1, Effective for periods beginning on or after January 1,

15 Standard Main requirements Effective date IFRS 16 / CPC 06 (R2) Leases. IFRS 16 replaces IAS 17 and related interpretations and sets forth the principles for lease recognition, measurement, presentation and disclosure. Effective for periods beginning on or after January 1, These standards, revised standards and interpretations are effective for annual financial statements beginning on or after 2018 and were not used in preparing these interim financial statements and the impact of their adoption was not measured yet. The does not expect that these new standards will have a material effect on the interim financial statements, except for IFRS 16 Leases, which may change the recognition, measurement, presentation and disclosure of leases. 3. CASH AND CASH EQUIVALENTS Cash and banks 85, ,226 92,861 1,217,382 Short-term investments 11,560 52,267 32, ,289 Debentures 26,307 28,409 44, , , , ,019 1,463,438 Short-term investments refer to floating rate Certificates of Bank Deposit (CDBs) and/or CDBs indexed at rates ranging from 94% to 104% of the Interbank Deposit Rate (CDI) as at December 31, 2017 (5% to 102% as at March 31, 2017). The CDBs investments are subject to repurchase commitments by the financial institutions issuers and/or custodians. Debentures not subject to Tax on Financial Transactions (IOF) are issued from local prime financial institutions indexed to 65% of CDI rate as at December 31, 2017 (50% to 99.5% as at March 31, 2017). 4. SHORT- AND LONG-TERM INVESTMENTS Short-term investments 33,003 34, , ,902 Fixed-income investment fund 94,510 3, ,435 9, ,513 38, , ,689 Current assets 122,568 24, , ,798 Non-current assets 4,945 13,218 21,920 19,891 Short and long-term investments refer to restricted deposits and are operations represented by (i) floating rate Certificates of Bank Deposit (CDBs) and/or CDBs indexed at rates ranging from 90% to 95% of the Interbank Deposit Rate (CDI) as at December 31, 2017 (90% to 100% as at March 31, 2017); (ii) margin deposits in derivative transactions; and (iii) foreign currency-denominated deposits related to prepayments of export performed by subsidiary Biosev Bioenergia International S.A., in the amount of R$18,193, as at December 31, 2017, indexed at average rate of 1.49% p.a. These deposits may be considered, together with future agricultural production and sugar and ethanol inventories, for purposes of calculation of the indices set forth in the prepaid export agreements. Out of the total of fixed income investment fund as at December 31, 2017, R$3,448 in and R$10,344 in (R$3,253 and R$9,759 as at March 31, 2017, respectively), refers to the quotas of Bellatrix Fundo de Investimento em Direitos Creditórios (FIDC) and to the value of each quota of R$1,080 (in reais), and R$91,063 in and in refers to the quotas of Investment Fund in Banco BNP Paribas and to the value of each quota of R$ (in reais). 17

16 5. TRADE RECEIVABLES Related parties (Note 18) In Brazil 17,974 2, Abroad 52,572 31,659 65,478 10,247 70,546 34,055 65,489 10,280 Third parties In Brazil 80,383 84, , ,730 Abroad ,836 58,403 80,414 84, , , , , , ,413 (-) Allow ance for doubtful accounts (280) (399) (13,087) (13,787) 150, , , ,626 Before recording transactions with new customers, the Group performs comprehensive risk analyses and assesses the qualification of such counterparties. This analysis is carried out using balanced scorecard techniques, through the analysis of financial statements, financial position and business references, taking into consideration quantitative and qualitative aspects. The aging list of trade receivables is as follows: Current 120, , , ,153 Overdue Up to 30 days 4,272 2,471 98,981 33, to 60 days 25, ,554 5, to 90 days ,435 24, to 180 days , Over 180 days ,717 13, , , , ,413 The change in the allowance for doubtful accounts is as follows: Balance at the beginning of period/year (399) (1,070) (13,787) (13,666) Impairment losses recognized on receivables (665) (2,098) (2,205) (5,596) Uncollectable amounts derecognized in the period/year , Amounts recovered in the period/year 153 2,194 1,121 4,797 (280) (399) (13,087) (13,787) The breakdown of the allowance for doubtful accounts per due date is as follows: to 90 days - (35) - (366) 91 to 180 days (8) (44) (16) (243) Over 180 days (272) (320) (13,071) (13,178) (280) (399) (13,087) (13,787) 18

17 The overdue items not included in the allowance for doubtful accounts are broken down as follows: Up to 30 days 4,272 2,471 98,981 33, to 60 days 25, ,554 5, to 90 days ,435 23, to 180 days , Over 180 days ,140 2, ,346 63,473 The income (expense) on the recognition of the allowance for doubtful accounts was recorded in line item Other operating income (expenses) in the statement of operations. When recovery of additional cash is not expected, the amounts credited to line item Allowance for doubtful accounts are in general reversed against the definite write-off of the receivable and are recorded in profit or loss. Maximum exposure to credit risk at the reporting dates is the carrying amount of each aging range, as shown in the aging list above. 6. INVENTORIES Finished products Sugar 72,059 51, ,069 64,711 Ethanol 220,517 85, , ,550 Sugar syrup 7,217 6,604 9,037 9,550 Other 55 37, ,496 Allow ance for negative inventory margin (4,897) (11,026) (15,456) (20,873) 294, , , ,434 Raw materials and packaging materials 1,317 2,048 1,496 3,076 Storeroom supplies 68,404 61, , ,441 Allow ance for realization of storeroom inventories (4,277) (3,996) (5,775) (5,701) Advances to suppliers (*) 53, , , , , , , , , , , ,391 (*) Refer to advances to sugarcane suppliers that are adjusted on a monthly basis according to the specific conditions and indices set forth in the agreements. The changes in the allowance for negative inventory margin and realization of storeroom inventories are broken down as follows: Negative inventory margin Opening balance (11,026) (2,668) (20,873) (16,448) Additions (4,897) (11,026) (15,456) (20,873) Reversals 11,026 2,668 20,873 16,448 (4,897) (11,026) (15,456) (20,873) Realization of storeroom inventories Opening balance (3,996) (3,933) (5,701) (5,518) Additions (3,635) (2,860) (4,937) (3,845) Reversals 3,354 2,797 4,863 3,662 (4,277) (3,996) (5,775) (5,701) 19

18 The allowance for negative inventory margin is calculated by analyzing the average production cost of finished products as compared to their realizable value in the market, less costs to sell. The allowance for realization of storeroom inventories, considering obsolete and slow-moving items is recognized on a quarterly basis based on inventory management procedure of storeroom inventories duly approved by the. The estimated storeroom inventories realizable after 12 months is R$12,830 as at December 31, 2017 (R$18,184 as at March 31, 2017). 7. BIOLOGICAL ASSETS Opening balance 530, , , ,707 Increases arising from expenses on sugarcane crops and crop treatments 426, , ,159 1,020, ,671 1,065,886 1,791,647 1,907,405 Gains on changes in fair value less estimated costs to sell 88, ,167 39, ,460 Sugarcane harvest at fair value in the year/period (478,186) (661,244) (889,247) (1,209,108) Write-off (198) (269) (198) (269) 566, , , ,488 When determining the fair value, the takes the following into consideration: Valuation methodology The discounted cash flow is the method used for the economic and financial evaluation of sugarcane biological assets. Discount rate The discount rate used to calculate the discounted cash flow was 11.02%, which represents the weighted average cost of capital (WACC), net of taxes. This rate is used as proper parameter to calculate the discount rate applicable to future cash flows of the biological assets. Market overview Own or third-party sugarcane is processed by the plant or ethanol distillery. Its own sugarcane has two different origins: (a) sugarcane grown in own land; and (b) sugarcane grown in leased land, where the plant leases the land from third parties and is responsible for all farming activities. These lease agreements are effective for a six-year period (one cycle). The sugarcane from third parties is acquired by the plant under supply contracts. Either the supplier or the plant itself can be responsible for the transportation of sugarcane to the plant. The formula of Conselho dos Produtores de Cana-de-Açúcar, Açúcar e Álcool (CONSECANA) calculates the consideration per ton of sugarcane based on: a) The volume of ATR/KG delivered by the sugarcane supplier. b) The share of the sugarcane production cost as a percentage of the sugar, ethanol residue, anhydrous ethanol and hydrated ethanol. c) The net prices of sugar in the domestic and foreign markets, and the prices of anhydrous ethanol and ethyl ethanol fuel, hydrated ethanol, and ethanol for other purposes. d) The plant s production mix for said crop. CONSECANA s reference price is published on monthly basis. 20

19 The following assumptions were used to determine the fair value: Estimated harvest area (in hectares) 187, , , ,402 Expected yields (in ton of sugarcane per hectare) Total volume of recoverable sugar (in kilogram per ton of sugarcane) Value of a kilogram of total recoverable sugar (in R$) - CONSECANA Discount rate 11.02% 11.02% 11.02% 11.02% As at December 31, 2017, the provided as guarantee for the export prepayment 161,946 hectares (226,034 hectares as at March 31, 2017), equivalent to approximately 14,160,791 tons of sugarcane (20,030,303 as at March 31, 2017), at fair value approximately of R$504,436 (R$691,499 as at March 31, 2017). Such prepayment falls due between September 2019 and April The is exposed to certain risks related to its plantations, such as (i) offer and demand, based on which the continuously monitors the market of its products and analysis the trends that regularly support the selling strategy in order to define and/or adjust the purchase and sale volumes of products or raw materials; (ii) regulatory and environmental risks, subject to specific laws and regulations, which are monitored by establishing policies and procedures to ensure the compliance with these rules; and (iii) climate risks, which expose the to the damages arising from climate changes, which are mitigated by monitoring the progress of these risks in the s routine and operating strategically in the sugarcane crops in order to minimize the damages to its biological assets. The seeks to optimize the crop sequence in order to avoid dry and frost periods, use the irrigation system in periods of shortage of water, handle of varied products in accordance with the edaphoclimatic environments, and adopt good agricultural practices in the field to maintain the sugarcane crop productivity. 8. RECOVERABLE TAXES State VAT (ICMS) 71,856 55,816 83,337 68,278 Taxes on revenue (PIS and COFINS) (a) 106, , , ,775 Witholding income tax (IRRF) on short-term investments and prepayments 62,560 59, , ,328 Excise Tax (IPI) and other taxes 7,784 7,758 31,466 31, , , , ,658 Current assets 173, , , ,911 Non-current assets 75, ,783 87, ,747 (a) Refer to PIS and COFINS credits related to: (i) Law 10637/02 which addresses the non-cumulativeness of PIS/PASEP; (ii) Law 10833/03 which addresses the non-cumulativeness of COFINS, PIS and PASEP; (iii) Law 11774/2008 which addresses the PIS/COFINS on property, plant and equipment; and (iv) Law 13043/14 relating to the Special Tax Reintegration Regime for Exporting Companies (REINTEGRA). 21

20 9. ESCROW DEPOSITS Civil 2,648 1,222 7,886 6,433 Environmental 1,467 1,450 6,928 6,851 4,115 2,672 14,814 13,284 Tax law suits Federal VAT (IPI) 5,151 4,887 16,878 16,191 Income tax (IRPJ)/Social Contribution (CSLL) 35,210 34,131 44,390 42,968 ICMS, PIS and COFINS 14,366 17,611 20,705 24,059 Social security contributions 24,532 23,337 31,707 30,272 Other 9 9 1,065 1,050 79,268 79, , ,540 Labor Labor appeals 112,584 85, , , ,584 85, , , , , , ,966 The changes in the s escrow deposits are as follows: Opening balance 168, , , ,877 Additions 34,372 52,120 49,809 89,060 Offsets/redemptions (6,924) (9,853) (7,336) (23,971) 195, , , , CURRENT AND DEFERRED INCOME TAX AND SOCIAL CONTRIBUTION 10.1 Deferred income tax and social contribution assets and liabilities disclosed in balance sheet Deferred income tax and social contribution assets 1,665-62,125 3,552 Deferred income tax and social contribution liabilities - (81,967) (41,358) (163,636) 1,665 (81,967) 20,767 (160,084) 10.2 Income tax and social contribution recognized in profit or loss Three-month period Results from current income tax and social contribution - - (1,868) - Results from deferred income tax and social contribution related to the origin and reversal of temporary differences and tax loss carryforw ards 30,234 90,718 94,096 (50,393) ended Nine-month period ended 30,234 90,718 92,228 (50,393) 22

21 Three-month period Results from current income tax and social contribution (4,570) 19 (1,299) (158) Results from deferred income tax and social contribution related to the origin and reversal of temporary differences and tax loss carryforw ards 61,687 91, ,818 (187,655) ended 57,117 91, ,519 (187,813) 10.3 Income tax and social contribution recognized in other comprehensive income (loss) Nine-month period ended Three-month period ended Nine-month period ended Results from deferred income tax and social contribution recognized in other comprehensive income (loss): Financial instruments - hedge accounting of futures 3,371 (39,552) (16,281) 1,318 Financial instruments - hedge accounting of Non-Deliverable Forw ard (NDF) (1,233) 16,964 14,306 6,883 Financial instruments - hedge accounting of exchange rate changes 4, (8,489) (14,269) 6,835 (21,972) (10,464) (6,068) Effects on subsidiaries 23,598 (2,814) (11,503) (117,154) 30,433 (24,786) (21,967) (123,222) Three-month period ended Nine-month period ended Results from deferred income tax and social contribution recognized in other comprehensive income (loss): Financial instruments - hedge accounting of futures 3,371 (39,552) (16,281) 1,318 Financial instruments - hedge accounting of Sw ap Libor (1,820) (6,739) (2,262) (10,403) Financial instruments - hedge accounting of Non-Deliverable Forw ard (NDF) 4,243 20,300 29,497 (4,291) Financial instruments - hedge accounting of exchange rate changes 24,639 1,205 (32,921) (109,846) 30,433 (24,786) (21,967) (123,222) 10.4 Reconciliation of income tax and social contribution expenses at statutory and effective rates Three-month period Results before taxes (308,860) (48,008) (915,390) (236,507) Statutory rate 34% 34% 34% 34% Income from income tax and social contribution at statutory rate 105,012 16, ,233 80,412 Equity in subsidiaries (3,748) (9,267) (159,194) (67,964) Unrecognized deferred income tax and social contribution credits (2,060) 88,006 24,781 (43,501) Tax revenue (grants) 2,315 3,300 5,729 7,280 Thin Capitalization (10,925) (7,300) (28,936) (22,084) Law suit against Instituto do Açúcar e do Álcool - IAA (*) (58,944) - (58,944) - Other (1,416) (344) (2,441) (4,536) ended Nine-month period ended Income (loss) from income tax and social contribution at effective rate 30,234 90,718 92,228 (50,393) (*) Refers to the non-deductible addition for income tax purposes based on the prerequisites indicated by article 299 of the RIR, related to lawsuit No in relation to the Instituto do Açúcar e do Álcool - IAA, as described in Note 26 (e). 23

22 Three-month period Results before taxes (335,803) (48,990) (1,024,660) (99,189) Statutory rate 34% 34% 34% 34% Income from income tax and social contribution at statutory rate 114,173 16, ,384 33,724 Equity in subsidiaries (755) (125) (1,154) (1,704) Goodw ill amortization 8,778 8,778 26,333 26,333 Unrecognized deferred income tax and social contribution credits 13,742 82,497 (39,629) (190,613) Tax revenue (grants) 2,315 3,300 5,729 7,280 Rate difference of foreign subsidiary 8,437 1,092 (199) 3,489 Thin Capitalization (29,552) (17,780) (77,074) (54,176) Law suit against Instituto do Açúcar e do Álcool - IAA (*) (58,944) - (58,944) - Other (1,077) (2,642) (1,927) (12,146) ended Nine-month period ended Income (loss) from income tax and social contribution at effective rate 57,117 91, ,519 (187,813) (*) Refers to the non-deductible addition for income tax purposes based on the prerequisites indicated by article 299 of the RIR, related to lawsuit No in relation to the Instituto do Açúcar e do Álcool - IAA, as described in Note 26 (e) Balances of deferred income tax and social contribution assets and liabilities Openning balance as at Recognized in profit or loss for the period Recognized in other comprehensive loss Closing balance as at Temporary differences: Provision for tax, labor, civil and environmental contingencies 38,687 2,250-40,937 Adjustment at fair value of biological assets (80,497) (16,799) - (97,296) Hedge accounting de sw ap Libor, NDF and exchange rate changes 35,339 15,190 (10,464) 40,065 Unrealized exchange rate changes 44,864 62, ,092 Amortization of tax goodw ill (245,277) - - (245,277) Impairment 42,574 (1,334) - 41,240 Mark-to-market of derivatives (117,424) 32,969 - (84,455) Other 20,294 (408) - 19,886 (261,440) 94,096 (10,464) (177,808) Unutilized tax losses and credits Tax loss carryforw ards 131, ,615 Social contribution tax loss carryforw ards 47, ,858 (81,967) 94,096 (10,464) 1,665 24

23 Openning balance as at Recognized in profit or loss for the period Recognized in other comprehensive loss Closing balance as at Temporary differences: Provision for tax, labor, civil and environmental contingencies 36,389 1,604-37,993 Adjustment at fair value of biological assets (109,068) (52,195) - (161,263) Adjustment to present value (AVP) - Law (93) - - Hedge accounting of Libor sw ap, NDF and exchange rate changes 80,371 (11,174) (6,068) 63,129 Effect of translation of functional currency (68,867) 68, Unrealized exchange rate changes 162,495 (98,677) - 63,818 Amortization of tax goodw ill (245,277) - - (245,277) Encouraged accelerated depreciation (42,235) 42, Impairment 26,570 3,319-29,889 Derivatives (57,474) 5,172 - (52,302) Other 38,671 (9,451) - 29,220 (178,332) (50,393) (6,068) (234,793) Unutilized tax losses and credits Tax loss carryforw ards 131, ,615 Social contribution tax loss carryforw ards 47, ,858 1,141 (50,393) (6,068) (55,320) Openning balance as at Recognized in profit or loss for the period Recognized in other comprehensive loss Closing balance as at Temporary differences: Provision for tax, labor, civil and environmental contingencies 104,756 (727) - 104,029 Adjustment at fair value of biological assets (167,078) (6,380) - (173,458) Hedge accounting of Libor sw ap, NDF and exchange rate changes 276,563 - (21,967) 254,596 Unrealized exchange rate changes 105, , ,029 Amortization of tax goodw ill (245,277) - - (245,277) Mark-to-market of derivatives (255,525) 57,574 - (197,951) Impairment 53, ,609 Appreciation of acquired assets (297,126) 16,400 - (280,726) Assets held for sale Fair value of financial debts (8,182) 3,825 - (4,357) Other 44,165 (2,885) - 41,280 (388,184) 202,818 (21,967) (207,333) Unutilized tax losses and credits Tax loss carryforw ards 166, ,759 Social contribution tax loss carryforw ards 61, ,341 (160,084) 202,818 (21,967) 20,767 25

24 Openning balance as at Recognized in profit or loss for the period Recognized in other comprehensive loss Closing balance as at Temporary differences: Provision for tax, labor, civil and environmental contingencies 115,181 (7,802) - 107,379 Adjustment at fair value of biological assets (172,288) (67,441) - (239,729) Adjustment to present value (AVP) - Law (26) - - Hedge accounting of Libor sw ap, NDF and exchange rate changes 450,609 - (123,222) 327,387 Effect of translation of functional currency (68,856) 68, Unrealized exchange rate changes 467,850 (322,779) - 145,071 Amortization of tax goodw ill (245,277) - - (245,277) Mark-to-market of derivatives (310,814) 100,279 - (210,535) Encouraged accelerated depreciation (42,235) 42, Impairment 36,851 3,209-40,060 Appreciation of acquired assets (317,135) 17,538 - (299,597) Assets held for sale Fair value of financial debts (16,315) 5,228 - (11,087) Other 91,170 (25,470) - 65,700 (10,340) (186,173) (123,222) (319,735) Unutilized tax losses and credits Tax loss carryforw ards 167,850 (1,089) - 166,761 Social contribution tax loss carryforw ards 61,734 (393) - 61, ,244 (187,655) (123,222) (91,633) As at December 31, 2017, the contains tax loss carryforwards in the amount of R$2,690,863, in, and R$5,176,206 in (R$2,763,748 and R$5,059,650 as at March 31, 2017, respectively) for which no deferred income tax and social contribution assets have been recognized Management projections for the realization of deferred income tax and social contribution balances According to the s management projections, deferred income tax and social contribution arising from tax loss carryforwards will be realized as shown below, based on taxable income projection /2018 crop - 77,641-93, /2019 crop - 96,389 28, , /2020 crop - 5,443 12,216 5, /2021 crop - - 7, /2022 crop 36,016-36, /2023 crop 41,025-41,025 - Beginning April , , , , , ,100 The s deferred income tax and social contribution balances consist of tax loss carryforwards and temporary differences. The study on the realization of these balances focuses exclusively on the expected realization (utilization) of tax loss carryforwards. The projections of future taxable income include several estimates related to the performance of the Brazilian and international economies, exchange rate fluctuation, sales volume, sales price, tax rates, and others, which may change in relation to actual data and amounts. The s projected earnings are based on the increase of own sugarcane availability, production capacity increase, increase in sugarcane suppliers, specific projects for cost reduction and market price increase. As income tax and social contribution depend not only on taxable income but also on the existence of non-taxable income, non-deductible expenses and several other variables, there is no relevant correlation between the Group s net profit and income tax and social contribution on net profit. 26

25 11. INVESTMENTS (PROVISION FOR INVESTMENT LOSS) Investments in subsidiaries and jointly-controlled subsidiaries 488, , , ,885 Other investments 2,502 2,502 2,502 2,502 Investments 491, , , ,387 Provision for investment loss (1,113,260) (672,325) - - a) Interest in subsidiaries and jointly-controlled entities Biosev Bioenergia S.A. Biosev Bioenergia International Biosev Comercializadora de Energia S.A. Capital 843, ,000 44,701 Profit (loss) for the year (468,459) (402) 114 5,810 Equity (1,606,844) 75,467 1,948 50,459 Elimination of losses on the sale of property, plant and equipment w ith related parties (1,024) Ow nership interest 100% 100% 100% 50% Value of investments in subsidiaries under equity method (1,607,868) 75,467 1,948 25,230 Goodw ill/realization of concession value, net 494, ,483 Elimination of gains on the sale of property, plant and equipment w ith related parties Investments - 75,467 1, ,713 Provision for investment loss (1,113,260) Equity pick up in subsidiaries (467,930) (402) 114 2,905 TEAG b) Changes in investments in subsidiaries, jointly-controlled entities and non-controlled entities Biosev Bioenergia International Biosev Comercializadora de Energia S.A. Goodw ill Biosev Bioenergia S.A. Tavares de Melo (*) Ampla (*) Other Opening balance (1,166,404) 75,869 3, ,675 3,691 2,502 (673,332) (712,159) Capital decrease - - (1,501) (1,501) - Equity pick up in subsidiaries (467,930) (402) (468,218) (248,977) Other comprehensive income (loss) 22, , ,804 Capital increase 4, ,456 - Value of investments in subsidiaries under equity method (1,607,339) 75,467 1, ,675 3,691 2,502 (1,116,056) (673,332) Goodw ill 494, , ,079 Value of investments - 75,467 1, ,675 3,691 2, , ,072 Provision for investment loss (1,113,260) (1,113,260) (672,325) (*) Companies merged in prior years. TEAG Other Opening balance 185,885 2, , ,655 Dividends (3,379) Capital decrease (10,000) Equity pick up in subsidiaries (3,394) - (3,394) (7,889) Profit 2,905-2, Realization of concession value, net (6,299) - (6,299) (8,399) Other Value of investments 182,713 2, , ,387 27

26 c) Additional information on the main investments in operating subsidiaries (direct and indirect) Crystalsev Comércio e Representação Ltda. Direct subsidiary On March 9, 2017, the shareholders of Crystalsev Comércio e Representação Ltda. ("Crystalsev") approved the reduction of the capital stock of Crystalsev, in the amount of R$49,270, by means of the delivery of the total interest of Crystalsev in Sociedade Operadora Portuária de São Paulo Ltda. ("SOP"), corresponding to 85% of the share capital of SOP, such delivery being made by Crystalsev to its partners, in proportion to the interest held by each partner in Crystalsev. As provided for in article 1,084, paragraphs 1 and 2, of the Civil Code, such approval will be effective after 90 days from the date of publication of the minutes of the meeting, provided that there is no opposition by creditors, in which case the capital reduction of Crystalsev will be approved. In December 2017 the process referred to above is underway. Also, on March 9, 2017, the shareholders of Crystalsev Comércio e Representação Ltda. ("Crystalsev") approved the assignment and transfer of all Crystalsev's shares held by Sociedade Agrícola Orindiúva Ltda. ("Orindiúva"), corresponding to 6,248,443 shares, of which: (a) 6,065,363 shares of Crystalsev were transferred to Biosev Bioenergia S.A., for the total amount of R$1.00; and (b) 183,080 shares of Crystalsev were transferred to Pioneiros Participações S.A., for the total amount of R$1.00. As a result of such transfers, Orindiúva withdraw from Crystalsev and Biosev Bionergia S.A. interest in Crystalsev increased from 90.45% to 93.08%. Biosev Comercializadora de Energia S.A. Direct subsidiary On July 31, 2017, the Extraordinary Shareholders Meeting of Biosev Comercializadora de Energia S.A. approved the s capital reduction, in the amount of R$1,501, from R$2,501 to R$1,000, upon the cancellation and termination of 1,501,000 registered common shares, with no par value, at the issuance price of R$1 per share, determined based on the share equity value. On October 31, 2017, the Extraordinary Shareholders Meeting confirmed the capital reduction and amended the s Bylaws. Biosev Terminais Portuários e Participações Ltda. Indirect subsidiary On September 29, 2017, the shareholders of Biosev Terminais Portuários e Participações Ltda., by means 22nd Amendment and Consolidation of the Articles of Incorporation, registered at the Junta Comercial do Estado de São Paulo on December 5, 2017, approved the s capital increase, in the amount of R$4,495, from R$39,261 to R$43,756, upon the issuance of 4,494,968 s new shares, at par value of R$1 each, paid upon conversion in cash of the proceeds from the Agreements for Advances for Future Capital Increase, entered into on September 11, d) Investments in jointly-controlled entities Terminal de Exportação de Açúcar do Guarujá Ltda. (TEAG) Due to the s control over Crystalsev Comércio e Representação Ltda. (Crystalsev) on December 28, 2011, the recognized, through its indirect subsidiary Sociedade Operadora Portuária (SOP), for accounting purposes, 50% of TEAG s capital. This investment results from a joint venture between SOP and Cargill Agrícola S.A., a company headquartered in Guarujá, SP, engaged in the undertaking of operations typical of a port operator and shipping agency; road transportation of goods for own account or for third parties; the provision of services for own account or for third parties, and the provision of specialized, commercial and industrial assistance to other local or foreign entities; and holding interests in other entities as shareholder. 28

27 The respective balance sheet and statement of operations are broken down as follows: TEAG Balance sheet Assets Total current assets 47,887 34,917 Long-term receivables 1,066 1,209 Property, plant and equipment and intangible assets 13,363 22,966 Total non-current assets 14,429 24,175 Total assets 62,316 59,092 Liabilities Total current liabilities 8,050 9,634 Total non-current liabilities 3,807 5,253 Equity Total equity 50,459 44,205 Total liabilities and equity 62,316 59,092 TEAG Statement of profit and loss Net revenue 69,695 66,746 Operating expenses General, administrative and selling (64,126) (64,823) Other operating income (loss) 1,626 (1,044) Operating profit (loss) before finance income (expenses) 7, Finance income, net 1,589 2,921 Income (loss) before income taxes 8,784 3,800 Income tax and social contribution (2,974) (1,225) Profit (loss) for the year 5,810 2, PROPERTY, PLANT AND EQUIPMENT Cost Accumulated depreciation Net Cost Accumulated depreciation Net Land 16,752-16,752 16,752-16,752 Buildings 323,491 (117,376) 206, ,889 (113,643) 209,246 Improvements 55,146 (31,983) 23,163 53,905 (30,620) 23,285 Facilities 426,890 (223,866) 203, ,069 (206,485) 213,584 Furniture and fixtures 16,257 (9,676) 6,581 16,029 (8,986) 7,043 IT equipment 35,190 (30,283) 4,907 35,724 (30,037) 5,687 Machinery and equipment (*) 2,498,046 (1,502,703) 995,343 2,422,801 (1,363,485) 1,059,316 Vehicles 21,097 (16,490) 4,607 21,277 (15,949) 5,328 Agricultural machinery and implements (**) 870,765 (730,651) 140, ,843 (652,792) 160,051 Bearer Plant 1,844,214 (1,312,341) 531,873 1,805,325 (1,148,741) 656,584 6,107,848 (3,975,369) 2,132,479 5,927,614 (3,570,738) 2,356,876 Construction in progress (Note 12.1) 16,811-16,811 15,393-15,393 6,124,659 (3,975,369) 2,149,290 5,943,007 (3,570,738) 2,372,269 (*) Includes deferred manufacturing costs. (**) Includes deferred agricultural costs. 29

28 Cost Accumulated depreciation Net Cost Accumulated depreciation Net Land 19,307-19,307 19,307-19,307 Buildings 531,569 (195,722) 335, ,863 (188,025) 342,838 Improvements 157,973 (71,300) 86, ,605 (67,437) 89,168 Facilities 605,725 (309,440) 296, ,845 (283,070) 312,775 Furniture and fixtures 24,580 (15,235) 9,345 24,294 (14,288) 10,006 IT equipment 61,855 (49,526) 12,329 60,862 (47,943) 12,919 Machinery and equipment (*) 5,487,993 (3,372,191) 2,115,802 5,387,677 (3,068,987) 2,318,690 Vehicles 55,707 (49,875) 5,832 57,120 (49,778) 7,342 Agricultural machinery and implements (**) 1,396,759 (1,154,369) 242,390 1,324,142 (1,036,049) 288,093 Bearer Plant 3,027,895 (2,168,628) 859,267 2,950,380 (1,891,005) 1,059,375 11,369,363 (7,386,286) 3,983,077 11,107,095 (6,646,582) 4,460,513 Construction in progress (Note 12.1) 43,369-43,369 28,512-28,512 11,412,732 (7,386,286) 4,026,446 11,135,607 (6,646,582) 4,489,025 (*) Includes deferred manufacturing costs. (**) Includes deferred agricultural costs. Changes in the net value of property, plant and equipment are as follows: Opening balance 2,372,269 2,336,375 4,489,025 4,489,503 Acquisitions and additions 216, , , ,686 Residual value of w rite-offs (14,621) (10,683) (20,297) (12,370) Impairment reversal (*) 5,074 1,001 5,284 2,087 Depreciation for the year/period (430,170) (439,892) (772,534) (807,881) 2,149,290 2,372,269 4,026,446 4,489,025 (*) See Note Construction in progress Construction in progress is broken down by plant as follows: Plant Leme 2,614 1,212 2,614 1,212 Passatempo 2,438 1,929 2,438 1,929 Giasa 254 6, ,679 Lagoa da Prata 3, , Rio Brilhante 5, , Maracaju - 3,028-3,028 Estivas 1, , Santa Elisa ,042 7,865 Vale do Rosário - - 8,024 1,095 MB - - 5,007 2,950 Continental - - 1,485 1,209 Corporativo ,811 15,393 43,369 28,512 30

29 The balance of construction in progress refers basically to the adaptation of industrial facilities, increase in sugar production and refurbishment of administrative facilities Fixed assets given in guarantees and commitments for acquisition of fixed assets As at December 31, 2017, the had agreements with suppliers for acquisition of fixed assets, amounting to R$74,584 (R$30,072 as at March 31, 2017), and total fixed assets given in guarantees in the amount of R$1,106,635 (R$1,160,611 as at March 31, 2017) Impairment As at December 31, 2017, the impairment was reversed in the amount of R$5,074 in and R$5,284 in due the sales and/or transfers of fixed assets between industrial clusters of the Group. As at December 31, 2017, the accumulated balance of impairment is R$65,753 in and R$190,026 in (R$70,827 and R$195,310 as at March 31, 2017, respectively). The main impaired assets comprise land, buildings, furniture and fixtures, computers, machinery and equipment, vehicles, and agricultural machinery and implements. 13. INTANGIBLE ASSETS Goodw ill Biosev Bioenergia , ,079 Usinas Tavares de Melo , ,675 Ampla - - 3,691 3, , ,445 Softw are Licenses 13,441 16,606 14,737 18,549 13,441 16,606 14,737 18,549 Other - - 5,886 7, ,886 7,313 13,441 16, , ,307 Changes in intangible assets are as follows: Additions Amortization Softw are Licenses 16,606 1,947 (5,112) 13,441 16,606 1,947 (5,112) 13, Additions Amortization Softw are Licenses 16,826 5,753 (6,969) 15,610 16,826 5,753 (6,969) 15,610 31

30 Goodw ill Additions Amortization Biosev Bioenergia 494, ,079 Usinas Tavares de Melo 407, ,675 Ampla 3, ,691 Softw are Licenses 18,549 2,157 (5,969) 14,737 Other Other 7,313 - (1,427) 5,886 Goodw ill 931,307 2,157 (7,396) 926, Additions Amortization Biosev Bioenergia 494, ,079 Usinas Tavares de Melo 407, ,675 Ampla 3, ,691 Softw are Licenses 20,724 5,933 (8,077) 18,580 Other Other 7,994 - (1,241) 6, ,163 5,933 (9,318) 930, BORROWINGS AND FINANCING Description Currenc Weighted average financial charges Maturity (*) Collaterals Advance on Foreign Exchange Contract (ACC) (a) US$ Financing - BNDES R$ Exchange rate change plus average interest rate of 6.79% p.a. TJLP plus average interest rate of 4.59% p.a. or currency basket plus average interest rate of 4.80% p.a. From to From to Guarantee and promissory note 771, ,819 Lien, guarantee and promissory note 3,673 14,196 Export Prepayment - PPE (a) US$ Exchange rate change plus Libor plus average Promissory note, receivables and Em interest rate of 5.72% p.a. guarantee 514, ,587 Constitutional Fund to Finance the the Midwest - FCO R$ Interest of 8.5% p.a. As at Collateral and financed assets and receivables 83,011 93,387 Finame R$ Average interest rate of 9.93% p.a. From to Mortgage, lien, guarantee and promissory note 8,791 5,479 FIDC (a)/(d) R$ Average interest rate of 14.20% p.a. As at ,449 7,302 Export Credit Note and Bill - NCE R$ Average interest rate of 4.38% of CDI From to Guarantee and promissory note 337, ,585 Offshore Loan - Proparco (a) US$ Exchange rate change plus Libor plus average interest rate of 6.22% p.a. As at Credit rights and machinery and equipment 198, ,839 Bank Credit Note - CCB R$ Average interest rate of 16.65% p.a. or average As at to Collection and assignment of receivables interest rate of % of CDI rate , ,209 2,122,679 2,375,403 Current liabilities 1,164, ,635 Non-current liabilities 958,629 1,614,768 (*) Refers to the last maturity date of the agreements. 32

31 Description Currenc Weighted average financial charges Maturity (*) Collaterals Restructured debt (ex-debentures) - R$ R$ CDI plus 1.72% p.a. Restructured debt - US$ US$ Exchange rate change plus Libor + average interest rate of 2.47% p.a. From to As at Restructured debt (Debenture) - R$ (a) R$ CDI plus 1.72% p.a. As at Advance on Foreign Exchange Contract - ACC (a) US$ Financiamentos BNDES R$ Exchange rate change plus average interest rate of 7.16% p.a. TJLP plus average interest rate of 4.59% p.a. or currency basket plus average interest rate of 4.80% p.a. From to From to Guarantee, receivables, mortgage and shares Guarantee, receivables, mortgage and shares Guarantee, receivables, mortgage and shares 169, , , , , ,385 Guarantee and promissory note 2,024,237 2,393,542 Mortgage, financed assets, guarantee and promissory note 3,673 14,196 Export Prepayment PPE (a)/(c) US$ Exchange rate change plus Libor + average interest From to Guarantee, promissory note and rate of 5.65% p.a receivables 1,245,033 1,008,973 Constitutional Fund to Finance the the Midwest - FCO R$ Interest of 8.5% p.a. As at Collateral and financed assets and receivables 83,011 93,387 Finame R$ Average interest rate of 9.33% p.a. From to Financed assets, guarantee and promissory note 16,790 18,624 FIDC (a)/(d) R$ Average interest rate of 14.20% p.a. As at ,634 18,393 Rural Securitization Program (PESA) R$ IGP-M plus 4% p.a. From to Guarantee, promissory note and National Treasury Certificate (CTN) 4,223 7,845 Export Credit Note and Bill - NCE (b) R$/US$ Average interest rate of 8.50% of CDI or exchange From to rate change plus interest of 4.38% p.a Guarantee and promissory note 461, ,792 Offshore Loan - Proparco (a) US$ Exchange rate change plus Libor plus average Mortgage, credit rights and machinery and As at interest rate of 6.22% p.a. equipment 198, ,217 Bank Credit Note - CCB R$ Average interest rate of 16.65% p.a. or average From to Collection and assignment of receivables interest rate of % of CDI rate , ,210 5,453,195 6,288,654 Current liabilities 2,097,934 1,944,007 Non-current liabilities 3,355,261 4,344,647 (*) Refers to the last maturity date of the agreements. (a) Net of commission costs and deferred expenses, in the amount of R$37,088 as at December 31, 2017 (R$53,379 as at March 31, 2017), monthly recorded in profit or loss through the maturity of such transaction. (b) As at December 31, 2017, the US debt amounts to R$44,841 in (R$45,065 as at March 31, 2017). (c) Include export prepayments, contracted on January 9, 2015, by subsidiary Biosev Bioenergia International S.A. with the trade union of foreign financial institutions, in the amount of R$730,367 as at December 31, 2017 (R$441,849 as at March 31, 2017). These operations are collateralized by a set of assets for settlement. As at December 31, 2017, the foreign currency-denominated deposits comprise, together with the agricultural production (sugarcane) of specific units and sugar and ethanol inventories, the ratio of % of the obligations. (d) The created a Receivables Investment Fund (FIDC) in July 2016 to sell a portion of its receivables from sales in installments in the domestic market, in the amount of R$60,000 (principal), out of which R$9,000 was recorded by subordinated units. As at December 31, 2017, the amount of outstanding invoices negotiated with the fund totaled R$34,747 (R$18,393 as at March 31, 2017). Non-current liabilities mature as follows (crop year): January 2019 to March , ,930 April 2019 to March ,146 2,099,555 April 2020 to March , ,311 April 2021 to March , ,104 April 2022 to October , , ,629 3,355,261 Some of the financing agreements entered into by the contain restrictive covenants, including the debt restructuring agreement of Biosev Bioenergia S.A., as set out in the Obligation Acknowledgment Master Agreement and Other Covenants entered into on October 26, 2009, and the related agreements, as part of the acquisition process of Biosev Bioenergia S.A. 33

32 These restrictive covenants, applicable beginning 2010 (inclusive), require compliance with a minimum current liquidity ratio, net debt-to-ebitda (earnings before interest, taxes, depreciation and amortization) ratio, as defined in the terms of contracts, and EBITDA-to-net financial expenses ratio. The verification of compliance with the restrictive covenants occurs annually, at the close of s year. As at March 31, 2017, the was compliant with the contractual provisions of its borrowings and financing. 15. TRADE PAYABLES Related parties (Note 18) In Brazil 7,565 9, ,670 25,105 Abroad 58,475 15, ,127 53,602 66,040 24, ,797 78,707 Third parties In Brazil 267, , , ,523 Abroad ,781 84,005 90, , , , , , , , ,989 Current liabilities 333, , , ,048 Non-current liabilities 598 1,039 1,310 1, TAXES AND CONTRIBUTIONS PAYABLE Installments plan (*) - - 1,925 1,877 IPI ,065 State VAT (ICMS) 7,511 7,123 19,773 15,651 Tax on revenue (PIS and COFINS) ,120 1,041 Social Securities Tax (INSS) 6,144 7,643 12,760 16,563 Income tax (IRPJ) and social contribution (CSLL) ,711 8,447 Withholding tax (IRPF) (**) 47,536-47,536 - Other 3,362 4,032 3,473 5,000 65,683 20,396 95,514 49,644 (*) Refer to the adhesion of installments plans in the State of Mato Grosso do Sul, according to Attachment IX, of Decree 9203/1998 RICMS/MS, including the outstanding ICMS credits subject to reduction of interest and fines, and extension of payment term. (**) Refers to Withholding Tax (IRPF) related to the process No to the Instituto do Açúcar e do Álcool - IAA, as described in Note 26 (e). 34

33 17. PROVISION FOR TAX, LABOR, CIVIL AND ENVIRONMENTAL CONTINGENCIES The is a party to various ongoing lawsuits involving tax, labor, civil and environmental matters arising in the normal course of business Inflation adjustment Additions Reversals Payments Tax IRPJ/CSLL Labor 97,800 (1,039) 31,324 (16,116) (9,267) 102,702 Environmental 9, (38) (2) 10,031 Civil 5,977 (147) 1,625 (205) (479) 6, ,889 (492) 33,214 (16,359) (9,748) 119, ,960 (489) 33,214 (16,359) (9,748) 119,578 Tax Inflation adjustment Additions Reversals Payments ICMS 219 (113) - (106) - - IRPJ/CSLL 801 (181) - (550) - 70 Social security contributions 12,163 (2,384) - (9,779) ,183 (2,678) - (10,435) - 70 Labor 79,811 3,311 31,457 (13,200) (5,256) 96,123 Environmental 7, (285) - 8,888 Civil 5, (60) - 5,839 93,018 4,432 32,201 (13,545) (5,256) 110, ,201 1,754 32,201 (23,980) (5,256) 110,920 Tax Inflation adjustment Additions Reversals Payments IPI levied on sugar sales 17, ,295 IPI PIS and COFINS 3, ,406 IRPJ/CSLL 2, ,848 Other , ,565 Labor 209,669 (7,274) 58,482 (28,610) (32,786) 199,481 Environmental 45,181 2,990 3,021 (845) (2) 50,345 Civil 29,130 1,123 2,775 (497) (777) 31, ,980 (3,161) 64,278 (29,952) (33,565) 281, ,282 (2,898) 64,278 (29,952) (33,565) 305,145 35

34 Inflation adjustment Additions Reversals Payments Tax IPI levied on sugar sales 16, ,921 IPI PIS and COFINS 6,380 (2,004) - (970) - 3,406 ICMS 218 (112) - (106) - - IRPJ/CSLL 9,448 (3,103) - (3,502) - 2,843 Social security contributions 38,032 (7,748) - (30,284) - - Other 724 (386) - (322) ,499 (12,983) - (35,184) - 23,332 Labor 200,054 4,693 62,100 (20,083) (28,880) 217,884 Environmental 38,674 2,316 5,289 (2,310) (20) 43,949 Civil 28,074 1, (111) - 29, ,802 8,589 67,673 (22,504) (28,900) 291, ,301 (4,394) 67,673 (57,688) (28,900) 314,992 Contingencies - court or out-of-court claims classified as possible losses and not provided for Tax The tax claims (court and out-of-court) existing as at December 31, 2017, with an acknowledged possible likelihood of loss and not provided for are shown in the table below: Tax 622, ,320 1,537,921 1,720, , ,320 1,537,921 1,720,360 Among the contingencies for which a provision has not been recognized and that have been assessed as possible loss is the collection of ICMS due to an alleged difference identified in inventories. Additionally, there is a discussion also involving ICMS on the reasonableness in levying ICMS on export of semi-finished products. Civil and labor The civil and labor claims (court and out-of-court) as at December 31, 2017, with an acknowledged possible likelihood of loss and not provided for are shown in the table below: Civil 31,551 27,632 52,670 43,794 Labor 48,414 26, , ,254 79,965 54, , ,048 As at December 31, 2017, the Group was a party to labor and civil lawsuits whose likelihood of loss is considered possible based on the opinion of Group s legal counsel. Labor claims are substantially related to (i) working hours; (ii) time in transit; (iii) additional premiums; (iv) refund of deductions, such as trade union fees; (v) contractual exclusivity; (vi) jointly-liability with service providers; (vii) occupational accidents and/or hazards/diseases; (viii) organizational climate; (ix) validity of the collective bargaining agreement, and (x) compensation costs in relation to the items mentioned above. The civil lawsuits basically refer to discussions involving contractual issues and occupational and/or traffic accidents, collection, possession issues and general indemnities. 36

35 18. RELATED PARTIES The information on related-party transactions was not significantly changed compared to that disclosed in the financial statements as at March 31, The related-parties transactions presented in the tables below, basically refer to: (i) product sales in the domestic and foreign market by price agreed between the parties, based on the market prices; (ii) loans; (iii) cost-sharing related to sharing structures; (iv) provision of services related to market advisory and brokerage services related to derivative transactions; (v) commodities exports performance; (vi) purchase of inputs operations, sugarcane, rural lease and/or agricultural partnership, sugar elevation and sugar storage. The table below shows the balances and transactions as at December 31, 2017 between the and its subsidiaries, which are consolidated in its balance sheet: Subsidiaries Trade receivables Assets Total Biosev Bioenergia International S.A. 52,572 52,572 Biosev Bioenergia S.A. 17,963 17, ,535 70,535 Biosev Bioenergia International S.A. 31,659 31,659 Biosev Bioenergia S.A. 2,363 2, ,022 34,022 Subsidiaries Trade payables (*) Liabilities Advances from customers (**) Loan (***) Total Biosev Bioenergia International S.A. 59, , ,791 Biosev Bioenergia S.A. 6, , ,244 Sociedade Operadora Portuária de São Paulo Ltda ,892 11, , , ,283 1,108,927 Biosev Bioenergia International S.A. 15, , ,111 Biosev Bioenergia S.A. 4, , ,484 Sociedade Operadora Portuária de São Paulo Ltda ,256 11, , , , ,851 (*) As at December 31, 2017, the amount of R$1,948 was recorded in current liabilities in line item Other payables. (**) As at December 31, 2017, the amounts of R$281,178 (R$192,025 as at March 31, 2017) and R$132,307 (R$55,787 as at March 31, 2017) were recorded in current liabilities and non-current liabilities, respectively. (***) As at December 31, 2017, out of total amount of R$629,283, recorded in non-current liabilities in line item Other payables". 37

36 Subsidiaries Sales Income Interest and exchange rate Profit (loss) changes Total Purchases Expenses Interest and exchange rate changes Biosev Bioenergia International S.A. 609, ,648 (38) (11,456) (11,494) Biosev Bioenergia S.A. 76,139-76,139 - (25,679) (25,679) Sociedade Operadora Portuária de São Paulo Ltda (657) (657) , ,787 (38) (37,792) (37,830) Total Biosev Bioenergia International S.A. 600,634 30, ,469 - (10,109) (10,109) Biosev Bioenergia S.A. 10,508-10,508 (31,641) (54,235) (85,876) Sociedade Operadora Portuária de São Paulo Ltda (830) (830) ,142 30, ,977 (31,641) (65,174) (96,815) The table below shows the balances and transactions as at December 31, 2017 between the and other related parties: Derivatives (*) Trade receivables Assets Advances to suppliers Companies under common control Louis Dreyfus Brasil S.A Term Commodities Inc. 18, , , ,610 Total Companies under common control Louis Dreyfus Brasil S.A , ,091 Term Commodities Inc. 11, ,048 11, , ,139 controlled by a relative of a 's key management member Sermatec Industria e Montagens Ltda. - 4,143-4,143-4,143-4, ,048 4, , ,282 (*) As at December 31, 2017, the amount of R$18,604 (R$11,048 as at March 31, 2017) was recorded in line item Shortterm investments, relating to margin deposits in derivative transactions. 38

37 Derivatives (*) Trade receivables Advances to suppliers Companies under common control Louis Dreyfus Ethanol Merchandising LLC Louis Dreyfus Brasil S.A Louis Dreyfus Suisse S.A. - 65,420-65,420 Louis Dreyfus Sucos S.A Term Commodities Inc. 18, ,604 controlled by a relative of a 's key management member Assets Total 18,604 65,489-84,093 Alebisa Empreendimento e Participações Ltda Anbisa Agricultura Ltda Beabisa Agricultura Ltda Beabisa Agro Comercial e Empreendimentos Ltda Carbisa Agricultura Ltda Edimasa Agricultura Ltda Elbel Comércio e Participações Ltda ,136 1,136 Panorama Agricultura Ltda Usina Santa Elisa S.A ,868 2,868 Relative of a 's key management member Beatriz Biagi Becker Maurilio Biagi Filho ,604 65,489 3,229 87,322 Companies under common control Louis Dreyfus Ethanol Merchandising LLC Louis Dreyfus Brasil S.A , ,589 LDC Trading and Services Co. S.A Louis Dreyfus Suisse S.A. 53,226 10,009-63,235 Term Commodities Inc. 11, ,048 controlled by a relative of a 's key management member 64,274 10, , ,110 Alebisa Empreendimento e Participações Ltda Anbisa Agricultura Ltda B5 Participações Ltda Beabisa Agricultura Ltda Beabisa Agro Comercial e Empreendimentos Ltda Carbisa Agricultura Ltda Edimasa Agricultura Ltda Elbel Comércio e Participações Ltda ,829 1,829 Panorama Agricultura Ltda Usina Santa Elisa S.A Sermatec Industria e Montagens Ltda. - 4,143-4,143-4,143 5,196 9,339 Relative of a 's key management member Beatriz Biagi Becker Edilah Faria Lacerda Biagi Maurilio Biagi Filho ,274 14, , ,240 (*) As at December 31, 2017, the amount of R$18,604 (R$11,048 as at March 31, 2017) was recorded in line item Shortterm investments, relating to margin deposits in derivative transactions. 39

38 Derivatives Trade payables Liabilities Advances from customers (*) Companies under common control Louis Dreyfus Ethanol Merchandising LLC - 1,117-1,117 Louis Dreyfus North Latam Holdings BV , ,860 Louis Dreyfus Brasil S.A Sugar Netherlands Finance BV , ,876 Term Commodities Inc. 1, , ,138 1, , ,703 Total Companies under common control Louis Dreyfus Ethanol Merchandising LLC Louis Dreyfus North Latam Holdings BV , ,598 Louis Dreyfus Brasil S.A. - 2,038-2,038 Louis Dreyfus Suisse S.A , ,202 Sugar Netherlands Finance BV , ,076 Macrofértil Indústria e Comércio de Fertilizantes Ltda. - 2,425-2,425 Term Commodities Inc ,502 1,096,876 1,101,940 (*) As at December 31, 2017, the amount of R$32,823 (R$273,092 as at March 31, 2017) in current liabilities and R$883,913 (R$823,784 as at March 31, 2017) in non-current liabilities, recorded in advances from foreign customers, relating to 2017/2018, 2018/2019 and 2019/2020 crops, may be extend for one or more crop years by mutual agreement between the parties. 40

39 Derivatives Trade payables Advances from customers (*) Companies under common control Louis Dreyfus Brasil S.A , ,036 Louis Dreyfus Suisse S.A , ,320 Louis Dreyfus North Latam Holdings BV - - 1,643,387 1,643,387 Sugar Netherlands Finance BV , ,692 Louis Dreyfus Ethanol Merchandising LLC - 1,807-1,807 Term Commodities Inc. 1, ,138 Total 1, ,163 2,467,079 2,750,380 Companies controlled by a relative of a 's key management member Alebisa Empreendimento e Participações Ltda Anbisa Agricultura Ltda B5 Participações Ltda Beabisa Agricultura Ltda Beabisa Agro Comercial e Empreendimentos Ltda Carbisa Agricultura Ltda Edimasa Agricultura Ltda Elbel Comércio e Participações Ltda. - 3,067-3,067 Panorama Agricultura Ltda Usina Santa Elisa S.A ,209-6,209 Relative of a 's key management member Beatriz Biagi Becker Edilah Faria Lacerda Biagi , ,797 2,467,079 2,757,014 Companies under common control Louis Dreyfus Brasil S.A. - 10,597-10,597 Louis Dreyfus Suisse S.A. - 52, , ,547 Louis Dreyfus North Latam Holdings BV 1,361,097 1,361,097 Sugar Netherlands Finance BV , ,448 Louis Dreyfus Ethanol Merchandising LLC Macrofértil Indústria e Comércio de Fertilizantes Ltda. - 3,134-3,134 Term Commodities Inc , ,333 2,568,641 2,636,536 Companies controlled by a relative of a 's key management member Alebisa Empreendimento e Participações Ltda Anbisa Agricultura Ltda B5 Participações Ltda Beabisa Agricultura Ltda Carbisa Agricultura Ltda Edimasa Agricultura Ltda Elbel Comércio e Participações Ltda. - 5,165-5,165 Panorama Agricultura Ltda Usina Santa Elisa S.A Companies under common control Liabilities - 9,984-9,984 TEAG - Terminal Exp. Açúcar Guarujá Ltda. - 1,048-1,048-1,048-1,048 Relative of a 's key management member Beatriz Biagi Becker Edilah Faria Lacerda Biagi ,707 2,568,641 2,647,910 (*) As at December 3, 2017, out of total amount of R$369,528 (R$515,922 as at March 31, 2017) recorded in line item Advances from foreign customers", in current liabilities, the amount of R$87,949 (R$442,903 as at March 31, 2017) refers to related parties, as shown in the table above. The remaining amount of R$2,379,130 (R$2,427,670 as at March 31, 2017) was recorded in line item Advances from foreign customers", in non-current liabilities (R$2,125,738 as at March 31, 2017). These amounts relating to 2017/2018, 2018/2019 and 2019/2020 crops may be extend for one or more crop years by mutual agreement between the parties. 41

40 Companies under common control Sales Interest and exchange rate Total income Purchases Interest and exchange rate Total expenses Louis Dreyfus Sucos S.A (2) - (2) Louis Dreyfus Brasil S.A. 1-1 (227,080) (151) (227,231) Louis Dreyfus Suisse S.A. 123, , Louis Dreyfus Asia Pte. Ltd. 177, , Macrofértil Indústria e Comércio de Fertilizantes Ltda Louis Dreyfus Ethanol Merchandising LLC (1,101) - (1,101) Louis Dreyfus North Latam Holdings BV - 5,824 5,824 - (42,377) (42,377) Sugar Netherlands Finance BV - 17,738 17,738 - (23,875) (23,875) Term Commodities Inc (867) (242) (1,109) ,752 23, ,314 (229,050) (66,645) (295,695) Income Profit (loss) Expenses Companies under common control Louis Dreyfus Brasil S.A (988,620) (2,181) (990,801) Louis Dreyfus Suisse S.A. 410,720 17, ,319 - (18,245) (18,245) Macrofértil Indústria e Comércio de Fertilizantes Ltda (975) - (975) Louis Dreyfus Asia Pte. Ltd. 489, , Berghmelk BV - 32,432 32,432 - (9,651) (9,651) Sugar Netherlands Finance BV - 8,010 8,010 - (3,193) (3,193) Term Commodities Inc. - 4,305 4,305 (58,808) (2,429) (61,237) 900,508 62, ,854 (1,048,403) (35,699) (1,084,102) controlled by a relative of a 's key management member Renk Zanini S.A. Equipamentos Industriais ,786 62, ,132 (1,048,403) (35,699) (1,084,102) 42

41 Sales Interest and exchange rate changes Total income Purchases Interest and exchange rate changes Total expenses Companies under common control Louis Dreyfus Ethanol Merchandising LLC (2,298) - (2,298) LDC Trading and Services Co.S.A (679) - (679) Louis Dreyfus Sucos S.A. 1,246-1,246 (3) - (3) Louis Dreyfus North Latam Holdings BV (223,326) (223,326) Louis Dreyfus Brasil S.A. 1-1 (730,222) (151) (730,373) Louis Dreyfus Suisse S.A. 1,077,295-1,077,295 (56,770) (398) (57,168) Louis Dreyfus Asia Pte. Ltd. 544, , Macrofértil Indústria e Comércio de Fertilizantes Ltda Sugar Netherlands Finance BV (103,149) (103,149) Term Commodities Inc (867) (451) (1,318) 1,623, ,623,341 (790,839) (327,475) (1,118,314) Jointly-controlled entity Teag-Terminal Exp. Açúcar Guarujá Ltda (44,726) (74) (44,800) (44,726) (74) (44,800) Companies controlled by a relative of a 's key management member Alebisa Empreendimento e Participações Ltda (2,328) - (2,328) Anbisa Agricultura Ltda (2,432) - (2,432) B5 Participações Ltda (1,928) - (1,928) Beabisa Agricultura Ltda (2,593) - (2,593) Beabisa Agro Comercial e Empreendimentos Ltda (37) - (37) Carbisa Agricultura Ltda (2,447) - (2,447) Edimasa Agricultura Ltda (1,875) - (1,875) Elbel Comércio e Participações Ltda (15,220) - (15,220) Panorama Agricultura Ltda (2,648) - (2,648) Santa Elisa Participações S.A (1,078) - (1,078) Usina Santa Elisa S.A (1,197) - (1,197) (33,783) - (33,783) Relative of a 's key management member Beatriz Biagi Becker (436) - (436) Edilah Faria Lacerda Biagi (1,532) - (1,532) (1,968) - (1,968) ,623, ,623,341 (871,316) (327,549) (1,198,865) Companies under common control Louis Dreyfus Ethanol Merchandising LLC (16,749) - (16,749) LDC Trading and Services Co.S.A (670) (16) (686) Berghmelk BV - 81,080 81,080 - (24,126) (24,126) Louis Dreyfus Brasil S.A (1,636,445) (4,397) (1,640,842) Louis Dreyfus Suisse S.A. 1,320,157 41,728 1,361,885 (74,724) (46,889) (121,613) Louis Dreyfus Asia Pte. Ltd. 900, , Macrofértil Indústria e Comércio de Fertilizantes Ltda (1,684) - (1,684) Sugar Netherlands Finance BV - 124, ,032 - (91,455) (91,455) Term Commodities Inc. - 4,305 4,305 (58,808) (2,672) (61,480) 2,221, ,145 2,472,152 (1,789,080) (169,555) (1,958,635) Jointly-controlled entity Teag-Terminal Exp. Açúcar Guarujá Ltda (14,370) (108) (14,478) (14,370) (108) (14,478) Companies controlled by a relative of a 's key management member Alebisa Empreendimento e Participações Ltda (2,973) - (2,973) Anbisa Agricultura Ltda (3,274) - (3,274) B5 Participações Ltda (2,267) - (2,267) Beabisa Agricultura Ltda (2,043) - (2,043) Carbisa Agricultura Ltda (2,157) - (2,157) Edimasa Agricultura Ltda (1,815) - (1,815) Elbel Comércio e Participações Ltda (16,385) - (16,385) Panorama Agricultura Ltda (826) - (826) Renk Zanini S.A. Equipamentos Industriais Santa Elisa Participações S.A (351) - (351) Usina Santa Elisa S.A (1,679) - (1,679) (33,770) - (33,770) Relative of a 's key management member Beatriz Biagi Becker (1,044) - (1,044) Edilah Faria Lacerda Biagi (3,583) - (3,583) (4,627) - (4,627) ,221, ,145 2,472,557 (1,841,847) (169,663) (2,011,510) Income Profit (loss) Expenses 43

42 d) Compensation of key management personnel The compensation of officers and other key management personnel for the period is as follows: and Three-month period ended Nine-month period ended Short-term benefits 1,496 2,059 6,729 10,064 Long-term benefits - - 1,304 4,988 1,496 2,059 8,033 15,052 Short-term benefits of the key management personnel consist of salaries, social security and pension plan contributions, payroll taxes, profit sharing, and short-term performance bonuses. Long-term benefits include performance bonus and deferred benefits that expired in each financial statements. 19. EQUITY Capital Changes in capital are as follows: Shares In thousands of Brazilian reais - R$ Common Capital Capital reserve ,628,363 2,618,214 1,355, ,628,363 2,618,214 1,360,072 As at December 31, 2017, capital is represented by 219,628,363 common shares (219,628,363 common shares as at March 31, 2017), all registered and without par value. In accordance with the s Bylaws, the is authorized to increase its capital by up to 167,000,000 registered common shares, with no par value, regardless of any amendment to the bylaws, based on a Board of Directors resolution, as well as define the price and other issuance terms and conditions. Capital reserve Capital reserve is composed of the balances of goodwill reserves in the issuance of shares, buyback of shares and costs directly related to the offer of shares. 44

43 20. NET REVENUES AND COST OF SALES AND SERVICES Gross revenue Domestic market Three-month period ended Nine-month period Sugar 103, , , , , , , ,066 Ethanol 366, , , , , ,486 1,647,156 1,284,870 Energy 34,269 49, , , ,703 77, , ,662 Other 1,819 5,327 6,567 12,973 18,375 33,679 52,131 84, , ,767 1,181,964 1,139, , ,679 2,343,927 2,140,300 Foreign market (f) Sugar 171, , , , , ,277 2,303,366 1,894,997 Ethanol - - 2,121 2, , ,126 Other (a) - 119, , , , ,964 1,487,106 ended Three-month period ended Nine-month period ended 171, , ,140 1,340, , ,998 3,138,211 3,529, , ,677 2,115,104 2,480,302 1,675,900 1,630,677 5,482,138 5,669,529 Taxes (b) (49,766) (29,079) (116,418) (75,490) (134,330) (76,241) (322,455) (201,043) Sales rebates (4,676) (3,273) (6,461) (7,113) (6,137) (3,903) (11,967) (15,730) Net revenue 622, ,325 1,992,225 2,397,699 1,535,433 1,550,533 5,147,716 5,452,756 Cost of sales (d) Domestic market Sugar (87,107) (92,262) (223,852) (240,624) (106,629) (148,168) (275,008) (374,067) Ethanol (302,243) (217,969) (690,199) (561,903) (538,675) (411,701) (1,374,220) (1,078,717) Energy (8,347) (15,213) (45,782) (36,044) (47,040) (27,364) (116,595) (65,499) Other (1,764) (9,235) (6,829) (17,754) (10,534) (32,792) (37,812) (72,679) (399,461) (334,679) (966,662) (856,325) (702,878) (620,025) (1,803,635) (1,590,962) Foreign market Sugar (d) (120,206) (163,864) (513,124) (515,227) (532,655) (606,294) (1,965,592) (1,733,632) Ethanol (d) - - (2,604) (3,952) (604) (477) (103,792) (164,440) Other (a) - (123,021) (304,723) (920,836) - (176,630) (763,884) (1,518,589) (120,206) (286,885) (820,451) (1,440,015) (533,259) (783,401) (2,833,268) (3,416,661) Gains (losses) on changes in fair value less estimated costs to sell biological assets Sugar 18,975 47,652 56, ,194 43,808 62,290 41, ,591 Ethanol 27,665 40,552 32, ,930 36,955 34,032 (1,779) 106,974 46,640 88,204 88, ,124 80,763 96,322 39, ,565 (473,027) (533,360) (1,698,738) (2,036,216) (1,155,374) (1,307,104) (4,597,261) (4,708,058) (a) Amounts relating to the export of commodities, as described in Note 18. (b) Includes government grants, which reduced the taxable base on sales by R$80,436, in, in the period ended December 31, 2017 (R$73,200 as at December 31, 2016). (c) Include PIS and COFINS credits in the amount of R$7,966, in, and R$12,300, in, in the period ended December 31, 2017 (R$11,877 and R$18,316, as at December 31, 2016, respectively), as prescribed by article 3, of Law 10637/02, which addresses the non-cumulativeness of PIS/PASEP; and article 3, of Law 10833/03, which addresses the non-cumulativeness of COFINS. (d) Include REINTEGRA credits, in the amount of R$12,149, in, and R$33,701, in, in the period ended December 31, 2017 (R$581 and R$1,766, as at December 31, 2016, respectively), as set forth in article 21, of Law 13043, of November 13, 2014, which addresses the REINTEGRA reintroducing. (e) Include ICMS-ST credits on the acquisition of diesel fuel, in the amount of R$218, in, and R$2,015 in (R$314 and R$2,300, as at December 31, 2016, respectively) as set forth in article 155, paragraph 2, of CF88 and untimely ICMS credits on materials, in the amount of R$478, in, and R$4,281, in (R$1,338 and R$9,289, as at December 31, 2016, respectively), in the period ended December 31, (f) Include the amount of R$9,787, in, and R$40,778, in, related to bill and hold sales, under CPC 30 (R1) Revenues. 45

44 21. EXPENSES BY NATURE The information on the nature of cost of sales and services and general, administrative and selling expenses is as follows: Cost of sales and services Personnel (*) (88,161) (68,840) (236,966) (180,426) (162,370) (124,173) (462,599) (355,203) Depreciation and amortization (**) (235,133) (219,337) (674,710) (587,702) (376,701) (364,011) (1,096,736) (989,449) Raw materials and inputs, net of taxes: Three-month period ended Nine-month period Raw materials (165,088) (173,701) (456,749) (477,541) (427,458) (485,072) (1,397,160) (1,492,250) Inputs (13,452) (25,465) (50,238) (91,095) (34,700) (55,144) (126,934) (180,136) Products for resale (17,833) (134,221) (368,450) (959,576) (234,908) (375,026) (1,553,474) (1,990,585) ended Three-month period ended Nine-month period ended (196,373) (333,387) (875,437) (1,528,212) (697,066) (915,242) (3,077,568) (3,662,971) Gains on changes in fair value less estimated costs to sell biological assets 46,640 88,204 88, ,124 80,763 96,322 39, ,565 (473,027) (533,360) (1,698,738) (2,036,216) (1,155,374) (1,307,104) (4,597,261) (4,708,058) General, administrative and selling expenses Personnel (*) (14,096) (17,010) (54,605) (63,689) (32,517) (36,473) (116,304) (121,659) Depreciation (2,905) (6,228) (8,952) (13,711) (6,047) (6,792) (18,494) (21,317) Freight (19,353) (19,118) (74,139) (66,974) (46,212) (40,271) (170,132) (156,239) Services (8,726) (10,530) (28,923) (24,838) (25,581) (34,227) (105,450) (98,881) Shipping expenses (651) (477) (3,742) (828) (14,955) (16,559) (64,137) (62,805) Other (6,242) (8,260) (20,868) (20,920) (10,130) (12,609) (33,534) (37,014) (51,973) (61,623) (191,229) (190,960) (135,442) (146,931) (508,051) (497,915) (*) As at December 31, 2017, the personnel expenses, in and, in the amount of R$291,571 and R$578,903, respectively (R$244,115 and R$476,862 as at December 31, 2016), comprise R$281,521 and R$560,462, respectively (R$233,929 and R$458,681 as at December 31, 2016) relating to personnel expenses, and R$10,050 and R$18,441 (R$10,186 and R$18,181 as at December 31, 2016) relating to INSS contribution, respectively. (**) Includes biological asset and agricultural produce. 46

45 22. FINANCE INCOME (EXPENSES) Finance income Discounts obtained , Income from financial investments 988 1,085 2,801 6,067 5,416 8,518 18,564 26,702 Interest 2,347 3,593 8,155 11,407 4,189 4,913 18,141 30,221 Other 447 1,274 1,893 4,806 1,068 1,467 4,354 7,439 3,808 5,984 13,684 22,517 10,719 14,961 42,088 64,614 Finance costs Three-month period ended Nine-month period Interest (117,254) (86,916) (305,287) (271,144) (208,089) (162,220) (643,245) (515,739) Discounts granted (267) (302) (3,228) (1,591) (1,563) (483) (8,210) (1,884) Tax on financial transactions (IOF) (565) (671) (2,425) (3,190) (1,326) (1,038) (5,965) (4,843) Tax on Financial Operations (IOF) - lntercompany transactions (2,108) (2,884) (8,666) (11,103) (2,108) (2,883) (8,666) (11,103) Other (230) (1,912) (2,342) (2,792) (353) (1,477) (4,544) (5,508) PIS and COFINS on finance income (65) 747 (241) (269) (760) (1,055) (2,407) (2,318) ended Three-month period ended Nine-month period ended (120,489) (91,938) (322,189) (290,089) (214,199) (169,156) (673,037) (541,395) Derivatives Derivatives of Commodities 870 3, (209) 792 2,223 (242) (1,733) Derivatives of Commodities- Commercial transactions (16,639) 40,342 24, ,904 (6,580) 24,136 (21,542) 40,685 Derivatives of Commodities- Financial transactions 9,410 (18,738) 26,161 (198,720) 9,411 (18,738) 26,162 (198,720) Derivatives of Interest rate - Libor sw ap (2,756) (3,535) (8,221) (9,969) (6,359) 24,976 51,198 (63,025) 867 4,086 (3,843) (169,737) Exchange rate changes (105,259) (17,878) (111,084) 118,745 (237,395) (18,148) (243,469) 270,433 Finance income (expenses) (228,299) (78,856) (368,391) (211,852) (440,008) (168,257) (878,261) (376,085) 23. OTHER OPERATING INCOME (EXPENSES) Three-month period Nine-month period Three-month period Nine-month period ended ended ended ended Reversal (recognition) of provision for tax, labor, civil and environmental contingencies (8,032) 4,208 (7,107) (2,965) (7,246) 24,817 (761) 18,915 Contratual Fines and indemnities (10,693) 1,049 (28,454) 1,058 15,244 (10,695) (43,012) (7,574) Tax income (expenses) (1,049) (1,994) (3,679) (5,397) (1,463) (2,094) (5,070) 11,198 Impairment reversal - property, plant and equipment 2, , , ,284 1,625 Profit (loss) on sale of property, plant and equipment (1,765) 1,328 (2,831) (4,718) (1,037) 991 (2,981) (6,646) Reversal (recognition) of allow ance for doubtful accounts (27) (79) 119 (272) (29) (926) Law suit against Instituto do Açúcar e do Álcool - IAA (*) (138,054) - (138,054) - (138,054) - (138,054) - Other operating income, net (10,561) 8,138 (6,107) 16,347 (8,510) 9,605 (1,516) 18,532 Total other operating income (expenses), net (167,388) 12,761 (181,039) 4,715 (138,192) 23,138 (185,410) 35,124 Total other operating income 9,067 25,951 39,268 41,906 11,697 48,669 44,435 85,105 Total other operating expenses (176,455) (13,190) (220,307) (37,191) (149,889) (25,531) (229,844) (49,981) (*) Refers to process No in relation to the Instituto do Açúcar e do Álcool - IAA, as described in Note 26 (e). 47

46 24. LOSS PER SHARE The basic and diluted loss per share was calculated based on the loss attributable to the Biosev s owners divided by the weighted average number of outstanding common shares. Nine-month period ended Nine-month period ended Loss for the period attributable to the 's ow ners (823,162) (286,900) (823,162) (286,900) Weighted average number of shares used to calculate basic and diluted earnings per share 214,163, ,708, ,163, ,708,321 Total basic and diluted loss per share ( ) ( ) ( ) ( ) 25. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS I - Risk management The is exposed to risks arising from its operations and considers market, credit, liquidity, and capital risks as the most significant risks to which it is exposed. The objective of the s risk management program is to hedge its results against fluctuations in sugar prices, ethanol, foreign exchange and interest rates. These risks are managed using hedging financial instruments available in the financial market, such as: swaps and interest rate futures; currency forwards and futures; commodity forwards, futures and options. Transactions carried out in the over-the-counter market are contracted through low-risk domestic and foreign banks, and transactions contracted on the stock exchange market are mainly traded in futures and options markets at the New York Commodities Exchange (NYSE: ICE), Chicago Commodities Exchange (NYSE: CME) and Brasil Bolsa Balcão (B3). The use of these instruments is guided by the Financial and Risk Management Policy approved and reviewed by the Board of Directors on September 13, 2013 and on June 1, 2016, respectively. Additionally, the does not carry out transactions with any type of leverage, as well as does not have transactions with exotic derivatives. The risk management policies, practices and instruments are determined by the Executive Committee and the Strategic Committee (the body that supports the s Board of Directors). The Executive Committee has the following responsibilities before the Board of Directors: (i) monitor the compliance with the policy and report eventual non-compliances; (ii) inform about the indebtness of the and its subsidiaries, as well as the related debt instruments; (iii) inform about the burdens on the assets of the and its subsidiaries; and (iv) monitor the risk management instruments of the and its subsidiaries. The Market Consultancy Service Agreement, between Biosev Bioenergia International S.A, Louis Dreyfus Suisse S.A. and Biosev S.A, entered into on November 29, 2010 with due date on March, 31, 2024, and according to the amendment on July 30, 2013, assists the Executive Committee s responsibilities in the Risk Management, based on the information on the sugar and ethanol markets provided by Louis Dreyfus Suisse S.A., including historical information, studies, analyses, credit risk advisory, as well as researches, opinions and estimates about several issues in the main agricultural commodities markets, including the domestic and international sugar and ethanol markets. The Risk Management Department is subject to the Chief Financial Officer and is responsible for the calculation, measurement, analysis and monitoring of the exposure, by issuing daily reports based on which the necessary corrective measures are taken. It is also responsible for monitoring the compliance with the risk management policies Market risk The is mainly exposed to risks related to foreign exchange, interest rate and agricultural commodity price fluctuations. In order to hedge against these market risks, the uses various derivative financial instruments, including: 48

47 Forward, options and futures foreign exchange contracts to hedge fair value and cash flow items against exchange rate changes; Interest rate futures to supplement the hedging of mentioned items; Interest rate swap contracts to mitigate LIBOR fluctuation risk; Derivative commodity contracts to hedge inventory and future agricultural commodity delivery transactions. The parameters used to manage these risks are based on hedging strategy monitoring tools, such as sensitivity analysis, stress tests, and a hedging scale, aimed at securing the future amount of sugar and ethanol sales, including the effects from foreign exchange rate, as well as interest rate exposure. As at December 31, 2017, the assets and liabilities relating to the derivative transactions are broken down as follows: Exchange risk management (Note ) 7, ,240 7, ,466 Interest rate risk management (Note ) - - (22,702) (28,846) Agricultural commodities risk management (Note ) (734) (550) (734) (550) 6, ,690 (15,966) 141,070 Current assets 37, ,482 37, ,708 Current liabilities (30,951) (15,792) (41,635) (28,402) Non-current liabilities - - (12,018) (16,236) Foreign exchange risk management Because the s functional currency is the Brazilian real (R$), the foreign currency-denominated operations are exposed to the foreign exchange risk. Foreign exchange positions are managed based on the Financial and Risk Management Policy, approved by the s Board of Directors on September 13, The carries out transactions with currency derivatives in order to reduce variability in its profit or loss due to the existence of US dollar denominated net cash flows from exports, costs and debts. The carries out transactions with interest rate derivatives traded on the B3 (one-day DI futures) in order to supplement foreign exchange rate hedges contracted under foreign exchange contracts traded on said exchange future dollar financial instruments (DOL) and exchange coupon futures (DDI). The consolidated use of such futures contracts aims at having effects similar to those of one single DOL futures contract. This strategy is adopted by the without leverage. This is necessary because an individually traded DOL futures contract does not have significant liquidity for terms above three months and, therefore, could not meet the s foreign exchange hedging requirements. This practice is regulated by the B3 and has been widely disseminated among futures market participants in Brazil for over a decade. 49

48 The table below shows the s NDF, DOL, DI and DDI forward currency sale instruments, used for purposes of hedging foreign exchange risk and respective results: Outstanding forw ard contracts NDF US dollar Hedge Accounting Maturity: Less than 3 months (111,121) (79,994) (380,054) (291,717) 11,085 38,364 3 to 6 months (152,980) - (559,738) - 67,328 Over 6 months (100,000) - (352,093) - 9,324 - Hedge accounting - long position Maturity: (211,121) (232,974) (732,147) (851,455) 20, ,692 Less than 3 months , ,020 - (11,419) - 3 to 6 months , ,289 - (9,212) Non-hedge accounting - short position Maturity: 113, , , ,289 (11,419) (9,212) Less than 3 months (93,879) (135,006) (315,610) (429,328) 3,965 1,574 3 to 6 months (44,000) (85,020) (145,314) (272,118) (1,917) 465 Over 6 months (60,000) (26,000) (203,091) (95,758) (1,204) 10,608 Non-hedge accounting - long position Maturity: (197,879) (246,026) (664,015) (797,204) ,647 Less than 3 months , , , ,321 4,655 9,565 3 to 6 months , ,128 - (3,732) - Over 6 months ,000-70,762 - (3,288) - Outstanding futures contracts DOL - dollar futures Maturity: 241, , , ,321 (2,365) 9,565 Less than 3 months (27,000) 45,500 (89,316) 144,162 (46) to 6 months 8,750 (85,000) 28,945 (269,314) (53) 461 Over 6 months (7,250) - (23,983) DDI - futures exchange coupon Maturity: (25,500) (39,500) (84,354) (125,152) (50) 627 Less than 3 months 34, , , ,884 (51) (2,689) 3 to 6 months (24,738) (22,050) (81,834) (69,864) Over 6 months 7,420 (101,954) 24,545 (323,031) (52) 484 DI - 1 day: Notional value Average exchange rate contracted Foreign currency Domestic currency (*) Fair value (Sale) purchase (Sale) purchase 16,694 41,343 55, , (2,057) Less than 3 months (6,318) (143,204) (20,900) (453,726) - (4) 3 to 6 months 15,621 41,777 51, ,367 (15) 15 Over 6 months 15, ,120 52, ,747 4 (33) 25,206 13,693 83,381 43,388 (11) (22) 7, ,240 50

49 Outstanding forw ard contracts NDF US dollar Hedge accounting - short position Maturity: (*) Convenience conversion Interest rate risk management Less than 3 months (111,121) (79,994) (380,054) (291,717) 11,085 38,364 3 to 6 months (152,980) - (559,738) - 67,328 Over 6 months (100,000) - (352,093) - 9,324 - Hedge accounting - long position Maturity: (211,121) (232,974) (732,147) (851,455) 20, ,692 Less than 3 months , ,020 - (11,419) - 3 to 6 months , ,289 - (9,212) Non-hedge accounting - short position Maturity: 113, , , ,289 (11,419) (9,212) Less than 3 months (93,879) (135,006) (315,610) (429,328) 3,965 1,574 3 to 6 months (44,000) (85,020) (145,314) (272,118) (1,917) 465 Over 6 months (60,000) (26,000) (203,091) (95,758) (1,204) 10,608 Non-hedge accounting - long position Maturity: (197,879) (246,026) (664,015) (797,204) ,647 Less than 3 months , , , ,321 4,655 9,565 3 to 6 months , ,128 - (3,732) - Over 6 months ,000-70,762 - (3,288) - Outstanding futures contracts DOL - dollar futures Maturity: 241, , , ,321 (2,365) 9,565 Less than 3 months (27,000) 45,500 (89,316) 144,162 (46) to 6 months 8,750 (85,000) 28,945 (269,314) (53) 461 Over 6 months (7,250) - (23,983) DDI - futures exchange coupon Maturity: (25,500) (39,500) (84,354) (125,152) (50) 627 Less than 3 months 34, , , ,884 (51) (2,689) 3 to 6 months (24,738) (22,050) (81,834) (69,864) Over 6 months 7,420 (101,954) 24,545 (323,031) (52) 484 DI - 1 day: 16,694 41,343 55, , (2,057) Less than 3 months (6,318) (143,204) (20,900) (453,726) - (4) 3 to 6 months 15,621 41,777 51, ,367 (15) 15 Over 6 months 15, ,120 52, ,747 4 (33) US outstanding option contracts Maturity: Notional value Average exchange rate contracted Foreign currency Domestic currency (*) Fair value (Sale) purchase (Sale) purchase 25,206 13,693 83,381 43,388 (11) (22) Less than 3 months - (28,859) - (91,437) - 4,695 3 to 6 months - (89,006) - (282,008) - 16,289 Over 6 months - (159,284) - (504,675) - 32,242 - (277,149) - (878,120) - 53,226 7, ,466 The uses Libor derivatives to hedge against interest rate fluctuations. These derivatives are traded on the Brazilian over-the-counter market with low-risk banks as counterparties, and are registered with CETIP S.A. Balcão Organizado de Ativos e Derivativos (Brazilian organized OTC market), as required by prevailing legislation. 51

50 The table below shows the s Libor swap instruments with receipt of Libor interest and payment of fixed rates, and presents the derivatives used for purposes of hedging Libor interest risk and respective results: Notional value Average fixed rate contracted - % Foreign currency Domestic currency (*) Fair value Hedge Accounting Outstanding position: Less than 1 year 3.15% 3.15% 39,967 39, , ,630 (10,684) (12,610) 1 to 2 years 3.15% 3.15% 39,967 39, , ,630 (5,229) (7,506) 2 to 5 years 3.15% 3.15% 119, , , ,891 (6,507) (7,745) More than 5 years 3.15% 3.15% 16,035 56,002 53, ,436 (282) (985) 215, , , ,587 (22,702) (28,846) (*) Convenience conversion Agricultural commodities risk management The carries out transactions with commodity derivatives (sugar and ethanol) in order to reduce the impact of the changes in the market prices considering that these changes may significantly affect the s future sales value. These risks are managed according to the s Risk Management Policy and the hedge strategy monitoring tool which determines the hedge volume and timeframe. The s futures and options contracts in the period used for commodity risk hedging and the related results are as follows: Outstanding sugar futures contracts ICE RAW Açúcar Hedge Accounting Maturity: Less than 3 months - (5,859) - (18,562) to 6 months (30,752) (597) (101,728) (1,893) (1,018) 6 Over 6 months (120,365) (29,119) (398,168) (92,260) (3,004) 379 Non-Hedge Accounting Notional value and Foreign currency Domestic currency (*) Fair value (151,117) (35,575) (499,896) (112,715) (4,022) 439 Maturity: Less than 3 months 56,996 (15,338) 188,542 (48,598) 2, to 6 months 36,993 8, ,373 28,443 1,212 (94) Over 6 months (25,609) 66,836 (84,715) 211,762 (679) (946) 68,380 60, , ,607 2,642 (1,019) Outstanding ethanol futures contracts Futuro Etanol - BMF&Bovespa Maturity: Less than 3 months 9,545 (146) 31,575 (463) to 6 months 5, ,624 2, Ethanol futures - CBOT Maturity: 14, ,199 2, Less than 3 months 7, ,411 1, , ,411 1, (734) (550) (*) Convenience conversion. 52

51 25.2 Credit risk The credit risk is managed through the careful analysis of the customer portfolio, the definition of credit limits, and the ongoing control of outstanding positions. In conformity with the s credit policy, using a risk assessment methodology, the adopted balanced scorecard techniques. The adopts hedging instruments, such as collaterals, pledges and guarantees, to mitigate potential credit exposures. Historically, the does not record significant losses in trade receivables Liquidity risk The operates with a liquidity level considered sufficient for its operations and uses a number of sources of funds to finance its activities. In order to cover possible liquidity deficiencies or mismatches between cash and cash equivalents with short-term maturities, the has good relationship with first-class banks, in Brazil or abroad, as well as a credit line with its parent. Moreover, the products manufactured by the are highly liquid and can be easily sold to generate cash or also be provided as a guarantee for financial transactions. In addition, part of the investments, especially those related to sugarcane plantation treatments, is supported by short-term financing and will be realized in the following harvest campaign Liquidity and interest rate tables The tables below show in detail the expected maturity of the Group s financial liabilities: Less than 1 month 1 to 3 months 3 months to 1 year 1 to 5 years Over 5 years Total As at December 31, 2017 Borrow ings and financing 8, , , , ,113 2,122,679 Derivative financial instruments 1,802 15,781 13, ,951 Trade payables 84,660 19, , ,635 Accrued payroll and related taxes 14,265 4,165 39, ,286 Taxes payable 17,726 47, ,683 Other payables 50, ,625 3,285 17, , ,969 As at March 31, ,273 1,127, , , ,751 3,431,203 Borrow ings and financing 14, , ,893 1,465, ,941 2,375,403 Derivative financial instruments 6,580-9, ,792 Trade payables 195,592 68,196 56,669 1, ,496 Accrued payroll and related taxes 12,223 14,744 34, ,050 Taxes payable 20, ,396 Other payables 34,404 42,234 5,243 23, , , , , ,100 1,490, ,182 3,321,814 Less than 1 month 1 to 3 months 3 months to 1 year 1 to 5 years Over 5 years Total As at December 31, 2017 Borrow ings and financing 22,759 1,137, ,006 3,109, ,597 5,453,195 Derivative financial instruments 1,801 15,781 24,053 11, ,653 Trade payables 408,805 39, ,945 1, ,545 Accrued payroll and related taxes 31,432 10,112 75, ,623 Taxes payable 37,372 49,445 8, ,514 Other payables 67, ,648 2,720 47, , ,607 1,385,640 1,587,500 3,169, ,228 6,958,691 As at March 31, 2017 Borrow ings and financing 75, ,828 1,136,081 3,842, ,806 6,288,654 Derivative financial instruments 6,580-21,822 15, ,638 Trade payables 641, ,318 34,413 1, ,989 Accrued payroll and related taxes 20,860 22,526 65, ,609 Taxes payable 39, , ,644 Other payables 106,533 50,493 4,271 32,828 23, , , ,552 1,271,318 3,893, ,300 7,504, Capital risk The manages its capital structure in order to safeguard a continuous return to the s shareholders. The monitors capital through financial leverage index analysis; these indexes include adjusted net debt to adjusted EBITDA ratio. In turn, the net debt corresponds to total borrowings and financing (including short- and long-term borrowings and financing), less cash, cash equivalents, short-term investments and highly liquid inventory (ethanol, sugar and allowance for negative inventory margin). 53

52 The allocates the swap contracts designated as hedge accounting (see Note ) to the adjusted net debt for capital risk analysis purposes. The may change its capital structure, in conformity with economic and financial conditions, aiming at optimizing its financial leverage and/or debt management Margin calls Derivative transactions in commodity exchanges (ICE and B3) require an initial margin call in guarantee. To trade on the ICE, as at December 31, 2017, the has R$18,759 (R$10,471 as at March 31, 2017), fully deposited by the s in cash, through fiduciary agent Term Commodities Inc, a company under common control. To trade on the B3, the margin call required, as at December 31, 2017, is R$7,818 (R$11,798 as at March 31, 2017), deposited as Bank Deposit Certificate (CDB), in the amount of R$6,000 (R$8,400 as at March 31, 2017). As at December 31, 2017, the s transactions in the over-the-counter market do not require an initial margin call in guarantee Categories of financial instruments The financial instruments recorded in the balance sheet, such as cash and cash equivalents and borrowings and financing, are stated at contractual values, which approximates their fair values due to their short terms and/or characteristics. Derivatives are specifically recorded at market value based on proper market information and/or evaluation methodologies for each financial instrument. The methods used are a common fair value measurement practice of the financial market. The use of different market inputs and/or valuation techniques might result in amounts different from the recognized realizable value of financial instruments. The fair value of financial instruments not traded in active markets (for example, over-the-counter derivatives) is determined using valuation techniques. The uses several methods and makes assumptions that are based on existing market conditions at the end of the interim financial statements. The fair value of foreign exchange forwards is determined based on forward exchange rates quoted at the end of the interim financial statements Financial assets: Fair value through profit or loss: Derivatives designated as hedge accounting (Note 25.1) 22, ,572 22, ,572 Held for trading 15,564 15,910 15,564 69,136 Held to maturity: Short- term investments (Note 4) 127,513 38, , ,689 Loans and receivables: Cash and cash equivalents (Note 3) 123, , ,019 1,463,438 Trade receivables (Note 5) 150, , , ,626 Other financial assets 220, , , ,886 Financial liabilities: Fair value through profit or loss: Derivatives designated as hedge accounting (Note 25.1) 17, ,855 29,309 Held for trading 13,798 15,329 13,798 15,329 Other financial liabilities: Borrow ings and financing (Note 14) 2,122,679 2,375,403 5,453,195 6,288,654 Trade payables (Note 15) 333, , , ,989 Other financial liabilities 943, , , ,326 54

53 25.7 Measurement at fair value recognized in balance sheet Technical pronouncement CPC 40 (R1) - Instrumentos Financeiros: Evidenciação/IFRS 7 Financial Instruments: Disclosure defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the primary or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Technical pronouncement CPC 40 (R1)/IFRS 7 also establishes a three-level fair value hierarchy which prioritizes inputs for fair value measurement by an entity in order to maximize the use of observable data and minimize the use of unobservable data. Technical pronouncement CPC 40 (R1)/IFRS 7 describes the three levels of inputs that should be used to measure fair value, which are the following: Level 1 - Quoted prices (unadjusted) in active markets for identical assets and liabilities. Level 2 - Inputs other than the data included in Level 1, where prices are quoted (unadjusted). Fair value measurements of Level 2 are obtained based on other variables besides quoted prices included in Level 1, which are directly or indirectly observable for an asset or liability. Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs) because market activity is insignificant or does not exist. The s financial assets and liabilities measured at fair value on a recurring basis and subject to disclosure as required by CPC 40 (R1)/IFRS 7, as at December 31, 2017, are as follows: Level 1 Level 2 Total Financial assets at fair value through profit or loss Derivative financial assets ,283 37, ,283 37,687 Financial liabilities at fair value through profit or loss Derivative financial liabilities (1,139) (29,812) (30,951) (1,139) (29,812) (30,951) Level 1 Level 2 Total Financial assets at fair value through profit or loss Derivative financial assets , , , ,482 Financial liabilities at fair value through profit or loss Derivative financial liabilities (2,046) (13,746) (15,792) (2,046) (13,746) (15,792) 55

54 Level 1 Level 2 Total Financial assets at fair value through profit or loss Derivative financial assets ,283 37, ,283 37,687 Financial liabilities at fair value through profit or loss Derivative financial liabilities (1,138) (52,515) (53,653) (1,138) (52,515) (53,653) Level 1 Level 2 Total Financial assets at fair value through profit or loss Derivative financial assets , , , ,708 Financial liabilities at fair value through profit or loss Derivative financial liabilities (2,046) (42,592) (44,638) (2,046) (42,592) (44,638) 25.8 Derivative and non-derivative financial instruments with the application of hedge accounting In accordance with accounting practices adopted in Brazil, derivative financial instruments are accounted for at fair value through profit or loss, unless a derivative is designated for hedge accounting. A derivative only qualifies for hedge accounting when all the conditions set out by CPC 38/IAS 39 are met. The adoption of hedge accounting is optional and aims at recognizing gains or losses on derivatives only when the hedged item is realized on an accrual basis and, therefore, reducing the volatility of gains or losses from the mark-to-market of derivatives. The applies hedge accounting to account for part of its derivative and non-derivative financial instruments. The s derivatives designated for hedge accounting are: Libor swaps, contracted to mitigate the effect of interest rate fluctuations on the long-term debt; sugar futures and currency forwards (NDFs), which hedge future sales and have been classified as cash flow hedges of highly probable transactions (CPC 38/IAS 39, Item 78 b). As prescribed by paragraph 72 of CPC 38/IAS 39, the also opted for using non-derivative financial instruments for hedge accounting, by designating export debts as foreign exchange risk hedges (natural hedge), which hedge future exports and are classified as cash flow hedges. The effective portion of changes in fair value of derivatives is recognized in equity, in line item Other comprehensive income (loss). The non-effective portion is recognized immediately in profit or loss for the year. The gain or losses recognized in equity are transferred to profit or loss when the hedged item impacts the profit or loss for the year. When the hedge instrument matures, is sold or the transaction is no longer designated for hedge accounting, the accumulated effective portion recorded in equity, in line item Other comprehensive income (loss), is held in this reserve until performance of the hedge transaction that impacts the s profit or loss Sensitivity analysis The table below shows the s sensitivity to the presented risk factor, based on changes in the risk factor considered reasonably possible by Management (probable scenario). The probable scenario is obtained based on future dollar, sugar and ethanol market curves (as at March 31, 2017) and the Group s expectations for each one of the variables indicated, over a twelve-month period. As required by CVM Instruction 475/2008, the sensitivity analysis is also presented to changes in the fair value of financial instruments for another two scenarios, in which market conditions are stressed by 25% and 50% (ethanol and sugar options are included as delta equivalent in futures contracts). The derivative financial instruments are provided to hedge against risks from future cash flows. The non-derivative financial instruments must not be considered as the s net exchange exposure because the table below does not consider the biological asset, as it is not a financial instrument, but it is used in the production of sugar and ethanol for future exports. See Notes 7 and

55 Notional amount - foreign currency Risk factor Probable Effects on fair value scenario 25% stress 50% stress Effects on profit or loss Exchange risk Non-derivatives Cash and cash equivalents 25,248 Decrease in US$ (11,811) (20,880) (41,760) Short-term investments 5,624 Decrease in US$ (2,631) (4,651) (9,302) Trade receivables 15,901 Decrease in US$ (7,439) (13,150) (26,301) Trade payables (18,367) Increase in US$ (8,593) (15,190) (30,380) Advances from foreign customers (402,123) Increase in US$ (188,120) (332,555) (665,111) Short- and long-term borrow ings and financing (350,277) Increase in US$ (163,866) (289,679) (579,358) Derivatives Futures and forw ards contracts in foreign currency 35,299 Decrease in US$ (34,148) (60,366) (120,733) Price risk Sugar futures and options contracts (purchase) 68,379 Decrease in sugar price (70,780) (58,284) (116,567) BMF ethanol futures contracts (sales) 14,873 Decrease in ethanol price (2,913) (3,919) (7,838) BMF ethanol futures contracts (sales) 7,077 Decrease in ethanol price (678) (1,362) (2,724) Effects on equity Exchange risk Non-derivatives Exchange rate change hedge accounting (98,636) Increase in US$ (46,144) (81,572) (163,145) Derivatives NDF hedge accounting (98,105) Increase in US$ (30,370) (53,688) (107,376) Price risk Derivatives Futures hedge accounting (151,117) Increase in sugar price (153,341) (126,269) (252,539) Notional amount - foreign currency Risk factor Probable Effects on fair value scenario 25% stress 50% stress Effects on profit or loss Exchange risk Non-derivatives Cash and cash equivalents 26,808 Decrease in US$ (12,541) (22,171) (44,341) Short-term investments 11,124 Decrease in US$ (5,204) (9,199) (18,398) Trade receivables 213,563 Decrease in US$ (99,908) (176,616) (353,233) Advances to suppliers 384,841 Decrease in US$ (180,035) (318,264) (636,527) Trade payables (226,345) Increase in US$ (105,888) (187,187) (374,374) Advances from foreign customers (1,236,631) Increase in US$ (578,518) (1,022,694) (2,045,388) Short- and long-term borrow ings and financing (746,350) Increase in US$ (349,156) (617,231) (1,234,463) Derivatives Futures and forw ards contracts in foreign currency 35,299 Decrease in US$ (34,148) (60,366) (120,733) Price risk Sugar futures and options contracts (purchase) 68,379 Decrease in sugar price (70,780) (58,284) (116,567) BMF ethanol futures contracts (sales) 14,873 Decrease in ethanol price (2,913) (3,919) (7,838) CBOT ethanol futures contracts (sales) 7,077 Decrease in ethanol price (678) (1,362) (2,724) Effects on equity Exchange risk Non-derivatives Exchange rate change hedge accounting (557,238) Increase in US$ (260,685) (460,836) (921,671) Derivatives NDF hedge accounting (98,105) Increase in US$ (30,370) (53,688) (107,376) Interest rate risk Derivatives Sw ap LIBOR Hedge Accounting 215,868 Decrease in libor rate (5,192) (10,391) (20,810) Price risk Derivatives Futures Hedge Accounting (151,117) Increase in sugar price (153,341) (126,269) (252,539) As at December 31, 2017, the probable scenario considers the CDI rate projected for 12 months, adjusted in accordance with the percentage of the respective exposures, based on the reference swap rates disclosed by B3; the Libor rate for 12 months and effective TJLP rate. These rates were applied to the volume exposed to each of the indices described in the table below of borrowings and financing, advances from customers, cash and cash equivalents and short-term investments for calculation of the probable impact of each index in the finance income (costs). For the three indices, simulations were performed considering the worst scenarios, an increase of 25% and 50% in the rates of probable scenarios. 57

56 The consolidated sensitivity results are broken down below: Notional amount - foreign currency Probable scenario 25% stress 50% stress Operations indexed to CDI (323,702) (24,323) (6,081) (12,161) Operations indexed to Libor (1,519,171) (17,999) (4,500) (8,999) Operations indexed to TJLP (3,199) (224) (56) (112) Total (1,846,072) (42,546) (10,637) (21,272) Notional amount - foreign currency Probable scenario 25% stress 50% stress Operations indexed to CDI (696,979) (50,005) (12,501) (25,003) Operations indexed to Libor (4,535,200) (57,381) (14,345) (28,691) Operations indexed to TJLP (3,199) (224) (56) (112) Total (5,235,378) (107,610) (26,902) (53,806) 26. COMMITMENTS a) Selling The Group has several arrangements in the sugar and ethanol market under which it commits to sell volumes of these products in future crops. As at December 31, 2017, the volumes of these commitments total 1,294,549 tons of sugar (1,601,137 tons of sugar as at March 31, 2017), 174,005 cubic meters of ethanol (126,846 cubic meters as at March 31, 2017), and electricity supply commitments, assumed in power auctions and free market, which total 8,789 GWh to be supplied by 2035 (9,622 GWh as at March 31, 2017). b) Purchases The Group has several commitments for the purchase of sugarcane from third parties to ensure part of its production in future crops. The volume of sugarcane to be purchased is estimated based on the expected productivity of the areas where the sugarcane plantations are located. The amount to be paid by the Group is determined at the end of each harvest campaign according to the price published by CONSECANA, plus or less other applicable contractual terms. As at December 31, 2017, estimated purchase commitments by crop are as follows: Harvest Estimated area (hectares) Estimated quantity of cane (Ton) Estimated amount 2018/ ,547 8,230, , / ,868 5,978, , / ,226 4,287, ,695 After ,656 3,758, , ,297 22,254,983 1,581,165 As at December 31, 2017, the has commitments for the purchase of sugar from third parties, at the volume of 84,362 tons of sugar. As at December 31, 2017, the has commitments for the purchase of ethanol from third parties, at the volume of 20,000 cubic meters (23,560 cubic meters as at March 31, 2017), in order to ensure the market demand in the Northeast region, where the production may not be sufficient to ensure its own supply between the crops. 58

57 c) Lease or agricultural partnership agreements As at December 31, 2017, the Group is a party to effective lease or agricultural partnership agreements, which should remain effective in future crops, as shown in the table below, aimed at ensuring the supply of sugarcane to its plants. The consideration of lease or agricultural partnership agreements is usually the payment for a certain sugarcane volume to the farmer, whose price, in turn, is determined at the end of each harvest campaign according to the price published by CONSECANA, plus or less other applicable contractual terms. Harvest Estimated quantity of cane (Ton) Estimated amount 2017/2018 1,456, , /2019 5,690, , /2020 4,314, , /2021 3,310, ,213 After ,717, ,040 22,489,077 1,599,990 The includes the sugarcane volume in leased areas or under agricultural agreements, as indicated above, in the calculation basis of the biological asset s fair value, according to the assumptions described in Note 7. d) Terminal de Exportação de Açúcar do Guarujá Limitada - TEAG TEAG is a party to an agreement for the lease of a port terminal with Companhia Docas do Estado de São Paulo ("CODESP"), which provides for the payment by TEAG, as lease, of a fixed monthly installment of R$2,6928/m² calculated on a minimum area of 74, m² equivalent to R$ per month or R$2,398 per year, plus a guaranteed variable minimum installment equivalent to R$3,699 per year payable to CODESP, corresponding to R$2.4660/ton calculated on a minimum handling of one million and five hundred thousand tons of cargo. The concession granted to TEAG to operate such terminal will expire on July 6, 2018, renewable for additional 20 years, at CODESP s discretion. e) Lawsuits against Instituto do Açúcar e do Álcool - IAA The is a plaintiff in lawsuits seeking a compensation from the Federal Government for losses arising from pricing differences incurred in the period in which sugar and ethanol prices were frozen. On December 20, 2017, the entered into the Private Agreement for Settlement of Graphic Accounts, Transaction and Other Covenants with the shareholders of Santelisa Vale S.A., the s current minority shareholders ( Transaction Agreement ), as well as other related instruments, whereby, among other provisions, the parties defined rights and terminated the reciprocal indemnity obligations arising from the association implemented under the terms of the Agreement for Association, Share Subscription and Other Covenants, dated April 14, 2009, as amended ( Association Agreement ). Accordingly, the Transaction Agreement set forth: (i) the settlement of the management accounts (graphic accounts) relating to the indemnifiable losses in the context of the Association Agreement; (ii) the definition of rights and obligations provided for in the Association Agreement; and (iii) the termination and general settlement of the obligations assumed by the parties in the Association Agreements and other documents and/or instruments related to the association. By virtue of items (i), (ii) and (iii) above, the complied with the obligations defined by the parties in the Association Agreement with the proceeds received as a result of the decision issued in connection with proceeding , on December 28, 2015, against Instituto do Açúcar e do Álcool IAA (filed by the Federal Government) relating to the period before the association, as set forth in the Association Agreement. By means of the above, as at December 31, 2017, the recorded the amount of R$138,054, in line item Other operating income (losses), less the amount previously recorded in line item Other payables, in current liabilities, plus inflation adjustment based on the CDI rate in the amount of R$35,311, recorded in line item Finance income (expenses), and less withholding income tax, in the amount of R$47,536, recorded in line item Taxes payable, totaling R$125,829, recorded in line item Other payables. Out of the net amount payable on December 31, 2017, R$91,063 was reserved on December 21, 2017, upon deposit in the restricted account, as described in Note 4, to cover eventual insufficient amount for the tax relief of the s subsidiary s encumbered assets, which will be solely transferred to the counterparties upon the effective release of the 59

58 encumbered assets. The remaining amount will be paid by means of escrow deposit, on behalf of the counterparties to the Transaction Agreement, in order to release the encumbrance on the s subsidiary s assets. The transaction and other initiatives set forth in the Transaction Agreement and all other related instruments were approved by the s Board of Directors at the meeting held on December 14, 2017, upon the settlement of the discussions and obligations in connection with the Association Agreement, effective since f) Bank guarantees and collateral insurance As at December 31, 2017, the balances of (i) bank guarantee is R$ in (R$117,019 in as at March 31, 2017); and (ii) collateral insurance relating to lawsuits of R$214,453 in and R$295,641 in (R$241,422 and R$320,730 as at March 31, 2017, respectively). 27. INSURANCE The and its subsidiaries adopt internal risk management policies, including insurance coverage. In addition, they are supported by specialists that guide the preparation of the agreements with the insurance companies, in accordance with the nature of the business and market practices, in order to cover significant losses on their assets and responsibilities. The insurance coverage effective as at December 31, 2017 includes: (1) Equivalent to the maximum coverage for sundry assets and locations. (*) The maximum coverage equivalent to the civil liability by covered vehicle. (**) and subsidiaries covered by the same policy. Maximum coverage (1) Insurance Assets, responsibilities or interests covered Operating risks (**) Buildings, fixed and machinery equipment of the group s 13 plants and offices 500, ,000 General civil liability (**) Damages against third parties arising from the s operations 15,000 15,000 Vehicles (*) Damages against third parties arising from traffic accidents Management liability (**) Law suits filed against the s management 40,000 40,000 Equipament and improvement Machinery and equipment 34,123 71,879 Guarantee (***) Operations and obligations backed by guarantee 214, ,641 (***) The maximum coverage equivalent to the total amount approved with the insurance companies. and subsidiaries share the same maximum indemnity limit. 28. EMPLOYEES BENEFIT The consolidated amount invested by the in the pension plan was R$1,446 in the period ended December 31, 2017 (R$2,078 as at March 31, 2017), recognized in line item General, administrative and selling expenses. Due to the features and design of the pension plan, the does not incur any future postemployment or actuarial obligations. As at December 31, 2017, the booked a liability related to the deferred variable compensation that will be paid to some eligible employees, in according to the policy, the amount of R$10,056 as at December 31, 2017 (R$12,000 as at March 31, 2017). Additionally, the has recorded a liability related to PPR (Profit Sharing Program), as set forth in the Collective Labor Agreement, in the amount of R$24,856 as at December 31, 2017 (R$13,080 as at March 31, 2017). 60

59 29. SEGMENT INFORMATION Information by product margin, and geographic areas, used by the key decision makers is as follows: Three-month period ended profit (loss) by product Sugar Ethanol Energy Other Total Net revenue 829, ,013 92,054 16,582 1,535,433 Cost of products sold (595,476) (502,324) (47,040) (10,534) (1,155,374) Gross profit 234,308 94,689 45,014 6, ,059 Gross margim 28% 16% 49% 36% 25% Selling expenses (53,658) (6,850) (2,080) (1,411) (63,999) Operating margin 180,650 87,839 42,934 4, ,060 Three-month period ended Sales by geographic area Sugar Ethanol Energy Other Total Asia 373, ,303 North America ,681 South America 41, ,717 Africa 250, ,255 Europe 35, ,087 Oceania 10, ,664 Foreign market 711, ,707 Domestic market 117, ,158 92,054 16, ,726 TOTAL 829, ,013 92,054 16,582 1,535,433 Three-month period ended profit (loss) by product Sugar Ethanol Energy Other Total Net revenue 808, ,212 65, ,219 1,550,533 Cost of products sold (692,172) (378,146) (27,364) (209,422) (1,307,104) Gross profit 116,483 95,066 38,083 (6,203) 243,429 Gross margin 14% 20% 58% -3% 16% Selling expenses (54,130) (5,098) (2,060) (19) (61,307) Operating margin 62,353 89,968 36,023 (6,222) 182,122 61

60 Three-month period ended Sales by geographic area Sugar Ethanol Energy Other Total Asia 444, , ,400 North America ,174 14,174 South America 2, ,015 Africa 169, , ,780 Europe 7, ,464 8,629 Oceania Foreign market 623, , ,998 Domestic market 185, ,212 65,447 30, ,535 TOTAL 808, ,212 65, ,219 1,550,533 Nine-month period ended profit (loss) by product Sugar Ethanol Energy Other Total Net revenue 2,590,167 1,486, , ,317 5,147,716 Cost of products sold (2,199,178) (1,479,791) (116,595) (801,697) (4,597,261) Gross profit 390,989 7, ,824 (12,380) 550,455 Gross margin 15% 0% 59% -2% 11% Selling expenses (205,670) (31,024) (6,359) (1,588) (244,641) Operating margin 185,319 (24,002) 158,465 (13,968) 305,814 Nine-month period ended Sales by geographic area Sugar Ethanol Energy Other Total Asia 1,347,989 44, ,618 2,093,378 North America 28,291 30, ,692 South America 74,561 16, ,271 Africa 761, ,588 Europe 80, , ,252 Oceania 10, ,398 13,030 Foreign market 2,303,366 91, ,963 3,138,211 Domestic market 286,801 1,394, ,419 46,354 2,009,505 TOTAL 2,590,167 1,486, , ,317 5,147,716 Nine-month period ended profit (loss) by product Sugar Ethanol Energy Other Total Net revenue 2,379,213 1,328, ,804 1,561,649 5,452,756 Cost of products sold (1,915,108) (1,136,183) (65,499) (1,591,268) (4,708,058) Gross profit 464, , ,305 (29,619) 744,698 Gross margin 20% 14% 64% -2% 14% Selling expenses (194,542) (25,573) (6,980) (5,618) (232,713) Operating margin 269, , ,325 (35,237) 511,985 62

61 Nine-month period ended Sales by geographic area Sugar Ethanol Energy Other Total Asia 1,158, ,451-1,374,448 2,634,910 North America 1,446 38,398-14,174 54,018 South America 20,550 5, ,619 Africa 566, , ,831 Europe 148,563 1,208-71, ,643 Oceania ,209 5,209 Foreign market 1,894, ,126-1,487,107 3,529,230 Domestic market 484,216 1,180, ,804 74,542 1,923,526 TOTAL 2,379,213 1,328, ,804 1,561,649 5,452,756 The s chief decision makers use the operating margin as a tool to measure the recurring operating cash generation capacity and it also allows comparisons with other companies. Three-month period Nine-month period ended ended Operating margin 316, , , ,985 Other operating expenses (211,855) (62,855) (452,213) (235,089) Finance expenses (440,008) (168,257) (878,261) (376,085) Income tax and social contribution 57,117 91, ,519 (187,813) Profit (loss) for the period (278,686) 42,787 (823,141) (287,002) Information on key customers In the period ended December 31, 2017, the Group have two customers, its related parties Louis Dreyfus Suisse S.A. and Louis Dreyfus Asia Pte. Ltd, under common control, that accounts for 32% of the Group s consolidated revenue. 30. NON-CASH TRANSACTIONS The carried out the following investing and financing activities not affecting cash, which, therefore, were not reflected in the statement of cash flows: Nine-month period ended Nine-month period ended Transfer from depreciation and amortization to inventories 93, , , ,565 Purchase of financed property, plant and equipment items 7,519-15,537 9, SUBSEQUENT EVENTS The updated the Financial and Risk Management Policy complementing the guidelines of Foreign exchange risk management and prices of commodities and ratifying the possibility of using derivative financial instruments that have direct and indirect relation with the s business to mitigate volatility of cash flows projected and measured in reais. This update was reviewed and approved by the Board of Directors on February 8,

62 32. APPROVAL OF INTERIM FINANCIAL STATEMENTS The interim financial statements were approved by the s management and authorized for issue on February 8,

63 Comments on the s Projections GUIDANCE UPDATE 3Q18 CANE CRUSHING (million tons) Biosev crushed 6.4 million tons of sugarcane in the third quarter of 2017/18 crop year resulting in 29.1 million tons of sugarcane crushed in the first nine months of this crop year and, according to the management of the company, the annual guidance for the crushing volume can be reaffirmed as already disclosed in the Reference Form. TRS CANE (kg/ton) In the third quarter of 2017/18 crop year cane TRS content was kg/ton resulting in kg/ton in the first nine months of this crop year and, according to the management of the company, the annual guidance for the TRS Cane can be reaffirmed as already disclosed in the Reference Form. TOTAL TRS (million tons) In the third quarter of 2017/18 crop year Total TRS was 855 thousand tons resulting in 3.8 million tons in the first nine months of this crop year and, according to the management of the company, the annual guidance for the Total TRS can be reaffirmed as already disclosed in the Reference Form. CAPEX (R$ million) Biosev s investments amounted R$ 281 million (two hundred and eighty one million reais) in CAPEX in the third quarter of 2017/18 crop year resulting in R$733 million (seven hundred and thirty three million reais) in CAPEX in the first nine months of this crop year and, according to the management of the company, the annual guidance for the CAPEX can be reaffirmed as already disclosed in the Reference Form. GUIDANCE UPDATE 2Q18 CANE CRUSHING (million tons) Biosev crushed 13.1 million tons of sugarcane in the second quarter of the 2017/18 crop year totaling 22.7 million tons of sugarcane crushed in the first half of the crop year. According to the management of the company, the annual guidance for the crushing volume can be reaffirmed as disclosed in the Reference Form. TRS CANE (kg/ton) In the second quarter of 2017/18 crop year, cane TRS was kg/ton consolidating kg/ton in the first half of the crop year. According to the management of the company, the annual guidance for the Cane TRS can be reaffirmed as disclosed in the Reference Form. TOTAL TRS (million tons) In the second quarter of 2017/18 crop year, Total TRS was 1.8 million tons, totalling 3.0 million tons in the first half of the crop year. According to the management of the company, the annual guidance for the Total TRS can be reaffirmed as disclosed in the Reference Form. 65

64 CAPEX (R$ million) Biosev s CAPEX amounted to R$ 185 million (one hundred and eighty five million reais) in CAPEX in the second quarter of 2017/18 crop year, totaling R$452 million (four hundred and fifty two million Reais) for the first half of the crop year. According to the management of the company, the annual guidance for the CAPEX can be reaffirmed as disclosed in the Reference Form. GUIDANCE UPDATE 1Q18 CANE CRUSHING (million tons) Biosev crushed 9.6 million tons of sugarcane in the first quarter of 2017/18 crop year and, according to the management of the company, the annual guidance for the crushing volume can be reaffirmed as disclosed in the Reference Form. TRS CANE (kg/ton) In the first quarter of 2017/18 crop year, cane TRS content was kg/ton and, according to the management of the company, the annual guidance for the Cane TRS can be reaffirmed as disclosed in the Reference Form. TOTAL TRS (million tons) In the first quarter of 2017/18 crop year, Total TRS was 1.2 million tons and, according to the management of the company, the annual guidance for the Total TRS can be reaffirmed as disclosed in the Reference Form. CAPEX (R$ million) Biosev s CAPEX amounted to R$ 267 million (two hundred and sixty seven million reais) in the first quarter of 2017/18 crop year and, according to the management of the company, the annual guidance for the CAPEX can be reaffirmed as disclosed in the Reference Form. 66

65 NON-STATUTORY AUDIT COMMITTEE OPINION The non-statutory Audit Committee of ( ), jointly with the representatives of the and of BDO RCS Auditores Independentes, independent auditors of the, examined the financial statements of the related to the fiscal year ended on December 31st, Based in the analysis performed and considering the draft of the audit report, without remarks, prepared by BDO RCS Auditores Independentes, the non-statutory Audit Committee of the recommended, unanimously and without remarks, to the Board of Directors of the the approval of the referred financial statements. São Paulo, February 07 th, FEDERICO ADRIAN CERISOLI WAGNER BERTAZO MÁRCIO ÁLVARO MOREIRA CASTRO 67

66 OPINIONS AND STATEMENTS As Directors of Biosev SA, we declare under Article 25, Paragraph 1, Item VI, CVM Instruction 480 of December 7, 2009, that we reviewed, discussed and agreed with information interim financial statements and the terms of the external auditors report on interim financial statements for the nine-month period ended December 31st, São Paulo, February 08 th, 2018 Rui Chammas Chief Executive Officer Paulo Prignolato Chief Financial and Investor Relations Officer Ricardo Lopes Chief Operating Officer Daniela Aragão Officer 68

67 ADJUSTED EBITDA 1 GROWS 45.4% TO R$588 MILLION IN THE QUARTER Unit cost decreases 21.6% in 3Q18 (measured by ex-resale Cash COGS) São Paulo, February 8, 2018 Biosev, the world s second largest sugarcane processor, announces its results for the third quarter of the 2017/18 crop year. 3Q18 & 9M18 HIGHLIGHTS Crushing came to 29.1 million in 9M18, in line with 9M17; B3: BSEV3 Stock price on 2/7/2018: R$ 4.32 No. of shares: 219,628,363 Market cap: R$949 million Conference Call in Portuguese with translation into English February 9, :00 a.m. (Brasília - BRST) 8:00 a.m. (U.S. EDT) 1:00 p.m. (London - GMT) Portuguese (11) (11) English: +1 (786) (888) Code: Biosev Replay: (11) Code: Portuguese # English # Investor Relations ri@biosev.com Telephone: (11) agricultural yield (TCH) stood at 80.2 ton/ha in 9M18, up 0.8%, led by the MS Cluster, where yield grew 5% to 85.1 ton/ha; TCH In the Center South region reached 82.4 ton/ha in 9M18, a decrease of 0.6%; Cane TRS increased 0.7% to kg/ton in 9M18; TSH (total sugar per hectare) rose 1.6% to 10.6 ton/ha in 9M18; Production volume measured by Product TRS grew 2.8% to 3.8 million tons in 9M18; Net revenue growth for sugar, ethanol and energy was 12%, 12% and 53%, respectively; Unit Cash COGS (ex-resale) fell 21.6% in 3Q18 and 9.3% in 9M18, confirming the downward trend observed in 2Q18; Cash SG&A expenses decreased 7.7% in the quarter; Adjusted EBITDA (ex-hacc/resale) amounted to R$588 million in 3Q18 and R$1.3 billion in 9M18, with EBITDA Margin of 44.5% and 34.0%, respectively; and R$173 million non-recurring impact in the P&L due to payment of the resources received as a result of favorable decisions in certain lawsuits filed against the Instituto do Açúcar e do Álcool IAA, to the historical Santelisa Vale shareholders, as already announced to the market in a Material Fact. 1 Adjusted EBITDA excludes non-recurring effects in the amount of R$159 million Biosev is the world s second largest sugarcane processor, with 11 agroindustrial units in Brazil. Biosev is controlled by the Louis Dreyfus Group and began operating in the sugar and ethanol industry in 2000, when it acquired its first unit in Brazil. Today its crushing capacity stands at 36.4 million tons/year. Biosev manages 346,000 hectares of land and has surplus biomass power generation capacity of 1,346 GWh. Biosev is listed on the São Paulo Stock Exchange (B3) Novo Mercado and adopts high standards of corporate governance.

68 70 1. OPERATING PERFORMANCE The following table presents key indicators for operating efficiency and productivity, which are analyzed in this section: Efficiency and Productivity 3Q18 3Q17 % 9M18 9M17 % Crushing ('000 tons) 6,400 7, % 29,101 29, % Own 4,484 5, % 17,925 18, % Third Parties 1,915 2, % 11,176 11, % TCH - Agricultural yield (ton/ha)* % % Sugarcane TRS (kg/ton) % % TSH (Kg/ha)** % % * Own cane only ** Total Sugar per Hectare: Calculated as the product of TCH and Sugarcane TRS 1.1 Crushing Biosev crushed 29.1 million tons in 9M18, virtually in line with the same period last crop year, with crushing affected by the smaller area harvested due to the higher rainfall in Brazil's Center-South region in the period. This effect was partially offset by the increase in TCH. At the Ribeirão Preto (RP) Cluster, crushing in 9M18 was 15.8 million tons, up 1.6%. This performance reflects the 4.0% growth in the harvested area, which was partially offset by the 1.9% drop in TCH. At the Mato Grosso do Sul (MS) Cluster, crushing volume was 7.3 million tons in 9M18, in line with 9M17. At the Leme (L) and Lagoa da Prata (LP) Clusters, combined crushing amounted to 4.0 million tons in 9M18, representing a decrease of 12.9% compared to 9M17, This performance is explained by the 8.3% decline in average yield measured by TCH and by the 5.8% contraction in the harvested area. In 3Q18, Biosev s consolidated crushing amounted to 6.4 million tons, down 18.7% from 3Q17. The lower crushing volume in the quarter is associated with s planning for agricultural activities, which provides for a resumption of crushing operations in March, and with the effects from higher rainfall at the MS Cluster.

69 71 The following charts show the evolution in crushing volume on a consolidated basis and at the RP and MS Clusters: Crushing Volume ('000) -0.1% 29,131 29,101 Ribeirão Preto 1.6% 15,542 15,798 Mato Grosso do Sul -0.4% 7,300 7,271 9M17 9M18 9M17 9M18 9M17 9M18 Ribeirão Preto Mato Grosso do Sul 7, % 6, % 3,664 3,398 2, % 1,454 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18

70 Productivity Tons of Cane per Hectare (TCH) In 9M18, the yield of sugarcane fields measured by TCH was 80.2 ton/ha, up 0.8%, led by the improvements implemented in the cane fields management, which include: (i) disciplined execution of the plan to adjust the sugarcane varietal profile; (ii) adoption of enhanced agricultural practices, including the use of liquid and foliar fertilization, ferti-irrigation and the modification of processes and equipment to optimize mechanized harvesting and reduce trampling; and (iii) more intensive use of agricultural technologies. An important factor in this result was the 5.2% improvement in yield at the MS Cluster, to 85.1 kg/ton in 9M18. In the first nine months of the crop year, TCH at the RP Cluster decreased by 1.9% to 81.7 ton/ha. Yield at the cluster was affected by the lower precipitation in January to March (crop development period) compared to the same period of the previous crop year. In 3Q18, consolidated yield stood at 70.7 ton/ha, decreasing 3.7% from 3Q17, mainly impacted by the 8.3% decline in the RP Cluster to 70.1 ton/ha, due to the effects from the unfavorable weather conditions mentioned above. The result was partially offset by the higher yields at the MS and NE Clusters. A highlight was the improvement in TSH (tons of sugar per hectare), which reached 10.6 ton/ha, up 1.6% from 9M17. In the quarter, TSH stood at 9.6 ton/ha, down 2.3%, impacted by the decrease in TCH.

71 73 The following charts show the evolution in TCH on a consolidated basis and at the RP and MS clusters: TCH (ton/ha) Ribeirão Preto Mato Grosso do Sul 0.8% % % M17 9M18 9M17 9M18 9M17 9M18 Ribeirão Preto Mato Grosso do Sul -3.7% % % Q17 3Q18 3Q17 3Q18 3Q17 3Q18 The following charts show the evolution in consolidated TSH: TSH (ton/ha) TSH (ton of sugar/ha) TSH (ton of sugar/ha) -2.3% 1.6% Q17 3Q18 9M17 9M18

72 74 Note that Biosev is implementing a new planting model that will utilize, in planting operations, the same workforce used in harvesting and treatment operations. Sugarcane planting in Brazil's Center-South region now will be concentrated systematically in the months from December to March. Furthermore, improvements made to the agricultural area over the past few years have helped to create newer cane fields with greater longevity, which will enable Biosev to reduce its plantation renewal rate over the coming crop year. The goal of this new model s implementation is to reduce planting costs (CAPEX) and consequently improve the s cost competitiveness.

73 Cane Total Recoverable Sugar (TRS) Cane TRS content was kg/ton in 9M18, increasing 0.7% from the same period a year ago, which mainly reflects the improvements in cane fields management and adjustments to the varietal profile, combined with weather conditions that favored the increase in sugar content at the RP Cluster. At the RP Cluster, Cane TRS grew 2.6% in comparison with 9M17, to kg/ton. At the MS Cluster, Cane TRS was kg/ton, down 1.2% on the year-ago period, affected by the 26% higher precipitation levels this crop year. In 3Q18 compared to 3Q17, consolidated Cane TRS advanced 1.5% to kg/ton. At the RP Cluster, Cane TRS in the quarter was kg/ton, up 6.3%, reflecting the aforementioned measures and the more favorable weather conditions. At the MS Cluster, Cane TRS stood at kg/ton in 3Q18, down 10.2% compared to 3Q17, reflecting the effects from higher rainfall in the period. The following charts show the change in TRS content between crop years: Sugarcane TRS (kg/ton) 0.7% Ribeirão Preto % Mato Grosso do Sul -1.2% M17 9M18 9M17 9M18 9M17 9M18 Ribeirão Preto Mato Grosso do Sul 1.5% % % Q17 3Q18 3Q17 3Q18 3Q17 3Q18

74 Agricultural Technology Biosev has intensified the use of enhanced agricultural practices to improve the productivity, longevity and quality of its sugarcane plantations. The use of new technology is crucial to improving on current productivity levels. In this light, Biosev has invested, for example, in precision agricultural, using UAVs to map faults and replanting, using software and systems in all agricultural processes and adopting drip irrigation at the NE Cluster, among other initiatives. Updating the varietal profile is one of priorities of the agricultural area. Modern varieties are more productive, richer and better adapted to mechanized harvesting. Biosev uses pre-sprouted seedlings to form its nurseries, including through intercropping, with the possibility of rotating the crops between the seedling lines. This is an important tool for increasing soil fertility and reducing logistics costs with seedling transportation. All planters use autopilot systems and all planting lines are mapped and used to guide equipment during treatment and harvesting operations. Biosev also uses automated planters that dose the optimal number of seedlings for better distribution, which reduces planting errors and ensures a better final stand with more plants per hectare, which is critical for the plantation s productivity and longevity. Another example of the good agricultural practices adopted by the is the substitution of mineral fertilizers for industry byproducts, such as filter cake and vinasse. All Biosev units have composting yards for solid byproducts (cake, ash and soot), where the materials are optimized for use as fertilizers on the plantations. Meanwhile, the vinasse is transported directly to the fields via pipelines and trucks, where it is applied to substitute mineral fertilizers. The use of solid or liquid fertilizers, whether on areas with exclusively mineral fertilization or where fertilization is complemented by filter cake or vinasse, is important for leveraging production and quality. The application of nutrients in optimal formulations, at the right dosages and right times for best absorption by plants, helps to sustain the productivity of the sugarcane plantations. Aerial foliar fertilization, applied during spring and summer, increase the absorption of nutrients and reduce fertilization costs. Biological pest control and the use of selective and systemic products form the foundation of the s phytosanitary efforts. At the RP Cluster, the adopts mathematical modeling to guide the identification and control of the sugarcane borer based on environmental, weather, varietal and management characteristics, which reduces the use of pesticides, costs and environmental risks. This practice will be rolled out to other units and for other pests. During harvest operations, 100% of harvesters in the Center-South operate using autopilot and onboard computers, thereby reducing the trampling of cane lines and the removal of ratoons. Biosev also has Agricultural Operation Centers (COAs) in place at its agro industrial units, which monitor the operational and quality indicators of all agricultural activities.

75 Production The following table shows production volume and the production mix: Production 3Q18 3Q17 % 9M18 9M17 % Sugar Mix (%) 39.8% 47.8% -8 p.p. 49.0% 51.3% -2,3 p.p. Anhydrous Mix (%) 18.9% 28.3% -9,4 p.p. 31.6% 36.3% -4,7 p.p. Production ('000 tons of TRS Product)* 855 1, % 3,799 3, % Sugar ('000 tons) % 1,781 1, % Ethanol ('000 m³) % 1,140 1, % Cogeneration (GWh) % % *It considers the conversion factors applied in São Paulo State, published in Consecana Manual Product TRS Production in terms of tons of Product TRS came to 3,799 thousand tons in 9M18, up 2.8%. The increase is explained primarily by the 0.7% increase in Cane TRS and by industrial efficiency gains. In 3Q18, production in terms of Product TRS came to 855,000 tons, down 14.9% from 3Q17. Performance in the quarter was adversely affected by the 18.7% reduction in crushing volume, which was partially offset by the 1.5% growth in Cane TRS. In 3Q18, the share of sugar in the production mix decreased compared to the previous crop year, due to the higher volume of TRS allocated to ethanol production because of its higher profitability compared to sugar. In 9M18, anhydrous ethanol accounted for 31.6% of total ethanol production, down 4.7 p.p. from the previous crop year, due to the product's lower relative profitability compared to hydrous ethanol and energy cogeneration. In the quarter, anhydrous ethanol accounted for 18.9% of total ethanol production, down 9.4 p.p. from 3Q17, due to the aforementioned factors.

76 Cogeneration Biosev has cogeneration power plants at all 11 of its industrial sites and is energy self-sufficient during the harvest period. Of these units, nine produce surplus electricity for sale. Cogeneration destined for sale in 9M18 grew 2.2% to 802 GWh. This growth was basically driven by the higher crushing volume at the units that produce surplus energy for sale and by the processing of outside biomass. The productivity of cogeneration units measured in kwh of power sold per ton of cane crushed 2 stood at 31.3 kwh/ton in 9M18, up 0.6% from the same period last crop year. This higher productivity is due to the higher operational reliability combined with the implementation of process improvements. In 3Q18, cogeneration for sale stood at 174 GWh, down 23.7%, mainly due to the lower crushing volume and lower productivity of cogeneration units. The following charts show a comparison of cogeneration for sale and productivity between the periods on consolidated basis and for the RP and MS Clusters: Cogeneration for Sale Ribeirão Preto Mato Grosso do Sul % % % M17 9M18 9M17 9M18 9M17 9M18 Ribeirão Preto Mato Grosso do Sul % % % Q17 3Q18 3Q17 3Q18 3Q17 3Q18 Cogen for sale (GWh) Cogen for sale - Outsourced biomass (GWh) Cogen for sale/crushing (kwh/ton) 2 This productivity indicator excludes crushing volume from mills that do not export energy and the amounts of outside biomass.

77 79 2. ECONOMIC AND FINANCIAL PERFORMANCE 2.1 Net Revenue In 9M18, net revenue excluding the non-cash effects from the hedge accounting of foreigndenominated debt (HACC) amounted to R$5.3 billion, down 3.9% compared to 9M17. The result is mainly due to the lower revenue from commodity export performance contracts, which more than neutralized the higher revenue from sugar, ethanol and energy sales. In 3Q18, net revenue amounted to R$1.5 billion, down 1.0% from 3Q17. The higher revenue from sugar, ethanol and energy, which grew 2.6%, 26.2% and 40.7%, respectively, was partially neutralized by the lower revenue from other products (dry yeast, powdered molasses, raw and hydrolyzed bagasse) and from commodity export performance contracts. Note that Biosev s net revenue also includes, in addition to revenue from sales of sugar, ethanol, energy cogeneration and the byproducts of sugar and ethanol production from its industrial units revenue from the resale of finished products, such as: (i) sugar, ethanol and energy; and (ii) other commodities, which are required to comply with export performance contracts associated with obligations denominated in foreign currency. The following table presents a breakdown of net revenue ex-hacc: Net Revenue ex-hacc (R$ Thousand) 3Q18 3Q17 % 9M18 9M17 % Sugar 835, , % 2,751,771 2,451, % Domestic Market 117, , % 286, , % Export Market 717, , % 2,464,970 1,967, % Ethanol 597, , % 1,502,977 1,342, % Domestic Market 596, , % 1,394,931 1,180, % Export Market , , % Energy 92,054 65, % 281, , % Other Products 16, , % 789,317 1,561, % Dry yeast, molasses and bagasse 16,582 30, % 46,353 74, % Export performance contracts - 172, ,964 1,487, % Total 1,540,979 1,555, % 5,325,484 5,539, % Revenue from resale operations is detailed in the following table: Resale operations (R$ Thousand) 3Q18 3Q17 % 9M18 9M17 % Sugar, ethanol and energy* ,3% ,0% Export performance contracts ,0% ,0% Total ,0% ,7% * Revenue from sugar, ethanol and energy resale transactions are accounted in each of the corresponding product lines in the Net Revenue ex-hacc table above Excluding the effects from the export performance contracts, Biosev posted net revenue of R$4.6 billion in 9M18, up 13.1% compared to 9M17. In 3Q18, on the same basis, net revenue amounted to R$1.5 billion, growing 11.4% on 3Q17. The following charts present a breakdown of net revenue by product, excluding the effects from hedge accounting (HACC) and revenue from export performance contracts. Note the higher share of energy sales in Biosev s total revenue and the lower share of other products:

78 80 Net Revenue by Product (%) 9M17 4.5% 1.8% 9M18 6.1% 1.0% 33.1% 32.8% 60.0% 60.5% The following charts present a breakdown of net revenue by market, excluding the effects from hedge accounting (HACC) and revenue from export performance contracts. Note the lower share of domestic revenue in Biosev s total revenue, reflecting the decision to prioritize sales of VHP sugar, which is mainly exported, over sales of crystal sugar: Net Revenue by Market (%) 9M17 9M % 47.5% 56.1% 43.9% The following table presents the sugar and ethanol inventory position at the end of the respective periods: Inventories 9M18 9M17 6M18 Sugar ('000 tons) Ethanol ('000 m 3 )

79 Sugar In 9M18, net revenue from sugar sales excluding the non-cash effects from the hedge accounting of foreign-denominated debt (HACC) amounted to R$2.8 billion, advancing 12.2% compared to 9M17. The result primarily reflects the sales volume growth of 11.1%, driven by 25% growth in export volumes, combined with the 1.0% increase in average price in the period. In 3Q18, net revenue from sugar sales amounted to R$835 million, increasing 2.6% from 3Q17. The performance was mainly due to the 1.6% increase in the average price and 1.0% growth in sales volume. The following charts present the evolution in net revenue and a comparison of sugar volumes and average prices, excluding the non-cash effects from the hedge accounting of foreign-denominated debt: Net Revenue (R$ million) Volume ( 000 tons) and Average Price (R$/ton) 2,752 1, % 1,268 2, % 1, % 2,170 1,967 2,465 1,643 1, M M M17 9M18 1.6% 1,274 1, % % Q17 3Q Q17 3Q18

80 82 The following charts present the breakdown of revenue by type of sugar, excluding the non-cash effects from the hedge accounting of foreign-denominated debt (HACC). Note that the shift in the product mix reflects Biosev s decision to focus the Santa Elisa and Lagoa da Prata units on VHP production, which consequently reduced the production of crystal sugar. The decision was taken to maximize cash flow and operating results by reducing production bottlenecks and costs and by increasing efficiency gains: Revenue by Sugar Type (%) 9M17 3.3% 5.9% 9M18 3.9% 2.4% 4.0% 18.2% 72.6% 89.8%

81 Ethanol In 9M18, net revenue from ethanol sales, excluding the non-cash impacts from the hedge accounting of foreign-denominated debt (HACC), came to R$1.5 billion, growing 12.0% from 9M17. The figure reflects the 23.2% increase in sales volume, which was partially offset by the 9.2% decrease in average price. The reduction in the average sales price for ethanol is due to the (i) lower market prices for hydrous and anhydrous ethanol in comparison with the same period of the last crop year, (ii) the termination of PIS/COFINS tax credits of R$120/m 3 on ethanol sales and (iii) the smaller share of anhydrous ethanol in the sales mix. Meanwhile, the sales volume growth of 23.2% is due to the higher share of ethanol in the production mix, which is explained by the product s higher profitability in relation to sugar. In 3Q18, net revenue from ethanol sales was R$597 million, up 26.2% from 3Q17, reflecting the 50.8% growth in sales volume, which was partially offset by the 16.4% drop in the average price, due to the aforementioned reasons. It is worth mentioning that Biosev has obtained the license to import ethanol, free of tariff, within the quota established by the Brazilian government in September It is important to note the positive trend in ethanol prices over the course of 9M18, as shown in the following chart, which validates Biosev s inventory-carryover strategy. Hydrous and Anhydrous Ethanol Average Prices (R$/m³) Source: Bloomberg, December 2017.

82 84 The following charts present the evolution in net revenue and a comparison of ethanol volumes and average prices, excluding the non-cash effects from the hedge accounting of foreign-denominated debt: Revenue (R$ million) Sales Volume ('000 m³) & Average Sales Price (R$/m³) 1, , , % 1,586 1, % 1, % M17 9M18 9M17 9M18 1, % 1, % % Q17 3Q18 3Q17 3Q18 The following charts present a breakdown of revenue by type of ethanol, excluding the non-cash effects from the hedge accounting of foreign-denominated debt (HACC): Revenue by Ethanol Type (%) 7.3% 9M17 5.5% 9M % 50.2% 39.1% 55.5%

83 Energy In 9M18, net revenue from energy sales grew 53.1% to R$281 million, basically due to the 45.9% increase in average price, which was driven by the higher spot price (PLD) following the decline in reservoir levels in Brazil's Center-South. In 3Q18, net revenue from energy sales came to R$92 million, up 40.7%, primarily reflecting the higher average sales price, which was partially offset by the lower sales volume. The following charts present the evolution in net revenue and a comparison of energy volumes and average prices: Net Revenue (R$ million) Volume (GWh) & Average Sales Price (R$/MWh) % % % 1,249 1,310 9M17 9M18 9M17 9M % % % T17 3T18 3T17 3T18

84 Other Products The line Other Products records revenue from sales of dry yeast, powdered molasses, raw and hydrolyzed bagasse for animal feed, in addition to revenue from the sale of commodities in the spot market to fulfill export performance contracts with the aim of settling obligations in foreign currency. In 9M18, revenue from other products amounted to R$789 million, compared to revenue of R$1.6 billion in 9M17. The reduction of 49.5% is mainly related to the reduced execution of export performance contracts associated with the settlement of foreign-denominated debt.

85 Cost of Goods Sold (COGS) Biosev recorded a reduction in costs compared to both the third quarter and the first nine months of the previous crop year. Unit cash COGS ex-resale decreased 21.6% in the quarter and 9.3% in the ninemonth period, as shown below: Cash COGS ex-resale (R$/Ton TRS sold) -21.6% Cash COGS ex-resale (R$/Ton TRS sold) -9.3% Q17 3Q18 9M17 9M18 As per the total cash COGS ex-resale, it decreased 6.0% in the quarter and 2.0% in 9M18. This improvement reflects the reduction of operating costs, as a result of the on-going process to optimize costs and streamline organizational structures. Such cost reduction more than offset the impact of increased volumes in the COGS as shown in the graph below. Note that the increase in Personnel costs is related to the termination of temporary agricultural workers due to the start of the intercrop period, which is a recurring event in the industry and that, in the 2017/18 crop year, occurred in December. In the previous crop year, this event occurred in January. An important factor was the non-recurring expenses under COGS, which is mainly due to the severance costs in 9M18, of R$13 million, associated with the ongoing streamlining of organizational structures. Excluding these non-recurring expenses, cash COGS ex-resale amounted to R$2.0 billion, down 2.6% from the same period last crop year. The following chart presents the evolution in cash COGS ex-resale between quarters, which shows the effects from volume, unit cost and non-recurring effects: Cash COGS ex-resale (R$MM) -2.0% -2.6% ,028 1,987 1,974 Cash COGS 9M17 Volume Effect Unitary Effect Cash COGS 9M18 Non recurring Cash COGS 9M18

86 88 The following tables present a breakdown of total COGS and cash COGS: CPV e CPV Caixa (R$ Mil) 3T18 3T17 % 9M18 9M17 % CPV Total (1,155,374) (1,307,104) -11.6% (4,597,261) (4,708,058) -2.4% Itens não-caixa (295,938) (267,689) 10.6% (1,057,094) (689,884) 53.2% Depreciações e Amortizações (376,701) (364,011) 3.5% (1,096,736) (989,449) 10.8% Ganhos (perdas) decorrentes de mudanças no valor justo menos custos estimados de venda do ativo biológico 80,763 96, % 39, ,565 - CPV Caixa (859,436) (1,039,415) -17.3% (3,540,167) (4,018,174) -11.9% Pessoal (162,370) (124,173) 30.8% (462,599) (355,203) 30.2% Matéria prima (cana, arrendamento e CCT) (427,458) (485,072) -11.9% (1,397,160) (1,492,250) -6.4% Insumos industriais e serviços (34,700) (55,144) -37.1% (126,934) (180,136) -29.5% Mercadoria de revenda (234,908) (375,026) -37.4% (1,553,474) (1,990,585) -22.0% Açúcar, etanol e energia (234,908) (203,261) 15.6% (789,514) (493,128) 60.1% Performance de exportação de commodities - (171,765) 0.0% (763,960) (1,497,457) -49.0% CPV Caixa ex-revenda (624,528) (664,389) -6.0% (1,986,693) (2,027,589) -2.0% CPV Caixa ex-revenda (R$ Mil) 3T18 3T17 % 9M18 9M17 % Custos Agrícolas (533,841) (567,197) -5.9% (1,704,197) (1,727,293) -1.3% CCT (cana própria + terceiros) (203,147) (176,525) 15.1% (605,186) (556,083) 8.8% Arrendamentos e parcerias (119,877) (129,202) -7.2% (364,825) (341,315) 6.9% Compra de cana de terceiros (210,817) (261,470) -19.4% (734,185) (829,895) -11.5% Custos Industriais (80,179) (95,637) -16.2% (238,257) (280,870) -15.2% Outros (10,508) (1,554) 576.1% (44,239) (19,425) 127.7% CPV Caixa ex-revenda (624,528) (664,388) -6.0% (1,986,693) (2,027,588) -2.0% ATR Produto vendido ex-revenda (mil tons) 1, % 3,267 3, % CPV Caixa ex-revenda (R$/Ton) (545) (695) -21.6% (608) (671) -9.3%

87 Selling, General and Administrative (SG&A) Expenses In 9M18, SG&A expenses amounted to R$490 million, increasing 2.7% from 9M17. Selling expenses came to R$245 million, increasing 5.1% from the same period last crop year. The main factor in this variation was the increase in logistics expenses associated with the higher share of exports in the sales mix. General and administrative expenses were R$245 million, practically in line with the prior-year period. In 3Q18, SG&A expenses amounted to R$129 million, down 7.7% from the same period of the prior crop year, mainly due to the 17.0% reduction in G&A expenses. It is important to note the recognition of R$1.5 million in 3Q18 and of R$3.6 million in 9M18 in nonrecurring items related to severance payments as part of the ongoing process to streamline operating and organizational structures, which includes reducing headcount. The following table presents a comparison of SG&A expenses between periods: SG&A (R$ Thousand) 3Q18 3Q17 % 9M18 9M17 % Selling (63,999) (61,307) 4.4% (244,641) (232,713) 5.1% Freight (46,212) (40,271) 14.8% (170,132) (156,239) 8.9% Shipping Charges (14,955) (16,559) -9.7% (64,137) (62,805) 2.1% Commissions, wharfage and other (2,832) (4,477) -36.7% (10,372) (13,669) -24.1% G&A (65,396) (78,832) -17.0% (244,916) (243,885) 0.4% Personnel (32,517) (36,473) -10.8% (116,304) (121,659) -4.4% Services (25,581) (34,227) -25.3% (105,450) (98,881) 6.6% Other (7,298) (8,132) -10.3% (23,162) (23,345) -0.8% SG&A (Cash) (129,395) (140,139) -7.7% (489,557) (476,598) 2.7% Depreciation expenses allocated as SG&A amounted to R$18.5 million in 9M18 and to R$6.0 million in 3Q18, compared to R$21.3 million and R$6.8 million in 9M17 and 3Q17, respectively.

88 EBITDA Biosev posted gross margin increase in comparison with both the same quarter and nine-month periods of the previous crop year. In 9M18, gross margin improved from 42.9% to 47.2%, while in 3Q18 it improved from 43.9% to 52.7%. These margin gains were obtained because of the higher sales volume and lower costs mentioned above: Gross Margin ex-resale / HACC (%) and Cash COGS/Net Revenue (%) 43.9% 52.7% 42.9% 47.2% -8.8 p.p p.p. 56.1% 47.3% 57.1% 52.8% 3Q17 3Q18 9M17 9M18 Cash COGS / Net Revenue (%) Gross Margin (%) Adjusted EBITDA (including resale/hacc) came to R$1.1 billion, increasing 11.5% from 9M17. In 3Q18, adjusted EBITDA (including resale/hacc) came to R$567 million, up 43.3% compared to 3Q17. To ensure a more accurate analysis of Biosev s operating profitability, we excluded from the calculation of adjusted EBITDA (3)(4) the effects from resale operations, including the performance of export performance contracts, and the non-cash effects from the hedge accounting (HACC) of foreigndenominated debt on net revenue. Furthermore, especially in 3Q18, a substantial volume of non-recurring items were recognized, in the amount of R$158.8 million, totaling R$171.9 million in 9M18. These costs are mainly associated with the expenses of R$138 million, incurred from the s ongoing operational and administrative restructuring and from the settlement of obligations with legacy shareholders from Santelisa Vale, as already announced by Biosev in a material fact notice. Accordingly, and as shown in the following chart, adjusted EBITDA ex-resale/hacc, and excluding the non-recurring effects of the period, came to R$1.3 billion in 9M18, advancing 18.5% on 9M17. Adjusted EBITDA margin (ex-resale/hacc) in the period was 34.0%, expanding 3.6 p.p. compared to 9M17. In 3Q18, adjusted EBITDA ex-resale/hacc, excluding the non-recurring effects of the period, was R$588 million, growing 45.4% on the year-ago period. Adjusted EBITDA margin ex-resale/hacc stood at 44.5%, increasing 10.4 p.p. from the same period last crop year. 3 EBITDA corresponds to earnings before net financial income (expenses); depreciation, amortization and depletion; and income and social contribution taxes on net income for the period. Among other metrics, we use EBITDA as a measure of our operating performance and operating cash flow generation. Adjusted EBITDA is calculated based on EBITDA (CVM Instruction 527), excluding non-recurring items. 4 EBITDA is not a measure of financial performance in accordance with the accounting practices adopted in Brazil (BR GAAP, IFRS) and should not be considered as an alternative to net income, as an indicator of operating performance, as an alternative for operating cash flow or as a measure of liquidity. EBITDA does not consider certain costs, which could significantly affect our profits, such as financial expenses, taxes, depreciation and amortization, thus limiting its use as a measure of our profitability.

89 91 The following charts show the change in adjusted EBITDA ex-resale/hacc and EBITDA margin between periods: Adjusted EBITDA ex-resale/hacc (R$ million) and EBITDA Margin (%) 34.1% 44.5% 30.4% 34.0% 45.4% 18.5% ,079 1,279 3Q17 3Q18 9M17 9M18 Adjusted EBITDA ex-resale/hacc Adjusted EBITDA margin ex-resale/hacc The following table presents breakdowns of Adjusted EBITDA and Adjusted EBITDA ex-resale/hacc: EBITDA Composition (R$ Thousand) 3Q18 3Q17 % 9M18 9M17 % Net Revenue 1,535,433 1,550, % 5,147,716 5,452, % Cash COGS (859,436) (1,039,415) -17.3% (3,540,167) (4,018,174) -11.9% Gross Profit (Cash) 675, , % 1,607,549 1,434, % SG&A (Cash) (129,395) (140,139) -7.7% (489,557) (476,598) 2.7% TEAG Profit/(Loss)¹ (120) 1,731-2,905 1, % Other Operating Revenue/Expenses (138,192) 23,138 - (185,409) 35,124 - Non-recurring items 158,771 (142) - 171,874 (1,448) - Adjusted EBITDA 567, , % 1,107, , % Adjusted EBITDA Margin 36.9% 25.5% 11.4 p.p. 21.5% 18.2% 3.3 p.p. Resale effect² 15,438 3,306 - (6,468) (736) - HACC effect³ 5,546 5, % 177,768 86, % EBITDA ex-resale/hacc 588, , % 1,278,662 1,078, % EBITDA Margin ex-resale/hacc 44.5% 34.1% 10.4 p.p. 34.0% 30.4% 3.6 p.p. 1 - Equivalent to 50% of TEAG's shareholding position 2 - Excludes the effects from resale operations of sugar, ethanol, energy and exports performance contracts 3 - Excludes the impact from hedge accounting (HACC) of foreign currency debt on net revenue (non-cash impact)

90 92 The following table presents a reconciliation of Adjusted EBITDA with the Income Statement in the Periods: EBITDA Reconciliation (R$ Thousand) 3Q18 3Q17 % 9M18 9M17 % NET INCOME (LOSS) (278,686) 42,787 - (823,141) (287,002) 186.8% Income Tax and Social Contribution (57,117) (91,777) -37.8% (201,519) 187,813 - Financial result 440, , % 878, , % Depreciation and Amortization 382, , % 1,115,230 1,010, % EBITDA CVM , , % 968,831 1,287, % Losses (gains) from changes in the Fair Value minus estimated costs to sell Biological Assets (80,763) (96,322) -16.2% (39,642) (299,565) -86.8% Amortization of Concession - TEAG 2,100 2,100-6,299 6,299 - Non-recurring items 158,771 (142) - 171,874 (1,448) - Adjusted EBITDA 567, , % 1,107, , % Adjusted EBITDA Margin 36.9% 25.5% 11.4 p.p. 21.5% 18.2% 3.3 p.p.

91 Hedge The following table shows the aggregate position of our hedged sugar volumes and prices via derivative commodity and foreign exchange contracts on December 31, Hedge on 12/31/ / /19 Sugar (#NY11) Volume ('000 tons) 1, Average Price (cus$/lb) FX (US$) Amount (US$ million) Average Price (R$/US$) Hedged Price (cr$/lb) The volume hedged of 815,000 tons accounts for 62% of Biosev s exposure for the 2018/19 crop year. Note that, adding up the 4.2% Brazilian VHP polarization premium to the average prices shown above, Biosev s hedged prices amounted to cr$/lb. Note that prices in the above table do not include this polarization adjustment. 2.6 Financial Result In 9M18, the net financial result was an expense of R$878 million, compared to an expense of R$376 million in the same period last crop year. Excluding the effects from exchange variation, the net financial result in 9M18 was an expense of R$635 million, down 1.8% from the prior-year period, mainly due to the lower losses from the mark-tomarket and settlement of derivative operations, which were partially offset by higher interest expenses. In 3Q18, Biosev recorded a net financial loss of R$440 million, compared to a net financial loss of R$168 million in 3Q17. This result was heavily affected by the depreciation in the Brazilian real against the U.S. dollar in the period, amounting to R$238 million. Excluding the effects from exchange variation, the net financial result in 3Q18 was an expense of R$203 million, increasing 35.0% from the previous crop year, mainly due to higher interest expenses. It is worth mentioning that this result was impacted by interest expenses from the settlement of obligations with legacy shareholders from Santelisa Vale, in the amount of R$35 million. At December 31, 2017, the U.S. dollar exchange rate was R$3.3080/US$.

92 94 The following table shows the changes in the financial result between periods: Financial Result (R$ Thousand) 3Q18 3Q17 % 9M18 9M17 % Financial Result, net (440,008) (168,257) 161.5% (878,261) (376,085) 133.5% FX Variation (237,395) (18,148) - (243,469) 270,433 - Financial Result before FX (202,613) (150,109) 35.0% (634,792) (646,518) -1.8% Interest Expenses (208,089) (162,220) 28.3% (643,245) (515,739) 24.7% Income from Short-term Investments 5,416 8, % 18,564 26, % Derivative transactions 867 4,086 - (3,843) (169,737) -97.7% Other Revenues/(Expenses) (807) (493) 63.7% (6,268) 12, Earnings Before Taxes (EBT) Earnings before provision for income and social contribution taxes (EBT) amounted to negative R$1,025 million in 9M18, compared to negative R$99 million in the same period of the previous crop year. In addition to the aspects discussed above, the variation in EBT is explained by the reduction of R$260 million in the fair value of biological assets less their estimated selling costs between the periods and by the increase in depreciation/amortization of R$104 million. The increase in depreciation/amortization is mainly explained by the higher investments in planting and crop treatments in recent crop years. In 3Q18, earnings before provision for income and social contribution taxes was negative R$336 million, compared to negative R$49 million in 3Q Net Income/Loss In 9M18, Biosev posted a net loss of R$823 million, compared to a net loss of R$287 million in 9M17. In addition to the aforementioned factors, the result of the period was positively impacted by deferred Income and Social Contribution taxes in the amount of R$202 million. This effect is mainly due to the variation in taxable temporary differences in the period related to unrealized foreign exchange variation and the mark-to-market adjustment of derivative positions. In 3Q18, Biosev recorded a net loss of R$279 million, compared to net income of R$43 million in the same period of the previous year. In addition to the aforementioned factors, the result of the period was positively impacted by deferred Income and Social Contribution taxes in the amount of R$57 million due to the variation in taxable temporary differences in the period related to unrealized foreign exchange variation and the mark-to-market adjustment of derivative positions.

93 95 3. CAPITAL EXPENDITURE Biosev implemented a new planting model that will utilize, in planting operations, the same workforce used in harvesting and treatment activities. In Brazil's Center-South region, sugarcane is now planted between December and March. Improvements made to the agricultural area over the past few years have helped to create newer cane fields with greater longevity, which will enable Biosev to reduce its plantation renewal rate over the coming crop years. The goal of this new model is to reduce planting costs (CAPEX) and consequently improve the s cost competitiveness. Capital expenditures in 9M18 amounted to R$733 million, down 13.5% from the same period of the previous crop year. Investments in operations in the period came to R$555 million, down 21.4% from 9M17. The performance is mainly due to the reduction in expenditures with planting, consistent with the new planting model explained above. Note that the result in 9M18 was impacted by R$9 million in nonrecurring costs incurred from the ongoing streamlining of the company s operational and organizational structures. The following table presents a breakdown of capital expenditures: Capex (R$ Thousand) 3Q18 3Q17 % 9M18 9M17 % Expansion 504 7, % 3,448 16, % Operations 159, , % 554, , % Industrial 20,944 26, % 69,666 66, % Agriculture 159 4, % 11,325 13, % Planting 19,292 96, % 111, , % Treatment 118, , % 356, , % Other 1,000 5, % 5,431 22, % Intercrop deferred costs 120,396 64, % 174, , % CAPEX 280, , % 732, , % Non-recurring items (709) - - (9,374) - - Recurring CAPEX 280, , % 723, , %

94 96 4. ADJUSTED EBITDA MINUS CAPEX Biosev posted an evolution in the Adjusted EBITDA minus CAPEX indicator in the quarter and in the year-to-date as shown in the graph below: Adjusted EBITDA - CAPEX (R$ million) 342% 139% Q17 3Q18 9M17 9M18

95 97 5. INDEBTEDNESS Biosev s gross debt stood at R$5.4 billion at the end of 3Q18, virtually in line with the previous quarter. Such position is explained by the net amortizations in the amount of R$219 million, which was offset by the effects from the 4.4% depreciation in the BRL against the USD on the dollar-denominated portion of liabilities, in the amount of R$183 million. Net debt stood at R$5.0 billion, increasing 2.3% from the balance at end-2q18, mainly due to the aforementioned factors. The following table presents a breakdown of the debt position: Debt (R$ Million) 12/31/ /30/2017 Var. % Gross Debt (5,453) (5,432) 0.4% Short Term (2,098) (2,126) -1.3% Long Term (3,355) (3,306) 1.5% Cash and Short-term Investments % Net Debt (5,046) (4,934) 2.3% Net Debt/Adjusted EBITDA 3.4x 3.8x

96 98 The following charts present a breakdown of debt by index and instrument on December 31, 2017, as well as the cash position by currency: Gross Debt by Instrument and Index (%) Cash and ST Investments by Currency (%) 1.8% 0.6% 8.5% 8.0% 35.6% 18.9% 0.1% 30.8% 10.2% 37.1% 9.1% 70.3% 69.2% BNDES/FCO/FNE Reestructed Debt Export Pre Payment ACC Other NCE USD = 78.9% LIBOR Fixed CDI TJLP Other BRL USD The following chart shows our cash position and debt amortization schedule: Cash and Amortization Schedule (R$ million) 1,863 2, Cash 1,239 1, / / / / /28 BRL USD

97 99 6. CAPITAL MARKETS AND INVESTOR RELATIONS The following chart presents the s stock performance in the last 12 months in comparison with the Bovespa Index, as well as the stock s liquidity: Performance BSEV3 vs. IBOV 150% 100% Market value: R$1.0 billion Nº of shares: 219,628,363 5,000 4,000 50% 0% -50% 76, % % 3,000 2,000 1, % dez-16 jan-17 fev-17 mar-17 abr-17 mai-17 jun-17 jul-17 ago-17 set-17 out-17 nov-17 0 Financial Traded Volume (R$ thousand) IBOV BSEV3 Source: Bloomberg, December 31, GUIDANCE Biosev confirms its guidance already given to the market, as shown in the following table: 2017/18 Crop year Guidance Crushing (Million tons) Sugarcane TRS (kg/ton) Total TRS (Million tons)* CAPEX (R$ Million) 1,250 +/- 90 *Total TRS is the product of crushing volume by sugarcane TRS

98 7. APPENDICES SUMMARIZED FINANCIAL STATEMENTS 7.1 INCOME STATEMENT Income Statement (R$ Thousand) 3Q18 3Q17 % 9M18 9M17 % Gross Revenue 1,675,900 1,630, % 5,482,138 5,669, % Taxes and Sales Deductions (140,467) (80,144) 75.3% (334,422) (216,773) 54.3% Net Revenue 1,535,433 1,550, % 5,147,716 5,452, % COGS (1,155,374) (1,307,104) -11.6% (4,597,261) (4,708,058) -2.4% GROSS PROFIT 380, , % 550, , % OPERATING INCOME (EXPENSES) (275,854) (124,162) 122.2% (696,854) (467,802) 49.0% G&A (71,443) (85,624) -16.6% (263,410) (265,202) -0.7% Selling (63,999) (61,307) 4.4% (244,641) (232,713) 5.1% Equity income/(loss) in subsidiaries (2,220) (369) - (3,394) (5,011) -32.3% Other operating income (expenses) (138,192) 23,138 - (185,409) 35,124 - Financial Result, net (440,008) (168,257) 161.5% (878,261) (376,085) 133.5% PROFIT (LOSS) BEFORE TAXES ON INCOME (335,803) (48,990) - (1,024,660) (99,189) 933.0% Income Tax and Social Contribution 57,117 91, % 201,519 (187,813) - NET INCOME (LOSS) (278,686) 42,787 - (823,141) (287,002) 186.8% 100

99 7.2 BALANCE SHEET ASSETS ASSETS (R$ Thousand) 12/31/ /31/2017 % CURRENT ASSETS Cash and cash equivalents 170,019 1,463, % Short-term investments 215, , % Derivative financial instruments 37, , % Accounts receivables 335, , % Inventories¹ 827, , % Biological Assets 941, , % Recoverable taxes 339, , % Other receivables 78, , % Assets held for sale 3,506 3,506 - Total current assets 2,949,887 4,109, % NON CURRENT ASSETS Long-term investments 21,920 19, % Advances to suppliers 18,830 14, % Escrow deposits 345, , % Recoverable taxes 87, , % Deferred income tax and social contribution 62,125 3, % Other receivables 11,648 17, % Investments 185, , % Property, plant and equipment 4,026,446 4,489, % Intangible assets 926, , % Total non-current assets 5,685,549 6,179, % TOTAL ASSETS 8,635,436 10,288, % 1 - Includes commodity products to fulfill export performance contracts: R$257 million on 03/31/

100 7.3 BALANCE SHEET LIABILITIES AND EQUITY LIABILITIES AND SHAREHOLDERS' EQUITY (R$ Thousand) 12/31/ /31/2017 % CURRENT LIABILITIES Borrowings and financing 2,097,934 1,944, % Advance from domestic customers 23,379 30, % Advance from foreign customers 369, , % Accounts payables 987, , % Accrued payroll and related taxes 116, , % Taxes payable 95,514 49, % Derivative financial instruments 41,635 28, % Other payables 203, , % Total current liabilities 3,935,654 3,631, % NON CURRENT LIABILITIES Borrowings and financing 3,355,261 4,344, % Advance from foreign customers 2,379,130 2,427, % Accounts payables 1,310 1, % Deferred income tax and social contribution 41, , % Derivative financial instruments 12,018 16, % Provision for tax, labor, civil and environmental contigencies 305, , % Other payables 47,355 56, % Total non-current liabilities 6,141,577 7,318, % SHAREHOLDERS' EQUITY Social Capital 2,618,214 2,618,214 - Capital reserve 1,360,072 1,355, % Accumulated losses (4,971,760) (4,148,598) 19.8% Other comprehensive income (loss) (460,181) (503,033) -8.5% Total equity attributable to shareholders (1,453,655) (677,801) 114.5% Non-controlling interest 11,860 16, % Total equity (1,441,795) (661,518) 118.0% TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 8,635,436 10,288, % 102

101 7.4 CASH FLOW STATEMENT Cash FLOW (R$ Thousand) 12/31/ /31/2016 CASH FLOW FROM OPERATING ACTIVITIES NET INCOME (LOSS) (823,141) (287,002) Non-cash transactions 1,427,477 1,263,030 Depreciation and amortization 1,115,230 1,010,766 Losses (gains) from changes in the Fair Value minus estimated costs to sell Biological Assets (39,642) (299,565) Interest, exchange rate changes and inflation adjustments, net 563,984 (48,191) Losses/(gains) on hedge operations 64, ,418 Deferred Income tax and social contribution (202,818) 187,655 Other non-cash transactions (73,887) 49,947 Decrease/(Increase) in assets 206,977 (385,302) Increase/(Decrease) in liabilities 158,420 (679,489) Dividends received - - Interest paid on borrowings and financing (345,366) (375,214) Net cash provided by/(used in) operating activities 624,367 (463,977) CASH FLOWS FROM INVESTING ACTIVITIES Increase in property, plant and equipment (307,463) (425,117) Additions to biological assets (397,813) (383,427) Increase in intangible assets (2,157) (5,933) Decrease/(Increase) in short-term investments (101,546) 150,632 Other (42,473) (47,236) Net cash provided by/(used in) investing activities (851,452) (711,081) CASH FLOW FROM FINANCING ACTIVITIES Borrowings and financing 2,501,935 2,363,672 Payment of borrowings and financing (3,568,269) (2,753,796) Net cash provided by/(used in) financing activities (1,066,334) (390,124) INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (1,293,419) (1,565,182) Cash and cash equivalents at the beginning of the period 1,463,438 1,826,121 Cash and cash equivalents at the end of the period 170, ,

102 8. APPENDIX MARKET OVERVIEW Sugar Price Sugar prices in USD averaged c/lb in 3Q18, increasing 4.3% from 2Q18. Compared to 3Q17, prices fell 30.3% (20.87 /lb). In BRL, the decline was intensified by the BRL strengthening against the USD, with the average price reaching R$ 47.4 c/lb in the quarter, 30.8% lower than in 3Q17 (R$68.56 c/lb). Fundamentals By end-december, Brazil s Center-South region had processed million tons of sugarcane, or 1.5% less than in the previous season. The share of sugar in the mix also decreased, with mills gradually migrating to mixes with a higher share of ethanol, influenced by the more favorable prices for ethanol than sugar since August. On the other hand, sugar production came to 35.8 million tons in the period, growing 1.7% from 3Q17, mainly due to the higher TRS content this crop year and higher crystallization capacities in the industry. The period also marked the start of the 2017/18 crop year in the northern hemisphere (Oct/17 to Sep/18). Favorable weather conditions in India, Thailand and Europe resulted in high cane yields. Global sugar output should set a new record of 186 million tons in 2017/18. After a shortfall of some 0.5 million ton in the prior crop year, the global market is expected to post a surplus this year, even with the expected drop in production in Brazil s Center-South region. This surplus is mainly due to the expectation of higher supply from certain producing regions, such as India, Thailand, Europe and China. This supply-demand imbalance, combined with the activities of speculative funds, has been driving sugar prices lower. The net effect of the above factors is shown in the following chart: Average Prices of VHP, Crystal and Refined Sugar (US$) VHP (#NY11) cus$lb Cristal (ESALQ) US$/Ton Refinado (Londres) US$/Ton Source: Bloomberg, December

103 Ethanol Price In 3Q18, hydrous ethanol net prices averaged R$1,647/m³, down 11.8% from R$1,867/m³ in 3Q17. Meanwhile, anhydrous ethanol traded at an average of R$1,559/m³, a premium of 9.3% on the hydrous ethanol price net of ICMS tax. Supply and Demand Brazilian ethanol production (CS and NE) from October to December of the 2017/18 crop year amounted to 5.7 million m³, increasing 15.7% from the same period last crop year. Of this amount, 3.47 million m³ was hydrous ethanol, which corresponds to a share of 59.7%, up from 52.7% in the year-ago period. Total ethanol consumption increased 12.2% between periods, resulting in demand of 7.5 million m³ in 3Q18, compared to 6.7 million m³ in 3Q17, mainly due to the higher share of hydrous ethanol in the country s fuel profile. On the other hand, the consumption of Otto-Cycle fuels was flat. Total consumption of Otto-Cycle products (ex-diesel and VNG) is estimated at million m³, compared to million m³ in the same period of the 2016/17 crop year. The higher ethanol supply boosted Brazilian exports of the product, which amounted to 345,700 m³ in 3Q18, compared to the 204,800 m³ exported in 3Q17. Imports decreased from 345,300 m³ in 3Q17 to 289,600 m³ in 3Q18, mainly due to the duties that weighed on imports of corn-based U.S. ethanol by reducing the product s competitiveness. The net effect of the above factors is shown in the following chart: Hydrous and Anhydrous Ethanol Average Prices (R$/m³) Hidratado (ESALQ) Anidro (ESALQ) Source: Bloomberg, December