Agropecuária Maggi Ltda. - amaggi.com.br

Agropecuária Maggi Ltda.

Financial Statements as of

December 31, 2014


Financial statements as of

December 31, 2014

2

Content

Independent auditor’s report 3

Statements of financial position 5

Statements of comprehensive income 6

Statements of changes in equity 7

Statements of cash flows 8

Notes to the consolidated and individual financial statements 9

3

KPMG Auditores Independentes

Rua Sete de Setembro, 1.950

13560-180 - São Carlos, SP - Brasil

Caixa Postal 708

13560-970 - São Carlos, SP - Brasil

Central Tel 55 (16) 2106-6700

Fax 55 (16) 2106-6767

Internet www.kpmg.com.br

KPMG Auditores Independentes, uma sociedade simples brasileira e

firma-membro da rede KPMG de firmas-membro independentes e

afiliadas à KPMG International Cooperative (“KPMG International”),

uma entidade suíça.

KPMG Auditores Independentes, a Brazilian entity and a member

firm of the KPMG network of independent member firms affiliated

with KPMG International Cooperative (“KPMG International”), a

Swiss entity.

Independent auditor’s report

To

The Board of directors and quotaholders of


Cuiabá - MT

We have audited the accompanying individual and consolidated financial statements of

Agropecuária Maggi Ltda. (“the Company”), identified as Company and Consolidated,

respectively, which comprise the statement of financial position as at December 31, 2014, the

statements of profit and loss and other comprehensive income, changes in equity and cash flows

for the year then ended, and notes, comprising a summary of significant accounting policies and

other explanatory information.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these individual and

consolidated financial statements in accordance with accounting practices adopted in Brazil and

in accordance with International Financial Reporting Standards (IFRS) issued by the

International Accounting Standards Board – IASB and for such internal control as management

determines is necessary to enable the preparation of financial statements that are free from

material misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these individual and consolidated financial

statements based on our audit. We conducted our audit in accordance with the Brazilian and

International Standards on Auditing. Those standards require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance about whether the

financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the individual and consolidated financial statements. The procedures selected

depend on our judgment, including the assessment of the risks of material misstatement of the

individual and consolidated financial statements, whether due to fraud or error. In making those

risk assessments, we consider internal control relevant to the entity’s preparation and fair

presentation of the individual and consolidated financial statements in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an

opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating

the appropriateness of accounting policies used and the reasonableness of accounting estimates

made by management, as well as evaluating the overall presentation of the individual and

consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion.

4

Opinion

In our opinion, the individual and consolidated financial statements give a true and fair view of

the individual and consolidated financial position of the Agropecuária Maggi Ltda. as at

December 31, 2014, and of its individual and consolidated financial performance and its

individual and consolidated cash flows for the year then ended in accordance with International

Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board –

IASB.

KPMG Auditores Independentes

CRC 2SP014428/O-6

Claudio José Biason

Accountant CRC 1SP144806/O-7

São Carlos, February 27, 2015


Statements of financial position

December 31, 2014 and 2013

(In thousands of US Dollars)

Assets Note 2014 2013 2014 2013 Liabilities Note 2014 2013 2014 2013

Cash and cash equivalents 6 89,138 22,466 88,288 22,452 Accounts payable to suppliers 16 62,308 64,857 45,386 51,342

Trade accounts receivable 7 46,554 41,547 44,350 42,248 Loans and financing 17 135,374 178,095 135,261 178,095

Inventories 8 133,313 128,886 107,023 128,885 Advances from customers 16,953 61,013 7,253 61,007

Biological assets 9 168,682 180,940 148,863 180,938 Taxes payable 559 1,317 470 1,299

Advances to suppliers 11 15,227 11,574 12,779 11,556 Salaries and vacation payable 5,934 6,028 5,389 6,024

Recoverable taxes 12 20,863 9,386 20,097 9,335 Derivative financial instruments 18 36,545 35,401 36,545 35,401

Securities brokerage operations 9,414 2,894 9,414 2,894 Other accounts payable 227 797 308 762

Derivative financial instruments 18 534 4,948 534 4,948 Total current liabilities 257,900 347,508 230,612 333,930

Prepaid expenses 5,323 2,798 5,186 2,798

Other credits 16,765 10,986 16,756 10,983

Total current assets 505,813 416,425 453,290 417,037 Accounts payable to suppliers 16 3,916 33,401 3,916 19,451

Loans and financing 17 477,450 230,130 476,778 230,130

Taxes payable - 3 - -

Trade accounts receivable 7 2,142 4,309 2,842 5,009 Provision for civil, labor and tax risks 20 1,540 1,859 1,486 1,811

Advances to suppliers 11 23,722 27,090 23,722 27,090 Deferred income tax and social contribution 10 150,581 186,920 139,846 182,755

Recoverable taxes 12 2,160 1,705 2,122 1,705 Total non-current liabilities 633,487 452,313 622,026 434,147

Loans granted 13 3,813 816 3,813 7,358

Prepaid expenses 7,548 1,566 7,044 1,566 Total liabilities 891,387 799,821 852,638 768,077

Other credits 627 755 509 603

Biological assets 9 3,804 25,744 3,738 25,679 Equity

Investments 14 2,588 2,528 107,216 42,828 Capital 115,190 115,190 115,190 115,190

Property, plant and equipment 15 758,680 710,467 667,853 630,786 Equity valuation adjustments 251,364 254,686 251,364 254,686

Intangible assets 2,108 14 2,107 14 Reserve special of goodwill on merger (21,353) (21,353) (21,353) (21,353)

Total non-currrent assets 807,192 774,994 820,966 742,638 Profit reserve to be destined 76,417 43,075 76,417 43,075

Total equity attributable to controlling interest 421,618 391,598 421,618 391,598

Total equity 22 421,618 391,598 421,618 391,598

Total assets 1,313,005 1,191,419 1,274,256 1,159,675 Total equity and liabilities 1,313,005 1,191,419 1,274,256 1,159,675

The notes are na integral part of these consolidated financial statements

Consolidated Company CompanyConsolidated

5


Statements of comprehensive income

Years ended December 31, 2014 and 2013

(In thousands on US Dollars)

Note 2014 2013 2014 2013

Net revenue 23 378,017 409,536 343,458 409,536

Changes in fair value of biological assets 9 39,516 76,756 27,251 76,756

Cost of goods and services (405,371) (454,428) (371,667) (455,128)

Gross profit 24 12,162 31,864 (958) 31,164

Selling expenses 25 (6,139) (5,496) (5,106) (5,496)

Administrative expenses 26 (9,982) (15,053) (9,492) (14,374)

Net other operating income (expenses) 27 20,448 25,988 19,560 26,085

Equity interest gain (loss) in subsidiaries 14 44 255 8,818 18,988

Income from operating activities and emplayees' profit sharing 16,533 37,558 12,822 56,367

Financial revenues 85,218 27,199 78,604 23,968

Financial expenses (134,661) (62,485) (131,372) (60,266)

Translation gain (loss) 48,615 13,672 44,742 (3,335)

Net financial income (expenses) 28 (828) (21,614) (8,026) (39,633)

Net income before income tax and social contribution and emplayees' profit

sharing 15,705 15,944 4,796 16,734

Income tax and social contribution - deferred 17,304 (2,263) 27,924 (3,113)

Income tax and social contribution - current (119) (9,220) - (9,160)

Net income before emplayees' profit sharing 32,890 4,461 32,720 4,461

Employees' profit sharing (2,870) (3,500) (2,700) (3,500)

Net income for the year 30,020 961 30,020 961


Consolidated Company

6


Statements of changes in equity



Capital

Equity valuation

adjustments

Reserve special of

goodwill on merger

Profit reserve to

be destined

Accumulated

profit Total equity

Balances at January 1, 2013 115,190 240,754 - 81,094 - 437,038

Dividends distribution - - - (25,048) - (25,048)

Deemed Cost realization - (1,748) - - 1,748 -

Deemed Cost realization in subsidiaries - (89) - - 89 -

Imcorporation Agropecuária Morrinhos Ltda - 15,769 - - (15,769) -

Recognition of special reserve of goodwill on merger - - (21,353) - - (21,353)

Net income for the year - - - - 961 961

Profit destination

Profit reserve to be destined - - - (12,971) 12,971 -

Balances at December 31, 2013 115,190 254,686 (21,353) 43,075 - 391,598

Deemed Cost realization - (2,014) - - 2,014 -

Deemed Cost realization in subsidiaries - (1,308) - - 1,308 -

Net income for the year - - - - 30,020 30,020

Allocation of net income:

Profit reserve to be destined - - - 33,342 (33,342) -

Balances at December 31, 2014 115,190 251,364 (21,353) 76,417 - 421,618

30,020


7


Statements of cash flows



2014 2013 2014 2013

Cash flows from operating activities

Net income for the year 30,020 961 30,020 961

Adjustment to:

Depreciation and amortization 10,733 11,354 8,592 10,734

Residual cost on disposal of fixed assets 16,929 2,756 15,361 1,734

Deferred income tax and social contribution (17,304) 2,263 (27,924) 3,113

Net impacts of cumulative translation adjustments in subsidiaries - - - 8

Equity interest gain (loss) (44) (255) (8,818) (18,988)

Provision (reversion) for civil, labor and tax risks (319) (273) (325) (266)

Incurred interests and exchange variation 4,277 (2,183) 3,453 8,288

Accrued interests (337) (76) (557) (25)

Unrealized derivatives 5,558 29,798 5,558 29,798

Changes in fair value of biological assets (39,516) (76,756) (27,251) (76,756)

Reversal of allowance for doubtful accounts 216 - 180 -

Provision for inventory losses 112 112 112 112

Investments losses on incorporation - - - 4,640

Provision for devaluation of inventories 7,726 - 6,504 -

18,051 (32,299) 4,905 (36,647)

Changes on assets and liabilities

(Increase) Trade accounts receivable (3,090) (11,904) (149) (11,905)

Decrease (Increase) Inventories (12,265) 52,612 655 52,610

Decrease (Increase) Advances to suppliers (285) 21,467 2,145 21,468

Decrease (Increase) Recoverable taxes (11,932) 4,988 (11,179) 4,803

Decrease (Increase) Securities brokerage operations (6,520) 4,699 (6,520) 4,699

(Increase) Prepaid expenses (8,507) (4,364) (8,372) (4,364)

Decrease (Increase) Other credits (5,617) 9,077 (5,645) 9,054

Decrease Biological assets 73,714 47,758 63,647 47,760

Increase (Decrease) Accounts payable to suppliers (32,034) (1,387) (21,491) 11,239

Increase (Decrease) Advances from customers (44,060) 18,623 (53,754) 18,624

Increase (Decrease) Taxes payable (761) 98 (829) 233

(Decrease) Salaries and vacation payable (94) (1,603) (635) (1,603)

Increase (Decrease) Other accounts payable (570) 334 (454) 339

Increase (Decrease) Deferred income tax and social contribution (19,035) 29,298 (14,985) 31,783

Cash provided (utilized) in from operations (71,056) 169,696 (57,566) 184,740

Interest paid (32,202) (18,146) (32,202) (18,622)

Net cash provided (utilized) in operating activities (85,207) 119,251 (84,863) 129,471

Cash flow from investing activities

Increase on investments - (220) - (216)

Advances for future capital increase - - (12,417) (15,941)

Acquisition of property, plant and equipment and intangible (77,969) (125,492) (73,534) (125,471)

Loans granted to related parties (4,007) (55,734) (8,767) (29,347)

Loans received from related parties 1,347 55,053 12,909 23,372

Cash flow utilized in investing activities (80,629) (80,629) (81,809) (147,603)

Cash flows from financing activities

Financial funding 494,282 264,176 494,282 264,176

Payments of loans and financing (261,774) (207,064) (261,774) (207,064)

Dividends paid - (25,048) - (25,048)

Net cash provided in financing activities 232,508 32,064 232,508 32,064

Increase in cash and cash equivalents 66,672 66,672 65,836 13,933

Statements of increase in cash and cash equivalents

At beginning for the year 22,466 8,544 22,452 8,519

At end for the year 89,138 22,466 88,288 22,452

66,672 13,922 65,836 13,933



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December 31, 2014

9

Notes to the consolidated and individual financial statements

(In thousands of U.S. dollars)

1. Reporting entity

Agropecuária Maggi Ltda. (the “Company”) is a limited entity domiciled in the city of Cuiabá,

state of Mato Grosso, Brazil. Its activities consist on the production and trading of agricultural

products, mainly soybean, corn and cotton and production and processing of seeds.

2. Subsidiaries

Shareholding

2014 2013

Direct subsidiary Country

Agro Sam Agricultura e Pecuária Ltda. Brazil 100.00% 100.00%

Associate

Amaggi Argentina S.A. Brazil 11.00% 11.00%

Amaggi Construções de Rodovias Ltda. Brazil 36.00% 36.00%

Agro Sam Agricultura e Pecuária Ltda.

Agro Sam Agricultura and Pecuária Ltda. is domiciled in the city of Cuiabá, state of Mato

Grosso, Brazil. Company’s activities consists on the production and trading of agricultural

products, mainly soybean, corn and cotton.

Amaggi Argentina S.A.

Amaggi Argentina S.A. is located in the city of San Isidro, state of Buenos Aires, Argentina and

its operations mainly consist in the trading of soybean, corn, wheat, sorghum and barley.

Amaggi Construções de Rodovias Ltda.

Amaggi Construções de Rodovias Ltda. is domiciled in the city of Cuiabá, state of Mato Grosso,

Brazil, and its activities consist, mainly, in the construction of roads.

3. Basis of preparation

a. Basis of accounting

The financial statements of the Company, which were prepared in accordance with

accounting practices adopted in Brazil, including the pronouncements issued by the

Accounting Pronouncements Committee - CPC and the International Financial Reporting

Standards - IFRS issued by the International Accounting Standards Board - IASB, one

since starting in 2014, the IFRS applicable to separated financial statements allowed the

application of the equity method in subsidiaries in the separated financial statements.



December 31, 2014

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The financial statements, accompanied by the independent auditors report were authorized

for issue by the Board of Directors on February 27, 2015.

Details of the Company's accounting policies are presented in note 4.

b. Basis of measurement

Financial statements have been prepared based on the historical cost basis except for the

following material items recognized on balance sheet:

Derivative financial instruments measured at fair value through profit and loss;

Non-derivative financial instruments measured at fair value through profit or loss; and

Biological assets measured at fair value.

c. Functional and presentation currency

Management defined Dollar (USD) as Company’s functional currency, according with the

rules described on “IAS 21 – The Effects of Changes in Foreign Exchange Rates”.

All financial information presented in U.S. Dollar has been rounded to the nearest

thousands, except when otherwise indicated.

d. Use of estimates and judgments

The preparation of financial statements according to IFRS requires management to perform

judgments, estimates and to adopt assumptions that affect the application of accounting

policies and the reported amounts of assets, liabilities, revenue and expenses. Actual results

of assets, liabilities, revenues and expenses may differ from these estimates.

Estimates and assumptions are reviewed on an ongoing basis. Reviews of accounting

estimates are recognized prospectively.

(i) Judgments

Information about judgments made in applying accounting policies that have the most

significant effects on the amounts recognized in the financial statements is included in the

following notes:

Note 2 and 4.a – Consolidation: whether the Company has the facto control over an

investee.

(ii) Assumptions and estimation uncertainties

Information about uncertainties on assumptions and estimates that have a significant risk of

resulting in a material adjustment within the next financial year are included in the

following notes:



December 31, 2014

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Note 4.d. (iii) – Useful life of property, plant and equipment;

Note 4.g. – Impairment test: key assumptions underlying recoverable amounts;

Note 4.n. e 10 – Recognition of deferred tax assets: availability of future taxable income to

compensate tax losses;

Note 5 e 9 – Determination of fair value of biological assets;

Note 18 – Determination of fair value of financial assets and liabilities; and

Note 20 – Provision for civil, labor and tax risks.

4. Significant accounting policies

The accounting policies set out below have been applied consistently to all periods reported in

these consolidated and individual financial statements.

a. Basis of consolidation

(i) Controlled entities

The entity controls another entity when is exposed, or have the rights, on the variable

income if this entity and has the ability to affect this income exercising its power over the

entity. The financial statements of controlled entities are included in the consolidated

financial statements from the date the control begins and they are maintained until the date

the control no longer exists.

(ii) Investments in associates

Associates are those entities in which the Group, directly or indirectly, has significant

influence, but not control, over the financial and operating policies.

The investments on associates are accounted by equity method on the consolidated and

individual financial statements and are initially recognized by cost plus transaction costs.

After initial recognition, consolidated financial statements include the participation on profit

or loss and other comprehensive income of the investee until the date that significant

influence exists.

The consolidated financial statements include the profit or loss and other comprehensive

income of equity accounted investees, after adjustments to align its accounting policies with

those of the Group, from the date that significant influence begins until the date that

significant influence or ceases.

When the Company’s share of losses exceeds its interest in an equity-accounted investee,

the carrying amount of the investment, including any long-term interests that form part

thereof, is reduced to zero, and the recognition of further losses is discontinued except to the

extent that the Group has an obligation or has made payments on behalf of the investee.



December 31, 2014

12

(iii) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealized profit or loss arising from intra-

group transactions, are eliminated during the preparation of the consolidated financial

statements.

Unrealized gains arising from transactions with equity-accounted investees are eliminated

against the investment on the extent of the Group’s interest in the investee.

Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent

that there’s no evidence of impairment.

b. Foreign currency

(i) Foreign currency transactions

Transactions in foreign currency are converted to the respective functional currency of the

Company at exchange rates in the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the reporting date are

converted to the functional currency at the exchange rate at that date. Exchange rate gain or

loss on monetary items is the difference between the amortized cost in the functional

currency at the beginning of the year, adjusted for effective interest and payments during the

year, and the amortized cost in foreign currency at the exchange rate at the reporting

exercise.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at

fair value are converted to the functional currency at the exchange rate at the date that the

fair value was determined. Foreign currency differences are generally recognized in profit

or loss. Non-monetary items that are measured based on historical cost in foreign currency

are not translated.

The income and expenses of foreign operations are converted to U.S. Dollar at exchange

rates on the date of transactions.

c. Financial instruments

(i) Non-derivative financial assets

The Company and its subsidiary recognizes loans and receivables on the date that they are

originated. All other financial assets (including assets designated as at fair value through

profit or loss) are recognized initially on the trade date, which is the date that the Company

becomes party to the contractual dispositions of the instrument.

The Company and its subsidiary derecognizes a financial asset when the contractual rights

to the cash flows from the asset expire, or when the Company transfers the rights to receive

the contractual cash flows of a financial asset in a transaction in which substantially all the

risks and rewards of ownership of the financial asset are transferred. Any interest in such



December 31, 2014

13

transferred financial assets that is created or retained by the Company is recognized as a

separate asset or liability.

Financial assets and liabilities are offset and the net amount reported in the statement of

financial position when, and only when, the Company has legal right to offset the amounts

and intends either to settle on a net basis or to realize the asset and settle the liability

simultaneously.

The Company and its subsidiary classifies non-derivative financial assets into the following

categories: recorded at fair value through profit or loss and loans and receivables.

Financial assets at fair value through profit or loss

A financial asset is classified as at fair value through profit or loss if it is classified as held

for trading or is designated as such on initial recognition. Financial assets are designated as

at fair value through profit or loss if the Company or its subsidiary manages such

investments and makes purchase and sales decisions based on the fair value in accordance

with the Company’s documented risk management and the Company investments strategy

or its subsidiary. Attributable transaction costs are recognized as incurred after the initial

recognition. Financial assets recorded as at fair value through profit or loss are measured at

fair value and changes on the fair value are recognized in profit or loss.

Loans and receivables

Loans and receivables are financial assets with fixed or determinate payments that are not

quoted in an active market. Such assets are recognized initially at fair value plus any

directly attributable transaction costs. Subsequent to initial recognition, loans and

receivables are measured at amortized cost using the effective interest method, less any

impairment losses.

Loans and receivables comprise cash and cash equivalents, trade accounts receivable,

securities brokerage operation (assets), loans granted and other credits.

Cash and cash equivalents

Cash and cash equivalents includes cash balances, bank deposits and financial investments

convertible into cash in an period within 90 days without significant loss on the amounts.

(ii) Non-derivative financial liabilities

Financial liabilities are initially recognized on the trade date, which is the date that the

Company or its subsidiary becomes party to the contractual dispositions of the instrument.

The Company or its subsidiary derecognizes a financial liability when its contractual

obligations are discharged, cancelled or expire.

The Company and its subsidiary classifies non-derivative financial liabilities into the other

financial liabilities category. Such liabilities are recognized initially at fair value plus any

directly attributable transaction cost. Subsequent to initial recognition, these financial

liabilities are measured at amortized cost using the effective interest method.



December 31, 2014

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The Company and its subsidiary has the following non-derivative financial liabilities:

accounts payable to suppliers, loans and financing and other accounts payable.

(iii) Capital

Quotes of capital are classified as equity.

(iv) Derivative financial instruments

The Company has derivative financial instruments to protect itself from exposures resulting

from changes in foreign currency and interest rate. Embedded derivatives are separated

from their principal contracts and are recorded individually in case the economic features,

the risks of the principal contract and the embedded derivative aren’t intrinsically related; or

if an individual instrument with the same conditions of the embedded derivative meets the

same conditions as a derivative, and the instrument combined is not measured by the fair

value through profit or loss.

Derivatives are initially recognized at the fair value; directly attributable transaction costs

are recognized at profit or loss as incurred. Subsequent to the initial recognition, derivatives

are recorded by its fair value, and the changes on fair value are recognized on profit or loss.

d. Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost of acquisition or construction

less accumulated depreciation and accumulated losses by impairment losses.

Cost includes disbursements that are directly attributable to the acquisition of the asset. The

cost of self-constructed assets includes the following:

The cost of materials and direct labor;

Any other costs directly attributable to bring the assets to a working condition for their

intended use by Management;

Dismantling costs and the costs to restore the site on which the assets are located; and

Capitalized borrowing costs on qualifying assets.

Purchased software that is an integrant part of the functionality of an equipment is

capitalized as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are

accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on the disposal of an item of property, plant and equipment (the difference

between the amount of the disposal and the carrying amount), are recognized in “net other

operating income (expense)” in the “statements of comprehensive income”.



December 31, 2014

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(ii) Subsequent costs

Subsequent costs are capitalized only when it is probable that the future economic benefits

associated with the costs will flow to the Company. Ongoing repairs and maintenance are

expensed as incurred.

(iii) Depreciation

Items of property, plant and equipment are depreciated on a straight-line basis in profit or

loss over the estimated useful lives of each component. Land is not depreciated.

Items of property, plant and equipment are depreciated from the date that they are installed

and are ready for use, or in respect of internally constructed assets, from the date that the

asset is completed and ready for use.

The estimated useful lives for the current year are as follows:

Classes of assets

Useful life

(Average) years

Weighted

Average Rate (p.y.)

Aircraft 19.60 5.10%

Improvements in properties of third parties 26.33 3.80%

Buildings 32.23 3.10%

Ships 13.92 7.19%

Hardware 3.15 31.71%

Facilities 19.58 5.11%

Machines and equipment 16.51 6.06%

Furniture and fixtures 10.77 9.28%

Radio-communication 7.72 12.95%

Vehicles 4.66 21.46%

Depreciation methods, useful lives and residual amounts are reviewed at each reporting date

and eventual adjustments are recorded as changes in accounting estimates.

e. Biological assets

Biological assets are measured at fair value less costs to sell. Changes on fair value less

costs to sell are recognized in profit or loss.

f. Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of

inventories is based on the mobile weighted average. In the case of manufactured

inventories and work in progress, cost includes an appropriate share of production

overheads based on normal operating capacity.

The cost of biological assets transferred to inventories is its fair value less expense to sell at

the date of harvest.



December 31, 2014

16

g. Impairment

(i) Non-derivative financial assets

Financial assets not classified at fair value through profit or loss, including in an interest in

an equity-accounted investee, are assessed at each reporting date to determine whether there

is objective evidence of impairment.

Objective evidence that financial assets are impaired includes:

default or delinquency by a debtor;

restructuration of amounts on terms that would not be considered otherwise;

indications that a debtor or issuer will enter bankruptcy;

adverse changes in the payment status of borrowers or issuers;

the disappearance of an active market for a security; or

Observable date indicating that there is measurable decrease in expected cash flows from

a group of financial assets.

For an investment in an equity security, objective evidence of impairment includes a

significant or prolonged decline in its fair value below its cost.

Financial assets measured at amortized cost

The Company considers evidence of impairment for assets measured at amortized cost at

both a specific asset and collective level.

All individually significant assets are assessed for specific impairment and if found not to

be specifically impaired are then collectively assessed for any impairment that has been

incurred but not yet identified.

Assets that are not individually significant are collectively assessed for impairment by

grouping together assets with similar risk characteristics.

In assessing collective impairment, the Company uses historical trends of the probability of

default, the timing of recoveries and the amount of loss incurred, adjusted for management’s

judgment as to whether current economic and credit conditions are such that the actual

losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortized cost is calculated

as the difference between its carrying amount and the present value of the estimated future

cash flows discounted at the assets original effective interest rate.

Losses are recognized in profit or loss and reflected in an allowance account against loans

and receivables.



December 31, 2014

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When an event occurring after the impairment was recognized causes the amount of the

impairment loss to decrease, the decrease in impairment loss is reversed through profit or

loss.

Equity-accounted investees

An impairment loss in respect of an equity-accounted investee is measured by comparing

the recoverable amount of the investment with is carrying amount. An impairment loss is

recognized on profit or loss and is reversed if there has been a favorable change in the

estimates used to determine the recoverable amount.

(ii) Non-financial assets

The carrying amounts of the Company's non-financial assets (other than biological assets,

inventories and deferred tax assets) are reviewed at each reporting date to determine

whether there is any indication of impairment. If any such indication exists, than the asset's

recoverable amount is estimated. Goodwill is tested annually for impairment.

An impairment loss is recognized if the carrying amount of the asset or cash generation unit

(“CGU”), that comprises assets that cannot be tested individually and that for this reason are

grouped into the smallest group of assets that generates inflows in a continuous use and that

are significantly independents of inflows generated by other assets or group of assets,

exceeds the recoverable amount.

The recoverable amount of an asset or CGU is the greater between its value in use and its

fair value less costs to sell.

In assessing value in use, the estimated future cash flows are discounted to their present

value using a pre-tax discount rate that reflects current market assessments of the time value

of money and the risks specific to the asset or CGU.

Impairment losses are recognized in profit or loss.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not

exceed the carrying amount that would have been determined, net of depreciation or

amortization, if no impairment loss had been recognized.

h. Advances to suppliers

The advances to suppliers with prices to be determined are update in accordance with the

rates defined in the purchase agreement. Other advances are maintained by their original

amount.

i. Employee benefits

(i) Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays

fixed contributions into a separate entity (Private pension entity) and has no legal or



December 31, 2014

18

constructive obligation to pay further amounts. Obligations for contributions to defined

contribution plans are recognized as an employee benefit expense in profit or loss in the

periods during which related services are rendered by employees.

(ii) Short-term employee benefits

Short-term employee benefits obligations are measured on an undiscounted basis and are

expensed as the related service is rendered. A liability is recognized for the amount

expected to be paid under short-term cash bonus or profit-sharing plans if the Company p

has a present legal or constructive obligation to pay this amount as a result of past service

provided by the employee, and the obligation can be estimated reliably.

j. Provisions

A provision is recognized, as a result of a past event, if the Company has a present legal or

constructive obligation that can be estimated reliably, and it is probable that an outflow of

economic benefits will be required to settle the obligation.

k. Revenue

(i) Agricultural goods sold

Revenue from the sale of goods in the course of ordinary activities is measured at the fair

value of the consideration received or receivable.

Operational revenue is recognized when persuasive evidence exists, usually in the form of

an executed sales agreement, that the significant risks and rewards of ownership have been

transferred to the customer, recovery of the consideration is probable, the associated costs

and possible return of goods can be estimated reliably, there is no continuing management

involvement with the goods, and the amount of revenue can be measured reliably.

The timing of the transfer of risks and rewards varies depending on the individual terms of

the sales agreement. For sales of the following products: soybean, gross and degummed

soybean oil, soy meal, soybean hulls, corn, cotton, seeds and fertilizers, the transference

usually occurs when the product is delivered to the client’s warehouse; however, in cases

where the sells take place in foreign markets, the transferences are made when the shipment

of the products occurs in the seller’s port.

l. Lease

(i) Lease payments

Payments made under operating leases are recognized in profit or loss on a straight-line

basis over the term of the lease.

(ii) Determining whether an arrangement contains a lease

At inception of an arrangement, the Company determines whether such an arrangement is or

contains a lease. This will be the case if the following conditions are fulfilled:



December 31, 2014

19

the arrangement is dependent on the use of a specific asset or assets; and

the arrangement contains a right to use the assets.

The Company separates, on the begin or in the moment of an eventual revaluation of the

contract, payments and other consideration required by an arrangement into those for the

lease and those for other elements on the basis of their relative fair values.

m. Finance income and costs

Financial income comprises interest on marketable securities, gains on hedge instruments

gains on exchange rates variation and changes in fair value of financial assets measured at

fair value through profit or loss. The interest income is recognized in profit or loss using the

effective interest method.

The finance cost comprises interest expense on borrowings, losses with hedge instruments

and losses with exchange rates variation.

Borrowing costs that are not directly attributable to the acquisition, construction or

production of a qualifying asset are recognized in profit or loss using the effective interest

method.

Exchange rata variation gains and losses are presented on a net basis.

n. Income tax

The Company’s and its investees are on the real profit regime or on the presumed tax

regime.

(i) Entities on the real profit regime

The current and deferred income tax and social contribution are calculated on the basis of

the following rates: 15% with an additional of 10% over the taxable profit exceeding BRL

240 for the income tax and 9% over the taxable profit for social contribution and it takes

into consideration the compensation of tax losses and the negative base of social

contribution limited to 30% of the annual taxable profit.

The expenses with income tax and social contribution comprise current and deferred income

taxes. The current tax and the deferred tax are recognized in the income unless they are

related to a business combination or to items directly recognized in equity or other

comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the

year, using tax rates enacted or substantively enacted at the reporting date, and any

adjustment to tax payable in respect of previous years.

Deferred tax is recognized taking into consideration the aliquots that are expected to be used

in respect of temporary differences between the carrying amounts of assets and liabilities for

financial reporting purposes and the amounts used for taxation purposes.



December 31, 2014

20

Deferred tax is measured at the tax rates that are expected to be applied to temporary

differences when they reverse, using tax rates enacted or substantively enacted at the

reporting date.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible

temporary differences to the extent that it is probable that future taxable profits will be

available against which they can be utilized.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it

is no longer probable that the related tax benefit will be performed.

In the determination of current and deferred income taxes entities take into consideration the

impact of uncertainties related to tax positions taken and if the payment of an additional

income tax and interest is necessary.

o. Environmental aspects

The Company considers that its facilities and activities are subject to environmental

regulations and decrease the risk associated to environmental aspects with operating

procedures and controls and with investments on equipments that controls pollution.

Company believes that no provision for losses related to environmental aspects is required,

based on the actual laws and regulations.

p. New rules and interpretations not yet adopted

A series of new rules and changes in rules and interpretations are effective to the exercises

started after January 1, 2013 and were not adopted on the preparation of these consolidated

financial statements. Those that may be relevant to the Company are shown below. The

Company do not intend to adopt these rules until they be mandatory.

IFRS 9 Financial Instruments (2010 and 2009)

IFRS 9 (2009) introduces new requirements to classification and measurement of financial

assets. In IFRS 9 (2009) financial assets are classified and measured based in the model they

are maintained and according to its contractual cash flow characteristics. IFRS 9 (2010)

introduces changes related to financial liabilities.

IASB has a project to implement changes on requirements of classification and

measurement of IFRS 9 and to add new requirements relate to impairment of financial

assets and hedge accounting.

IFRS 9 (2010 and 2009) is effective to the exercises started on or after January 1, 2015. The

adoption of IFRS 9 (2010) may not cause impacts in financial assets and liabilities of the

Company.

5. Determination of fair value

Many accounting policies and disclosures of the Company require the determination of fair

value, for both financial and non-financial assets and liabilities. Fair values have been



December 31, 2014

21

determined for measurement and/or disclosure purposes based on the following methods. When

applicable, further information about the assumptions made in determining fair value is

disclosed in the notes specific to that asset or liability.

(i) Biological assets

Fair value of soybean, cotton and corn is based on the present value of future cash flows

expected from biological assets on the most relevant market and include potential biological

transformation and risks related to the assets.

Fair value of rubber trees is based on the present value of future cash flows expected from

biological assets, including revenues from wood sells in the end of the rubber trees useful

lives, on the most relevant market and include potential biological transformation and risks

related to the assets

(ii) Derivative financial instruments

The fair value of forward exchange contract is based on their quoted price, if available. The

fair value of derivative instruments to protect currency and interest is determined by the

future value of agreed conditions and the present value based on market curves, taken from

the Bloomberg and BM&F database.

If a quoted price is not available, then fair value is estimated by discounting the difference

between the contractual forward price and the current forward price for the residual maturity

of the contract using a risk-free interest rate (based on government bonds).

(iii) Transactions with brokers

The fair value of assets and liabilities of the brokerage operations is measured by updating

these amounts at the end of each period, based on contracts of sale and the future price of

commodities in its active markets.

(iv) Trade Accounts receivable

The fair value of trade accounts receivable is estimated as the present value of future cash

flow, discounted by the market rate of interest at the reporting date.

(v) Other credits

The fair value of other receivables is estimated as the present value of future cash flow,

discounted by the market rate of interest at the reporting date.

(vi) Other non-derivative financial liabilities

The fair value of other non-derivative financial liabilities is estimated as the present value of

future cash flow, discounted by the market rate of interest at the reporting date.



December 31, 2014

22

6. Cash and cash equivalents


2014 2013 2014 2013

Cash 3 2 3 2

Bank deposits 37,784 19,470 36,934 19,456

Marketable securities 51,351 2,994 51,351 2,994

89,138 22,466 88,288 22,452

Marketable securities refer substantially to Banking Deposits Certificate (CDB), remunerated at

market rates based on Interbank Deposit Certificate (CDI) determined by Cleaning House for

the Custody and Financial Statement of Securities (CETIP). The average percentage of CDI that

remunerates short-term investments of Company on December 31, 2014 is 101.36%.

Details about credit risk, interest rate and other risks related to those assets are reported on note

18.

7. Trade accounts receivable


2014 2013 2014 2013

Foreign market 11,606 6,384 6,505 6,384

Foreign market - related parties (note 21) 15,022 5,538 14,724 5,538

Domestic market 10,570 8,797 9,437 8,573

Domestic market - related parties (note 21) 12,066 25,879 16,905 27,279

(-) Provision for doubtful accounts (a) (568) (742) (379) (517)

48,696 45,856 47,192 47,257

Current assets 46,554 41,547 44,350 42,248

Non-current assets 2,142 4,309 2,842 5,009

a) Provision for doubtful accounts


2014 2013 2014 2013

Initial balances (742) (742) (517) (517)

Addition (379) - (379) -

Reversed 527 - 517 -

Exchange rate variation 26 - - -

Final balances (568) (742) (379) (517)

Exposure to currency and credit risk and impairment related to trade accounts receivable and

other accounts, except to working in process, are reported on note 18.



December 31, 2014

23

8. Inventories


2014 2013 2014 2013

Cotton in seed 2,637 1,727 1,257 1,727

Cotton lint 45,535 26,186 31,249 26,186

Storeroom materials 4,728 3,708 4,278 3,708

Inputs 70,227 72,499 57,945 72,499

Corn 8,733 20,686 8,702 20,686

Seeds 1,774 831 1,684 831

Soybean 2,275 2,265 2,118 2,265

Other inventories 2,107 1,096 3,270 1,095

(-) Impairment provision (a) - (112) - (112)

(-) Provision for inventories devaluation (b) (4,703) - (3,480) -

133,313 128,886 107,023 128,885

Impairment provision of inventories is calculated based on the technical losses estimated to

incur during the transportation of commodities between farms and ports.

Provision for inventories devaluation was calculated to bring inventories of agricultural

products at the lower of cost and net realizable value.

a) Impairment provision


2014 2013 2014 2013

Cotton - (76) - (76)

Soybean - (36) - (36)

- (112) - (112)

b) Provision for inventories devaluation


2014 2013 2014 2013

Cotton (3,670) - (2,511) -

Soybean (1,033) - (969) -

(4,703) - (3,480) -

9. Biological assets

The Company has eight agricultural units (farms) producing biological assets, which are:

Itamarati, Tucunaré, SM01, Vale do Araguaia, Michelin and Tanguro.

The direct subsidiary Agro Sam owns one agricultural unit (farm) denominated Água Quente.

These farms are located in the state of Mato Grosso, in the cities of Sapezal, Campo Novo do

Parecis, Rondonópolis and São Felix do Araguaia and its activities consist basically on the

agricultural exploration, mainly related to soybean, corn and cotton.

Below are shown the changes on the biological assets:



December 31, 2014

24

Consolidated

Soybean

Soybean

seeds Corn Cotton

Other Total

Balances as of January 01, 2014 162,897 - 10,209 5,812 27,766 206,684

Production costs 154,768 1,947 41,547 52,858 3,336 254,456

Harvested products, transferred to inventory (218,278) - (33,283) (73,598) (3,011) (328,170)

Changes in fair value (b) 30,353 15,863 (7,874) 23,358 (22,184) 39,516

Balances as of December 31, 2014 129,740 17,810 10,599 8,430 5,907 172,486

Soybean

Soybean

seeds Corn Cotton

Other Total


Production costs 134,177 - 46,991 26,726 5,653 213,547


Impairment (a) - - - - 27,559 27,559

Changes in fair value 82,591 - 14,513 1,622 (21,970) 76,756

Balances as of December 31, 2013 162,897 - 10,209 5,812 27,766 206,684

Company

Soybean

Soybean

seeds Corn Cotton

Other Total


Production costs 130,677 1,567 37,727 37,604 3,087 210,662

Paid in capital through soybean crops (6,760) - - - - (6,760)


Changes in fair value (b) 26,843 14,875 (7,091) 14,809 (22,185) 27,251

Balances as of December 31, 2014 115,025 16,442 9,847 5,446 5,841 152,601

Soybean

Soybean

seeds Corn Cotton

Other Total


Production costs 134,177 - 46,991 26,726 5,651 213,545


Impairment (a) - - - - 27,559 27,559

Changes in fair value 82,591 - 14,513 1,622 (21,970) 76,756

Balances as of December 31, 2013 162,897 - 10,209 5,812 27,699 206,617


2014 2013 2014 2013

Current assets 168,682 180,940 148,863 180,938


172,486 206,684 152,601 206,617

(a) In 2013, a provision of impairment of biological assets constituted in 2012 was reversed

based on the consideration that rubber trees would not be rented during all its useful life.

Initially it was considered a rent during all its useful life.

(b) The reduction on fair value of other biological assets is due to a reduction of the price of

raw rubber sold by Agropecuária Maggi. The price in 2013 was BRL 2.76 and in 2014 BRL

1.81.

Biological assets comprise, substantially, the following plantations (in ha):



December 31, 2014

25


2014

2013

2014

2013

Cotton - 4,000 - 4,000

Corn 2,154 - 2,154 -

Rubber trees 7,411 7,411 7,411 7,411

Soybean 161,725 146,697 144,856 146,697

Fair value measurement to all the cultures above have been categorized as level 3, based on the

inputs used on the valuation technique.

There are several risks related to the plantations, which are:

Regulatory and environmental risks

The Company and its direct subsidiary are subject to laws and regulations in many countries in

which it operates. Due to this it was established environmental policies and procedures aimed to

comply with environmental laws and regulations.

Management conducts regular analysis to identify environmental risks and to ensure that the

working systems are suitable to manage these risks.

Risk of supply and demand

The Company and its direct subsidiary are exposed to the risk of price and sales volume of

crops fluctuations. When possible, the Company manages this risk by aligning the extraction

volume with the market supply and demand.

Management conducts regular analysis of the industry trends to ensure that the price structure of

the Company complies with the market and to ensure that projected volumes of extraction are

consistent with the expected demand.

Weather and other risks

The Company and its direct subsidiary are plantations are exposed to damage from weather

change, diseases, forest fires and other nature forces. The Company has extensive processes in

place aimed at monitoring and reducing these risks, including regular health inspections and

analyzes of forest diseases and pests in the industry.

10. Income and social contribution taxes

a) Deferred assets and liabilities

Deferred tax assets and liabilities are recorded to reflect future tax effects related to temporary

differences between the tax bases and their respective carrying amount.

Deferred assets and liabilities are originated from:



December 31, 2014

26


2014 2013 2014 2013

Goodwill 8,800 11,000 - -

Exchange rate variation (11,945) (27,826) (10,913) (23,777)

Deemed cost (129,491) (131,202) (113,959) (115,050)

Accelerated depreciation (28,362) (26,613) (26,388) (26,613)

Negative goodwill on investment (219) (181) (219) (181)

Fair value of inventories - 7,270 - 7,270

Employees’ profit sharing 976 - 918 -

Tax losses carry forward 6,933 4,944 5,226 -

Provision for civil, labor and tax risks 523 563 505 547

Allowance for doubtful accounts 205 252 140 176

Impairment of inventories 1,599 38 1,183 38

Impairment of investments - 934 - 934

Fair value of biological assets (11,844) (35,588) (8,583) (35,588)

Fair value of derivative financial

instruments 12,244 9,489 12,244 9,489

(150,581) (186,920) (139,846) (182,755)

b) Current income Tax and Social Contribution

The income tax and social contribution amounts recorded on profit or loss is calculated

according to the terms of Brazilian regulation and do not consider, on the calculation, the

translation amounts due to financial statements conversion to functional currency.

11. Advances to suppliers


2014 2013 2014 2013

Foreign market 25 12 25 12

Domestic market 36,625 38,595 34,918 38,577

Domestic market - related parties (note 21) 2,299 57 1,558 57

38,949 38,664 36,501 38,646

Current assets 15,227 11,574 12,779 11,556


Advances with prices to be fixed and fixed prices are secured by commercial pledge represented

by ballot farmer and guarantees provided by third parties.



December 31, 2014

27

12. Recoverable taxes


2014 2013 2014 2013

COFINS - Contribution for social security funding 9,770 3,310 9,385 3,310

CSLL - Social contribution taxes recoverable 1,548 648 1,539 639

ICMS - Value-added tax on sales and services (on

fixed assets recoverable) 5,243 3,773 5,176 3,773

IRPJ - Income tax 4,031 1,919 4,001 1,884

PIS – Social integration program 1,611 485 1,527 485

Other taxes 820 956 591 949

23,023 11,091 22,219 11,040

Current assets 20,863 9,386 20,097 9,335


13. Loans granted

Consolidated

Currency

Weighted

average rate

on 12/31/2014 Maturity

2014 2013

Amaggi Construções de Rodovias Ltda. USD 2% p.y. Undetermined 10 10

Amaggi Insumos Agrícolas e

Comércio Ltda. BRL 110% CDI Undetermined 3,803 806

3,813 816

Company

Currency

Weighted

average rate

on 12/31/2014 Maturity

2014 2013

Agro Sam Agricultura e Pecuária Ltda. USD 4% p.y. Undetermined - 6,542

Amaggi Construções de Rodovias Ltda. USD 2% p.y. Undetermined 10 10

Amaggi Insumos Agrícolas e

Comércio Ltda. BRL 110% CDI Undetermined 3,803 806

3,813 7,358

14. Investments

a. Investments value


2014 2013 2014 2013

Agro Sam Agricultura e Pecuária Ltda. - - 104,628 40,300

Amaggi Argentina S.A. 1,542 1,511 1,542 1,511

Amaggi Construção de Rodovias Ltda. 30 17 30 17

Unisoja S.A. 1,013 997 1,013 997

Other 3 3 3 3

2,588 2,528 107,216 42,828



December 31, 2014

28

b. Changes on investments

Consolidated

Balances

on

12/31/2013

Equity

method

Cumulative

translation

adjustments AFCI

Disposal/

Transfer

Goodwill in

Agro Sam

incorporation Addition

Balances

on

12/31/2014

Amaggi Argentina S.A. 1,511 31 - - - - - 1,542

Amaggi Construção de Rodovias Ltda. 17 13 - - - - - 30

Unisoja S.A. 997 - - - - - 16 1,013

Other 3 - - - - - - 3

Total 2,528 44 - - - - 16 2,588

Balances

on

12/31/2012

Equity

method

Cumulative

translation

adjustments AFCI

Disposal/

Transfer

Goodwill in

Agro Sam


Balances

on

12/31/2013

Amaggi Argentina S.A. 895 612 - - - - 4 1,511

Amaggi Construção de Rodovias Ltda. 374 (357) - - - - - 17

Unisoja S.A. 781 - - - - - 216 997

Other 3 - - - - - - 3

Total 2,053 255 - - - - 220 2,528

Company

Balances

on

12/31/2013

Equity

method

Cumulative

translation

adjustments AFCI

Disposal/

Transfer

Goodwill in

Agro Sam


Balances

on

12/31/2014

Agro Sam Agricultura e Pecuária Ltda. 40,300 8,774 - 12,417 - - 43,137 104,628

Amaggi Argentina S.A. 1,511 31 - - - - - 1,542 Amaggi Construção de Rodovias Ltda. 17 13 - - - - - 30

Unisoja S.A. 997 - - - - - 16 1,013

Other 3 - - - - - - 3

Total 42,828 8,818 - 12,417 - - 43,153 107,216

Balances

on

12/31/2012

Equity

method

Cumulative

translation

adjustments AFCI

Disposal/

Transfer

Goodwill in

Agro Sam


Balances

on

12/31/2013

Agro Sam Agricultura e Pecuária Ltda. - 14,096 - 40,657 (14,453) - - 40,300

Agropecuária Morrinhos Ltda. 31,616 4,640 - (24,715) 9,812 (21,353) - - Amaggi Argentina S.A. 895 616 - - - - - 1,511

Amaggi Construção de Rodovias Ltda. 374 (364) 7 - - - - 17

Unisoja S.A. 781 - - - - - 216 997

Other 3 - - - - - - 3

Total 33,669 18,988 7 15,942 (4,641) (21,353) 216 42,828

c. Information concerning the direct subsidiaries

2014

Share % Total assets Total liabilities Total equity Net income for the year

Agro Sam Agricultura e Pecuária Ltda. 100.00000% 152,221 47,480 95,855 8,886

Amaggi Argentina S.A. 11.00086% 36,198 22,174 13,740 284 Amaggi Construções de Rodovias Ltda. 36.00000% - 11 45 (56)

9,114

2013

Share % Total assets Total liabilities Total equity Net income for the year

Agro Sam Agricultura e Pecuária Ltda. 100.00000% 79,986 39,686 21,568 18,732

18,732



December 31, 2014

29

15. Property, plant and equipment

Consolidated

Cost

Balances on

January 1,

2014 Additions Disposals Transfers

Balances on

December 31,

2014

Balances on

December 31,

2013

Lands 535,250 511 - - 535,761 535,250 Buildings 38,805 23 (246) 1,942 40,524 38,805 Machine and equipments 139,264 59,075 (30,416) 203 168,126 139,264 Facilities 2,912 43 (31) 153 3,077 2,912 Furniture and fixtures 2,307 716 (303) 6 2,726 2,307 Vehicles 7,604 3,673 (1,592) 85 9,770 7,604 Hardware 730 268 (143) 16 871 730 Vessels 1 - - - 1 1 Aircraft 10,972 (74) - - 10,898 10,972 Radio-communication 798 196 (112) 36 918 798 Improvements in properties of

third

819 1,868 - - 2,687 819 Work in progress 10,058 25,764 - (2,342) 33,480 10,058 Equipment for mounting 190 938 - (99) 1,029 190 Advances to suppliers 5,556 15,803 (21,003) - 356 5,556

Other - 29 - - 29 -

755,266 108,833 (53,846) - 810,253 755,266

Depreciation

Balances on

January 1,


Balances on

December 31,

2014

Balances on

December 31,

2013

Buildings (5,835) (1,184) 175 - (6,844) (5,835)

Machines and equipments (31,353) (10,288) 6,054 - (35,587) (31,353)

Facilities (905) (130) 3 - (1,032) (905)

Furniture and fixtures (737) (189) 93 - (833) (737)

Vehicles (3,743) (1,237) 527 - (4,453) (3,743)

Hardware (494) (139) 110 - (523) (494)

Aircraft (1,317) (455) - - (1,772) (1,317)

Radio-communication (343) (85) 46 - (382) (343)

Improvements in properties of third

(72) (75) - - (147) (72)

(44,799) (13,782) 7,008 - (51,573) (44,799)

Carrying amount 710,467 758,680 710,467



December 31, 2014

30

Company

Cost

January 1,


December 31,

2014

December 31,

2013

Lands 463,126 511 - - 463,637 463,126

Buildings 32,413 - (246) 1,942 34,109 32,413

Machine and equipments

134,814 47,670 (28,696) 203 153,991 134,814

Facilities 2,839 17 (31) 153 2,978 2,839

Furniture and fixtures 2,223 413 (269) 6 2,373 2,223

Vehicles 7,555 2,661 (1,464) 85 8,837 7,555

Hardware 658 218 (87) 16 805 658

Vessels 1 - - - 1 1

Aircraft 10,972 (74) - - 10,898 10,972

Radio-communication 774 140 (103) 36 847 774

Improvements in properties of

third 819 1,869 - - 2,688 819

Work in progress 10,058 23,784 - (2,342) 31,500 10,058

Equipment for mounting 189 937 - (99) 1,027 189

Advances to suppliers 5,557 14,628 (19,827) - 358 5,557

Other - 29 - - 29 -

671,998 92,803 (50,723) - 714,078 671,998

Depreciation

January 1,


December 31,

2014

December 31,

2013

Buildings (4,758) (980) 175 - (5,563) (4,758)

Machine and equipments (29,042) (8,662) 5,817 - (31,887) (29,042)

Facilities (882) (124) 3 - (1,003) (882)

Furniture and fixtures (684) (165) 70 - (779) (684)

Vehicles (3,694) (995) 463 - (4,226) (3,694)

Hardware (433) (113) 58 - (488) (433)

Aircraft (1,317) (455) - - (1,772) (1,317)

Radio-communication (330) (74) 43 - (361) (330)

Improvements in properties of

third

(72) (74) - - (146) (72)

(41,212) (11,642) 6,629 - (46,225) (41,212)

Carrying amount 630,786 667,853 630,786

16. Accounts payable to suppliers


2014 2013 2014 2013

Foreign market - related parties (note 21) 970 743 135 743

Domestic market 47,927 58,363 43,676 58,362

Domestic market - related parties (a) (note

21) 17,327 39,152 5,491 11,688

66,224 98,258 49,302 70,793

Current liabilities 62,308 64,857 45,386 51,342

Non-current liabilities 3,916 33,401 3,916 19,451



December 31, 2014

31

17. Loans and financing

Below is the composition of the consolidated and company loans:

Consolidated

Modality or resource source

Currency

Weighted

average rate

on 12/31/2014

Maturity

Carrying amount

2014 2013

ACC - Advances on exchange contracts USD 0.99% p.y. 2014 - 8,036

CCB - Certificate of bank credit USD 3.26% p.y. + Libor 2017 854 1,139

Agricultural loans BRL 6.50% p.y. 2015 7,667 8,764

Working capital BRL 10.00% p.y. 2015 27,788 -

FCO - Constitutional Funds BRL 8.50% p.y. 2019-2021 15,431 17,573

FEPM – Stocking loan BRL 6.50% p.y. 2015 4,028 -

FINAME BRL 4.14% p.y. 2015-2024 47,786 18,001

Related party loans (note 21) USD 4.50% p.y. Undetermined 3,770 9,843

NCE - Export notes USD 4.30% p.y. 2015 - 35,172

NCE - Export notes BRL 1.67% p.y. + 100% CDI 2015-2017 156,804 218,015

NCE - Export notes BRL 115.87% CDI 2015 5,025 11,240

PPE – Prepayment USD 3.36% p.y. + Libor 2015-2018 343,671 80,442

612,824 408,225

Current liabilities 135,374 178,095

Non-current liabilities 477,450 230,130

Company

Modality or resource source

Currency

Weighted

average rate

on 12/31/2014

Maturity

Carrying amount

2014 2013

ACC - Advances on exchange contracts USD 0.99% p.y. 2014 - 8,036

CCB - Certificate of bank credit USD 3.26% p.y. + Libor 2017 854 1,139

Agricultural loans BRL 6.50% p.y. 2015 7,667 8,764

Working capital BRL 10.00% p.y. 2015 27,788 -

FCO - Constitutional Funds BRL 8.50% p.y. 2019-2021 15,431 17,573

FEPM – Stocking loan BRL 6.50% p.y. 2015 4,028 -

FINAME BRL 4.14% p.y. 2015-2024 47,001 18,001

Related party loans (note 21) USD 4.50% p.y. Undetermined 3,770 9,843

NCE - Export notes USD 4.30% p.y. 2015 - 35,172

NCE - Export notes BRL 1.67% p.y. + 100% CDI 2015-2017 156,804 218,015

NCE - Export notes BRL 115.87% CDI 2015 5,025 11,240

PPE – Prepayment USD 3.36% p.y. + Libor 2015-2018 343,671 80,442

612,039 408,225

Current liabilities 135,261 178,095

Non-current liabilities 476,778 230,130

On December 31, 2014, financing are guaranteed by: promissory notes guaranteed by quota

holders, chattel mortgage of rural properties and commercial pledge.

The maturity of maturities for loans and financing and other risks related to theses financial

liabilities are presented in Note 18.



December 31, 2014

32

18. Financial instruments

The Company and its subsidiary have exposure to the following risks arising from financial

instruments:

Credit risk;

Liquidity risk; and

Market risk.

This note presents information about the Company’s exposure to each of the above risks, the

Company’s objectives, polices and processes for measuring risks, risk management and capital

management.

18.1 Risk management framework

The Chief Executive Officer - CEO has overall responsibility for the establishment and

oversight Company’s risk management structure and is assisted on this function by the

Department of Risk Management, which is responsible for monitor and analyze with the

objective of identify risks the Company is exposed, as well as to map possible impacts due to

economic and financial variables, like exchange and interest fluctuations and other.

These analyzes are also used as a management tool to set commercial and hedge strategies,

reducing exposures.

Policies of risk management were established to identify and analyze exposure risks and define

acceptable risk limits. It was also created an appropriate structure of controls to monitor risks

and the utilization of limits set. Policies and limits are revised in a regular base.

18.2 Credit risk

Credit risk is the risk of financial losses to the Company or its subsidiary due to a customer or

counterparty in a financial instrument and arises from a fail of them to meet their contractual

obligations.

18.2.1 Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum

exposure to credit risk at the reporting date was the follows:


Note 2014 2013 2014 2013

Marketable securities (a) 6 51,351 2,994 51,351 2,994

Trade accounts receivable (b) 7 48,696 45,856 47,192 47,257

Bank deposits (c) 6 37,784 19,470 36,934 19,456

Loans granted 13 3,813 816 3,813 7,358

Derivative financial instruments 534 4,948 534 4,948

Securities brokerage operations 9,414 2,894 9,414 2,894

Other credits 17,392 11,741 17,265 11,586

168,984 88,719 166,503 96,493



December 31, 2014

33

(a) Marketable securities

Amounts maintained in first line financial institutions to minimize credit risk of these

operations.

(b)Trade accounts receivables

Management seeks to mitigate credit of trade accounts receivable through monitoring and

periodic individual evaluation of its customers.

Criteria for accepting new customers include an analysis of potential customer’s financial

condition and socio-economic profile, defining credit limits and payment terms. The analysis of

this information by the Company may include external ratings, where available, and bank

references.

Credit limits are established to each customer, in an individual basis, and represent the

maximum amount of exposure accepted to each customer. Credit limits are reviewed when

considered necessary or when it is required. Transactions with customers with no approved

credit limits are only The Company's exposure to credit risk is influenced mainly by the

individual characteristics only performed through advances.

The segment where the Company operates rarely presents losses by default, however, when

necessary, it is recorded a provision for doubtful accounts, analyzing each customer

individually.

(c) Bank deposits

Amounts maintained in first line financial institutions to minimize credit risk of these

operations.

18.3 Liquidity risk

Liquidity risk is the risk of difficulties to meet the obligations associated with its financial

liabilities that are settled by delivering cash or other financial assets. Company’s or its

subsidiary approach to manage liquidity is to ensure, as far as possible, that it will always have

sufficient liquidity to meet its liabilities when it is due, under both normal and stressed

conditions, without incurring unacceptable losses or risking damage to reputation.

Below, the contractual maturities of financial liabilities are presented, including estimated

interest payments:



December 31, 2014

34

Consolidated

December 31, 2014 Note

Total

amount

Contractual

Cash flow

Until 1

year

1 - 2

years

2 - 4

years

More than

4 years

Non-derivative financial liabilities

Accounts payable to suppliers 16 66,224 66,224 62,308 3,916 - -

Loans and financing 17 612,824 851,629 135,374 318,875 223,679 173,701

Other accounts payable 227 227 227 - - -

679,275 918,080 197,909 322,791 223,679 173,701

Derivative financial liabilities

Derivative financial liabilities 36,545 36,545 36,545 - - -

36,545 36,545 36,545 - - -

715,820 954,625 234,454 322,791 223,679 173,701

December 31, 2013 Note Total

amount

Contractual

Cash flow Until 1 year 1 - 2

years

2 - 4

years

More than

4 years





507,280 752,737 243,749 349,193 134,365 25,430



35,401 35,401 35,401 - - -

542,681 788,138 279,150 349,193 134,365 25,430

Company


Total

amount

Contractual

Cash flow

Until 1

year

1 - 2

years

2 - 4

years

More than

4 years





661,649 900,183 180,955 322,508 223,395 173,325



36,545 36,545 36,545 - - -

698,194 936,728 217,500 322,508 223,395 173,325

December 31, 2013 Note Total

amount

Contractual

Cash flow Until 1 year 1 - 2

years

2 - 4

years

More than

4 years





479,780 725,237 230,199 335,243 134,365 25,430



35,401 35,401 35,401 - - -

515,181 760,638 265,600 335,243 134,365 25,430



December 31, 2014

35

Amounts stated above represent cash flows related to derivative and non-derivative financial

instruments recorded as liabilities maintained to risk management and normally, not liquidated

before their contractual maturity.

18.4 Market risk

Market risk is the risk that changes on market prices, such as foreign exchange rates, interest

rates and commodity prices will affect the Company’s income or the value of its investments in

financial instruments.

The objective of market risk management is to manage and control market risk exposures,

within acceptable parameters, while optimizing returns.

The Company also operates with derivative financial instruments and complies with financial

obligations to manage market risks. All these operations are conducted within the Department of

Risk Management requirements.

18.4.1 Exchange rate risk

The Exchange rate risk is related to market risk and is related to the possibility of oscillations of

exchange rates that may cause losses to the Company or its subsidiary, reducing its assets or

increasing its obligations.

As the Company and its subsidiary are located in Brazil, the main Company’s exposure to

exchange rate risk refers to the fluctuation of Dollar (USD), its functional currency, in relation

to Real (BRL), the Brazilian currency.

The entity gets into some non-deliverable (NDF) and option contracts with financial institutions

to hedge itself from this exposure.

Follows, below, the composition of these financial instruments:

Consolidated and Company

a) Non-deliverable of currency

2014

2013

Position

Kind of

asset

Notional

(USD)

Maturity

Fair

value

Effect on

profit/loss

Notional

(USD)

Maturity

Fair

value

Effect on

profit/loss

Long USD - - - - 3,780 2014 95 95

Long USD 4,876 2015 (2) (2) - - - -

Short USD - - - - 57,646 2014 (2,842) (2,842)

Short USD 21,678 2015 (1,625) (1,625) - - - -

(1,627) (1,627)

(2,747)

(2,747)



December 31, 2014

36

b) SWAP of currency

2014

2013

Position

Kind of

asset

Notional

(USD)

Maturity

Fair

value

Effect on

profit/loss

Notional

(USD)

Maturity

Fair

value

Effect on

profit/loss

Active

CDI +

Pre fixed

rate

5,000 2015

4,991 4,991

- -

- -

Passive % CDI 5,000 2015 (5,098) (5,098) - - - -

(107) (107)

-

-

Exchange rate sensitivity analysis

Company presents three scenarios to sensitivity analysis, one probable and two others that

presents the deterioration of fair value. Follows the scenarios:

Scenarios

Risk Remote Possible Probable

Possible Remote

(-50%) (-25%) (+ 25%) (+50%)

Non-deliverable of currency Variation of Dollar (814) (1,220) (1,627) (2,034) (2,441)

SWAP of currency Variation of Dollar (54) (80) (107) (134) (161)

(868) (1,300) (1,734) (2,168) (2,602)

18.4.2 Interest rate risk

The Company and its subsidiary seeks to maintain its exposure to interest rates at acceptable

levels. Exposure to this risk is substantially related to loans and financing and financial

investments.

On the date of these financial statements, the profile of financial investments remunerated

through interests was, without any interference of hedge instruments, as follows:


Note 2014 2013 2014 2013

Variable rate financial instruments

Marketable securities 6 51,351 2,994 51,351 2,994

Loans granted 13 3,803 816 3,803 7,358

Loans and financing 17 (506,354) - (534,142) -

(451,200) 3,810 (478,988) 10,352

Fixed rate financial instruments

Loans granted 13 10 - 10 -

Loans and financing 17 (106,470) (408,225) (77,897) (408,225)

(106,460) (408,225) (77,887) (408,225)

(557,660) (404,415) (556,875) (397,873)

The Company and its subsidiary does not account for any financial assets or liabilities indexed

to fixed rates at fair value through profit or loss and does not designate derivatives (swap of

interest rates) as fair value hedges. This results that any variation on interest rates at the date of

financial statements would not change profit or loss.



December 31, 2014

37

Hedge instruments contracted to mitigate this risk that prevails on the date of these financial

statements are presented below:


a) SWAP of interest rates

2014

2013

Position

Kind of

asset

Notional

(USD)

Maturity

Fair

value

Effect on

profit/loss

Notional

(USD)

Maturity

Fair

value

Effect on

profit/loss

Active

% CDI

- - - -

61,910 2014

4,369

4,369

Active

% CDI

6,497 2015 288 288

12,993 2015

811

811

Active

CDI + Pre

fixed rate -

-

- -

23,877 2014

1,999

1,999

Active

CDI + Pre

fixed rate 3,300

2015

230 230

22,643 2015

3,199

3,199

Active

CDI + Pre

fixed rate 31,533

2016

2,709 2,709

14,981 2016

3,815

3,815

Active

CDI + Pre

fixed rate 139,795

2017

15,130 15,130

114,795 2017

17,320

17,320

Active

Pre fixed

rate -

-

- -

9,362 2014

427

427

Active

Dollar + Pre

fixed rate 22,959

2017

4,863 4,863

22,959 2017

2,824

2,824

Passive

Dollar + Pre

fixed rate -

-

- -

95,149 2014

(26,306)

(26,306)

Passive

Dollar + Pre

fixed rate 16,427

2015

(3,305) (3,305)

35,636 2015

(8,475)

(8,475)

Passive

Dollar + Pre

fixed rate 30,078

2016

(10,771) (10,771)

14,981

2016

(5,559)

(5,559)

Passive

Dollar + Pre

fixed rate 47,959 2017 (15,195) (15,195)

22,959

2017

(8,175)

(8,175)

Passive

Dollar +

Libor + Pre

fixed rate

114,796 2017 (26,119) (26,119)

114,795

2017

(15,392)

(15,392)

(32,170) (32,170)

(29,143) (29,143)

Interest rate sensitivity analysis

Company presents three scenarios to sensitivity analysis, one probable and two others that

presents the deterioration of fair value. Follows the scenarios:

Scenarios

Risk Remote Possible Probable

Possible Remote

(-50%) (-25%) (+ 25%) (+50%)

SWAP of interest rates Variation of interest rates (16,085) (24,128) (32,170) (40,213) (48,255)

(16,085) (24,128) (32,170) (40,213) (48,255)

18.4.3 Commodities price risk

Company and its subsidiary commercializes soybean, corn, cotton, products considered as

commodities.

As commodities are traded, in Brazil (BM&FBOVESPA) and abroad (CBOT) it is able to adopt

some hedge tools. Between the most common practices adopted, we can see the use of future

contracts and options as the main hedge tools to mitigate the risk of price variations.

Buy and sell operation of grains and other products are done simultaneously, using hedge tools

to protect prices when clients are not immediately available in the moment of grains acquisition.



December 31, 2014

38

The Company may incur in physical position open, in acquisitions and sells, on the following

situations:

Purchase long position: if the quantity of products acquired or contracted exceeds the

quantity of products sold or contracted so, the difference is protected through hedge tools;

and

Sell short position: if the quantity of products acquired or contracted is lower than the

quantity of products sold or contracted so, the difference is protected through hedge tools

Hedge instruments contracted to mitigate this risk that prevails on the date of these financial

statements are presented below:


a) Future of commodities

2014

2013

Position

Kind of

asset

Notional

(Ton)

Maturity

Fair

value

Effect on

profit/loss

Notional

(Ton)

Fair

value

Effect on

profit/loss Maturity

Long

Corn

-

-

-

-

113,923

2014

(1,807) (1,807)

Short

Corn

- - - -

154,946

2014

4,099 4,099

Short Corn 43,436 2015 (960) (960) - - - -

Short Corn 80,013 2015 (855) (855) - - - -

Short

Soybean

- - - -

126,818

2014

(306) (306)

Short Soybean 179,350 2015 (48) (48) - - - -

(1,863) (1,863)

1,986 1,986


b) Term of commodities

2014

2013

Position

Kind of

asset

Notional

(Ton)

Maturity

Fair

value

Effect on

profit/loss

Notional

(Ton)

Maturity

Fair

value

Effect on

profit/loss

Short

Cotton

-

-

-

-

12,590

2013

(15) (15)

Short Corn - - - - 91,789 2013 (1,085) (1,085)

Short Corn - - - - 55,000 2014 551 551

Short Corn 40,000 2015 (244) (244) - - - -

(244) (244)

(549) (549)

Commodity price risk sensitivity analysis

It is presented three scenarios to sensitivity analysis, one probable and two others that presents

the deterioration of fair value. Follows the scenarios:



December 31, 2014

39


Scenarios

Risk Remote Possible

Probable

Possible Remote

(-50%) (-25%) (-25%) (-50%)

Future of commodities

Short position Price increase (932) (1,397) (1,863) (2,329) (2,795)

(932) (1,397) (1,863) (2,329) (2,795)

Term of commodities

Short position Price increase (122) (183) (244) (305) (366)

(122) (183) (244) (305) (366)

(1,054) (1,580) (2,107) (2,634) (3,161)

18.5 Reconciliation of net effects of fair value of derivatives with balance sheet

The fair value of derivative financial instruments is recorded as an asset or a liability on

financial statements.

Follows, below, the reconciliation of net effects of fair value recorded on the balance sheet:

a) Amounts on the balance sheet:


2014 2013 2014 2013

Derivative financial instruments (assets) 534 4,948 534 4,948

Derivative financial instruments (liabilities) (36,545) (35,401) (36,545) (35,401)

(36,011) (30,453) (36,011) (30,453)

b) Amounts by kind of operation:


2014 2013 2014 2013

NDF of currency (1,627) (2,747) (1,627) (2,747)

SWAP of currency (107) - (107) -

SWAP of interest rates (32,170) (29,143) (32,170) (29,143)

Future of commodities (1,863) 1,986 (1,863) 1,986

Term of commodities (244) (549) (244) (549)

(36,011) (30,453) (36,011) (30,453)

18.6 Capital management

The Board’s policy is to maintain a strong capital base to maintain investors, creditors and

market confidence and to sustain future development of the business. The Board of Directors

monitors capital returns that Company and its subsidiary defines as result of operational

activities divided by total equity. The Board of Directors also monitors the level of profit

distribution to shareholders.



December 31, 2014

40

The Board of Directors tries to maintain a good relation between high returns and adequate level

of loans, advantages and security, provided by a healthy position of capital.

The Company’s and its subsidiary net debt to adjusted equity ratio was as follows:


Note 2014 2013 2014 2013

Current and non-current liabilities 891,387 799,821 852,638 768,077

(-) Cash and cash equivalents 6 (89,138) (22,466) (88,288) (22,452)

(=) Net debt 802,249 777,355 764,350 745,625

(/) Shareholders' equity 22 421,618 391,598 421,618 391,598

(=) Net debt by shareholders' equity 1.90 1.99 1.81 1.90

18.7 Accounting classifications and fair value

Fair value versus carrying amounts

The fair value of financial assets and liabilities, together with the carrying amounts presented in

financial statements, are as follows:

Consolidated


Fair value

through

profit or loss

Loans and

receivables

Liabilities at

amortized cost

Carrying

amount Fair value

Non derivative financial instruments

Marketable securities 6 51,351 - - 51,351 51,351

Cash 6 - 3 - 3 3

Bank deposits 6 - 37,784 - 37,784 37,784

Trade accounts receivable 7 - 48,696 - 48,696 48,696

Securities brokerage operations - 9,414 - 9,414 9,414

Loans granted 13 - 3,813 - 3,813 3,813

Other credits - 17,392 - 17,392 17,392

Accounts payable to suppliers 16 - - (66,224) (66,224) (66,224)

Loans and financing 17 - - (612,824) (612,824) (492,930)

Other accounts payable - - (227) (227) (227)

51,351 117,102 (679,275) (510,822) (390,928)

Derivative financial instruments

Assets 534 - - 534 534

Liabilities (36,545) - - (36,545) (36,545)

(36,011) - - (36,011) (36,011)

15,340 117,102 (679,275) (546,833) (426,939)



December 31, 2014

41


Fair value

through

profit or loss

Loans and

receivables

Liabilities at

amortized cost

Carrying

amount Fair value



Cash 6 - 2 - 2 2

Bank deposits 6 - 19,470 - 19,470 19,470



Loans granted 13 - 816 - 816 816

Other credits - 11,741 - 11,741 11,741




2,994 80,779 (507,280) (423,507) (447,191)


Assets 4,948 - - 4,948 4,948

Liabilities (35,401) - - (35,401) (35,401)

(30,453) - - (30,453) (30,453)

(27,459) 80,779 (507,280) (453,960) (477,644)

Company


Fair value

through

profit or loss

Loans and

receivables

Liabilities at

amortized cost

Carrying

amount Fair value



Cash 6 - 3 - 3 3

Bank deposits 6 - 36,934 - 36,934 36,934



Loans granted 13 - 3,813 - 3,813 3,813

Other credits - 17,265 - 17,265 17,265




51,351 114,621 (661,649) (495,677) (375,783)


Assets 534 - - 534 534

Liabilities (36,545) - - (36,545) (36,545)

(36,011) - - (36,011) (36,011)

15,340 114,621 (661,649) (531,688) (411,794)



December 31, 2014

42

December 31, 2013

Fair value

through

profit or loss

Loans and

receivables

Liabilities at

amortized cost

Carrying

amount Fair value


Marketable securities 2,994 - - 2,994 2,994

Cash - 2 - 2 2

Bank deposits - 19,456 - 19,456 19,456

Trade accounts receivable - 47,257 - 47,257 47,257


Loans granted 13 - 7,358 - 7,358 7,358

Other credits - 11,586 - 11,586 11,586




2,994 88,553 (479,780) (388,233) (411,917)


Assets 4,948 - - 4,948 4,948

Liabilities (35,401) - - (35,401) (35,401)

(30,453) - - (30,453) (30,453)

(27,459) 88,553 (479,780) (418,686) (442,370)

18.8 Fair value hierarchy

The table below presents financial instruments recorded at fair value, based on the evaluation

method.

Level 1: quoted prices available in active markets for identical assets or liabilities on the

date of the Financial Statements. Active markets are those where transactions to the assets

or liabilities occurs in a sufficient frequency and in volumes that allows anyone to gather

information about the price in any moment. Level 1 is normally composed by derivatives,

shared and other assets traded on stock exchanges.

Level 2: other prices observable in different markets of Level 1, but that is directly or

indirectly observable on the date of Financial Statements. Level 2 includes derivative

financial instruments evaluated through an evaluation model or other evaluation

methodology. These models are standardized by the market and are largely used by other

players that consider many assumptions as future commodity prices, amounts through

time, volatility factors, actual market and contractual prices to subjacent instruments, as

well as any other relevant economic measurements. Almost all of these assumptions may

be observed in the long term market of the instrument which is being priced, derived from

observable inputs or though levels that may be observed where similar transactions are

performed in the market. Instruments in this level include derivatives not traded on stock

exchanges as swaps, futures and options traded in over-the-counter market.

Level 3: price information that is less observable, but from objective sources. These

sources can be combined with internal methodologies developed by the Company that

results in the best fair value estimate of management. On the date of each Financial

Statements, the Company performs an analysis and includes on level 3 all those fair

values that are not based on non-observable information.



December 31, 2014

43

Consolidated

December 31, 2014 Note Level 1 Level 2 Level 3 Total

Assets

Marketable securities 6 - 51,351 - 51,351

Derivative financial instruments - 534 - 534

- 51,885 - 51,885

Liabilities

Derivative financial instruments - (36,545) - (36,545)

- (36,545) - (36,545)

- 15,340 - 15,340


Assets


Derivative financial instruments - 4,948 - 4,948

- 7,942 - 7,942

Liabilities


- (35,401) - (35,401)

- (27,459) - (27,459)

Company


Assets


Derivative financial instruments - 534 - 534

- 51,885 - 51,885

Liabilities


- (36,545) - (36,545)

- 15,340 - 15,340


Assets


Derivative financial instruments - 4,948 - 4,948

- 7,942 - 7,942

Liabilities


- (35,401) - (35,401)

- (27,459) - (27,459)



December 31, 2014

44

19. Employee benefits

The Company provides several benefits to its employees and the most important ones are:

Managers and employees salaries:

Consolidated

Company

2014

2013

2014

2013

Wages and benefits 38,828 34,625 33,514 34,612

Supplementary pension plan with defined contribution:

The Company maintains a defined contribution plan to which contributions are made in

proportion to the contribution made by their employees. The Company's contributions

correspond to the percentage up to 4% of employee salary, in accordance with internal rules.

Consolidated

Company

2014

2013

2014

2013

Defined contribution plan 57 42 53 42

Profit sharing plan: 100% of employees are eligible and the Company distributes the

minimum percentage of 6% of the net results, as the collective bargaining agreement;

Health plan: 100% of employees are eligible and includes dependents;

Life insurance: 100% of employees are eligible;

Meal tickets: 100% of employees are eligible;

Education assistance: employees are eligible according to a specific internal rule.

Refectory: the Group holds refectories in some plants, specifically at manufacture plants,

pushers and tugs.

20. Provision for civil, labor and tax risks

The Company and its controlled entities are part (defendant) in judicial lawsuits and

administrative proceedings in several courts and government agencies, arising from the normal

course of operations, including tax, labor, civil and other proceedings.

Management recorded the following provisions in amounts considered sufficient to cover

probable estimated losses from the current actions based on information from its legal advisors,

review of pending legal proceedings, and previous experience with regards to amounts claimed:



December 31, 2014

45

Consolidated

Balances at: Civil Labor Tax Total

January 01, 2014 9 250 1,600 1,859

Addition - 3 9 12

Reversed (8) (135) (1) (144)

Exchange rate variation (1) 2 (188) (187)

December 31, 2014 - 120 1,420 1,540

January 01, 2013 10 287 1,835 2,132

Exchange rate variation (1) (37) (235) (273)

December 31, 2013 9 250 1,600 1,859

Company

Balances at: Civil Labor Tax Total

January 01, 2014 9 202 1,600 1,811

Reversed (8) (135) (1) (144)

Exchange rate variation (1) 8 (188) (181)

December 31, 2014 - 75 1,411 1,486

January 01, 2013 10 232 1,835 2,077

Exchange rate variation (1) (30) (235) (266)

December 31, 2013 9 202 1,600 1,811

Company and its subsidiary are counterpart in other labor, civil and tax lawsuits that according

to its consultants presents a possible, but not probable, risk of losses that cannot be reliable

measured. Company management, supported by its consultants opinion and accounting

practices, understand that no provision is necessary to these lawsuits.

21. Related parties transactions

Related party transactions

The main balances of assets and liabilities, as well as transactions that influence profit or loss

related to transactions with the Company and related parties, arising from operations between

the Company and its related parties.



December 31, 2014

46

Impact on balance sheet


Note 2014 2013 2014 2013

Trade accounts receivable

Agro Sam Agricultura e Pecuária Ltda. - - 5,251 1,400

Amaggi Exportação e Importação Ltda. 9,702 24,543 9,290 24,543

Amaggi Insumos Agrícolas e Comércio Ltda. 1,935 1,089 1,935 1,089

Amaggi International Ltd. 15,022 5,538 14,724 5,538

André Maggi Participações S.A. 423 237 423 237

Divisa Energia S.A. 1 1 1 1

Ilha Comprida Energia S.A. 2 3 2 3

Maggi Energia S.A. 1 3 1 3

Segredo Energia S.A. 2 3 2 3

7 27,088 31,417 31,629 32,817

Advances to suppliers

Amaggi Exportação e Importação Ltda. 806 57 65 57

Hermasa Navegação da Amazônia S.A. 1,493 - 1,493 -

11 2,299 57 1,558 57

Loans granted

Agro Sam Agricultura e Pecuária Ltda. - - - 6,542

Amaggi Construções de Rodovia Ltda. 10 10 10 10

Amaggi Insumos Agrícolas e Comércio Ltda. 3,803 806 3,803 806

13 3,813 816 3,813 7,358

Accounts payable to suppliers

Agro Sam Agricultura e Pecuária Ltda. - - 3,401 -

Amaggi Exportação e Importação Ltda. 2,180 8,618 2,089 -

Amaggi International Ltd. 970 743 136 8,618

Hermasa Navegação da Amazônia S.A. 3,705 3,068 - -

Ilha Comprida Energia S.A. - 1 - 3,068

Segredo Energia S.A. - 1 - 743

Shareholder’s - - - 1

SVB Participações e Empreendimentos Ltda. 11,442 27,464 - 1

16 18,297 39,895 5,626 12,431

Loans and financing

BBM Administração e Participação Ltda. - 4,733 - 4,733

HFLC Administração e Participação Ltda. 3,770 4,740 3,770 4,740

MP Administração e Participação Ltda. - 159 - 159

Shareholder’s - 211 - 211

17 3,770 9,843 3,770 9,843

Advances from customers

Amaggi Exportação e Importação Ltda. - 25,778 - 25,778

Amaggi International Ltd. 9,654 22,850 - 22,850

9,654 48,628 - 48,628



December 31, 2014

47

Impact on income statement


Note 2014 2013 2014 2013

Revenue

Agro Sam Agricultura e Pecuária Ltda. - - 3,732 -

Amaggi Exportação e Importação Ltda. 25,268 37,921 24,804 37,921

Amaggi Insumos Agrícolas e Comércio Ltda. 700 701 700 701

Amaggi International Ltd. 230,392 260,492 205,447 260,492

23 256,360 299,114 234,683 299,114

Corporate expenses

Amaggi Exportação e Importação Ltda. (6,401) (7,540) (6,401) (7,540)

André Maggi Participações S.A. 1,109 523 1,109 523

Divisa Energia S.A. 3 5 3 5

Ilha Comprida Energia S.A. 6 10 6 10

Maggi Energia S.A. 4 15 4 15

Segredo Energia S.A. 8 13 8 13

26 (5,271) (6,974) (5,271) (6,974)

Despatch

Amaggi International Ltd. - 13 - 13

27 - 13 - 13

Demurrage

Amaggi International Ltd. (81) (345) (71) (345)

27 (81) (345) (71) (345)

Financial revenues

Agro Sam Agricultura e Pecuária Ltda. - - 220 381

Amaggi Insumos Agrícolas e Comércio Ltda. 302 143 302 143

Shareholder’s 35 - 35 -

28 337 143 557 524

Financial expenses

BBM Administração e Participação Ltda. (186) (191) (186) (191)

Hermasa Navegação da Amazônia S.A. (433) (54) (392) (54)

HFLC Administração e Participação Ltda. (191) (145) (191) (145)

MP Administração e Participação Ltda. - (8) - (8)

Shareholder’s (2) (56) (2) (56)

VIP Administração e Participação Ltda. - (8) - (8)

28 (812) (462) (771) (462)

22. Equity

Capital

The subscribed capital on December 31, 2014 and December 31, 2013 is represented by USD

115,190, which corresponds to 249,074,220 quotas.

Equity valuation adjustments

The Company recognizes in this account increases or decreases in value assigned to assets and

liabilities as a result of its evaluation at fair value, while not recorded in profit or loss according

to the accrual basis.



December 31, 2014

48

Special reserve special of goodwill on merger

Amounts of goodwill written-off to equity during the process of reverse incorporation (where an

investee incorporates an investor).

Profit reserve to be destined

Management decided to propose to a “profit reserve to be destined” the amounts of accumulated

profit, to the deliberation of shareholders on the next Annual General Meeting.

23. Net revenue

a. Reconciliation of net revenue


2014 2013 2014 2013

Sale to related parties - foreign market

(note 21) 230,392 260,492 205,447 260,492

Sale to related parties - domestic market

(note 21) 25,968 38,622 26,812 38,622

Sale to third parties - foreign market 118,983 106,290 104,908 106,290

Sale to third parties - domestic market 12,064 16,308 12,040 16,308

Services rendered 365 - 365 -

Services rendered to third parties - - 2,424 -

(=) Gross revenue 387,772 421,712 351,996 421,712

(-) Sale returns (1,578) (2,196) (1,578) (2,196)

(-) Tax on sales (8,177) (9,980) (6,960) (9,980)

(=) Net revenue 378,017 409,536 343,458 409,536

b. Revenue by kind of product/service sold


2014 2013 2014 2013

Cotton 64,486 73,586 53,931 73,586

Corn 68,476 104,606 62,568 104,606

Soybean seeds 11,041 - 11,248 -

Soybean 235,106 226,323 212,501 226,323

Other 8,663 17,197 11,748 17,197

387,772 421,712 351,996 421,712



December 31, 2014

49

c. Revenue month by month


2014 2013 2014 2013

January 13,146 44,485 13,146 44,485

February 19,447 35,274 19,448 35,274

March 58,489 38,837 58,592 38,837

April 46,610 35,890 47,040 35,890

May 35,080 20,024 35,097 20,024

June 58,358 34,435 46,722 34,435

July 30,950 62,486 20,608 62,486

August 30,176 30,218 28,506 30,218

September 33,485 42,163 30,291 42,163

October 31,662 43,438 25,772 43,438

November 16,843 10,084 14,659 10,084

December 13,526 24,378 12,115 24,378

387,772 421,712 351,996 421,712

24. Reconciliation of gross profit without biological assets effects


2014 2013 2014 2013

Net revenue (nota 23) 378,017 409,536 343,458 409,536

(-) Cost of good sale (except biological assets

realization) (309,657) (344,886) (285,387) (345,586)

(=) Gross profit before biological assets fair

value impacts 68,360 64,650 58,071 63,950

Percentage of net revenue 18,08% 15,79% 16,91% 15,62%

Gross profit before biological assets fair value

impacts 68,360 64,650 58,071 63,950

(+) Changes in fair value of biological assets

(note 9) 39,516 76,756 27,251 76,756

(-) Impact of biological assets on cost (95,714) (109,542) (82,280) (109,542)

Gross profit on income statement 12,162 31,864 (958) 31,164

25. Selling expenses


2014 2013 2014 2013

Brokerage and commissions (785) (966) (746) (966)

Freight (1,970) (263) (1,147) (263)

Inputs (1,062) (168) (1,062) (168)

Royalties (260) (315) (260) (315)

Other services (564) (777) (507) (777)

Port fees (1,477) (2,578) (1,363) (2,578)

Other (21) (429) (21) (429)

(6,139) (5,496) (5,106) (5,496)



December 31, 2014

50

26. Administrative expenses


2014 2013 2014 2013

Rents and leases (242) (804) (242) (804)

Fuels and lubricants (256) (188) (256) (188)

Depreciation and amortization (33) (1,002) (33) (383)

Corporate expenses (note 21) (5,271) (6,974) (5,271) (6,974)

General expenses (443) (1,115) (443) (1,077)

Social charges (191) (199) (188) (197)

Maintenance (264) (503) (264) (502)

Taxes recovered 1,400 (259) 1,540 (259)

Salaries (2,003) (1,211) (1,657) (1,205)

Consultancy and audit services (1,588) (1,502) (1,588) (1,502)

Other services (227) (147) (227) (147)

Other (864) (1,149) (863) (1,136)

(9,982) (15,053) (9,492) (14,374)

27. Net other operating income (expenses)


2014 2013 2014 2013

Other operational revenues Non realized gain on non-deliverable forwards

(NDF) 1,419 - 1,419 -

Realized gain on non-deliverable forwards (NDF) - 1,174 - 1,174

Despatch 635 154 292 154

Despatch – related parties (note 21) - 13 - 13

Impairment provision - 27,559 - 27,559

Dividends revenue 99 - 99 -

Rural leases revenue 3,140 4,880 3,140 4,880

Public sale revenues - CONAB 8,203 - 7,433 -

Indemnity revenues 377 118 377 118

Inventory differences 8,253 - 8,253 -

Other revenues 2,141 1,603 1,826 1,603

24,267 35,501 22,839 35,501

Other operational expenses

Demurrage – related parties (note 21) (81) (345) (71) (345)

Non realized loss on non-deliverable forwards

(NDF) - (3,167) - (3,167)

Realized loss on non-deliverable forwards (NDF) (51) - (51) -

Loading and execution (377) - (377) -

Taxes on other revenues (1,032) (622) (990) (564)

Loss on the disposal of property, plant and

equipment (2,278) (174) (1,790) (206)

Other expenses - (5,205) - (5,134)

(3,819) (9,513) (3,279) (9,416)

Net 20,448 25,988 19,560 26,085



December 31, 2014

51

28. Net financial income (expenses)


2014 2013 2014 2013

Financial revenues

Discounts obtained 331 17 331 17

Gains on derivatives 69,927 11,889 69,927 11,889

Interest on marketable securities 2,477 - 2,477 -

Interest on investments - 346 - 346

Interest on related party transactions (note

21) 337 143 557 524

Price index variation 9,914 9,571 3,080 5,976

Other 2,232 5,233 2,232 5,216

85,218 27,199 78,604 23,968

Financial expenses

Brokerage and commissions - (43) - (43)

Discounts granted (62) (626) (62) (626)

Taxes on financial transactions (303) (385) (188) (236)

Interest on loans and financing (39,970) (28,243) (39,969) (28,243)

Interest on related party transactions (note

21) (812) (462) (771) (462)

Loss on derivatives (82,665) (27,058) (82,665) (27,058)

Price index variation (10,745) (5,561) (7,662) (3,511)

Other (104) (107) (55) (87)

(134,661) (62,485) (131,372) (60,266)

Translation gain (loss)

Translation adjustments 48,615 13,672 44,742 (3,335)

48,615 13,672 44,742 (3,335)

Net financial income and expenses (828) (21,614) (8,026) (39,633)

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