André Maggi Participações S.A. (André Maggi Group) · 12/31/2017 · André Maggi...

André Maggi

Participações S.A.

(André Maggi

Group)

Financial Statements as of December 31, 2017

André Maggi Participações S.A. (André Maggi Group) Financial statements as of

December 31, 2017

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Content Independent auditor’s report 3 Statements of financial position 6 Statements income 7 Statements of comprehensive income 8 Statements of changes in equity 9 Statements of cash flows 10 Notes to the financial statements 11

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.

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KPMG Auditores Independentes

Passeio das Castanheiras, 431 - Salas 407 a 411

Condomínio Tríade - Torre Nova York - Parque Faber Castell

13561-384 - São Carlos/SP - Brasil

Caixa Postal 708 - CEP 13560-970 - São Carlos/SP - Brasil

Telefone +55 (16) 2106-6700, Fax +55 (16) 2106-6767 www.kpmg.com.br

Independent auditors' report on the financial statements To The Board of Directors and Shareholders of André Maggi Participações S.A. Cuiabá - MT Opinion

We have audited the individual and consolidated financial statements of André Maggi Participações S.A. (“the Company”), respectively referred to as Company and Consolidated, which comprise the statement of financial position as at December 31, 2017, the statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising significant accounting policies and other explanatory information.

In our opinion, the accompanying individual and consolidated financial statements present fairly, in all material respects, the individual and consolidated financial position of the André Maggi Participações S.A. as at December 31, 2017, and of its individual and consolidated financial performance and its individual and consolidated cash flows for the year then ended in accordance with Accounting Practices Adopted in Brazil and with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB).

Basis for Opinion

We conducted our audit in accordance with Brazilian and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Individual and Consolidated Financial Statements section of our report. We are independent of the Company and its subsidiaries in accordance with the relevant ethical requirements included in the Accountant Professional Code of Ethics (“Código de Ética Profissional do Contador”) and in the professional standards issued by the Brazilian Federal Accounting Council (“Conselho Federal de Contabilidade”) and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.



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Responsibilities of Management for the Individual and Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the individual and consolidated financial statements in accordance with Accounting Practices Adopted in Brazil and 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.

In preparing the individual and consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company and subsidiaries or to cease operations, or has no realistic alternative but to do so.

Auditors’ Responsibilities for the Audit of the Individual and Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the individual and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Brazilian and international standards on auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Brazilian and international standards on auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the individual and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit 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 Company’s and subsidiaries internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern



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basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s and subsidiaries ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the individual and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company and subsidiaries to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financialstatements, including the disclosures, and whether the individual andconsolidated financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial informationof the entities or business activities within the Group to express an opinion onthe consolidated financial statements. We are responsible for the direction,supervision and performance of the group audit. We remain solely responsiblefor our audit opinion.

We communicate with those charged with management among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

São Carlos, SP, February 28, 2018

KPMG Auditores Independentes CRC 2SP014428/O-6

Fernando Rogério Liani Alexandre Tadeu de Almeida Contador CRC 1SP229193/O-2 Contador CRC 1SP-184819/O-0

André Maggi Participações S.A. (André Maggi Group)

Statements of financial position

Years ended December 31, 2017 and 2016

(In thousands of US Dollars)

Assets Note 2017 2016 2017 2016 Liabilities Note 2017 2016 2017 2016

Cash and cash equivalents 9 591,827 345,495 11 15 Accounts payable to suppliers 20 176,778 131,062 3 262 Marketable securities 10 18,741 - - - Loans and financing 21 499,868 535,555 - - Trade accounts receivable 11 192,738 166,937 - - Advances from customers 22 265,457 266,340 - - Inventories 12 340,234 349,862 - - Taxes payable 5,014 6,223 - - Biological assets 13 178,433 172,132 - - Current taxes liabilities 1,302 12,381 - - Advances to suppliers 14 583,523 553,787 - - Salaries and vacation payable 38,495 38,002 8 9 Recoverable taxes 15 48,437 46,152 - - Derivative financial instruments 23 60,631 136,323 - - Current taxes assets 15 82,318 64,921 - - Securities brokerage operations 12,492 4,434 - - Loans granted 16 10,528 - - - Dividends payable 25 27,840 57,466 21,015 43,830 Securities brokerage operations 3,572 37,297 - - Others accounts payable 6,219 9,294 681 3,283 Derivative financial instruments 23 65,968 105,013 - - Total current liabilities 1,094,096 1,197,080 21,707 47,384 Prepaid expenses 10,881 13,693 11 5 Other credits 20,485 21,298 - - Total current assets 2,147,685 1,876,587 22 20 Accounts payable to suppliers 20 1,604 1,628 - -

Loans and financing 21 1,478,554 1,223,854 - - Taxes payable - 913 - -

Marketable securities 10 10,853 11,418 - - Provision for contingencies 24 3,037 4,379 - - Trade accounts receivable 11 3,699 3,729 - - Deferred income and social contribution taxes 17 224,909 219,228 - - Advances to suppliers 14 80,146 19,604 - - Total non-current liabilities 1,708,104 1,450,002 - - Recoverable taxes 15 17,764 28,506 - - Loans granted 16 22,540 41,975 - - Total liabilities 2,802,200 2,647,082 21,707 47,384 Prepaid expenses 11,155 12,533 - - Other credits 771 626 - - Equity 26Biological assets 13 15,241 16,080 - - Capital 179,138 179,138 179,138 179,138 Deferred income and social contribution taxes 17 2,642 2,860 322 403 Legal reserve 30,719 30,719 30,719 30,719 Investments 18 201,482 201,365 912,339 849,868 Equity valuation adjustments 162,302 164,540 162,302 164,540 Property, plant and equipment 19 1,566,601 1,587,737 85 99 Cumulative translation adjustments (67,002) (65,566) (67,002) (65,566) Intangible assets 4,255 6,140 - - Special reserve of goodwill on merger (12,605) (12,605) (12,605) (12,605) Total non-current assets 1,937,149 1,932,573 912,746 850,370 Goodwill on capital transactions (483) (483) (483) (483)

Participation of variation in controlled capital 541 541 541 541 Profit retention reserve 598,451 506,722 598,451 506,722 Total shareholders’ equity 891,061 803,006 891,061 803,006

Non-controlling interest 391,573 359,072 - -

Total equity 1,282,634 1,162,078 891,061 803,006

Total assets 4,084,834 3,809,160 912,768 850,390 Total equity and liabilities 4,084,834 3,809,160 912,768 850,390

Consolidated Company Consolidated Company

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Statements income


(In thousands on US Dollars)

Consolidated CompanyNote 2017 2016 2017 2016

Net revenue 27 4,430,112 3,446,840 - - Changes in fair value of biological assets 13 39,440 45,522 - - Cost of goods and services 28 (4,035,153) (3,089,405) - - Gross profit 29 434,399 402,957 - -

Selling expenses 30 (114,496) (88,146) - - Administrative expenses 31 (98,733) (92,375) (462) (3,076) Net other operating income (expenses) 32 44,898 89,815 7 (4) Equity interest gain (loss) in subsidiaries 18 4,745 (62) 117,932 72,285 Income from operating activities 270,813 312,189 117,477 69,205

Financial revenues 33 148,682 182,220 - - Financial expenses 33 (155,157) (197,068) - - Exchange rate variation (net) 33 (11,225) (2,255) 20 (636) Net financial income (expenses) 33 (17,700) (17,103) 20 (636)

Net income before taxes 253,113 295,086 117,497 68,569

Income tax and social contribution - deferred 17 (4,459) (114,314) (81) (178) Income tax and social contribution - current 17 (53,161) (62,583) - - Net income before employees' profit sharing 195,493 118,189 117,416 68,391

Employees' profit sharing (28,087) (28,544) - -

Net income for the year 167,406 89,645 117,416 68,391

Net income for the yearControlling interests 117,416 68,391 117,416 68,391 Non-controlling interests 49,990 21,254 - - Net income for the year 167,406 89,645 117,416 68,391

The notes are an integral part of these financial statements.

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Statements of comprehensive income



2017 2016 2017 2016

Net income for the year 167,406 89,645 117,416 68,391 Cumulative translation adjusments (2,049) 11,299 (1,436) 10,090 Effect of hedge accounting in joint ventures (121) 153 (100) 126 Participation of variation in controlled capital - - - 138

Comprehensive income 165,236 101,097 115,880 78,745

Net income for the yearControlling interests 165,870 78,745 115,880 78,745 Non-controlling interests (634) 22,352 - -

Comprehensive income 165,236 101,097 115,880 78,745


Consolidated Company

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Statements of changes in equity (unaudited)



Total

'Balances at January 1, 2016 179,138 26,169 171,546 (75,656) (12,605) (484) 404 535,421 - 823,933 351,241 1,175,174

Dividends distribution - - - - - - - - - - (15,807) (15,807)

Unrealized dividends distribution - - - - - - - 10,086 - 10,086 - 10,086

Loss disproportionate distribution of profit in subsidiary - - - - - - - (64,069) - (64,069) - (64,069)

Deemed cost realization in subsidiaries - - (5,807) - - - - - 5,807 - - -

Effect of hedge accounting in subsidiaries - - 126 - - - - - - 126 27 153

Impairment provision of property, plant and equipament - - (1,325) - - - - - - (1,325) (503) (1,828)

Cumulative translation adjusments in subsidiaries - - - 10,090 - - - - - 10,090 1,209 11,299

Participation of variation in subsidiaries - - - - - 1 137 - - 138 (138) -

Adjustments by capital reserve in subsidiries - - - - - - - (534) - (534) - (534)

Increase in non-controlling interest Agropecuária Maggi Ltda. - - - - - - - - - - 1,789 1,789

Net income for the year - - - - - - - - 68,391 68,391 21,254 89,645

Profit destination:Legal reserve constitution - 4,550 - - - - - - (4,550) - - - Statutory dividends - - - - - - - - (43,830) (43,830) - (43,830) Profit retention reserve - - - - - - - 25,818 (25,818) - - -

Balances at December 31, 2016 179,138 30,719 164,540 (65,566) (12,605) (483) 541 506,722 - 803,006 359,072 1,162,078

Dividends distribution - - - - - - - - - - (16,053) (16,053)

Unrealized dividends distribution - - - - - - - 43,830 - 43,830 - 43,830

Loss disproportionate distribution of profit in subsidiary - - - - - - - (52,691) - (52,691) - (52,691)

Deemed cost realization in subsidiaries - - (4,189) - - - - - 4,189 - - -

Effect of hedge accouunting in subsidiaries - - (100) - - - - - - (100) (21) (121)

Impact of impairment provision of property, plant and equipament - - 2,051 - - - - - - 2,051 783 2,834

Cumulative translation adjusments in subsidiaries - - - (1,436) - - - - - (1,436) (613) (2,049)

Net income for the year - - - - - - - - 117,416 117,416 49,990 167,406

Profit destination:Statutory dividends - - - - - - - - (21,015) (21,015) (1,585) (22,600) Profit retention reserve - - - - - - - 100,590 (100,590) - - -

Balances at December 31, 2017 179,138 30,719 162,302 (67,002) (12,605) (483) 541 598,451 - 891,061 391,573 1,282,634


Capital Legal reserveNon-controlling

interest Total equity

Goodwill on capital

transactions

Participation ofvariation in

controlled capitalEquity valuation

adjustmentsCumulativetranslation

Special reserve of goodwill on

Accumulatedprofit

Profit retentionreserve

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Statements of cash flows



2017 2016 2017 2016

Cash flows from operating activities

Net income for the year 167,406 89,645 117,416 68,391

Adjustment to:Depreciation and amortization 64,403 61,380 17 14 Residual cost on disposal of fixed assets and intangible 4,028 9,598 - - Income on disposal of investments (31,083) - - - Income from sale of property, plant and equipment - (9,131) - - Deferred income tax and social contribution 4,459 114,314 81 178 Equity interest gain (loss) in subsidiaries (4,745) 62 (117,932) (72,285) Provision (reversion of) for contingencies (1,328) 1,288 - - Incurred interests and exchange variation 69,503 142,197 - 552 Changes in fair value of biological assets (39,440) (45,522) - - Impact of biological assets on cost 27,960 27,422 - - Impairment provision of property, plant and equipment (3,615) (159) - - Loss on settlement - net assets 2,146 - - - Unrealized derivatives (36,647) 71,931 - - Income tax and social contribution 53,161 62,583 - 8,594 Credit and market risks, and impairment losses (7,128) (1,535) - - Reversion of inventory losses (4,341) (2,452) - - Provision (reversion of) for net realizable value of inventories 4,044 (16,323) - - Others - (578) - -

268,783 504,720 (418) 5,444 Decrease (increase) on assets

Trade accounts receivable (25,017) 44,007 - - Inventories 11,248 (50,347) - - Advances to suppliers (83,903) (38,819) - - Recoverable taxes 8,457 (32,437) - - Current taxes assets (78,713) (62,668) - - Securities brokerage operations 33,725 (32,343) - - Prepaid expenses 4,190 1,753 (6) (5) Other credits (34,553) (19,518) - - Biological assets 4,507 (9,748) - -

Increase (decrease) on liabilitiesAccounts payable to suppliers 21,669 12,773 (259) (55) Advances from customers (883) 72,214 - - Taxes payable (2,122) 635 - - Current taxes liabilities (1,239) 9,992 - (8,594) Salaries and vacation payable 493 1,056 (1) 4 Securities brokerage operations 8,058 (17,915) - - Other accounts payable (3,075) (1,111) (2,602) (161)

Cash provided by (utilized in) from operations 131,625 382,244 (3,286) (3,367)

Interest paid (79,741) (77,846) - - Income taxes paid (1,507) (4,110) - -

Net cash flow provided by (utilized in) operating activities 50,377 300,288 (3,286) (3,367)

Cash flow from investing activitiesIncrease on investments (14,326) (145,000) - - Decrease on investments 43,501 - - - Dividends received 4,106 5,881 3,285 3,829 Advances from future capital increase (34) (28) - - Proceeds from sale of property, plant and equipment 24,023 - - - Acquisition of property, plant and equipment and intangible (39,381) (80,926) (3) (17) Marketable securities (18,176) (5,272) - - Increase of non-controlling interest - (534) - (534) Loans granted to related parties (90,869) (80,649) - - Loans received from related parties 101,568 85,900 - -

Net cash flow provided by (utilized in) investing activities 10,412 (220,628) 3,282 3,278

Cash flows from financing activitiesFinancial funding 1,606,954 1,001,305 - - Payments of loans and financing (1,381,566) (985,330) - - Increase on non-controlling interests - 1,789 - - Dividends paid (39,845) (79,009) - -

Net cash flow provided by (utilized in) financing activities 185,543 (61,245) - -

Increase (decrease) in cash and cash equivalents 246,332 18,415 (4) (89)

Statements of increase (decrease) in cash and cash equivalentsAt beginning for the year 345,495 327,080 15 104 At end for the year 591,827 345,495 11 15

246,332 18,415 (4) (89)


Consolidated Company

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December 31, 2017

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Notes to the financial statements

(In thousands of U.S. Dollars)

1. Reporting entity

André Maggi Participações S.A. (“André Maggi Group” or the “Group”) is composed by many entities that act in different segments of the economy: commodities trading, agriculture, grains crushing, fluvial transportation, electric power generation and administration of ports.

Group operational headquarters is located in André Antônio Maggi Avenue, 303, City of Cuiabá, State of Mato Grosso. It operations are located in Brazil, Argentina and Paraguay.

The consolidated financial statements of the Group include the Company (“André Maggi Participações S.A.”) and its subsidiaries and associates (together referred as the “Group” and individually as “Group entities”).

André Maggi Participações S.A. is a holding and its operations consist in investing directly in Amaggi Exportação e Importação Ltda. and Agropecuária Maggi Ltda.

2. Subsidiaries and affiliates relation

André Maggi Participações S.A. holds investments on the following direct subsidiaries, indirect subsidiaries, jointly controlled entities and associate entities:

Shareholding

Country Functional currency 2017 2016

Direct subsidiaries Agropecuária Maggi Ltda. Brazil Dollar 59.03% 59.03%Amaggi Exportação e Importação Ltda. Brazil Dollar 82.71% 82.71%

Indirect subsidiaries – Amaggi Exportação e Importação Ltda

Amaggi Argentina S.A. Argentina Dollar 100.00% 100.00%Amaggi Comércio e Serviços Ltda. Brazil Real 100.00% 100.00%Amaggi International Ltd. BVI Dollar 100.00% 100.00%Amaggi Paraguay S.R.L. Paraguay Dollar 100.00% 100.00%Aruanã Comercializadora de Energia Ltda. Brazil Real 55.00% 55.00%Divisa Energia S.A. Brazil Dollar 98.73% 98.73%Hermasa Navegação da Amazônia S.A. Brazil Real 87.52% 87.52%Ilha Comprida Energia S.A. Brazil Real 99.99% 99.99%Jesuíta Energia S.A. Brazil Real 99.97% 99.97%Maggi Energia S.A. Brazil Real 55.00% 55.00%Segredo Energia S.A. Brazil 99.99% 99.99%

Indirect subsidiaries – Agropecuária Maggi Ltda Amaggi Pecuária Ltda. Brazil Real 91.24% 91.24%

Jointly controlled entities Amaggi Louis Dreyfus Zen-Noh Holdings S.A. (a) Brazil Dollar 33.33% 50.00%Navegações Unidas Tapajós S.A. Brazil Dollar 50.00% 50.00%Rio Madeira Administração de Bens Ltda. Brazil Real 50.00% 50.00%Terminal Fronteira Norte - Logística S.A. Brazil Dollar 50.00% 50.00%


December 31, 2017

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Shareholding Country Functional currency 2017 2016Associates

Amaggi Construções de Rodovias Ltda. Brazil Real 36.00% 36.00%Terminal de Granéis do Guarujá S.A. Brazil Real 33.00% 33.00%

(a) In July 2017 the company sold 16.67% of its participation in Amaggi & LDC Holding S.A. to Zen-Noh Grain Brasil Holdings Ltda. to 33.33%.

With Zen-Noh as a new partner, the company will be renamed Amaggi Louis Dreyfus Zen-Noh Holdings S.A. The change occurred is shown in note 18.

Agropecuária Maggi Ltda.

It’s a limited entity domiciled in the city Cuiabá, state of Mato Grosso, Brazil. Its activities consist on the production and commercialization of agricultural products, mainly soybean, corn and cotton and seeds production and processing.

Amaggi Exportação e Importação Ltda.

It’s a limited entity domiciled in the city of Cuiabá, state of Mato Grosso, Brazil and its main objectives are the commodities trading, mainly soybean exportation, seed processing, fertilizers importation and commercialization, extraction and commercialization of crude and degummed soybean oil and soybean meal. Substantial part of its exportation is performed through Amaggi International Ltd.

Amaggi Argentina S.A.

Headquarters and operations are located in the city of Buenos Aires, state of Buenos Aires, Argentina. Its activities consist in the trading of soybean, corn, wheat, sorghum and barley.

Amaggi Comércio e Serviços Ltda.

Headquarters and operations are located in the city of Cuiabá, state of Mato Grosso, Brazil and its main objective commercial representation of raw materials for agricultural production.

Amaggi Paraguay S.R.L.

Headquarters and operations are located in the city of Ciudad del Este, state of Alto Paraná, Paraguay. Its activities consist in the trading of soybean, corn and wheat.

Amaggi Pecuária Ltda.

Headquarters is located in the city of Cuiabá, state of Mato Grosso, Brazil. Its activities consist in the activity of livestock in the purchase and resale, breeding of cattle and breeding animals in semi-confinement and confinement for cutting.


December 31, 2017

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Aruanã Comercializadora de Energia Ltda.

Headquarters and operations are located in the city of Cuiabá, state of Mato Grosso, Brazil. Its activities consists is the trading of electric power.

Divisa Energia S.A.

Headquarters is located in the city of Cuiabá, state of Mato Grosso, Brazil, but its activities are located in the city of Campos de Júlio, state of Mato Grosso, Brazil. Its activities consist in the electric power generation and commercialization in Brazil’s territory, with the authorization of the competent legal authorities.

Hermasa Navegação da Amazônia S.A.

Headquarters is located in the City of Cuiabá, state of Mato Grosso, Brazil, but its activities are located in the Brazilian states of Rondônia, Amazonas and Pará. Its activities consists, mainly, is the rendering of services of fluvial navigation, transportation, storage and transshipment of grains, substantially to related parties.

Ilha Comprida Energia S.A.

Headquarters is located in the city of Cuiabá, state of Mato Grosso, Brazil, but its activities are located in the city of Sapezal, state of Mato Grosso, Brazil. Its activities consist in the electric power generation and commercialization in Brazil’s territory, with the authorization of the competent legal authorities.

Jesuíta Energia S.A.

Headquarters is located in the city of Cuiabá, state of Mato Grosso, Brazil. Its activities consists is the electric power generation and commercialization in Brazil’s territory, with the authorization of the competent legal authorities. The Company is on stage of review of its basic project approved.

Maggi Energia S.A.


Segredo Energia S.A.



December 31, 2017

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Amaggi Louis Dreyfus Zen-Noh Holdings S.A.

It’s a joint venture in conjunction with Louis Dreyfus Company Brasil S.A. and Zen-Noh Grain Brasil Holdings Ltda., headquarters and operations are located in the city of São Paulo, state of São Paulo, Brazil. Its activities consists mainly of investments in others entities with own resources.

Navegações Unidas Tapajós S.A.

It’s a joint venture with Bunge Alimentos S.A., headquarters is located Cuiabá, state of Mato Grosso, Brazil. Its activities consists, mainly, is the rendering of services of fluvial navigation.

Rio Madeira Administração de Bens Ltda.

It’s controlled in conjunction with Nilto Costa Alves, and headquarters are located in the city of São Paulo, state of São Paulo, Brazil but its operations are located in the city of Porto Velho, state of Rondônia, Brazil. Its activities consist in the trading and administration of land.

Terminal Fronteira Norte - Logística S.A.

It’s a joint venture in conjunction with Bunge Alimentos S.A., headquarters and operations are located in the city of Barcarena, state of Pará, Brazil. Its activities consists, mainly, is the rendering of services of fluvial navigation, transportation, storage and transshipment of grains, substantially to related parties.

Amaggi Construções de Rodovias Ltda.

Headquarters is located in the city of Cuiabá, state of Mato Grosso, Brazil. Nowadays the entity has no operations.

Terminal de Granéis do Guarujá S.A.

Headquarters and operations are located in the city of Guarujá, state of São Paulo, Brazil. It operates as a marine terminal to receive, store and load grains (corn, soybeans and their sub products).

3. Basis of preparation

a. Basis of accounting

The financial statements, which were prepared in accordance with accounting practices adopted in Brazil, including the pronouncements issued by the Accounting Pronouncements Committee – CPC and in accordance with International Financial Reporting Standards - IFRS issued by the International Accounting Standards Board – IASB.

The financial statements accompanied by the independent auditors report were authorized for issue by the Board of Directors on February 23, 2018. After their issuance, only the shareholders have empowered to change the financial statements.


December 31, 2017

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Details of the Company's significant accounting policies are presented in note 6.

All the relevant information to the financial statements, and only them, are being disclosure, and correspond to those used by Management in its management.

b. Basis of measurement

The financial statements have been prepared based on the historical cost basis except for the following items recorded on the financial information:

For the derivative financial instruments which are measured at fair value;

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

Biological assets which are measured at fair value less expenses to sell; and

Inventories of commodities of trading companies which are evaluated at marked values less selling expenses.

4. Functional and presentation currency

(i) Functional currency

The Company's management after analysis of their operations and business, especially with regard to the factors to determine its functional currency, concluded that the US Dollar ("US$" or "Dollars") is its functional currency. This conclusion is based on the analysis of the following indicators:

Currency that most influences the prices of goods and services;

Currency of the country whose competitive forces and regulations mainly determine the selling price of its products and services;

Currency that most influence the material and other costs of providing goods or services; and

Currency in which they are obtained substantially funds from financing activities.

5. Use of estimates and judgments

In the preparation of these financial statements, Management used judgments, estimates and assumptions that affect the application of the Group's accounting policies and reported amounts of assets and expenses. Actual results may differ from these estimates.

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


December 31, 2017

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Judgments

Information about judgments made in applying accounting policies that have significant effect on the amounts recognized in the financial statements are included in the following notes:

Note 6.a - Consolidation: determining whether the Group has the control about on investee; and

Note 6.n - Rental: determining whether an arrangement contains a lease.

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:

Note 6.f and 19 – Impairment test: key assumptions underlying recoverable amounts;

Note 13 – Biological assets;

Note 17 – Deferred income and social contribution taxes;

Note 19 – Useful life of property, plant and equipment;

Note 23 – Determination of fair value of financial assets and liabilities; and

Note 24 – Provisions for contingencies.

6. 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.

In the Company's individual financial statements, the financial information of subsidiaries is recognized using the equity method.

(ii) Investments in associates and joint ventures

Associates are those entities in which the Group, directly or indirectly, has significant influence, but not control, over the financial and operating policies.


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Jointly ventures are those entities whose activities the Group has joint control, established by contractual agreements and requiring unanimous consent on the strategic financial and operating decisions.

The investments on associates and joint ventures 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 or shared control exists.

The consolidated financial statements include the profit or loss and other comprehensive income of equity accounted investees, after adjustments to align its the accounting policies with those of the Group, from the date that significant influence or joint control begins until the date that significant influence or joint control ceases.

When the Group’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.

(iii) Transactions eliminated on consolidation

Intragroup balances and transactions, and any unrealized profit or loss arising from intragroup 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.

(iv) Business combination

Business combinations are recorded using the acquisition method when control is transferred to the Group. The consideration transferred is generally measured at fair value, as well as identifiable net assets acquired. Any goodwill arising in the transaction is tested annually for impairment. Gains on an advantageous purchase are recognized immediately in the result. The transaction costs are recorded in the income statement as incurred, except for costs related to the issuance of debt or equity instruments.

b. Foreign currency

(i) Foreign currency transactions

Transactions in foreign currency (other than the functional currency), are translated into the respective functional currency of the Group at exchange rates in the dates of the transactions.


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Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currency at the exchange rate at that date.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated into 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.

c. Financial instruments

The Group classifies non-derivative financial assets into the following categories: financial assets measured at fair value through profit or loss and loans and receivables.

The Group classifies non-derivative financial liabilities into the following categories: financial liabilities measured at fair value through profit or loss and other financial liabilities.

(i) Non-derivative financial assets and liabilities – recognition and derecognition

The Group 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 Group becomes party to the contractual dispositions of the instrument.

The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when the Group 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 transferred financial assets that is created or retained by the Group is recognized as a separate asset or liability.

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when, and only when, the Group 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 Group classifies non-derivative financial assets into the following categories: recorded at fair value through profit or loss and loans and receivables.

(ii) Non-derivative financial assets - measurement

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. 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.


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Held-to-maturity financial assets

These assets are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortized cost using the effective interest method.

Loans and receivables

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, loans granted, securities brokerage operations 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.

Marketable securities – Government bonds

Investments in marketable securities include investment in debt securities. Initially measured at cost, these instruments are classified and subsequently measured as follows:

Fair value through profit or loss: include securities acquired or incurred primarily for the purpose of selling or repurchasing in a very short period of time. Measured at fair value, whose changes are recognized in profit or loss.

Held-to-maturity: includes non-derivative securities with fixed or determinable payments with defined maturities for which the Group has a maturity and ability to hold to maturity. Measured at amortized cost, using the effective interest rate method.

(iii) Non-derivative financial liabilities - measurement

Financial liabilities are initially recognized on the trade date, which is the date that the Group becomes party to the contractual dispositions of the instrument. The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.

The Group 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.

(iv) Derivative financial instruments

The Group and its subsidiaries hold derivative financial instruments: futures, swaps (interest rate and exchange risk protection) and NDFs – Non Deliverable Forward - for hedge


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operations to exchange variations (currency) and commodity prices.

The purpose of operations involving derivatives is always related to the operation of the Group and its subsidiaries and the reduction of their exposure to currency and market risks, duly identified by established policies and guidelines. The results obtained with these operations are consistent with the policies and strategies defined by the Group's Management. All gains or losses arising from derivative financial instruments are recognized at fair value.

Gains / losses on unrealized derivative financial instruments arising from commodity price protection are recognized within gross profit, while the effects of derivatives related to foreign exchange and interest rate risks are recognized in the financial result.

Derivatives are initially recognized at fair value and their attributable transaction costs are recognized in income, when incurred. Subsequent to the initial recognition, they are measured at fair value and changes in income for the period.

d. Capital

The Company's share capital is composed only of common shares which are classified as shareholders' equity.

e. 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.

The cost of certain items of property as of January 1, 2008, anticipated date of the Group transition to the pronouncements of the Accounting Pronouncements Committee Technicians ("CPCs") was determined based on its fair value at that date.

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 equipment is capitalized as part of that equipment.


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When parts of an item of property, plant and equipment have different useful life, 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”.

(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 Group. 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.

Depreciation methods, useful lives and residual amounts are reviewed at each reporting date and eventual adjustments are recorded as changes in accounting estimates.

f. 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.


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Financial assets measured at amortized cost

The Group considered evidence of assets measured at cost loss amortized both individually and collectively. All individually significant assets are assessed for loss on impairment. Those who have not suffered loss individually are then tested collectively for any impairment that may have occurred, but have not yet been identified. Assets that are not individually significant are collectively evaluated for impairment based on the group of assets with similar risk characteristics.

In assessing collective impairment, the Group 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 the carrying amount and the present value of estimated future cash flows discounted at the asset's original effective interest rate. Losses are recognized in the income statement and reflected in an allowance account against receivables, when applicable. When a subsequent event indicates a reversal of the impairment, the decrease in impairment loss is reversed and recorded in income.

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 Group's non-financial assets other than biological assets, inventories and deferred tax assets are reviewed at each balance sheet date to determine if there is any indication of impairment. If such an indication occurs, then the recoverable value of the asset is estimated.

For impairment tests, assets are grouped into Cash Generating Units (CGU), that is, the smallest possible group of assets that generates cash inflows due to their continuous use, which are largely independent of the inputs of other assets or CGU.

The recoverable amount of an asset or UGC is the greater of its value in use and its fair value less costs to sell. The value in use is based on estimated future cash flows discounted to present value using a pre-tax discount rate that reflects the current market valuations of the time value of money and the specific risks of the asset or the UGC.

An impairment loss is recognized if the carrying amount of the asset or CGU exceeds its recoverable value.

Impairment losses are recognized in income.


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Impairment of assets is reversed only if the carrying amount of the asset does not exceed the book value that would have been calculated, net of depreciation or amortization, if the loss of value had not been estimated.

g. Inventories

Commodities of trading companies are adjusted to the market value (“mark to market”) less costs to sell. In order to perform the calculation of the fair value, trading companies use as reference the quotations and rates published by public sources that are related to the products and active markets in which the Group acts. Changes in the fair value of inventories are recognized in cost.

Other 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 expenses to sell at the date of harvest.

h. 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. Costs to sell include all costs that would be necessary to sell the assets, including transportation costs.

i. 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.

j. Provisions

Provisions are determined by discounting estimated future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and specific risks for the related liability. The effects of derecognition of the discount over time are recognized in the statement of income as a financial expense.

k. 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 Group 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.


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l. 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.

(ii) Services and other revenue

Revenue from services rendered and supply of electric power is recognized in profit or loss in proportion to the stage of completion. Revenue is not recorded if there is significant uncertainty of its realization.

When two or more activities that generate revenues or when the delivery of selling products are done under the same agreement. The allocation of the revenue for the components is based on the relative fair value of each specific component.

m. Government grants

Grants that compensate the Group for expenses incurred are recognized in profit or loss as on a systematic basis in the periods that the expenses are recognized.

n. Lease

Lease payments

Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease.

o. Finance income and costs

Financial income comprises interest on marketable securities, gains on hedge instruments and gains on exchange rates variation. The interest income is recognized in profit or loss using the effective interest method.

The finance cost comprises interest expense on borrowings, and related parties, losses with


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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 rate variation gains and losses are presented on a net basis.

p. Income tax

The Group is composed by entities that are on the real profit regime and 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 R$ 240 (two hundred and forty thousand Brazilian Reais) 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 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.

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.


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(ii) Entities on the presumed profit regime

On this regime, taxable profit corresponds to 8% of operational revenue plus other operational income, to income tax, and 12% of operational revenue plus other operational income to social contribution.

Income tax is calculated based on a 15% aliquot plus 10% of the presumable taxable profit that exceeds annually R$ 240 (two hundred and forty thousand Brazilian Reais). Social contribution is calculated based on a 9% aliquot of the presumed taxable profit.

7. Determination of fair value

Management regularly reviews significant unobservable data and valuation adjustments. If the third-party information such as quotes from brokers or pricing services, is used to measure the fair value, then the Administration reviews the evidence obtained from third parties to support the conclusion that such assessments meet the CPC requirements, including the level the fair value hierarchy in which such assessments are classified.

In measuring the fair value of an asset or a liability, the Company uses observable market data as much as possible. The fair values are classified into different levels in a hierarchy based on the information (inputs) used in the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities and markets;

Level 2: inputs, except quoted prices included in Level 1 that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices); and

Level 3: inputs, for the asset or liability that are not based on observable market data (unobservable inputs).

When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

(i) Inventories

Inventories are measured at fair value less the estimated costs of completion and sale, on mark to market, according to commodities and Group market.

8. Standards issued but not yet effective

A number of new standards and amendments will be effective after annual periods beginning after January 1st, 2017. The Group has not adopted these amendments in this financial statement. The Group does not intend to adopt these standards early.

The preliminary valuation of the Group has not indicated any material impact in the application of following standards:


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a. IFRS 9 (CPC 48) and IFRS 15 (CPC47)

The Group is required to adopt IFRS 9 (CPC 48) - Financial Instruments and IFRS 15 (CPC 47) - Customer Contract Revenue as of January 1st, 2018. The Group is evaluating the main estimated impacts of the initial application of such pronouncements in its financial statements. The estimated impact of adopting these standards on Group equity on January 1st, 2018 is based on valuations carried out up to the date of issuance of these financial statements. The actual impacts of adopting standards by January 1, 2018 may be different because:

The new accounting policies are subject to change until the Group presents its first financial statements that include the date of initial application.

In relation to IFRS 9 (CPC 48), although the Group has measurement criteria, there were no significant impacts.

In relation to IFRS 15 (CPC 47), although the Group has criteria for measuring revenue from customers to be considered, there were no impacts of this standard in the initial application.

b. IFRS 9 (CPC 48) Financial Instruments

IFRS 9 (CPC 48) - Financial Instruments establishes requirements to recognize and measure financial assets, financial liabilities and certain contracts to buy or sell non-financial items. This standard replaces IFRS 9 (CPC 38) - Financial Instruments: Recognition and Measurement.

(i) Classification – Financial assets

IFRS 9 contains a new classification and measurement approach for financial assets that reflects the business model in which assets are managed and their cash flow characteristics.

IFRS 9 contains three principal classification categories for financial assets: measured at amortized cost, fair value through other comprehensive income (FVOCI) and fair value through profit or loss (FVTPL). The standard eliminates the existing IAS 39 categories of held to maturity, loans and receivables and available for sale.

Under IFRS 9, derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never bifurcated. Instead, the hybrid financial instrument as a whole is assessed for classification.

Based on its preliminary assessment, the Group does not believe that the new classification requirements, if applied at December 31th, 2017, would have had a material impact on its accounting for trade receivables, loans, investments in debt securities and investments in equity securities that are managed on a fair value basis.

(ii) Impairment – Financial assets and contract assets

IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with a forward-looking ‘expected credit


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loss’ (ECL) model. This will require considerable judgement as to how changes in economic factors affect ECLs, which will be determined on a probability-weighted basis.

The new impairment model will apply to financial assets measured at amortized cost or FVOCI, except for investments in equity instruments, and to contract assets.

Under IFRS 9, loss allowances will be measured on either of the following bases:

12-month ECLs. These are ECLs that result from possible default events within the 12 months after the reporting date; and

Lifetime ECLs. These are ECLs that result from all possible default events over the expected life of a financial instrument.

Lifetime ECL measurement applies if the credit risk of a financial asset at the reporting date has increased significantly since initial recognition and 12-month ECL measurement applies if it has not. An entity may determine that a financial asset’s credit risk has not increased significantly if the asset has low credit risk at the reporting date. However, lifetime ECL measurement always applies for trade receivables and contract assets without a significant financing component; an entity may choose to apply this policy also for trade receivables and contract assets with a significant financing component.

The Group believes that impairment losses should occur for receivables under the concession contract in the model of IFRS 9. Based on the impairment methodology, the Group estimated that the application of impairment requirements of CPC 48 on January 1st 2018 will result in non-significant impairment losses.

(iii) Classification – Financial liabilities

IFRS 9 largely retains the existing requirements in IAS 39 for the classification of financial liabilities.

However, under IAS 39 all fair value changes of liabilities designated as at FVTPL are recognized in profit or loss, whereas under IFRS 9 these fair value changes are generally presented as follows:

the amount of change in the fair value that is attributable to changes in the credit risk of the liability is presented in OCI; and

the remaining amount of change in the fair value is presented in profit or loss.

The Group has not designated any financial liabilities at FVTPL and the Group has no current intention to do so. The Company’s preliminary assessment did not indicate any material impact if IFRS 9’s requirements regarding the classification of financial liabilities were applied at January 1st 2018.

(iv) Disclosures

IFRS 9 will require extensive new disclosures, in particular about hedge accounting, credit


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risk and expected credit losses. The Group’s preliminary assessment included an analysis to identify data gaps against current processes and the Group plans to implement the system and controls changes that it believes will be necessary to capture the required data.

(v) Transition

Changes in accounting policies resulting from the adoption of IFRS 9 will generally be applied retrospectively, except as described below.

The Group plans to take advantage of the exemption allowing it not to restate comparative information for prior periods with respect to classification and measurement (including impairment) changes. Differences in the carrying amounts of financial assets and financial liabilities resulting from the adoption of IFRS 9 generally will be recognized in retained earnings and reserves as at January 1st 2018.

The following assessments have to be made on the basis of the facts and circumstances that exist at the date of initial application:

The determination of the business model within which a financial asset is held.

The designation and revocation of previous designations of certain financial assets and financial liabilities as measured at FVTPL.

The designation of certain investments in equity instruments not held for trading as at FVOCI.

c. IFRS 15 (CPC 47) Revenue from Contracts with Customers

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. Revenues are currently recognized when the product is delivered to the customer, considered as the moment when the customer accepts the goods and the risks and benefits related to the property are transferred. Revenue is recognized at this time as long as revenue and costs can be measured reliably, receipt of the consideration is probable and there is no continuous involvement of management with the products.

Services

In accordance with CPC 47 / IFRS 15, the total consideration for these service contracts should be attributed to services based on their individual sales prices. The individual sales prices will be determined based on the price table that the Group uses for sales transactions of each service separately.

Based on the Group's assessment, the fair value and sales prices of individual services are broadly similar, since the contracts are standardized. Therefore, the Group does not expect that the application of CPC 47 / IFRS 15 will result in significant differences in the recognition of revenue for these services.


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In accordance with IFRS 15, revenue must be recognized when the customer obtains control of the products.

The IFRS 15 (CPC 47) introduces a comprehensive framework for determining whether and when revenue is recognized, and how much revenue is measured. The IFRS 15 (CPC 47) replaces current revenue recognition standards, including IAS 18 (CPC 30) - Revenue, IAS 11 (CPC 17) - Construction Contracts.

(i) Transition

The Group plans to adopt IFRS 15 (CPC 47) using the cumulative effect method, with initial application of the standard at the initial date (ie, January 1st, 2018). As a result, the Group will not apply the requirements of IFRS 15(CPC 47) to the comparative period presented.

The Group plans to use the practice files for completed contracts. This means that your only completed contract will not be restated.

d. IFRS 16 Leases

IFRS 16 replaces existing leases guidance including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases—Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

The standard is effective for annual periods beginning on or after 1 January 2019. Early adoption is permitted for entities that apply IFRS 15 Revenue from Contracts with Customers at or before the date of initial application of IFRS 16.

IFRS 16 introduces a single, on-balance lease sheet accounting model for lessees. A lessee recognizes a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are optional exemptions for short-term leases and leases of low value items. Lessor accounting remains similar to the current standard – i.e. lessors continue to classify leases as finance or operating leases.

The Group has started an initial assessment of the potential impact on its consolidated financial statements. The actual impact of the application of IFRS 16 on the financial statements in the initial period of application will depend on future economic conditions, including the Group’s indebtedness ratio as of January 1st, 2019, the composition of the Group’s leasing portfolio at that date, Group will exercise any lease renewal options and the extent to which the Group will choose to use practical expedients and exemptions from recognition.

In addition, the nature of expenses related to those leases will now change as IFRS 16 replaces the straight-line operating lease expense with a depreciation charge for right-of-use assets and interest expense on lease liabilities.

(i) Determining whether an arrangement contains a lease

On transition to IFRS 16, the Group can choose whether to:


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Apply the IFRS 16 definition of a lease to all its contracts; or

Apply a practical expedient and not reassess whether a contract is, or contains, a lease.

The Group is assessing whether to apply the practical expedient and the potential impact on its consolidated financial statements, and whether this will affect the number of contracts identified as leases on transition.

(ii) Transition

As a lessee, the Group can either apply the standard using a:

Retrospective approach; or

Modified retrospective approach with optional practical expedients.

The lessee applies the election consistently to all of its leases.

The Group intends to apply IFRS 16 initially on January 1st, 2019, using the modified retrospective approach. Therefore, the cumulative effect of the adoption of IFRS 16 will be recognized as an adjustment to the opening balance of retained earnings on January 1, 2019, without updating the comparative information.

When applying the modified retrospective approach to leases previously classified as operating leases in accordance with IAS 17, the lessee may elect, for each lease, a series of practical expedients applied in the transition. The Group is evaluating the potential impact of the use of these practical records. The Group is not required to make adjustments to leases in which it is a lessor, except when it is an intermediate lessor in a sublease.

Other changes

The following changes and interpretations will not have a significant impact or no impact on the Group’s financial statements.

Annual Improvements to IFRS Standards 2014-2016 Cycle.

Changes in IFRS 10 Consolidated Financial Statements (CPC 36) and IAS 28 Investments in Associates and Joint Ventures (CPC 18), Sales or contributions of assets between an investor and its associate/joint venture.

IFRIC 22 / ICPC 21 – Foreign Currency Transactions and Advance Consideration.

IFRIC 23 – Uncertainly over Income Tax treatments.

The Accounting Pronouncements Committee has not yet issued an accounting pronouncement or amendment to the current pronouncements corresponding to all new IFRS. Therefore, the early adoption of these IFRS is not permitted for entities that disclose their financial statements in accordance with accounting practices adopted in Brazil.


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9. Cash and cash equivalents

Consolidated Company 2017 2016 2017 2016Cash 22 29 - -Bank deposits 137,671 64,862 11 15 Marketable securities 454,134 280,604 - -

591,827 345,495 11 15

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 on December 31, 2017 is 99.13% of CDI and on December 31, 2016 was 101.21% of CDI.

The amounts in deposits in brokerages refer to margin deposits and to premiums and adjustments paid or received in transactions with derivative instruments not settled on the Stock Exchange.

Details about credit risk, interest rate and other risks related to those assets are reported on note 23.

10. Marketable securities

2017 2016Capitalization bonds 212 31Government bonds for trading (a) 3,066 -Government bonds held to maturity (b) 15,675 -Interbank deposit certificate (c) 10,641 11,387 29,594 11,418 Current assets 18,741 -Non-current assets 10,853 11,418

a) Government bonds for trading

Trading securities refer mainly to investments in Brazilian public securities. These financial investments have terms and maturities of more than three months and are mostly presented in current assets due to the expected realization in the short term.

b) Government bonds held to maturity

Held to maturity refers to applications in LEBAC - (Letras del Banco Central) that are issued by the Central Bank of the Republic of Argentina. These financials have a specific deadline, fixed rates and in short term.

c) Interbank deposit certificates

Interbank Deposit Certificates (CDI) are remunerated at the market rate based on the percentage variation of the Central Securities Custody and Financial Settlement (CETIP). The percentage


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of applications that remunerates long-term investments on December 31, 2017 is 68.75% of CDI and on December 31, 2016 was 95.55% of CDI.

Marketable securities classified as noncurrent assets are guaranteeing long-term.

11. Trade accounts receivable (consolidated)

2017 2016Domestic market 92,634 68,165 Domestic market - related parties (note 25) 45 29,064 Foreign market 81,589 60,125 Foreign market - related parties (note 25) 23,677 14,067 (-) Credit and market risks, and impairment losses (a) (1,508) (755) 196,437 170,666

Current assets 192,738 166,937 Non-current assets 3,699 3,729

a) Credit and market risks, and impairment losses

2017 2016Initial balances (755) (441)Addition (924) (303)Reversed 158 97 Exchange rate variation 13 (108)Final balances (1,508) (755)

Trade accounts receivable are classified as receivables, stated at amortized cost. The Company sensitized the adjustment to present value of its accounts receivable balances as of December 31, 2017 and 2016, and concluded that the amounts substantially matched the book values presented in the balance sheet.

Group exposure to currency and credit risk and impairment related to trade accounts receivable and other accounts are reported on note 23.

12. Inventories (consolidated)

2017 2016Corn 70,842 61,757 Cotton lint 38,131 42,053 Inputs 20,193 21,618 Soybean 43,516 35,291 Soybean meal - hypro 2,527 12,142 Soybean oil 12,701 13,579Storeroom materials 118,498 131,609 Others 24,484 22,768 (+/-) Provision for losses/leftovers of inventories (a) 2,431 (1,910)(+/-) Provision for net realizable value (b) 6,911 10,955 340,234 349,862


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34

a) Provision for losses/leftovers of inventories

Provisions for losses or leftovers of inventories are calculated based on the technical losses estimated to incur during the transportation of commodities between farms and ports and is related to the following inventory items:

2017 2016Corn (1,052) (270)Soybean 3,426 (942)Soybean meal common (406) 65 Soybean meal hypro 428 (675)Soybean oil 35 (88) 2,431 (1,910)

Inventories of marketable products, corn, soybeans, common soybean meal, soybean meal, and soybean oil are valued at their fair value based on mark-to-market prices less costs to sell. Monthly, the cost of acquisition is compared, not including freight, warehousing and recoverable taxes, and the price, at the base date, equivalent in the market. Reference prices are public and are obtained from CBOT - Chicago Board Trading.

b) Provision for net realizable value

Provision is calculated to bring the inventories of agricultural products to the value between its cost and net realizable market value.

2017 2016Barley 25 -Corn (2,962) 2,267Cotton 14,877 16,032Soybean (3,798) (3,801)Soybean meal - common 579 543Soybean meal - hypro 174 (2,254)Soybean oil (2,077) (1,898)Wheat 93 66 6,911 10,955

13. Biological assets (consolidated)

The Group operates eight agricultural units (farms), which are: Água Quente, Itamarati, Tucunaré, SM01, SM02, SM03, Vale do Araguaia and Tanguro.

These farms are located in the state of Mato Grosso, in the cities of Sapezal, Campo Novo do Parecis, Querência, Rondonópolis, Itiquira and São Felix do Araguaia its activities consist on the agricultural exploration, mainly related to soybean, corn and cotton.

Below are shown the changes on the biological assets of the Group:


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35

Soybean Corn Cotton Animals Other TotalBalances as of January 01, 2016 117,241 12,993 13,016 2,093 12,704 158,047Production costs 180,570 34,906 51,573 6,606 2,250 275,905Harvested products, transferred to inventory (198,780) (27,734) (55,762) - - (282,276)Changes in fair value 40,686 (5,271) - - 10,107 45,522Sale of biological assets - - - (15,785) - (15,785)Acquisition of biological assets - - - 7,975 - 7,975Opening balance Amaggi Pecuária Ltda. - - - 7,656 - 7,656Others - - - 166 (8,998) (8,832)Balances as of December 31, 2016 139,717 14,894 8,827 8,711 16,063 188,212

Soybean Corn Cotton Animals Other TotalBalances as of January 01, 2017 139,717 14,894 8,827 8,711 16,063 188,212Production costs 164,064 54,970 81,093 3,771 2,788 306,686Harvested products, transferred to inventory (206,466) (48,747) (78,873) - 1 (334,085)Changes in fair value 49,903 (11,149) - 686 - 39,440Sale of biological assets - - - (9,320) - (9,320)Acquisition of biological assets - - - 7,525 - 7,525Others - - - (1,284) (3,312) (4,596)Conversion effect - - - (189) - (189)Balances as of December 31, 2017 147,218 9,968 11,047 9,900 15,540 193,673

2017 2016Current assets 178,433 172,132 Non-current assets 15,241 16,080 193,674 188,212

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

2017 2016Rubber trees - 850Soybean 176,433 173,966

Fair value measurement to all the cultures above have been categorized as level 3, based on the inputs used on the valuation technique.

Fair value of soybean 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.

The Group is exposed to several risks related to its plantations that are:

Regulatory and environmental risks

The Group is 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.


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36

Risk of supply and demand

The Group is exposed to the risk of price and sales volume of crops fluctuations. When possible, the Group 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 Group complies with the market and to ensure that projected volumes of extraction are consistent with the expected demand.

Weather and other risks

The Group plantations are exposed to damage from weather change, diseases, forest fires and other nature forces. The Group 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.

14. Advances to suppliers (consolidated)

2017 2016Domestic market 461,809 359,895Domestic market - performance 198,094 196,715 Domestic market - related parties (note 25) 248 2,234 Foreign market 14,288 18,942 (-) Credit and market risks, and impairment losses (10,770) (4,395) 663,669 573,391 Current assets 583,523 553,787 Non-current assets 80,146 19,604

In order to reduce credit risk on advances to suppliers, the Group adopts as a practice the detailed analysis of the financial and market situation of its suppliers, establishing a credit limit and deadlines, as well as permanently monitoring the outstanding balance. The Group has a credit committee composed of the commercial and financial board that approve or refuse such credit applications.

The analyzes basically have three parameters:

quantitative analysis containing a careful evaluation of the economic and financial indices related to indebtedness, liquidity, profitability;

a qualitative analysis that should include the corporate structure, consultations with tax authorities, Sintegra and Serasa, technical visit report, time in the market, commercial references, list of main suppliers, company and / or company assets ; and

analysis of guarantees, examined by the areas of Credit, Legal, Environmental Partner and requested under the criterion of the discretion of its management.

The Credit and Origination area monitors the relationship between credit granted to suppliers, against their volume of product delivery and the respective mark-to-market of contracts still


December 31, 2017

37

outstanding. This monitoring aims to ensure the monitoring of the credit limits available and to suggest, when feasible, possible revaluations of such limits.

Advances with prices to be fixed and fixed prices are secured by commercial pledge represented by ballot farmer and guarantees provided by third parties.

Provision for credit risk and calculation of estimates of valuation risk performed by the Group’s credit department, with the main premise being the non-receipt of the products that originated the advance.

15. Recoverable taxes and current taxes assets (consolidated)

2017 2016Recoverable taxes Contribution for social security funding - COFINS 30,006 41,099 Social integration program - PIS 9,139 9,640 Tax on operations related to the circulation of goods and provision of transport services - ICMS 14,391 11,098 Value added tax - IVA 7,999 9,236 Other taxes 4,666 3,585 66,201 74,658Current taxes assets Income tax - IRPJ 25,258 44,644 Social contribution - CSLL 57,060 20,277 82,318 64,921 Total 148,519 139,579

Current assets 130,755 111,073 Non-current assets 17,764 28,506

16. Loans granted (consolidated)

CurrencyWeighted average rate on 12/31/2017 Maturity

Carrying amount 2017 2016

Related parties (note 25) Amaggi Construções de Rodovias Ltda. BRL 85% CDI Undetermined 16 16 Amaggi Luxembourg S.à r.l. USD 2% p.y. August-2018 6,574 - Amaggi S.A. USD - December-2017 - 21,500 Cidezal Agrícola Ltda. BRL 85% CDI Undetermined 159 58 Navegações Unidas Tapajós S.A. BRL 80% CDI Undetermined 22,257 20,401 Rio Madeira Adm. Bens Ltda. BRL 80% CDI Undetermined 108 - 29,114 41,975 Third parties EASA - Estaleiros Amazônia S.A. BRL 1% p.m. December-2017 1,179 -ERIN - Estaleiros Rio Negro Ltda. BRL 1% p.m. December-2017 2,775 - 3,954 - Total 33,068 41,975 Current assets 10,528 -Non-current assets 22,540 41,975


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38

17. 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:

Consolidated Company 2017 2016 2017 2016Deemed cost (138,011) (139,604) - -Employees' profit sharing 9,436 9,571 - -Exchange rate variation (39,677) (76,120) - - Fair value of biological assets (17,261) (13,366) - - Fair value of derivatives (1,625) 11,190 - - Market to market of inventories (2,231) (3,759) - - Functional currency adjustments 9,211 (7,160) 322 403 Impairment 298 3,333 - -Incentivized depreciation (54,981) (38,094) - -Negative goodwill on investment (2,702) (2,702) - -Tax losses carry forward 11,309 35,342 - -Others 3,967 5,001 - - (222,267) (216,368) 322 403 Assets 2,642 2,860 322 403Liabilities (224,909) (219,228) - -

The changes in deferred tax assets and liabilities, including the effect on result and equity of this period are disclosure as below:

Consolidated

2016Effect on

resultEffect on

equity

Cumulative translation

adjustments 2017Deemed cost (139,604) 3,053 (1,460) - (138,011)Employees' profit sharing 9,571 (135) - - 9,436Exchange rate variation (76,120) 36,443 - - (39,677)Fair value of biological assets (13,366) (3,903) - 8 (17,261)Fair value of derivatives 11,190 (12,815) - - (1,625)Market to market of inventories (3,759) 1,528 - - (2,231)Functional currency adjustments (7,160) 16,371 - - 9,211 Impairment 3,333 (3,035) - - 298 Incentivized depreciation (38,094) (16,887) - - (54,981)Negative goodwill on investment (2,702) - - - (2,702)Tax losses carry forward 35,342 (24,045) - 12 11,309 Others 5,001 (1,034) - - 3,967 (216,368) (4,459) (1,460) 20 (222,267)


December 31, 2017

39

Company

2016 Effect on result 2017Functional currency adjustments 403 (81) 322 403 (81) 322

Deferred tax assets were recognized. The Company reviewed its estimates of future results and considered it probable that future taxable income would be available and could be used against such expenses.

b) Income tax and social contribution

In view of the tax base of assets and liabilities being kept in real for their historical value and the accounting basis in US dollars (functional currency), fluctuations in the exchange rate impacted the tax base.

Consolidated

2017 2016Income before income tax and social contribution, net of employees' profit sharing 225,026 266,542 Conversion effect and differences between corporate and tax 115,368 531,206 340,394 797,748 (*) Combined tax rate 34% 34% (=) Income tax and social contribution at combined tax rates (115,734) (271,234) (+/-) Adjustments of tax related: Compensation of tax loss carry forwards (1,064) (8,592)Impacts depreciation by deemed cost 1,832 (3,558)Impacts depreciation encouraged (19,112) 8,139Impacts of equity income 57,493 108,918Impacts of exchange rate differences cash or accrual 1,323 (1,211)Impacts of losses on settlement - net assets (749) -Profit impact on exploration and others 11,968 13,608Tax depreciation against book depreciation 4,262 2,317Taxation differences from deemed profits companies 1,653 3,314Other additions/deletions 508 (28,598)(=) Total (57,620) (176,897) (+/-) Income tax and social contribution - deferred (4,459) (114,314)(-) Income tax and social contribution - current (53,161) (62,583)(=) Income tax and contribution on income (57,620) (176,897) (*) Effective rate 16% 22%


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40

Company

2017 2016Income before income tax and social contribution, net of employees' profit sharing 110,268 68,569Conversion effect and differences between corporate and tax (8,653) 140,939 101,615 209,508 (*) Combined tax rate 34% 34% (=) Income tax and social contribution at combined tax rates (34,549) (71,233) (+/-) Adjustments of tax related: Impacts of equity income 34,622 72,094Other additions/deletions (154) (1,039)(=) Total (81) (178) (+/-) Income tax and social contribution - deferred (81) (178)(=) Income tax and contribution on income (81) (178) (*) Effective rate 0% 0%

Income tax reduction

By the year 2018 the indirect controlled Hermasa Navegação da Amazônia S.A. and the direct controlled Amaggi Exportação e Importação Ltda., has an income tax established in accordance with article 3, paragraph 2 of law number 9.532/97, which arises from a development project approved by Superintendence for the Development of the Amazon (SUDAM).

18. Investments

The Group recorded a gain of U$ 117,932 in the parent company and a gain of U$ 4,745 in the consolidated on December 31, 2017 and U$ 72,285 in the parent company and loss of U$ 62 in the consolidated on December 31, 2016 of equivalence assets of its affiliates, subsidiaries and jointly-controlled ventures in the financial statements.

a. Changes on investments

Consolidated Balances on

January 1, 2016

Equity method


adjustments

Effects on

equity

Receipt of dividends and interest equity Transfers Addition Others

Balances on December

31, 2016 Amaggi & LD Commodities S.A. 13,986 1,628 - 71 - (15,685) - - - Amaggi & LDC Holding S.A. - (936) (207) 82 - 36,807 - - 35,746 Amaggi & LDC Terminais Portuários S.A. 18,167 1,339 1,616 - - (21,122) - - - Navegações Unidas Tapajós S.A. 4,343 (3,717) - - - - - - 626 Rio Madeira Administração de Bens Ltda. 2,982 (149) 315 - (2,528) - - 28 648 Terminal Fronteira Norte - Logística S.A. (b) - (649) (278) - - - 145,000 - 144,073 Terminal de Granéis do Guarujá S.A. 17,278 2,422 2,203 - (3,295) - - - 18,608 Unisoja S.A. 1,548 - - - - - - - 1,548 Other 119 - - - (3) - - - 116 Total 58,423 (62) 3,649 153 (5,826) - 145,000 28 201,365

Balances on

January 1, 2017

Equity method


adjustments

Effects on

equity

Receipt of dividends and interest equity Disposal Addition

Loss on settlement - net assets Others

Balances on December 31,

2017Amaggi Louis Dreyfus Zen-Noh Holdings S.A. (a) 35,746 1,264 (6) (121) - (12,417) - - - 24,466Navegações Unidas Tapajós S.A. 626 1,332 - - - - 14,326 - 24 16,308Rio Madeira Administração de Bens Ltda. 648 (90) (8) - - - - - 34 584Terminal de Granéis do Guarujá S.A. 18,608 3,887 (350) - (4,241) - - - - 17,904Terminal Fronteira Norte - Logística S.A. (b) 144,073 (1,648) 278 - - - - (2,146) - 140,557Unisoja S.A. 1,548 - - - - - - - - 1,548Other 116 - - - - (1) - - - 115Total 201,365 4,745 (86) (121) (4,241) (12,418) 14,326 (2,146) 58 201,482


December 31, 2017

41

(a) Amaggi Louis Dreyfus Zen-Noh Holdings S.A.

The sale of 16.67% of its participation in Amaggi & LDC Holding S.A. to Zen-Noh Grain Brasil Holdings Ltda. was carried out for the amount of 43,500, as result of 31,083, recorded through profit and loss.

(b) Terminal Fronteira Norte – Logística S.A.

Business combinations

On December 12, 2016, the subsidiary Amaggi Exportação e Importação Ltda. entered into a purchase and sale agreement of 190,017,642 (one hundred and ninety million, seventeen thousand, six hundred and forty two) shares from Terminal Fronteira Norte - Logística S.A., in order to provide logistics services and port operations, coming from or destined for water transport in the Tapajós River, for the value of U$ 145,000 paid in cash.

The Company determined acquisition data for December 31, 2016 for accounting purposes in accordance with Technical Pronouncement CPC 15 (IFRS 3) - Business Combination.

The effects are related to the measurement of the fair value of the assets acquired, liabilities assumed and consideration given their respective disclosures are presented in the tables below:

i. Fair value of assets acquired and liabilities assumed

Balances as of December 31, 2016 U$ Property, plant and equipment 17.217License 59,476Deferred income and social contribution taxes (26,076)Total net identifiable assets 50,617

ii. Goodwill on acquisition

The goodwill recognized as a result of the acquisition was identified as follows:

Total amount of consideration transferred U$ Value of the stock purchase agreement 145,000 Amount of stockholders' equity of the acquire prior to acquisition (58,536)(-) Fair value of identifiable net assets (50,617) Goodwill 35,847

The fair value of the investment with joint arrangement between the companies Amaggi Exportação e Importação Ltda. and Bunge Alimentos S.A., acquired was obtained through an appraisal report at market value, according to the usual valuation techniques for this type of operation.


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42

The goodwill is mainly attributable to the increase in cash generation expected in the coming years, due to the synergies expected to be obtained from the integration of the entity into the existing business of the Parent Company.

Company

Balances on January 1,

2016 Equity

method


adjustmentsEffects on

equity

Receipt of dividends and interest equity Disposal Other


31, 2016 Agropecuária Maggi Ltda. 273,797 (7,837) 515 - - (146) (22) 266,307 Amaggi Exportação e Importação Ltda. 563,197 80,126 9,575 (1,062) (3,829) (64,069) (383) 583,555 Amaggi Paraguay S.R.L. 10 (4) - - - - - 6 Total 837,004 72,285 10,090 (1,062) (3,829) (64,215) (405) 849,868

Balances on

January 1, 2017

Equitymethod


adjustments Effects on

equity

Receipt of dividends and interest equity Disposal


31, 2017Agropecuária Maggi Ltda. 266,307 33,853 (150) - - (8,977) 291,033Amaggi Comércio e Serviços Ltda. - 1 - - (1) - -Amaggi Exportação e Importação Ltda. 583,555 84,054 (1,286) 1,951 (3,284) (43,714) 621,276Amaggi Paraguay S.R.L. 6 24 - - - - 30Total 849,868 117,932 (1,436) 1,951 (3,285) (52,691) 912,339

b. Information concerning the direct subsidiaries

2016

Share % Total assets Total liabilitiesTotal

equity Net income

for the periodAgropecuária Maggi Ltda. 59.03065% 1,350,293 894,967 466,283 (10,957)Amaggi Exportação e Importação Ltda. 82.71177% 2,614,207 1,836,040 654,928 123,239 112,282

2017

Share % Total assets Total liabilitiesTotal

equity Net income for the year

Agropecuária Maggi Ltda. 59.03065% 1,365,896 883,413 437,393 45,090Amaggi Exportação e Importação Ltda. 82.71177% 2,781,657 1,971,420 699,534 110,703 155,793


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43

19. Property, plant and equipment

Consolidated

Cost Useful life (in years)

Balances on January

1, 2016 Addition Disposals Transfers

Opening balance Amaggi Pecuária

Ltda. Conversion

effect


31, 2016Lands - 564,400 1,126 (1,175) - - 47 564,398Reservoirs, dams and aqueducts 50.00 18,272 - - - - 3,620 21,892Buildings 36.67 312,712 8,984 (2,203) 16,638 - 13,011 349,142Machine and equipment 14.60 414,893 18,874 (8,942) 11,458 24 6,859 443,166Facilities 23.22 43,558 2,662 (103) 3,242 2 - 49,361Vehicles 4.95 15,618 613 (1,518) 935 - 72 15,720Fluvial fleet 21.24 387,847 1,396 (87,595) 34,877 - - 336,525Aircraft 20.00 34,810 1,809 (6,761) 5,670 - - 35,528Work in progress (a) - 79,347 4,176 - (36,198) 163 1,132 48,620Advances to suppliers - 10,474 33,286 - (37,488) - - 6,272Other 8.28 49,095 6,138 (1,050) 866 394 104 55,547 1,931,026 79,064 (109,347) - 583 24,845 1,926,171Depreciation Reservoirs, dams and aqueducts (1,073) (409) - - - (242) (1,724)Buildings (46,088) (6,778) 1,706 18 - (1,111) (52,253)Machine and equipment (99,744) (25,605) 6,795 56 (3) (1,058) (119,559)Facilities (6,167) (1,701) 66 (169) - - (7,971)Vehicles (8,132) (2,406) 1,314 (27) - (34) (9,285)Fluvial fleet (102,450) (17,572) - - - - (120,022)Aircraft (4,430) (1,751) 2,020 - - - (4,161)Other (10,641) (3,668) 540 122 (2) (7) (13,656) (278,725) (59,890) 12,441 - (5) (2,452) (328,631)

Impairment provision (b) (6,630) (3,173) - - - (9,803)

Net carrying amount 1,645,671 22,393 1,587,737


Balances on January

1, 2017 Addition Disposals Transfers Conversion

effect


31, 2017Lands 564,398 2,815 - - (4) 567,209Reservoirs, dams and aqueducts 50.00 21,892 - - - (324) 21,568Buildings 37.90 349,036 - (473) 6,863 (1,153) 354,273Machine and equipment 14.76 443,166 8,642 (5,730) 14,869 (629) 460,318Facilities 23.55 49,361 - (7) 492 - 49,846Vehicles 4.94 15,720 1,197 (1,237) 2 (4) 15,678Fluvial fleet 21.30 336,525 16 (6) 28,498 - 365,033Aircraft 20.00 35,528 - (36) - - 35,492Work in progress (a) 48,620 20,049 (5) (42,358) (129) 26,177Advances to suppliers 6,272 1,149 (3,629) - - 3,792Other 8.27 55,547 8,812 (676) (8,366) (17) 55,300 1,926,065 42,680 (11,799) - (2,260) 1,954,686Depreciation Reservoirs, dams and aqueducts (1,724) (447) - - 41 (2,130)Buildings (52,146) (7,211) 81 (94) 179 (59,191)Machine and equipment (119,559) (27,378) 3,287 (764) 155 (144,259)Facilities (7,971) (1,852) 5 847 - (8,971)Vehicles (9,285) (2,365) 1,061 (1) 3 (10,587)Fluvial fleet (120,022) (17,730) 3 - - (137,749)Aircraft (4,161) (1,775) 36 - - (5,900)Other (13,657) (4,080) 319 12 2 (17,404) (328,525) (62,838) 4,792 - 380 (386,191)

Impairment provision (b) (9,803) - 7,909 - - (1,894)

Net carrying amount 1,587,737 (1,880) 1,566,601


December 31, 2017

44

Company


Balances on January

1, 2016 Addition Disposals Transfers Conversion

effect


31, 2016Machine and equipment 10.00 42 - - (26) - 16 Furniture and fixtures 10.00 71 - - 24 - 95 Hardware 5.00 6 17 - 2 - 25 119 17 - - - 136Depreciation Machine and equipment (8) (3) - 7 - (4)Furniture and fixtures (14) (8) - (7) - (29)Hardware (2) (2) - - - (4) (24) (13) - - - (37) Net carrying amount 95 99


Balances on January 1, 2017 Addition Disposals Transfers

Conversion effect


31, 2017Machine and equipment 10.00 16 - - - - 16Furniture and fixtures 10.00 95 3 - - - 98Hardware 5.00 25 - - - - 25 136 3 - - - 139Depreciation Machine and equipment (4) (2) - - - (6)Furniture and fixtures (29) (10) - - - (39)Hardware (4) (5) - - - (9) (37) (17) - - - (54) Net carrying amount 99 85

(a) On December 31, 2017, the balance of work in progress refers mainly to:

i. Construction projects of river tugs and pusher craft and construction of barges in Itacoatiara city, state of Amazonas in indirect subsidiary Hermasa Navegação da Amazônia S.A. (U$ 8,636);

ii. UHE Cachoeirão 64 MW and UHE Juruena 46 MW (projects on stage of approbation by ANEEL - Agência Nacional de Energia Elétrica) and PCH Jesuíta 23 MW (on stage of review of its basic project approved), both in Sapezal city, state of Mato Grosso (U$ 6,825);

iii. Expansion of warehouses and factories of the operation capacity of units in the city Sapezal and Lucas do Rio Verde, state of Mato Grosso (U$ 464);

iv. Construction of support buildings, opening of new areas and other improvements (U$ 7,724).

(b) Impairment amounts are related to property, plant and equipment acquired by the indirect subsidiary Hermasa Navegação da Amazônia S.A. to transport minerals in Brazilian north region, whose contracts were terminated. Most of the vessels were put into operation in 2017, generating cash flow to the Group.


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45

20. Accounts payable to suppliers

Consolidated Company 2017 2016 2017 2016Domestic market 167,847 117,162 3 3 Domestic market - related parties (note 25) 119 70 - 259 Foreign market 4,109 15,453 - - Foreign market - related parties (note 25) 6,307 5 - - 178,382 132,690 3 262 Current liabilities 176,778 131,062 3 262 Non-current liabilities 1,604 1,628 - -

The Company's exposure to currency and liquidity risks related to suppliers is disclosed in note 23.

21. Loans and financing (consolidated)

CurrencyWeighted average rate on 12/31/2017 Maturity

Carrying amount

2017 2016ACC - Advances on exchange contracts USD 2.29% p.y. 2018 116,450 45,011CCB - Certificate of bank credit USD - 2017 - 285FCO - Constitutional Funds Financing Midwest (b) BRL 7.90% p.y. 2018-2031 103,965 110,454FINAME - Financing of Machinery and Equipment BRL 6.61% p.y. 2018-2027 49,769 52,069FINAME - Financing of Machinery and Equipment USD 4.80% p.y. 2018-2027 2,331 -FINIMP - Import financing USD 3.30% p.y. + Libor 2018-2021 13,049 16,446FMM - Merchant Marine Fund (c) USD 3.29% p.y. 2018-2032 81,477 88,370FNO - Constitutional Funds the North BRL 3.73% p.y. 2018-2032 81,193 73,418NCE - Export notes BRL 0.53% p.y. + CDI 2018-2020 82,423 37,483PPE - Prepayment (a) USD 2.83% p.y. + Libor 2018-2026 1,441,598 1,334,922Related party loans (note 25) BRL 85% CDI Undetermined 6,167 951

1,978,422 1,759,409 Current liabilities 499,868 535,555Non-current liabilities 1,478,554 1,223,854

On December 31, 2017 and 2016 the loans are guaranteed by promissory notes backed by quota holders, liens on rural properties and commercial pledge.

The maturity of maturities for loans and financing and other risks related to these financial liabilities are presented in note 23.

a. Prepayment

The Group has prepayment contracts which provide compliance with financial indicators (Covenants).

The covenants required, common to loans and financing, have been fully achieved by the Group and are presented as follows: Current Ratio, Debt Equity Ratio and Interest Coverage Ratio.

Additionally, the Group has the following credit line: U$ 110,000 in the Stand-by Revolving Credit Facility mode (SRCF), with the purpose of improving its financial liquidity. The amount is available for borrowing at any time until February 2018. If used,


December 31, 2017

46

the credit line will be an "ACC". Until December 2017, the Group did not use this credit facility.

b. Constitutional Funds Financing of Midwest

The financing operations of Constitutional Funds Midwest (FCO) include credits given to the investment on small hydroelectric plants on the state of Mato Grosso.

(i) Interest rate

The interest rate agreed on the contract is 10% p.y., however, if the installments are paid until its maturity date it is given a discount of 15% of the interest amounts.

(ii) Covenants

All covenants related to financial ratios, such as limits to the coverage obtained debt service of EBITDA / net financial expense ratio, and also normal restrictions on creation of new liens on the assets, significant changes in the Company's control, sale of property, plant and payment of dividends in excess of the minimum required by law in cases of default on loans and transactions with subsidiaries have been complied with by the Company on the base date of these financial statements.

(iii) Guarantees

Guaranteeing the financing operations the shareholders have engaged:

100% of Maggi Energia S.A., Segredo Energia S.A. and Ilha Comprida Energia S.A. shares;

The rights arising from authorizations of ANEEL to the following entities: Segredo Energia S.A., Ilha Comprida Energia S.A. and Divisa Energia S.A.; and

The revenues earned through the energy sell of Segredo Energia S.A., Ilha Comprida Energia S.A., Maggi Energia S.A. and Divisa Energia S.A.

It was also constituted chattel mortgages of the assets financed and offered guarantees of the direct controlling entity Amaggi Exportação e Importação Ltda.

c. Merchant Marine Fund

The indirect controlled entity Hermasa Navegação da Amazônia S.A. is part in 5 financing contracts under the modality of Merchant Marine Fund (FMM), through its agents, the Banco Nacional de Desenvolvimento Econômico e Social (BNDES), Banco do Brasil S.A. and Banco da Amazônia S.A., used to river fleet acquisition.

(i) Covenants

The Company needs to attend to many restrictive clauses related to these contracts, between them, the entity needs:


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47

To respect all clauses of the agreements;

To constitute reserve accounts;

To maintain a minimum level, during all the duration of the contract, of Ratio of Coverage of Debit Service;

To maintain a minimum level, during all the duration of the contract, of Ratio of Coverage of Debit; and

Not to distribute dividends beyond the minimum mandatory dividends without the previous written authorization of the bank.

The required covenants were fully complied with.

(ii) Guarantees

The shareholders have given, as guarantees:

100% of the financed assets;

The credit rights of the services provided with the use of the assets financed;

Guarantees provided by André Maggi Participações S.A.; and

Guarantees provided by Amaggi Exportação e Importação Ltda.

The maturity of maturities for loans and financing is presented in note 23.

22. Advances from customers (consolidated)

2017 2016Domestic market (a) 232,782 234,330 Foreign market 32,675 10,447 Foreign market - related parties (note 25) - 21,563 265,457 266,340

(a) Advances to suppliers balances refer mainly to the performance of operations. Balance at December 31, 2017 is U$ 199,547 and at December 31, 2016 was U$ 198,857.

23. Financial instruments

The Group has exposure to the following risks arising from financial instruments:

Credit risk; Liquidity risk; and Market risk.


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This note presents information about the Group exposure to each of the above risks, the Group objectives, polices and processes for measuring risks, risk management and capital management.

23.1 Risk management framework

The CEO - Chief Executive Officer has overall responsibility for the establishment and oversight Group’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 Group 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.

23.2 Credit risk

Credit risk is the risk of financial losses to the Group due to a customer or counterparty in a financial instrument and arises from a fail of them to meet their contractual obligations.

23.2.1 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:

Consolidated Company Note 2017 2016 2017 2016

Bank deposits (a) 9 137,671 64,862 11 15 Derivative financial instruments 65,968 105,013 - -Loans granted 16 33,068 41,975 - -Marketable securities (b) 10 483,728 292,022 - -Securities brokerage operations 3,572 37,297 - -Trade accounts receivable (c) 11 196,437 170,666 - -Other credits 21,256 21,924 - - 941,700 733,759 11 15

(a) Bank deposits

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

(b) Marketable securities

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


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(c) 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 Group 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 Group's exposure to credit risk is influenced mainly by the individual characteristics only performed through advances.

The segment where the Group operates rarely presents losses by default, however, when necessary, it is recorded a provision for doubtful accounts, analyzing each customer individually.

The composition by class of maturity at the end of the reporting period of the balances was as follows:

Consolidated 2017 2016

Future 164,295 127,641Overdue to 30 days 6,304 20,000Overdue 31 to 60 days 8,077 9,721Overdue 61 to 90 days 2,413 3,316Overdue 91 to 120 days 1,930 1,705Overdue 121 to 150 days 5,524 3,463Overdue 151 to 180 days 1,310 816Overdue 181 to 210 days 3,438 979Overdue 211 to 360 days 3,146 3,025Overdue by more than 360 days 1,508 755

197,945 171,421

Management believes that amounts that have not been impaired due to impairment and which are past due for more than 30 days are still fully chargeable, based on historical payment behavior and detailed analyzes of the credit risk of the respective customers.

Amounts of impairment related to trade accounts receivable are reported on note 11.

23.3 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. Group’s 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 the Group’s reputation.


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

Consolidated

December 31, 2017 Note Total

amount Contractual

Cash flowUntil 1

year1 - 2

years 2 - 5

years More than

5 yearsNon-derivative financial liabilities Accounts payable to suppliers 20 178,382 178,382 176,778 1,604 - - Loans and financing 21 1,978,422 2,233,687 517,700 393,451 881,687 440,849 Advances from customers 22 265,457 265,457 265,457 - - - Securities brokerage operations 12,492 12,492 12,492 - - - Others accounts payable 6,219 6,219 6,219 - - - 2,440,972 2,696,237 978,646 395,055 881,687 440,849 Derivative financial liabilities Derivative financial liabilities 60,631 60,631 60,631 - - - 60,631 60,631 60,631 - - - Net 2,501,603 2,756,868 1,039,277 395,055 881,687 440,849


amount Contractual

Cash flowUntil 1

year1 - 2

years 2 - 5

years More than

5 yearsNon-derivative financial liabilities Accounts payable to suppliers 20 132,690 132,690 131,062 1,628 - -Loans and financing 21 1,759,409 2,004,138 582,695 329,388 631,067 460,988Advances from customers 22 266,340 266,340 266,340 - - -Securities brokerage operations 4,434 4,434 4,434 - - -Others accounts payable 9,294 9,294 9,294 - - - 2,172,167 2,416,896 993,825 331,016 631,067 460,988Derivative financial liabilities Derivative financial liabilities 136,323 136,323 136,323 - - - 136,323 136,323 136,323 - - - Net 2,308,490 2,553,219 1,130,148 331,016 631,067 460,988

Company


amount Contractual

Cash flowUntil 1

year1 - 2

years 2 - 5

years More than

5 yearsNon-derivative financial liabilities Accounts payable to suppliers 20 3 3 3 - - -Others accounts payable 681 681 681 - - - Net 684 684 684 - - -


amount Contractual

Cash flowUntil 1

year1 - 2

years 2 - 5

years More than

5 yearsNon-derivative financial liabilities Accounts payable to suppliers 20 262 262 262 - - -Others accounts payable 3,283 3,283 3,283 - - - Net 3,545 3,545 3,545 - - -

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.

As disclosed on note 21, Group maintains loans with covenants.


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23.4 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 Group 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.

23.4.1 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 Group, reducing its assets or increasing its obligations.

As the Group is 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

a) Non-deliverable of currency

2017 2016

Position Kind of asset Notional MaturityFair

value Effect on

profit/loss Notional Maturity Fair

value Effect on

profit/lossLong Dollar - - - - 366.294 2017 (12,964) (12,964)Long Dollar 246.524 2018 (55) (55) - - - -Long Swiss franc 10.210 2018 (42) (42) - - - -Short Dollar - - - - 865.957 2017 59,142 59,142Short Dollar 807.419 2018 (1,963) (1,963) 1.554 2018 85 85Short Euro 7.700 2018 3 3 - - - -

(2,057) (2,057) 46,263 46,263


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b) SWAP of currency

2017 2016

Position Kind of asset Notional Maturity Fair

valueEffect on


value Effect on

profit/loss

Active Dollar + pre fixed

rate - - - - 108.580 2017 111,900 111,900


rate 185.055 2018 9,711 9,711 15.095 2018 15,070 15,070


rate 80.315 2019 5,058 5,058 80.315 2019 81,364 81,364


rate 6.852 2020 211 211 - - - -


rate 97.738 2022 3,340 3,340 - - - -Passive %CDI - - - - 108.580 2017 (125,650) (125,650)Passive %CDI 185.055 2018 (5,498) (5,498) 15.095 2018 (16,349) (16,349)Passive %CDI 80.315 2019 (10,353) (10,353) 80.315 2019 (82,433) (82,433)Passive %CDI 6.852 2020 (295) (295) - - - -Passive %CDI 97.738 2022 (4,798) (4,798) - - - -

(2,624) (2,624) (16,098) (16,098)

Exchange rate sensitivity analysis

The Group has three scenarios for sensitivity analysis, a probable, shown below, and two that can affect the deterioration of the fair value of financial instruments of the Group.

Consolidated

Scenarios Risk Remote Possible

Probable Possible Remote

(-50%) (-25%) (+25%) (+50%) Non-deliverable of currency Variation of Dollar (1,029) (1,543) (2,057) (2,571) (3,086)SWAP of currency Variation of Dollar (1,312) (1,968) (2,624) (3,280) (3,936) (2,341) (3,511) (4,681) (5,851) (7,022)

Exposure to foreign exchange risk

The summary of the quantitative data on the Company's exchange risk exposure, as reported to management is demonstrated below:

Consolidated Company Note 2017 2016 2017 2016Trade accounts receivable Real 54,566 39,137 - - Dollar 141,871 131,529 - - 11 196,437 170,666 - -Accounts payable to suppliers Real (141,232) (100,818) (3) (262) Dollar (37,150) (31,872) - - 20 (178,382) (132,690) (3) (262)Loans and financing Real (323,517) (274,375) - - Dollar (1,654,905) (1,485,034) - - 21 (1,978,422) (1,759,409) - -Net exposures of the balance sheet Real (410,183) (336,056) (3) (262) Dollar (1,550,184) (1,385,377) - -


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23.4.2 Interest rate risk (consolidated)

The Group 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 2017 2016Variable rate financial instruments Loans and financing 21 (1,543,237) (1,389,136)Loans granted 16 22,540 20,475 Marketable securities 468,053 292,022 (1,052,644) (1,076,639)Fixed rate financial instruments Loans and financing 21 (435,185) (370,273)Loans granted 16 10,528 21,500 Marketable securities 15,675 - (408,982) (348,773) Net (1,461,626) (1,425,412)

The Group 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.

Hedge instruments contracted to mitigate this risk that prevails on the date of these financial statements are presented below:

Consolidated

a) SWAP of interest rates

2017 2016

Position Kind of asset Notional Maturity Fair

value Effect on


value Effect on

profit/loss Active CDI + Pre fixed rate - - - - 57.203 2017 37,576 37,576 Active CDI + Pre fixed rate 30.000 2020 4,593 4,593 - - - - Active CDI + Pre fixed rate 152.846 2018 147,630 147,630 - - - - Active Pre fixed rate 11.482 2019 261 261 11.482 2019 418 418 Active Pre fixed rate 35.081 2020 8,654 8,654 18.301 2020 1,916 1,916 Active Pre fixed rate 8.730 2023 732 732 9.298 2023 840 840 Active Pre fixed rate 5.609 2024 788 788 6.461 2024 982 982 Active Pre fixed rate 13.936 2027 992 992 13.936 2027 1,100 1,100

Passive Dollar + Libor + pre

fixed rate

- - - - 44.688 2017 (46,105) (46,105)

Passive Dollar + Libor + pre

fixed rate

152.846 2018 (147,630) (147,630) - - - - Passive Dollar + Pre fixed rate - - - - 12.515 2017 (4,993) (4,993) Passive Dollar + Pre fixed rate 11.482 2019 (3,329) (3,329) 11.482 2019 (3,459) (3,459) Passive Dollar + Pre fixed rate 65.081 2020 (12,558) (12,558) 18.301 2020 1,444 1,444 Passive Dollar + Pre fixed rate 8.730 2023 (3,022) (3,022) 9.298 2023 (3,157) (3,157) Passive Dollar + pre fixed rate 5.609 2024 (2,895) (2,895) 6.461 2024 (3,451) (3,451) Passive Dollar + Pre fixed rate 13.936 2027 (4,478) (4,478) 13.936 2027 (4,252) (4,252)

(10,262) (10,262) (21,141) (21,141)


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Interest rate sensitivity analysis


Consolidated

Scenarios Risk Remote Possible

Probable Possible Remote

(-50%) (-25%) (+25%) (+50%)SWAP of interest rates Variation of interest rates (5,131) (7,697) (10,262) (12,828) (15,393) (5,131) (7,697) (10,262) (12,828) (15,393)

23.4.3 Commodities price risk

Group sale soybean and corn, products and sale soybean meal, soybean oil and corn (commodities), originating from own production and third parties.

Group acquires the grains in the domestic market and sells industrialized products and grains in the domestic or foreign market.

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 industrialized products are done simultaneously, using hedge tools to protect prices when clients are not immediately available in the moment of grains acquisition.

The Group 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:


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Consolidated

a) Future of commodities

2017 2016

Position Kind of asset Notional

(Ton.) Maturity Fair value Effect on

profit/loss Notional


profit/loss Long Corn - - - - 224.676 2017 (1,283) (1,283) Long Corn 73.929 2018 (551) (551) - - - - Long Singapore-180 - - - - 4.488 2017 321 321 Long Soybean - - - - 554.105 2017 (15,987) (15,987) Long Soybean 523.202 2018 (7,718) (7,718) 2.041 2018 (2) (2) Long Soybean 8.164 2019 11 11 - - - - Long Soybean meal - - - - 10.161 2017 (727) (727) Long Soybean meal 41.822 2018 (765) (765) - - - - Long Soybean oil - - - - 5.879 2017 (1,778) (1,778) Long Soybean oil 7.593 2018 (90) (90) - - - - Long Wheat 2.900 2018 (19) (19) - - - - Short Corn - - - - 676.233 2017 9,402 9,402 Short Corn 697.905 2018 6,290 6,290 - - - - Short Soybean - - - - 734.952 2017 9,442 9,442 Short Soybean 2.053.704 2018 31,369 31,369 12.316 2018 (33) (33) Short Soybean 9.117 2019 (6) (6) - - - - Short Soybean meal - - - - 80.559 2017 3,752 3,752 Short Soybean meal 283.861 2018 4,554 4,554 - - - - Short Soybean oil - - - - 3.783 2017 1,275 1,275 Short Soybean oil 74.190 2018 1,621 1,621 - - - -

34,696 34,696 4,382 4,382

b) Term of commodities

2017 2016

Position Kind of asset Notional


profit/loss Notional


profit/loss Long Barley 25.772 2018 191 191 - - - -Long Corn - - - - 780.527 2017 (13,683) (13,683)Long Corn 502.652 2018 (1,911) (1,911) - - - -Long Soybean - - - - 1.887.724 2017 (19,708) (19,708)Long Soybean 2.265.938 2018 (5,742) (5,742) 579 2018 211 211Long Soybean 999 2019 7 7 - - - -Long Wheat - - - - 47.403 2017 521 521Long Wheat 24.697 2018 31 31 - - - -Short Barley 25.000 2018 118 118 - - - -Short Corn - - - - 1.173.561 2017 (6,209) (6,209)Short Corn 689.254 2018 (4,682) (4,682) - - - -Short Soybean - - - - 1.928.896 2017 (8,701) (8,701)Short Soybean 1.655.486 2018 (4,942) (4,942) - - - -Short Soybean hull - - - - 667 2017 (1) (1)Short Soybean meal - - - - 152.238 2017 3,535 3,535Short Soybean meal 319.230 2018 3,480 3,480 - - - -Short Soybean oil - - - - 73.098 2017 (706) (706)Short Soybean oil 62.017 2018 (738) (738) - - - -Short Wheat - - - - 85.000 2017 25 25Short Wheat 158.368 2018 (228) (228) - - - -

(14,416) (14,416) (44,716) (44,716)

Commodity price risk sensitivity analysis



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Consolidated

Scenarios Risk Remote Possible Possible Remote (-50%) (-25%) Probable (+ 25%) (+50%)

Future of commodities Long position Price decrease (4,566) (6,849) (9,132) (11,415) (13,698)Short position Price increase 65,742 54,785 43,828 32,871 21,914 61,176 47,936 34,696 21,456 8,216 Term of commodities Long position Price decrease (3,712) (5,568) (7,424) (9,280) (11,136)Short position Price increase (3,496) (5,244) (6,992) (8,740) (10,488) (7,208) (10,812) (14,416) (18,020) (21,624)

53,968 37,124 20,280 3,436 (13,408)

23.5 Reconciliation of net effects of fair value of derivatives with balance sheet (consolidated)

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:

2017 2016Derivatives financial instruments (assets) 65,968 105,013 Derivatives financial instruments (liabilities) (60,631) (136,323)

5,337 (31,310)

b) Amounts by kind of operation:

2017 2016NDF of currency (2,057) 46,263 SWAP of currency (2,624) (16,098)SWAP of interest rates (10,262) (21,141)Future of commodities 34,696 4,382 Term of commodities (14,416) (44,716)

5,337 (31,310)

23.6 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 Group defines as result of operational activities divided by total equity, excluding non-redeemable preference shares, and non-controlling interests. The Board of Directors also monitors the level of dividends to ordinary shareholders.

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.


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23.7 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

December 31, 2017 Note

Designated as at fair

value Held to

maturity Loans and receivables

Liabilities at amortized

cost Carrying

amount Fair value

Fair value

hierarchyNon-derivative financial instruments Marketable securities 468,053 15,675 - - 483,728 483,728 Level 2 Bank deposits 9 - - 137,671 - 137,671 137,671 - Cash 9 - - 22 - 22 22 - Trade accounts receivable 11 - - 196,437 - 196,437 196,437 - Securities brokerage operations - - 3,572 - 3,572 3,572 - Loans granted 16 - - 33,068 - 33,068 33,068 - Others credits - - 21,256 - 21,256 21,256 - Accounts payable to suppliers 20 - - - (178,382) (178,382) (178,382) - Loans and financing 21 - - - (1,978,422) (1,978,422) (2,038,480) Level 2 Securities brokerage operations - - - (12,492) (12,492) (12,492) - Other accounts payable - - - (6,219) (6,219) (6,219) - 468,053 15,675 392,026 (2,175,515) (1,299,761) (1,359,819) Derivative financial instruments Assets 65,968 - - - 65,968 65,968 Level 2 Liabilities (60,631) - - - (60,631) (60,631) Level 2 5,337 - - - 5,337 5,337 Net 473,390 15,675 392,026 (2,175,515) (1,294,424) (1,354,482)



value Held to



cost Carrying

amount Fair value

Fair value

hierarchyNon-derivative financial instruments Marketable securities 292,022 - - - 292,022 292,022 Level 2Bank deposits 9 - - 64,862 - 64,862 64,862 -Cash 9 - - 29 - 29 29 -Trade accounts receivable 11 - - 170,666 - 170,666 170,666 -Securities brokerage operations - - 37,297 - 37,297 37,297 -Loans granted 16 - - 41,975 - 41,975 41,975 -Others credits - - 21,924 - 21,924 21,924 -Accounts payable to suppliers 20 - - - (132,690) (132,690) (132,690) -Loans and financing 21 - - - (1,759,409) (1,759,409) (1,751,587) Level 2Securities brokerage operations - - - (4,434) (4,434) (4,434) -Other accounts payable - - - (9,294) (9,294) (9,294) - 292,022 - 336,753 (1,905,827) (1,277,052) (1,269,230) Derivative financial instruments Assets 105,013 - - - 105,013 105,013 Level 2Liabilities (136,323) - - - (136,323) (136,323) Level 2 (31,310) - - - (31,310) (31,310) Net 260,712 - 336,753 (1,905,827) (1,308,362) (1,300,540)


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Company



value Held to



cost Carrying

amount Fair value

Fair value

hierarchyNon-derivative financial instruments Bank deposits 9 - - 11 - 11 11 - Accounts payable to suppliers 20 - - - (3) (3) (3) - Other accounts payable - - - (681) (681) (681) - - - 11 (684) (673) (673)



value Held to



cost Carrying

amount Fair value

Fair value

hierarchyNon-derivative financial instruments Bank deposits 9 - - 15 - 15 15 - Accounts payable to suppliers 20 - - - (262) (262) (262) - Other accounts payable - - - (3,283) (3,283) (3,283) - - - 15 (3,545) (3,530) (3,530)

24. Provision for contingencies

The Group is 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, based on information from its legal advisors, review of pending legal proceedings, and previous experience with regards to amounts claimed, recorded the following provisions in amounts considered sufficient to cover probable estimated losses from the current actions:

Balances at: Civil Labor Tax TotalJanuary 01, 2016 315 1,009 1,336 2,660Addition 320 950 737 2,007 Reversed (298) (75) (346) (719)Exchange rate variation 8 192 210 410Conversion effect - 21 - 21December 31, 2016 345 2,097 1,937 4,379 Addition 8 729 - 737Reversed (223) (1,127) (715) (2,065)Exchange rate variation (4) (26) 15 (15)Conversion effect - 1 - 1December 31, 2017 126 1,674 1,237 3,037

Group is part in other lawsuits related to labor, civil and tax issues in which according to its consultants, the loss is possible, but not probable, and no accurate measurement of the amount in risk can be performed. To these lawsuits, management, supported by its consultants and according to accounting practices, understand that no provision is necessary.


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25. Related parties transactions

Other related party transactions

The main balances of assets and liabilities, as well as transactions that influence profit or loss related to transactions with the Group and related parties, arising from operations between the Group and its related parties.

Impact on balance sheet

Consolidated Company Note 2017 2016 2017 2016Trade accounts receivable Amaggi & LD Commodities Terminais Portuários S.A. - 291 - -Amaggi Europe B.V. 12,864 - - -Amaggi Louis Dreyfus Zen-Noh International Ltd. 345 - - -Amaggi S.A. 10,468 14,068 - -Navegações Unidas Tapajós S.A. 26 28,772 - -Terminal Fronteira Norte - Logística S.A. 19 - - - 11 23,722 43,131 - -Advances to suppliers Navegações Unidas Tapajós S.A. - 2,234 - -Terminal Fronteira Norte - Logística S.A. 248 - - - 14 248 2,234 - -Loans granted Amaggi Construções de Rodovias Ltda. 16 16 - -Amaggi Luxembourg S. à r.l. 6,574 - - -Amaggi S.A. - 21,500 - -Cidezal Agrícola Ltda. 159 58 - -Navegações Unidas Tapajós S.A. 22,257 20,401 - -Rio Madeira Administração de Bens Ltda. 108 - -

16 29,114 41,975 - -Dividends receivable Terminal de Granéis do Guarujá S.A. 191 - - -

191 - - -Accounts payable to suppliers Agropecuária Maggi Ltda. - - - 69 Amaggi Europe B.V. 4,251 5 - - Amaggi Exportação e Importação Ltda. - - - 190 Amaggi S.A. 1,679 - - -Navegações Unidas Tapajós S.A. 119 70 - - Terminal Fronteira Norte - Logística S.A. 377 - - - 20 6,426 75 - 259 Loans and financing HFLC Administração e Participações Ltda. - 14 - -Shareholder's 983 937 - -VIP Administração e Participações Ltda. 5,184 - - - 21 6,167 951 - -Advances from customers Amaggi S.A. - 21,563 - -

22 - 21,563 - -Dividends payable BBM Administração e Participações Ltda. 3,503 7,305 3,503 7,305 HFLC Administração e Participações Ltda. 3,503 7,305 3,503 7,305 MP Administração e Participações Ltda. 3,503 7,305 3,503 7,305 MS Administração e Participações Ltda. 3,503 7,305 3,503 7,305 Shareholder’s 5,087 10,804 3,500 7,305 VIP Administração e Participações Ltda. 8,741 17,442 3,503 7,305 27,840 57,466 21,015 43,830


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Impact on income statement

Consolidated Company Note 2017 2016 2017 2016Revenue Amaggi Louis Dreyfus Zen-Noh International Ltd. 10,441 - - -Amaggi Louis Dreyfus Zen-Noh Terminais Portuários S.A. 573 - - -Amaggi Europe B.V. 405,973 198,217 - -Amaggi S.A. 624,622 118,919 - -Denofa A.S. 68,176 - - -Navegações Unidas Tapajós S.A. - 4,450 - - 27 1,109,785 321,586 - -Corporate revenues (expenses) Agropecuária Maggi Ltda. - - - (704)Amaggi & LD Commodities S.A. - 368 - -Amaggi Exportação e Importação Ltda. - - - (1,960)Navegações Unidas Tapajós S.A. 301 275 - -Terminal Fronteira Norte - Logística S.A. 248 - - -

31 549 643 - (2,664)Demurrage Amaggi Louis Dreyfus Zen-Noh Grãos S.A. (38) - - -Amaggi Louis Dreyfus Zen-Noh International Ltd. 5 - - -Amaggi S.A. (2,697) (1) - -Denofa A.S. (6) - - - 32 (2,736) (1) - -Despatch Amaggi Louis Dreyfus Zen-Noh Grãos S.A. (17) - - -Amaggi Louis Dreyfus Zen-Noh International Ltd. (2) - - -Amaggi S.A. 602 18 - -Denofa A.S. 119 - - - 32 702 18 - -Expenses from brokerage on grains purchasing Amaggi S.A. (29) - - - 32 (29) - - -Financial revenues Amaggi Construções de Rodovias Ltda. 1 1 - -Amaggi Europe B.V. - 83 - -Amaggi Luxembourg S. à r.l. 124 76 - -Cidezal Agrícola Ltda. 7 3 - -Navegações Unidas Tapajós S.A. 1,732 1,688 - -Rio Madeira Administração de Bens Ltda. 2 - - - 33 1,866 1,851 - -Financial expenses Amaggi S.A. (41) (181) - -HFLC Administração e Participações Ltda. - (2,209) - -Shareholder's (80) (514) - -VIP Administração e Participações Ltda. (508) (136) - - 33 (629) (3,040) - -

26. Equity (company)

Capital

At December 31, 2017 and 2016, the subscribed and paid-in capital was represented by the amount of U$ 179,138, which corresponds to 372,986,854 shares, all nominative, without par value.


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Legal reserve

It consists by 5% of net income according to art, 193 of Law 6.404/76, up to the limit of 20% of the capital.

Equity valuation adjustments

It consists substantially of the effect of the adoption of deemed cost for fixed assets of its own assets and its subsidiaries due to the application of IAS 27 and Technical Interpretation ICPC 10, net of related income tax and social contribution, and that has been realized through depreciation, sale or disposal of assets from which it originated.

The Group 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.

Cumulative translation adjustments

Differences generated on the conversion of financial statements from the local currencies of the entities to the currency presented on these financial statements.

Special reserve of goodwill on merger

Amounts of goodwill written-off to equity during the process of reverse incorporation among its indirect subsidiaries Agro Sam Agropecuária e Pecuária Ltda. and Agropecuária Morrinhos Ltda.

Goodwill on capital transaction

Records the amount of goodwill paid in acquisition of additional participation of non-controlling shareholders of subsidiary.

Participation of variation in controlled capital

Records the amount by cancellation of non-controlling interest in subsidiaries. The amount is presented as an increase on the controlling equity.

Profit retention reserve

Retained earnings up to December 31st, 2017 have been reclassified in stockholders' equity from retained earnings to profit reserves, and are available to shareholders. In accordance with art. 199 of Law 6.404/76, on December 31st, 2017 the Company has excess reserves over capital. The Management's proposal is to resolve the allocation at the next Shareholders' General Meeting.

Dividends

Shareholders’ are guaranteed a minimum dividend of 20% of annual net income, adjusted according to Brazilian Corporate Law.


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Mandatory minimum dividends are calculated adjusting accounting profit to Brazilian tax profit in Real and converting it through the closing rate of Dollar.

27. Net revenue (consolidated)

a. Reconciliation of net revenue

2017 2016Sale to related parties - foreign market (note 25) 1,109,212 317,136Sale to third parties - domestic market 1,244,213 1,101,064Sale to third parties - foreign market 2,115,647 2,059,600Services rendered to related parties (note 25) 573 4,450Services rendered to third parties 14,590 27,076(=) Gross revenue 4,484,235 3,509,326 (-) Sale returns (7,706) (6,701)(-) Tax on sales (46,417) (55,785)(=) Net revenue 4,430,112 3,446,840

b. Revenue by kind of product/service sold

2017 2016Corn 681,182 486,371Cotton 144,941 115,297Fertilizers 219,964 167,361Soybean 2,380,281 1,676,858Soybean meal - common 94,976 124,194Soybean meal - hypro 442,672 455,044Soybean oil 284,423 269,493Others 235,796 214,708

4,484,235 3,509,326

c. Gross revenue by month

2017 2016January 160,694 178,980February 384,748 277,825March 533,395 392,707April 601,069 386,974May 439,632 418,697June 474,254 454,012July 410,352 288,311August 374,979 330,226September 296,626 214,473October 279,191 161,637November 267,255 214,823December 262,040 190,661 4,484,235 3,509,326


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28. Cost of goods and services (consolidated)

2017 2016Cost of sales (2,953,433) (2,189,752)Depreciation and amortization (50,179) (42,643)Freight (610,785) (407,392)Fuels and lubricants (26,950) (21,243)Gains (losses) on non-realized derivatives 20,757 (76,722)Gains on realized derivatives 104,372 41,660Impact of biological assets (27,960) (27,422)Inputs (183,183) (167,349)Maintenance (32,534) (26,113)Market to market of inventories (4,056) 16,335Salaries (41,287) (33,693)Other cost (229,915) (155,071) (4,035,153) (3,089,405)

29. Reconciliation of gross profit without biological assets effects (consolidated)

2017 2016Net revenue (note 27) 4,430,112 3,446,840(-) Cost of good sale (except biological assets realization) (4,007,193) (3,061,983)(=) Gross profit before biological assets fair value impacts 422,919 384,857 Percentage of net revenue 9.55% 11.17% Gross profit before biological assets fair value impacts 422,919 384,857(+) Changes in fair value of biological assets (note 13) 39,440 45,522(-) Impact of biological assets on cost (27,960) (27,422)Gross profit on income statement 434,399 402,957

30. Selling expenses (consolidated)

2017 2016Brokerage and commissions (5,459) (4,513)Freight (22,343) (14,369)Other services (8,369) (4,977)Port charges (59,491) (43,053)Salaries (2,709) (2,160)Storage and transshipment (8,398) (10,962)Other selling expenses (7,727) (8,112) (114,496) (88,146)


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31. Administrative expenses

Consolidated Company 2017 2016 2017 2016Benefits (5,626) (4,681) (4) (7)Consultancy and audit services (6,097) (5,100) (208) (170)Corporate revenues (expenses) (note 25) 549 643 - (2,664)Depreciation and amortization (8,824) (8,798) (17) (13)Electric power (3,765) (2,887) - -Fuels and lubricants (1,500) (1,513) - -General expenses (4,880) (5,765) (16) (14)Insurance (2,214) (1,526) (47) (48)Maintenance (5,611) (4,225) (2) -Other services (5,394) (4,718) - -Salaries (32,021) (33,061) (123) (109)Social charges (8,726) (7,624) (30) (27)Taxes (4,406) (5,615) (1) (1)Travel expenses (1,847) (1,745) (3) (11)Other administrative expenses (8,371) (5,760) (11) (12) (98,733) (92,375) (462) (3,076)

32. Net other operating income (expenses)

Consolidated Company 2017 2016 2017 2016Demurrage (3,297) (3,962) - -Demurrage - related parties (note 25) (2,736) (1) - -Despatch 3,592 2,081 - -Despatch - related parties (note 25) 702 18 - -Gains (losses) on non-realized derivatives (7,203) 2,290 - -Gains on disposal of investments 31,083 - - -Gains on realized derivatives 16,985 52,482 - -Indemnity revenues 3,161 4,363 - -Inventory differences 6,923 (579) - -Losses on settlement - net assets (2,146) - - -Taxes (6,261) 23,071 - -Term market - 5,419 - -Other revenues (expenses) 4,095 4,633 7 (4)Net 44,898 89,815 7 (4)


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33. Net financial income (expenses)

Consolidated Company 2017 2016 2017 2016

Financial revenues Gains on non-realized derivatives 24,483 63,863 - -Gains on realized derivatives 36,625 40,164 - -Interest on advances 22,170 22,065 - -Interest on marketable securities 32,790 34,190 - -Interest on related party transactions (note 25) 1,866 1,851 - -Price index variation 1,652 10,558 - -Update of tax credits based on SELIC rate 16,473 296 Other 12,623 9,233 - - 148,682 182,220 - -Financial expenses Interest on loans and financing (84,524) (83,415) - -Interest on related party transactions (note 25) (629) (3,040) - -Losses on non-realized derivatives (1,390) (61,362) - -Losses on realized derivatives (59,840) (38,565) - -Taxes on financial transactions (3,463) (2,621) - -Other (5,311) (8,065) - - (155,157) (197,068) - -Exchange rate variation Exchange rate variation (net) (11,225) (2,255) 20 (636) (11,225) (2,255) 20 (636) Net (17,700) (17,103) 20 (636)

34. Environmental aspects

The production facilities of the Group and its activities are subject to environmental regulations. The Group reduces the risks associated with environmental matters, by operational procedures and controls and investments in pollution control equipment and systems. The Group believes that no allowance for loss relating to environmental matters is required at present, based on the current laws and regulations in force.

35. Subsequent Events

Companhia Agrícola do Parecis - Ciapar

On February 2, 2018, the Company informed that it acquired all the shares of the share capital from Companhia Agrícola do Parecis (Ciapar).

Waldemir Loto Presidente Executivo Dante Pozzi Diretor Administrativo Financeiro Derli Teobaldo Halberstadt Contador – CRC-PR-042073/O-6 CPF: 561.425.280-00

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