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BrasilAgro - Brazilian Agricultural Real Estate Co 6-K, filed Jan 25, 2021

BrasilAgro - Brazilian Agricultural Real Estate Co (LND)

6-K 2021-01-25 For: 2021-01-25
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Added on July 04, 2026

About this 6-K

BrasilAgro - Brazilian Agricultural Real Estate Co filed this 6-K on January 25, 2021.

FORM6-KU.S. SECURITIES AND EXCHANGE COMMISSION****Washington, D.C. 20549

REPORTOF FOREIGN PRIVATE ISSUERPURSUANT TO RULE 13a-16 OR 15d-16 OF THESECURITIES EXCHANGE ACT OF 1934

datedJanuary 25, 2021

BRASILAGRO– COMPANHIA BRASILEIRA DE PROPRIEDADES AGRÍCOLAS(Exact Name as Specified in its Charter)

BrasilAgro– Brazilian Agricultural Real Estate Company

(Translation of Registrant’s Name)

1309Av. Brigadeiro Faria Lima, 5th floor, São Paulo, São Paulo 01452-002, Brazil

(Address of principal executive offices)

GustavoJavier Lopez,

AdministrativeOfficer and Investor Relations Officer,

Tel.+55 11 3035 5350, Fax +55 11 3035 5366, ri@brasil-agro.com

1309Av. Brigadeiro Faria Lima, 5^th^ floor

SãoPaulo, São Paulo 01452-002, Brazil

**(**Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☒    Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐    No ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable.

BrasilAgro- Companhia Brasileira de Propriedades Agrícolas

UnauditedInterim Condensed Consolidated Financial Statements

September 30, 2020

1

BrasilAgro– Companhia Brasileira de Propriedades Agrícolas

Unaudited interim condensed consolidated financial statements

September 30, 2020

Contents

Unaudited interim condensed consolidated financial statements
Interim condensed consolidated statement of financial position 3
Interim condensed consolidated statement of profit or loss 5
Interim condensed consolidated statement of comprehensive income 6
Interim condensed consolidated statement of changes in equity 7
Interim condensed consolidated statement of cash flows 8
Notes to the interim condensed consolidated financial information 9 
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BrasilAgro – Companhia Brasileirade Propriedades Agrícolas

Interim condensed consolidated statement of financial position

(In thousands of reais)

Note September 30,<br><br> 2020 June 30,<br><br> 2020
Unaudited Audited
Assets
Current assets
Cash and cash equivalents 5.1 224,169 171,045
Derivative financial instruments 6 6,728 7,180
Accounts receivable and others 7 205,714 183,350
Inventories 8 127,247 138,778
Biological assets 9 97,515 115,553
Transactions with related parties 29 916 701
Total current assets 662,289 616,607
Noncurrent assets held for sale - 25,857
Noncurrent assets
Biological assets 9 22,939 25,444
Restricted marketable securities 5.2 5,069 5,044
Derivative financial instruments 6 760 1,746
Deferred taxes 17.1 36,846 23,282
Accounts receivable and others 7 336,173 262,387
Investment properties 10 872,230 858,261
Transactions with related parties 29 1,519 1,511
Investments 11 5,745 5,742
Property, plant and equipment 12 107,154 115,925
Intangible assets 1,454 1,469
Right-of-use of assets 13 89,501 101,093
Total noncurrent assets 1,479,390 1,401,904
Total assets 2,141,679 2,044,368

See accompanying notes.

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BrasilAgro – Companhia Brasileirade Propriedades Agrícolas

Interim condensed consolidated statements of financial position

(In thousands of reais)

Liabilities and equity Note September 30, <br> 2020 June 30,<br> 2020
Unaudited Audited
Current liabilities
Trade accounts payable and others 15 113,898 111,170
Loans, financing and debentures 16 208,061 217,274
Salaries and payroll obligations 15,577 19,600
Derivative financial instruments 6 53,494 18,333
Other liabilities 18 6,471 5,017
Transactions with related parties 29 2,881 2,849
Leases payable 14 29,482 25,849
Total current liabilities 429,864 400,092
Noncurrent liabilities
Trade accounts payable and others 15 32,698 28,002
Loans, financing and debentures 16 247,176 296,839
Deferred taxes 17.1 39,194 34,031
Leases payable 14 137,496 126,514
Derivative financial instruments 6 9,291 1,462
Provision for legal claims 27 1,535 1,485
Other liabilities 18 39,893 34,374
Total noncurrent liabilities 507,283 522,707
Total liabilities 937,147 922,799
Equity
Capital 19.a 699,811 699,811
Capital reserves (34,292 ) (34,292 )
Treasury shares 19.f (31,501 ) (31,501 )
Income reserves 358,606 358,606
Additional dividends proposed 19.d 13,606 13,606
Other comprehensive income 19.e 122,648 115,339
Retained earnings 75,654 -
Total equity 1,204,532 1,121,569
Total liabilities and equity 2,141,679 2,044,368

See accompanying notes.

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BrasilAgro – Companhia Brasileirade Propriedades Agrícolas

Interim condensed consolidated statements of income

For the three-month period ended September 30

(In thousands of reais, unless stated otherwise)

Note 2020 2019
Unaudited
Revenue 21.a 222,214 166,006
Gain on sale of farms 21.b 5,752 16,572
Changes in fair value of biological assets and agricultural products 9 50,599 38,218
Adjustment to net realizable value of agricultural products after harvest, net 8,1 2,269 (1,345 )
Cost of sales 22 (207,539 ) (158,808 )
Gross profit 73,295 60,643
Selling expenses 22 (5,437 ) (3,873 )
General and administrative expenses 22 (7,908 ) (9,186 )
Other operating (expenses) income, net 24 (2,813 ) 446
Share of loss of a joint venture 11.a (44 ) (40 )
Operating income 57,093 47,990
Financial income (expenses)
Financial income 25 187,273 71,605
Financial expenses 25 (171,806 ) (70,370 )
Profit before income and social contribution taxes 72,560 49,225
Income and social contribution taxes 17,2 3,094 (8,649 )
Net profit for the period 75,654 40,576
Basic earnings per share - in Brazilian reais 26 1.2749 0.7542
Diluted earnings per share - in Brazilian reais 26 1.2638 0.7495

See accompanying notes.

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BrasilAgro – Companhia Brasileirade Propriedades Agrícolas

Interim condensed consolidated statements of comprehensive income

For the three-month period ended September 30

(In thousands of reais, unless otherwise stated)

Notes 2020 2019
Unaudited
Net income for the period 75,654 40,576
Other comprehensive income that may be reclassified to statement of income in subsequent periods:
Currency translation adjustment of foreign operations 19.e 7,309 16,233
Total comprehensive income for the period 82,963 56,809

See accompanying notes.

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BrasilAgro – Companhia Brasileirade Propriedades Agrícolas

Interim condensed consolidated statements of changes in equity

For the three-month period ended September 30, 2020 and 2019

(In thousands of reais)

Capital reserves Income reserves
Note Capital Additional<br><br> paid-in <br><br>capital Share-based<br><br> payments Treasury <br><br>shares Legal <br><br>reserve Reserve for<br><br> investment <br><br>and <br><br>expansion Additional<br><br> dividends<br><br> proposed Other<br><br> comprehensive<br><br> income Retained <br><br>earnings Total <br><br>equity
At June 30, 2019 584,224 - 3,645 (35,208 ) 25,557 255,495 7,944 38,876 - 880,533
Share-based compensation plan - - 1,510 - - - - - - 1,510
Net profit for the period - - - - - - - - 40,576 40,576
Currency translation adjustment of foreign operations 19.e - - - - - - - 16,233 - 16,233
At September 30, 2019 584,224 - 5,155 (35,208 ) 25,557 255,495 7,944 55,109 40,576 938,852
Capital reserves Income reserves
Note Capital Additional <br><br>paid-in <br><br>capital Share-based <br><br>payments Treasury <br><br>shares Legal <br><br>reserve Reserve for<br><br> investment <br><br>and <br><br>expansion Additional <br><br>dividends <br><br>proposed Other <br><br>comprehensive <br><br>income Retained <br><br>earnings Total <br><br>equity
At June 30, 2020 699,811 (33,566 ) (726 ) (31,501 ) 31,535 327,071 13,606 115,339 - 1,121,569
Net profit for the period - - - - - - - - 75,654 75,654
Currency translation adjustment of foreign operations 19.e - - - - - - - 7,309 - 7,309
At September 30, 2020 699,811 (33,566 ) (726 ) (31,501 ) 31,535 327,071 13,606 122,648 75,654 1,204,532

See accompanying notes.

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BrasilAgro – Companhia Brasileirade Propriedades Agrícolas

Interim condensed consolidated statements of cash flows

For the three-month period ended September 30

(In thousands of reais)

Note 2020 2019
Unaudited
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit for the period 75,654 40,576
Adjustment to reconcile net profit for the period
Depreciation and amortization 22 29,706 11,972
Gain on sale of farm 21.b (5,752 ) (16,572 )
Residual value of property, plant and equipment and intangible assets disposed 3,117 245
Write-off of capitalized costs in investment properties 108 487
Share of loss of a joint venture 11.a 44 40
Unrealized loss on derivatives, net 25 44,445 2,849
Unrealized foreign exchange loss, monetary variation and financial charges, net 21,422 6,077
Gain on remeasurement of receivable from sale of farms, net (89,951 ) (10,202 )
Effect of share-based incentive plan – ILPA - 1,510
Deferred income and social contribution taxes 17,2 (8,401 ) 3,688
Changes in fair value of biological assets and agricultural products 9 (50,599 ) (38,218 )
Adjustments to net realizable value of agricultural products after harvest 8,1 (2,269 ) 1,345
Allowance for expected credit losses 22 (163 ) -
Provision (reversal of) for legal claims 27 50 (89 )
17,411 3,708
Changes in working capital
Trade accounts receivable 19,544 9,696
Inventories 13,531 4,643
Biological assets 72,535 56,604
Recoverable taxes (3,917 ) (3,451 )
Derivative financial instruments (168 ) 685
Other receivables 11,227 (9,012 )
Trade accounts payable 176 661
Transactions with related parties (235 ) (163 )
Taxes payable 4,293 7,472
Income and social contribution taxes - (4,458 )
Salaries and payroll obligations (4,045 ) (6,584 )
Advances from customers 1,625 (3,915 )
Leases payable (62 ) (7,531 )
Other obligations (2,284 ) (34 )
Net cash flows from operating activities 129,631 48,321
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment and intangible assets (8,009 ) (6,975 )
Additions to of investment properties (9,766 ) (3,734 )
Redemption of marketable securities, net 1,061 353
Increase in investments and interest held in associates - (2,087 )
Acquisition of joint venture Cresca - 24
Cash received from sale of farms 5,500 2,698
Net cash used in investing activities (11,214 ) (9,721 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loans and financing 16 7,856 12,622
Interest paid on loans, financing and debentures 16 (10,754 ) (14,931 )
Repayment of loans, financing and debentures 16 (62,458 ) (31,906 )
Net cash flows used in financing activities (65,356 ) (34,215 )
Net increase in cash and cash equivalents 53,061 4,385
Cash and cash equivalents at beginning of period 5,1 171,045 106,627
Effect of exchange rate variation on cash and cash equivalents 63 1,449
Cash and cash equivalents at end of period 5,1 224,169 112,461

See accompanying notes.

8

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

1. Operations

BrasilAgro

  • Companhia Brasileira de Propriedades Agrícolas (“BrasilAgro” or "Company") was incorporated on September 23, 2005 and is headquartered at Avenida Brigadeiro Faria Lima, 1309, in São Paulo with branches in the states of Bahia, Goiás, Mato Grosso, Minas Gerais, Maranhão and Piauí, and in Paraguay, in the state of Boquerón. The ultimate parent company of BrasilAgro is Argentine-based Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (“Cresud S.A.C.I.F.Y.A.”).

BrasilAgro corporate purpose includes:

● agriculture,<br>cattle raising and forestry activities of any type and nature and rendering directly or indirectly related services;
● the<br>import and export of agricultural products and inputs and those related to cattle raising activity;
--- ---
● the<br>purchase, sale and/or rental of properties, land, buildings and real estate in rural and/or urban areas; real estate brokerage<br>involving any type of operations;
--- ---
● holding<br>interest, as a member, in other companies and commercial ventures of any nature, in Brazil and/or abroad, directly or indirectly<br>related to the purposes described herein; and
--- ---
● management<br>of its own and third-party assets.
--- ---

The Company has sixteen (16) farms in six (6) Brazilian states and one (1) farm in Paraguay, for a total area of 215,330 hectares of own lands and 50,747 hectares of leased lands.

1.1. Sale of Farms
a) Sale of Jatobá IV Farm
--- ---

On July 11, 2019, the Company signed a purchase and sale agreement for a total area of 1,134 hectares (893 agricultural hectares) of the Jatobá Farm, a rural property located in the city of Jaborandi, state of Bahia, for an amount corresponding to 302 bags of soybean per agricultural hectare, totaling R$23,183 as of September 2, 2019.

On September 2, 2019, the buyer met the contractual conditions to take possession of the Jatobá IV farm upon the down payment of R$2,698. As a result, revenue was recognized in the statement of income (see Note 21.b) and the remaining balance corresponding to 232,000 soybean bags is recorded in accounts receivable from sales of farms, to be received in six annual installments ending in 2025 (Note 7.1.e – Jatobá IV).

b) Saleof Bananal X Farm

On July 31, 2020, the Company concluded the sale of a 2,160-hectare area of the Bananal Farm (“Bananal X”), a property located in the municipality of Luís Eduardo Magalhães (Bahia), with 1,714 hectares of agricultural area and 446 hectares of legal reserve and permanent preservation area. The area sold was owned by the subsidiary Agrifirma, a company acquired on January 27, 2020, and was not part of the Company’s farm portfolio due to the sale commitment signed by the former management.

The agreement was executed on March 22, 2019 for a fixed price of R$28,000 to be paid in seven installments. In the last fiscal year ended June 30, 2020, the farm was maintained as noncurrent asset held for sale due to a disagreement involving the lessor of the area at the time of the sale that impeded the transfer of possession to the buyer. On July 31, 2020, the conditions provided for in the agreement were met and the Company recognized the sale without effect on profit or loss for the period, since the asset was registered at its fair value less selling expenses, as set forth in IFRS 5 – Noncurrent Assets Held for Sale and Discontinued Operations.

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BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

Up to the date of transfer of ownership, the Company received R$7,500 (Note 7.1.e – Bananal X). The amount of R$2,000 refers to installments 1 and 2, which were transferred on February 20, 2019 and March 15, 2019 as advances, while the amount of R$5,500 corresponds to installments 3 and 4 received on July 31, 2020. The remaining balance of R$20,500 will be received in three annual installments ending in 2023.

1.2. COVID-19Impacts

COVID-19 cases were first reported on December 31, 2019, and since then the disease has spread to various countries, including Brazil and Paraguay, where the Company operates, with reports of numerous deaths caused by the new coronavirus. On March 11, 2020, the World Health Organization declared a global pandemic.

In March 2020, the Company developed and implemented a plan with various measures to protect the health of the employees, contribute to containing COVID-19 and mitigate its effects on operations. These measures included:

● Creating<br>a Prevention and Risk Committee to continuously assess the overall situation, update preventive measures and actions to minimize<br>risks, and coordinate the implementation of action plans;
● Establishing<br>a home office policy for employees who are at risk or who work at the corporate office in São Paulo;
--- ---
● Adoption<br>of various measures and protocols to protect the safety of all persons involved in the Company’s operational context, following<br>the guidelines of the Brazilian Ministry of Health;
--- ---
● Contingency<br>plans to support any possible disruption in the Company’s operations.
--- ---

The operations in Brazil and Paraguay continued normally and to date the Company has not had any material impact caused by the spread of COVID-19.

COVID-19 could affect the Company’s operations if a significant portion of its workforce cannot work effectively due to the spread of the virus, quarantines, government actions, the shutdown of facilities or other restrictions. Part of the Company’s revenue is generated by the sale of commodities to local clients, but the global market for said commodities relies on an extensive logistics and supply chain, including ports, distribution centers and suppliers. In addition, the high volatility in the U.S. dollar exchange rate and the prices of commodities could result in losses for the Company.

With regards to its business, a fact that merits attention is the strong demand for exports benefited by the appreciation of the U.S. dollar. With regards to the logistics chain, no significant disruptions were noted in the logistics and export operations, as well as in inbound shipments of raw materials and goods, most of which had been acquired prior to the quarantine period in Brazil. With regard to sales commitments for the 2019/20 crop year, the Company has not identified any material changes, since their origination is based on a strong correlation between the way the negotiations are conducted, and the players selected as commercial partners. Therefore, to date, the Company has not observed any matters related to these commitments. Moreover, the Company is well positioned to surmount the effects caused by covid-19, with its main concerns including its cash preservation, leverage ratio and cost and borrowing efficiency, which are aligned with the risk policies adopted by the Company.

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BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

Short and long-term liquidity is preserved, and even any changes in inbound and outbound shipments are scaled to not affect significantly the Company’s financial position. BrasilAgro did not identify significant risks with regards to its capacity to continue operating. Lastly, no material subsequent events related to facts known after June 30, 2020 that should be disclosed were identified. During the quarter ended September 30, 2020, no material impacts were identified, being important to note that:

● As<br>of the reporting date, most of the crop already had been shipped; with only the cotton crop partially affected by delays in chain,<br>but without any adverse effect on invoicing;
● In<br>terms of logistics, the receipt of inputs is on schedule without adverse effects on the start of planting and the remainder is<br>scheduled to be received in accordance with the Company’s needs for planting over the coming months;
--- ---
● The<br>sugarcane operations continue without any adverse effects, considering that the mills have not interrupted their activities and<br>that prices have recovered, despite the initial volatility; and
--- ---
● In<br>Paraguay, meat packers have reopened and sales of meat have resumed.
--- ---
2. Basis of preparation and presentation of the consolidated financial statements
--- ---

The significant accounting policies applied when preparing these Interim condensed consolidated financial statements are consistent with the policies applied as of June 30, 2020.

2.1. Basisof preparation

On December 28, 2020, the Company’s executive board approved these Interim condensed consolidated financial statements and authorized them for issuance.

The interim condensed consolidated financial statements are presented in thousands of reais (“R$”), which represents the Company’s presentation and functional currency.

The interim condensed consolidated financial statements for the three-month period ended September 30, 2020 have been prepared in accordance with IAS 34, Interim Financial Reporting.

Non-financial data included in this Interim condensed consolidated financial statements, such as number of hectares owned by the Company, among others, has not been subject to audit procedures, or any review from our independent auditors.

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BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

Basis of consolidation

The interim condensed consolidated financial statements comprise the financial statements of BrasilAgro and its subsidiaries as of September 30, 2020 and June 30, 2020, as described below.

Subsidiaries and joint ventures (%) September 30, <br><br>2020 June 30,<br><br> 2020
Jaborandi Agrícola Ltda. (“Jaborandi Agrícola”) 99.99 99.99
Imobiliária Jaborandi Ltda. (“Jaborandi”) 99.99 99.99
Imobiliária Cremaq Ltda. (“Cremaq”) 99.99 99.99
Imobiliária Engenho Ltda. (“Engenho”) 99.99 99.99
Imobiliária Araucária Ltda. (“Araucária”) 99.99 99.99
Imobiliária Mogno Ltda. (“Mogno”) 99.99 99.99
Imobiliária Cajueiro Ltda. (“Cajueiro”) 99.99 99.99
Imobiliária Ceibo Ltda. (“Ceibo”) 99.99 99.99
Imobiliária Flamboyant(“Flamboyant”) 99.99 99.99
Agrifirma Agro Ltda (“Agrifirma”) (**) 99.99 99.99
Agrifirma Bahia Agropecuária Ltda. (“Bahia”) (*) 99.99 99.99
I.A. Agro Ltda. (“I.A. Agro”) (*) 99.99 99.99
GL Empreendimentos e Participações Ltda. (“GL”) (*) 99.99 99.99
Agrifirma Delaware LLC (“Delaware”) (*) - 100.00
Palmeiras S.A. (“Palmeiras”) 99.99 99.99
Agropecuaria Morotí S.A. (“Moroti”) 99.99 99.99
(*) Subsidiaries<br>of Agrifirma – indirect control.
--- ---
(**) The<br>corporate name of the subsidiary Agrifirma, which was acquired on January 27, 2020, was changed from Agrifirma Brasil Agropecuária<br>S.A. to Agrifirma Agro Ltda in the period ended September 30, 2020.
--- ---
2.2. Newstandards, amendments and interpretations of standards
--- ---

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended June 30, 2020, except for the adoption of new standards effective as of July 1, 2020. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

Several amendments and interpretations apply for the first time in 2020, but do not have an impact on the interim condensed consolidated financial statements of the Company. There are no new standards and interpretations issued that caused, according to Management’s analysis, any significant impact on these interim consolidated financial statements.

a. Amendmentsto IFRS 3 (R1): Definition of a business

In October 2018, the IASB issued amendments to IFRS 3 regarding the definition of a business to help entities to determine if a set of activities and assets acquired is a business or not. They clarify the minimum requirements for a company, eliminate the assessment of if market participants are capable of replacing missing elements, include guidelines to help entities to evaluate if an acquired process is substantive, determine better the definitions of business and outputs and introduce a test of concentration of optional fair value. New illustrative cases were provided with the amendments.

Since the amendments apply prospectively to transactions or other events occurring on the date or after the first-time adoption, the Company will not be affected by these amendments on the transition date.

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BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

b. Amendmentsto IAS 1 and IAS 8: Definition of material omission

In October 2018, IASB issued amendments to IAS 1 and IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors to align the definition of omission in all standards, with the information material if omitting, misstating or obscuring if it could reasonably influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity

Such amendments are not expected to have a significant impact on Company’s individual and consolidated financial statements.

There are no other standards and interpretations issued and not yet adopted that may, in the opinion of the Management, significantly impact profit or loss or shareholders’ equity disclosed by the Company.

3. Significantaccounting estimates and judgments

Accounting estimates and judgments are continuously assessed and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the current circumstances.

Based on the assumptions, the Company concerning its future. The resulting accounting estimates will, by definition, seldom equal the related actual amounts. The estimates and assumptions that have a significant risk of causing a material misstatement to the carrying amounts of assets and liabilities within the next year are as follows:

a) Contingencies

The Company is party to different legal and administrative proceedings, as described in Note 27. Provisions are set up for all the contingencies related to legal claims that are estimated to represent probable losses (present obligations resulting from past events in which an outflow of resources is probable, and amounts can be reliably estimated). The evaluation of the likelihood of loss is responsibility of the Company and includes the opinion of outside legal advisors.

b) Biological<br>assets

The fair value of biological assets recorded in the balance sheet (Note 9) was determined using valuation techniques, including the discounted cash flow method. The inputs for these estimates are based on those observable in the market, whenever possible, and when such inputs are not available, a certain level of judgment is required to estimate the fair value. Judgment includes considerations on data e.g. price, productivity, crop cost and production cost.

Changes in the assumptions on these factors might affect the fair value recognized for biological assets.

An increase or decrease by 1% in the expected productivity of sugarcane and grains/cotton would result in an increase or decrease in biological asset by R$1,002 and an increase or decrease by 1% in the price of sugarcane and grains/cotton would result in an increase or decrease in biological asset by R$1,583.

With regard to cattle, the Company values its stock at fair value based on market price publicly available for the region.

13

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

c) Investment<br>properties

The fair value of investment properties was determined through an appraisal prepared by the Company.

The appraisal was performed by means of standards adopted in the market considering the characteristics, location, type of soil, climate of the region, calculation of improvements, presentation of the elements and calculation of the land value, which may differ based on these variables.

d) Deferred<br>income tax

The Company recognizes deferred income tax assets and liabilities, as described in Note 17, on tax loss carryforwards and temporary differences between the carrying amount and the tax basis of assets and liabilities using statutory rates. The Company regularly assesses if the deferred income tax assets recognized are recoverable, considering the taxable profit generated in the past as well as the expected future taxable profit, in accordance with a technical feasibility study performed by the Company.

e) Leases

The Company analyzes its agreements in accordance with the requirements of IFRS 16 and recognizes right-of-use assets and lease liabilities for the lease operations under agreements that meet the requirements of the accounting standard. Management considers as the lease component only the minimum fixed lease payments for the purpose of measuring the lease liabilities. The measurement of lease liabilities corresponds to the total future payments of leases and rentals, adjusted to present value, considering the incremental borrowing rate.

f) Non-financial<br>obligations

The Company analyzes its agreements in accordance with the requirements of IFRS 16 and recognizes right-of-use assets and lease liabilities for the lease operations under agreements that meet the requirements of the accounting standard. The Management of the Company considers as the lease component only the minimum fixed value for the purpose of measuring the lease liabilities. The measurement of lease liabilities corresponds to the total future payments of leases and rentals, adjusted to present value, considering the nominal discount rate which ranges between 4.87% and 8.93%.

For the cases where payments are indexed to the soybean bag, future minimum payments are estimated in number of soybean bags and translated into local currency using the soybean price of each region, on the base date of first-time adoption of IFRS 16, and adjusted to the current price at time of payment. Meanwhile, payments indexed to Consecana are stipulated in tons of sugarcane and translated into local currency based on the Consecana price in effect at the time.

14

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

4. Financial risk management

The financial risk management adopted in the preparation of the consolidated interim financial statements is consistent with that adopted in Note 4 to the annual financial statements for June 30, 2020. Notes 4.1, 4.2, 4.3 to 4.10 disclosed in the annual financial statements for June 30, 2020 did not have significant changes.

4.1. Analysisof exposure to financial asset and liability risks
a) Currency<br>risk

This risk arises from the possibility that the Company may incur losses due to fluctuations in exchange rates, which reduces the nominal amount of assets or increase the amount of liabilities. This risk also arises with respect to commitments to sell products existing in inventories or agricultural products not yet harvested when sales are made at prices to be fixed at a future date, prices which vary depending on the exchange rate.

b) Interest<br> rate and indices risk

This risk arises from the possibility that the Company may incur losses due to fluctuations in the interest rates or indices which increase financial expenses related to certain contracts for the acquisition of farms, indexed by inflation, such as the IGP-M rate ("FGV").

c) Commodities<br> risk

This risk arises from the possibility that the Company may incur losses due to fluctuations in the market prices of agricultural products.

4.2. Estimateof fair value of derivative financial instruments
a) Sensitivity<br>analysis

Management identified for each type of derivative financial instrument the conditions for variation in foreign exchange rates, interest rates or commodities prices which may generate loss on assets and/or liabilities which is being hedged or, in the case of derivative financial instruments related to transactions not recorded in the balance sheet, in the fair value of the contracted derivatives.

The sensitivity analysis shows the impact from the changes in the market variables on the aforementioned financial instruments of the Company, considering all other market indicators comprised. Upon their settlement, such amounts may differ from those stated below, due to the estimates used in their preparation.

This analysis contemplates five distinct scenarios that differ due to the intensity of variation in relation to the current market. At September 30, 2020, as reference for probable scenarios I, II, III and IV, a variation in relation to the current market of 0%, -25%, -50%, +25%, +50%, respectively, was considered.

The preparation of the probable scenario took into consideration the market prices of each one of the reference assets of derivative financial instruments held by the Company at year end. Since all these assets are traded in competitive and open markets, the current market price is a meaningful reference for the expected price of these assets. Accordingly, since the current market price was the reference for the calculation of both book value and the Probable Scenario, it resulted in no mathematical difference.

15

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

The assumptions and scenarios are as follows:

September 30, 2020
Probable<br><br> scenario Scenario I<br><br> -25% Scenario II<br><br> -50% Scenario III<br><br> +25% Scenario IV<br><br>+50%
Soybean - R / bag – November 13, 2020 (CBOT) 118.58 88.94 59.29 148.23 177.87
Soybean - R / bag – December 23, 2020 (CBOT) 127.19 95.39 63.60 158.99 190.79
Soybean - R / bag – December 28, 2020 (CBOT) 127.19 95.39 63.60 158.99 190.79
Soybean - R / bag – February 19, 2021 (CBOT) 126.97 95.23 63.49 158.71 190.46
Soybean - R / bag – February 23, 2021 (CBOT) 126.97 95.23 63.49 158.71 190.46
Soybean - R / bag – June 25, 2021 (CBOT) 127.19 95.39 63.60 158.99 190.79
Soybean - R / bag – July 14, 2021 (CBOT) 127.19 95.39 63.60 158.99 190.79
Soybean - R / bag – November 12, 2021 (CBOT) 120.20 90.15 60.10 150.25 180.30
Corn - R / bag – November 16, 2020 (CBOT) 66.46 49.85 33.23 83.08 99.69
Corn - R / bag – August 27, 2021 (CBOT) 51.73 38.80 25.87 64.66 77.60
Corn - R / bag – September 15, 2021 (CBOT) 56.38 42.29 28.19 70.48 84.57
Fed Cattle - R / @ – October 30, 2020 (BM&F) 256.00 192.00 128.00 320.00 384.00
Fed Cattle - R / @ – November 30, 2020 (BM&F) 258.40 193.80 129.20 323.00 387.60
Fed Cattle - R / @ – December 30, 2020 (BM&F) 257.45 193.09 128.73 321.81 386.18
Cotton - R / @ – November 13, 2020 (CBOT) 122.72 92.04 61.36 153.40 184.08
Cotton - R / @ – December 8, 2020 (CBOT) 122.72 92.04 61.36 153.40 184.08
Cotton - R / @ – November 12, 2021 (CBOT) 122.81 92.11 61.41 153.51 184.22
Cotton - R / @ – December 8, 2021 (CBOT) 122.81 92.11 61.41 153.51 184.22
– November 27, 2020 5.64 4.23 2.82 7.05 8.46
– November 30, 2020 5.64 4.23 2.82 7.05 8.46
– January 26, 2021 5.64 4.23 2.82 7.05 8.46
– June 28, 2021 5.68 4.26 2.84 7.10 8.52
– June 29, 2021 5.68 4.26 2.84 7.10 8.52
– June 30, 2021 5.68 4.26 2.84 7.10 8.52
– July 5, 2021 5.68 4.26 2.84 7.10 8.52
– July 15, 2021 5.68 4.26 2.84 7.10 8.52
– November 16, 2021 5.73 4.30 2.87 7.16 8.60
– November 17, 2021 5.73 4.30 2.87 7.16 8.60
– June 27, 2022 5.87 4.40 2.94 7.34 8.81
– June 28, 2022 5.87 4.40 2.94 7.34 8.81
Interest (rate%) – August 15, 2023 5.32 % 3.99 % 2.66 % 6.65 % 7.98 %

All values are in US Dollars.

June 30, 2020
Probable<br> scenario Scenario I<br> -25% Scenario II<br> -50% Scenario III<br> +25% Scenario IV<br> +50%
Soybean - R / bag – July 3, 2020 (CBOT) 106.76 80.07 53.38 133.45 160.14
Soybean - R / bag – November 13, 2020 (CBOT) 106.51 79.88 53.26 133.14 159.77
Soybean - R / bag – December 28, 2020 (CBOT) 106.67 80.00 53.34 133.34 160.01
Soybean - R / bag – February 19, 2021 (CBOT) 106.09 79.57 53.05 132.61 159.14
Soybean - R / bag – June 25, 2021 (CBOT) 106.67 80.00 53.34 133.34 160.01
Corn - R / bag – July 15, 2020 (CBOT) 48.10 36.08 24.05 60.13 72.15
Corn - R / bag – July 16, 2020 (CBOT) 46.26 34.70 23.13 57.83 69.39
Corn - R / bag – September 15, 2020 (CBOT) 46.26 34.70 23.13 57.83 69.39
Corn - R / bag – September 16, 2020 (CBOT) 46.26 34.70 23.13 57.83 69.39
Corn - R / bag – August 27, 2021 (CBOT) 47.44 35.58 23.72 59.30 71.16
Fed Cattle - R / @ – October 30, 2020 (BM&F) 215.85 161.89 107.93 269.81 323.78
Cotton - R / @ – November 13, 2020(CBOT) 110.25 82.69 55.13 137.81 165.38
Cotton - R / @ – December 8, 2020(CBOT) 110.25 82.69 55.13 137.81 165.38
– August 31, 2020 5.45 4.09 2.73 6.81 8.18
– June 28, 2021 5.50 4.13 2.75 6.88 8.25
– June 29, 2021 5.50 4.13 2.75 6.88 8.25
– June 30, 2021 5.50 4.13 2.75 6.88 8.25
– July 15, 2021 5.51 4.13 2.76 6.89 8.27
– November 16, 2021 5.56 4.17 2.78 6.95 8.34
– November 17, 2021 5.56 4.17 2.78 6.95 8.34
Interest (rate%) – August 15, 2023 4.67 % 3.50 % 2.34 % 5.84 % 7.01 %

All values are in US Dollars.

This sensitivity analysis aims to measure the impact of variable market changes on the aforementioned financial instruments of the Company, considering all other market indicators remain unchanged. Estimated amounts below can significantly differ from amount eventually settled.

16

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

In addition, the Company presents a summary of possible scenarios for the following 12 months of the Company’s financial instruments. Reliable sources of index disclosure were used for the rates used in the “probable scenario”.

**** **** Amounts in thousands reais R$ ****
Scenario I - Scenario I<br> - Possible Scenario II<br> - Remote Scenario I<br> - Possible Scenario II<br> - Remote
(*) annual average rates At<br> September 30, 2020 Probable Decrease Decrease Increase Increase
Operation Risk Balance<br><br> (R$) Notional Rate Balance<br><br> (R$) Rate<br><br> (*) Balance<br><br> (R$) -25%<br><br> Rate Balance<br> <br><br> (R$) -50%<br><br> Rate Balance<br><br> (R$) 25%<br><br> Rate Balance<br><br> (R$) 50%<br><br> Rate
Short-term investments CDI 172,327 - 1.90 % (1,516 ) 2.78 % (1,206 ) 2.09 % (2,395 ) 1.39 % 1,206 3.48 % 2,395 4.17 %
Marketable securities CDI 5,069 - 1.90 % (45 ) 2.78 % (35 ) 2.09 % (70 ) 1.39 % 35 3.48 % 70 4.17 %
Cash<br> - 35,502 6,294 5.64 (442 ) 5.71 (8,986 ) 4.28 (17,972 ) 2.86 8,986 7.14 17,972 8.57
Total<br> cash and cash equivalents 212,898 6,294 (2,003 ) (10,227 ) (20,437 ) 10,227 20,437
Financing in Paraguay - Palmeiras (8,731 ) (1,548 ) 5.64 (612 ) 5.71 12,465 4.28 24,930 2.86 (12,465 ) 7.14 (24,930 ) 8.57
Debentures CDI (99,876 ) - 1.90 % (879 ) 2.78 % 699 2.09 % 1,388 1.39 % (699 ) 3.48 % (1,388 ) 4.17 %
Financing for agricultural<br> costs CDI (40,053 ) - 1.90 % (352 ) 2.78 % 280 2.09 % 557 1.39 % (280 ) 3.48 % (557 ) 4.17 %
Financing<br> for working capital CDI (77,015 ) - 4.91 % - 4.91 % 947 3.68 % 1,895 2.46 % (947 ) 6.14 % (1,895 ) 7.37 %
Total<br> financing (b) (225,675 ) (1,548 ) (1,843 ) 14,391 28,770 (14,391 ) (28,770 )
Araucária III Soybean bags 3,924 39,254 103.18 - 103.18 (981 ) 77.39 (1,962 ) 51.59 981 128.98 1,962 154.77
Araucária IV Soybean bags 7,598 64,749 121.66 - 121.66 (1,900 ) 91.25 (3,799 ) 60.83 1,900 152.08 3,799 182.49
Araucária V Soybean bags 51,734 450,000 127.70 - 127.70 (12,934 ) 95.78 (25,867 ) 63.85 12,934 159.63 25,867 191.56
Jatobá I Soybean bags 3,540 30,000 119.80 - 119.80 (885 ) 89.85 (1,770 ) 59.90 885 149.76 1,770 179.71
Jatobá II Soybean bags 150,096 1,309,497 137.41 - 137.41 (37,524 ) 103.06 (75,048 ) 68.71 37,524 171.77 75,048 206.12
Jatobá III Soybean bags 58,183 500,194 136.97 - 136.97 (14,546 ) 102.73 (29,092 ) 68.48 14,546 171.21 29,092 205.45
Jatobá IV Soybean bags 21,601 184,000 136.05 - 136.05 (5,400 ) 102.04 (10,801 ) 68.02 5,400 170.06 10,801 204.07
Jatobá V Soybean bags 41,613 360,000 140.96 - 140.96 (10,403 ) 105.72 (20,807 ) 70.48 10,403 176.19 20,807 211.43
Alto Taquari I Soybean bags 4,820 45,312 116.68 - 116.68 (1,205 ) 87.51 (2,410 ) 58.34 1,205 145.85 2,410 175.02
Alto Taquari II Soybean bags 4,932 32,628 117.48 - 117.48 (1,233 ) 88.11 (2,466 ) 58.74 2,694 146.85 2,466 176.22
Alto<br> Taquari III Soybean bags 10,774 93,478 133.66 - 133.66 (2,694 ) 100.25 (5,387 ) 66.83 1,233 167.08 5,387 176.22
Total<br> receivables from farms 358,815 3,109,112 - (89,705 ) (179,409 ) 89,705 179,409
Operations with derivatives,<br> net Grains (36,278 ) (5,161,450 ) (a) (36,278 ) (a) 21,728 (a) 66,678 (a) (124,552 ) (a) (214,745 ) (a)
Operations with derivatives,<br> net (22,082 ) (46,690 ) (a) (22,083 ) (a) 42,970 (a) 108,022 (a) (87,136 ) (a) (152,188 ) (a)
Operations with derivatives,<br> net Cattle - (52,140 ) (a) - (a) 464 (a) 3,805 (a) (6,219 ) (a) (9,560 ) (a)
Operations with derivatives,<br> net Cotton (674 ) (4,050,000 ) (a) (674 ) (a) 3,348 (a) 7,166 (a) (5,739 ) (a) (10,888 ) (a)
Operations with derivatives,<br> net Ethanol - (2,550 ) (a) - (a) 1,212 (a) 2,416 (a) (1,196 ) (a) (2,400 ) (a)
Operations with derivatives,<br> net Swap 706 8,967 (a) 706 (a) 983 (a) 1,195 (a) 378 (a) 13 (a)
Margin<br> - LFT Socopa SELIC 3,031 - 1.90 % (27 ) 2.78 % (21 ) 2.09 % (42 ) 1.39 % 21 3.48 % 42 0.04
Total<br> derivatives (a) (55,297 ) (58,356 ) 70,684 189,240 (224,443 ) (389,726 )
Cresca, net (1,732 ) (307 ) 5.64 (21 ) 5.71 438 4.28 877 2.86 (438 ) 7.14 (877 ) 8.57
Helmir,<br> net 443 79 5.64 8 5.71 (113 ) 4.28 (226 ) 2.86 113 7.14 226 8.57
Total<br> related parties (1,289 ) (228 ) (13 ) 325 651 (325 ) (651 )
Serra<br> Grande Farm Soybean bags (19,159 ) 162,000 124.88 - 124.88 4,790 93.66 9,580 62.44 (4,790 ) 156.10 (9,580 ) 187.32
Total<br> Acquisitions payable (19,159 ) 162,000 - 4,790 9,580 (4,790 ) (9,580 )

All values are in US Dollars.

(*) SOURCE<br>Risks: Bloomberg
(a) For<br>sensitivity analysis of derivative positions, forward rates and prices at each maturity date of the operation were used, according<br>to the table above.
--- ---
(b) The<br>sensitivity analyses do not consider financing transactions with fixed rate.
--- --- 
17

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

b) Credit<br>risk

Credit risk refers to the risk of the noncompliance by a counterparty of its contractual obligations, leading the Company to incur financial losses. The risk to which the Company is exposed arises from the possibility of not recovering the amounts receivable from the sale of sugarcane, grains, and from the leasing of land.

To reduce credit risk in commercial transactions, the Company adopts the practice of defining credit limits in which it analyzes factors such as: the counterparty’s history, history of its business, commercial references and Credit Protection Institution (Serasa). The Company also constantly monitors the outstanding balances.

Currently, management does not expect losses due to the default of its counterparties and has no significant exposure to any individual counterparty.

c) Liquidity<br>risk

The table below shows the Company’s financial liabilities by maturity. The amounts disclosed in the table are the discounted contractual cash flows, in addition to the net derivative financial instruments, which are recorded at fair value. With respect to payables for the purchase of farms all amounts due at September 30, 2020 and June 30, 2020 are payable upon the fulfillment of certain conditions precedent by the sellers and as a result its payment date cannot be determined and have been considered as payable on demand in the table below and no interest or other financial charges have been considered.

Consolidated financial liabilities Note Less than<br><br> one year From one to <br><br>two years From three to<br><br> five years Above five<br><br> years Total
At September 30, 2020
Trade accounts payable 15.1 60,499 - - - 60,499
Derivative financial instruments 6 53,494 9,291 - - 62,785
Loans, financing and debentures 16 208,061 198,766 33,574 14,836 455,237
Lease payables 14 29,482 23,130 65,930 48,436 166,978
Transactions with related parties 29 2,881 - - - 2,881
Other liabilities 18 6,471 33,584 6,309 - 46,364
At June 30, 2020
Trade accounts payable 15,1 55,603 - - - 55,603
Derivative financial instruments 6 18,333 1,462 - - 19,795
Loans, financing and debentures 16 217,274 198,793 82,037 16,009 514,113
Lease payables 14 25,849 26,200 45,330 54,984 152,363
Transactions with related parties 29 2,849 - - - 2,849
Other liabilities 18 5,017 29,777 4,597 - 39,391 
18

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

4.3. Capitalmanagement

The Company presents net debt of loans, financing and debentures and other liabilities and the financial leverage index:

September 30,<br><br> 2020 June 30,<br><br> 2020
Total loans, financing and debentures (Note 16) 455,237 514,113
Total Other liabilities (Note 18) 46,364 39,391
Total derivatives (Note 6) 55,297 10,869
556,898 564,373
Less: cash and cash equivalents (Note 5.1) (224,169 ) (171,045 )
Less: restricted marketable securities (Notes 5.2) (5,069 ) (5,044 )
(229,238 ) (176,089 )
Net debt 327,660 388,284
Total equity 1,204,532 1,121,569
Financial leverage ratio 27.20 % 34.62 %
4.4. Fairvalue hierarchy and classification of financial instruments
--- ---

The carrying amount (less impairment) of trade accounts receivable and payables approximate their fair values. The fair value of financial liabilities, for disclosure purposes, is estimated by discounting the future contractual cash flows at the current market interest rate that is available for similar financial instruments.

The Company adopted IFRS 7 and IFRS 13 for financial instruments that are measured in the balance sheet at fair value; this requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

● Quoted<br>(unadjusted) prices in active markets for identical assets or liabilities (level 1);
● Inputs<br>other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as<br>prices) or indirectly (that is, derived from prices) (level 2);
--- ---
● Inputs<br>for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
--- --- 
19

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

The following table presents the Company’s assets and liabilities, their classification and the fair value, as well as the level of hierarchy:

September 30, 2020
Consolidated – R$ thousand Note Book value Fair value Quoted prices in active markets <br><br>(Level 1) Significant observable data <br><br>(Level 2) Significant non-observable data <br><br>(Level 3)
Financial assets measured at amortized cost
Current
Trade accounts receivable, net 7.1 88,546 88,546 - 88,546 -
Transactions with related parties 29 916 916 - 916 -
Noncurrent
Transactions with related parties 29 1,519 1,519 - 1,519 -
Financial assets measured at fair value through profit or loss
Current
Cash and cash equivalents 5.1 172,327 172,327 172,327 - -
Receivables from sales of farm, net (c) 7.1 92,492 92,492 - - 92,492
Derivative financial instruments (b) 6 6,728 6,728 6,048 680 -
Noncurrent
Restricted marketable securities 5,2 5,069 5,069 5,069 - -
Receivables from sales of farm, net (c) 7.1 307,915 307,915 - - 307,915
Derivative financial instruments (b) 6 760 760 22 738 -
Non-financial assets measured at fair value
Current
Biological assets 9 97,515 97,515 - 6,590 90,925
Noncurrent
Biological assets 9 22,939 22,939 - 22,939 -
Non-financial assets measured at cost
Noncurrent
Investment property 10 832,761 1,872,701 - - 1,872,701
Total 1,629,487 2,669,427 183,466 121,928 2,364,033
Financial liabilities measured at amortized cost
Current
Trade accounts payable 15.1 60,499 60,499 - 60,499 -
Loans, financing and debentures (a) 16 208,061 208,061 - 208,061 -
Transactions with related parties 29 2,881 2,881 - 2,881 -
Noncurrent
Loans, financing and debentures (a) 16 247,176 247,176 - 247,176 -
Financial liabilities measured at fair value through profit or loss
Current
Leases payable 14 29,482 29,482 - 29,482 -
Derivative financial instruments (b) 6 53,494 53,494 34,939 18,555 -
Payables related to farm acquisition 18 6,471 6,471 - - 6,471
Noncurrent
Leases payable 14 137,496 137,496 - 137,496 -
Derivative financial instruments (b) 6 9,291 9,291 5,052 4,239 -
Restricted shares 18 14,233 14,233 14,233 - -
Warrants – Agrifirma 18 12,162 12,162 - 12,162 -
Warrant dividends – Agrifirma 18 810 810 - - 810
Payables related to farm acquisition 18 12,688 12,688 - - 12,688
Total 794,744 794,744 54,224 720,551 19,969 
20

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

June 30, 2020
Consolidated - R$ thousand Note Book value Fair value Quoted prices in active markets (Level 1) Significant observable data<br> (Level 2) Significant non-observable data<br> (Level 3)
Financial assets measured at amortized cost
Current
Trade accounts receivable, net 7.1 72,014 72,014 - 72,014 -
Transactions with related parties 29 701 701 - 701 -
Noncurrent
Transactions with related parties 29 1,511 1,511 - 1,511 -
Financial assets measured at fair value through profit or loss
Current
Cash and cash equivalents 5.1 141,095 141,095 141,095 - -
Receivables from sales of farm, net (c) 7,1 73,678 73,678 - - 73,678
Derivative financial instruments (b) 6 7,180 7,180 6,121 1,059 -
Noncurrent
Restricted marketable securities 5,2 5,044 5,044 5,044 - -
Receivables from sales of farm, net (c) 7.1 240,074 240,074 - - 240,074
Derivative financial instruments (b) 6 1,746 1,746 305 1,441 -
Non-financial assets measured at fair value
Current
Biological assets 9 115,553 115,553 - 9,037 106,516
Noncurrent
Biological assets 9 25,444 25,444 - 25,444 -
Non-financial assets measured at cost
Noncurrent
Investment property 10 814,398 1,872,701 - - 1,872,701
Total 1,498,438 2,556,741 152,565 111,207 2,292,969
Financial liabilities measured at amortized cost
Current
Trade accounts payable 15.1 55,603 55,603 - 55,603 -
Loans, financing and debentures (a) 16 217,274 217,274 - 217,274 -
Transactions with related parties 29 2,849 2,849 - 2,849 -
Noncurrent
Loans, financing and debentures (a) 16 296,839 296,839 - 296,839 -
Financial liabilities measured at fair value through profit or loss
Current
Leases payable 14 25,849 25,849 - 25,849 -
Derivative financial instruments (b) 6 18,333 18,333 5,900 12,433 -
Payables related to farm acquisition 18 5,017 5,017 - - 5,017
Noncurrent
Leases payable 14 126,514 126,514 - 126,514 -
Derivative financial instruments (b) 6 1,462 1,462 645 817 -
Restricted shares 18 13,490 13,490 13,490 - -
Warrants – Agrifirma 18 10,860 10,860 - 10,860 -
Warrant dividends - Agrifirma 18 778 778 - - 778
Payables related to farm acquisition 18 9,246 9,246 - - 9,246
Total 784,114 784,114 20,035 749,038 15,041
(a) The<br>book value of loans, financing and debentures presented in the financial statements approximates the fair value, since the rates<br>of these instruments are substantially subsidized and there is no intention of early settlement;
--- ---
(b) The<br>derivative transactions negotiated at active market are measured at fair value at Level 1, over-the-counter transactions are measured<br>at Level 2, as presented in the table above
--- ---
(c) Due<br>to market volatility, one of the non-observable inputs became significant and the receivables from sales of farms were reclassified<br>from Level 2 to Level 3. The Company’s policy is to recognize transfers from and to Level 3 on the date of the event or<br>change in the circumstances that caused the transfer.
--- --- 
21

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

The significant non-observable inputs used in the measurement of the fair value of the credits from the sale of the farm classified as Level 3 in the fair value hierarchy, along with an analysis of quantitative sensitivity at September 30, 2020, are as follows:

Description Evaluation method Significant non-observable inputs Variation of non-observable inputs Sensitivity of inputs to fair value
Receivables from sales of farms Discounted cash flow Premium (or Basis) 0.56 – 0.96 USD/bu The increase or decrease of 0.20 USD/bu in the premium (or basis) paid for the soybean would result in an impact of R$7,536. An increase or decrease of 1.9% in the receivables from the farm.
Payables due to acquisition of Serra Grande Farm Discounted cash flow Premium (or Basis) 0.56 – 0.96 USD/bu The increase or decrease of 0.20 USD/bu in the premium (or basis) paid for the soybean would result in an impact of R$394,035. An increase or decrease of 2.1% in payables for the farm.
5. Cashand cash equivalents and marketable securities
--- ---
5.1. Cashand cash equivalents
--- ---
CDI* September 30,<br> 2020 June 30,<br> 2020
Cash and banks 51,842 29,950
Repurchase agreements (a) 62 % - 15,446
Bank deposit certificates 95.5% a 104 % 172,327 125,649
224,169 171,045
* Interbank<br>Deposit Certificates
--- ---
(a) The<br>Company uses this type of investment for funds that will be redeemed in less than 30 days, according to the projected cash flow<br>and also in case of need to invest funds that were received after banking hours.
--- ---

The Company has R$35,502 (R$27,688 at June 30, 2020), of bank balances denominated in foreign currencies which do not bear any interest.

5.2. Marketablesecurities
CDI* September 30, <br> 2020 September 30, <br> 2019
Banco do Nordeste (BNB) (a) (b) 99 % 5,069 5,044
Total noncurrent 5,069 5,044
* Interbank<br>Deposit Certificate;
(a) Indexed<br>to rates from 98% to 99% of the CDI – Interbank Deposit Certificate.
--- ---
(b) The<br>securities in BNB consist of CDBs provided as collateral for financing from the Bank and must be held up to the end of the contract.
--- --- 
22

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

6. Derivativefinancial instruments
September<br> 30, 2020
**** **** **** **** **** **** **** **** Total **** Volume / Position
Risk Maturity Outstanding<br> derivative instruments Counterparty Receivable Payable Net<br><br> balance Notional<br><br> ('000) Short<br><br> (long)<br> position Unit
Currency<br> US November-20 NDF Itaú<br> BBA 202 - 202 900 - US$
Currency<br> US November-20 NDF Itaú<br> BBA/Rabobank/Banco do Brasil - (12,088 ) (12,088 ) (16,400 ) - US$
Currency<br> US January-21 NDF Itaú<br> BBA - (66 ) (66 ) (500 ) - US$
Currency<br> US June-21 NDF Rabobank/Banco<br> do Brasil - (5,243 ) (5,243 ) (11,430 ) - US$
Currency<br> US June-21 NDF OLAM 478 - 478 (1,500 ) - US$
Currency<br> US June-21 NDF Banco<br> do Brasil - (38 ) (38 ) (1,300 ) - US$
Currency<br> US July-21 NDF Banco<br> do Brasil - (50 ) (50 ) (2,000 ) - US$
Currency<br> US July-21 NDF Rabobank/Banco<br> do Brasil - (1,070 ) (1,070 ) (2,890 ) - US$
Currency<br> US November-21 NDF Rabobank - (383 ) (383 ) (890 ) - US$
Currency<br> US November-21 NDF Macquarie 32 - 32 (280 ) - US$
Currency<br> US June-22 NDF Itaú<br> BBA - (2,976 ) (2,976 ) (8,400 ) - US$
Currency<br> US June-22 NDF Cargill (880 ) (880 ) (2,000 ) - US$
Current 680 (18,555 ) (17,875 ) (35,120 ) - US$
Noncurrent 32 (4,239 ) (4,207 ) (11,570 ) - US$
Total<br> currency risk 712 (22,794 ) (22,082 ) (46,690 ) - US$
Soybean<br> CBOT February-21 Soybean<br> options Trading/Banks/CBOT 17 (6,006 ) (5,989 ) - (440,000 ) bags
Soybean<br> CBOT February<br> -21 Soybean<br> options Trading/<br> Banks/CBOT - (4,508 ) (4,508 ) - (735,000 ) bags
Soybean<br> CBOT June-21 Soybean<br> options Trading/<br> Banks/CBOT 2,407 (18,639 ) (16,232 ) - (1,495,000 ) bags
Soybean<br> CBOT November-21 Soybean<br> futures Trading<br> Companies/Banks/CBOT - (4,358 ) (4,358 ) - (1,055,000 ) bags
Soybean<br> CBOT July-21 Soybean<br> futures Trading<br> Companies/Banks/CBOT - (864 ) (864 ) - (185,000 ) bags
Soybean<br> CBOT December-20 Accrual Trading<br> Companies/Banks/CBOT - (2,099 ) (2,099 ) - (185,000 ) bags
Soybean<br> CBOT December<br> -20 Accrual Trading<br> Companies/Banks/CBOT - (1,102 ) (1,102 ) - (185,000 ) bags
Corn August-21 Corn<br> options Trading<br> Companies/Banks/CBOT 78 (212 ) (134 ) - (200,000 ) bags
Corn<br> CBOT August<br> -21 Corn<br> futures Trading<br> Companies/Banks/CBOT - (992 ) (992 ) - (600,000 ) bags
Corn<br> BMF November<br> -20 Corn<br> futures Trading<br> Companies/Banks/CBOT - - - - (72,450 ) bags
Corn<br> BMF September-21 Corn<br> futures Trading<br> Companies/Banks/CBOT - - - - (9,000 ) bags
Fed<br> Cattle BM&F October-20 Fed<br> cattle futures BM&F - - - - (42,240 ) arroba
Fed<br> Cattle BM&F November<br> -20 Fed<br> cattle futures BM&F - - - - (3,300 ) arroba
Fed<br> Cattle BM&F December<br> -20 Fed<br> cattle futures BM&F - - - - (6,600 ) arroba
Cotton November<br> -20 Cotton<br> options Trading<br> Companies/Banks/CBOT - (517 ) (517 ) - (1,400,000 ) ton
Cotton November<br> -21 Cotton<br> options Trading<br> Companies/Banks/CBOT 22 (499 ) (477 ) - - ton
Cotton December<br> -20 Cotton<br> futures Trading<br> Companies/Banks/CBOT 515 - 515 - (2,000,000 ) ton
Cotton December<br> -21 Cotton<br> futures Trading<br> Companies/Banks/CBOT - (195 ) (195 ) - (650,000 ) ton
Ethanol<br> BM&F October-20 Ethanol<br> futures BM&F - - - - (750 ) m^3^
Ethanol<br> BM&F November<br> -20 Ethanol<br> futures BM&F - - - - (300 ) m^3^
Ethanol<br> BM&F December<br> -20 Ethanol<br> futures BM&F - - - - (600 ) m^3^
Ethanol<br> BM&F January-21 Ethanol<br> futures BM&F - - - - (600 ) m^3^
Ethanol<br> BM&F February<br> -21 Ethanol<br> futures BM&F - - - - (300 ) m^3^
Current<br> (bags) 2,502 (34,422 ) (31,920 ) - (4,106,450 ) bags
Current<br> (arrobas) - - - (52,140 ) arrobas
Current<br> (tons) 515 (517 ) (2 ) - (3,400,000 ) tons
Current<br> (cubic meters) - - - - (2,550 ) cubic<br> meters
Noncurrent<br> (bags) - (4,358 ) (4,358 ) - (1,055,000 ) bags
Noncurrent<br> (tons) 22 (694 ) (672 ) - (650,000 ) tons
Total<br> risk with commodities 3,039 (39,991 ) (36,952 ) - (9,266,140 )
Interest<br> R Auguts-23 Fixed<br> DI SWAP Banks 706 - 706 8,967 - BRL
Noncurrent 706 - 706 8,967 - BRL
Total<br> risk with interest 706 - 706 8,967 - BRL
Total<br> risks 4,457 (62,785 ) (58,328 ) (37,723 ) (9,266,140 )
Margin<br> deposit 3,031 - 3,031
Current 6,728 (53,494 ) (46,766 )
Noncurrent 760 (9,291 ) (8,531 )
At<br> September 30, 2020 (Note 25) 75,523 (130,472 )

All values are in US Dollars.

23

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

June<br> 30, 2020
Total Volume<br> / Position
Risk Maturity Outstanding<br> derivative instruments Counterparty Receivable Payable Net<br><br> balance Notional<br><br> ('000) Short<br><br> (long)<br> position Unit
Currency<br> US August-20 NDF Rabobank 141 - 141 (4,600 ) - US$
Currency<br> US November-20 NDF Rabobank - (221 ) (221 ) (1,500 ) - US$
Currency<br> US November<br> -20 NDF Itaú<br> BBA - (8,958 ) (8,958 ) (14,000 ) - US$
Currency<br> US June-21 NDF Rabobank - (1,426 ) (1,426 ) (4,930 ) - US$
Currency<br> US June<br> -21 NDF Banco<br> do Brasil - (1,828 ) (1,828 ) (6,500 ) - US$
Currency<br> US June<br> -21 NDF OLAM 733 - 733 (1,500 ) - US$
Currency<br> US June<br> -21 NDF Banco<br> do Brasil 185 - 185 (1,300 ) - US$
Currency<br> US July-21 NDF Banco<br> do Brasil 106 (311 ) (205 ) (1,450 ) - US$
Currency<br> US July<br> -21 NDF Rabobank - (367 ) (367 ) (1,440 ) - US$
Currency<br> US November<br> -21 NDF Rabobank - (139 ) (139 ) (520 ) - US$
Currency<br> US November<br> -21 NDF Macquarie 78 - 78 (280 ) - US$
Current 1,059 (12,433 ) (11,374 ) (34,330 ) - US$
Noncurrent 184 (817 ) (633 ) (3,690 ) - US$
Total<br> currency risk 1,243 (13,250 ) (12,007 ) (38,020 ) - US$
Soybean<br> CBOT July-20 Soybean<br> options Trading<br> Companies/Banks/CBOT - (1 ) (1 ) - (83,344 ) bags
Soybean<br> CBOT February-21 Soybean<br> options Trading<br> Companies/Banks/CBOT 252 (774 ) (522 ) - (199,571 ) bags
Soybean<br> CBOT June-21 Soybean<br> options Trading<br> Companies/Banks/CBOT 1,718 (1,916 ) (198 ) - (301,625 ) bags
Soybean<br> CBOT November-20 Soybean<br> futures Trading<br> Companies/Banks/CBOT - (16 ) (16 ) - (77,107 ) bags
Soybean<br> CBOT December-20 Accrual Trading<br> Companies/Banks/CBOT 47 (40 ) 7 - (83,911 ) bags
Corn<br> BM&F July<br> -20 Corn<br> options Itaú<br> BBA - (55 ) (55 ) - (16,650 ) bags
Corn<br> BM&F September-20 Corn<br> futures Macquarie - (529 ) (529 ) - (83,250 ) bags
Corn<br> BM&F September<br> -20 Corn<br> options BM&F - (1,431 ) (1,431 ) - (253,350 ) bags
Corn<br> BM&F September<br> -20 Corn<br> options Itaú<br> BBA - (682 ) (682 ) - (166,500 ) bags
Corn<br> CBOT August-21 Corn<br> options FC<br> Stone 178 (130 ) 48 - (84,670 ) bags
Corn<br> CBOT September<br> -20 Corn<br> futures Trading<br> Companies/Banks/CBOT 51 (200 ) (149 ) - (211,500 ) bags
Corn<br> CBOT August<br> -21 Corn<br>futures Trading<br> Companies/Banks/CBOT - (257 ) (257 ) - (254,011 ) bags
Fed<br> Cattle BM&F October<br> -20 Fed<br> cattle futures BM&F - - - - (54,450 ) arroba
Cotton November<br> -20 Cotton<br> options Trading<br> Companies/Banks/CBOT - (256 ) (256 ) - (625 ) ton.
Cotton November<br> -21 Cotton<br> options Trading<br> Companies/Banks/CBOT 127 (258 ) (131 ) - - ton.
Cotton December-20 Cotton<br> futures Trading<br> Companies/Banks/CBOT 1,038 - 1,038 - (893 ) ton.
Ethanol<br> BM&F August<br> -20 Ethanol<br> futures BM&F - - - - (150 ) m³
Ethanol<br> BM&F September<br> -20 Ethanol<br> futures BM&F - - - - (450 ) m³
Ethanol<br> BM&F October-20 Ethanol<br> futures BM&F - - - - (150 ) m³
Current<br> (bags) 2,068 (5,644 ) (3,576 ) - (1,476,808 ) bags
Current<br> (arrobas) - - - - (54,450 ) arrobas
Current<br> (tons) 1,038 (256 ) 782 - (1,518 ) tons
Current<br> (cubic meters) - - - - (750 ) cubic<br> meters
Noncurrent<br> (bags) 178 (387 ) (209 ) - (338,681 ) bags
Noncurrent<br> (tons) 127 (258 ) (131 ) - - tons
Total<br> risk with commodities 3,411 (6,545 ) (3,134 ) - (1,872,207 )
Interest<br> R August-23 Fixed<br> DI SWAP Bradesco 1,257 - 1,257 11,847 - BRL
Noncurrent 1,257 - 1,257 11,847 - BRL
Total<br> risk with interest 1,257 - 1,257 11,847 - BRL
Total<br> risks 5,911 (19,795 ) (13,884 ) (26,173 ) (1,872,207 )
Margin<br> deposit 3,015 - 3,015
Current 7,180 (18,333 ) (11,153 )
Noncurrent 1,746 (1,462 ) 284
At<br> September 30, 2019 (Note 25) 26,288 (29,031 )

All values are in US Dollars.

The Company uses derivative financial instruments such as forward currency contracts and forward commodities contracts to hedge against currency risk and commodities prices, respectively.

The margin deposits in operations with derivatives refer to the so-called margins by counterparties in operations with derivative instruments.

The total fair value of a derivative is classified as non-current assets or liabilities if the remaining maturity of the derivative is over 12 months, and as current assets or liabilities if the remaining maturity of the derivative is less than 12 months.

24

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

7. Accountsreceivable and others
Note September 30,<br><br> 2020 June 30,<br><br> 2020
Trade accounts receivable 7.1 181,038 145,692
Recoverable taxes 7.2 7,514 9,305
Advances to suppliers 8,691 20,609
Other receivables 8,471 7,744
Total current 205,714 183,350
Trade accounts receivable 7.1 308,082 240,407
Recoverable taxes 7.2 26,382 20,274
Judicial deposits 27 1,709 1,706
Total noncurrent 336,173 262,387
7.1 Tradeaccounts receivable
September 30, <br> 2020 June 30,<br> 2020
Sales of sugarcane 51,910 30,031
Sales of grains 31,532 36,777
Sales of cattle 127 636
Leases and rentals 5,280 4,868
Sales of machinery 913 918
Sales of farms 92,492 73,678
182,254 146,908
Allowance for expected credit losses (1,216 ) (1,216 )
Total current 181,038 145,692
Sales of machinery 167 333
Sales of farms 307,915 240,074
Total noncurrent 308,082 240,407
a) Changes<br>in the allowance for doubtful accounts:
At June 30, 2020 1,216
--- ---
At September 30, 2020 1,216
b) Breakdown<br>of receivables by maturity
--- ---
September 30, <br> 2020 June 30, <br> 2020
--- --- --- --- ---
Falling due:
Up to 30 days 66,478 57,188
31 to 90 days 7,582 44,424
91 to 180 days 20,054 8,748
181 to 360 days 86,273 34,954
Over 360 days 308,082 240,407
Past due:
Up to 30 days - 378
31 to 90 days 651 -
181 to 360 days 51 -
Over 360 days 1,165 1,216
490,336 387,315 
25

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

c) Sale of sugarcane

The Company has two sugarcane supply agreements. The first agreement was with Brenco Companhia Brasileira de Energia Renovável and the second agreement is included in the partnership Agreement IV, as mentioned in the Explanatory Note on Commitments, whose credit risks are assessed in accordance with the internal policy as presented in Note 4.2b.

No expected credit allowance was noted at September 30, 2020, and there is no record of default until the date of disclosure of these Financial Statements.

d) Sale of grains

For the period ended September 30, 2020, corn and soybean were sold mainly to the clients Cargill, ADM do Brasil, and Bunge Alimentos, respectively.

e) Receivables from sales of farms

Total amounts sold, collected and receivables from sale of farms are as follows:

Araucária<br> III Araucária<br> IV Araucária<br> V Jatobá<br> I Jatobá<br> II Jatobá<br> III Jatobá<br> IV Jatobá<br> V Alto<br> Taquari I Alto<br> Taquari II Alto<br> Taquari III Bananal<br> IX Bananal<br> X Consolidated
At<br> June 30, 2020 3,336 7,258 37,504 2,569 129,741 47,384 15,481 33,029 3,545 3,554 7,946 22,405 - 313,752
Accrual - - - - 2,904 3,885 - - - - - - 26,858 33,647
Receipts - (1,750 ) - - (23,309 ) (9,038 ) - (3,550 ) - - - - (7,500 ) (45,147 )
Fair value adjustment 588 2,090 14,230 971 40,760 15,952 6,120 12,134 1,275 1,378 2,828 94 (265 ) 98,155
At<br> September 30, 2020 3,924 7,598 51,734 3,540 150,096 58,183 21,601 41,613 4,820 4,932 10,774 22,499 19,093 400,407
Current 3,924 3,826 14,629 3,540 30,722 11,909 4,565 7,144 2,446 1,668 830 7,289 - 92,492
Noncurrent - 3,772 37,105 - 119,374 46,274 17,036 34,469 2,374 3,264 9,944 15,210 19,093 307,915
* Of the R$7,500 received, the amount of R$2,000 was received<br>in the period ended December 31, 2019 as advances from customers.
--- ---

Information on sales and the amounts received in the period ended September 30, 2020 is presented in Notes 1.1 and 21.b.

Variable consideration

In the case of sales for which official measurement during or upon termination of the agreement is mandatory, the Company adopts the variable consideration concept set forth in IFRS 15 – Revenue and does not recognize 2.3% of the sale until the measurement is made. This percentage, whose calculation is based on the highest historical deviation plus a safety margin, represents the risk of proportional reversion upon sale recognition if there is any difference between the area negotiated and the area delivered. The Company has never delivered a narrower area than the negotiated area and recognizes the 2.3% of revenue from sale after the official measurement.

The following table provides a breakdown of credits with the variable consideration element:

Jatobá II Jatobá III Jatobá IV Jatobá V Alto Taquari I June 30,<br><br> 2020
June 30, 2020 129,741 47,384 15,481 33,029 3,545 229,180
Variable consideration (2.3%) 3,054 1,115 364 778 83 5,394
Total 132,795 48,499 15,845 33,807 3,628 234,574
Jatobá II Jatobá III Jatobá IV Jatobá V Alto Taquari I September 30,<br><br> 2020
--- --- --- --- --- --- --- --- --- --- --- --- ---
September 30, 2020 - 58,183 21,601 41,613 4,820 126,217
Variable consideration (2.3%) - 1,370 509 980 113 2,972
Total - 59,553 22,110 42,593 4,933 129,189 
26

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

7.2 Recoverable taxes
September 30,<br> 2020 June 30,<br> 2020
Withholding income tax (IRRF) on financial investments to be offset 3,764 3,508
Income tax losses and social contribution carryforwards - 3,155
Other taxes and contributions to be offset 1,068 977
Tax on value added - IVA – (Paraguay) 2,682 1,665
Total current 7,514 9,305
ICMS recoverable 12,715 9,786
ICMS recoverable on property, plant and equipment 59 83
Non-cumulative PIS and COFINS to be offset 5,522 1,486
IRRF on financial investments to be offset 517 454
INSS recoverable 6 -
Tax on value added - IVA – (Paraguay) 7,563 8,465
Total noncurrent 26,382 20,274
8. Inventories
--- ---
September 30,<br> 2020 June 30, <br> 2020
Soybean 8,606 68,975
Corn 30,959 37,223
Bean 673 3,279
Cotton 23,766 3,500
Other harvests 1,021 340
Agricultural products 65,025 113,317
Raw materials 62,222 25,461
127,247 138,778
8.1 Adjustment to recoverable amount of inventories ofagricultural products
At June 30, 2020 (2,661 )
Reversal of provision for impairment of agricultural products 2,269
Write-offs 392
At September 30, 2020 -
9. Biological assets
September 30,<br> 2020 June 30, <br> 2020
Food cattle 6,590 9,037
Production cattle 22,939 25,444
Grain plantation 22,215 20,749
Cotton plantation - 13,724
Sugarcane plantation 68,710 72,043
Total 120,454 140,997
Current 97,515 115,553
Noncurrent 22,939 25,444

The amounts of expenditures with plantation and tilling of crops are substantially represented by expenditures with the formation of harvest such as: seeds, fertilizers, pesticides, depreciation and manpower used in the crops.

27

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

The area (hectares) to be harvested corresponding to the biological assets is as follows:

Planted area (Hectares)
September 30,<br> 2020 June 30,<br> 2020
Grains (i) - 9,836
Cotton - 1,404
Sugarcane (ii) 24,508 26,959
24,508 38,199
(i) Grain crops do not include the hectares planted in the<br>quarter because planting is in progress and the balances recognized as biological assets refer to initial planting costs and apportionments<br>of direct and indirect costs.
--- ---
(ii) For sugarcane the area considered above refers to the<br>total of unharvested sugarcane to be harvested, considered in the cash flow for calculation of fair value of biological assets.<br>This area includes the hectares leased from Brenco, under the agreement signed on May 8, 2015, and the hectares referring to Partnership<br>IV, according to contracts executed on February 7, 2017.
--- ---

Changes in agricultural activity

Current Current Current
**** **** Grains **** **** Cotton **** **** Sugarcane ****
Balance at June 30, 2020 20,749 13,724 72,043
Expenditures with plantation 22,360 5,819 -
Expenditures with tilling - - 70,313
Fair value variation 7,634 3,031 37,016
Harvest of agricultural produce (28,575 ) (22,574 ) (110,662 )
Effect of conversion 47 - -
Balance at September 30, 2020 22,215 - 68,710

Changes in cattle raising activity

Heads of cattle<br> (in number) Cattle ()
At June 30, 2020 15,064 34,481
Acquisition/birth costs 649 1,138
Handling costs - 3,582
Sales (5,431 ) (12,613 )
Deaths (30 ) (66 )
Consumption (6 ) (17 )
Effect of conversion - 106
Change in fair value - 2,918
At September 30, 2020 10,246 29,529

All values are in US Dollars.

Quantitative data about cattle raising activity, expressed in heads of cattle

Consumable cattle Production cattle
At June 30, 2020 2,624 12,440
At September 30, 2020 1,116 9,130

Fair value hierarchy at September 30, 2020

Amount Fair value
Sugarcane 68,710 Level 3
Cattle 29,529 Level 2
Grains 22,215 Level 3 
28

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

The significant non-observable inputs used in the measurement of the fair value of sugarcane, grains and cotton classified as Level 3 in the fair value hierarchy, along with an analysis of quantitative sensitivity at September 30, 2020, are as follows:

Description Evaluation method Significant non-observable inputs Variation of non-observable inputs Increase in inputs Decrease in inputs
Biological Asset<br> - sugarcane Discounted<br> cash flow -<br> Yield Yield:<br> 45.0 to 115 tons per hectare. An<br> increase in yield generates a positive result in the fair value of biological assets. A<br> decrease in yield generates a negative result in the fair value of biological assets.
-<br> TRS (Kg of sugar per ton of sugarcane) Total<br> recoverable sugar: TRS 134 to 152 per ton of cane An<br> increase in TRS generates a positive result in the fair value of biological assets. A<br> decrease in TRS generates a negative result in the fair value of biological assets.

There were no reclassifications among the levels during the period.

Changes in fair value recorded in income

September 30, <br> 2020 September 30,<br> 2019
Grains 7,634 670
Cotton 3,031 498
Sugarcane 37,016 38,261
Cattle 2,918 (1,211 )
50,599 38,218
10. Investment properties – noncurrent
Land – Farms Buildings and improvements Opening of area Total in operation Construction in progress September 30,<br> 2020
At September 30, 2020
Opening balance 686,051 56,995 104,533 847,579 10,682 858,261
Acquisitions - 3 - 3 9,763 9,766
Disposals (341 ) - (556 ) (897 ) - (897 )
Transfers - 548 573 1,121 (1,121 ) -
(-) Depreciation / amortization - (730 ) (2,106 ) (2,836 ) - (2,836 )
Effect of conversion 5,723 426 1,614 7,763 173 7,936
Net book balance 691,433 57,242 104,058 852,733 19,497 872,230
At September 30, 2020
Total cost 691,433 71,503 179,005 941,941 19,497 961,438
Accumulated depreciation - (14,261 ) (74,947 ) (89,208 ) - (89,208 )
Net book balance 691,433 57,242 104,058 852,733 19,497 872,230
Annual depreciation rates (weighted average) - % 4-20 05-20

Four farms owned by the Company are held as guarantee for loans and financing according to Note 15, representing, in the consolidated, 28% of total investment properties.

29

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

The table below shows the fair value of investment properties are as follows:

Hectares Fair<br> value * Cost<br> Value **
Farm State September 30,<br><br> 2020 June 30,<br><br> 2020 Real<br> estate Acquisition September 30,<br> <br> 2020 June 30,<br> <br> 2020 September 30,<br><br> 2020 June 30,<br> <br> 2020
Jatobá Bahia 14,930 14,930 Jaborandi Ltda Mar-07 242,504 242,504 31,575 28,352
Alto Taquari Mato Grosso 5,103 5,103 Mogno Ltda Aug-07 194,504 194,504 33,228 33,259
Araucária Goiás 5,534 5,534 Araucária Ltda Apr-07 190,276 190,276 45,460 45,488
Chaparral Bahia 37,182 37,182 Cajueiro Ltda Nov-07 417,660 417,660 89,875 89,558
Nova Buriti Minas Gerais 24,212 24,212 Flamboyant Ltda Dec-07 35,313 35,313 23,455 23,454
Preferência Bahia 17,799 17,799 Cajueiro Ltda Sep-08 68,160 68,160 26,794 27,067
São José Maranhão 17,566 17,566 Ceibo Ltda Feb-17 247,572 247,572 111,082 110,443
Marangatu y Udra Farm Boqueron Paraguay 59,585 59,585 Agropecuária Moroti S/A feb-18 235,270 235,270 239,585 232,976
Arrojadinho Farm Bahia 16,642 16,642 Agrifirma Agro Ltda Jan-20 88,482 88,482 84,825 84,825
Rio do Meio Farm Bahia 12,288 12,288 Agrifirma Agro Ltda Jan-20 122,687 122,687 120,791 120,791
Serra Grande Farm Piauí 4,489 4,489 Imobiliária Cremaq Apr-20 30,273 30,273 26,091 26,091
215,330 215,330 1,872,701 1,872,701 832,761 822,304
(*) The fair value of the investment property at September 30, 2020 was R$1,872,701 (R$1,872,701<br>at June 30, 2019). The fair value was determined based on a comparative market approach and was prepared by the Company’s<br>specialists. The comparable sales value of investment properties is adjusted considering the specific aspects of each property,<br>where the price per hectare is the most relevant assumption. The fair value presented is considered as level 3 in the fair value<br>hierarchy and there were no reclassifications among levels in the period.
--- ---
(**) At September 30, 2020 the cost value of R$832,761 (R$822,304 at June 30, 2020) is not<br>comparable to that disclosed in the “Investment properties” note, since the note contemplates investments made in certain<br>partnerships (leased farms), which are not an integral part of the Company’s portfolio of owned farms.
--- ---
11. Investments
--- ---
a) Changes in investments
--- ---
June 30,<br><br> 2020 Capital increase Dividends Equity pickup Effect from conversion September 30,<br><br> 2020
--- --- --- --- --- --- --- --- --- --- --- --- --- ---
Cresca 1,615 - - (44 ) 47 1,618
Agrofy 4,127 - - - - 4,127
5,742 - - (44 ) 47 5,745
b) Interest in joint venture
--- ---

Cresca’s summarized financial information, based on the financial statements prepared in accordance with the accounting practices adopted in Brazil and with IFRS, and the reconciliation with the book value of the investment in the consolidated financial statements are presented below at fair value on the acquisition date up to September 30, 2020:

September 30,<br> 2020 June 30,<br> 2020
Assets 3,500 3,489
Current 3,457 3,447
Cash and cash equivalents 176 175
Accounts receivable, inventories and other receivables 3,281 3,272
Noncurrent 43 42
Other noncurrent assets 43 42
Liabilities 264 260
Current 264 260
Trade accounts payable, taxes and loans 264 260
Total net assets 3,236 3,229
Company’s interest – 50% 50 % 50 %
Company’s interest in net assets at estimated fair value 1,618 1,615
September 30,<br> 2020 June 30,<br> 2020
--- --- --- --- --- --- ---
Administrative expenses (2 ) (1 )
Finance costs (86 ) (79 )
Profit (loss) before income tax (88 ) (80 )
Profit (loss) for the period (88 ) (80 )
Company’s interest – 50% (44 ) (40 ) 
30

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

12. Property, plant and equipment
Buildings and improvements Equipment and facilities Agricultural vehicles and machinery Furniture and fixtures Total in operation Property, plant and equipment in progress Sugarcane Total property, plant and equipment
At June 30, 2020
Opening balance 111 13,774 11,022 1,044 25,951 - 81,901 107,852
Acquisitions - 1,391 2,519 238 4,148 96 20,508 24,752
Acquisitions – business combination - - 14,279 1,356 15,635 - - 15,635
Disposals - (115 ) (4,968 ) (10 ) (5,093 ) - - (5,093 )
Transfers 108 92 - - 200 (96 ) (104 ) -
Depreciation (47 ) (1,817 ) (5,294 ) (235 ) (7,393 ) - (20,740 ) (28,133 )
Effect of conversion - 87 776 49 912 - - 912
Accounting balance, net 172 13,412 18,334 2,442 34,360 - 81,565 115,925
At June 30, 2020
Total cost 1,041 19,540 46,668 4,065 71,314 - 152,403 223,717
Accumulated depreciation (869 ) (6,128 ) (28,334 ) (1,623 ) (36,954 ) - (70,838 ) (107,792 )
Accounting balance, net 172 13,412 18,334 2,442 34,360 - 81,565 115,925
At September 30, 2020
Opening balance 172 13,412 18,334 2,442 34,360 - 81,565 115,925
Acquisitions - 790 5,464 563 6,817 276 808 7,901
Disposals - (292 ) (2,825 ) - (3,117 ) - - (3,117 )
Transfers - 276 - - 276 (276 ) - -
Depreciation (12 ) (988 ) (1,142 ) (627 ) (2,769 ) - (10,874 ) (13,643 )
Effect of conversion - 2 77 9 88 - - 88
Accounting balance, net 160 13,200 19,908 2,387 35,655 - 71,499 107,154
At September 30, 2020
Total cost 1,041 20,852 49,384 4,149 75,426 - 154,808 230,234
Accumulated depreciation (881 ) (7,652 ) (29,476 ) (1,762 ) (39,771 ) - (83,309 ) (123,080 )
Accounting balance, net 160 13,200 19,908 2,387 35,655 - 71,499 107,154
Annual depreciation rates (weighted average) - % 2-25 10 13-20 10 16-27
13. Right-of-use asset
Land – Farms Buildings and improvements Vehicles and Agricultural Machinery Right-of-use Total
At September 30, 2020
Opening balance 99,363 292 1,438 101,093
New contracts - - 2,730 2,730
(-) Depreciation / Amortization (13,568 ) (118 ) (660 ) (14,346 )
Effect of conversion 16 5 3 24
85,811 179 3,511 89,501
At September 30, 2020
Total cost 120,166 877 5,894 126,937
Cumulative depreciation (34,355 ) (698 ) (2,383 ) (37,436 )
Book balance, net 85,811 179 3,511 89,501
10-25 50 50 
31

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

14. Leases payable
Nature September 30,<br> 2020 June 30,<br> 2020
Current
Finance lease sugarcane fields Parceria III - 287
Operating leases - IFRS 16 29,482 25,562
29,482 25,849
Noncurrent
Finance lease sugarcane fields Parceria IV 42,613 34,011
Operating leases - IFRS 16 - 94,883 92,503
137,496 126,514
166,978 152,363

Changes in leases

June 30,<br> 2020 Exchange differences Monetary variation Payments New contracts September 30,<br> 2020
Finance lease sugarcane fields - Parceria III 287 - - (287 ) - -
Finance lease sugarcane fields - Parceria IV 34,011 - 8,602 - - 42,613
Operating leases - IFRS 16 118,065 (24 ) 4,098 (504 ) 2,730 124,365
152,363 (24 ) 12,700 (791 ) 2,730 166,978

As of September 30, 2020, the Company’s main contracts subject to IFRS 16 are related to agricultural partnership and land lease operations, as well as other less relevant contracts that involve leases of machinery, vehicles and properties.

Changes in lease liabilities occur upon effective payment of the lease as well as periodic restatement by variation in the soybean or sugarcane price and adjustment to present value. The impacts from adjustment to present value are recognized under financial income (loss), net in the income statement.

As of September 30, 2020, the Company and its subsidiaries held the following agreements for leases from third parties:

Lease liabilities
Description Location Currency September 30,<br> 2020
Partnership II Ribeiro Gonçalves - PI R$ 14,636
Partnership III Alto Taquari - MT R$ 39,739
Partnership IV – Cane field leases São Raimundo de Mangabeira R$ 42,612
Partnership V São Félix do Xingu - MT R$ 35,992
Araucária Mineiros - GO R$ 2,272
Partnership VII Baixa Grande do Ribeiro - PI R$ 27,147
Vehicle lease N.A. R$ 447
Services with identified assets N.A. R$ 3,798
Lease of vehicles and office in Paraguay Asunción - Paraguay R$ 335
R$ 166,978

The above lease liabilities, which are under IFRS 16, represent a discount rate that ranges from 4.87% to 8.93%.

The lease agreements with third parties of the Company are indexed to the price of the soybean bag in the region where each unit is located, except for Parceria III and Headquarters, where the price is determined via Consecana and fixed payments, respectively. For the cases where payments are indexed to the soybean bag, future minimum payments are estimated in number of soybean bags and translated into local currency using the soybean price of each region, on the base date of first-time adoption of IFRS 16, and adjusted to the current price at time of payment. Meanwhile, payments indexed to Consecana are determined in tons of sugarcane and translated into local currency based on the Consecana price in effect at the time.

32

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

With regard to the lease agreements of third parties, we also inform:

(i) they contain no contingent payment clause;
(ii) the lease agreements of Parceria II, V and Araucária are, for the most part, indexed to<br>the variation in the soybean bag price, and, in the case of Parceria II, there is a clause for adjustment of payment for yield<br>bonus;
--- ---
(iii) there are no restrictions imposed, such as those related to dividends and interest on equity, additional<br>debt or any other that requires additional disclosure.
--- ---

The future minimum lease payments of the aforementioned leases are detailed below:

1 year 29,482
2 years 23,130
3 years 23,216
4 years 26,378
5 years 16,336
Above 5 years 48,436
166,978
15. Trade accounts payable and other liabilities
--- ---
Note September 30,<br> 2020 June 30,<br> 2020
--- --- --- --- --- ---
Trade accounts payable 15.1 60,499 55,603
Taxes payable 14,198 12,396
Dividends payable 28,394 28,394
Advances to customers 9,875 10,249
Other liabilities 932 4,528
Total current 113,898 111,170
Taxes payable 29,154 25,770
Other payables 3,544 2,232
Total noncurrent 32,698 28,002
15.1 Trade accounts payable

At September 30, 2020, the Company’s balance of trade accounts payable is as follows:

September 30,<br> 2020 June 30,<br> 2020
Raw materials and services 60,499 55,603
60,499 55,603 
33

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

16. Loans, financing and debentures
Annual interest rates and charges - %
Index September 30,<br> 2020 June 30,<br> 2020 September 30,<br> 2020 June 30,<br> 2020
Financing for agricultural costs
Fixed rate + CDI 1.80% + 100 % 1.80%<br>+ 100 % 40,053 40,568
Fixed rate 3.24 % - 7,865 -
Fixed rate 3.90 % 3.90 % 9,162 9,072
Fixed rate 6.30 % 6.30 % 106,539 108,057
Fixed rate 6.34 % 6.34 % 3,055 3,251
Fixed rate 7.64 % 7.64 % 9,248 9,076
175,922 170,024
Financing for agricultural costs ()
Fixed rate 7.00 % 7.00 % 2,870 2,787
Fixed rate 8.50 % 8.50 % 5,861 5,573
8,731 8,360
Financing for agricultural costs (PYG)
Fixed rate 8.00 % 8.00 % 7,795 7,940
Fixed rate 8.25 % 8.25 % 19,439 19,749
27,234 27,689
Bahia Project Financing
Fixed rate 3.50 % 3.50 % 10,113 10,023
Fixed rate - 6.50 % - 66
Fixed rate - 7.50 % - 165
10,113 10,254
Financing of working capital
Fixed rate + CDI 2% + 100% 2% + 100% 77,015 77,516
77,015 77,516
FINAME
Fixed rate - 7.22 % - 230
- 230
Financing of sugarcane
Fixed rate 6.76 % 6.76 % 1,869 2,447
Fixed rate 6.14 % 6.14 % 25,367 40,857
Fixed rate 6.34 % 6.34 % 30,465 29,986
57,701 73,290
Debentures
CDI 106.50 % 106.50 % 56,984 88,884
CDI 110.00 % 110.00 % 42,892 59,548
99,876 148,432
(-) Transaction costs (1,355 ) (1,682 )
455,237 514,113
Current 208,061 217,274
Noncurrent 247,176 296,839

All values are in US Dollars.

Keys:

TJLP – Long Term Interest Rate

FINAME – Financing of Machinery and Equipment (BNDES)

BNB – Banco do Nordeste

PYG – Paraguayan currency (Guarani)

34

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

Breakdown of debt by index

September 30,<br> 2020 June 30,<br> 2020
Fixed rate 238,293 247,597
CDI 216,944 266,516
455,237 514,113

Maturities of short- and long-term loans, financing and debentures are broken down as follows:

September 30,<br> 2020 June 30,<br> 2020
1 year 208,061 217,274
2 years 198,766 198,793
3 years 24,079 51,670
4 years 3,406 22,098
5 years 6,089 8,269
Above 5 years 14,836 16,009
455,237 514,113

Changes in loans, financing and debentures

June 30,<br> 2020 Contracting Payment of principal Payment Interest Appropriation of interest Foreign exchange differences September 30,<br> 2020
Agricultural Cost Financing 170,024 7,856 (3,235 ) (1,102 ) 2,379 - 175,922
Agricultural Cost Financing Overseas 36,049 - - (1,268 ) 786 398 35,965
Bahia Project Financing (*) 10,254 - (226 ) (8 ) 93 - 10,113
Working Capital Financing 77,516 - - (1,295 ) 794 - 77,015
Financing of Machinery and Equipment - FINAME 230 - (222 ) (8 ) 4 (4 ) -
Sugarcane financing 73,290 - (16,128 ) (516 ) 1,055 - 57,701
Debentures 148,432 - (42,647 ) (6,557 ) 648 - 99,876
Transaction costs (1,682 ) - - - 327 - (1,355 )
514,113 7,856 (62,458 ) (10,754 ) 6,086 394 455,237
(*) Financing to raise funds for opening of areas and improvements in Jatobá and Chaparral farms.
--- ---
(a) Loans and Financing
--- ---

Covenants

All loans and financing contracts above are in Reais and have specific terms and conditions defined in the respective contracts with governmental economic and development agencies that directly or indirectly grant those loans. At September 30, 2020 and June 30, 2020, the Company’s financial agreements did not require compliance with financial covenants, but rather only operating covenants, on which the Company is in compliance.

(b) Debentures

On May 25, 2018, one hundred forty-two thousand, two hundred (142,200) non-convertible debentures were subscribed to and paid in, with security interest, in the total of R$142,200 (R$85,200 for the first series and R$57,000 for the second).

35

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

The maturity date of the first-series debentures is August 1, 2022 (“maturity date of the first series”) and their unit face value will be paid in three (3) annual installments, the first on July 30, 2020 and the final on the maturity date of the first series. Compensatory interest corresponding to one hundred six point fifty percent (106.50%) of the DI rate will be accrued on the unit face value of first-series debentures, which will be paid on July 30 of each year or on the maturity date of the first series. The maturity date of the second-series debentures is July 31, 2023 (“maturity date of the second series”) and their unit face value will be paid in four (4) annual installments, the first on July 30, 2020 and the final on the maturity date of the second series. Compensatory interest corresponding to one hundred ten percent (110.00%) of the overnight DI rate will be accrued on the unit face value of second-series debentures, which will be paid on July 30 of each year or on the maturity date of the second series.

The Debentures were linked to a securitization transaction, serving as guarantee for the issue of Certificates of Agribusiness Receivables (“CRA”) pursuant to Law No. 11076/2004 and CVM Ruling No. 414/2004, which were the object of a public distribution offer with restricted efforts, under CVM Ruling No. 476/2009 (“Restricted Offer”).

The Debentures are backed by security interest in the form of fiduciary sale of properties owned by the Company and registered under No. 6254, 6267 and 6405, all of which at the Property Records Office of Correntina in the state of Bahia.

Covenants

The debentures have covenants related to the maintenance of certain financial indicators, based on the ratio of net debt to fair value of properties for investment. Failure by the Company to attain these indicators during the term of the debentures may entail advance maturity of the debt.

At September 30, 2020, the Company is in compliance with the covenants described above.

36

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

17. Income and social contribution taxes
17.1. Deferred taxes

Deferred income and social contribution tax assets and liabilities are offset when there is a legal right to offset tax credits against tax liabilities, and provided that they refer to the same tax authority and the same legal entity.

The fiscal year for income tax and social contribution calculation purposes is different from that adopted by the Company for the preparation of its consolidated financial statements, which ends June 30 of each year.

Deferred income tax and social contribution tax assets and liabilities as of September 30, 2020 and June 30, 2020 are as follows:

September 30,<br><br> 2020 June 30,<br><br> 2020
Assets
Noncurrent
Tax losses 39,186 63,066
Biological assets 77 1,389
Finance lease 22,547 13,886
Contingency, bonuses and fair value 7,461 4,794
Derivative financial instruments 19,832 4,720
Allowance for expected credit losses 835 890
Difference in cost of farms 170 170
Provision of other accounts payable 2,193 2,550
Subscription warrant 1,064 358
93,365 91,823
Noncurrent
Biological assets 25,060 27,735
Surplus on investment 1,733 1,733
Costs of transaction 461 570
Provision of residual value and useful life of PPE assets 1,075 981
Accelerated depreciation of assets for rural activity 40,727 44,606
Deferred taxes on surplus value of PPE and investment property – Deferred taxes on surplus value of PPE and investment property – Acquisition of Agrifirma 26,657 26,947
95,713 102,572
Deferred assets, net 36,846 23,282
Deferred liabilities, net (39,194 ) (34,031 )
Net balance (2,348 ) (10,749 ) 
37

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

The net change in deferred income tax is as follows:

At June 30, 2019 20,510
Tax losses 8,511
Biological assets (21,075 )
Finance lease 10,501
Provision for legal claims, bonus, share-based compensation, present value and fair value adjustments (4,580 )
Hedge 2,535
Costs of transactions (44 )
Allowance for doubtful accounts 402
Provision for other accounts payable 82
Accelerated depreciation of assets for rural activity (1,002 )
Subscription warrant 358
Acquisition of Agrifirma (27,731 )
Deferred taxes on surplus value 784
At June 30, 2020 (10,749 )
Tax losses (23,880 )
Biological assets 1,363
Finance lease 8,661
Provision for legal claims, bonus, share-based compensation, present value and fair value adjustments 2,667
Hedge 15,112
Costs of transactions 109
Allowance for doubtful accounts (55 )
Provision for other accounts payable (357 )
Accelerated depreciation of assets for rural activity 3,785
Subscription warrant 706
Deferred taxes on surplus value of PPE and investment property – Acquisition of Agrifirma 290
At September 30, 2020 (2,348 )

The estimated years of realization of deferred tax assets are as follows:

September 30,<br> 2020
2021 45,017
2022 7,382
2023 4,613
2024 4,487
2025 to 2030 31,866
93,365 
38

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

17.2. Income and social contribution tax expenses
September 30,<br> 2020 September 30,<br> 2019
--- --- --- --- --- --- ---
Income before income and social contribution taxes 72,560 49,225
Combined nominal rate of income and social contribution taxes – % 34 % 34 %
(24,670 ) (16,737 )
Equity pickup/Investment losses (15 ) (14 )
Management bonuses (18 ) (30 )
Share-based incentive plan - ILPA - 126
Non-deductible expenses (3 ) -
Net effect of profits taxes abroad - 6
Net effect of subsidiaries taxed whose profit is computed as a percentage of gross revenue (*) 29,829 8,179
Other permanent addition (2,029 ) (179 )
Income and social contribution taxes for the period 3,094 (8,649 )
Current (5,307 ) (4,961 )
Deferred 8,401 (3,688 )
3,094 (8,649 )
Effective rate 4 % -18 %
(*) For some of our real estate subsidiaries, profit tax is measured based on the regime whereby profit<br>is computed as a percentage of gross revenue, i.e., income tax is determined on a simplified base to calculate the taxable profit<br>(32% for lease revenues, 8% for sale of farms and 100% for other earnings). This results effectively in taxing the profit of subsidiaries<br>at a rate lower than if taxable income were based on accounting records.
--- ---
18. Other liabilities
--- ---
September 30,<br> 2020 June 30,<br> 2020
Accounts payable for acquisition of Serra Grande Farm (a) 19,159 14,263
Variable consideration for acquisition of Agrifirma (b) 27,205 25,128
46,364 39,391
Current 6,471 5,017
Noncurrent 39,893 34,374
a) On April 20, 2020, the Company acquired 4,489 hectares of Serra Grande Farm for R$25,047. At September 30,<br>2020, the liability refers to the delivery of 162,000 bags of soybean divided into three annual installments of 54,000 bags each.<br>The Company maintains its liability measured at fair value through profit or loss.
b) The consideration transferred in exchange for control of Agrifirma is divided into four classes, classified<br>in the financial statement in accordance with their characteristics. Restricted shares, Agrifirma Warrants and Agrifirma Warrant<br>Dividends, given their variation factor, were classified as financial liability and are measured at fair value through profit or<br>loss. The impact of this variation in profit or loss at September 30, 2020 was R$2,077.
--- ---

The breakdown of the consideration transferred in exchange for the control of Agrifirma is shown below:

September 30,<br> 2020 June 30,<br> 2020
Restricted shares 14,233 13,490
Warrants 12,162 10,860
Warrant dividends 810 778
Total 27,205 25,128

The maturities of accounts payable due to acquisition of Serra Grande Farm are broken down as follows:

1 year 6,471
2 years 33,584
3 years 6,309
46,364 
39

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

19. Equity
a) Capital (number of shares)
--- ---
Number of shares
--- --- --- --- ---
September 30,<br> 2020 June 30,<br> 2020
Shareholder
Cresud S.A.C.I.F.Y.A. 19,910,800 19,910,800
Board of Directors 190,800 192,800
Executive Board 253,653 263,453
Officers 444,453 456,253
Treasury 2,761,820 2,761,820
Other 38,987,228 38,975,428
Total shares of paid-up capital 62,104,301 62,104,301
Total outstanding shares 38,987,228 38,975,428
Outstanding shares as percentage of total shares (%) 63 63

At September 30, 2020 and June 30, 2020, the Company’s subscribed and paid-up capital amounted to R$699,811. The Company is authorized to increase its capital, regardless of amendments to the articles of incorporation, up to the limit of R$3,000,000, as determined by the Board of Directors.

b) Capital reserve

Capital Reserves are composed of amounts received by the company that are not registered under profit or loss as revenue, since they refer to amounts allocated to capital reinforcement, which did not involve any effort from the company in delivering the goods or services.

Goodwill on share issue

The reserve recorded as of September 30, 2020 is related to the acquisition of the subsidiary Agrifirma on January 27, 2020, a transaction conducted via exchange of shares that generated a difference between the amount of the capital increase and the consideration transferred related to the unrestricted shares, as shown below:

Number of shares Amount
Unrestricted shares 4,402,404 97,569
Restricted shares (*) 812,981 18,018
Shares issued in the initial exchange ratio / Capital increase 5,215,385 115,587
Unrestricted shares (final exchange ratio) / Capital increase 4,044,654 82,021
Reserve of goodwill on share issue (33,566 )
(*) Shares with restrictions on sale do not meet the definition of equity instruments and are registered<br>as financial liabilities.
--- --- 
40

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

c) Income reserves

Legal reserve

Pursuant to article 193 of Law No. 6404/76 and article 36, item (a), 5% (five per cent) of the Company’s net income at the end of each year must, before any other allocation, be used to set up a legal reserve, which shall not exceed 20% (twenty percent) of share capital.

The Company is allowed not to set up the legal reserve for the financial year in which the reserve balance, plus the amount of capital reserve addressed in item 1, of article 182, of Law No. 6404/76, exceeds 30% (thirty per cent) of capital. The legal reserve aims at assuring the integrity of the Company’s capital and may only be used to offset loss and increase capital.

Reserve for investment and expansion

According to article 36, item (c), of the Company’s articles of incorporation and article 196 of Law No. 6404/76, the Company may allocate the remaining portion of adjusted net income for the year ended, to reserve for investment and expansion, subject to approval on the General Shareholders’ Meeting.

The balance of the retained profits reserve, except for the reserves of unrealized profit and reserves for contingencies, may not exceed the amount of capital. Once this maximum limit is reached, the General Meeting may resolve on the investment of the exceeding portion in the payment, increase of capital or in dividend distribution.

d) Dividends

On October 16, 2020, the Company approved the payment of dividends at the Annual Shareholders Meeting, which included mandatory minimum dividends of R$28,394 and additional dividends proposed of R$13,606. In accordance with article 40 of the Articles of Incorporation, dividends not received or claimed will be time-barred within three (3) years from the date they were made available to the shareholder and will revert to the Company.

e) Other comprehensive income

At September 30, 2020, the effects from foreign exchange rate differences arising from the translation of Cresca, Palmeiras and Moroti financial statements amounted to R$7,309 (positive R$16,233 at September 30, 2019), and the accumulated effect reached R$122,648 (R$55,109 at September 30, 2019).

f) Treasury shares

Under article 20, item XII of the Articles of Incorporation of the Company, the Board of Directors is responsible, among other responsibilities established therein of by law, for deliberating on the acquisition by the Company of shares issued itself, to be held in treasury and/or for later cancellation or sale.

The Company approved three (3) Share Repurchase Programs at the Board of Directors’ meetings held on: (i) September 2, 2013; (ii) June 25, 2016; and, lastly (iii) the last Share Repurchase Program of the Company, approved at the Board of Directors’ meeting held on September 20, 2016, whose term of eighteen (18) months ended on March 21, 2018. Currently there is no Share Repurchase Program in force, and the number of treasury shares at September 30, 2020 is 2,761,820, corresponding to R$31,501.

41

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

20. Segment information

Segment information is presented consistently with the internal report provided by the chief operating decision maker that is the Executive Board, responsible for allocating resources, assessing the performance of the operating segments, and for making the Company’s strategic decisions.

Segment information is based on information used by BrasilAgro executive board to assess the performance of the operating segments and to make decisions on the investment of funds. The Company has six segments, namely: (i) real estate, (ii) grains, (iii) sugarcane, (iv) cattle raising, (v) cotton and (vi) other. The operating assets related to these segments are located only in Brazil. The main activity of the grains segment is the production and sale of soybean and corn.

The Sugarcane segment includes the sale of the raw product.

The Real Estate segment presents the P&L from operations carried out in the Company’s subsidiaries.

The cattle raising segment consists of producing and selling beef calves after weaning, which characterizes the activity as breeding and fattening of cattle.

The cotton segment is engaged primarily in the production and sale of cotton lint and seed.

The selected P&L and assets information by segment, which were measured in accordance with the same accounting practices used in the preparation of the financial statements, are as follows:

September 30, 2020
Agricultural activity
Total Real estate Grains Cotton Sugarcane Cattle raising Other Not allocated
Revenue 222,214 (575 ) 110,128 1,629 97,723 13,426 (117 ) -
Gain from sale of farm 5,752 5,752 - - - - - -
Changes in fair value of biological assets and agricultural products 50,599 - 7,665 3,031 37,016 2,918 (31 ) -
Adjustment to net realizable value of agricultural products after harvest, net 2,269 - 2,269 - - - - -
Cost of sales (207,539 ) (530 ) (100,866 ) (1,969 ) (88,751 ) (12,101 ) (3,322 ) -
Gross profit (loss) 73,295 4,647 19,196 2,691 45,988 4,243 (3,470 ) -
Selling expenses (5,437 ) - (5,280 ) - - (157 ) - -
General and administrative expenses (7,908 ) - - - - - - (7,908 )
Other operating income (2,813 ) - - - - - - (2,813 )
Share of loss of a joint venture (44 ) - - - - - - (44 )
Operating income (loss) 57,093 4,647 13,916 2,691 45,988 4,086 (3,470 ) (10,765 )
Net financial income
Financial income 187,273 106,874 29,145 - 5,654 3,601 6,154 35,845
Financial expenses (171,806 ) (26,769 ) (34,398 ) - (5,771 ) (5,771 ) (18,623 ) (80,474 )
Net income (loss) before income and social contribution taxes 72,560 84,752 8,663 2,691 45,871 1,916 (15,939 ) (55,394 )
Income and social contribution taxes 3,094 (4,627 ) (2,945 ) (915 ) (15,596 ) (651 ) 5,419 22,409
Net profit (loss) for the period 75,654 80,125 5,718 1,776 30,275 1,265 (10,520 ) (32,985 )
Total assets 2,141,679 1,277,917 146,630 23,890 173,654 30,434 63,945 425,209
Total liabilities 937,147 206,871 228,093 - 57,701 - - 444,482 
42

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

September 30, 2019
Agricultural activity
Total Real estate Grains Cotton Sugarcane Cattle raising Other Not allocated
Revenue 166,006 2,061 60,825 5,226 91,936 5,980 (22 ) -
Gain from sale of farm 16,572 16,572 - - - - - -
Changes in fair value of biological assets and agricultural products (Note 9) 38,218 (1,719 ) 692 485 39,326 (477 ) (89 ) -
Adjustment to net realizable value of agricultural products after harvest, net (1,345 ) - (496 ) (849 ) - - - -
Cost of sales (158,808 ) (351 ) (55,740 ) (5,939 ) (90,862 ) (6,203 ) 287 -
Gross profit 60,643 16,563 5,281 (1,077 ) 40,400 (700 ) 176 -
Selling expenses (3,873 ) - (3,816 ) - - (57 ) - -
General and administrative expenses (9,186 ) - - - - - - (9,186 )
Other operating (expense) income, net 446 - - - - - - 446
Share of loss of a joint venture (40 ) - - - - - - (40 )
Operating income (loss) 47,990 16,563 1,465 (1,077 ) 40,400 (757 ) 176 (8,780 )
Net financial income
Financial income 71,605 39,775 5,244 - 834 - 365 25,387
Financial expenses (70,370 ) (29,557 ) (265 ) - (3,386 ) - (8,086 ) (29,076 )
Profit (loss) before income and social contribution taxes 49,225 26,781 6,444 (1,077 ) 37,848 (757 ) (7,545 ) (12,469 )
Income and social contribution taxes (8,649 ) (1,433 ) (2,191 ) - (12,868 ) 257 2,565 5,021
Net Profit (loss) for the period 40,576 25,348 4,253 (1,077 ) 24,980 (500 ) (4,980 ) (7,448 )
Total assets 1,473,756 791,106 114,446 11,408 172,850 38,820 57,089 288,037
Total liabilities 534,904 - 63,045 - 46,708 - - 425,151

The statement of financial position accounts are represented by “Accounts receivable and others”, “Biological assets”, “Inventories of agricultural products” and “Investment properties”.

a) Information on concentration of customers

In the period ended September 30, 2020, the Company has four customers individually representing 10% or more of the revenues from the sugarcane, grains and cotton segments, representing 68.4% of the total sales of the Company. Of these four customers, two account for 100% of the revenues from the sugarcane segment and two account for 48.5% of the revenues from the grains/cotton segment.

b) Consolidated geographic information

Revenues and noncurrent assets, excluding financial instruments, income and social contribution taxes, deferred assets, post-employment benefits and rights arising from insurance contracts of the Consolidated, are distributed as follows:

**** **** In Brazil **** **** Subsidiaries abroad ****
September 30,<br> 2020 September 30,<br> 2019 September 30,<br> 2020 September 30,<br> 2019
Net income 214,087 160,473 8,127 5,533
**** **** In Brazil **** **** Subsidiaries abroad ****
--- --- --- --- --- --- --- --- --- --- --- --- ---
September 30,<br> 2020 June 30,<br> 2020 September 30,<br> 2020 June 30,<br> 2020
Noncurrent assets 843,966 853,957 283,147 275,957 
43

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

21. Revenues from contracts with customers
a) Operating sales
September 30,<br> 2020 September 30,<br> 2019
Sales of grains 112,099 61,744
Sales of cotton 1,656 5,260
Sales of sugarcane 97,726 91,937
Revenue from cattle sales 13,910 6,263
Revenue from leases 3,571 2,603
Other revenues 327 137
Gross operating revenue 229,289 167,944
Sales deductions
Taxes on sales (7,075 ) (1,938 )
Revenue 222,214 166,006
b) Sale of farms
September 30,<br> 2020 September 30,<br> 2019
Sale of farm 36,406 22,650
Adjustment to present value (2,776 ) (3,676 )
Gross revenue from sale of farm 33,630 18,974
Sales taxes (248 ) (693 )
Cost of sale of farm (27,630 ) (1,709 )
Gain from sale of farm 5,752 16,572
Income and social contribution taxes (209 ) (584 )
Net profit from sale of farm 5,543 15,988

The meeting of certain obligations related to prior-year sales enabled the recognition of the revenues pending on the execution date. Of the total gross Revenue from the sale of farms, R$3,885 refers to the delivery of a 133-hectare area of Cerrado biome negotiated in the sale of Jatobá II, a condition related to the variable consideration concept provided for in IFRS 15 – Revenue from contracts with customers, mentioned in Note 7.1(e).

The sale of the Bananal X Farm (Note 1.1.b) did not affect the Gain from sale of farms because the asset was recognized at its fair value less selling expenses, as set forth in IFRS 5 – Noncurrent Assets Held for Sale and Discontinued Operations, as shown below:

September 30,<br> 2020
Sale of farm 28,000
Present value adjustment (1,159 )
Gross revenue from sale of farms 26,841
Cost of sale (25,231 )
Commission on sale (1,610 )
Gain from sale of farms - 
44

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

22. Expenses by nature
Cost of sales Selling expenses General and administrative expenses Total
Depreciation and amortization 29,337 - 369 29,706
Personnel expenses 6,773 692 4,571 12,036
Expenses with service providers 63,578 - 1,342 64,920
Leases and rentals (2,674 ) - 15 (2,659 )
Cost of raw material 53,758 - - 53,758
Fair value of cost of agricultural products 52,683 - - 52,683
Freight and storage - 4,908 - 4,908
(Reversal) set-up of allowance for doubtful accounts - (163 ) - (163 )
Maintenance, travel expenses and other 4,084 - 1,611 5,695
At September 30, 2020 207,539 5,437 7,908 220,884
Depreciation and amortization 11,648 - 324 11,972
Personnel expenses 8,239 529 6,018 14,786
Expenses with service providers 63,488 - 1,098 64,586
Leases and rentals 14,295 - 89 14,384
Cost of raw material 25,388 - - 25,388
Fair value of cost of agricultural products 31,581 - - 31,581
Freight and storage - 3,344 - 3,344
Maintenance, travel expenses and other 4,169 - 1,657 5,826
At September 30, 2019 158,808 3,873 9,186 171,867
23. Management compensation and share-based compensation

The expenses with Management compensation were recorded under “General and administrative expenses”, as follows:

September 30,<br> 2020 September 30,<br> 2019
Board of directors and executive board compensation 854 679
Bonus 52 89
Overall compensation 906 768
Share grants - 965
Total 906 1,733

The total compensation of the Company’s officers and members of the Board of Directors, for the period ended September 30, 2020 in the amount of R$14,082, was approved at the Annual General Meeting held on October 16, 2020.

a) Share-based compensation

On October 2, 2017, the Shareholders Meeting approved the creation of the Long-term Share-based Incentive Plan (“ILPA Plan”). Under the terms of the ILPA Plan, participants will be entitled to receive a certain number of shares if they remain in the Company for a vesting period and achieve certain key performance indicators (“KPIs”). The ILPA Plan establishes that the Board of Directors will have broad powers to implement the ILPA Plan and take all measures necessary for it. The shares to be granted under the ILPA Plan may not exceed, at any time, the maximum and cumulative limit of 2% of the shares issued by the Company.

45

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

The first grant of incentives was approved by the Board of Directors on June 18, 2018, when the 1^st^ ILPA Program was approved and the beneficiaries, number of shares to be granted, vesting period and KPIs to be achieved were defined.

The vesting period for the 1^st^ ILPA Program is the period between October 2, 2017 and October 2, 2019, and participants were selected from among those who were Company employees at the start of the vesting period, considering their category and compensation on that date.

Shares will be granted to participants only if they remain in the Company until the end of the vesting period and achieve certain KPIs. One of the KPIs is a certain percentage of appreciation of the price of the AGRO3 stock in the vesting period; if such percentage is not reached, participants will not have the right to receive any shares. If the KPI of stock appreciation is achieved, the number of shares to be granted will vary in three ranges, depending on the level of achievement of three other KPIs, and will be adjusted by the dividends per share distributed in the vesting period, and will increase by an amount established in case the share appreciation exceeds the floor price.

The fair value of the benefit was estimated at R$8.96.To measure the fair value of the benefit, the Company considered the price of the AGRO3 stock on the date of the grant and projected the probable range of stock price at the end of the vesting period based on the past performance of the stock price in a period of 1 year and 4 months (compatible with the period between the grant in June 2018 and the end of the vesting period in October 2018). Considering the volatility of the AGRO3 stock, the Company determined the probability of the stock price at the end of the vesting period reaching the value necessary to achieve the appreciation KPI.

To determine the number of shares and the compensation expense, in each fiscal year the Management determines the estimated number of shares to be granted based on its best judgment of the portion of each of the three KPIs that does not depend on the stock price and the dividends to be paid in the vesting period. The expense amount is adjusted on account of such revision and the effects are recognized prospectively. The estimated expense is recognized upon the grant, in June 2018 being appropriated linearly during the vesting period, between October 2, 2017 and October 2, 2019.

In the period ended September 30, 2019, expenses with compensation amounted to R$1,510, with the cumulative amount R$4,002.

The program was terminated in January 2020, with profit or loss in the period ended September 30, 2020 not affected by the plan.

24. Other operating income (expenses), net
September 30,<br> 2020 September 30,<br> 2019
Gain (loss) on sale of PPE (231 ) 585
Set-up (reversal) of provision for legal claims (50 ) 88
Warrants and restricted shares (a) (2,077 ) -
Other (455 ) (227 )
(2,813 ) 446
(a) In the acquisition of Agrifirma, BrasilAgro issued warrants as part of the consideration paid,<br>which correspond to rights that entitle the selling shareholders to acquire 601,302 shares for R$0.01. The obligation was recognized<br>as financial liabilities and continues to be measured at fair value due to compliance with certain conditions that could change<br>the number of shares to be transferred.
--- --- 
46

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

25. Finance income (expenses)
Note September 30,<br> 2020 September 30,<br> 2019
Finance income
Interest on marketable securities 995 1,757
Interest receivable 62 156
Monetary variation (i) - -
Foreign exchange variation (ii) 3,819 2,795
Gain on remeasurement of leases (iii) 2,895 834
Gain on remeasurement of receivables from sale of farms (iv) 103,979 39,775
Realized profit from derivative transactions (v) 6 39,678 4,812
Unrealized profit from derivative transactions (vi) 6 35,845 21,476
187,273 71,605
Finance expenses
Marketable securities charges (327 ) (83 )
Bank charges (190 ) (147 )
Interest payable (6,726 ) (4,879 )
Monetary variation (i) (183 ) -
Foreign exchange variation (ii) (7,139 ) (1,380 )
Loss on remeasurement of leases (iii) (14,818 ) (5,293 )
Loss on remeasurement of receivables from sale of farms (iv) (11,951 ) (29,557 )
Realized loss from derivative financial transactions (v) 6 (50,182 ) (4,706 )
Unrealized loss from derivative financial transactions (vi) 6 (80,290 ) (24,325 )
(171,806 ) (70,370 )
Finance income (expense), net 15,467 1,235

Net balances are as follows:

September 30,<br> 2020 September 30,<br> 2019
Monetary variation (i) (183 ) -
Foreign exchange differences (ii) (3,320 ) 1,415
Restatement of leases (iii) (11,923 ) (4,459 )
Restatement of receivables from farm value (iv) 92,028 10,218
Income from derivatives (v) (10,504 ) 106
Unrealized income from derivatives (vi) (44,445 ) (2,849 )
21,653 4,431
26. Earnings per share
September 30,<br> 2020 September 30,<br> 2019
--- --- --- --- ---
Net profit attributed to controlling shareholders 75,654 40,576
Weighted average number of common shares issued 59,342 53,802
Effect from dilution – shares (in thousands) 521 338
Weighted average number of common shares issued adjusted by the dilution effect 59,863 54,140
Basic earnings per share 1.2749 0.7542
Diluted earnings per share 1.2638 0.7495 
47

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

27. Provision for legal claims

The Company and its subsidiaries are involved in civil, labor, environmental and tax lawsuits and administrative proceedings. The provision for probable losses arising from these lawsuits are determined and updated by management, supported by the opinion of the Company’s external legal advisors.

Probable risks

Labor Civil Environ. Total
At June 30, 2020 1,018 67 400 1,485
Additions 382 - - 382
Monetary variation 32 2 4 38
Reversal/payments (299 ) (69 ) (2 ) (370 )
At September 30, 2020 1,133 - 402 1,535

Possible risks

The Company and its subsidiaries are parties to legal suits of civil, labor, environmental and tax natures, and administrative tax proceedings for which no provisions were set up, since they involve risk of loss classified as possible by the Company and its external legal advisors. The contingencies are as follows:

September 30,<br> 2020 June 30,<br> 2020
Civil 9,681 9,532
Tax 4,534 4,511
Labor 1,840 3,389
Environmental 193 193
16,248 17,625

Judicial deposits

September 30,<br> 2020 June 30,<br> 2020
Labor 377 378
Tax 1,182 1,178
Civil 150 150
(Note 7) 1,709 1,706
28. Commitments
a) Contracts of sugarcane supply between BrasilAgro and Brenco

For the period ended September 30, 2020, net sugarcane sales of BrasilAgro to Brenco came to R$46.9 million, representing 21.1% of the Company’s total net revenue.

September 30,<br> 2020 September 30,<br> 2019
Number<br> (tons) Amount Number<br> (tons) Amount
Net revenue from sugarcane 438,956 46,852 477,626 49,290

The price of sugarcane ton delivered was calculated on Total Sugar Recoverable (ATR) assessed on the sales date.

There is a future balance of sugarcane to be delivered, the estimated quantity and amounts of which are difficult to be established considering the scenarios of fluctuating market value and crop productivity.

48

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

b) Sugarcane agricultural partnership agreement (IV)

On February 7, 2017, the Company entered into an agricultural partnership agreement involving a property in São Raimundo das Mangabeiras, in the state of Maranhão, named Partnership IV.

The agreement deals with sugarcane supply, in which the parties aim to regulate the price and conditions of supply, as well as the obligations of each party in a cyclical system, which involves the need to supply sugarcane, in a certain delivery frequency and schedule that is consistent with buyer’s receipt and production capacity.

For the period ended September 30, 2020, net sugarcane sales to Partnership IV came to R$50.9 million, representing 22.9% of the Company’s total net revenue.

September 30, <br><br>2020 September 30, <br><br>2019
Quantity<br> (Tons) Amount Quantity<br> (Tons) Amount
Gross sugarcane sales Partnership IV 527,072 50,871 514,510 42,646
29. Transactions with related parties
September 30,<br> 2020 June 30,<br> 2020
Current assets
Accounts receivable - -
Dividends receivable (a) - -
Helmir (b) 443 314
Cresud (b) 261 176
Other (d) 212 211
916 701
Noncurrent assets
Other (d) 1,519 1,511
1,519 1,511
Current liabilities – trade accounts payable
Accounts payable – Cresca (c) 1,732 1,724
Cresud (b) 830 814
Moroti - -
Other 319 311
2,881 2,849
a) Dividends receivable from its subsidiaries Jaborandi, Araucária, Cajueiro, Mogno and Ceibo,<br>in the amounts of R$85,483, R$7,445, R$500, R$5,251 and R$5,000, respectively;
b) Expenses and revenue related to Due Diligence of new acquisitions and implementation of the budget<br>and controls system and reimbursement of general expenses;
--- ---
c) Acquisition of biological assets and other items related to the Palmeiras operation;
--- ---
d) The amounts substantially refer to the total shares exercised under the Second and Third Programs,<br>as detailed in Note 19.
--- --- 
49

BrasilAgro – Companhia Brasileira de Propriedades Agrícolas

Notes to the interim condensed consolidated financial statements

September 30, 2020

(In thousands of reais, unless otherwise stated)

30. Insurance

The Company and its subsidiaries maintain (i) civil liability insurance for all employees working at the farms, (ii) insurance for machinery, (iii) life insurance for all the employees, as well as (iv) insurance for Directors and Officers (D&O) and for other Board members. The coverage amount is considered sufficient by management to cover risks, if any, over its assets and/or liabilities. The Company assessed the risk of farm buildings and facilities owned by the Group, as well as its inventories and biological assets, concluding that there is no need for other types of insurance due to low likelihood of risks.

Below is the table of the liabilities covered by insurance and the related amounts at September 30, 2020:

Insurance type Coverage R$
Civil liability (D&O) 20,000
Civil, professional and general liability 10,641
Machinery/Automobiles 16,532
Fire/lightning/explosion/electrical damage 7,262
Rural multi-risk 21,400
75,835 
50

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: January 25, 2021
By: /s/<br> Gustavo Javier Lopez
Name: Gustavo<br> Javier Lopez
Title: Administrative Officer and<br><br> <br>Investor Relations Officer

51

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