Companhia Mineira de Açúcar e Álcool Participaçõescmaa.ind.br/upload/files/0109_NE-ITR-CMAA-30-09-19...2019/09/30 · Companhia Mineira de Açúcar e Álcool Participações

Companhia Mineira de Açúcar e Álcool Participações

Quarterly Information - ITR

September 30, 2019

Contents Independent auditor’s review report on quarterly information 1

Statements of financial position 3

Statements of profit or loss 5

Statements of comprehensive income 6

Statements of changes in equity 7

Statements of cash flows - indirect method 8

Statements of value added 9

Notes to quarterly information 10

1

Ed. Walk Bueno Business Rua T-55 esq. Com T-30, 930 - 11o Andar Setor Bueno 74,215-17 – Goiânia, GO, Brasil Tel: +55 62 3605 1100 www.ey.com.br

A free translation from Portuguese into English of independent auditor’s review report on quarterly information prepared in Brazilian currency in accordance with NB TG 21 and IAS 34 and the rules issued by the Brazilian Securities and Exchange

Commission (“CVM”) applicable to the preparation of Quarterly Information (ITR)

Independent auditor’s review report on quarterly information To the Shareholders, Board of Directors and Officers Companhia Mineira de Açúcar e Álcool Participações Uberaba - MG Introduction We have reviewed the accompanying individual and consolidated interim financial information of Companhia Mineira de Açúcar e Álcool Participações (“Company”), contained in the Quarterly Information Form (ITR) for the quarter ended September 30, 2019, comprising the statement of financial position as of September 30, 2019 and the related statements of profit or loss and of comprehensive income for the three- and six-month periods then ended, and of changes in equity and of cash flows for the six-month period then ended, including accompanying notes. Management is responsible for preparation of the individual and consolidated interim financial information in accordance with Accounting Pronouncement NBC TG 21 – Interim Financial Reporting, and IAS 34 – Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as for the fair presentation of this information in conformity with the rules issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of the Quarterly Information Form (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of review We conducted our review in accordance with the Brazilian and international standards on review engagements (NBC TR 2410 and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the standards on auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion on the individual and consolidated interim financial information Based on our review, nothing has come to our attention that causes us to believe that the individual and consolidated interim financial information included in the quarterly information referred to above was not prepared, in all material respects, in accordance with NBC TG 21 and IAS 34 applicable to the preparation of Quarterly Information (ITR), and presented consistently with the rules issued by the Brazilian Securities and Exchange Commission (CVM).

2

Other matters

Statement of value added The above mentioned quarterly information include the individual and consolidated statement of value added (SVA) for the six- month period ended September 30, 2019, prepared under Company’s Management responsibility and presented as supplementary information by IAS 34. These statements have been subject to review procedures performed together with the review of the quarterly information with the objective to conclude whether they are reconciled to the interim financial information and the accounting records, as applicable, and if its format and content are in accordance with the criteria set forth by NBC TG 09 – Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that they were not prepared, in all material respects, consistently with the overall individual and consolidated interim financial information. Goiânia, November 14, 2019 Wagner dos Santos Junior Partner – Accountant CRC-1SP-216386/O-T

ERNST & YOUNG Auditores Independentes S.S. CRC-2SP015199/O-6

A free translation from Portuguese into English of quarterly information prepared in Brazilian currency in accordance with NB TG 21 and IAS 34 and the rules issued by the Brazilian Securities and Exchange Commission (“CVM”) applicable to the

preparation of Quarterly Information (ITR)

3

Companhia Mineira de Açúcar e Álcool Participações Statements of financial position at September 30 and March 31, 2019

(In thousands of reais)

Consolidated Individual

Assets Note 09/30/2019 03/31/2019 09/30/2019 03/31/2019

Cash and cash equivalents 3 156,843 381,350 49 11

Restricted short-term investments 4 441 4,619 - -

Trade and other accounts receivable 5 63,684 28,731 - -

Leases receivable 6 37,888 - - -

Inventories 7 226,857 46,579 - -

Biological assets 8 66,466 90,996 - -

Taxes and contributions recoverable 9 20,728 22,079 182 166

Derivative financial instruments 21 18,420 7,626 - -

Advances to suppliers and other assets 10 49,780 94,464 94 94

Total current assets

641,107 676,444 325 271

Noncurrent assets

Advances to suppliers and other assets 10 - 41,533 - -

Trade and other accounts receivable 5 28,831 29,480 335 332

Leases receivable 6 158,025 - - -

Judicial deposits

2,050 2,911 21 10

Taxes and contributions recoverable 9 29,189 28,463 66 65

Derivative financial instruments 21 4,619 443 - -

Deferred income and social contribution taxes 22 24,405 23,382 - -

Total noncurrent assets

247,119 126,212 422 407

Investments 11 2,742 140 331,382 302,254

Property, plant and equipment 12 633,676 689,079 - -

Intangible assets

6,151 6,153 722 722

Right of use 13 240,830 - - -

Total noncurrent assets

1,130,518 821,584 332,526 303,383

Total assets

1,771,625 1,498,028 332,851 303,654

4


Liabilities Note 09/30/2019 03/31/2019 09/30/2019 03/31/2019

Loans and financing 14 200,140 212,658 - -


Trade and other accounts payable 15 159,266 103,288 - 93

Leases and agricultural partnerships payable 16 69,508 - - -

Provisions and labor charges

28,120 23,873 - -

Tax obligations

8,490 9,132 5,240 5,240

Advance from customers 17 56,202 40,095 - 1

Other current liabilities

140 652 82 83

Total current liabilities

535,948 391,369 5,322 5,417

Loans and financing 14 616,185 719,532 - -

Intercompany loans 14 - - 6,554 5,552


Leases and agricultural partnerships payable 16 257,144 - - -

Other noncurrent liabilities

2,684 2,686 - -

Advance from customers 17 25,316 79,364 - -

Provisions for contingencies 18 3,347 4,356 - -

Total noncurrent liabilities

914,702 813,974 6,554 5,552

Equity 19

Capital

379,239 379,239 379,239 379,239

Capital reserve

4,164 4,164 4,164 4,164

Equity adjustment

(19,190) (17,476) (19,190) (17,476)

Accumulated losses

(43,238) (73,242) (43,238) (73,242)

Total equity

320,975 292,685 320,975 292,685

Total liabilities

1,450,650 1,205,343 11,876 10,969

Total liabilities and equity

1,771,625 1,498,028 332,851 303,654

See accompanying notes.

5

Companhia Mineira de Açúcar e Álcool Participações Statements of profit or loss Three and six-month periods September 30, 2019 and 2018

(In thousands of reais, except for earnings per share)


Note 09/30/2019 09/30/2018 09/30/2019 09/30/2018 09/30/2019 09/30/2018 09/30/2019 09/30/2018

(3 months) (3 months) (6 months) (6 months) (3 months) (3 months) (6 months) (6 months)

Net operating revenue 24 301,953 264,767 564,750 442,144 - - - -

Change in fair value of biological assets 7 2,069 - 2,343 - - - - -

Costs of sales and services 25 (221,072) (187,848) (433,115) (322,908) - - - -

Gross profit 82,950 76,919 133,978 119,236 - - - -

Operating expenses

Selling expenses 25 (19,877) (16,190) (30,220) (26,111) - - - -

Administrative expenses 25 (8,114) (7,113) (15,366) (12,465) (486) (782) (812) (1,146)

Other operating income (expenses), net (1,051) (899) (1,130) (184) 34 20 34 20

Equity pickup 11 - - - - 26,165 44,425 30,842 52,115

(29,042) (24,202) (46,716) (38,760) 25,713 43,663 30,064 50,989

Income before net finance income (costs) and taxes 53,908 52,717 87,262 80,476 25,713 43,663 30,064 50,989

Finance costs 26 (55,381) (113,131) (108,827) (202,363) (31) (30) (63) (53)

Finance income 26 23,767 84,336 51,404 169,673 2 2 3 5

Finance income (costs), net (31,614) (28,795) (57,423) (32,690) (29) (28) (60) (48)

Income before taxes 22,294 23,922 29,839 47,786 25,684 43,635 30,004 50,941

Current income and social contribution taxes 22 - 3,265 - (1,313) - - - -

Deferred income and social contribution taxes 22 3,390 16,448 165 4,468 - - - -

3,390 19,713 165 3,155 - - - -

Net income for the period 25,684 43,635 30,004 50,941 25,684 43,635 30,004 50,941

Basic and diluted earnings per share (in reais) 27 0.0241 0.0410 0.0282 0.0479 0.0241 0.0410 0.0282 0.0479


6


Statements of comprehensive income

Three and six-month periods September 30, 2019 and 2018



09/30/2019 09/30/2018 09/30/2019 09/30/2018 09/30/2019 09/30/2018 09/30/2019 09/30/2018

(3 months) (3 months) (6 months) (6 months) (3 months) (3 months) (6 months) (6 months)

Net income for the period 25,684 43,635 30,004 50,941 25,684 43,635 30,004 50,941

Net gains (losses) from cash flow hedge in subsidiaries/investees (8,105) 1,145 (1,714) (10,781) (8,105) 1,145 (1,714) (10,781)

Changes in equity acquired - 3,015 - 3,015 - 3,015 - 3,015

Comprehensive income attributable to controlling interests 17,579 47,795 28,290 43,175 17,579 47,795 28,290 43,175


7

Companhia Mineira de Açúcar e Álcool Participações Statements of changes in equity

Six-month periods ended September 30, 2019 and 2018


Equity

adjustment

Total equity

Capital Capital reserve

Accumulated

losses

Balance at April 1, 2018 303,364 4,164 (7,616) (95,089) 204,823

Capital increase 75,875 - - - 75,875

Net losses from cash flow hedge - - (10,781) - (10,781)

Changes in equity acquired - - 3,015 - 3,015

Net income for the period - - - 50,941 50,941

Balance at September 30, 2018 379,239 4,164 (15,382) (44,148) 323,873

Balance at April 1, 2019 379,239 4,164 (17,476) (73,242) 292,685

Net losses from cash flow hedge - - (1,714) - (1,714)

Net income for the period - - - 30,004 30,004

Balance at September 30, 2019 379,239 4,164 (19,190) (43,238) 320,975


Companhia Mineira de Açúcar e Álcool Participações Quarterly information (ITR) – Quarter ended

September 30, 2019

8

Companhia Mineira de Açúcar e Álcool Participações Statements of cash flows - indirect method




09/30/2019 09/30/2018 09/30/2019 09/30/2018

Cash flow from operating activities Income for the period 30,004 50,941 30,004 50,941

Adjustments to reconcile profit or loss: Present value adjustment 8,369 - - - Changes in fair value of biological assets (2,343)

Depreciation and amortization 28,002 25,789 - -

Amortization of the right of use on leases and agricultural partnerships 19,238 - - -

Reduction in crop due to sugarcane harvest 43,337 30,657 - -

Amortization of inter-crop 62,350 48,547 - -

Amortization of ratoon cane treatments 64,921 56,609 - -

Equity pickup - - (30,842) (52,115)

Residual value of property, plant and equipment written off 1,309 4,456 - 111

Interest on loans and financing 40,060 38,081 - 79

Interest and Tax on Financial Transactions (IOF) on intercompany loans (1,676) (5,172) - (29)

Unrealized foreign exchange differences and monetary restatement on

loans

7,194 70,232 - -

Unrealized (gains) losses on derivative financial instruments (3,141) (53,951) - -

Provision for contingencies and other liabilities (1,009) 663 - -

Deferred income and social contribution taxes (165) (4,468) - -

296,450 262,384 (838) (1,013)

(Increase) decrease in trade accounts receivable and other receivables (35,321) (31,467) (3) -

Decrease (increase) in inventories (180,278) (158,178) - -

Decrease (increase) in taxes and contributions recoverable 625 3,377 (17) (10)

Decrease (increase) in advances to suppliers and other assets 16,872 60,331 - -

(Decrease) increase in trade accounts payable and other accounts

payable

52,758 (33,236) (93) 32

(Decrease) increase in provisions and labor charges 4,247 1,487 - (8)

(Decrease) increase in tax obligations (642) 1,501 - (9)

(Decrease) increase in advances from customers (37,941) (34,796) (1) -

Other assets and other liabilities 347 (9,412) (12) (34)

Cash from (used in) operating activities 117,117 61,991 (962) (1,042)

Repayment of interest on loans and financing (36,558) (48,049) - (635)

Cash flow from (used in) operating activities

80,559 13,942 (964) (1,677)

Cash flow from investing activities Capital payment – Cz Energy Comercializadora de Etanol S.A. (2,600) - - -

Restricted short-term investments (made)/redeemed 4,178 (812) - -

Formation of biological assets (38,048) (30,744) - -

Proceeds from disposal of property, plant and equipment 1,222 - - -

Acquisition of property, plant and equipment (78,754) (36,582) - -

Acquisition of intangible assets (731) (109) - (111)

Intercompany loans received (granted) 1,471 (8,688) - -

Cash and cash equivalents acquired – Vale do Pontal - 9,291 - -

Cash from (used in) investing activities (113,262) (67,644) - (111)

Cash flow from financing activities Loans and financing taken out 14,918 227,322 - -

Payment of principal of loans and financing (141,479) (237,115) - (31)

Intercompany loans taken out/(paid) 3,220 (5,911) 1,002 1,284

Amortization of leases and agricultural partnerships (68,463) - - -

Cash from (used in) financing activities (191,804) (15,704) 1,002 1,253

Net increase (decrease) in cash and cash equivalents (224,507) (69,406) 38 (535)

Cash and cash equivalents at beginning of period 381,350 242,729 11 562

Cash and cash equivalents at end of period 156,843 173,323 49 27



September 30, 2019

9

Companhia Mineira de Açúcar e Álcool Participações Statements of value added




09/30/2019 09/30/2018 09/30/2019 09/30/2018

Revenues Sales of goods, products and services 620,294 492,274 - -

Other revenues 8,533 9,809 36 20

628,827 502,083 36 20

Inputs acquired from third parties (including PIS and COFINS)

Cost of goods and products sold and services rendered (61,552) (86,063) (101) (82)

Materials, electricity, third-party services and other (65,645) (39,979) (682) (1,007)

Other (28,528) (22,049) - 1

(155,725) (148,091) (783) (1,088)

Gross value added 473,102 353,992 (747) (1,068)

Depreciation and amortization (217,848) (161,602) - -

Net value added produced by the Company 255,254 192,390 (747) (1,068)

Value added received in transfer

Equity pickup - - 30,842 52,115

Finance income 51,404 169,673 3 5

Total value added to be distributed 306,658 362,063 30,098 51,052

Personnel 74,564 58,379 - 1

Direct compensation 50,341 39,608 - -

Benefits 20,221 15,440 - 1

Unemployment Compensation Fund (FGTS) 4,002 3,331 - -

Taxes, charges and contributions 61,298 50,658 78 68

Federal 42,907 33,428 48 48

State 14,728 14,797 5 7

Other taxes 3,663 2,433 25 13

Debt remuneration 140,792 202,085 16 42

Interest 70,086 150,227 14 23

Leases 33,859 33,823 - -

Other 36,847 18,035 2 19

Equity remuneration 30,004 50,941 30,004 50,941

Income for the period 30,004 50,941 30,004 50,941

Value added distributed 306,658 362,063 30,098 51,052



September 30, 2019

10

Notes to quarterly information


1 Operations

Companhia Mineira de Açúcar e Álcool Participações (“Company” or “Group”), located at

Rodovia BR 050 (km 121) - I Industrial District of the city of Uberaba, Minas Gerais State, is a

joint-stock corporation engaged in holding interest in other entities engaged in the production, sale and export of sugar, ethanol, energy and other sugarcane processing by-products. On March

4, 2009, the Company was registered as a publicly-held company through CVM/SEP/RIC

Memorandum Circular No. 001/2009 for trading of common shares in the non-organized over-the-counter market.

The Company is the Parent of the following entities:

• Vale do Tijuco Açúcar e Álcool S.A. (Vale do Tijuco)

• Vale do Pontal Açúcar e Etanol Ltda. (Vale do Pontal)

Subsidiary Vale do Tijuco Açúcar e Álcool S.A. started up on April 12, 2010. Its manufacturing

unit has a milling capacity of approximately 4.5 million tons of sugarcane per year, producing sugar, anhydrous ethanol, hydrated ethanol and energy, as well as fusel oil and sugarcane bagasse

by-products.

Vale do Pontal Açúcar e Etanol Ltda. is a privately-held company that started up its operations

on July 1, 2006, and became a subsidiary of Companhia Mineira de Açúcar e Álcool Participações on July 1, 2018, as stated in Note 11. Its manufacturing plant has a milling capacity of

approximately 2.5 million tons of sugarcane per year, producing sugar, anhydrous and hydrated

ethanol, as well as fusel oil and sugarcane bagasse by-products.

Sugarcane plantation requires an 18-month period for maturing and for the beginning of the

harvest. The harvest generally takes place between April and November, which is also the period when sugar and ethanol are produced. The sale of production takes place throughout the year and

does not suffer changes due to seasonality, only changes in the regular market supply and demand

(commodity price and foreign exchange differences).

Direct subsidiary Vale do Tijuco Açúcar e Álcool S.A. merged its direct subsidiaries Triângulo Mineiro Açúcar and Álcool S.A. and Rio Tijuco Agropecuária S.A., as approved at the Special

Annual Meeting held on June 22, 2018.

The accounting valuation report of Triângulo Mineiro Açúcar e Álcool S.A. and Rio Tijuco

Agropecuária S.A., dated May 18, 2018, was based on the statement of financial position as of

April 30, 2018.


September 30, 2019

11

1 Operations (Continued)

The balances effectively merged were those of June 18, 2018, as shown below:

Triangulo Mineiro Rio Tijuco

ASSETS

Current assets 12 469

Noncurrent assets 1,213 13,203

TOTAL ASSETS 1,225 13,672

LIABILITIES

Current liabilities 48 1,358

Noncurrent liabilities 11,075 -

TOTAL LIABILITIES 11,123 1,358

NET ASSETS MERGED (I) (9,898) 12,314

(I) BREAKDOWN OF MERGED COMPANY’S EQUITY:

Capital 6,397 10,752

Income reserves (16,254) 1,573

Changes in equity in June 2018 (41) (11)

TOTAL MERGED COMPANY’S EQUITY (9,898) 12,314

The purpose of the merger was to combine efforts and equity, which will allow a better use of

resources, in addition to streamline activities and reduce costs significantly.

2 Presentation of interim financial information and significant

accounting policies

2.1 Basis of preparation The individual interim financial information was prepared in accordance with Accounting Pronouncement CPC 21 - Interim Financial Reporting, while the consolidated interim financial

information was prepared in accordance with CPC 21(R1) - Interim Financial Reporting and with

International Accounting Standard (IAS) 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), and is presented in line with the rules issued

by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of

Quarterly Information (ITR).


September 30, 2019

12


accounting policies (Continued)

2.1 Basis of preparation (Continued) This interim financial information was prepared considering the basis of preparation and

accounting principles consistent with those adopted in preparing the annual financial statements

as at March 31, 2019, authorized and issued by management on June 19, 2019, and should be read together with the referred to annual financial statements. The explanatory note information that

did not suffer material changes compared with that contained in the financial statements as at

March 31, 2019 is not fully disclosed in this interim financial information. However, selected

information was included to explain significant events and transactions occurred in order to enable the understanding of changes in the financial position and performance of the Company’s

operations since the publication of the annual financial statements at March 31, 2019.

In preparing this interim financial information, management used judgments, estimates and

assumptions that affect the application of the Group’s accounting policies and reported amounts

of assets, liabilities, revenues and expenses. Actual results may differ from those estimates.

Estimates and assumptions are reviewed on an ongoing basis and had no significant changes upon preparing this interim financial information in relation to the annual financial statements as at

March 31, 2019.

The presentation of the Statement of Value Added (SVA) is required by the Brazilian Corporation

Law and by accounting practices adopted in Brazil applicable to publicly-held companies. The International Financial Reporting Standards (IFRS) do not require SVA presentation. As a result,

under IFRS, this statement is presented as supplementary information, without detriment to the

set of quarterly information.

The non-financial data included in this individual and consolidated interim financial information

such as crop mix per hectare, planted hectares and total hectares and qualitative aspects to determine insurance coverage were not audited by independent auditors.

Management authorized the issue of this interim financial information on November 14, 2019.

2.2 Basis of consolidation The consolidated financial information includes the quarterly information of Companhia Mineira de Açúcar and Álcool Participações and its subsidiaries listed below:

Percentage of interest

Subsidiaries Country 09/30/2019 03/31/2019

Vale do Tijuco Açúcar e Álcool S.A. (Vale do Tijuco) Brazil 99.99% 99.99% Vale do Pontal Açúcar e Etanol Ltda. (Vale do Pontal) Brazil 99.99% 99.99%


September 30, 2019

13


accounting policies (Continued)

2.3 New standards applicable to the quarterly information

Leases

The Company, since April 1, 2019, has adopted IFRS 16 (CPC 06 (R2)) - Leases that introduces

a single model for recognition of leases and agricultural partnerships in the statement of financial position. The right to use the asset was recognized as an asset and the payment obligation as a

liability. The comparative information presented for March 31, 2019 follows CPC 06/IAS 17 and

related interpretations, based on the modified retrospective approach. The following are detailed

changes in accounting policies:

a) IFRS 16 (CPC 06 R2) definition The Company adopted the lease definition of ICPC 03/IFRIC 4 - Complementary Aspects of

Leases. Now, according to IFRS 16 / CPC 06 (R2), it considers lease any agreement that,

through consideration, transfers to it the right to control the use of an asset for a certain period. Agricultural partnership agreements were accounted for as leases, although they have a different

legal nature.

b) Lessee The Company and its subsidiaries adopted the modified retrospective approach and the following criteria: (i) liabilities: remaining balances of the agreements in force on the date of

first-time adoption, discounted by the funding cost of the Company and its subsidiaries

(weighted average rate of 9.8% p.a. in Vale do Pontal, and 8.5% p.a. in Vale do Tijuco); and (ii)

assets: amount equivalent to liabilities adjusted to present value.

No assets and liabilities were recognized for low-value agreements (computers, telephones and

IT equipment in general) and/or duration limited to 12 months. Payments associated with these agreements were recorded as expense under the straight-line method.

c) Lessor The Company and its subsidiaries have agricultural partnership assignment agreements with third

parties in which they act as a lessor. For these agreements, the accounts receivable resulting from

the assignment of the right to use these agreements were measured, also discounted to present value at the same rates as those of original partnership agreements.

The impacts of adopting the standard are detailed in Notes 6.13 and 16.


September 30, 2019

14

3 Cash and cash equivalents


09/30/2019 03/31/2019 09/30/2019 03/31/2019

Cash and banks 14,936 106,349 - - Sort-term investments 141,907 275,001 49 11

Total 156,843 381,350 49 11

The balance of cash and banks derives from proceeds from commercial transactions and are funds available to meet the immediate cash needs of the Company and its subsidiaries. All funds are

deposited in first-tier banks.

Short-term investments are cash equivalents since they are readily convertible into a known cash

amount and subject to insignificant risk of change in their value.

They refer to Bank Deposit Certificates (CDB) in various financial institutions, the remuneration

rate of which ranges from 95% to 100% of the Interbank Deposit Certificate (CDI). Short-term

investments do not have a monthly maturity date and may be redeemed at any time.

Information on the Group’s exposure to market, credit and fair value measurement risks related

to cash and cash equivalents is included in Note 21.

4 Restricted short-term investments

Consolidated

09/30/2019 03/31/2019

Restricted short-term investments 441 4,619

Total 441 4,619

Companhia Mineira de Açúcar e Álcool Participações maintains restricted short-term investments amounting to R$441 at September 30, 2019 that refer to investments linked to the delivery of

VHP sugar, with remuneration at 100% of the CDI, approximately.

Information on the Group’s exposure to market, credit and fair value measurement risks related

to restricted short-term investments is included in Note 21.


September 30, 2019

15

5 Trade and other accounts receivable


09/30/2019 03/31/2019 09/30/2019 03/31/2019

From sales of ethanol 11,085 10,482 - - From sales of energy 15,883 3,818 - - From sales of sugar 23,664 763 - - From sales of sugarcane 8,969 7,086 - - Other (a) 26,971 28,648 - -

Trade accounts receivable 86,572 50,797 -

Related-party receivables (Note 29) 5,943 7,414 335 332

Other receivables 5,943 7,414 335 332

Total 92,515 58,211 335 332

Current assets 63,684 28,731 - - Noncurrent assets 28,831 29,480 335 332

(a) On November 27, 2017, subsidiary Bacuri Agrícola Ltda was sold by its controlling member JFLIM Participações S.A., which transferred the credit rights of the referred to transaction to Vale do Pontal Açúcar

e Etanol Ltda. as “settlement of intercompany loans”. These accounts receivable amount to R$22,651 at September 30, 2019, annually restated by reference to the Extended Consumer Price Index (IPCA) until its

maturity in 2026.

Information on the Group’s exposure to credit, market and fair value measurement risks, as well

as impairment losses related to trade accounts receivable and other receivables is disclosed in

Note 21.

6 Leases receivable

Consolidated

Balance at March 31, 2019 -

Adoption of IFRS 16 (CPC 06 R2) 137,981

Balance at April 1, 2019 137,981

Addition of new lease contracts 74,679

Addition due to changes in sugarcane market price 5,020

Interest 6,236

Receipts (20,915)

Write-off due to contract dissolution/modification (7,088)

Balance at September 30, 2019 195,913

Current assets 37,888

Noncurrent assets 158,025


September 30, 2019

16

Maturity Consolidated

10/01/2020 to 09/30/2021 81,510

10/01/2021 to 09/30/2022 21,302

10/01/2022 to 09/30/2023 16,249

10/01/2023 to 09/30/2024 11,088

10/01/2024 to 09/30/2025 7,748

10/01/2025 to 09/30/2026 5,315

09/30/2026 onwards 14,813

158,025

7 Inventories

Consolidated

09/30/2019 03/31/2019

Finished product

VHP sugar 68,838 6,310 Anhydrous ethanol 66,119 322

Hydrated ethanol 62,316 623 Storeroom Storeroom - sundry (a) 30,361 32,343 Provision for obsolescence (1,899) (2,525) Inventories in the possession of third parties (b) 1,122 9,506

Total 226,857 46,579

(a) The most significant amounts concerning the storeroom refer to consumer goods and inventory of agricultural inputs and pesticides to be used in the planting areas.

(b) These refer to agricultural inputs and pesticides to be used in planting areas on third-party crops.

8 Biological assets

Changes in biological assets (sugarcane) are as follows:

Consolidated

Balance at April 1, 2018

73,316

Opening balance due to the merger of Vale do Pontal 16,918 Additions to sugarcane treatments 30,744 Absorption of sugarcane harvested costs (56,609) Fair value less estimated selling expenses -


Additions to sugarcane treatments 36,031 Absorption of sugarcane harvested costs (10,202) Fair value less estimated selling expenses 798


Additions to sugarcane treatments 38,048 Absorption of sugarcane harvested costs (64,921)

Fair value less estimated selling expenses 2,343



September 30, 2019

17

8 Biological assets (Continued)

Sugarcane ratoon crops Planted areas represent only sugarcane crops, not considering the land where these are located.

The following assumptions were used to determine fair value using the discounted cash flow method:

Consolidated

09/30/2019 03/31/2019

Harvest estimated area (hectare) 30,946 33,853 Projected production (ton of sugarcane per hectare) 82 80 Total Recoverable Sugar - ATR (kg) 134 135 Price of ATR kilo (R$) 0.62 0.66

The discount rate used in the cash flow for each period, denominated “Weighted Average Cost of

Capital”, corresponded to 9.35% p.a. (9.13% at March 31, 2019), which was reviewed and

approved by Company management.

The Group is exposed to a number of risks related to its plantations:

Regulatory and environmental risks The Group is subject to laws and regulations and established environmental policies and procedures focused on compliance with environmental and other laws. Management conducts

regular analysis to identify environmental risks and ensure that systems in place are adequate to

manage those risks.

Supply and demand risks The Group is exposed to risks arising from price fluctuation and sales volume of its plantations.

Whenever possible, the Group manages this risk by aligning its extraction volume with market supply and demand. Management conducts regular reviews of the industry trend to ensure that

the Group’s price structure is in line with the market and that projected extraction volumes are

consistent with expected demand.

Climate risks and other The Group’s plantations are exposed to the risks of damage caused by climate change, diseases,

forest fires and other natural forces. The Group has extensive procedures in place to monitor and reduce these risks, including regular inspections of the sugarcane plantation health and analysis

of industrial diseases and pests. The Group also assures itself against natural disasters.


September 30, 2019

18

9 Taxes and contributions recoverable


09/30/2019 03/31/2019 09/30/2019 03/31/2019

COFINS recoverable 14,096 19,275 - - State VAT (ICMS) recoverable - purchase of

inputs

6,064

4,765

- - ICMS recoverable - acquisition of property, plant and equipment

10,997 8,920 - -

Withholding Income Tax (IRRF) on short-term investments

12,304

11,073 166 166

PIS recoverable 2,228 3,388 - - Other taxes recoverable 4,228 3,121 82 65

Total 49,917 50,542 248 231

Current assets 20,728 22,079 182 166 Noncurrent assets 29,189 28,463 66 65

PIS and COFINS

This balance comprises credits arising from PIS and COFINS non-cumulative payment, referring

to the acquisitions of parts and pieces used in the maintenance of manufacturing facilities and

agricultural fleet, maintenance services of manufacturing and agricultural facilities, freight and warehousing in sales transactions, electric energy and other credits on acquisitions of machinery

and equipment, and buildings and constructions intended for production. These credits may be

offset against other federal taxes and are not time-barred by statutes.

ICMS

This balance basically comprises credits determined on acquisitions of property, plant and

equipment items, which are being realized at the ratio of 1/48, and may be offset against taxes of

the same nature.

IRRF

This refers to Withholding Income Tax (IRRF) on short-term investments and prepaid income and social contribution taxes, which may be offset against federal taxes payable.


September 30, 2019

19

10 Advances to suppliers and other assets

Consolidated

09/30/2019 03/31/2019

Advances to sugarcane suppliers (partnership) - third parties - 93,092

Advances to sugarcane suppliers (partnership) - related parties (Note 29) - 6,207

Advances to sugarcane suppliers - third parties 24,206 25,088

Advances to local suppliers - third parties 22,074 10,123

Other 3,500 1,487

Total 49,780 135,997

Current assets 49,780 94,464

Noncurrent assets - 41,533

The balance of advances to suppliers refers to the execution of sugarcane supply contracts entered

into by subsidiaries Vale do Tijuco Açúcar e Álcool S.A. and Vale do Pontal Açúcar e Etanol Ltda. with their suppliers. The balance classified as noncurrent assets refers to sugarcane supply

advance contracts that will be performed upon receipt of sugarcane in subsequent crops, priced

based on the Total Recoverable Sugar (ATR) index disclosed by the São Paulo State Council of

Sugarcane, Sugar and Ethanol Producers (Consecana/SP), at the end of the crop.

11 Investments

Breakdown of balances

Individual

09/30/2019

03/31/2019

Investments stated by the equity method

Vale do Pontal Açúcar e Etanol Ltda. 90,374 82,379

Vale do Tijuco Açúcar e Álcool S.A. 241,008 219,875

331,382 302,254

Consolidated

09/30/2019

03/31/2019

Investments stated by the equity method

CZ Energy Comercializadora de Etanol S.A. 2,600 -

Other investments 142 140

2,742 140

The Company recorded a gain of R$30,842 in the period ended September 30, 2019 (R$52,115

at September 30, 2018) referring to the equity pickup of its subsidiaries.

On June 18, 2018, Rio Tijuco Agropecuária S.A. and Triângulo Mineiro Açúcar e Álcool S.A. were merged into Vale do Tijuco Açúcar e Álcool S.A., and the control over part of the assets

was transferred to the Company on that date.


September 30, 2019

20

11 Investments (Continued)

The Company’s investments in its subsidiary are accounted for using the equity method. The

Company’s and its subsidiaries’ shares are not listed on the Stock Exchange.

Subsidiary Vale do Tijuco began to hold equity interest in joint venture CZ Energy Comercializadora de Etanol S.A. (“CZ Energy”) by subscribing 2,600 registered common shares

with no par value, issued by virtue of the capital increase of CZ Energy, approved by the Special

Shareholders' Meeting held on June 18, 2019. The shares now subscribed were paid up in local currency, for the issue price of R$1.00 (one real) per share, totaling R$ 2,600.

Changes in investments in subsidiaries

Individual

09/30/2019 03/31/2019

Investment opening balance 302,254 212,567

Vale do Pontal Açúcar e Etanol Ltda. merger - 78,890

Equity pickup 30,842 20,637

Equity adjustment (Vale do Tijuco S.A.) (1,714) (9,860)

Other - 20

Total 331,382 302,254

Consolidated

09/30/2019 03/31/2019

Investment opening balance 140 137

Capital contribution - Cz Energy 2,600 -

Equity pickup - -

Other 2 3

Total 2,742 140


September 30, 2019

21


Information on investees The table below presents a summary of 100% of financial information of the subsidiaries:

Six-month period ended September 30, 2019

Individual (%) Equity

interest

Current

assets

Noncurrent

assets

Total

assets

Current

liabilities

Noncurrent

liabilities

Total

liabilities Equity Revenues Expenses

Income/

loss

Equity

pickup

September 30, 2019

Vale do Tijuco S.A. 99.99% 646,584 813,194 1,459,778 435,505 783,265 1,218,770 241,007 477,755 (454,909) 22,846 22,846

Vale do Pontal Ltda. 99.99% 159,921 334,574 494,495 95,118 309,004 404,122 90,374 196,449 (188,453) 7,996 7,996

806,505 1,147,768 1,954,273 530,623 1,092,269 1,622,892 331,381 674,204 (643,362) 30,842 30,842


Consolidated (%) Equity

interest Current

assets Noncurrent

assets Total

assets

Current

liabilities Noncurrent

liabilities Total


Income/

loss

Equity

pickup

September 30, 2019

CZ Energy S.A. 26.00% 10,120 - 10,120 33 - 33 10,087 120 (33) 87 -

10,120 - 10,120 33 - 33 10,087 120 (33) 87 -


September 30, 2019

22


Information on investees


(%) Equity

interest

Current

assets

Noncurrent

assets

Total

assets

Current

liabilities

Noncurrent

liabilities

Total


Income/

loss

Equity

pickup

March 31, 2019

Triângulo Mineiro S.A. 99.99% - - - - - - - - (41) (41) (41)

Vale do Tijuco S.A. 99.99% 720,797 605,052 1,325,849 312,203 793,771 1,105,974 219,875 549,708 (503,022) 46,686 46,686

Vale do Pontal Ltda. 99.99% 120,464 227,590 348,054 73,749 191,926 265,675 82,379 116,702 (111,221) 5,481 5,481

Rio Tijuco S.A. 100.00% - - - - - - - (11) (11) (11)

841,261 832,642 1,673,903 385,952 985,697 1,371,649 302,254 666,410 (614,295) 52,115 52,115


Quarterly information (ITR) – Quarter ended

September 30, 2019

23

12 Property, plant and equipment

Consolidated - cost Industrial

equipment

Constructions

and buildings

Agricultural

machinery

and tractors

Paving Vehicles Agricultural

equipment Land

Machinery,

equipment

and tools

Furniture

and

fixtures

Computers

and

peripherals

Construction

in progress

(a)

Expenses

with inter-

crop

maintenance

Crop in

formation Other Total

Cost

Balance at April 1, 2018 401,247 89,598 36,836 7,862 13,109 21,381 3,609 4,854 1,586 2,279 15,024 122,242 279,621 6,590 1,005,838

Opening balance merged

(Vale do Pontal)

(01/07/2018)

43,165 46,961 1,447 6,118 1,839 3,591 6,186 168,120 2,072 807 21,589 45,489 34,938 136 382,458

Additions 1,464 27 3,582 - 226 2 - 35 15 77 5,999 - 25,654 (499) 36,582

Write-offs - (32) (28) - (389) (109) - (3) (3) (97) (3,737) - (3,937) (36) (8,371)

Transfers 3,506 (10,622) 5,232 15,759 260 445 - 94 15 119 (8,212) - (5,492) (1,104) -

Balance at September 30,

2018 449,382 125,932 47,069 29,739 15,045 25,310 9,795 173,100 3,685 3,185 30,663 167,731 330,784 5,087 1,416,507

Additions 494 830 5,052 - 5,240 731 6,722 137 79 17 2,610 68,573 30,083 8,719 129,287

Write-offs (152) - (1,321) - (698) (331) - (83) (12) (166) - - - (411) (3,174)

Transfers 7,135 935 (4,060) - 67 481 - 24 30 1,288 (8,299) - (261) 2,660 -

Balance at March 31, 2019 456,859 127,697 46,740 29,739 19,654 26,191 16,517 173,178 3,782 4,324 24,974 236,304 360,606 16,055 1,542,620

Additions 104 - - - 690 285 1,279 32 20 16 33,345 - 41,973 1,010 78,754

Write-offs (415) - (4,968) - (595) (218) - (50) (2) (22) - - (101) - (6,371)

Transfers 1,717 92 7,260 7,520 1,047 296 - 392 49 290 (4,091) - (3,829) (10,743) -

Balance at September 30,

2019 458,265 127,789 49,032 37,259 20,796 26,554 17,796 173,552 3,849 4,608 54,228 236,304 398,649 6,322 1,615,003


September 30, 2019

24

12 Property, plant and equipment (Continued) Consolidated -

depreciation

Industrial

equipment

Constructions

and buildings

Agricultural

machinery

and tractors

Paving Vehicles Agricultural

equipment Land

Machinery,

equipment and

tools

Furniture

and

fixtures

Computers

and

peripherals

Construction

in progress

(a)

Expenses with

inter-crop

maintenance

Crop in

formation Other Total

Depreciation

Balance at April 1,

2018 (143,464) (20,186) (29,529) (5,795) (10,015) (15,638) - (3,930) (1,136) (1,679) - (76,267) (156,012) (3,926) (467,577)

Opening balance

merged (Vale do

Pontal) (07/01/2018)

(3,942) (47,898) (401) (1,268) (710) (1,112) - (138,780) (1,525) (189) - (31,236) (7,894) - (234,955)

Depreciation for the

period (13,081) (2,164) (2,573) (3,092) (1,198) (1,671) - (947) (49) (180) - (48,548) (30,658) (265) (104,426)

Write-offs - - 2 - 163 76 - 3 3 96 - - - 17 360

Transfers - 5,566 - (5,566) - - - - - - - - - - -

Balance at September

30, 2018 (160,487) (64,682) (32,501) (15,721) (11,760) (18,345) - (143,654) (2,707) (1,952) - (156,051) (194,564) (4,174) (806,598)


period (14,110) (2,476) (2,883) (4,039) (1,538) (1,345) - (1,661) (84) (290) - (9,019) (10,879) (1,143) (49,467)

Write-offs - - 1,103 - 238 127 - 69 10 141 - - - 836 2,524

Transfers - - - - - - - - - - - - - - -

Balance at March 31,

2019

(174,597) (67,158) (34,281) (19,760) (13,060) (19,563) - (145,246) (2,781) (2,101) - (165,070) (205,443) (4,481) (853,541)


period

(14,607) (2,307) (3,041) (3,643) (823) (1,157) - (1,184) (57) (323) - (62,350) (43,337) (19) (132,848)

Write-offs 75 - 4,838 - 87 - - 50 2 10 - - - - 5,062

Transfers - - - - - - - - - - - - - - -


30, 2019

(189,129) (69,465) (32,484) (23,403) (13,796) (20,720) - (146,380) (2,836) (2,414) - (227,420) (248,780) (4,500) (981,327)

Net carrying amount

Balance at March 31,

2019

282,262 60,539 12,459 9,979 6,594 6,628 16,517 27,932 1,001 2,223 24,974 71,234 155,163 11,574 689,079


30, 2019

269,136 58,324 16,548 13,856 7,000 5,834 17,796 27,172 1,013 2,194 54,228 8,884 149,869 1,822 633,676

(a) (a) This basically refers to construction works for expanding the manufacturing facility and acquisitions of equipment.



September 30, 2019

25

12 Property, plant and equipment (Continued)

Guarantee The Company has given some property, plant and equipment items as guarantees for loans and

financing, as described in Note 14.

Impairment test In accordance with CPC 01 (R1)/IAS 36 - Impairment of Assets, the Group assessed the

impairment indicators at March 31, 2019 and concluded that there was no need to determine the recoverable amount.

13 Right of use on leases and agricultural partnerships

As described in Note 2.3, the Company recognized IFRS 16 (CPC 06 (R2)) on April 1, 2019.

Changes in the right of use on leases and agricultural partnerships during the current interim

information were as follows:

Cost: Properties Machinery and

equipment Vehicles Land Total

Balance at March 31, 2019 - - - - -

Adoption of IFRS 16 (CPC 06 R2)

123

2,857 - 211,865 214,845

Balance at April 1, 2019 123 2,857 - 211,865 214,845

Additions of new right-of-use

contracts - 2,907

6,451 52,841 62,199

Restatement due to changes in

sugarcane market price - - - 8,481 8,481

Write-off due to contract

dissolution/modification - - - (16,735) (16,735)

Balance at September 30, 2019 123 5,764 6,451 256,452 268,790

Accumulated amortization:

Balance at April 1, 2019 - - - - -

Amortization for the period (14) (1,674) (1,678) (24,594) (27,960)

Balance at September 30, 2019 (14) (1,674) (1,678) (24,594) (27,960)

Useful life (years) 5 1 to 2 1 to 2 1 to 17

Residual value at March 31, 2019 - - - - -

Residual value at September 30,

2019 109 4,090 4,773 231,858 240,830



September 30, 2019

26

14 Loans and financing

This note discloses contractual information on loans and financing of the Company and its subsidiaries. Note 21 discloses additional information regarding the Company’s and its

subsidiaries’ exposure to interest rate and currency risks.

Credit facility RE. Currency Index Year of

maturity

Consolidated

09/30/2019 03/31/2019

ACC (b) USD CDI 2019 - 13,197

CCB (b) R$ CDI 2020 10,229 10,473

CCB (b) R$ Fixed rate 2022 65,816 81,808

CCE (b) R$ CDI 2020 70,126 70,163

CCE (b) R$ CDI 2021 21,105 28,150

CCE (b) R$ CDI 2022 72,359 80,301

CPR (b) R$ CDI 2022 108,353 117,054

CRA (d) R$ CDI 2019 - 11,049

CRA (d) R$ CDI 2022 155,405 154,858

CRA (d) R$ CDI 2023 75,709 75,385

Finame (a) R$ TJLP 2021 3,831 4,750

Finame (a) R$ TJLP 2022 21,798 26,344

Finame (a) R$ TJLP 2023 645 724

Finame (a) R$ TJLP 2024 1,112 1,242

Finame (a) R$ Fixed rate 2019 - 15

Finame (a) R$ Fixed rate 2021 988 1,216

Finame (a) R$ Fixed rate 2022 246 284

Finame (a) R$ Fixed rate 2023 10,123 12,528




Finame (a) R$ SELIC 2023 1,045 1,152

Finame (a) R$ SELIC 2024 17,187 438

Finame (a) R$ SELIC 2026 105 102

Finame (a) R$ TLP 2026 3,716 3,724

Finame (a) R$ TLP 2028 3,634 3,641

NCE (b) R$ CDI 2021 40,276 40,256

NCE (b) R$ CDI 2022 37,003 40,109

PPE (b) USD CDI 2019 - 22,195

PPE (b) USD LIBOR +

USD 2019 97,655 136,449

PPE (b) USD Fixed rate 2019 - 3,459

831,103 954,948

Transaction costs

(14,778) (22,758)

Total (*) 816,325 932,190

Current

liabilities 200,140 212,658

Noncurrent

liabilities 616,185 719,532

(*) The weighted average rate of financial charge is of 8.47% p.a.

Individual

Credit facility RE. Currency Index

Year of

maturity 09/30/2019 03/31/2019

Intercompany loan - noncurrent liabilities (Note 29) (c) R$ (c) (c) 6,554 5,552



September 30, 2019

27

14 Loans and financing (Continued)

(a) This refers to loans taken out for the purpose of financing the acquisition of industrial and agricultural equipment. These loans have a grace period for payment of the first installment of principal from 6 to 24 months from the agreement grace period date. The agreements are guaranteed by assignment in trust upon disposal of financed assets.

(b) These refer to loans that were entered into with various financial institutions and that will be settled through exports made in the period from 2019 to 2022.

(c) Amount granted by subsidiaries Vale do Tijuco Açúcar e Álcool S.A. and Vale do Pontal Açúcar e Etanol Ltda., without interest, which will be paid by the Company according to its cash availability, as per Note 29.

(d) It refers to Agribusiness Receivables Certificates (“CRA”):

The first release occurred in October 7, 2014, in the amount of R$99 million. The CDCA installments were increased by annual conventional interest, from the CRA payment date up to the respective payment date of each CDCA interest installment. The following financial institutions and agents were contracted: coordinator leading bank: BB-Banco de Investimentos S.A.; creditor issuer agent: Gaia Agro Securitizadora S.A.; trustee: Planner Trustee Distribuidora de Títulos e Valores Mobiliários Ltda; registrar agent: BNY Mellon Serviços Financeiros Distribuidora

de Títulos e Valores Mobiliários S.A.; and custodian: SLW Corretora de Valores de Câmbio Ltda. The agreements were guaranteed by assignment in trust upon disposal of financed assets, bond of credit rights of VHP sugar receivables, agricultural pledge as well as corporate surety. The agreements were fully settled on September 10, 2019.

The second release occurred in October 15, 2018, in the amount of R$150 million. The debenture installments will be increased by annual conventional interest, from the CRA payment date up to the respective payment date of each debenture interest installment, calculated on par value. The following financial institutions and agents were contracted: coordinator leading bank: Eco Securitizadora de Direitos Creditórios do Agronegócio S.A.; leading coordinator: XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A.; trustee: Pentágono S.A. Distribuidora de Títulos e Valores Mobiliários; settling bank: Banco Bradesco S.A., custodian: Pentágono S.A. Distribuidora de Títulos e Valores Mobiliários, bookkeeping agent: Vórtx Distribuidora de Títulos e Valores

Mobiliários Ltda., market maker: XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A.

The third release occurred in January 31, 2019, in the amount of R$75 million. The debenture installments will be increased by annual conventional interest, from the CRA payment date up to the respective payment date of each debenture interest installment, calculated on par value. The following financial institutions and agents were

contracted: coordinator leading bank: Eco Securitizadora de Direitos Creditórios do Agronegócio S.A.; leading coordinator: XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A.; trustee: Pentágono S.A. Distribuidora de Títulos e Valores Mobiliários; settling bank: Banco Bradesco S.A., custodian: Pentágono S.A. Distribuidora de Títulos e Valores Mobiliários, bookkeeping agent: Vórtx Distribuidora de Títulos e Valores Mobiliários Ltda., market maker: XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A.

Maturities of consolidated loans and financing are as follows:

September 30, 2019 Carrying

amount

Up to 1 to 2 2 to 3 3 to 4 4 to 5 Above

12

months years years years years 5 years

Loans and financing 816,325 200,140 227,262 250,206 129,114 5,966 3,637

March 31, 2019 Carrying

amount


12

months years years years years 5 years

Loans and financing 932,190 212,658 249,178 284,942 175,597 5,006 4,809



September 30, 2019

28

14 Loans and financing (Continued)

Covenants

The Company has contractual obligations arising from financing agreements related to the maintenance of certain financial and nonfinancial ratios established in these agreements

(covenants), whose calculation period is at year-end.

Management has timely controls on these indicators and at September 30, 2019 understands that

any requirement by creditors before the original long-term maturity as well as the need for reclassification are unlikely.

15 Trade and other accounts payable


09/30/2019 03/31/2019 09/30/2019 03/31/2019

Local suppliers of materials and services 38,630 82,621 - 93 Sugarcane suppliers 116,345 19,596 - -

Sugarcane suppliers (Related Parties – Note 29) 4,291 1,071 - -

Total 159,266 103,288 - 93

The harvest period of sugarcane, between April and December of each year, on average, has a

direct impact on the balance of sugarcane suppliers and cutting, loading and transportation services.

The amounts payable to sugarcane suppliers and agricultural partners take into consideration

sugarcane delivered and not yet paid, as well as the price supplement calculated based on the final crop price through the Total Recoverable Sugar (ATR) index disclosed by the São Paulo State

Council of Sugarcane, Sugar and Ethanol Producers (Consecana/SP).

The Company and its subsidiaries evaluated the present value adjustment of their trade accounts

payable at September 30, 2019 and March 31, 2019, and concluded that these balances do not

generate material adjustments to present value in financial information.

Information on the Group’s exposure to liquidity and fair value measurement risks related to trade accounts payable and other accounts payable is disclosed in Note 21.



September 30, 2019

29

16 Leases and agricultural partnerships payable

Changes in lease liabilities for the six-month period ended September 30, 2019 are as follows:

Consolidated

Balance at March 31, 2019 -

Adoption of IFRS 16 (CPC 06 R2) 283,480


Additions of new right-of-use and lease contracts 96,235

Restatement due to changes in sugarcane market price 13,510

Interest 14,605

Payments (72,802)

Write-off due to contract dissolution/modification (8,376)


Current liabilities 69,508

Noncurrent liabilities 257,144

The maturity of estimated balances of noncurrent lease and partnership payable is as follows: Maturity Consolidated

10/01/2020 to 09/30/2021 59,991

10/01/2021 to 09/30/2022 45,783

10/01/2022 to 09/30/2023 37,794

10/01/2023 to 09/30/2024 29,325

10/01/2024 to 09/30/2025 23,032

10/01/2025 to 09/30/2026 17,331

09/30/2026 onwards 43,888

257,144

17 Advance from customers

Consolidated

09/30/2019 03/31/2019

Advances from customers - sugar 79,750 74,095

Advances from customers - ethanol 1,550 1,172 Advances from customers - sugarcane - 43,069

Other 218 1,123

Total 81,518 119,459

Current liabilities 56,202 40,095 Noncurrent liabilities 25,316 79,364



September 30, 2019

30

18 Provision for contingencies

The Group is a party to lawsuits involving labor, civil, tax and environmental contingencies. To

cover future losses related to these proceedings, a provision was recorded at an amount deemed

sufficient by Group management to cover losses assessed as probable. The assessment of the likelihood of loss in these lawsuits, as well as the determination of amounts involved, was

performed considering the claims of plaintiffs, the case law on the matters and the opinion of the

Group’s legal advisors. Significant information on these proceedings is as follows:

Consolidated

09/30/2019 03/31/2019

Opening balance 4,356 3,468

Opening balance merged (Vale do Pontal) (06/30/2018) - 1,994 Additions - 1,713

Write-offs (1,009) (2,819)

Closing balance 3,347 4,356

Based on information from its legal advisors, analysis of pending legal proceedings and previous

experience with regard to amounts claimed, management set up a provision at an amount deemed sufficient to cover losses, if any, on ongoing proceedings.

Unaccrued contingent liabilities

Contingent liabilities not recognized in the quarterly information refer to proceedings whose

likelihood of loss is assessed as possible by the legal advisors, amounting to R$2,305 at September 30, 2019 (R$4,050 at March 31, 2019), for which no provision has been recorded, since the

accounting practices adopted in Brazil and International Financial Reporting Standards (IFRS) do

not require such recording.

19 Equity

a. Capital

At September 30, 2019, capital is divided into 1,064,082,217 (1,064,082,217 at March 31, 2019)

common registered shares, with no par value, held as follows:

Individual and Consolidated

09/30/2019 03/31/2019

Shares R$ Shares R$

IndoAgri Brazil Participações Ltda. 372,428,776 175,466 372,428,776 175,466 Ápia SP Participações S.A. 372,428,776 127,898 372,428,776 127,898 JFLIM Participações S.A. 319,224,665 75,875 319,224,665 75,875

Total 1,064,082,217 379,239 1,064,082,217 379,239



September 30, 2019

31

19 Equity (Continued)

b. Capital reserve

As a result of the capital increase on July 13, 2007, the Company recorded a special goodwill reserve in the amount of R$4,164 according to the Brazilian Corporation Law.

c. Legal reserve

The legal reserve is set up at 5% of the net income for each year, under the terms of Law No.

6404/76, article 193, capped at 20% of the capital. Due to accumulated losses, the legal reserve

was not recorded.

d. Statutory reserve

The Company shall maintain a statutory reserve for the development or expansion of its

business, the purposes of which shall be: (i) ensuring funds for investments in research and

technology; (ii) increasing working capital to ensure operational conditions appropriate to the

achievement of the Company’s business purposes; and (iii) financing the growth of the

Company’s business. After legal adjustments and deductions, up to 100% of the remaining net

income may be allocated to the statutory reserve, up to the limit of capital, if approved at the

Annual General Meeting.

e. Equity adjustment

This includes the effective portion of the cumulative net variation of foreign exchange differences

of liabilities denominated in US dollar and derivatives designated as cash flow hedging

instruments of its future exports (hedged item), as described in Note 21.

f. Dividends

The Company’s Articles of Incorporation determine a percentage not less than 25% to the

payment of mandatory minimum dividends. Due to accumulated losses, there were no

declarations and payments of dividends.

20 Capital management

The Group’s capital is managed so as to balance own and third party’s sources of funds, return to shareholders and risk for shareholders and creditors.

The Group’s debt relating to adjusted capital ratio at the end of the period/year is as follows:

Consolidated

09/30/2019 03/31/2019

Total liabilities 1,450,650 1,205,343

(-) Cash and cash equivalents and restricted short-term investments (157,284)

(385,969)

(=) Net debt (A) 1,293,366

819,374

Equity (B) 320,975

292,685

Net debt-to-equity ratio (A) / (B) 4.03

2.80



September 30, 2019

32

21 Financial instruments

a) Accounting classification and fair values

The table below shows the carrying amounts and fair values of financial assets and liabilities, including their levels in the fair value hierarchy. It does not include information on the fair value

of assets and liabilities not measured at fair value, if the carrying amount is a reasonable

approximation of fair value.

Consolidated Carrying amount Fair value

September 30, 2019

Fair value

through

profit or loss

Amortized

cost Total Level 1 Level 2 Level 3 Total

Financial assets measured at fair value

Cash and cash equivalents 14,936 - 14,936 14,936 - - 14,936

Sort-term investments 141,907 - 141,907 - 141,907 - 141,907

Restricted short-term investments 441 - 441 - 441 - 441

Derivative financial instruments 23,039 - 23,039 - 23,039 - 23,039

Total 180,323 - 180,323 14,936 165,387 - 180,323

Financial assets not measured at fair value

Trade and other accounts receivable - 86,572 86,572

Accounts receivable from related parties (Note 29) - 5,943 5,943

Leases receivable - 195,913 195,913

Total - 288,428 288,428

Consolidated

Carrying amount Fair value

September 30, 2019

Fair value

through

profit or

loss

Amortized


Financial liabilities measured at fair value

Loans and financing - 816,325 816,325 - 816,325 - 816,325

Leases and agricultural partnerships payable - 326,652 326,652 - 326,652 - 326,652


Total

24,108 1,142,977 1,167,085 - 1,167,085 - 1,167,085

Financial liabilities not measured at fair value

Trade and other accounts payable - 159,266 159,266

Total - 159,266 159,266

March 31, 2019 Fair value

through

profit or loss

Amortized


Financial assets measured at fair value

Cash and banks 106,349 - 106,349 106,349 - - 106,349

Sort-term investments 275,001 - 275,001 - 275,001 - 275,001

Restricted short-term investments 4,619 - 4,619 - 4,619 - 4,619


Total 394,038 - 394,038 106,349 287,689 - 394,038

Financial assets not measured at fair value

Trade and other accounts receivable - 50,797 50,797

Accounts receivable from related parties (Note 29) - 7,414 7,414

Total - 58,211 58,211



September 30, 2019

33

21 Financial instruments (Continued)

March 31, 2019 Fair value

through

profit or loss

Amortized


Financial liabilities measured at fair value

Loans and financing - 932,190 932,190 - 932,190 - 932,190


Total 9,707 932,190 941,897 - 941,897 - 941,897

Financial liabilities not measured at fair value

Trade and other accounts payable - 103,288 103,288

Total - 103,288 103,288

a) Fair value measurement

The carrying amount of financial instruments recorded in the statement of financial position, when compared to the amounts that could be obtained from their trading in an active market, or in the

absence of such markets, using the net present value adjusted for the current market interest rate,

substantially approximates the related market value.

There were no transfers between levels to be considered as at September 30, 2019, in relation to

the disclosures as at March 31, 2019.

b) Financial risk management

The Group engages in transactions involving financial instruments to meet its own needs. As at

September 30, 2019, the Group does not have financial instruments that are not recorded in the accounting books and does not carry out transactions involving financial instruments for

speculation purposes. The main risks related to the Group's operations are as follows:

• Credit risk;

• Liquidity risk; and

• Market risk.

This Note brings information about the Group's exposure to each of the aforementioned risks, the

Group's objectives, policies and processes for measuring and managing risks, and its capital

management.

Risk management framework The Board of Directors is responsible for monitoring the Group's risk management policies, and each manager regularly reports the department activities to the Board.

The Group’s risk management policies are established to find and analyze any risks faced by the Group, to define limits and appropriate risk controls, and to monitor risks and compliance with

these limits. These risk management systems and policies are regularly reviewed to reflect

changes in market conditions and in the Group’s activities. The Group, through its standards and

training and management procedures, aims at developing a disciplined and constructive control environment, where all employees understand their roles and obligations.



September 30, 2019

34

21 Financial instruments (Continued) b) Financial risk management

Credit risk Credit risk is the risk of the Group incurring losses due to a customer or a counterparty in a

financial instrument arising from their failure to comply with their contractual obligations. The

risk derives mainly from trade accounts receivable and financial instruments as shown below.

Credit risk exposure The carrying amounts of financial assets represent the maximum credit risk exposure. The maximum credit risk exposure at the reporting date was as follows:


09/30/2019 03/31/2019 09/30/2019 03/31/2019

Cash and cash equivalents 156,843 381,350 49 11

Restricted short-term investments 441 4,619 - -

Trade and other accounts receivable 92,515 58,211 335 332

Leases receivable 195,913 - - -

Derivative financial instruments 23,039 8,069 - -

Total 468,751 452,249 384 343

Current assets 277,910 422,326 49 11

Noncurrent assets 190,841 29,923 335 332

Cash and cash equivalents The principle adopted by the Company and its subsidiaries is to handle a limited number of

financial institutions, seeking to do business with those that are more solid. In addition, another policy aimed at mitigating credit risk is to hold balances of short-term investments in proportion

to the balance of loans and financing with each institution.

The Company and its subsidiaries have not recorded losses on cash and cash equivalents.

Loans and receivables The exposure of the Company and its subsidiaries to credit risk is mainly influenced by the

individual characteristics of each customer. In addition, sales well-distributed throughout the corporate year (mainly in the harvest period, which runs from March to December of each

calendar year), which enables the Company and its subsidiaries to interrupt deliveries to

customers that may be a potential credit risk.



September 30, 2019

35

21 Financial instruments (Continued) c) Financial risk management

Impairment losses The aging list of receivables from customers recorded in current assets at the reporting date for which no impairment losses were recognized is broken down as follows:

Consolidated

09/30/2019 03/31/2019

Falling due 76,958 50,322 Overdue within 30 days 9,620 4,796 Overdue from 31 to 90 days 4,654 280 Overdue from 91 to 180 days 1,283 2,813

Overdue above 181 days 6 7 92,521

58,218

Allowance for doubtful accounts (6) (7)

92,515 58,211

The Company and its subsidiaries reviewed the present value adjustment of their trade accounts

receivable as at September 30, 2019 and March 31, 2019, and concluded that the amounts approximate the related carrying amounts, since the receivables turnover is short-term.

The allowance for doubtful accounts is recorded based on trade notes overdue for more than 180

days, at an amount considered sufficient by management to cover probable losses on the realization of trade accounts receivable. Management assessed the characteristics of its accounts

receivable by customer and does not expect future losses, and no additional allowance for losses

is required.

For customers with a history of non-compliance with their financial obligations, the Company

and its subsidiaries seek to require prepayments.

Guarantees Subsidiaries Vale do Tijuco Açúcar e Álcool S.A. and Vale do Pontal Açúcar e Etanol Ltda. are the guarantors with financial entities and credit cooperatives, of transactions of purchase of inputs

and financing to be used in the planting and harvesting of sugarcane of their suppliers. At

September 30, 2019, the total amount guaranteed is R$ 74,608. Subsidiaries will assume the debt

of their suppliers, within the limit of the guarantee provided, in case of nonpayment of their obligations. Any amounts disbursed by the Company to pay suppliers’ obligations, in the event

of default, will be adjusted by reference to the TJLP (Long-Term Interest Rate), plus 5.5% per

year on a “pro-rata” day basis, and will be discounted when the sugarcane is supplied by the supplier.

Liquidity risk Liquidity risk is the risk that the Group may have difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The responsibility

for managing liquidity risk lies with the Group’s Management and Board of Directors, which

manages liquidity risk based on the need for funding and short, medium and long-term liquidity

management, having credit facilities according to cash needs, combining the maturity profiles of their financial assets and liabilities.



September 30, 2019

36

21 Financial instruments (Continued) The Group uses information systems and management tools that provide the condition for

monitoring cash flow requirements and optimizing its cash return on investments. The Group’s

policy is to operate with high liquidity to ensure compliance with operating and financial

obligations for at least one operating cycle; this includes the potential impact of extreme circumstances that cannot be reasonably anticipated, such as natural disasters and cyclical

changes in the commodities market.

The Company does expect that cash flows included in the Group’s maturity analyses may occur

significantly earlier or at amounts significantly different.

Liquidity risk exposure

The carrying amount of financial liabilities with liquidity risk is shown below: Consolidated Individual

09/30/2019 03/31/2019 09/30/2019 03/31/2019

Loans and financing 816,325 932,190 - -

Intercompany loans (Note 29) - - 6,554 5,552

Leases and agricultural partnerships payable 326,652 - - -

Trade and other accounts payable 159,266 103,288 - 93

Derivative financial instruments 24,108 9,707 - -

Total 1,326,351 1,045,185 6,554 5,645

Current liabilities 442,996 317,617 - 93

Noncurrent liabilities 883,355 727,568 6,554 5,552

The recorded maturity of financial liabilities is as follows:

Consolidated Carrying

amount

Contractual

flow


September 30, 2019 12 months years years years years 5 years

Loans and financing 816,325 831,102 200,140 227,262 250,206 129,114 5,966 3,637

Leases and agricultural partnerships

payable

326,652 326,652 69,508 59,991 45,783 37,794 29,325 84,251

Trade and other accounts payable 159,266 159,266 159,266 - - - - -

Derivative financial instruments 24,108 24,108 14,082 6,931 532 2,563 - -

Total 1,326,351 1,341,128 442,996 294,184 296,521 169,471 35,291 87,888

Consolidated Carrying

amount

Contractual

flow


March 31, 2019 12 months years years years years 5 years

Loans and financing 932,190 1,081,330 212,658 249,178 284,942 175,597 5,006 4,809

Trade and other accounts payable 103,288 103,288 103,288 - - - - -

Derivative financial instruments 9,707 9,707 1,671 5,232 - 2,804 - -

Total 1,045,185 1,194,325 317,617 254,410 284,942 178,401 5,006 4,809

Cash flows included in the Group’s analyses of maturity are not expected to occur significantly

earlier or in significantly different amounts.



September 30, 2019

37


Market risk Market risk is the risk that changes in market prices, such as exchange rates and interest rates, may affect the Group’s results or its share in financial instruments. Through its activities, the

Group is also exposed to financial risks resulting from changes in the price of Total Recoverable

Sugar (ATR), used to calculate the fair value of the biological asset, and in the price of VHP (Very

High Polarization) sugar.

Interest rate risk The Group is exposed to interest rate risks related to loans and financing taken out and short-term

investments, mainly exposed to changes in CDI, Selic and TJLP rates. The Group's management

monitors fluctuations in variable interest rates linked to some debts, using derivative instruments

to minimize the impact from these risks.

Profile

At the reporting date, the profile of the Group’s interest-bearing financial instruments was:

Consolidated Individual 09/30/2019 03/31/2019 09/30/2019 03/31/2019

Financial assets

Cash and cash equivalents 156,843 381,350 49 11

Restricted short-term investments 441 4,619 - -

Total 157,284 385,969 49 11

Financial liabilities

Loans and financing 816,325 932,190 - -

Total 816,325 932,190 - -

Cash flow sensitivity analysis for variable rate instruments - consolidated The sensitivity analysis is determined based on the exposure to interest rates of non-derivative

financial instruments as at September 30, 2019. As determined by CVM Rule No. 475/08, which

requires the presentation of two scenarios with 25% and 50% decrease in the risk variable

considered, we show below the possible impacts of how much the equity and the result for the period would have increased (decreased) according to the amounts shown below. These scenarios

could bring impacts to the Group’s profit or loss and future cash flows as described below:

• Scenario I: This refers to the most probable scenario for interest rates, at the reporting date;

• Scenario II: 25% decrease in the main risk factor of the financial instrument in relation to

the level verified in the probable scenario; and

• Scenario III: 50% decrease in the main risk factor of the financial instrument in relation to the level verified in the probable scenario.



September 30, 2019

38


Interest rate risk on financial assets and liabilities - appreciation of rates

(Consolidated)

Scenarios

Exposure Probable 25% variation in the

index

50% variation in the

index

Instruments

in

September

2019

Risk % Amount % Amount % Amount

Financial assets

Sort-term investments 141,907

CDI

5.40%

7,663

6.75%

1,916

8.10%

3,831

Restricted short-term

investments

441

CDI

5.40%

24

6.75%

6

8.10%

12


CCB (10,229) CDI 5.40% (562) 6.75% (138) 8.10% (276)

CCE (163,590) CDI 5.40% (8,834) 6.75% (2,209) 8.10% (4,417)

CPR (108,353) CDI 5.40% (5,851) 6.75% (1,463) 8.10% (2,926)

CRA (231,114) CDI 5.40% (12,480) 6.75% (3,120) 8.10% (6,240)

Finame (27,386) TJLP 6.71% (1,837) 8.38% (459) 10.06% (918)

Finame (18,337) SELIC 5.50% (1,009) 6.88% (252) 8.25% (504)

Finame (3,716) TLP 10.97% (408) 13.71% (102) 16.46% (204)

Finame (3,634) TLP 11.24% (408) 14.05% (102) 16.86% (204)

NCE (77,279) CDI 5.40% (4,173) 6.75% (1,044) 8.10% (2,086)

Impact on profit or loss and equity (27,875) (6,966) (13,932)

Interest rate risk on financial assets and liabilities - appreciation of rates - Consolidated

Scenarios

Exposure Probable 25% variation in the

index

50% variation in the

index

Instruments

in

September

2019

Risk % Amount % Amount % Amount

Financial assets

Sort-term investments 141,907

CDI

5.40%

(7,663)

6.75%

(1,916)

8.10%

(3,831)

Restricted short-term

investments

441

CDI

5.40%

(24)

6.75%

(6)

8.10%

(12)


CCB (10,229) CDI 5.40% 562 6.75% 138 8.10% 276

CCE (163,590) CDI 5.40% 8,834 6.75% 2,209 8.10% 4,417

CPR (108,353) CDI 5.40% 5,851 6.75% 1,463 8.10% 2,926

CRA (231,114) CDI 5.40% 12,480 6.75% 3,120 8.10% 6,240

Finame (27,386) TJLP 6.71% 1,837 8.38% 459 10.06% 918

Finame (18,337) SELIC 5.50% 1,009 6.88% 252 8.25% 504

Finame (3,716) TLP 10.97% 408 13.71% 102 16.46% 204

Finame (3,634) TLP 11.24% 408 14.05% 102 16.86% 204

NCE (77,279) CDI 5.40% 4,173 6.75% 1,044 8.10% 2,086

Impact on profit or loss and equity 27,875 6,966 13,932

Source: Information on CDI was obtained from the CETIP database, TJLP was obtained from the Brazilian IRS; and SELIC was

obtained from the Central Bank of Brazil.



September 30, 2019

39


Currency risk The Group is subject to currency risk (US dollar) in part of its borrowings denominated in a

currency other than the functional currency.

With respect to other monetary assets and liabilities denominated in foreign currency, the Group

ensures that its net exposure is kept at an acceptable level by buying or selling foreign currencies

at spot rates, when necessary, to address short-term instabilities. The short-term portions of monetary liabilities denominated in foreign currency are backed by

assets also denominated in foreign currency (export of sugar with a price fixed in foreign

currency).

The long-term portion of these liabilities is backed by the Company's sugar exports, which

represent 100% of exports, and has prices denominated in foreign currency and with little

sensitivity to exchange rate fluctuations.

Currency risk exposure The net exposure in foreign currency is shown in the table below by principal amounts (in US$

thousand):

Consolidated 09/30/2019 03/31/2019

Cash and cash equivalents 1,518 27,187

Swap 19,460 9,225

Loans and financing (23,450) (44,816)

Advances from customers (20,000) (696)

NDF - currency and commodities (32,973) (14,048)

Options - -

Net exposure (55,445) (23,148)

Sensitivity analysis - currency risk - Consolidated The sensitivity analysis is based on the exposure of loans and financing to the US dollar

fluctuation as at September 30, 2019. As required by CVM Rule No. 475/08, which requires the

presentation of two scenarios with 25% and 50% decrease in the risk variable considered, we show below the possible impacts of how much the equity and the result for the period would have

increased (decreased) according to the amounts shown below. These scenarios could bring

impacts to the Group’s profit or loss and/or future cash flows as described below:

• Scenario I: For the probable scenario in US dollars, the exchange rate in effect at September

30, 2019 was considered;

• Scenario II: 25% decrease in the main risk factor of the financial instrument in relation to the

level verified in the probable scenario; and

• Scenario III: 50% decrease in the main risk factor of the financial instrument in relation to

the level verified in the probable scenario.



September 30, 2019

40


Scenarios USD thousand R$ Increase (R$) Decrease (R$)

25% 50% 25% 50%

Financial instruments

Assets

Cash and cash equivalents 1,518 6,322 1,581 3,161 (1,581) (3,161)


Swap 20,000 5,550 1,388 2,775 (1,388) (2,775)

Options 34,000 485 121 243 (121) (243)

NDF - currency and commodities 54,369 15,409 3,852 7,705 (3,852) (7,705)

Liabilities

Loans and financing (23,450) (97,655) (24,414) (48,828) 24,414 48,828

Advances from customers (20,000) (83,288) (20,822) (41,644) 20,822 41,644


Swap (540) (3) (1) (2) 1 2

NDF - currency and commodities (87,342) (18,877) (4,719) (9,439) 4,719 9,439

Impact on profit or loss and

equity (21,445) (172,057) (43,014) (86,029) 43,014 86,029

The information used to calculate the sensitivity analysis shown above was obtained from external

market sources such as Bloomberg and BM&FBovespa.

Hedge accounting

Cash flow hedge involving Group exports The Group adopts a cash flow hedge accounting structure that consists of hedging an expected highly probable export transaction in foreign currency (US dollar - USD) against the risk of

fluctuations in the USD/BRL exchange rate, using as hedging instruments non-derivative

financial instruments -- such as ACC (Advances on Foreign Exchange Contracts) and NCE (Export Credit Note) -- and derivative financial instruments -- such as NDF (Non-Deliverable

Forward), in amounts and maturities equivalent to those of exports. The following is a hedging

relationship designated for hedge accounting:

Consolidated 09/30/2019 09/30/2018

Realized Unrealized Realized Unrealized

Profit or

loss

Equity Profit or

loss

Equity

(Note 24) (Note 24)

ACC and NCE - (22,704)

- (28,877)

NDF - currency and commodities (3,415) (6,371)

- -

Total exposure (3,415) (29,075)

- (28,877)

(-) Deferred IR/CS 1,161 9,886 - 9,480

Net exposure (2,254) (19,190) - (18,397)



September 30, 2019

41


The effective portion of the change in the fair value of derivatives designated and qualified as

cash flow hedge, and not settled, and the foreign exchange differences on non-derivative hedging

instruments are recognized in equity as “Equity adjustments.” This portion is realized upon the

elimination of the risk for which the hedging instruments were designated. Upon settlement of financial instruments, gains and losses previously deferred in other comprehensive income are

transferred to profit or loss.

Derivative financial instruments The Group is exposed to the currency risk of future cash flows in foreign currency, due to revenue from sugar exports. In order to mitigate this risk, the Group adopts hedging procedures based on

the exchange exposure calculated by the commercial credit amount for the next 12 months, which

is monthly reviewed. The future cash flow hedge is reviewed and discussed by the Group's Board of Directors, which approves and authorizes the purchase and designation of derivative financial

instruments for hedge accounting.

The table below shows the major financial instrument transactions, as well as their respective fair

values calculated by the Group’s management.

Consolidated

09/30/2019 03/31/2019

Type Notional Fair value Notional Fair value

Currency (US$/R$ thousand) (R$) (US$/R$

thousand) (R$)

Assets

Swap US$ 20,000 5,550 13,585 3,992

Swap R$ 27,630 1,595 28,905 396

Call and put options US$ 34,000 485 - -

NDF - currency and commodities VHP 54,369 15,409 1,260 3,681

Total 23,039 8,069

Current assets 18,420 7,626

Noncurrent assets 4,619 443

Consolidated

09/30/2019 03/31/2019

Type Notional Fair value Notional Fair value

Currency (US$/R$ thousand) (R$) (US$/R$ thousand) (R$)

Liabilities

Swap US$ (540) (3) (4,360) (266)

Swap R$ 128,244 (3,694) (152,393) (2,804)

Call and put options US$ 34,000 (1,534) - -

NDF - currency and commodities US$ (87,342) (18,877) (15,308) (6,637)

Total (24,108) (9,707)

Current liabilities (14,082) (1,671)

Noncurrent liabilities (10,026) (8,036)



September 30, 2019

42


The instruments mature as follows:

Assets

Consolidated Type Notional

Carrying

amount

Up to 1 to 2 2 to 3 3 to 4 4 to 5

September 30, 2019 12 months years years years years

Swap USD 20,000 5,550 2,745 2,804 - - -

Swap R$ 27,630 1,595 310 572 618 96 -

Options USD 34,000 485 485 - - - -

NDF - currency and commodities VHP 54,369 15,409 14,879 530 - - -

Subtotal VHP 54,369 15,409 14,879 530 - - -

Subtotal R$ 27,630 1,595 310 572 618 96 -

Subtotal USD 54,000 6,035 3,230 2,804 - - -

Total 23,039 18,419 3,906 618 96 -

Liabilities

Consolidated Type Notional

Carrying

amount

Up to 1 to 2 2 to 3 3 to 4 4 to 5

September 30, 2019 12 months years years years years

Swap USD (540) (3) (3) - - - -

Swap R$ 128,244 (3,694) (2,014) (1,040) (532) (108) -

Options USD - (1,534) (1,534) - - - -

NDF - currency and

commodities VHP

(87,342) (18,877) (10,531) (5,891) - (2,455) -

Subtotal VHP (87,342) (18,877) (10,531) (5,891) - (2,455) -

Subtotal R$ 128,244 (3,694) (2,014) (1,040) (532) (108) -

Subtotal USD (540) (1,537) (1,537) - - - -

Total (24,108) (14,082) (6,931) (532) (2,563) -



September 30, 2019

43


Assets

Consolidated Type Notional Carrying amount

Up to 1 to 2 2 to 3 3 to 4 4 to 5

March 31, 2019 12 months years years years years

Swap R$ 28,905 396 - 396 - - -

Swap USD 13,585 3,992 3,992 - - - -

NDF - currency and commodities VHP 1,260 3,681 3,633 48 - - -

Subtotal VHP 1,260 3,681 3,633 48 - - -

Subtotal R$ 28,905 396 - 396 - - -

Subtotal USD 13,585 3,992 3,992 - - - -

Total 8,069 7,625 444 - - -

Liabilities

Consolidated Type Notional Carrying amount

Up to 1 to 2 2 to 3 3 to 4 4 to 5

March 31, 2019 12 months years years years years

Swap R$ (152,393) (2,804) - - - (2,804) -

Swap USD (4,360) (266) (40) (226) - - -

NDF - currency and commodities VHP (15,308) (6,637) (1,631) (5,006) - - -

Subtotal VHP (15,308) (6,637) (1,631) (5,006) - - -

Subtotal R$ (152,393) (2,804) - - - (2,804) -

Subtotal USD (4,360) (266) (40) (226) - - -

Total (9,707) (1,671) (5,232) - (2,804) -



September 30, 2019

44


Sensitivity analysis of derivative financial instruments Below is the sensitivity analysis of the change in the fair value the Group’s derivative financial

instruments in the probable, possible and remote scenarios.

Interest rate risk on financial assets and liabilities - appreciation of rates

Scenario 1 Scenario 2 Scenario 3

Instrument Notional Risk % Amount % Amount % Amount

Derivative financial instruments - assets

Swap 20,000 CDI 5.40% 5,550 6.75% 6,937 8.10% 8,325

Swap 27,630 FX 4.1644 1,595 5.2055 1,994 6.2466 2,393

Options 34,000 FX 4.1644 485 5.2055 606 6.2466 727

NDF - currency and commodities 54,369 FX 4.1644 15,409 5.2055 19,261 6.2466 23,113

Total derivative financial instruments - assets 23,039 28,798 34,558

Current assets

18,420

Noncurrent assets

4,619

Derivative financial instruments - liabilities

Swap (540) CDI 5.40% (3) 6.75% (4) (4)

Swap 128,244 FX 4.1644 (3,694) 5.2055 (4,618) (5,542)

NDF - currency and commodities (87,342) FX 4.1644 (18,877) 5.2055 (23,601) (28,321)

Total derivative financial instruments -

liabilities (22,574)

(28,223)

(33,867)

Current liabilities (12,548)

Noncurrent liabilities (10,026)

Impact on profit or loss and equity (change) 465

575 691



September 30, 2019

45


Interest rate risk on financial assets and liabilities - depreciation of rates

Scenario 1 Scenario 2 Scenario 3

Instrument Notional Risk % Amount % Amount % Amount

Derivative financial instruments - assets

Swap 20,000 CDI 5.40% (5,550) 6.75% (6,937) 8.10% (8,325)

Swap 27,630 FX 4.1644 (1,595) 5.2055 (1,994) 6.2466 (2,393)

Options 34,000 FX 4.1644 (485) 5.2055 (606) 6.2466 (727)

NDF - currency and commodities 54,369 FX 4.1644 (15,409) 5.2055 (19,261) 6.2466 (23,113)

Total derivative financial instruments - assets (23,039) (28,798) (34,558)

Current assets

(18,420)

Noncurrent assets (4,619)

Derivative financial instruments - liabilities

Swap (540) CDI 5.40% 3 6.75% 4 4

Swap 128,244 FX 4.1644 3,694 5.2055 4,618 5,542

NDF - currency and commodities (87,342) FX 4.1644 18,877 5.2055 23,601 28,321

Total derivative financial instruments -

liabilities 22,574

28,223 33,867

Current liabilities 12,548

Noncurrent liabilities 10,026

Impact on profit or loss and equity (change) 465

575 691



September 30, 2019

46


Gain (loss) on derivative financial instruments The Group recorded gains and losses arising from these transactions in the statement of profit or loss for the period. At September 30, 2019 and 2018, the impacts recorded in the statement of

profit or loss are shown below:

Consolidated

Derivative Market Risk 09/30/2019 09/30/2019 09/30/2018 09/30/2018

(3 months) (6 months) (3 months) (6 months)

NDF - currency and commodities CETIP USD - - (920) 1,527

Call and put options CETIP USD (1,535) 285 (179) 435

Swap CETIP USD 629 (1,393) 47,039 57,922

(906) (1,108) 45,940 59,884

(-) Deferred IR/CS 308 377 (15,620) (20,361)

Net effect on the Group’s profit or

loss

(598) (731) 30,320 39,523


Quarterly information (ITR) – Quarter ended September 30, 2019

47

22 Deferred income and social contribution taxes

Consolidated

Assets/liabilities Profit or loss Equity

09/30/2019 03/31/2019 09/30/2019 09/30/2018 09/30/2019 09/30/2018


Provision for contingencies 2,041 2,929 (888) 225 - -

Allowance for doubtful accounts 2 2 - - - -

Provision for inventory losses 645 858 (213) - -

Effects of swap contracts (817) (448) (369) (12,981) - -

Income and social contribution tax losses (a) 18,276 2,143 16,133 232 - -

Fair value of biological assets (1,183) (386) (797) - - -

Effects of ACC 19,203 17,279 1,216 16,992 708 5,507

Effects of NDF - foreign exchange 3,172 1,005 1,992 - 175 -

Effects of tax x useful life depreciation difference (17,419) - (17,419) - -

Effect of variation of IFRS 16 adoption 1,745 - 1,745 - - -

Other (1,260) - (1,235) - -

Net 24,405 23,382 165 4,468 883 5,507

(a) Company management recognized deferred income and social contribution tax assets arising from income tax

and social contribution tax loss carryforwards based on expected generation of future taxable profits. The remaining balance of unrecorded deferred income and social contribution tax losses is approximately of R$205,903.



September 30, 2019

48

22 Deferred income and social contribution taxes (Continued)

Reconciliation of the effective rate Consolidated

2019 2018

Income before taxes 29,839 47,786

Statutory rate 34% 34%

Tax expense at statutory rate (10,145) (16,247)

Adjustments for effective rate calculation: Tax x useful life depreciation difference – prior periods (17,419) -

Recognition of prior-period income tax and social contribution tax loss

carryforwards 16,133 -

Grants 4,842 4,107

Other 6,754 15,295

Current taxes - (1,313)

Deferred taxes 165 4,468

0.55% 6.19%

The statutory tax rate is 34% on adjusted income, according to current legislation in Brazil for annual taxable profit. The effective rate shown above represents management’s best estimate for

the expected annual rate.

According to current tax legislation, deductible temporary differences and accumulated tax losses are not barred by the statute of limitations.

23 Operating segments

The Group’s management prepares its reports on the quarterly information on the same basis as

this information is disclosed, as this quarterly information is regularly reviewed by the Group’s chief decision maker about resource allocations. Accordingly, management has one single

operating segment, namely “energy”.



September 30, 2019

49

24 Net operating revenue

The Group’s operating revenue comprises sugar and ethanol sales to the domestic and foreign

markets and electric power.

Reconciliation between gross revenues for tax purposes and revenues stated in the statement of

profit and loss for the period is as follows:

Consolidated

09/30/2019 09/30/2018 09/30/2019 09/30/2018


Gross revenue from sales and services:

Ethanol - domestic market 167,227 171,644 373,267 288,398

Sugar - foreign market 126,536 85,738 186,636 139,736

CPC 38 - Hedge accounting (Note 21) (3,415) - (3,451) -

Electric power (a) 28,392 34,926 55,717 60,555

Other revenues 4,263 3,191 8,125 3,585

Gross revenue for tax purposes 323,003 295,499 620,294 492,274

Sales taxes (21,050) (30,732) (55,544) (50,130)

Net operating revenue 301,953 264,767 564,750 442,144

(a) This refers to the supply of electric power to the Electric Energy Trading Chamber (CCEE), as established in the contract executed following the bid organized by the Brazilian Electricity Regulatory Agency (ANEEL). The energy supply contract establishes the supply of 876,000 Mwh, between April 2010 and March 2025, as follows:

Year of

Agreed in

contract Exported

supply (Mwh) (Mwh)

2010 / 2011 17,520 17,520 2011 / 2012 61,320 61,320 2012 / 2013 61,320 61,320 2013 / 2014 61,320 61,320 2014 / 2015 61,320 61,320 2015 / 2016 61,320 61,320

2016 / 2017 61,320 61,320 2017 / 2018 61,320 61,320 2018 / 2019 61,320 61,320 2019 / 2020 61,320 53,600 2020 / 2021 61,320 - 2021 / 2022 61,320 - 2022 / 2023 61,320 - 2023 / 2024 61,320 - 2024 / 2025 61,320 -

Total 876,000 561,680

Subsidiary Vale do Tijuco Açúcar e Álcool S.A. maintains contracts for the sale of energy with other companies amounting to 449,920/Mwh until the 22/23 crop. The flow of deliveries for the

next crops is as follows:

Crop 2019/2020 2020/2021 2021/2022 2022/2023 TOTAL

Total 149,860 100,020 100,020 100,020 449,920

Energy income is split into fixed and variable revenue.



September 30, 2019

50

24 Net operating revenue (Continued)

Fixed revenue Subsidiary Vale do Tijuco Açúcar e Álcool S.A. is entitled to receive annual fixed revenue of

R$9,412, monetarily restated by reference to the Extended Consumer Price Index (IPCA). The fixed revenue is paid monthly at the proportion of one twelfth. In case the energy is supplied at

amounts below the agreed in the contract, subsidiary Vale do Tijuco Açúcar e Álcool S.A. will

be required to pay an annual refund to be calculated by CCEE at the end of each supply period. The Company already delivered 87% of the 61,320 Mwh agreed by CCEE for the year.

25 Expenses by nature

The Company presented its statements of profit or loss using a classification of expenses based

on their function. Information on the nature of these expenses recognized in the statements of

profit or loss is as follows:

Consolidated

09/30/2019 09/30/2018 09/30/2019 09/30/2018

Cost of products sold (3 months) (3 months) (6 months) (6 months)

Amortization of treatments (23,909) (21,943) (44,395) (39,310)

Amortization of plantation (14,232) (10,254) (29,386) (21,808)

Purchase of sugarcane on conveyor (74,941) (55,957) (151,233) (92,786)

Amortization of right of use (12,728) - (19,238) -

Agricultural partnership - lease - (10,339) - (18,854)

Depreciation (5,774) (3,819) (12,887) (11,512)

Costs with harvesting/cutting, loading and transportation

(60,713) (53,859)

(113,511)

(92,185)

Manufacturing costs (34,161) (36,292) (69,240) (55,792)

Biomass (1,183) (1,479) (3,739) (1,479)

Costs of services rendered (1,405) (1,243) (2,385) (1,490)

Other costs (484) 1,944 (2,218) 1,448

Recovery of PIS and COFINS 8,458 5,393 15,117 10,860

Total (221,072) (187,848) (433,115) (322,908)

Consolidated

09/30/2019 09/30/2018 09/30/2019 09/30/2018

Selling expenses (3 months) (3 months) (6 months) (6 months)

Freight

(19,460) (12,860) (26,371) (20,459)

Personnel expenses (544) (556) (1,231) (1,036)

Depreciation and amortization (322) (319) (643) (580)

Other selling expenses 449 (2,455) (1,975) (4,036)

Total (19,877) (16,190) (30,220) (26,111)



September 30, 2019

51

25 Expenses by nature (Continued)

Consolidated

09/30/2019 09/30/2018 09/30/2019 09/30/2018

Administrative expenses (3 months) (3 months) (6 months) (6 months)

Personnel expenses (3,749) (3,277)

(7,855)

(6,181)

Third-party services (1,545) (1,935)

(3,945)

(2,881)

Depreciation, amortization and depletion

(433)

(375)

(871)

(637)

Other administrative expenses (2,387) (1,526)

(2,695)

(2,766)

Total (8,114) (7,113) (15,366) (12,465)

Individual

09/30/2019 09/30/2018 09/30/2019 09/30/2018

Administrative expenses (3 months) (3 months) (6 months) (6 months)

Third-party services (373) (669) (684) (1,007)

Other administrative expenses (113) (113) (129) (139)

Total (486) (782) (812) (1,146)



September 30, 2019

52

26 Finance income (costs), net

27 Consolidated

09/30/2019 09/30/2018 09/30/2019 09/30/2018


Finance costs:

Interest on loans and financing (19,374) (19,684) (39,598) (37,178)

Tax on Financial Transactions (IOF) (1,040) (731) (1,998) (956)

Fair value adjustment loss on derivatives (8,025) (30,667) (15,095) (46,761)

Effective losses - settlement of transactions – derivatives

(578) (1,828) (2,595) (5,556)

Foreign exchange differences, net (12,705) (50,931) (21,545) (100,016)

Other finance costs (5,781) (9,290) (13,391) (11,896)

Present value adjustment (7,878) - (14,605) -

Total (55,381) (113,131) (108,827) (202,363)

Finance income:

Fair value adjustment gains on derivatives 8,669 30,462 16,179 84,462

Effective gains - settlement of transactions – derivatives

111 16,936 1,487 28,699

Foreign exchange gains 8,150 33,908 18,295 49,497

Other finance income 3,477 3,030 9,207 7,015

Present value adjustment 3,360 - 6,236 -

Total 23,767 84,336 51,404 169,673

Finance income (costs), net (31,614) (28,795) (57,423) (32,690)

27 Earnings (loss) per share

Basic earnings (loss) per share are calculated by dividing the income (loss) for the period attributed to the Group’s common shareholders by the final number of common shares in the

periods, excluding treasury shares, if any.

Basic and diluted earnings or loss per share are equal, since there are no financial instruments or equity instruments that could potentially dilute the number of shares. The table below shows profit

or loss data and the number of shares used to calculate basic and diluted earnings or loss per share:



September 30, 2019

53

27 Earnings per share (Continued) Individual and Consolidated

09/30/2019 09/30/2018

Basic and diluted earnings per share:

Income for the period 30,004 50,941

Number of shares at end of period 1,064,082,217 1,064,082,217

Diluted earnings per share (in reais) 0.0282 0.0479

28 Agreement commitments

Sale commitment Subsidiaries Vale do Tijuco Açúcar e Álcool S.A. and Vale do Pontal Açúcar e Etanol Ltda. are primarily engaged in the commodity market. Sales are substantially performed at the price of the

transaction date. However, the subsidiaries have various agreements in the sugar market, through

which they undertake to sell volumes of these products in future crops. Sugar sales commitments at September 30, 2019 in accordance with the crop schedule per producing unit are as follows:

Crop Vale do

Pontal

Vale do

Tijuco Total

19-20 - 219,054 219,054

20-21 45,000 160,000 205,000

21-22 45,000 155,000 200,000

22-23 45,000 155,000 200,000

Grand total 135,000 689,054 824,054

In addition, the subsidiaries have contracts entered into for the sale of anhydrous and hydrated ethanol in the volume of 65,694 cubic meters for the 2019/2020 crop.

At September 30, 2019, the balances of ethanol sales commitments, by crop, product and

production unit are as follows:

Crop Vale do

Pontal

Vale do

Tijuco Total

Hydrated

ethanol 4,533 8,314 12,847

Anhydrous

ethanol 15,647 37,200 52,847

19-20 20,180 45,514 65,694



September 30, 2019

54

28 Agreement commitments (Continued)

Leases and agricultural partnership agreements

Subsidiaries Vale do Tijuco Açúcar e Álcool S.A. and Vale do Pontal Açúcar e Etanol Ltda. have

land lease agreements and partnership for sugarcane cultivation, whose rights of use were

recognized as described in Note 13, and the related liabilities are described in Note 16.

29 Related parties

a. Company and ultimate parent company

The Company is a jointly-controlled entity, through the execution of a shareholder agreement

between IndoAgri Brazil Participações Ltda., Ápia SP Participações S.A. and JFLIM

Participações S/A., according to the ownership structure stated in Note 19a.

b. Key management personnel compensation

Key management personnel comprise the Company’s Executive Board. Key management

personnel compensation for the period ended September 30, 2019 as short-term benefits amounted

to R$3,057 (R$2,687 at September 30, 2018), recorded in the general and administrative expenses group, and include salaries, bonuses, variable compensations and direct and fringe benefits.

The Company and its subsidiaries have no other type of compensation, such as post-employment

benefits, other long-term benefits or employment termination benefits.

c. Significant balances and transactions

Transactions with related parties, other than purchase of raw materials, which are performed at market price, are carried out based on conditions negotiated between the Company and related

parties, which could differ if performed with unrelated parties. Balances with related parties are

as follows:



September 30, 2019

55

29 Related parties (Continued)


09/30/2019 03/31/2019 09/30/2019 03/31/2019

Noncurrent assets

Transactions with related parties (Note 5) (a) [i]

Canápolis Açúcar e Etanol S.A. 1,322 6,329 274 274

Subtotal 1,322 6,329 274 274

Related-party receivables (Note 5) (a)

[ii]

Canápolis Açúcar e Etanol S.A. 3,500 - - -

JFLIM Participações S.A. 1,117 1,082 60 -

Other 4 3 - 58

Subtotal 4,621 1,085 60 58

- -

Total receivables from related parties 5,943 7,414 334 332

Right of use on agricultural partnerships Marco Otavio Galvão (b) 1,461 6,207 - -

Subtotal 1,461 6,207 - -

Total assets 7,404 13,621 334 332


09/30/2019 03/31/2019 09/30/2019 03/31/2019

Liabilities

Accounts payable to related parties (Note 15)

(c)

JF Citrus Agropecuária 4,253 989 - -

Canápolis Açúcar e Etanol S.A. 38 82 - -

Subtotal 4,291 1,071 - -

Intercompany loans (Note 14)

Vale do Tijuco Açúcar e Álcool S.A. - - 6,182 5,156

Vale do Pontal Açúcar e Etanol Ltda. - - 372 396

Subtotal - - 6,554 5,552

Advance from customers

JF Citrus Agropecuária - 18,534 - -

Subtotal - 18,534 - -

Total liabilities 4,291 19,605 6,554 5,552



September 30, 2019

56

29 Related parties (Continued)

Consolidated

09/30/2019 09/30/2018

Profit or loss

Purchase of raw material (sugarcane)

(d)

JF Citrus Agropecuária - 4,374

Marco Otavio Galvão 1,075 1,732

Total 1,075 6,106

(a) [i] Amount referring to sales of agricultural inputs and assets between the subsidiaries as a cost reduction strategy and

strategic planning.

[ii] Amount granted to affiliates Canápolis Açúcar e Etanol S.A. and JFLIM Participações S.A. with interest, and which will be settled by the companies according to cash availability.

(b) Amount granted to Marco Otávio Galvão, not subject to interest, which will be settled upon delivery of sugarcane, in the 2019/2020 crop.

(c) Amount referring to the purchase of sugarcane between the subsidiaries as a cost reduction strategy and strategic planning.

(d) Mr. Marco Otávio Galvão has sugarcane plantations near Vale do Tijuco Açúcar e Álcool S.A. which, therefore, operate as regular sugarcane suppliers. He is characterized as a related party since he figures as a shareholder of one of the Company’s controlling shareholders.

The Company provides surety for its subsidiaries in loan and financing agreements, as stated in Note 14.

Subsidiary Vale do Tijuco Açúcar e Álcool S.A. provides financial guarantees for suppliers’

transactions, as described in Note 21.

30 Insurance coverage The Group’s policy is to take out insurance coverage for assets subject to risks at amounts deemed

sufficient to cover losses, if any, considering the nature of its activities.

At September 30, 2019, the Group has insurance coverage at amounts deemed sufficient by its

management to cover losses, if any, which are described below:

Assets covered Amount insured

Civil liability 60,000

Rural pledge 15,695

Vehicles 100% of FIPE table

Sundry machinery and equipment 27,434

Property 302,000

D&O (Top Management) 20,000



September 30, 2019

57

31 Subsequent events On October 2, 2019, a request to register a public offering of Agribusiness Receivables Certificates (CRA) was filed with CVM, under the terms of CVM Rule No. 400, of December 29,

2003, as amended, in connection with the 26th issue of Eco Securitizadora de Direitos Creditórios

do Agronegócio S.A. (“Offering”), to be issued backed by agribusiness credit rights represented

by non-convertible unprivileged debentures, with additional personal security, to be issued under the 4th issue of Vale do Tijuco Açúcar e Álcool S.A. (subsidiary of CMAA). The total Offering,

if and when realized, is expected to initially amount R$250,000,000.00 (two hundred fifty million

reais), with the possibility of issue at a lower or higher value, by increasing the base offering by no more than 20% (twenty percent). The grace period is four years; amortization will take place

by the end of the 4th, 5th and 6th year. The Offering will be intermediated by XP Investimentos

Corretora de Câmbio, Títulos e Valores Mobiliários S.A. as the leading broker.

* * *

Board of Directors

Members

José Francisco de Fátima Santos

Chairman

Luiz Gustavo Turchetto Santos

Hansjorg Suelzle

Moleonoto Tjang Surjadi Tirtarahardia

Mark Julian Wakeford

Executive Board

Carlos Eduardo Turchetto Santos Celso Oliveira

Jeferson Degaspari

Eduardo Scandiuzzi Lopes Marcelo Bosquetti

Accountant

Anderson César Augusto Alves CRC/SP No. 1SP206284/O-8

* * *

Documents

Companhia Mineira de Açúcar e Álcool Participaçõescmaa.ind.br/upload/files/0109_NE-ITR-CMAA-30-09-19...2019/09/30 · Companhia Mineira de Açúcar e Álcool Participações