(A free translation of the original in Portuguese) FEDERAL ...(A free translation of the original in Portuguese) FEDERAL PUBLIC SERVICE CVM - BRAZILIAN SECURITIES AND EXCHANGE COMMISSION

(A free translation of the original in Portuguese)

FEDERAL PUBLIC SERVICE CVM - BRAZILIAN SECURITIES AND EXCHANGE COMMISSION STANDARD FINANCIAL STATEMENTS - DFP COMMERCIAL, INDUSTRY & OTHER TYPES OF COMPANY

June 30, 2010 Brazilian Corporate Law

1

REGISTRATION WITH CVM SHOULD NOT BE CONSTRUED AS AN EVALUATION OF THE COMPANY. COMPANY MANAGEMENT IS RESPONSIBLE FOR THE INFORMATION PROVIDED.

01.01 - IDENTIFICATION

1 - CVM CODE 2 - COMPANY NAME 3 - CNPJ (Corporate Taxpayer’s ID)

02003-6 BRASILAGRO CIA BRAS PROPRIEDADES AGRICOL 07.628.528/0001-59

4 - NIRE (Corporate Registry ID)

35300326237

01.02 - HEADQUARTERS

1 - ADDRESS

AVENIDA BRIG FARIA LIMA, 1309 5O ANDAR

2 - DISTRICT

JARDIM PAULISTANO

3 - ZIP CODE

01452-002 4 - CITY

SÃO PAULO 5 - STATE

SP

6 - AREA CODE

011 7 - TELEPHONE

3035-5374 8 - TELEPHONE

3035-5350 9 - TELEPHONE

3035-5358 10 - TELEX

0

11 - AREA CODE

011 12 - FAX

3035-5366 13 - FAX

-0 14 - FAX

-0

15 - E-MAIL

[email protected]

01.03 - INVESTOR RELATIONS OFFICER (Company Mailing Address)

1- NAME

JULIO TOLEDO PIZA

2 - ADDRESS

AVENIDA BRIG FARIA LIMA, 1309 5O ANDAR

3 - DISTRICT

JARDIM PAULISTANO

4 - ZIP CODE

01452-002 5 - CITY

SÃO PAULO 6 - STATE

SP

7 - AREA CODE

011

8 - TELEPHONE

3035-5374 9 - TELEPHONE

3035-5350 10 - TELEPHONE

3035-5358 11 - TELEX

0

12 - AREA CODE

011 13 - FAX

3035-5366 14 - FAX

-0 15 - FAX

-0

15 - E-MAIL

[email protected]

01.04 - DFP REFERENCE AND AUDITOR INFORMATION

YEAR 1 – DATE OF THE FISCAL YEAR BEGINNING 2 – DATE OF THE FISCAL YEAR END

1 – Last 07/01/2009 06/30/2010

2 – Next to last 07/01/2008 06/30/2009

3 – Third to last 07/01/2007 06/30/2008 4 - INDEPENDENT ACCOUNTANT

PRIECEWATERHOUSECOOPERS AUDITORES INDEPENDENTES

5 - CVM CODE

00287-9

6 - TECHNICIAN IN CHARGE

WANDER RODRIGUES TELLES 7 - TECHNICIAN’S CPF (INDIVIDUAL TAXPAYER’S REGISTER)

153.211.501-68




2


1 - CVM CODE

02003-6 2 - COMPANY NAME

BRASILAGRO CIA BRAS PROPRIEDADES AGRICOL 3 - CNPJ (Corporate Taxpayer’s ID)

07.628.528/0001-59

01.05 - CAPITAL STOCK

Number of Shares (Units)

1 06/30/2010

2 06/30/2009

3 06/30/2008

Paid-in Capital

1 - Common 58,422,400 58,422,400 58,422,400

2 - Preferred 0 0 0

3 - Total 58,422,400 58,422,400 58,422,400

Treasury Stock

4 - Common 0 0 0

5 - Preferred 0 0 0

6 - Total 0 0 0

01.06 - COMPANY PROFILE 1 - TYPE OF COMPANY

Commercial, Industry and Other Types of Company

2 - STATUS

Operational

3 - NATURE OF OWNERSHIP

Foreign

4 - ACTIVITY CODE

1210 – Agriculture (Sugar, Alcohol and Sugar cane)

5 - MAIN ACTIVITY

AGRIBUSINESS

6 - CONSOLIDATION TYPE

Total

01.07 - COMPANIES NOT INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS

1 - ITEM 2 - CNPJ (Corporate Taxpayer’s ID) 3 - COMPANY NAME

01.08 - CASH DIVIDENDS

1 - ITEM 2 - EVENT 3 - APPROVAL 4 - DIVIDEND 5 - DATE OF PAYMENT 6 - TYPE OF SHARE 7 - AMOUNT PER SHARE

01.09 - INVESTOR RELATIONS OFFICER

1 – DATE

2 - SIGNATURE




3


1 - CVM CODE



07.628.528/0001-59

02.01 - BALANCE SHEET - ASSETS (in thousands of reais)

1 - CODE 2 - DESCRIPTION 3 – 06/30/2010 4 – 06/30/2009 5 – 06/30/2008

1 Total Assets 657,731 636,395 610,239

1.01 Current Assets 237,997 298,663 383,630

1.01.01 Cash and Cash Equivalents 181,565 245,955 331,319

1.01.01.01 Cash and Banks 262 87 105

1.01.01.03 FIM Guardian Investments 181,303 245,868 331,214

1.01.02 Credits 29,654 19,398 22,625

1.01.02.01 Clients 10,426 3,291 17,252

1.01.02.01.02 Receivables from products sold 10,426 3,291 17,252

1.01.02.02 Sundry Credits 19,228 16,107 5,373

1.01.02.02.01 Sundry Advances 2,549 984 1,120

1.01.02.02.02 Fiscal and Tax Credits 16,666 11,659 2,642

1.01.02.02.03 Other credits 13 1,016 1,611

1.01.02.02.04 Receivables from derivatives – commodities – current crop

0 2,448 0

1.01.03 Inventories 26,505 18,299 28,032

1.01.03.01 Inventories of soybean grains 9,114 1,773 242

1.01.03.02 Inventories of corn grains 6,394 3,670 0

1.01.03.03 Inventories of sorghum grains 1,214 242 0

1.01.03.04 Inventories of rice grains 2,251 1,361 0

1.01.03.05 Other crops 34 53 0

1.01.03.06 Crop under progress – soybeans 0 73 465

1.01.03.07 Crop under progress – corn 1,535 4,522 3,190

1.01.03.08 Crop under progress – sorghum 560 1,258 994

1.01.03.09 Crop under progress – sugarcane 0 4 0

1.01.03.10 Crop under progress – rice 0 53 0

1.01.03.11 Inputs – Storehouse 4,611 4,378 13,264

1.01.03.12 Advances for purchase of inputs 0 912 9,876

1.01.03.13 Unexpired Indirect Costs 792 0 1

1.01.04 Other 273 15,011 1,654

1.01.04.01 Prepaid Expenses 273 331 117

1.01.04.02 Commodities Derivatives – Brokerage Firms Balance

0 1 1,537

1.01.04.06 Short-Term Financial Investments 0 14,679 0

1.02 Non-Current Assets 419,734 337,732 226,609

1.02.01 Long-Term Assets 50,798 15,566 5,832

1.02.01.01 Sundry Credits 44,738 9,657 4,940

1.02.01.01.01 Advances and Prepayment 24 0 0

1.02.01.01.02 Deferred Taxes and Contributions 16,360 9,657 4,940

1.02.01.01.03 Fiscal and Tax Credits 2,882 0 0

1.02.01.01.04 Long-Term Financial Investments 25,472 0 0

1.02.01.02 Credit with Related Parties 6,060 0 33

1.02.01.02.01 Direct and Indirect Associated Companies 0 0 0

1.02.01.02.02 Subsidiaries 0 0 0




4


1 - CVM CODE



07.628.528/0001-59

02.01 - BALANCE SHEET - ASSETS (in thousands of reais)

1 - CODE 2 – DESCRIPTION 3 – 06/30/2010 4 – 06/30/2009 5 – 06/30/2008

1.02.01.02.03 Other Related Parties 6,060 0 33

1.02.01.03 Other 0 5,909 859

1.02.01.03.01 Receivables from Derivatives - Commodities 0 5,909 859

1.02.02 Permanent Assets 368,936 322,166 220,777

1.02.02.01 Investments 264,594 236,160 166,415

1.02.02.01.01 In Direct and Indirect Associated Companies 410 6,979 6,915

1.02.02.01.02 In Direct and Indirect Associated Companies – Goodwill

0 0 0

1.02.02.01.03 In Subsidiaries 241,691 208,847 155,539

1.02.02.01.04 In Subsidiaries – Goodwill 0 0 0

1.02.02.01.05 Other Investments 0 0 0

1.02.02.01.06 Advance for Investments in Subsidiaries in the Country

22,493 20,334 3,961

1.02.02.02 Property, Plant and Equipment 103,895 85,156 53,059

1.02.02.02.01 Land and Farm Facilities 21,007 31,139 30,860

1.02.02.02.02 Operating Assets 8,047 5,553 2,785

1.02.02.02.03 Refurbishment and Improvements 2,498 1,710 1,233

1.02.02.02.04 Construction in Progress 9,109 2,088 203

1.02.02.02.05 Permanent Crop - Construction in Progress 0 0 9,703

1.02.02.02.06 Permanent Crop – PP&E 63,234 44,666 8,275

1.02.02.03 Intangible 0 0 0

1.02.02.04 Deferred 447 850 1,303

1.02.02.04.01 Pre-Operating Expenses – R&D 0 374 578

1.02.02.04.02 Pre-Operating Expenses – General 447 476 725




5


1 - CVM CODE



07.628.528/0001-59

02.02 - BALANCE SHEET - LIABILITIES (in thousands of reais)


2 Total Liabilities 657,731 636,395 610,239

2.01 Current Liabilities 47,093 36,332 22,965

2.01.01 Loans and Financing 21,149 11,044 262

2.01.02 Debentures 0 0 0

2.01.03 Suppliers 6,928 4,771 2,635

2.01.04 Taxes, Fees and Contributions 301 3,390 3,454

2.01.04.01 Withholding Taxes and Contributions 82 68 67

2.01.04.02 Taxes and Contributions on Revenues 219 490 310

2.01.04.03 Income Tax and Social Contribution Payable 0 2,000 2,957

2.01.04.04 Provisions for Deferred Corporate Income Tax and Social Contribution

0 832 120

2.01.05 Dividends Payable 2 2 1,130

2.01.06 Provisions 0 0 0

2.01.07 Debts with Related Parties 0 0 0

2.01.08 Other 18,713 17,125 15,484

2.01.08.01 Payroll and Social Charges Payable 4,024 3,044 4,655

2.01.08.02 Acquisitions Payable – Current 14,663 14,081 9,797

2.01.08.03 Liabilities Payable 0 0 12

2.01.08.05 Accounts Payable from Derivatives - Commodities 0 0 1,020

2.01.08.08 Other Liabilities 26 0 0

2.02 Non-Current Liabilities 49,720 23,311 11,472

2.02.01 Long-Term Liabilities 49,720 23,311 11,472

2.02.01.01 Loans and Financing 31,704 9,467 809

2.02.01.02 Debentures 0 0 0

2.02.01.03 Provisions 346 0 0

2.02.01.04 Debts with Related Parties 0 0 0

2.02.01.05 Advance for Future Capital Increase 0 0 0

2.02.01.06 Other 17,670 13,844 10,663

2.02.01.06.01 Long-term Acquisitions Payable 0 0 6,088

2.02.01.06.02 Provision for Taxes and Contributions 17,670 13,844 4,575

2.03 Deferred Income 0 0 0

2.05 Shareholders’ Equity 560,918 576,752 575,802

2.05.01 Paid-up Capital 584,224 584,224 584,224

2.05.01.01 Cash Private Subscription - Country 110 110 110

2.05.01.02 Cash Private Subscription - Abroad 914 914 914

2.05.01.03 Public Subscription 583,200 583,200 583,200

2.05.02 Capital Reserves 0 0 3,629

2.05.02.01 Legal Reserve 0 0 238

2.05.02.02 Reserve for Investment and Expansion 0 0 3,391

2.05.03 Revaluation Reserves 0 0 0

2.05.03.01 Own Assets 0 0 0

2.05.03.02 Subsidiaries/Direct and Indirect Associated Companies

0 0 0




6


1 - CVM CODE



07.628.528/0001-59

02.02 - BALANCE SHEET - LIABILITIES (in thousands of reais)


2.05.04 Profit Reserves 0 0 0

2.05.04.01 Legal 0 0 0

2.05.04.02 Statutory 0 0 0

2.05.04.03 For Contingencies 0 0 0

2.05.04.04 Unrealized Income 0 0 0

2.05.04.05 Profit Retention 0 0 0

2.05.04.06 Special for Non-Distributed Dividends 0 0 0

2.05.04.07 Other Profit Reserves 0 0 0

2.05.05 Assets Valuation Adjustments 0 0 0

2.05.05.01 Securities Adjustments 0 0 0

2.05.05.02 Accumulated Translation Adjustments 0 0 0

2.05.05.03 Business Combination Adjustments 0 0 0

2.05.06 Retained Earnings/Accumulated Losses (23,306) (7,472) (12,051)

2.05.07 Advance for Future Capital Increase 0 0 0




7

01.01 – IDENTIFICATION

1 - CVM CODE



07.628.528/0001-59

03.01 - INCOME STATEMENT (in thousands of reais)

1 - CODE 2 – DESCRIPTION 3 – 07/01/2009 to 06/30/2010

4 – 07/01/2008 to 06/30/2009

5 – 07/01/2007 to 06/30/2008

3.01 Gross Revenue from Sales and/or Services 31,751 30,799 23,414

3.01.01 Revenues from Land Leasing 0 0 47

3.01.02 Revenues from Grain Sales 25,008 30,638 18,797

3.01.03 Revenues from Sugarcane Sales 6,731 88 4,570

3.01.04 Byproduct Sales and Other 12 73 0

3.02 Gross Revenue Deductions (1,737) (854) (888)

3.02.01 Taxes on Lease Revenues (18) (26) (18)

3.02.02 Taxes on Revenues from Grain Sales (1,305) (828) (870)

3.02.03 Taxes on Other Revenues (414) 0 0

3.03 Net Revenue from Sales and/or Services 30,014 29,945 22,526

3.04 Cost of Goods and/or Services Sold (40,470) (30,561) (18,964)

3.04.01 Costs of Grain Products Sold (40,094) (29,405) (18,964)

3.04.02 Market Value Adjustment 0 (1,156) 0

3.04.03 Cost of Other Products Sold (376) 0 0

3.05 Gross Income (10,456) (616) 3,562

3.06 Operating Expenses/Income (14,240) 6,323 22,826

3.06.01 Selling (1,840) (1,026) (614)

3.06.02 General and Administrative (22,419) (20,945) (19,003)

3.06.02.01 Administrative Expenses (409) (143) (988)

3.06.02.02 Fee Expenses (9,004) (9,363) (7,694)

3.06.02.03 Personnel Expenditures (10,170) (6,970) (5,729)

3.06.02.04 Share Placement Expenditures 0 (1,897) 0

3.06.02.05 Depreciation and Amortization Expenses (904) (538) (539)

3.06.02.06 Other General and Administrative Expenses (1,932) (2,034) (4,053)

3.06.03 Financial 17,902 32,306 43,226

3.06.03.01 Financial Income 21,893 33,733 44,697

3.06.03.01.01 Exclusive Fund Investment Yields 21,519 21,133 44,568

3.06.03.01.02 Exchange Variation on Liabilities 42 517 160

3.06.03.01.03 Monetary Variation on Liabilities 1,374 (218) (1,055)

3.06.03.01.04 Interest Gains 870 901 87

3.06.03.01.05 Derivatives realized income – commodities (1,912) 5,014 (1,799)

3.06.03.01.06 Derivatives realized income – currency 0 0 1 ,050

3.06.03.01.07 Derivatives realized income – indexes 0 0 1,616

3.06.03.01.08 Derivatives income - outstanding commodities 0 6,386 70

3.06.03.01.09 Derivatives income - outstanding currency 0 0 0

3.06.03.01.10 Derivatives income – outstanding indexes 0 0 0

3.06.03.02 Financial Expenses (3,991) (1,427) (1,471)

3.06.03.02.01 Banking Expenses and Charges (3,991) (1,427) (1,471)

3.06.04 Other Operating Income 0 0 0

3.06.05 Other Operating Expenses 209 186 93

3.06.06 Equity in the Earnings of Subsidiaries (8,092) (4,198) (876)




8


1 - CVM CODE



07.628.528/0001-59

03.01 - INCOME STATEMENT (in thousands of reais)


4 – 07/01/2008 to 06/30/2009

5 – 07/01/2007 to 06/30/2008

3.06.06.01 Equity Income (1,523) (4,198) (876)

3.06.06.02 Investment Losses in Associated Companies (6,569) 0 0

3.07 Operating Income (24,696) 5,707 26,388

3.08 Non-Operating Income 0 0 0

3.08.01 Revenues 0 0 0

3.08.02 Expenses 0 0 0

3.09 Income Before Tax/Holdings (24,696) 5,707 26,388

3.10 Provision for Income Tax and Social Contribution 0 (369) (9,034)

3.11 Deferred Income Tax 8,862 (4,388) (1,896)

3.12 Statutory Holdings/Contributions 0 0 0

3.12.01 Holdings 0 0 0

3.12.02 Contributions 0 0 0

3.13 Reversal of Interest on Own Capital 0 0 0

3.15 Income/Loss for the Period (15,834) 950 15,458

No. SHARES, EX-TREASURY (Units) 58,422,400 58,422,400 58,422,400

EARNINGS PER SHARE (Reais) 0.01626 0.26459

LOSS PER SHARE (Reais) (0.27103)




9


1 - CVM CODE 02003-6

2 - COMPANY NAME BRASILAGRO CIA BRAS PROPRIEDADES AGRICOL

3 - CNPJ (Corporate Taxpayer’s ID) 07.628.528/0001-59

04.01 – STATEMENT OF CASH FLOWS – INDIRECT METHOD (in thousands of reais)


4 – 07/01/2008 to 06/30/2009

5 – 07/01/2007 to 06/30/2008

4.01 Net Cash from Operating Activities (28,296) (47,892) (19,213)

4.01.01 Cash Generated in the Operations (3,196) 7,676 19,532

4.01.01.01 Income for the Period (15,834) 950 15,458

4.01.01.02 Depreciation, Amortization and Depletion 10,489 3,658 2,606

4.01.01.04

Equity Income and Investment Losses in Associated Company

8,092 4,198 876

4.01.01.05

Foreign Exchange and Monetary Variations Over Liabilities

581 (299) 895

4.01.01.06 Unrealized Income from Derivative Operation 0 (6,386) (70)

4.01.01.07 Deferred Income Tax (8,862) 4,388 (427)

4.01.01.08 Interest on Financing 3,275 1,070 194

4.01.01.09 Net Write-Offs of Property, Plant and Equipment 91 97 0

4.01.01.10 Interest Receivable (1,374) 0 0

4.01.01.11 Provision for Contingencies 346 0 0

4.01.02 Variations on Assets and Liabilities (25,100) (55,568) (38,745)

4.01.02.01 (Increase) Decrease in Securities (10,793) 0 0

4.01.02.02 (Increase) Decrease in Clients (11,845) 13,961 (17,252)

4.01.02.03 (Increase) Decrease in Tax Credits (7,889) (9,017) 3,993

4.01.02.04 (Increase) Decrease in Prepaid Expenses and Advances (222) (214) (1,663)

4.01.02.05 (Increase) in Other Credits (562) (13,948) 24

4.01.02.06 (Increase) in Inventories (8,206) 9,733 (27,309)

4.01.02.07 (Increase) Decrease in Short-Term Investments 0 (57,569) (1,537)

4.01.02.08 Increase in Suppliers 2,183 2,134 1,764

4.01.02.09 Increase in Taxes and Contributions Payable 2,896 101 72

4.01.02.10 Increase (decrease) in Payroll and Charges 980 (1,611) 3,386

4.01.02.11 Increase (decrease) in Related Parties Liabilities 0 33 0

4.01.02.12 Increase (decrease) in Other Liabilities 0 1,425 (223)

4.01.02.13 (Increase) in Derivatives Operations and Investments 8,358 (596) 0

4.01.03 Other 0 0 0

4.02 Net Cash from Investment Activities (65,442) (54,041) (24,518)

4.02.01 Additions to Property, Plant and Equipment (39,048) (35,085) (26,600)

4.02.02 Additions to Deferred Charges 0 0 (4,946)

4.02.03 Payment for Acquisition of Farms 0 (2,583) (4,266)

4.02.04 Decrease (increase) in Investments and Interest (30,141) (16,373) 11,294

4.02.05 Interest and/or Dividends Received 5,905 0 0

4.02.06 Advance for Future Capital Increase (2,158) 0 0

4.03 Net Cash from Financing Activities 29,348 16,569 876


4.03.03 Dividends Payable 0 (1,128) 0

4.03.04 Payment of Loans and Financing (12,859) (1,313) 0

4.04 Exchange Variation on Cash and Cash Equivalents 0 0 0

4.05 Increase (Decrease) in Cash and Cash Equivalents (64,390) (85,364) (42,855)

4.05.01 Opening Balance of Cash and Cash Equivalents 245,955 331 ,319 374,174




10


1 - CVM CODE 02003-6

2 - COMPANY NAME BRASILAGRO CIA BRAS PROPRIEDADES AGRICOL

3 - CNPJ (Corporate Taxpayer’s ID) 07.628.528/0001-59


4 – 07/01/2008 to 06/30/2009

5 – 07/01/2007 to 06/30/2008

4.05.02 Closing Balance of Cash and Cash Equivalents 181,565 245,955 331,319




11


1 - CVM CODE



07.628.528/0001-59

05.01 – STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 07/01/2009 TO 06/30/2010 (in thousands of reais)

1 - CODE 2 - DESCRIPTION 3 – CAPITAL STOCK

4 – CAPITAL RESERVES

5 – REVALUATION RESERVES

6 – PROFIT RESERVES

7 – RETAINED EARNINGS/ACCUMULATED LOSSES

8 – ASSETS VALUTATION ADJUSTMENTS

9 - TOTAL SHAREHOLDERS’ EQUITY

5.01 Opening Balance 584,224 0 0 0 (7,472) 0 576,752

5.02 Adjustments of Previous Years 0 0 0 0 0 0 0

5.03 Adjusted Balance 584,224 0 0 0 (7,472) 0 576,752

5.04 Income/Loss for the Year 0 0 0 0 (15,834) 0 (15,834)

5.05 Allocations 0 0 0 0 0 0 0

5.05.01 Dividends 0 0 0 0 0 0 0

5.05.02 Interest on Own Capital 0 0 0 0 0 0 0

5.05.03 Other Allocations 0 0 0 0 0 0 0

5.06 Realization of Profit Reserves 0 0 0 0 0 0 0

5.07 Assets Valuation Adjustments 0 0 0 0 0 0 0

5.07.01 Securities Adjustments 0 0 0 0 0 0 0

5.07.02 Accumulated Translation Adjustments 0 0 0 0 0 0 0

5.07.03 Business Combination Adjustments 0 0 0 0 0 0 0

5.08 Increase/Decrease in Capital Stock 0 0 0 0 0 0 0

5.09 Recording/Realization of Capital Reserves 0 0 0 0 0 0 0

5.10 Treasury Shares 0 0 0 0 0 0 0

5.11 Other Capital Transactions 0 0 0 0 0 0 0

5.12 Other 0 0 0 0 0 0 0

5.13 Closing Balance 584,224 0 0 0 (23,306) 0 560,918




12


1 - CVM CODE



07.628.528/0001-59








9 - TOTAL SHAREHOLDER’S EQUITY

5.01 Opening Balance 584,224 0 0 3,629 (12,051) 0 575,802


5.03 Adjusted Balance 584,224 0 0 3,629 (12,051) 0 575,802

5.04 Income/Loss for the Year 0 0 0 0 950 0 950

5.05 Allocations 0 0 0 0 0 0 0

5.05.01 Dividends 0 0 0 0 0 0 0



5.06 Realization of Profit Reserves 0 0 0 (3,629) 3,629 0 0

5.06.01 Losses Absorbed by Reserves 0 0 0 (3,629) 3,629 0 0









5.12 Other 0 0 0 0 0 0 0

5.13 Closing Balance 584,224 0 0 0 (7,472) 0 576,752




13


1 - CVM CODE



07.628.528/0001-59








9 - TOTAL SHAREHOLDER’S EQUITY

5.01 Opening Balance 584,224 0 0 0 (13,755) 0 570,469



5.04 Income/Loss for the Year 0 0 0 0 6,463 0 6,463

5.05 Allocations 0 0 0 0 (1,130) 0 (1,130)

5.05.01 Dividends 0 0 0 0 (1,130) 0 (1,130)



5.06 Realization of Profit Reserves 0 0 0 3,629 (3,629) 0 0

5.06.01 Mandatory Legal Reserve 0 0 0 238 (238) 0 0

5.06.02 Statutory Reserve for Expansion 0 0 0 3,391 (3,391) 0 0









5.12 Other 0 0 0 0 0 0 0

5.13 Closing Balance 584,224 0 0 3,629 (12,051) 0 575,802




14


1 - CVM CODE



07.628.528/0001-59

06.01 – STATEMENT OF VALUE ADDED (in thousands of reais)

1 - CODE 2 - DESCRIPTION 3 – 07/01/2009 to 06/30/2010

4 – 07/01/2008 to 06/30/2009

5 – 07/01/2007 to 06/30/2008

6.01 Revenues 31,960 30,985 0

6.01.01 Sale of Goods, Products and Services 31,751 30,799 0

6.01.02 Other Revenues 209 186 0

6.01.03 Revenues related to the Construction of Own Assets

0 0 0

6.01.04 Allowance for/Reversal of Doubtful Accounts 0 0 0

6.02 Input Acquired from Third Parties (54,186) (43,535) 0

6.02.01 Cost of Products, Goods and Services Sold (40,470) (30,561) 0

6.02.02 Materials – Energy – Third Party Services - Other (13,716) (11,709) 0

6.02.03 Loss/Recovery of Assets 0 (1,265) 0

6.02.04 Other 0 0 0

6.03 Gross Value Added (22,226) (12,550) 0

6.04 Retention (904) (604) 0

6.04.01 Depreciation, Amortization and Depletion (904) (604) 0

6.04.02 Other 0 0 0

6.05 Net Value Added Produced (23,130) (13,154) 0

6.06 Value Added Received in Transfers 13,801 29,535 0

6.06.01 Equity in the Earnings of Subsidiaries (8,092) (4,198) 0

6.06.02 Financial Revenues 23,805 22,333 0

6.06.03 Other (1,912) 11,400 0

6.06.03.01 Derivatives (1,912) 11,400 0

6.07 Total Value Added to Distribute (9,329) 16,381 0

6.08 Allocation of Value Added (9,329) 16,381 0

6.08.01 Personnel 8,860 8,682 0

6.08.01.01 Direct Compensation 7,823 7,472 0

6.08.01.02 Benefits 861 954 0

6.08.01.03 Government Severance Indemnity Fund for Employees (FGTS)

176 256 0

6.08.01.04 Other 0 0 0

6.08.02 Taxes, Fees and Contributions (6,791) 5,346 0

6.08.02.01 Federal (7,559) 5,141 0

6.08.02.02 State 684 125 0

6.08.02.03 Municipal 84 80 0

6.08.03 Value Distributed to Providers of Capital 4,436 1 ,403 0

6.08.03.01 Interest Rates 3,964 1,086 0

6.08.03.02 Rentals 472 317 0

6.08.03.03 Other 0 0 0

6.08.04 Value Distributed to Shareholders (15,834) 950 0

6.08.04.01 Interest on Own Capital 0 0 0

6.08.04.02 Dividends 0 0 0

6.08.04.03 Retained/Accumulated Losses for the Year (15,834) 950 0

6.08.05 Other 0 0 0


FEDERAL PUBLIC SERVICE CVM - BRAZILIAN SECURITIES AND EXCHANGE COMMISSION STANDARD FINANCIAL STATEMENTS - DFP ATE LAW COMMERCIAL, INDUSTRY & OTHER TYPES OF COMPANY – 09/30/2004

June 30, 2010

Brazilian Corporate Law

15


1 - CVM CODE



07.628.528/0001-59

07.01 – CONSOLIDATED BALANCE SHEET - ASSETS (in thousands of reais)


1 Total Assets 733,797 678,996 702,732

1.01 Current Assets 269,987 319,937 396,069

1.01.01 Cash and Cash Equivalents 206,200 264,370 331,763

1.01.01.01 Cash and Banks 1,352 356 505

1.01.01.02 Financial Investments 204,848 264,014 331,258

1.01.02 Credits 39,743 22,409 32,386

1.01.02.01 Clients 17,773 5,986 21,328

1.01.02.01.01 Leasing Receivable 552 272 0

1.01.02.01.02 Receivables from Agricultural Sales 14,707 3,291 17,751

1.01.02.01.03 Receivables from Farm Sold 2,514 2,423 3,577

1.01.02.02 Sundry Credits 21,970 16,423 11,058

1.01.02.02.01 Sundry Advances 2,644 453 920

1.01.02.02.02 Fiscal and Tax Credits 18,131 12,438 3,004

1.01.02.02.03 Other Credits 15 1,016 1,672

1.01.02.02.05 Receivables from derivatives - commodities 0 2,448 0

1.01.02.02.06 Receivables from derivatives - currency 1,180 0 2,815

1.01.02.02.07 Receivables from derivatives - index 0 68 2,647

1.01.03 Inventories 23,629 18,002 30,239

1.01.03.01 Inventories of Soybean Grains 6,925 1,772 242

1.01.03.02 Inventories of Corn Grains 5,840 3,001 0

1.01.03.03 Inventories of Sorghum Grains 1,003 242 0

1.01.03.04 Inventories of Rice Grains 2,062 1,255 0

1.01.03.05 Other Crops 34 41 0

1.01.03.06 Crop under progress – Soybean 134 73 113

1.01.03.07 Crop under progress – Corn 1,384 4,522 2,949

1.01.03.08 Crop under progress – Sorghum 500 1,031 890

1.01.03.09 Crop under progress – Sugarcane 0 4 0

1.01.03.10 Crop under progress – Rice 0 53 0

1.01.03.11 Inputs – Storehouse 5,096 4,789 14,049

1.01.03.12 Advances for Purchase of Inputs 0 1,219 11,996

1.01.03.13 Unexpired Indirect Costs 651 0 0

1.01.04 Other 415 15,156 1,681

1.01.04.01 Prepaid Expenses 415 474 144

1.01.04.02 Commodities Derivatives – Brokers Balance 0 3 1,537

1.01.04.03 Short-Term Financial Investments 0 14,679 0

1.02 Non-Current Assets 463,810 359,059 306,663

1.02.01 Long-Term Assets 343,867 255,700 238,263

1.02.01.01 Sundry Credits 54,260 17,676 17,169

1.02.01.01.01 Advances and Prepayment 24 0 0

1.02.01.01.02 Deferred Taxes and Contributions 20,499 11,378 5,975

1.02.01.01.03 Receivables from Farm Sold 4,293 6,298 11,194



June 30, 2010


16


1 - CVM CODE



07.628.528/0001-59

07.01 – CONSOLIDATED BALANCE SHEET - ASSETS (in thousands of reais)


1.02.01.01.04 Fiscal and Tax Credits 2,882 0 0

1.02.01.01.05 Long-Term Financial Investments 26,562 0 0

1.02.01.02 Credit with Related Parties 6,060 0 33

1.02.01.02.01 Direct and Indirect Associated Companies 0 0 0

1.02.01.02.02 Subsidiaries 0 0 0

1.02.01.02.03 Other Related Parties 6,060 0 33

1.02.01.03 Other 283,547 238,024 221,061

1.02.01.03.01 Rural Property Inventories 283,547 232,115 219,710

1.02.01.03.02 Receivables from derivatives - Commodities 0 5,909 859

1.02.01.03.03 Receivables from derivatives - Currency 0 0 0

1.02.01.03.04 Receivables from derivatives - Index 0 0 492

1.02.02 Permanent Assets 119,943 103,359 68,400

1.02.02.01 Investments 410 6,979 6,915

1.02.02.01.01 In Direct and Indirect Associated Companies 410 6,979 6,915

1.02.02.01.02 In Subsidiaries 0 0 0

1.02.02.01.03 Other Investments 0 0 0

1.02.02.02 Property, Plant and Equipment 119,058 95,487 60,092

1.02.02.02.01 Rural Properties – Lands and Farm Facilities 21,007 31,139 30,860

1.02.02.02.02 Operating Assets 9,002 7,567 3,678

1.02.02.02.03 Refurbishments and Improvements 3,851 1,916 1,778

1.02.02.02.04 Construction in Progress 9,265 2,123 9,705

1.02.02.02.05 Permanent Crop - Construction in Progress 0 0 14,071

1.02.02.02.06 Permanent Crop 75,933 52,742 0

1.02.02.03 Intangible 0 0 0

1.02.02.04 Deferred 475 893 1,393

1.02.02.04.01 Research and Development Expenses 0 374 578

1.02.02.04.02 General Pre-Operating Expenses 475 519 815



June 30, 2010


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07.628.528/0001-59

07.02 – CONSOLIDATED BALANCE SHEET - LIABILITIES (in thousands of reais)


2 Total Liabilities 733,797 678,996 702,732

2.01 Current Liabilities 97,760 74,427 103,759


2.01.02 Debentures 0 0 0

2.01.03 Suppliers 1,803 1,490 2,145

2.01.04 Taxes, Fees and Contributions 1,465 4,543 5,692

2.01.04.01 Withholding Taxes and Contributions 91 74 68

2.01.04.02 Taxes and Contributions on Revenues 316 505 451

2.01.04.03 Income Tax and Social Contribution Payable 207 2,273 2,132

2.01.04.04 Provision for Deferred Income Tax and Social Contribution

851 1,691 3,041

2.01.05 Dividends Payable 2 2 1,130

2.01.06 Provisions 0 0 0

2.01.07 Debts with Related Parties 0 0 0

2.01.08 Other 65,801 52,904 94,361

2.01.08.01 Payroll and Social Charges Payable 4,143 3,128 4,687

2.01.08.02 Acquisitions Payable – Current 61,420 47,780 86,610

2.01.08.03 Liabilities Payable 178 0 11

2.01.08.05 Payables from derivatives - Commodities 0 0 1,020

2.01.08.06 Payables from derivatives - Currency 60 519 1 ,439

2.01.08.08 Other Liabilities 0 1,477 594

2.02 Non-Current Liabilities 68,847 25,317 21,056

2.02.01 Long-Term Liabilities 68,847 25,317 21,056

2.02.01.01 Loans and Financing 49,299 9,759 1,341

2.02.01.02 Debentures 0 0 0

2.02.01.03 Provisions 346 0 0

2.02.01.04 Debts with Related Parties 0 0 0

2.02.01.05 Advance for Future Capital Increase 437 0 0

2.02.01.06 Other 18,765 15,558 19,715

2.02.01.06.01 Long-term Acquisitions Payable 0 0 12,100

2.02.01.06.03 Payables from Derivatives - Currency 0 637 759

2.02.01.06.05 Provision for Tax and Contributions 18,765 14,921 6,856

2.03 Deferred Income 0 0 0

2.04 Minority Interest 6,272 2,500 3,037

2.05 Shareholders’ Equity 560,918 576,752 574,880

2.05.01 Paid-up Capital Stock 584,224 584,224 584,224

2.05.01.01 Cash Private Subscription - Country 110 110 110

2.05.01.02 Cash Private Subscription – Foreign 914 914 914

2.05.01.03 Public Subscription 583,200 583,200 583,200

2.05.02 Capital Reserves 0 0 3,629

2.05.02.01 Legal Reserve 0 0 238

2.05.02.02 Investment and Expansion Reserve 0 0 3,391



June 30, 2010


18


1 - CVM CODE



07.628.528/0001-59

07.02 – CONSOLIDATED BALANCE SHEET - LIABILITIES (in thousands of reais)


2.05.03 Revaluation Reserves 0 0 0

2.05.03.01 Own Assets 0 0 0

2.05.03.02 Subsidiaries/Direct and Indirect Associated Companies

0 0 0

2.05.04 Profit Reserves 0 0 0

2.05.04.01 Legal 0 0 0

2.05.04.02 Statutory 0 0 0

2.05.04.03 For Contingencies 0 0 0

2.05.04.04 Unrealized Income 0 0 0

2.05.04.05 Profit Retention 0 0 0

2.05.04.06 Special for Non-Distributed Dividends 0 0 0

2.05.04.07 Other Profit Reserves 0 0 0

2.05.05 Assets Valuation Adjustments 0 0 0

2.05.05.01 Securities Adjustments 0 0 0

2.05.05.02 Accumulated Translation Adjustments 0 0 0

2.05.05.03 Business Combination Adjustments 0 0 0

2.05.06 Retained Earnings/Accumulated Losses (23,306) (7,472) (12,973)





19


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07.628.528/0001-59

08.01 – CONSOLIDATED INCOME STATEMENT (in thousands of reais)


4 – 07/01/2008 to 06/30/2009

5 – 07/01/2007 to 06/30/2008

3.01 Gross Revenue from Sales and/or Services 38,978 36,653 46,558

3.01.01 Revenues from Land Leasing 373 498 427

3.01.02 Revenues from Grain sales 31,600 35,994 19,948

3.01.03 Revenues from Sugarcane Sales 6,731 88 4,570

3.01.04 Income from Byproducts and Other 274 73 0

3.01.05 Income from Real Estates 0 0 21,613

3.02 Gross Revenue Deductions (2,233) (1,369) (1,169)

3.02.01 Tax on Lease Revenues (241) (404) (134)

3.02.02 Tax on Revenues from Grain Sales (1,556) (965) (911)

3.02.03 Taxes on Real Estate Sales 0 0 (124)

3.02.04 Taxes on Other Revenues (436) 0 0

3.03 Net Revenue from Sales and/or Services 36,745 35,284 45,389

3.04 Cost of Goods and/or Services Sold (48,447) (35,905) (30,061)

3.05 Gross Income (11,702) (621) 15,328

3.06 Operating Expenses/Income (15,884) 4,218 12,218

3.06.01 Selling (2,175) (1,172) (657)

3.06.02 General and Administrative (23,335) (21,756) (19,667)

3.06.02.01 Administrative Expenses (857) (688) (1,529)

3.06.02.02 Fee Expenses (9,191) (9,481) (7,766)

3.06.02.03 Personnel Expenditures (10,213) (7,116) (5,728)

3.06.02.04 Share Placement Expenditures 0 (1,897) 0

3.06.02.05 Depreciation and Amortization Expenses (904) (540) (542)

3.06.02.06 Other General and Administrative Expenses (2,170) (2,034) (4,102)

3.06.03 Financial 15,778 27,641 35,989

3.06.03.01 Financial Income 21,966 32,313 42,705

3.06.03.01.01 Fund Investments Yield 19,570 35,806 43,919

3.06.03.01.02 Exchange Variation on Liabilities 61 (4,303) 6,166

3.06.03.01.03 Monetary Variation on Liabilities 1,373 (2,923) (10,186)

3.06.03.01.04 Interest Receivable 932 2,221 330

3.06.03.01.05 Derivatives Realized Income – Commodities (1,912) 5,390 (1,799)

3.06.03.01.06 Derivatives Realized Income – Currency (375) (7,913) (1,490)

3.06.03.01.07 Derivatives Realized Income – Indexes 28 2,123 926

3.06.03.01.08 Derivatives Income - Outstanding Commodities 0 6,386 70

3.06.03.01.09 Derivatives Income - Outstanding Currency 2,357 (1,403) 1,630

3.06.03.01.10 Derivatives Income – Outstanding Indexes (68) (3,071) 3,139

3.06.03.02 Financial Expenses (6,188) (4,672) (6,716)

3.06.03.02.01 Banking Expenses and Charges (325) (4,672) (6,716)

3.06.03.02.02 Interest Payable (5,863) 0 0

3.06.04 Other Operating Income 0 13 (3,447)

3.06.05 Other Operating Expenses 417 (508) 0

3.06.06 Equity in the Earnings of Subsidiaries (6,569) 0 0



June 30, 2010


20


1 - CVM CODE



07.628.528/0001-59

08.01 – CONSOLIDATED INCOME STATEMENT (in thousands of reais)


4 – 07/01/2008 to 06/30/2009

5 – 07/01/2007 to 06/30/2008

3.06.06.01 Equity on Foreign Subsidiaries 0 0 0

3.06.06.02 Exchange Variation on Investments Abroad (6,569) 0 0

3.06.06.03 Equity on Local Subsidiary 0 0 0

3.07 Operating Income (27,586) 3,597 27,546

3.08 Non-Operating Income 0 0 0

3.08.01 Revenues 0 0 0

3.08.02 Expenses 0 0 0

3.09 Income Before Tax/Holdings (27,586) 3,597 27,546

3.10 Provision for Income Tax and Social Contribution (605) (1,748) (10,495)

3.11 Deferred Income Tax 11,323 (1,436) (2,793)

3.12 Statutory Holdings/Contributions 0 0 0

3.12.01 Holdings 0 0 0

3.12.02 Contributions 0 0 0

3.13 Reversal of Interest on Own Capital 0 0 0

3.14 Minority Interest 1,034 537 278

3.15 Income/Loss for the Period (15,834) 950 14,536

No. SHARES, EX-TREASURY (Units) 58,422,400 58,422,400 58,422,400

EARNINGS PER SHARE (Reais) 0.01626 0.24881

LOSS PER SHARE (Reais) (0.27103)




21


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07.628.528/0001-59

09.01 – CONSOLIDATED STATEMENT OF CASH FLOWS – INDIRECT METHOD (in thousands of reais)


4 – 07/01/2008 to 06/30/2009

5 – 07/01/2007 to 06/30/2008

4.01 Net Cash from Operating Activities (52,641) 16,638 (35,177)

4.01.01 Cash Generated in the Operations (5,909) 13,642 2,651

4.01.01.01 Income for the Period (15,834) 950 14,536

4.01.01.02 Depreciation, Amortization and Depletion 11,954 4,639 2,829

4.01.01.03 Exchange Variation Over Investments 0 0 1,106

4.01.01.04

Equity Income and Investment Losses in Associated Companies

6,569 0 0

4.01.01.05 Exchange Variation and Interest Over Liabilities 943 7,226 4,020

4.01.01.06 Unrealized Income from Derivative Operations (2,289) (1,912) (4,839)

4.01.01.07 Deferred Income Tax (11,323) 1,436 (2,793)

4.01.01.08 Interest on Financing 3,974 1,235 103

4.01.01.09 Net Write-Offs of Property, Plant and Equipment 91 97 0

4.01.01.10 Other Operating Income/Expenses 0 508 (775)

4.01.01.11 Gains from Properties Sold 0 0 (11,258)

4.01.01.12 Minority Interest 1,034 (537) (278)

4.01.01.13 Interest Receivable (1,374) 0 0

4.01.01.14 Provision for Contingencies 346 0 0

4.01.02 Variation on Assets and Liabilities (46,732) 2,996 (37,828)

4.01.02.01 (Increase) Decrease in Securities (11,883) 0 0

4.01.02.02 (Increase) Decrease in Clients (14,511) 16,389 (13,535)

4.01.02.03 (Increase) Decrease in Tax Credits (8,575) (9,558) 3,631

4.01.02.04 (Increase) Decrease in Prepaid Expenses and Advances (221) (330) (1,487)

4.01.02.05 (Increase) in Other Credits (1,190) (13,523) (7,537)

4.01.02.06 (Increase) Decrease in Inventories (46,927) 911 (24,613)

4.01.02.07 Increase in Short-Term Investments 0 (64) (1,537)

4.01.02.08 (Increase) Decrease in Suppliers 313 (666) 1,965

4.01.02.09 Decrease in Taxes and Contributions Payable 2,968 201 371

4.01.02.10 (Increase) Decrease in Payroll and Charges 1,015 (1,558) 3,403

4.01.02.11 Increase (Decrease) in Other Liabilities (1,299) 1,323 425

4.01.02.12 (Increase) Decrease in Derivatives Operations 8,441 (228) 1,086

4.01.02.13 Decrease in Acquisitions Payable 25,137 10,099 0

4.01.03 Other 0 0 0

4.02 Net Cash from Investment Activities (54,577) (105,274) (138,875)

4.02.01 Additions to Property, Plant and Equipment (45,330) (36,238) (27,825)

4.02.02 Additions to Deferred Charges 0 0 (10,859)

4.02.03 Payment for Farms Purchased (12,422) (72,378) (100,318)

4.02.04 Increase in Investments and Interest 2,738 0 (3,273)

4.02.05 Receipt Due to Properties Sold 0 3,342 3,400

4.02.06 Interest and/or Dividends Received 0 0 0


4.03 Net Cash from Financing Activities 49,048 21,243 4,085

4.03.01 Investment of capital – Minority Shareholders of Subsidiaries 0 883 2,416




22


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07.628.528/0001-59

09.01 – CONSOLIDATED STATEMENT OF CASH FLOWS – INDIRECT METHOD (in thousands of reais)


4 – 07/01/2008 to 06/30/2009

5 – 07/01/2007 to 06/30/2008

4.03.02 Loans and Financing Obtained 60,108 23,010 1,669

4.03.03 (Increase) in Long-Term Assets 1 ,799 0 0

4.03.04 Dividends Payable 0 (1,128) 0

4.03.05 Payment of Loans and Financing (12,859) (1,522) 0

4.04 Exchange Variation on Cash and Cash Equivalents 0 0 0

4.05 Increase (Decrease) in Cash and Cash Equivalents (58,170) (67,393) (169,967)

4.05.01 Opening Balance of Cash and Cash Equivalents 264,370 331,763 501,730

4.05.02 Closing Balance of Cash and Cash Equivalents 206,200 264,370 331,763




23


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07.628.528/0001-59

10.01 – CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 07/01/2009 TO 06/30/2010 (in thousands of reais)








5.01 Opening Balance 584,224 0 0 0 (7,472) 0 576,752



5.04 Income/Loss for the Year 0 0 0 0 (15,834) 0 (15,834)

5.05 Allocations 0 0 0 0 0 0 0

5.05.01 Dividends 0 0 0 0 0 0 0



5.06 Realization of Profit Reserves 0 0 0 0 0 0 0









5.12 Other 0 0 0 0 0 0 0

5.13 Closing Balance 584,224 0 0 0 (23,306) 0 560,918


FEDERAL PUBLIC SERVICE CVM - BRAZILIAN SECURITIES AND EXCHANGE COMMISSION STANDARD FINANCIAL STATEMENTS - DFP ATE LAW COMMERCIAL, INDUSTRY & OTHER TYPES OF COMPANY

June 30, 2010


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07.628.528/0001-59









5.01 Opening Balance 584,224 0 0 3,629 (12,973) 0 574,880


5.03 Adjusted Balance 584,224 0 0 3,629 (12,051) 0 575,802

5.04 Income/Loss for the Year 0 0 0 0 950 0 950

5.05 Allocations 0 0 0 0 0 0 0

5.05.01 Dividends 0 0 0 0 0 0 0



5.06 Realization of Profit Reserves 0 0 0 (3,629) 3,629 0 0

5.06.01 Losses Absorbed by Reserves 0 0 0 (3,629) 3,629 0 0









5.12 Other 0 0 0 0 0 0 0

5.13 Closing Balance 584,224 0 0 0 (7,472) 0 576,752



June 30, 2010


25


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07.628.528/0001-59









5.01 Opening Balance 584,224 0 0 0 (13,755) 0 570,469



5.04 Income/Loss for the Year 0 0 0 0 5,541 0 5,541

5.05 Allocations 0 0 0 0 (1,130) 0 (1,130)

5.05.01 Dividends 0 0 0 0 (1,130) 0 (1,130)



5.06 Realization of Profit Reserves 0 0 0 3,629 (3,629) 0 0

5.06.01 Mandatory Legal Reserve Recorded 0 0 0 238 (238) 0 0

5.06.02 Reserve for Expansion 0 0 0 3,391 (3,391) 0 0











June 30, 2010


26

5.12 Other 0 0 0 0 0 0 0


1 - CVM CODE



07.628.528/0001-59









5.13 Closing Balance 584,224 0 0 3,629 (12,973) 0 574,880




27


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07.628.528/0001-59

11.01 – CONSOLIDATED STATEMENT OF VALUE ADDED (in thousands of reais)

1 - CODE 2 - DESCRIPTION 3 – 07/01/2009 to 06/30/2010

4 – 07/01/2008 to 06/30/2009

5 – 07/01/2007 to

06/30/2008

6.01 Revenues 39,395 35,919 0

6.01.01 Sale of Goods, Products and Services 38,978 36,653 0

6.01.02 Other Revenues 417 (734) 0

6.01.03 Revenues related to the Construction of Own Assets

0 0 0

6.01.04 Allowance for/Reversal of Doubtful Accounts 0 0 0

6.02 Input Acquired from Third Parties (63,003) (40,834) 0

6.02.01 Cost of Products, Goods and Services Sold (48,447) (35,905) 0

6.02.02 Materials – Energy – Third Party Services - Other (14,556) (3,664) 0

6.02.03 Loss/Recovery of Assets 0 (1,265) 0

6.02.04 Other 0 0 0

6.03 Gross Value Added (23,608) (4,915) 0

6.04 Retention (904) (606) 0

6.04.01 Depreciation, Amortization and Depletion (904) (606) 0

6.04.02 Other 0 0 0

6.05 Net Value Added Produced (24,512) (5,521) 0

6.06 Value Added Received in Transfers 15,397 32,313 0

6.06.01 Equity in the Earnings of Subsidiaries (6,569) 0 0

6.06.02 Financial Revenues 21,936 30,801 0

6.06.03 Other 30 1,512 0

6.06.03.01 Derivatives 30 1,512 0

6.07 Total Value Added to Distribute (9,115) 26,792 0

6.08 Allocation of Value Added (9,115) 26,792 0

6.08.01 Personnel 8,991 9,193 0

6.08.01.01 Direct Compensation 7,954 7,912 0

6.08.01.02 Benefits 861 999 0

6.08.01.03 Government Severance Indemnity Fund for Employees (FGTS)

176 282 0

6.08.01.04 Other 0 0 0

6.08.02 Taxes, Fees and Contributions (7,868) 4,457 0

6.08.02.01 Federal (8,750) 3,996 0

6.08.02.02 State 707 125 0

6.08.02.03 Municipal 175 336 0

6.08.03 Value Distributed to Providers of Capital 6,630 12,729 0

6.08.03.01 Interest Rates 6,162 11,854 0

6.08.03.02 Rentals 468 875 0

6.08.03.03 Other 0 0 0

6.08.04 Value Distributed to Shareholders (16,868) 413 0

6.08.04.01 Interest on Own Capital 0 0 0

6.08.04.02 Dividends 0 0 0

6.08.04.03 Retained/Accumulated Losses for the Period (15,834) 950 0

6.08.04.04 Minority Interest – Retained Earnings (1,034) (537) 0

6.08.05 Other 0 0 0




02003 – 6 BRASILAGRO CIA BRAS PROPRIEDADES AGRICOL 07.628.528/0001-59

12.01 - REPORT OF INDEPENDENT AUDITORS – UNQUALIFIED OPINION

28

Report of Independent Auditors

To the Management and Shareholders

Brasilagro Companhia Brasileira de Propriedades Agrícolas

1 We have examined the balance sheets of Brasilagro Companhia Brasileira de Propriedades Agrícolas and

the consolidated balance sheets of Brasilagro Companhia Brasileira de Propriedades Agrícolas and its subsidiaries on June 30, 2010 and 2009, as well as the respective statements of income, changes in shareholders’ equity and cash flows and value added for the years ended on these dates, prepared under the responsibility of the Company’s Management. Our responsibility is to issue a report on these financial statements.

2 Our audit was conducted in accordance with the audit rules applicable in Brazil, which require the audits to

be carried out with the purpose of evidencing that the financial statements were properly presented in their

all material respects. Therefore, our audit comprised, among other procedures: (a) work planning, taking

into account the relevance of balances, the volume of transactions and the Companies’ accounting and

internal controls systems, (b) the verification, based on tests, of the evidence and records that support the

amounts and accounting information disclosed and (c) the evaluation of the most significant accounting

practices and estimates adopted by the Company’s Management, as well as the presentation of financial

statements taken as a whole.

3 In our opinion, said financial statements fairly present, in all their material aspects, the equity and financial

condition of Brasilagro Companhia Brasileira de Propriedades Agrícolas and Brasilagro Companhia

Brasileira de Propriedades Agrícolas and its subsidiaries on June 30, 2010 and 2009, as well as the result

of operations, the changes in shareholders’ equity, the cash flows and the value added for Brasilagro

Companhia Brasileira de Propriedades Agrícolas for the years ended on those dates, as well as the

consolidated result of operations, consolidated cash flows and consolidated value added for said years, in

accordance with the accounting practices adopted in Brazil.

4 As mentioned in Note 2, the Brazilian Securities and Exchange Commission - CVM, approved several

Pronouncements, Interpretations and Technical Guidelines issued by the Brazilian Accounting

Pronouncements Committee – CPC, effective for 2010, which altered the accounting practices adopted in

Brazil. As authorized by CVM Resolution 603/09, the Company’s Management decided to present its

financial statements using the accounting standards adopted in Brazil up to June 30, 2010. The Company

disclosed this fact in Note 2 to the financial statements, as well as the evaluation of possible effects on the

Company’s shareholders' equity and results.

São Paulo, September 1, 2010.

PricewaterhouseCoopers

Auditores Independentes

CRC 2SP000160/O-5

Wander Rodrigues Teles

CRC Accountant 1DF005919/O-3 “S” SP





13.01 - MANAGEMENT REPORT

29

Dear Shareholders,

In compliance with legal and statutory provisions, we submit our Financial Statements for the

fiscal year ended June 30, 2010 for your examination.

HIGHLIGHTS

2009/2010 year highlights:

Total planted area reached 46.1 thousand hectares, a 38% increase over the

previous harvest;

Total developed area reached 17.9 thousand hectares;

Construction of a silo at Cremaq Farm with grain storage capacity of 72 thousand

tons;

Horizontina Farm acquisition, in Maranhão state, with a total area of 14,358 hectares;

Beginning of the sugarcane supply planted in Alto Taquari and Araucária farms;

Over R$60.0 million in short- and long-term financing disbursed by government

development agencies;

Proposal for termination of the Agreement with Paraná will be submitted for approval

at the next Shareholders‟ Meeting.

Launch of the Level I ADR Program.

Election of two new Board Members, one of them independent. The Company is

bound by arbitration at the Market Arbitration Panel, according to the Arbitration

Clause of its Bylaws.






30

MANAGEMENT'S COMMENTS

The 2009/2010 harvest year was affected by unstable climate conditions in Brazil, with heavy

rainfall in the midwest region and strong unexpected drought in the northeast region.

In this scenario, BrasilAgro used its experience, aligned with conservative financial

management, portfolio and geographical diversification, investments in technology and cost

reduction, to maximize results and continue consolidating its position.

The Company continued to invest in the integrated enterprise management system (SAP)

which, besides streamlining the internal processes, brings greater agility and transparency to its

operations. We continue to invest in new technologies and processes, constantly focusing on

greater efficiency and quality of our business.

We raised funds from government development agencies, which granted short- and long-term

loans at interest rates below the market costs. Increasing fund raising through low cost

financing agencies allows the Company to use the available cash to expand its property

portfolio.

An important step in 2010 was the acquisition of the Horizontina Farm in Maranhão state. The

farm will be used for grain crops and has high potential for value creation by improving its

operations. Due to certain farm‟s attributes the transformation process can be accelerated.

BrasilAgro maintained the brisk pace of expanding the planted area in the 2009/2010 harvest

year, which increased by 38% year-on-year. The Company also completed the transformation

of over 17 thousand hectares and built a silo at Cremaq Farm with grain storage capacity of 72

thousand tons.

The initiatives taken during the year, together with a long-term vision and the prospects of the

business opportunities being explored by the Company make us highly optimistic about

achieving our objectives for the coming year.






31

OPERATING PERFORMANCE

In the 2009/2010 harvest year, BrasilAgro planted a total area of 46,140 hectares, divided

among soybean, corn, sorghum, rice, seed pasture and sugarcane, higher 38% over the

previous year. Total developed area of 17,972 hectares, 17% more than in the previous year.

We started supplying sugarcane planted in Alto Taquari and Araucária farms, in compliance with

the exclusive supply agreement with ETH Bioenergia. The agreement is effective for two

complete sugarcane crop cycles (six harvest years with five harvests).

A total of 28,331 hectares of soybean were planted, divided into new areas, under development

and developed. The average yield (standardized) of the new areas and those in the first and

second year of cultivation was 32.7 bags per hectare, and in developed areas with at least four

years of cultivation, average yield (standardized) was 54.5 bags per hectare.

Despite the heavy rainfall during the harvest period, the soybean yield in developed areas was

7% higher than in the 2008/2009 crop. Crops in the new areas and those under development

were affected by the strong atypical drought in the region.

Since the start of its operations in 2006, the Company has posted average growth of 45% in

total planted area. For the 2010/2011 crop, we plan to maintain the growth pace in both the

planted and developed areas.

In the 2010/2011 harvest year, BrasilAgro plans to plant an area of approximately 65 thousand

hectares, divided into soybean, corn (summer and winter crops), rice, sorghum (summer and

winter crops), sugarcane, pasture and forestry, besides developing an area of around 20

thousand hectares.






32

PROPERTY PORTFOLIO

Total Area Arable Area Acquisition Price Price per Hectare

(ha) (ha) (R$ MM) (R$ thousand)

São Pedro Farm Chapadão do Céu/GO 2,443 1,700 R$ 9.9 R$ 4.1

Cremaq Farm Baixa Grande Ribeiro/PI 32,375 22,019 R$ 42.2 R$ 1.3

Jatobá Farm (1) Jaborandi/BA 31,602 24,600 R$ 35.4 R$ 1.1

Alto Taquari Farm Alto Taquari/MT 5,266 3,720 R$ 34.0 R$ 6.5

Araucária Farm Mineiros/GO 9,682 7,007 R$ 70.5 R$ 7.3

Chaparral Farm Correntina/BA 37,129 28,000 R$ 45.9 R$ 1.2

Nova Buriti Farm Januária/MG 24,185 19,935 R$ 21.9 R$ 0.9

Preferência Farm Barreiras/BA 17,800 14,199 R$ 10.7 R$ 0.6

Horizontina Farm Tasso Fragoso/MA 14,358 8,600 R$ 37.0 R$ 2.6

Total 174,840 129,780 R$ 307.5

171,680 127,320 R$ 303.8Total Owned by BrasilAgro (1)

(1) The Jatobá Farm is owned by one of our affiliated, Jaborandi S.A., of which we own 90% of the capital stock and the Maeda Group

Properties Location

São Pedro Farm

The Company is concluding the harvest of 594 hectares of the winter corn crop and has already

started preparations for planting soybean and corn in the 2010/2011 crop.

Cremaq Farm

The Company concluded the harvest of the summer soybean, corn, sorghum and rice crops. A

part of the production was not sold and is stored in the silo. Soybean prices in the region have

risen 30% since the end of harvest.

We have started preparations to plant soybean, corn and rice in the 2010/2011 crop. We will

also continue the development process.

Jatobá Farm

The Company concluded the harvest of the summer crop and has already started preparations

to plant soybean and corn in the 2010/2011 crop. We have leased 600 hectares in this property

to third parties.

We will also continue the development process.






33

Alto Taquari Farm

The Alto Taquari farm has an agreement with ETH Bionergia to supply sugarcane, effective for

two complete sugarcane crop cycles (six harvest years with five harvests). We started supplying

sugarcane last quarter.

Sugarcane is planted in 100% of the 3,673 hectare property. We are currently in the sugarcane

harvesting process.

Araucária Farm

The Company concluded the harvest in 688 hectares of winter corn crop and has already

started preparations to plant soybean in the 2010/2011 crop. Additionally, the Company has

planted sugarcane on 4,973 hectares and leased 194 hectares to third parties. We are currently

in the sugarcane harvesting process.

The Araucária farm has an agreement with ETH Bionergia to supply sugarcane, effective for two

complete sugarcane crop cycles (six harvest years with five harvests). We started sugarcane

supply last quarter.

Chaparral Farm

The Company concluded the harvest soybean and has already started preparations for planting

soybean in the 2010/2011 crop. We will also continue the development process.

Nova Buriti Farm

The Company is currently awaiting the licenses required for starting operations on this farm.

Preferência Farm

After registering the Definitive Purchase and Sale Deed and obtaining possession of the

property, the Company began implementing the cattle project on this farm, where it will grow

grass for pasture. We will also continue the development process.






34

Horizontina Farm

After obtaining effective possession of the property, the Company took over the farm‟s

operations and started preparations to plant soybean and rice in the 2010/2011 crop. We will

also continue the development process.

FARMING AND EXPLORATION ACTIVITIES

2009/2010 Harvest Year

As of the publication of this release, BrasilAgro had concluded harvesting soybean and planting

sugarcane, while starting the harvest of the winter corn crop at São Pedro Farm.

In addition to the area directly cultivated by the Company, we also have 2,651 hectares in the

Cremaq and Jatobá Farms leased to third parties.

Culture Area Status

Soybean - Summer Crop 28,331 100% Planted / 100% Harvested

Corn - Summer Crop 1,887 100% Planted / 100% Harvested

Rice - Summer Crop 877 100% Planted / 100% Harvested

Sorghum - Summer Crop 956 100% Planted / 100% Harvested

Corn - Winter Crop 1,282 100% Planted / 60% Harvested

Sorghum - Winter Crop 850 100% Planted

Seed Pasture 630 100% Planted

Sugarcane 8,676 100% Planted / Ongoing Harvest

Total 43,489

In 4Q10, we started the supply of sugarcane planted in the Alto Taquari and Araucária farms, in

compliance with the exclusive supply agreement with ETH Bioenergia. The agreement is

effective for two complete sugarcane crop cycles (six harvest years with five harvests).

Of the 28,331 hectares planted with soybean, 71% are new areas with average yield

(standardized) of 32.7 bags per hectare. On the other hand, developed areas, which represent

13% of soybean planted area, recorded average yield (standardized) of 54.5 bags per hectare,

8% higher than in the previous harvest.

The yield of the summer corn crop was affected by the heavy rainfall in the São Pedro Farm

(GO) and strong atypical drought in the Cremaq Farm (PI), which registered average yield of 98

bags per hectare.






35

HEDGE POSITION

The current hedge position is shown below:

Hedge (%)

Price1

(USD/bag) Hedge (%) BRL / USD US$

09/10 87.7% 10.02 87.5% 1.88 18,813,015

10/11 20.1% 10.16 16.9% 1.92 6,804,921

¹Soybean Sales Chicago - CBOT

Soybean

Harvest

FX

FINANCIAL PERFORMANCE

INCOME STATEMENT

BrasilAgro ended the 2009/2010 harvest year with accumulated loss of R$15.0 million, mainly

due to the R$6.5 million decline in investments, resulting from the booking of impairment on

the assets of Green Ethanol LLC, and the decrease in revenue from grain sales as we did not

sell the entire production by the end of the year, as well as the decrease in yield on account of

heavy rainfall in the midwest region and strong atypical drought in the northeast region.

Net Revenue from Sales and/ or Services

In 4Q10, the R$12.9 million revenue from grain sales refers to the sale of a part of the

soybean, corn, rice and sorghum production and the R$6.7 million revenue from sugarcane

sales is related to the start of the agreement for the supply of sugarcane planted in Alto Taquari

and Araucária Farms.

Year-to-date net revenue from sales and/or services was R$ 36.7 million, up 4% on the same

period of the previous year. A part of the grain produced in the 2009/2010 harvest was not

sold.

Net revenue from leasing refers to the agreements signed with BrasilAgro‟s subsidiaries,

Imobiliária Cremaq and Jaborandi Agrícola Ltda. Leasing prices are based on bags of soybean.

Note that there are no purchase option clauses under these agreements to be exercised by the

lessees.






36

General and Administrative Expenses

General and administrative expenses in 4Q10 were R$5.7 million, increasing 41% from the

previous fiscal year. This variation is mainly due to the increase in personnel expenses as a

result of the increase in the number of Company employees and an increase in depreciation and

amortization expenses, which resulted from the purchase of seed planting machines and

sugarcane harvesters.

The credit in general and administrative expenses in 4Q10 and 4Q09 is the result of PIS and

COFINS service tax credits.

In the year, the 44% increase in personnel expenses is due to the increase in the number of

Company employees. There was a slight 7% variation in total general and administrative

expenses as a result of the „fund raising expenses‟ accounts which did not occur this year, and

the PIS and COFINS credit, which ended up offsetting the increase in other expenses.

Financial Result

The consolidated financial result corresponds to the following elements: (i) returns on

investments, (ii) foreign exchange variation on the amount payable for the acquisition of the

Jatobá Farm, (iii) monetary variation on the amount payable for the acquisition of the Alto

Taquari and Nova Buriti Farms, (iv) result of hedge operations, (v) interest on tax credits and

loan to the Maeda Group, (vi) banking charges and expenses.

In 4Q10, with the sale of the soybean harvested, we carried out the commodity and currency

hedge operations.

BALANCE SHEET

Current Assets

The balance of current assets declined 16% in relation to June 30, 2010, mainly due to the

reduction in cash and cash equivalents following the payments made for farm acquisitions.

Long-Term Assets

Receivables from related parties include the loan between BrasilAgro and Grupo Maeda

involving the surplus of advances for future capital increase made related to its proportional






37

interest in the capital of the investee company, in the amount of R$6.0 million plus interest of

1.35% per month.

Sundry credits include amounts receivable of R$4.3 million from the sale of the Engenho Farm,

the deferred tax on the tax losses from rural operations of R$20.5 million, ICMS (state VAT)

recoverable in the amount of R$2.9 million and long term investments in the amount of R$26.5

million.

The balance of Inventories on June 30, 2010 was R$283.5 million, 22% up year-on-year, due to

the acquisition of the Horizontina Farm in March 2010, and the transfer of the São Pedro Farm

to Imobiliária Araucária, a subsidiary of BrasilAgro, in 2Q10 and the transfer of 3,064 hectares

of Nova Buriti Farm to Imobiliária Flamboyant, a subsidiary of BrasilAgro, in 4Q10.

Current Liabilities

The increase in current liabilities is mainly due to the disbursement of R$25.8 million of the

short-term financing with BNB and the purchase of Horizontina Farm, in addition to the

payment of installments related to the acquisitions of the Alto Taquari, Jatobá, and Nova Buriti

farms. These liabilities correspond to the outstanding amounts related to the following farm

acquisitions: (i) Jatobá Farm, which is indexed to the U.S. dollar; (ii) Alto Taquari Farm, which is

indexed to 100% of the CDI overnight rate; (iii) Nova Buriti Farm, which is indexed to the IGP-

M inflation index; and (iv) Horizontina Farm, which has no monetary restatement for the next

12 months, after which it will be restated at 60% of CDI.

Long-Term Liabilities

The increase in long-term liabilities is mainly due to the disbursement of R$36.7 million in long-

term financing by BNB.

CORPORATE GOVERNANCE

In May, the new Chairman and Vice-Chairman of BrasilAgro‟s Board of Directors as well as two

new members in place of the outgoing Board members, Messrs. Pedro de Andrade Faria and

José Carlos Reis de Magalhães, were elected.

Mr. Eduardo S. Elsztain was elected Chairman of the Board and Mr. Robert Charles Gibbins, an

independent member, was elected Vice-Chairman.






38

The new Board members are Mr. Gabriel Pablo Blasi and Mr. Isaac Selim Sutton (independent

member). Following is a brief summary of their professional background:

Gabriel Pablo Blasi – he holds a degree in business administration from the University of

CEMA (Centro de Estudos Macroeconômicos Argentino) and a graduate degree in finance from

the Austral University in Argentina. He started his career in 1989 at Citibank, where he was as a

Senior Trader for 7 years. He then worked as treasurer at Buenos Aires Branch plc. and at

Lloyds Bank plc. in Buenos Aires. He has over 20 years of experience in Investment Banking

and Capital Markets, having worked at Banco Río (BSCH). He was the manager of Rio Valores

Sociedad de Bolsa, CFO of the Carrefour Group in Argentina and of Goyaique SACIFIA. He is

currently the CFO of the Cressud Group companies, IRSA and Alto Palermo.

Isaac Selim Sutton - he holds a degree in economics from the University of São Paulo (USP).

He was an executive officer at the Safra Group‟s holding company from 1994 to 2009, where he

participated in several privatizations and investments, as well as joint ventures in several

sectors. He is currently a member of the Fiscal Council of Bardella S.A. Indústrias Mecânicas.

From 1995 to 2008, he was a member of the Board of Directors, Alternate to the Chairman of

the Board and Coordinator of the Audit Committee since its creation in 1997, at Aracruz

Celulose S/A. He has also served on the Boards of the following companies: Bardella S/A.,

DPVAT S/A., Telenorte Celular, TIM Participações S/A., Veracel Celulose S/A., BR Properties

S/A., Gevisa S/A and Celma S/A and on the Fiscal Councils of TIM Sul, Têxtil Renaux and TIM

Nordeste.

Termination of Paraná Agreement

At a meeting held on July 22, 2010, the independent members of the Board of Directors

approved the proposal to terminate the Consulting Agreement signed on March 15, 2006

between the Company and Paraná Consultora de Investimentos S.A.

The independent Board members recognized the vital role played by Paraná, working together

with the Company during its structuring and operational kick-off after its foundation in 2006.

Paraná, through its experienced representatives, contributed decisively to the Company in

planning operations, building up land portfolio and exploring the acquired properties. However,

the Board members believe that during its relationship with Paraná, the Company gradually

acquired the knowledge and knowhow to conduct these operations using in-house resources






39

and hence, since the beginning of the current fiscal year (July 1, 2010), the consulting services

under the Agreement are no longer justifiable and the Company no longer needs to maintain

the Agreement.

The independent Board members thanked the Company for the support they received for the

discussion and the resolution approved at the meeting, underlining that the provisions of the

Bylaws and the best corporate governance practices were strictly observed. They also thanked

the other Board members, who decided not to take part in the discussion, as informed to the

Company.

As required by Article 23 of the Company‟s Bylaws, the independent Board members resolved to

submit the matter to the Shareholder‟s Meeting for approval.

Level I ADR Program

At a meeting held on July 5, 2010, the Board of Directors approved the launching of the Level I

American Depositary Receipts Program.

The ADR Program will be Level I, pursuant to the rules of the U.S. Securities and Exchange

Commission (SEC), the exemptions from registration envisaged in Rule 12g3-2b of the U.S.

Securities Act of 1933 (“Securities Act”), Regulation S of the Securities Act and the rules of the

Securities and Exchange Commission of Brazil (CVM);

The Program‟s underlying securities will be the Company‟s common shares, at the ratio of 1

ADR per common share. The Bank of New York Mellon will be the issuer and/or depositary

bank, while Itau-Unibanco S.A. will be the custodian bank.






40

FINAL CONSIDERATIONS

The Independent Auditors, PricewaterhouseCoopers Auditores Independentes, which have been

reviewing the Company‟s financial statements since 2006, only provided services to BrasilAgro –

Companhia Brasileira de Propriedades Agrícolas related to the audit of the financial statements.

We remain available to provide any further information.

São Paulo, September 1, 2010.

Julio Cesar de Toledo Piza Neto

CEO and Investor Relations Officer





14.01 –NOTES TO THE FINANCIAL STATEMENTS

41

1 Operational Context

The Company was incorporated on September 23, 2005, is headquartered in São Paulo and has branches in the States of Bahia, Goiás, Maranhão, Mato Grosso, Minas Gerais and Piauí.

Pursuant to the Bylaws, the corporate purpose is: (a) exploration of agriculture, cattle raising and forestry activities of any kind and nature as well as directly or indirectly related services; (b) import and export of agricultural products and inputs and related to the cattle raising activity, (c) purchase, sale and/or leasing of properties, lands, buildings and real estate in rural and/or urban areas, (d) real estate intermediation involving any type of operations, (e) investment, as a partner, in other companies, either civil or commercial, and in business undertakings of any nature, in Brazil and/or abroad, either directly or indirectly related to the purposes described herein, and (f) management of own and third parties’ assets.

The Company and its subsidiaries have eleven (11) farms in six Brazilian states, a total area of 174,840 hectares (unaudited). It aims at consolidating its position as one of the major companies operating in the agribusiness segment in Brazil by means of: (a) the acquisition of new farms and the start of a production expansion strategy; (b) optimization of productive processes; (c) geographic and productive diversification; and (d) sale of farms acquired, once the intended valuation is obtained or their agribusiness productive potential is reached.

The subsidiaries Cremaq Ltda. (“Cremaq”), Engenho de Maracajú Ltda. (“Engenho”), Jaborandi Propriedades Agrícolas S.A. (“Jaborandí”), Araucária Ltda. (“Araucária”), Mogno Ltda. (“Mogno”), Cajueiro Ltda. (“Cajueiro”), Ceibo Ltda. (“Ceibo”) and Flamboyant Ltda. (“Flamboyant”) have as purpose the purchase and sale of properties, lands, buildings and real estates in rural and/or urban areas. As authorized in their respective bylaws and charters, while the real estate properties belonging to said companies are not sold, these may be purpose of lease to third parties, but only as a strategy to ease their valuation.

New businesses have been prospected, but they will only be announced when the technical and legal valuations and the respective due diligence are completed, pursuant to the Company’s disclosure policy.

2 Presentation of the financial statements and main accounting practices

2.1 Presentation of the financial statements

These financial statements were approved by the Company’s Board of Executive Officers on September 01, 2010.

Figures are expressed in thousands of Reais, except when otherwise indicated.

The notes to the financial statements refer to the parent company’s annual information and, when indicated, they also refer to the consolidated annual information.

The Company’s financial statements were prepared and are being presented in conformity with the accounting practices adopted in Brazil, based on the provisions contained in the Brazilian Corporate law and in the rules issued by the Brazilian Securities Commission – (CVM).

The main accounting practices adopted in the preparation of these financial statements correspond to the standards and guidelines effective for the financial statements ended June 30, 2010, which differ from those that will be used when preparing the financial statements of






42

June 30, 2011, due to the standards and interpretations issued by the Accounting Pronouncements Committee - CPC which were published and are mandatory for the fiscal years beginning on or as of January 1, 2010. Since the Company’s fiscal year ends on June 30 each year, the Company’s Management is assessing the impacts of these changes as of July 1, 2010, as detailed in item 2.3 below. In the preparation of the financial statements, it is necessary to use estimates to record certain assets, liabilities and other transactions. The financial statements of the Company and its subsidiaries then include estimates referring to the selection of the fixed assets useful lives, provisions necessary for contingent liabilities, the definition of allowances for income tax and other similar taxes. Actual results may differ from the estimates. 2.2 Description of main accounting practices (i) Determination of income Revenues and expenses are recognized in compliance with the accrual basis.

Revenues from land leasing are recognized on a straight-line basis within the term of the

leasing. When the leasing price is defined in quantity of agricultural or cattle products, the

amount of leasing is recognized taking into account the price of the agricultural or cattle product

in force on the balance sheet closing date or on the date set forth by agreement, as this is the

case. The amounts received in advance as leasing are recognized in current liabilities, under

“Other liabilities”.

The revenue from grain and sugarcane sales is recognized when material risks and goods

ownership benefits are transferred to the buyer, usually when products are delivered to the

buyer at specified location, pursuant to the sale conditions agreed upon.

Concerning grain sales, the Company usually executes forward sales agreements, providing that the price may be determined by the Company for total or partial volume sold, up to delivery, according to formulas established in the agreement. In some cases, the formula established in the agreement sets up a fixed price in U.S. dollars. The amount in Reais is also determined in agreement, based on the exchange rate effective certain days prior to the financial settlement date. The price may also be adjusted by other factors, such as humidity and other grain technical features. Once grains are delivered, revenue is recognized based on the price established with each buyer, considering the exchange rate effective on the delivery date. After the delivery of grains to receiver, the quality and the final weight are evaluated, thus, determining the final price of the operation and adjusting the contractual amounts by these factors, as well as by the exchange rate variation up to the settlement date. (ii) Cash and cash equivalents The cash and banks balances are stated in the Parent Company’s financial information, as is the investment in quotas of FIM Guardian exclusive fund, which holds investments in fixed income securities, redeemable within no later than 90-day period. In addition to the balances described above, investments in banks (deposit certificates and repo agreements), which have the same liquidity characteristics and are redeemable in a maximum term of 90 days as of the balance sheet date, are stated as “Cash and Cash Equivalents” in the Consolidated. Investments are stated at the amortized cost, corresponding to the initial investment amount less amortization of principal, plus interest incurred calculated based on the interest rate method up to the balance sheet date. Taking into account the nature of instruments held by the






43

Company, there are no significant differences between their book value and market value on the balance sheet date. Fixed income investments aim the monetary restatement of amounts held by the Company and not yet allocated to rural activities, which are ruled by a policy approved by the Board of Directors. In addition to the specific purpose of investment, the Company has no financial instrument called “embedded derivative”. Pursuant to the Company’s investment policy (Note 22), fixed income securities (deposit certificates and repo agreements) may have maturity exceeding 90 days, in this case, there is a buyback guarantee provided by the financial institution selling these securities, ensuring liquidity with no penalties. The statements of cash flows, referring to financing and investment activities, include only effective cash and cash equivalents transactions. Therefore, purchases and sales of financed assets are included in Notes 9, 10, 12 and 13. (iii) Financial instruments

Classification and measurement

The Company classifies its financial assets under the following categories: measured at fair

value through income, loans and receivables, held-to-maturity and available-for-sale securities.

The classification depends on the purpose for which financial assets were acquired. The

Management determines the classification of its financial assets in the initial recognition. In the

reported periods, the Company exclusively holds financial assets classified as loans and

receivables.

Loans and receivables

This category includes loans granted and receivables which are non-derivative financial assets

with fixed or determinable payments, not quoted in an active market. They are included as

current assets, except for those with maturity over 12 months after the balance sheet date

(these are classified as non-current assets). The Company’s loans and receivables mainly

comprise trade accounts receivable, other accounts receivable, cash and cash equivalents and

short-term financial investments corresponding to time deposits at banks. Loans and

receivables are recorded by the amortized cost, using the real interest rate method.

The Company evaluates, on the balance sheet date, if there is objective evidence that a

financial asset or a group of financial assets is recorded by value above its recoverable value

(impairment).

Fair Value

The fair value of investments publicly traded is based on current purchase prices. For financial

assets without active market or not publicly traded, the Company establishes the fair value

through valuation techniques. These techniques include the use of recent operations contracted

with third parties, benchmark to other instruments which are substantially similar, the analysis of

discounted cash flows and the options pricing models that use the highest amount of






44

information generated by the market and least possibly relying on information generated by the

entity’s management.

(iv) Derivative instruments and hedge activities

Initially, derivatives are recognized by the fair value on the date derivatives agreement is

executed and subsequently are measured again at their fair value, with fair value variations

recorded against income under “Financial revenues”, except when the derivative is designated

for accounting purposes as cash flows hedge instrument.

Although the Company uses derivatives for hedge purposes, it has not applied in the reported

periods the so-called hedge accounting.

The fair value of derivative instruments is disclosed in Note 22.

(v) Deferred income tax and social contribution

Deferred income tax and social contribution are calculated over income tax losses, social

contribution tax loss carryforwards and corresponding temporary differences between the

calculation basis of tax over assets and liabilities and book values of the financial statements.

These taxes rates, currently defined to determine deferred credits are 25% for income tax and

9% for social contribution (Note 18).

Deferred tax assets are recognized to the extent it is probable that future taxable income is

available to be used when offsetting the temporary differences and/or tax losses, based on

projections of future results prepared and based on in-house assumptions and future economic

scenarios that may, therefore, suffer changes.

(vi) Tax credits

These are stated at cost or at realization value, including, when applicable, monetary

restatements. Tax credits correspond especially to withholding income tax on income from

financial investments as well as indirect tax credits in the acquisition of inputs and services.

(vii) Trade accounts receivable

Trade accounts receivable are firstly valuated at present value and deducting allowance for

doubtful accounts. The allowance for doubtful accounts is established when there is objective

evidence that the Company will not be able to collect all amounts due according to the original

terms of the accounts receivable. The provision amount is the difference between the book

value and the recoverable value. The Company did not record allowance for doubtful accounts

in the reported periods.






45

The present value is calculated on the installment sale of farms based on interest rates effective

on the recognition date of the accounts receivable compatible with the nature, term and risks of

similar transactions under market conditions. In case of installment sale of farms, this rate

corresponded on average to 10.74 % p.a.. The effect of adjustment is recorded on the farm sale

date as a reduction of sales revenues, and it is the difference between the adjusted value on the

sale date and the face value receivable recognized as financial result between the sales date

and the receipt date of asset.

(viii) Inventories - current

Finished products - are stated by the lower between production cost value and net realizable

value. The cost is determined using the average cost method measured by tonne of product at

the level of each individual tract of land. The net realizable value is the sales price estimated for

the normal course of businesses, less execution and sales expenses.

Crops in progress - stated at direct and indirect costs incurred up to the balance sheet date and

correspond to the expenditures related to the crop growing.

Inputs – inventories of seeds, composts, fertilizers, pesticides, fuels, lubricants, storehouse and

various materials were assessed by the average cost of acquisition, which do not exceed

market prices.

Advances for purchase of seeds and inputs - correspond to advances related to the purchase of

inputs, which have not been received yet by the Company on the balance sheet date,

accounted at cost.

(ix) Rural properties inventories - non-current

Lands of rural properties purchased by the subsidiaries whose activity is the purchase and sale

of properties are stated at the acquisition cost which does not exceed its net realization value. In

case of installment purchases without any charges, in addition to exchange variation or

monetary restatement, the acquisition cost corresponds to the cash cost estimated by the

adjustment to present value of contractual cash flows, adjusted by IGPM (General Market Price

Index).

The Company’s business strategy has as fundamental backbone the rural properties purchase

for their resale after their appreciation. As part of the real estate property appreciation process,

the Company, directly or through subsidiaries, performs the property leases or their exploration

for agricultural activities. Since the Company’s ultimate purpose is to sell the rural properties,

these properties have been classified as “Rural Property Inventory”. Considering that on the

date this financial statement has been drawn up there was no prospect of selling the rural

properties within the next twelve months, they have been recorded as “Non-current Assets”.

The Management carries out periodic valuations of these properties and we verified that the

market value exceeds the value recorded.






46

(x) Investments

Interest in subsidiaries is valuated by the equity method of accounting, recognized in income for

the year as operating revenue (expense).

Pursuant to CPC 02, the foreign investee’s functional currency is the Real; thus, exchange

variation is not levied.

(xi) Property, plant and equipment

These are stated at the acquisition cost, deducted from depreciation/depletion, calculated based

on the annual rates that take into consideration the useful life of the assets.

In case of installment purchases without any charges, in addition to exchange variation or

monetary restatement, the acquisition cost corresponds to the cash cost estimated by the

adjustment to present value of contractual cash flows.

Gains and losses in sales are determined by comparing sale amounts and book value and are

included in income.

Repairs and maintenance are appropriated to income during the period these are incurred. The

cost of the main improvements is included in the book value of asset when it is probable that the

future economic benefits that exceed the performance standard initially assessed to the existing

asset will flow into the Company. The main improvements are depreciated during the remaining

useful life of related asset.

(xii) Deferred charges

The amounts registered as deferred charges were recorded at the historical cost of acquisition

and formation up to June 30, 2008. The balances correspond to expenditures incurred during

the Company’s incorporation and organization phase, which were appropriated to deferred

charges, being amortized by the estimated term of five years.

(xiii) Current and Non-Current liabilities

Financial liabilities are valued at the amortized cost corresponding to the initial disbursement

received, less amortizations of the principal, plus interest incurred calculated based on the

interest rate method until the balance sheet date.

Other liabilities are stated at known or calculable values, plus, where applicable, the

corresponding charges and foreign exchange rate and monetary variations incurred.

For long-term liabilities, when their conditions do not include charges, besides exchange

variation or monetary restatement, the original cost was recognized as discounted present value

using rates compatible with the nature, term and conditions of the financing. The effect of

adjustment to present value of liabilities due to the acquisition of farms is recorded on the

acquisition date, as a reduction in the value of the acquired farm; the difference between the

adjusted value on the acquisition date and the face value payable is recognized as financial

expense between the acquisition date and the date of payment of corresponding liabilities.






47

(xiv) Provisions

Provisions are recognized when the Company has a current, legal or not formalized liability, as

a result of past events and it is probable that outflow will be necessary to settle the liability so

that a reliable estimate of the amount may be made.

The contingent liabilities resulting from labor, social security, tax, contractual, operational

proceedings, as well as from administrative and judicial pleading obligations, are provisioned at

their estimated value when the loss is considered probable.

(xv) Benefits to employees – Profit sharing and bonus

The recognition of this profit sharing is usually carried out at year-end, when the value may be

reliably measured by the Company

(xvi) Share-based compensation

The Company offers share-based compensation plans to executives, paid with Company

shares, according to which the Company receives employees’ services as consideration of the

stock options (See Note 23). Once granted, the options fair value is recognized as expense,

during the vesting period.

2.3 Standards and interpretation of standards not effective yet

Standards and interpretations changing the accounting practices adopted in Brazil were

published, within the process of convergence with the international accounting standards. The

following standards are those that may significantly affect (or should affect) the Company’s

financial statements. Pursuant to these new rules, figures herein referring to the fiscal year

ended June 30, 2010 shall be presented again for comparison purposes, when presenting the

financial statements for the fiscal year ended June 30, 2011. The Company did not adopt these

standards for the fiscal year ended June 30, 2010.

(a) Pronouncements

CPC 22 – Segment information, approved by CVM Resolution 582 of July 31, 2009

CPC 28 – Investment Properties, approved by CVM Resolution 584 of July 31, 2009

CPC 29 – Biological Asset and Agricultural Product, approved by CVM Resolution 596 of

September 15, 2009

CPC 33 – Employees benefits, approved by CVM Resolution 600 of October 7, 2009

(b) Interpretations

ICPC 04 – CPC10 Comprehensiveness – Share-based payment, approved by CVM

Resolution 614 of December 22, 2009.

ICPC 05 – Technical Pronouncement CPC 10 – Share-based payment, approved by CVM

Resolution 615 of December 22, 2009.






48

(c) Estimate of effects verified up to date

The Company is analyzing eventual effects resulting from applying CPCs 22, 28 and 33, and

also ICPC 05, and it has already calculated the effects of applying CPC 22 and ICPC 04, whose

effects are summarized as follows:

Parent Company Consolidated

Assets 6/30/2010

Adjustments

effects of new

CPCs Adjusted balance 6/30/2010

Adjustments

effects of new

CPCs Adjusted balance

Non-current

Long-Term Assets

Biological Assets (1) (2) 54,942 54,942 54,942 54,942

Permanent Assets

Property, plant and equipment (2) 103,895 (35,627) 68,268 119,058 (35,627) 83,431

Liabilities and shareholders' equity 6/30/2010

Adjustments

effects of new

CPCs Adjusted balance 6/30/2010

Adjustments

effects of new

CPCs Adjusted balance

Non-current

Long-Term Liabilities

Deferred Tax 17,670 (6,689) 10,981 18,765 (6,689) 12,076

Warrants (3) 57,611 57,611 57,611 57,611

Shareholders' Equity 560,918 (44,863) 516,055 560,918 (44,863) 516,055

(1) Adjustment to fair value of biological assets – CPC 29 (2) Reclassification of sugarcane from fixed assets to biological assets – CPC 29

(3) Adjustment to fair value of warrants held by founder shareholders – ICPC 4

Shareholders' Equity Result Shareholders' Equity Result

Balance before adjustment on June 30, 2010 560,918 (15,834) 560,918 (15,834)

Fair value over biological assets 19,315 14,875 19,315 14,875

Warrants (57,611) 822 (57,611) 822

Deferred income tax and social contribution (6,567) (5,057) (6,567) (5,057)

Balance after adjustment on June 30, 2010 516,055 (5,194) 516,055 (5,194)


3 Consolidated annual information

On June 30, 2010, the consolidated financial statements was prepared according to the consolidation principles set forth in the Corporate Law, in addition to complementary provisions of CVM, and comprise the financial statements of the Company, its subsidiaries and its exclusive investment funds which are SPEs - Special Purpose Entities, of which the Company holds the controlling power, directly or indirectly. Investments among the companies, equity in income, assets and liabilities balances, and revenues and expenses resulting from operations among the consolidated companies were eliminated in the consolidated financial statements, as well as the unearned income among the companies.






49

4 Cash and cash equivalents

Parent Company Consolidated Parent Company Consolidated

Cash and banks 262 1,352 87 356

Repo agreements 91,497 39,780

Time deposits in banks in Brazil 181,303 113,351 245,868 224,234

181,565 206,200 245,955 264,370

6/30/2010 6/30/2009

The investments in time deposits in banks in Brazil and in Repo agreements, held by FIM

Guardian Fund, on June 30, 2010, have contractual maturities until May 15, 2013 and

November 1, 2026, respectively. The banks grant the Company redemption rights of the total

amount invested, without any penalty. The FMI Guardian Fund is the Company’s exclusive fund,

which holds 100% of its quotas, in the amount of 113,988,877 quotas in June 2010 (June 2009

– 171,861,753). The financial statements of this Fund were audited by independent auditors.

5 Clients


Sugarcane sale 2,116 2,116 3,291 3,291

Grain sale 8,310 12,591

Leasings 552 272

Farm sale 2,514 2,423

Total current 10,426 17,773 3,291 5,986

Farm sale - non-current 4,293 6,298

6/30/20096/30/2010

Grain sale receivable basically refers to soybean sale agreements. Total amount was received in July 2010.






50

6 Tax credits and tax claims

6/30/2010 6/30/2009Parent Company Consolidated Parent Company Consolidated

Withholding income tax on financial investments recoverable 14,396 14,950 6,712 6,838

Non-cumulative PIS and Cofins recoverable 2,096 2,381

Prepaid taxes 2,118 2,372

Other taxes and contributions recoverable 174 800 2,829 3,228

Total current amount 16,666 18,131 11,659 12,438

ICMS recoverable 2,741 2,741

ICMS recoverable on fixed assets 141 141

Total non-current 2,882 2,882

7 Inventories – current


Finished products

Rice 2,251 2,062 1,361 1,255

Corn 6,394 5,840 3,670 3,001

Soybean 9,114 6,925 1,773 1,772

Sorghum 1,214 1,003 242 242

Other crops 34 34 53 41

Crops in progress

Rice 53 53

Sugarcane 4 4

Corn 1,535 1,384 4,522 4,522

Soybean 134 73 73

Sorghum 560 500 1,258 1,031

Inputs 4,611 5,096 4,378 4,789

Advances to suppliers 792 651 912 1,219

26,505 23,629 18,299 18,002

6/30/2010 6/30/2009






51

8 Long-term investments

(Parent company and consolidated) It corresponds to reserve and collateral accounts to guarantee the loans obtained in December 2009 and June 2010, respectively (Note 13).

9 Rural properties inventories – non-current

Farm State Hectares Broker Acquisition 6/30/2010 6/30/2009

São Pedro Goiás 2,443 Araucária Ltda. 9/1/2006 9,937

Jatobá Bahia 31,602 Jaborandi S.A. 3/5/2007 32,998 32,998

Araucária Goiás 9,682 Araucária Ltda. 4/20/2007 70,362 67,361

Alto Taquari Mato Grosso 5,266 Mogno Ltda. 8/2/2007 33,211 33,211

Chaparral Bahia 12,576 Cajueiro Ltda. 11/29/2007 21,647 20,592

Cometa Bahia 11,473 Cajueiro Ltda. 11/29/2007 12,337 12,337

Cachoeira Bahia 13,080 Cajueiro Ltda. 11/30/2007 13,858 13,470

Cremaq Piauí 32,375 Cremaq Ltda. 4/22/2008 42,021 42,021

Preferência Bahia 17,800 Cajueiro Ltda. 9/11/2008 9,540 10,125

Horizontina Maranhão 14,358 Ceibo Ltda. 3/9/2010 37,197

Nova Buriti Minas Gerais 3,064 Flamboyant Ltda 5/28/2010 429

283,547 232,115

Consolidated

. São Pedro Farm On December 31, 2009, the Company transferred São Pedro Farm to its subsidiary Imobiliária

Araucária, which manages the farms in the state of Goiás. According to our tax policy,

productive farms must be deemed as rural property inventories in subsidiaries.

. Araucária Farm On January 6, 2010, the parties terminated the condominium between Imobiliária Araucária and ETH Bioenergia and carried out the legal division of the Morro Vermelho Farm.

According to the results of the parties valuation, the Araucária land corresponds to 75% of the farm’s total economic value and ETH Bioenergia land corresponds to 25% of the farm’s total economic value. Therefore, there is no financial compensation to occur between the parties due to the farm division. On January 27, 2010, the Company acquired part of the tract Morrinhos, owned by ETH

Bioenergia, located in the area of the Araucária Farm, which has 223.3 hectares and was

evaluated at R$3,001 by the parties considering the amount of 320 bags of soybean per hectare

at R$42.00/bag.






52

. Horizontina Farm

On March 9, 2010, the Company, authorized by its Board of Directors, acquired the Horizontina Farm, managed by its subsidiary Imobiliária Ceibo, responsible for the farms located in the state of Maranhão. According to our tax policy, productive farms must be considered rural property inventory at the subsidiaries. . Nova Buriti Farm

On June 30, 2010, the Company transferred 3,064 ha of Nova Buriti Farm to its subsidiary

Imobiliária Flamboyant, manager of the farms in the state of Minas Gerais.

. Cremaq Farm

In December 2009, 10,097 hectares of Cremaq farm were collateralized to pay-off the loan raised with Banco do Nordeste – BNB (Note 13).

10 Investments in consolidated entity

Thousands of

shares or quotas

held by the

CompanyInterest in total

capital - %

Adjusted

shareholders'

equity

Adjusted

income (loss)

in the period

On June 30, 2010

Subsidiaries

Araucária 82,140 99.99 79,242 1,320

Cremaq 40,361 99.99 42,850 346

Engenho de Maracaju 10,194 99.99 10,355 162

Jaborandi 26,577 90.00 26,072 228

Jaborandi Ltda 18,004 75.00 14,658 (4,225)

Cajueiro 52,319 99.99 58,637 901

Mogno 22,717 99.99 16,153 (1,273)

Ceibo 99.99 2 (8)

Flamboyant 99.99 (7) (7)

Associated Company

Green Ethanol LLC 4,376 40.65 1,009 (16,971)

On June 30, 2009

Subsidiaries

Araucária 72,436 99.99 68,932 1,281

Cremaq 40,361 99.99 44,271 1,291

Engenho de Maracaju 10,194 99.99 14,899 (1,983)

Jaborandi 15,391 90.00 16,369 (658)

Jaborandi Ltda 4,774 75.00 3,452 (1,885)

Cajueiro 51,628 99.99 47,776 629

Mogno 22,624 99.99 17,810 (1,246)

Associated Company

Green Ethanol LLC 4,376 40.65 20,115 (4,051)






53

Breakdown of investments

(i) Fiscal year ended June 30, 2010

Cremaq Engenho Jaborandi S.A.

Jaborandi

Ltda. Araucária Mogno Cajueiro Ceibo Flamboyant Tarpon Total

Balance on June 30, 2009 43,704 14,899 23,260 13,611 68,215 17,426 48,066 6,979 236,160

Capital increase 8,529 11,572 9,707 93 10,361 10 40,272

Advance for future capital

increase (4,594) (9,055) 2,996 (93) (691) 13,147 449 2,159

Equity in the earnings of

subsidiaries 346 162 205 (3,169) 1,320 (1,273) 901 (8) (7) (1,523)

Loss in investments (6,569) (6,569)

Distribution of dividends (1,200) (4,705) (5,905)

Balance on June 30, 2010 42,850 10,356 27,400 12,959 82,238 16,153 58,637 13,149 442 410 264,594

Investments 42,850 10,356 23,465 10,993 79,242 16,153 58,637 2 (7) 410 242,101

Advance for future capital

increase 3,935 1,966 2,996 13,147 449 22,493

42,850 10,356 27,400 12,959 82,238 16,153 58,637 13,149 442 410 264,594

(*) Advance for future capital increase – Negative figures result from 2009 payments made in 2010.

(ii) Fiscal year ended June 30, 2009

Cremaq Engenho

Jaborandi

S.A.

Jaborandi

Ltda. Araucária Mogno Cajueiro

Tarpon

Ethanol Total

Balance before Law 11,638

adjustments on June 30, 2008 43,664 21,110 17,100 8,359 49,188 17,515 13,893 6,915 177,744

Retroactive application of Law 11,638

adjustments (683) (4,234) (1,776) -395 (2,204) (1,015) (1,022) (11,329)

Balance after Law 11,638

adjustments on June 30, 2008 42,981 16,876 15,324 7,964 46,984 16,500 12,871 6,915 166,415

Capital increase 6 20,667 2,556 34,276 64 57,569

Advance for future capital increase 8,529 7,061 93 691 16,373

Equity in the earnings of subsidiaries 723 (1,983) (593) (1,414) 564 (1,723) 228 (4,198)

Balance on June 30, 2009 43,704 14,899 23,260 13,611 68,215 17,426 48,066 6,979 236,160

Balance on June 30, 2009

Investment 43,704 14,899 14,732 2,589 68,215 17,333 47,376 6,979 215,826

Advance for future capital increase 8,529 11,022 93 690 20,334

43,704 14,899 23,260 13,611 68,215 17,426 48,066 6,979 236,160






54

As mentioned in Note 3, shareholders’ equity and results used in the calculation of investment

and equity income were adjusted to reflect the intercompany’s unearned income.

Information on the investees Jaborandi was created as part of the partnership with Maeda Group for the acquisition and exploration of Jatobá Farm. The minority interests in Jaborandi S.A. and Jaborandi Ltda. are held by Maeda group. On February 18, 2010, ETH Bioenergia acquired Brenco, thus diluting Green Ethanol’s interest to 0.047%. In view of this acquisition, Green Ethanol carried out an impairment of its interest in the new company. This revaluation showed that the amount corresponding to Green Ethanol’s interest in the new company is R$1,088. Thus, Brasilagro which holds 40.65% continued recording its investments in associated companies in the amount of R$410, registering investment losses in associated companies of R$6,569 in its results.

11 Property, plant and equipment

(a) Parent Company

Land –

Farms

Buildings and

improvements

Equipment and

facilities

Agricultural

vehicles and

machinery

Furniture

and fixtures Permanent crop

Total in

operation

Construction in

progress

Total

property,

plant and

equipment

Balance on July 1, 2008 30,860 1,233 674 1,839 272 8,275 43,153 9,906 53,059

Acquisitions 279 552 956 2,578 4 38,849 43,218 1,926 45,144

Write-offs (45) (45) (9,745) (9,790)

Depreciation and depletion (75) (451) (107) (167) (2,457) (3,257) (3,257)

Balance on June 30, 2009 31,139 1,710 1,134 4,310 109 44,667 83,069 2,087 85,156

Total cost 31,139 1,897 1,674 4,670 288 48,483 88,151 2,087 90,238

Accumulated depreciation (187) (540) (360) (179) (3,816) (5,082) (5,082)

Residual value 31,139 1,710 1,134 4,310 109 44,667 83,069 2,087 85,156

Balance on June 30, 2009 31,139 1,710 1,134 4,310 109 44,667 83,069 2,087 85,156

Acquisition 391 2,795 1,286 68 27,486 32,026 7,022 39,048

Write-offs (10,132) (91) (10,223) (10,223)

Transfer 527 (424) (103)

Depreciation and depletion (130) (55) (1,082) 100 (8,919) (10,086) (10,086)

Balance on June 30, 2010 21,007 2,498 3,450 4,320 277 63,234 94,786 9,109 103,895

Total cost 21,007 2,815 4,045 5,762 356 75,969 109,954 9,109 119,063

Accumulated depreciation (317) (595) (1,442) (79) (12,735) (15,168) (15,168)

Residual value 21,007 2,498 3,450 4,320 277 63,234 94,786 9,109 103,895

Annual depreciation rates - % 10-20 10-20 20 20 15-25






55

(b) Consolidated

Land –

Farms

Buildings and

improvements

Equipment and

facilities

Agricultural

vehicles and

machinery

Furniture

and fixtures Permanent crop

Total in

operation

Construction in

progress

Total

property,

plant and

equipment

Balance on July 1, 2008 30,860 1,778 773 2,602 303 14,071 50,387 9,705 60,092

Acquisitions 279 212 2,167 2,637 18 41,900 47,213 47,213

Write-offs (45) (45) (7,582) (7,627)

Depreciation and depletion (74) (633) (72) (183) (3,229) (4,191) (4,191)

Balance on June 30, 2010 31,139 1,916 2,262 5,167 138 52,742 93,364 2,123 95,487

Total cost 31,139 2,103 2,992 5,563 334 57,329 99,460 2,123 101,583

Accumulated depreciation (187) (730) (396) (196) (4,587) (6,096) (6,096)

Residual value 31,139 1,916 2,262 5,167 138 52,742 93,364 2,123 95,487

Balance on June 30, 2009 31,139 1,916 2,262 5,167 138 52,742 93,364 2,123 95,487

Acquisitions 487 2,871 1,376 75 33,379 38,188 7,142 45,330

Write-offs (10,132) (91) (10,223) (10,223)

Transfers 1,660 (1,531) (128) (1)

Depreciation and depletion (212) 76 (1,318) 106 (10,188) (11,536) (11,536)

Balance on June 30, 2010 21,007 3,851 3,678 5,006 318 75,933 109,793 9,265 119,058

Total cost 21,007 4,250 4,332 6,720 408 90,708 127,425 9,265 136,690

Accumulated depreciation (399) (654) (1,714) (90) (14,775) (17,632) (17,632)

Residual value 21,007 3,851 3,678 5,006 318 75,933 109,793 9,265 119,058

Annual depreciation rates - % 10-20 10-20 20 20 15-25

The Company concluded its periodic analysis of useful life term, aiming at reviewing and

adjusting the estimated economic useful life when calculating depreciation, as well as

determining the fixed assets residual value. For the purposes of this analysis, the Company

engaged a specialized company which issued an Appraisal Report in July 2010. When

preparing this report, the appraisal company took into account the Company’s operational

planning for the next years, in-house track records, such as the maintenance level and

utilization of items, comparison external elements, such as available technologies,

recommendations, manufacturers handbook and assets’ useful life rates. Considering that the

Company historically does not sell its main items of fixed assets, except for scrap metal, the

residual value of items of fixed assets was equal to zero. Taking into account that the

Company’s assets have little useful life, the appraisal report concluded that the estimate of fixed

assets useful life has not changed, as well as impairment of these assets.






56

Depreciations incurred in the farms’ fixed assets are allocated to the cost of goods sold. On June 30, 2010, R$9,182 (June 2009 – R$2,653) and R$904 (June 2009 – R$604) were allocated as cost and expenses, and R$10,632 (June 2009 – R$3,585) and R$904 (June 2009 – R$606) in the consolidated, respectively. . Lands – farms

. Nova Buriti Farm

The R$21,007 balance corresponds to the purchase of Nova Buriti Farm. The amount recognized under Property, Plant and Equipment corresponds to the acquisition cost of R$21,113 and expenses of R$323, directly related to the property acquisition. On June 30, 2010, R$429 was transferred referring to 3,064 hectares to Imobiliária Flamboyant.

12 Acquisitions payable


Current liabilities

Jatobá Farm (i) 4,429 7,774

Alto Taquari Farm (ii) 18,278 16,836

Nova Buriti Farm (iii) 14,663 14,663 14,081 14,081

Horizontina Farm (iv) 24,050

Preferência Farm 9,089

14,663 61,420 14,081 47,780

6/30/2010 6/30/2009

Liabilities related to: i) Jatobá Farm are restated by the U.S. dollar variation, ii) Alto Itaquari

Farm at 100% of the CDI rate, iii) Nova Buriti Farm at the IGP-M (General Market Price Index),

and iv) Horizontina Farm – will not be restated in the following 9 months, and after that period

will be restated at 60% of the CDI rate. All payments are made in local currency.

Liabilities referring to Jatobá Farm are carried to the present value restated at the U.S. dollar average rate calculated on the prevailing face value on the purchase date.






57

13 Financing – short- and long-term

Annual interest rate

and charges - % Parent Company Consolidated Parent Company Consolidated

Short term

Agricultural cost financing -

BNB 7.23% / 6.16% 18,509 25,869 10,090 14,203

Other 1.95 + TJLP / 4.5 2,640 2,820 954 1,285

21,149 28,689 11,044 15,488

Long term

Crop Financing - Itaú 1.95 + TJLP 10,212 10,212

Financing for Sugarcane

Plantation 1.95 + TJLP 7,577 7,577

Financing for Machinery

and Equipment - FINAME 1.95 + TJLP / 4.5 2,048 2,296 1,890 2,182

Financing Cremaq Project -

BNB 8.5 19,444 36,791

31,704 49,299 9,467 9,759

52,853 77,988 20,511 25,247

6/30/2010 6/30/2009

Acronyms: . TJLP – Long-Term Interest Rate

. FINAME – Government Agency for Machinery and Equipment Financing

. BNDES – National Bank for Economic and Social Development

. EGF – Federal Government Loan

. BNB – Banco do Nordeste (Gross Rate)

The outstanding amounts on June 30, 2010 are broken down as follows, by year of maturity:


2010 21,149 28,689

2011 3,884 5,248

2012 6,587 6,770

2013 5,224 7,836

2014 16,009 29,445

52,853 77,988

The assets, purpose of this financing, were offered as guarantee and will be maintained as conditional sale until the final settlement of the agreements. All the aforementioned financing has its own characteristics and conditions established in agreements with governmental development agencies, which direct and indirectly provide the onlending. Interest rates are lower than market rates, due to the fact that these credit facilities have long-term characteristics restricted to the governmental development agencies.






58

In February 2010, the Company contracted from Banco do Nordeste – BNB lines to finance its

crops. The consolidated amount totals R$25,869, maturing in 1 year and restated at the rate of 1.95 + long-term interest rate (TJLP).

In June 2010, Jaborandi Ltda raised a loan in the amount of R$17,280 with Banco do Nordeste – BNB, with a 9-year term and an 8.5% annual interest rate.

Loans raised in December 2009 and June 2010 have a liquidity fund in reserve account of R$1,416 and R$1,090, respectively, yielded by CDI.

The Parent Company has a mortgage of Cremaq farm as collateral for the loan raised in

December 2009, and a surety of R$24,056 referring to funds raised in June 2010 by subsidiary Jaborandi Ltda, yielded by CDI.

14 Provision for Contingencies

On June 30, 2010, the Company is a party to labor (R$146), tax (R$137) and environment (R$63) proceedings, and is currently discussing these issues both in the administrative and

judicial levels, which are covered by escrow deposits when applicable. Provisions for losses related to these lawsuits are estimated and updated by Management, based on the opinion of its external legal advisors.

15 Shareholders' equity

(a) Capital stock

The capital stock on June 30, 2010, and June 30, 2009, comprises 58,422,400 common shares.

(b) Legal reserve, profit retention and dividends

The legal reserve is annually recorded as 5% of the net income for the period and may not exceed 20% of the capital stock. The legal reserve aims at assuring capital stock’s integrity and only can be used in losses carryforward and capital increase. The portion necessary to pay mandatory dividends shall be earmarked, every year, which shall not be lower than 25% of the annual adjusted net income, as provided for in Article 202 of the Brazilian Corporation Law. (c) Shareholders’ agreement

On March 24, 2006, Cresud S.A.C.I.F. Y A., Tarpon Investimentos S.A., Tarpon Agro LLC, Cape Town LLC and Elie Horn (“Signatory Shareholders”) entered into a shareholders’ agreement, the main characteristics of which are summarized as follows: (i) Binding of 80% of shares owned by the Signatory Shareholders to the agreement. (ii) The Signatory Shareholders undertake to vote together in block certain matters contemplated by the agreement at the General Meeting.






59

(iii) The Board of Directors’ members appointed by the Signatory Shareholders shall vote in accordance with the Signatory Shareholders’ joint decision on certain matters within the Board of Directors’ authority. (iv) The signatory shareholders shall be entitled to preemptive rights for the acquisition of shares or rights of a signatory shareholder who intends to dispose his/her interest. (v) The agreement shall remain effective for 25 years or until the Signatory Shareholders’ jointly interest is equal to zero, whichever occurs first. (d) Warrants On March 15, 2006, the Board of Directors approved the issuance of 512 thousand share warrants: 256 thousand for the first issuance and 256 thousand for the second issuance, which were delivered to the founding shareholders, at the proportion of their interest in the Company’s capital stock on the issuance date of the warrants. Each one of the issuances of the warrants grants their holders the subscription right of shares issued by the Company, in the amount equivalent to 20% of its capital stock, after the increase resulting from the full exercise of the warrants of each issuance. The 1

st issuance warrants grant their holders, as of the dates on which they become liable of

exercise, the right to the subscription of shares issued by the Company by means of the payment of the price per share at the initial public offering, subject to certain restatement and adjustment rules. The 1

st issuance warrants were issued in three tranches, which differ

exclusively as to the date on which the right to subscribe the shares granted by them starts. The 1

st issuance/1

st tranche warrants may be exercised as of the end of the 12

th month counted

as of the date of their issuance and have as purpose a total of 85,336 warrants. The 1st

issuance/2nd

tranche warrants may be exercised as of the end of the 24th month, counted as of

the date of their issuance and has as purpose a total of 85,332 warrants. The 1st issuance/3

rd

tranche warrants may be exercised as of the end of the 36th month, counted as of the date of

their issuance and have as purpose a total of 85,332 warrants. Exceptionally, the 1

st issuance warrants may be exercised by their holders in the event of

control transfer or acquisition of material interest in the Company, as defined under the terms of corporate act which resolved on the issuance of the warrants. Each set of 1 thousand warrants of the 1

st issuance gives the right to the subscription of one (1) share issued by the Company

when its attribution takes place (100 shares after the split approved in October 2007). The 2

nd issuance warrants grant their holders the right to subscribe shares issued by the

Company for up to 15 years counted as of the publication date of the closure announcement of the initial public offering and exclusively in the event of control transfer or acquisition of material interest in the Company, as defined under the terms of corporate act which resolved on the issuance of the warrants. In such events, a public tender offer for the acquisition of total Company’s outstanding shares must be reported. For the subscription of shares purpose of the 2

nd issuance warrants, holders are determined to pay the same price per share practiced in the

referred public tender offer. Each set of 1 thousand warrants of the 2nd

issuance gives the right to the subscription of one (1) share issued by the Company when its attribution takes place (100 shares after the split approved in October 2007). The amounts of shares to be subscribed according to the Subscription Bonuses shall be adjusted in case there is a split or reverse split of the shares.






60

16 Revenues from sale of grains and sugarcane

(a) Parent Company

Tonnes harvested

(unaudited by independent

auditor)

Revenue

recognized in the

twelve-month

period

Tonnes harvested

(unaudited by

independent

auditor)

Revenue

recognized in the

twelve-month

period

Sugarcane sales 445,797 6,731 88

Grain sales

Soybean 36,716 18,962 36,336 25,215

Sorghum 2,710 521 3,786 720

Corn 20,561 5,222 15,223 4,665

Rice 598 296 127 38

Bean 7

25,008 30,638

Sale of byproducts and other 12 73

31,751 30,799

6/30/2010 6/30/2009

(b) Consolidated

Sugarcane sales

Tonnes harvested

(unaudited by independent

auditor)

Revenue

recognized in the

twelve-month

period

Tonnes harvested

(unaudited by

independent

auditor)

Revenue

recognized in

the twelve-

month period

445,797 6,731 88Grain sales

Soybean

Sorghum 50,553 25,814 43,631 30,561

Corn 2,710 521 3,786 720

Rice 20,561 4,962 15,223 4,675

Bean 598 296 127 38

7

31,600 35,994 Sale of byproducts and other

274 73

38,605 36,155

6/30/2010 6/30/2009

17 Consolidated income from land leasing

Accumulated income from land leasing in the year ended June 30, 2010, corresponds to agreements entered into by its subsidiaries Jaborandi and Cremaq. There are no call option clauses on the part of the lessee for such agreements.






61

18 Income tax and social contribution

The fiscal period for the purposes of determining the income tax and social contribution is the calendar year, which differs from the Company’s fiscal year which ends on June 30 of each year.

Reconciliation of benefit (expense) related to income tax and social contribution

Parent Company

6/30/2010 6/30/2009

Other activities Rural activity Total Total

Income (loss) before income tax and social contribution (12,420) (12,276) (24,696) 5,707

Combined nominal rate of income tax and social contribution - % 34 34 34 34

Income tax and social contribution rates pursuant to the laws 4,223 4,174 8,397 (1,940)

Adjustments for calculation by effective rate

Equity income and investment losses 2,751 2,751 1,427

Other (2,286) (2,286) (4,244)

Income tax and social contribution 4,688 4,174 8,862 (4,757)

Current (369)

Deferred 4,688 4,174 8,862 (4,388)

4,688 4,174 8,862 (4,757)






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Consolidated

6/30/2010 6/30/2009

Other activities Rural activity Total Total

Income (loss) before income tax and social contribution (13,578) (14,008) (27,586) 3,597

Combined nominal rate of income tax and social contribution - % 34 34 34 34

Income tax and social contribution rates pursuant to the laws 4,616 4,763 9,379 (1,223)

Adjustments for calculation by effective rate

Investments losses 2,233 2,233

Other (2,356) 1,462 (894) (1,961)

Income tax and social contribution 4,493 6,225 10,718 (3,184)

Current (605) (605) (1,748)

Deferred 5,098 6,225 11,323 (1,436)

4,493 6,225 10,718 (3,184)

(b) Breakdown of deferred income tax and social contribution

The balance of deferred assets and liabilities is presented below:

6/30/2010 6/30/2009


Assets

Non-current, substantially tax loss from

rural activities and other activities 16,360 20,499 9,657 11,378

Liabilities

Current - other (851) (832) (1,691)

Non-current, substantially accelerated depreciation of

assets used for rural activities (17,670) (18,765) (13,844) (14,921)






63

(c) Estimated realization period

The deferred tax assets’ values show the following realization expectations:

Year Parent Company Consolidated

2016 2,581 2,581

2017 4,454 4,454

2018 4,699 4,699

2019 4,626 6,735

2020 2,030

16,360 20,499

6/30/2010

(d) Transition Tax Regime

When the Company delivered the 2010 corporate income tax return (DJPI-2010) referring to the 2009 calendar year, it opted for adopting the Transition Tax Regime - RTT, which allows the company to eliminate the accounting effects of Law 11,638/07 and MP 449/08.

19 Related parties

(a) Consulting agreement

On March 15, 2006 the Company executed a consulting agreement with Paraná Consultora de Investimentos S.A., a company specialized in consulting services for the agribusiness/livestock industry, indirectly controlled by the Company’s shareholder, Tarpon BR S.A. (company controlled by the shareholders Tarpon Investimentos S.A. and Mr. Elie Horn), and by the following related parties: Consultores Asset Management S.A. and Mr. Alejandro Elsztain. The main conditions set forth in the referred agreement are: (i) the agreement will be effective for an indeterminate term and may be terminated six months in advance, (ii) Paraná will receive as compensation, on an annual basis, 1% of the Company’s capital stock and (iii) in the event of termination of the agreement by the Company, without just cause, a fine of R$4,316 must be paid to Paraná, restated by the Broad Consumer Price Index - IPC-A. As per Material Fact disclosed on July 26,2010, the Company announced to its shareholders and to the public in general the termination of this agreement (Note 24). (b) Physical structure sharing agreements

Brasilagro entered into an agreement of physical, administrative and operating structure sharing with its subsidiaries in monthly amounts of R$3. (c) Leasing agreements

The parent company and the subsidiary Jaborandi S.A. have executed land leasing agreement

with real estate subsidiaries. The total amount of leasing recognized as revenue by real estate

companies (and excluded in consolidated) in the fiscal years ended June 30, 2010 and 2009

was R$5,483 and R$5,067, respectively.






64

(d) Maeda loan

In April 2010, Brasilagro and Maeda Group entered into an amendment to the loan agreement referring to the excess of investments, such as advance for future capital increase in relation to its interest in the investee’s capital, in the amount of R$6,060, plus 1.35% per month of interest. Part of Jaborandi S.A. shares held by Maeda Group were given as collateral.

20 Insurance

The Company also maintains insurances on vehicles, civil liabilities including coverage for the farms and life insurance and personal accident insurance for employees and officers, and also the “D&O” (Directors and Officers) insurance. The Company assessed the risk of buildings and facilities of group’s farms and concluded that there is no need of taking out other types of insurance, due to the low probability of risks.

21 Commitments

As part of its business policy, the Company performs sales agreements for future delivery of its estimated production.

Soybean The sales price of soybean may be set by the Company for the total or partial volume up to delivery. The price is determined according to a contractual formula based on soybean quotation on Chicago Board of Trade (“CBOT”). The price established in U.S. dollars is paid at the end of the commitment period in Reais, taking into account exchange rates contractually defined few days before the financial settlement. The terms of the agreements subject the Company to pay fines should committed volumes be not delivered. On June 30, 2010, commitments are made related tor 738,333 soybean bags (In June, there were no commitments of this nature). The currency and soybean hedge position is detailed as per CVM rules in the Note of Financial Instruments (Note 22).

Sugarcane supply agreements between Brasilagro and ETH Bionergia On March 6, 2008, the Company executed agreements for the exclusive supply to ETH Bioenergia, binding ETH Bioenergia, in its turn, to acquire from the Company, the total production of two full cycles of sugarcane cultivation, comprising six agricultural years with five cuts, and the eventual extension or postponement of this term for another one agricultural cycle, by means of agreement between the parties. The duration of each cycle may be extended, also by common agreement between the parties. One of the agreements refers to the cultivation to be implemented by the Company in an area of approximately 5,718 ha in Araucária Farm and the second agreement corresponds to the approximate area of 3,669 ha in Alto Taquari Farm.






65

The sugarcane price per tonne, for effects of these present agreements, shall be that one fixed based on Total Recoverable Sugar (ATR) per tonne of sugarcane effectively delivered, taking into account the mix of industrial unit production under consideration.

22 Financial instruments

The Company operates with several financial instruments, specially cash and cash equivalents, including financial investments, trade accounts receivable, accounts payable to suppliers and loans and financing. Certain Company’s operations are exposed to market risks, mainly in relation to the exchange rate and interest rates variations, and variations in agricultural commodities prices. Thus, the Company also operates with derivative financial instruments, especially swap operations. Considering the nature of instruments, excluding derivative financial instruments, the fair value is basically determined by the application of the discounted cash flow method. Amounts recorded under current assets and liabilities have immediate liquidity or mature, most of them, in less than six months. Regarding the term and characteristics of these instruments, which are systematically renegotiated, book values come close to fair values.

Cash and cash equivalents, financial investments, trade accounts receivable, other current assets and accounts payable Amounts recorded are close to the realized amount. Investments They mainly consist of investments in privately-held associated companies, registered by the equity accounting method, in which the Company has a strategic interest. Considerations on the market value of shares/quotas held are not applicable. Loans and financing The book value of loans and financing in reais has its rates fixed or pegged to the TJLP variation and is close to the market value. (a) Policies Approved by the Company’s Board of Directors for the Utilization of Financial Instruments, including Derivatives The Company maintains the following policies that guide its operations in relation to financial instruments, which are approved by the Board of Directors; (i) Investment Policy ruling the Company’s cash investment, observing counterparty, instruments, credit and liquidity risks, among others. (ii) The Hedge Policy that guides the management of Company’s exposure to exchange risk, interest rates, indexes and agricultural commodities prices, always linking hedges with an asset or liability that may trigger exposure (iii) Risk Policy, encompassing items not included in the Investment Policy or Hedge Policy or also related to the protection of future cash flows, such as commercialization of future production of commodities. The Chief Financial Officer reports the operations at the Board of Directors’ meetings.






66

(b) Risk exposure analysis (i) Exchange rate risks This risk derives from the possibility of the Company incurring in losses due to exchange rate fluctuations, which reduce the assets nominal values or increase the liabilities due amounts. This risk also derives from sale commitments of products in inventory or under development with prices to be determined, which may vary according to the exchange rate. (ii) Interest rate and indexes risks This risk derives from the possibility of the Company incurring in losses due to interest rate or indexes fluctuations that increase the financial expenses related to the agreements for the acquisition of lands, indexed by IGP-M (“FGV”). (iii) Commodities risks This risk derives from the possibility of the Company incurring in losses due to fluctuations in agricultural products market prices. (c) Risk management objectives and strategies and utilization of derivative instruments The financial risk management is the responsibility of the Chief Financial Officer, who assesses the exposure to the exchange rate, interest rate, indexes risks and agricultural commodities prices existing in Company’s assets, liabilities and forecasted operations. In view of the exposure to these risks, the Company’s Management assesses the convenience, cost and availability of derivative financial instruments in the market that allow to reducing the exposure to such risks. Once concluded this assessment, the executive officer resolves on contracting derivative financial instruments within parameters previously approved by the aforementioned policies and reported to the Board of Directors at their meetings. (d) Risks associated with each performance strategy The utilization of derivative instruments as hedge strategy minimizes the risks of changes in cash flows deriving from risks related to foreign exchange, interest rates, indexes and commodities prices, currently, soybean. However the change in fair value of contracted instrument may differ from variations in cash flows or fair value of assets, liabilities or hedged operations, as a result of several factors, such as, among other, differences between contracting dates, settlement dates, spreads of hedged assets and liabilities and the corresponding legs (streams) of swaps. In the case of hedge operations of assets and liabilities already recognized by the Company, the Management believes that derivative financial instruments show a high level of hedge to the variations observed in assets and liabilities. In the case of strategy to hedge expected sales of soybean or accounts payable/receivable denominated in commodities, differences may occur deriving from additional factors, such as differences between estimated and actual collectible soybean volume, or differences between soybean quotes on the international markets where derivatives are quoted and market quotes where soybean is effectively delivered/received by the Company. Should the soybean volume effectively collected be lower than the protected value, the Company will be exposed to commodities price variations by the excess protected value and vice-versa should the soybean volume effectively collected be higher than the hedged value.






67

To the extent that the Company does not set out soybean sales prices through derivative instruments, but establishes a range of prices through the utilization of options, the volume of U.S. dollars to be received deriving from soybean sale and the settlement of options is a range of values. Should the volume of U.S. dollar futures sales contracts be lower than the amount received, the Company will be exposed to U.S. dollar rate variations by excess protected value and vice versa should the volume of U.S. dollar futures sales contracts be higher than the amount received.

In addition, the Company is subject to credit risk in relation to the counterparty of the derivative financial instrument. The Company has been contracting derivative financial instruments on stock exchanges or with financial institutions or prime trading companies. The Company understands that on the balance sheet date there are no indications of amounts recognized as assets by their derivative financial instruments being uncollectible.

(e) Controls over utilization of derivative instruments

Main controls established about the utilization of derivative instruments include: - existence of policies defined by the Board of Directors; - restrictions on contracting of derivative operations other than the chief financial officer; - maintenance of a centralized inventory of outstanding derivative agreements under the responsibility of the chief financial officer; - a daily consolidated risk report to a group composed of executive officers and few members of the Board of Directors; - the chief financial officer will monthly monitor fair values reported by counterparties and the amounts estimated by Management; and - the fair value of derivatives contracted is obtained according to the market where these derivatives were contracted and also where instruments are included.






68

(f) Outstanding derivative instruments

Reference Risk Maturity Strategy

Outstanding

derivative

instruments Counterparty Receivable Payable Receivable Payable Net balance

Volume / Position

(000) Unit

1. Currency US$ Jul-10 (i) NDF Domestic banks 308 US$

2. Currency US$ Dec-10 (i) NDF Domestic banks 1,073 US$

3. Currency US$ Dec-11 (i) NDF Domestic banks 1,068 US$

4. Currency US$ Jul-10 (ii) NDF Domestic banks (8,200) US$

5. Currency US$ Jul-10 (ii) BM&F Domestic banks 2,000 US$

6. Currency US$ Aug-10 (ii) BM&F Domestic banks (500) US$

Current 1,180 60 1,120

1,180 60 1,120 (4,251) US$

Current 1,180 60 1,120

References:

OTC – Over the counter market swaps

Strategy to which the instrument is related:

(i) Liability from purchase of farm;

(ii) Estimate of 2010 crop sales

On June 30, 2010


Total risk with exchange rate – Currency US$

References:

June 30, 2009


Reference Risk Maturity Strategy

Outstanding derivative

instruments Counterparty Receivable Payable Receivable Payable Net

Balance

Volume/ Position

(000) Unit

1. Currency US$ March, 2010 (i) NDF Domestic Banks 4,159 US$

2. Currency US$ May 2010/ May 2013 (ii) NDF Domestic Banks (8,925) US$

3. Currency US$ July 2010 (iii) NDF Domestic Banks (3,600) US$

Current 519 (519) Long-term 637 (637)

Total risk with exchange rate – Currency US$ 0 0 0 1,156 (1,156) (8,366) US$

4. Indexes R$ December

2009 (i) IGP-M x CDI

Swap Domestic Banks 5,700 R$

Total risk with interest rates and indexes - Current 0 0 68 0 68 5,700 R$

5. Commodities -

Soybean July 2010 (iii) OTC Soybean International

Trading Companies (170) sacks

6. Commodities -

Soybean

May 2010/May

2012 (ii) OTC Soybean International

Trading Companies (315) sacks

Current 2,448 2,448 2,448 Long-term 5,909 5,909 5,909

Total Risk with commodities - SOYBEAN 8,357 0 8,357 0 8,357 (485) sacks

Total Risk 8,357 0 8,425 1,156 7,269

Current 2,448 2,516 519 1,997 Long-term 5,909 5,909 637 5,272

OTC – Swaps over-the-counter market

Strategy to which the instrument is related:

(i) Liability from purchase of farm;

(ii) Assets from sale of farm;

(iii) Estimate of 2010 crop sales.






69

(g) Impact of instruments on income

The impact of derivative financial instruments on the Company’s income is outlined in specific

accounts of the statement of income classified into realized income (corresponding to

derivatives already settled on the corresponding balance sheet date) and unearned income

(corresponding to derivatives which have not been settled yet) and by type of risk being

protected.

(h) Determination of fair value of derivative instruments

Derivative instruments quoted in organized exchanges (BM&F Bovespa and Chicago Board of

Trade) are recorded based on quotes prevailing on the balance sheet date. In order to

determine the fair value of derivatives not quoted on organized exchanges, quotations of similar

operations are used or public information available in the financial market and valuation

methodologies generally accepted and practiced by the counterparties. The estimates do not

ensure, necessarily, that these operations may be carried out in the market at values indicated.

The use of different market information and/or valuation methodologies may have a material

effect on the estimated market value.

Derivatives existing in the FIM Guardian (currency and indexes derivatives) are marked to

market by the investment fund according to these investment funds rules, i.e., using market

curves of the Commodities & Futures Exchange (BM&F), Cetip S.A. (Clearing House for the

Custody and Financial Settlement of Securities), among others, which are reviewed by

independent auditors.

Company’s specific derivatives:

1) Commodities derivatives – the fair value is obtained through several market sources among

them, International Brokers, International Banks and the Chicago Board of Trade (CBOT).

2) Currency derivatives – the fair value is also obtained through several market sources, among

them BM&F, Cetip S.A., local banks, in addition to the information sent by the operation’s

counterparty.

(i) Sensitivity analysis required by CVM Rule 475

As required by CVM Rule 475 the Management identified for each type of derivative financial instrument a situation of changes in exchange rates, interest rates or commodities prices that may cause loss in assets and/or liabilities that have been hedged, in the case of derivative instruments related to expected operations not recorded in the balance sheet, at fair value of contracted derivative instruments. For each situation identified, the Management defined a probable scenario based on information available on the balance sheet date and considering a three-month period scenario. In addition, two additional scenarios were reported pursuant to CVM Rule 475: (i) a scenario identified as “possible” with deterioration in the 25% variable price risk in relation to the probable scenario and (ii) another scenario identified as “remote” with deterioration in the 50% variable price risk in relation to the probable scenario.






70

The chart below shows for each situation, the effects of change in fair value estimated on June 30, 2010, of derivative financial instrument, as well as effects on increase or decrease of estimated fair value of corresponding asset or liability. Effects of change in fair value and variations of assets or liabilities have been determined on an individual basis for each derivative financial instrument, asset or liability, in each situation and each scenario excluding combined or compensatory effects of change in more than one variable or same variable in other derivative financial instruments, i.e., maintaining unchangeable all other variables. Thus, each line of the chart should be considered individually, not including the effects reported in other lines. Referring to the operations 3 and 5 below, as these refer to the commercialization of future crop, usually, they neither have corresponding entry in inventories nor in accounts receivable. Therefore, the chart does not include variation in cash flows corresponding to these operations. The Company expects that the variations in the fair value of derivatives that hedge said operations are substantially offset by the cash flows of these same operations. Demontrative chart of the Company's sensitivity analysis

We divided the analysis into 3 risks:

1)Risk with exchange rate – Currency USD

2)Risk with interest rates and indexes (R$)

3)Risk with commodities - SOYBEAN (sacks)

1) Exchange rate risk – Currency USD (000)

Operation 1 - Hedge - Exchange Debt Risk Scenario I - Probable value - USD 1.85 Scenario II 25% Scenario III 50%

1# NDF Jul 2010 - USD 308 (Long USD) Hedge 1 144 286

1# NDF Dec 2010 - USD 1,073 (Long USD) Hedge (41) 455 951

1# NDF Dec 2011 - USD 1,068 (Long USD) Hedge (229) 265 759

Farm Purchase Liability - USD 308 (Short USD) USD high (21) (164) (306)

Farm Purchase Liability - USD 1,073 (Short USD) (74) (570) (1,066)

Farm Purchase Liability - USD 1,068 (Short USD) (74) (568) (1,062)

Net effect (438) (438) (438)

Operation 2 Risk Scenario I - Probable value - USD 1.85 Scenario II 25% Scenario III 50%

2# NDF May 2010 - USD 1,530 (Short USD) USD high (90) (797) (1,505)

Operation 3 Risk Scenario I - Probable value - USD 1.85 Scenario II 25% Scenario III 50%

3# NDF July 2010 - USD 7,700 (Short USD) USD high (249) (3,811) (7,372)

Operation 4 Risk Scenario I - Probable value Soybean CBOT 10 USD/bushel Scenario II 25% Scenario III 50%

4# OTC Soybean - May and July 2010 - 112 sacks (Short) Soybean increase (588) (3,082) (5,575)

Operation 4 Risk Scenario I - Probable value Soybean CBOT 10 USD/bushel Scenario II 25% Cenario III 50%

5# Purchase Call May 2010 Strike 11 USD/bushel (60 sacks) Soybean decrease 525 2,752 4,978

Operation 5 Risk Scenario I - Probable value Soybean CBOT 10 USD/bushel Scenario II 25% Cenario III 50%

6# Sell Call May 2010 Strike 14 USD/bu (75 sacks) Soybean increase (657) (3,440) (6,222)

(*) The number reference in the sensitivity analysis indicates the operation presented in the chart “outstanding derivative instruments” on June 30, 2010.






71

23 Key management compensation

In the years ended June 30, 2010 and 2009, the compensation was as follows:

Consolidated

June 30, 2010

June 30, 2009

Compensation of Board of Directors and Executive Officers

2,931

3,134

Bonus payments

2,127

1,289

5,058

4,423

The Company does not have post-employment and severance pay benefits. During the year of 2009, no relevant transactions occurred between the Company and its key Management. Stock option plan

As provided for in the Bylaws, the Company has a Stock Option Plan (“Plan”), approved by the General Meeting, aiming at integrating executives in the Company’s development process in the medium and long terms. This Plan is managed by a Compensation Committee and granting approvals are given by the Board of Directors. At the Extraordinary General Meeting held on October 29, 2008, the Company’s stock option plan was approved. The Stock Option Plan grants powers to the Board of Directors for:

- creating and applying general rules related to the granting of options within the terms of

this Plan and solving doubts related to the Plan’s construal;

- establishing goals related to the performance of managers and executives of the

Company and its subsidiaries, so that to establish objective criteria for election of

Participants;

- electing the Plan’s participants and authorizing the stock option grating on their behalf,

establishing all the conditions of the options to be granted, as well as changing such

conditions when necessary to conform these options with the terms of laws or

applicable regulation;

- issuing the Company new shares, within the limit of authorized capital, as a result of the

exercise of stock option by the Participants;

The stock options to be granted pursuant to the Plan may grant rights over a number of shares that do not exceed, at any time, the maximum and cumulative amount of 2% of the Company






72

shares, observing the minimum price of the Company shares average quote on the trading sessions of the São Paulo Stock Exchange (BOVESPA), weighted by the trading volume of the last 30 trading sessions preceding the option granting. Until June 30, 2010, no stock options had been granted.

24 Subsequent events

(a) Implementation of ADR Level I Program

(i) At a meeting held on July 5, 2010, the Company’s Board of Directors approved the

implementation of ADR Level I Program, as follows:

- Program Sponsor: Brasilagro – Companhia Brasileira de Propriedades Agrícolas;

- Program Level: ADR Level I Program, pursuant to the rules of the Securities and Exchange

Commission – SEC, according to registration exemptions provided for in Rule 12g3 – 2b of

1933 of the United States of America (“Securities Act”) in compliance with the procedures

provided for in the Regulation S of the Securities Act, and, also pursuant to the rules of Brazilian

Securities and Exchange Commission – CVM;

- Securities Type: common shares issued by Brasilagro – Companhia Brasileira de

Propriedades Agrícolas;

- Depositary Bank or ADRs Issuer: The Bank of New York Mellon;

- Custodian Bank: Itaú Unibanco S.A. ii) Cresud – Tarpon Pursuant to agreement entered into Cresud and Tarpon, Tarpon agreed to sell to Cresud, (a) 9,581,750 common shares issued by Brasilagro (as shares or ADRs to be issued by the Company) and (b) 6,400,000 first-issue Company warrants and 6,400,000 second-issue Company warrants, the effective transfer of shares and warrants held by Tarpon to Cresud as a result of the agreement should occur within ten (10) days after the implementation of the ADR program. The transaction does not comprise a disposal of the Company’s control, and therefore it does not entail a mandatory public offering envisaged in Article 254-A of Law 6,404/1976.






73

(b) Termination of Paraná Agreement

The Company announced to its shareholders and the public in general that the independent

board members of the Company at a meeting held on July 22, 2010 approved a proposal to

terminate the Consulting Agreement, executed on March 15, 2006 between the Company and

Paraná Consultora de Investimentos S.A. (Note 19 (a)). This agreement provides for a

termination fine of R$4,316, adjusted by the Extended Consumer Price Index - IPC-A.

As required by Article 23 of the Company’s Bylaws, this proposal to terminate the agreement

shall be submitted to approval at the next Company’s General Meeting.



June 30, 2010


74


1 - CVM CODE



07.628.528/0001-59

TABLE OF CONTENTS

GROUP TABLE DESCRIPTION PAGE

01 01 IDENTIFICATION 1

01 02 HEADQUARTERS 1

01 03 INVESTOR RELATIONS OFFICER (Company Mailing Address) 1

01 04 DFP REFERENCE 1

01 05 CAPITAL STOCK 2

01 06 COMPANY PROFILE 2

01 07 COMPANIES NOT INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS 2

01 08 CASH DIVIDENDS 2

01 09 INVESTOR RELATIONS OFFICER 2

02 01 BALANCE SHEET - ASSETS 3

02 02 BALANCE SHEET - LIABILITIES 5

03 01 INCOME STATEMENT 7

04 01 STATEMENT OF CASH FLOWS 9

05 01 STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 07/01/2009 TO 06/30/2010 11



06 01 STATEMENT OF VALUE ADDED 14

07 01 CONSOLIDATED BALANCE SHEET - ASSETS 15

07 02 CONSOLIDATED BALANCE SHEET - LIABILITIES 17

08 01 CONSOLIDATED INCOME STATEMENT 19

09 01 CONSOLIDATED STATEMENT OF CASH FLOWS 21

10 01 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 07/01/2009 TO 06/30/2010 23



11 01 CONSOLIDATED STATEMENT OF VALUE ADDED 27

12 01 REPORT OF INDEPENDENT AUDITORS – UNQUALIFIED 28

13 01 MANAGEMENT REPORT 29

14 01 NOTES TO THE FINANCIAL STATEMENTS 41

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(A free translation of the original in Portuguese) FEDERAL ...(A free translation of the original in Portuguese) FEDERAL PUBLIC SERVICE CVM - BRAZILIAN SECURITIES AND EXCHANGE COMMISSION