Terra Santa Agro S.A.

Transcription

1 Terra Santa Agro S.A. ( formerly Vanguarda Agro S.A.) at September 30, 2017 (A free translation of the original report in Portuguese, as filled with the Brazilian Securities and Exchange Commission (CVM), prepared in accordance with the Technical Pronouncement CPC 21 (R1) - Interim Financial Reporting and the international standard IAS 34 - Interim Financial Reporting, as issued by the international Accounting Standards Board - IASB)

2 Contents Independent auditors report on the interim financial information 3 Balance sheets 5 Statements of income (loss) 6 Statements of comprehensive income (loss) 8 Statements of changes in equity 9 Statements of cash flows - Indirect method 10 Statements of value added 11 Explanatory notes to the interim financial information 12 2

3 KPMG Auditores Independentes Rua Arquiteto Olavo Redig de Campos, 105, 6º andar - Torre A São Paulo/SP - Brasil Caixa Postal CEP São Paulo/SP - Brasil Phone +55 (11) , Fax +55 (11) Independent auditors report on the interim financial information (A free translation of the original report in Portuguese, as filed in the Brazilian Securities and Exchange Commission ( CVM ), containing individual and consolidated interim financial information prepared in accordance with the Technical Pronouncement CPC 21(R1) - Interim Financial Reporting and IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board - IASB) To The Board of Directors and Shareholders of Terra Santa Agro S.A. (formerly Vanguarda Agro S.A.) São Paulo - SP Introduction We have reviewed the accompanying individual and consolidated interim financial information of Terra Santa Agro S.A. ("Company"), contained in the Quarterly Information Form - ITR for the quarter ended September 30, 2017, which comprises the balance sheets as at September 30, 2017and the related statements of income (loss) and comprehensive income (loss) for the three and nine-month periods then ended, and statements of changes in equity and cash flows for the nine-month period then ended, including the explanatory notes. Management is responsible for the preparation of this interim financial information in accordance with Technical Pronouncement CPC 21(R1) - Interim Financial Reporting and IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as for the presentation of this information in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of the Quarterly Information Form - ITR. Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of review We conducted our review in accordance with Brazilian and International Standards on Reviews of Interim Financial Information (NBC TR 2410 and ISRE Review of Interim Financial Information Performed by the Independent Auditor of the Entity). A review of interim information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Brazilian and International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. KPMG Auditores Independentes, uma sociedade simples brasileira e firmamembro da rede KPMG de firmas-membro independentes e afiliadas à KPMG International Cooperative ( KPMG International ), uma entidade suíça. KPMG Auditores Independentes, a Brazilian entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. 3

4 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 CPC 21(R1) and IAS 34, issued by the IASB, applicable to the preparation of the Quarterly Information Form - ITR, and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM). Other matters Statement of value added The individual and consolidated interim financial information, related to the statements of value added for the nine-month period ended September 30, 2017, prepared under the responsibility of the Company s Management and presented as supplementary information for the purposes of IAS 34, were submitted to review procedures performed together with the review of the Company s Quarterly Information - ITR. In order to form our conclusion, we evaluated whether these statements are reconciled to the interim financial information and to the accounting records, as applicable, and whether their form and content are in accordance with the criteria set forth in Technical Pronouncement CPC 09 - Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that they have not been prepared, in all material respects, in accordance with the individual and consolidated interim financial information taken as a whole. Audit and review of corresponding amounts The corresponding amounts related to the individual and consolidated balance sheet as of January 1, 2016 (derived from the financial statements for the year ended December 31, 2015) and December 31, 2016, herein restated due to the matters described in Note 2.2, were audited by other independent auditors, who issued reports dated August 8, 2017, without qualifications, and the interim financial information related to the statements of income (loss) and comprehensive income (loss) for the three and nine-month periods ended September 30, 2016, and statements of changes in equity, cash flows and value added (supplementary information) for the nine-month period ended September 30, 2016, presented for comparison purposes, herein restated due to the matters described in Note 2.2, were revised by other independent auditors, who issued reports dated November 1, 2017, without qualifications. São Paulo, November 1, KPMG Auditores Independentes CRC 2SP014428/O-6 (Original report signed in Portuguese) Ulysses M. Duarte Magalhães Accountant CRC RJ /O-8 KPMG Auditores Independentes, uma sociedade simples brasileira e firmamembro da rede KPMG de firmas-membro independentes e afiliadas à KPMG International Cooperative ( KPMG International ), uma entidade suíça. KPMG Auditores Independentes, a Brazilian entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. 4

5 Balance sheets as of September 30, 2017 and December 31, 2016 (In thousands of reais) Parent Company Parent Company Assets Note Liabilities and equity Note (restated) (restated) Current assets Current liabilities Cash and cash equivalents 3 14,726 1,768 14,928 4,232 Salaries and social charges 17,979 10,271 18,081 11,274 Marketable securities Trade payables , , , ,245 Trade accounts receivable from customers 4 11, ,865 5,164 Taxes payable 12,120 5,955 15,201 8,707 Notes receivable 5 6,315 3,602 11,663 9,070 Loans and financing , , , ,897 Inventories 6 348, , , ,930 Intercompany loans 10 38,260 2, Biological assets 7 36, ,161 36, ,161 Taxes payable in installments 19 4,090 1,251 10,974 2,075 Taxes recoverable 8 10,723 16,451 16,006 17,549 Advances from customers 17 71,391 64,714 72, ,143 Prepaid expenses 1, ,442 3,438 Derivative financial instruments 22 11,567 5,907 11,567 5,907 Other assets 1,548 3,629 1,572 4,239 Leases and services payable 6,134 15,453 6,134 15,453 Non-current assets held for sale Federal Government Debt - PESA 18 3,212 3,236 3,212 3,236 Notes payable 5,419 6,443 5,736 6,850 Total current assets 430, , , ,993 Total current liabilities 489, , , ,787 Non-current liabilities Trade payables 15 30,362 2,067 30,362 2,090 Non-current assets Loans and financing , , , ,273 Notes receivable 5 13,813 8,818 28,146 24,385 Taxes paid in installments 19 4,538 4,898 10,187 5,256 Taxes recoverable 8 51,670 26,485 88,687 59,208 Notes payable ,207 2,061 Deferred taxes 9 153, , , ,532 Deferred taxes ,851 8,211 Judicial deposits 20 2,528 2,563 19,838 7,880 Federal Government Debt - PESA 18 2,744 2,978 2,744 2,978 Advances for future capital increase Provision for contingencies 20 19,838 19,795 19,838 19,795 Other assets 15,124 15,028 15,141 15,046 Provision for losses on investments 11 1,479 1, Total long-term assets 236, , , ,051 Total non-current liabilities 653, , , ,664 Total liabilities 1,143,931 1,073,032 1,169,631 1,124,451 Investment properties 12 7,976-7,976 - Investments 11 1,201,610 1,206, Equity 21 Property, plant and equipment , ,906 1,099,653 1,114,547 Share capital 2,707,502 2,707,502 2,707,502 2,707,502 Intangible assets 14 1,078 1, , ,496 Capital reserves 1,856 2,108 1,856 2,108 Equity valuation adjustments 1,446 (22,725) 1,446 (22,725) Total non-current assets 1,695,252 1,668,328 1,694,008 1,657,094 Accumulated losses (1,728,581) (1,709,249) (1,728,581) (1,709,249) Total equity 982, , , ,636 Total assets 2,126,154 2,050,668 2,151,854 2,102,087 Total liabilities and equity 2,126,154 2,050,668 2,151,854 2,102,087 The explanatory notes are an integral part of the interim financial information 5

6 Statements of income (loss) As of and for the three and nine-month periods ended September 30, 2017 and 2016 (In thousands of Reais) Parent Company Note Quarter 9 months Quarter 9 months (restated) (restated) Net revenue 24 97, , , ,146 Changes in fair value of biological assets and net realizable value of agricultural products 25 (384) 80,608 43,887 94,615 Realization of the fair value of biological assets 25 10,038 (54,648) (68,065) (107,850) Cost of products sold 25 (128,958) (421,042) (232,732) (681,204) Gross profit (loss) (22,043) 21,992 (40,828) (79,293) Operating income (expenses) General, administrative and selling expenses 25 (16) (41) (13) (37) Management compensation 23 (1,914) (5,620) (1,421) (4,255) Equity in the results of investees 11 5,462 (1,474) (74) 15,274 Provision for losses on investments 11 (16) (36) (67) (116) Other income (expenses), net ,266 (21,594) (22,191) (11,376) (27,660) (36,342) (48,710) Loss before financial result, income and social contribution taxes (33,419) (5,668) (77,170) (128,003) Finance result 26 Finance income 4,607 25, ,200 Finance expenses (26,509) (91,410) (26,373) (93,430) Foreign exchange variations, net 6,664 11,235 1,048 31,924 (15,238) (54,530) (24,403) (37,306) Loss before income and social contribution taxes (48,657) (60,198) (101,573) (165,309) Income tax and social contribution 9(b) Deferred (16,216) 40,513 9,831 17,439 Loss for the period (64,873) (19,685) (91,742) (147,870) Loss for the period attributable to controlling shareholders (64,873) (19,685) (91,742) (147,870) The explanatory notes are an integral part of the interim financial information. 6

7 Statements of income (loss) As of and for the three and nine-month periods ended September 30, 2017 and 2016 (In thousands of Reais, except losses per share) Note Quarter 9 months Quarter 9 months (restated) (restated) Net revenue , , , ,585 Changes in fair value of biological assets and net realizable value of agricultural products 25 (3,016) 93,369 21,482 70,183 Realization of the fair value of biological assets 25 10,038 (63,893) (41,942) (100,872) Cost of products sold 25 (125,683) (454,631) (139,687) (616,431) Gross profit (loss) (15,096) 61,066 (32,664) (49,535) Operating income (expenses) General, administrative and selling expenses 25 (16,399) (46,636) (19,928) (51,721) Management compensation 23 (1,914) (5,620) (1,421) (4,255) Other income (expenses), net ,278 (25,531) (26,879) (17,529) (45,978) (46,880) (82,855) Income (loss) before financial result, income and social contribution taxes (32,625) 15,088 (79,544) (132,390) Finance result 26 Finance income 4,882 26,540 (566) 24,777 Finance expenses (26,366) (115,302) (25,354) (91,870) Foreign exchange variations, net 7,013 12, ,350 (14,471) (76,560) (25,075) (31,743) Loss before income and social contribution taxes (47,096) (61,472) (104,619) (164,133) Income tax and social contribution 9(b) Current - - (4) (4) Deferred (17,777) 41,787 12,881 16,267 Loss for the period (64,873) (19,685) (91,742) (147,870) Loss for the period attributable to controlling shareholders (64,873) (19,685) (91,742) (147,870) Loss for the period Basic and diluted 28 (3,6214) (1,0989) (5,1212) (8,2544) The explanatory notes are an integral part of the interim financial information. 7

8 Statement of comprehensive income (loss) As of and for the three and nine-month periods ended September 30, 2017 and 2016 (In thousands of Reais) Parent Company and Quarter 9 months Quarter 9 months (restated) (restated) Loss for the period (64,873) (19,685) (91,742) (147,870) Other comprehensive income (loss): Items that will be reclassified to profit or loss Net result with financial instruments designated as hedge accounting 33,411 36,623 24, ,297 Income tax and social contribution on other comprehensive income (loss) (11,360) (12,452) (8,486) (63,001) Other comprehensive income, net of taxes 22,051 24,171 16, ,296 Total comprehensive income (loss) (42,822) 4,486 (75,267) (25,574) The explanatory notes are an integral part of the interim financial information. 8

9 Statement of changes in equity As of and for the nine-month periods ended September 30, 2017 and 2016 (In thousands of Reais) Share Capital Note Share capital Share issue costs Capital reserves Equity valuation adjustments Accumulated losses Total equity Balance at January 1, 2016, as previously disclosed 2,728,353 (20,851) 2,708 (173,183) (1,514,988) 1,022,039 Impact of correction of errors ,704 (42,704) - Balance restated at t January 1, ,728,353 (20,851) 2,708 (130,479) (1,557,692) 1,022,039 Comprehensive income (loss) for the period Impact of correction of errors (17,126) (17,126) Loss for the period (130,744) (130,744) Other comprehensive income for the period , ,296 Total comprehensive income (loss), net of taxes ,296 (147,870) (25,574) Capital transactions Effects arising from the stock option plan recognized in the period Total capital transactions Balance restated at September 30, ,728,353 (20,851) 2,856 (8,183) (1,705,562) 996,613 Balance at January 1, 2017, as previously disclosed 2,728,353 (20,851) 2,108 (69,706) (1,662,268) 977,636 Impact of correction of errors ,981 (46,981) - Balance restated at January 1, ,728,353 (20,851) 2,108 (22,725) (1,709,249) 977,636 Comprehensive income (loss) for the period Loss for the period (19,685) (19,685) Other comprehensive income for the period ,171-24,171 Total comprehensive income (loss), net of taxes ,171 (19,685) 4,486 Capital transactions Effects arising from the stock option plan recognized in the period (252) Total capital transactions - - (252) Balance at September 30, ,728,353 (20,851) 1,856 1,446 (1,728,581) 982,223 The explanatory notes are an integral part of the interim financial information. 9

10 Statement of cash flows - Indirect method As of and for the nine-month periods ended September 30, 2017 and 2016 (In thousands of Reais) Parent Company (restated) (restated) Cash flows from operating activities Loss before income and social contribution taxes (60,198) (165,309) (61,472) (164,133) Adjustments for: Changes in the fair value of biological assets and net realizable value of agricultural products (80,608) (94,615) (93,369) (70,183) Realization of the fair value of biological assets 54, ,850 63, ,872 Depreciation and amortization 25,858 24,229 27,742 27,630 Result on the sale and write-off of property, plant and equipment Equity in the results of investees 1,474 (15,274) - - Provision for losses on investments Expenses with stock option plans Provision for contingencies 47 1, ,140 Allowance for doubtful accounts Provision (reversal) for impairment of notes receivable (21,129) 21,956 (21,129) 21,956 Provision (reversal) of estimated inventory losses (77) 221 (77) 221 Provision (reversal) for adjustment of tax credits to recoverable value (1,798) (162) (1,798) 14 Adherence to tax installment programs 1,616-17,342 - Impairment of assets, including goodwill allocated to agreements 149 2, ,557 Adjustment of financial assets and liabilities to present value 5,987 5,676 5,703 5,419 Interest and foreign exchange variations, net 67,985 83,582 93,033 80,836 Changes in assets and liabilities: Trade accounts receivable from customers (10,784) (81,116) (14,231) 7,757 Notes receivable 7,139 13,802 9,706 25,215 Inventories (174,475) 82,960 (129,649) 5,988 Biological assets 172, , , ,936 Taxes recoverable (22,115) 6,882 (33,297) (8,561) Prepaid expenses (839) (510) (4) 1,928 Other assets 1,985 4,469 2,572 4,197 Judicial deposits 31 (935) (11,962) (1,242) Salaries and social charges 7,708 2,776 6,807 3,404 Trade payables (21,742) (137) (23,489) 972 Taxes payable 10,621 9,883 13,653 11,595 Advances from customers 8,743 (49,613) (28,120) (58,156) Taxes payable in installments 16,536-28,114 (805) Leases and services payable (9,293) (38,976) (9,293) (38,976) Intercompany loans 35,404 35, Notes payable (893) 663 (968) 811 Cash provided by operating activities 15, ,420 12, ,286 Income tax and social contribution paid (4) Interest paid (24,678) (58,496) (24,678) (58,496) Derivative financial instruments received (paid) - NDF 4,124 (427) 4,124 (427) Net cash provided by (used in) operating activities (5,533) 79,497 (7,643) 83,359 Cash flows from investing activities Financial investments - 5,005 (118) 5,005 Cash received upon disposals of fixed assets 1,026 2,114 1,026 2,279 Additions to property, plant and equipment (11,930) (3,498) (11,967) (3,498) Additions to intangible assets (70) (39) (67) (39) Net cash provided by (used in) investing activities 10,974 3,582 11,126 3,747 Cash flows from financing activities Loans and financing 131,774 41, ,774 41,697 Amortization of loans and financing (100,727) (147,677) (100,727) (147,677) Payment of funding costs (1,347) - (1,347) - Derivative financial instruments paid - Swap (235) (887) (235) (887) Net cash provided by (used in) financing activities 29, ,867 29, ,867 Net increase (decrease) in cash and cash equivalents 12,958 23,788 10,696 19,761 Cash and cash equivalents at the beginning of the period 1,768 24,240 4,232 25,414 Cash and cash equivalents at the end of the period 14, ,928 5,653 The explanatory notes are an integral part of the interim financial information. 10

11 Statement of added value As of and for the nine-month periods ended September 30, 2017 and 2016 (In thousands of Reais) Parent Company (restated) (restated) Revenue Sales of goods and products 460, , , ,885 Other revenue 4,271 9,317 4,689 9,800 Sales deductions and returns (1,268) (1,877) (1,984) (1,901) Allowance from doubtful accounts 21,129 (21,792) 21,129 (21,792) Fair value of biological assets and agricultural products 80,608 94,615 93,369 70, , , , ,175 Inputs acquired from third parties Raw materials consumed (240,828) (265,189) (240,828) (265,19) Realization of the fair value of biological assets (54,648) (107,850) (63,893) (100,87) Materials, energy, outsourced services and other (126,145) (349,168) (148,017) (281,79) Estimated inventory losses 77 (221) 77 (221) Other expenses (7,637) (14,067) (22,737) (19,303) (429,181) (736,495) (475,398) (667,376) Gross value added 135,948 57, ,774 73,799 Depreciation and amortization (25,858) (24,229) (27,742) (27,630) Net added value produced by the Company 110,090 33, ,032 46,169 Added value received as transfer Equity in the results of investees (1,474) 15, Provision for losses on investments (36) (116) - - Finance income 25,645 24,200 26,540 24,777 Total added value to distribute 134,225 72, ,572 70,946 Distribution of added value Personnel: Direct compensation 44,428 47,138 58,183 58,743 Benefits 1, , Government Severance Indemnity Fund for Employees (FGTS) 3,241 3,526 4,341 4,510 48,706 51,590 63,566 64,224 Taxes and contributions: Federal 13,846 34,460 16,044 21,813 State 10,526 7,100 12,489 8,955 Municipal Deferred (40,513) (17,439) (41,787) (16,267) (15,920) 24,203 (12,350) 14,612 Value distributed to providers of capital: Interest and foreign exchange variations 91, , , ,056 Fines 4, ,739 1,363 Rental and leases 24,622 29,561 24,622 29, , , , ,980 Value distributed to shareholders: Loss for the period (19,685) (147,870) (19,685) (147,870) (19,685) (147,870) (19,685) (147,870) Distributes added value 134,225 72, ,572 70,946 The explanatory notes are an integral part of the interim financial information. 11

12 Explanatory notes to the interim financial information In thousands of reais, unless otherwise stated 1 General information 1.1 Operations Terra Santa Agro S.A., formerly Vanguarda Agro S.A. ("Company" or "Terra Santa Agro") was incorporated on July 18, 2003, under the name Brasil Biodiesel Comércio e Indústria de Óleos Vegetais Ltda., as a limited liability partnership. The Company is currently headquartered at Praça General Gentil Falcão, cj 81, Brooklin Novo, São Paulo, State of São Paulo. On November 9, 2006, through Circular Letter 046/2006 ("OFÍCIO/CVM/SEP/RIC/046/2006"), the Brazilian Securities and Exchange Commission (CVM) authorized the Company's registration as a publicly-traded company, thereby enabling the Company to trade its common shares on stock exchanges. On October 28, 2016, shareholders attending the Extraordinary Shareholders Meeting unanimously approved the change of the Company s corporate name to Terra Santa Agro S.A., in honor of one of its farms located in the north of Mato Grosso State. This change aims to be a landmark of the new cycle that began after the conclusion of the operational turnaround started in 2013 and the restructuring of the bank debt. The Company will maintain the organizational identity created and developed, whose main purpose is to achieve operational excellence in land development and grain and fiber production. The Company and its subsidiaries Maeda S.A. Agroindustrial and Vanguarda do Brasil S.A. carry out agricultural activities, mainly the cultivation of soybean, corn and cotton, basically consisting of: cultivation and sale of agricultural products; sale of agricultural inputs; processing of cottonseed, owned by the Company or by third parties; rendering of storage services for agricultural inputs and products; rendering of soil preparation and harvesting services using agricultural machinery. These activities are carried out on Company-owned land, on land leased from third parties, and through agricultural partnerships with the related parties Vanguarda do Brasil S.A. and Maeda S.A. Agroindustrial. 12

13 1.2 Economic and financial situation of the Company On September 30, 2017, the Company presented negative working capital of R$ 59,056 in the Parent Company, mainly represented by intercompany loans in the amount of R$ 38,260 with its subsidiaries Maeda S.A. Agroindustrial and Vanguarda do Brasil S.A. The Company entered into loan agreements with its subsidiaries, through which the parties grant each other a credit of R$ 120,000 and these transactions were carried out with variable and renewable maturity terms, adjusted at 100% of the CDI rate. The funds arise from the sale of agricultural products by the subsidiaries. In the consolidated, the Company also presented negative working capital in the amount of R$ 8,163 due to third-quarter seasonality, as the crops from the previous cycle had already been harvested and the crops of the new harvest were in the planting phase. 2 Summary of significant accounting policies 2.1 Basis of preparation The interim financial information was prepared in accordance with Technical Pronouncement CPC 21(R1) - Interim Financial Reporting and international accounting standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), and is presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of the Quarterly Information Form (ITR). As permitted in CVM Circular Letter CVM/SNC/SEP 03/2011, the Company chose to present the explanatory notes in this ITR in a summarized manner when the information is the same as that presented in the annual financial statements. As a result, this quarterly information was prepared in accordance with the basis of preparation, calculation methods and accounting policies consistent with those adopted in the preparation of the financial statements of December 31, 2016, disclosed on March 8, 2017, and therefore must be read along with those statements. Except for the restatement of corresponding amounts related to hedge accounting, as described in Note 2.2, the information included in the notes to the interim financial information that was not subject to significant changes or presented irrelevant disclosures as compared to December 31, 2016 were not fully restated in this quarterly information. However, selected information was included to explain the main events and transactions for the understanding of the changes in financial position and operating performance since the publication of the Company s operations since the publication of the financial statements as of December 31, In the preparation of these interim financial information, Management used judgments, estimates and assumptions that affect the application of the Company s accounting policies and the reported amounts of assets, liabilities, revenues and expenses. Actual results may differ from these estimates. The estimates and assumptions are reviewed continuously and have not occur any relevant changes in the preparation of this interim financial information in relation to the financial statements as of December 31, 2016, The Company declares that all significant information specific to the quarterly information, and only them, are being evidenced and that correspond to those used by it in its management. The Statement of Added Value (DVA) is required by Brazilian corporate law and by the practices adopted by the publicly held companies in Brazil. The IFRS do not require the presentation of this statement, which is considered a supplementary information, without prejudice to all the quarterly information as whole. 13

14 The issue of this interim financial information was authorized by the Company's management and Board of Directors on October 31, Restatement of corresponding amounts The Company identified amounts recorded in previous periods as equity valuation adjustments arising from the foreign exchange variation of financial liabilities designated as cash flow hedge instruments to hedge future expected transactions (hedge object) against foreign exchange risk. The amounts of these transactions should have been reclassified to the result of previous periods as the future transactions occurred. As a result, the Company rectified the corresponding Parent company and amounts related to the balance sheets of January 1, 2016 and December 31, 2016, the statements of income (loss) and comprehensive income (loss) for the three- and nine-month periods ended September 30, 2016, and the statements of changes in equity and value added (supplementary information) for the nine-month period ended September 30, 2016, in accordance with CPC 23 / IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors. The impact on the corresponding amounts is as follows: a. Balance sheets - Parent Company (In thousands of Reais - R$) December 31, 2016 January 1, 2016 As previously disclosed Impact Restated As previously disclosed Impact Restated Total assets December 31, 2016 January 1, 2016 As previously disclosed Impact Restated As previously disclosed Impact Restated Total liabilities Equity Share capital Capital reserves Equity valuation adjustments (69.706) (22.725) ( ) ( ) Accumulated losses ( ) (46.981) ( ) ( ) (42.704) ( ) Total equity Total liabilities and equity The effect of the adjustment is null between the total balance of assets and the total balance of liabilities. 14

15 b. Balance sheets - (In thousands of Reais - R$) December 31, 2016 January 1, 2016 As previously disclosed Impact Restated As previously disclosed Impact Restated Total assets December 31, 2016 January 1, 2016 As previously disclosed Impact Restated As previously disclosed Impact Restated Total liabilities Equity Share capital Capital reserves Equity valuation adjustments (69.706) (22.725) ( ) ( ) Accumulated losses ( ) (46.981) ( ) ( ) (42.704) ( ) Total equity Total liabilities and equity The effect of the adjustment is null between the total balance of assets and the total balance of liabilities. c. Statements of income (loss) - Parent Company (In thousands of Reais - R$) September 30, Quarter As previously disclosed Impact Restated September 30, Half-year As previously disclosed Impact Restated Net revenue (25.144) Other ( ) - ( ) ( ) - ( ) LGross profit (loss) (42.159) (40.828) (54.149) (25.144) (79.293) Operating income (expenses) (36.342) - (36.342) (48.710) - (48.710) Loss before finance result and income and social contribution taxes (78.501) (77.170) ( ) (25.144) RFinance result (23.599) (804) (24.403) (36.502) (804) (37.306) PLoss before income and social contribution taxes ( ) 527 ( ) ( ) (25.948) ( ) IIncome tax and social contribution Deferred (179) Loss for the period (92.090) 348 (91.742) ( ) (17.126) ( ) Loss for the period attributable to controlling shareholders (92.090) 348 (91.742) ( ) (17.126) ( ) ( ) d. Statements of Income (loss) - (In thousands of Reais - R$) September 30, Quarter As previously disclosed Impact Restated Seotember 30, Half-year As previously disclosed Impact Restated Net revenue (25.144) Other ( ) - ( ) ( ) - ( ) GGross profit (loss) (33.995) (32.664) (24.391) (25.144) (49.535) Operating income (expenses) (46.880) - (46.880) (82.855) - (82.855) Loss before finance result and income and social contribution taxes (80.875) (79.544) ( ) (25.144) ( ) Finance result (24.271) (804) (25.075) (30.939) (804) (31.743) LLoss before income and social contribution taxes ( ) 527 ( ) ( ) (25.948) ( ) Income tax and social contribution Current (4) - (4) (4) - (4) Deferred (179) Loss for the period (92.090) 348 (91.742) ( ) (17.126) ( ) LLoss for the period attributable to controlling shareholders (92.090) 348 (91.742) ( ) (17.126) ( ) 15

16 e. Statement of comprehensive income (loss)- Parent Company and (In thousands of Reais - R$) September 30, Quarter As previously disclosed Impact Restated September 30, Half-year As previously disclosed Impact Restated Loss for the period (92.090) 348 (91.742) ( ) (17.126) ( ) Other comprehensive income (loss): Items that will be reclassified to profit or loss (527) Net result with financial instruments designated as hedge accounting (8.939) 179 (8.760) (54.452) (8.822) (63.274) Other comprehensive income, net of income tax and social contribution (348) Total comprehensive income (74.737) - (74.737) (25.043) - (25.043) f. Statement of added value - Parent Company and (In thousands of Reais - R$) September 30, Parent Company September 30, As previously disclosed Impact Restated As previously disclosed Impact Restated Total value added to distribute Distribution of value added Personnel: Direct compensation Benefits Government Severance Indemnity Fund for Employees (FGTS) Taxes and contributions: Federal State Municipal Deferred (8.617) (8.822) (17.439) (7.445) (8.822) (16.267) Value distributed to providers of capital: Interest and foreign exchange variations Fines Rents and leases Value distributed to shareholders: Loss for the period ( ) (17.126) ( ) ( ) (17.126) ( ) Value added distributed Statement of cash flows - Parent Company and There is no impact on total operating, investing and financing activities in the individual and consolidated cash flows for the nine-month period ended September 30, Consolidation basis This interim financial information was prepared in accordance with the consolidation basis consistence with those adopted in the preparation of the financial statements as of December 31, Therefore, the corresponding information in explanatory note 2.2 to those financial statements should be referred to. 2.4 New standards not yet effective The following new standards were issued by the IASB, but are not yet effective for the period ended September 30, The early adoption of these standards, although encouraged by the IASB, is not permitted in Brazil by the Accounting Pronouncements Committee (CPC). IFRS 9/ CPC 48 - "Financial Instruments" addresses the classification, the measurement and the recognition of financial assets and liabilities. The complete version of IFRS 9 was issued in July 2014, with validaty for January 1, 2018 and replaces IAS 39/CPC 38 guidance in relation to the classification and measurement of financial instruments. IFRS 9 includes the following main changes: (i) new criteria for the classification of financial assets; (ii) new impairment model for financial assets, hybrid of expected and incurred losses, replacing the current model of incurred losses; and (iii) flexibilization of requirements to adopt hedge accounting. Management have 16

17 evaluate the new pronouncement and, considering its current transactions, did not identify changes that could have a material impact the Company s financial statements. IFRS 15/ CPC 47 - "Revenue from Contracts with Customers" - This new standard addresses the principles used by an entity to determine when revenue is recognized and how it is measured. This standard is based on the principle that revenue is recognized when the control of an asset or service is transferred to a customer, and thus the principle of control will replace the principle of risks and benefits. It will take effect on January 1, 2018, replacing IAS 11/CPC 17 - Construction Contracts, IAS 18/ CPC 30 - Revenue and its corresponding interpretations. Management have evaluated this new standard, and based on its opinion, this regulation should not have relevant effect on their financial statements, considering the kind of their selling transactions, where the performance obligations are clear and the control transference of goods and services are not complex. IFRS 16 - "Leases" - with this new standard, the lessees must become to recognize the liability of the future payments and the right of use of the leased asset for almost all leasing contracts, including the operational ones, being able to stay out of the scope of this new regulation some short-term or small amount contracts. The recognition and measurement criterias for the leasings in the financial statements of the lessees will stay substantially kept. The IFRS 16 will take effect as of or after January 1, 2019, and replaces the IAS 17/ CPC 06 - "Leasing Operations and Corresponding Interpretations. The management is currently evaluating the impacts on adopting this regulation, since it is keeping leasing operations with third parties for the purpose on the tillage of biological assets, totalizing 74 thousand hectares of agriculturable lands and future commitments in the order of R$118,748 (see Note 30 (b)). For the time being, the understanding of the management is that the referred amount shall be recognized as asset and liability in the sheets. Given the complexity of the topic, it may be that, until the initial adoption of this standard, would occur a review of this conclusion. 3 Cash and cash equivalents Parent Company Description Banks - local currency 1,480 1,647 1, Banks - foreign currency 6, , Financial investments (i) 6, , ,768 14,928 4,232 (i) On September 30, 2017, financial investments classified as cash equivalents were mainly represented by bank deposit certificates and/or compromised operations at an average of 98% of the CDI rate (5% at December 31, automatic short-term investments). The Company can immediately redemption these investments, without any charge or restrictions. 17

18 4 Trade accounts receivable from customers Parent Company Trade accounts receivables in local currency Trade accounts receivables in foreign currency 11, ,197 5,164 11, ,883 5,182 ( - ) Allowance for doubtful accounts (18) (18) (18) (18) 11, ,865 5,164 The aging of trade accounts receivable from customers is as follows: Parent Company Not yet due: Up to 30 days 4, ,772 4,169 From 31 to 90 days 5,438 5,491 - From 91 to 180 days 1,576-1,602 - Overdue: Up to 30 days More than 180 days , ,883 5,182 At December 31, 2016, trade accounts receivable from customers in the amount of - R$995 were overdue, but not fully impaired. These amounts without impairment referred to a number of independent customers who have no recent history of default. Management has collection procedures and believes that these customers will not result in losses. The procedures include: (a) (b) (c) Credits more than thirty days overdue: Issue out-of-court notice informing the counterparty in advance of the inclusion in bad credit lists. Inclusion in bad credit lists: The counterparty will be included in a bad credit list thirty days after confirmation of receipt of the out-of-court notice. Credits more than ninety days overdue: The Company will carry out a judicial collection, gathering all documents related to the negotiation. The Company recognizes estimated losses on receivables more than 180 days overdue or in the case of insolvent customers. In addition, the Company and its subsidiaries analyze their customers on a case by case basis to record an allowance for doubtful accounts. 18

19 The Company and its subsidiaries analyzed the realization of overdue balances and recorded an alloance for doubtful accounts of the amounts with a low possibility of recovery. The changes in the allowance for doubtful of trade accounts receivable from customers were as follows: Parent Company Opening balance Allowance for doubtful accounts recognized Receivables written off during the period as uncollectible - (182) - (182) Closing balance Notes receivable Parent Company For sale of property, plant and equipment 7,077 10,704 14,254 19,506 For sale of oil plant ,800 13,800 For sale of industrial units 11,895 20,304 11,895 20,304 Subleases and admissions of debt 3,075 4,062 3,075 5,714 Credit with agricultural partners 1,006 1,464 1,006 1,464 Other credits 2,113 2,071 2, ( - ) Adjustments to present value (150) (168) (1,446) (1,749) ( - ) Provision for impairment (i) (4,888) (26,017) (4,888) (26,017) 20,128 12,420 39,809 33,455 Current 6,315 3,602 11,663 9,070 Non-current 13,813 8,818 28,146 24,385 (i) On June 30, 2017, the Company entered into a Private Instrument of Transaction and Other Covenants with Camera Agroalimentos S.A. Under this agreement, the provision for impairment (recorded in the previous year) was reversed in the amount of R$ 20,304. The amount agreed upon totaled R$ 35,000, resulting in the receipt of R$ 2,000 on the signature date, the transfer of a grain warehouse in Rosário do Sul (RS) in the amount of R$ 8,113 thousand (classified as Investment Properties), and receivables in monthly and half-yearly installments. The remaining balance is guaranteed by an Accessory Property Fiduciary Sale Agreement between the parties. The secured property was appraised in a valuation report issued by independent appraisers. The instrument envisages that, for each payment of the amount agreed upon, a performance bonus of % will be calculated, so that for every R$ 1.00 that is amortized, R$ will be discounted from the amount agreed upon, as long as the debtor strictly complies with the conditions and maturities in the agreement. The aging of notes receivable is as follows: 19

20 Parent Company (i) Not yet due: Up to 30 days , From 31 to 90 days 794 2, ,156 From 91 to 180 days ,458 From 180 to 360 days 4, ,067 2,241 More than 360 days 13,480 7,247 13,480 10,496 Subject to conditions (i) ,103 16,103 Overdue: Up to 30 days From 31 to 90 days From 91 to 180 days From 180 to 360 days 112 1, ,632 More than 360 days 5,169 26,042 5,169 26,072 25,166 38,605 46,143 61,221 The amount of R$ 16,103 will be paid by the buyers of property, plant and equipment and the oil plant after the Company proves the effective write-off and cancellation of the guarantee of the Special Program for Asset Recovery (PESA) debt at the real estate registry office, expected for November Inventories Parent Company Agricultural products Agricultural products - formation cost 148,302 6, ,592 51,056 Agricultural products adjustments to fair value and net realizable value (i) 38,988 (798) 41,815 (1,487) Seeds, compost, fertilizers and crop protection products 111,420 98, ,420 98,148 Packaging, storage materials and spare parts 6,197 4,895 6,200 5,771 Advances to suppliers 26, , Expenditures with maintenance in the inter-crop period 13,658 47,983 14,812 47,983 Other inventories 3,708 4,360 3,711 4,580 ( - ) Provision for impairment (ii) (506) (583) (506) (583) 348, , , ,930 (i) (ii) These amounts consider the marking to fair value of agricultural products as biological assets, totaling a positive amount of R$ 60,723 (a positive R$ 10,291 on December 31, 2016) and the marking to net realizable value as agricultural products, in the negative amount of R$ 18,908 (a negative R$ 11,778 on December 31, 2016). Refers substantially to the obsolescence of materials in inventory with little expectation of realization. On September 30, 2017, 130,248 metric tons of agricultural products, amounting to approximately R$141,640, were pledged as collateral to suppliers of agricultural inputs (2,723 20

21 metric tonsat December 31, 2016, totaling approximately R$ 11,898). The amount collateralized includes the balances under the Biological assets rubric. The changes in the provision for impairment were as follows: Opening balance Additions Reversals (77) (430) Closing balance The expense relating to estimated inventory losses is recorded in the statements of income (loss), in the rubric "Other expenses. 7 Biological assets a. Changes January 1 to September 30, 2017 Parent Company and Cotton Soybean Corn Other crops Total Balance of biological assets at December 31, 2016 Biological asset - adjustment to fair value - 13, ,826 Biological asset - formation costs (i) - 180, , , ,161 Increase resulting from planting and crop treatment 154, ,399 98,475 3, ,299 Decrease resulting from harvesting (154,853) (257,738) (98,475) (1,192) (512,258) Changes in fair value - (13,826) - - (13,826) Balance of biological assets at September 30, ,317-3,059 36,376 Biological asset - adjustment to fair value Biological asset - formation costs (i) - 33,317-3,059 36,376-33,317-3,059 36,376 (i) Pursuant to the biological asset valuation policy adopted by the Company, a significant portion of its biological asset had not yet undergone biological transformation (as of the 78th day after planting, as expected) and therefore the asset was held at formation cost. At September 30, 2017, the Company was cultivating around thousand hectares of arable land (113.2 thousand hectares on December 31, 2016), including both its own land and land 21

22 owned by third parties. The areas cultivated by the Company are located in the State of Mato Grosso, to grow temporary crops, especially cotton, soybeans and corn. The fair values of the biological assets of the Company represent the present values of the estimated net cash flows for these assets, determined by applying the assumptions established by the Management of the Company. The land owned by the Company on which crops are planted is classified as property, plant and equipment, and is not included in the fair value of biological assets. b. Significant assumptions utilized in the measurement of fair value (i) Cash inflows are obtained by multiplying (i) the estimated production, measured in sacks of 60 kg for soybean and corn, and "arrobas" (a unit equivalent to 15 kg) for seed cotton; and (ii) in the prices in the futures market for each product, when available. (ii) (iii) (iv) (v) The price of seed cotton (agricultural product of the cotton crop) is obtained based on the available price for cotton lint (commodity), less the costs of processing (removal of seeds), and the prices attributable to the byproducts (seed and fiber). Cash outflows are represented by the estimates of (i) costs necessary for the biological transformation of the crop (crop treatment) before the harvest; (ii) costs of harvesting, loading and transportation; and (iii) cost of capital (rental of land and machinery and equipment). Based on the estimated revenue and costs, the Company determines the fair value of biological assets, which is recorded in the biological assets account with a corresponding entry to "Changes in the fair value of biological assets and net realizable value of agricultural products" in the statement of income (loss). The model and assumptions utilized when determining the fair value represent Management's best estimate at the end of the reporting period and are reviewed quarterly and, if necessary, adjusted. c. Sensitivity analysis Management believes that the result obtained from the measurement of the fair value of biological assets is sensitive to variations in the above-mentioned assumptions and that actual results may increase or decrease in the event of differences between the estimated amounts and the amounts realized when biological assets are harvested. The main assumptions used to determine the fair value of biological assets are as follows: 22

23 At December 31, 2016 Assumptions Soybean Total estimated harvest area (ha) 106,562 Total area being marked to value (ha) 54,519 Estimated productivity in bags/arrobas, net of agricultural partnerships Amount in US$ Exchange rate 3.28 On September 30, 2017, due to their little biological transformation, crops in formation were measured at formation cost. As a result, the Company did not present a sensitivity analysis for this base date. 8 Taxes recoverable Parent Company Value-added Tax on Sales and Services (ICMS) 13,764 13,579 13,950 13,937 Social Contribution on Revenues (COFINS) (*) 52,478 36,221 87,258 62,793 Social Integration Program (PIS) (*) 11,656 8,336 17,512 14,036 Corporate Income Tax (IRPJ) 27,848 27,848 28,023 28,023 Withholding Income Tax (IRRF) 8,089 9,882 9,843 11,194 Social Contribution on Net Income (CSLL) 9,994 9,994 10,163 10,163 Other taxes 1,276 1,586 2,963 3,428 ( - ) Provision for impairment (**) (62,712) (64,510) (65,019) (66,817) 62,393 42, ,693 76,757 Current 10,723 16,451 16,006 17,549 Non-current 51,670 26,485 88,687 59,208 (*) Mainly refers to credits arising from purchases of inputs, freight and raw materials. (**) Refers to impairment of IRPJ, CSLL, ICMS, PIS and COFINS tax credits, realized based on the projection of realization of said taxes. The Company has accumulated credit balances of Social Integration Program (PIS) and Social Contribution on Revenues (COFINS) over the past years mainly due to domestic shipments subject to the suspension of taxes and sales to the foreign market. The realization of the credits occurs in two ways: (i) offset against tax liabilities, past due or falling due; or (ii) reimbursement in cash. In May 2017, the Company and its subsidiaries included certain tax liabilities in the Tax Regularization Program (PRT), as described in Note 19 - Taxes payable in installments. With the assistance of external legal advisors, the Company and its subsidiaries decided to cancel PIS/COFINS reimbursement requests still pending of approval by the Brazilian Federal Revenue Office (SRFB) in order to include tax liabilities related to these requests in said program. The amount of PIS/COFINS tax credits recorded due to cancellation totaled R$ 27,229. In June 2017, the Company and its subsidiaries Maeda S.A. Agroindustrial and Vanguarda do Brasil S.A. were granted favorable preliminary injunctions related to the PIS/COFINS 23

24 reimbursement requests in the principal amount of R$ 65 million; SRFB is required to conclude the administrative proceedings within 90 days. The reimbursement requests also require the levying of the Selic rate (Special Clearance and Escrow System) as of the protocol date of said requests until the effective payment date. Due to the lack of legal provision, the Company did not recognize the adjustment by the Selic rate, of approximately R$ 6,912, on September 30, The Company and its subsidiaries Maeda S.A. Agroindustrial and Vanguarda do Brasil S.A. presented supporting documents for the reimbursement requests, which are now being reviewed by the tax authorities and, based on the legal deadlines, these proceedings are estimated to be concluded by the end of the year, with the consequent deposit of the amounts claimed. 9 Deferred taxes The Company and its subsidiaries Maeda S.A. Agroindustrial and Vanguarda do Brasil S.A. utilize the taxable income method to calculate and record their taxes based on the rates in effect on the date of the interim financial information. a. Nature and expected realization of deferred taxes Parent Company Nature Tax assets on: Accumulated income tax losses 208, , , ,570 Accumulated negative basis for social contribution taxes 75,125 65,164 97,404 97,404 Temporary differences: Taxes with suspended payment 1,431 1,387 1,431 1,387 Fair value of biological assets and agricultural products Provision for impairment 2,082 9,469 2,665 10,519 Provision for contingencies 6,197 6,228 6,197 6,228 Adjustments to present value of long-term receivables Derivative financial instruments 3,933 2,008 3,933 2,008 Provision for tax losses 3,225 3,225 3,331 3,331 Hedge accounting - 35,908-35,908 Other temporary provisions 1,668 1,328 2,237 1, , , , ,029 Tax liabilities on: Exchange variation 44,619 1,746 46,277 2,833 Fair value of biological assets and agricultural products 13,256 4,430 14,218 5,027 Deemed cost 20,067 21, , ,694 Adjustments to present value - PESA Hedge accounting , ,867 Amortization of goodwill 70,248 56,199 70,248 56, , , , ,708 Tax assets, net 153, , , ,532 Tax liabilities, net - - (43,851) (8,211) Total, net 153, , , ,321 24

25 Deferred income and social contribution taxes are calculated on income tax losses and negative basis for social contribution taxes, as well as on temporary differences between the tax bases of assets and liabilities and the carrying amounts in the interim financial information. Deferred tax assets are only recorded when it is probable that the Company and its subsidiaries will generate future taxable profits in sufficient amounts for these to be realized. The deferred tax credits on the balance of income tax losses and negative basis for social contribution taxes, calculated up to September 30, 2017 and not recorded, amounted to R$97,859 (R$131,633 at December 31, 2016), in the Parent company and, once these unrecorded credits did not meet the recognition requirements determined by the related accounting standard. When assessing the capacity to recover deferred tax assets, Management takes into consideration projections of future taxable profit and the changes in temporary differences. When it is probable that a portion or all of the taxes will not be realized, no deferred tax assets are recorded. Income tax and social contribution losses can be carried forward indefinitely. The expectation of the realization of the assets relating to the income tax losses and negative basis for social contribution taxes is in accordance with the following schedule: Parent Company Amount Percentage Amount Percentage In ,507 4% In ,900 3% 19,300 5% In ,700 4% 22,900 6% In ,300 5% 28,300 8% Between 2022 and ,400 35% 132,456 36% Between 2025 and ,511 53% 150,511 41% 283, % 367, % b. Reconciliation of income and social contribution taxes benefit The income and social contribution taxes amounts that had an impact on the result for the period are as follows: Parent Company (restated) (restated) Loss before income and social contribution taxes (60,198) (165,309) (61,472) (164,133) Nominal rate 34% 34% 34% 34% 20,467 56,205 20,900 55,805 Taxes on permanent exclusions (additions): Equity in the results of investees (513) 5, Non-deductible expenses (13,600) (17) (13,818) (316) Deferred temporary taxes: Unrecorded tax credit on tax losses (29,414) (41,992) (29,414) (41,992) Tax credit recorded on tax losses from previous years (i) 63,189-63,189 - Calculation of subsidiaries' taxes on the deemed profit basis - - (12) (319) Other 384 (1,911) 942 3,085 Recorded in statements of income (loss) for the period 40,513 17,439 41,787 16,263 (i) Recognition of deferred tax credits in the amount of R$ 63,189 in the period due to the inclusion of tax liabilities in the Tax Regularization Program, as per Note 19 Taxes payable in installments. 25

26 10 Related parties a. Balances Parent Company Current assets Other assets FWA Empreendimentos e Participações S.A. (i) - 2,379-2,379 Non-current assets Advances for future capital increase Other assets FWA Empreendimentos e Participações S.A. (i) - 14, ,332 Parent Company Current liabilities Intercompany loans (ii) Maeda S.A. Agroindustrial 1,334 2,631 Vanguarda do Brasil S.A. 36, ,260 2,840 (i) (ii) In February 2017, the Company was informed by BTG Pactual WM Gestão de Recursos Ltda., as manager of Fundo de Investimento Multimercado Crédito Privado VNT ( Fund ), held by investor Otaviano Olavo Pivetta, that a total of 2,147,952 registered common shares with no par value issued and held by the Company, representing 11.99% of its share capital, were sold in an auction held by B3. With the sale of its respective shares, the Fund s interest in the Company s share capital reduced to zero (0.0%). As a result, in the Company s assessment, the balance presented in December 31, 2016 is no longer classified as Related parties as of the date the shares were sold. The balance related to this operation is presented in the rubric Other assets. Additionally, see disclosure on Note 20. The balances presented in current liabilities relate to intercompany loans with various and renewable maturities, subject to the rates and/or indexes agreed between the parties. At September 30, 2017 and December 31, 2016, the transactions were updated at 100% of the CDI. 26

27 b. Transactions Transactions with related parties in the period were as follows: Parent Company Transactions Sales of goods and products Vanguarda do Brasil S.A. (i) 2 164, Cost of products sold Vanguarda do Brasil S.A. (i) (2) (136,063) - - Result from rental and lease Bonsucex Holding S.A. (ii) (28) (31) (28) (31) Maria Zilda Oliveira de Araújo (iii) (338) (320) (338) (320) Finance income (costs) on intercompany loans Maeda S.A Agroindustrial (927) (567) - - Vanguarda do Brasil S.A. (195) (522) - - (i) (ii) Refers mainly to the sale of inventories to subsidiary Vanguarda do Brasil S.A. Refers to the rental of a residential property used by an executive officer of the Company. (iii) Contract to lease an office to house the Company's headquarters facilities, maturing in April Investments (Parent company) 11.1 Changes in investments January 1 to September 30, 2017 Maeda S.A. Agroindustrial Vanguarda do Brasil S.A. Crateús Algodoeir a S.A. Total At December 31, , , ,206,045 Equity in the results of investees (9,452) 7,978 - (1,474) Amortization of net asset fair value surplus (175) (2,786) - (2,961) At September 30, , , ,201,610 27

28 11.2 Information on investees September 30, 2017 Investee Percentage holding Assets Liabilit ies Equity (deficit) Net revenue Profit or loss for the period Effect on the statements of income (loss) in the Parent company Vanguarda do Brasil S.A. (i) % 667,504 49, ,190 78,479 7,978 7,978 Maeda S.A. Agroindustrial % 120,509 14, ,790 12,018 (9,452) (9,452) Ecotrans Transporte Ltda.(ii) 99.99% - 1,419 (1,419) - (38) (38) Buriti Agrícola Ltda. (ii) % - 60 (60) Crateús Algodoeira S.A % Mocuri Agrícola Ltda. (ii) 99.99% - 2 (2) December 31, 2016 (1,510) Equity in the results of investees (1,474) Provision for losses on investment (36) Investee Percentage holding Assets Liabiliti es Equity (deficit) Net revenue Profit or loss for the year Effect on the statements of income (loss) in the Parent company Vanguarda do Brasil S.A % 662,946 52, , ,174 8,707 8,707 Maeda S.A. Agroindustrial % 116,813 1, ,242 10,671 2,144 2,144 Ecotrans Transporte Ltda. 99,99% - 1,381 (1,381) - (136) (136) Buriti Agrícola Ltda % 1 61 (60) - (897) (897) Mocuri Agrícola Ltda % - 2 (2) Crateús Algodoeira S.A % (2) (2) 9,816 28

29 September 30, 2016 Investee Percentage holding Assets Liabilities Equity (deficit) Net revenue Profit (loss) for the year Effect on the statements of income (loss) in the Parent company Vanguarda do Brasil S.A % 781, , , ,639 13,317 13,317 Maeda S.A. Agroindustrial % 118,047 2, ,892 8,929 2,794 2,794 Ecotrans Transporte Ltda.(ii) 99,99% 42 1,358 (1,316) (71) (71) Buriti Agrícola Ltda % (44) (881) (881) Crateús Algodoeira S.A % (1) Mocuri Agrícola Ltda. (ii) 99.99% ,158 Equity in the results of investees 15,274 Provision for losses on investment (116) The cash flows of the subsidiaries affect the consolidated interim financial information, mainly due to the result of the operating cash flow, since the financing and investing activities are mostly comprised of funds transferred among the parties. (i) (ii) The profit for the period includes R$1,239 related to the alignment of the accounting practices in the subsidiary's financial statements for consolidation purposes, in connection with the valuation of agricultural products at market value at September 30, 2017, in accordance with the terms of paragraph 36 of CPC 18 (R2) "Investment in associates, subsidiaries and joint ventures". The balances referring to the provision for losses on investments in the Parent company were as follows: 29

30 Parent Company Buriti Agrícola Ltda Mocuri Agrícola Ltda. 2 2 Ecotrans Transporte Ltda. 1,419 1,381 1,479 1, Goodwill on investments a. Maeda S.A. Agroindustrial Amortization Fair value surplus of land 36,598-36,598 Intangible assets related to agreements 466 (175) 291 Goodwill 116, , (175) The goodwill presented above refers to the acquisition of Maeda S.A. Agroindustrial on December 23, These amounts were allocated based on a purchase price allocation (PPA) report issued on March 28, 2011 by independent appraisers. b. Vanguarda do Brasil S.A Amortization Fair value surplus of land 160, ,698 Intangible assets related to agreements 7,179 (2,786) 4,393 Goodwill 159, , ,339 (2,786) 324,553 The goodwill presented above refers to the acquisition of Vanguarda Participações S.A. on September 6, 2011 (subsequently incorporated by the Company on December 23, 2013). These amounts were allocated based on the PPA report issued on October 3, 2012 by independent appraisers. 12 Investment Properties Properties include grain warehouses leased to third-parties in Rosário do Sul (RS), resulting from the Private Instrument of Transaction and Other Covenants entered into with Camera Agroalimentos S.A at June 30, These properties are held to generate lease revenue, are not occupied by the Company and are measured at cost, less depreciation calculated under the straight-line method. On the acquisition date, these assets totaled R$8,113, as per the valuation report issued by independent appraisers. At September 30, 2017, due to accounting depreciation, the carrying amount of these assets totaled R$7,

31 13 Property, plant and equipment 13.1 Changes from January 1 to September 30, 2017 (Parent Company) Opening Closing Cost balance Additions Write-offs Transfers balance Land for cultivation 2, ,314 Buildings and facilities 53, (35) ,000 Machinery and equipment 325,607 1,123 (5,406) 1, ,107 Vehicles 35,227 - (497) - 34,730 Aircraft 15,524 - (1,349) - 14,175 Furniture and fittings 10, (56) 12 10,221 Construction in progress 2,167 11,627 (9) (12,171) 1,614 Advances for purchase of property, plant and equipment 209 1,319 (1,189) (269) 70 Soil correction 55, ,106 64,921 Other property, plant and equipment 3,665 - (31) 555 4,189 Total 504,123 14,790 (8,572) - 510,341 Opening Closing Accumulated depreciation balance Additions Write-offs Transfers balance Buildings and facilities (8,753) (1,364) 1 2 (10,114) Machinery and equipment (160,034) (13,893) 4,178 (2) (169,751) Vehicles (16,981) (1,264) (17,837) Aircraft (7,987) (1,316) (8,443) Furniture and fittings (6,516) (668) 41 - (7,143) Soil correction (42,105) (4,638) - - (46,743) Other property, plant and equipment (1,841) (406) - - (2,247) Total (244,217) (23,549) 5,488 - (262,278) Net balance Land for cultivation 2,314 2,314 Buildings and facilities 44,886 44,750 Machinery and equipment 153, ,573 Vehicles 16,893 18,246 Aircraft 5,732 7,537 Furniture and fittings 3,078 3,576 Construction in progress 1,614 2,167 Advances for purchase of property, plant and equipment Soil correction 18,178 13,710 Other property, plant and equipment 1,942 1,824 Total 248, ,906 31

32 13.2 Changes from January 1 to September 30, 2017 () Opening Closing Cost balance Additions Write-offs Transfers balance Land for cultivation 786, ,993 Buildings and facilities 120, (698) ,768 Machinery and equipment 335,969 1,618 (5,460) 1, ,940 Vehicles 35,239 - (497) - 34,742 Aircraft 15,524 - (1,349) - 14,175 Furniture and fittings 10, (60) 12 10,259 Construction in progress 2,198 11,628 (9) (12,201) 1,616 Advances for purchase of property, plant and equipment 209 1,328 (1,189) (269) 79 Soil correction 100, , ,429 Other property, plant and equipment 4,966 - (31) 555 5,490 Total 1,412,276 15,508 (9,293) - 1,418,491 Opening Closing Accumulated depreciation balance Additions Write-offs Transfers balance Buildings and facilities (19,824) (2,657) 206 (2) (22,277) Machinery and equipment (160,766) (14,417) 4,179 2 (171,002) Vehicles (16,982) (1,265) (17,839) Aircraft (7,987) (1,316) (8,443) Furniture and fittings (6,527) (672) 43 - (7,156) Soil correction (83,798) (6,073) - - (89,871) Other property, plant and equipment (1,844) (406) - - (2,250) Total (297,728) (26,806) 5,696 - (318,838) Net balance Land for cultivation 786, ,993 Buildings and facilities 99, ,901 Machinery and equipment 162, ,203 Vehicles 16,903 18,257 Aircraft 5,732 7,537 Furniture and fittings 3,103 3,603 Construction in progress 1,616 2,198 Advances for purchase of property, plant and equipment Soil correction 19,558 16,525 Other property, plant and equipment 3,240 3,121 Total 1,099,653 1,114, Intangible assets a. Parent Company Cost Accumulated amortization Net Net Right of use - software 5,190 (4,286) 904 1,193 Other intangible assets ,364 (4,286) 1,078 1,364 32

33 b Accumulated Cost amortization Net Net Land lease agreements (Vanguarda) 45,505 (41,112) 4,393 7,179 Land lease agreements (Maeda) 4,632 (4,341) Right of use - software 5,192 (4,282) 910 1,196 Other intangible assets Goodwill - 275, , , ,984 (49,735) 281, , Changes in Intangible assets from January 1 to September 30, Parent Company Opening balance 1, ,496 Additions (-) Amortization (353) (353) (-) Surplus appropriation - (2,961) (=)Closing balance 1, , Trade payables Parent Company For agricultural inputs In foreign currency 107, , , ( - ) Adjustments to present value (2,454) (3,564) (2,454) (3.564) In local currency 40,089 19,598 40, ( - ) Adjustments to present value (414) (476) (414) (476) Sundry - in local currency 7,745 8,092 7, , , , Current 122, , , Non-current 30,362 2,067 30,362 2,090 The Company and the subsidiary Vanguarda do Brasil S.A. calculate the adjustment to present value ( AVP ) on the purchase of inputs payable in more than 90 days, using an average rate of 7.31% p.a. (5% p.a. at December 31, 2016) for trade payables in foreign and local currency, which, according to the understanding of Management, corresponds to the average financial cost of the transactions with suppliers. At September 30, 2017, the Parent company and amounts, in foreign currency, totaled US$ 34,045 thousand (US$ 46,922 thousand at December 31, Parent Company and ). 33

34 16 Loans and financing Weighted average cost Parent Company Type Index Local currency Rural credit and funding R$ 13.92% p.a % p.a. 26,107 14,789 28,522 14,789 Purchases of property, plant and equipment (BNDES, Finame and FCO) R$ 3.93% p.a. 3.86% p.a. 21,940 32,088 21,940 32,088 Guaranteed account R$ % p.a. - 1,849-1,849 Purchases of property, plant and equipment (lease) R$ 14.28% p.a % p.a , ,278 Indirect export credit (CCB, CCE and NCE) R$ 15.65% p.a % p.a. 21,076 11,355 21,076 11,355 Project funding (BNDES PCA) R$ 3.50% p.a. 3.50% p.a , ,293 Purchase of on-demand credits trade bills R$ 27.27% p.a. - 8,075-8, % p.a % p.a. 78,685 62,652 81,100 62,652 Foreign currency Export prepayments (PPE) US$ 7.16% p.a. 7.10% p.a. 584, , , ,731 Advances on Foreign Exchange Contracts (ACC) US$ 7.54% p.a. 7.07% p.a. 78,575 71,069 78,575 71,069 Purchases of property, plant and equipment (Finimp and Res. 2770) US$ + Libor % p.a. 6.32% p.a. 6,498 11,699 6,498 11,699 Indirect export credit (CCB, CCE and NCE) US$ 6.75% p.a. 6.75% p.a. 43,869 46,019 43,869 46, % p.a. 7.06% p.a. 713, , , ,518 Total 7.76% p.a. 7.31% p.a. 791, , , ,170 Current 197, , , ,897 Non-current 594, , , ,273 The fair values of loans substantially approximate the amounts presented in the interim financial information. The maturities of the portion recorded in non-current liabilities are as follows: 34

35 Type Book balance to 2023 Local currency Rural credit and funding Purchases of property, plant and equipment (BNDES, Finame and FCO) 12, ,152 1,764 1,443 2,256 Guaranteed account Purchases of property, plant and equipment (lease) Indirect export credit (CCB, CCE and NCE) 5,200 1,300 3, Project funding (BNDES PCA) ,772 2,205 10,104 1,764 1,443 2,256 Foreign currency Export prepayments (PPE) 477,599 40,976 89,982 83,046 43, ,289 Advances on Foreign Exchange Contracts (ACC) 57,088 5,249 15,563 15,584 15,607 5,085 Purchases of property, plant and equipment (Finimp and Res. 2770) 2,902-2, Indirect export credit (CCB and CCE) 39,072 7,920 11,616 11,616 7, ,661 54, , ,246 66, ,374 Total 594,433 56, , ,010 68, ,630 35

36 (i) Guarantees The loans of the Company are secured by statutory liens on assets and properties, guarantees, sureties, loan trustees, mortgages, promissory notes, and agricultural pledges. The loans that are guaranteed by property mortgages and statutory liens on the land of the Company and of its subsidiaries amounted to R$632,862 (R$611,216 at December 31, 2016). Within the scope of the restructuring carried out in 2016, the Company pledged all the shares of subsidiaries Maeda S.A. Agroindustrial and Vanguarda do Brasil S.A. to Itaú Unibanco S.A. and Bradesco S.A. Currently, these companies main assets comprise land cultivated by the Company. It is worth mentioning that a major part of these assets has already been mortgaged to the same creditors or to other banks. (ii) Covenants and Other commitments In order for the creditors of loans contracts to monitor the financial situation of the Company and its subsidiaries, financial covenants are utilized in some debt contracts. The Company performs the fulfillment of the financial covenants follow up every annual closing, and when it is applicable, the Company negotiates an achievement of waiver letters before the closing of the accounting year. On December 31, 2016 the management achieved some waiver letters from the financial institutions whose covenant contracts were not fulfilled. The contracts entered into within the scope of the renegotiation, especially with Banco do Brasil S.A., Itaú Unibanco S.A. and Bradesco S.A., have standardized financial covenants, notably a limit for the Debt x Adjusted EBITDA ratio, in addition to the obligation to maintain interests held by the main shareholders. Within the scope of debt restructuring agreements, the Company has an incentive to settle in advance its debt with Itaú Unibanco S.A. and Bradesco S.A. This incentive was carried out through the creation of a growing fee letter (expense) envisaged in the agreements due to the lack of early settlement, that is, this amount begins at zero and gradually increases until 2022, to US$ 15,537 thousand. The amounts in the table below will only be due when the debt is not early settled or at the end of settlement. Period Amount in thousands of US$ (*) 06/15/2019 1,488 12/15/2019 1,369 06/15/2020 1,265 12/15/2020 1,730 06/15/2021 2,046 12/15/2021 2,664 06/15/2022 2,232 12/15/2022 2,743 15,537 (*) U.S. dollar 36

37 The Company intends to settle the debt in advance, pursuant to its business plan, and calculated the effective rate of the fee letter based on this assumption. At September 30, 2017, the Company provisioned the amount of R$1, Advances from customers Parent Company Local customers 3,818 5,038 5,120 13,306 Foreign customers 67,573 59,676 67,573 88,837 71,391 64,714 72, ,143 At September 30, 2017, the Parent company and amounts, in foreign currency, corresponded to US$ 21,330 thousand (US$ 18,374 thousand and US$ 27,021 thousand at December 31, Parent Company and, respectively). 18 Federal Government Debt - PESA (Parent Company and ) Amount of principal + future interest 146, ,118 Restricted financial investments - CTN (140,289) (131,643) Present value of future interest (426) (261) 5,956 6,214 Current 3,212 3,236 Non-current 2,744 2,978 In 1998, through a contract amendment and securitization transaction, the maturities of agricultural loans from a federal financial institution were extended, supported by Resolution 2,471/98 of the Brazilian Central Bank under the Special Program for Asset Recovery (PESA). According to the agreements formalized, the monetary restatement of these loans (IGP-M - General Market Price Index) is capitalized for repayment on the maturity of the transaction, scheduled for November The interest currently charged of 3% p.a. is to be paid each year and the IGP-M charged on the principal is limited to 9.5% p.a. The Federal Government became the creditor of these loans, as of 2001, in accordance with Provisional Measure 2,196/03, without any changes to the conditions agreed in the contract with the financial institution. The loans are guaranteed by sureties, mortgages and property, plant and equipment items, as well as financial investments in National Treasury Bonds (CTN), with maturities equivalent to those of the loans. In accordance with the contractual terms, the monetary adjustment by the IGP-M and interest of 12% p.a. on these financial investments are capitalized so that, on maturity, the amount accumulated is equal to the amount of the loans. Due to the specific conditions of this financial instrument (extended term and subsidized charges), the Company's Management has recorded the loans utilizing the concept of adjustment 37

38 to present value. Under this concept, the amount of the obligation is calculated based on the flow of future disbursements adjusted to their present value, discounted at an interest rate determined with reference to the date on which the transaction was entered into, of 12% p.a. The balance referring to PESA was received through the spin-off of the net assets of the subsidiary Maeda S.A. Agroindustrial. 19 Taxes payable in installments Parent Company ICMS PRT (i) 5,813-16,835 - Social security 2,815 6,149 3,872 6,535 Other ,628 6,149 21,161 7,331 Current 4,090 1,251 10,974 2,075 Non-current 4,538 4,898 10,187 5,256 (i) At May 31, 2017, the Company and its subsidiaries Maeda S.A. Agroindustrial and Vanguarda do Brasil S.A. adhered to the Tax Regularization Program (PRT), established by Provisional Measure 766/2017, effective until June 1, The Company and its subsidiaries decided to adhere to tax credit programs in the spheres of the Brazilian Federal Revenue Office ( SRFB ) and the Office of the General Counsel for the National Treasury. The changes in the debts included in both programs are as follows: Parent Company At December 31, ,149 7,331 Inclusion in recurring installments 3,698 4,443 Inclusion in PRT 30,009 83,802 Transfer of recurring installments to PRT (7,061) (7,667) Financial charges in the period 1,295 2,741 Cash payments in the period (2,655) (6,300) Settlement with deferred tax credits (22,807) (63,189) At September 30, ,628 21,161 As a result, the Company and its subsidiaries used R$ 63,189 of deferred tax credits from income and social contribution tax loss carryforwards, previously not recorded, to partially settle the remaining balance of the installments paid to SRFB. 38

39 All installments due must be regularized from the month of adherence, i.e. when the first installment was paid, to the month prior to the consolidation of the debits paid in installments, subject to the termination of the installment program. The termination will occur in the event of failure to pay three consecutive installments or six alternating installments overdue more than 30 days or, at least, one installment, with all other installments paid. Consequently, the termination would result in the immediate payment of the total overdue and not yet paid debit, adjusted by legal charges pursuant to the applicable legislation at the time of the respective taxable events until the termination date, less the installments paid. 20 Provision for contingencies Management, based on an individual analysis of the lawsuits filed against the Company and its subsidiaries, and supported by the opinion of its legal counsel, recorded a provision in noncurrent liabilities for the risk of probable losses, as shown below: Lawsuits Provision Judicial deposits Net amount Provision Judicial deposits Net amount Labor 9,637 (2,234) 7,403 10,485 (2,239) 8,246 Tax 2,397-2,397 2,630-2,630 Civil 6,193 (362) 5,831 5,201 (362) 4,839 Taxes under litigation 4,207-4,207 4,080-4,080 Total 22,434 (2,596) 19,838 22,396 (2,601) 19,795 Judicial deposits (non-current assets) 19,838 7, Judicial deposits Judicial deposits mainly refer to a lawsuit filed by subsidiary Vanguarda do Brasil S.A. in 2011, aimed at the declaration of the right of first refusal for the acquisition of a rural property given that it was the object of a previous lease agreement with the plaintiff, and its consequent adjudication. An order was issued in favor of the plaintiff. The defendants disputed said order and the plaintiff replied. The judge rejected the preliminary arguments of the defendant and denied the claim. On August 12, 2013, the plaintiffs filed an appeal, which was partially granted, maintaining the invalidity of the claim, but reducing the amount of the award granted in the trial court. The plaintiffs and the defendants filed motions for clarification, which were denied. Subsequently, the plaintiffs and defendants filed special appeals, which were granted and denied, respectively. 39

40 The defendants lodged an interlocutory appeal against the decision that denied the special appeal and the plaintiffs filed for a provisional remedy to advance the effects of the special appeal granted. The plaintiff filed a petition stating that it had deposited the undertaking amount, and the preliminary injunction to stay the execution of the defendants special appeal and ensure ownership of the disputed property until the final decision of said appeal was granted. Subsequently, after careful consideration, analysis of the possible scenarios and the content of the vote of the appellate judge, the plaintiffs saw it fit to make an additional deposit totaling R$11,558 in order to remove any possible obstacle to the recognition of the right of first refusal of subsidiary Vanguarda do Brasil S.A. in the acquisition of the disputed property. The case is being held under advisement. At September 30, 2017, the updated carrying amount of the abovementioned judicial deposit was R$17,263 (R$7,117 at December 31, 2016). Additionally, at September 30, 2017, the Company and its subsidiaries had judicial deposits totaling R$2,528 (Parent company) and R$19,838 () ( R$2,563 and R$7,880, respectively), in respect of which no provisions for contingencies were booked Changes in the provisions from January 1 to September 30, 2017 for lawsuits in which the likelihood of loss is probable (Parent Company and ) Parent Company and Taxes under Lawsuits Labor Tax Civil litigation Total At December 31, ,246 2,630 4,839 4,080 19,795 New lawsuits and complements 1,083-1,151-2,234 Write-offs in the period (1,933) (233) (159) - (2,325) Related judicial deposits (4) (4) Financial charges in the period At September 30, ,403 2,397 5,831 4,207 19, Lawsuits in which the likelihood of loss is considered to be possible The lawsuits presented below comprise those in which the likelihood of loss is considered to be possible, based on the opinion of the Company's legal counsel, and which are therefore are not provided for in the financial statements: Parent Company and Lawsuits Tax 75,686 80,896 Labor 17,329 17,438 Civil 7,050 7, , ,384 40

41 a. Tax The tax claims with a possible likelihood of loss refer to: requests for reimbursement of noncumulative COFINS credits; alleged payment of taxes at lower differential tax rates in state transactions; undue use of ICMS credits related to the purchase of electricity; denied requests for reimbursement of Tax on Industrialized Products or IPI tax credits; non-disclosure of amounts related to contributions in FGTS Payment Forms and Information to Social Security (GFIP); alleged underpayment of amounts related to social security contributions in the agricultural sector (SENAR); income tax and social contribution solutio indebiti; alleged failure to pay income tax on capital gain on corporate entities in the merger of Maeda S.A. s shares by the Company; tax-deficiency notices regarding the collection of social security contributions on gross revenue from cotton and soybean exports through trading operations; and noncompliance with Electronic Reimbursement Requests (PER) and Offsetting Statements (DCOMP) related to the offsetting of presumed IPI credits. The law firms and attorneys in charge of these cases classify the likelihood of loss for these claims as possible because the issue is not yet a settled precedent of regional and superior courts, certain defense arguments are not very specific and, in some cases, there are few decisions on the matter in question, in addition to precedents in similar leading cases with unfavorable decisions. b. Labor The labor claims with a possible likelihood of loss basically refer to requests related to occupational accidents and/or accidents due to work-related activities and the respective indemnifications for pain and suffering and pecuniary injury; hazard pay; work breaks; reversal of dismissals for cause; overtime and related amounts; commuting hours; transfer premium; indemnification for temporary stability; night-shift premium; and secondary liability in relation to outsourced services, impact on 13th salary bonus, vacation and other amounts, as well as contributions to Social Security (INSS) and Government Severance Indemnity Fund (FGTS). These claims usually refer to lawsuits filed by former employees, seeking supposedly unpaid amounts and rights during their period of employment. The law firms and attorneys in charge of these cases classify the likelihood of loss for these claims as possible due to the existence of a large number of documents proving the payment of said amounts, particularly overtime, commuting hours and related amounts, in addition to the existence of documents proving the real daily work hours (punch card), the delivery of personal protective equipment (PPE), safety instructions and training, medical exams, investigations of accidents and employee misbehavior related to dismissal for cause, in addition to other documents related to the employment contract. c. Civil The civil lawsuits with a possible likelihood of loss involve collection requests related to vehicle leasing agreements, contractual default related to service provision, pain and suffering and pecuniary injury due to traffic accidents, execution due to notice of environmental violation and civil lawsuit due to alleged environmental damage. 41

42 The law firms and lawyers in charge of these cases classify the likelihood of loss for these claims as possible due to the existence of documents and other types of evidence capable of supporting facts that invalidate, modify or extinguish the plaintiffs rights, in addition to case law. FWA Empreendimentos e Participações S.A. In the third quarter of 2017, FWA Empreendimentos e Participações S.A. filed a lawsuit for Termination of Contract with a request for Interlocutory Relief to terminate the Sales Agreement of a property and its leaseholds entered into with the Company on September 30, 2014, with the consequent termination of the amendment to the lease agreement and the return of the trucks given as payment. The court partially granted the interlocutory relief, suspending planting in the area leased for the 2017/2018 harvest. The defendant then filed an interlocutory appeal to annul the preliminary injunction, given that the Company had already planted approximately 70% of the disputed area and acquired inputs for planting the remainder of the area. The interlocutory appeal was denied, and the trial court decision was upheld. As a result, the Company filed an internal interlocutory appeal to the Revocation Judge requesting a review of the injunction in order to allow planting the remaining 30% of the area, given the irrecoverable losses the appellant would incur should the decision be upheld. The internal interlocutory appeal was partially granted, allowing the appellee to conclude planting in the remainder of the disputed area. On September 30, 2017, the Company had recorded R$14,275 in Other Assets referring to advances on the abovementioned lease agreement. This amount could only be considered non-realizable in case of an unfavorable outcome. Based on its external counsel opinion, the Company believes that the lawsuit has a possible likelihood of loss Other information The lawsuits considered significant by the Company's Management are: a. Labor claims On March 17, 2009, the Company was notified of the existence of a claim for breach of a contractual clause with Marcos Cesar de Morais (penalty clause) and an indemnity request for alleged employment stability. The claim was granted in the lower court and then upheld in the appellate courts; it is now pending the interlocutory appeal decision by the Superior Labor Court. The plaintiff started the provisional execution of the sentence and, on September 15, 2015, a request (Rogatory Letter) was issued to the Municipality of Nova Mutum, for the purpose of pledging the assets given as collateral by the Company. The restated award amount is R$ 17,512 (R$ 17,667 at December 31, 2016), of which the Company provisioned R$ 4,789 on September 30, 2017, the remainder of the restated award amount of R$ 12,722 is considered a possible loss by the Company and its lawyers due to the possibility of reduction of the restated amount of the penalty clause (from R$ 5,000 to R$ 1,000, at original amounts). b. Tax lawsuits Based on the favorable opinion of its legal counsel, the subsidiary Maeda S.A. Agroindustrial is challenging the payment of certain taxes, in addition to requiring, at the administrative or judicial level, the acknowledgment of credits offset against certain taxes and contributions. The balances were received by the Company through the spin-off of the net assets of Maeda S.A. Agroindustrial on December 23,

43 At September 30, 2017, the Company maintained a provision for probable losses amounting to R$ 4,208 (R$ 4,080 at December 31, 2016), relating to the presumed IPI credit calculated on exports made in the period from 2000 to 2002, which was offset with tax liabilities in the months of November and December 2003 and July c. Civil lawsuit - Construrio Ltda. This lawsuit refers to an action for the repossession of property and compensation for damages filed by Construrio Ltda. against a former investor of the Company (Lawsuit 1031/2006/ 2nd Court/Judicial District of Nova Mutum). A court decision was issued on this action, which, after the motions for clarification of judgment were rejected by the judge, was published on February 1, 2012, and ruled the claims as valid for: (i) repossession of ownership of Construrio Ltda.; and (ii) sentencing of the defendant to pay an indemnity for the period of utilization of possession, with the indemnity amount to be determined on the finalization of the sentence. The Company filed an appeal, which was received and rejected by the court. This was followed by a Special Appeal (REsp), which was rejected. As a result of this decision, the Company filed an interlocutory appeal, which was also rejected. Lastly, the Company filed a motion for clarification, which was denied, and a final and unappealable decision was issued against the Company. The final execution of the sentence is still pending and the plaintiff already repossessed the property. The amount of indemnification for the use of land is still being calculated. The estimated loss amounts to R$ 5,000 (R$ 5,146 at December 31, 2016), which has been provided for. 21 Equity (restated) a. Share capital The share capital at September 30, 2017 and December 31, 2016 was represented by 17,914 thousand registered common shares with no par value. The shares issued by the Company are exclusively registered, book-entry common shares, with no par value. The shareholders are entitled to preferential rights to subscriptions in capital increases in proportion to the shares held by them. b. Allocation of profits The profit for the period, after the deduction of accumulated losses, if any, is allocated as follows: 5% to the legal reserve, the balance of which may not exceed 20% of the capital. 25% distributed as a mandatory minimum dividend, as required by Article 202 of Law 6,404/76. If, after the deductions referred to above, there is still a balance remaining, its allocation will be determined by a General Meeting of Shareholders. c. Equity valuation adjustments At September 30, 2017, the cash flow hedge reserve presented a gain of R$ 1,446 (loss of R$ 22,725 at December 31, 2016). 43

44 (restated) At the beginning of the period (i) (22,725) (130,479) Changes in the fair value of cash flow hedges 16, ,182 Effective amounts transferred to the statements of income (loss) 19, Ineffective portion of loss transferred to finance result - (14.468) Deferred taxes on cash flow hedges (12,452) (55,510) At the end of the period 1,446 (22,725) (i) See Note Financial instruments a. General information In the normal course of their operations, the Company and its subsidiaries are exposed to risks such as market and credit risks. These risks are monitored by Management utilizing management tools and policies defined by the Board of Directors. b. Capital risk management The Company manages its capital to ensure the maintenance of its ability to continue as a going concern, while seeking to maximize returns to all stakeholders by optimizing the balance of debts and equity. The Company's capital structure consists of its own capital, including capital and reserves, and third-party capital. The Company's Management reviews the capital structure on an annual basis, based on the provisions established by the covenants of the borrowing transactions (Note 16(ii)). As part of this review, Management considers the cost of capital and the risks associated with each class of capital. c. Significant accounting policies The significant accounting policies and methods adopted, including the criteria for recognition, the measurement basis and the basis on which revenue and expenses are recognized in statements of income (loss) for each class of financial instruments, are the same as those utilized in the annual financial statements for the year ended December 31, 2016 (Note 2). 44

45 d. Category of financial instruments Parent Company Category of financial instruments Assets Cash and cash equivalents Loans and receivables 14,726 1,768 14,928 4,232 Marketable securities Fair value through profit or loss Trade accounts receivable from customers Loans and receivables 11, ,865 5,164 Notes receivable Loans and receivables 20,128 12,420 39,809 33,455 Other assets Loans and receivables 15,196 15,084 15,141 15,046 61,229 29,482 89,861 57,897 Liabilities Trade payables Other liabilities 152, , , ,335 Loans and financing Other liabilities 791, , , ,170 Derivative financial instruments Fair value through profit or loss 11,567 5,907 11,567 5,907 Federal Government Debt - PESA Other liabilities 5,956 6,214 5,956 6,214 Notes payable Other liabilities 5,998 6,891 7,943 8,911 Intercompany loans Other liabilities 38,260 2, ,006, , , ,537 e. Classification and methodology for calculation of the fair value of financial instruments The carrying amount of trade accounts receivable from customers, notes receivable, marketable securities, other assets, trade payables, federal government debt (PESA), notes payable and intercompany loans, less any impairment loss in the case of trade accounts receivable from customers and notes receivable, approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at current market interest rates that are available to the Company and its subsidiaries for similar financial instruments. The Company and its subsidiaries adopt Technical Pronouncement CPC 40/IFRS 7 Financial Instruments: Disclosures for financial instruments that are measured in the balance sheets at fair value, which requires the disclosure of fair value measurements according to the following hierarchy: Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1). Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2). Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3). At September 30, 2017, all the consolidated financial assets and liabilities that were measured at fair value through profit or loss were classified in Level 2, as follows: 45

46 Assets Marketable securities Liabilities Derivative financial instruments 11,567 5,907 f. Financial risk management The Company is exposed to the following risks resulting from the use of financial instruments: credit risk, liquidity risk and market risk. This note presents information on the exposure to each of these risks, as well as the Company's objectives, policies and processes for measuring and managing risk and managing its capital. Additional quantitative disclosures are included in these financial statements and also in this note. g. Risk management structure The Board of Directors, advised by the Audit and Risk Management Committee and by the Strategic Finance Committee, is responsible for establishing and supervising the Company's risk management structure. The Company's operating risks are constantly assessed by the Internal Audit Department, which reports directly to the Audit and Risk Management Committee, whose responsibility is to oversee and establish guidelines to be followed by the internal audit area. The Operating Risk Committee, a non-statutory body comprised of the Company's executive directors, was established to monitor and manage exposure to the foreign exchange rate risk, interest rate risk, credit risk and agricultural commodity price risk, as well as to take the necessary actions to mitigate exposure. The main market risks to which the Company and its subsidiaries are exposed in conducting their activities are as follows: (i) Credit risk The risk arising from the possibility that the Group could incur losses due to difficulties in collecting amounts billed to its customers. Credit risk is managed through specific standards regarding accepting customers, analyzing credit and establishing individual exposure limits. Historically, the Company and its subsidiaries do not record significant losses in trade accounts receivable from customers. A significant portion of the Company s and its subsidiaries sales is reserved for highlyqualified and exclusive customers, mainly trading companies. As a result, Management believes that the customer portfolio profile does not expose the Company to material credit risks. The Company considers the balance of trade accounts receivable from customers as exposed to this risk. At September 30, 2017, the balance totaled R$11,179 in the Parent company and R$19,865 in the (R$210 in the Parent company and R$5,164 in the at December 31, 2016). (ii) Liquidity risk The Company manages its liquidity risk by maintaining bank credit lines and lines of credit for raising loans, as it considers appropriate, through the continuous monitoring of estimated and actual cash flows and the management of the maturity of financial assets and liabilities. 46

47 At September 30, 2017, the Company effected repayments of loans to the financial institutions in the amount of R$125,405 (R$206,173 at September 30, 2016). The Company did not have any lines of credit contracted as at September 30, 2017 that had not been used. The tables below analyze the financial liabilities of the Company and its subsidiaries, by maturity, corresponding to the remaining period at balance sheets up to the contractual maturity date. Less than one year Between 1 and 2 years Between 2 and 5 years Total At September 30, 2017 Trade payables 122,668 33, ,898 Loans and financing 252, ,532 41, ,171 Derivative financial instruments 11, ,567 Federal Government Debt - PESA 6,424 5,915-12,339 Notes payable 5,736 2,207-7, , ,884 41,967 1,074,918 As previously mentioned, the Company successfully renegotiated its bank liabilities and has been renegotiating its other short-term liabilities pursuant to the liquidity risk management policies. (iii) Foreign exchange rate risk The Company has sale and purchase commitments and loans in foreign currency. The Company contracts derivatives to reduce exposure to the foreign exchange rate risk. Therefore, the exchange rate risk is calculated taking two main aspects into consideration: (i) the impact on balance sheets accounts indexed to foreign currency and (ii) the impact on the cash inflows and outflows indexed to foreign currency. As of August 2013, the Company adopted the hedge accounting policy, designating its debts exposed to foreign exchange rate fluctuations as hedges for its future export sales, as well as for the future sales indexed to the U.S. dollar, as described in item (h). The foreign exchange variations of designated loans are classified as "Equity valuation adjustments" in equity, net of deferred taxes, and these amounts are reclassified to the results in the periods when the hedged item affects the results of operations, with the related effects recorded in "Net sales revenue", in order to minimize undesirable variations in connection with the hedged item. Sensitivity analysis of foreign currency The Company had assets and liabilities denominated in foreign currency in the balance sheets at September 30, 2017 and, for the purpose of the sensitivity analysis, adopted as Scenario I (probable) the future market rate prevailing at the reference date of preparation of these financial statements. For Scenario II (possible), this rate was adjusted by 25% and, for Scenario III (remote), by 50%. 47

48 25% 50% Scenario I - Probable Scenario II - Possible Scenario III - Remote Description Net exposure at September 30 in US$ thousand Rate (*) R$ gain (loss) Rate R$ gain (loss) Rate R$ gain (loss) Assets Bank deposits in foreign currency 2, , ,548 Trade accounts receivable from customers 3, , ,845 Advances to suppliers 8, , , ,975 Liabilities Suppliers of inputs 34, (4,753) (28,152) (56,303) Loans and financing 225, (31,424) (186,125) (372,250) Advances from customers 21, (2,978) (17,638) (35,275) Net effect on statements of income (loss) (37,183) (220,230) (440,460) (*) The conversion rate (R$ to US$1.00) used in the sensitivity tables for the probable scenario for the next 12 months was obtained from B3 - São Paulo Commodities, Futures and Stock Exchange on the base date of September 30, The Company and its subsidiaries have sales contracts in U.S. dollars for agricultural products, amounting to US$125,566 thousand, as disclosed in Note 30. These sales were not included in the table above since they have not yet been billed and, therefore, are not recorded in trade accounts receivable from customers. The Company's loans and financing in U.S. dollars are subject to hedge accounting. Any losses on these instruments due to the appreciation of the U.S. dollar in relation to the Brazilian real will be offset by gains on the hedged items (in this case, the Company's revenue) and vice versa. (iv) Interest rate risk The Company has loans indexed to variations in the London Interbank Offered Rate (LIBOR) and the General Market Price Index (IGPM), as well as financial investments indexed to variations in the CDI, which expose these assets and liabilities to fluctuations in interest rates, as shown in the sensitivity analysis below. The Company continuously monitors market interest rates in order to assess the need to contract derivatives to hedge against the volatility risk of these rates. Sensitivity analysis of changes in interest rates For the purpose of the sensitivity analysis, and utilizing the balances of financial investments and loans at September 30, 2017, the Company presents Scenario I (probable) based on market expectations for the average basic interest rate in In the projection of Scenario II (possible), this average was adjusted by 25%, and, for Scenario III (remote), by 50%. 48

49 Scenario I Scenario II Scenario III Type Net exposure at Rate (*) R$ gain (loss) Rate R$ gain (loss) Rate R$ gain (loss) Financial investments Interbank Deposit Certificates (CDI) 6, % (539) 10.43% % 809 Loans and financing 6-month Libor 6, % (98) 1.88% (122) 2.26% (147) Net effect on statements of income (loss) (637) (*) The rates utilized in the sensitivity tables as a probable scenario were obtained from the official agencies that disclose these indexes. (v) Market value of financial instruments The Group's financial instruments measured at amortized cost are mainly financial investments and loans and financing subject to floating interest rates, as disclosed in the related notes. Additionally, the Company and its subsidiaries have financial instruments represented by trade accounts receivable from customers and trade payables, mostly with short-term maturities. In the opinion of Management, due to these characteristics, the fair values of these instruments approximate their carrying amounts. (vi) Commodity price risk The Company produces and sells soybean, corn, sunflower and cotton byproducts (seed and lint), which are characterized as agricultural commodities. The commodities are sold in Brazil and abroad and allow for the adoption of price hedging. Commodity price variation is mostly hedged through advance sales directly to customers with physical delivery. The Company manages the commodity price risk through the continuous monitoring of estimated and actual cash flows, and the management of the maturity of its assets and liabilities. (vii) Derivative financial instruments The derivative financial instruments are intended to hedge the Company's transactions against the risk of fluctuations in foreign exchange rates and commodity prices, and are not used for speculative purposes Notional Fair Effect on Notional Fair Loss in Amount value finance amount value finance in, (market) result in (market) result Type USD in R$ in R$ R$ in R$ in R$ Currency and interest rate swap Fair value hedge/swap in US$ - - (235) 5,617 (54) (723) Fair value Non- Deliverable Forward (NDF) in US$ 13,681 (11,567) 4,124 7,697 (5,853) 4,109 Put option in US$ (4,536) 49

50 h. Hedge accounting As of August 2013, the Company has been adopting the formal designation of its transactions subject to hedge accounting, for non-derivative financial instruments used for hedging cash flows from the revenues from soybean, cotton lint, cottonseed and corn exports, documenting: (i) the hedge relationship; (ii) the Company's risk management objective and strategy for entering into the hedge; (iii) the identification of the financial instrument; (iv) the item or transaction hedged, (v) the nature of the risk to be hedged; (vi) the description of the hedge relationship; (vii) the correlation between the hedge and the hedged item; and (viii) the retrospective and prospective demonstration of the hedge effectiveness. The Company has been recording the gains and losses considered as effective for hedge accounting purposes in a specific equity account until the hedged item affects the results of operations, at which time, the gain or loss on each designated instrument will affect the results in the same account as the item hedged (in this case, sales revenue). The impacts recorded in the Company's equity at September 30, 2017 and the estimate of realization in the results are as follows: Year of realization Financing agreement Overall Total Export prepayments (PPE) (829) (4,994) 8, (64) 6 2,846 Advances on Foreign Exchange Contracts (ACC) 442 (348) Purchases of property, plant and equipment (Finimp and Res. 2770) (104) (879) (832) (1,815) Indirect export credit (CCB, CCE and NCE) ,066 (482) (5,934) 8, ,191 Sales/finance result (482) (5,934) 8, ,191 (-)Deferred taxes 164 2,018 (2,754) (125) (45) (2) (745) Effect on equity (318) (3,916) 5, ,446 The changes in other comprehensive income (loss) in the period were as follows: At December 31, 2016 (restated) (22,725) Changes in the fair value of cash flow hedges 16,962 Effective amounts transferred to the statements of income (loss) 19,661 Total changes in the period 36,623 Deferred taxes on cash flow hedges (12,452) At September 30, , Management remuneration In accordance with Brazilian corporation law, including the changes in accounting practices introduced by Law 11,638/07, and the Company's bylaws, it is the responsibility of the shareholders, at Annual Shareholders Meetings, to establish the overall amount of the annual Management remuneration. 50

51 The (fixed and variable) remuneration of officers and Board members in the period was as follows: Parent Company and Remuneration of members of the Board of Directors (1,116) (853) Management remuneration (3,721) (2,718) Social charges (783) (684) (5,620) (4,255) The Company does not grant post-employment benefits and severance pay benefits. Additional information on share-based payments is provided in Note Net revenue Parent Company (restated) (restated) Gross sales and services revenue 460, , , ,885 Foreign exchange variations (cash flow hedge) (19,661) (57,166) (19,661) (57,166) (-)Returns and rebates (1,268) (1,877) (1,984) (1,901) (-)Taxes on sales and services (22,386) (39,377) (27,103) (28,233) Net sales and services revenue 417, , , , Expenses by nature The nature of the costs and expenses in the statements of income (loss), according to their function, is as follows: Parent Company Variable costs and indirect production costs (96,152) (322,130) (106,291) (238,920) Raw materials (240,828) (265,189) (240,828) (265,189) Changes in the fair value of biological assets and net realizable value of agricultural products 80,608 94,615 93,369 70,183 Realization of the fair value of biological assets (54,648) (107,850) (63,893) (100,872) Personnel expenses (44,718) (50,181) (60,210) (62,829) Management fees (5,620) (4,255) (5,620) (4,255) Maintenance, repair and outsourced expenses (42,919) (43,592) (48,996) (50,177) Depreciation and amortization (25,858) (24,229) (27,742) (27,630) Freight, commissions and port expenses (3,413) (3,175) (7,607) (14,896) Equity in the results of investees (1,474) 15, Provision for losses on investments (36) (116) - - Result on the sale and write-off of property, plant and equipment (293) (728) (296) (728) Allowances (reversal) for doubtful accounts (reversal) provision impairment of notes receivable 21,129 (21,792) 21,129 (21,792) 51

52 Provision (reversal) for the adjustment of tax credits to recoverable value 1, ,798 (14) Estimated inventory losses 77 (221) 77 (221) Other income (expenses), net (10,395) (9,742) (26,023) (12,635) (422,742) (743,149) (471,133) (729,975) These amounts are presented in the statements of income (loss) for the period in the following accounts: Parent Company Cost of products sold (421,042) (681,204) (454,631) (616,431) Changes in the fair value of biological assets and net realizable value of agricultural products 80,608 94,615 93,369 70,183 Realization of the fair value of biological assets (54,648) (107,850) (63,893) (100,872) General, administrative and selling expenses (40,796) (37,422) (46,636) (51,721) Management compensation (5,620) (4,255) (5,620) (4,255) Equity in the results of investees (1,474) 15, Provision for losses on investments (36) (116) - - Other operating income (expenses), net (i) 20,266 (22,191) 6,278 (26,879) (422,742) (743,149) (471,133) (729,975) (i) Other operating income (expenses) was impacted by the inclusion of tax liabilities in the Tax Regularization Program in the amount of R$ 1,616 in the Parent company and R$ 17,342 in the. 52

53 26 Finance result Parent Company (restated) (restated) Finance income Income from financial investments Adjustments to present value of receivables Interest receivable 10,553 16,912 10,709 17,007 Monetary variations gains 1,493 3,622 1,493 3,770 Discounts obtained 2,354 1,293 2,380 1,297 Gain due to derivative financial instruments 11,105 1,092 11,105 1,092 25,645 24,200 26,540 24,777 Finance expenses Interest on loans and financing (49,807) (61,766) (49,991) (61,769) Interest payable and late payment fines (i) (16,835) (9,205) (40,096) (7,542) Monetary variations losses (2,395) (7,027) (2,401) (7,027) Loss on derivative financial instruments (12,877) (5,022) (12,877) (5,022) Adjustments to present value of suppliers of inputs (6,053) (6,205) (6,472) (6,205) Tax on financial transactions (IOF) (502) (670) (504) (729) Amortization of new-borrowing costs (1,149) (2,732) (1,149) (2,732) Other expenses (1,792) (803) (1,812) (844) (91,410) (93,430) (115,302) (91,870) Foreign exchange variations, net Foreign exchange gains 45,338 80,275 47,946 92,637 Foreign exchange losses (34,103) (48,351) (35,744) (57,287) 11,235 31,924 12,202 35,350 Finance result (54,530) (37,306) (76,560) (31,743) (i) Interest payable and late payment fines were impacted by the inclusion of tax liabilities in the Tax Regularization Program in the amount of R$ 7,133 in the Parent company and R$ 31,563 in the. 27 Transactions not affecting cash and cash equivalents The transactions that did not affect cash and cash equivalents in the period were as follows: Parent Company Offset of taxes payable against recoverable balances 4,456 9,130 7,159 9,708 Capital increase in subsidiaries - 18, Sale of assets in installments 1,339 17,260 2,712 17,260 Acquisition of property, plant and equipment in installments 2,860 8,870 3,541 9,069 53

54 28 Loss per share The tables below present the result for the period and the weighted average number of shares utilized to calculate basic and diluted loss per share (restated) Loss used to calculate basic and diluted l earnings (loss) Per share (19,685) (147,870) Weighted average number of shares outstanding in the period (in thousands) 17,914 17,914 Loss per share - basic and diluted (R$) (1.0989) (8.2544) Antidilutive instruments The instruments shown below were not included in the calculation of the diluted earnings (loss) per share. As a result, the weighted average number of common shares utilized in the calculation was the same as that for the basic earnings (loss) per share Shares considered as issued with no corresponding impact in relation to share-based payments (in thousands) 29 Share-based payments The Company has a share-based payment plan for its executive officers. Under the plan, which was approved by the shareholders at the Annual Shareholders' Meeting held on April 30, 2009 and subsequently regulated by the Board of Directors on October 7 and 26, 2010, the executives selected to participate in the plan received options to purchase common shares. Each purchase option of the employees can be converted into one common share of the Company on the exercise of the option. No amount is payable or will be payable by the beneficiary when receiving the option. The options do not entitle the holders to dividends or votes. The number of options granted was defined by the Company's Board of Directors, advised by the Human Resources Committee, and is not linked to the achievement of the individual or collective goals of the Company. In accordance with the same methodology, the Company's Board of Directors approved in 2013, 2014, 2015, 2016 and the current fiscal year, the granting of share purchase options to the Company's CEO, who will receive options to purchase common shares at an exercise price of R$ 99.90, R$ , R$ 30.00, R$ and R$ 11.92, respectively. One of the conditions for exercising the stock options is the continued employment of executives at the Company. In the event of employment termination, the options should be exercised within 30 days, otherwise they lose their validity. At September 30, 2017, the Company had in effect under the program the stock options granted to the CEO. Presented below is a statement of the plans granted by the Company and still in effect: 54

55 1st grant 24 months 36 months Grant date 03/14/ /14/2013 Volatility of the share price 39.70% p.a % p.a. Vesting period 24 months 36 months Period for exercise after the vesting period 36 months 36 months Number of options 7,407 7,407 Fair value - R$ Option value - R$ nd grant 12 months 24 months 36 months Grant date 02/18/ /18/ /18/2014 Volatility of the share price 27.03% p.a % p.a % p.a. Vesting period 12 months 24 months 36 months Period for exercise after the vesting period 36 months 36 months 36 months Number of options 7,407 7,407 7,407 Fair value - R$ Option value - R$ rd grant 12 months 24 months 36 months Grant date 02/24/ /24/ /24/2015 Volatility of the share price 57.33% p.a % p.a % p.a. Vesting period 12 months 24 months 36 months Period for exercise after the vesting period 36 months 36 months 36 months Number of options 7,407 7,407 7,407 Fair value - R$ Option value - R$ th grant 12 months 24 months 36 months Grant date 02/23/ /23/ /23/2016 Volatility of the share price 51.64% p.a % p.a % p.a. Vesting period 12 months 24 months 36 months Period for exercise after the vesting period 36 months 36 months 36 months Number of options 7,407 7,407 7,407 Fair value - R$ Option value - R$ th grant 12 months 24 months 36 months Grant date 01/24/ /24/ /24/2017 Volatility of the share price 65.88% p.a % p.a % p.a. Vesting period 12 months 24 months 36 months Period for exercise after the vesting period 36 months 36 months 36 months Number of options 7,407 7,407 7,407 Fair value - R$ Option value - R$

56 a. Fair value of stock options granted during the period (Parent Company and ) The Company recognizes expenses with the stock option plan based on the fair value of options granted, considering their fair value on the grant date. The Black & Scholes pricing methodology was used to determine the value of the options in the grant of share purchase options, considering that it is widely used in the financial market for the valuation of this type of asset. The maturity by year is used as an assumption in the Black & Scholes model. The stock options evaluated have a grace period for the exercise of the options, as well as a validity of 36 months as of each due date. The maturity in years represents the annualized number of days up to the validity of the stock options. The options were priced according to the volatility of historical prices and were calculated by the Exponential Weighted Moving Average methodology for a period of 60 days, utilizing quotations relating to March 14, 2013 (1st grant), February 18, 2014 (2nd grant), February 24, 2015 (3rd grant), February 23, 2016 (4th grant) and January 24, 2017 (5th grant). b. Changes in stock options during the period (Parent Company and ) Number of options At January 1, 88,884 70,369 Granted during the period 22, Expired during the period (7,407) - At September 30, 103,698 92,590 Expenses are recorded on a pro rata basis during the period of service, starting at the grant date and extending up to the date on which the beneficiary becomes entitled to exercise the option, with a corresponding entry to a capital reserve in equity. The expenses recognized in the period were as follows: Parent Company and Personnel expenses - stock options (101) (148) 30 Commitments () a. Future sales The future commitments of the Company and its subsidiaries at September 30, 2017 were as follows: 56

57 Product Delivery date Amount Contracts Unit Currency Freight Price 16/17 harvest Cotton lint (i) Jul to Sep/17 6, LP U.S. dollar CIF 0.71 Cotton lint (i) Jul to Sep/ LP U.S. dollar FOB 0.72 Cotton lint Oct to Dec/17 22, LP U.S. dollar CIF 0.75 Cotton lint Oct to Dec/17 3,750 4 LP U.S. dollar FOB 0.72 Cottonseed (ii) Jul to Sep/17 7, Metric ton Real FOB Cottonseed Oct to Dec/17 20, Metric ton Real FOB Cottonseed Jan to Mar/ Metric ton Real FOB Corn grain (iii) Jul to Sep/ SC Real CIF Corn grain (iii) Jul to Sep/17 17,679 5 SC U.S. dollar FOB 4.86 Corn grain (iii) Jul to Sep/17 20,001 5 SC Real FOB Corn grain Oct to Dec/17 18,553 3 SC U.S. dollar FOB 5.10 Corn grain Oct to Dec/17 21,146 1 SC Real FOB /18 harvest Cotton lint Jul to Sep/18 12, LP U.S. dollar CIF 0.77 Cotton lint Jul to Sep/18 4,351 1 LP U.S. dollar FOB 0.76 Cotton lint Oct to Dec/18 24, LP U.S. dollar CIF 0.78 Soybean Jan to Mar/18 185, SC U.S. dollar FOB To be established Soybean Jan to Mar/18 81, SC U.S. dollar FOB Soybean Apr to Jun/18 6,000 2 SC U.S. dollar FOB To be established Soybean Apr to Jun/18 5,500 2 SC U.S. dollar FOB Cottonseed Jul to Sep/18 1,000 1 SC Real FOB Cottonseed Oct to Dec/18 7,000 2 Metric ton Real FOB (ii) (iii) (iv) Non-delivery of 6,680 metric tons of Cotton in the third quarter of 2017 due to delays in buyer inspections, mainly resulting from rain in mid-august, as it led to an inversion in processing order, as the cotton that got wet had to be processed first. As a result, it took longer to gather enough material for white-cotton lots, the object of most contracts. In addition, there are fewer ships in Santos port, causing delays in customer shipments. Non-delivery of 7,603 metric tons of Cottonseed in the third quarter of 2017, mainly due to logistics problems in Mato Grosso state. The sharp increase in corn freight prevented many customers from collecting Cottonseed in July and August. With the end of the corn harvest, the flow of trucks returned to normal levels. Customers are expected to normalize collection and conclude the contracts in the last quarter of Non-delivery of 38,313 metric tons of Corn grain in the third quarter of 2017, due to delays in collection by customers, mainly in the Parecis region, whose primary destination is the port in Rondônia state. The main reason for said delay was the low water levels on the Madeira River, which has been returning to normal since the rainy season began. b. Leases and agricultural partnerships At September 30, 2017, the Company had 74,288 hectares under operating lease agreements and agricultural partnerships entered into with third parties, with maturities through 2026, as shown below: Weighted amounts (in bags of soybean/ha/y ear) Leased Unit Location State area (in ha) Maturity of contracts Type of lease Campo Novo do Mato São José Parecis Grosso 10, Operating Ribeiro Mato do Céu Nova Mutum Grosso 18, Operating Guapira Mato ma Diamantino Grosso 16, Operating Parecis Mãe Margari da Sete Placas Cachoei ra Terra Santa Campo Novo do Parecis Sta. Rita do Trivelato Diamantino Campo Novo do Parecis Tabaporã Mato Grosso 8, Operating Mato Grosso 7, Operating Mato Grosso 4, Operating Mato Grosso 5, Operating Mato Grosso 2, Operating 74,288 57

58 The Company's minimum future payments relating to operating leases and rentals, in Brazilian reais, are summarized as follows: Payment flow Amounts In up to one year 39,195 Between one and five years 69,923 More than five years 9,630 Total minimum future lease payments 118,748 The lease agreements entered into by the Company and third parties are indexed to the quoted price of the soybean bag in each region. Therefore, minimum future payments are estimated in quantity of soybean bags, converted into local currency, using the quoted price of soybean in each region on each balance sheets date. Consequently, the minimum payment amounts shown above could suffer significant changes up to the payment date, as a result of changes in the market price of the commodity. As regards the lease agreements entered into with third parties, the following should be highlighted: there are no contingent payment clauses; there are no renewal terms or purchase option terms, except for those established in Law 4,504/64, article 92, paragraph 3 and 95, IV; the agreements entered into are indexed to the changes in the price of the soybean bag, and there are no other readjustment clauses; there are no restrictions, such as those relating to dividends and interest on capital, additional debt or any other requiring additional disclosure. 31 Insurance The Company and its subsidiaries have insurance policies contracted with some of the leading insurers in the country, which were chosen based on the advice of experts and took into consideration the nature and degree of risk involved. At September 30, 2017, the Company had insurance coverage against fire and sundry risks to property, plant and equipment, as shown below. Amount insured Civil liability 80,000 Sundry risks - property, plant and equipment 472, , Segment information The Management of Terra Santa Agro S.A. defined agriculture as the single operating segment of the Company, which is engaged in agricultural activities, mainly soybean, corn and cotton, based on the reports used by the CEO and the Board of Directors, who are responsible for making operational and strategic decisions. The performance evaluations and targets are defined and monitored considering the segment as a whole. 58

59 The agricultural segment mainly comprises the production and sale of soybean, corn and cotton, basically consisting of cultivation and sale of agricultural products; sale of agricultural inputs; and processing of cottonseed, owned by the Company or by third parties. The Company s net revenue from sales in the domestic and foreign markets is as follows: Domestic market 416, ,928 Foreign market 69, ,657 Net sales and services revenue 486, ,585 Net sales revenue, by geographic segment, based on the country of destination, are as follows: Brazil 87% 72% Asia 1% 5% Europe 6% 8% North America 6% 15% Total 100% 100% Below, a breakdown of net sales revenue by product: Soybean 320, ,987 Corn 66,358 92,892 Cotton lint 74, ,886 Cottonseed 15,062 17,288 Resale of products 29, ,698 Foreign exchange variation (cash flow hedge) (19,661) (57,166) Total 486, ,585 59

60 Between September 30, 2016 and 2017, the Company s main customers, who individually accounted for 10% or more of total revenue, were as follows: Bunge Alimentos S.A % 22.21% ADM do Brasil Ltda % 4.40% Amaggi Exportação e Importação Ltda 12.68% 9.74% 60

61 3Q17 Earnings Release

62 3Q17 Earnings Release MESSAGE FROM MANAGEMENT 3Q17 was marked by the end of the corn and cotton crop harvest and sale, as well as the beginning of the 2017/18 harvest with the planting of soybean. Brazil's 2016/17 grain harvest, as disclosed in the 12 th CONAB Survey, is expected to reach record average productivity (3.92 t/ha), due to the favorable weather conditions throughout the cycle. In addition, the country also recorded the largest grain planted area of the historical series (60.9 million hectares), which led the national production to reach million tons, a record that exceeded the 2015/16 harvest by 28%. In Terra Santa Agro, the results for the 2 nd cotton and corn crops were no different, as described below: Cotton (2 nd crop): the Company concluded the cotton harvest with a final average yield of 4,014 kg/ha slightly above the Company s initial target. It is worth mentioning the cotton lint productivity increased from 40.4% in the 2015/16 harvest to 41.1% in the 2016/17 harvest, benefiting the lint yield, which reached 1,650 kg/ha 2.1% above the initial target of 1,617 kg/ha Corn (2 nd crop): the Company concluded the harvest with a final average yield of 6,912 kg/ha (115.2 bags/ha), 3.0% lower than the initial target of 7,122 kg/ha (118.7 bags/ha). Weather related factors such as the lack of rainfall during important stages of the crop, the excess rainfall causing the leaching of nitrogen and the low humidity of the grain during harvest negatively impacted the productivity of the crop. Also from an operational point of view, the Company began planting the 2017/18 harvest, and completed 88% of the planting of the soybean crop by October 31. The very irregular rainfall from the second half of September negatively impacted the continuous good pace of planting and demanded an efficient strategy in order for crops to be planted within the recommended time frame and with operational quality. So far, we have approximately 3% of the soybean area at risk, which should be mostly replaced by the 1 st cotton crop, therefore reducing the soybean planted area to around 100,000 hectares and maintaining the initially estimated area for the cotton crop (32,261 thousand hectares). The chart below shows the performance of soybean plantation in the Company's last 3 harvests, demonstrating a significant improvement in operating performance as of October 24, when rainfall returned to normal levels throughout the state of Mato Grosso. 2

63 3Q17 Earnings Release Planting Terra Santa Agro Comparative (3 crops) Analyzing the Company s quarterly results and the seasonality of agricultural activities, the result of the quarter or the fiscal year is often distorted due to (i) temporary exchange rate issues, (ii) sale (or no sale) of a certain amount of product in a given quarter, (iii) the mark to market of biological assets and agricultural produce and/or (iv) the distribution criterion adopted for the cost of each crop. 3Q is the quarter that generated the lowest revenue for the Company, since the soybean crop was sold in the first half of the year and most of the cotton revenue will be recognized in the fourth quarter and in the beginning of the following year (carryover stock). In addition, corn and cotton crops showed practically no gross result in the quarter due to the mark to market of biological assets and agricultural produce, which recognizes the gains (or losses) of the crop during its development until harvest. As a result, the Company posted a net loss of R$64.9 million in 3Q17, compared to a net loss of R$91.7 million in 3Q16. Adjusted EBITDA was a negative R$17.4 million in 3Q17, versus a negative R$26.0 million in 3Q16. In 9M17, it totaled R$42.2 million compared to R$52.1 million in 9M16. Operating cash generation was a negative R$45.6 million and R$7.6 million in 3Q17 and 9M17, respectively, compared to positive operating cash generation of R$12.8 million and R$83.4 million in 3T16 and 9M16, respectively. It is important to note that cash generation in 2017 was impacted by the postponement of payments negotiated with suppliers from the 2015/16 harvest in the amount of R$63.7 million, which was done in 1Q17, as well as compliance with all bank obligations (interest) for the year. Excluding the postponement of payments negotiated with suppliers mentioned above, the Company's cash generation was R$56.1 million in 9M17, compared to R$19.7 million in 9M16. It is worth highlighting the evolution of the sale of the 2016/17 harvest, especially soybean and cotton lint, with 83% and 74% of the expected production, respectively, already sold. Finally, the Company believes that, due to the operational results posted in the 2016/17 harvest and the positive prospects for the 2017/18 harvest, good agricultural planning and planting performed within the recommended time frame, in conjunction with all the investments already made, are sufficient factors to guarantee the success of the 2017/18 harvest and the fulfillment of the established targets for the soybean crop (3,468 kg/ha and 57,8 bags/ha), as well as an average higher than the state of Mato Grosso, which we have achieved in the last 3 seasons, as shown below. 3

64 3Q17 Earnings Release 4