6-K 1 lnditr3q12_6k.htm ITR 3Q12 lnditr3q12_6k.htm - Generated by SEC Publisher for SEC Filing

 

FORM 6-K
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934

dated December 13, 2012

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

BrasilAgro – Brazilian Agricultural Real Estate Company

U(Translation of Registrant’s Name)

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

U(Address of principal executive offices)

Julio Cesar de Toledo Piza Neto,

Chief Executive Officer and Investor Relations Officer,

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

1309 Av. Brigadeiro Faria Lima, 5th floor

São Paulo, São Paulo 01452-002, Brazil

U(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 x   Form 40-F o 

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): U                   

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): U                   

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 o   No x 

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

Quarterly Information (ITR) as at

September 30, 2012

 

 

 

 

REVIEW REPORT OF QUARTERLY INFORMATION

 

To the Shareholders, Board Members and Management

Brasilagro Companhia Brasileira de Propriedades Agrícolas

São Paulo, SP

 

Introduction

 

We have performed a review of the interim individual and consolidated information of Brasilagro Companhia Brasileira de Propriedades Agrícolas, contained in the quarterly information (ITR) for the quarter ended September 30, 2012, comprising the balance sheet at September 30, 2012 and respective statements of income, of comprehensive income, of changes in shareholders’ equity and cash flows for the three-month period then ended, including the summary of main accounting policies and other notes to the financial statements.

 

Company management is responsible for the preparation of interim individual financial information in accordance with the Technical Pronouncement of the Brazilian FASB (CPC) 21 – Interim Financial Statements, and the interim consolidated financial information in accordance with CPC 21 and IAS 34 – Interim Financial Reporting, issued by International Accounting Standards Board – IASB, as well as for the presentation of this information in compliance with the rules issued by the CVM, applicable to the preparation of quarterly information (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review.

 

Scope of review

 

We conducted our review according to the Brazilian and international review standards of interim information (NBC TR 2410 – Review of Interim Information performed by the Auditor of the Entity, and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of inquiries, mainly of the people responsible for the financial and accounting matters, and the application of analytical and other review procedures. The scope of a review is significantly narrower than that of an audit conducted in accordance with audit standards and, accordingly, it did not permit us to obtain assurance that we took notice of all significant matters that could have been raised in an audit. Therefore, we did not express an audit opinion.

 

Conclusion on the interim individual information

 

Based on our review, we are not aware of any fact that makes us to believe that the interim individual financial information included in the quarterly information referred to in paragraph 1 was not prepared, in all material respects, in accordance with CPC21 applicable to the preparation of quarterly information (ITR), and presented in compliance with the rules issued by the CVM. 

 

 

 

 

Conclusion on the interim consolidated information

 

Based on our review, we are not aware of any fact that makes us believe that the interim consolidated financial information included in the quarterly information referred to in paragraph 1 was not prepared, in all material respects, in accordance with CPC21 and IAS 34, applicable to the preparation of quarterly information (ITR), and presented in compliance with the rules issued by the CVM.

 

Other matters

 

Interim value added information  

 

We have also reviewed the interim individual and consolidated value added information (DVA) for the three-month period ended September 30, 2012, prepared under the management’s responsibility, which presentation in the interim information is required by the rules issued by CVM applicable to the preparation of quarterly information and considered additional information by the IFRS, which do not require the presentation of the Statement of Value Added. These statements were submitted to the same previously described review procedures and, based on our review, we are not aware of any fact that makes us believe that they were not prepared, in all material respects, in accordance with the interim individual and consolidated accounting information taken as a whole.

 

Audit and review of the amounts corresponding to prior year and period

 

The amounts correspondent to individual and consolidated balance sheets for the year ended June 30, 2012 and the statements of income, of comprehensive income, of changes in shareholders’ equity, of cash flows and of value added for the three-month period ended September 30, 2011 presented for comparison purposes, were previously audited and reviewed, respectively, by other independent accountants, who issued an unmodified opinion dated September 4, 2012 and review report of quarterly information, which contained emphasis paragraph on restatement and reissuance of interim financial information for errors correction identified after its conclusion, dated May 10, 2012. 

São Paulo, November 13, 2012

ERNST & YOUNG TERCO

Auditores Independentes S.S.

CRC 2SP015199/O-6

 

 

Daniel G. Maranhão Jr.

Accountant CRC 1SP215856/O-5

 

 

 

Management’s Comments

We began the 2012/2013 harvest year on a highly optimistic: we sold a farm witch 100% appreciation, Level 2 ADRs program upgrade and listing on the New York Stock Exchange (NYSE) and will plant approximately 82,000 hectares.

The sale of the Horizontina Farm is in line with the Company’s business strategy that focuses not only on agricultural production but also on capital gains through the sale of properties. The property was sold for R$75.0 million and had been acquired in 2010 for R$37.7 million. The profit with the sale of the farm will be accounted in the next quarter.

This transaction closes one complete cycle of the Company project in which the acquisition, development, exploration and sale phases generated an Internal Rate of Return (real estate + production) of approximately 27%.

On November 8, we held a ceremony to celebrate the debut of our American Depositary Receipts (ADR) on Level 2 of the NYSE under the ticker ‘LND’.

In keeping with its pioneering spirit, the Company, which was the first agricultural production company to list its shares on the Novo Mercado segment of the BM&FBOVESPA, was also the first Brazilian agribusiness company to list its ADRs on NYSE. This important step indicates the level of maturity the Company has achieved and aims to increase its exposure to the universe of investors and to facilitate access to its stock.

We began our operations for the 2012/2013 harvest year, during which we plan to plant approximately 82,000 hectares, divided among soybean, corn (summer and winter crops), sugarcane and pasture. Moreover, in 2012/2013 harvest year, we intend to develop approximately 12,000 hectares.

 

 

 

 

Operating Performance

In the 2012/2013 harvest year, we intend to plan a total 81,630 hectares, composed of sugarcane, soybean, corn, and pasture. The table below presents a breakdown of planted area by farm: 

Planted Area Sugarcane Soybean Corn  Corn 2nd
crop 		 Pasture Total
Cremaq Farm    18,840  1,529  3,133    23,502 
Jatobá Farm    11,439  2,942      14,381 
Alto Taquari Farm  3,621          3,621 
Araucária Farm  5,577          5,577 
Chaparral Farm    10,337  667      11,004 
Preferência Farm    201      8,802  9,003 
Horizontina Farm    8,506    895    9,401 
Partnership I Farm    5,141        5,141 
Total  9,198  54,464  5,138  4,028  8,802  81,630 

 

 

Property Potfolio

 

Propperties Location Acquisition Date Project  Total Area
ha 		  Arable Area
ha 
Cremaq Farm  Baixa Grande do Ribeiro/PI   Oct / 06  Grains  32,702  21,823 
Jatobá Farm  Barreiras/BA    Mar / 07  Grains and cotton  31,606  24,254 
Alto Taquari Farm  Alto Taquari/MT    Aug / 07  Sugarcane  5,186  3,666 
Araucária Farm  Mineiros/GO   Apr / 07  Sugarcane  9,682  7,205 
Chaparral Farm  Correntina/BA    Nov / 07  Grains and cotton  37,182  27,414 
Nova Buriti Farm  Januária/MG    Dec / 07  Florest  24,247  19,004 
Preferência Farm  Barreiras/BA  Sep / 08  Cattle  17,799  14,237 
Parceria I Farm  Jaborandi/BA     Sep / 11 (1)  Grains  7,699  5,725 
Total        166,104  123,328 
1) BrasilAgro has purchase option in the "Partnership I Farm" with fixed price.     

 

On October 10, 2012, we sold the Horizontina Farm, rural property  located in Tasso Fragoso, Maranhão state, which has a total area of 14,359 hectares, of which approximately 8,500 hectares are arable land. The farm had been acquired by the Company in April 2010 for R$37.7 million and  in the last two and a half years the farm was transformed, with the planted area increasing from 2,000 hectares to approximately 8,000 hectares in the upcoming harvest year.

The sale price was R$75.0 million. The buyer made a payment of R$1.0 million, with the balance to be paid in two installments. The first amount was paid in October in the value of R$26.0 millionand the second amounting of R$48.0 million, due upon transfer of the ownership title in January 2013. As part of its business, the Company will continue to operate the farm until July 2013, through a lease agreement.

As a reference, the sale price of R$75.0 million represents an appreciation of 100% over the acquisition price and of 40% in relation to the latest independent appraisal conducted by Deloitte in December 2010. From the accounting point of view, on September 30, 2012, the farm’s value under the Company’s assets totaled R$48.0 million (acquisition + investments net of depreciation). biological assets in progress (sugarcane and grains) and adjusted for the harvest’s derivative results.

 

 

The transaction closes a complete cycle of a Company project in which the acquisition, development, exploration and sale phases generated an Internal Rate of Return (real estate + production) of approximately 27%.

The revenue from the sale of Horizontina Farm will be accounted in the next quarter.

Currently, BrasilAgro’s property portfolio totals 166,104 hectares, with an arable area of 123,328 hectares.

 

Financial Performance

The consolidated financial statements were prepared and are being presented in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.

EBITDA and Adjusted EBITDA

 

EBITDA (R$ thousand)  1Q13  1Q12  Change 
Gross profit            11,844            16,722  29% 
Selling expenses             (1,994)                (402)  35% 
General and administrative             (6,672)             (5,740)  43% 
Other operating revenue                    43                     n.a 
Depreciations              6,722              5,378  34% 
EBITDA              9,943            15,958  38% 
       
Adjusted EBITDA (R$ thousand)  1Q13  1Q12  Change 
Gross profit            11,844            16,722  29% 
Elimination of gains on biological assets (grains and sugarcane planted)             (1,575)             (4,914)  68% 
Selling expenses             (1,994)                (402)  396% 
General and administrative             (6,672)             (5,740)  16% 
Other operating revenue                    43                     n.a. 
Hedge results                  (20)              1,606  n.a. 
Depreciations              5,589              6,279  11% 
Adjusted EBITDA              7,215            13,551  47% 

 

EBITDA is calculated as gross profit adjusted for general, administrative, and selling expenses, other operating revenue and depreciation expenses, including: the depreciation of fixed assets at farms and administrative facilities, of developed areas and permanent crops. Adjusted EBITDA was calculated by excluding the gains from

 

Julio Toledo Piza

CEO & Investor Relation Officer

 

 

 

 

Management’s declaration on Independent auditor's report

In accordance with section V of article 25 of CVM Instruction 480, as of December 7, 2009, the Management declares that reviewed, discussed and agreed with the independent auditor’s report on the Company's Financial Statements for the quarterly ended September 30, 2012, issued on this date.

São Paulo, November 14, 2012.

 

Julio Toledo Piza Neto

CEO e Diretor de Relações com Investidores

 

Gustavo Javier Lopez

Diretor Administrativo

 

André Guillaumon

Diretor de Operações

 

Mario Henrique Aguirre

Diretor Técnico Agrícola

 

 

 

Management’s declaration on Financial Statements

 

In accordance with section VI of article 25 of CVM Instruction 480, of December 7, 2009, the Management declares that reviewed, discussed and agreed with the Company's Financial Statements for the quarterly ended September 30, 2012.

 

São Paulo, November 14, 2012.

 

Julio Toledo Piza Neto

CEO e Diretor de Relações com Investidores

 

Gustavo Javier Lopez

Diretor Administrativo

 

André Guillaumon

Diretor de Operações

 

Mario Henrique Aguirre

Diretor Técnico Agrícola

 

 

Contents

 

Balance Sheets

Statements of Income

Statements of Changes on Equity

Statements of Cash Flows

Statements of Value Added

Notes to the Quarterly Information

 

 

 

 

A free translation from Portuguese into English of Quarterly Information in accordance with accounting practices adopted in Brazil, IFRS and specific rules established by the Brazilian Securities and Exchange Commission (CVM)

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Balance sheets - Assets

(In thousands of reais)

 

 

   

Parent Company

Consolidated

 

Note

September 30, 2012

June 30, 2012

September 30, 2012

June 30, 2012

Assets

          

Current assets

          

Cash and cash equivalents

6

33,346

23,562

53,824

67,464

Trade accounts receivable

8

15,911

43,828

28,098

60,655

Inventories

10

54,988

62,581

73,595

72,558

Biological assets

11

18,710

3,208

21,323

4,111

Taxes recoverable

9

6,396

6,529

9,602

9,331

Derivative financial instruments

7

22,074

4,259

22,138

4,327

Transactions with related parties

32

5,989

21,944

-

-

Other

  

661

545

817

710

  

158,075

166,456

209,397

219,156

          

Noncurrent assets

          

Biological assets

11

26,423

31,931

26,423

31,931

Marketable securities

12

22,271

21,872

23,621

23,197

Taxes recoverable

9

23,311

22,398

23,676

22,803

Deferred taxes

21

10,905

7,692

18,149

14,960

Receivables for sale of farms

8

-

-

13,496

12,759

Investment properties

13

96,989

94,357

395,715

391,907

Other receivables

  

592

268

592

268

  

180,491

178,518

501,672

497,825

          

Investments

14

340,548

326,538

410

410

Property, plant and equipment

16

14,181

14,644

15,305

15,764

Intangible assets

15

2,588

2,607

2,588

2,607

          

  

537,808

522,307

519,975

516,606

          

          

          

          

Total assets

  

695,883

688,763

729,372

735,762

 

 

9

 

 

 

 

  

Parent Company

Consolidated

 

Notes

September 30, 2012

June 30, 2012

September 30, 2012

June 30, 2012

Liabilities and equity

          

Current liabilities

          

Trade accounts payable

18

18,974

14,509

2,711

4,151

Loans and financing

19

36,106

39,071

39,188

43,067

Labor obligations

  

3,784

7,241

3,997

7,436

Taxes payable

20

1,451

1,701

3,427

3,102

Dividends proposed

  

2

2

2

2

Transactions with derivatives

7

-

-

-

8,307

Payables for acquisitions of farms

17

17,222

16,588

41,914

40,858

Advances from customers

  

5,252

4,112

5,849

4,490

   

82,791

83,224

97,088

111,413

          

Noncurrent liabilities

          

Loans and financing

19

36,818

35,262

52,632

51,294

Taxes payable

20

-

-

2,668

2,695

Derivative financial instruments

7

18,751

10,209

19,378

10,209

Provision for legal claims

30

1,012

1,087

1,108

1,183

Other liabilities

  

13

13

-

-

  

56,594

46,571

75,786

65,381

          

Total liabilities

  

139,385

129,795

172,874

176,794

          

Equity

 

        

Attributed to controlling shareholders

         

Share capital

22

584,224

584,224

584,224

584,224

Capital reserve

  

2,344

2,134

2,344

2,134

Equity valuation adjustments

  

(6,920)

(6,920)

(6,920)

(6,920)

Accumulated losses

  

(23,150)

(20,470)

(23,150)

(20,470)

Total Equity

  

556,498

558,968

556,498

558,968

          

          

Total liabilities and equity

  

695,883

688,763

729,372

735,762

 

 

See accompanying notes.

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Statements of operations

Quarters ended September 30

(In thousands of reais, unless otherwise stated)

 

 

   

Parent Company

Consolidated

 

Notes

2012

2011

2012

2011

          

Net revenue

24

37,836

29,644

39,004

31,711

Gain from sale of farm

  

-

-

-

12,987

Gain (loss) in fair value of biological assets and agricultural products

11

2,945

(3,786)

9,802

(3,786)

Reversal of provision for agricultural products after harvest

  

392

880

590

889

Cost of sales

25

(36,388)

(26,033)

(37,552)

(25,079)

          

Gross profit

  

4,785

705

11,844

16,722

          

Selling expenses

25

(1,782)

(210)

(1,994)

(402)

General and administrative

25

(5,794)

(5,366)

(6,672)

(5,740)

Other operating income

  

176

-

43

-

Equity pick up

14.a

7,011

14,775

-

-

          

Operating profit

  

4,396

9,904

3,221

10,580

          

Financial income (expenses), net

          

Financial income

27

1,118

16,887

4,270

13,412

Financial expenses

27

(11,407)

(6,476)

(12,260)

(2,225)

          

Income (loss) before income tax and social contribution

  

(5,893)

20,315

(4,769)

21,767

          

Income tax and social contribution

28

3,213

(2,526)

2,089

(4,109)

          

Net income (loss) for the period

  

(2,680)

17,789

(2,680)

17,658

          

Attributed to:

         

Controlling shareholders

     

(2,680)

17,789

Noncontrolling shareholders

     

-

(131)

      

(2,680)

17,658

          

Basic earnings (loss) per share - reais

29

    

(0.05)

0.30

Diluted earnings (loss) per share - reais

29

    

(0.05)

0.30

 

 

See accompanying notes.

 

There was no other comprehensive income in the periods disclosed which would requires presentation of a comprehensive income statement.


 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Statements of changes in equity

(In thousands of reais)

 

 

   

Attributed to controlling shareholders

    
 

Note

Capital

Capital reserve - grant of stock options

Equity valuation adjustment

Retained earnings (accumulated losses)

Total

Non controlling shareholders

Total

 

                

At June 30, 2011

  

584,224

996

-

(14,898)

570,322

6,601

576,923

Net income for the period

  

-

-

-

17,789

17,789

(131)

17,658

Share based compensation

  

-

285

-

-

285

-

285

Increase in non-controlling interest due to change in Jaborandi Ltda. interest

14

-

-

(1,135)

-

(1,135)

1,135

-

Increase in non-controlling interest

  

-

-

-

-

-

268

268

At September 30, 2011

  

584,224

1,281

(1,135)

2,891

587,261

7,873

595,134

 

 

Attributed to controlling shareholders

    
 

Capital

Capital reserve - grant of stock options

Equity valuation adjustment

Accumulated losses

Total

Non controlling shareholders

Total

              

At June 30, 2012

584,224

2,134

(6,920)

(20,470)

558,968

-

558,968

               

Loss for the period

-

-

-

(2,680)

(2,680)

-

(2,680)

Share based compensation

-

210

-

-

210

-

210

               

At September 30, 2012

584,224

2,344

(6,920)

(23,150)

556,498

-

556,498

 

 

See accompanying notes.

 

12

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Cash flow statements

Quarters ended September 30

(In thousands of reais)

 

 

   

Parent Company

Consolidated

 

Notes

2012

2011

2012

2011

Cash flow from operating activities

          

Net income (loss) for the period

  

(2,680)

17,789

(2,680)

17,658

Adjustments to reconcile net income (loss)

          

Depreciation and amortization

25

6,542

5,196

6,722

5,378

Cost on sale of investment property

  

-

216

-

10,153

Grant of stock options

  

210

285

210

285

Residual value of property, plant and equipment sold

16

74

-

208

-

Write off of Investment property

13

-

-

83

-

Equity pickup

14

(7,011)

(14,775)

-

-

Unrealized gain with derivatives

27

(8,542)

(12,648)

(8,902)

(6,285)

Foreign exchange, monetary variation and financial charges

27

1,802

289

2,574

409

Gain on remeasurement of receivables from sale of farms

26

-

-

(2,154)

(867)

Deferred income tax and social contribution

28

(3,213)

2,526

(3,189)

4,109

Fair value of biological assets and agricultural products and depletion of harvest

11

24,962

3,786

26,329

3,786

Reversal of impairment of agricultural products after harvest

  

(392)

(880)

(590)

(889)

Allowance for doubtful accounts

  

422

-

422

-

Set up (reversal) of provision for legal claims

  

(485)

280

(484)

280

  

11,689

2,064

18,549

34,017

Change in working capital

          

Trade accounts receivable

  

27,555

7,034

32,612

(12,412)

Inventories

  

10,503

(6,177)

2,672

(8,838)

Taxes recoverable

  

(512)

(818)

(876)

(1,316)

Transactions with derivatives

  

(731)

(90)

(8,047)

621

Prepaid expenses

  

-

22

-

25

Other receivables

  

(485)

-

(431)

791

Trade accounts payable

  

4,474

726

(1,009)

2,299

Taxes payable

  

(250)

210

298

311

Labor obligations

  

(3,457)

(2,207)

(3,439)

(2,236)

Advances from customers

  

1,140

-

1,359

-

Other liabilities

  

410

(2,641)

603

(4,209)

Net cash provided by (used in) operating activities

  

50,336

(1,877)

42,291

9,053

          

Cash flow from investing activities

          

Advance for future capital increase

  

(6,999)

(20,401)

-

-

Additions to ´property, plant and equipment and intangible assets

  

(655)

(594)

(845)

(690)

Additions to investment properties and biological assets

  

(45,585)

(7,948)

(50,650)

(10,561)

Investment in (redemption of) marketable securities

  

(399)

-

(424)

-

Dividends received

  

16,000

-

-

-

Decrease in subsidiaries

  

-

2,317

-

-

Cash received from sale of farms

  

-

-

1,000

2,250

Net cash used in investing activities

  

(37,638)

(26,626)

(50,919)

(9,001)

          

Cash flow from financing activities

          

Payments of farms financing

  

-

-

-

(18,648)

Proceeds from loans and financing

  

-

6,009

-

6,009

Interest on loans and financing

  

(583)

-

(1,404)

-

Payment of loans and financing

  

(2,329)

(1,224)

(3,607)

(1,296)

Increase (decrease) in long term receivables

  

(2)

-

(1)

-

Net cash provided by (used in) financing activities

  

(2,914)

4,785

(5,012)

(13,935)

          

          

Increase (decrease) in cash and cash equivalents

  

9,784

(23.718)

(13.640)

(13.883)

          

Cash and cash equivalents at the beginning of the period

6

23,562

113.323

67.464

135.615

Cash and cash equivalents at the end of the period

6

33,346

89.605

53.824

121.732

   

9,784

(23.718)

(13.640)

(13.883)

 

 

See accompanying notes.

 

13

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Statements of value added

Quarters ended September 30

(In thousands of reais)

 

 

   

Parent Company

Consolidated

 

Notes

2012

2011

2012

2011

Revenues

          

Gross operating revenue

24

39,733

30,992

41,123

33,325

Gain on sale of farm

  

-

-

-

12,987

Gains (losses) with biological assets and agricultural products

  

3,336

(2,906)

10,392

(2,897)

Other revenues

  

177

-

44

-

Allowance for doubtful accounts - (Constitution)

  

(422)

-

(422)

-

  

42,824

28,086

51,137

43,415

Inputs acquired from third parties

          

Cost of sales

26

(36,388)

(26,033)

(37,552)

(25,079)

Materials, energy, outsourced services and other

  

(3,251)

(1,943)

(3,916)

(2,183)

  

(39,639)

(27,976)

(41,468)

(27,262)

          

Gross value added

  

3,185

110

9,669

16,153

          

Depreciation and amortization

  

(304)

(274)

(304)

(274)

Net value added produced by the entity

  

2,881

(164)

9,365

15,879

Value added received in transfer

 

        

Equity pickup

14

7,011

14,775

-

-

Financial income

27

1,118

16,887

4,270

13,412

  

-

31,662

4,270

13,412

          

Total value added to be distributed

  

11,010

31,498

13,635

29,291

Distribution of value added

          

Personnel and charges

          

Compensation

  

2,589

2,520

2,626

2,520

Benefits

  

337

285

340

285

Severance Fund ( F.G.T.S.)

  

65

56

67

56

Taxes, charges and contributions

          

Federal

  

(1,084)

4,054

646

6,078

State

  

263

186

260

204

Municipal

  

29

25

32

27

Financers

          

Interest and monetary and foreign exchange variations

  

11,407

6,476

12,260

2,225

Rentals

  

84

107

84

107

Net income (loss) for the period

  

(2,680)

17,789

(2,680)

17,658

Non-controlling shareholders

  

-

-

-

131

  

11,010

31,498

13,635

29,291

 

 

See accompanying notes.

 

 

 

 


Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information - ITR

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

1.   General information

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas ("Company" or "Brasilagro") 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, Maranhão, Mato Grosso, Minas Gerais and Piauí.

 

Pursuant to the bylaws, the Company’s business purpose includes: (a) the carrying out of agricultural, cattle raising and forestry activities of any type and nature and rendering directly or indirectly related services, (b) the import and export of agricultural products and inputs and those related to cattle raising activity, (c) the purchase, sale and/or rent of properties, land, buildings and real estate in rural and/or urban areas, (d) real estate intermediation involving any type of operations, (e) participation as partner in other companies and commercial ventures of any nature, in Brazil and/or abroad, directly or indirectly related to the herein described business purposes, and (f) management of its own and third party assets.

 

The Company and its subsidiaries have nine farms in six Brazilian states, with a total area of  180,462 hectares, including 7,699 leased hectares. The Company aims to consolidate its position as one of the main companies in the agribusiness segment in Brazil through a business strategy based on the acquisition of new farms and the ultimate sale of the farms acquired, once the intended potential valuation is achieved or when their agribusiness potential is achieved, optimization of production processes at the farms acquired and geographic and productive diversification.

 

The activities of  the wholly-owned subsidiaries Cremaq Ltda. ("Cremaq"), Engenho de Maracajú Ltda. ("Engenho"), Imobiliária Jaborandi Ltda. ("Jaborandi"), Jaborandi Agrícola Ltda., Araucária Ltda. ("Araucária"), Mogno Ltda. ("Mogno"), Cajueiro Ltda. ("Cajueiro"), Ceibo Ltda. (“Ceibo”) and Flamboyant Ltda. (“Flamboyant”), comprise the purchase and sale of properties, land, buildings and real estate in rural and/or urban areas. As permitted in their respective bylaws and articles of organization, until the real estate assets belonging to these companies are not sold, the assets may be leased to third parties, but only as a strategy to enhance the value of the real estate. All the subsidiaries as well as FIM Guardian Fund, exclusive investment fund of the Company, are headquartered and operate in Brazil. 

 

15

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

2.   Summary of significant accounting practices and presentation of the Quarterly Information - ITR

 

2.1.    Basis of preparation

 

The Company’s Board of Directors is entitled to change the Company’s individual and consolidated Quarterly Information after its issuance. On November 13, 2012, the Company’s Board approved the Company’s individual and consolidated Quarterly Information and authorized its disclosure.

 

The individual interim accounting information comprised in this quarterly information has been prepared in accordance with the accounting pronouncement CPC 21 –  Interim Reporting and presented consistently with the standards issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of the Quarterly Information – ITR. The consolidated interim information included in this quarterly information has been prepared in accordance with the accounting pronouncement CPC 21 – Interim Reporting and with the international accounting standard IAS 34 – “Interim Financial Reporting”, issued by the International Accounting Standards Board (IASB), and presented consistently with the standards issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of the Quarterly Information - ITR.

 

The individual and consolidated Quarterly Information has been prepared and is being presented based on the same accounting practices adopted in the presentation and preparation as mentioned in Note 2 of the financial statements for the year ended June 30, 2012, which should be read together with this Quarterly Information.  These policies have been consistently applied to all periods presented, unless otherwise stated.

 

According to CVM/SNC/SEP Circular Letter No. 03/2011, the Company opted for presenting the notes to this Quarterly Information on a summarized basis in relation to the ones presented in the annual financial statements. The Company declares that the significant judgments, estimates and accounting assumptions as well as the main accounting practices are the same as the ones disclosed in the annual financial statements for the year ended June 30, 2012 and remain effective for this Quarterly Information. Accordingly, this Quarterly Information does not encompass all notes and disclosures required by the standards for the annual financial statements and, as a consequence, the related information should be read together with note 2 to those financial statements.

 

16

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

2.   Summary of significant accounting practices and presentation of the Quarterly Information – ITR (Continued) 

 

2.1.    Basis of preparation (Continued) 

 

The individual and consolidated Quarterly Information has been prepared based on the historical cost, unless otherwise stated. The historical cost is usually based on the amount of consideration paid in exchange for the assets.

 

All the amounts presented in this Quarterly Information are expressed in thousands of reais, unless otherwise indicated.

 

The non financial data included in this Quarterly Information, such as sales volume, planted and leased area, contractual data, economic forecasts, related to insurance and environment, has not been reviewed by the independent auditors.

 

Except for net income (loss) for the period, the Company has no other comprehensive income (losses).

 

The notes that have not significantly changed in relation to the individual and consolidated financial statements for June 30, 2012 have not been included in this Quarterly Information.

 

2.2.    Foreign currency translation

 

a)    Functional and reporting currency

 

Items included in the financial information  of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The individual and consolidated interim information is  presented in Brazilian reais (R$), which is the Company's functional currency and the Group's reporting currency.

 

b)    Transactions and balances

 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuations where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period - end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the statements of operations.

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

2.   Summary of significant accounting practices and presentation of the Quarterly Information – ITR (Continued) 

 

2.2.    Foreign currency translation (Continued) 

 

b)    Transactions and balances (Continued)

 

Foreign exchange gains and losses that relate to loans and financing as well as cash and cash equivalents are presented in the statements of operations as "Financial income or financial expenses".

 

2.3.    Reclassification of balances in the financial statements for June 30, 2012 and quarterly information for September 30, 2011

 

Upon the preparation of the interim information  for the quarter ended September 30, 2012, the Company’s Management reviewed its accounting practice for classification of income tax on time differences of subsidiaries opting for the income taxes calculation based on presumed profit regime (“lucro presumido”). As a consequence, the amount of R$3,960 was reclassified from deferred taxes to taxes payable (R$1,265 short term and R$2,695 long term).

 

In addition, the Company reviewed the presentation of financial instruments by category, mentioned in Note 5.c, restating the balances of cash and cash equivalents and marketable securities as instruments at fair value through profit or loss. Originally the instruments were presented as loans and receivables.

 

In the quarter ended September 30, 2011, the Company reclassified the amount of R$23,291 from revenue with sales of farm and R$10,304 from cost of sale of farm to the caption gain with sale of farm in the amount of R$12,987.

 

 

3.   Significant accounting estimates and judgments

 

Accounting estimates and judgments are continuously assessed and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the current circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The effects arising from review of accounting estimates are recognized upon the review period.

 

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next period  are addressed  in Note 3 to the annual financial statements.

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

 

4.   New pronouncements issued by CPC/IASB

 

New pronouncements, changes in the existing pronouncements and new interpretations were issued and are mandatory for the years started on or after July 1, 2012.

 

In 2012, Brazilian FASB (CPC) approved the following pronouncements:

 

·   CPC 18 R1 – Investment in Subsidiaries and Affiliates -  CVM Rule  No. 688 of October 04, 2012 (IAS 28);

·   CPC 40 R1 –Financial Instruments: Evidence –  CVM Rule  No. 684 of August 30, 2012 (IFRS 7);

·   CPC 17 (R1) – Construction Contracts – CVM Rule No. 691 of November 8, 2012 (IAS 11);

·   CPC 30 (R1) – Revenues –  CVM Rule No.  692 of November 8, 2012 (IAS 18); and

·   CPC 35 (R2) –Separate Financial Statements – CVM Rule No.  693 of November 8, 2012.

 

Additionally, the following accounting interpretations were issued by CPC and approved by CVM:

 

·   ICPC 08 R1 – Accounting of Proposal for Payment of Dividends - CVM Rule No.  683 of August 30,2012; and

·   ICPC 09 R1 – Individual Financial Statements, Separate Financial Statements, Consolidated Financial Statements and Application of the Equity Method-  CVM Rule No. 687 of October 04, 2012.

 

The Company and its subsidiaries have not early adopted such alterations in their consolidated quarterly information for September 30, 2012 and due to time constrain have not yet assessed possible impact from the adoption of these alterations.

 

No new pronouncements have been issued by IASB further to those disclosed in the financial statements as of June 30, 2012.

 

5.   Financial instruments

 

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

There were no significant changes in financial risk factors, in the capital management policy and estimate at fair value in the first quarter of 2013, in relation to those described in the annual financial statements for the year ended June 30, 2012,as disclosed in the related Notes 4.1 to 4.10.

 

a)      Sensitivity analysis

 

Below is the table of sensitivity analysis of financial instruments for one year period or up to the contract maturities, which describes the risks that may generate material variations in the Company’s net income (loss), as set forth by CVM Rule No. 475/08, in order to present 25% and 50% of appreciation/ depreciation in the considered risk variable.

 

The assumptions and scenarios are as follows:

 

 

September 30, 2012

 

Probable scenario

Scenario I

Scenario II

Foreign exchange rate - US$/R$

2.03

2.54

3.05

Soybean - R$ / bushel – July 2013

30.39

37.99

45.59

Corn - R$ / bushel – July 2013

15.21

19.01

22.81

Corn - R$ / bag – May 2013

30.00

37.50

45.00

Corn - US$ / bushel – May 2013

7.57

9.46

11.35

  
 

June 30, 2012

 

Probable scenario

Scenario I

Scenario II

Foreign exchange rate - US$/R$

2.12

2.65

3.18

Soybean - US$/ bushel –November 2012

14.99

18.74

22.48

Soybean - R$/ bushel – March 2013

29.86

37.33

44.79

Soybean - US$/ bushel – May 2013

14.22

17.78

21.33

Soybean - R$ / bushel – July 2013

29.90

37.38

44.85

Soybean - US$ / bushel – July 2013

14.16

17.70

21.24

Corn - R$ / bushel – July 2013

14.45

18.06

21.68

Corn - R$ / bushel – September 2012

25.80

32.25

38.70

Corn - US$ / bushel – September 2012

6.60

8.25

9.90

 

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

5.   Financial instruments (Continued) 

 

a)      Sensitivity analysis (Continued)

 

The table below presents, for each situation, the effect on the change in the estimated fair value at September 30, 2012 of the derivative financial instrument as well as the effect on the increase or decrease of the estimated fair value of the related asset or liability. The effect on the variation of fair value and on the variation of the asset or liability has been determined on an individual basis for each derivative financial instrument, asset or liability, for each situation and for each scenario without considering combined or compensatory effects of the change in more than one variable or in the same variable in other derivative financial instruments, i.e., maintaining all the other variables unaltered. Accordingly, each line of the table shall be individually considered without considering the effects presented in the other lines.

 

This sensitivity analysis aims to measure the impact of changes in market variables  on the mentioned financial instruments of the Company, considering all other market indicators unaltered. Upon their settlement such amounts may differ from the ones stated above, due to the estimates used in their determination.

 

September 30, 2012

         

Position

    

Operation

Risk

Probable scenario (I)

Scenario (II)

Scenario (II)

Unit of measure

Volume

Maturities

Derivative

SOYBEAN

(13,982)

(32,061)

(52,222)

Soybean bags

(1,113)

Nov/12 to May/14

 

CORN

(4,036)

(10,834)

(18,866)

Corn bags

(950)

Jul/13 to Dec/13

 

USD

(853)

(9,780)

(23,046)

US$

(26,133)

Dec/12 to Jul/13

Debt for purchase of farm 

(56)

(540)

(1,039)

  

(983)

Dec/12

               

June 30, 2012

         

Position

    

Operation

Risk

Probable scenario (I)

Scenario (II)

Scenario (II)

Unit of measure

Volume

Maturities

Derivative

Appreciation of Soybean

(3,866)

(24,166)

(44,465)

Soybean bags

(1,247)

Nov/12 to Jul/13

 

Appreciation of Corn

(1,289)

(3,837)

(7,061)

Corn bags

(407)

Aug/12 to Jun/13

 

Appreciation of US$

(3,269)

(20,434)

(37,600)

US$

(31,833)

Jul/12 to Jul/13

Debt for purchase of farm 

(101)

(633)

(1,165)

  

(983)

Dec/12

 

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

5.   Financial instruments (Continued) 

 

b)      Hierarchy of fair value - Consolidated

 

Below is the level of fair value hierarchy for financial instruments measured at fair value through profit or loss, presented in the quarterly information for September 30, 2012:

 

   

September 30, 2012

June 30, 2012

Consolidated - thousands R$

Note

Level 2

Total

Level 2

Total

Assets

          

Current

          

Receivable from sale of farms

8 and 5.c

10,722

10,722

9,495

9,495

Derivative financial instruments

7

6,529

6,536

4,327

4,327

          

Noncurrent

          

Receivable from sale of farms

  

7,692

7,692

12,759

12,759

Marketable securities

8

22,271

22,279

22,271

22,271

          

Total

  

47,214

47,214

48,852

48,852

          

  

September 30, 2012

June 30, 2012

Consolidated - thousands R$

Note

Level 2

Total

Level 2

Total

Liabilities

          

Current

          

Derivative financial instruments

7

-

7

8,307

8,307

          

Noncurrent

          

Derivative financial instruments

7

10,209

10,216

10,209

10,209

          

Total

  

10,209

10,209

18,516

18,516

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

5.   Financial instruments (Continued) 

 

c)      Financial instruments by category - Consolidated

 

   

September 30, 2012

June 30, 2012

Consolidated - thousands R$

Note

Loans and receivables

Designated at fair value through profit/loss

Derivatives used for economic hedge

Total

Loans and receivables

Designated at fair value through profit/loss

Derivatives used for economic hedge

Total

Assets

                  

Current assets

                  

Cash and cash equivalents

  

-

53,824

-

53,824

-

67,464

-

67,464

Trade accounts receivable

  

17,376

-

-

17,376

51,210

-

-

51,210

Receivable from sale of farms

5.b

-

10,722

-

10,722

-

9,445

-

9,445

Transactions with derivatives

5.b

-

-

22,138

22,138

-

-

4,327

4,327

                  

Noncurrent assets

                  

Marketable securities

  

-

23,621

-

23,621

-

23,197

-

23,197

Receivable from sale of farms

5.b

-

13,496

-

13,496

-

12,759

-

12,759

Investment in unquoted equity instruments (at cost ) less impairment

  

-

-

-

-

-

-

-

-

Total

  

17,376

101,663

22,138

141,177

51,210

112,865

4,327

168,402

 

   

September 30, 2012

June 30, 2012

Consolidated - thousands R$

Note

Derivatives used for economic hedge

Financial liabilities at amortized cost

Total

Derivatives used for economic hedge

Financial liabilities at amortized cost

Total

Liabilities

              

Current liabilities

              

Trade accounts payable

  

-

531

531

-

4,151

4,151

Loans and financing

  

-

39,188

39,188

-

43,067

43,067

Derivative financial instruments

5.b

-

-

-

8,307

-

8,307

Acquisitions payable

  

-

41,914

41,914

-

40,858

40,858

               

Noncurrent liabilities

              

Loans and financing

  

-

52,632

52,632

-

51,294

51,294

Derivative financial instruments

5.b

19,378

-

19,378

10,209

-

10,209

Total

  

19,378

134,265

153,643

18,516

139,370

157,886

 

The model and assumptions used in the determination of fair value represent management’s best estimate and are reviewed at each presentation of quarterly information and adjusted, when necessary.

 

 

6.   Cash and cash equivalents

 

 

Parent Company

Consolidated

 

September 30, 2012

June 30, 2012

September 30, 2012

June 30, 2012

Cash and banks

1,483

10,817

3,338

12,181

Repurchase agreements

-

-

12,051

8,803

Time deposits in Brazilian banks

31,863

12,745

38,435

46,480

 

33,346

23,562

53,824

67,464

 

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

6.   Cash and cash equivalents (Continued) 

 

The terms of time deposits and repurchase agreements held at September 30, 2012 and June 30, 2012 contractually require redemption of the amount originally invested plus accrued interest through the date of redemption without any penalty, at any time without prior notice. This provision effectively results in demand deposits and agreements, despite having a maturity date.

 

Amounts invested carry interest based on a percentage of CDI (Interbank Deposit Certificate), an interest rate for interbank deposits measured and disclosed daily by CETIP, an independent entity that provides custody services) which ranges between 100% and 103.5% of the daily CDI as of September 30, 2012 and June 30, 2012, respectively.

 

In the quarter ended September, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements, Note 6.

 

 

7.   Derivative financial instruments

 

         

At September 30, 2012

         

Parent Company

Consolidated (R$)

Total (R$)

    

Risk

Maturity

Strategy

Outstanding derivative instrument

Counterparty

Receivable

Payable

Receivable

Payable

Net balance

Volume/ Position (000)

Unit

Currency US$

December -12

(ii)

NDF

Local Banks

-

-

56

-

56

983

US$

Currency US$

July-13

(i)

NDF

Local Banks

-

-

-

(334)

(334)

(9,945)

US$

Currency US$

April-13

(ii)

NDF

Local Banks

-

-

-

(229)

(229)

(2,810)

US$

Currency US$

March-13

(iii)

NDF

Local Banks

-

-

-

(2)

(2)

(1,590)

US$

Currency US$

March-14

(iii)

NDF

Local Banks

-

-

-

(62)

(62)

(5,288)

US$

Currency US$

October-12

(ii)

BMF

Local Banks

-

-

8

-

8

(6,500)

US$

Option

Jul/13

(ii)

USD Option

Local Banks

-

(235)

-

(235)

(235)

-

US$

     

Current

  

-

-

64

(627)

(563)

-

  
     

Long term

  

-

(235)

-

(235)

(235)

-

  
     

Total Currency Risk US$

-

(235)

64

(862)

(798)

(25,150)

US$

 

Commodities

                    

Corn

2013

(ii)

Derivatives Corn

International Trading Companies (a)

-

(4,036)

-

(4,036)

(4,036)

(950)

bags

Soybean

2013

(ii)

Derivatives Soybean

International Trading Companies (a)

499

(14,480)

499

(14,480)

(13,981)

(1,113)

bags

     

Current

499

-

499

-

499

(2,063)

  
     

Long term

-

(18,516)

-

(18,516)

(18,516)

-

  
     

Total Commodities Risk

499

(18,516)

499

(18,516)

(18,017)

(2,063)

bags

     

Total Risks

499

(18,751)

563

(19,378)

(18,815)

    

      

Margin value

21,575

-

21,575

-

-

    

                      

    

Current (Note 5.b)

22,074

-

22,138

-

22,138

    

  

Noncurrent (Note 5.b)

-

(18,751)

-

(19,378)

(19,378)

    

    

Result from Derivatives

  

(9,162)

  

(9,181)

-

    

References:

                    

OTC – Swaps “over the counter” – over the counter market

                

                      

Strategy to which the instrument is related:

                

(i)   Liability for purchase of farm;

                

(ii) Estimate of sale of crop 2013

                

(iii) Hedge sale of farm

                 
                             

 

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

7.   Derivative financial instruments (Continued) 

 

         

At June 30, 2012

         

Parent Company

Consolidated (R$)

Total (R$)

    

Risk

Maturity

Strategy

Outstanding derivative instrument

Counter party

Receivable

Payable

Receivable

Payable

Net balance

Volume / Position (000)

Unit

Currency US$

July-12

(ii)

NDF

Local Banks

-

-

-

(6,928)

(6,928)

(11,030)

US$

Currency US$

August-12

(ii)

NDF

Local Banks

173

-

173

(31)

142

2,592

US$

Currency US$

December -12

(i)

NDF

Local Banks

-

-

68

-

68

983

US$

Currency US$

April-13

(ii)

NDF

Local Banks

-

-

-

(236)

(236)

(2,183)

US$

Currency US$

July-13

(ii)

NDF

Local Banks

-

-

-

(343)

(343)

(9,945)

US$

Currency US$

July-12

(ii)

BMF

Local Banks

-

-

-

(769)

(769)

(12,250)

US$

Option

July-13

(ii)

OPTION

Local Banks

-

(196)

-

(196)

(196)

-

US$

Currency US$

July-13

(ii)

USD option

International Trading Companies

-

(37)

-

(37)

(37)

-

US$

    

Current

  

173

-

241

(8,307)

(8,066)

-

  

    

Long term

  

-

(233)

-

(233)

(233)

-

  

    

Total Currency Risk US$

173

(233)

241

(8,540)

(8,299)

(31,833)

US$

Commodities

                    

Soybean

July-13

(ii)

Soybean derivatives (a)

International Trading Companies

-

(7,660)

-

(7,660)

(7,660)

(1,247)

bags

Corn

August-12

(ii)

NDF CORN

Local Banks

68

-

68

-

68

-

bags

Corn

July-13

(ii)

Corn Derivatives (a)

International Trading Companies

-

(2,316)

-

(2,316)

(2,316)

(406)

bags

    

Current

68

-

68

-

68

(1,653)

  

    

Long term

-

(9,976)

-

(9,976)

(9,976)

    

    

Total Commodities Risk

68

(9,976)

68

(9,976)

(9,908)

(1,653)

bags

    

Total Risks

241

(10,209)

309

(18,516)

(18,207)

    

Margin

    

Margin value

4,018

-

4,018

-

-

    

    

Current (Note 5.b)

4,259

-

4,327

(8,307)

-

    

  

Noncurrent (Note 5.b)

-

(10,209)

-

(10,209)

-

    

    

Result from Derivatives

10.335

(30,606)

11,993

(31,301)

-

    

References:

OTC – Swaps “over the counter” – over the counter market

Strategy to which the instrument is related:

(i)   Liability for purchase of farm;

(ii)  Estimate of sale of crop 2013

(iii) Hedge sale of farm

 

The Company uses derivative financial instruments, such as currency and forward contracts and forward commodities contracts to provide hedge against risk of variation in foreign exchange rates and commodities prices, respectively. At September 30, 2012, the Company has no cash flow derivative financial instruments.

 

The margin deposits in transactions with derivatives refer to margin calls  by counterparties in transactions with derivative instruments.

 

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

7.   Derivative financial instruments (Continued) 

 

(a)    The accumulator is a future sale at a contractually established price in which the volume sold (notional) depends on the daily observable commodity quotation during the contract term. The accumulator is settled at a sole payment at the contract maturity. The total notional amount contracted is divided by the number of days of the transaction establishing a daily notional amount. It is daily determined whether the market quotation of the commodity of such day is: (i) below a suspension price and in such case the volume sold is zero, (ii) between the suspension price and the selling price contractually established and in this case the volume sold is the daily notional volume, or (iii) above the selling price contractually established, and in this case the volume sold is twice the daily notional volume. Due to the variation in the volume sold at June 30,2012 the 2012/2013 harvest volume for which commodities derivatives were contracted may vary as indicated below:

 

 

% of volume of production expected with contracted economic hedge

09/30/2012

% minimum

% maximum

Soybean

33,98%

55,59%

Corn

16,32%

44,98%

 

Trading derivative financial instruments are classified as current assets or liabilities. The total fair value of a hedging derivative financial instrument is classified in noncurrent assets or liabilities if the remaining period for maturity of the hedged item is more than 12 months, and as current assets or liabilities if the remaining period for maturity of the hedged item is less than 12 months.

 

In the quarter ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements, Note 7.

 

 

8.   Trade accounts receivable

 

   

Parent Company

Consolidated

 

Note

September 30, 2012

June 30, 2012

September 30, 2012

June 30, 2012

Sale of sugarcane (a)

  

13,745

3,207

13,745

3,207

Sale of grains

  

3,540

41,573

4,260

48,270

Lease of land

  

-

-

745

685

Sale of farms (b)

5.b

-

-

10,722

9,445

  

17,285

44,780

29,472

61,607

          

Allowance for doubtful accounts

  

(1,374)

(952)

(1,374)

(952)

          

Total current

  

15,911

43,828

28,098

60,655

          

Sale of farms - noncurrent

5.b

-

-

13,496

12,759

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

8.   Trade accounts receivable (Continued) 

 

Changes in the allowance for doubtful accounts:

 

 

Parent Company and Consolidated

At June 30, 2012

952

Constitution of provision

432

Write-off or reversal

(10)

At September 30, 2012

1,374

 

 

Parent Company

Consolidated

 

September 30, 2012

June 30, 2012

September 30, 2012

June 30, 2012

Falling due:

        

Up to 30 days

10,106

14,374

10,247

15,389

From 31 to 90 days

312

28,145

520

32,885

From 91 to 180 days

-

457

403

1,217

From 181 to 360 days

4,325

147

14,994

10,181

Above 360 days

-

-

14,241

12,759

        

Overdue:

        

Up to 30 days

1,093

301

1,210

468

From 31 to 90 days

75

74

(20)

74

From 91 to 180 days

62

236

62

345

From 181 to 360 days

188

146

188

146

Above 360 days

1,123

900

1,123

900

        
 

17,285

44,780

42,968

74,366

 

The note on trade accounts receivable should be read together with Note 8 to the annual financial statements for June 30, 2012.

 

a)      Sale of sugarcane

 

The amounts receivable refer to the sale of sugarcane to ETH Bioenergia ("ETH").

 

b)      Receivables for sale of farm

 

(i)    Engenho Farm

 

The amount receivable comprises the sale of the Engenho Farm, according to a rural property sale and purchase agreement entered into on June 13, 2008. The sales price in reais is equivalent to 387,500 bags of soybean, corresponding to R$25,003,to be paid in installments on the dates established in the contract, up to April 2013.

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

8.   Trade accounts receivable (Continued) 

 

b)    Receivables for sale of farm (Continued)

 

(i)    Engenho Farm (Continued) 

 

The amount of accounts receivable of R$ 4,844  was determined based on the quotation of soybean for future delivery, at the maturity date of only one installment at April 30, 2013 (or based on estimates and quotations of brokers when there is no quotation of soybean for future delivery at a specific maturity date) and on the exchange rate of US$ to R$ for future delivery also at the same maturity date (considering that future soybean quotations are denominated in US$) and the resulting amount is discounted to present value at average interest rate of 7.56% p.a. Present value adjustment amount recorded in income for the three month period ended September 30, 2012 amounts to R$662 (September 2011 – R$869).

 

(ii)   São Pedro Farm

 

On September 28, 2011, the Company sold São Pedro Farm, a rural property with total declared area of 2,447 hectares (of which 1,724 hectares are ready for agricultural purposes), located in the Municipality of Chapadão do Céu – Goiás State. The sales price is equivalent to 580,000 bags of soybeans equivalent in reais to R$ 23,391. This sale was part of the Company's business strategy to generate capital gains from the sale of properties.  "Gain on the sale of farms" of R$12,987 was recognized corresponding to the difference between the sales price of R$ 23,391 and the carrying amount of the São Pedro farm of R$ 10,304.

 

The amount of R$2,250 was received as advance (equivalent to 50,000 bags of soybean) on the sale and an additional payment of R$7,519 (equivalent to 160,000 bags of soybean), on March 30, 2012. The remaining amount of R$19,374 to be paid in installments measured based on the quotation of soybean for future delivery, at the maturity date of each installment (or based on estimates and quotations of brokers where there is no quotation of soybean for future delivery at a specific maturity date), and based on the exchange rate of US dollars to reais for future delivery also at the maturity date. The remaining balance shall be paid in four installments, on March 30 of each subsequent year, in the amount equivalent to 92,500 bags of soybean each.

 

The property was acquired in September 2006 and the total amount invested in acquisition and development was R$ 10 million.

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

 

8.   Trade accounts receivable (Continued) 

 

b)    Receivables for sale of farm (Continued)

 

(ii)   São Pedro Farm (Continued) 

 

The resulting amount is discounted to present value at the average rate of 6.48% p.a.

 

The amount recorded related to adjustment to present value in income for the three month period ended September 30, 2012 is R$1,497 (September 2011 – R$2,809).

 

 

9.   Taxes recoverable

 

 

Parent Company

Consolidated

 

September 30, 2012

June 30, 2012

September 30, 2012

June 30, 2012

Recoverable withholding income tax on short-term investments

5,193

5,193

5,623

5,494

Other recoverable taxes and contributions

1,203

1,336

3,979

3,837

Total current

6,396

6,529

9,602

9,331

        

ICMS recoverable

5,848

5,199

5,848

5,199

ICMS recoverable on fixed asset purchases

463

514

463

514

Noncumulative Pis and Cofins credit

6,595

5,355

6,595

5,355

Recoverable withholding income tax on short-term investments

10,405

11,330

10,770

11,735

Total noncurrent

23,311

22,398

23,676

22,803

 

In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note 9.

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

10. Inventories

 

 

Parent Company

Consolidated

 

September 30, 2012

June 30, 2012

September 30, 2012

June 30, 2012

Agricultural products

10,333

27,179

12,461

28,462

Sugarcane – LT

-

2,238

-

2,238

Soybean- ST

5,841

13,778

6,149

14,558

Corn – ST

4,064

10,027

4,064

10,530

Rice – ST

302

309

302

309

Cotton – ST

-

737

1,820

737

Other harvests

126

90

126

90

         

Inputs (i)

17,391

10,038

27,758

12,535

         

Advance to suppliers

27,264

25,364

33,376

31,561

 

54,988

62,581

73,595

72,558

         

ST - Short Term

        

LT - Long term

        

 

(i)    The variation in inputs account is due to the formation of inventories for the beginning of soybean and corn plantation (2012-2013 harvest).

 

The cultures existing in the Company usually occur during the following periods:

 

   

Period from plantation to harvest

Unit

Location

Sugarcane (day/month)

Soybean

Corn

Second crop

corn "safrinha"

Rice

Cotton

Fazenda Cremaq

Piauí

N/A

25/10 to 30/05

25/11 to 30/06

01/02 to 30/08

15/12 to 15/05

30/11 to 30/08

Fazenda Jatobá

Bahia

N/A

25/10 to 30/05

25/10 to 30/06

N/A

Not Planted

25/11 to 30/08

Fazenda Alto Taquari

Mato Grosso

01/02 to 30/11

01/10 to 28/02

01/10 to 30/10

N/A

Not Planted

N/A

Fazenda Araucária

Goiás

01/02 to 30/11

01/10 to 28/02

01/10 to 30/10

N/A

Not Planted

N/A

Fazenda Chaparral

Bahia

N/A

01/11 to 30/05

25/10 to 05 /12

N/A

Not Planted

25/11 to 30/08

Fazenda Nova Buriti

Minas Gerais

N/A

Not Planted/ Harvest

N/A

N/A

Not Planted

N/A

Fazenda Preferência

Bahia

N/A

Not Planted/ Harvest

N/A

N/A

Not Planted

N/A

Fazenda Horizontina

Maranhão

N/A

05/11 to 30/05

25/11 to 30/06

05/02 to 30/08

15/12 to 15/05

N/A

Parceria I

Bahia

N/A

25/10 to 30/05

25/10 to 30/06

N/A

Not Planted

25/11 to 30/08

 

The inventories note should be read together with Note 10 to the annual financial statements for June 30, 2012.

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

11. Biological assets

 

 

Parent Company

Consolidated

 

Current

Noncurrent

Current

Non=current

 

Grains

Sugarcane

Grains

Sugarcane

At June 30, 2012

3,208

31,931

4,111

31,931

        

Expenditures with plantation

18,293

16,663

21,370

16,663

        

Fair value variation

(354)

3,299

6,503

3,299

Harvest of agricultural products

(2,437)

(25,470)

(10,661)

(25,470)

 

(2,791)

(22,171)

(4,158)

(22,171)

        

At September 30, 2012

18,710

26,423

21,323

26,423

         

 

In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note 11.

 

 

12. Marketable securities

 

   

Parent Company

Consolidated

 

Restatement index

September 30, 2012

June 30, 2012

September 30, 2012

June 30, 2012

          

Noncurrent

          

Banco do Nordeste (BNB) (a)

CDI

1,769

1,736

3,119

3,061

Banco Itaú BBA

CDI

20,502

20,136

20,502

20,136

   

22,271

21,872

23,621

23,197

 

(a)   The securities were given as guarantee to financing from Banco BNB, and should be held up to the end of the financing contract term in October 2021.

 

In the quarter ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note12.

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

13. Investment properties - Noncurrent

 

 

Parent Company

 

Land – Farms

Buildings and improvements

Opening of area

Total in operation

Construction in progress

Total investment properties

At June 30, 2012

            

Araucária

-

1,379

1

1,380

62

1,442

(-) Depreciation / Amortization

-

(127)

-

(127)

-

(127)

Alto Taquari

-

55

-

55

-

55

(-) Depreciation / Amortization

-

(16)

-

(16)

-

(16)

Chaparral

-

1,354

17,029

18,383

2,139

20,522

(-) Depreciation / Amortization

-

(246)

(6,781)

(7,027)

-

(7,027)

Cremaq

-

10,954

38,936

49,890

130

50,020

(-) Depreciation / Amortization

-

(1,057)

(11,006)

(12,063)

-

(12,063)

Preferência

-

1,364

10,613

11,977

1,023

13,000

(-) Depreciation / Amortization

-

(71)

(1,480)

(1,551)

-

(1,551)

Horizontina

-

665

8,562

9,227

59

9,286

(-) Depreciation / Amortization

-

(21)

(1,008)

(1,029)

-

(1,029)

Parceria I

-

15

512

527

4

531

(-) Depreciation / Amortization

-

-

(56)

(56)

-

(56)

Nova Buriti

21.007

412

-

21,419

-

21,419

(-) Depreciation / Amortization

-

(49)

-

(49)

-

(49)

Net book balance

21.007

14,611

55,322

90,940

3,417

94,357

At September 30, 2012

            

Opening balance

21.007

14,611

55,322

90,940

3,417

94,357

Acquisitions

-

296

4,273

4,569

552

5,121

Transfers

-

2,822

-

2,822

(2,822)

-

(-) Depreciation / Amortization

-

(259)

(2,230)

(2,489)

-

(2,489)

Net book balance

21.007

17,470

57,365

95,842

1,147

96,989

At September 30, 2012

            

Araucária

-

1,456

1

1,457

62

1,519

(-) Depreciation / Amortization

-

(154)

-

(154)

-

(154)

Alto Taquari

-

55

-

55

-

55

(-) Depreciation / Amortization

-

(18)

-

(18)

-

(18)

Chaparral

-

3,482

17,310

20,792

328

21,120

(-) Depreciation / Amortization

-

(293)

(7,500)

(7,793)

-

(7,793)

Cremaq

-

11,051

39,506

50,557

151

50,708

(-) Depreciation / Amortization

-

(1,203)

(11,999)

(13,202)

-

(13,202)

Preferência

-

1,990

11,375

13,365

603

13,968

(-) Depreciation / Amortization

-

(99)

(1,794)

(1,893)

-

(1,893)

Horizontina

-

778

10,801

11,579

-

11,579

(-) Depreciation / Amortization

-

(26)

(1,166)

(1,192)

-

(1,192)

Parceria I

-

70

933

1,003

3

1,006

(-) Depreciation / Amortization

-

-

(102)

(102)

-

(102)

Nova Buriti

21.007

434

-

21,441

-

21,441

(-) Depreciation / Amortization

-

(53)

-

(53)

-

(53)

Net book balance

21.007

17,470

57,365

95,842

1,147

96,989

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

13. Investment properties - Noncurrent (Continued) 

 

 

Consolidated

 

Land – Farms

Buildings and improvements

Opening of area

Total in operation

Construction in progress

Total investment properties

At June 30, 2012

            

Jatobá

33,012

2,146

27,169

62,327

405

62,732

(-) Depreciation / Amortization

-

(242)

(6,372)

(6,614)

-

(6,614)

Araucária

70,392

1,379

1

71,772

62

71,834

(-) Depreciation / Amortization

-

(127)

-

(127)

-

(127)

Alto Taquari

33,211

55

-

33,266

-

33,266

(-) Depreciation / Amortization

-

(16)

-

(16)

-

(16)

Chaparral

47,877

1,354

17,029

66,260

2,139

68,399

(-) Depreciation / Amortization

-

(246)

(6,781)

(7,027)

-

(7,027)

Cremaq

42,021

10,954

38,936

91,911

130

92,041

(-) Depreciation / Amortization

-

(1,057)

(11,006)

(12,063)

-

(12,063)

Preferência

9,554

1,364

10,613

21,531

1,023

22,554

(-) Depreciation / Amortization

-

(71)

(1,480)

(1,551)

-

(1,551)

Horizontina

37,735

665

8,562

46,962

59

47,021

(-) Depreciation / Amortization

-

(21)

(1,008)

(1,029)

-

(1,029)

Parceria I

-

15

512

527

4

531

(-) Depreciation / Amortization

-

-

(56)

(56)

-

(56)

Nova Buriti

21,649

412

-

22,061

-

22,061

(-) Depreciation / Amortization

-

(49)

-

(49)

-

(49)

Net book balance

295,451

16,515

76,119

388,085

3,822

391,907

At September 30, 2012

            

Opening balance

295,451

16,515

76,119

388,085

3,822

391,907

Acquisitions

44

817

5,696

6,557

552

7,109

Disposals

-

-

-

-

(83)

(83)

Transfers

-

3,133

-

3,133

(3,133)

-

(-) Depreciation / Amortization

-

(284)

(2,934)

(3,218)

-

(3,218)

Net book balance

295,495

20,181

78,881

394,557

1,158

395,715

At September 30, 2012

            

Jatobá

33,012

2,979

28,592

64,583

11

64,594

(-) Depreciation / Amortization

-

(269)

(7,076)

(7,345)

-

(7,345)

Araucária

70,392

1,455

1

71,848

62

71,910

(-) Depreciation / Amortization

-

(154)

-

(154)

-

(154)

Alto Taquari

33,224

55

-

33,279

-

33,279

(-) Depreciation / Amortization

-

(18)

-

(18)

-

(18)

Chaparral

47,877

3,482

17,310

68,669

328

68,997

(-) Depreciation / Amortization

-

(293)

(7,500)

(7,793)

-

(7,793)

Cremaq

42,030

11,051

39,506

92,587

151

92,738

(-) Depreciation / Amortization

-

(1,203)

(11,999)

(13,202)

-

(13,202)

Preferência

9,562

1,990

11,375

22,927

603

23,530

(-) Depreciation / Amortization

-

(97)

(1,794)

(1,891)

-

(1,891)

Horizontina

37,749

778

10,801

49,328

-

49,328

(-) Depreciation / Amortization

-

(26)

(1,166)

(1,192)

-

(1,192)

Regalito

-

70

933

1,003

3

1,006

(-) Depreciation / Amortization

-

-

(102)

(102)

-

(102)

Nova Buriti

21,649

434

-

22,083

-

22,083

(-) Depreciation / Amortization

-

(53)

-

(53)

-

(53)

Net book balance

295,495

20,181

78,881

394,557

1,158

395,715

 

 

Parent Company

Consolidated

 

September 30, 2012

June 30, 2012

September 30, 2012

June 30, 2012

         

Cost of acquisition

121,396

116,275

427,465

420,439

Depreciation/Amortization

(24,407)

(21,918)

(31,750)

(28,532)

         
 

96,989

94,357

395,715

391,907

 

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

13. Investment properties - Noncurrent (Continued) 

 

The disclosure related to the useful life and depreciation and amortization rates may be read in note 2.13 - summary of significant accounting practices in the annual financial statements for June 30, 2012.

 

Statement of investment properties at fair value

 

The Company assesses annually the fair value of its land through a specialized company. The comments related to valuation at fair value of farms may be read in Note 13 to the annual financial statements ended June 30, 2012; there was no significant change in fair value measurement at September 30, 2012.

 

In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note 13.

 

 

14. Investments

 

 

Thousands of shares or units of interest held by the Company

Ownership interest - %

Adjusted equity

Adjusted net income (loss) for the period

At September 30, 2012

        

Subsidiaries

        

Araucária

85,136

99.99

90,969

2,801

Cremaq

40,361

99.99

48,453

828

Engenho de Maracaju

10,194

99.99

10,949

755

Jaborandi S.A.

33,909

99.99

34,863

277

Jaborandi Ltda

34,331

99.99

26,876

43

Cajueiro

61,988

99.99

62,458

1,674

Mogno

22,717

99.99

15,490

195

Ceibo

37,732

99.99

40,399

448

Flamboyant

786

99.99

680

(10)

Investment at cost

        

Green Ethanol LLC

4,376

40.65

-

-

         
         

Subsidiaries

        

Araucária

85,136

99.99

88,168

17,935

Cremaq

40,361

99.99

47,625

2,825

Engenho de Maracaju

10,194

99.99

10,194

2,700

Jaborandi S.A.

33,909

99.99

34,586

1,164

Jaborandi Ltda

34,331

99.99

26,834

(6,367)

Cajueiro

61,988

99.99

60,784

1,103

Mogno

22,717

99.99

15,295

(716)

Ceibo

18,707

99.99

39,951

2,348

Flamboyant

458

99.99

360

(40)

Investment at cost

        

Green Ethanol LLC

4,376

40.65

-

-

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

14. Investments (Continued) 

 

Except for the change in the name of the subsidiary Jaborandi S.A. to Imobiliária Jaborandi Ltda., on August 1, 2012, there were no significant changes in the Company’s investments in relation to the information disclosed in the annual financial statements at June 30, 2012, Note 14.

 

a)      Change in investments

 

Period ended September 30, 2012

 

 

Cremaq

Engenho

Imobiliária Jaborandi

Jaborandi Ltda.

Araucária

Mogno

Cajueiro

Ceibo

Flamboyant

Green Ethanol (i)

Total

Changes in the balance at June 30, 2012

47,625

10,194

34,586

28,835

88,168

15,295

60,784

39,951

690

410

326,538

                       

Capital increase

-

-

-

-

-

-

-

-

330

-

330

Transfer of advance for future capital increase

-

-

-

-

-

-

-

-

(330)

  

(330)

Advance for future capital increase

-

-

-

6,999

-

-

-

-

  

-

6,999

Other

                      

Equity pickup

828

755

277

43

2,801

195

1,674

448

(10)

-

7,011

                       

Balance at September 30, 2012

48,453

10,949

34,863

35,877

90,969

15,490

62,458

40,399

680

410

340,548

                       

Investments

48,453

10,949

34,863

26,876

90,969

15,490

62,458

40,399

680

410

331,547

Advance for future capital increase

-

-

-

9,001

-

-

-

-

-

-

9,001

                       

Balance at September 30, 2012

48,453

10,949

34,863

35,877

90,969

15,490

62,458

40,399

680

410

340,548

 

(i)      Green Ethanol

 

In March 2007, the Company acquired a 40.65% interest in Green Ethanol LLC  (former Tarpon Ethanol LLC). At this time Green Ethanol held 2.47% interest in  Brenco - Brazilian Renewable Energy Company ("Brenco"), a Brazilian privately held company in the sugar and ethanol segment, which started its activities in 2007. In September 2008, Green Ethanol reduced its interest in Brenco to 1.55%, and in December 2008 increased it to 3.8%.

 

On February 18, 2010, ETH Bioenergia acquired Brenco, decreasing Green Ethanol’s ownership interest  to 0.046%.

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

14. Investments (Continued) 

 

(i)      Green Ethanol (Continued)

 

Although the Company holds 40.65% interest in Green Ethanol LLC, the Limited Liability Charter of Green Ethanol LLC (which was originally issued in March 2007 and amended in 2009) does not provide the Company with any influence power in accordance with IAS 28/CPC 18. According to the charter, the other investor was appointed as Managing Member and only this Managing  Member is entitled to vote to approve issues or make decisions.  Green Ethanol LLC businesses are solely managed by the Managing Member. The charter appoints another investor as Managing Member and may only be amended by means of a document signed by the Managing  Member. The only asset of Green Ethanol is the ownership interest in ETH Bioenergia. The interest held by the Company in Green Ethanol LLC is being recorded at cost since ETH Bionergia and Brenco are privately held companies and accordingly no public information is available. The Company and Green Ethanol LLC had no access to financial and operating information of ETH Biornergia and Brenco (historical or forecast), which might be used to calculate the fair value of these shares. The Company formally requested access to information directly to ETH Bioenergia and indirectly through Green Ethanol LLC, which was formally denied.

 

As a consequence of the losses incurred and the significant level of Brenco’s indebtedness, the Company carried out an impairment analysis of the investment at July 1, 2009 and concluded that there was impairment at this date. In order to measure the loss for impairment, the Company estimated the fair value of the investment at February 2010, considering the purchase of Brenco by ETH Bioenergia for the amount of R$6,979 and recognized such loss at July 1, 2009 in the amount of R$6,569.

 

 

15. Intangible assets

 

 

Parent Company and Consolidated

 

Software

At June 30, 2012

2,607

Acquisition

185

Amortization for the year

(204)

At September 30, 2012

2,588

 

In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note 15.

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

 

16. Property, plant and equipment

 

 

Parent Company

 

Buildings and improvements

Equipment and facilities

Vehicles and agricultural machinery

Furniture and fixtures

Total in operation

Construction in progress

Total PPE

 

              

At June 30, 2012

              

Total cost

714

3,314

17,251

816

22,095

134

22,229

Accumulated depreciation

(550)

(1,002)

(5,843)

(190)

(7,585)

-

(7,585)

Net book balance

164

2,312

11,408

626

14,510

134

14,644

 

              

At September 30, 2012

              

Opening balance

164

2,312

11,408

626

14,510

134

14,644

Acquisitions

-

106

225

45

376

94

470

Disposals

-

-

(74)

-

(74)

-

(74)

Depreciation

(31)

(100)

(707)

(21)

(859)

-

(859)

Net book balance

133

2,318

10,852

650

13,953

228

14,181

 

              

At September 30, 2012

              

Total cost

714

3,420

17,403

861

22,398

228

22,626

Accumulated depreciation

(581)

(1,102)

(6,551)

(211)

(8,445)

-

(8,445)

Net book balance

133

2,318

10,852

650

13,953

228

14,181

 

              

Annual depreciation rates (weighted average) - %

4

15,78

17,03

10

      

 

 

Consolidated

 

Buildings and improvements

Equipment and facilities

Vehicles and agricultural machinery

Furniture and fixtures

Total in operation

Construction in progress

Total PPE

 

              

At June 30, 2012

              

Total cost

714

3,741

18,633

881

23,969

134

24,103

Accumulated depreciation

(550)

(1,129)

(6,448)

(212)

(8,339)

-

(8,339)

Net book balance

164

2,612

12,185

669

15,630

134

15,764

 

              

At September 30, 2012

              

Opening balance

164

2,612

12,185

669

15,630

134

15,764

Acquisitions

-

149

226

57

432

228

660

Disposals

-

-

(74)

-

(74)

(134)

(208)

Depreciation

(31)

(112)

(745)

(23)

(911)

-

(911)

Net book balance

133

2,649

11,592

703

15,077

228

15,305

 

              

At September 30, 2012

              

Total cost

714

3,890

18,785

938

24,327

228

24,555

Accumulated depreciation

(581)

(1,241)

(7,193)

(235)

(9,250)

-

(9,250)

Net book balance

133

2,649

11,592

703

15,077

228

15,305

 

              

Annual depreciation rates (weighted average) - %

4

15,78

17,03

10

      

 

In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note16.

 

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

17. Acquisitions payable

 

 

Parent Company

Consolidated

 

September 30, 2012

June 30, 2012

September 30, 2012

June 30, 2012

Fazenda Jatobá

-

-

1,983

1,974

Fazenda Alto Taquari

-

-

22,709

22,296

Fazenda Nova Buriti

17,222

16,588

17,222

16,588

 

17,222

16,588

41,914

40,858

 

The comments related to the farms may be read in Note 17 to the annual financial statements, ended June 30, 2012. In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note 17.

 

 

18. Trade accounts payable

 

The trade accounts payable balance corresponds to payables for the purchase of inputs and services used for the planting and development of crops, and leasing transactions of farms between the parent company and its subsidiaries, as mentioned in Note 32, which are eliminated in the consolidation of the annual financial statements ended June 30, 2012.

 

In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note 18.

 

 

19. Loans and financing

 

   

Parent Company

Consolidated

 

Annual interest rates and charges - %

September 30, 2012

June 30, 2012

September 30, 2012

June 30, 2012

Current

          

Financing for Agricultural Costs - BNB and Itaú

9.54 and TJLP + 1.95 to 3,10

30,155

29,432

30,155

29,432

Financing Cremaq Project and Jaborandi - BNB

7.23

3,244

6,982

6,296

10,941

Financing of Machinery and Equipment - FINAME

5.5 to 10 and TJLP + 1.95 to 3,10

2,707

2,657

2,737

2,694

   

36,106

39,071

39,188

43,067

           

Noncurrent

          

Crop financing - Itaú

TJLP + 1.95 to 3,10

5,588

7,869

5,588

7,869

Financing of Machinery and Equipment - FINAME

5.50 to 10

4,927

5,355

4,927

5,358

Financing Cremaq Project and Jaborandi - BNB

7,23

26,303

22,038

42,117

38,067

   

36,818

35,262

52,632

51,294

           
   

72,924

74,333

91,820

94,361

 

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

19. Loans and financing (Continued) 

 

References:

 

·   TJLP – Long Term Interest Rate.

·   FINAME – Financing of Machinery and Equipment (BNDES).

·   BNB – Banco do Nordeste (Net Rate).

 

At September 30, 2012 amounts due by maturity are as follows:

 

 

Parent Company

Consolidated

     

1 year

36,,106

39,188

2 years

7,453

10,504

3 years

11,164

14,216

4 years

5,062

8,114

5 years

2,990

6,042

Over 5 years

10,149

13,756

 

72,924

91,820

 

The financing for Agricultural Cost BNB and Cremaq Project has future crops as guarantee. For FINAME contracts, the financed machinery and equipment  were provided as collateral. All of them will be pledged until the final repayment of the loan.

 

Additionally, in relation to BNB financing for acquisition of Cremaq Farm, part of the land of the farm acquired was provided as collateral. As regards the financing obtained for acquisition of Jaborandi Farm, a guarantee letter in the amount of R$ 18,492 was provided.

 

The BNB financing requires the maintenance of deposits in liquidity fund remunerated at CDI. The balances at September 30, 2012 and 2011 are disclosed in Note 12.

 

All the financing above is in Reais and have specific terms and conditions defined in the respective contracts with the governmental development agencies that directly or indirectly fund those loans. At September 30, 2012 and June 30, 2012, the Company’s financing had no covenants.

 

The fair value of the loans and financing approximates book value.

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

19. Loans and financing (Continued) 

 

a)    Payments of loans and financing

 

On August 31, 2012, the Company settled the financing contract obtained from the Federal Government to finance the crops cost in the amount of R$1,339. Until September 30, 2012, the Company paid R$517 related to machinery financing, R$1,066 related to crops cost and R$1,471 related to the financing of Jaborandi project.

 

In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note 19.

 

 

20. Taxes payable

 

 

Parent Company

Consolidated

 

September 30, 2012

June 30, 2012

September 30, 2012

June 30, 2012

ISS payable

128

99

184

118

Withheld social contributions

116

578

233

610

IOF payable

761

761

761

761

ICMS payable

-

22

-

22

Funrural payable

446

241

456

281

Pis and Cofins payable

-

-

42

45

IRPJ and CSLL payable - based on presumed profit

-

-

1,751

1,265

Total current

1,451

1,701

3,427

3,102

         

 

 

 

 

 

IRPJ and CSLL payable – based on presumed profit

-

-

2,668

2,695

Total noncurrent

-

-

2,668

2,695

 

 

21. Deferred taxes

 

 

Parent Company

Consolidated

 

September 30, 2012

June 30, 2012

September 30, 2012

June 30, 2012

Assets

       

Tax losses

15,456

13,861

22,601

17,723

Biological assets

173

1,850

669

2,651

Hedge, contingency and ADA

11,199

9,519

12,091

13,275

Difference in cost of farms

170

170

170

171

 

26,998

25,400

35,531

33,820

Liabilities

        

Accelerated depreciation of assets for rural activity

16,093

17,708

17,382

18,860

 

16,093

17,708

17,382

18,860

         

Net balance

10,905

7,692

18,149

14,960

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

21. Deferred taxes (Continued) 

 

The net changes in deferred income tax and social contribution are as follows:

 

 

Parent Company

Consolidated

At June 30, 2012

7,692

14,960

Tax loss

1,595

4,878

Adjustments to biological assets and agricultural products

(1,677)

(1,982)

Hedge, legal claims and provision for doubtful accounts

1,680

(1,185)

Accelerated depreciation

1,615

1,478

At September 30, 2012

10,905

18,149

 

The estimated periods of realization of deferred tax assets are as follow:

 

 

September 30, 2012

 

Parent Company

Consolidated

2013

1,222

1,222

2014

3,448

3,448

2015

5,211

5,211

2016

8,770

8,770

2017

8,347

13,379

2018

-

3,501

 

26,998

35,531

 

In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note 20.

 

 

22. Share capital

 

a)    Share capital (quantity of shares)

 

 

Number of shares

Shareholder

September 30, 2012

June 30, 2012

    

Cresud S.A.C.I.F.Y.A.

21,153,015

21,153,015

Elie Horn

3,274,600

3,274,600

24,427,615

24,427,615

    

Board of Directors

7,810,000

7,810,000

Executive Board

500

500

Officers

7,810,500

7,810,500

    

Other

26,184,285

26,184,285

    

Total shares of paid up capital

58,422,400

58,422,400

    

Total outstanding shares

26,184,285

26,184,285

    

Outstanding shares as percentage of total shares(%)

45

45

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

 

22. Share capital (Continued) 

 

a)    Share capital (quantity of shares) (Continued)

 

In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note 21.

 

b)      Brasilagro subscription warrants

 

Brasilagro

September 30, 2012

June 30, 2012

     

Quoted market price of share - R$

9.61

7.45

Years to maturity (years)

8.57

8.82

Date of issuance (day/month/year)

28/04/2006

28/04/2006

Maturity (day/month/year)

27/04/2021

27/04/2021

Exercise price at the end of the year - R$/share

13.7

13.51

Number of outstanding shares

58,422

58,422

     

Percentage of capital shares to be issued in the year (percentage of new capital) - %

20

20

Limit quantity of shares to be issued in the year (shares)

14,606

14,606

Quantity of subscription warrants

25,600

25,600

 

Subscription warrants

 

The Company issued subscription warrants to its founder shareholders in March 2006, before its initial public offering. In the prospect of the initial public offering, the Company disclosed that the issuance of subscription warrants to its founder shareholders was recognition for the work of the Company’s foundation, for the entrepreneurial spirit, for having prepared the Company for its initial public offering and for preparing the business plan, assuring their commitment with the Company’s development. The attribution of the subscription warrants to the company’s founder shareholders was carried out on a free basis.

 

The subscription warrants were recorded under IFRS 2, as equity instrument issued in exchange for services rendered by parties that are not  its employees.

 

First tranche

 

Since the warrants of first tranche are recorded under IFRS 2  and may be fully exercised  since March 15, 2009, which precedes the transition date to IFRS, which is July 1, 2009,  the Company has not disclosed the fair value of the warrants at their assessment date and the warrants are not recorded in the financial statements.

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

 

 

22. Share capital (Continued) 

 

b)    Brasilagro subscription warrants (Continued)

 

Second tranche

 

Management believes that the warrants of second tranche (which may only be exercised in case of transfer of controlling interest or acquisition of significant ownership interest) have no significant fair value in any of the periods presented, because the exercise price shall be equivalent to the price per share observable in public offerings for acquisition of controlling interest or  significant interest in the Company.

 

The outstanding warrants of second tranche at September 30, 2012 and June 30, 2012 are 25,600 and there were no changes in the number of outstanding warrants in the years/periods ended. The warrants of second tranche grant to their holders the right to shares subscription issued by the Company, in the amount equivalent to 20% of its capital, after the increase arising from the full exercise of the warrants of second issuance.

 

c)      Stock option plan

 

The information on the stock option plan and issuance of new shares  is described in Note 27. In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note 21.

 

 

 

 

23. Segment information

 

a)      Parent Company

 

The balance sheet accounts are represented by “Trade accounts receivable”, “Biological assets” and “Agricultural products”.

 

 

Parent Company

       

2012

      

2011

 

Total

Grains

Sugarcane

Not Allocated

Total

Grains

Sugarcane

Not Allocated

 

                

Net operating revenue

37,836

17,595

20,170

71

29,644

8,054

22,937

(1,347)

Gain (loss) in fair value of biological assets and agricultural products

2,945

(354)

3,299

-

(3,786)

(407)

(3,379)

-

Impairment of agricultural products after harvest

392

392

-

-

880

880

-

-

Cost of sales

(36,388)

(16,943)

(19,445)

-

(26,033)

(7,070)

(18,951)

(12)

 

               

Gross profit (loss)

4,785

690

4,024

71

705

1,457

607

(1,359)

 

               

Operating revenue (expenses)

               

Selling expenses

(1,782)

(1,782)

-

-

(210)

(210)

-

-

General and administrative

(5,794)

-

-

(5,794)

(5,366)

-

-

(5,366)

Other operating revenue

176

-

-

176

-

-

-

-

Equity pickup in profit of subsidiaries

7,011

-

-

7,011

14,775

-

-

14,775

Operating result

4,396

(1,092)

4,024

1,464

9,904

1,247

607

8,050

 

               

Financial income (expense)

                

Financial income

1,118

-

-

1,118

16,887

-

-

16,887

Financial expenses

(11,407)

-

-

(11,407)

(6,476)

-

-

(6,476)

 

               

Income (loss) before taxation

(5,893)

(1,092)

4,024

(8,825)

20,315

1,247

607

18,461

 

               

Income tax and social contribution

3,213

371

(1,368)

4,210

(2,526)

(342)

(2,835)

651

 

               

Net income (loss) for the period

(2,680)

(721)

2,656

(4,615)

17,789

905

(2,228)

19,112

                

Total assets

695,883

31,206

40,168

624,509

688,763

68,769

37,377

582,617

Total liabilities

139,385

-

-

139,385

129,795

-

-

129,795

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

 

23. Segment information (Continued) 

 

b)      Consolidated 

 

 

Consolidated

 

2012

2011

 

Total

Grains

Sugarcane

Real estate

Not Allocated

Total

Grains

Sugarcane

Real estate

Not Allocated

 

                    

Net operating revenue

39,004

18,331

20,169

59

445

31,711

9,970

22,178

52

(489)

Gain from sale of farm

-

-

-

-

-

12,987

-

-

12,987

-

Gain (loss) in fair value of biological assets and agricultural products

9,802

6,503

3,299

-

-

(3,786)

(406)

(3,380)

-

-

Impairment of agricultural products after harvest

590

590

-

-

-

889

889

-

-

-

Cost of sales

(37,552)

(17,434)

(19,445)

-

(673)

(25,079)

(8,745)

(18,952)

2,642

(24)

 

                    

Gross profit (loss)

11,844

7,990

4,023

59

(228)

16,722

1,708

(154)

15,681

(513)

 

                    

Operating revenue (expenses)

                   

Selling expenses

(1,994)

(1,994)

-

-

-

(402)

(402)

-

-

-

General and administrative

(6,672)

-

-

-

(6,672)

(5,740)

-

-

-

(5,740)

Other operating revenue

43

-

-

-

43

-

-

-

-

-

 

                    

Operating result

3,221

5,996

4,023

59

(6,857)

10,580

1,306

(154)

15,681

(6,253)

 

                    

Financial income (expenses)

                    

Financial income

4,270

-

-

-

4,270

13,412

-

-

-

13,412

Financial expenses

(12,260)

-

-

-

(12,260)

(2,225)

-

-

-

(2,225)

 

                    

Income (loss) before taxation

(4,769)

5,996

4,023

59

(14,847)

21,767

1,306

(154)

15,681

4,934

 

                    

Income tax and social contribution

2,089

(2,039)

(1,368)

(20)

5,516

(4,109)

(444)

52

(5,332)

1,615

 

                    

 

(2,680)

3,957

2,655

39

(9,331)

17,658

862

(102)

10,349

6,549

 

                    

Net income (loss) for the period

(2,680)

3,957

2,655

39

(9,331)

17,658

862

(102)

10,349

6,549

 

                    

 

        

September 30, 2012

        

June 30, 2012

Total assets

729,372

38,043

40,168

407,182

243,979

735,762

78,604

37,376

402,037

217,745

Total liabilities

172,874

-

-

41,914

130,960

176,794

-

-

40,858

135,936

 

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

The balance sheet accounts are represented by “Trade accounts receivable”, “Biological assets” and “Agricultural products”.

 

In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note 22.

 

 

 

24. Revenues

 

 

Parent Company

Consolidated

 

September 30, 2012

September 30, 2011

September 30, 2012

September 30, 2011

         

Sale of grains

18,863

8,054

20,146

10,335

Sale of sugarcane

20,701

22,937

20,701

22,937

Leasing

108

-

215

52

Other revenue

61

1

61

1

Gross operating revenue

39,733

30,992

41,123

33,325

        

Sales deductions

        

Taxes on sales

(1,897)

(1,348)

(2,119)

(1,614)

(1,897)

(1,348)

(2,119)

(1,614)

        

Net sales revenue

37,836

29,644

39,004

31,711

 

The main variation occurred in the period ended September 30, 2012 is due to the sale of grains in inventories.

 

 

25. Expenses by nature

 

 

Parent Company

Consolidated

 

Cost of products sold

Selling expenses

General and administrative

Total

Cost of products sold

Selling expenses

General and administrative

Total

                

Depreciation and amortization

(4,922)

-

(274)

(5,196)

(5,104)

-

(274)

(5,378)

Personnel expenses

(628)

-

(3,230)

(3,858)

(674)

-

(3,230)

(3,904)

Expenses with services rendered

(9,056)

-

(628)

(9,684)

(9,470)

-

(645)

(10,115)

Leasing

(1,685)

-

-

(1,685)

-

-

-

-

Inputs

(8,820)

-

-

(8,820)

(9,091)

-

-

(9,091)

Freight and storage

  

(210)

-

(210)

-

(402)

-

(402)

Other expenses

(922)

-

(1,234)

(2,156)

(740)

-

(1,591)

(2,331)

                

At September 30, 2011

(26,033)

(210)

(5,366)

(31,609)

(25,079)

(402)

(5,740)

(31,221)

                

Depreciation and amortization

(6,238)

-

(304)

(6,542)

(6,418)

-

(304)

(6,722)

Personnel expenses

(1,062)

-

(3,488)

(4,550)

(1,124)

-

(3,538)

(4,662)

Expenses with services rendered

(9,003)

-

(1,279)

(10,282)

(9,226)

-

(1,281)

(10,507)

Leasing

(3,005)

-

-

(3,005)

-

-

-

-

Inputs

(13,858)

-

-

(13,858)

(17,750)

-

-

(17,750)

Freight and storage

-

(1,782)

-

(1,782)

-

(1,994)

-

(1,994)

Other expenses

(3,222)

-

(723)

(3,945)

(3,034)

-

(1,549)

(4,583)

                

At September 30, 2012

(36,388)

(1,782)

(5,794)

(43,964)

(37,552)

(1,994)

(6,672)

(46,218)

                   

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

 

 

 

26. Management compensation

 

 

Consolidated

 

September 30, 2012

September 30, 2011

Board of directors and executive board compensation

837

805

Grant of shares

210

284

Bonus

445

135

 

1,492

1,224

 

Stock option plan

 

On August 11, 2010, July 03, 2012 and September 04, 2012 the Board of Directors approved the creation of the Stock Option Program 1, 2 and 3 (the "Program"), respectively; authorizing the Company’s Board to grant stock options to the elected beneficiaries at that time. In the Program, the beneficiaries, the number of shares that each one may acquire upon exercise of the options, the exercise price per share to be paid in cash by the beneficiaries and the conditions of options, were established. Each option grants the right to the beneficiary when exercised, to purchase 1 share of the Company for the exercise price established in the Program. The Programs comprise 5 beneficiaries and the grant of 370,007, 315,479 and 314,479 options at an exercise price of R$8.97, R$8.25 and R$8.52 per share, respectively, and may be exercised in full as from August 12, 2012 , July 03, 2014 and July 03, 2014 (vesting date), respectively; through a period of 3 years as from the vesting date. On June 30, 2012 there was no option exercisable or cancelled.

 

The table below presents the information on the Program:

 

 

first grant

second grant

third grant

Date of issuance

08/11/2010

07/03/2012

09/04/2012

Exercise price (R$/share)

8.97

8.25

8.52

Quoted market price at granting date (R$/share)

9.60

7.69

8.50

Quoted market price at the end of the period

9.61

9.61

9.61

Risk free interest rate %

11.36

9.37

9.12

Average period through maturity

5 years

5 years

5 years

Expected dividend yield %

1.00

0.50

0.50

Volatility of shares in the market %

67.48

41.62

40.50

Number of outstanding options

370,007

315,479

315,479

Number of options to be exercised

370,007

315,479

315,479

Estimated fair value (R$/share)

6.16

3.60

4.08

 

In the quarter ended September 30, 2012, the Company recognized the amount of R$210 recorded under administrative expenses.

 

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

 

In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note 26.

 

 

27. Financial income (expenses)

 

 

Parent Company

Consolidated

 

September 30, 2012

September 30, 2011

September 30, 2012

September 30, 2011

Financial income

        

Income from financial investments

788

3,038

1,767

4,821

Interest on assets

330

433

349

3

Monetary variation

-

251

-

455

Foreign exchange variation

-

22

-

486

Gain on remeasurement of receivables from sale of farms

-

-

2,154

867

Realized gain on derivative transactions

-

495

-

495

Unrealized gain on derivative transactions

-

12,648

-

6,285

1,118

16,887

4,270

13,412

Financial expenses

        

Bank expenses

(95)

(234)

(156)

(235)

Interest on liabilities

(2,141)

(1,596)

(2,492)

(1,990)

Monetary variation

-

-

(413)

-

Foreign exchange variation

(9)

-

(18)

-

Realized loss on derivative transactions

(620)

(4,646)

(279)

-

Unrealized loss on derivative transactions

(8,542)

-

(8,902)

-

(11,407)

(6,476)

(12,260)

(2,225)

        

Financial income (loss)

(10,289)

10,411

(7,990)

11,187

 

 

28. Income tax and social contribution

 

 

Parent Company

Consolidated

 

September 30, 2012

September 30, 2011

September 30, 2012

September 30, 2011

Income (loss) before income tax and social contribution

(5,893)

20,315

(4,769)

21,767

Combined nominal rate of income tax and social contribution - %

34%

34%

34%

34%

 

2,004

(6,907)

1,621

(7,401)

 

        

Equity pickup on investments

2,384

5,023

-

-

Management bonus

(151)

(534)

(151)

(534)

Net effect of subsidiaries taxed based on presumed profit (*)

-

-

1,642

3,779

Reversal of management bonus - 2011

(1,000)

-

(1,000)

-

Other

(24)

(108)

(23)

47

 

        

IRPJ and CSLL as per the statement of operations

3,213

(2,526)

2,089

(4,109)

 

        

Current

-

-

(1,101)

(2,018)

Deferred

3,213

(2,526)

3,190

(2,091)

 

        

 

3,213

(2,526)

2,089

(4,109)

Effective rate

-

12%

-

19%

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

 

(*)   Some of subsidiaries which have annual revenue below a certain threshold established in the tax regulations in Brazil have their income tax measured on the "presumed tax regime" whereby income tax is determined on a simplified basis to calculate the taxable income (32% for lease revenues, 8% for sale of farm and 100% for other earnings).  This results effectively in taxing the taxable income of subsidiaries under the "presumed tax regime" at a lower rate.

 

 

28. Income tax and social contribution (Continued) 

 

In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, (Note 28), including the information related to the option for the Transition Tax Regime - RTT.

 

 

29. Earnings per share

 

a)      Basic 

 

   

Consolidated

 

September 30, 2012

September 30, 2011

Income (loss) attributed to controlling shareholders

(2,680)

17,789

Weighted average number of common shares issued (thousands)

58,422

58,422

Basic income (loss) per share

(0.05)

0.30

 

b)      Diluted 

 

There was no difference in the weighted average number of common shares used for calculating basic and diluted earnings (loss) per share, since all the potentially diluting outstanding common shares were antidilutive shares. At September 30, 2012, there were 1,000,965 outstanding stock options and 256,000 warrants (Note 22.b), which could have a dilution impact in the future, but were antidilutive in such period.

 

As a consequence, the diluted earnings (loss) per share are equal to the basic earnings (loss) per share for the presented periods.

 

See Note 29 to the annual financial statements, for the period ended June 30, 2012.

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

30. Provision for legal claims

 

The Company is involved in labor claims  and is discussing these matters both at the administrative level and also in court for which judicial deposits were made, where applicable. The provision for probable losses arising from these lawsuits has been estimated and remeasured by management, as supported by the opinion of the Company's external legal advisors. As at September 30, 2012 the Company maintained a provision of R$1,012 (R$1,108 in the consolidated financial statements) corresponding to lawsuits involving the risk of probable loss, as summarized below:

 

 

Parent Company

Consolidated

At June 30, 2012

1,087

1,183

Additions

410

409

Monetary restatement

10

11

Reversal

(495)

(495)

At September 30, 2012

1,012

1,108

 

In addition, the Company's civil, labor and environmental lawsuits, for which the risk of loss is considered possible but not probable and for which no provision has been recorded, are as follows:

 

 

Parent Company and Consolidated

 

September 30, 2012

June 30, 2012

Civil suits

6,446

6,382

Tax suits

10,215

9,900

Labor claims

1,094

1,001

Environmental proceedings

3,777

3,907

 

21,532

21,190

 

(i)      Civil suits

 

At September 30, 2012, the amount of R$6,446 (R$6,382 at June 30, 2012) refers mainly to declaration of nullity of the acknowledgment of debt  due to the purchase and sale of rice in the amount of R$1,695 and default on advance of funds  for services rendering, guaranteed by lien in the amount of R$764.

 

(ii)     Tax suits

 

At September 30, 2012, the amount of R$10,215 (R$9,900 at June 30, 2012) refers mainly to the appeal lodged by  Brasilagro, against the decision that did not recognize the credit right claimed by the Company and, accordingly, did not approve the offset of income tax. The credit right amount used in the offset was R$6,216, arising from tax overpayments in 2006.

 

30. Provision for legal claims (Continued) 

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

 

(iii)    Labor claims

 

At September 30, 2012, the balance of R$1,094 (R$1,001 at June 30, 2012) refers to labor proceedings filed by former employees and third parties, mainly claiming severance pay differences and the recognition of job relationship.

 

(iv)   Environmental proceedings

 

At September 30, 2012, the balance of R$3,777 (R$3,907 at June 30, 2012) refers to contestation against IBAMA’s notice issued for breach of the protection regulations in permanent preservation area. Management supported by analyses prepared by its legal advisors assessed the risk of disbursement at 10% of the proceeding  estimated amount.

 

In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note 30.

 

 

31. Commitments

 

At September 30, 2012 the Company entered into a private instrument of leasing of the rural property for the agricultural exploration of property located in the municipality of Tasso Fragoso, State of Maranhão. The total area of this property is 14,358.5322ha (fourteen thousand, three hundred and fifty-eight hectares, fifty-three ares and twenty-two centiares), of which, 8,500ha (eight thousand and five hundred hectares) are composed of land suitable for the grains cultivation. The contract shall be effective up to July 31, 2013, except for the Preparation Area which may be delivered until August 31, 2013. The contract price is R$1,000, to be paid on May 30, 2013.

 

The Company has option contract for the purchase of farm located in the municipality of Jaborandi, State of Bahia. At June 30, 2012 the fair value of this option approximates  zero.

 

At September 30, 2012 there are commitments entered into for 63,078 bags of soybean.

 

The other commitments entered into by the Company, which had no changes in this quarter, may be read in Note 31 to the annual financial statements, for the period ended June 30, 2012.

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

32. Related party transactions

 

The main balances of assets and liabilities, and of transactions that have affected the results for the period for transactions between related parties, arose from transactions with the Company and its subsidiaries. Management believes that these transactions were carried out in accordance with the usual market terms and conditions applicable to these types of transactions, as follows:

 

 

Parent Company

 

September 30, 2012

June 30, 2012

Current Assets

    

Rentals and sharing receivable (a)

46

43

Dividends receivable (d)

5,944

21,944

 

5,989

21,987

Noncurrent assets - Trade receivables

    

Accounts receivable (c)

45

-

 

45

-

Current liabilities - Trade payables

    

Leasing payable (b)

16,554

10,625

 

16,554

10,625

 

 

Parent Company

 

September 30, 2012

September 30, 2011

Result

    

Leases

    

Imobiliária Cremaq (b)

(394)

(555)

Imobiliária Araucária (b)

(1,570)

(781)

Imobiliária Cajueiro (b)

(1,061)

(359)

Imobiliária Mogno (b)

(668)

(317)

Imobiliária Ceibo (b)

(104)

(321)

 

(3,797)

(2,333)

Sharing

    

Jaborandi Ltda (a)

56

56

Jaborandi S/A (a)

9

9

Imobiliária Cremaq (a)

9

9

Imobiliária Engenho (a)

9

9

Imobiliária Araucária (a)

9

9

Imobiliária Mogno (a)

9

9

Imobiliária Cajueiro (a)

9

9

Imobiliária Ceibo (a)

9

9

Imobiliária Flamboyant (a)

9

9

 

128

128

    

 

(3,669)

(2,205)

 

(a)  Contracts for sharing of physical infrastructure - The Company shares a physical space and provides financial and accounting services to the real estate companies  and Jaborandi Ltda. and charges for those services.

 

(b)  Leases - The subsidiaries that own real estate have leasing contracts with the Company at prices restated based on quoted soybean price.

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

 

 

32. Related party transactions (Continued) 

 

(c)  Intercompany transactions - These are sundry bills of subsidiaries   and paid by BrasilAgro.

 

(d) Dividends receivable from the real estate companies Engenho and Jaborandi S.A. in the amount of  R$5,309 and R$635, respectively.

 

In the period ended September 30, 2012, there was no significant change in relation to the other information disclosed in the annual financial statements for June 30, 2012, Note 32.

 

 

33. Insurance

 

The Company maintains insurance on vehicles, liability coverage for farms and life insurance and personal accident insurance for employees and directors, as well as insurance for Directors and Officers liability insurance for amount considered sufficient by management to cover adventitious risks and liabilities . The Company has assessed the risk of farm buildings and facilities owned by the Group, as well as its inventory and biological assets and concluded that there was no need for other types of insurance due to low chances of occurrence thereof.

 

Below is the table of the liabilities covered by insurance and the related amounts at September 30, 2011:

 

Insurance type

Coverage - In thousands of R$

   
   
   

Vehicles

1,769

Civil liability (Directors and Officers)

20,000

 

The assumptions adopted, given their nature, are not part of the interim information review scope. As a consequence, they have not been reviewed by our independent auditors.

 

 

34. Subsequent events

 

a)      Sale of farm

 

On October 11, 2012, the Company announced an agreement to sell Horizontina Farm, located in the municipality of Tasso Fragoso, State of Maranhão, for a total price of R$75,000. With initial payment of R$1,000 by the purchaser, and the remaining amount to be paid in two installments: R$26,000 in October 2012 and R$ 48,000 upon the execution of the deed, which is forecast for January 2013.

 

 

 

 

Brasilagro Companhia Brasileira de Propriedades Agrícolas

 

Notes to the Quarterly Information – ITR (Continued)

At September 30, 2012

In thousands of reais, unless otherwise stated

 

 

 

Horizontina Farm has an area of 14,359 hectares and was acquired on March 10, 2010 by the subsidiary Imobiliária Ceibo for R$37,749. Before the acquisition, 2,100 hectares of the farm were used for the cultivation of grains. Until September 30, 2012, the Company invested R$10,388 (net of accumulated depreciation) in infra-structure improvements. During the plantation time for 2011/2012 crop year,  4,319 hectares of soybean and 2,095 hectares of corn were planted. The sales commission was R$2,625 and the taxes on sale of R$5,047 and the gain on the disposal was R$19,190 less the commission, costs and taxes.

 

b)      Going public – New York stock exchange

 

On October 24, 2012, the Company informed its shareholders and the public in general that it taking steps to trade, on Stock Exchange in the United States of America, American Depositary Receipts - ADR. The beginning of ADR trading occurred on November 08, 2012. The ADR listing did not result in raising of funds by the Company at the moment.

 

 

 

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: December 13, 2012.

 

 

 

 

BRASILAGRO – COMPANHIA BRASILEIRA DE PROPRIEDADES AGRÍCOLAS

 

 

 

 

 

By:

/s/ Julio Cesar de Toledo Piza Neto

 

 

Name:

Julio Cesar de Toledo Piza Neto

 

 

Title:

Chief Executive Officer and Investor Relations Officer

 

Date: December 13, 2012.

 

 

By:

/s/ Gustavo Javier Lopez

 

 

Name:

Gustavo Javier Lopez

 

 

Title:

Chief Administrative Officer