Management Report 2020

Management Report 2020 disclosures made in the notes to the individual and consolidated financial statemnts. As a result of these procedures, we identified an audit adjustment related to the measurement of the fair value of certain transactions. This adjust- ment was not recorded by management in view of its immateriality in relation to the financial statements taken as a whole. Based on the results of the audit procedures performed, which are consistent with management's assessment, we consider that the Company's hedge ac- counting policies are acceptable in relation to the requirements of NBC TG 48 (IFRS 9) to support the judgments, estimates and information included in the footnotes to the individual and consolidated financial statements taken as a whole. Measurement of lease liabilities and right-of-use assets in ac- cordance with NBC TG 06 (R3) (IFRS 16) As described in Note 13, the Company recorded right-of-use assets and lease liabilities for the contracts covered by NBC TG 06 (R3) (IFRS 16). As at De- cember 31, 2020, right-of-use assets were recorded for R$2,463,254 thousand in the Individual financial statements and for R$828,496 thousand in the Con- solidated financial statements; and lease liabilities were recorded for R$2,615,382 thousand in the Individual financial statements and for R$934,284 thousand in the Consolidated financial statements. This was considered a key audit matter due to the materiality of the amounts involved in relation to the asset and liability balances and to the profit and loss balances, as well as due to the uncertainties inherent in this type of es- timation, and the required level of judgment to be made by management in determining the relevant assumptions, which also include the discount rate used. How our audit addressed this matter Our audit procedures included, among others, assessing the main assump- tions adopted in connection with the lease term, the discount rate and con- sideration amounts, in addition to the calculation methodology used by the SLC Agrícola Company to measure the accounting impacts; reviewing the inventory of the Company's lease contracts, in addition to determining whether the contracts comply with the scope of the standard. We also tested a sample of contracts selected at random for the reasonableness of the criteria adopted by the Com- pany, considering the information contained in the contracts and their amend- ments, in addition to testing the accuracy of the amounts calculated by the Company for these transactions. Finally, we examined the adequacy of the disclosures made by the Company in this regard in the footnotes, including the requirements of NBC TG 06 (R3) (IFRS 16) and the guidelines of the Bra- zilian Securities and Exchange Commission (CVM). Based on the results of the audit procedures performed, which are consistent with management's assessment, we consider that the criteria and assump- tions adopted by management to measure and record lease contracts in ac- cordance with the requirements of NBC TG 06 (R3) (IFRS 16), as well as the related disclosures in Note 13, are appropriate in the context of the individual and consolidated financial statements taken as a whole. Other matters Statements of value added The individual and consolidated statements of value added (SVA) for year ended December 31, 2020, prepared under the responsibility of Company management, and presented as supplementary information for purposes of IFRS, were submitted to audit procedures conducted together with the audit of the Company's financial statements. To form our opinion, we evaluated if these statements are reconciled to the financial statements and accounting records, as applicable, and if their form and content comply with the criteria defined by NBC TG 09 - Statement of Value Added. In our opinion, these statements of value added were prepared fairly, in all material respects, in accordance with the criteria defined in abovementioned accounting pro- nouncement, and are consistent in relation to the overall individual and con- solidated financial statements. 74

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