5. Financial risk management

5.1. Financial risk factors

The Company operates with various financial instruments, including cash and cash equivalents, marketable securities, trade accounts receivables, accounts receivable and others, trade accounts payable, accounts payable for the purchase of farms, loans and financing and derivative financial instruments.

The Company’s operations expose it to market risks, mainly in relation to exchange rates, interest rates and changes in the prices of agricultural commodities. As a result, the Company also enters into derivative financial instruments, used to hedge its exposures with respect to crops or with respect to assets and liabilities recognized in the balance sheet, depending on the nature of the specific operation.

Considering the nature of the instruments, excluding derivative financial instruments, the fair value is basically determined by the discounted cash flow method. The amounts recorded as current assets and liabilities have either immediate liquidity or maturity in less than 12 months. Considering the terms and characteristics of these instruments, which are systematically renegotiated, the book values approximate fair values.

5.2. Policies approved by the Board of Directors for the use of financial instruments, including derivatives

The Company’s adopts the following policies guiding its financial instruments, which have been approved by the Board of Directors: (i) Investment Policy which provides guidance on Company’s investment of available funds, considering the risks of counterparty, credit instruments and liquidity, among others; (ii) derivative financial instruments policy which provides guidance on the management of the Company’s exposures to foreign currency, interest rate and indices risks, and agricultural commodities price risk, always relating derivative financial instruments to an asset or liability that generates the exposure; and (iii) Risk Policy, which addresses items not covered by the Investment Policy or in the derivative financial instruments policy or still related to the hedge of future cash flows, e.g. sale of future production of commodities.

5.3. Analysis of exposure to financial asset and liability risks

a) Currency risk

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

b) Interest rate and index risk

This risk arises from Company incurring losses due to fluctuations in interest rates or indices that increase financial expenses related to land acquisition contracts and financing for agricultural operating costs, which are indexed to the IPCA and CDI.

c) Agricultural commodities price risk

This risk arises from losses due to fluctuations in the market prices of agricultural products.

5.4. Objectives and strategies of risk management and of use of derivative financial instruments

The management of financial risks is the responsibility of the Executive Officers who evaluate the exposure to risks such as foreign currency, interest rate and index and agricultural commodities on assets, liabilities and Company commitments. Management assesses the cost and availability in the market of derivative financial instruments to reduce the exposure to such risks. The Executive Officers may then decide to execute derivative financial instruments within the parameters previously approved in the Policies referred to above and as reported to the Board of Directors.

5.5. Risks related to each operating strategy

Derivative instruments are intended to reduce the risks of changes on cash flows arising from variations in exchange rates, interest rates and price indexes, and from variations in the price of agricultural commodities.

However, the change in the fair value of the derivative financial instrument may differ from the change in the cash flows or fair value of the assets, liabilities or forecasted transactions which are being hedged, as a result of different factors, such as differences between the contract dates, the maturity and settlement dates, or differences in “spreads” on the financial assets and liabilities being hedged and the corresponding spreads in the related legs of the swaps.

In the case of the derivative financial instruments strategy to hedge recognized assets and liabilities, management believes that the derivative financial instruments present a high degree of protection with respect to the changes in the assets and liabilities being hedged.

As to the strategy to hedge forecasted sales of soybean or to hedge accounts payable/receivable, which are susceptible to changes commodity prices, differences may arise due to additional factors, such as differences between the estimated and actual soybean volume to be harvested, or differences between the quoted price of soybean in the international markets where the derivative financial instruments are quoted and the price of soybean in the markets in which soybean is physically delivered/received by the Company. Should the soybean volume effectively harvested be lower than the amount for which derivative financial instruments were contracted, the Company will be exposed to variations in the price of the commodities by the volume hedged in excess and vice-versa should the soybean volume effectively harvested be higher than the hedged volume.

In the case of exposure to exchange rates, there is a risk that the total U.S. dollars sold through forward contracts will be higher than that to which the Company is exposed. In such case, foreign exchange rates risk continues to exist in the same proportion as the mismatch, which could result from a reduction in the expected yield of a certain commodity or in a reduction in prices denominated in foreign currencies.

5.6. Restrictions related to the use of derivative financial instruments

The Company is subject to credit risk with respect to the counterparty of the derivative financial instrument. The Company has contracted derivative financial instruments either traded on stock exchanges or from prime financial institutions or trading companies. Management believes that at the balance sheet date there are no indicators of risk of non-collectability with respect to the amounts recognized as assets with respect to derivative financial instruments.

The main controls over on the use of derivative financial instruments are as follows:

5.7. Impact of derivative financial instruments on the statement of income

The gains and losses for changes in the fair value of derivative financial instruments are recognized in the statement of income separately between realized profit and loss (corresponding to derivative financial instruments that have already been settled) and unrealized profit and loss (corresponding to derivative financial instruments not yet settled).

5.8. Estimate of fair value of financial instruments

The fair value of derivative financial instruments traded on stock exchanges (B3 and Chicago Board of Trade) is determined based on quotations at the balance sheet date. To estimate the fair value of derivative financial instruments not traded on stock exchanges, the Company uses quotes for similar instruments or information available in the market and uses valuation methodologies widely used and that are also used by the counterparties. The estimates do not necessarily guarantee that such operations may be settled at the estimated amounts. The use of different market information and/or valuation methodologies may have a relevant effect on the amount of the estimated fair value.

Specific methodologies used for derivative financial instruments entered into by the Company:

Management identified for each type of derivative financial instrument variables arising from foreign exchange rates, interest rates or commodities prices which may generate loss on assets and/or liabilities.

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

This analysis contemplates five distinct scenarios in relation to the current market. On June 30, 2026, as probable scenarios for the coming 12 months, I, II, III, IV and V a variation in relation to the current market of 0%, -25%, -50%, +25%, +50%, respectively, was considered.

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

b) Credit risk

Credit risk refers to the risk of noncompliance by a counterparty of its contractual obligations, leading the Company to incur financial losses. The risk to which the Company is exposed includes defaults on receivables for the sale of sugarcane, sale of grains, leasing of land and receivables from farms.

To reduce credit risk from commercial transactions, management determines credit limits considering factors such as: age of the company, history of business with the Company, commercial references and Serasa (credit rating). The Company monitors the outstanding balances.

After the sale is made, the Company adopts continual monitoring criteria. This process includes, among others, the analysis of delays, non-compliance with contractual clauses and the evaluation of relevant information about buyers, considering legal, commercial and business factors, covering both the history and current profiles. However, due to the low level of default in the agricultural sector, the Company uses a simplified risk matrix to estimate potential losses based on historical trends, even when no risk was identified in the previous analysis.

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

c) Liquidity risk

The table below shows the Company’s financial liabilities grouped by maturity. The Company and its subsidiaries continually monitor cash flows to avoid a mismatch between accounts receivable and payable. The amounts disclosed in the table are the discounted contractual cash flows, except for “Loans, financing and debentures” and “Leases payable” lines, in addition to the net derivative financial instruments (fair value disclosed).

5.9. Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for stockholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.

To maintain or adjust its capital structure, the Company may take several measures, including revising the amount of dividends to be distributed, returning capital to shareholders, issuing new shares, or disposing of assets or reducing its debt level.

In line with industry practices, the Company monitors its capital structure based on its financial leverage ratio, calculated as the ratio of net debt to shareholders’ equity. Net debt is the sum of loans, financings, debentures, payables for acquisitions, and derivatives, less the balance of cash and cash equivalents.

The following table demonstrates the financial debts.

5.10. Fair value hierarchy

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

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

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

The significant non-observable inputs used in the measurement of the fair value of the credits from the sale of the farm classified as Level 3 in the fair value hierarchy, along with an analysis of quantitative sensitivity on June 30, 2026, are as follows:

The significant non-observable inputs used in the measurement of the fair value of biological assets and investment properties are disclosed in Notes 10 and 11, respectively.