Financial Statements Camil Alimentos S.A.

Financial Statements

Camil Alimentos S.A. February 28, 2015 and 2014 with Independent Auditor’s Report

Camil Alimentos S.A.

Financial statements February 28, 2015 and 2014 Contents Independent auditor’s report on financial statements ...................................................................... 1 Audited financial statements Balance sheets ............................................................................................................................... 3 Income statements .......................................................................................................................... 5 Statements of comprehensive income ............................................................................................ 6 Statements of changes in equity ..................................................................................................... 7 Cash flow statements ...................................................................................................................... 8 Statements of value added ............................................................................................................. 9 Notes to financial statements ........................................................................................................ 10

Condomínio São Luiz

Av. Presidente Juscelino Kubitschek, 1830

Torre I - 8º Andar - Itaim Bibi

04543-900 - São Paulo - SP - Brasil

Tel: (5511) 2573-3000

ey.com.br

Uma empresa-membro da Ernst & Young Global Limited

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A free translation from Portuguese into English of Independent Auditor’s Report on Individual and Consolidated Financial Statements prepared in Brazilian currency in accordance with accounting practices adopted in Brazil and International Financial Reporting Standards (IFRS), issued by International Accounting Standards Board – IASB

Independent auditor’s report on financial statements

The Shareholders, Board of Directors and Officers

Camil Alimentos S.A. São Paulo (SP) We have audited the accompanying individual and consolidated financial statements of Camil Alimentos S.A. (“Company”), identified as Company and Consolidated, respectively, which comprise the balance sheet as at February 28, 2015 and the related statements of income, of comprehensive income, of changes in equity and of cash flows for the year then ended, and a summary of significant accounting practices and other explanatory information.

Management’s responsibility for the 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 in accordance with the 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.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Brazilian and international standards on auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement in the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the preparation and fair presentation of the Company’s financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting practices used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to support our audit opinion.

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Opinion on financial statements In our opinion, the individual and consolidated financial statements referred to above present fairly, in all material respects, the individual and consolidated financial position of Camil Alimentos S.A. as at February 28, 2015, its individual and consolidated operating performance and individual and consolidated cash flows for the year then ended, in accordance with accounting practices adopted in Brazil and in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).

Other matters

Statements of value added

We have also audited the individual and consolidated statement of value added (SVA) for the year ended February 28, 2015, prepared under management’s responsibility, whose presentation is required by the Brazilian Corporation Law for publicly-held companies and as additional information by the IFRS, which do not require SVA presentation. These statements have been subject to the same auditing procedures previously described and, in our opinion, are presented fairly, in all material respects, in relation to the overall financial statements.

São Paulo, May 26, 2015.

ERNST & YOUNG Auditores Independentes S.S CRC-2SP015199/O-6 Douglas Travaglia Lopes Ferreira Accountant CRC-1SP218313/O-4

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A free translation from Portuguese into English of Individual and Consolidated Financial Statements prepared in Brazilian currency in accordance with accounting practices adopted in Brazil and International Financial Reporting Standards (IFRS), issued by International Accounting Standards Board – IASB

Camil Alimentos S.A. Balance sheets February 28, 2015 and 2014 (In thousands of reais)

Company Consolidated

Note 02/28/2015 02/28/2014 02/28/2015 02/28/2014

Assets Current assets Cash and cash equivalents 4 225,985 209,403 243,978 261,856

Short-term investments 5 52,990 36,805 134,830 53,992 Trade accounts receivable 6 413,479 409,838 575,326 526,650 Inventories 7 236,532 271,777 414,287 436,514 Advances to suppliers and producers 8 130,317 110,056 230,688 191,400 Taxes recoverable 9 109,370 82,996 122,793 91,750 Transactions with related parties 16 13,513 5,287 13,362 10,467 Other receivables

15,064 11,626 33,150 30,051 Prepaid expenses

4,930 5,299 9,288 5,433

Total current assets

1,202,180 1,143,087 1,777,702 1,608,113

Noncurrent assets Short-term investments 5 16,872 20,049 16,936 20,113

Taxes recoverable 9 2,798 4,051 2,798 4,051 Transactions with related parties 16 - - 5,171 4,192 Judicial deposits 17 4,953 5,087 5,028 5,087 Other receivables 10 16,358 41 16,888 871

40,981 29,228 46,821 34,314

Investments 12 760,070 640,380 20,271 16,099 Property, plant and equipment 13 531,627 567,939 830,847 821,322 Intangible assets 14 227,011 234,290 590,117 521,943

Total noncurrent assets

1,559,689 1,471,837 1,488,056 1,393,678

Total assets

2,761,869 2,614,924 3,265,758 3,001,791

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Note 02/28/2015 02/28/2014 02/28/2015 02/28/2014

Liabilities and equity Current liabilities Trade accounts payable

217,686 189,464 418,607 349,436 Loans and financing 15a 84,969 88,629 167,394 199,402 Debentures 15b 172,878 162,642 172,878 162,642 Transactions with related parties 16 29,860 22,123 6,241 2,938 Social charges

9,905 18,678 18,290 25,259 Taxes payable

4,626 2,727 27,464 9,278 Vacation accrual and related charges

13,385 12,972 24,017 19,705 Special installment program 18 9,981 9,627 10,173 9,627 Dividends payable 19b 25,950 34,000 25,950 34,000 Notes payable

71,239 62,694 71,239 62,694 Other accounts payable

7,644 16,857 32,836 39,444

Total current liabilities

648,123 620,413 975,089 914,425

Noncurrent liabilities Loans and financing 15a 271,988 316,265 436,141 398,405

Debentures 15b 517,967 468,880 517,967 468,880 Special installment program 18 70,089 74,508 71,316 75,928 Deferred income tax 20b 46,588 16,410 56,766 24,044 Provision for contingencies 17 9,872 8,051 11,126 9,590 Notes payable

- 62,694 - 62,694 Other accounts payable

53,488 61,710 53,599 61,832

Total noncurrent liabilities

969,992 1,008,518 1,146,915 1,101,373

Equity 19 Capital

527,428 527,428 527,428 527,428 Capital reserve

333

333

Income reserves

320,061 236,965 320,061 236,965 Equity adjustment

296,265 221,267 296,265 221,267

Total equity

1,143,754 985,993 1,143,754 985,993

Total liabilities and equity

2,761,869 2,614,924 3,265,758 3,001,791

See accompanying notes.

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Camil Alimentos S.A. Income statements Years ended February 28, 2015 and 2014 (In thousands of reais, except for earnings per share, expressed in reais)


Note 02/28/2015 02/28/2014 02/28/2015 02/28/2014

Net revenue from sales and services 27 2,605,264 2,642,282 3,675,782 3,581,563 Costs of sales and services 28 (1,985,545) (1,979,317) (2,824,365) (2,702,454)

Gross profit

619,719 662,965 851,417 879,109 Operating income (expenses)

Selling expenses 28 (286,837) (300,878) (402,099) (413,387) Administrative expenses 28 (132,226) (125,325) (173,907) (162,132) Equity pickup 12 40,606 32,399 (303) (1,235) Other operating income (expenses) 22 7,492 (7,992) 9,916 (3,464)

Income before financial income and expenses

248,754 261,169 285,024 298,891 Financial expenses 21 (175,328) (150,404) (204,067) (185,454) Financial income 21 64,721 55,117 75,798 65,862

Pretax income

138,147 165,882 156,755 179,299 Income and social contribution taxes

Current 20 (3,009) (18,268) (16,898) (28,384) Deferred 20 (30,178) (23,400) (34,897) (26,701)

Total income and social contribution taxes

(33,187) (41,668) (51,795) (55,085)

Net income for the year

104,960 124,214 104,960 124,214

Basic and diluted earnings per share - R$

0.93 1.10


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Camil Alimentos S.A. Statements of comprehensive income Years ended February 28, 2015 and 2014 (In thousands of reais)

Consolidated

02/28/2015 02/28/2014

Net income for the year 104,960 124,214 Other comprehensive income

Currency translation gains (losses) - foreign transactions 79,084 47,012

Comprehensive income for the year 184,044 171,226


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Camil Alimentos S.A. Statements of changes in equity (Company and Consolidated) Years ended February 28, 2015 and 2014 (In thousands of reais)

Capital reserve Income reserves

Note Capital

Investment grants

Legal reserve

Profits to be distributed

Equity adjustment

Retained earnings Total

Balances at February 28, 2013

527,428 333 17,026 125,459 179,054 - 849,300 Exchange variation on foreign investments 12 - - - - 47,012 - 47,012 Realization/depreciation of fair value, net of taxes

- - - - (4,799) 4,799 -

Net income for the year

- - - - - 124,214 124,214 Proposed allocation:

- - - - - - -

Set-up of legal reserve 19c - - 6,211 - - (6,211) - Provision for dividends to be distributed 19b - - - (3,299) - (30,701) (34,000) Prior-year additional dividends distributed 19b - - - (533) - - (533) Set-up of reserve of profits to be distributed

- - - 92,101 - (92,101) -


527,428 333 23,237 213,728 221,267 - 985,993

Exchange variation on foreign investments 12 - - - - 79,084 - 79,084 Realization/depreciation of fair value, net of taxes 19e - - - - (4,086) 4,086 - Net income for the year

- - - - - 104,960 104,960

Proposed allocation:

- - - - - - - Set-up of legal reserve 19c -

5,248 - - (5,248) -

Provision for dividends to be distributed 18b - - - - - (25,950) (25,950) Set-up of reserve of profits to be distributed

- (333) - 77,848 - (77,848) (333)


527,428 - 28,485 291,576 296,265 - 1,143,754


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Camil Alimentos S.A. Cash flow statements Years ended February 28, 2015 and 2014 (In thousands of reais)


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Cash flows from operating activities Net income for the year before income and social

contribution taxes 138,147 165,882 156,755 179,299 Adjustments to reconcile P&L to cash provided by operating activities:

Equity pickup (40,606) (32,399) 303 1,235 Accrued financial charges 141,456 98,613 163,231 120,792 Allowance for doubtful accounts (4,541) (758) (4,551) (363) Provision for rebates (2,159) (1,725) (2,159) (1,725) Provision for contingencies 1,821 2,256 1,536 3,765 Depreciation 44,881 42,141 67,414 63,064 Amortization 8,263 12,811 8,849 13,366 Gain (loss) on disposal of property, plant and equipment (251) (287) (2,500) 1,585

287,011 286,534 388,878 381,018

Decrease (increase) in assets Trade accounts receivable 3,059 (57,854) 4,905 (71,158)

Inventories 35,245 (88,057) 46,633 (87,024) Current and noncurrent assets (46,391) (1,751) (33,769) (44,403)

Total assets (8,087) (147,662) 17,769 (202,585)

Decrease (increase) in liabilities Trade accounts payable 42,082 12,480 31,848 7,099

Salaries and charges payable (8,360) 4,103 (6,518) 3,876 Tax liabilities (7,699) (63,398) 7,213 (74,627) Other current and noncurrent liabilities 15,020 (10,290) 21,926 (18,359) Payment of Corporate Income Tax (IRPJ) and Social Contribution Tax on Net Profit (CSLL) - (1,100) (12,407) (6,798)

Total liabilities 41,043 (58,205) 42,062 (88,809)

Cash provided by operating activities 319,967 80,667 448,709 89,624

Cash flow from investing activities: Short-term investments (13,008) 268,968 (64,490) 264,446

Disposal of property, plant and equipment 6,080 - 6,268 17,235 Additions to intangible assets (984) (1,001) (1,145) (1,122) Additions to investments (84,880) (107,941) (142,534) (121,839) Additions to property, plant and equipment (46,990) (94,156) (70,079) (108,629) Cash from acquisitions - - 3,612 306

Cash generated by (used in) investing activities (139,782) 65,870 (268,368) 50,397

Cash flow from financing activities: Loans taken out (paid) (34,065) 152,433 (60,818) 144,149

Interest paid on loans (96,005) (68,566) (106,701) (90,463) Dividends distributed (33,533) (33,533) (34,000) (33,533)

Cash used in (generated by) financing activities (163,603) 50,334 (201,519) 20,153

Exchange gains (losses) on cash and cash equivalents - - 3,300 9,564 Increase (decrease) in cash and cash equivalents 16,582 196,871 (17,878) 169,738

Increase in cash and cash equivalents At beginning of period 209,403 12,532 261,856 92,118

At end of period 225,985 209,403 243,978 261,856

Increase (decrease) in cash and cash equivalents 16,582 196,871 (17,878) 169,738


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Camil Alimentos S.A. Statements of value added February 28, 2015 and 2014 (In thousands of reais, unless otherwise stated)


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Revenues Sales of goods, products and services 2,848,347 2,873,536 4,091,377 3,874,926

Other revenues 12,051 2,840 18,067 11,571 (Reversal of) allowance for doubtful accounts 10 (1,451) (633) (1,895)

2,860,408 2,874,925 4,108,811 3,884,602

Inputs acquired from third parties Cost of sales and services (1,712,225) (1,714,643) (2,577,395) (2,428,813)

Materials, energy, third-party services and other expenses (436,463) (450,595) (580,207) (591,178) Other (4,559) (10,832) (8,140) (15,023)

(2,153,247) (2,176,070) (3,165,742) (3,035,014)

Gross value added 707,161 698,855 943,069 849,588

Retentions Depreciation, amortization and depletion (53,144) (54,952) (76,263) (76,430)

(53,144) (54,952) (76,263) (76,430)

Net value added produced 654,017 643,903 866,806 773,158

Value added received in transfer Equity pickup 40,606 32,399 (303) (1,235)

Financial income 64,722 55,117 75,799 57,655

105,328 87,516 75,496 56,420

Total value added to be distributed 759,345 731,419 942,302 829,578

Distribution of value added Personnel Direct compensation 121,757 115,734 208,668 143,061

Benefits 40,769 40,927 55,903 41,985 Unemployment Compensation Fund (FGTS) 12,520 10,650 12,520 10,650 Other 34,118 30,701 34,217 30,757

209,164 198,012 311,308 226,453

Taxes, rates and contributions Federal 64,958 66,514 84,752 80,953

State 190,062 178,457 219,026 204,838 Municipal 2,816 2,099 5,913 3,960

257,836 247,070 309,691 289,751

Debt remuneration Interest 175,328 150,404 204,067 177,246

Rent 12,057 11,719 12,276 11,914

187,385 162,123 216,343 189,160

Equity remuneration Dividends 25,950 33,000 25,950 33,000

Net income for the year 79,010 91,214 79,010 91,214

104,960 124,214 104,960 124,214

759,345 731,419 942,302 829,578


Camil Alimentos S.A. Notes to financial statements February 28, 2015 and 2014 (In thousands of reais – R$, unless otherwise stated)

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1. Operations Camil Alimentos S.A. (“Company”) is a privately-held corporation headquartered in the city and state of São Paulo, primarily engaged in the manufacturing and sale of rice, beans, fish and sugar. The Company became operational in 1963 as a rice cooperative and has since then been expanding both through acquisitions of companies and/or food brands in Brazil and in some of the main countries in South America. The Company owns a large brand portfolio, including “Camil”, “Pescador”, “Alcyon”, “Navegantes” and “Coqueiro”, “União”, "Barra”, “Dolce”, “Neve” and “Duçula” in Brazil, “Saman” in Uruguay, “Tucapel” in Chile, and “Costeño” and “Paisana” in Peru. With these brands, the Company has a prominent position in the Brazilian and South American fish and sugar markets. Company activities are supplied by 11 grain processing units in Brazil, 10 in Uruguay, 3 in Chile, 2 in Peru and 1 in Argentina, besides 2 fish processing plants and 5 sugar mills, 3 of which are owned by the Company while the other 2 are subcontracted. The “Fundo de Investimentos em Participações Camil” managed by Gávea Investimentos Ltda. holds 3175% interest in Company capital. Company management aims at expanding its brand portfolio and products and leveraging synergy among the business units and operations.

2. Summary of significant accounting practices

2.1. Basis of preparation and presentation of financial statements

There were no changes to the Company accounting practices. The Company applied all pronouncements in force on the date the financial statements. The individual and consolidated financial statements were prepared in accordance with accounting practices adopted in Brazil, which comprise the rules established by Brazilian Securities and Exchange Commission (CVM) and the pronouncements, interpretations and guidances issued by the Brazilian FASB (CPC) and in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB).

Camil Alimentos S.A. Notes to financial statements (Continued) February 28, 2015 and 2014 (In thousands of reais – R$, unless otherwise stated)

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2. Summary of significant accounting practices (Continued)

2.1. Basis of preparation and presentation of financial statements (Continued) The financial year of the Company and its subsidiaries ends on February 28 every year, in order to align financial year end with rice harvest cycle, the main Company product. Harvest seasonality affects Company purchases, but does not result in significant changes in P&L. Authorization for conclusion of preparation of these financial statements was provided by the Company’s CEO e Vice CEO on May 26, 2015.

2.2. Consolidated financial statements

At February 28, 2015, the Company held interest in the following subsidiaries and affiliates:

2015 2014

Uruguay

Direct Indirect Direct Indirect S.A. Molinos Arrocenros Nacionales (SAMAN) Subsidiary - 100.00% - 100.00% S.A. Mercantil Uruguaya (SAMU) Subsidiary - 100.00% - 100.00% Camil Uruguay Sociedad de Inversión S.A. Subsidiary - 100.00% - 100.00% Arrozur S.A. Affiliate - 49.19% - 49.19% Tacua S.A. Affiliate - 40.72% - 40.72% Agencia Marítima Sur Affiliate - 40.72% - 40.72% Comisaco S.A. Affiliate - 50.00% - 50.00% Galofer S.A. Affiliate - 45.00% - 45.00%

Chile

Camil Chile SpA. Subsidiary - 100.00% - 100.00% Empresas Tucapel S.A. Subsidiary - 99.86% - 99.86% Servicios Externos S.A. Subsidiary - 100.00% - 100.00%

Peru

Camil Alimentos Perú S.A.C. Subsidiary - 100.00% - 100.00% Costeño Alimentos S.A.C. Subsidiary - 100.00% - 100.00% Envasadora Arequipa S.A.C Subsidiary - 100.00% - 100.00%

Argentina

Camil Internacional Argentina S.A. Subsidiary 100.00% - 100.00% - La Loma Alimentos S.A. Subsidiary - 100.00% - 100.00%

Brazil

Ciclo Logística Ltda. Subsidiary 100.00% - 100.00% - Carreteiro Indústria e Comércio de Alimentos S.A. Subsidiary 100.00% - 100.00% -


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2.2. Consolidated financial statements (Continued) The financial reporting period of consolidated subsidiaries coincides with that of the Company, and accounting policies were uniformly applied by consolidated companies, being consistent with those used in the prior year.

The main consolidation procedures are:

Elimination of asset and liability balances between consolidated companies;

Elimination of interest in capital, reserves and retained earnings of consolidated companies; and

Elimination of revenues, expenses and unearned profits from intercompany transactions.

2.3. Business combination

Business combinations are accounted for using the acquisition method, pursuant to CPC 15 (R1)IFRS 3. The cost of an acquisition is measured as the sum of the consideration transferred, evaluated based on fair value at acquisition date, and value of any noncontrolling interest in the acquiree. For each business combination, the acquirer must measure noncontrolling interests in the acquiree either at its fair value or on the basis of its proportionate share in the identifiable net assets of the acquiree. Costs directly attributable to the acquisition must be recorded as expenses, as incurred. When purchasing a business, the Company evaluates the financial assets and liabilities assumed in order to classify and allocate them according to the contractual terms, economic circumstances and the relevant conditions on the purchase date. Any contingent portion to be transferred by the acquirer will be recognized at fair value on acquisition date. Subsequent changes in the fair value of the contingent portion to be considered as an asset or liability shall be recognized in accordance with CPC 38 in the income statement or in other comprehensive income. If the contingent portion is classified as equity, it shall not be revalued until finally settled in equity.


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2.3. Business combination (Continued) Goodwill is initially measured as the excess of the consideration transferred over the net assets acquired. If consideration is lower than fair value of net assets acquired, the difference is to be recognized as gains in the income statement.

After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. For impairment test purposes, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company’s cash-generating units that are expected to benefit from the synergies arising from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

During the year ended February 28, 2015, the Company acquired:

i) all shares representing Romero Trading S.A. capital (holder of the Paisana brand in

Peru).

Details and effects of these business combinations are stated in Note 10.

2.4. Segment information

From the year ended February 2014, the Company started to be organized in the business segment by geographic area, consistently with the principles and concepts used by the Company’s main decision-makers for assessing performance. Information is analyzed by segment as follows: Food products – Brazil: It includes the operations of the units in Brazil with grains, fish and sugar. Food products – International: It includes the operations of the units in Uruguay, Chile, Peru and Argentina with grains, fish and sugar.


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2.5. Translation of balances denominated in foreign currency

2.5.1. Functional and reporting currency of financial statements

The Company’s functional currency is the Real (BRL), which is the same currency used to prepare and present the financial statements, Company and consolidated. The financial statements of each consolidated subsidiary used as a basis for valuation of investments under the equity method are prepared based on the functional currency of each entity. Assets and liabilities of foreign subsidiaries are translated into Reais (BRL) at the exchange rate of balance sheet closing dates and the results of operations are translated at the average monthly rates of the years. Translation gains or losses are recorded in equity.

2.5.2. Transactions denominated in foreign currency

Monetary assets and liabilities stated in foreign currency are translated into the functional currency (Real) at the exchange rate in force as of the balance sheet dates. Gains and losses resulting from the restatement of these assets and liabilities incurred between the exchange rate prevailing at the transaction date and reporting dates are recognized in P&L as financial income or expense.

2.6. Revenue recognition

Revenue is recognized to the extent economic benefits are likely to be generated for the Company and when such amount can be reliably measured. Revenue is measured based on fair value of the consideration received, net of discounts, rebates and taxes or charges on sales. The Company measures revenue transactions in accordance with specific criteria to determine whether it has been operating as an agent or a principal, and eventually it concluded that it has been operating as a principal in all of its revenue agreements. The following specific criteria must also be met before revenue recognition: Sale of goods Sales revenue is recognized when significant risks and rewards of ownership of the products are transferred to the buyer, which generally occurs upon delivery.


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2.6. Revenue recognition (Continued)

Interest income

For all financial instruments measured at amortized cost and interest-bearing financial assets, classified as available for sale, financial income or financial expense is recorded using the effective interest rate that exactly discounts the estimated future cash payments or receipts over the estimated life of the financial instrument or a shorter period of time, where applicable, to the net book value of the financial asset or liability. Interest income is recognized under financial income, in the income statement.

2.7. Taxes

Current income and social contribution taxes

These are stated as current or noncurrent according their expected settlement. The tax rates and laws used to calculate the amount are those in force or substantially in force at balance sheet date. In Brazil, income taxes include both income and social contribution taxes. Income tax is computed at the rate of 15%, plus a surtax of 10% on taxable profit exceeding R$240 over 12 months, whereas social contribution tax is computed at the rate of 9% on taxable profit, both recognized on an accrual basis, therefore additions to book income deriving from temporarily non-deductible expenses or exclusions from temporarily non-taxable profit upon determination of current taxable profit generate deferred tax assets or liabilities. In Uruguay, the rate is 25%, in Chile 21%, in Argentina 35% and in Peru 30%.

Deferred income and social contribution taxes

Deferred tax is generated by temporary differences at balance sheet date between the tax bases of assets and liabilities and their carrying amounts. Deferred tax liabilities are recognized on all temporary tax differences, except:

when a deferred tax liability arises upon initial recognition of goodwill or of an asset or liability in a transaction other than a business combination and, at the transaction date, has no impact on book income or tax income (loss); and

on temporary differences related to investments in subsidiaries, in which temporary difference reversal period can be controlled and temporary differences are not likely to be reversed in the near future.


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2.7. Taxes (Continued)

Deferred income and social contribution taxes (Continued)

Deferred tax assets are recognized for all deductible temporary differences, unused tax credits and tax losses to the extent that it is probable that taxable income will be available for the deductible temporary differences to be realized, and unused tax credits and tax losses to be used, except when the deferred tax asset related to deductible temporary difference is generated upon initial recognition of the asset or liability in a transaction other than a business combination and, at transaction date, does not affect book profit or income or loss for tax purposes. The book value of deferred tax is reviewed at each reporting date and written off to the extent that taxable profits will not likely be available so that deferred tax assets can be used in total or in part. Deferred tax assets written off are reviewed at each balance sheet date and recognized to the extent that future taxable profits will likely allow recovery of deferred tax assets. Deferred tax assets and liabilities are recognized in noncurrent assets and liabilities and are measured at the tax rate that is expected to be applicable in the year in which the asset will be realized or the liability settled, based on tax rates (and tax law) in force at balance sheet date. Deferred taxes related to items recognized directly in equity are also recognized in equity, rather than in the income statement. Deferred tax items are recognized based on the transaction from which deferred tax was originated, in comprehensive income or directly in equity. Deferred tax assets and liabilities are presented net when there is a legal or constructive right to offset tax asset against tax liability and deferred taxes relate to the same taxpaying entity and subject to the same tax authority.


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2.7. Taxes (Continued) Sales taxes

Revenues, expenses and assets are recognized net of the amount of sales taxes, except:

When sales taxes levied on purchase of goods or services are not recoverable from tax authorities, case in which sales taxes are recognized as part of the acquisition cost of the asset or as an expense item, as applicable;

When the amounts receivable or payable are stated with the amount of sales taxes; and

Net sales taxes, either recoverable or payable, are included as components in amounts receivable or payable in the balance sheet.

Revenues from sales in Brazil are subject to the following taxes and contributions, at the basic rates below::

Rates

State VAT (ICMS)

0.00% to 19.00%

Contribution Tax on Gross Revenue for Social Security Financing (COFINS)

0.00% to 7.60%

Contribution Tax on Gross Revenue for Social Integration Program (PIS)

0.00% to 1.65%

Federal VAT (IPI)

0.00% to 5% Service Tax (ISS)

3% to 5%

Social Security Contribution Tax (INSS)

1%

(*) Refers to percentage due in the fish segment from January 1, 2013, with enactment of the payroll tax exemption Act.

Tax credits arising from noncumulative taxation by PIS/COFINS are recorded as a deduction from cost of sales in the income statement. Tax prepayments or recoverable taxes are stated in current or noncurrent assets, based on the forecast of their realization. Revenues are stated net of taxes in the income statement. In Uruguay, sales are subject to Value-Added Tax (IVA) levied at rates ranging from 10% to 22%. In Chile, IVA rate is 19% on sales. In Peru, IVA rate is 18%. In Argentina, IVA rate is 21%.


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2.8. Financial instruments – Initial recognition and subsequent measurement and derecognition

Initial recognition and measurement The Company’s financial instruments are initially recorded at fair value, plus transaction costs directly attributable to their acquisition or issue, except for financial assets and liabilities classified under the “at fair value through P&L” category, whereupon such costs are posted directly to P&L for the year. Key financial assets recognized by the Company are: cash and cash equivalents, short-term investments, trade accounts receivable and derivative instruments. These assets were classified under financial assets at FVTPL and receivables. Key financial liabilities are: trade accounts payable, other accounts payable, loans and financing, debentures and derivative financial instruments. Subsequent measurement Subsequent measurements of financial instruments occur at each balance sheet date according to their classification into the following categories of financial assets or liabilities: financial assets or financial liabilities measured at fair value through P&L, loans and receivables. Derecognition (write-off) A financial asset (or, whenever the case, a part of a financial asset or a part of a group of similar financial assets) is derecognized when:

The right to receive cash flows from assets expires;

The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to fully pay any cash flows it has received, without significant delay to a third party under a pass-through arrangement, and (a) the Company transferred substantially all risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all risks and rewards related to the asset, but has transferred control over the asset.

A financial liability is derecognized when the liability has been revoked, cancelled or expired.


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2.9. Derivative financial instruments

The Company uses derivative financial instruments, principally interest rate swaps to provide hedge against the risk of changes in exchange rates and the risk of changes in interest rates, respectively. Derivatives are presented as financial assets when the instrument's fair value is positive and as financial liabilities when fair value is negative. Any gains or losses from changes in fair value of derivatives during the year are recorded directly in the income statement.

2.10. Cash and cash equivalents

These include cash, positive bank account balances and short-term investments redeemable within 90 days from the transaction dates, subject to insignificant risk of change in their market value. Short-term investments included in cash and cash equivalents are mostly classified as “financial assets measured at fair value through profit or loss”. There was no change in the policy for determining components of cash and cash equivalents disclosed in the years.

2.11. Trade accounts receivable

These are stated at realizable values and trade accounts receivable in foreign market are restated based on exchange rates in force on the financial statement date. An allowance was set up at an amount deemed sufficient by management to cover doubtful accounts.

2.12. Allowance for contractual discounts

The Company and its subsidiaries have incentive and discount-on-sale programs. These programs include discounts to customers for sales performance based on volume, and marketing actions at the points of sales. A provision is set up for the estimated discount amount as of balance sheet dates that is recorded as sales deductions.


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2.13. Inventories

Inventories are carried at average cost of acquisition or production, not exceeding their market value. Provisions for slow-moving inventory items are set up whenever deemed necessary by management. The Company adopts the absorption costing method through weighted moving average.

In Uruguay, the terms and conditions of sale of a significant portion of rice production agreed with rural producers and industries are established by formal agreement between the Industries (Gremial de Molinos) and the Rice Growers Association of that country (“Asociación de Cultivadores de Arroz”).

The mechanism to calculate paddy rice bag price is established in a formal agreement based on the selling price (FOB price) obtained by industries in trading rice for each harvest, net of costs and expenses previously agreed with the Association of Rice Growers and a guaranteed minimum margin of the industries. This price is set by the producers association and the industries when approximately 90% of the Uruguayan harvest is effectively traded and sold by industries, which usually occurs in the first quarter of the year following current year harvest.

To allow the granting of advances by the industries and partial settlements of rice purchases, the association of producers and industries set at each harvest end, usually in June each year, a provisional price for reference to the market. Partial payments made are complemented by the industries or returned by producers when defining the definitive price.

2.14. Investments

Investments in subsidiaries are recorded by the equity method for purposes of financial statements of the Company. Other investments that do not fit into the above category are recorded at cost of acquisition less provision for depreciation, where applicable.

After the equity method is applied for disclosure of the Company’s financial statements, the Company determines whether it is necessary to recognize additional impairment losses on its investments in each subsidiary. The Company determines, at every balance sheet date, whether there is objective evidence that the investments in subsidiaries had impairment losses. If so, the Company calculates the impairment loss as the difference between the recoverable amount of the subsidiary and its book value, and recognizes such amount in its income statement.


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2.15. Property, plant and equipment

Property, plant and equipment items are stated at cost, net of accumulated depreciation and/or accumulated impairment, if any, and PIS/COFINS and ICMS credits, the contra entry being to taxes recoverable. This cost includes replacement cost of part of property, plant and equipment and borrowing costs for long-term construction projects, when recognition criteria are met. When significant parts of property, plant and equipment are replaced, the Company recognizes such parts as individual assets with specific useful life and depreciation. Likewise, when a material inspection is carried out, its cost is recognized in the book value of property, plant and equipment, if recognition criteria are met. All other repair and maintenance costs are recognized in P&L as incurred. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset, using the following rates:

Annual weighted depreciation rates

Company

Consolidated

Buildings 4%

3% Machinery and equipment 11%

9%

Leased machinery and equipment 7%

7% Furniture and fixtures 10%

10%

Vehicles 19%

20% Facilities 8%

8%

Improvements 4%

4% Computers and peripherals 20%

20%

An item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. Gains or losses, if any, arising therefrom are the difference between the net disposal proceeds and the carrying amount of the asset, and are classified in the income statement for the year in which the asset is derecognized. Net book value and useful life of assets and depreciation methods are reviewed at each year end and adjusted prospectively, if applicable. There was no change in the rates observed in the year ended February 28, 2015 in relation to the charges observed in the previous year.


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2.16. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the underlying asset cost. All other borrowing costs are recorded in expense in the period they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. The Company capitalizes borrowing costs for all eligible assets.

2.17. Intangible assets

Intangible assets acquired separately are measured at cost upon their initial recognition. After initial recognition, intangible assets are stated at cost, less accumulated amortization and impairment. Internally generated intangible assets are not capitalized and expenditure is reflected in the income statement in the year in which the expenditure is incurred. The useful life of an intangible asset is assessed either as finite or indefinite. For intangible assets that have a definite useful life, the Company uses the following annual amortization rates:

Annual amortization rates

Company

Consolidated

Software 20%

20% Customer relationship – acquisition of BB Mendes 33.33%

33.33%

Customer relationship – acquisition of Tucapel Chile 33.33%

33.33% Supplier relationship – acquisition of Tucapel Chile 33.33%

33.33%

Customer relationship – acquisition of Docelar 20%

20% Non-completion agreement – acquisition of Docelar 17%

17%

Customer relationship – acquisition of Coqueiro 20% 20%


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2.17. Intangible assets (Continued) Finite-lived intangible assets are amortized over their economic useful lives and are tested for impairment whenever there is any indication of impairment loss. Amortization period and method for an intangible asset item with finite useful life are reviewed at least at the end of each financial year. Changes in the estimated useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and treated as changes in accounting estimates. The amortization charges on finite-lived intangible assets are recognized in the income statement in the expense category consistent with the use of the intangible asset. Intangible assets with indefinite useful lives are not amortized, but annually tested for impairment at the cash-generating-unit level. Indefinite useful life assessment is reviewed annually to determine whether such assessment continues to be justified. Otherwise, useful life is changed from indefinite to finite on a prospective basis. Gains and losses resulting from intangible asset write-off are measured as the difference between net value obtained from sale and book value of the asset, and are recognized in the income statement when the asset is written off.

2.18. Present value adjustment of assets and liabilities

Current and noncurrent monetary assets and liabilities are adjusted to present value when the effect is deemed significant in relation to the overall financial statements. At February 28, 2015 and 2014, only trade accounts receivable and trade accounts payable were considered material and subject to present value adjustment. Present value adjustment is calculated considering contractual cash flows and the explicit, sometimes implicit, interest rates of the corresponding assets and liabilities. Therefore, interest rates accrued on revenues, expenses and costs associated with these assets and liabilities are discounted with a view to recognizing them on an accrual basis. This interest is subsequently reallocated to financial income and expenses in P&L by using the effective interest rate method in relation to contractual cash flows. Implicit interest rates were determined on the basis of assumptions and accounting estimates are considered.


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2.19. Impairment of non-financial assets

Management annually tests the net book values of the assets with a view to determining whether any events or changes in economic, operating or technological circumstances may indicate an impairment loss. When such evidence is found, and net book value exceeds the recoverable value, a provision for impairment is recorded so as to adjust the net book value to the recoverable amount. The recoverable amount of an asset or certain cash-generating unit is defined as the higher of value in use or fair value less costs to sell. In estimating value in use of an asset item, estimated future cash flows are discounted to present value at a pre-tax discount rate reflecting the weighted average capital cost for the segment in which the cash-generating unit operates. Fair value less costs to sell is determined, whenever possible, based on a firm sale agreement in an arm’s length transaction, between knowledgeable and willing parties, adjusted by costs to sell the asset, or, in the absence of a firm sale agreement, based on the observable market price in an active market, or on the price of the most recent transaction involving similar assets. At the balance sheet dates, there were no factors indicating the need for a provision for impairment of assets.

2.20. Provisions

General A provision is recognized in the balance sheet when the Company has a legal or constructive obligation as a result of a past event, the settlement of which is likely to generate an outflow of economic benefits. Provisions are recorded in view of the best estimates of the risk involved. An asset is recognized in the balance sheet when it is likely that future economic benefits will flow to the Company and its cost or value can be measured reliably. Asset and liability provisions are classified as current when they are likely to be realized or settled within the following twelve months. Otherwise, they are stated as noncurrent. Expenses related to any provision are stated in P&L, net of any reimbursements.


25


2.20. Provisions (Continued)

Provision for contingencies

Provisions are recognized for all contingencies in connection with legal proceedings for which it is likely that a cash outflow will be required to settle the contingency/obligation and a reasonable estimate can be made. Assessment of the likelihood of loss includes analysis of available evidence, hierarchy of laws, available case law, latest court decisions and their relevance in the legal system, as well as the opinion of external legal advisors. Provisions are reviewed and adjusted to take into consideration changes in circumstances, such as applicable statute of limitations, conclusions of tax audits or additional exposures identified based on new matters or court decisions.

2.21. Debentures

These are initially recorded at fair value plus transaction costs that are directly attributable to issue thereof. They are subsequently measured at amortized cost using the effective interest rate method. Interest and monetary restatement, where applicable, are recognized as financial income or expenses in P&L, when incurred.

2.22. Government grants and assistance

Government grants and assistance are recognized when there is reasonable certainty that the conditions established by the agency granting the benefit were fulfilled and that they will be received. They are recorded as income in the income statement for the period necessary to match the expense that the government grant or assistance intended to offset. In the year ended February 28, 2015, government grant for the unit in Pernambuco was not recognized since it is currently being renewed.

2.23. Lease agreements

A lease agreement is defined based on substantive aspects related to the use of an asset or specific assets, or even the right to use a certain asset on the execution date.


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2.23. Lease agreements (Continued) Finance lease agreements transferring to the Company basically all risks and benefits related to the leased item ownership are capitalized at the beginning of the lease agreement for the lower of fair value of the leased asset item or fair value of minimum lease payments. Initial direct costs incurred in the transaction are added to cost, when applicable. Payments of finance lease agreements are allocated to financial charges and reduction of finance lease liabilities in order to obtain constant interest rate on the outstanding liability balance. The financial charges are recognized in the income statement. The leased assets are depreciated over their useful lives. However, when there is no reasonable guarantee that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of its estimated useful life or the lease term.

Operating leasing contracts are recognized as expense in the income statement on a straight-line basis over the lease term.

2.24. Employee benefits

Benefits granted to Company’s employees and management members include, in addition to fixed compensation (salaries and social security contributions (INSS), vacation pay and 13th monthly salary pay), variable compensation, such as profit sharing. These benefits are recorded to P&L for the year when the Company has a liability accounted for on an accrual basis, as incurred.

2.25. Cash flow statements and statement of value added

The cash flow statements were prepared under the indirect method and are presented in accordance with accounting pronouncement CPC 03-R2 (IAS 7) – Statement of Cash Flows. The statement of value added was prepared in accordance with CPC 09 and is presented as supplementary information.


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2.26. New pronouncements

i) Standards effective from January 1, 2014

In 2014, the following standards issued by IASB became effective and did not materially impact the Company’s financial statements:

IAS 32 - Disclosures - Offsetting Financial Assets and Financial Liabilities. Establishes requirements for disclosure of offsetting financial assets and financial liabilities agreements.

IAS 36 Impairment of Assets (Amendment) – This amendment clarifies that the scope of disclosure of information on the recoverable amount is limited to the recoverable amount of depreciated assets, which are measured based on fair value less disposal costs. Ammendments must be applied retrospectively.

IFRIC 2, Levies – IFRIC 21 is an interpretation of IAS 37 - Provisions, Contingent Liabilities and Contingent Assets. IFRIC 21 provides guidance on when to recognize a liability for a levy imposed by a government (except income tax). IFRIC 21 clarifies that an entity recognizes a liability for a levy when the activity that triggers payment, as identified by the relevant legislation, occurs.

IAS 27 – Equity Method in Separate Financial Statements enables the adoption of the equity method for investments held in subsidiaries, affiliates and joint ventures in the separate financial statements. Camil already used the equity method in its individual financial statements to recognize these investments.

ii) Standards issued but not yet effective

IFRS 9 Financial Instruments and amendment

IFRS 9 establishes two main categories to measure financial assets: amortized cost and fair value. The classification base depends on the entity’s business model and contractual cash flow characteristics of the financial asset. IFRS 9 provided for new requirements for hedge accounting. No significant impacts are expected on the Company's financial position and performance. This standard is applicable to annual periods beginning on or after January 1, 2018.


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2.26. New pronouncements (Continued)

ii) Standards issued but not yet effective (Continued) IFRS 11 - Joint Arrangements The amendments to IFRS 11 deal with the accounting for acquisition of an interest in a joint arrangement which constitutes a business. This standard is applicable to annual periods beginning on or after January 1, 2016. IFRS 10 and IAS 28 – Sales or Contributions of Assets between an Investor and its Associate/Joint venture Amendments refer to the accounting treatment of operations with assets between an investor and associate/joint-venture companies. This standard is applicable to annual periods beginning on or after January 1, 2016. IAS 16 and IAS 38 – Clarification of Acceptable Methods of Depreciation and Amortization It establishes as acceptable methods of depreciation and amortization of assets economic benefits expected from the use of an asset. This standard is applicable to annual periods beginning on or after January 1, 2016. IFRS 15 - Revenue from Agreements with Customers On May 28, 2014, IASB published a new standard on revenue recognition, replacing most part of the detailed revenue recognition guidance currently existing in IFRS. The new standard specifies that revenue must be recognized when (or as) an entity transfers the control of goods or services to customers for the amount the entity understands it is entitled to receive. This standard is applicable to annual periods beginning on or after January 1, 2018. IAS 1 – Disclosure It provides for evidence in the disclosure of general purpose financial statements. This standard is applicable to annual periods beginning on or after January 1, 2016.


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2.26. New pronouncements (Continued)

ii) Standards issued but not yet effective (Continued) Amendment to IAS 27 Equity method in separate financial statements The revised standard allows for the adoption of the equity method for investments held in subsidiaries in the separate financial statements. Amendments to IFRS 10, IFRS 12 and IAS 28 Investment entity – Applying the Consolidation Exception Among other clarifications, it is established that a non-investment entity will be able to retain, when applying the equity method, the fair value measurement through P&L used by its investments. Company management assessed these amendments and, based on the current wording, it expects no significant accounting effects on the financial statements for the year ended February 28, 2015.

3. Significant accounting judgments, estimates and assumptions

Judgments

The preparation of the financial statements of the Company and its subsidiaries requires that management make judgments and estimates and adopt assumptions that affect the amounts disclosed referring to revenues, expenses, assets and liabilities, as well as the disclosures of contingent liabilities, as at the financial statements reporting date. However, the uncertainty related to these assumptions and estimates could lead to results that would require significant adjustment to the carrying amount of the assets or liabilities affected in future periods.

Estimates and assumptions

Significant assumptions regarding sources of uncertainty in future estimates and other major sources of uncertainty in estimates as at the balance sheet date, involving a significant risk that a significant adjustment to the carrying amount of assets and liabilities may be required in the next financial year are presented below.


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3. Significant accounting judgment, estimates and assumptions (Continued)

Estimates and assumptions (Continued) Impairment of non-financial assets Impairment loss exists when the book value of an asset or cash-generating unit exceeds its recoverable amount, which is the higher of fair value less cost to sell and value in use. The calculation of fair value less cost to sell is based on information available on transactions for sale of similar assets or market prices less additional costs to dispose of the asset. The calculation of value in use is based on the discounted cash flow model. Cash flows arise from the budget from the next five years and do not include reorganization activities to which the Company has not yet committed or significant future investments that will improve the asset base of the cash-generating unit under test. The recoverable amount is sensitive to the discount rate used in the discounted cash flow method, as well as expected future cash receipts and growth rate used for extrapolation purposes. In the case of goodwill, recoverable amount is estimated every year at the same time. For purposes of testing the goodwill recoverable amount, the amount of goodwill determined in a business combination is allocated to the CGU for which the benefit of combination synergy is expected. This allocation reflects the lower level at which goodwill is monitored for internal purposes. Determination and review of the useful life of property, plant and equipment and intangible assets The useful lives of property, plant and equipment and intangible assets are determined based on assumptions that take into consideration the history of fixed and intangible assets already depreciated or amortized, as well as future projections based on estimates that may not materialize in accordance with the provisions and that may significantly differ from the amount initially estimated. Provision for tax, civil, labor and environmental contingencies The Company and its subsidiaries recognize provision for civil and labor claims. Assessment of the likelihood of loss includes analysis of available evidence, hierarchy of laws, available case law, latest court decisions and their relevance in the legal system, as well as the opinion of external legal advisors. Provisions are reviewed and adjusted to take into consideration changes in circumstances, such as applicable statute of limitations, conclusions of tax audits or additional exposures identified based on new matters or court decisions.


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3. Significant accounting judgment, estimates and assumptions (Continued)

Estimates and assumptions (Continued) Taxes There are uncertainties regarding the interpretation of complex tax regulations and the amount and timing of future taxable profits. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could require future adjustments to tax income and expenses already recorded. The Company and its subsidiary set up provisions, based on reliable estimates, for possible consequences from audits by tax authorities of the respective jurisdictions in which they operate. The amount of these provisions is based on various factors, such as past tax audit experience and different interpretations of tax regulations by the taxable entity and by the relevant tax authority. These interpretation differences may arise for several matters, depending on conditions effective in the corresponding domicile of the Company, its branches and subsidiaries. Fair value of financial instruments

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, their fair value is determined using valuation techniques including the discounted cash flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgment includes considerations on the data used, such as: liquidity, credit and volatility risks. Changes in the assumptions about these factors could affect the reported fair value of financial instruments.

4. Cash and cash equivalents


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Cash and cash equivalents 2,744 120,599 20,736 124,477 Short-term investments 223,241 88,804 223,242 137,379

225,985 209,403 243,978 261,856


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4. Cash and cash equivalents (Continued)

Cash and cash equivalents are substantially represented by non-interest bearing bank deposits. Short-term investments classified as cash and cash equivalents comprise fixed-income investments backed by average earnings corresponding to 99.82% (101.16% at February 28, 2014) of the Interbank Deposit Certificate (CDI) variation, and are redeemable within 90 days, with no grace period applicable.

5. Short-term investments

Short-term investments comprise fixed income investments with average earnings corresponding to 102.5% of the CDI (103.8% of the CDI at February 28, 2014), and are recorded at fair value through profit or loss, with grace period clauses.

At February 28, 2015, the Company holds short-term investments classified as noncurrent assets amounting to R$16,872 - Company (20,049 at February 28, 2014) and R$16,936 - Consolidated (R$20,113 at February 28, 2014). Investment in the Company was carried out with BTG Pactual S.A. bank to ensure payment of the obligations of the agreement for purchase and sale of units of interest entered into by Camil and Pepsico do Brasil Ltda., for the purchase of Canadá Participações Ltda. (Coqueiro) in 2011.

6. Trade accounts receivable


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Falling due 416,526 416,916 549,391 480,938 Overdue up to 30 days 8,207 3,524 28,208 31,119 Overdue from 31 to 60 days 771 1,212 4,251 21,653 Overdue from 61 to 90 days 590 575 2,989 2,711 Overdue for more than 91 days 3,128 10,009 7,946 14,353

429,222 432,236 592,785 550,774

Contractual disconts (9,109) (11,268) (9,109) (11,268) Allowance for doubtful accounts (4,889) (9,430) (6,605) (11,156) Present value adjustment (1,745) (1,700) (1,745) (1,700)

413,479 409,838 575,326 526,650

Changes in the allowance for contractual discounts are as follows:


Contractual disconts 02/28/2015 02/28/2014 02/28/2015 02/28/2014

Balance at beginning of year (11,268) (12,993) (11,268) (12,993) Additions 2,159 1,725 2,159 1,725

Balance at end of year (9,109) (11,268) (9,109) (11,268)


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6. Trade accounts receivable (Continued)

Changes in allowance for doubtful accounts are as follows:


Allowance for doubtful accounts 02/28/2015 02/28/2014 02/28/2015 02/28/2014

Balance at beginning of year (9,430) (10,188) (11,156) (11,519) Additions - - - (395) Write-offs 4,541 758 4,551 758

Balance at end of year (4,889) (9,430) (6,605) (11,156)

7. Inventories


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Rice 75,900 73,208 175,233 237,945 Beans 7,411 10,120 15,838 10,120 Sugar 23,394 28,702 23,394 28,702 Oil 358 297 4,616 297 Ready-made line 374 442 374 442 Fish 50,879 49,359 50,879 49,359 Other products 11,707 10,905 13,691 10,905 Packages 19,945 24,699 26,728 24,699 Byproducts 1,453 1,673 1,936 1,673 Imports in transit 6,798 6,794 7,469 6,794 Ancillary materials 499 484 11,408 484 Resale goods 517 246 752 246 Inventories held by third parties 26,672 49,290 26,672 49,290 Inventories in transit 11,851 16,479 56,523 16,479 Present value adjustment (1,226) (921) (1,226) (921)

236,532 271,777 414,287 436,514

Inventories are insured against fire and other sundry perils. Coverage is determined based on the amounts of risks involved. Detailed information on coverage is provided in Note 25.

8. Advances to suppliers and producers

These are advances made to cooperatives, rice producing companies and independent producers to ensure rice purchases.


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9. Taxes recoverable


02/28/2015 02/28/2014 02/28/2015 02/28/2014

ICMS and VAT (IVA) recoverable 3,649 6,234 13,745 11,791 PIS and COFINS recoverable 74,370 39,856 74,370 39,856 Withholding Income Tax (IRRF) 9,073 16,655 12,399 19,852 IPI recoverable 13,651 9,299 13,651 9,299 Other 11,425 15,003 11,426 15,003

112,168 87,047 125,591 95,801 Current portion 109,370 82,996 122,793 91,750

Noncurrent portion 2,798 4,051 2,798 4,051

Recoverable ICMS and IVA amounts refer to credits generated in the normal course of business of the Company and its subsidiaries and may be offset against future debits of the same nature. In Brazil, accumulated credits may be sold to third parties, provided that certain requirements are met. The Company also recorded ICMS recoverable amounting to R$25,634, for the acquisition of Docelar, for which a provision in the same amount was recorded, given the likelihood of recovery of the referred to tax credits.

In the Company’s individual financial statements, Contribution Tax on Gross Revenue for Social Integration Program (PIS) and Contribution Tax on Gross Revenue for Social Security Financing (COFINS) recoverable refer to credits generated in its normal course of business, credits introduced by Law No. 10925/04 (this is the same law regulating the use of such tax credits) and credits on self-arbitration by Femepe Indústria e Comércio S.A. for the period 2005 to 2009. Company management carries out studies on use of these amounts and no losses are expected on the realization of such credits. Femepe Indústria e Comércio S.A. merged into Camil Alimentos S.A. on November 1, 2011. Withholding income tax (IRRF) refers mainly to redemption of short-term investments. In consolidated, the balance also comprises Corporate Income Tax (IRPJ) and Social Contribution Tax on Net Profit (CSLL) credits regarding the self-arbitration and overpayments in 2010 by the merged subsidiary Femepe Indústria e Comércio S.A.

10. Other receivables


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Notes receivable – Even-Rio 16,343 - 16,343 -

Other receivables 15 41 545 871

16,358 41 16,888 871

The Company’s amount of R$16,343 refers to receivables from Even Rio for the sale of land

from the unit in Piedade (RJ).


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11. Business combinations

a) Carreteiro Indústria e Comércio de Alimentos Ltda. On May 10, 2013, the Company acquired 49,999,999, representing all capital in Carreteiro Indústria e Comércio Ltda., in accordance with Official Letter No. 494/2013/OF of proceeding No. 0051785-76.2012.8.19.0001. The Company acquired only assets and trademarkes relating to significant food business operations of Carreteiro Alimentos Ltda., which was undergoing in-court reorganization. The Company completed the fair value measurement process and did not identify any changes in relation to information disclosed in 2014, as stated in the table below, where all allocations were made, impacting property, plant and equipment and trademarks. Carreteiro (Assets and Trademarks)

Assets

R$ thousand

Intangible assets - Trademarks 16,362 Property, plant and equipment 28,354

Total identifiable assets and liabilities, net 44,716 (-) Consideration amount (45,000)

Goodwill 284

Acquisition costs 4,061

In the year ended February 28, 2014, acquisition costs of R$4,061 were recognized in the income statement; namely: i. R$175 under administrative expenses; and ii. R$3,886 under financial expenses.

b) La Loma Alimentos S.A. On June 3, 2013, the Company, through its parent company Camil Internacional, acquired 100% of units of interest of La Loma Alimentos S.A., pursuant to a unit of interest purchase and sale agreement.


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11. Business combinations (Continued)

b) La Loma Alimentos S.A. (Continued) Fair value of identifiable assets and liabilities of La Loma Alimentos S.A is as follows: Assets R$ thousand

Cash 140 Trade accounts receivable 904 Inventories 8,315 Taxes recoverable 1,771 Other accounts receivable 933 Property, plant and equipment 10,888

Total identifiable assets, net 22,951 Liabilities Trade accounts payable 10,979 Taxes and contributions 602 Other liabilities 3,467

Total liabilities 15,048

Total identifiable assets and liabilities, net 7,903

(-) Consideration amount 7,082

Negative goodwill (821) Acquisition costs 190

In the year ended February 28, 2014, acquisition costs of R$190 were recognized in P&L for the year under administrative expenses. The Company completed the fair value measurement process and did not identify any changes in relation to year 2014.

c) Speed Transportes Ltda. On July 25, 2013, Camil Alimentos S.A., through its subsidiary Ciclo Logística Ltda., acquired 100% of Speed Transportes Ltda., which was merged on October 1, 2013, pursuant to a unit of interest purchase and sale agreement for the amount of R$100.00.


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11. Business combinations (Continued) c) Speed Transportes Ltda. (Continued)

The Company completed the fair value measurement process of Speed Transportes Ltda. as follows: Speed

Assets

R$ thousand

Cash 28 Trade accounts receivable 379 Taxes recoverable 49 Other accounts receivable 66 Property, plant and equipment 18,449

Total assets 18,971

Liabilities Trade accounts payable 503

Taxes and contributions 2,003 Loans 9,812 Provisions for contingencies 864 Other liabilities 6,653


Total identifiable assets and liabilities, net (864)

(-) Consideration amount -

Goodwill 864

Acquisition costs 20

In the year ended February 28, 2014, acquisition costs of R$20 were recognized in P&L for the year under administrative expenses.

d) Envasadora Arequipa S.A.C.

On November 18, 2013, the Company, through its subsidiary Camil Internacional, acquired 100% of the units of interest of Envasadora Arequipa S.A.C., pursuant to a share purchase and sale agreement.


38

11. Business combinations (Continued)

d) Envasadora Arequipa S.A.C. (Continued) The Company completed the fair value measurement process of Envasadora Arequipa S.A.C. as follows:

Assets

R$ thousand

Cash 138 Trade accounts receivable 734 Inventories 845 Other receivables 238 Property, plant and equipment 3,554 Intangible assets 160

Total assets 5,669 Liabilities Trade accounts payable 146 Other liabilities 2,011

Total liabilities 2,157 Total identifiable assets and liabilities, net 3,512 (-) Consideration amount 8,440

Goodwill 4,928 Acquisition costs 52

In the year ended February 28, 2014, acquisition costs of R$52 were recognized in P&L for the year under administrative expenses.

e) Romero Trading S.A

On September 19, 2014, a share purchase and sale agreement was entered into by and between Camil and shareholders from Romero Trading S.A., in the amount of R$57,654 (USD22,520 at transation date), which provided for the acquisition, through subsidiary Camil Peru, of all shares representing Romero Trading S.A. capital. The completion thereof was subject to condition precedent usual in operations of this nature and took place on November 28, 2014, by means of payment of the consideration amounting to R$57,654.


39

11. Business combinations (Continued) e) Romero Trading S.A. (Continued)

Preliminary fair value of identifiable assets and liabilities of Romero Trading S.A. is as follows:

Assets R$

thousand

Cash 3,612 Trade accounts receivable 13,205 Inventories 7,657 Taxes recoverable 5,515 Other accounts receivable 4 Property, plant and equipment 8,835 Intangible assets 2,878

Total assets 41,706

Liabilities

Trade accounts payable 5,757 Taxes and contributions 893 Loans 18,279 Other liabilities 2,682


Total identifiable assets and liabilities, net 14,095 (-) Consideration amount 57,654

Preliminary goodwill determined 43,559

Acquisition costs 119

The Company is nearly completing the determination of the fair value of certain components, which shall be completed within one year from the purchase date. Acquisition costs of R$119 were recognized in P&L for the year under administrative expenses. On February 28, 2015, Romero Trading S.A. was merged into Costeño Alimentos S.A.C.

12. Investments

Breakdown of investments is as follows:


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Investment in subsidiaries 574,795 455,105 - - Investment in affiliates - - 20,271 16,099 Goodwill on investment acquisition 185,275 185,275 - -

760,070 640,380 20,271 16,099


40

12. Investments (Continued)

Changes in investments are as under:


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Balance at beginning of year 640,380 513,215 16,099 14,411 Additions: Carreteiro - 45,000 - - Additions: Camil Internacional - 2,754 - - Equity pickup 40,606 32,399 (303) (1,235) Exchange variation on investments 79,084 47,012 4,475 2,923

Balance at end of year 760,070 640,380 20,271 16,099

Interests in subsidiaries are as follows: Direct subsidiaries

02/28/2015

Investments

Capital Equity

P&L for the year

Equity interest %

Equity pickup 02/28/2015 02/28/2014

Camil Internacional Argentina S.A. 341,165 525,145 38,821 100.0% 38,821 525,145 406,954 Ciclo Logística Ltda. 1,000 3,888 1,464 100.0% 1,464 3,888 2,426 Carreteiro Ind. e Com. de Alimentos S.A. 45,000 45,762 321 100.0% 321 45,762 45,726

40,606 574,795 455,106

Camil Internacional S/A, whose head office is in Argentina, was incorporated on January 5, 2011 and, in May 2011 became controlling shareholder of subsidiaries Camil Chile SpA and Camil Alimentos Peru S.A.C.; on October 31, 2011, it also became controlling shareholder of subsidiary S.A. Molinos Arroceros Nacionales (SAMAN). These companies were previously direct subsidiaries of the Company. On June 3, 2013, Camil Internacional acquired 100% of units of interest of La Loma Alimentos S.A. On September 19, 2014, Camìl Peril acquired 100% of units of interest of Romero Trading S.A. On February 28, 2015, Costeño Alimentos S.A.C. merged Romero Trading S.A.

Ciclo Logística Ltda was organized on February 28, 2011 and its major business purpose is to distribute Camil Alimentos S/A products. In the year ended February 28, 2015, the amount of R$79,084 (R$47,012 at February 28, 2014) was recorded referring to effects of foreign exchange variation from the translation of the financial statements of foreign subsidiaries into reais, originally prepared in US dollars (USD) and Chilean pesos (CLP), Argentinian pesos (ARS) and the new sol (PEN), respectively. These effects are recorded as other comprensive income, in equity.


41

12. Investments (Continued) Affiliate companies

Company’s subsidiary S.A. Molinos Arroceros Nacionales (SAMAN) holds investments in the following companies:

02/28/2015

Investment

Capital Equity

P&L for the year

Equity interest % Equity pickup 02/28/2015 02/28/2014

SAMAN: Comisaco S.A - - - 50.00% - - -

Arrozur S.A. 25,420 32,371 513 49.19% 252 15,924 11,621 Tacua S.A. 1,068 4,481 (809) 40.72% (329) 1,825 1,479 Agencia Marítima Sur - (615) 943 40.72% 384 (250) (203) Galofer S.A. 18,780 6,160 (1,355) 45.00% (610) 2,772 3,202

Total

(303) 20,271 16,099

13. Property, plant and equipment

Company

Cost Land Buildings and improvements

Machinery and equipment

Advances to suppliers

Construction in progress Other Total

Balance at 02/28/2014 87,494 228,026 457,154 19,153 78,610 18,057 888,494 Acquisitions 900 4,532 2,551 - 37,416 1,591 46,990 Write-offs (18,234) (13,372) (9,347) (6,123) (903) (1,267) (49,246) Transfers

21,174 60,181 (3,104) (69,621) 3,164 11,794

Balance at 02/28/2015 70,160 240,360 510,539 9,926 45,502 21,545 898,032

Depreciation Land

Buildings and improvements

Machinery and equipment

Advances to suppliers

Construction in progress Other Total

Balance at 02/28/2014 - (74,419) (234,349) - - (11,787) (320,555) Depreciation - (7,695) (35,585) - - (1,600) (44,880) Write-offs - 4,811 5,202 - - 811 10,824 Transfers - (304) (8,876) - - (2,614) (11,794)

Balance at 02/28/2015 - (77,607) (273,608) - - (15,190) (366,405)

Balance at 02/28/2014 87,494 153,607 222,805 19,153 78,610 6,270 567,939

Balance at 02/28/2015 70,160 162,753 236,931 9,926 45,502 6,355 531,627


42

13. Property, plant and equipment (Continued)

Consolidated

Cost Land Buildings and improvements

Machinery and

equipment Advances to

suppliers Construction in progress Other Total

Balance at 02/28/2014 106,328 333,277 717,087 19,509 81,210 56,871 1,314,282 Exchange variation 14,271 18,080 60,200 (285) 3,689 5,157 101,112 Opening balance - Romero 5,378 1,206 7,443 - 82 278 14,387

Acquisitions 900 5,509 4,272 3,248 53,819 2,331 70,079 Write-offs (18,234) (13,722) (10,083) (6,123) (2,425) (1,935) (52,522) Transfers - 23,013 63,483 (3,104) (75,466) 3,868 11,794

Balance at 02/28/2015 108,643 367,363 842,402 13,245 60,909 66,570 1,459,132

Depreciation Land Buildings and improvements

Machinery and

equipment Advances to

suppliers Construction

in progress Other Total

Balance at 02/28/2014 - (100,108) (372,240) - - (20,612) (492,960) Exchange variation - (17,990) (40,203) - - (4,264) (62,457) Opening balance - Romero - (218) (5,134) - - (200) (5,552)

Depreciation - (10,656) (52,558) - - (4,200) (67,414) Write-offs - 5,082 5,756 - - 1,054 11,892 Transfers - (304) (8,875) - - (2,615) (11,794)

Balance at 02/28/2015 - (124,194) (473,254) - - (30,837) (628,285)

Balance at 02/28/2014 106,328 233,169 344,847 19,509 81,210 36,259 821,322

Balance at 02/28/2015 108,643 243,169 369,148 13,245 60,909 35,733 830,847

Construction in progress basically refers to the expansion of storage capacity. Property, plant and equipment items recorded in “Machinery and equipment” were given in guarantee for financing operations (see Note 14a). Consolidated debt balance of these financing agreements, as of February 28, 2015, totaled R$66,743 (R$ 121,875 in the consolidated). Company’s operations were performed with Banco do Brasil S.A., Banco Itaú S.A. and Banco ABC Brasil S.A.. Subsidiaries’ operation were performed with banks FIDIS S.A., Banco Mercedes Benz, Caixa Econômica Federal, BROU – Banco de La Republica Oriental de Uruguay, Banco Itaú, Banco HSBC, DEG Bank – Bank for the fostering of the German Government, Banco Santander and Safra. Maturity schedule of these loan agreements is as follows:


02/28/2015 02/28/2015

2016 - 25,508 2017 - 13,551 2018 2,137 10,116 2019 6,596 12,296 2020 7,634 9,649 2021 2,766 2,766 2022 onwards 47,610 47,989

66,743 121,875


43

14. Intangible assets

Company

Software Goodwill Trademarks and patents

Relationship with customers

Non-competition agreement Total

Balance at 02/28/2014 1,360 - 201,525 29,871 1,534 234,290 Acquisitions 984 - - - - 984 Amortization (462) - - (7,582) (219) (8,263)

Balance at 02/28/2015 1,882 - 201,525 22,289 1,315 227,011

Consolidated

Software Goodwill

Trademarks and

patents Relationship

with customers

Non-competition agreement Total

Balance at 02/28/2014 2,730 228,071 259,737 29,871 1,534 521,943 Opening balance - Romero Trading - - 2,878 - - 2,744

Acquisitions 1,145 43,559 - - - 44,704 Exchange variation 176 22,236 7,029 - - 29,575 Amortization (1,048) - - (7,582) (219) (8,849)

Balance at 02/28/2015 3,003 293,866 269,644 22,289 1,315 590,117

Intangible assets were tested for impairment and, for the periods ended February 28, 2015 and February 28, 2014, no assets were detected recorded at an amount exceeding their recoverable amount. Projections are in accordance with the Business Plan prepared by Company management. The growth projected for sales, costs and economic indicators are expected to be in line with the curve observed in previous years, and in line with the economic growth of countries where the company acquired operated.


44

15. Loans, financing and debentures

a) Loans and financing


Index

Weighted annual rate 02/28/2015 02/28/2014 02/28/2015 02/28/2014

Working capital - Local currency - 12.60% p.a. 290,214 349,408 290,321 349,863

Local currency - 11.45% p.a. - - - - Foreign currency USD 1.96% p.a. - - 220 14,153 Foreign currency USD 6.30% p.a. - - 4,320 - Foreign currency CLP 5.20% p.a. - - 23,365 30,368 Foreign currency PEN 5.89% p.a. - - 149,294 63,471 Foreign currency ARS 30.00% p.a. - - 12,382 13,108 Lease CLP 6.50% p.a. - - 1,046 1,961 Lease PEN 4.87% p.a. - - 657 318 Lease USD 5.50% p.a. - - 55 133 PP&E – foreign currency USD 3.91% p.a. 5,205 - 5,205 - PP&E – foreign currency EURO 3.91% p.a. - 4,600 - 4,600 Property, plant and equipment TJLP 2.34% p.a. - 250 - 250

Property, plant and equipment TJLP 4.43% p.a. - - 1,649 7,682

Property, plant and equipment - 2.76% p.a. - - - -

Property, plant and equipment - 3.59% p.a. 61,538 50,636 65,031 50,636

Property, plant and equipment USD 6.02% p.a. - - 49,990 61,264

356,957 404,894 603,535 597,807 Current portion

(84,969) (88,629) (167,394) (199,402)

Noncurrent portion

271,988 316,265 436,141 398,405

Breakdown of loans by financial institution:


02/28/2015 02/28/2015

Banco Citibank 120,208 124,911 Banco do Brasil 181,359 182,993 Banco Itaú 50,939 61,186 Banco Santander 2,566 25,898 Banco ABC Brasil 335 335 Banco do Nordeste do Brasil 1,550 1,550 Banco de La Republica Oriental de Uruguay - 6,532 HSBC Bank S.A. - 7,336 DEG Bank - 28,011 Other - 1,981 Banco deCredito del Perú - 149,294 Scotiabank - 3,297 Banco de Chile - 8,655 Bradesco - 682 Caixa Economica Federal - 874

356.957 603.535


45

15. Loans, financing and debentures (Continued)

a) Loans and financing (Continued)

Except for working capital operations with Banco do Brasil in the amount of R$165,890, with Banco Citibank of R$120,208 and import financing (FINIMP) with Banco Itaú amounting to R$5,205, which do not have guarantees, all the other loans and financing are guaranteed by statutory lien on property, plant and equipment items (see Note 12) and pledge on inventories. Subsidiary SAMAN has a loan guaranteed by mortgage, machinery and inventory of subsidiaries Arrozur S.A and Galofer S.A.

Noncurrent portions of loans mature as follows:


02/28/2015 02/28/2014 02/28/2015 02/28/2014

2015 - - - 12,282 2016 - 69,546 - 107,106 2017 79,473 70,051 142,908 89,834 2018 136,675 133,304 169,890 140,919 2019 18,580 15,449 43,158 18,715 2020 18,016 27,915 40,442 29,549 2021 onwards 19,243 - 39,743 -

Total 271,988 316,265 436,141 398,405

b) Debentures

Breakdown of outstanding debentures is as follows:

Company and Consolidated

Type Outstanding debentures

Annual financial charges U.P. 02/28/2015 02/28/2014

Unsecured guarantee Issued on 01/20/2012 450 CDI + 1.55% p.a 1.000 304,175 455,912

Issued on 10/04/2012 170 CDI + 1.35% p.a 1.000 178,417 177,481 Issued on 07/03/2014 200 CDI + 1.30% p.a 1.000 211,307 -

Transaction costs

(3,054) (1,871)

690,845 631,522 Current liabilities

(172,878) (162,642)

Noncurrent liabilities

517,967 468,880


46

15. Loans, financing and debentures (Continued) b) Debentures (Continued)

Issue on January 20, 2012 On January 20, 2012, Board of Directors’ members approved the second issue of debentures nonconvertible into shares, of the non-privileged type, amounting to 450 debentures in two series, totaling R$450,000. The debentures will be amortized semi-annually, the first payment being due on July 19, 2014 and last payment on January 19, 2017. Remuneration of the first series will be paid on a semiannual basis, as from issue date, on the 19th day of January and July each year, beginning on July 19, 2012 and ending on the maturity date. Remuneration of the second series will be paid on a quarterly basis, as from issue date, on the 19th of January, April, July and October each year, beginning on April 19, 2012 and ending on the maturity date, together with the date of payment of the first series debenture remuneration. Costs incurred with fund raising were matched against liabilities, and were charged to P&L over the term of the contract for payment of the debentures using the effective interest rate method. No premium was paid in connection with issue of debentures. Funds raised were used for early redemption of 250 first issue simple debentures, nonconvertible into shares, issued on December 10, 2009, in the principal amount of R$250,000 on the issue date, maturing on December 10, 2014 and remaining balance to strengthen the Company’s working capital.

Issue on October 4, 2012 On October 4, 2012, 170 debentures were issued at the par value of R$1,000 by Docelar Alimentos e Bebidas S.A., nonconvertible into shares, unprivileged type, which were merged by Camil Alimentos S.A. on December 31, 2012, according to the minutes of approval of the Rationale for the Merger. Debenture remuneration will be paid on a semiannual basis, as from issue date, on the 4th day of April and October each year, beginning on April 4, 2013.


47

15. Loans, financing and debentures (Continued) b) Debentures (Continued)

Issue on July 3, 2014

On July 3, 2014, the Company performed its fourth issue of debentures amounting to R$200,000 (two hundred million reais), according to the “Private Indenture Document of 4th Issue of unprivileged single-series unsecured junior debentures nonconvertible into shares, for Public Distribution with Restricted Efforts, of Camil Alimentos S.A.”, executed by and between Issuer and Banco Bradesco BBI S.A.

There was issue of 200 debentures with par value of R$1,000 (one million reais) each with term of five years from issue date (March 15, 2014), therefore maturing on March 15, 2019.

On the debt balance of the par value of each debenture there will be levy of interest of 100% of the accumulated variation of the average DI rates (one-day interbank deposits), plus spread of 1.30% p.a.

The Company may fully or partially redeem debentures in advance as from the date of issue, through written notice to the trustee and the publication of written notice to debenture holders.

The debenture indentures address that the following covenants will be complied with:

i) (i) net debt/ebtida equal to or lower than 3.0 (three times) in February 2012 and February 2013; (b) 2.75 (two point seventy-five times) in February 2014 and February 2015; (c) 2.5 (two point five times) in February 2016; and

ii) current assets/current liabilities equal to or higher than 1.0 (one time).

The Company is in compliance with the covenants.

Noncurrent portions of debentures mature as follows:


02/28/2015 02/28/2014

2016 - 206,107 2017 183,529 206,106 2018 117,496 56,667 2019 167,219 - 2020 onwards 49,723 -

Total 517,967 468,880


48

16. Transactions with related parties The Company’s parent company is Arfei Comércio e Participações S.A. There are no transactions between the Company and its parent company, but dividend payment. The following balances are held between the Company, its subsidiaries and other related parties:


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Current assets Trade accounts receivable Subsidiaries: S.A. Molinos Arroceros Nacionales 2 2,464 - -

Ciclo Logística Ltda. 13,511 2,823 - - Affiliates:

Galofer S.A - - 4,750 3,690 Comisaco S.A - - 2,345 1,795 Arrozur S.A. - - 11 6

Other: Climuy S.A. - - 6,256 4,976

13,513 5,287 13,362 10,467

Noncurrent assets Trade accounts receivable Affiliates: Galofer S.A - - 5,171 4,192

Total assets 13,513 5,287 18,533 14,659


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Current liabilities Accounts payable for purchases Subsidiaries: S.A. Molinos Arroceros Nacionales 8,166 3,428 - -

Ciclo Logística Ltda. 3,784 2,549 - - Empresas Tucapel S.A. 950 - - - Carreteiro Alimentos S.A. 16,380 15,585 - - Affiliates:

Climuy S.A. - -

88 Arrozur S.A. - - 4,569 1,612 Tacua S.A. - - 1,092 658 Galofer S.A. - -

19

Other: Q4 Empreendimentos e Participações Ltda. 580 561 580 561

Total liabilities 29,860 22,123 6,241 2,938


49

16. Transactions with related parties (Continued)


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Expenses with purchase of processed rice S.A Molinos Arroceros Nacionales 32,686 71,385 - -

Empresas Tucapel S.A. 5,479 - - - Rent expenses

Q4 Empreendimentos e Participações Ltda. 6,825 6,028 6,825 6,028 Freight expenses

Ciclo Logística Ltda. 49,493 61,561 - - Expenses with bottle filling and purchase of mineral water

Classe Brasil Ltda. - 222 - 222 Irrigation expenses

Comisaco S.A - - 21 (43) Climuy S.A. - - (921) 3,978 Buskoy Trading S.A.

- 13 Electrical energy expenses

Galofer S.A - - 1,394 1,055 Expenses with rice parboiling

Arrozur S.A. - - 16,152 12,618 Expenses with port services

Tacua S.A. - - 8,847 6,681

Total expenses 94,483 139,197 32,318 30,552

Purchase transactions conducted with subsidiary S.A. Molinos Arroceros Nacionales (SAMAN) refer to purchase of rice to ensure supply Northeastern region of Brazil. Payments are substantially made in advance. Transactions with other affiliates and related parties refer substantially to advances for services to be rendered to the Company and its subsidiary S.A. Molinos Arroceros Nacionales. The building and land on which the Production Units of São Paulo state and of Campo Grande in Rio de Janeiro State are located belong to related party Q4 Empreendimentos e Participações Ltda., which charges monthly rental of R$475 and R$105 (R$461 and R$100 at February 28, 2014), maturing on the third and fifth day of the subsequent month, respectively. The transactions with related parties are carried out under the price and terms agreed by the parties.


50

16. Transactions with related parties (Continued) a) Sureties provided

S.A. Molinos Arroceros Nacionales is guarantor of the following transactions: Related parties:

Bank loan transactions 02/28/2015 02/28/2014

Arrozur S.A. 6,463 3,849 Comisaco 3,994 3,262 Galofer S.A. 26,551 21,525

37,008 28,636 Rice producers:

Bank loan transactions 2,079 2,664 Supplier transactions 2,748 4,119

4,827 6,783

b) Key management personnel compensation

For the year ended February 28, 2015, compensation paid to management and independent board totaled R$10,486 (R$7,703 at February 29, 2014), and is carried as administrative expenses in P&L. The following was not paid to the Company’s key management personnel: 1) Long-term benefits;

2) Severance pay;

3) Other benefits/remuneration;

4) Post-employment benefits, and

5) Share-based payment.


51

17. Provision for contingencies

a) Probable risks The Company is party to various ongoing legal proceedings of labor, civil and tax nature, arising in the ordinary course of its business. Based on management analyses and the opinion of Company legal advisors, management set up a provision in an amount deemed sufficient to cover probable losses, if any. Provision for contingencies is as follows:

Company

Provision for contingencies Labor Tax

Environmental Civil Total

At February 28, 2014 4,763 1,057 41 2,190 8,051 Additions 4,716 - 48 - 4,764 Write-offs (292) (784) - (1,867) (2,943)

At February 28, 2015 9,187 273 89 323 9,872

Judicial deposits Company

At February 28, 2014 (729) (3,572) (261) (525) (5,087) Additions (988) - - (307) (1,295) Write-offs 1,065 - 261 103 1,429

At February 28, 2015 (652) (3,572) - (729) (4,953)

Consolidated

Provision for contingencies Labor Tax

Environmental Civil Total

At February 28, 2014 4,793 2,607 - 2,190 9,590 Additions 5,940 - 89 0 6,029 Write-offs (292) (2,334) - (1,867) (4,493) Exchange variation -

- - -

At February 28, 2015 10,441 273 89 323 11,126

Judicial deposits

Consolidated At February 28, 2014 (729) (3,572) (261) (525) (5,087)

Additions (1,065) - - (307) (1,372) Write-offs 1,067 - 261 103 1,431

At February 28, 2015 (727) (3,572) - (729) (5,028)

The Company and its subsidiaries are parties to several labor claims, whose individual amounts are considered immaterial by management. Their legal advisers consider that there will be no significant cash outflows stemming from the issues under discussion, and based on past history of claims of this type of the Company and its subsidiaries.


52

17. Provision for contingencies (Continued)

b) Possible risks

The Company is party to proceedings whose likelihood of an unfavorable outcome has been rated as possible by management and its legal advisers. As a result, no provision therefor has been recorded.

(i) The Company figures as defendant in collection proceeding No. 0100208-

33.2013.8.19.0001 brought by company Soluções Ambientais Águas do Brasil Ltda. (SAAL), in progress before the 13th Civil Court of Rio de Janeiro – RJ, at the historical cost of R$6,553 - restated amount of R$9,088 (monetary restatement and interest charges), due to alleged noncompliance, by Camil, with the service agreement for industrial waste treatment, in the unit of São Gonçalo/RJ. The process is under investigation, pending examination by the technical expert.

(ii) In November 2010, the Company was served a tax delinquency notice regarding the

collection of import duties, plus arrears interest and fines totaling approximately R$11 million, for alleged rice imports under incorrect tax classification and consequent underpayment of the import duty. A voluntary appeal was filed and is awaiting judgment.

(iii) In 2007, tax authorities of the State of São Paulo issued a tax delinquency notice against

the Company, aiming at the collection of State Value-Added Tax (ICMS) for alleged underpayment regarding undue recording of tax credits, which correspond to the difference between the separately identified tax amount in invoices, at the rate of 12%, and the tax amount actually paid in the state of origin, namely Rio Grande do Sul, at the rate of 5% by operation of a tax benefit. The amount of this notice as restated totals R$9,600. The proceeding is pending judment.

(iv) Tax colletion claim No. 0047913-80.2013.4.03.6182 amounting to R$16,886 related to

alleged PIS/COFINS debits for calendar years 11/2000 to 05/2001 and 07/2001 to 12/2002, which had been assessed as a possible risk was reassessed as a remote risk for the year ended February 28, 2015.


53

18. Special installment program (PAES)


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Special installment program (PAES) 88 504 88 504 Additional claims 79,982 83,631 81,401 85,051

80,070 84,135 81,489 85,555 Current (9,981) (9,627) (10,173) (9,627)

Noncurrent 70,089 74,508 71,316 75,928

a) PAES

The Company joined the Special Installment Program – PAES for federal and social security taxes, as permitted by Law No. 10684/03. The installment requests were registered on July 30, 2003, to be settled in 120 months, restated by the Long-Term Interest Rate (TJLP). Balances of this installment program is as follows:


02/28/2015 02/28/2014

Original debt balance 13,821 13,821 Interest and restatement 4,500 4,384 Amortization (15,386) (14,854) Reduction of penalties and interest pursuant to Law No. 11941/09 (2,847) (2,847)

88 504 (-) Current portion (88) (423)

Noncurrent liabilities - 81


54

18. Special installment program (PAES) (Continued)

b) Other installment programs On November 13, 2009, the Company filed an application for inclusion of its debt balance from the former special installment program in the new federal tax debt installment program instituted by Law No. 11941, dated May 27, 2009. Based on the provisions and regulations of the new law, the remaining debt balance was recalculated, less reductions provided for by law.

In addition, the Company withdrew from certain administrative proceedings which contested notices issued by tax authorities referring to offset of income tax debts against PIS and COFINS tax credits, having included the amounts due in the special installment program. Balances in this installment program are as follows:


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Original debt balance 95,039 95,039 95,039 95,039 Balance – merger of Speed Transportes Ltda. - - 1,420 1,420 Interest and restatement 34,195 30,717 34,195 30,717 Amortization (45,678) (38,551) (45,679) (38,551) Reduction of penalties and interest pursuant to Law No. 11941/09 (3,574) (3,574) (3,574) (3,574)

79,982 83,631 81,401 85,051 (-) Current portion (9,893) (9,204) (10,085) (9,204)

Noncurrent liabilities 70,089 74,427 71,316 75,847

19. Equity

a) Capital

At February 28, 2015, the Company’s fully subscribed and paid-in capital amounts to R$527,428, divided into 112,986,740 book-entry registered common shares with no par value.


55

19. Equity (Continued)

b) Dividends

Shareholders are assured minimum mandatory dividends equivalent to 25% of adjusted net income, after legal deductions. The Company may, at its Board of Directors’ discretion, prepare monthly, quarterly or semi-annual interim financial statements and make dividend payments based on the interim financial statements, observing applicable legal limits.

02/28/2015 02/28/2014

Net income for the year 104,960 124,214 Income reserve 4,086 4,799 Set-up of legal reserve (5,248) (6,211)

Dividend calculation base 103,798 122,802 Minimum mandatory dividend (25,950) (30,701) Supplementary dividend paid - (3,299)

(%) of dividends to be distributed 25% 28%

In the Board of Directors' Meeting held on May 18, 2015, minimum mandatory dividend payment was approved, according to the Company's balance sheet corresponding to the year ended February 28, 2014.

c) Legal reserve

Legal reserve is set up based on 5% of net income for the year, limited to 20% of the Company’s capital. For the year ended February 28, 2015, it totaled R$28,485 (R$23,237 as of February 28, 2014).

d) Retained profit reserve

This will be allocated to investments provided for in the capital budged to be approved in Annual Meeting. In this meeting shareholders will also approve the financial statements as of February 28, 2015.


56

19. Equity (Continued) e) Equity adjustment


02/28/2015 02/28/2014

Exchange variation on foreign investments 169,109 90,025 GIF Codajás goodwill reserve 70,510 70,510 Deemed cost 56,646 60,733

Equity adjustment 296,265 221,267

20. Income and social contribution taxes

a) Reconciliation of amounts posted to P&L

Company

02/28/2015 02/28/2014

Income tax

Social contribution

tax Income tax

Social contribution

tax

Net income before taxes 138,147 138,147 165,882 165,882 Statutory rates 25% 9% 25% 9%

Income and social contribution taxes at nominal rates (34,537) (12,433) (41,471) (14,929)

Equity pickup 10,152 3,655 8,100 2,916 Permanent exclusions (additions), net (18) (6) 2,732 984

Amount posted to P&L (24,403) (8,784) (30,639) (11,029)

Income and social contribution taxes at effective rates - (33,187) - (41,668)

Effective rate - 24.0% - 25.1%


57

20. Income and social contribution taxes (Continued)

a) Reconciliation of amounts posted to P&L (Continued)

Consolidated

02/28/2015 02/28/2014

Income tax

Social contribution

tax Income tax

Social contribution

tax

Net income before taxes 156,755 156,755 179,299 179,299 Statutory rates 25% 9% 25% 9%

Income and social contribution taxes at nominal rates (39,189) (14,108) (44,825) (16,137) Effect of income earned abroad* (76) (27) (309) (111) Permanent exclusions (additions), net 1,180 425 4,630 1,667

Amount posted to P&L (38,085) (13,710) (40,504) (14,581)

Income and social contribution taxes at effective rates - (51,795) - (55,085)

Effective rate - 33.0% - 30.7%

* Income tax calculated at the rate of 25% for subsidiaries located in Uruguay; 21% for those located in Chile; 30% for those

located in Peru; and 35 % for those located in Argentina. No social contribution tax is levied in these countries.

b) Deferred income and social contribution taxes


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Temporary differences - assets Allowance for doubtful accounts 1,662 3,206 2,384 3,693

Provision for freight on sales 451 3,345 451 3,345 Provision for profit sharing 1,181 3,631 1,181 3,631 Provision for losses - State VAT (ICMS) 8,716 8,716 8,716 8,716 Present value adjustment 593 578 593 578 Provision for contingencies 3,264 2,854 3,264 2,854 Income and social contribution tax losses 2,760 - 2,760 - Deferred tax credits on GIF Codajás goodwill* 39,956 54,058 39,956 54,058 Difference between accounting and tax goodwill 18,773 42,638 18,773 42,638 Fixed asset value adjustment - - 5,727 7,903 Other temporary provisions 6,146 6,832 7,631 7,485

Total 83,502 125,858 91,436 134,901

Temporary differences - liabilities

Deferred depreciation – technological innovation 608 2,208 608 2,208 Deferred CSLL payments (MP No. 219) 5,901 5,820 5,901 5,820 Other - - 13,816 3,818 On allocation to intangible assets 47,011 49,663 51,307 52,938 On allocation to PP&E 22,100 24,163 22,100 27,496 Deemed cost – PP&E 54,470 60,414 54,470 66,665

130,090 142,268 148,202 158,945

Deferred income and social contribution taxes, net Classified in noncurrent liabilities 46,588 16,410 56,766 24,044

Portion classified in noncurrent liabilities 46,588 16,410 56,766 24,044


58

20. Income and social contribution taxes (Continued)

b) Deferred income and social contribution taxes (Continued) (*) Tax credits for the merger refer to future income and social contribution tax benefit, based on accounting and tax

amortization of merged goodwill. On December 1, 2012, GIF Codajás Participações S.A. (GIF Codajás), company which held interest in Camil, merged into Camil Alimentos S.A., as mentioned in Note 18.a. Goodwill paid by GIF Codajás, supported by the expected future profitability, was merged into Camil, net of any adjustment to provision for goodwill set forth in CVM Ruling No. 319/99 which, in essence, represents the tax benefit arising from the deductible nature of the referred to goodwill. The merged net assets will be amortized in both accounting and tax records over an estimated term of five years and matched against the special goodwill reserve account to be transferred to the capital account to the benefit of the shareholders upon total realization of the tax benefit.

c) Reconciliation of deferred income and social contribution taxes posted to P&L

Company

02/28/2015 02/28/2014 Difference

Deferred tax assets 83,502 125,858 (42,356)

Deferred tax liabilities (130,090) (142,268) 12,178

Deferred taxes posted to P&L for the year

(30,178)

Consolidated

02/28/2015 02/28/2014 Difference

Deferred tax assets 91,436 134,901 (43,465)

Deferred tax liabilities (148,202) (158,945) 10,743

(32,722)

Exchange variation

(2,175)

Deferred taxes posted to P&L for the year

(34,897)


59

21. Financial income and expenses


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Financial expenses Interest on loans (141,456) (98,613) (163,231) (120,792)

Tax on Financial Transactions (IOF) (292) (2,424) (578) (2,424) Exchange variation (860) (17,155) (7,007) (28,421) Monetary variation (19,007) (16,541) (18,852) (16,541) Present value adjustment of liabilities (9,917) (7,997) (9,917) (7,997) Other (3,796) (7,674) (4,482) (9,279)

(175,328) (150,404) (204,067) (185,454)

Financial income Interest 2,682 1,761 4,940 11,088

Discounts 3,669 2,470 3,978 2,805 Short-term investments 32,973 18,643 38,908 18,643 Present value adjustment of assets 16,963 13,986 16,963 13,986 Exchange variation 2,795 2,040 5,368 3,123 Swap revenue - 15,884 - 15,884 Other 5,639 333 5,641 333

64,721 55,117 75,798 65,862

Total (110,607) (95,287) (128,269) (119,592)

22. Other operating income (expenses)


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Sales area restructuring - (6,069) - (6,069) Fines and interest on tax credits (18) (1,138) (18) (1,138) Disposal of property, plant and equipment (251) - (251) - Claims 579 - 579 - ICMS 682 - 682 - Recovery of PIS and COFINS credits 7,389 - 7,389 - Services rendered to producers - - 2,827 4,528 Other (889) (785) (1,292) (785)

7,492 (7,992) 9,916 (3,464)


60

23. Risk management and financial instruments

As mentioned in Note 1, the Company’s business and that of its subsidiaries involve the manufacture and sale in Brazil and abroad of various products, particularly rice, beans, sugar and fish. The estimated realizable values of the financial assets and liabilities of the Company and its subsidiaries were determined based on available market information and proper valuation methodologies.

a) Market value

The market value of the main financial instruments presented approximates book value, as described below:

Cash and cash equivalents – these are stated at market value, which approximates book value at balance sheet date. Short-term investments – investments classified as “available for sale” that are measured at fair value. Accounts receivable - these result from the Company’s commercial operations and are recorded at their original amounts and subject to exchange and monetary variation, estimated loss with doubtful accounts, discount for punctual payment and present value adjustment. Accounts payable - these arise from the Company’s commercial operations and are recorded at their original amounts and subject to exchange and monetary variation, as applicable. Loans, financing and debentures – these are classified as financial liabilities measured at amortized cost by the effective interest rate method and are recorded for the contractual amounts. The market value of these loans and financing approximates book value at the balance sheet date.


61

23. Financial instrument and risk management (Continued)

b) Risk factors that may affect the Company’s and its subsidiaries’ business

The operations of the Company and its subsidiaries are subject to the following main risks:

Credit risk

The Company and its subsidiaries are subject to counterparty credit risk in their operations involving short-term investments and accounts receivable.

Sales policies of the Company and its subsidiaries are subject to the credit policies established by management and are designed to minimize any problems arising from customer default. This goal is achieved through the careful selection of customer portfolio that takes into consideration their creditworthiness (credit rating) and the diversification of sales (risk dilution). The Company and its subsidiaries have historically obtained satisfactory results in relation to their goals of mitigating this risk. Short-term investments are always kept in banks listed among the 10 largest in the country.

For the year ended February 28, 2015, the Company and its subsidiaries had no customers accounting for more than 10% of their total net revenue.

Liquidity risk

Liquidity risk represents shortage of funds intended for payment of debts (substantially loans and financing agreements). The Company and its subsidiaries adopt cash monitoring policies to avoid mismatching of accounts receivable and payable. In addition, the Company has readily redeemable short-term investments to cover any mismatches between the maturity of its contractual obligations and its cash flow. The Company and its subsidiaries have historically obtained satisfactory results in relation to their goals of mitigating this risk.

The schedule of debenture and loan installment payments, including projected interest, existing as of February 28, 2015 may be represented as follows:


Principal Projected interest Principal

Projected interest

2016 220,499 119,190 255,814 129,286 2017 252,991 101,415 288,706 110,046 2018 253,525 49,939 285,300 55,920 2019 185,376 28,255 207,939 32,229 2020 66,797 11,773 87,208 14,075 2020 onwards 19,243 962 39,743 1,873

Total 998,431 311,534 1,164,710 343,429


62

23. Financial instrument and risk management (Continued) b) Risk factors that may affect the Company’s and its subsidiaries’ business (Continued)

Market risk

Inputs and finished products price risk The main inputs used in the Company’s and its subsidiaries’ manufacturing process are agricultural commodities, the prices of which are subject to fluctuations as a result of public agricultural fostering policies, seasonal harvests and climate change, which may result in losses due to fluctuations in market prices. To minimize this risk, the Company continually monitors price fluctuations in the domestic and international markets. The Company has historically obtained satisfactory results in relation to its goals of mitigating this risk. Interest rate risk This risk arises from the possibility of the Company incurring losses due to fluctuations in interest rates that increase its financial expenses relating to loans and financing, or reduce the gains with its investments. The Company continuously monitors the volatility of the market interest rates. In order to reduce the possible impacts resulting from fluctuations in interest rates, the Company and its subsidiaries adopt the policy of keeping their funds invested in instruments linked to the CDI. The Company has historically obtained satisfactory results in relation to its goals of mitigating this risk. Currency risk This risk is associated with exchange variation, which affects financial income (expenses) and the liability (or asset) balance of agreements denominated in foreign currency. In addition to accounts receivable deriving from exports from Brazil, short-term investments and foreign investments constitute a natural hedge against exchange rate fluctuations. For the asset and liability balance, which is subject to currency risk, the Company and its subsidiaries evaluate their currency exposure risk and, if necessary, contract additional hedging derivative financial instruments. The Company has historically obtained satisfactory results in relation to its goals of mitigating this risk.


63

23. Financial instrument and risk management (Continued)

c) Sensitivity analysis

The following table presents a sensitivity analysis of financial instruments, describing the risks that may generate material loss to the Company, with the most probable scenario (scenario 1) according to management’s assessment, and considering a twelve-month period at the end of which the next financial information containing such analysis shall be disclosed. In addition, two other scenarios are presented, in order to present 25% and 50% deterioration in the risk variable considered, respectively (scenarios II and III).

Sensitivity analysis – Debts and short-term investments Financial operations relating to cash investment and funding pegged to currencies other than the real, CDI and TJLP are subject to exchange rate (USD/BRL, CLP/BRL, PEN/BRL and EUR/BRL) and interest rate variation. Sensitivity Analysis – Debt (rate increase)

Scenario I Scenario II Scenario III

Probable 25% 50%

Program Instrument Risk Rate R$

(Thousand) R$

(Thousand) R$

(Thousand)

Financing Import Financing (FINIMP) Fluctuation of BRL/USD 3.30 (265) (783) (1,302) Financing Working capital Fluctuation of CDI 10.81% (32,036) (40,045) (48,054) Financing Debentures Fluctuation of CDI 10.81% (76,078) (95,098) (114,117) Financing Debt denominated in USD Fluctuation of BRL/USD 3.30 (7,366) (21,773) (36,181) Financing Debt denominated in PEN** Fluctuation of BRL/PEN 1.066635 (21,975) (64,957) (107,939) Financing Debt denominated in ARS*** Fluctuation of BRL/ARS 0.378247 (2,448) (7,235) (12,022) Financing Debt denominated in CLP* fluctuation of BRL/CLP 0.005346362 (3,577) (10,575) (17,572)

Total

(143,745) (240,466) (337,187)

Sensitivity Analysis – Cash and cash equivalent investment and short-term investments (rate decrease)

Scenario I Scenario II Scenario III

Probable -25% -50%

Program Instrument Risk Rate R$

(Thousand) R$

(Thousand) R$

(Thousand)

Cash investments Short-term investments Fluctuation of CDI 10.81% 29,861 22,395 14,930 Cash investments Short-term investments Fluctuation of BRL/USD 3.30 11,369 (10,867) (33,103)

Total

41,230 11,528 (18,173)

* CLP – Chilean pesos ** PEN – New Sol /Peru *** ARS - Argentinean pesos


64

24. Derivative financial instruments

For the year ended February 28, 2015, the Company does not have derivative agreements recorded as per books and subsidiary Camil Chile SpA has swap contracts recorded at insignificant amounts. The Company and its subsidiaries have no investments of a speculative nature, in derivatives or any other risky assets.

25. Profit sharing Pursuant to an Agreement entered into by the Company and the different employee categories, the Company now has a profit-sharing program for its employees. For year ended February 28, 2015, the amount to be distributed as profit sharing is calculated based on EBITDA/Net revenue from sales and services of the Company. Subsequently, an assessment is conducted so as to determine whether the Company’s global objectives have been met or exceeded, and whether industry or specific-area objectives have been met or exceeded. The Company recorded a provision amounting to R$4,649 (R$10,680 at February 28, 2014) as profit sharing payable, under current liabilities, under other accounts payable.

26. Insurance coverage

The Company has a risk management program aimed at mitigating risks, which seeks market coverage compatible with its size and operations. Insurance coverage was contracted for amounts shown as follows and considered sufficient by management to cover possible claims, considering the nature of the business, the risks involved in operations and the advice of their insurance consultants.

Insurance term Value at risk Consolidated

Risk From Up to Company Consolidated URUGUAY CHILE PERU LA LOMA

Fire and sundry risks 05/30/2014 05/30/2015 961,146 1,836,276 742,576 110,460 14,547 7,547 Loss of profit 05/30/2014 05/30/2015 40,000 81,086 - 28,099 12,987 - Civil liability 05/30/2014 05/30/2015 1,500 9,558 2,878 2,755 2,326 99

Insurance coverage of the Company and its subsidiaries is determined by management at amounts deemed sufficient to cover possible losses. Given its nature, sufficiency of insurance coverage is not part of the scope of an audit of financial statements, and consequently was not assessed by the independent auditors.


65

27. Gross sales revenue


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Gross sales revenue Sales of goods and services - domestic market 2,959,187 3,005,384 3,653,027 3,612,926

Sales of goods - foreign market 88,342 74,561 539,481 472,415

3,047,529 3,079,945 4,192,508 4,085,341 Sales deductions

Sales taxes (241,258) (229,200) (266,208) (252,589) Returns and rebates (201,007) (208,463) (250,518) (251,189)

(442,265) (437,663) (516,726) (503,778)

Net revenue from sales and services 2,605,264 2,642,282 3,675,782 3,581,563

28. Expenses by nature


02/28/2015 02/28/2014 02/28/2015 02/28/2014

Expenses by function Cost products sold (1,985,545) (1,979,317) (2,824,365) (2,702,454)

Selling expenses (286,837) (300,878) (402,099) (413,387) General and administrative expenses (132,226) (125,325) (173,907) (162,132)

(2,404,608) (2,405,520) (3,400,371) (3,277,973)

Expenses by nature Depreciation and amortization (53,144) (54,952) (76,263) (76,430)

Personnel expenses (219,994) (215,032) (315,284) (289,525) Raw material and materials (1,698,450) (1,693,337) (2,329,851) (2,247,023) Freight (217,029) (240,348) (314,469) (326,782) Tax expenses (5,049) (6,478) (14,001) (13,250) Commissions on sales (15,972) (19,291) (20,500) (23,046) Marketing expenses (42,906) (30,632) (54,234) (38,392) Expenses with maintenance (49,214) (42,466) (65,808) (51,254) Electrical energy expenses (16,593) (21,242) (30,703) (36,297) Expenses with third party-services (39,715) (35,549) (50,025) (61,451) Other expenses (46,542) (46,193) (129,233) (114,523)

(2,404,608) (2,405,520) (3,400,371) (3,277,973)


66

29. Segment information

Detailed information on Company segments is as follows:

Food products - Brazil Food products - International Total - Consolidated

02/28/2015 02/28/2014 02/28/2015 02/28/2014 02/28/2015 02/28/2014

Net sales revenue 2,600,624 2,639,921 1,075,158 941,642 3,675,782 3,581,563 Gross profit 614,456 656,082 236,961 223,027 851,417 879,109

Selling and administrative expenses (403,070) (405,836) (172,936) (169,683) (576,006) (575,519)

Other operating income (expenses) (56) (19,603) 9,669 14,904 9,613 (4,699)

Income before financial income and expenses 211,330 230,643 73,694 68,248 285,024 298,891

Financial expenses (176,006) (150,773) (28,061) (34,681) (204,067) (185,454) Financial income 65,721 55,724 10,077 10,138 75,798 65,862 Pretax income 101,045 135,594 55,710 43,705 156,755 179,299 IRPJ and CSLL (34,906) (42,885) (16,889) (12,200) (51,795) (55,085)

Net income 66,139 92,709 38,821 31,505 104,960 124,214

Food products - Brazil Food products - International Total - Consolidated

02/28/2015 02/28/2014 02/28/2015 02/28/2014 02/28/2015 02/28/2014

Current assets 1,223,284 1,163,177 554,418 444,936 1,777,702 1,608,113 Noncurrent assets 41,120 29,291 1,446,936 1,364,387 1,488,056 1,393,678 Current liabilities 640,988 601,302 334,101 313,123 975,089 914,425 Noncurrent liabilities 975,012 1,015,509 171,903 85,864 1,146,915 1,101,373

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Financial Statements Camil Alimentos S.A.

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